COURT FILE NO.: 46686/14

DATE: September 2, 2015

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: B. Love Holdings Inc., Scott and Pichelli Limited, in its capacity as Trustee of the Estate of Mida International Inc., a Bankrupt, Applicants

AND:

Deloitte Restructuring Inc. and Thornton Grout Finnigan LLP, Respondents

BEFORE: The Honourable Mr. Justice R. J. Nightingale

COUNSEL: Irwin Duncan, Counsel, for the Applicants

Michael Valente, Counsel, for the Respondents

HEARD: December 17, 2014 and May 29, 2015

ENDORSEMENT

[1] The Applicants request a review and adjustment after assessment of the Respondents’ accounts including their legal accounts for the Respondents’ work in respect of the private receivership of Mida International Inc. (“Mida”). This and other ancillary relief is claimed under sections 148, 246 and 248 of the Bankruptcy and Insolvency Act (“BIA”).

Factual Background

[2] The Applicant B. Love Holdings Inc. (“Love Holdings”) owns all of the shares of Mida. It is also a secured creditor of Mida which operated a recycling metal and electric waste business in Stoney Creek since 1999.

[3] The Applicant Scott and Pichelli Limited (“Pichelli”) is the Trustee administering the bankrupt estate of Mida.

[4] The Respondent Deloitte Restructuring Inc. (“Deloitte”) was appointed as a private receiver of Mida by HSBC, a secured creditor, under its general security agreement.

[5] The Respondent, Thornton Grout Finnigan (“TGF”) provided legal services to the Respondent Deloitte and HSBC regarding the Mida receivership.

[6] HSBC also had guarantees of the debt of Mida from the Applicant Love Holdings and Brian Love, Mida’s president, personally.

[7] Mida also borrowed money from the Business Development Bank of Canada (“BDC”) secured by a general security agreement (“GSA”) over specific assets.

[8] BDC had first priority over only some of Mida’s secured assets and the HSBC security was otherwise first priority over the majority of Mida’s assets. The security interest of Love Holdings in the Mida assets was third in priority.

[9] In the spring of 2013 because of unfavourable business prospects, Brian Love (“Love”) made the decision to cease operations of Mida, liquidate its assets and pay off the amounts owing to HSBC and BDC.

[10] On June 25, 2013 Love attended at the offices of HSBC with Mida’s accountant to advise them of Mida’s decision and outline a simple planned liquidation process of Mida by Love to ensure that HSBC’s and BDC’s loans would be paid in full. Love Holdings, as third priority secured creditor, would then receive the balance.

[11] HSBC representatives, who were then advised that Pichelli would be appointed trustee in bankruptcy of Mida and as the receiver for the secured creditor Love Holdings, approved the plan. They appreciated that Mr. Love had presented it rather than not coming forward at all. In particular, there was no evidence that HSBC even mentioned any need to appoint their own receiver separately.

[12] Mida made an assignment in bankruptcy on July 2, 2013 naming Pichelli as trustee. HSBC appointed Deloitte (Rob Biehler) initially as its consultant only on July 5, 2013 who agreed in cross-examination that the bankruptcy did not affect the positions of Mida’s secured creditors including HSBC.

Events of July 5 to July 10, 2013

[13] The evidence of both Love and Rob Biehler regarding their meeting of July 5, 2013 with Pichelli’s representative Peter Pichelli is clear that Pichelli and Love demonstrated to Rob Biehler what they had done to date regarding Mida’s windup.

[14] In particular, Pichelli and Love had already collected approximately $1.4 million, approximately half of the outstanding receivables, which they had deposited in the bank to the credit of HSBC’s loans. These accounts receivable were mostly provincial government debts and there was no issue on their being easily and totally collectable which Love would continue to take care of. Approximately 80% of the remaining receivables of about $1.6 million was also owed by that provincial government agency.

[15] They had already secured the building with the landlord for two months to complete the receivership with the landlord’s agreement to reduce the rent from $75,000 per month to $10,000 and terminate the lease by August 31, 2013.

[16] The business was already shut down and was no longer operating and the inventory was already sold by Love. They also had terminated the employment of most of the Mida’s 54 employees, (except for a few needed to complete the windup operations including the bookkeeper), and completed the T4’s.

[17] At that meeting, Pichelli also provided Biehler with an appraisal report from a reputable appraiser it had hired confirming complete details of all of Mida’s equipment still on Mida’s site secured by the HSBC and BDC securities and its individual appraised values totalling approximately $362,000. Biehler admitted that that appraisal was materially complete and that he later used that information from that appraisal to complete a list to take to market for a sale of the equipment. Love also assured Biehler of his continued assistance in arranging the sale of that equipment to maximize the sale proceeds.

[18] Biehler agreed that there never was any priority dispute between the three secured creditors and that the trustee in bankruptcy never attacked the security of any of the secured creditors. Everyone understood at the meeting that HSBC was first in priority over all of Mida’s assets except for certain specific items over which BDC had first priority.

[19] There accordingly was relatively little work to be done to complete the windup of Mida under a proposed receivership by Deloitte.

[20] Biehler was assured in that meeting that HSBC’s entire debt would be paid in full first from Mida’s receivables and sale of equipment with the balance of the proceeds to be paid to BDC and Love Holdings pursuant to their security.

[21] Love was clear that Pichelli then asked Biehler what he thought the balance of the work would cost to wrap up the file in a receivership and Biehler quoted $30,000-$40,000, based on these details they had just discussed. Biehler said it could possibly be $50,000 but that he couldn’t see that amount based on where they were at already. Mr. Love understood based on Biehler’s representation that it was a rather simple windup of the company and he accordingly consented to the private receivership of Deloitte by HSBC on July 8 or 9.

[22] Biehler’s evidence was that he was aware at that meeting of July 5 that Mida had made an assignment in bankruptcy on July 2 with Pichelli as its appointed trustee and that there were three secured creditors being the HSBC, BDC and Love Holdings. He stated he did not provide the parties with an estimate for his fees for this private receivership.

[23] However, he then admitted that there was in fact a discussion about the receiver’s fees at that meeting to complete the windup but only stated he “recalled” from that meeting that the $30,000 to $40,000 to a possible and extreme case high of $50,000 was Pichelli’s estimate for his own fees for a private receivership for the Mida situation. Biehler produced no notes of that meeting he made but said there was no reference in his notes about a fees estimate despite this discussion.

[24] However, Biehler did not state in that meeting, in his affidavit or cross examination thereon that those figures discussed were unreasonable amounts to complete the receivership work required. He did not state that he disagreed with those amounts discussed at that meeting or that he thought the amounts discussed were low. In particular, Biehler did not say in that meeting that he would be charging $550 per hour for whatever time he spent on the receivership and lesser hourly rates for other associates in his office regardless of this understanding and agreement of the maximum fees to be incurred as discussed at that meeting.

