





CITATION:
Kaiser (Re) , 2011 ONCA 713



DATE: 20111114



DOCKET: M40462



COURT OF APPEAL FOR ONTARIO



Cronk J.A. (In Chambers)



In the Matter of
          the Bankruptcy

of Morris Kaiser

of the City of
          Toronto

in the Province of
          Ontario



BETWEEN



Morris Kaiser, a Bankrupt



Applicant



and



Soberman Inc.,
          Trustee in Bankruptcy

of the Estate
          of Morris Kaiser



Respondent



Melvyn L. Solmon and Cameron J. Wetmore, for the applicant



Neil Rabinovitch and Milton A. Davis, for the respondent



Heard:
October 18, 2011



On a motion for leave to appeal from the
          order of Justice F.J.C. Newbould of the Superior Court of Justice, dated
          August 16, 2011.



ENDORSEMENT



[1]

This is a motion for leave to appeal to this court from the order of
    Newbould J. of the Superior Court of Justice, In Bankruptcy, dated August 16,
    2011, refusing to order the removal of a law firm as counsel of record for a
    trustee in bankruptcy.

I.         Background

[2]

The applicant, Morris Kaiser (Kaiser), was adjudged bankrupt on
    October 17, 2009.  The respondent, Soberman Inc. (the Trustee), was appointed
    trustee of the bankrupt estate.

[3]

For more than a decade, Milton Davis (Davis), a partner in the law
    firm of Davis Moldaver LLP, has acted as counsel in various legal proceedings
    against or involving Kaiser.  Specifically, since the spring of 1999, Davis has
    acted as counsel for approximately 20 individual or corporate litigants in more
    than 14 actions against Kaiser or his interests.  By reason of these
    professional engagements, Davis has gained considerable knowledge of Kaiser as
    a litigant.

[4]

Davis, through Davis Moldaver LLP, also acts for the Trustee in the
    Kaiser bankruptcy.

[5]

As set out in an affidavit sworn by Kenneth Tessis (Tessis) of the
    Trustees offices on July 14, 2010, as a result of Davis extensive experience
    with Kaiser, the Trustee regards Davis Moldaver LLP as the best suited law
    firm to be acting on behalf of the Trustee in the Kaiser bankruptcy.

[6]

Representatives of three of Kaisers largest creditors  Bernie Ghert,
    Lautec Properties Inc. (Lautec) and the Canada Revenue Agency  serve as
    inspectors in Kaisers bankruptcy.  It is undisputed that each of these
    creditors has unequivocally advised the Trustee of their desire to have Davis
    Moldaver LLP continue to act for the Trustee in the Kaiser bankruptcy.

[7]

It is against this general background that this leave to appeal motion must
    be understood.

(1)       Removal
    Motion

[8]

In the summer of 2011, Kaiser moved for an order removing Davis Moldaver
    LLP as counsel of record for the Trustee (the Removal Motion).  As relevant
    to this leave motion, Kaiser alleged on the Removal Motion that Davis Moldaver
    LLP was in a conflict position because: (1) while acting for the Trustee, Davis
    was also acting for Lautec; and (2) in breach of obligations that Kaiser
    claimed are owed to him by Davis and the Trustee (in particular, the alleged
    duty to protect Kaisers right to solicitor-client privilege), Davis advised
    and permitted the Trustee to take steps that preferred Lautecs interests over
    those of the Trustee and the Kaiser estate.

[9]

By order dated August 16, 2011, the motion judge dismissed the Removal Motion
    and awarded costs to the Trustee.

(2)       Leave
    to Appeal Motion

[10]

Kaiser seeks leave to appeal from the motion judges order dismissing
    his request for a removal order.  If leave be granted, he also seeks an order
    expediting the appeal.

[11]

Section 193 of the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c.
    B-3 (the BIA) provides for an appeal as of right to the Court of Appeal from
    any order or decision of a judge in bankruptcy in limited circumstances as set
    out in ss. 193(a) to (d).  Under s. 193(e), leave of a judge of the Court of
    Appeal is required to appeal to this court in any other case.

