COURT FILE NO.: FS-08-64289-00

DATE: 2019 11 25

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: EDDY MUDRONJA, Applicant

• AND -

MARIJANA MUDRONJA, Respondent

BEFORE: Barnes J.

COUNSEL: Evelyn Rayson, Counsel for the Applicant

Avneet Virk, Counsel for the Respondent

HEARD: July 3, 2019

ENDORSEMENT

INTRODUCTION

Introduction

1The Applicant (Mr. Mudronja) and the Respondent (Ms. Mudronja) are divorced. The parties have two children. Family law matters were settled between them on a final basis by Justice Seppi in Mudronja v. Mudronja, 2014 ONSC 6217 (Final Order). Mr. Mudronja was ordered to make an equalization payment of $1,796,550.00 to Ms. Mudronja.

2Aspects of the Final Order were varied by a Consent Order of Justice André on July 9,2015 (Consent Order). The intent of the Consent Order was to bring the parties in compliance with aspects of the Final Order.

3Mr. Mudronja seeks retroactive and ongoing child support for their second child Thomas Mudronja and various credits to reduce the equalization payment. Ms. Mudronja seeks post judgment interest on the equalization payment and a removal of an interim restraining order against her.

BACKGROUND

Background

4The Final Order included the following orders, Mudronja, at para. 183:

(1) The applicant shall pay the respondent an equalization payment of $1,796,550.

(2) (a) The matrimonial home located at 5197 Elmridge Drive shall be listed for sale by no later than February 16, 2015 and sold with an agent selected by the parties, or, failing their agreement by their counsel;

(b) The net proceeds of sale, after payment of all encumbrances, including any liens, plus all outstanding claims on account of the maintenance and repair of the home shall be divided equally [emphasis added];

(c) The applicant’s one-half share of the net proceeds from the sale shall be paid to the respondent as partial payment of the equalization payment, and credited accordingly to the applicant;

(d) In the event the respondent neglects or refuses to cooperate with listing the property in accordance with this Order, on or before February 16, 2015, her consent to the listing and sale shall be dispensed with, effective February 17, 2015, and the applicant shall then be authorized to sign all documentation to effect a sale at fair market value;

(e) The respondent may offer to purchase the property on the market in open competition with other interested purchasers;

(f) The respondent shall allow all showings requested and scheduled by the listing agent;

(g) Any and all repairs to the home, as undertaken on consent by the parties pending the listing, shall be paid by them in equal shares. Failing agreement on repairs the property shall be listed and sold “as is”;

(3) The applicant shall pay the respondent a retroactive child support payment of $150,000, and a lump sum retroactive spousal support payment of $136,760.

(4) The applicant shall pay periodic spousal support of $7,500 per month commencing January 1, 2014 which payments shall continue until the full payment for equalization and retroactive support has been paid in accordance with this order, after which spousal support will terminate, without prejudice to a review in the event of an unanticipated and material change of circumstances.

(5) Interest on payments are to be calculated at 3% per annum.

5As of July 9, 2015, several aspects of the Final Order had not been complied with. On that date, the parties obtained a consent order from Justice André which varied aspects of the Final Order. Some of the variations include:

(1) The purchase price of the matrimonial home was set at $1,350,000.00. Ms. Mudronja was to purchase Mr. Mudronja’s interest in the matrimonial home. Ms. Mudronja was to assume a new mortgage on the matrimonial home.

(2) Mr. Mudronja was to pay $2,300.00 per month towards the lump sum spousal support arrears ordered by Justice Seppi.

(3) The Lincoln Navigator was to be transferred to Ms. Mudronja for $3,000.00 which would be credited towards Mr. Mudronja’s equalization payment.

6The Consent Order affirmed that net proceeds of sale shall be determined by deducting all the “mortgages and encumbrances registered thereon” and Mr. Mudronja’s half share of “the net proceeds shall be credited towards [Mr. Mudronja’s equalization payment due and owing to [Ms. Mudronja] pursuant to the [Final Order]”.

7The parties continued to have a dispute over the amount of the equalization payment outstanding. In late December 2018, Ms. Mudronja brought a motion to request financial disclosure from Mr. Mudronja. Mr. Mudronja by cross motion requested the court’s direction on the quantum of outstanding equalization payment claiming various credits to reduce the amount outstanding and a direction on the amount of interest owed.

8On January 25, 2019, Justice André ordered these motions to be consolidated into this long motion and ordered Mr. Mudronja to pay Ms. Mudronja 1.30 million dollars in certain instalments by July 1^st, 2019.

9At the time of this motion, it was assumed by the parties that Mr. Mudronja had completed payment as per the schedule set in the January 25, 2019 Order. The issues of retroactive spousal and child support under the Final Order have been dealt with. The issues left for resolution in this motion are set out below.

