On February 9, 2026 the court dismissed the receiver's motion to approve a sublease of the Yorkdale Mall premises formerly occupied by Hudson's Bay — space held under a head lease from Oxford and subleased to HBC, per *Riocan Real Estate Investment Trust v. 2455034 Ontario Limited Partnership*, 2026 ONSC 2204, paras. 1–2.
Oxford, having won, asked for $707,229.66 — and asked that FTI Consulting Canada Inc. pay it personally.
It got $400,000, from the estate. The reasoning is the most useful survey of costs in restructuring proceedings to appear this year.
Costs are unusual here, and why
The starting point is that a successful party in a restructuring often gets nothing.
As the endorsement puts it, drawing on YG Limited Partnership and YSL Residences (Re), a restructuring is often not a "classic adversarial civil proceeding"; the statute is intended to provide a "forum for stakeholder views to be brought forward, considered, and taken into account". Where that is what happened, the fact that the court preferred one stakeholder's view does not mean that stakeholder is entitled to costs, per 2026 ONSC 2204, paras. 7, 10.
Two extensions are worth noting. The principles from the HBC Costs Decision, In Re Hudson's Bay Company, 2026 ONSC 1331, made under the CCAA, apply equally in a BIA receivership. And costs remain discretionary under s. 131 of the Courts of Justice Act, analysed in three stages — entitlement, scale and quantum — with a fourth question added here: who should pay, and when.
What took this motion out of the ordinary is that it was not really a stakeholder consultation:
Oxford and RioCan are direct competitors in the Canadian retail mall market. Oxford was engaged in a commercial dispute about its contractual rights and obligations and was at odds with, among others, one of its direct competitors that was propounding the Fairweather Sublease that Oxford was not willing to consent to. Both had economic interests at stake. Oxford's position prevailed, following an adjudication that was more in the nature of a "classic adversarial proceeding".
The receiver had entered into the sublease and was recommending it — but the real dispute, the lis, was between Oxford as landlord and RioCan, the first secured creditor of the debtor, which had been "very much involved in the arrangements" and had agreed to fund the rent deficiency between what was owing under the HBC sublease and what the new subtenant would pay, for as long as that remained in its economic interest, per 2026 ONSC 2204, para. 11.
The judicial notice
Before reaching the exception, the court confirms the rule — and does so in an unusually candid way.
The receiver argued it would be unusual for costs to be awarded when a court declines to approve a transaction proposed by a court officer. Oxford complained there was no authority for that proposition. Kimmel J.'s answer:
having sat on the Commercial List now for more than four years, I have no hesitation in taking judicial notice that this is, indeed, the case. This is at least, in part, because the court encourages court officers to explore value maximizing transactions and would not want an adverse costs award to serve as a disincentive to the court officer or to other market participants to explore these transactions.
That is worth having in a citable form. Court officers propose transactions that fail; if every failed approval motion carried a costs risk, officers would stop proposing anything creative, and counterparties would stop engaging with them.
The judge was satisfied that charging the estate here would not create that deterrent — because of who really bears it.
Not the receiver, personally
Oxford relied on two authorities for personal liability, and the endorsement distinguishes both in a way that maps the boundary usefully, per 2026 ONSC 2204, para. 19:
*Haunert-Faga v. Faga* concerned a receiver seeking advance costs immunity for litigation it was pursuing as a party outside the bankruptcy proceeding. It was refused because pursuing litigation is a business decision a receiver makes, and blanket advance immunity is not available for it.
*Akagi v. Synergy Group (2000) Inc.*, 2015 ONCA 771, is the leading case, and the language is the test: receivers only rarely incur personal liability for costs, but that protection "does not apply where the receiver turns itself into a 'real litigator', impermissibly drawing others into the fray and forcing them to defend themselves in what amounts to a process that is extraneous to the creditor-driven receivership". In Akagi the receiver had taken an investigative receivership too far — treating it as akin to a criminal investigation or public inquiry — and had to bear the consequences when the orders were set aside.
Neither applied:
I do not consider there to be any basis on which to hold the Receiver in this case, acting in the normal course of its duties to bring forward a potential transaction for the court's approval, even if at the behest of a significant secured creditor, to be held personally liable to Oxford for its costs. There has been no finding that the Receiver was not acting in good faith or that it stepped outside of the bounds of its mandate, nor was the Receiver pursuing litigation outside of the restructuring proceeding.
The February decision had already recorded that the receiver was doing its job, taking steps to identify a transaction that might reduce creditors' losses in a case where the debtors held "what appeared to be highly valuable assets (leases) that proved to be very difficult to monetize", per 2026 ONSC 2204, para. 21.
