SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS-08-64289-00
DATE: 2012-05-01
RE: Eddy Mudronja v. Marijana Mudronja
BEFORE: Van Melle J.
COUNSEL: Kelvin Ford, for the Applicant
Pathik Baxi, for the Respondent
MOTION CONTINUED: March 16, 2012
E N D O R S E M E N T
[ 1 ] In my endorsement from November 8, 2011, I adjourned some of the relief sought for further information. As of April 19, 2012 all the information in support of the motion has been received by me. Additional submissions were made on March 16, 2012. The issues that remain for each party are:
[ 2 ] Eddy Mudronja:
a) An Order holding Marijana in contempt of paragraph 10 of my Order dated April 5, 2011.
b) An Order varying the Order of Justice Lemon dated December 23, 2008 reducing Eddy’s spousal support payments to reflect the mortgage payment required on a bi-weekly basis effective September 16, 2011.
c) An Order for Partition and Sale of the matrimonial home and in furtherance of such, an Order directing that the matrimonial home be sold to Eddy on terms consistent with the proposal of purchase and sale attached as Schedule “A” to the Notice of Motion dated October 31, 2011.
d) Costs.
[ 3 ] Marijana Mudronja:
a) An Order granting an advance payment of $400,000.00 as an interim advance payment from Eddy, the characterization of this payment to be determined by the trial judges, or in the alternative an advance equalization payment in the amount of $400,000.00 from Eddy.
b) An Order varying the Order of Justice Lemon dated December 30, 2008 with respect to interim spousal support from $5,000.00 per month based on an income of $201,459.00 to $22,175.00 a month based on Eddy’s 2009 income of $716,000.00.
c) An Order varying the Order of Justice Lemon dated December 30, 2008 with respect to interim child support from $1,635.00 per month based on an income of $201,459.00 to $5,442.00 a month based on Eddy’s 2009 income of $716,000.00.
d) An Order that Eddy pay his proportionate share of Thomas’ special and extraordinary expenses, in accordance with his 2009 income of $716,000.00.
e) An Order that the interim spousal support, interim child support and interim payment of special and extraordinary expenses be retroactive to December 1, 2008 on a without prejudice basis to either party to claim a different amount at trial.
f) An Order requiring Eddy to provide for his one-half share of the repairs necessary to the matrimonial home after the application of any available insurance coverage.
g) An Order requiring Eddy to provide for full payment of any extra costs associated with the repairs to the matrimonial home to which he has unnecessarily and unreasonably delayed.
h) An Order dispensing with Eddy’s consent to any work to be done and/or repairs to the matrimonial home.
i) An Order requiring Eddy to execute and deliver in favour of Marijana the General Security Agreement attached to Marijana’s Notice of Motion as Schedule “A”.
j) In the alternative to (i), an Order appointing a private receiver to operate Jitsu Manufacturing Inc. and Mareddy Corp.
k) In the alternative to (i) or (j), an Order that Eddy be restrained from depleting, disposing, transferring any interest in same, or encumbering the companies Jitsu Manufacturing Inc. and Mareddy Corp.
l) an Order barring Eddy from bringing any further motions, nor taking any further steps in the within matter, until he has complied with the outstanding disclosure, as set out in a Request for Information, dated October 31, 2011, and in accordance with the Rules.
m) Costs.
[ 4 ] At the hearing on March 16, 2013, Mr. Ford, on behalf of Eddy, advised that despite taking the position in his Application, that the date of separation was August 2006, since November, 2010 Eddy has been in agreement with Marijana’s date of separation which is November 27, 2007.
[ 5 ] At the outset, I can state that I decline to order Eddy to execute and deliver in favour of Marijana a General Security Agreement, and I am not going to order the appointment of a private receiver to operate or monitor Jitsu Manufacturing Inc. or Mareddy Corp. There is no need for such a drastic remedy. I am not persuaded that Eddy is not properly operating the corporations.
