Court of Appeal for Ontario

CITATION: Liu v. Huang, 2020 ONCA 450

DATE: 20200710

DOCKET: C66143

Rouleau, van Rensburg and Roberts JJ.A.

BETWEEN

Chong Liu

Applicant

(Respondent)

and

Fang Huang

Respondent

(Appellant)

Gary S. Joseph and Stephen Kirby, for the appellant

Toni E. Wharton, for the respondent

Heard: in writing

On appeal from the order of Justice Freya Kristjanson of the Superior Court of Justice dated October 9, 2018, with reasons reported at 2018 ONSC 3499, and from the costs order dated December 14, 2018, with reasons reported at 2018 ONSC 7441, 19 R.F.L. (8th) 403.

REASONS FOR DECISION

A. Overview

[1] The appellant mother appeals from the trial judge’s order granting sole custody of their young daughter to the respondent father, ordering her to pay child support and other amounts, and providing for certain credits to the respondent father on equalization. If unsuccessful on her appeal, the appellant seeks leave to appeal the trial judge’s costs order that the appellant pay full recovery costs to the respondent.

[2] At the heart of this proceeding was a high-conflict contest over the custody of the parties’ young daughter. The parties separated under the cloud of allegations of domestic violence against each other. The appellant’s focus at the 12-day trial was to demonstrate that the respondent was an angry, inattentive father who cared little for his daughter. The respondent denied these allegations and attested to the appellant’s violence against him, while nevertheless agreeing that she was a good mother to their daughter.

[3] The trial judge noted at the beginning of her lengthy reasons that the credibility and reliability of the parties were key in this case. After a detailed assessment, the trial judge rejected the appellant’s version of events and accepted the evidence called by the respondent. She found, among other things, that the appellant had fabricated allegations of domestic violence by the respondent, and that the appellant had been violent toward the respondent. She concluded that there were no domestic violence concerns that would affect the appellant’s ability to parent. However, she concluded that the appellant had made concerted efforts to exclude the respondent from their daughter’s life, and that the respondent would best support access and consultation about significant issues involving the child, and who placed the child’s best interests first. As a result, the trial judge determined that it was in the best interests of the parties’ daughter to grant the respondent sole custody of their daughter with a shared parenting schedule providing for residence with each parent 50% of the time.

[4] With respect to the parties’ financial and property issues, the trial judge found that the appellant was not entitled to spousal support, either on a compensatory or a needs basis. She ordered the appellant to pay the respondent $74,812.83 as equalization of net family property, $28,392.12 as reimbursement for expenses paid on her behalf by the respondent, and child support plus a proportionate contribution for other expenses for their daughter. The trial judge ordered that the net proceeds of sale of the parties’ matrimonial home would be divided equally between the parties, subject to certain credits for payments owing between the parties, including occupation rent that the trial judge ordered that the appellant pay to the respondent until the closing of the sale of the matrimonial home.

[5] For the following reasons, we dismiss the appeal and deny leave to appeal the costs award.

B. Issues and Analysis

(1) Order Regarding Custody and Support

[6] The appellant raises several grounds of appeal which we address in turn.

(i) There Was No Denial of Natural Justice

[7] The appellant submits the trial process denied her natural justice. She argues that following the trial, the respondent’s trial counsel improperly communicated directly with the trial judge. Further, she contends that the trial judge incorrectly issued a temporary order granting sole custody of the parties’ daughter to the respondent and her reasons for judgment delivered three months later provided after-the-fact justification for her temporary order.

[8] We are not persuaded by these submissions. There was no unfairness in these trial proceedings.

[9] The exchanges between counsel for both parties and the trial judge about the respondent’s re-employment following trial did not violate natural justice nor r. 1.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Communication with the trial judge by email was initiated on consent. The appellant’s trial counsel was copied on the correspondence, did not object to this communication, and had an opportunity to be heard.

