Court File and Parties

Court File No.: CV-16-560262 Date: 2017-02-22 Superior Court of Justice – Ontario

Re: Gbadebo Adebayo Adeniji, Applicant And: Florence Mbah Segbaya, Respondent

Before: Justice Jasmine T. Akbarali

Counsel: Glenroy K. Bastien, for the Applicant Adetayo G. Akinyemi, for the Respondent

Heard: February 15, 2017

Endorsement

Overview

[1] In these motions, I am asked to either dismiss the applicant’s application for his failure to pay security for costs, or alternatively, to set aside or vary the order to pay security for costs because, the applicant argues, the respondent frustrated his ability to make the required payment.

Background

[2] The parties to this application are former romantic partners. The application centres around a house in Toronto which, at one time, was registered in the names of both parties as tenants in common, with the respondent, Ms. Segbaya, owning a 60% share and the applicant, Mr. Adeniji, owning a 40% share.

[3] In June 2008, Mr. Adeniji executed a handwritten declaration to the effect that Ms. Segbaya was the sole owner of the house in question and she had only put his name on title to assist him in “processing [his] resident papers in Canada”. In December 2008, Mr. Adeniji voluntarily transferred his interest in the property to Ms. Segbaya.

[4] In October 2015, Ms. Segbaya sold the property to a third party purchaser. Mr. Adeniji assisted with the sale, and kept $40,000.00 of the proceeds for himself. The remaining funds were placed into Ms. Segbaya’s account. In September 2016, Mr. Adeniji brought this application seeking a mareva injunction and claiming his share of the proceeds of sale.

[5] Mr. Adeniji obtained mareva orders from this court on September 13 and 26, 2015. He did not disclose the existence of the declaration he had signed when obtaining those orders. These orders had the effect of freezing funds in Ms. Segbaya’s bank account.

[6] Ms. Segbaya responded by bringing a motion to set aside the mareva orders and for security for costs on the basis that Mr. Adeniji is a non-resident without assets in the jurisdiction. That motion was settled on the basis that the mareva injunction would be set aside, Ms. Segbaya would pay into court the sum that Mr. Adeniji claims in his application as his share of the proceeds, and Mr. Adeniji would pay $20,000.00 into court in security for costs. That settlement was encompassed in a consent order of Firestone J. dated October 17, 2016. Under its terms, the payments into court were to be made within 25 days.

[7] Ms. Segbaya made the $194,587.00, payment required of her, but Mr. Adeniji failed to pay the $20,000.00 in security for costs. Ms. Segbaya brought a motion that came before me on January 5, 2017, seeking the dismissal of Mr. Adeniji’s application for his failure to comply with the terms of Firestone J.’s order. At that time, Mr. Adeniji’s counsel alleged that his client had been prevented from complying with the terms of the order by the conduct of Ms. Segbaya. Accordingly, I granted an adjournment to allow Mr. Adeniji to bring a motion to vary or set aside the order for security for costs and provide an evidentiary basis to which Ms. Segbaya could respond. I ordered $50,000.00 from the funds paid into court to be returned to Mr. Segbaya. I ordered the motions to be heard together.

Position of the Parties

[8] Mr. Adeniji argues that the term of the consent order that requires him to pay security for costs should be set aside because it was procured by fraud. He alleges that Ms. Segbaya intended to frustrate his ability to comply with the order and she has done so. He claims her actions have made him lose his businesses and he is now impecunious. He also argues the order should be set aside due to a change in circumstances – that is, his impecuniosity – and that his application is meritorious and should be allowed to proceed.

[9] Ms. Segbaya argues that Mr. Adeniji has not produced the kind of documentation necessary to establish impecuniosity and moreover, his allegations that she has disrupted his life, his businesses and his ability to earn income are not credible. She also argues that an order for security for costs is justified because he is a non-resident without assets in the jurisdiction, and his application is not meritorious.

[10] While both parties seek their costs of these motion, Ms. Segbaya also argues that she is entitled to her costs from Mr. Adeniji’s lawyer, Glenroy Bastien, personally.

