COURT OF APPEAL FOR ONTARIO

CITATION: Mudronja v. Mudronja, 2020 ONCA 569

DATE: 2020-09-11

DOCKET: C67802 & M51619

van Rensburg, Pardu and Huscroft JJ.A.

BETWEEN

Eddy Mudronja

Applicant (Appellant/ Respondent by way of cross-appeal/ Moving Party)

and

Marijana Mudronja

Respondent (Respondent/ Appellant by way of cross-appeal/ Responding Party)

Counsel:

Evelyn K. Rayson, for Eddy Mudronja

Avneet Virk, for Marijana Mudronja

Heard: in writing

On appeal from the order of Justice Kofi N. Barnes of the Superior Court of Justice, dated November 25, 2019, with reasons reported at 2019 ONSC 6811.

REASONS FOR DECISION

[1] Each party appeals from the order of the motion judge, Barnes J., settling amounts owing pursuant to a judgment of Seppi J., as varied on consent in the order of André J.

[2] Mr. Mudronja also seeks leave to appeal from the award of costs against him by Barnes J.

[3] The parties married in 1986. They are divorced. After a trial in 2014, Seppi J. ordered Mr. Mudronja to pay Ms. Mudronja an equalization payment of nearly $1.8 million. Seppi J. also ordered that he pay her retroactive lump sum child support of $150,000, retroactive lump sum spousal support of $136,760 and periodic spousal support of $7,500 per month until the equalization and retroactive support was fully paid. Seppi J. ordered post-judgment interest calculated at three percent and awarded costs in favour of Ms. Mudronja.

[4] Mr. Mudronja did not make the payments required by the judgment. In 2015, André J. issued a consent order varying some aspects of Seppi J.’s order, including that Ms. Mudronja would purchase Mr. Mudronja’s interest in the matrimonial home. Mr. Mudronja was ordered to pay $322,000 to comply with the trial costs order in favor of Ms. Mudronja. André J.’s order provided that interest on payments in default under that order would be calculated at two percent.

[5] In 2018, Ms. Mudronja brought a motion for financial disclosure to try to enforce the judgment in her favor and Mr. Mudronja brought a motion requesting the court’s direction regarding credits to reduce the outstanding equalization payment and interest owed. André J. consolidated the motions and issued another order in January 2019, ordering Mr. Mudronja to pay, by July 1, 2019, $1.3 million towards the equalization payment judgment of 2014 and the $12,000 that remained unpaid on the costs awarded by Seppi J. to Ms. Mudronja. By July 1, 2019, Mr. Mudronja had done both. The remaining matters were adjourned to a hearing in July 2019.

Decision Below

[6] The motion judge, Barnes J., ordered that Mr. Mudronja make several payments to Ms. Mudronja. The motion judge accepted Ms. Mudronja’s calculation of the outstanding equalization payment and post-judgment interest, totalling $266,907.79. The motion judge rejected Mr. Mudronja’s position that his monthly periodic spousal support payments of $7,500 should be credited against the equalization payment or against the post-judgment interest on the outstanding equalization payment. The motion judge also ordered that Ms. Mudronja pay Mr. Mudronja retroactive child support, to be set off against the outstanding equalization and post-judgment interest payment that Mr. Mudronja was ordered to pay his former wife.

Mr. Mudronja’s Grounds of Appeal

[7] Mr. Mudronja raises two arguments on appeal. He submits that the motion judge erred in calculating post-judgment interest on the equalization payment, both by calculating interest on an amount that Mr. Mudronja disputed and by applying the rate specified in the judgment of Seppi. J, as opposed to the rate stipulated in the later order of André J. Second, he argues that the periodic spousal support of $7,500 paid to Ms. Mudronja should have been credited against the post-judgment interest accruing on the equalization payment.

[8] We do not accept these arguments. The hearings before Barnes J. and André J. were in the nature of proceedings to enforce compliance with the judgment of Seppi J. Just because Mr. Mudronja disputed that he owed further funds on the equalization payment or sought a reduction in the amount because of spousal support paid – positions that were not accepted – does not mean that he does not owe post-judgment interest on that amount. Further, it is the original judgment giving rise to the entitlement that determines the rate of post-judgment interest.

