Legal Blog

Bankruptcy – Property

Thistle v. Schumilas 2020 Ont CA

The plaintiff voluntarily assigned into bankruptcy. Between the date of that assignment and the date of his discharge, the plaintiff had a cause of action against an insurance broker for negligent advice relating to a life insurance policy. The plaintiff did not know of his cause of action against the insurance broker until after he had been discharged. The court noted that all of his property became vested in his trustee in bankruptcy, including any causes of action that he may have had. Further, upon his discharge, any property remained with the trustee until the plaintiff moved to have the trustee re-transfer any unrealised property to him. The plaintiff claimed that, because his limitation period did not start until his discovery of the cause of action, he should be allowed to continue his action against the broker as if he had obtained an order granting him standing during the bankruptcy. The court refused to do so; an order could not be granted nunc pro tunc (i.e. retroactively) if a limitation period had already expired, which was the situation in this case even considering the discovery principle.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.