Tuesday, July 10, 2018
By NICO SCAVELLA
Tribune Staff Reporter
THE Court of Appeal has ordered a man to pay his former wife over a quarter of a million dollars within the next two months or risk the 3,000 shares he holds in his $1.1 million investment company being sold at public auction to satisfy the court order.
Former appellate President Dame Anita Allen, and fellow Justices Jon Isaacs and Stella Crane-Scott, ordered Sean Collie to pay Aneka Collie $340,000 by September 18, otherwise the 3/5th shares he holds would be auctioned off by the Registrar of the Supreme Court.
To ensure that he obeys the order, the appellate judges affirmed a former chief justice’s order that Mr Collie’s shares be held as security for the payment, and that he be prohibited from exercising his powers as a majority shareholder and director of his investment company to cause it to “sell, encumber or otherwise transfer” its assets—one of which is the matrimonial home where his former wife still resides, to any other person without prior leave of the court.
In doing so, the appellate judges upheld Sir Michael Barnett’s previous ruling on the matter in which he ordered, amongst other things, that Mr Collie make a lump sum payment equivalent to half of the value of his 3/5th’s shareholding in his investment company, because he found Mrs Collie “would have nothing” if she were only allowed to keep two “heavily indebted” properties in her sole name, with a net value of minus $19,000, as her share of the matrimonial assets.
According to the ruling, their relationship started when Mrs Collie was about 23 years old and was employed in Mr Collie’s business. They began an intimate relationship which produced two children—a girl born in 1999 and a boy born in 2000. They married in 2002, a union that would last for the next 15 years.
In March 1998, before the birth of their first child, and while they were still cohabiting, Mr Collie purchased a five-acre parcel of land in western New Providence, which was acquired in the name of a company, Westfall Company Limited.
The purchase was made with Mr Collie’s money and funding from a bank which held a mortgage over the property.
Westfall then began constructing an apartment complex on a portion of the five-acre property; the company ultimately constructed 16 units in total.
Westfall has 5,000 shares; 3,000 are owned by Mr Collie and the remaining 2,000 are held in trust for three of his children, two of whom are from prior relationships.
Subsequent to the couple’s marriage, the family moved into one of the units which served as the matrimonial home since 2002. Apart from the unit the family occupied, the other units have been sold, with some of the sales occurring during the course of the couple’s divorce proceedings.
Meanwhile, during the marriage Mrs Collie acquired two properties in her sole name; a six-unit apartment building on Hamster Road, and a four-unit apartment building on Harrold Road, the latter of which houses a Spanish school— Chicos Felices—that she operates.
Mrs Collie operated two businesses during the marriage that were educational in nature, according to the ruling. The Smart Start Academy closed in 2014 and at the date of the hearing, only the Spanish School was still operational.
The proceedings in the Supreme Court were initiated by Mrs Collie by way of a petition filed on August 13, 2012 seeking dissolution of the marriage on the grounds of adultery. She also asked that arrangements be made for the custody and maintenance of the minor children of the marriage, property adjustment and payment by Mr Collie of such lump sum and/or periodical payments as the Court deemed just, in addition to costs.
According to the ruling, the decree nisi was “on its face” issued on the basis of Mr Collie’s adultery. On July 31, 2013, the husband filed a notice of application for ancillary relief supported by a second affidavit filed on the same date.
He sought a variety of orders, including property adjustment orders relative to two properties owned by Mrs Collie; an order that he be granted possession of the former matrimonial home where Mrs Collie was still residing with the two minor children; declarations and various orders concerning two businesses operated by his ex-wife.
Mr Collie also sought an order for joint custody of the children with an order that he be granted custody, care and control of the children three days a week.
Meanwhile, Mrs Collie sought joint custody of the children of the marriage with care and control to her and “reasonable access” to the husband. She also sought $2,500 per month from the husband towards the maintenance of the children together with an order that he continue to pay one half of the school fees and all other related educational expenses for the children.
Concerning the application for ancillary relief related to property issues between the former couple, Mrs Collie, on one hand, sought to have the unit that served as the matrimonial home transferred to her. Alternatively, she claimed a lump sum payment of an amount that would enable her to acquire a similar home for herself and the children of the marriage.
Mrs Collie made no proposals and sought no orders concerning the Spanish School, or the two properties on Hamster Road and Harrold Road that she acquired in her sole name.
