CITATION: Re: National Telecommunications Inc., a bankrupt, 2017 ONSC 2376 COURT FILE NO.: 31-2014067 DATE: 20170418
SUPERIOR COURT OF JUSTICE - ONTARIO (IN BANKRUPTCY AND INSOLVENCY) (COMMERCIAL LIST)
IN THE MATTER OF THE BANKRUPTCY OF NATIONAL TELECOMMUNICATIONS INC. OF THE TOWN OF VAUGHAN, IN THE PROVINCE OF ONTARIO
BEFORE: F.L. Myers, J.
COUNSEL: James Clark for Deloitte Restructuring Inc., trustee in bankruptcy of the estate of National Telecommunications Inc., a bankrupt Bryan C. McPhadden for 1219172 Ontario Inc. and Brian Coones
READ: April 18, 2017
COSTS ENDORSEMENT
[1] By endorsement dated March 3, 2017, reported at 2017 ONSC 1475, the Court found Mr. Coones and his company 1219172 Ontario Inc. liable to the trustee in bankruptcy for $159,330 under s. 96 (1) of the BIA. The trustee seeks costs.
[2] The trustee offered to settle the proceeding on December 22, 2016 for $100,000. The offer remained open until one minute after the commencement of the hearing. It therefore met the procedural requirements of Rule 49. Therefore, under Rule 49.02(2), the offer qualifies for the costs treatment provided by the Rule. I see no basis to depart from the ordinary application of the normative approach that costs are payable to the winner or from the enhancement of costs provided under Rule 49. The trustee beat the amount for which it had offered to settle. It is therefore is entitled to its costs to December 22, 2016 on a partial indemnity basis and thereafter on a substantial indemnity basis.
[3] The trustee’s lawyer’s rates and hours spent are well within the reasonable range. It asks for a small increase in costs to penalize the respondents for filing material late and after their counsel had cross-examined both without leave. In my view, the trustee’s counsel has properly included in its bill of costs the time it spent responding to the late material. There is no basis for any further penalty.
[4] Counsel for the respondents submits that the trustee should be entitled to costs on a partial indemnity basis in accordance with the bill of costs that it submitted at the hearing. However, I was told at the hearing that there were offers to settle to be discussed once I had released my decision. Therefore, I reserved costs for further submissions accordingly. As stated above, I see no basis to depart from the normal operation of Rule 49.
[5] Accordingly, Mr. Coones and 1219172 Ontario Inc. are jointly and severally liable to pay to the trustee forthwith its costs fixed in the amount of $15,356.99 inclusive of disbursements and taxes.
F.L. Myers J.
Date: April 18, 2017