Court File and Parties
Court File No.: 810/10 (Guelph) Date: 2016-07-21 Ontario Superior Court of Justice
Between: Barbara Ann Blatherwick, Applicant – and – Brian Earl Blatherwick, Respondent
Counsel: J. Cox, for the Applicant D. Kilgour, for the Respondent
Heard: June 29, 2016
Reasons for Sentence
RICCHETTI J.
Background
1By Reasons for Judgment dated April 27, 2015, this court granted judgment in favour of Mrs. Blatherwick (“Judgment”).
2Mr. Blatherwick failed to comply with the terms of the Judgment and, in particular, two terms of the Judgment:
a) To “cash in” the Mauritius Orangefield life insurance policy (the “Policy”) and pay the cash surrender value of the Policy to Mrs. Blatherwick; and
b) Not to transfer control of Seasons Limited – Macau Commercial Offshore (“Seasons Macau”).
(these two terms are hereafter referred to as the “Terms of the Judgment”)
3Mrs. Blatherwick brought a contempt motion as a result of Mr. Blatherwick’s alleged deliberate and flagrant breach of the Terms of the Judgment.
4A contempt hearing was held on April 19, 2016. Mr. Blatherwick was represented by counsel and called evidence (the “Contempt Hearing”).
5By reasons dated May 9, 2016, Mr. Blatherwick was found to be in contempt (“Contempt Reasons”). A sentencing hearing was scheduled at a future date to provide Mr. Blatherwick at least a further 30 days to purge his contempt.
6The sentencing hearing was held on June 29, 2016. Despite having had 50 days to purge his contempt, Mr. Blatherwick failed to do so and continues to fail to comply with the Terms of the Judgment. No further evidence was filed by Mr. Blatherwick at the sentencing hearing.
7At the sentencing hearing, Mr. Blatherwick offered an unsworn apology and sought significantly more time to comply with the Judgment.
Position of the Parties
Mrs. Blatherwick
8Mrs. Blatherwick submits this court should impose a sentence of 180 days incarceration without release on electronic monitoring, followed by a subsequent period to permit Mr. Blatherwick to purge his contempt and thereafter followed by a further 180 days incarceration if he fails to do so.
Mr. Blatherwick
9Mr. Blatherwick wants more time. In the alternative, Mr. Blatherwick sought a conditional sentence with parole conditions.
Analysis
10It is now 14 months after the Judgment was issued. There was no appeal from the Judgment. Mr. Blatherwick does not deny that he continues to be the beneficial owner of the majority of the shares in the Seasons Halloween Business. Unfortunately for Mrs. Blatherwick, the Seasons Halloween Business is located in China making the enforcement of the Judgment difficult.
11The value of the Seasons Halloween Business is substantial and continues to grow. The Judgment remains outstanding.
12Despite this continued growth and substantial value of the Seasons Halloween Business, Mr. Blatherwick has not made any effort or taken any steps to realize on his interest in the Seasons Halloween Business by way of sale, mortgage or any other manner to satisfy the Judgment. More importantly to this proceeding, Mr. Blatherwick has deliberately and flagrantly failed to comply with the Terms of the Judgment.
13Mr. Blatherwick’s extensive and consistent history of ignoring and breaching court orders continues. The Reasons for Judgment set out Mr. Blatherwick’s prior contumacious attitude and actions towards Mrs. Blatherwick. They need not be repeated here.
14Mr. Blatherwick makes a meaningless meagre monthly support payment to Mrs. Blatherwick and somehow believes this will suffice to keep the law at bay.
15At the Contempt Hearing, Mr. Blatherwick had nothing to offer to demonstrate a bona fide willingness or effort to comply with the Terms of the Judgment. Further, Mr. Blatherwick’s own evidence shows continued, deliberate and flagrant actions by him to avoid complying with the Judgment including the Terms of the Judgment. The findings are set out in the Contempt Reasons.
