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A man who was ordered to pay $10 million in spousal support and other payments to his wife of 40 years, spent six months in jail for deliberately ignoring the order and, to date, has not yet complied- potentially setting himself up for another finding of contempt and more jail time.
Brian and Barbara Blatherwick were high school sweethearts who met when they were 16 and 14 years old, respectively, and married shortly after Barbara graduated from high school. Barbara stopped working once they began to have children (of which they had three total).
From a small operation they first launched out of their living room, the Blatherwicks eventually built a substantial Halloween costume empire, with international partners and a global reach. Business partnerships in Hong Kong required Brian to travel to Asia frequently.
In 2004, after 33 years of marriage, Barbara discovered that Brian was leading a secret second life in the Philippines, complete with a fiancée and family.
After Barbara made her discovery, Brian sought legal advice. When he learned that he would have to share half of his assets and income with her if they separated, he decided to remain married, expressing his regret about the affair and asking Barbara for her forgiveness. For six years, the couple attempted to make their marriage work- going to counselling, taking vacations, and attempting to reconnect.
The “Brotherhood of Trust”
In 2010, while on vacation, the couple got into a fight and Brian told Barbara that he would rather declare bankruptcy in Canada than provide her with her share of the property and assets to which she was entitled. He further informed her that his money was protected by a “brotherhood of trust”.
Barbara quickly consulted with a family lawyer. A short time later, they filed for a Mareva injunction, a court order that would freeze Brian’s assets so that he could not move or otherwise dispose of his money until division of property was determined. They also filed a motion to obtain Brian’s laptop, arguing that they needed to review its contents and determine whether there was any information about his assets on there. They were successful on the motion, and the laptop was eventually seized by a sheriff and private investigator.
Files and other information in the laptop revealed the complicated ownership structure of the costume company, including nine corporations registered in five countries. There was also a trial of transactions from a company Barbara had never heard of, registered in the British Virgin Islands, that was moving money through a bank in Singapore. Over the course of five years, $8.9 million had been moved from the company’s account.
Another transaction trial revealed that almost $1 million had been paid to three different women in the Philippines. A private investigator dispatched to that country discovered that Brian was engaged to two other women (In addition to the one which Barbara had initially found out about). He had given hundreds of thousands of dollars and expensive engagement rings to each woman.
When Brian discovered that a private investigator had been speaking to the three women, he turned to his “brotherhood of trust” for help. One of his business partners delivered a parcel of cash to one of the women to “keep her mouth shut”.
The “brotherhood” had also been mobilized when the couple first separated. The group of men decided to jointly fund Brian’s divorce litigation in order to defeat Barbara. Together the “brotherhood” forged and doctored documents to show that Brian was in debt and that substantial amounts of money should be subtracted from the sum that he owed Barbara. In return, Brian also helped the other men, moving significant sums of money for them through one of his corporations in order to keep that money hidden from their spouses.
The Couple’s Road to Divorce: “Acrimonious Resistance”
As the dispute between the couple continued, Brian did everything he could to shield and hide his assets. For instance, he made a voluntary disclosure to Revenue Canada, telling them that he had been underpaying his taxes. He then claimed that this new tax debt had pushed him “into the red” and hired a bankruptcy lawyer to file for bankruptcy. At the same time, his business partner in Hong Kong sued one of Brian’s Canadian companies over ownership of a building (conveniently, the same building that had been awarded to Barbara earlier in the proceedings). All of these court actions were launched in different cities.
Concurrently, Brian stopped paying Barbara the spousal support he had previously been ordered to pay, and formally applied to reduce his support payments to zero. He then extended $120,000 to her from his own line of credit in order to “keep her in the game”. His goal was to wear her down emotionally and financially.
In 2014, a judge agreed to combine all the separate court actions into one, calling Brian’s bankruptcy “highly suspicious” and a possible “abuse of process”, and raising the question of whether the lawsuit over the ownership of the building had been staged as part of an overall strategy of “acrimonious resistance”.
By this point in their ongoing dispute, the former couple had collectively paid more than $2 million in legal fees, and the actual divorce had not yet made it to the courtroom.
“A Divorce is Hereby Granted”
The couple’s divorce trial finally began in February 2015, almost five years after the fateful fight in Vancouver.
Brian’s deliberate financial game playing continued. He brought in a business valuation expert to testify about Brian’s shares and equity holdings. A bankruptcy trustee testified that the value of all of Brian’s offshore operations was $1. The judge hearing the case questioned the business valuation expert’s independence and objectivity and the bankruptcy trustee’s testimony was characterized as “ludicrous”.
The judge issued a detailed 220-page decision that touched on as many of the convoluted issues as possible, including the “brotherhood”, the maze of corporations, the bankruptcy and other attempts to hide income, and other issues, asking:
What is Mr. Blatherwick’s income? What was the value of his corporate interests? …Four and a half years of litigation, over $2 million in legal and expert fees, and the answer to these two questions are not capable of precise determination.
The judge slammed Brian’s conduct, and rejected the entirety of his evidence, questioning his credibility and reliability, and calling him evasive. Barbara was awarded $10.6 million in spousal support, equalization payment, and proceeds from a life insurance policy.
The Saga is Not Over: Contempt
Despite the judgment, Barbara has yet to be paid any money that she is owed.
In July 2016, the same judge who granted the divorce sentenced Brian to six months in jail for contempt of court, stating that the jailtime was the “only remedy that’s left” given Brian’s failure to comply with the order to pay. Brian served the time at Maplehurst Correctional Centre, in Milton.
In May 2017, the couple returned to a courtroom to appear before the same judge. Brian was asked if he had complied with the order. He had not. The judge gave him some time to “make amends”. He is scheduled to appear before the same judge on August 4th, at which time he will be sentenced to another jail term if he has failed to comply with the order.
In the meantime, despite the huge judgment in her favour, Barbara is working at a retail store, earning just over minimum wage:
I have a 200-page court document that says I have an entitlement to a settlement, but until Brian is willing to write a cheque, I have nothing. I haven’t won anything. I’ve lost more. I’ve lost everything.
Barbara has said that she would not wish this on any other woman.
Contempt of court is a serious issue with significant consequences. Judges have the discretion to decide what actions (or inactions) are considered “in contempt”, and also have the discretion to order penalties for that contempt.
In family court, individuals have been found in contempt for failing to appear in court when scheduled, failing to answer a judge’s questions, acting aggressively during proceedings, failure to produce accurate income records, fabricating evidence, and, as in this case, failing to comply with a court order.
The penalties for contempt range from fines to, as in this case, jail time.
Dealing with separation, divorce, and related issues such as spousal support can be some of the most stressful events of a person’s life. At Gelman & Associates, we strive to make this experience easier by empowering our clients to make informed decisions. Our lawyers guide our clients through Ontario’s family law system with compassion and understanding, while still aggressively protecting their rights. Call us at (416) 736-0200 or 1-844-736-0200 or contact us online for an initial consultation.