Citation: Kuczera, 2017 ONSC 5699

COURT FILE NO.: 32-1207800

DATE: 2017-09-26

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST – IN BANKRUPTCY)

IN THE MATTER OF THE BANKRUPTCY OF MIROSLAW IAN KUCZERA OF THE CITY OF BRAMPTON, IN THE REGIONAL MUNICIPALIOTY OF PEEL, IN THE PROVINCE OF ONTARIO,

BEFORE: F.L. Myers J.

COUNSEL: Robert A. Klotz, counsel for the appellant Patrick Bloomfield, Trustee in Bankruptcy

READ: September 25, 2017

Endorsement

[1] The appellant appealed his discharge from bankruptcy. He sought to overturn the condition imposed upon him by the Registrar that requires him to pay $61,000 to the trustee for distribution to creditors.

[2] Mr. Kuczera did not succeed in the appeal; Re Kuczera, 2017 ONSC 5140. He agrees that there is no reason to deviate from the normative approach under which costs follow the event. But Mr. Kuczera asks that the trustee take its costs from the $61,000 that Mr. Kuczera will be paying into the estate. To require him to pay more, he argues, will impede his rehabilitation as the $61,000 condition is already a very substantial imposition upon him.

[3] I have some sympathy for the appellant's plight. So too did the Registrar. He has a financial obligation and a costs award makes it worse. But the appellant must be taken to have known that appealing included a risk of increasing his burden. He gambled and took the risk of paying a few thousand more dollars in costs against the chance to win a release from the $61,000 obligation.

[4] The appellant asks to be relieved of the costs risk and to impose the trustee's costs on the creditors who would otherwise be entitled to receive the $61,000 that the appellant owes. That does not strike me as fair. While accepting the obligation to pay costs, his submission would actually relieve him of any liability to do so.

[5] The trustee seeks costs of $6,915.31 on a substantial indemnity basis. The trustee relies on allegations made by the bankrupt that impugned the trustee's conduct. As noted in my prior endorsement, the appellant was quick to blame everyone else for his predicament including going so far as to speculate that his children may have stolen money from him.

[6] Like the Registrar, I view it as important and appropriate that the appellant bear responsibility for his decisions and for the natural outcome of the advice upon which he chooses to act. That is an important element of his financial rehabilitation as well.

[7] I do not find this to be a case deserving of punitive costs. The allegations made by Mr. Kuczera were not of sufficient severity nor made with sufficient particularity to put the trustee’s professional reputation at risk. Nor did they, in fact, significantly increase the time spent by the trustee in responding to the appeal. The trustee was not sufficiently moved by the allegations to retain counsel to act for it in the appeal. As a result, the costs claimed by the trustee are quite modest in comparison to the costs that ought reasonably to have been expected had the trustee been represented by a lawyer.

[8] It was apparent from the trustee’s materials and its argument that the trustee performed work that counsel would have been expected to perform. As the trustee was not representing a third party, there is no issue of it functioning as a lawyer. Rather, it brought its bankruptcy and insolvency expertise to bear and saved the bankrupt estate and the appellant significant legal fees in doing so.

[9] The appellant is ordered to pay costs to the trustee on a partial indemnity basis in the amount of $4,250 all-inclusive within 60 days.

F.L. Myers J.

Date: September 26, 2017