SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Re Spiros Pantziris, a bankrupt

BEFORE: D. M. Brown J.

COUNSEL:
C. Kopach, for the Trustee in bankruptcy, Albert Gelman Inc.
F. Bennettt, for the bankrupt, Spiros Pantziris

HEARD: April 28, 2014, with further written submissions dated May 9 and 13, 2014.

REASONS FOR DECISION

Trustee’s motion for directions regarding the appeal of an order dismissing an action returned to the Bankrupt

1Spiros Pantziris was adjudged bankrupt on October 8, 2013. Prior to his bankruptcy, Pantziris had commenced the “Keane Action” (2010) and the “Cobalt Action” (2012). The Trustee, Albert Gelman Inc., initially moved for directions regarding both actions because it had concluded that prosecuting the actions was not likely to result in a net monetary gain for the benefit of the estate’s creditors and, to the contrary, might result in a net liability to the estate.

2On February 28, 2014, prior to the hearing of the motion, I ordered the Trustee to file a “place holder” notice of appeal from the decision of Master Dash made February 19, 2014, dismissing the Keane Action. Subsequently, at the April 28 hearing, the parties agreed that both Actions should be returned to the bankrupt pursuant to section 40(1) of the Bankruptcy and Insolvency Act. The Trustee’s interest in that action was conveyed to the Bankrupt on April 28, 2014.

3The parties could not agree on who should pursue the appeal of the dismissed Keane Action. I called for written submissions. On May 13, 2014 the Trustee advised that as a result of a direction from the Divisional Court to perfect the appeal, the Trustee “was then forced to perfect the appeal in order to perfect the Bankrupt’s rights and filed a ‘placeholder’ factum”.

4The Bankrupt submitted that the Trustee had failed to take steps to keep the Keane Action alive and therefore should perfect and argue the appeal from the order of Master Dash “so that it is in a position to return the 2010 law suit to the bankrupt in the manner in which the trustee acquired it”.

5I do not accept that submission. The Trustee’s Second Report dated April 4, 2014, disclosed that the Trustee had made reasonable efforts to preserve the Keane Action, both in its preparation for and its submissions at the status hearing before Master Dash on February 19, 2014. The Trustee kept the Bankrupt’s counsel informed about the status hearing and the materials it was filing for that hearing. When Bankrupt’s counsel advised that he would be on vacation the week of the status hearing, Trustee’s counsel asked whether there was anything he wanted the Trustee to bring to the attention of Master Dash at the status hearing. The Trustee appeared at the status hearing and made submissions to keep the Keane Action alive. Notwithstanding that Master Dash did not accept those submissions, the record disclosed that the Trustee made reasonable efforts to protect the Keane Action from dismissal. There was no failure on the Trustee’s part.

6Consequently, now that the Trustee’s interest in the Keane Action has been transferred to the Bankrupt, it falls on the Bankrupt to prosecute the appeal of Master Dash’s order. The Bankrupt has argued vigorously at several appearances that he sees real value in the Keane Action, despite the very adverse arbitration award made against him on December 16, 2011. If the Bankrupt sees value in that action, then he should risk his money to prosecute the appeal.

7For those reasons, I direct that, effective today, the prosecution of the appeal of the order of Master Dash made February 19, 2014 in the Keane Action shall be the responsibility of the Bankrupt, and the Trustee shall file a notice of change of solicitor to that effect with the Divisional Court. As well, since the administrative direction from the Divisional Court to perfect the appeal was made before this motion could be decided, I order the Bankrupt to pay the Trustee its reasonable legal fees incurred in preparing and filing the notice of appeal and factum, together with the court filing fees incurred by the Trustee, all within 60 days of the date of this order.

D. M. Brown J.