[25] It appears that Biehler did not say that his proposed receiver’s fees were excluding additional legal fees to be charged to the receiver for this straightforward receivership. There is no evidence that Biehler advised Love that HSBC and/or Deloitte had already retained counsel and incurred significant legal fees pertaining to a court ordered receivership for which Mida and Love would be responsible before obtaining his consent to the private receivership.

[26] Pichelli was obviously experienced in bankruptcy and receivership matters for businesses as was Biehler and even if Biehler’s version of the discussion was true, Biehler at no time suggested Pichelli did not know what he was talking about or that he believed the estimate was too low.

[27] The evidence of Mr. Love is more realistic and makes common sense and I accept it where it conflicts with that of Biehler. It makes little or no sense that Pichelli would give his opinion of what he would charge to do the Mida receivership windup and not Biehler as Pichelli wasn’t the one going to do the job.

[28] Regardless, based on their discussions and what Biehler said, the reasonable inference from all the evidence was that all of the parties present in that meeting understood and agreed that the total costs for the work of Deloitte as private receiver for HSBC to complete the rather modest work required for the Mida windup would be no more than $30,000-$40,000 to an outside maximum of $50,000. Those figures appear to be reasonable ones in those circumstances.

[29] There was no suggestion by Biehler or understanding or agreement of the parties that the Deloitte account was going to be based on hourly rates with no limit on the hours spent or that the account could be two or three times greater than what was discussed and agreed by the parties in that meeting. Otherwise, given that Love Holdings and Love were asking HSBC proceed with a private receivership and were being asked to consent to that, Biehler would surely have said something to Love and Pichelli if he disagreed with the figures actually discussed or thought his fees including legal fees could or would be significantly higher. He did not.

[30] Biehler stated that as of the date of the bankruptcy which was July 2, 2013, Mida was indebted to HSBC in the amounts of approximately $1.7 million and $100,000 US. However, the value of Mida’s accounts receivable and secured assets by HSBC well exceeded HSBC’s outstanding loans. At no time prior to that date had Mida defaulted in any of its payment obligations to HSBC and Mida’s principals enjoyed a good working relationship with the HSBC. Love and Love Holdings provided guarantees of Mida’s indebtedness to HSBC. There was likely no risk of HSBC not being paid in full. Accordingly, it was in Love’s interests to fully cooperate with HSBC and BDC, collect and deposit Mida’s receivables to credit HSBC’s loans and sell its equipment promptly and efficiently which Love was continuing to do.

[31] It appears from the legal account of TGF of August 16, 2013 that discussions and correspondence then took place that same day July 5 between the lawyers for both HSBC and Love regarding the appointment of Deloitte as Mida’s private receiver with further similar discussions taking place on July 8. The private receivership terms were likely finalized between the parties on July 9 when HSBC signed a private receivership appointment engagement letter which was forwarded to Love’s lawyer. Love, through his lawyer, confirmed the acceptance of the private receivership appointment of Deloitte the next day July 10 after he received the HSBC signed documentation.

[32] Love Holdings through Brian Love had consented to that appointment so that HSBC did not need to seek a court appointed receiver. Their position was clear throughout that a court appointed receiver was unnecessary and would be unfair to other secured creditors as the costs would skyrocket. HSBC also agreed to the private appointment to minimize costs for the benefit of all of Mida’s creditors including BDC and Love Holdings with Love’s consent that HSBC would not be prevented from proceeding by way of a court appointed receivership if it was necessary.

Events of July 11, 2013 to March 1, 2014

[33] Brian Love after that devoted many hours without compensation and was instrumental in arranging for the Ontario Electric Stewardship program which had Mida’s largest receivable and other Mida debtors to pay most of the balance of the outstanding accounts receivable to Deloitte without any significant involvement or effort by Deloitte or time delays.

[34] Biehler admitted Love walked the auctioneers and potential buyers through the premises showing them the equipment. This minimized Deloitte’s costs and Love was also fully cooperative and attended on the auction sale of the equipment on August 21, 2013 which Deloitte arranged through a private contractor Corporate Assets.

[35] All the net proceeds of the receivables and sale of equipment received by Deloitte were paid out by them to HSBC on the following dates :

a) $400,000 August 8, 2013

b) $700,000 September 18, 2013

c) $99,020.48 October 3, 2013

d) $340,692.16 October 21, 2013

$1,596,929.58 Total

[36] By that October 21, 2013 payment, given the additional monies collected and deposited prior to the receivership by Love, all of Mida’s indebtedness to HSBC was paid in full and Deloitte’s only remaining duties would be those as a receiver under the Bankruptcy and Insolvency Act.

[37] HSBC had also discharged its collateral security that secured Mida’s indebtedness including its security against Love Holdings by December 13, 2013.

[38] On February 3, 2014, Deloitte prepared and filed its receiver’s Final Report and Statement of Accounts. Deloitte indicated that its final total fees and costs charged to Midas estate were $101,907.50 plus HST and in addition legal fees of $32,746.40 plus HST, all of which was far greater than the $30,000-$40,000 to a possible high of $50,000 all parties understood and agreed on July 5, 2013 would be charged for the total receivership costs.

[39] On February 13, 2014, Deloitte paid over the sum of $57,126.94 to the receiver acting for BDC which were stated at that time to be the final payment related to the receivership of Mida. These were surplus funds held by Deloitte after paying off the HSBC indebtedness and paying itself for all its fees (including legal fees) and disbursements charged to complete the Mida receivership. Biehler retained an additional $10,000 for a “contingency reserve fees and disbursements and other matters”. He stated there were only a couple of minor issues after that including their writing a cheque for $900 to cover WSIB premiums owed in 2013 that it had missed for Mida employees employed after the receivership.

[40] However, Deloitte on March 17, 2014 then paid itself $5650 from that $10,000 reserve for its further new account dated March 5. That account now referred to services allegedly performed back to December 3, 2013 even though the receiver’s final report of February 3, 2014 then confirmed payment of its total costs incurred. Moreover, of the 30 entry dates for services rendered, only 8 entries pertain to matters after that date up to February 20 for very minimal work done. Deloitte’s final accounts now totalled $106,907.50 plus disbursements of $823 plus HST.

[41] In addition, Deloitte then paid out $3059 from that $10,000 reserve for TGF’s further legal accounts one of which was dated January 17, 2014 for work performed in December 2013 and another of March 14, 2014 for work in January and February 2014. Those 2 accounts were only for legal advice on how to distribute the above mentioned surplus funds.