Issues

[11] I must first determine whether the order for payment of security for costs should be set aside or varied. It is Mr. Adeniji’s burden to prove either a material change in circumstances or fraud. Both of these arguments turn on the same allegations that Ms. Segbaya took actions designed to make Mr. Adeniji impecunious, and unable to pay security for costs.

[12] If Mr. Adeniji fails to prove that the order should be set aside or varied, the question becomes whether his failure to comply with it justifies the relief that Ms. Segbaya is seeking, that is, the dismissal of the application and the release of the funds paid into court to her.

Analysis

[13] I conclude that Mr. Adeniji has failed to discharge his burden to prove that he is impecunious and that his impecuniosity was caused by the actions of Ms. Segbaya.

[14] Mr. Adeniji’s evidence is that he was a businessman who operated internationally. He was successful, and used his money to buy many properties for Ms. Segbaya. He claims he did so for the same reason he claims he signed over his interest in the Toronto house to Ms. Segbaya - because he was blinded by love. He deposes that Ms. Segbaya was concerned he would return to his wife and children; buying properties for her was a way for him to demonstrate that she should trust him. However, their relationship deteriorated.

[15] Mr. Adeniji’s evidence is that, a few days before he had to pay security for costs, Ms. Segbaya came to his house on Dany Estate in Nigeria with armed men. He was not home, and so managed to evade them, and went into hiding. In a couple of days, he went to the police station where he found Ms. Segbaya waiting for him. He deposes that the police wrongfully detained him, beat him, and tortured him, all in an effort to get him to sign documents to the effect that he has no interest in the proceeds from the house sale in Toronto. He states Ms. Segbaya bribed the police officers. He states that with the help of a friend, who he was able to call when his brother-in-law snuck a cell phone into the jail, he managed to secure his release.

[16] Mr. Adeniji also deposes that, once released, he attempted to return to the home on Dany Estate, from which he states runs his businesses, but was again detained by the police who threatened him not to return there again. He states he went into hiding at a place without telecommunication access and from where he could not communicate with anyone. He states that because he has been kept from the Dany Estate home, he has been unable to run his businesses, and they have collapsed. He claims to have no access to documents [1] or money.

[17] I find that Mr. Adeniji has not proven these events occurred on a balance of probabilities. There are inconsistencies in his evidence. For example:

a. Although Mr. Adeniji claims to be operating his businesses out of the Dany Estate house from which he claims to have been excluded, the record discloses that the house was originally Ms. Segbaya’s, and that Mr. Adeniji had apparently left the house by July 2016. b. In Mr. Adeniji’s version of events, Ms. Segbaya broke into the Dany Estate home. Since it was Ms. Segbaya’s house, that kind of destruction appears unnecessary when she could just use her key. c. There is no documentary evidence in the record that Mr. Adeniji ever operated any business out of the home on Dany Estate. The bank account statements Mr. Adeniji produced all bear addresses that are different from the address of the Dany Estate house. There are no registration documents for the businesses. There is not even a piece of letterhead. d. Mr. Adeniji claims he was in hiding where there was no access to telecommunications, but during the period of alleged hiding, his bank account statements show multiple withdrawals from ATMs. e. Mr. Adeniji claims he was able to contact a friend to secure his release when his brother-in-law smuggled in a cell phone to the jail. He states his brother-in-law was the only person allowed to visit him. This does not make sense. There would be no need to smuggle in a cell phone; his brother-in-law could have made the call for him.

[18] In addition to these inconsistencies, there is evidence that is lacking. For example:

a. Mr. Adeniji states a friend helped secure his release from prison. There is no affidavit from his friend, but only an unsigned letter purporting to describe the events. b. There is evidence in the record that Mr. Adeniji had a TD bank account but he has provided no evidence of the current status of the account. There is nothing to prevent him from doing so. c. There is a lack of evidence about Mr. Adeniji’s businesses which he deposes included, at the time he met Ms. Segbaya, three different businesses operating in more than twenty business areas, including buying and selling stocks, real estate and activities in oil and gas. There is no indication of what happened to these three businesses or whether they were all operated out of the house on Dany Estate. The record suggests Mr. Adeniji operated his businesses in Nigeria and in other countries. It is unclear why such broad business interests would be run solely out of the house on Dany Estate. d. There is no evidence as to Mr. Adeniji’s assets, liabilities, or income. There are no tax returns. Mr. Adeniji portrays himself as someone who was (before Ms. Segbaya destroyed his businesses) very successful. If so, he should have capital assets accumulated. There is no evidence on this issue.