16It was clear after hearing evidence at the Contempt Hearing that Mr. Blatherwick continues to do everything in his power to avoid paying his wife her the amounts due under the Judgment through lies, obfuscation, and just outright ignoring the Terms of the Judgment. Apparently, Mr. Blatherwick is making good on a statement to his wife before the litigation started years ago – she would not access his Asian assets in a divorce. Mr. Blatherwick has and will take any steps to carry out that “promise”.
17At the Contempt Hearing, Blatherwick submitted impecuniosity as an excuse for not complying with the terms of the Judgment. Mr. Blatherwick alleges that his “partners” only provide him with a minimal salary. However, as set out in the Contempt Reasons, he continues to have financial resources to send money to his girlfriends, buy another building for Seasons Halloween Business in Canada and apparently controls Discovery Bay’s offshore accounts. He admits that the Seasons Macau, the corporation in which he is the largest shareholder, typically has $15,000,000 USD in the bank in November each year.
18As for the Terms of the Judgment, it is clear that Mr. Blatherwick not only deliberately and flagrantly breached the Terms of the Judgment, Mr. Blatherwick did not take any steps to comply with the Terms of the Judgment. Worse still, it was clear that Mr. Blatherwick was cooperating with his “partners” to breach the Terms of the Judgment and make it more difficult for Mrs. Blatherwick to execute on the Judgment. The evidence at the Contempt Hearing disclosed that, shortly after the Judgment issued, Mr. Blatherwick attempted to move customer’s accounts in the Seasons Halloween Business to insulate Mr. Blatherwick’s assets from Mrs. Blatherwick’s enforcement actions. This is particularly troubling. Giving Mr. Blatherwick more time to carry out any such scheme would be prejudicial to Mrs. Blatherwick and contrary to the spirit and intention of the Judgment. This concern becomes even more troubling when Mr. Blatherwick was examined in aid of execution on February 1, 2016, gave numerous undertakings, some of which required detailed financial disclosure regarding the Seasons Halloween Business. Mr. Blatherwick has failed to answer all of the undertakings. As a result, aside from knowing that the Seasons Halloween Business had approximately $48,000,000 USD gross sales in 2015 and Mr. Blatherwick is the majority shareholder of the Seasons Halloween Business, Mrs. Blatherwick is in the “dark” about what is happening with Mr. Blatherwick’s financial interests and assets.
19One particular issue is demonstrative of Mr. Blatherwick’s flagrant attitude and disregard for the truth and court orders. During the trial Mr. Blatherwick denied under oath that he did not have any control over profits from the Seasons Halloween Business deposited in an offshore account, Discovery Bay. He explained at trial that his right to control funds in Discovery Bay had been terminated years earlier. Yet, in January 2016, Mr. Blatherwick’s own email shows that he continued to control the distribution of monies in the Discovery Bay offshore account.
20Subsequent to the release of the Contempt Reasons, and despite having had time to purge his contempt, Mr. Blatherwick has not provided evidence of:
a) any steps since the Contempt Hearing to comply with the Terms of the Judgment - nothing;
b) any direct communications with or any dealings with Mauritius Orangefield to attempt to cancel the Policy to comply with the specific term of the Judgment at issue in this contempt proceeding - nothing;
c) any steps taken or attempts to regain or take control over Seasons Macau, including calling a shareholders’ meeting or retain counsel - nothing; or
d) any attempt to sell or mortgage his interest in Seasons Halloween Business to comply with the Judgment including any evidence that Mr. Blatherwick’s interest in the Seasons Halloween Business is for sale or that Mr. Blatherwick has taken any legal steps in Hong Kong or Macau to realize on his very valuable shareholdings - nothing.
21At the sentencing hearing, Mr. Blatherwick made no proposal to comply with or even attempt to comply with the Terms of the Judgment.
22The Defence submits that Mr. Blatherwick is 66 years old and suffers from medical issues. There is no evidence that any medical issues cannot be properly and fully accommodated during incarceration by the Correctional Facility.
23What is a fit and proper sentence?
