Court File and Parties

COURT FILE NO.: FS-23-00036263-0000 DATE: 20240614 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DWIGHT WARREN GERLING, Applicant AND: AMY CRYSTAL CULL GERLING, Respondent

BEFORE: VELLA J.

COUNSEL: Jaret Moldaver and Jesse Rosenberg, for the Applicant Robert Halpern and Jessica Brown, for the Respondent

HEARD: IN WRITING

COSTS ENDORSEMENT

[1] By Reasons dated February 16, 2024, I released my rulings awarding the Father exclusive possession of the matrimonial home on consent and on a final basis, and a temporary order determining the parenting schedule including an order that the parties shall communicate through Our Family Wizard.

[2] The Respondent was successful on the motion. She is presumptively entitled to costs (r. 24(1), Family Law Rules; Mattina v. Mattina, 2018 ONCA 867 at para. 12)). However, she seeks costs on a partial recovery basis to February 21, 2023, in the amount of $10,274.89 and costs on a full recovery basis thereafter in the sum of $73,714.79 (inclusive of HST). She issued several proposals to resolve the parenting issues in this matter before the Applicant commenced this motion. She seeks costs from the date of her letter dated February 21, 2023, as an offer to settle under r. 18. She submits that she received a result that is as favourable or more favourable than her proposal set out in her February 21, 2023, letter and subsequent proposals (the “offers to settle”). The total amount sought by the Respondent is $83,989.68.

[3] The Applicant concedes that the Respondent is entitled to reasonable costs but on a partial recovery basis and only for fees incurred after he served his motion. He further submits that the Respondent’s letters setting out proposals for the parenting schedule could not be offers to settle the motion, because the motion had not yet been started by him. The Applicant submits that a fair and reasonable costs award in favour of the Respondent is $30,000 all inclusive.

[4] The Applicant justifies this amount based on the Respondent lawyer’s dockets for time incurred after the service of his motion (October 27, 2023) less $12,822 (being a reduction in the amount of time docketed for cost submissions which he states should be capped at 6 hours, rather than 34.5 hours as claimed) in the sum of $44,914.68. This is further reduced to $30,000 to reflect a partial recovery basis.

[5] The Applicant’s Bill of Costs shows that his full indemnity costs, inclusive of disbursements and HST, are $41,428.26, his “estimated full indemnity fees” (at 90%) are $37,285.43. “estimated substantial recovery” fees (at 80%) are $33,142.60 and partial recovery fees (at 65%) is $26,928.36.

General Principles

[6] Costs are in the discretion of the court (s. 131 of the Courts of Justice Act).

[7] In the family law context, the court’s discretion will be guided by the factors listed in r. 24(12) of the Family Law Rules, and other relevant rules, notably r. 24(5) and r. 18(14) in this case.

[8] The exercise of the court’s discretion must be informed by the following objectives of costs: indemnity, encouragement of settlement, to discourage and sanction inappropriate behaviour by litigants, and dealing with cases justly consistent with r. 2(2) and 2(3) of the Family Law Rules (Fong v. Chan (1999), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22; Osmar v. Osmar at para. 2; Serra v. Serra, 2009 ONCA 395 (Ont. C.A..), at para. 8; Bridge v. Laurence, 2017 ONSC 1655 (Ont. Div. Ct.) at paras 9-10).

[9] In addition, the principles of proportionality and reasonableness are the touchstones of costs in a family law context (Mattina v. Mattina, 2018 ONCA 867, at para. 10).

[10] Courts will also consider the reasonable (or unreasonable) efforts of the parties to resolve their family law issues without the need for litigation. This consideration recognizes the practical realties that families need and deserve a fair result in an expeditious and cost-efficient manner insofar as is realistically possible (r. 2(3), Family Law Rules). This consideration is heightened in parenting matters where the best interests of the children are engaged.

[11] As stated by the Court of Appeal in Sordi v. Sordi, 2011 ONCA 665, at para 21, “[i]n the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial indemnity”. Courts have implemented this observation to support the approach that, unlike under the Rules of Civil Procedure cost regime, a court may fix costs on a continuum from nominal costs through to full recovery costs.

[12] In Mattina, at para. 11, the Court of Appeal notes that the Family Law Rules are a “marked departure from some aspects of the Rules of Civil Procedure”.

How to treat the responding party’s pre-motion proposals to resolve the parenting issues?

