A bankrupt sought costs following the withdrawal of a motion relating to the scope of a section 163 examination under the Bankruptcy and Insolvency Act.
The examination concerned whether corporate credit cards were being used to pay the bankrupt’s personal expenses and whether income was being diverted through a company controlled by the bankrupt’s spouse.
During argument, the court raised concerns about the procedural posture of the examination and the potential overlap between the trustee’s investigative powers and a separate section 38 action commenced by certain creditors represented by the same counsel.
The motion itself was ultimately withdrawn after the parties reached a partial resolution, leaving only the issue of costs.
Applying proportionality, the court awarded the bankrupt a credit of $2,500 plus HST against obligations owed to the estate.
