Bankruptcy of Sergio Grillone, 2025 ONSC 1259

COURT FILE NO.: BK-24-00159382-0032
DATE: 2025-02-24
SUPERIOR COURT OF JUSTICE – ONTARIO
IN BANKRUPTCY AND INSOLVENCY
IN THE MATTER OF THE BANKRUPTCY OF SERGIO GRILLONE
OF THE CITY OF MISSISSAUGA, IN THE PROVINCE OF ONTARIO
RE: Bankruptcy of Sergio Grillone
BEFORE: Osborne
COUNSEL:

• Sergio Grillone, self-represented (Bankrupt)
• Brandon Jaffe, for B. Riley Farber Inc., Trustee in Bankruptcy of the Estate of Mr. Grillone
• Adriana Di Biase, for Omega Process Servers
• Kenneth Kraft, for Bluecore Capital Inc.
• Matthew Moloci, for Scarfone Hawkins LLP
• Amanda Bafaro, for Bridgepoint Financial
  HEARD: 2025-02-24

Endorsement

This Case Conference

[1] This case conference was requested by Mr. Sergio Grillone. Mr. Grillone, an Ontario lawyer (administratively suspended), is self-represented in this proceeding. A court reporter was present.

[2] Mr. Grillone requested this case conference to seek advice and directions with respect to his proposed appeal from the scheduling Endorsement of Justice Kimmel of this Court dated January 20, 2025, following on an earlier case conference conducted by Justice Kimmel on January 17, 2025. As more particularly described below, his chief complaint is that the Registrar has declined to accept his proposed Notice of Appeal dated January 30, 2025 and should be directed to accept the Notice in order that he can proceed with his proposed appeal.

[3] In his Request Form filed to schedule this case conference, Mr. Grillone also stated that he was seeking an order recusing Justice Kimmel from determining this matter on the basis of a reasonable apprehension of bias which, he submits, is clear on the face of Justice Kimmel’s January 20, 2025 Endorsement.

[4] All of the relief being sought by Mr. Grillone is opposed by the Trustee in Bankruptcy and all creditors.

[5] As a preliminary matter, this case conference came on before me rather than Justice Kimmel with the result that Mr. Grillone’s proposed recusal motion in respect of Justice Kimmel is moot and is not being pursued.

Background

[6] Mr. Grillone was adjudged a bankrupt by order dated October 12, 2023 following a contested bankruptcy trial before Justice Kimmel: 2023 ONSC 5710. His appeal from that bankruptcy order was dismissed by the Court of Appeal for Ontario. Regrettably, this bankruptcy proceeding has been the subject of many motions and appearances both in this Court and in the Court of Appeal.

[7] On December 13, 2024, Mr. Grillone appeared at a case conference requested by him to schedule two proposed motions. First, he sought to bring a contempt motion against a representative of one of the creditors, Bluecore, and its counsel in this matter. Second, he sought to bring a motion pursuant to rule 59.06 for an order setting aside the bankruptcy order on the grounds of an alleged fraud perpetrated against the Court.

[8] The Endorsement of this Court in respect of the December 13, 2024 case conference directed Mr. Grillone to first file his motion materials before the Court would consider his scheduling request. Mr. Grillone undertook to file those materials by December 31, 2024.

[9] As reflected in the December 13, 2024 Endorsement, the direction of the Court was to the effect that after Mr. Grillone’s motion records had been served, those parties were to advise whether they intended to bring motions pursuant to rules 2.1, 2.2 and/or 37.16, or an application pursuant to section 140 of the Courts of Justice Act, and/or whether it would be their position that Mr. Grillone was required to obtain leave to bring his motions on any other basis, such as section 215 of the Bankruptcy and Insolvency Act. Bluecore and the Trustee were directed to advise Mr. Grillone of such, and serve their notices of motion, as applicable, no later than January 10, 2025.