[ 6 ] I am also not going to bar Eddy from bringing any further motions, nor taking any further steps in this proceeding until he has complied with the disclosure requested by Marijana by way of Request for Information. Eddy says that he has made most of the requested disclosure and I would not in any event make such an order without a detailed listing and consideration as to what has not been produced and why it is required.
CONTEMPT
[ 7 ] Eddy’s request that Marijana be held in contempt relates to an Order that I made on consent on April 5, 2011. Part of the Order addressed Eddy’s wish to take Thomas to Croatia for a family vacation from August 1 to 23, 2011. Eddy notified Marijana of his travel times in advance. Marijana was required to provide Eddy with Thomas’ passport and a notarized Travel Consent.
[ 8 ] Paragraph 10 of my Order states:
For the summer of 2011, Thomas shall spend 22 consecutive days of holiday time with the Applicant in order to travel with the Applicant to Croatia and travel with the Applicant back to Canada. The respondent shall be entitled to a similar period of holiday time with Thomas. The applicant shall provide the respondent with 45 days notice as to the dates for such trip together with an itinerary, address and contact numbers at which Thomas may be reached. The applicant shall be present in Croatia with Thomas for the duration of the entire trip. The Respondent shall provide the Applicant with Thomas’ passport 10 days prior to the departure date of such trip and will also provide a notarized Consent to Travel. In future years, the holiday period shall be 14 days and any holiday plans for travel outside North America shall be subject to Thomas’ wishes as shall any extension proposed by either party as to the duration of the holiday period. The regular weekend access period shall be suspended so as to facilitate this.
[ 9 ] Marijana provided the Travel Consent but did not provide Thomas’ passport. On July 25, 2011 she advised Eddy that she did not have Thomas’ passport. Eddy brought an urgent motion on July 26, 2011.
[ 10 ] Mr. Ford, Eddy’s counsel advised Mr. Baxi, Marijana’s counsel that attendance at the motion would not be necessary if Marijana signed a passport application and made Thomas available to have his passport photo taken. Mr. Baxi agreed via e-mail at 11:22 a.m. on July 26 by which time the motion materials had already been filed with Justice Sproat. Justice Sproat made an Order to that effect. He also ordered that:
The default of the Respondent in complying with the Order of Madam Justice Van Melle made April 5, 2011 as it relates to this issue and the issue of the Applicant’s entitlement of costs with respect to the bringing of the motion shall, subject to her consent, be determined by Justice Van Melle on such date as she may determine.
[ 11 ] Marijana signed the passport application but she did not make Thomas available for pick up. Marijana said that Thomas refused to have his photo taken and refused to go on the trip “for his own reasons”. Eddy believes that Marijana influenced Thomas so that he would not want to go as he had not expressed any reluctance to go on the trip prior to July 26, 2011. As a result the trip to Croatia was cancelled at a cost to Eddy of almost $6,000.00, not including Eddy’s legal fees for bringing the motion on July 26 th .
[ 12 ] Marijana denied that she was in contempt of my order. She said that she did everything in her power to ensure that Thomas’ passport photos were done and to encourage him to travel with his father.
[ 13 ] I agree with Eddy that it appears that Marijana has influenced Thomas so that he did not want to travel with his father. However, the standard in contempt is the criminal standard of proof beyond a reasonable doubt. The information provided by Eddy does not rise to the level. However, Marijana should have advised Eddy long before July 25, 2011 that she did not have Thomas’ passport. The consent was signed in April and she should have advised Eddy at that time. Her behaviour in this regard was totally unreasonable. Eddy shall have his costs thrown away of the trip and his costs of the appearance before Justice Sproat.
