Albert Gerrard Formosa

Following the release of the main decision, the Court of Appeal for Ontario received further submissions on costs.

The Court ordered that the costs of the application for leave, the motion for leave to appeal, and the appeal be awarded to the appellant in the cause.

The appellant appealed the dismissal of an application for leave under s. 215 of the Bankruptcy and Insolvency Act to commence an action against a trustee administering a court-approved proposal.

The Court of Appeal held that on a s. 215 motion the judge must only determine whether there is a factual basis for the claim and whether it discloses a cause of action, not finally decide the merits.

The motions judge erred by conclusively interpreting the proposal and the trustee's duties, thereby exceeding jurisdiction on the threshold application.

The court also declined to refuse leave on the basis that the appellant should have proceeded under s. 37 instead.

Leave to commence the action was granted.