[19] I thus conclude that Mr. Adeniji has failed to discharge his burden of proof to establish that there are changed circumstances that warrant setting aside the security for costs order. He has not provided the full financial disclosure necessary to establish impecuniosity: see O’Neill v. Le Roux, 2011 ONSC 3931, at paras. 19-20 and 24.

[20] Moreover, he has failed to establish fraud on the facts, in that he has failed to establish that Ms. Segbaya intended to and did cause him to become impecunious.

[21] Having reached these conclusions about the evidence before me, it is not necessary to consider the merits of Mr. Adeniji’s application. However, I will make three brief observations. First, Mr. Adeniji has produced a bank draft he alleges proves he paid for the Toronto house. The only connection the bank draft has to Mr. Adeniji is that his name is handwritten on the bottom corner. The source of the funds is unidentified. He produced no banking records to show from where the funds came.

[22] Second, I am troubled by the fact that Mr. Adeniji did not disclose the handwritten declaration (or the fact of it) when he obtained the mareva orders from this court. Mr. Adeniji argues that he never sought residency status in Canada, so the declaration makes no sense. This misses the point. The question is not whether Mr. Adeniji actually sought to be on title on Ms. Segbaya’s property to assist his residency application. The question is whether Ms. Segbaya’s evidence that she put him on title for that reason is correct. Moreover, Mr. Adeniji’s argument that he signed the declaration under pressure is undermined by his voluntary transfer of the property to Ms. Segbaya six months later.

[23] Third, I do not accept his evidence that he gave Ms. Segbaya many properties and his interest in the Toronto property because he was blinded by love and to gain her trust. He alternately deposed that he abandoned contact with his wife and children to prove his love to Ms. Segbaya, and that he remains married to his wife, who he allows to live in the United States with his children so his wife can pursue her career. He also deposed that when he was arrested in France during the currency of his relationship with Ms. Segbaya, his wife paid his legal fees.

[24] I thus turn to Ms. Segbaya’s request for relief. Mr. Adeniji is in default of his obligation to pay security for costs. I am not satisfied that the order could not be paid. Mr. Adeniji has had sufficient opportunity to correct the default. He has demonstrated no effort to do so. He has proposed no plan to rectify the default. Accordingly, I order the application dismissed for failure to pay security for costs pursuant to r. 56.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[25] I also grant Ms. Segbaya’s request for an order directing the Accountant of the Superior Court of Justice to release to Ms. Segbaya the remaining funds that she deposited into court pursuant to the order of Firestone J. dated October 17, 2016.

Costs

[26] There is no reason to depart from the usual rule that costs follow the event. Both parties claimed costs in similar amounts. Ms. Segbaya seeks $9,100.00 in costs. This amount was less than that sought by Mr. Adeniji. It is fair and reasonable in the circumstances. I order Mr. Adeniji to pay Ms. Segbaya’s costs of $9,100.00, inclusive of HST and disbursements.

[27] However, I dismiss Ms. Segbaya’s request to order that her costs be paid by Mr. Adeniji’s counsel personally. I see no evidence that Mr. Bastien has caused costs to be incurred without reasonable cause, or to be wasted by undue delay, negligence or other default: see r. 56.06(1)(c) of the Rules of Civil Procedure. Rather, Mr. Adeniji is responsible for the course of this litigation. He alone bears responsibility for the costs.

Justice J. T. Akbarali

Date: February 22, 2017

[1] Although he claims to have no access to documents, Mr. Adeniji filed a voluminous record including significant documentary evidence.