Meanwhile, in his notice of application for ancillary relief, Mr Collie claimed a 50 per cent interest as a “tenant-in-common” in the properties on Hamster and Harrold Roads, and property adjustment orders in relation to those.
He also sought a discharge of a Protection order that was made on June 19, 2013 in the Supreme Court, excluding him from the matrimonial home and an order granting him possession of the unit and requiring the wife to vacate the former matrimonial home within 28 days.
Mr Collie also claimed a 50 per cent interest in the profits generated from the Spanish School and sought either a lump sum payment representing the value of the interest, or alternatively, periodic payments representative of his 50 per cent interest.
On December 10, 2014, after hearing the oral evidence and submissions from both parties, Sir Michael ordered that both individuals be granted joint custody of the children of the marriage. Sir Michael also granted care and control of the children to the wife and granted the husband liberal access, the details of which were to be worked out between the former couple.
Sir Michael also ordered the husband to pay maintenance in the amount of $1,000 per month commencing on December 1, 2014.
Concerning the property issues, the appellate judges said Sir Michael “essentially acceded” to Mrs Collie’s alternative proposal and ordered the husband to make a lump sum payment to her of $340,000 on or before February 28, 2015. Failure to do so would result in his 3,000 shares in Westfall being sold at public auction to satisfy the debt.
Sir Michael further ordered the shares to be held as security for the debt and enjoined Mr Collie, without the Court’s leave, from exercising his power as a director of his company from selling, encumbering or otherwise transferring its assets to any other person.
According to the appellate judges, Sir Michael did this because the possibility existed that if the ancillary proceedings did not go his way, Mr Collie might use his position as director to cause the apartment unit occupied by Mrs Collie and the two children to be sold before the lump sum payment was settled.
That concern was further highlighted based on evidence that some of the sales of the other apartment units took place during the course of the divorce proceedings.
Thus, the appellate judges said while Sir Michael could not make an order directly against Mr Collie’s investment company, the judge still secured Mrs Collie’s position by enjoining Mr Collie in his “personal capacity” from using his position in the company to adversely affect Mrs Collie’s position without the Court’s leave.
Mr Collie appealed Sir Michael’s ruling, charging that in granting his ex-wife the $340,000 lump sum payment, Sir Michael wrongfully treated property owned by the company as a matrimonial asset.
Mr Collie also complained that the value of his shares in Westfall should not have been included in Sir Michael’s calculation of assets available for distribution since the company was acquired prior to the marriage from a source “wholly external to the marriage”.
Conversely, Mr Collie said that at the time of Sir Michael’s ruling, the evidence established that Mrs Collie’s financial needs could have been adequately met from the Hamster and Harrold Roads properties and the two schools without having to resort to his shares.
However, the appellate court said in the absence of “full and frank disclosure” from Mr Collie regarding his income, property, and financial resources, Sir Michael was “completely justified” in drawing “adverse inferences” about his credibility and also in finding that he had the means by which to satisfy the orders concerning the maintenance and lump sum payments.
According to the appellate judges, a perusal of the transcripts of the proceedings in the Supreme Court showed how Mr Collie appeared to be “evasive and not to be completely frank and forthcoming on many issues, including those relating to his income, the beneficial ownership of Westfall and the manner in which transfers had been made between his personal account and the account which had been set up by the Bank of the Bahamas to service the loan account”.
Additionally, the appellate judges said on “many occasions”, the judge had to intervene during cross examination to insist that Mr Collie answer the specific questions being put to him as opposed to “volunteering information that was not asked”.
According to the appellate judges, Mr Collie’s evidence was that his monthly income was uncertain because it depended on rental income collected on behalf of Westfall from one rented unit, and maintenance fees collected on Westfall’s behalf from some of the units that had been sold.
And in his evidence-in-chief on June 11, 2014, Mr Collie said his circumstances hadn’t changed concerning his income since his filed affidavits. He also said he was in a “lean period” and had no income. He also said he had failed at trying to secure financing from the bank and due to bank policy, was unable to secure a loan until the divorce proceedings were finalized.
However, under cross-examination, Mr Collie was confronted with a loan application form he had completed in 2012 in which he represented to the bank that his income had been $48,000 per month and that his net worth in 2012, after liabilities, was $2.6m. That revelation was “neither denied nor rebutted” by Mr Collie during his evidence at trial.
