Robyrt Hawyrden Regan

Following the abandonment of a motion by the bankrupt seeking annulment of her bankruptcy, secured creditors sought substantial indemnity costs against the bankrupt, her husband, and her counsel.

The court held that under Rule 37.09(3) of the Rules of Civil Procedure, responding parties are presumptively entitled to costs where a motion is abandoned unless good cause exists to order otherwise.

No such cause was established, as the evidence showed the motion lacked merit and was withdrawn after cross‑examination revealed the evidence would not support annulment.

However, the court declined to impose costs against the husband or counsel, finding insufficient evidence that they caused unnecessary costs or acted improperly.

Partial indemnity costs were awarded against the bankrupt in amounts the court found fair and proportionate.

The defendants brought a motion to set aside a default judgment and permit the filing of a Statement of Defence.

The court applied the three-part test for setting aside default judgment—promptness, a plausible explanation for the default, and the existence of an arguable defence.

The defendants attributed their failure to file a defence to misconduct and negligence by their former solicitor, including failing to file the drafted defence and misleading the defendants regarding its status.

The court held that the motion was brought promptly by new counsel and that the defendants had established a plausible explanation and an arguable defence on the merits.

The default judgment was set aside and the noting in default vacated, with costs of the motion ordered personally against the defendants’ former solicitor under Rule 57.07(1)(c).

The plaintiff brought a motion seeking to have the defendants found in contempt of court for failing to comply with several court orders related to examinations in aid of execution and other litigation obligations.

The defendants argued that their failures were attributable to the conduct and advice of their former solicitor and a disbarred lawyer assisting him.

The court held that while parties are generally responsible for their own conduct in litigation, the circumstances raised sufficient doubt regarding the defendants’ culpable intent.

Given the high onus required to establish contempt of court, the court declined to make a contempt finding.

The court further ordered that there would be no costs of the contempt motion.