Ontario Civil

Civil Practice and Procedure


Offers to settle or payment into court

Bankrupt’s consultants ordered to pay costs after rejecting settlement offer

Bankrupt re-sold telephone equipment. In May 2012, bankrupt began paying consultant, C, and C’s company $10,000 per month. In November 2013, bankrupt began receiving loans from new lender it reported as revenue. In March 2015, bankrupt’s old lender brought application for bankrupt’s receivership. In April 2015, receiver and manager were appointed. In July 2015, bankrupt was assigned into bankruptcy. At October 2015 examination under s. 163 of Bankruptcy and Insolvency Act (BIA), C testified he had no contact with and could not name any of bankrupt’s customers or suppliers. Trustee in bankruptcy brought successful motion for order requiring C and C’s company to repay $159,330 transferred during year prior to March 2014 (relevant period) to estate of bankrupt under s. 96 of BIA. Hearing was held to determine costs. C and C’s company were jointly and severally liable to pay trustee its costs fixed in amount of $15,356.99 inclusive of disbursements and taxes. Trustee’s offer to settle proceeding for $100,000 met procedural requirements of Rule 49 of Rules of Civil Procedure. There was no basis to depart from usual approach of ordering costs payable to winner or from enhancement of costs provided under Rule 49. Trustee beat amount of its offer and was entitled to costs to day of offer on partial indemnity basis and thereafter on substantial indemnity basis. Trustee’s lawyer’s rates and hours were well within reasonable range. Small increase as penalty for time spent responding to late filed material and for cross-examination without leave was properly included in bill of costs.

National Telecommunications Inc., Re (2017), 2017 CarswellOnt 5573, 2017 ONSC 2376, F.L. Myers J. (Ont. S.C.J. [Commercial List]); additional reasons (2017), 2017 CarswellOnt 3184, 2017 ONSC 1475, F.L. Myers J. (Ont. S.C.J. [Commercial List]).

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