CITATION: Homsi v. Zaya, 2009 ONCA 322
DATE: 20090420
DOCKET: C48638
COURT OF APPEAL FOR ONTARIO
Rosenberg, Watt and Epstein JJ.A.
BETWEEN
Muhammad Jamil Homsi
Applicant (Appellant)
and
Evelyn Zaya
Respondent (Respondent in Appeal)
Mitchell B. Rosenblatt, for the appellant
Kanata J. Cowan, for the respondent
Heard: March 18, 2009
On appeal from the judgment of Justice Peter B. Hambly of the Superior Court of Justice, Family Court Branch, dated March 8, 2008.
Epstein J.A.:
[1] Muhammed Homsi appeals from the judgment of Hambly J. dated March 18, 2008, awarding custody of the couple’s then 3-year old son, Anthony, to the respondent, Evelyn Zaya. The trial judge also ordered Homsi to pay monthly spousal support of $250 per month with a review after 3 years, guideline child support of $333 per month based on imputed annual income of $36,000, plus $100 per month for extraordinary expenses, and $12,000 for equalization of net family property.[^1]
[2] Homsi submits that the trial judge erred in (i) ignoring his de facto custody of Anthony in awarding custody to Zaya; (ii) awarding, without any evidentiary foundation, child support based on an imputed income, and a further amount for extraordinary expenses; (iii) awarding spousal support even though Zaya was voluntarily unemployed; and, (iv) awarding Zaya an equalization payment without any evidentiary support for the valuation of the property in issue.
[3] Homsi asks that the judgment be set aside in its entirety and that custody of Anthony be granted to him (with access to Zaya). He seeks an order quashing the child support order and an order that Zaya pay him child support in accordance with the guidelines. He also asks for an order quashing the spousal support order and rescinding the award of outstanding arrears of child and spousal support, as well as an order quashing the equalization order. Finally, Homsi requests an order replacing the trial judge’s costs order with one in his favour on a substantial indemnity basis.
[4] For the reasons that follow, I would allow the appeal in part.
FACTS
[5] Homsi and Zaya were married in 2003. Zaya had a daughter, aged 12 at the time of the trial, from a previous marriage. Anthony was born on July 2, 2004.
[6] During the marriage, Zaya was employed as a hairdresser. However, due to health problems during her pregnancy, she did not work between September 2003 and February 2006. In February 2006, she accepted employment as a manager of a jewelry store at an annual salary of approximately $19,000. Until December 2005 when he lost his job, Homsi worked as a car salesman. After that, he was largely unemployed although he did find sporadic work at a gas bar and tried unsuccessfully to make a living in a submarine sandwich shop venture.
[7] In 2004, the couple bought a house for $220,000 with a mortgage of $215,000. In the mortgage application, Homsi reported his income as over $63,000. The decrease in the family’s income during 2006 caused the couple to incur financial problems. The mortgage on their home went into arrears and other debts accumulated.
[8] The marriage began to deteriorate in the fall of 2006. In December of that year, Homsi removed Anthony from the matrimonial home and took him to his parents’ residence. Zaya went to live with her parents. In January 2007, Homsi moved to Montreal to find work and to be near family members. He took Anthony with him.
[9] In January 2007, Homsi agreed to sell the matrimonial home to a man he met by chance at an Auto Mart. Title to the property was transferred in consideration for the assumption of the mortgage and other debts. No money changed hands. The land transfer tax statement on the transfer showed that there was $201,927 outstanding on the mortgage. The transfer documentation included a statement by Homsi that he was not a spouse. Around the same time, Homsi also sold most of the home furnishings.
[10] During 2007 when Homsi and Anthony were in Montreal, Zaya tried to find her son, but experienced difficulties with lawyers she retained for this purpose. Eventually she retained a lawyer who helped her to obtain an order that gave her access to her son over Christmas of 2007.