[13] The Applicant served his Notice of Motion for this parenting motion on October 27, 2023.

[14] Prior to that, the Respondent, through her lawyer, put forward several proposals in writing to resolve the parenting issues and particularly parenting schedules (including holiday schedules). The first proposal was made over one year ago. It was followed by six more writing proposals.

[15] Of particular note, the Respondent’s proposal dated February 21, 2023 offered that the parties would immediately implement a 60/40 shared parenting schedule and transition to a 50/50 shared parenting schedule by August 2024 on a 2-2-3 arrangement alternating Mondays/Tuesdays and Wednesday/Thursdays and alternating weekends. She also sought a right of first refusal on weekdays to care for the children in the event the Applicant’s work required him to go out of town on his parenting time.

[16] Furthermore, in the Respondent’s proposals dated August 25 and September 15, 2023, and in order to “stop the bleeding”, she offered an immediate 50/50 shared parenting schedule. In the latter offer, she proposed an immediate 50/50 shared parenting schedule on either a 2-2-3 basis or alternatively a 2-2-5-2-2-5 schedule, together with the right of first refusal for her to look after the children in the event the Applicant’s work took him out of town during his parenting time. The Respondent also attempted to resolve the holiday time. The latter proposal was very similar to the relief the Applicant sought in his Notice of Motion.

[17] The Respondent made several comparable attempts to resolve the parenting schedule, all substantively similar with some slight modifications and the Applicant rejected all of them.

[18] The Applicant made one offer to settle dated October 27, 2023 – the same day he served his motion. In that offer, he does not address a right of first refusal. His offer to settle clearly satisfies the elements of r. 18. However, his offer was neither as favourable nor more favourable than the motion result.

[19] The real issue is whether the Respondent’s pre-motion proposals are “offers to settle” within the meaning of r. 18. The Applicant says they are not, because they were issued before he served his motion, and therefore were not offers to settle his motion. He relies on the wording of r. 18(14) but offers no jurisprudence in support of his position.

[20] When comparing offers to settle with the ultimate court decision, the court is examining the overall success as measured against the court decision. The court is not undertaking a microscopic examination of the subject offers to settle (V.S.B. v. B.L.O., 2022 ONCJ 569, at para. 19, citing various authorities). This makes sense given the various configurations of time parenting schedules with terms can take. This is not a question of comparing a finite financial result.

[21] Rule 18(1) defines “offer” to mean “an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer”.

[22] Rule 18(2) plainly states that an offer can be made “even before the case has started”.

[23] Rule 18(14) 1. requires that the offer that “relates” to the motion must be made at least one day before the motion date.

[24] In my view, if an offer can be made “even before the case has started” in order to attract the cost consequences of r.18(14), an offer can also be made before a motion has been served. This interpretation is also consistent with the primary objective of the Family Law Rules (r. 2(2)) which is to “deal with cases justly” and includes, at r. 2(3)(b)), “saving expense and time” which is also a primary objective of costs in promoting settlement of matters.

[25] The fact that the offer was made prior to the formal commencement of the subjection motion does not, on its own, lessen its status as a r. 18 offer to settle. What is relevant is that the substance of the alleged offer addresses the substance of the motion and was neither withdrawn nor expired prior to the hearing. In this case, the Respondent’s proposals were to resolve the very issues that became the subject of the Applicant’s motion. Therefore, the offers “relate” to the motion and were neither withdrawn nor expired prior to the hearing.

[26] The Respondent achieved a result that is as favourable or more favourable than the three pre-motion offers to settle with the exception that the right of first refusal was extended to both parties (not just the Respondent) in my decision. However, the Applicant did not pursue a right of first refusal (in either his offer to settle or notice of motion) and hence this right granted jointly to the Applicant and Respondent does not, in my view, disqualify the offer as being as or more favourable than the motion result within the meaning of r. 18(14).

[27] In my view, the Respondent’s written proposals to resolve the parenting schedule delivered prior to the formal commencement of the Applicant’s motion constitute offers to settle. Furthermore, as they satisfy the requisite elements reflected in r. 18(14) as relates to motions, the Respondent is presumptively entitled to costs on a full recovery basis. The Respondent has discharged her burden of proof in this regard.

[28] Furthermore, and in any event, I am entitled to take into consideration “any written offer to settle” when exercising my discretion over costs, even if subrule (14) did not apply (r. 18(16)).

