DATE: 20060203
DOCKET: C42864 & M32603
COURT OF APPEAL FOR ONTARIO
MOLDAVER, ARMSTRONG and JURIANSZ JJ.A.
B E T W E E N :
IN THE MATTER OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, as amended
AND IN THE MATTER OF THE BANKRUPTCY OF THE GRAPHICSHOPPE LIMITED, OF THE CITY OF TORONTO, IN THE PROVINCE OF ONTARIO
Harvey Chaiton and George Benchetrit for the appellant
Andrew Hatnay and Clio Godkewitsch for the respondents
Heard: June 16 & 17, 2005 Reasons Released: December 5, 2005
On appeal from the judgment of Justice Joan L. Lax of the Superior Court of Justice dated December 23, 2004.
A D D E N D U M
C O S T S
MOLDAVER and ARMSTRONG JJ.A.
[1] We have considered the issue of costs and we largely accept the submissions of the appellant trustee.
[2] In particular, we agree with the trustee that the respondent employees are not "public interest litigants". They had a direct financial stake in the outcome of the proceedings and their decision to appeal the trustee's dispute of their claim was not "for the genuine purpose of having a point of law of general interest resolved" nor "to achieve behaviour modification by the wrongdoer" (in this case the bankrupt employer).
[3] Additionally, this is not a case where public interest principles warrant a denial of costs to the successful litigant. The trustee is not a public entity, governmental authority or the beneficiary of a statutory monopoly in the provision of services to the public. Where, as in this case, there are no unencumbered funds in the estate to pay the trustee's costs, depriving the trustee of his costs would effectively penalize him personally for having fulfilled his statutory duty to fairly and reasonably review and assess claims filed in the bankruptcy. No such sanction is warranted here.
[4] Nor is this a case in which the cost principles that inform proceedings under the Class Proceedings Act, 1992, S.O. 1992, c. 6, should be applied. This was not a class action and the employees knew or should have known that if they did not succeed in appealing the trustee's dispute of their claim, they would be liable for costs. Any expectations on their part to the contrary would, in the circumstances, have been unreasonable.
[5] Likewise, we agree with the trustee that the issue in this case, as determined by the majority, was not novel. Hence, novelty is not a basis for reducing the amount of costs that the trustee is otherwise entitled to receive.
[6] In the end, we are of the view that the trustee is entitled to costs of the appeal before this court and the proceedings leading to it.
[7] Commencing with the proceeding before the registrar, the trustee is entitled to the costs fixed by the registrar at $7,500 plus G.S.T.
[8] With respect to the next level of appeal before Lax J., the trustee is entitled to costs in the amount of $4,500 inclusive of disbursements and G.S.T. (the amount that Lax J. awarded to the employees).
[9] As for the appeal and the motion to quash, we think that the total amount sought by the trustee (approximately $23,000) is too steep. In our view, an award of $12,000 for both matters, inclusive of G.S.T. and disbursements, would be fair and reasonable in the circumstances.
[10] In the result, the appellant trustee is entitled to costs here and below in the amounts fixed.
Signed: "M.J. Moldaver J.A."
"Robert P. Armstrong J.A."
RELEASED: "MJM" FEBRUARY 3, 2006