[11] Homsi had commenced his application for divorce and associated relief early in 2007. The trial took place over two days in March 2008. At the time of the trial, Homsi was working in Montreal for $12.00 per hour. His T4s indicated that he was earning roughly $19,000 per year. Zaya had quit her job at the jewelry store in order to qualify for legal aid. She was receiving support from Ontario Works.
THE TRIAL JUDGMENT
[12] After setting out the facts reviewed above, the trial judge first dealt with the issue of the division of net family property. With the limited information available, the trial judge found that there was at least $18,000 of equity in the former matrimonial home. He arrived at this number by calculating the difference between the amount outstanding on the mortgage when the purchasers assumed it ($202,000), and the value of the mortgage that the purchasers placed on the property less than two months later ($221,616). The trial judge accepted counsel’s submission that the costs of the sale of a comparable house would be approximately $14,000. He found that the value of the house at the time of separation was $230,000. From this amount, he subtracted first the amount outstanding on the mortgage ($202,000) and then the costs of disposition ($14,000), to arrive at the conclusion that there was $14,000 remaining equity in relation to the house. Homsi also sold many of the furnishings of the matrimonial home and did not take great issue with Zaya’s submission that these items were worth $25,000. Homsi said he used the proceeds of the sale of the furnishings to pay mortgage arrears and utilities bills for the matrimonial home, but he did not produce any documentation to support this. Accordingly, the trial judge determined that Homsi received at least $10,000 from the sale of the furniture for which he did not account. Adding $10,000 in proceeds from the furnishings to the $14,000 in equity in the house, the trial judge arrived at a net family property value of $24,000. Zaya was entitled to half this amount.
[13] The trial judge next turned to the issue of custody. In his reasons, the trial judge remarked upon Homsi’s unilateral decision to “seize custody” of Anthony and take him to Montreal. He also noted Zaya’s close involvement with Anthony during the first few years of his life. In addition, the trial judge briefly canvassed the plan that each parent offered for Anthony’s care.
[14] The trial judge concluded that it would be in Anthony’s best interests for Zaya to have custody. In support of this conclusion, the trial judge expressed his concern about the dearth of evidence that Homsi offered in support of his plans for Anthony. On the other hand, the trial judge noted Zaya’s qualities as a mother and took into consideration the benefit to Anthony in residing with his sister.
[15] Turning to support, the trial judge considered Homsi’s evidence that at the time of separation, he was earning approximately $19,000 per year. He referred to Homsi’s 2007 financial statement, which stated that he was at that time earning approximately $30,000. The trial judge also noted that in order to obtain a mortgage in 2004, Homsi had indicated an annual income of $62,000. The trial judge concluded that Homsi was capable of earning more than $19,000, taking into account his ability to sell cars and his apparent intelligence. He imputed to Homsi an income of $36,000 and accordingly ordered him to pay guideline support in the amount of $333 per month. He also ordered $100 per month in extraordinary expenses. The reasons contain no explanation for this aspect of the child support order.
[16] Lastly, the trial judge ordered the payment of monthly spousal support to Zaya in the amount of $250 per month, finding that she suffered an economic disadvantage as a result of the breakdown of the marriage. There were no reasons in support of the amount of this order.
ANALYSIS
1. Whether the trial judge erred in awarding custody of Anthony to Zaya
[17] Homsi submits that the trial judge erred by not giving proper weight to Homsi’s de facto custody of Anthony for one year in Montreal. This is his primary ground of appeal. He argues that Zaya acquiesced in his decision to move to Montreal with Anthony and to start a new life there. He suggests that the evidence demonstrates that Zaya made no real effort to interfere with this arrangement. Homsi also argues that there is no evidence to support a finding that Anthony’s interests would not be best-served by maintaining the status quo.