[10] Moreover, we see no error in the trial judge issuing a temporary custody order following trial that was incorporated into the final order. As the appellant acknowledges, it was within the trial judge’s discretion to issue an order and subsequently provide reasons: R. v. Teskey, 2007 SCC 25, [2007] 2 S.C.R. 267, at para. 16. In this 12-day trial where custody of the parties’ young daughter was the key focus and had been the subject of considerable acrimony between the parents for several years, it was a reasonable exercise of the trial judge’s discretion to advise the parties as quickly as possible of her determination of this extremely important issue. Her detailed reasons released only three months later do not give rise to any suggestion of after-the-fact reasoning.

(ii) The Credibility Assessment Was Fair

[11] The appellant maintains that the trial judge’s credibility assessment of the parties was unfair, uneven and erroneous and that she failed to consider the whole of the evidence.

[12] We see no error in the trial judge’s credibility assessment of the parties. Her reasons reflect a careful and thorough review of the whole of the evidence, including the frailties and strengths of both parents’ credibility and reliability. The trial judge’s negative assessment of the appellant’s credibility was open to her to make and included consideration of the “significant inconsistencies” in her evidence, as well as her introduction of new issues, allegations and documents at trial. Importantly, the appellant takes no issue with the trial judge’s acceptance of the evidence of Haifang Zhang, a friend of both parties, which supported the respondent’s version of events, including the appellant’s unreasonable exclusion of the respondent because she “wanted [the respondent] to leave her life and leave the baby’s life and she did not want him to see the baby again.”

[13] The appellant argues that the trial judge’s credibility analysis was impaired by the following additional errors: (1) she accepted the respondent’s evidence concerning the incidents of domestic violence between the parties without considering the contradiction about this issue in his pleadings; (2) she drew an adverse inference against the appellant for her failure to call her parents to corroborate her allegations of domestic abuse, and she failed to draw the same inference against the respondent for failing to call his mother as a witness to attest to the circumstances surrounding the 9-1-1 call; (3) she relied on unauthenticated hearsay evidence contained in a police occurrence report; and (4) she misapplied the rule in Browne v. Dunn (1893), 6 R. 67 (H.L.), in her assessment of the appellant’s evidence.

[14] We are not persuaded by these submissions.

[15] With respect to the respondent’s pleadings, the appellant submits that the respondent departed from the statement in his Amended Application that there had been no physical violence between the parties before the date of separation. In his Reply to the allegations contained in the appellant’s Answer, he alleged the incidents of violence were committed against him by the appellant in 2007 and 2012.

[16] When the respondent was cross-examined on this alleged contradiction, he explained that he did not initially think the incidents were relevant to the issues before the court. When the appellant included allegations of domestic violence against him in her Answer, he addressed those incidents in his Reply, advancing his position that it was the appellant who was the aggressor in these incidents. It does not appear that the appellant took the position at trial that the alleged contradiction constituted the withdrawal of an admission. In her closing submissions, the appellant included the allegations contained in the respondent’s Reply as part of her recitation of the facts. However, nowhere in her closing submissions did she assert that there was a withdrawal of an admission or a contradiction between the Amended Application and the Reply.

[17] The trial judge can hardly be criticized for not including something in her reasons regarding credibility that was not emphasized at trial as a material contradiction, let alone an alleged withdrawal of an admission. Moreover, we do not see the respondent’s pleadings as giving rise to any contradiction or clear withdrawal of an admission, but rather as a clarification of the respondent’s position in response to the appellant’s Answer. Regardless, the manner in which the respondent pleaded his case occasioned no prejudice to the appellant. The respondent detailed the incidents of violence alleged to have been committed by the appellant against the respondent in his Reply more than two years prior to trial. Her trial counsel cross-examined the respondent on the Reply allegations and dealt with them in her closing submissions.