[42] Deloitte had rendered an account in July and two in August 2013 to HSBC for its pre-receivership consultant and receivership work totaling $61,951 plus HST. Biehler stated in his affidavit that all accounts had been provided to Love on a timely basis and until this court application, there had been no significant concerns expressed by Love.

[43] However, Brian Love, whose evidence I accept, stated that he did not actually receive on his computer copies of those initial accounts rendered by Deloitte including TGF’s legal account rendered to HSBC dated August 16, 2013 for $27,734 for fees and disbursements plus HST at that time. Love’s evidence was that when they were allegedly emailed on August 13, 2013 by Biehler, Mida’s company computers were already shut down and removed from the business at that time and therefore he did not have access to the computers. Accordingly he did not see or review them until early 2014 when Deloitte’s Counsel forwarded them to his Counsel. The reasonable inference is that is why he did not complain to Deloitte when those accounts were rendered about the size of those bills based on what was discussed and agreed at their July 5, 2013 meeting.

Events of March 1, 2014 to June 26, 2014

[44] On March 11, 2014, Deloitte unexpectedly received two refund cheques from Canada Revenue Agency made payable to Mida in the amounts of $4206.50 (HST) and $262,972.23 (income tax). Deloitte notified BDC and Love on March 13 of that. The receiver for BDC immediately that same day requested the cheques be sent to him stating that after payment of BDC’s debt, he would send the surplus funds to the trustee Pichelli. Love confirmed he agreed with that arrangement by email to Biehler on March 17, 2014 and was thanked by Biehler a few minutes later. Biehler admitted he knew that if a secured creditor was paid out in full, any funds remaining go out to the next secured creditor i.e., BDC under s. 64 of the Personal Property Security Act.

[45] However, Deloitte despite that requirement and those directions received did not do so. Its lawyers TGF by letter of March 21, 2014 insisted that Love first sign an enclosed agreement regarding that requested and agreed upon distribution of all of those funds by Deloitte to BDC. However, and more importantly, they included a clause in that agreement that required Love and BDC to release Deloitte of all claims under the receivership.

[46] Biehler admitted in cross examination that that release would in effect have prevented Love and BDC from having any opportunity to review Deloitte’s accounting for the receivership or with respect to Deloitte’s accounts for their services. Biehler also admitted there was no court appointed receivership, that HSBC had been long paid in full and its security discharged and that Deloitte was not entitled to the release but he asked for it anyway.

[47] Biehler’s evidence is misleading in his cross-examination when he said he felt the need to have the agreement “to clarify amongst the parties how the monies would be disbursed and to whom”. He suggested the reason for that was that he had heard three different forms of the direction of funds, one from BDC’s receiver to turn it over to him, one from Love to cash the cheques and write a cheque over to BDC and one from Love to send the money to his trustee. He stated that BDC’s instructions were contradictory to what Love’s instructions were.

[48] That evidence is simply contrary to the clear, written similar instructions he received from both BDC of March 13 and Love of March 17 which were in fact included in that first TGF draft agreement of March 21, 2013. No other emails or documents from Love or BDC prior to that draft agreement of March 21 purporting to change those instructions were provided by Biehler in his evidence. In fact, there was no confusion whatsoever then as to whom Deloitte was to pay these surplus funds.

[49] It wasn’t until a few days later after Love and BDC confirmed that they were not prepared to sign that draft agreement because it included a release clause that these alternate instructions were discussed during the negotiations to try and conclude the matter of having the CRA funds paid out immediately by Deloitte.

[50] Moreover, no such release agreement had been requested of the creditors by Deloitte let alone discussed by Deloitte before it delivered its final report of February 3, 2014 and paid the approximately $57,000 in surplus funds to BDC.

[51] The reasonable inference is clear that Deloitte was initially demanding the release signed by Love and BDC, to which it was not entitled, which would have prevented Love and BDC from pursuing any claims against them including a review of their accounts for the receivership. They had no authority to hold those CRA cheques and certainly no authority to withhold them until the release agreement was signed by Love.

[52] Love refused to sign the release agreement including subsequent redrafts which purported to still require BDC to release Deloitte but removing Love as a releasor but which may not have had that effect as the language still suggested that Love Holdings Inc. was being asked to sign the agreement.

[53] Moreover, Deloitte’s insisting that BDC sign a release agreement binding on BDC’s assignees would have prevented BDC and any assignee of its claims on payment of its debt, including Love Holdings, from challenging the Deloitte receivership work and accounts rendered.

[54] Deloitte continued to refuse to deliver the CRA cheques to BDC or a separate cheque to BDC for the amount of their debt with the balance payable to Love.

[55] Love’s evidence is that he returned a telephone call to Biehler on April 9, 2014. During that conversation he said Biehler told him that if he did not sign the agreement that he sent to him, that Biehler would cash the CRA cheques and advise Deloitte’s lawyers to commence legal proceedings and that Deloitte would use “my money to sue me”. Biehler denied on cross-examination that he told Love that or that if he proceeded to court, Biehler would use his money to fight with him.

[56] What is significant is that Deloitte then continued to refuse to distribute these surplus funds as required to BDC and in fact cashed the cheques after this application was commenced by Love in April 2014. Deloitte even continued to withhold the funds after it had received documentation on April 21 confirming that BDC had indeed assigned its security interest to Love Holdings and that there was no longer any issue with respect to its payment of all of these surplus funds to Love Holdings.

[57] Biehler admitted in its final report of April 25, 2014, in light of that assignment, that it was prepared to distribute the CRA refund it held to Love Holdings (net of any costs incurred by the receiver in finalizing the administration including the costs relating to the within application). However, they only paid part of the funds as noted below to the trustee Pichelli on June 26, 2014, a month after another request to do so was made during cross examinations.

[58] What is also significant is that an earlier letter of April 1, 2014 of TGF advised Love’s lawyer that if the terms of the initial draft agreement it provided including the release were unacceptable to Love, Deloitte would bring an application under the Personal Property Security Act seeking an order authorizing the distribution of the surplus funds to BDC and Love Holdings and a release in favour of the receiver with respect to all claims relating to the Mida receivership. TGF then stated that “all costs of doing so will, of course, be paid from the proceeds held by the receiver”. When counsel for Love suggested to Mr. Miller of TGF that was the decision Deloitte was making because they were trying to make Mr. Love sign a release, his response was “they absolutely requested a release” but he saw nothing inappropriate with that.