[10] Further, as reflected in Justice Kimmel’s January 20, 2025 Endorsement, Mr. Grillone (and other parties) also attended at a case conference before Associate Justice Ilchenko of the Bankruptcy Court shortly after December 13, 2024, at which Mr. Grillone sought to schedule other motions and request relief, including a stay of the bankruptcy order, that appeared to overlap with matters addressed at the December 13, 2024 case conference before this Court.

[11] Accordingly, Associate Justice Ilchenko directed that Mr. Grillone also serve any motion materials in respect of the proposed relief he was seeking from the Registrar in Bankruptcy by December 31, 2024 in order that all of those matters could be addressed by Justice Kimmel at the January 17, 2025 case conference.

[12] Mr. Grillone did not serve any motion materials by the December 31, 2024 deadline, and indeed had not done so by the time of the January 17, 2025 case conference before Justice Kimmel.

The January 17, 2025 Case Conference and Endorsement of January 20, 2025

[13] As reflected in Justice Kimmel’s Endorsement of January 20, 2025, Mr. Grillone served, on January 9, 2025, a Notice of Motion exceeding 30 pages in length, without supporting evidence, seeking findings of contempt of court and sanctions against Bluecore and its counsel, other creditors and their counsel and the Trustee in Bankruptcy, for allegedly knowing and intentionally breaching the bankruptcy order. Mr. Grillone’s Notice of Motion also sought orders under rule 59.06(2) setting aside the bankruptcy order on the basis of fraud (that was alleged to have both pre-dated and post-dated the order), perjury, and alleged criminal activity, and fully discharging Mr. Grillone.

[14] Justice Kimmel’s consideration of the issues, and the directions given, are fully set out in the Endorsement of January 20, 2025. Among other things, Justice Kimmel noted that it was the position of Bluecore, supported by the Trustee and by another creditor, Omega Process Servers, that Mr. Grillone’s January 9, 2025 Notice of Motion is scandalous and vexatious on its face, and there was no affidavit in support, with the result that the appropriate course of action was for the Court to invoke the process contemplated by rule 2.1.02(1) to dismiss or stay Mr. Grillone’s motion. Bluecore further submitted that it was unfair to require Bluecore or any party to formally bring a motion for a stay or dismissal of Mr. Grillone’s proposed motion, since he remains an undischarged bankrupt and to force parties to incur additional costs that will never be recovered was highly prejudicial and simply unfair.

[15] The Trustee further submitted that Mr. Grillone requires leave to proceed with his motion for a finding of contempt against the Trustee, as required by section 215 of the BIA. If Mr. Grillone served and filed motion materials to seek that required leave, the Trustee intended to bring a motion for security for costs and for an order that Mr. Grillone not be permitted to proceed with either of his motions for contempt or for a section 59.06 order, or for the motion for leave pursuant to section 215 of the BIA, until he had satisfied any order for security for costs made.

[16] The Trustee further submitted that Mr. Grillone, as an undischarged bankrupt, lacks standing to seek much of the relief he is purporting to advance ostensibly for the benefit of the estate and its creditors, and that time and money should not be wasted responding to a motion that Mr. Grillone lacks the standing to bring.

[17] Justice Kimmel considered the positions and submissions of all parties and determined that the rule 2.1 motion to stay or strike needed to be dealt with first, since, depending upon the outcome, that may be no need to address the other contemplated preliminary motions or the proposed motions of Mr. Grillone.

[18] The rule 2.1 Requests for a Stay or Dismissal of Mr. Grillone’s proposed motion, served by Bluecore and Omega, (two creditors in the bankruptcy estate), had already been served on Mr. Grillone and received by the Court. Such requests are expressly contemplated by rule 2.1.01(6). Accordingly, Justice Kimmel made the scheduling directions in accordance with rule 2.1.01, all set out in the Endorsement.