[12]

Thus, the preliminary issue on this motion is whether leave to appeal
    the motion judges decision to this court is required.

[13]

In his notice of motion, Kaiser seeks leave to appeal, if leave is
    required, pursuant to s. 193(e) of the BIA.  Kaiser previously filed a Notice
    of Appeal and Amended Notice of Appeal in which he invoked ss. 193(a) and (c)
    and, if necessary, s. 193(e) of the BIA as the jurisdictional basis for
    appealing the motion judges decision to this court.

[14]

In both his leave motion materials and his oral submissions, Kaiser took
    the position that leave to appeal under s. 193(e) is not required.  At the same
    time, he also expressly sought leave to appeal under s. 193(e) of the BIA.  He advanced
    no argument regarding an appeal as of right under any of ss. 193(a) to (d)
    of the BIA.  Leave to appeal was the only relief sought on the motion, apart
    from an expedited appeal date.

[15]

Argument of the leave motion proceeded on the basis that s. 193(e) of
    the BIA applies in the circumstances.  It is the Trustees position that s.
    193(e) is engaged, that leave to appeal to this court is required, and that
    leave should be denied given the history of this matter, as outlined below.

[16]

I am not persuaded that Kaisers proposed appeal from the motion judges
    decision falls within any of the appeal as of right categories set out in s.
    193 of the BIA.
[1]
Nor, as I have said, did Kaiser urge a contrary conclusion.  I therefore
    proceed on the basis that leave to appeal to this court is required under s.
    193(e) of the BIA.

II.        Governing Legal
    Principles

[17]

The jurisprudence of this court indicates that a flexible approach
    should be applied to the factors to be considered on a motion for leave under
    s. 193(e) of the BIA.  As Armstrong J.A. of this court explained in
Fiber
    Connections Inc. v. SVCM Capital Ltd.
(2005), 10 C.B.R. (5th) 201 (in
    chambers), at para. 19, There is a variety of factors to consider depending
    upon the circumstances presented to the court.  These factors include: (1) whether
    the judgment at issue appears to be contrary to law, amounts to an abuse of
    judicial power or involves an obvious error, causing prejudice for which there
    is

no remedy; (2) whether the point of the appeal is of
    significance to the practice or to the action itself; (3) whether the appeal is
prima facie
meritorious or frivolous; and (4) whether the appeal will
    unduly prejudice the progress of the action: see
Fiber Connections
,
per
Armstrong J.A., at para. 15;
GMAC Commercial Credit Corp. of Canada
    v. TCT Logistics
, [2003] O.J. No. 5761 (C.A.) (in chambers),
per
Feldman J.A., at para. 9.  The relevant factors to consider will vary according
    to the circumstances of each case.

[18]

One factor that is considered in all cases where leave to appeal under
    s. 193(e) of the BIA is sought is whether the proposed appeal is
prima facie
meritorious.  In assessing the merits of a leave to appeal motion under this
    provision, the courts inquiry is informed by the principle of deference owed
    to a commercial court judge.  Absent demonstrable error, an appeal court will
    not interfere.  See
Ravelston Corp. (Re)
2007 ONCA 268, (2007), 31 C.B.R.
    (5th) 233 (in chambers),
per
Borins J.A., at paras. 11-12;
Fiber
    Connections
,
per
Armstrong J.A., at paras. 15-19;
GMAC Commercial
    Credit
,
per
Feldman J.A., at para. 9.

[19]

In addition, where the order sought to be appealed from is
    discretionary, as in this case, this court has recognized that leave will not
    be granted unless the matter is of importance either to the administration of
    justice generally or to the respective rights of the parties to the litigation:
Fiber Connections
,
per
Armstrong J.A., at para. 15;
GMAC
    Commercial Credit
,
per
Feldman J.A., at paras. 9 and 14;
Zurich
    Indemnity Co. of Canada v. Reemark Rideau Developments Ltd.
(1992), 22
    C.B.R. (3d) 291 (B.C.C.A.) (in chambers),
per
Southin J.A., at para. 21.

