In Bankruptcy and Insolvency
Citation: Railside Developments Ltd. (Re), 2010 NSSC 237
Date: 20100618
Docket: Hfx No. 314695
Registry: Halifax
In the Matter of the Receivership of Railside Developments Limited
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DECISION on COSTS
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Judge: The Honourable Justice Gerald R. P. Moir
Written Submissions: April 5, April 9, and April 30, 2010
Counsel: Sheree L. Conlon and Maurice P. Chiasson, Q.C.
for Green Hunt Wedlake Inc. as Receiver of Railside Developments Limited
John Kulik, Q.C. and Joseph McNally for LaFarge Canada Inc.
Alexander M. Cameron for the Province of Nova Scotia
Ralph Winter and Jean Winter on their own behalf
Moir, J:
[1] I have to determine costs following a motion. The issue in contention was the authority of the court under the new national receivership provisions of the Bankruptcy and Insolvency Act to require registration as a condominium of a building developed by the company in receivership with a view to registration.
[2] The Attorney General and Lafarge Canada Inc. succeeded in their positions that the receiver's argument for court ordered registration amounted to an intrusion on applicable provisional laws that is not authorized by the Bankruptcy and Insolvency Act.
[3] The parties cannot agree on costs. The receiver suggests $1,000 each for the successful parties. Lafarge suggests it be paid $3,500, and the Attorney General suggests the same.
[4] The range in Tariff C for half-day chambers motions is $750 to $1,000. Although the Tariffs are republished in the Nova Scotia Civil Procedure Rules, they are not made by the judges under the Judicature Act. They are made by a Costs and Fees Committee subject to approval by the Attorney General under the Costs and Fees Act. They were not revised for the new Rules made by the judges in 2008.
[5] Tariff C(3) permits a judge to depart from the Tariff C range in order to "award costs that are just and appropriate in the circumstances". Mr. Kulik and Mr. Cameron suggest that this is a case for doing so. Ms. Conlon points out:
_ The motion was not factually complex.
_ It was of equal importance to the various parties.
_ It turned on the appropriate interpretation of the Bankruptcy and Insolvency Act.
_ The receiver sought directions, as is encouraged by the order appointing it. It did so as an officer of the court.
[6] Mr. Cameron points out that the main issue was constitutional, and the Attorney General responds to constitutional challenges. Mr. Kulik says, rightly I think, that the constitutional issue was complex and important not only to the parties, but to insolvency practice generally.
[7] Based on my knowledge of the work all counsel put into the motion and on my knowledge of the cost of a lawyer's work, I find that $1,000 would not come close to meeting the fundamental principle that party and party costs should be quantified so as to provide a substantial, but partial, contribution towards a usual bill for the services. In other words, the complexity of the constitutional issue was such that an award of $1,000 would not be just or appropriate.
[8] In the circumstances, the amount payable to the successful parties ought not to be reduced merely because the issue was determined on a motion by a court officer for directions. The practice on receiverships under the equitable jurisdiction, as clarified by the Judicature Act, has long been to award costs personally against a receiver only in exceptional cases.
[9] That practice is consistent with the provisions about costs against a trustee in s. 197(3) of the Bankruptcy and Insolvency Act, and it should be applied as well to a national receiver. The award is against Green Hunt Wedlake Inc. as receiver of Railside Developments Limited. As such, it is payable out of the estate administered by the receiver: the title of Railside at the time of the making of the mortgage or as subsequently acquired. In short, costs are payable in priority to the interests of the secured creditor but Green Hunt Wedlake Inc. bears no personal liability for the costs.
[10] I award costs of $3,500 each to the Attorney General and Lafarge against Green Hunt Wedlake Inc. as receiver of Railside. The receiver will have its solicitor and client costs out of the estate.
J.