24Rule 31(5) of the Family Law Rules provide:
(5) If the court finds a person in contempt of the court, it may order that the person,
(a) be imprisoned for any period and on any conditions that are just;
(b) pay a fine in any amount that is appropriate;
(c) pay an amount to a party as a penalty;
(d) do anything else that the court decides is appropriate;
(e) not do what the court forbids;
(f) pay costs in an amount decided by the court; and
(g) obey any other order.
25In Chiang (Re), 2009 ONCA 3 the Court of Appeal stated:
90Custodial sentences for civil contempt are rare. Lengthy custodial sentence are even rarer. Canadian courts have tended to punish contempt of court leniently. Ordinarily, the mere conviction for contempt together with a modest fine suffices to obtain compliance and protect the court's authority. Ordinarily, incarceration is a sanction of last resort: see Robert J. Sharpe, Injunctions and Specific Performance, 3rd. ed. (Aurora, Ont.: Canada Law Book, 2000), at para. 6.120.
26The mitigating factors are:
a) There is no evidence of a prior criminal record;
b) Mr. Blatherwick is 66 years old; and
c) Mr. Blatherwick has some health issues.
27The aggravating factors are:
a) There has been extensive and conclusive evidence of a course of serious, deliberate, flagrant and continuing misconduct by Mr. Blatherwick including lying to this court, disregarding numerous court orders, continued financial non-disclosure, deliberate obfuscation, and misrepresentation of his financial affairs;
b) There are too many breaches of court orders to list here. They are set out in the Reasons for Judgment and Contempt Reasons;
c) Mr. Blatherwick continues to be a majority owner of a very valuable business and essentially “thumbs his nose” at Mrs. Blatherwick and, more importantly, at this court and this court’s jurisdiction;
d) Mr. Blatherwick has and continues to financially benefit from his actions at the expense of Mrs. Blatherwick;
e) The apology was, in my view, not sincere. When suggested it be under oath by Mrs. Blatherwick’s counsel, Mr. Blatherwick was not prepared to offer his apology or set out any steps he has taken to purge or attempt to purge his contempt under oath;
f) There has been ample time for Mr. Blatherwick to purge his contempt but his actions do not even show a bona fide attempt to comply with the Terms of the Judgment; and
g) Mrs. Blatherwick has spent countless hours and millions of dollars to have this matter adjudicated by this court but to no avail despite Mr. Blatherwick’s enormous wealth.
28The principle reasons for sentencing in civil contempt are to obtain compliance with court orders and to promote a society where the rule of law prevails. These reasons were described by Justice Lax in Chiang (Trustee of) v. Chiang, (2007), 85 OR (3d) 425;
16The contempt power is used to vindicate the rule of law and the administration of justice. As others have explained its rationale with great eloquence, I will simply repeat some of these comments.
17In 1992, Chief Justice McLachlin said:
Both civil and criminal contempt of court rest on the power of the court to uphold its dignity and process. The rule of law is at the heart of our society; without it there can be neither peace, nor order nor good government. The rule of law is directly dependent on the ability of the courts to enforce their process and maintain their dignity and respect. To maintain their process and respect, courts since the 12th century have exercised the power to punish for contempt of court. [page432]
18Also in 1992, Mr. Justice Blair made the following statement, which is frequently quoted:
No society which believes in a system of even-handed justice can permit its members to ignore, disobey, or defy its laws and its courts' orders at their whim because in their own particular view it is right to do so. A society which countenances such conduct is a society tottering on the precipice of disorder and injustice.
19More recently, in 2003, Mr. Justice Cumming emphasized the importance of obedience to court orders to society as a whole as it relates to commercial disputes. He said:
It is integral to a free and democratic society like Canada that citizens act pursuant to and under the rule of law. Court orders in force must be respected and followed. The deliberate failure to obey a court order strikes at the very heart of the administration of justice. This includes court orders relating to commercial matters as seen in the case at hand. If someone can simply ignore or finesse his way around a court order it will tend to add uncertainties and risks, with consequential inefficiencies and additional costs, as well as causing unfairness with consequential inequities and additional costs, to the commercial marketplace. Just as a white collar crime is crime, white collar contempt is contempt.