[59] I disagree. That is not what section 64 of the PPSA requires and those proceeds held by the Deloitte, after payment to BDC, indeed belonged to Love Holdings which TGF and Deloitte knew. It is clear that the real reason for the threatened court application by Deloitte was not to obtain directions for payment of the CRA cheques with respect to any priority dispute over those CRA funds as there was none. Rather, the only reason was to try and obtain a release by Love Holdings and if it was not provided, Deloitte would seek payment of additional fees and costs out of those surplus funds for their court application which in my view was neither necessary nor reasonable.

[60] Biehler received a copy of that letter. Biehler admits he then had a conversation with Love but said that it took place on April 4. He said he told Love that he had these cheques in his credenza going on three weeks and at that point in time, there was still no form of how to resolve this issue. Interestingly, he was vague when he also stated “and in terms of who’s going to get paid down the line, how it’s going to happen without getting in the middle of the dispute, I really have no interest in “.

[61] The reasonable inference from all that evidence confirms as correct the version of Love of that conversation especially as even on June 26, Deloitte only forwarded $218,141.41 of the CRA funds to Pichelli holding back to date $50,000. As submitted by its counsel, that amount was its “compensation for the passing of its accounts” on this application or as indicated in its factum, “for Deloitte’s continuing costs and expenses, including the costs of defending this proceeding”. It appears Deloitte has done essentially what Biehler and Deloitte’s counsel said it would do with Love Holdings’ money without any justification. Superior Coatings Canada Limited v. Pete Marwick Thorne Inc. [1995] O.J. No. 2854 (Ont. C.A.)

Analysis

[62] What is obvious in this case is that HSBC and Deloitte knew from the outset and certainly no later than July 10, 2013 that it had the complete cooperation of Love Holdings, Brian Love and the trustee Pichelli in winding up the Mida business already shut down, collecting the remaining outstanding accounts receivable and selling the assets and equipment with the proceeds to be payable to HSBC to pay off its outstanding indebtedness and that of the other secured creditors BDC and Love Holdings. Love had personally guaranteed the HSBC loan and Love Holdings would be entitled to any remaining proceeds as a third in priority secured creditor.

[63] There never was any question there was going to be surplus funds available and there was no danger of HSBC not recovering payment in full of its debt with Mida.

[64] In fact, Love and Pichelli had already collected approximately half of the accounts receivable by July 10, 2013 and paid them over to HSBC.

[65] HSBC and Deloitte also knew or ought to have known from the outset that there was likely no need for a court-appointed receiver for Mida given the simple windup required and Love’s assistance and cooperation. Deloitte knew and agreed that a reasonable amount of Deloitte’s fees for the private receivership would be in the area of $30,000-$40,000 and $50,000 at the outside. Nothing in the evidence suggested that anything significant happened during the receivership that resulted in any more work and effort by Deloitte than was originally contemplated as of July 10, 2013.

[66] Deloitte’s authority as a private receiver to act was restricted to the powers set out in the HSBC security agreement and those conferred by its letter of appointment. Bennett on Receiverships (3d) (Toronto: Carswell, 2011) @42; Royal Bank of Canada v. First Pioneer Investments [1979] O.J. No. 4501 at para. 9, affirmed [1981] O.J. No. 3242 (Ont. C. A.), partially reversed on other grounds [1984] S.C.J. No. 34 (S.C.C.).

[67] Deloitte was appointed only for the purpose of taking control of Mida’s collateral security to HSBC and realizing upon it for the purpose of paying Mida’s debt to HSBC. As the HSBC’s security agreement or appointment did not provide for more than that, Deloitte’s receivership was spent once HSBC had been paid in full. This was subject to its obligation to send a final report with a statement of accounts and hold any surplus for Mida and third-party creditors BDC and Love Holdings as required under section 246 of the BIA. Bennett on Bankruptcy, 14th edition, pages 635, 638 and 641. It did so on February 3, 2014 and shortly after paid the surplus to BDC.

[68] HSBC remains liable for Deloitte’s acts, omissions and remuneration as its receiver. Bennett on Bankruptcy, p. 641. However that does not necessarily mean that Mida’s estate or its assets should be.

[69] There is no automatic taxation or assessment of Deloitte’s accounts by Mida’s bankruptcy trustee Pichelli or by Love Holdings as a subsequent creditor. However, because of these facts and despite Deloitte’s attempt to require Love Holdings sign a release of all claims against it including an assessment of their accounts before the remaining surplus was paid, Deloitte is required to submit its accounts and have its fees and disbursements taxed including the legal fees of TGF. Bennett on Bankruptcy, page 647.

[70] The affidavits of the parties and the transcripts of their cross-examination thereon in my view provide sufficient evidence for that assessment by this Court.

Deloitte’s Fees After Review

[71] Deloitte as the receiver bears the burden of proving that its fees charged are fair and reasonable including its legal fees incurred. What is fair and reasonable should dominate the analysis. The value of the receiver’s services provided predominate over the mathematical calculation reflected in the hours spent times an hourly rate equation. Its fees must be proportional and reasonable and the focus of the fair and reasonable assessment should be on what was accomplished, not on how much time it took. The Bank Nova Scotia v. Diemer 2014 ONCA 851.

[72] The Court in The Bank of Nova Scotia confirmed the following non-exhaustive factors applicable to the assessment of receiver’s compensation :

a) the nature, extent, and value of the assets

b) any complications or difficulties encountered during receivership

c) the degree of assistance provided by the debtor

d) the time spent

e) the receiver’s knowledge, experience and skill

f) the diligence and thoroughness displayed by the receiver

g) the responsibilities assumed

h) the results of the receiver’s efforts

i) the cost of comparable services when performed in a prudent and economical manner

[73] The Court also appeared at paragraph 49 to consider that receiver’s fees generated by hourly rates could be reduced if the standard rates were not disclosed prior to the appointment of the receiver.

[74] In my view, Deloitte’s remuneration should be assessed based on these factors including the original understanding and prior agreement of the parties as to what the maximum receivership fees would be for this uncomplicated windup receivership. This would be subject to a consideration of some compensation on a quantum merit basis if there was significant time, trouble and responsibility involved in the receivership beyond what was originally contemplated by the parties.

[75] In this case, it is not appropriate to determine the receiver’s fees based on a percentage of its receipts given the simplicity of the work required and the work performed by Mr. Love. A percentage calculation of fees in this case would not be fair and reasonable value for its services.

[76] Unfortunately, the accounts submitted by Deloitte only provide a total of the hours claimed by its staff for the work mentioned in those accounts although there is itemization of the work done by staff on the days noted. There is no way to tell how long it took each individual staff member to do the task performed on each day which should have been provided. Bakemates International Inc. 2002 CanLII 45059 (ON CA), [2002] O.J. No. 3569(OCA) @ para. 37. It was only Biehler who provided an affidavit providing general details of the work done by Deloitte staff throughout the receivership.