ISSUES

Issues

10This motion raises the following issues:

(1) What credits should Mr. Mudronja receive towards the equalization payment?

(2) Is Mr. Mudronja responsible for half of the Juff’s lien on the matrimonial home?

(3) Does Mr. Mudronja owe Ms. Mudronja interest on unpaid support and cost award?

(4) Should the Temporary Restraining Order of December 18, 2010 be terminated?

(5) Should Ms. Mudronja pay retroactive child support for Thomas Mudronja for the 51-month period retroactive from July 1, 2019?

DISCUSSION

Discussion

11The focus of this motion is the enforcement of the Final Order and the Consent Order. Generally, absent and appeal and subject to some certain circumstances such as where the Final Order was contained fraudulently, a Final Order cannot be changed unless there is a material change in circumstances. A change in circumstance is material where if known at the time the Final Order was made will have caused the Court to make a different order: Willick v. Willick, 1995 CanLII 65 (SCC), 15 R.F.L. (4^th) 201 (S.C.C.). This is not an appeal.

Periodic Spousal Support as Credit

Periodic Spousal Support as Credit

12In accordance with the Consent Order, the matrimonial home was valued at $1,360,000.00; $488,833 of Mr. Mudronja’ s equity and $3,000.00 attributed to the Lincoln Navigator was credited to Mr. Mudronja’ s equalization payment. A total of $491,833.00.

13The Final Order states that $7,500.00 of periodic spousal support shall be paid to Ms. Mudronja until the equalization payment has been paid in full. Mr. Mudronja submits that since the partial equalisation payment of $491,833.00 represents 27% of the equalization payment awarded, he should receive a credit of 27% ($2,053.24) for each monthly spousal support payment he made until the equalization payment was made in full. He seeks credit over 96 months totalling $94,449.00.

14Justice Seppi was very thorough in her reasons and Orders made. Upon a review of the entirety of her reasons for decision, it is apparent that it was not Justice Seppi’s intention for Mr. Mudronja to be credited for any of the periodic support payments. The intent of the learned justice is clear and unambiguous. The periodic payments were to end when the equalization payment was made in full. No order was made for the equalization payment to be reduced by the amount of periodic spousal support made. The order did not contemplate credit for periodic spousal support payments made by Mr. Mudronja. Mr. Mudronja shall receive no credit for these payments

Juff’s Lien

Juff’s Lien

15The parties agree that in June 2012, a lien was registered by Juff’s Roofing on the matrimonial home in the amount of $40,000.00. Mr. Mudronja’ s half share of the lien is $20,000.00. The Final and Consent Orders require the amounts of any encumbrance on the matrimonial home to be shared equally between the parties.

16The Final Order specifically includes the term lien. Section 1 of the Mortgages Act, R.S.O. 1990, Chapter 1 defines an “encumbrance” to include a lien. Mr. Mudronja’ s payment of his half share of the lien is mandated by the Final Order and the Consent Order.

17Mr. Mudronja submits that he should not pay for his share of the lien because Ms. Mudronja caused a lien to be placed on the matrimonial home in violation of a preservation order and Ms. Mudronja has received insurance payments from State Farm Insurance Company for the roof damage. The issue of the preservation order predates the Final Order and I do not have the jurisdiction to consider that matter within the confines of this motion. The Final Order mandates that liens on the matrimonial home shall be shared equally.

18I accept Ms. Mudronja’s evidence that the payments referred to by Mr. Mudronja covers loss that occurred on March 16, 2011 with payments received on June 24, 2011. The claim by Juff’s is for a different period - February 22, 2012 to March 6, 2012. Thus, the payments Mr. Mudronja references are not in relation to the Juff claim. Therefore, in accordance with the Final and Consent Orders, Mr. Mudronja shall pay Ms. Mudronja $20,000.00 for his share of the lien.

Cassels Brock Legal Costs

Cassels Brock Legal Costs

19Ms. Mudronja seeks an order requiring Mr. Mudronja to pay one half of $9,907.27. This amount was paid by Ms. Mudronja and represents legal costs associated with a claim for default payments of Mr. Mudronja’ s line of credit secured by the matrimonial home. Ms. Mudronja provided proof of this payment. I accept her evidence. Legal costs associated with the matrimonial home are captured by the Final Order. Mr. Mudronja shall pay his one-half share which is $4,953.64. Ms. Mudronja claims $4,500 of this amount.