If the remedies a court directs to be put in place through its orders can be ignored with impunity, the road to civil anarchy is close at hand. The thin veil of civilization that cloaks our community through the rule of law is fragile, in need of constant protection, and in need of being seen by all members of the community to be constantly protected.
29The gravity of Mr. Blatherwick’s actions cannot be understated. Deterrence and denunciation are the primary principles of sentencing in this case because it is necessary to ensure that other members of the public, in family matters and all civil proceedings, know that there are consequences for their deliberate and flagrant disobedience of court orders.
30Only a lengthy period of incarceration will provide the deterrence and denunciation in the circumstances of this case. Perhaps, this will encourage Mr. Blatherwick to purge his contempt and comply with the outstanding court orders.
31I am satisfied that Mr. Blatherwick be sentenced to 180 days incarceration, continuously and without release on electronic monitoring.
32Upon his release, and no earlier than 90 days thereafter, upon a further motion by Mrs. Blatherwick on notice, this matter may be brought back before this court for a further contempt hearing. To be clear, this court retains the jurisdiction on a further motion, if appropriate, to sentence Mr. Blatherwick to a further penalty if Mr. Blatherwick has not purged his contempt or made significant and bona fide efforts to comply with the Terms of the Judgment (and hopefully all terms of the Judgment).
Conclusion
33Mr. Blatherwick is hereby sentenced to 180 days incarceration to be served continuously and without release on electronic monitoring.
Costs of the Contempt Hearing
34Written cost submissions were received on the Contempt Hearing.
35Mrs. Blatherwick seeks costs of $42,957.45 all-inclusive.
36Mr. Blatherwick submits that the amount sought is excessive.
37Section 24 of the Family Law Rules provides for the awarding of costs in family law proceedings.
s. 24 (8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
24 (11) A person setting the amount of costs shall consider,
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness of each party’s behaviour in the case;
(c) the lawyer’s rates;
(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
38The court should only grant what is a fair and reasonable amount for costs. Boucher v. Public Accountants Council for the Province of Ontario et al, [2004] 71 O.R. (3rd) 291.
39In Scalia v. Scalia, 2015 ONCA 492 the Court of Appeal described the circumstances where bad faith occurs in a family law context:
[68].....The legal test for bad faith in the family law context, as set out in S. (C.) v. S. (M.) (2007), 38 R.F.L. (6th) 315 (S.C.J.), at para. 17, aff’d 2 O.A.C. 225, is that the impugned behaviour must be shown to be carried out with “intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court.” In short, the essential components are intention to inflict harm or deceive.
40Mrs. Blatherwick is entitled to full indemnity costs. Mr. Blatherwick’s conduct can and is easily described as a deliberate intention to inflict financial harm on Mrs. Blatherwick and an intention to deceive Mrs. Blatherwick and this court regarding his actions and behaviour in the Contempt Hearing, through his lack of disclosure and falsehoods made to this court. I find Mr. Blatherwick’s actions to be in bad faith.
41I find the hourly rates sought by Mrs. Blatherwick’s counsel of $550 per hour for experience family law counsel and $150 per hour for articling student support to be reasonable.
42I agree with Mr. Blatherwick’s counsel’s submission that the examination in aid of execution is not a cost of the Contempt Hearing even though the examination became useful to Mrs. Blatherwick and this court in the Contempt Hearing. I reduce Mrs. Blatherwick’s costs by $13,000, being the approximate amount of the time spent on the examination in aid and follow up. This is without prejudice to a claim for these costs in the appropriate proceeding.
43I reject Mr. Blatherwick’s counsel’s submission that this matter was not complex. Given the history of this matter, this was a complex matter and was of significant importance to Mrs. Blatherwick.
44I reject Mr. Blatherwick’s counsel’s submission that Mr. Blatherwick “is no longer of the same means”. I am shocked that this submission could even be made by Mr. Blatherwick given the clear and unequivocal findings in the Reasons for Judgment and Contempt Reasons.
45Costs of the Contempt Hearing fixed at $30,000 all-inclusive and payable by Mr. Blatherwick immediately.
Ricchetti, J.
Released: July 21, 2016