SUPERIOR COURT OF JUSTICE – ONTARIO

(BANKRUPTCY AND INSOLVENCY)

COURT FILE NO.: BK 31-347546
DATE: 20120709

RE: IN THE MATTER OF THE BANKRUPTCY OF THOMAS PIRNER,
OF THE CITY OF TORONTO IN THE PROVINCE OF ONTARIO

BEFORE: JUSTICE NEWBOULD

COUNSEL:
Robert A. Klotz, for the Bankrupt, Thomas Pirner
John Legge, for Diane Pirner

E N D O R S E M E N T

[ 1 ] I previously dismissed a motion by Mrs. Pirner to annul the bankruptcy of Mr. Pirner. I have now received cost submissions. Mr. Pirner seeks costs on a full indemnity basis, including HST, of $23,357.99, or costs, including HST, of $15,462.11 if he is entitled only to partial indemnity costs. Mrs. Pirner claims that costs should be fixed at $500 to Mr. Pirner in the cause.

[ 2 ] I see no reason for costs to be fixed in the cause. The normal rule is for costs to be fixed and paid within 30 days and there is no basis to order otherwise. This is not a case in which the outcome of the merits of the motion decided remains to be dealt with by the judge ultimately dealing with either the motion by Mr. Pirner to expunge the claim of Mrs. Pirner or the discharge application. The motion to annul lacked any realistic basis whatsoever as it was many years out of date and even far beyond the times in reported cases in which such motions had been dismissed as being brought too late. In my view, the costs that are to be paid should be paid within 30 days of the date of this endorsement.

[ 3 ] Mr. Pirner claims costs on a full indemnity basis because of the allegations of fraud made against him by Mrs. Pirner. While fraudulent allegations, if not proven, are certainly the basis for a cost order of substantial or full indemnity, in this case I made no findings regarding the fraud allegations. The reasons for the dismissal of the motion to annul the bankruptcy were essentially because of the delay involved. In my view the costs should be on a partial indemnity basis.

[ 4 ] Part of the work that was done on behalf of Mr. Pirner was to defend the motion by Mrs. Pirner to annul the bankruptcy and part was to prepare a motion to expunge the claim of Mrs. Pirner, which motion has not yet been heard. Mr. Klotz estimates that half of the work before the hearing of the motion to annul was for the expungement motion. In spite of the unsupported argument of Mrs. Pirner that the prior work was primarily for the expungement motion, I see no reason to question Mr. Klotz's estimate that 50% of his work before the hearing was for the motion to annul.

[ 5 ] Mrs. Pirner seeks a small order for costs against her basically on allegations that Mr. Pirner has misconducted himself in the past, the relevance of which on a cost submission I have difficulty with, and on alleged misconduct in the way in which these motions have been conducted. With respect to the latter point, from the vantage point that I have had in 9:30 a.m. appointments prior to the motion, there is considerable reason to question the way in which the proceedings have been conducted on behalf of Mrs. Pirner. I certainly would not reduce costs on the basis of the allegations of Mrs. Pirner regarding these allegations.

[ 6 ] I do think that the hourly rates charged on a partial indemnity basis by Mr. Klotz are somewhat high. Taking into account the factors in rule 57.01, including what reasonable amount a person in the position of Mrs. Pirner could expect to pay for losing the motion, I fix the costs payable by Mrs. Pirner to Mr. Pirner at $10,000, inclusive of HST, to be paid within 30 days.

[ 7 ] The parties have agreed to attend a mediation session with Campbell J. for two hours before any further steps are taken. They should take out the appointment through the Commercial list office and deal with Campbell J. as to what should be provided to him in advance.

Newbould J.

DATE: July 9, 2012