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Court Says: Be Practical and Try Solving Problems on Your Own. Puh-leeese!

A quick note of Mr. Justice Brown’s recent Endorsement on a motion for costs related to the Bankruptcy and Insolvency Act – Exposoft Solutions Inc. (Re), 2013 ONSC 5798. I do not practice in this area but I couldn’t help but notice that the start of His Honour’s Reasons simply did not look very promising to either party:

I. A motion which should never have been: variation of a BIA sale approval order

[1] This was a motion which should never have been. It also involved the smallest amount of money I have encountered to date in a Commercial List matter – less than $5,000. But, being a motion brought in the Toronto Region, about two inches of materials were served and filed, and four cases handed up during the course of the argument, capped off with a request for full indemnity costs of $28,136.23. Just another day in the wonderful world of litigation, Toronto-style.

II. The all-too-simple facts

Seems that one of the parties tried to purchase all the assets of Exposoft, a defunct company, for $1,000.00; in dispute was whether this would include the ‘intellectual property’ owned by Exposoft. The Trustee hummed and hawed and didn’t sell the IP portion of the company, leading to this motion in which the purchaser demanded about $28,000 in legal costs.

Everyone lost a little on this one, as the Court found that the Trustee did not manage this file particularly well and was at least partially to blame for this motion having to be brought, while also noting that the purchaser’s request for costs – $28,000 – was not proportional to the relief sought nor the nature of the proceedings.

In the end, the purchaser was awarded $3,500 in costs but it was to be paid by the Trustee in Bankruptcy personally.

Our thanks to Mr. Justice Brown for the wise lesson – try being practical before coming to Court – packaged in an entertaining Endorsement.
Gregory Chang
Toronto Insurance Lawyer