[18] In any event, the trial judge’s credibility analysis did not depend on the parties’ pleadings, but rather on her assessment of their testimony and the other evidence presented at trial. The evidence at trial as a whole provided an ample basis for her conclusions. She was under no obligation to reference every alleged inconsistency in the evidence or respond to every argument put before her: R. v. A.M., 2014 ONCA 769, 123 O.R. (3d) 536, at para. 14. Based on her assessment of the whole of the evidence, including the respondent’s explanation for only including the allegations in his Reply, which she was entitled to accept, the trial judge reasonably did not impugn the respondent’s credibility because of the manner in which he pleaded.

[19] Further, in the circumstances of this case, it was open to the trial judge to draw an adverse inference against the appellant. The appellant’s allegations of domestic abuse throughout the marriage and on the date of separation raised important questions materially affecting the issues of custody and access. She maintained that her parents had witnessed the alleged abuse. However, she did not call her father as a witness and her mother’s affidavit was silent in relation to the appellant’s allegations of domestic assault by the respondent. This was contrary to the appellant’s indication at the trial management conference that her mother would attest to issues of custody and access, as well as financial issues. Her mother’s affidavit only addressed financial issues. The situation concerning the respondent’s mother is distinguishable because the circumstances of the 9‑1‑1 call that she witnessed were supported by the recording of the call itself.

[20] The police occurrence report concerned the incident where the appellant called 9-1-1 and, as the trial judge found, made very serious but unfounded allegations against the respondent. Both parties testified at trial concerning this incident. No issue regarding its admissibility was raised at trial. Rather, both parties included the police report in their exhibit books and referenced its contents during their trial testimony. The trial judge placed little reliance on the police report, referring to it only to note her agreement with its conclusion that the appellant’s side of the story regarding this incident “did not make sense”. Her rejection of the appellant’s version of events depended principally on her assessment of the parties’ trial testimony and the recording of the 9-1-1 call, which she reviewed in the portion of her reasons immediately preceding her reference to the report.

[21] Finally, the trial judge did not misapply the rule in Browne v. Dunn. This rule of trial fairness requires parties to cross-examine opposing witnesses on points that the party will later seek to contradict by calling evidence to that effect and thereby give witnesses the opportunity to address major contradictions so that their evidence can be assessed fairly. It is not an inflexible rule but rather a matter within the trial judge’s discretion. Its application is therefore subject to significant deference on appeal: see Nemchin v. Green, 2019 ONCA 634, 147 O.R. (3d) 530, at paras. 27-29; R. v. Quansah, 2015 ONCA 237, 125 O.R. (3d) 81, at paras. 80-82, leave to appeal refused, [2016] S.C.C.A. No. 203.

[22] The appellant had failed to cross-examine Mr. Zhang on an important conversation between them that she detailed in her direct examination about her fear of the respondent and her efforts to find a “safe” way to include him in their daughter’s life. This directly contradicted Mr. Zhang’s evidence and should have been put to him during cross-examination. The respondent’s counsel promptly objected to the admission of this evidence as contrary to Browne v. Dunn, and the trial judge heard submissions about whether the rule had been breached and the appropriate remedy. She concluded that it was not suitable to recall Mr. Zhang. She permitted Ms. Huang to testify, but ultimately concluded that the failure to cross-examine Mr. Zhang about the conversation called into question the reliability of her evidence. She stated that she preferred Mr. Zhang’s evidence where the evidence of the two were in conflict.

[23] The appellant contends that there was no breach of the rule in Browne v. Dunn because her counsel had cross-examined Mr. Zhang on one aspect of his testimony: that she had admitted to scratching the respondent during the date of separation incident. The appellant also suggests that any breach could have been remedied by recalling Mr. Zhang as a witness.

[24] We disagree. The argument that the rule was not breached was made before the trial judge and properly rejected. The appellant’s counsel did not cross-examine Mr. Zhang about the specific and important conversation that the appellant later recalled in her own testimony. There was no question that the rule in Browne v. Dunn was engaged. As for remedy, it was within the trial judge’s discretion not to recall Mr. Zhang and to approach the appellant’s evidence as she did. We see no error in the exercise of her discretion.