[29] Accordingly, pursuant to r. 24(5) and 18(14) I find that costs on a full recovery basis is warranted in the circumstances of this case.

[30] In light of my finding under r. 18, I need not consider the Applicant’s behaviour for determining the appropriate rate of recovery. However, and in any event, I do not find that the Applicant’s behaviour reached the high bar of bad faith.

Is the Respondent entitled to costs incurred prior to receipt of the Notice of Motion?

[31] The Applicant challenges the Respondent’s position that she is entitled to costs before and after the date of her offers to settle. The Respondent seeks costs from 2021 and forward.

[32] As a general principle, there is no reason why a responding party should be prevented from claim costs incurred prior to formally receiving service of a notice of motion. If the costs were genuinely incurred with respect to preparing a response to an anticipated motion, and were otherwise reasonable, then they may be recoverable once that motion is brought.

[33] Certainly, a moving party will necessarily incur costs of preparation of their motion prior to formally commencing it.

[34] The Respondent has attached a Time Summary Sheet and a “Costs Breakdown re Parenting Claims” to her Costs Submissions. The Time Summary Sheet supports the time claimed for $10,274.89 (on a partial recovery basis) with respect to her prior lawyer of record’s time, all of which predates February 21, 2023, which she attributes to “exclusively parenting issues”. It also supports the claimed time of an additional $73,714.79, also on a full recovery basis, for the period from February 21, 2023 to February 26, 2024 for both “parenting issues” and costs submissions.

[35] However, the Respondent’s claim for costs is overreaching. She is entitled to reasonable costs relating to this motion, and not to all work done in relation to “parenting issues” at large. In this respect, having reviewed the Time Summary (though not in minute detail), the costs relating to the preparation of the three r. 18 offers to settle and her response to the motion, in addition to some costs relating to her cost submissions, are recoverable.

[36] The remaining costs relating to “parenting issues” may still be recoverable in the cause of this proceeding, and my ruling is without prejudice to the Respondent’s ability to claim those costs at trial or other determination of this matter.

Quantum of Costs

[37] The Respondent claims about 140 hours of lawyer and clerk time for this regular one-hour motion. A portion of this time is not recoverable with respect to this motion, as stated in paragraph 35.

[38] The court recognizes that the Respondent was required to respond to allegations attacking her mental health, and also to the proposed admission of a surreptitious recordings ultimately found to be inadmissible. These allegations, and inadmissible surreptitious recordings, required to the Respondent to invest more time by way of adducing fact witness affidavits and submissions as to the law of admissibility of surreptitious recordings justifying more time than might otherwise have been reasonable on a short motion with otherwise uncomplicated parenting issues.

[39] I am also alert to the fact that the Applicant’s legal team’s costs were $41,428.26 all-inclusive for preparing and arguing this motion, inclusive of preparation of cost submissions. He must therefore reasonably have expected comparable costs being awarded against him should he lose the motion.

[40] I have considered the factors under r. 24(12) in fixing costs of the motion (excluding cost submissions).

[41] I find that the hourly rates the Respondent’s lawyers are reasonable. The issues were important to the parties and fundamentally engaged the best interests of their children. In addition, the Applicant’s behaviour in attacking the Respondent’s mental health, in the face of his apparent agreement that the children were not at risk to their well-being while in the care of the Respondent, and his surreptitious recordings merit rebuke by the court. I have also considered the time spent by each party relative to this motion. All of these factors inform the reasonableness and proportionality of the costs. I find that a fair and reasonable cost award for the motion, on a full recovery basis, to the Respondent is $42,000, excluding preparation of costs submissions.

[42] With respect to the amount sought by the Respondent for her cost submissions, I agree with the Applicant that the amount of time docketed (approximately 34.5 hours) is excessive, disproportionate and was caused in part by preparing detailed attachments to the 3-page submission. I find that 6 hours is an appropriate amount of time to have devoted to the submissions. This too is awarded on a full recovery basis. I fix an award of $2,500 for the Respondent’s preparation of her costs submissions.

[43] Accordingly, I fix the sum of $44,500 all-inclusive as costs payable by the Applicant on a full recovery basis within 30 days from today. This amount is fair and reasonable in the circumstances of this motion.

Justice S. Vella Date: June 14, 2024