Thus, the appellate judges said it was “clear” from his ruling that Sir Michael rejected Mr Collie’s previous evidence that he had no income. Sir Michael also found that the man’s evidence “was not credible” and further found that he “had the means to earn income and must do so”.
Mr Collie also charged that Sir Michael’s order prohibiting him from exercising his power as a director of Westfall to sell, encumber or otherwise transfer the company’s assets to a third party without prior leave of the court was unfair because it effectively meant that Westfall could no longer continue in its business of developing its land.
His attorney, Denise Dorsett further claimed that without being able to approach a bank for financing, Westfall has been at a “standstill” since Sir Michael’s ruling as Mr Collie has been “entangled” in seeking relief from the order, which, she claimed, has adversely affected his income and the value of his shares.
However, the appellate judges said they found “absolutely no difficulty” with Sir Michael’s order, which they said was “quite obviously” made to “secure or buttress” his order for the husband to make the lump sum payment, and to not use his position as director and majority shareholder to cause the company to encumber, sell or transfer the former matrimonial home without the Court’s leave.
Additionally, the appellate judges noted that the power of the Supreme Court to grant injunctions “is not in any doubt”, and further charged that every Court must be “deemed to possess all such powers as are necessary to ensure that its orders are effective and not frustrated by the actions of one or other of the parties to the proceedings”.
The appellate judges further dismissed the assertion that Sir Michael’s ruling hampered Westfall in conducting its business, charging that the order was not made directly against Westfall, but against Mr Collie in his “individual capacity”.
“Indeed, as the majority shareholder and director of Westfall, it was (and still remains) open to (Mr Collie) to approach the Supreme Court at any time seeking an order for the injunction against him to be lifted so as to give him for example the ability to cause Westfall to sell Unit 1; or alternatively, to mortgage or sell the remaining portions of its property,” the appellate judges said. “Additionally, (Mr Collie) also had for example (if he so wished) the ability using his shares as security, to negotiate financing, including borrowing from Westfall the capital amount necessary, to enable him to meet his court-ordered obligations to (Mrs Collie).
“If such an approach had been made (and were to be made) the Supreme Court would undoubtedly, have considered (and may still consider) any bona fide proposals which (Mr Collie) may put forward for settling the lump sum payment due to (Mrs Collie)”.
Concerning Mr Collie’s assertions that his shares in Westfall should not have been included in the calculation of assets, the appellate judges said following a divorce and dissolution of a marriage, Courts have “wide discretion” to make orders on an application for ancillary relief that will produce a “financial package” capable of achieving a “fair result for the parties and their children”.
In this instance, the appellate judges said the process Sir Michael employed, that is, identifying and valuing the available assets and financial resources of the parties and then applying the equal sharing principle, is “consistent with the approach discussed in numerous authorities”.
According to the appellate judges, Sir Michael, after accepting Westfall’s value of $1.1m as provided by Mr Collie, calculated the value of his shareholding in the company, then added it to the net and negative values of Mrs Collie’s two properties. He consequently arrived at a total value of $641,000 which he thus found should be equally shared between both parties in the sum of $320,500 each.
Thus, the appellate judges said based on the “state of the evidence”, they were satisfied that Sir Michael was entitled to make the “financial provision” order that he made. The judges said based on the “relatively long duration” of the marriage, coupled with the “limited equity” in Mrs Collie’s two properties, and Mr Collie’s “financial resource” in the form of his 3/5th’s shareholding in Westfall, Sir Michael was “entitled” to take those factors into account when applying the “equitable sharing principle to achieve a fair result”.
“In our judgement, given the negative appraised values of the wife’s Hamster Road and Harrold Road properties, the judge was entitled to find that the wife ‘would have nothing’ if he were to leave the value of the husband’s shares in Westfall out of his calculations of the available assets and to simply make the ‘property adjustment’ orders which the (husband) had requested,” the appellate judges noted.
“In an effort to achieve a fair result between both parties, the learned chief justice elected instead to make a financial provision order in the form of a lump sum payment and we are unable to say that he was wrong to do so”.
“For all of the above reasons, we dismiss the (husbands’) appeal and affirm the orders of the learned chief justice”.