Steven Leonard Graff

Following a successful appeal, the appellant submitted a bill of costs.

The respondent failed to provide responding submissions.

The Court of Appeal assessed the costs based on the appellant's bill and awarded costs on a partial indemnity scale fixed at $11,642.36 inclusive of GST and disbursements.

The appellant borrowed $500,000 from the respondent under an agreement that effectively charged an interest rate exceeding 60 per cent per annum, violating the criminal interest rate provisions of the Criminal Code.

The application judge found the agreement violated the Criminal Code but applied a 'notional severance' to reduce the interest rate to the legal maximum of 60 per cent.

The Court of Appeal allowed the appeal, holding that notional severance is not an available remedy.

Instead, the court applied traditional severance principles, striking out the illegal 4 per cent per month interest provision entirely, while leaving the principal repayment and other valid fees intact.

Following the release of the main decision, the Court of Appeal for Ontario received further submissions on costs.

The Court ordered that the costs of the application for leave, the motion for leave to appeal, and the appeal be awarded to the appellant in the cause.

The appellant appealed the dismissal of an application for leave under s. 215 of the Bankruptcy and Insolvency Act to commence an action against a trustee administering a court-approved proposal.

The Court of Appeal held that on a s. 215 motion the judge must only determine whether there is a factual basis for the claim and whether it discloses a cause of action, not finally decide the merits.

The motions judge erred by conclusively interpreting the proposal and the trustee's duties, thereby exceeding jurisdiction on the threshold application.

The court also declined to refuse leave on the basis that the appellant should have proceeded under s. 37 instead.

Leave to commence the action was granted.