[77] Although Biehler admitted on cross examination that Deloitte’s staff had dockets for their specific hours of work performed each day, no such dockets were provided to the Court notwithstanding the onus on Deloitte to prove the fairness and reasonableness of its fees.

[78] It is not usually the function of the court to scrutinize in fine detail the hours claimed by the receiver. However, in this case, the work required by Deloitte was modest at best as the Mida business was already closed down and it was Love who performed most of the work while unpaid to collect the receivables with the help of a paid Mida bookkeeper to minimize Deloitte’s costs. Despite that, Deloitte’s accounts of $106,907.50 plus disbursements and HST and its legal fees $35,322.50 plus disbursements and HST are three or four times the original understood and agreed maximum amount as of July 5, 2013 and Deloitte should be expected to provide the required evidence in detail justifying those fees.

[79] The following are some of the relevant factors:

1. Collection of Accounts Receivable

The affidavit evidence of Mr. Biehler and his cross examination thereon and Deloitte’s accounts do not provide any specific details of what Deloitte actually did if anything to collect the balance of the accounts receivable when it was appointed as receiver. It simply says that the receiver was engaged in the monitoring and accounting for account receivable collections being completed by Mida’s bookkeeper and Love thereby acknowledging Love’s significant involvement.

[80] The affidavit also suggested there was contacting of customers on an as needed basis including the provincial stewardship program which had a $1.2 million balance before the receivership. However, I could find no entries in any of the accounts rendered to confirm anyone from Deloitte’s staff including Biehler ever did that.

[81] Mr. Biehler further alleged the receiver overall “collected approximately $1,488,000 representing approximately 90% of the net book value of pre-receivership balances of $1.6 million”. That evidence is somewhat misleading as it was Mr. Love who took the necessary steps without payment to collect those receivables. Moreover, about 80% of those receipts were from the Ontario government Stewardship program which paid $1,158,592 of that total received and there were only 10 other debtors who paid about $326,000 of that total received.

[82] The evidence suggests that Deloitte only consulted with Love and Mida’s bookkeeper periodically. Biehler’s evidence was that he and Love worked together on the receivables and that if Love had issues, he came to Biehler. However, he provided no evidence as to whether that ever happened at any time and is contrary to the evidence and reasonable inferences from that evidence that Love and Mida’s former bookkeeper, who was being paid by the receiver, did all the work.

[83] Again, the accounts of Deloitte provide no breakdown of what time or hours were actually spent or what work was actually done by it specifically to collect the balance of the accounts receivable. There is no suggestion in any of the accounts for example that Deloitte even had to send letters out to the debtors or then did follow-up responses to collect the debts. The likelihood is that Love and the bookkeeper did that.

[84] The receipts were then turned over to Deloitte which simply remitted the funds eventually to HSBC. Given the work of Love and the bookkeeper who was already being paid out of Mida’s assets, Biehler’s and Deloitte’s actual work to collect the balance of the receivables could and would not have been significant at all or involve much time spent.

2. Sale of Equipment

[85] Deloitte after going out into the market with the list and details of Mida’s equipment provided earlier by Love and Pichelli and receiving nine responses, simply arranged for Corporate Assets, a company it had dealt with on several previous occasions, to sell the equipment located on-site at public auction. Deloitte negotiated a net minimum guaranteed payment of $288,000 to it plus a surplus or bonus depending on how well the sale went. The sale went well realizing proceeds of $345,000 and Deloitte’s total net recovery was $320,000.

[86] However, it was Love, not Biehler, who was left in charge of walking the auctioneers and buyers through the premises and showing them the equipment and assisted the auctioneer on site regarding the equipment sale. Again no breakdown of Deloitte’s time spent was specified or proven from the Deloitte accounts or from the evidence at this hearing with respect to this rather minimal work required.

3. CRA Audit

[87] Deloitte claims it was reasonable and necessary for it to have one of its accountants attend for a four-day audit of Mida’s income tax affairs by CRA. However, the trustee in bankruptcy Pichelli provided its own offices and staff and their assistance for the entire audit. No evidence was provided by Deloitte that there was ever any actual need for its own staff to attend as well for that audit given the involvement of the trustee in bankruptcy even though technically income tax arrears would take priority over bank security. No evidence was provided that there was any concern whatsoever of there being a risk that HSBC’s outstanding loan would not be paid in full in any event of the audit results.

[88] There was little or no evidence of what assistance or input, if any, Deloitte’s staff provided during the CRA audit that was reasonable or necessary to protect the priority of HSBC’s security interest in the Mida assets. Biehler simply said he suspected there were questions for which his staff member would have answers. Again, no specific times or breakdown or details of the hours spent by the Deloitte staff for this CRA audit were included in the affidavit material, report of the receiver or its accounts eventually provided to Love Holdings.

4. Income Tax and HST Returns

[89] Deloitte suggested it prepared the income tax and HST returns of Mida. However Mr. Love’s evidence was that it was Pichelli as the trustee in bankruptcy that completed those returns. Biehler admitted that it was Pichelli as the trustee who signed the income tax returns and Biehler could not dispute Pichelli also signed the HST returns.

[90] At best, it appears that Deloitte, based on Biehler’s own affidavit, simply asked Mida’s bookkeeper continue to complete the books and financial records for which she was paid and then asked the existing accountants of Mida, S B Partners located just down the hallway, to complete the income tax returns as they had done in the past for which they were also paid. Pichelli as the trustee in bankruptcy then signed the returns. Again, there was no specific breakdown in terms of hours or time spent by Deloitte or details of what they actually did in their accounts for this work.

5. No Operation of Business

[91] There is no dispute that the business of Mida was already shut down by the time Deloitte was appointed as private receiver. They had no obligations whatsoever and did not in fact operate the business at any time pending the completion of the receivership.

6. Lease Termination

[92] At the time Deloitte was appointed, Mr. Love had already arranged the termination of Mida’s lease with the landlord effective the end of August to allow for the completion of the Mida windup. Only two months’ rent of $10,000 each month was to be paid from the assets of Mida which was most favourable to HSBC.

[93] Biehler’s evidence on cross-examination simply stated that agreement was “never formalized” before Deloitte was there. However, Deloitte paid exactly what had been arranged by Love and there was little work that had to be done by Deloitte to complete those arrangements other than perhaps draft a short simple agreement with the landlord. Again, no specific details of the hours and time spent by the receiver for that work was included in its accounts. Their accounts reflect very few references to any discussions between Deloitte and the landlord.

