Varjacic v. Radoja, CITATION: 2018 ONSC 1650

COURT FILE NO.: CV-12-470665

CV-15-55177

CV-15-55465

DATE: 2018-03-12

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: CV-12-470665

Dragan Varjacic and Miroslav Milenkovic, Applicants

AND: Royal Yugoslav Army Combatants Association in Canada – Draza Mihailovic, Sveto Volandovic, Nenad Radoja, Susan Glenn and Milan Djordjevic, Respondent

AND RE: CV-15-55177

Nenad Radoja and Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic, Applicants

AND: Dragan Varjacic, Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic Inc., Rade Cavic, Stevo Gajic, Ljubornir Jovancevic and Djuro Zdero, Respondents

AND RE: CV-15-554465

Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic Inc., Applicant

AND: Nenad Radoja and Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic, Respondents

BEFORE: Mr Justice Ramsay

COUNSEL: Eric Freedman for Dragan Varjacic; Dean Peroff for Nenad Radoja, Richard H. Parker QC for Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic. Rade Cavic representing himself and with leave of the court Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic Inc.

HEARD: March 9, 2018 at Hamilton

ENDORSEMENT

[1] These three applications were set down for trial and then struck from the list. Four motions were before me today. In one of them, I gave leave to Mr Cavic to represent the corporate party. This endorsement deals with the remaining three motions.

The litigation

[2] The litigation concerns a building and piece of land owned by the Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic (“the unincorporated Association”). In 2010, the president of the association, Radoja, expelled a number of members from the Association, including Varjacic. With the approval of the remaining members, he transferred title to the property to his own name and sought permission from the court to sell it and receive the proceeds in trust for the unincorporated Association. In 2012 Varjacic brought the Application in file 12-470665 to challenge this. A number of expelled members formed a corporation, Royal Yugoslav Army Combatants Association in Canada Draza Mihailovic Inc. (“the corporate Association”), to challenge the sale and the expulsions and to carry on the work of the Association. In 2015 Radoja filed the Application in file 15-55177 in response to Varjacic’s Application. The same year the corporate Association filed the Application in 15-55465, claiming a declaration that the Association’s membership included the expelled members, who were listed in the pleading.

[3] On January 26, 2016 Carpenter-Gunn J. consolidated the Applications and converted them to an action, with comprehensive directions including a timetable and orders preserving the property. In compliance with this order the property was re-conveyed to the unincorporated Association. The matter was set down for trial but later struck from the list, apparently because of a change of counsel.

The motions

[4] On behalf of the unincorporated Association and its current president, Natasha Varjacic, Mr Parker asked for an order declaring that the membership of the Association consists of 42 named persons. The list includes all persons considered parties by the present leadership of the Association and by Radoja.

[5] On behalf of Radoja, Mr Peroff asks that the unincorporated Association’s motion be dismissed, that its involvement in the action be terminated for lack of standing and that the corporate Association’s Application be dismissed, again for lack of standing.

[6] Dragan Varjacic does not oppose Radoja’s motions.

[7] The corporate Association supports the unincorporated Association.

Declaration of membership

[8] This motion asks me to give the unincorporated Association the relief it seeks in the Application in spite of its conversion to an action. The membership of the Association, whether now or at a relevant time in the past, cannot be determined on the written record. There are serious factual disputes which can only be resolved by hearing live evidence. Carpenter-Gunn J. already decided so. That is reason enough to dismiss the motion.

Standing of the Association, unincorporated and incorporated

[9] The unincorporated Association is not a legal entity. It cannot sue or be sued. Natasha Varjacic has an interest as a member of the Association and as a person who paid $20,000 worth of property tax out of her own pocket, but she is not a party. If she has not yet decided to join the litigation as a party, no one else can sue for her.

[10] The incorporated Association is a legal entity but it has no interest in the litigation. It has no connection to the property. Members of the corporation may have an interest as members of the Association, but their interest is not the corporation’s. See Polish National Catholic Church of Canada v. Polish National Catholic Church, 2014 ONSC 4501, [2014] O.J. No. 3750 (SCJ, Archibald J.). In the Polish Church case, the corporate plaintiff was a member of the unincorporated defendant. The situation is even more pronounced here. The corporation came into being as a result of the dispute, and at least in part it seems to me for the purpose of protecting the complaining members from exposure to costs.

[11] Accordingly, I make the following orders:

a. The unincorporated Association’s motion is dismissed.

b. The corporate Association’s Application in 15-55465 is dismissed.

c. All proceedings in these three files for or against the unincorporated Association and the corporate Association are dismissed.

[12] I do not agree with the submission of counsel for Radoja that the order of Carpenter-Gunn J. was made in file 15-55465 and is therefore spent. The terms of the order applied expressly to all three files. In view of the developments since the order was made, however, some adjustments are needed. For greater certainty I shall reiterate the parts of the order that I do not change. I order as follows:

a. The order of Carpenter-Gunn J. of January 26, 2016 in file CV-15-554465 remains in force, except for paragraphs 3 and 4. For the purposes of paragraphs 5, 6, 9, 12 and 13 only, “parties to the proceedings” and “parties” includes Natasha Varjacic, the unincorporated Association and the corporate Association as well as the parties to the action.

b. The proceedings shall continue as an action under file number CV-12-470665 and shall be tried together without a jury at Hamilton.

c. The style of cause shall be amended to read:

i. Dragan Varjacic and Miroslav Milenkovic, plaintiffs;

ii. Nenad Radoja, Sveto Volanovic, Susan Glenn and Milan Djordevic, defendants and plaintiffs by counter-claim;

iii. Dragan Varjacic, and Miroslav Milenkovic, defendants by counterclaim.

iv. Rade Cavic, Stevo Gajic, Ljubornir Jovancevic and Djuro Zdero, third parties.

v. The matter is restored to the trial list. It shall be spoken to at the assignment court of April 18, 2018 when dates for judicial pre-trial and trial shall be set.

vi. The plaintiff shall file a new trial record under the new file number and style of cause. The new trial record shall include the contents of the previous trial record and this order.

vii. The issues at trial shall be determined at the judicial pre-trial.

[13] There will be no costs with respect to today’s motions. Dragan Varjacic and Nenad Radoja were essentially in agreement. Both were successful. The unincorporated Association is not an entity and costs cannot be ordered against it. The corporate Association likely has no assets upon which to execute. I would not order costs against either in any event. Their involvement, while unsuccessful, was not ill-intentioned.

[14] The Registrar may sign an order with approval of Messrs Freedman, Peroff and Parker.

J.A. Ramsay J.

Date: 2018-03-12