SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Sotheby’s (Canada) Inc., Plaintiff

AND:

Ira Hopmeyer, Stephen Ranger, Valery Skotareko, S.A. Sugar Management Inc., Tom Haberer, Veronica Gerow, Abbie Gerow, Kevin Stout, Karen Pratte and CFE Financial Inc., Defendants

BEFORE: D. M. Brown J.

COUNSEL: R. Hargovan, for the Plaintiff

Ira Hopmeyer, Defendant in person

HEARD: December 12, 2013

REASONS FOR DECISION

I. Refusals in a BIA s. 38 action

[1] Sotheby’s (Canada) Inc. has brought this action pursuant to section 38 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, to recover a debt it alleges is owed by Ira Hopmeyer, the former Chairman of the bankrupt, Ritchie’s Inc., and to set aside certain transactions with former directors, officers and employees of the bankrupt under BIA ss. 95 and 96.

[2] On October 23, 2013, I gave directions for the hearing of an undertakings and refusal motion against Mr. Hopmeyer. Prior to the return of the motion Mr. Hopmeyer provided answers to the undertakings. Three sets of refusals remained for adjudication.

II. The refusals

[3] Q. 1727, Transcript of the examination for discovery of Ira Hopmeyer conducted July 25, 2013. The question was a proper one. Paragraph 24(b) of the Amended Statement of Claim expressly pleaded that the bankrupt had issued a July 10, 2008 cheque to Mr. Hopmeyer and the question sought to ascertain whether Mr. Hopmeyer had received that payment. The question must be answered.

[4] QQ. 2322; 2346, 2352; and 2396. These questions were proper ones. As a group the questions sought to explore the nature and extent of discussions which Mr. Hopmeyer had with the co-defendant, Stephen Ranger, about the bankrupt’s affairs. Ranger was the bankrupt’s President, but in his statement of defence Ranger pleaded, in paragraph 9, that he “had limited knowledge of the Bankrupt’s financial affairs”. The questions posed related directly to the issue of Ranger’s knowledge of the bankrupt’s financial affairs stemming from dealings Mr. Hopmeyer had with him, as well as to the issue under BIA ss. 95 and 96 as to whether Ranger, in fact, was dealing at arm’s length with the debtor, an issue specifically raised by the amended statement of claim. Finally, in respect of Q. 2322, Mr. Hopmeyer had already provided a partial answer to the question at Q. 2319, so he could not take the position that he was entitled to refuse to answer the second part of the question. These questions must be answered.

[5] QQ. 2512 and 2517. These questions concerned communications between Mr. Hopmeyer and the principal of the co-defendant, CFE Financial Inc., in respect of which the plaintiff seeks to set aside under BIA ss. 95 and 96 a June 1, 2009 payment, some four months prior to the date of the bankruptcy order. These questions are relevant to the issue under BIA ss. 95 and 96 as to whether CFE Financial Inc. in fact was dealing at arm’s length with the debtor. These questions must be answered.

[6] An order shall go requiring Ira Hopmeyer to re-attend for examination, at his own expense, no later than January 31, 2014, to answer the following questions, and any questions arising from those answers: QQ. 1727, 2322; 2346; 2352; 2396; 2512 and 2517. I fix the costs of this motion at $3,000, payable to the plaintiff by Mr. Hopmeyer, but in the cause of the action.

D. M. Brown J.

Date: December 12, 2013