In litigation concerning environmental liabilities associated with the purchase of a paper mill asset from a receivership, the defendant purchaser sought leave under s. 215 of the Bankruptcy and Insolvency Act to pursue a third party claim against the court-appointed receiver for alleged wilful negligence and intentional misrepresentation.
The receiver moved to dismiss or permanently stay the third party claim on the basis that leave had not been obtained and that the claim was frivolous.
Applying the low threshold for granting leave established in the case law, the court held that the pleadings and contractual documents disclosed a sufficient factual basis for the proposed claim.
The court granted leave nunc pro tunc to proceed against the receiver (rather than the receiver’s firm), dismissed the receiver’s motion to stay, and awarded costs to the purchaser.