[25] We therefore see no reason to interfere with the trial judge’s credibility assessment.

(iii) The Trial Judge Properly Considered the Best Interests of the Child

[26] The appellant submits that the trial judge failed to focus on the best interests of the child and erroneously based her determination of custody on irrelevant considerations of parental rights and conduct.

[27] We disagree. To the contrary, the trial judge’s focus was entirely on the best interests of the parties’ daughter. In particular, the trial judge recognized the importance of the daughter having the benefit of both parents in her life. She also acknowledged that notwithstanding the appellant’s efforts to exclude the respondent from their daughter’s life, the appellant was otherwise a good and loving mother. The trial judge contrasted the appellant’s refusal to engage in joint decision-making or even to consult with the respondent about their daughter, with the respondent’s conduct that respected the importance of the appellant’s role in their daughter’s life. The trial judge found that it was the appellant’s inability to put the child’s interests above her own and to permit their daughter to foster a relationship with both parents that warranted an award for sole custody to the respondent. Moreover, the trial judge concluded that the appellant’s unwillingness and inability to communicate with the respondent precluded an order for joint custody. Nevertheless, the trial judge’s custody order that requires their daughter to reside equally with her parents fairly reflects the equal importance of both parents in their daughter’s life.

(iv) The Trial Judge Made No Error by Including RRSP Withdrawals in the Appellant’s Income

[28] The appellant submits that the trial judge erred in her assessment of the appellant’s income for support purposes by including the appellant’s 2017 registered retirement savings plan (“RRSP”) withdrawals.

[29] It was open to the trial judge to include the appellant’s 2017 RRSP withdrawals in her income for support purposes. As the appellant acknowledges, the starting point is a party’s total income as indicated on the party’s T1 income tax form, which may include RRSP income: Federal Child Support Guidelines, S.O.R./97-175, s. 16; see Fraser v. Fraser, 2013 ONCA 715, 40 R.F.L. (7th) 311, at paras. 97-98. As such, RRSP income received in a particular year is presumptively part of a spouse’s income. Section 17 of the Guidelines permits a court to depart from the income determination made under s. 16 where it is of the opinion that this would not be the fairest determination of income. However, this exclusion is not mandatory and remains within a court’s discretion: Fraser, at paras. 103-104, 107.

[30] We see no error in the trial judge’s exercise of her discretion. She was alive to the issue of potential unfairness. As the appellant included RRSP withdrawals in the respondent’s income to calculate his income for child support purposes, the trial judge reasonably determined that “a reciprocal arrangement” would not be unfair in this litigation. Moreover, any prejudice to the appellant is mitigated by the terms of the order. The trial judge specifically provided for annual retroactive adjustment of child support based on the previous year’s income. As a result, if the appellant does not draw from her RRSP in a given year, such that her total income is lower, she will be compensated for any overpayment in that year and the child support amount will be adjusted for the following year.

(v) The Trial Judge Made No Error in Her Assessment of Post-separation Adjustments

[31] Finally, the appellant submits that the trial judge erred in her assessment of the post-separation adjustments claimed by the respondent and effectively permitted the respondent triple recovery for his payment of expenses for the matrimonial home.

[32] We are not persuaded by this submission. The trial judge did not err in her treatment of the respondent’s post-separation contributions. The trial judge determined the child support and s. 7 expenses retroactive to the date of separation that the respondent owed to the appellant. The trial judge’s finding that the respondent had paid certain of the parties’ joint expenses post-separation was rooted in the record. As a result, the trial judge allowed the respondent to offset amounts that he had paid on behalf of the appellant towards joint expenses from the amounts owing by him to the appellant for child support and s. 7 expenses.

[33] The trial judge also permitted the respondent to offset the occupation rent that she ordered against the appellant from these amounts. This order was within the trial judge’s discretion and was reasonable in the circumstances. The appellant had sole use of the jointly-held matrimonial home, which she directed the respondent to leave, and he could not have reasonably moved back. The respondent had sought the sale of the home since separation and the trial judge reasonably attributed the delay in bringing a motion to sell the house to the respondent’s litigation focus on access issues. We see no reason to interfere with the trial judge’s exercise of her discretion.

