Ilic v. Ilic, 2010 ONCA 848

CITATION: Ilic v. Ilic, 2010 ONCA 848

DATE: 20101210

DOCKET: C51881

COURT OF APPEAL FOR ONTARIO

Blair, Rouleau and Karakatsanis JJ.A.

BETWEEN

Gabriela Ilic

Applicant (Respondent in Appeal)

and

Slavco Ilic

Respondent (Appellant in Appeal)

Glenda D. McLeod, for the appellant

Richard H. Parker Q.C., for the respondent

Heard: December 8, 2010

On appeal from the order of Justice C.A. Tucker of the Superior Court of Justice dated October 9, 2009 and February 17, 2010

APPEAL BOOK ENDORSEMENT

[1] Mr. and Mrs. Ilic separated after a 9-year marriage during which they had two children, Tatiana and Aleksander. Pursuant to a consent order granted by Reilly J. on September 26, 2007, the issues of custody, access, child support s.7 expenses and the costs associated with those issues, were resolved. In February and March 2009 and February 2010, Tucker J. tried the remaining issues relating to (a) arrears of child support and education costs; (b) the amount of the equalization payment to be made; (c) a commercial property known as 125 Ainslie St. N., Cambridge; and (d) costs.

[2] We conclude that the trial judge erred in certain respects in relation to each of these areas and that the appeal must be allowed and the two orders of the judge below dated October 9, 2009 and February 17, 2010 be varied as follows.

[3] First, Mr. Parker fairly concedes that the trial judge erred in failing to give the appellant credit in the amount of a further $6,364.00 with respect to child support. As a result, there are no arrears of child support and education expenses owing. Paragraph 1 of the October 9, 2009 order is varied to provide for no arrears of child support.

[4] Secondly, we would vary the equalization payment of $104,169.67 ordered to be paid by the appellant. The appellant is entitled to a credit of the difference between the amount of $3,869 erroneously found to be arrears of child support, and now eliminated, and the uncredited amount of $6364 referred to above, namely $2495. In addition, the trial judge failed to take into account the fact that $7500 of the payments to the father with respect to the appellant’s loan from the father on the Ainslie property were paid after separation. She therefore undervalued the extent of the debt to the father as of the date of separation. One-half of that amount, namely $3750, is to be deducted from the equalization payment owing. Paragraph 1 of the February 17, 1010 is varied accordingly.

[5] The appellant attacked the trial judge’s findings with respect to the value of the Café Malibu business, the wife’s jewellery, the Ainslie St. property, the appellant’s Xotica business, and other minor assets – all with a view to reducing the amount of his equalization payment.

[6] The trial judge was in a difficult position as the evidence led on those various matter of value was weak. She did the best she could, and we are satisfied overall that it was open to her to make the findings she did with respect to them. We would not interfere further with the equalization amount.

[7] The most troubling aspect of this appeal is the trial judge’s order that the Ainslie property be sold and the proceeds held in trust pending a determination of who is entitled to what, amongst the appellant, the respondent and the appellant’s father. We can see no basis in law on her findings for such an order.

[8] The appellant’s father, Jovan Ilic, is the registered owner of the property. The property had been purchased in 2004 by the appellant’s company for $115,000 – $111,179.75 of which was advanced by Mr. Ilic Sr. The evidence of the appellant and his father was that the appellant was to repay the debt at the rate of $1500 per month (Mr. Ilic Sr. would carry the taxes) and that, in the event of default, the title to 125 Ainslie was to revert to Mr. Ilic Sr. At some point after separation, the appellant ceased making payments on the loan. (He was in jail, having been arrested on drug-related charges. He remained incarcerated at the time of trial.) In any event, the title to the Ainslie property was formally transferred to Mr. Ilic Sr. in January 15, 2007

[9] Ms. Ilic commences a fraudulent conveyance action against Mr. Ilic Sr. seeking to set aside the transfer. We know little about the processing of that action, but the record indicates that by agreement of counsel at the conclusion of trial, an order was sought consolidating the fraudulent conveyance action with the Divorce Act action and Mr. Ilic’s statement of defence was apparently filed at that time. No formal order to this effect was ever made and Mr. Ilic Sr. does not seem to have been involved in defending himself on those issues at trial.

[10] In her second decision, the trial judge observed that the transfer was “very suspicious”. She ordered the property sold.

[11] This order cannot stand. Mr. Ilic Sr. is not a party to these proceedings under appeal. More significantly, the trial judge made no finding that the transfer or conveyance was fraudulent. In fact, no order was made declaring the transfer null and void and setting it aside. Without such a finding, there is no basis in law to transfer title from Mr. Ilic Sr. or to order it sold without his consent. The order for the sale of the Ainslie property is set aside.

[12] With respect to the costs ordered at trial, the bill of costs included costs incurred before the date of the order of Reilly J. dated September 26, 2007 providing that “each party shall bear its own costs to date.” In addition, the costs submitted included costs for small claims court proceedings. Finally, the costs award includes costs of the fraudulent conveyance action. Accordingly, we would vary the costs awarded to reflect only costs of the Divorce Act proceedings after the order of Reilly J. We fix those costs of trial at $20,000.

[13] The appeal is allowed and the orders of Tucker J. varied as set out above.

[14] Success was divided. There will no costs of the appeal.