[19] Justice Kimmel directed the Registrar to give Notice to Mr. Grillone to advise him that the Court was considering making an order staying or dismissing his January 9, 2025 Notice of Motion because it appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court pursuant to rule 2.1.02(2) (and by incorporation 2.1.01(3)), and under rule 36.17 and rule 2.1.02(3) (if the existing rule 37.16 order of the Court of Appeal was no longer in effect) prohibiting Mr. Grillone from making any further motions, without leave.

[20] As contemplated by rule 2.1.01(3)2, the notice advised Mr. Grillone that he may, within 15 days, file with the court a written submission responding to the notice and that, pending the outcome of the written hearing under rule 2.1.01(3) or further order of the court, no further steps shall be taken with respect to Mr. Grillone’s proposed motion and the registrar was directed to accept no further filings from Mr. Grillone with the exception of his written rule 2.1 submissions, if any.

Events Subsequent to the January 20, 2025 Endorsement and this Case Conference

[21] Mr. Grillone did not file a submission within the 15-day period, and indeed has not filed one even as of the date of this case conference. On the contrary, it is his position, as noted at the outset of this Endorsement, that he wishes to appeal the Endorsement of Justice Kimmel dated January 20, 2025, with the result that he has not taken, and will not take, any steps as directed therein until his proposed appeal is determined.

[22] At this case conference, I advised Mr. Grillone of my preliminary concern with his proposed appeal that it was premature in that the only thing that Justice Kimmel’s endorsement did was to direct the registrar to provide notice to Mr. Grillone that the court was considering making an order. The rule 2.1 process had not been completed and Justice Kimmel had not made any order as to whether Mr. Grillone’s proposed motions should be stayed or dismissed on the basis that they were frivolous or vexatious or otherwise an abuse of the process of the court. Similarly, the Court had not made any determination as to whether Mr. Grillone should be prohibited from making further motions in the proceeding without leave.

[23] Mr. Grillone disagreed and maintained his position that he has a right of appeal to the Court of Appeal (without any requirement for leave) from Justice Kimmel’s Endorsement directing the Registrar to advise Mr. Grillone that he may file a written submission, responding to the rule 2.1 notices. Put differently, his position is that he is entitled to challenge “the invocation” of the rule 2.1 process itself, whether or not it has been completed and irrespective as to whether any determination or order thereunder has been made.

[24] It follows, in Mr. Grillone’s submission, that until his appeal is determined by the Court of Appeal, the rule 2.1 process is automatically stayed, and no steps can be taken with respect thereto.

[25] I specifically asked Mr. Grillone whether, given my concern that his proposed appeal was premature since no order had been made pursuant to either rule 2.1 or 36.17 and that the written submission process contemplated by rule 2.1 should be completed as a first step, he wished to request an extension of the 15 day period prescribed by rule 2.1.01(3)2 to file a written submission in response to the notice, in order that I could entertain such an extension request.

[26] Mr. Grillone stated that he did not wish to request any extension and would not be filing any submission.

The Issues to be Determined

[27] Accordingly, I must address two issues:

a. whether Mr. Grillone has a right of appeal to the Court of Appeal (without leave) in respect of Justice Kimmel’s Endorsement of January 20, 2025, with the result that the rule 2.1 process is stayed pending a determination thereof; and

b. if my determination in respect of that first issue is that Mr. Grillone does not have a right of appeal, given Justice Kimmel’s Endorsement, whether any order should be made under rule 2.1.

[28] I will address these issues in order.

Issue #1: Does Mr. Grillone have a Right of Appeal in respect of the January 20, 2025 Endorsement?

[29] With respect to his proposed appeal, Mr. Grillone submitted at the case conference and in his aide memoire filed in advance that:

a. the Registrar of the Commercial List has no jurisdiction “to deny the filing of the Notice of Appeal to the Court of Appeal for Ontario”;

b. the Superior Court has no jurisdiction to deny the filing of such a Notice of Appeal;

c. he has a statutory right of appeal under the BIA; and

d. Justice Kimmel’s Endorsement is “judicial overreach and a violation of the doctrine of paramountcy” and it creates a “circular contradiction” because Justice Kimmel “imposed a filing ban, Grillone is appealing the filing ban, and the Registrar refuses to accept the appeal because of the very ban Grillone is appealing”. The Endorsement creates an “impossible loop” because Grillone is “denied the ability to challenge the order because of the order itself” and this violates a “fundamental principle of justice that litigants must have a right to challenge judicial decisions”.

