A. Zweig

This decision addresses the costs arising from a successful motion to annul a corporate bankruptcy.

The court found that the assignment into bankruptcy was an improper use of the Bankruptcy and Insolvency Act, driven by self-interest to halt ongoing litigation.

While the conduct was not 'especially egregious' to warrant full indemnity costs, it justified an award of substantial indemnity costs.

The court awarded the successful party $55,750 in substantial indemnity costs against the party who improperly initiated the bankruptcy, comprising fees, HST, and disbursements.

No costs were awarded to or against the trustee.

The moving party, Gaspare Caruso, brought a motion to annul the bankruptcy of 1947755 Ontario Ltd. under s. 181(1) of the Bankruptcy and Insolvency Act.

The assignment in bankruptcy had been made by John Hanna Nissan amidst a protracted dispute over corporate control.

The court found that the corporation was not insolvent at the time of the assignment, as its assets exceeded its liabilities and it could have met its obligations with a modicum of effort.

Furthermore, the court held that the assignment was an abuse of process, strategically timed to avoid scheduled examinations in the ongoing litigation.

The motion to annul the bankruptcy was granted.

The trial in this matter was scheduled to commence on September 20, 2021.

Due to health issues involving counsel for the defendants, the court adjourned the trial to January 10, 2022, making the new date peremptory to the defendants.

The court also made orders regarding the re-drafting of pleadings and the production of outstanding documents by the defendants.

The issue of the plaintiffs' costs thrown away was reserved to the trial judge.

At a pre-trial conference for a property ownership dispute, the court addressed trial management issues to ensure readiness for a September 2021 trial.

The court set deadlines for the defendants to provide a redrafted statement of defence, finalize their position on the joint document brief, and answer outstanding undertakings regarding the property's income and expenses.

The court noted that failure to provide the undertakings could result in the plaintiff seeking to strike the defence at trial.

The plaintiff brought a motion for a status hearing to extend the deadline to set the action down for trial.

Shortly after the motion was filed, the Registrar mistakenly issued an Order Dismissing Action for Delay.

The court set aside the dismissal order because the motion was brought before the five-year deadline.

Applying the test for extending the trial deadline, the court found the plaintiff provided an acceptable explanation for the delay, citing the principal's mistaken belief that the action was settled alongside related actions, and the inadvertence of counsel.

The court also found the defendant would suffer no non-compensable prejudice, as documentary evidence was preserved and key witnesses were available.

The motion was granted and a timetable was set.

In this construction lien costs reference following trial, the successful plaintiff sought more than $298,000 in costs, including substantial indemnity costs after an offer to settle and extensive expert and transcript expenses.

The court held that no settlement offer engaged Rule 49 presumptions in the plaintiff’s favour and, in any event, substantial indemnity costs would have been inappropriate because the plaintiff was unsuccessful on a major quid pro quo claim that materially increased the length and expense of the litigation.

Applying proportionality, the least expensive course principle under the Construction Lien Act, and the general costs factors under the Rules, the court substantially reduced the claimed legal fees and expert disbursements.

Costs were fixed at $137,098.53 inclusive of HST, payable by the defendant to the plaintiff.

In a construction lien action arising from a condominium renovation, the court held that the parties' project proposal was void for uncertainty because there was no meeting of the minds on price, scope of work, or completion timing.

The contractor nevertheless established entitlement to restitutionary quantum meruit recovery because the owner requested, approved, and received the benefit of the services and materials supplied.

The court rejected the contractor's attempt to add a 36 percent markup for profit and overhead, finding no contractual basis and no evidence of reasonable market value.

The owner's counterclaims for delay, most alleged deficiencies, and permit-related damages failed, save for a reduction reflecting the reasonable cost to retrofit a stair railing that did not comply with code.

Judgment was granted for the contractor in the amount of $57,657.31 and the lien was held to have been preserved and perfected in time.