Wasserman, Arsenault Ltd. et al. v. Sone et al., (2002) 164 O.A.C. 195 (CA)

JudgeWeiler, Abella and Goudge, JJ.A.
CourtCourt of Appeal (Ontario)
Case DateOctober 04, 2002
JurisdictionOntario
Citations(2002), 164 O.A.C. 195 (CA)

Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (CA)

MLB headnote and full text

Temp. Cite: [2002] O.A.C. TBEd. OC.012

Wasserman, Arsenault Limited and The Superintendent of Bankruptcy (applicants/respondents) v. Marshall Bryan Sone, Marshall Sone Receiver & Trustee Ltd., Anne Lynn Sone, Rumanek & Cooper Ltd., Canadian Imperial Bank of Commerce , The Attorney General of Canada, Rosenberg, Sone, Geary and Company Limited, Trustee of the Estate of Allan S. Rosenberg, a Bankrupt, Osler, Hoskin & Harcourt, Warren Shelly Sone, Marshall Bryan Sone and Pamela Nancy Schwartzberg as Executors and Trustees of the Estate of Abraham Sone, Warren Shelly Sone, Marshall Bryan Sone and Pamela Nancy Schwartzberg as Executors and Trustees of the Estate of Dorothy Sone and Citadel General Insurance Company (respondents/ appellants )

(C35525; C35555)

Indexed As: Wasserman, Arsenault Ltd. et al. v. Sone et al.

Ontario Court of Appeal

Weiler, Abella and Goudge, JJ.A.

October 4, 2002.

Summary:

The following five questions were posed to the court in this bankruptcy proceeding: "(1) Does the court have jurisdiction upon the taxation of a summary administration bankruptcy to allow an amount for fees which exceeds the tariff of fees for summary administration estates stipulated under the Bankruptcy and Insolvency Act ('BIA') and Bankruptcy and Insolvency Rules (the 'Rules'). If so, what are the principles which must be applied in allowing such excess?; (2) Is there any jurisdiction for the Bankruptcy Court, the Superintendent of Bankruptcy (the 'Superintendent') or a Trustee to withdraw or authorize the withdrawal of amounts from the estate funds held with respect to a summary administration estate for the payment of any amount other than a trustee's proper taxed fees and disbursements related to administration of the estate in question. Specifically, must the withdrawals made by Rumanek & Cooper Ltd. ('R&C') from the consolidated trust account ('CTA') maintained with respect to the summary administration bankruptcy estates formerly administered by Sone with the approval of the Superintendent and/or the Court after the commencement of R&C's involvement in this matter be credited against amounts which may be found on taxation to be due to R&C or Sone for outstanding fees and disbursements related to the administration of such estates? If such withdrawals are allowed what are the principles which govern such withdrawals and how are they to be accounted for? Should the amount of $71,000 ordered by the Court to be paid to CIBC, if proven, be treated in any manner different from other withdrawals from the CTA?; (3) Can any party claim payment out of the CTA for fees and disbursements payable to a Trustee other than those fees and disbursements directly related to administrating the Summary Administration Estates? Specifically, can any party claim payment out of the CTA for fees and disbursements arising out of matters such as the administration of the ordinary administration bankruptcy estates, or for the cost of dealing with ordinary or extraordinary administrative requests by the Superintendent or others? If such payments are allowed, what are the principles which govern the making of these payments and how are the payments to be allocated among the bankruptcy estates?; (4) Do the fees and disbursements of the Guardian with respect to its administration of the Summary Administration Estates which are under its administration have priority over the claims of other fee claimants against the CTA by reason of s. 136 (1)(b)(i) of the BIA or on some other basis? If so, to what extent do the Guardian's fees and disbursements have priority? If not, what are the principles which should guide the Registrar in determining priority of payment among the competing fee claimants?; and (5) If the amount in the CTA is insufficient to pay both the proper fees and disbursements payable out of the CTA fund and also the proper dividends that ought to be paid to creditors in the Summary Administration Estates which are not fully administered, how should the shortfall be allocated as between the fee claimants and the creditors?".

The Ontario Superior Court, in a judgment reported [2000] O.T.C. 932, answered the questions as follows: (1) "The court does not have jurisdiction to allow fees in summary administration bankruptcy estates which exceed the tariff."; (2) "The court and the Superintendent do not have the jurisdiction to authorize the payment of funds from summary administration bankruptcy estates to cover items other than tariff fees and disbursements; there can be no extra compensation for overhead or other costs of a trustee. Specifically, the withdrawals by R&C from the CTA with the approval of the Superintendent or the court must be credited against the amounts which may be found on taxation to be due to R&C."; (3) "A trustee in bankruptcy cannot claim payment out of the CTA for fees and disbursements other than those related to such summary administration estates."; (4) "The claims of the Guardian have priority over the fee claims of R&C in the open bankruptcy estates pursuant to the BIA; this is not a retroactive application of the Act since fees and disbursements are only determined at the time that an estate is closed; and (5) "Sone and then R&C must bear the burden of any shortfall in the CTA caused by excessive draws for fees and disbursements. With respect to the CIBC issue, it takes through Sone. The $71,000 payable to the CIBC cannot reduce the amount to which creditors in the estates are entitled to receive. It was never before Blair, J., and the Court of Appeal that they were dealing with a shortfall situation." R&C and CIBC appealed.