[20]

Given the nature of the order sought to be appealed, Kaisers leave motion
    is also informed by those principles that govern the court-ordered removal of a
    litigants counsel of record.  These principles were relevant to the motion
    judges discretionary decision to deny the relief sought by Kaiser.  They are
    also a relevant consideration in assessing the merits of Kaisers proposed
    appeal.

[21]

As the motion judge properly noted, A litigant should not be deprived
    of counsel of its choice without good cause.  See
McDonald Estate v. Martin
,
    [1990] 3 S.C.R. 1235.  For this reason, Canadian courts exercise the highest
    level of restraint before interfering with a partys choice of counsel.  Where
    such discretionary, equitable relief is invoked, there must be a possibility of
    real mischief should a removal order be refused.  The test is whether a
    fair-minded and reasonably informed member of the public would conclude that
    counsels removal is necessary for the proper administration of justice: see
    for example,
McDonald
;
Zawadzki v. Matthews Group Ltd.
(1998), 18
    C.P.C. (4th) 373 (Ont. Gen. Div.);
Colville-Reeves v. Canadian Home
    Publishers Inc.
(2002), 111 A.C.W.S. (3d) 1202 (S.C.);
Lautec Properties
    Inc. v. Barzel Windsor (1984) Inc.
(2002), 26 C.P.C. (5th) 131 (S.C.).

III.      Discussion

[22]

In my opinion, it cannot be said that Kaisers appeal is
prima facie
meritorious.  Far from it.

[23]

Kaiser sought discretionary, equitable relief of a type that is granted
    only sparingly and with great caution  the involuntary removal of counsel
    chosen by a client in the face of the clients opposition to the removal.  That
    relief was denied by the motion judge for clear and cogent reasons.  On the
    motion judges findings, the requested relief was sought for improper and
    tactical, rather than legitimate, reasons.  This factor alone tells strongly
    against granting equitable relief.  Further, in all the circumstances, I do not
    regard any of the issues sought to be raised on appeal as important either to
    the administration of justice generally or to the rights of the parties.

[24]

I therefore conclude that Kaiser has failed to satisfy the test for
    leave under s. 193(e) of the BIA.  I note, in particular, the following.

[25]

First, the record suggests that Kaiser has a demonstrated history of
    initiating proceedings, including removal motions, for purely strategic
    reasons.  His motive for bringing the Removal Motion, which was a central issue
    before the motion judge, bears directly on the merits of his proposed appeal.

[26]

The motion judge declined to exercise his discretion in favour of
    granting the requested removal order in part because he concluded that the
    Removal Motion had been brought for tactical purposes to try to delay actions
    by the [T]rustee [to recover Kaisers assets for the estate].   In his view,
    the Removal Motion was completely miscast.  These conclusions are firmly
    grounded in the evidentiary record.

[27]

The record reveals that the Removal Motion was not Kaisers first
    attempt to secure Davis removal as counsel of record in proceedings against
    Kaiser or his interests.  In 2002, Kaiser moved for an order removing Davis as
    counsel of record in 14 related actions.  In dismissing that motion, Epstein
    J., then of the Superior Court of Justice, concluded that: (1) the motion was
    brought for an improper, tactical purpose; (2) the moving parties knew that
    such an order would cause delay and inconvenience; and (3) the evidence before
    her did not support the allegations of misconduct advanced against Davis:
Lautec
    Properties
, at paras. 42-45.  These were serious findings of impropriety by
    Kaiser.  Justice Epstein put it this way, at para. 46: [T]he case made out in
    support of the relief sought ... was like a blanket heavily patterned with
    strong animus toward Mr. Davis and woven together with speculation and
    conjecture.

[28]

Further, Kaiser had attempted in the past, without success, to secure a
    removal order against Davis predecessor  also a senior member of the
    litigation bar in Toronto  as counsel of record for parties opposite in
    interest to Kaiser.  On that removal motion as well, Kaiser alleged serious
    professional wrongdoings by the involved counsel, allegations that were later
    found to be wholly groundless.

