COURT FILE AND PARTIES
COURT FILE NO.: FS-11-3677854
DATE: 20120801
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ELIZABETH OMOLEWA OGUNLESI, Applicant
AND:
ANTHONY OLUFOLOHAN OGUNLESI, Respondent
BEFORE: PENNY J.
COUNSEL:
Vivien E. Rerri for the Applicant
Joan C. Manafa for the Respondent
HEARD: July 26, 2012
ENDORSEMENT
[ 1 ] This case involves an application for divorce, custody, child and spousal support, equalization of net family property, sale of family property and preservation of assets pending trial. It was issued in Toronto on April 1, 2011. The application was served on the respondent in Lagos, Nigeria where he resides. The applicant resides at 58 Marine Parade Dr. in Etobicoke.
[ 2 ] The parties came before me on Tuesday, July 24, 2012. The confirmation forms failed to identify the relevant material, as a result of which the necessary affidavits, etc. were not before the court. In addition, through an exercise of “piling on,” the parties had shoe-horned about four hours of motions into a 30 minute appointment.
[ 3 ] In the circumstances, I declined to hear from the parties that day on the merits of any of their motions and issued case management directions to enable what the parties agreed was the most pressing issue to proceed before me on July 26, 2012.
[ 4 ] That issue has to do with the interim preservation and management of real property in Toronto.
[ 5 ] It is extremely important to acknowledge that the respondent challenged the jurisdiction of the Ontario court in a motion brought before Czutrin J. on March 19, 2012. In his decision of April 17, 2012 accepting jurisdiction, Czutrin J. said:
The issue I have to decide is whether this court has the jurisdiction to consider the wife’s application for divorce, custody of a near seventeen year old son, spousal and child support, equalization of property and related remedies. Without attorning to the jurisdiction, or filing an Answer, the Respondent husband challenges the jurisdiction of this court, and asks that the action be dismissed.
The husband commenced an action in Nigeria (subsequent to the wife's Ontario Application) where he also seeks an annulment of the marriage, and is making claims on all of the couples’ properties. In doing so, he has continued to challenge this court’s jurisdiction, and has only participated in questioning to the extent necessary to challenge jurisdiction.
The wife unsuccessfully sought to have the Nigerian court dismiss or stay the husband’s Nigerian action as being “duplication” and her request to register Justice Backhouse’s non-dissipation order in Nigeria was adjourned.
[ 6 ] Czutrin J. identified two issues for determination: first, jurisdiction and, even if this court has jurisdiction, second, whether this court is the appropriate forum. He said, starting at paragraph 171:
While I find that prima facie and on a balance of probabilities the wife separated from her husband on the date she claims, and was ordinarily resident in Ontario for the requisite period, the court needs better evidence on the Nigerian family law to consider the issue of forum non conveniens .
The parties apparently applied for permanent resident status in Canada as married spouses, and now the husband suggests otherwise.
The parties have significant assets in Canada and the United Kingdom, and while the court may conclude that Nigerian law may apply, I find that knowing the range of outcomes and enforcement under that law will be a factor.
On the face of the husband's claims, he appears to be attempting to deny any rights to the wife.
[ 7 ] Czutrin J. concluded:
In summary therefore:
On the evidence provided to date, I am satisfied that the wife has established the residency requirement of the Divorce Act .
On the evidence as presented, there are certain credibility issues that require a trial. Specifically, the court must deal with determining the appropriate forum. This requires more knowledge about the Nigerian court process and the parties’ rights as between Ontario and Nigeria relating to property, spousal support, validity of marriage and divorce, any differential treatment of married and unmarried spouse[s]. Also need[ed] is a better understanding of the parties’ holdings since 2009 in Canada, the United Kingdom, Nigeria and elsewhere.
The court also requires a list of potential fact and expert witnesses and the nature of their evidence, as well as the Westec, supra, factors and expert evidence relating to the family justice system in Nigeria.
[ 8 ] The respondent has appealed Czutrin J.’s decision to the Ontario Court of Appeal. That appeal is still pending.