7. Mida Employees Termination

[94] Mr. Love had arranged for only six Mida employees to continue as of the date of the receivership to wind up the company. All the others had already been terminated. HSBC simply continued with those arrangements and paid those employees and then chose to complete the required forms for the Worker’s Employment Protection Plan program (WEPP) which work was already been started by Pichelli as trustee and the WSIB forms and terminated their employment . Deloitte then filed an amended WSIB form in early 2014. Again there were no specific hours or times indicated for this work on the days noted.

8. Lack of Complications or Difficulties

[95] The evidence is clear that there were no complications or extra work incurred because of difficulties encountered during this simple windup receivership as there were no such difficulties. HSBC was paid in full as expected by October 2013 and its security agreement discharged by December 13, 2013. Mr. Love had cooperated fully working significant hours for no payment as an officer of Mida and on behalf of Love Holdings to collect the accounts receivable and to assist in the sale of Mida’s equipment.

[96] The description of work performed by the receiver July 5, 2013 to February 28, 2014 described by Mr. Biehler in his affidavit indicated nothing other than the modest work for this receivership that would obviously have been contemplated and known to Mr. Biehler on July 5, 2013 when he discussed the receiver’s costs for the work with Love and Pichelli.

[97] For example Deloitte’s “taking possession and control of all the property of Mida including assets secured by BDC” on the evidence only involved calling a locksmith to change the locks but then giving a key to Mr. Love who maintained access to the premises throughout and in fact would be the one responsible to close up at night.

[98] Deloitte’s “compiling list of assets to be sold” involved simply using the appraisal report which included a detailed list of those assets provided by Pichelli on July 5.

[99] Deloitte did not itself complete the financial statements or tax returns. The simply hired the same Mida contractors and outside accountants to do that for which they were paid.

[100] Reference is made to Deloitte’s staff attending meetings with CRA with respect to the audit. Even if the extent of that work and Deloitte’s involvement in the WEPP program administration may not have been contemplated by Biehler on July 5, 2013 on his proposed $30-$40,000 fees, the extra $10,000 contingency up to the $50,000 used by him would likely be a fair allotment for those services given no specific times for that work were provided by Deloitte in the evidence.

[101] It is hard to imagine an easier windup of a business to be administered by a receiver or case where there was more involvement and assistance provided by the debtor to the receiver during the windup.

9. Fees Agreement Versus Hourly Rates Fees

[102] The time claimed to be spent of 303 hours by Deloitte personnel is substantial and excessive with hourly rates as high as $550 for Biehler and lesser rates for other staff. But the reasons for that substantive time involvement, given the relatively simple administration required, were not adequately explained.

[103] Deloitte has considerable experience in receivership work and should normally be paid at the going rate they charge all of their clients for the services they rendered. However, the concern in this case is that everyone at the outset understood and agreed, based on Biehler’s representation, that the total fees would be no more than $30,000-$40,000 to an outside maximum $50,000 given the simple circumstances of the receivership and Love’s assistance and cooperation which never changed after that.

[104] Biehler would have known given his experience that was the appropriate range for what was involved. He did not disclose that he would be charging by the hour let alone that the hourly rate would be $550 per hour prior to Deloitte’s appointment as the receiver and that there would be no maximum fee based on that calculation. That was not part of the agreement reached by the parties.

[105] Biehler in his affidavit simply states that the hourly rates charged by Deloitte in this case are comparable to the rates charged by other insolvency practitioners for similar solvency work and no more than Deloitte’s normal hourly rates in similar proceedings.

[106] That may be but that is not the real question in this case. Firstly, there is no evidence from other insolvency practitioners that over 300 hours of time for this simple receivership would be reasonable.

[107] Secondly, the onus is on Deloitte to prove the reasonableness of its fees including legal fees charged including why it should be entitled to simply claim fees based on the hours it allegedly incurred times significant hourly rates without any maximum amount. No explanation was given as to why the original agreed upon fees were not reasonable or why the fees actually charged were more than double or even triple the original amount agreed on. This was a simple windup with no business to run, there was no doubt on the collection of the receivables which Love collected and there was complete cooperation throughout by Love including on the straightforward sale of the assets.

10. Results of Receiver’s Efforts

[108] The evidence does not establish that it was because of the receiver’s efforts that resulted in the significant realization of Mida’s assets. Deloitte “collected” almost $1.5 million in receivables only in the sense that it “received” that amount with little effort on their part as a result of the efforts of Love and the Mida bookkeeper.

[109] Deloitte was not responsible for the successful auction held by Corporate Assets any more than it would not be faulted if the auction wasn’t as successful. Again, it was Love who was providing on-site assistance and cooperation for the auctioneer and at the sale. Pichelli had obtained the detailed appraisal and listing of the equipment used by Deloitte. It just happened that more funds than expected were realized on the auction.

Deloitte Accounts

[110] The accounts rendered by Deloitte are as follows:

[111] July 31, 2013. This account covers services from July 5, 7 and 9 2013 and the assistance of Mr. Conti on July 5 at the meeting on-site. At this time, Deloitte was only retained as a consultant by HSBC because of the initial meeting of the parties on June 25 shortly before. Mr. Biehler claimed to have spent 16.5 hours at $550 an hour and an additional three hours of time for Mr. Conti for a total account of $10,125. No breakdown or dockets were provided for what work was done on each day. In fact, it appears he spent significant time reviewing and preparing documents for a court appointed receiver which was not necessary given the parties’ previous discussions of June 25 and July 5, 8 and 9. Deloitte has not provided adequate justification for including any part of this consultant’s bill for work it did for HSBC prior to Deloitte’s receivership appointment on July 10 for which Mida, Love Holdings and Mr. Love would now be responsible even though HSBC might. Mr. Love did not receive a copy of this bill to question or challenge it until early 2014.

[112] August 1, 2013. This account claims for services rendered by Deloitte from July 8, 2013 to July 25, 2013. Deloitte’s staff attended on-site for inspection of the assets, changed the locks, met with employees, dealt with the bank accounts and auctioneer and the employees regarding the WEPP claims and other usual incidentals. It claims 34 hours for Mr. Biehler at $550 per hour, 2.7 hours Mr. Casey at $550 per hour, 2.2 hours for a manager at $350 per hour, 40.2 hours for Ms. Rollo at $250 per hour and 4.5 hours for Rose Brown for “trust administration” at $110 per hour. This account totaled $31,850 plus HST for work done over 13 days in July.

[113] Mr. Casey’s work on July 8, 2013 to draft materials for the court appointed receiver was not necessary and most of his claims for that should be deleted. Again, no specific breakdown or dockets were provided by any of the Deloitte staff including Mr. Biehler for time actually spent by them on each day for the work done for this account or for each subsequent account referred to below.

