SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 12-CV-457029

DATE: 2013/09/19

RE: Vogrin v. Hrvojic

BEFORE: Moore J.

COUNSEL: Ronald G. Chapman, for the Plaintiff

Ivan Hrvojic and Nada Hrvojic, in person

E N D O R S E M E N T

[1] The plaintiff moves for summary judgment against Ivan Hrvojic for $33,939.00 plus interest thereon in the amount of 10% per annum since March 20, 2010.

[2] Against both defendants, the plaintiff seeks a declaration setting aside the transfer of land from Ivan and Nada Hrvojic to Nada Hrvojic on June 25, 2009, No. PR1658653, as the transfer of land was made at a time when Ivan Hrvojic was insolvent and unable to pay his debts, including his debt then owing the plaintiff, as fraudulent and void against the plaintiff.

[3] Ivan Hrvojic freely acknowledges his indebtedness to the plaintiff in the amount claimed and consents to judgment accordingly.

[4] The defendants dispute the plaintiff’s right to the declarations sought that the transfer in question was fraudulent, that the lands are liable to satisfy the plaintiff’s claims insofar as Ivan Hrvojic’s ownership in said lands is concerned and/or the plaintiff’s entitlement to a certificate of pending litigation against the lands.

[5] The plaintiff loaned money to Ivan Hrvojic at times including the time when he owned the property municipally known as 2065 Kempton Park Drive, Mississauga, Ontario, legally described as PCL 42-1, Sec 43M551; LT 42, PL 43M551; S/T LT6519080, LT519081, PIN 13384-0311 LT.

[6] The property was sold as described above. The transfer document described consideration for the transfer, registered as instrument no. PR1658653, to be “inter-spousal transfer for natural love and affection.”

[7] In her affidavit filed on this application however, Nada Hrvojic asserts that in 2009, her husband was experiencing financial difficulties and he requested that she loan him funds in order that he might qualify for a Consumers Proposal and to keep his business operating. She agreed to loan him $9200 on June 22, 2009 but, in return, demanded a transfer of the property into her name. Ownership was transferred on June 25, 2009. She asserts that this was a bona fide loan and that she expects to be paid.

[8] Ivan Hrvojic asserted, in his affidavit, that at the time of this loan transaction with his wife, he considered that, taking into account a few previous remortgages of the family home to finance his business, direct loans to his business, his portion of equity in the home then was close to zero. In argument on the motion however he stated that but for the loans from his wife, his equity in the home was about $100,000.

[9] The plaintiff has filed expert evidence asserting that the property may be fairly valued at approximately $665,000 as of March 2013. The defendants filed no expert evidence regarding the value of property at issue at any time.

[10] The defendants both submit that they mortgaged the property from time to time and insist that given the undocumented funding of costs associated with maintaining the property by Nada Hrvojic over the years and the undocumented assertions that she loaned money to her husband, his net financial interest in the property at the time of this transfer in 2009 was near zero.

[11] The plaintiff correctly asserts that as the transfer in question was one between spouses and made at a time when at least one of the spouses was indebted to plaintiff, the onus rests with the defendants to establish that the transaction was bona fide and made at fair value. Put another way, defendants must establish that if the transfer was indeed the result of an agreement between husband and wife by which she loaned him $9200 in exchange for which he signed over his interest in the property, his equity interest at the time must demonstrably be established to approximate or be less than the amount borrowed.

[12] The plaintiff correctly points out that there is no evidence that the $9200 in question is anything that might be related to fair market value. He insists therefore that the only reasonable inference to be drawn is that the defendants wanted to keep the property away from creditors and the plaintiff was a creditor of Mr. Hrvojic at the time.

[13] In the face of an application such as this one, the defendants cannot rest upon unproven assertions and must put their best foot forward in response to the plaintiff's claims. It is not enough to attest to vague equity values in affidavits or to raise arguments in submissions on this application. The defendants must tender cogent, admissible and relevant evidence.

[14] By way of example, Nada Hrvojic asserts that the $9200 was not the only money that she gave to her husband to pay his business debts over the years. She asserts that they remortgaged their home several times since the purchase of the home in order to finance his debts and that the money was never repaid. She further insists that she gave her husband over $72,000, money withdrawn from her credit cards, at his insistence in order to finance his business debts and that money was never repaid.

[15] She submits that she felt, considering all the money he took from her and out of the property over the years, his equity in the home was close to nil. She submits that, in her opinion, the transfer was only a formality because she had moved so much money over time. And she disputes the evidence of the plaintiff’s expert as to the value of property.

[16] But, the defendants have not put forward evidence to support these positions. Mr. Hrvojic has not responded with evidence regarding his understanding of his equity in the property and his intent regarding its transfer at a time when he concedes he was insolvent but indebted to the plaintiff. He took steps to file for consumer protection from his unsecured creditors but the evidence on this application confirms that he did not list the plaintiff as a creditor.

[17] In the result I am compelled to find that the defendants have failed to meet the onus upon them to demonstrate that the transfer of the property was a legitimate transfer and not one aimed at sheltering it from unsecured creditors including the plaintiff.

[18] The plaintiff shall have judgment as detailed in paragraph one, above, and declarations as detailed in paragraph two. The plaintiff shall also recover costs of this application.

[19] The plaintiff seeks costs alternately on a partial or substantial indemnity basis. In my view the lower level of costs is appropriate. In that level, he seeks $9,942.55, inclusive of fees, disbursements and applicable HST. The defendants take no specific issue with the submissions supporting the plaintiff’s claims for costs save to point out that they tried to resolve the matter without success. They suggest the plaintiff’s claim be fixed at one half the amount claimed.

[20] In fixing costs the court looks to the many factors set out in rule 57 and the overall reasonableness of the amount to be awarded. Having done this and having considered the submissions of the parties, I fix and award the plaintiff costs of $5,500.00 inclusive.

Moore J.

DATE: September 19, 2013