[30] It is Mr. Grillone’s submission that an appeal as of right lies to the Court of Appeal pursuant to section 183(2) of the BIA. That section provides that “courts of appeals throughout Canada, within their respective jurisdictions, are invested with power and jurisdiction at law and in equity, according to their ordinary procedures, except as varied by this Act or the General Rules, to hear and determine appeals from the courts vested with original jurisdiction under this Act”.

[31] Pursuant to Rule 31(1) of the Bankruptcy and Insolvency General Rules, “an appeal to a Court of Appeal referred to in subsection 183(2) of the Act must be made by filing a notice of appeal at the office of the registrar of the court appealed from, within 10 days after the day of the order or decision appealed from, or within such further time as a judge of the Court of Appeal stipulates”.

[32] Rule 31(2) provides that “if an appeal is brought under paragraph 193(e) of the Act, the notice of appeal must include the application for leave to appeal”.

[33] Section 193 of the BIA provides that an appeal lies to the Court of Appeal from any order or decision of a judge of the court:

a. if the point at issue involves future rights;

b. if the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings;

c. if the property involved in the appeal exceeds in value $10,000;

d. from the grant of or refusal to grant a discharge if the aggregate unpaid claims of creditors exceed $500; and

e. in any other case by leave of a judge of the Court of Appeal.

[34] As I understand Mr. Grillone’s submission, it is that to the extent that a decision made pursuant to rule 2.1 (which is a provincial rule of civil procedure) “compels” him to file submissions in response to a notice advising him that the court is considering making an order that his motion appears on its face to be frivolous or vexatious or otherwise an abuse of process, such violates the doctrine of paramountcy since he has a statutory right of appeal under the BIA.

[35] I have considered all of Mr. Grillone’s submissions. In my view, the relevant provisions of the BIA and the General Rules do not assist him, leaving aside entirely for present purposes the additional issue of whether, in the circumstances of this case, leave would be required for such an appeal in any event given the order made by the Court of Appeal in this proceeding and/or operation of section 215 of the BIA which provides that, except with leave, no action lies against the Trustee with respect to any action (which I do not need to determine).

[36] The simple yet fundamental reason that these provisions do not assist him is that no order has been made pursuant to rule 2.1, and there has been no determination from which any appeal lies.

[37] Put differently, Justice Kimmel’s Endorsement of January 20, 2025 does not compel Mr. Grillone to file a submission in response to the notice (or indeed to do anything else). It merely repeats the steps specifically enumerated in rule 2.1, and reminds Mr. Grillone that he may (emphasis added) file a written submission of no more than 10 pages in length, pursuant to rule 2.1.01(3)2. It also directs that, in terms of sequencing, the rule 2.1 process should be completed before the Court considered any motions for security for costs and for leave, as a result of the order of the Court of Appeal, section 215 of the BIA, rule 37.16 and/or for failure to pay outstanding costs orders.

[38] Mr. Grillone has elected not to file any submission as part of the rule 2.1 process. That is his right. However, it does not follow in my view that he has an automatic right of appeal to challenge the effect of rule 2.1.01(1) that provides, on its face that “the court may, on its own initiative, stay or dismiss a proceeding …” before the court has made any decision as to whether to do so or not. The endorsement of Justice Kimmel directs the Registrar to provide Mr. Grillone with notice of the court’s concerns and an opportunity to provide submissions in response to the court’s concerns. Providing notice and an opportunity to respond is the beginning of a summary process, not the end.