ADVANCE PAYMENT
[ 14 ] In November, I advised Mr. Baxi that I would require on behalf of Marijana:
a) A litigation budget for Marijana setting out the anticipated cost to complete the valuation and the anticipated cost of legal fees and related disbursements;
b) A list of the repairs that are absolutely required for health and safety reasons to the matrimonial home, itemized to include the cost for each item;
c) Information as to the amount of money that Marijana received from the insurance company and what the money was intended to cover. It would be useful for me to know as well what the funds have been used for if indeed they have been expended.
[ 15 ] The litigation budget provided by Mr. Baxi indicates that the $400,000.00 advance payment claimed is made up of the following:
$300,000.00 in legal fees;
$40,000.00 for Melanie Russell of Kalex Valuations to finalize the valuation report and testify at trial;
$50,000.00 for Steve McIntyre, MG Forensics; and
$10,000.00 Contingent Expenses.
[ 16 ] I note that Marijana has already received $168,000.00 made up of the following:
$43,000.00 from Thomas’ bank account;
$70,000.00 advance payment pursuant to my order of May 19, 2009;
$55,000.00 from the Line of Credit against the matrimonial home.
[ 17 ] She should have used this money to fund the valuation. Her previous counsel, Mr. Philbert indicated that the increased cost for the valuation resulted from Marijana’s attempt to involve herself in the valuation process. She must let Ms. Russell do her job. I am concerned that the valuation has stalled because Marijana has run out of money with which to pay for it.
[ 18 ] In my decision of May 19, 2009, I dealt with the first request for an advance payment. I stated that I felt that ordering an advance payment against equalization was akin to granting summary judgment. In this motion Marijana is still asking for an advance against equalization. A court must be assured that a party is either going to end up with more than the advance payment being sought, or that the other party will have to pay at least that much in costs at the end of the proceeding. In support of this motion, no up-to-date Net Family Property Statements have been produced. At the motion in April of 2009, Marijana calculated that she was due an equalization payment of $792,730.42 and Eddy calculated that he owed an equalization payment of $299,008.33. Of note is the fact that in this proceeding, Eddy claims an unequal division of Net Family Property, which Mr. Ford has indicated is based on the case of Serra v. Serra, 2009 ONCA 105.
[ 19 ] In all the circumstances, considering the amounts of money that Marijana has already received and looking at an equalization payment that Marijana could hope to receive, an advance of $100,000.00 is appropriate and one that Eddy should be able to raise. In May, 2009 I noted that he was able to purchase a home at that time for some $2 million. He has since sold that home and realized a profit which he says that for the most part he has put back into the businesses. He is, however, still able to live in a home worth in excess of $1,000,000.00. He should be able to raise the funds. $50,000.00 is to be paid to Marijana within 60 days and the balance with 120 days.
[ 20 ] It is imperative that the valuation be completed right away and that serious settlement discussions take place or that the matter proceed to trial. There will be no further advance payment . If Marijana requires funds in addition to this advance she will have to consider selling the matrimonial home to realize her interest or she will have to find employment and raise some money that way.
[ 21 ] Marijana will have to account for her use of these funds. The characterization of the payment will be left to the trial judge.
VARIATION OF ONGOING SUPPORT PAYMENTS
[ 22 ] I asked Mr. Ford to provide me with an update of the report by Pettinelli Mastroluisi Consulting Inc. to set out the actual income that the author of the report, Jeff Marino, believes Eddy earned for 2009 and for 2010 and any information available for 2011.
[ 23 ] Regarding the support increase asked for by Marijana, Mr. Ford submits that we cannot overlook the fact that Eddy Jr. has resided with Eddy. He is going to university and since separation, Eddy has borne all of the costs with respect to Eddy Jr.
[ 24 ] He submits as well that since November 2007 Marijana has not in any way made any efforts to contribute to her own support.
[ 25 ] Marijana takes the position that support should be calculated on $716,000 which is Ms. Russell’s calculation of Eddy’s income for 2009. She is seeking child support in the amount of $5,442.00 per month and spousal support of $22,175.00 per month, retroactive to December 2008.
