Legal Blog

Limitations & Bankruptcy

Re John Trevor Eyton 2021 Ont SCJ

A promissory note was statute barred by way of the Limitations Act, 2002. However, when the promisor assigned into bankruptcy, the creditor filed a proof of claim in the bankruptcy. The trustee disallowed the claim because the creditor’s action was statute barred. On appeal, the motion judge upheld the bankruptcy associate judge and held that a debt that was extinguished could not be claimed in a subsequent bankruptcy. The judge specifically referred to reasoning in a previous case, noted that it was obiter and therefore not binding, and refused to follow it.

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