The Ontario Court of Appeal, in a judgment reported 157 O.A.C. 183, dismissed the appeal. The court agreed with all five answers, with the exception of finding that the court's decision respecting how any further shortfall was to be divided was obiter.

The Ontario Court of Appeal, in the following addendum on costs, awarded only the respondent Guardian (Wasserman) its costs, on a partial indemnity basis ($30,000) for all time billed, with 75% to be paid by Rumanek & Cooper and 25% to be paid by CIBC.

Practice - Topic 7762

Costs - Special orders - Indemnity - The Ontario Court of Appeal awarded a successful respondent partial indemnity of $30,000 under the new costs scheme that came into force January 1, 2002 (Reg. 284/01) - The court noted that it would be inappropriate to use a mechanical application of the same percentage discount in every case.

Cases Noticed:

Lawyers' Professional Indemnity Co. et al. v. Geto Investments Ltd., [2002] O.J. No. 921 (Sup. Ct.), refd to. [para. 4].

Counsel:

George Glezos and Juliane Park, for the appellant, Rumanek & Cooper Ltd.;

Graham F. Alloway and Calvin J. Ho, for the appellant, Canadian Imperial Bank of Commerce;

Daniel R. Dowdall, Alex A. Ilchenko and James Tumbridge, for the respondent, the Guardian, Wasserman, Arsenault Ltd.;

William J. Burden and John N. Birch, for the respondent, the Superintendent of Bankruptcy.

This appeal was heard on February 7-8, 2002, before Weiler, Abella and Goudge, JJ.A., of the Ontario Court of Appeal.

The following addendum on costs was released by the Court on October 4, 2002.

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15 practice notes
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    ...2010 ONCA 249, Bondy-Rafael v. Potrebic, 2019 ONCA 1026, Whitfield v. Whitfield, 2016 ONCA 720, Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (C.A.), British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, Boucher v. Public Accountants Council (Ontario) (2004......
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    ...2010 ONCA 249, Bondy-Rafael v. Potrebic, 2019 ONCA 1026, Whitfield v. Whitfield, 2016 ONCA 720, Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (C.A.), British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, Boucher v. Public Accountants Council (Ontario) (2004......
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    ...(Ont.) et al. (2004), 188 O.A.C. 201 (C.A.), refd to. [para. 165, footnote 6]. Wasserman, Arsenault Ltd. et al. v. Sone et al. (2002), 164 O.A.C. 195 (C.A.), refd to. [para. 166, footnote Zesta Engineering Ltd. v. Cloutier et al., [2002] O.A.C. Uned. 288 (C.A.), refd to. [para. 167, footnot......
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13 cases
  • Restoule v. Canada (Attorney General),
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    • November 5, 2021
    ...57. [300] See e.g., Whitfield v. Whitfield, 2016 ONCA 720, 133 O.R. (3d) 753, at para. 29. [301] Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (C.A.), at para. [302] British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371, at paras. 16, 47......
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    ...(Ont.) et al. (2004), 188 O.A.C. 201 (C.A.), refd to. [para. 165, footnote 6]. Wasserman, Arsenault Ltd. et al. v. Sone et al. (2002), 164 O.A.C. 195 (C.A.), refd to. [para. 166, footnote Zesta Engineering Ltd. v. Cloutier et al., [2002] O.A.C. Uned. 288 (C.A.), refd to. [para. 167, footnot......
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    ...Pharmaceuticals (1991), 37 C.P.R.(3d) 335 (Ont. Gen. Div.), refd to. [para. 43]. Wasserman, Arsenault Ltd. et al. v. Stone et al. (2002), 164 O.A.C. 195 (C.A.), refd to. [para. Lac des Mille Lacs Indian Band v. Canada (Attorney General), [2002] O.T.C. 713 (Sup. Ct.), refd to. [para. 43]. Ze......
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    ...v. Robinson (1978), 21 O.R. (2d) 769 (C.A.); Mortimer v. Cameron (1994), 17 O.R. (3d) 1 (C.A.). In Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (C.A.) at para. 4, the court wrote that "partial indemnity means just that -- indemnification for only a part, or a proportion, of......
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2 firm's commentaries
  • Court Of Appeal Summaries (November 1-5, 2021)
    • Canada
    • Mondaq Canada
    • November 10, 2021
    ...2010 ONCA 249, Bondy-Rafael v. Potrebic, 2019 ONCA 1026, Whitfield v. Whitfield, 2016 ONCA 720, Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (C.A.), British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, Boucher v. Public Accountants Council (Ontario) (2004......
  • Court Of Appeal Summaries (November 1-5, 2021)
    • Canada
    • Mondaq Canada
    • November 10, 2021
    ...2010 ONCA 249, Bondy-Rafael v. Potrebic, 2019 ONCA 1026, Whitfield v. Whitfield, 2016 ONCA 720, Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (C.A.), British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, Boucher v. Public Accountants Council (Ontario) (2004......

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