Court File and Parties

COURT FILE NO.: 35-2122786 DATE: 2023/02/28 SUPERIOR COURT OF JUSTICE – ONTARIO IN BANKRUPTCY AND INSOLVENCY

In the matter of the bankruptcy of Brian Wayne Flight of the City of London In the County of Middlesex In the Province of Ontario

BEFORE: Justice M.D. McArthur

COUNSEL: Ms. Tara Vasdani for the Bankrupt Mr. D. Reason for the Respondent Trustee, Adamson & Associates Inc.

Endorsement on Costs

[1] The moving party, Mr. Flight, requested the production of documents from, as well as the examination of, the trustee in bankruptcy in proceedings involving Mr. Flight where the respondent acted as the Trustee in Bankruptcy for him.

[2] I initially made an endorsement that was essentially a position adopted and consented to by the parties as reflected in the endorsement dated December 7, 2021. The production and disclosure of the records with the trustee had then been subsequently addressed with a remaining item being the affidavit of service by the trustee of a statement of claim upon Ms. LeBlanc that was purported to go to a substantive issue that was not before me. Counsel for the respondent undertook to locate the document and I outlined further action that could be taken with specified times. This addressed the issues under s. 26(1) of the Bankruptcy and Insolvency Act.

[3] The affidavit was subsequently submitted. Counsel for the moving party in separate submissions dated January 15, 2023 indicates that the respondent submitted to the moving party a false Affidavit of Service that was otherwise deficient in various respects. Counsel for the moving party also submits additional issues, references other court decisions in relation to additional documents and sought to make additional submissions as to the motion which had been decided. None of these submissions are submissions this court can nor should entertain in relation to the decisions already made on the motion.

[4] The remaining issue on the return of the motion then was whether the respondent trustee was to be examined by the moving party under oath by the applicant. In the endorsement dated December 27, 2022, I found there is no evidence as to how the creditors would benefit from information in relation to the trustee’s administration involving Mr. Flights fourth bankruptcy. Mr. Flight’s action against Ms. LeBlanc was now at an end.

[5] I also found the applicant did not establish any creditor benefits from such an examination, rather, what was sought was that of Mr. Flight who sought to reduce his liability as a result of his subsequent commercial proposal that nullified the fourth bankruptcy. I found that such an examination was for the moving party’s particular benefit and was effectively outside of the core statutory purposes and context of the Bankruptcy and Insolvency Act and that it would otherwise be an oppressive use of the Bankruptcy and Insolvency Act provisions.

[6] The court is aware that there are many other related court proceedings between these parties. The court on this motion did not venture into those cases in any depth nor does so for this endorsement but understands the larger context.

[7] Counsel for the moving party also made written submissions dated January 16, 2023 seeking substantial indemnity costs against the responding party in the amount of $17,249.07 on the basis that it was substantially successful at the initial stage and eventual return of the motion. The alternate position submitted by the moving party was costs on a partial indemnity basis of $13,205.23.

[8] The moving party submits the responding party, in relation to another proceeding, misled the court as to the chose in action being released or not in the bankruptcy proceeding that have been annulled. Regardless of the dispute between the parties, this is a factual feature and issue that did not bear upon the prior endorsements that this court made on this motion.

[9] The position of the respondent is that its partial indemnity costs should be awarded amounting to fees of $17,543.40 plus HST and disbursements for a total of $20,560.18 since the motion by Mr. Flight was not successful.

[10] Under the s. 197 of the Bankruptcy and Insolvency Act, costs are the discretion of the court and, absence the direction of the court, costs shall follow the event and be taxed on a party and party basis. I have also considered Section 131 of the Courts of Justice Act and the factors provided in Rule 57.01 of the Rules of Civil Procedure that include the principle of indemnity, the reasonableness of the amount claimed, apportionment, complexity, the importance of the issues and party conduct.

[11] The issues in this case were not necessarily complex and more the result of the acrimony and lack of trust between the parties. This is evidenced by the context of surrounding litigation and decisions referred to between the parties. It is not the position nor role of this court to determine what the merits of this motion may or may not have been based on the decision of other justices and courts.

[12] Firstly, the issue of production was not as much the court being required to determine this issue but rather a mechanism of verification directed by the court to ensure the moving party’s counsel could attend to review and confirm all documents were provided. This cannot be fairly or properly characterized as the refusal of documents by the respondent. There was a large volume of documents that the responding party had come into possession of during the course of the bankruptcy proceeding. The responding party was not refusing production.

[13] Secondly, the court declined to grant the examination of the trustee by the moving party in these proceedings.

[14] Success was somewhat divided but limited to disclosure verification. The respondent was successful in resisting the request by the moving party for the examination of the trustee.

[15] In these circumstances, an award of costs should be considered in favour of the responding party overall. There is nothing otherwise exceptional or unusual in this case.

[16] In these circumstances, I order that the moving party applicant pay the respondent’s costs fixed at $12,500 fixed for total fees, disbursements and HST.

Justice M.D. McArthur Date: February 28, 2023