[ 9 ] The issue before me on July 26, 2012, involved two motions. The applicant brought a motion for an order compelling the respondent to keep current with mortgage payments, condominium fees and property taxes on properties owned by them in Ontario. The applicant also sought an order compelling the respondent to complete the closings of two agreements of purchase and sale involving units in the Trump tower currently being built at Bay and Adelaide in Toronto.
[ 10 ] The respondent brought a motion for an order compelling Ms. Rerri, the applicant’s counsel, to release trust funds she is holding (approximately $368,000) to assist in closing the purchase of the units in the Trump tower and for an order authorizing the respondent to sell two other units, the Ritz-Carlton (units 3705 and 3706), in order to use the proceeds of that sale to purchase the Trump tower units and to pay mortgages and carrying costs.
[ 11 ] At the heart of both motions is the June 8, 2011 order of Backhouse J. The relevant portion of that order provides as follows:
Pending the hearing of the [jurisdiction] motion, and without prejudice to the respondent’s position, I order that the application be amended to claim CPL’s on the Ontario properties set out in the applicant’s case conference brief and CPL’s may issue. Neither party shall dissipate any assets whether real or other property pending the return of the motion. This places an onus on the respondent to deal with the two property closings (the Ritz-Carlton Suite 3706, 183 Wellington St., Toronto and Trump Hotel and Tower Unit 11 Level 17, Suite 1711.
[ 12 ] In an endorsement of May 31, 2012, Czutrin J. found that the Backhouse J. order “continues to apply.”
[ 13 ] The parties’ real estate holdings in the Toronto area alone are very significant. The applicant’s sworn financial statement of April 1, 2011 lists six condominiums held by one or both of the parties with a total apparent value of over $4 million. Since that time, two properties have been sold, with most of the net proceeds being held by Ms. Rerri (the $368,000 referred to above) and another $88,000 apparently held in trust by another law firm. The evidence discloses, however, that that the CRA has asserted a tax liability associated with the sale of these properties owed to CRA of $280,972. This has been challenged by the applicant.
[ 14 ] The applicant’s April 1, 2011 financial statement does not include two Trump tower units in respect of which both parties signed agreements of purchase and sale in 2005, by which they agreed to acquire one unit for $4.6 million and a second unit for $863,000. The applicant’s April 1, 2011 financial statement also does not include four units apparently acquired by the parties in the Four Seasons building, also currently under construction at 50 Yorkville in Toronto. The record does not disclose the value or purchase price of the Four Seasons units, however,
[ 15 ] Thus, the parties appear to have real estate and real estate-related cash or agreements in Ontario worth well over $10 million. [1]
[ 16 ] In her June 25, 2012 affidavit, the applicant deposes:
We have bought several properties over the years in Canada and the United Kingdom. The Respondent always paid all the mortgages, taxes, condo fees and utilities. He did so from the business income we generated in Nigeria as well as from rental income from our properties in Nigeria and UK. He would transfer funds from Nigeria to our bank account here to cover those costs. All references in the bank statements to the purchase of foreign exchange is for the purpose of transferring funds out of Nigeria for our use to service our utilities or for our vacations etc. The Respondent is now however refusing to do so to cover our operational costs and only does so after numerous defaults and after threats of a lien (condo fees), distrain (property taxes) or even foreclosure (mortgage).
Interestingly, the respondent had indeed been paying all our housing costs but is now three months behind on the mortgage, property taxes and condo fee payments. He has paid the mortgage and taxes, condo fees insurance and utilities on our residents at 1212, 58 Marine Parade Dr., Toronto, where have been residing, with the exception of one payment for condo fees which I paid in July 2011 after threats of a lien... The only explanation for his delay in refusal to make payments is to deplete our assets to prevent me from any meaningful equalization in due course.
