Richard Killen & Associates Inc. had an agreement with its debtor for extra fees:
“[6] … the Administrator seeks to be paid for legal expenses incurred in the registration and filing, and subsequent removal, of a restrictive covenant in favour of the Administrator against the Debtor’s real property as security for compliance with the terms of the Proposal. The fees were authorized by the Debtor and fully disclosed in the Proposal under the “additional terms” provisions contained in paragraph 6 of Form 47 …”
In Master Mills’s view, s. 129 of the BIA General Rules is a complete code on fees and cannot be supplemented, even by debtor agreement and approval of the creditors.
“[13] The fees are prescribed in Rule 129 for consumer proposals and the court has no jurisdiction to deviate from Rule 129. Having specified the permissible fees, it could not have been the intention of Parliament that paragraph 6 of Form 47 then be utilized by administrators to take additional compensation or fees.
‘[14] Further, to require court approval for any disbursement outside the parameters of Rule 129 defeats the core purpose of a Division II consumer proposal, which is to provide a debtor with an efficient and cost effective means by which to address a debt burden with a minimum of administrative time or expense.”
Master Mills advised that if an administrator needs further fees or disbursements beyond those allowed under r. 129, it should lead the debtor to make a Div I proposal. So, the $1134 of legal fees were disallowed.
Re Rousseau, 2016 ONSC 962 (Ont. Master)