Legislation is clear that granting or denial of prejudgment interest is discretionary: Ont. CA

Appeal court upholds trial judge's decision in family law case

Legislation is clear that granting or denial of prejudgment interest is discretionary: Ont. CA
Dani Frodis and Ryan Kniznik.

The Court of Appeal has upheld a trial judge’s decision in the Muraven v. Muraven case regarding date of marriage deduction, the after-tax cost of the children’s parochial school, and the trial judge’s refusal to grant prejudgment interest to the appellant.

The appellant argued that the trial judge applied inconsistent standards in reviewing the evidence and determining the value of the date of marriage assets for both parties and challenged the deductions to s.7 expenses provided by the trial judge, says the defendant's lawyer, Ryan Kniznik. 

Kniznik says the appellant also argued that the trial judge made an error by not providing reasons for not granting prejudgement interest on child support equalization payment and arrears.

The court wrote that it saw no basis to interfere with the trial judge’s decision on all grounds and dismissed the appeal.

“We find no support for the appellant’s argument that the trial judge was uneven in his treatment of the evidence of the parties,” Jutices Lauwers, Coroza and Sossin wrote.

The court found no error in the trial judge’s decision regarding the date of marriage deduction because the appellant inherited the property before the marriage and did not qualify for the exclusion. 

Regarding prejudgement interest, the court wrote that “a payor spouse is required to pay prejudgment interest on an equalization payment owing to the payee spouse. However, the applicable legislation makes clear that the granting or denial of prejudgment interest is discretionary: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 130. There are exceptions to the general rule.” 

“The appellant has not pointed to an error that would warrant interference by this court in the trial judge’s exercise of discretion. We reject this ground of appeal,” the court wrote.

Kniznik says parties need to provide sufficient evidence when asking the courts to put a value on an asset, and people should be aware that there are exceptions to the general principle that prejudgement interests are payable on equalization payments. “Depending on the facts of the case, there may be situations where prejudgment interest is not awarded.”

Lawyer for the appellant Dani Frodis says the Court of Appeal decision is not surprising. He says it was a complex case with difficult evidentiary issues, and the court ultimately ruled in a way supported by the evidence.

“It may not be how my client would have liked to have seen it, but there was enough evidence there to certainly make the findings that were made and give that outcome.

“Every case presents different difficulties, but we did this one in a way that we thought might be more efficient and in hindsight it might not have been the best way to approach it.”

Frodis says that it is a little concerning that a judge can decline to grant prejudgement interest without any reason, but it is normal for the appeal court to uphold the lower court’s decision.

“It’s a typical support the trial judge and dismiss the appeal type of situation,” he says. “It’s what we anticipated and what we told our client to expect, but we thought that it was worth taking a relatively minor gamble in the big picture to try to appeal the outcome.”

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