Attached hereto as Exhibit “BB” are copies of letters dated October 3, 2011 from Walman, Catre, Wise and Stone regarding the default on their mortgages for our property at Suite 3706, the Ritz-Carlton, 183 Wellington St., Toronto. Attached hereto as Exhibit “CC” is a warrant to distrain for taxes from the city of Toronto for default on property taxes for our property at 2103 – 710 Humberwood Boulevard, Toronto which was forwarded by e-mail to me on October 5, 2011 by Mr. Wahab Bello, our property agent. I had never received any prior notice of any default on the taxes. That property is rented out. The Respondent withdrew the rental funds from our account and yet did not pay the taxes.
On May 17, 2012, I was served with two Statements of Claim by the mortgagees for foreclosure and power of said sale of Suite 3706, The Ritz-Carlton. This property is in our joint names. I note that there is no default on the Suite 3705 The Ritz-Carlton which is in the sole name of the Respondent.… It is clear to me that the Respondent intends to have any properties in our joint names go into foreclosure and the equity be lost leaving properties in his sole name and at his disposal. At this time, I do not even have the funds to defend this claim.
I believe that he is attempting to deplete the funds that are currently held in trust in Canada so that I would have no facility to receive any meaningful equalization once our separation is sorted out by a Court. There is no other explanation why he would fail to pay the mortgage and taxes on our properties in Canada especially in light of the fact that the Respondent continues to receive and withhold all rental income from our properties in Nigeria, UK and even in Canada…
[ 17 ] It is on the basis of the defaults outlined in the applicant’s affidavit that she seeks an order that the respondent immediately bring all defaulting mortgages and arrears of taxes and condominium fees in connection with properties they own in Ontario into good standing and that he make all payments as they become due until further order of the court.
[ 18 ] The respondent’s May 29, 2012 notice of motion, originally returnable before Czutrin J. on May 31, 2012, seeks an order that Ms. Rerri release the funds from the proceeds of sale of the parties’ properties currently held in her trust account to the respondent’s solicitors to assist in closing the purchase of the Trump tower units, one of which was scheduled to take place on May 31, 2012; and an order giving the respondent the sole authority to manage all Canadian properties whether jointly held or held in the sole names of the parties, including authority to lease or sell, as the case may be, without the consent of the applicant, so that these properties are not dissipated.
[ 19 ] In his supporting affidavit, the respondent deposes that he would like to use the funds held by Ms. Rerri in trust to assist in the closing the purchases of the two Trump tower units. While he complains about the fact that the applicant “refused to sign” a listing agreement (it was not specified for what or on the what property) and that the applicant is “refusing… to cooperate with the lease or sale of the properties” (again, which properties is not specified), nowhere in his affidavit does the respondent provided any information about his assets or means or suggest in any way that he is unable to close the Trump tower deals without access to the $368,000 held by Ms. Rerri or without selling other properties, such as the Ritz-Carlton units.
[ 20 ] Czutrin J., on the return of the motion, found that the material before him did not provide sufficient information about what the parties knew or what properties are to close when and whose responsibility it was to close them. On this basis, he adjourned the motion.
[ 21 ] Since that time, the applicant has filed her affidavit of July 5, 2012, quoted above, which explains that the responded always organized the financing for the closings of their various properties and looked after payment of all ongoing costs and expenses.
[ 22 ] For the return of his motion before me this week, the respondent filed no additional affidavit evidence. The only additional material filed on his behalf came via Preet Pannu, an articling student with Ms. Manafa, the repondent’s counsel, purporting to provide hearsay evidence on behalf of the respondent. Among other things, the Pannu affidavit claims that the respondent is having difficulty “keeping up with carrying costs, mortgage payments and purchases of new properties” and that the Central Bank of Nigeria “does not allow the transfer of money for purposes of purchasing property overseas.” The affidavit claims to provide information about how much money is needed to close the various outstanding transactions, including the Trump tower deals and the Four Seasons deals. On the respondent's behalf, the affidavit concedes that the respondent has been the one paying the mortgages and the carrying costs of the parties’ properties to date. As well, the Pannu affidavit purports to set out a “proposal” calling for the use of the funds in Ms. Rerri’s trust account to assist in the payment of mortgages and the carrying costs of their Ontario properties, the immediate sale of the two Ritz-Carlton units and the Humberwood unit and the use of those proceeds to pay ongoing costs and the costs of closing the Trump tower and Four Seasons transactions.
