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PROCEEDINGS - Parties - Standing - Limitation periods

Friday, March 27, 2020 @ 9:26 AM  

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Appeal by the defendant Schumilas from a decision of a motion judge dismissing his motion for dismissal of the action against him on the basis that any right to assert a claim against him arose when the respondent was an undischarged bankrupt and, therefore, the cause of action vested with his trustee in bankruptcy. The motion judge allowed the respondent’s cross-motion for an order nunc pro tunc granting him standing to bring this action. The respondent made a voluntary assignment in bankruptcy in 2009. He was discharged from bankruptcy in 2011. He commenced the present action in 2011 but only discovered the cause of action against the appellant in 2013, after his discharge from bankruptcy. The motion judge relied on s. 187(9) of the Bankruptcy and Insolvency Act which provided that no bankruptcy proceeding shall be invalidated by a formal defect or irregularity. The motion judge further found that the expiry of the limitation period was not an absolute bar to an order nunc pro tunc and that the court could still exercise its discretion.

HELD: Appeal allowed. The motion judge did not have the authority to make the order nunc pro tunc as the limitation period had expired when the motion was brought in 2018. The respondent required a nunc pro tunc order because the cause of action vested in the trustee. A bankrupt’s property was broadly defined and included a cause of action, regardless of whether it had been discovered or not. As the respondent’s motion was brought after the expiry of a limitation period, a nunc pro tunc order could not be made since such an order was of no practical effect.

Thistle v. Schumilas, [2020] O.J. No. 497, Ontario Court of Appeal, D. Watt, C.W. Hourigan and G.T. Trotter JJ.A., February 6, 2020. Digest No. TLD-March232020009