In Humphrey Estate v. Canada (Superintendent of Bankruptcy), the court upheld the trial judge's ruling that license fees charged on a file-by-file basis for use of software program can be claimed by a trustee in bankruptcy as disbursement. The issue arose over Alger & Associates' use of Ascend software provided by Promeric Technologies Inc.
Under the Bankruptcy and Insolvency General Rules and Directives, a trustee's disbursements do not include the indirect costs of the trustee's facilities such as computer software charges. Berger, J.A. agreed with the trial judge's reasoning that Ascend software is not part of the "infrastructure" of a trustee's office since the license fee charged is specific to a particular estate. Thus, the fees are not contemplated by the prohibitions in the Rules and Directives as those extend to more general software such as word processing and billing. Berger, J.A. added that the license fees here are analogous to postage and courier charges, which are direct costs incurred in the administration of a particular estate.
Berger, J.A. held for the court that the software license fees could be claimed as disbursement and dismissed the appeal.
July 5, 2011
Link to Decision
Adrienne Ho
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