[29]

Moreover, it is uncontested that Kaiser previously sued Davis for
    conspiracy, but adduced no evidence to support this serious claim when the
    matter proceeded to arbitration.  The experienced arbitrator, a former judge of
    the Superior Court of Justice, held that there was no evidentiary basis for any
    criticism of Davis and that the allegations against him were unfounded and
    persistent.  He awarded costs to Davis and others on a substantial indemnity
    scale.

[30]

This troublesome history of improperly-motivated litigation strongly
    supports the motion judges conclusion in this case that removal motions
    appear to be part of Mr. Kaisers
modus operandi
 and that Kaiser holds
    a clear
animus
towards Davis.  Kaisers pattern of advancing serious
    unfounded allegations of professional improprieties against counsel opposite
    and of initiating ill-founded removal motions, raises a sharp red flag,
    necessitating close scrutiny of the merits of any proposed appeal from the
    motion judges ruling on the Removal Motion.

[31]

Second, the record also indicates that Kaiser, in numerous ways, has
    declined to co-operate with the Trustee and has sought to frustrate the
    disclosure of his financial resources and assets and the efficient
    administration of his bankrupt estate by the Trustee.

[32]

The motion judge held that Kaiser, who has an obligation to the trustee
    to assist in locating assets belonging to the bankrupt estate, was taking
    every opportunity to refuse to provide information that could assist the
    trustee.  This finding was not challenged during argument of the leave
    motion.  Nor is it attacked by Kaiser in his Notice of Appeal or Amended Notice
    of Appeal as a factual finding tainted by palpable and overriding error.

[33]

Again, there was considerable evidence before the motion judge to support
    this finding.  Consider the following:

(1)

the Trustee provided evidence on the Removal Motion that although Kaiser
    claimed to be impecunious at the time of his bankruptcy, he engaged in a
    lifestyle, both
before and after
the date of his bankruptcy, that belied
    this claim.  This included evidence of frequent gambling trips to the United
    States, the loss of significant funds at gambling tables during these trips and
    numerous cash withdrawals on credit cards belonging to or controlled by a third
    party (who is suspected by the Trustee to be complicit in Kaisers efforts to
    conceal his assets) at or near various casinos;

(2)

it was also the Trustees uncontradicted evidence on the Removal Motion
    that the Trustee has not been able to determine much regarding Kaisers
    affairs, that a motion is pending to determine the source of funds being used
    by Kaiser to finance this litigation, that Kaiser appears to have structured
    his affairs in such a way as to have [a third party act] as a straw man 
    thereby shielding his funds from the Trustee and his creditors and, further,
    that Kaiser appears to have access to funds, which he did not have before, the
    source of which is unknown to the Trustee, to pay for his various family,
    living and day-to-day expenses;

(3)

on his examination conducted under s. 163 of the BIA, Kaiser or his
    counsel objected to approximately one-half of the questions asked on the ground
    of privilege.  Yet, in the opinion of the motion judge following a review of
    the relevant questions, most, if not all, the refusals related to factual
    matters in respect of which a privilege claim could not be advanced; and

(4)

on June 30, 2011, Kaiser was cross-examined in respect of the pending
    Removal Motion.  The motion judge noted that every question asked of Kaiser
    regarding his affairs was objected to, as being irrelevant to the Removal
    Motion.

[34]

In part on the basis of these facts, Tessis indicated in his affidavit
    sworn on behalf of the Trustee in response to the Removal Motion that, in the
    Trustees opinion, the Removal Motion was brought to deflect attention from
    the fact that [Kaiser] seems to have access to significant sums of money which
    he has not disclosed to the Trustee.

[35]

The foregoing circumstances militate in favour of the conclusion that
    the Removal Motion and, arguably, this associated leave motion, are merely the
    latest steps taken by Kaiser to delay and impede the expeditious and efficient
    administration of his bankrupt estate.  At the very least, they provide a solid
    foundation for the motion judges decision to deny discretionary equitable
    relief of the type sought by Kaiser.  They also undercut Kaisers contention
    that his proposed appeal from that decision is meritorious or of significance
    either to the parties or to commercial bankruptcy practice in general.