Who actually pays
Having declined personal liability, the court had to decide whether the estate should pay, and whether it should pay now.
The reasoning follows the money. RioCan is the first secured creditor and primary economic stakeholder in the estate. It has been funding the receivership. It stood to benefit if the motion had succeeded. And it is the stakeholder that indirectly bears any award made against the estate.
That is entirely appropriate in this case given the role it played in developing and advocating for the Receiver to enter into and seek court approval of the New Fairweather Sublease. The Receiver was doing its job, but RioCan is a commercial stakeholder just like Oxford.
The precedent is Re: 144 Park Ltd., 2015 ONSC 6864, where Newbould J. held the mortgagees directly liable for costs because the trustee's motion had been in their interests. Requiring the creditors to pay directly or indirectly "is also an avenue available to the court to deal with costs where fairness dictates".
And the reason the award is payable forthwith rather than in the ordinary course of distribution is a point every unsecured litigant should note:
it would be unfair to then require the successful litigant (Oxford, an unsecured creditor in respect of any costs awarded in its favour) to have to line up behind RioCan (the first secured creditor) for recovery of its costs of this motion from the YSS 1 estate.
A costs award against an insolvent estate is an unsecured claim. Winning a motion and then ranking behind the secured creditor you beat is, in practical terms, winning nothing. Ordering payment forthwith is what makes the award real — available here because there was no evidence it would disrupt priorities, and because the motion concerned the lease held by one debtor rather than all the entities in the receivership.
The judge adds a caution against over-reading it: "Not every costs award in an insolvency proceeding will be dealt with in this manner."
The offer that was not an offer
Oxford's claim for substantial indemnity costs after November 25, 2025 turned on an offer to settle, and the offer is remarkable.
Oxford offered to pay $5 million before cross-examinations began, or $2.5 million after, if the receiver ended the litigation by terminating the HBC sublease and abandoning its motion, per 2026 ONSC 2204, para. 25.
The landlord offering the estate millions of dollars to go away is not what most people picture when they hear "offer to settle". Oxford also pointed out that acceptance would have saved YSS 1 approximately $970,000 in further rent paid under the HBC sublease to keep it alive, plus hundreds of thousands in professional fees.
It nonetheless failed to attract r. 49.10 consequences, for two reasons that are worth committing to memory:
- It could not be accepted by the receiver alone. The offer was explicit that both the receiver and RioCan had to accept it.
- It contained terms beyond the scope of the motion: a full and final mutual release of uncertain scope, surrender and termination of all Yorkdale leases and related agreements — which would have precluded the receiver from exploring any other transaction — and the deletion of instruments from title.
An offer incorporating demands beyond the scope of the proceeding does not comply with r. 49: NorthStar Earth & Space Inc. v. Spire Global Subsidiary, Inc., 2024 ONSC 5060, per 2026 ONSC 2204, paras. 26–27.
The court could still consider it as a non-compliant offer, and made two observations that cut both ways. The $5 million window was only ten days, dropping to $2.5 million thereafter — against a dispute both sides agreed involved "hundreds of millions of dollars in value". And the receiver made no counter-offer at all, which drew this:
I agree with Oxford that parties to disputed, high stakes litigation ought to be incentivized to make meaningful efforts to settle, with cost consequences that follow.
But evaluated at the time it was made, the offer did not achieve anything approximating the estimated value the receiver was trying to unlock. Partial indemnity it was, per 2026 ONSC 2204, paras. 28–31.
The number
Oxford's partial indemnity claim was $558,187.26. The receiver proposed $250,000 — about $210,000 in fees plus the full $38,438.30 of Oxford's disbursements, and $40,000 more than the receiver's own certified partial indemnity costs.
The receiver's complaint was proportionality: Oxford's docketed hours were excessive, particularly on cross-examinations. Even allowing for what the receiver had left out of its own outline — the cost of preparing its report, and RioCan's lawyers' time supporting the motion — the court found it "hard to conceive of how that could account for why Oxford's claimed costs are more than twice the claimed costs of the Receiver", per 2026 ONSC 2204, paras. 32–34.
Balancing importance against proportionality and "the objectively reasonable expectation about the magnitude of costs that might be awarded to the opposing party, if successful", Kimmel J. fixed costs at an all-inclusive $400,000 — roughly the midpoint of the two partial indemnity figures — payable forthwith, within 30 days, out of the estate of HBC YSS 1 Limited Partnership, per 2026 ONSC 2204, paras. 35–37.
The receiver keeps its immunity. The estate pays. And the creditor who built the transaction is the one whose recovery it comes out of.
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