[ 23 ] Is not clear to me how the respondent can decline to attorn the jurisdiction of Ontario, challenge the jurisdiction of the Ontario court in this proceeding, refuse to file a sworn financial statement or any other information about his assets and means or to answer questions on his cross examination about anything except jurisdiction, and yet seek relief from this court allowing him to buy and sell properties, some of which are held jointly with his wife, without his wife's consent, all on the strength of vague hearsay from his counsel’s articling student that he cannot afford to pay the carrying costs of the Ontario properties or close any further transactions.
[ 24 ] The respondent managed to close the two Ritz-Carlton deals (involving purchase costs of $1.3 and $1.8 million) without funds from the sale of other Ontario properties. He does not explain how he managed to acquire very substantial real estate holdings in the UK under the allegedly constraining Nigerian currency laws or why he could not, for that matter, access funds in the UK, rather than Nigeria, to close the pending Ontario property transactions.
[ 25 ] In my opinion the unsupported hearsay evidence of the articling student is wholly inadmissible and, in any event, wholly inadequate to support the relief sought by the respondent on this motion.
[ 26 ] The real estate holdings of these parties in Ontario alone appear to exceed $10 million in value. If what is being proposed is an orderly real estate divestment plan to maximize the value for the benefit of both parties, the evidence is completely inadequate. Much more detailed evidence would be required on the holdings themselves, their cost and values, their carrying costs, etc. Detailed expert evidence on the marketing and sale of luxury condominium units, and the best plan for the sale of these particular units, would be required as well. This list is by no means comprehensive.
[ 27 ] The respondent has not even come close, in my opinion, to justifying the extraordinary relief he is seeking on this motion. His motion is, therefore, dismissed.
[ 28 ] With respect to the applicant’s motion for payment of arrears and ongoing expenses, on the evidence before me, including the uncontested evidence of the applicant and the admission of the respondent’s counsel that the respondent has always been responsible for looking after the financing and payment of costs for their Ontario properties, I can come to no other conclusion but that it is the respondent’s obligation and onus to ensure the preservation of the parties’ real estate assets in Ontario.
[ 29 ] This is the concept which underpinned the June 8, 2011 order of Backhouse J. which, as Czutrin J. pointed out, is still in effect. If there is any doubt about that, I explicitly continue that order until further order of court.
[ 30 ] In my opinion, the payment of ongoing mortgage, tax and condominium fee obligations is clearly required to avoid the dissipation of existing assets. I therefore order, consistent with the order of Backhouse J., the respondent to ensure all mortgage arrears and unpaid taxes and condominium fees are paid and that they continue to be paid as they fall due with respect to the identified properties owned by either or both of the parties in Ontario.
[ 31 ] With respect to pending transactions, the Trump tower units and the Four Seasons units, there is insufficient evidence to make further orders at this time. The order of Backhouse J. says what it says. I extend the order of Backhouse J. to both Trump tower units and note only that the evidence filed before me seems to say that those two units are: a hotel condominium unit (#1910) and a residential condominium unit (Suite 1502, level 32, unit 2) as identified in the agreements of February 13, 2005 and March 10, 2005 respectively.
[ 32 ] The motion of the applicant is, therefore, allowed in part.
[ 33 ] I expect the parties to seek an agreement on the disposition of costs for these motions. Failing agreement, however, the applicant may file a written submission not to exceed two typed, double-spaced pages, supported by a Bill of Costs and any other relevant documents, within two weeks of the release of these Reasons. The respondent may file responding submissions, subject to the same page limit, within a further two weeks.
PENNY J.
Date: August 1, 2012
[1] There are mortgages on various properties as well. In addition, there is a foreign property tax liability of some $280,000 claimed by the CRA outstanding.