[36]

Finally, a word about the merits of the specific proposed grounds of
    appeal identified by Kaiser.  To be blunt, I consider the merits of the
    identified grounds to be highly dubious.

[37]

Kaiser raised numerous grounds of appeal in his Amended Notice of
    Appeal.  However, during oral argument of this motion, these grounds became
    more focused.

[38]

Kaisers principal complaint is that Davis, while acting as counsel for
    the Trustee, also acted for Lautec, one of Kaisers major creditors.  Kaiser
    seeks to renew his argument on appeal, advanced before the motion judge, that
    Davis dual engagement as counsel placed him and Davis Moldaver LLP in a
    conflict position, that Davis allegedly abused his role as counsel to the
    Trustee and breached alleged duties to Kaiser by advising the Trustee to take
    steps that favoured Lautecs interests over those of the Trustee and Kaiser,
    and that, by so doing, Davis exposed Davis Moldaver LLP to an influence that
    impaired its professional judgment in respect of the Kaiser bankruptcy.

[39]

At the heart of this complaint is a written waiver document dated
    February 10, 2010, prepared by Davis and executed by the Trustee (the
    Waiver), pursuant to which the Trustee purported to waive Kaisers
    solicitor-client privilege and authorized certain solicitors to disclose
    information that might otherwise have been subject to that privilege.

[40]

In the main, Kaiser contends that Davis, as counsel for the Trustee,
    owed a duty to Kaiser to protect his solicitor-client privilege.  Kaiser
    invokes the professional standards set out in the
Bankruptcy and Insolvency
    General Rules
, C.R.C., c. 368 (the Rules), in support of his claim that
    Davis breached this duty by drafting and arranging for the execution and subsequent
    use of the Waiver for the benefit of Lautec in breach of Kaisers right to
    solicitor-client privilege.  Kaiser describes the Waiver as an unlawful,
    misleading and prejudicial document, the preparation and use of which was a
    misuse of the process and powers of the BIA.

[41]

These arguments were raised before the motion judge and fully addressed
    by him in his reasons on the Removal Motion.  He rejected Kaisers claims of any
    impropriety by the Trustee, Davis or Davis Moldaver LLP generally and, in
    particular, in respect of the Waiver.  I see no reviewable error in this
    ruling.

[42]

Kaiser argued before the motion judge, and seeks to re-argue on appeal,
    that duties are owed directly by a trustee in bankruptcys counsel to the
    bankrupt.  In support of this proposition, he relies on
Engels v. Richard
    Killen & Associates Ltd.
(2002), 60 O.R. (3d) 572 (S.C.) (In
    Bankruptcy), affd (2004), 69 O.R. (3d) 183 (C.A.) and
Dugas (Re)
, 2003
    NBQB 197, (2003), 41 C.B.R. (4th) 168 (N.B.Q.B.) and various of the Rules.

[43]

The Rules do not appear to have been raised before the motion judge.  The
    motion judge considered the above-mentioned cases cited by Kaiser and declined
    to follow them, preferring instead to adopt his own prior reasoning on this
    issue in
Turbo Logistics Canada Inc. v. HSBC Bank Canada
, 2009 CanLII
    55292 (S.C.).
Turbo
involved yet another solicitor-removal motion
    brought by counsel who act for Kaiser on this motion, albeit against another
    law firm in an unrelated proceeding.  In
Turbo
, after considering the
    decisions in
Engels
and
Dugas
, the motion judge said, at para. 16
    :