Mortgage arrears

Mortgage arrears

20Mr. Mudronja submits that he should receive credit for payment of $5,656.38 to solicitors to cover mortgage arrears which had accrued on the matrimonial home as a result of Ms. Mudronja’ s actions. Ms. Mudronja disputes that Mr. Mudronja paid these arrears. Mr. Mudronja provided proof of the arrears but did not provide proof of payment of the arrears. Therefore, he shall receive no credit for the $5,656.38.

Line of Credit Payments

Line of Credit Payments

21Mr. Mudronja submits that by Order of Justice Van Melle dated December 18, 2011, Ms. Mudronja received $55,000 from a line of credit secured by the matrimonial home. Mr. Mudronja explained that he had to aggressively pay down the first mortgage in the amount of $89,290.00 and paid off the line of credit secured by the home. He explains that Ms. Mudronja failed to take this into account in her calculations of the amount outstanding in equalization payments.

22This issue was addressed by Justice Seppi in her reasons for decision. In calculating the equalization payment, Justice Seppi, considered that Ms. Mudronja received certain cash advances “pending trial, totalling $225,000”. In an event, any issues with the calculation of the equalization payment are properly the subject of an appeal. This is not an appeal. I have no jurisdiction to reopen the equalization calculations as determined in the Final Order.

Equalization payment interest

Equalization payment interest

23The interest rate on payments mandated in the Final Order is 3% per annum. The Final Order is silent with respect to deadlines for the equalization payment. The interest rate on payments mandated in the Consent Order is 2% per annum. Both orders are silent on a deadline for payment. On January 25, 2019, Justice André set a deadline for payment of July 1, 2019.

24Ms. Mudronja submits that she is entitled to interest payments on amounts owing as described in Appendix A. Ms. Mudronja uses the 3% per annum interest rate mandated in the Final Order. Mr. Mudronja did not dispute the use of that interest rate. Instead he disputes Ms. Mudronja’s entitlements to the amounts owing on the basis: that her calculation fails to account for the monetary credits I have previously discussed; the monthly payments of spousal supports represent payments of interest on the unpaid equalization payment; Mr. Mudronja paid an equalization payment over a five year period, 2014 to 2019. He also paid spousal support to Ms. Mudronja during that time and it would be unfair for Ms. Mudronja to receive spousal support which was derived from businesses which have been equalized.

25Section 129(1) of the Courts of Justice Act, R.S.O, Chapter C.43, states that money owing under an order including costs, bears interest at the post judgment interest rate calculated from the date of the order. See also: Placentite v Fabris, 14 C.P.C. (3d) 210 (Ont. Gen.Div.); Kidd Creek Mines Ltd. v. Northern & Central Gas Corp., 29 C.PC. (2d) 257 (Ont. C.A.) Therefore, in this case post judgement interest of 3 % per annum begins to run from October 30, 2014 to the July 1, 2019 (the month this motion was heard). Section 130 of the Courts of Justice Act gives a Court the discretion to consider the circumstances of a case and disallow interest payable under section 129(1).

26The Final Order was made on October 30, 2014. Mr. Mudronja took steps to place additional mortgages on his residence located at 19 Fenton Way in Brampton resulting in a total mortgage of $1,505,500.00 on the property. I am satisfied that these steps were a deliberate attempt by Mr. Mudronja to frustrate and delay payment of the outstanding equalization amount. While there may have been disputes over the amount of equalization payment owing, I conclude that this was an attempt by Mr. Mudronja to relitigate matters already decided by Justice Seppi. Almost four years after the Final Order, Ms. Mudronja had to commence action in the court in an effort to compel Mr. Mudronja to make the equalization payments.

27At first blush, Mr. Mudronja’s argument to disallow interest on the equalization payment on account of his periodic spousal support payments of $7,500.00 and to grant a 27% discount in the amount of periodic spousal support paid on account of a partial equalization payment of $491,833.00 is persuasive. I have found that he took deliberate steps to delay and frustrate payment. It is apparent the intent of the Order for periodic monthly spousal support payments of $7,500.00 until the equalization payment was paid in full, without provision for a corresponding reduction in the amount of equalization payment outstanding, was to address this precise circumstance.

28The Final Order did not specify a date by which the equalization order was to be paid and Mr. Mudronja was prepared to drag his feet and simply pay the periodic $7,500 per month without taking any proactive step to pay the equalisation payment in full until Ms. Mudronja commenced action before the court. Mr. Mudronja cannot benefit from slow compliance with the Final Order. Under all these circumstances, I conclude that it is appropriate for Mr. Mudronja to pay interest on the equalization payments and all the outstanding amounts claimed by Ms. Mudronja in Appendix A.

29I accept the amounts owed and the interest calculations set out by Ms. Mudronja in Appendix A. Therefore, Mr. Mudronja shall pay Ms. Mudronja $266,907.79 set off in accordance with the amount set out below.