[114] September 19, 2013. This invoice covers the time from August 19 to September 11, 2013. During that time the auction sale equipment was completed and discussions with the landlord took place regarding the termination of lease as well as other routine matters. Forty eight hours of total professional hours were claimed for a bill of $16,112 plus disbursements and HST.

[115] October 17, 2013. This invoice covers the period from September 16 to October 10, 2013 and claimed 30.5 hours and fees of $13,649 plus HST and disbursements. Deloitte staff continued to deal with the WEPP program and a staff member attended the CRA audit to “provide support for audit and HST returns “. No explanation was given as why it was necessary or what was provided to assist Deloitte in that audit.

[116] December 6, 2013. This invoice covers October 15to December 2, 2013 claiming 27 hours and fees of $10,536.50 plus disbursements plus HST. Nothing of significance took place other than reviewing the CRA audit report and continuing to administer the WEPP program, prepare an HST form and do the banking.

[117] March 5, 2014. This account claims for services from December 3, 2013 to February 28, 2014 even though Deloitte’s security was discharged on December 13, 2013 and it had filed its final report for its total accounts on February 3, 2014. Twenty five hours were claimed totaling $9682 but the account was reduced by Deloitte to $5000. The only work was the banking, WSIB wrap up administration, and completing the December HST return and other incidentals.

Conclusion on Deloitte Receivership Fees

[118] Counsel for the Applicant’s position is that Deloitte has not established any entitlement for its receivership fees in an amount significantly more than what was originally discussed and agreed upon by the parties back on July 5, 2013. He submits that the proper amount for those receivership fees taking into account all of this evidence and allowing a reasonable additional amount is the maximum agreed upon figure of $50,000.

[119] Counsel for Deloitte concedes in his submissions that it is appropriate that the court award a lesser amount for Deloitte’s receivership fees than were being claimed. He frankly suggested a 20% reduction in the accounts which total $106,907.50 plus disbursements plus HST. That amount would be approximately $85,000 plus disbursements and HST. The Court appreciates the candour of Respondents’ counsel.

[120] However, the evidence provided by the receiver simply does not establish to the Court’s satisfaction the entitlement of Deloitte for its receivership fees even in that amount suggested by its Counsel. There is nothing in the evidence to substantiate entitlement to receivership fees of even $85,000 for this simple wind up of a company already shut down where the receiver essentially hired an independent contractor to sell $350,000 of equipment on-site that had already been completely listed and appraised. In addition , the only real evidence was that Deloitte simply received, not collected with little or no work on its part, the substantial accounts receivable as a result of the efforts of Love and the paid Mida bookkeeper.

[121] Given the value and nature of the Mida assets and the degree of assistance and cooperation provided by Love throughout, the standard rates used by Deloitte and in particular by Mr. Biehler and the hours claimed to be expended were simply far too high, were not fair and reasonable and lacked proportionality. I do not accept the affidavit evidence of Deloitte or its receiver’s report as determinative of the fairness and reasonableness of its fees requested.

[122] The experienced Biehler knew at the outset that Deloitte fees should be no more than $30,000-$40,000 to an outside maximum of $50,000 given the simplicity of the work required. No evidence was presented to suggest that the work Deloitte performed was anything but very simple and uncomplicated receivership work with the debtor who was not just cooperative because of his personal financial interest in minimizing the receivership costs but who also did most of the work in collecting accounts receivable.

[123] I conclude for these reasons that the appropriate fees payable to Deloitte for its entire receivership work provided is $50,000 plus HST. There was no evidence whatsoever about what specifically the disbursements were totaling $823. In all the Deloitte accounts they are simply described as “disbursements”. Accordingly, without any evidence to explain their reasonableness and necessity for the receivership, I allow nothing for those.

[124] In addition, I allow nothing for receivership fees of Mida for any of the time spent by Deloitte in defending this application including its time for preparing a detailed document titled “Report of the Receiver of April 25, 2014”. This was not a court appointed receivership and none of secured creditors HSBC, being Love Holdings or BDC or the trustee in bankruptcy asked him to prepare it. If anything, the evidence contained therein could have been included in Deloitte’s responding affidavit in its defence of this motion which would be relevant on the issue of costs of the application rather than its receivership fees but it was not.

[125] Deloitte’s attempt to try and claim fees for this uncomplicated receivership of more than double its maximum quoted fees as agreed upon by the parties at the outset plus substantial legal fees, its demands for a signed release to which Deloitte knew it was not entitled, its refusal to immediately pay the entire amount of the CRA tax refunds cheques to the receiver for BDC and its still withholding $50,000 from those funds since June 2014 is sufficient conduct that warrants an order that Deloitte not be paid any costs on this assessment of its accounts or for this application.

Disposition on TGF Legal Accounts

[126] The TGF legal accounts rendered are for its services which commenced July 5, 2013 and ending March 28, 2014. They totalled $35,322.50 plus disbursements and HST. The initial 2 accounts of August 16^th^ and September 19, 2013 were rendered to HSBC for almost $29,000 plus disbursements and HST. Three later accounts of November 14 and December 11, 2013 and January 17, 2014 were rendered to HSBC totaling $1890 plus disbursements and HST.

[127] The two last accounts of March 14 totaling $2117.50 plus disbursements and HST and of April 21, 2014 of $2470 plus HST and disbursements were rendered to the receiver Deloitte. These two accounts total all-inclusive $5196.77.

[128] Mr. Miller of TGF initially swore all of the TGF accounts were incurred in the course of Mida’s receivership between July 10, 2013 and March 31, 2014.

[129] However, Miller also frankly stated that of that total amount of $35,322.50, $26,234.18 relates to services rendered by TGF to HSBC and not Deloitte, the receiver. In addition, it appears that most of that $26,234.18 billing was for work Mr. Nunes of that firm may have done on July 5, 6, 7, 8 and 9 preparing an application for a court appointed receiver for Mida. This was despite the acceptance by HSBC representatives on June 25 of the Love wind up proposal for Mida and the continuing discussions of July 5 and after between counsel for Mida/Love and TGF for HSBC for a private receivership appointment for Mida which was achieved on consent on July 9 and formalized on July 10.

[130] There is no evidence that Mida, Love or their counsel were ever told that HSBC was instructing TGF to prepare the court application receivership documents and there was no evidence on this motion of any urgency or need for that court application receivership given the complete cooperation by Love and Mida’s trustee in bankruptcy and value of Mida’s assets covered by HSBC’s security agreement.

[131] In that regard, I do not accept the position of Mr. Miller of TGF that the court appointed receivership application was urgent, reasonable or necessary for the following reasons:

[132] One of his reasons for TGF proceeding with that motion because of Mida and Love not providing immediate and unfettered access to Mida’s assets is simply not borne out by the evidence.

