



COURT OF APPEAL FOR ONTARIO

CITATION: Mudronja v. Mudronja, 2020 ONCA
    569

DATE: 20200911

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)

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 Andr
é
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. Mudronjas
    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 courts 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.
    Mudronjas calculation of the outstanding equalization payment and
    post-judgment interest, totalling $266,907.79. The motion judge rejected Mr.
    Mudronjas 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. Mudronjas 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. Mudronjas 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 Directors 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. Mudronjas 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 parents or spouses 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 payors income. The motion judge included the spousal support
    in determining Ms. Mudronjas child support obligations at paragraph 33:

At trial Ms. Mudronjas
    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.
    Mudronjas appeal is dismissed. Ms. Mudronjas 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),
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. Mudronjas costs submissions.

K.
    van Rensburg J.A.

G.
    Pardu J.A.

Grant
    Huscroft J.A.