[9] Seppi J.’s judgment is clear. Mr. Mudronja was to pay post-judgment interest on the equalization payment at the rate of three percent and was also to pay periodic spousal support until the equalization payment was made in full. The motion judge was correct to use this as the basis for determining the parties’ obligations. He was not hearing an appeal from the judgment of Seppi J. Accordingly, the interest owing on the equalization payment was $197,528.66 and the balance owing on the equalization payment was $69,379.12, for a total owing for equalization and interest on the equalization payment of $266,907.79.

Ms. Mudronja’s Grounds of Appeal

[10] Ms. Mudronja sought orders from Barnes J. to determine the amounts of post-judgment interest on the equalization payment, post-judgment interest on orders for lump sum payments of spousal and child support, and post-judgment interest on costs awarded to her, all in accordance with the judgment of Seppi J. On appeal she asks this court to settle the post-judgment interest owing on the arrears of spousal and child support and on the costs awarded in her favour. Although Barnes J. indicated an intention to deal with those matters at the beginning of his written decision, he did not deal with them. Further, Ms. Mudronja submits that he erred in calculating the guideline support payable by her as a result of a child going to live with the father. She submits that the Child Support Guidelines, O. Reg. 391/97, provide that in calculating income for the purpose of determining child support payable by a payor who is also a recipient of spousal support, the total income must be adjusted by deducting the spousal support received.

Post-judgment Interest Due to Ms. Mudronja

[11] At paragraph 10 (3) of his reasons, Barnes J. noted that one of the issues to be determined was “Does Mr. Mudronja owe Ms. Mudronja interest on unpaid support and cost award?”, but he did not deal with that issue. According to the material before this court, Mr. Mudronja paid the $12,000 balance of the costs award against him, due on November 23, 2015, on February 1, 2019. Ms. Mudronja says he owes her $766.03 on this amount. Seppi J. ordered retroactive child support in the sum of $150,000 on October 30, 2014. Since the funds were not paid until October 30, 2018, Ms. Mudronja claims post-judgment interest on this amount in the sum of $18,000. Seppi J. also ordered a lump sum retroactive spousal support payment of $136,760. Since these funds were also not paid until October 30, 2018, Ms. Mudronja claims post-judgment interest on this amount in the sum of $11,402.17, less $2,426.00 for payments by Mr. Mudronja since Barnes J. heard the motion, leaving $8,976.17 outstanding.

[12] Section 129(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that money owing under an order, including costs, bears interest at the post-judgment interest rate, calculated from the date of the order.

[13] Mr. Mudronja does not dispute the entitlement to or calculation of interest but submits that the interest on support arrears should be left to enforcement by the Family Responsibility Office.

[14] There is no reason why Ms. Mudronja is not entitled to interest on the late payments of costs or support in accordance with the judgment of Seppi J. The costs awarded by Seppi J. did not include an order that those costs were to be enforced as if they were a support order. The dispute about the equalization payment was much more substantial in monetary terms than the issue of arrears of support. Ms. Mudronja is entitled to enforce payment of the $766.03 interest on the late costs payment as she sees fit. On that basis, we would credit her with that further sum in the calculation of what Mr. Mudronja owes her.

[15] Section 6(7) of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, “FRSA”, provides that no person other than the Director shall enforce a support order that is filed in the Director’s office. “Support order” is defined in s. 1 as a “provision in an order made in or outside Ontario and enforceable in Ontario for the payment of money as support or maintenance and includes a provision for … (g) interest or the payment of legal fees or other expenses arising in relation to support or maintenance”. The order of Seppi J. provides at paragraph 12 that “[u]nless this support order is withdrawn from the office of the Director of the Family Responsibility Office, it shall be enforced by the Director and amounts owing under the support order shall be paid to the Director, who shall pay them to the person to whom they are owed.” The consent order of July 9, 2015 provides that “[i]f the parties agree to opt out of the Family Responsibility Office at any time, they are both required to file with the Offer [sic] of the Director of the Family Responsibility Office a separate written request consenting to the withdrawal of the Support Order and the Support Deduction Order.”