[34] Neither of these offsets constitute double or triple recovery for the respondent.

[35] Overall, we see no reason to interfere with the trial judge’s conclusions on these issues and we accordingly dismiss the appeal.

(2) Costs Order

[36] As we are dismissing the appeal on the merits, the appellant requires leave to appeal the costs award made against her in the amount of $249,765.47: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 133(b). In order to be granted leave to appeal, the appellant must show strong grounds on which this court could find the trial judge erred in exercising her discretion to award costs: Hobbs v. Hobbs, 2008 ONCA 598, 54 R.F.L. (6th) 1, at para. 32. The appellant has failed to meet this threshold.

[37] We see no error in the exercise of the trial judge’s discretion to award the respondent his costs on a full recovery basis. The trial judge considered the general legal principles governing costs in family litigation, including the overarching factors of reasonableness and proportionality. She noted this court’s observations in Mattina v. Mattina, 2018 ONCA 867, at para. 10, that “modern family cost rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants”. She reviewed and applied the applicable provisions of rr. 18 and 24 of the Family Law Rules respecting offers to settle and costs. In particular, she noted the reasonableness criteria set out in r. 24(5), the costs consequences for a party who has acted in bad faith under r. 24(8), and the various factors set out in r. 24(12), including the reasonableness and proportionality of each party’s behaviour, the time spent by each party, and any written offers to settle.

[38] The trial judge’s reasons reflect these principles. She made her costs order on the basis that the respondent exceeded his offer to settle and that the appellant took unreasonable and obstructive positions throughout the proceedings. She concluded that the appellant had engaged in bad faith conduct that was “designed to inflict emotional and financial harm to the [respondent], [was] harmful to the daughter, and [was] taken to deceive both the [respondent] and the Court.” She determined that the respondent’s substantial legal fees could have been avoided but for the unreasonable positions and bad faith conduct of the appellant. The trial judge’s findings were amply supported by the record.

[39] While the amount awarded by the trial judge is large, when considered in the context of these proceedings, it is reasonable, proportionate and fair. These costs were incurred over three years of litigation made acrimonious and costly by the appellant’s actions, which culminated in a 12-day trial. The trial judge found that the appellant had engaged in deceitful and obstructive conduct and was not a credible or reliable witness. The respondent was credible and reliable as a witness, did not overreach in his positions at trial, and supported the appellant as a good parent. His positions were reasonable and prevailed.

[40] We do not accept the appellant’s submission that the trial judge erred by failing to consider the impact this costs order will have on the appellant’s ability to provide for her daughter. This was not an issue before the trial judge. The appellant made no such submission to the trial judge. Nor, significantly, is there evidence that this will be the case. Indeed, according to the appellant’s financial circumstances as reflected in her financial statement at trial, she had a current income of over $79,000 per year and will have approximately $100,000 remaining from her share of the proceeds of the matrimonial home, after payment of her liabilities, including the costs order.

[41] As a result, leave to appeal is denied.

C. Disposition

[42] For these reasons, the appeal from the trial judge’s order on the merits is dismissed. We do not grant leave to appeal the costs order.

[43] The respondent claims his costs of this appeal on a substantial indemnity basis. We see no basis to depart from the usual partial indemnity scale on this appeal. While the appellant was unsuccessful, her appeal was not totally without merit or conducted in a way that would warrant the exceptional scale of substantial indemnity costs.

[44] Accordingly, the respondent is entitled to his partial indemnity costs. If the parties cannot agree on the amount, they may submit brief written submissions of no more than two pages, plus their respective costs outlines, electronically to coa.e-file@ontario.ca within ten days of the release of these reasons.

“Paul Rouleau J.A.”

“K. van Rensburg J.A.”

“L.B. Roberts J.A.”