I cannot agree with the notion that counsel for a
    trustee in bankruptcy, or for a court-appointed receiver, normally owes any
    duty to the creditors of the bankrupt or debtor under a court-appointed
    receiver.  The obligation of a solicitor is to his or her client.  The fact
    that the solicitor is an officer of the court does not change that.  It is the
    trustee in bankruptcy or the court-appointed receiver that owes a fiduciary
    duty to the creditors or other stakeholders.  To suggest that the lawyer
    advising the trustee in bankruptcy or the court-appointed receiver owes a duty
    to those creditors or other stakeholders would, amongst other things, lay the
    solicitor open to actions at the hands of the creditors of the trustee in
    bankruptcy or court-appointed receiver for failure to properly carry out the
    lawyers obligations to those creditors or stakeholders.  This is not the law
    and would make no sense.  A solicitor giving advice to a client, whether the
    client is a trustee in bankruptcy or court-appointed receiver or otherwise, is
    responsible to the client to give proper advice to the client.  It is the
    client, and not the solicitor, that owes duties to creditors and other
    stakeholders in the case of a trustee in bankruptcy or court-appointed
    receiver.

See also
Manufacturers Life Insurance Co. v. Juno
    Developments (North Bay) Ltd.
, 2011 ONSC 3945, (2011), 79 C.B.R. (5th) 229
    (S.C.).

[44]

I see no error in the motion judges reasoning on this issue or in the
    proposition that it is the trustee in bankruptcy, as principal, rather than his
    or her solicitor, as agent, who owes direct legal duties to the creditors of a bankrupt
    or the bankrupt.  Nor do I read the Rules now cited by Kaiser as undermining
    this conclusion.

[45]

I reject Kaisers contention that his proposed appeal raises an
    important question of law for which there are conflicting authorities in
    Ontario, namely, whether a trustees counsel owes direct legal duties to a
    bankrupt and, if so, the scope of those duties.

[46]

Engels
is the only Ontario decision cited by Kaiser that is said
    to be contrary to the motion judges ruling on this issue.
Engels
was
    concerned primarily with whether the bankrupt in that case was bound by a
    common law non-solicitation restriction following the sale by a trustee in
    bankruptcy of a book of business to a third party.  It was in this context that
    the trial judge in
Engels
commented on the duties of trustees in
    bankruptcy and the obligation of the trustee and its counsel to act fairly and
    neutrally in the conduct of the administration of a bankrupt estate.

[47]

In any event, it is not in every instance in which potentially
    conflicting decisions exist that leave to appeal to this court is warranted.  The
    issue has now been addressed squarely in two recent Superior Court decisions 
Turbo
and
Manufacturers Life
.  In both cases, the notion of duties of counsel
    of the type urged by Kaiser was rejected.

[48]

Perhaps more importantly, on the motion judges findings, neither Davis
    nor Davis Moldaver LLP breached any obligations to Kaiser.

[49]

The motion judge considered, and rejected, Kaisers contention that the
    drafting, execution and use of the Waiver required the removal of Davis
    Moldaver LLP as the Trustees counsel.  In my view, this conclusion is
    overwhelmingly supported by the record.

[50]

First, the Waiver was prepared following the numerous privilege-based
    refusals by Kaiser on his BIA s. 163 examination, described above.  Although
    Davis sent the Waiver to Kaisers previous solicitors, he did not, in fact,
    request the disclosure of privileged information by those solicitors.  In
    addition, it is uncontroverted that no privileged information was obtained as a
    result of the Waiver.  Thus, regardless of the propriety of the Waiver, no
    prejudice was occasioned to Kaiser by its creation, execution or use.

[51]

Second, the motion judge granted a declaration, without opposition from
    the Trustee, that the Waiver was null, void and of no effect.

[52]

Third, the motion judge accepted the Trustees argument that the issue
    of the Waiver, and the attempt to invoke it as a basis for the removal of Davis
    Moldaver LLP as counsel for the Trustee, was part of a continuing effort to
    protect Kaiser from having to provide information to the Trustee.

[53]

Fourth, and importantly, the record indicates that Kaiser instructed his
    counsel to object to Davis representation of the Trustee about one month
before
the Waiver was signed.  Thus, Kaisers reliance on the Waiver to support the
    Removal Motion was an after-the-fact stratagem.