[133] Firstly, Miller could not recall whether he knew on July 5,2013 that there were no collection issues with respect to the accounts receivable because they were mostly government debts.

[134] Secondly, there was no evidence that Love ever denied HSBC or Mr. Biehler any access to the premises where all the equipment was stored in one place and arrangements already had been made with the landlord to permit that access for two months so that it could be sold. In addition, it is telling that once Biehler attended to secure the premises, he gave a key to Love .

[135] Another reason suggested by Mr. Miller was that Mida’s bankruptcy on July 2 without notice to the HSBC “is not something that is indicative of a cooperative and open dialogue with the bank”. Although Miller suggested he thought there was some conflicting evidence as to what was discussed at the meeting between Love and HSBC on June 25, he was not there for that meeting and no particulars of any such conflicting evidence was provided to the court by the respondents. The only evidence is that of Love and reasonable inferences from that evidence that HSBC was told on June 25 of the pending filing of bankruptcy by Mida and was happy with and accepted the wind up proposal made then by Love and his accountant.

[136] Another reason Miller suggested was that priority issues with three secured creditors lent itself perfectly to a court appointed receivership. However, there never was any dispute with respect to the validity of HSBC’s security or any priority dispute among the secured creditors over Mida’s assets and Biehler knew that on July 5. In fairness to Mr. Miller, he did not know if he spoke to Deloitte that day.

[137] Miller also admitted that in general terms if the secured creditor’s security over all the security was valid, there was actually no role for the trustee in bankruptcy dealing with the secured creditors . Accordingly, there would be no urgency or necessity for a court appointed receiver.

[138] A demand for payment was made on Mida but Miller admitted because of the bankruptcy of Mida that this was not necessary but was simply prepared in any event.

[139] Just because HSBC or its receiver may be responsible for services performed by TGF on its behalf does not necessarily mean that the debtors Mida and Love Holdings should be notwithstanding the provisions of the GSA when the work is neither urgent nor necessary to protect the interests of HSBC.

[140] Counsel for the Respondents in final submissions indicated he had instructions from TGF to submit that only those last two accounts should be assessed as the receiver’s legal fees and the previous accounts should not be. In other words, I should ignore those claims for legal services performed by TGF for HSBC rather than the receiver as part of the receivership fees payable.

[141] In my view, most of those claims prior to July 10, 2013 for TGF‘s legal services are not likely payable by the Applicant Love Holdings as part of the Deloitte receivership for Mida in any event for the above-mentioned reasons.

[142] Counsel for Love Holdings requested that all of TGF’s accounts be assessed. This makes sense as Mr. Miller of TGF admitted that TGF was paid from the Mida funds held by Deloitte as security pursuant to HSBC’s direction for the first two accounts rendered to HSBC. Given that, including the potential obligation on TGF to refund some monies paid to it in excess of what is assessed, in order to finalize now all matters of responsibility for those accounts of Love Holdings under the Mida GSA, all TGF accounts shall be assessed.

[143] Even though it appears the majority of the first TGF account of August 16, 2013 is for preparation of court-appointed receivership documents prior to Deloitte’s receivership appointment on July 10 as indicated above, Love Holdings’ counsel is not opposed to the receiver’s request for payment of $20,000 including HST on that account as compared to the claimed amount of approximately $29,645 including HST. That is quite fair and reasonable in the circumstances and I allow that amount inclusive of fees, disbursements and HST totalling $21,000.

[144] Love Holdings’ counsel conceded there was no objection to TGF’s legal accounts of September 19, November 14, December 11, 2013 and January 17, 2014. Accordingly those accounts are allowed in full as claimed.

[145] Love Holdings’ counsel objects to any payment for TGF’s accounts of March 14 and April 21, 2014 rendered to Deloitte. The first account pertains to TGF’s advice provided regarding the final report of Deloitte and its distribution of the funds to BDC’s receiver in February 2014. That was receiver’s last job to complete under the BIA subject to some incidentals and I allow that account in full in the amount of $2398.68 all-inclusive.

[146] Counsel for Love Holdings objects to any payment for the last TGF account of April 21, 2014 which obviously dealt with services rendered to Deloitte regarding the non-payment of the CRA funds. Deloitte’s obligations were clear at that that point to deliver the CRA cheques to BDC under the PPSA especially given the signed directions to that effect from both Love Holdings and BDC. It was not entitled to a signed release preventing any challenge to their accounts or services rendered. Even though Deloitte is responsible for those legal fees, the Applicants are not. That account of $2798.09 is disallowed in its entirety.

[147] Accordingly, I fix and allow the total amount of the TGF legal fees rendered in all their accounts dated from August 2013 to March 2014 in the sum of $28,516.79 inclusive of disbursements and HST.

Conclusion

[148] This Court orders the following:

a) the accounts of Deloitte Restructuring Inc. in respect of the receivership of Mida be reviewed and assessed by this Court together with the solicitors accounts of TGF in respect of all legal work provided for HSBC and Deloitte Restructuring Inc. in respect to that receivership.

b) Deloitte Restructuring Inc.’s accounts for the receivership of Mida are hereby adjusted and fixed in the total amount of $50,000 plus HST.

c) TGF’s solicitors’ accounts for services in respect of its work on account of Deloitte Restructuring Inc. and HSBC from July 2013 to April 2014 are assessed and fixed in the amount of $28,516.79 inclusive of disbursements and HST.

d) Deloitte shall pay to the applicant Scott and Pichelli limited in its capacity as trustee of the estate of Mida International Inc., a bankrupt, the $50,000 held back by it from the CRA tax refund together with prejudgment interest in accordance with the Courts of Justice Act from March 21, 2014.

[149] Given the adjustment of these accounts which are likely already paid, the Respondents will be obligated to provide additional refunds to the Applicants. If the parties are unable to agree on the amounts or terms of repayment, they can apply to the Court for further directions through the Trial Coordinator’s office in Simcoe.

[150] If the parties are unable to agree on the issue of costs, the Applicants shall provide their written submissions of no more than four pages in length along with a bill of costs and relevant offers to settle within 15 days of this decision.

[151] The Respondents shall have 10 days thereafter to provide similar responding submissions.

[152] If no submissions are made, each party shall bear their own costs of these proceedings.

The Honourable Mr. Justice R. J. Nightingale

Date: September 2, 2015

COURT FILE NO.: 46686/14

DATE: 2015/09/02

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

B. Love Holdings Inc., Scott and Pichelli Limited, in its capacity as Trustee of the Estate of Mida International Inc., a Bankrupt

Applicants

• and -

Deloitte Restructuring Inc. and Thornton Grout Finnigan LLP

Respondents

ENDORSEMENT

Nightingale J.

Released: September 2, 2015