[16] We conclude therefore that the Family Responsibility Office is the proper authority to enforce the payment of the $18,000 interest on child support arrears and the $8,976.17 interest on spousal support arrears at this time, unless and until enforcement of support is withdrawn from that office. We will not add these to the amounts to be paid directly by Mr. Mudronja to Ms. Mudronja.

Determination of Ms. Mudronja’s Income to Calculate Her Child Support Obligations

[17] Section 16 of the Child Support Guidelines provides that “[s]ubject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.”

[18] Schedule III of the Child Support Guidelines provides, in s. 3(a), that support payments, other than child support, received by the payor from the other parent or spouse must be deducted when calculating the child support payor’s income. The motion judge included the spousal support in determining Ms. Mudronja’s child support obligations at paragraph 33:

At trial Ms. Mudronja’s income was inputted to be $20,000.00. In addition, since January 1, 2014, she has received monthly periodic spousal support of $7,500.00. Thus, an annual income of $110,000.00 is imputed to Ms. Mudronja. As per the Child Support Guidelines, the amount of monthly child support is $1,369.00. Over the 51-month period the amount of retroactive child support payable is $69,819.00.

[19] Seppi J. concluded that Ms. Mudronja was reasonably capable of earning $25,000 per annum. Applying the Guidelines to this amount results in a monthly child support payment of $200 over the 51-month period in issue, entitling Mr. Mudronja to $10,200 in retroactive child support, rather than the $69,819 ordered by the motion judge.

[20] This, too, is an order for support within the meaning of the FRSA, and an order will issue in the usual form directing payment to the Family Responsibility Office in respect of this amount.

[21] The result of the foregoing is that Mr. Mudronja’s appeal is dismissed. Ms. Mudronja’s cross-appeal is allowed. Paragraph 4 of the order of Barnes J. of November 25, 2019 is varied to substitute $10,200 for the retroactive child support ordered payable by Ms. Mudronja for the 51-month period to July 1, 2019. Paragraph 5 is varied to recalculate the balance owing on the equalization payment, interest on the equalization payment, and interest on costs owed by Mr. Mudronja, to provide that Mr. Mudronja shall pay Ms. Mudronja $267,673.82 to satisfy these aspects of the order of Seppi J. Ms. Mudronja is at liberty to enforce payment of that amount as she sees fit. That paragraph is further varied to provide that Mr. Mudronja is to pay the interest owing on the spousal and child support (totaling $26,976.17) to the Family Responsibility Office, and that Ms. Mudronja is to pay the retroactive child support in the sum of $10,200 to the same office, leaving a net amount owed in respect of support by Mr. Mudronja of $16,776.17, as at July 1, 2019. This amount shall be enforced by the Family Responsibility Office unless and until enforcement is withdrawn from that office, in accordance with the order of André J. or any subsequent order of the Superior Court permitting Ms. Mudronja to withdraw the enforcement of the order unilaterally.

The Motion for Leave to Appeal Costs

[22] Mr. Mudronja also seeks leave to appeal from the award of costs against him by Barnes J. on June 3, 2020, in the sum of $111,372.17. Barnes J. concluded that Mr. Mudronja took active steps to delay and frustrate compliance with the final order of Seppi J. and characterized his behaviour as unreasonable and in bad faith. These findings were reasonably available on the evidence and were factors properly considered in assessing costs and specifically stipulated under r. 24(8) of the Family Law Rules, O. Reg. 114/99. The motion judge concluded that Ms. Mudronja was entitled to full recovery of her costs and assessed the reasonableness of those costs claimed by her.

[23] Leave to appeal costs is granted sparingly and we are not convinced that there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion” (Brad-Jay Investments Ltd. v. Village Developments Ltd. (2006), 2006 42636 (ON CA), 218 O.A.C. 315 (C.A.), leave to appeal refused, [2007] S.C.C.A. No. 92).

[24] The motion for leave to appeal costs is dismissed.

[25] The parties may make brief written submissions regarding the costs of this appeal, and the motion for leave to appeal costs, due from Ms. Mudronja within 10 days of the release of this decision, and from Mr. Mudronja within 7 days after he receives Ms. Mudronja’s costs submissions.

“K. van Rensburg J.A.”

“G. Pardu J.A.”

“Grant Huscroft J.A.”