[54]

Fifth, the motion judge, as he was entitled to do, accepted the
    Trustees evidence that the Waiver was used in an effort to trace funds that
    the Trustee has grounds to believe either emanated from Kaiser or from persons
    who hold money at his behest.  He also accepted that at least part of the funds
    at issue may have been applied to reduce the debt owed to Lautec, one of
    Kaisers largest creditors.  The reduction of this debt, if it occurred, could
    only have decreased the amount of Lautecs claim in the bankruptcy and,
    consequently, increased the funds potentially available for recovery by Kaisers
    other creditors.  In these circumstances, the Trustee had a legitimate interest
    in attempting to trace the funds in question.

IV.      Disposition

[55]

I end where I began.  It bears repeating that none of the Trustee or
    Kaisers major creditors and estate inspectors has voiced any objection to the representation
    of the Trustee by Davis and his law firm.  Nor have they voiced any concern
    about Davis conduct or a conflict of interest arising from the fact that Davis
    acts for both Lautec and the Trustee.

[56]

To the contrary, the Trustee has sworn that there is no conflict, that
    Davis has not preferred Lautecs interests over those of the Trustee, and that
    Kaisers largest creditors, together with the Trustee, wish Davis to continue
    as counsel to the Trustee.  The Trustees position was succinctly stated in
    Tessis affidavit on the Removal Motion:

[I]t would be a disservice to the creditors and
    bankruptcy estate and ultimately a large and expensive impediment to the smooth
    administration of this bankruptcy if [Davis Moldaver LLP] was to be removed as
    solicitor of record.

[57]

Accordingly, for the reasons given, I conclude that Kaiser has not
    satisfied the test for leave to appeal under s. 193(e) of the BIA.  The leave
    motion is dismissed.

V.        Costs

[58]

The Trustee is entitled to its costs of this motion.  I have now
    received and reviewed the parties written submissions concerning costs.  The
    Trustee seeks its costs of the leave motion on a full indemnity basis, in the
    sum of $21,521.48.  The Trustee argues that this motion, like the Removal
    Motion, was tactical in nature and designed to further delay the proper administration
    of Kaisers bankrupt estate.  Consequently, the Trustee says that the dismissal
    of the leave motion should attract a costs award on the full indemnity scale.

[59]

Kaiser submits that his leave motion was reasonable and justified.  He
    argues that, based on the decisions in
Engels
and
Dugas
, he had a
    legitimate legal foundation on which to object to Davis Moldaver LLPs
    continuing representation of the Trustee.  He argues that the costs of the
    leave motion should be fixed in the amount of $5,000.

[60]

The Trustee emphasizes that the motion judge awarded costs to the
    Trustee in the amount of $50,000  almost the entire amount of the Trustees
    full indemnity costs ($53,758.76).  In large part, that award was based on the
    motion judges conclusion that the Removal Motion was misconceived and tactical
    in nature.  He viewed the Removal Motion as merely one more effort by Kaiser to
    stone wall the Trustees efforts to ascertain and realize on Kaisers assets
    for the benefit of his bankrupt estate.

[61]

I have strong suspicions that, like the Removal Motion, Kaisers leave
    motion was brought for tactical reasons.  That said, the record before me does
    not clearly establish an improper purpose in the decision to seek leave to
    appeal.

[62]

I therefore conclude that the Trustee is entitled to its partial
    indemnity costs of the leave motion.  Contrary to Kaisers submission, I regard
    the amount of $14,200, inclusive of disbursements and all applicable taxes, as
    an appropriate award of partial indemnity costs in this case and I so order.  I
    decline to grant any other relief in respect of the Trustees costs of this
    motion.

E.A. Cronk J.A.





[1]
For example, s. 193(a) of the BIA provides for an appeal as of right if the
    point at issue involves future rights.  The proposed appeal concerns the
    motion judges discretionary ruling refusing to order the removal of Davis
    Moldaver LLP as ongoing counsel of record for the Trustee.  Kaiser has no
    existing, let alone future, right to dictate the Trustees choice of counsel. 
    I do not regard the Trustees selection of counsel as implicating Kaisers
    future rights.  Similarly, it is difficult to see how s. 193(c) of the BIA is
    engaged in this case.  That provision applies if the property involved in the
    appeal exceeds $10,000 in value.