[ 26 ] Mr. Marino states that Eddy’s income for support purposes is as follows:
2006 $467,000
2007 $368,000
2008 $232,000
2009 $200,000
2010 $192,000
2011 $192,000
[ 27 ] The rationale, put forward by Mr. Marino, for the decrease in income is that the recession in 2008 hit the auto sector particularly hard, especially smaller parts suppliers. As well, one of the major clients, Mitsubishi has eliminated all Canadian parts supplier and the current agreement with Jitsu will expire in the Spring of 2012. Given the current economic climate, I find this to be a credible explanation for the purposes of this motion only.
[ 28 ] The current level of support was set by Justice Lemon in December 2008 and was based on an annual income of $201,459. The monthly payments for spousal support alone are $5,000.00 and should be sufficient to meet Marijana’s needs until trial. I see no reason to vary that order at this time. A trial is required to determine Eddy’s income.
[ 29 ] In December 2011 I made an Order that any payments made by Eddy to the Bank of Nova Scotia for mortgage payments are tax deductible to him pursuant to the Income Tax Act . He had made some payments on the mortgage that were not credited to his spousal support obligation. I am not going to make an Order at this time that those payments be credited to spousal support, although any payments made on the mortgage by him after December 16, 2011 are to be credited to spousal support. The “extra” payments can be dealt with at trial.
REPAIRS TO THE MATRIMONIAL HOME
[ 30 ] I also asked Mr. Baxi for a list of items that absolutely had to be repaired in the matrimonial home for safety reasons. The list prepared by Marijana includes items that are not absolutely required to be repaired, for example, suggested repairs to the swimming pool. In my view, the only item that is needed for safety is the mould remediation. The quote that Marijana has from 2010 indicates that the cost for the mould remediation will be $81,000.00. In light of this issue, I remain concerned that Marijana will not agree to sell the house. I do not understand why she continues to subject herself and Thomas to life in a house with the problems to which she deposes have existed for all this time. She and Thomas have however managed to live in the house without mould remediation since the separation and will have to continue to do so pending trial. It is absolutely imperative to get this matter on for trial as quickly as possible.
PARTITION AND SALE OF MATRIMONIAL HOME
[ 31 ] Eddy seeks an order for partition and sale of the matrimonial home and an order directing that the matrimonial home be sold to him. I cannot make an order that the matrimonial home be sold to him. Such an order is not supported by case law.
[ 32 ] I decline to make an order for partition and sale at this time. Marijana takes the position that she will be in a position to set off Eddy’s interest in the matrimonial home against his equalization payment to her. Marijana argues as well, that Eddy is living in a home worth in excess of $1,000,000.00 and she should not have to downsize.
[ 33 ] My concern is that Marijana is expending a great deal of money on legal fees and experts and that when the litigation is over, even if she receives a large equalization payment most of it will have been spent on the litigation. As well, from the affidavit evidence filed on behalf of Marijana it appears that the matrimonial home is in deplorable condition and will continue to deteriorate. It makes a great deal of sense to sell the home now and downsize. For the time being, that remains Marijana’s decision to make.
[ 34 ] Orders will issue reflecting the foregoing. The parties may make costs submissions, not to exceed 3 pages in addition to a costs outline. Eddy’s costs submissions are to be served and filed within 15 days of today’s date, Marijana has 15 days to Reply and Eddy has a further 5 days to make final submissions. As well, given the truncated nature of this motion, if I have overlooked anything, I may be spoken to.
VAN MELLE J.
DATE: May 1, 2012
COURT FILE NO.: FS-08-64289-00
DATE: 2012-05-01
SUPERIOR COURT OF JUSTICE - ONTARIO RE: Eddy Mudronja v. Marijana Mudronja BEFORE: Van Melle J. COUNSEL: Kelvin Ford, for the Applicant Pathik Baxi, for the Respondent ENDORSEMENT Van Melle J.
DATE: May 1, 2012