Retroactive Child Support

Retroactive Child Support

30On January 6, 2014, the parties were co-parenting Thomas Mudronja born July 31, 1997. At that time, Thomas lived equally with each party and thus by order dated January 6, 2014, no child support was ordered. Shortly thereafter, Thomas began to live exclusively with Mr. Mudronja. The change in Thomas Mudronja’s abode constitutes a material change in circumstance warranting a change in the Order.

31Ms. Mudronja submits that Mr. Mudronja’s motion for child support has been improperly constituted and should be recommenced appropriately. In addition, there is no evidence of Thomas Mudronja’s ability to make financial contributions to reduce any child support payable.

32Since September 2018, Ms. Mudronja has been aware of Mr. Mudronja’s intent to seek retroactive child support. In his Notice of Motion, with a September 26, 2018 hearing date, Mr. Mudronja sought financial disclosure from Ms. Mudronja to determine child support payable pursuant to the Federal Child Support Guidelines, Family Law Act and Family Law Rules. Ms. Mudronja has chosen to ignore this request and there is no need to delay this matter any further for the disclosure previously requested. Mr. Mudronja seeks retroactive child support for a 51-month period retroactive from July 1, 2019.

33At 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.

34I have ordered Mr. Mudronja to pay Ms. Mudronja the amount of $266,907.79. Therefore, Ms. Mudronja can pay the retroactive child support. The amount of retroactive child support owing is set off against the $266,907.79. Mr. Mudronja shall pay Ms. Mudronja $197,088.79 by May 1, 2020. Post Judgment interest is set at 3% per annum.

Restraining Order

Restraining Order

35Prior to the trial in 2014, Mr. Mudronja obtained a temporary restraining order against Ms. Mudronja. This was not addressed by in the Final Order. It was open to Mr. Mudronja to request that the temporary restraining order continue. Temporary orders are meant to be temporary i.e. remain until trial. These orders are subsumed by Final Orders made at trial: Hamdy v Hamdy, 2015 ONSC 5605, at para. 18.

36At paragraph 128, Justice Seppi references conduct by Ms. Mudronja which formed the basis of the restraining order. Justice Seppi noted that Ms. Mudronja contacted Jitsu customers necessitating the retraining order against her. Jitsu is a business owned and operated by Mr. Mudronja, however, these comments were not made in the context of the restraining order. This issue was not raised by either party. Under such circumstances the temporary restraining order remains a live issue. It was not addressed in the final order.

37Ms. Mudronja submits that the restraining order is prejudicial to her ability to obtain employment. Mr. Mudronja is opposed. He relies on his previous allegations of Ms. Mudronja’s interference with his business by contacting his customers. I have no basis to conclude that the circumstances warranting the restraining order are no longer present. The temporary restraining order shall remain in place without prejudice to Ms. Mudronja to seek a review at a future date.

Costs

Costs

38Should the parties be unable to resolve the issue of costs, each party shall file a cost outline of no more than 4 pages within 15 days after the date of this endorsement.

Barnes J.

Date: November 25, 2019

APPENDIX A

Appendix A

Interest on the Equalization Payment at 3%

1. Equalization as Ordered at trial on Oct 30, 2014 $1,796,550.00

2. Less credit for Eddy’s portion of house - 424,170.87

Subtotal owing as of Nov 24/15 $1,372,379.13

3. Interest owing from date of Order to date of

transfer of home credit $ 57,440.38

4. Less credit for transfer of Lincoln Navigator

(transferred Dec 24, 2015) - 3,000.00

Equalization only owing as of Dec 25/15 $1,369,379.13

5. Interest owed from Nov 24/15 to Dec 24 $ 3,383.95

(between house & car transfer per order of July 9, 2015)

6. Total unpaid equalization ($1,369,379.13) as of January 31, 2019.

7. Interest from Dec 25/15 to Jan 31/2019 $127,521.09

8. Less Payments on account of Equalization made pursuant to Order dated January 25, 2019:

January 31, 2019 - $200,000.00

Interest from February 1, 2019 to February 26, 2019 $2,402.83

March 2, 2019 - $200,000.00

Interest from February 27, 2019 to February 26, 2019 $2,629.28

April 1, 2019 - $200,000.00

Interest from April 2, 2019 to May 1, 2019 $1,833.86

May 1, 2019 - $200,000.00

Interest from May 2, 2019 to June 3, 2019 $1,497.55

June 3, 2019 - $200,000.00

Interest from June 4, 2019 to July 1, 2019__ $ 819.72

July 1, 2019 - $300,000.00

Interest from October 30, 2014 to July 1, 2019 TOTAL $197,528.66

Total Equalization Payment of $69,379.12 + interest accrued as of July 1, 2019 is $266,907.79