[18] In his analysis of the main issue raised at trial – custody of Anthony – the trial judge identifies his obligation to decide custody on the basis of Anthony’s best interests. He then dispenses with this obligation in a single paragraph. He finds that there is inadequate evidence about Homsi’s plan for the child. He then comments on Zaya’s difficulties with the legal system during the year when Anthony was with Homsi in Montreal and rejects the suggestion that her efforts to find her son were inadequate. He further notes that Homsi was “less than forthcoming” in providing access to Zaya during this time.
[19] He finds Zaya to be a competent mother in relation to her daughter and observes that the court should strive to keep siblings together.
[20] Unfortunately, the trial judge’s reasons do not do much to elucidate the basis upon which the ‘best interests of the child’ determination was made. Section 16(8) of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.) provides that in any custody decision, the court shall take into consideration only the best interests of the child by reference to the conditions, means, needs and other circumstances of the child. Section 24(2) of the Children’s’ Law Reform Act R.S.O. 1990, c. C.12, illuminates this concept by providing a list of considerations of the needs and circumstances of the child.
[21] Unfortunately, the reasons include neither any explicit mention of the guidelines nor any analysis that implicitly refers to them.
[22] But that is not the end of the inquiry. Case law confirms that a trial judge’s reasons should not be viewed on a stand-alone basis. What is required on appeal is an examination of whether the reasons, considered in the context of the entire record, show that the trial judge has “seized the substance of the matter”: R. v. R.E.M. (2008), 2008 SCC 51, 235 C.C.C. (3d) 290 (S.C.C.), at paras. 43-44. In my view, the question is, therefore, whether the record demonstrates that the trial judge implicitly, and adequately, considered the best interests of Anthony.
[23] An examination of the reasons in the context of the record reveals evidence that is capable of supporting the trial judge’s conclusion that it was in Anthony’s best interests to award custody to Zaya.
[24] The record includes evidence about Zaya’s close relationship with her son before the parties separated. The reasons address the ability of each person to parent and to provide for the child, as well as each parent’s plans for Anthony’s upbringing. In commenting upon the absence of access when Anthony was in Montreal, the trial judge implicitly considers the benefit to Anthony in maximum contact with both parents
[25] Turning to Homsi’s argument that the trial judge erred by not considering the status quo, I note two things. First, the trial judge may well have considered the status quo and simply failed to refer to it in his reasons. Second, status quo is merely one factor among many, and it is less important where the other parent was previously the primary caregiver. There is evidence that such was the case here.
[26] This court's power of appellate review only allows intervention where there is a material error, serious misapprehension of the evidence, or an error in law. None of these elements is present in relation to the trial judge’s conclusion that Anthony’s best interests would be served if his mother had custody. I would therefore not disturb the trial judge’s finding in this regard.
2. Whether the trial judge erred in awarding child support on the basis of an imputed income
[27] Homsi submits that the trial judge imputed income to him without evidentiary foundation.
[28] I agree. The approach mandated by this court in Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711 requires a consideration of whether the spouse is intentionally unemployed or under-employed, and, if so, what the appropriate income is under the circumstances. The onus is on the person requesting an imputation of income to establish an evidentiary basis for such a finding. Here, the trial judge cited only historic and unproven evidence in support of imputing an income of $36,000 to Homsi. In my view, the trial judge’s observation that Homsi was intelligent and had the ability to sell cars (in Quebec when he does not speak French) was not evidence capable of supporting the inference that Homsi was intentionally under-employed and that an annual income of $36,000 was reasonably imputed to him.
[29] The only reliable evidence concerning Homsi’s income was presented in the form of his T4 slips. These demonstrated an annual income of approximately $19,000.
[30] The trial judge’s reasons supplied no foundation for imputing $36,000, as opposed to any other amount, to Homsi. It follows that the child support order of $333 per month cannot stand. Counsel for Homsi submitted, and counsel for Zaya did not respond, that the Quebec table amount applies.[^2] However, since no submissions were made respecting Zaya’s income, a factor that must be considered in computing the Quebec table amount, and since any difference in Anthony’s support based on what is in the record with respect to the incomes of Zaya and Homsi, would be minimal, I would order, as the trial judge did, that Homsi pay Zaya in accordance with the Ontario table amount. Any future variations to the child support amount should, however, be made in compliance with the Quebec table amounts.
[31] I would therefore order that Homsi pay Zaya $164 per month in child support retroactive to March 18, 2008.
[32] There was also neither evidence nor analysis to support the award in the amount of $100 per month for extraordinary expenses. I would accordingly set that order aside.
3. Whether the trial judge erred in awarding spousal support to Zaya
[33] Zaya submits that appellate courts should only interfere with a lower court decision awarding support if the trial judge made a material error. The trial judge held that Zaya suffered an economic disadvantage from the marriage because she was not working for 18 months after Anthony was born and would have been employed if the marriage had not broken down.
[34] The trial judge provided no reasons in relation to this part of his judgment. Accordingly, it is open to this court of make its own assessment of whether Zaya is entitled to support, for how long, and in what amount.
[35] Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813 (at para. 74) establishes that since there is no automatic entitlement to spousal support, the evidence must be examined. There was no evidence to support a finding that Zaya had suffered economic disadvantage as a result of the marriage. The marriage was not long, and there was nothing to suggest that Zaya suffered disadvantage as a result of the marriage. In fact, her employment record during the marriage was stronger than Homsi’s. Moreover, the trial judge ignored Homsi’s limited ability to pay support. The law is clear that priority should be given to support for Anthony.
[36] I would give effect to this ground of appeal and set aside the spousal support award in its entirety.
4. Whether the trial judge erred in awarding an equalization payment in the amount of $12,000
[37] Homsi contends that the trial judge awarded an equalization payment in the absence of any evidentiary support with respect to either the value of the house or the furnishings.
[38] While it is true that there is a paucity of evidence in this regard, the onus is on the party asserting the value of an asset that he or she controls to provide credible evidence as to its value: Conway v. Conway, 2005 CanLII 14136 (ON SC), [2005] O.J. No. 1698 (S.C.J.) at para.14. Homsi had control of the items in question since he took possession of the matrimonial home and proceeded to sell it without Zaya’s consent. It was open to the trial judge to draw an adverse inference from Homsi’s failure to produce an updated financial statement or an assessment of the property in support of his position. While the factual foundation for the trial judge’s numerical calculations, as well as his ultimate assessment of value of the net family property, are rather opaque, I appreciate that he was not provided with much assistance in this regard. The trial judge’s determination that Zaya was entitled to an equalization payment of $12,000 was supported by the limited evidence available to him.
[39] In the absence of any palpable and overriding error in the trial judge’s determination of the equalization payment, I would therefore not give effect to this ground of appeal.
DISPOSITION
[40] For these reasons, I would allow the appeal, in part. I would vary the Judgment below in accordance with these reasons. Specifically, I would set aside the spousal support order and the order requiring Homsi to pay $100 for Anthony’s extraordinary expenses. I would award monthly child support in the amount of $164. These changes to Homsi’s support obligations will be effective as of March 18, 2008. Any arrears of support payments due under the judgment below will be rescinded. Any amounts paid under the judgment below for spousal and child support will be applied toward Homsi’s child support, as adjusted.
[41] The parties have asked for the opportunity to make submissions in respect of costs. Brief written submissions are to be made within 30 days of the release of these reasons.
RELEASED:
“MR” “G.J. Epstein J.A.”
“APR 20 2009” “I agree M. Rosenberg J.A.”
“I agree David Watt J.A.”
[^1]: The trial judge also granted a divorce. This aspect of the judgment is not in issue in this appeal. [^2]: Ont. Reg. 391/97 – Child Support Guidelines defines “table” to mean the following: “(b) if the parent or spouse against whom an order is sought ordinarily resides elsewhere in Canada, the table set out in the Federal Child Support Guidelines for the province of territory in which the parent or spouse ordinarily resides at the time of the application”.