[39] It follows that the rule 2.1 process that is already underway is not stayed by Mr. Grillone’s purported appeal. In my view, to conclude otherwise would circumvent the very purpose and object of rule 2.1 in the first place. It would bifurcate the summary process intended under rule 2.1 before the reviewing judge reached any conclusion regarding whether the proposed motion is frivolous or vexatious. This case represents a perfect illustration of a situation to which the rule should apply. Rule 2.1 is intended to be a summary (i.e., in-writing) process pursuant to which the court may stay or dismiss a proceeding if it appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court.

[40] The very objective is to provide a mechanism to bring to an end frivolous, vexatious or abusive proceedings without requiring other parties to incur the significant expense of responding, particularly in a case like this where the moving party is a bankrupt and the recovery of any costs is highly unlikely, and without requiring the court to expend scarce judicial resources determining an endless loop of frivolous, vexatious or abusive proceedings.

Issue #2: Is Mr. Grillone’s Proposed Motion Frivolous, Vexatious or an Abuse?

[41] Because Mr. Grillone has repeatedly stated that he will not file submissions as part of this process, I must proceed to consider the second issue; namely, whether Mr. Grillone’s proposed proceeding as framed in his Notice of Motion dated January 9, 2025 is frivolous, vexatious or otherwise an abuse of the process of the court, such that it should be stayed or dismissed pursuant to rule 2.1.01.

[42] In my view, the proposed motion should be dismissed.

[43] It has been observed that rule 2.1 is not for “close calls”. If a proceeding is to be dismissed under rule 2.1, and while the rule should be interpreted and applied robustly so that a motion judge can effectively exercise his or her gatekeeping function to weed out litigation that is clearly frivolous, vexatious or an abuse, the frivolous, vexatious or abusive nature of the proceeding must be apparent on its face, and there should generally be a basis in the pleadings to support the resort to the attenuated process of rule 2.1: Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, paras 8-9.

[44] Mr. Grillone’s Notice of Motion is not entirely linear and in parts is hard to follow. At its core, however, it includes the following:

a. Mr. Grillone seeks a finding of contempt against principals of Bluecore and Omega (two of his creditors, the claims of which were the subject of the bankruptcy trial), their respective counsel in these proceedings, and the Trustee in Bankruptcy for “knowingly and with intent to do so” breaching the bankruptcy order;

b. Mr. Grillone seeks an order pursuant to rule 59.06 setting aside the bankruptcy order on the basis that:

i. it was obtained through fraud;

ii. it is being funded with proceeds of crime;

iii. the Trustee subsequently determined that the security upon which the bankruptcy order is based was invalid and ended, forcible;

iv. Bluecore filed a fraudulent and forged proof of claim;

v. the principal of Bluecore committed perjury on the stand, by giving false evidence which evidence was relied upon by Justice Kimmel in granting the bankruptcy order;

vi. a “trove of evidence” has been discovered that was intentionally suppressed by the principal of Bluecore that would have changed findings at trial; and

vii. new facts have arisen during the administration of the estate revealing fraudulent conduct central to the order demonstrating that the original bankruptcy application was fundamentally deceptive; and

c. the request that as a result of all of the above, the bankruptcy order be set aside, that Grillone be discharged from bankruptcy, and the Trustee be ordered to account for all funds and proceeds in the estate.

[45] In my view, there are numerous and significant problems and deficiencies in the proposed motion.

[46] First, it is still not supported by any affidavit or other evidence. None was served or filed:

a. by the deadline of December 31, 2024 set by Justice Kimmel in the December, 2024 case conference;

b. at the time the Notice of Motion was delivered on January 9, 2025;

c. by the date of the case conference conducted by Justice Kimmel on January 17, 2025, resulting in the Endorsement of January 20 that Mr. Grillone seeks to challenge;

d. by the end of January, 2025, being the date by which Mr. Grillone committed to delivering his complete motion record, as reflected in the January 20 Endorsement at paragraph 7, which also notes that Mr. Grillone was apologizing for not following the Court’s previous direction; or

e. at any time thereafter up to and including the date of this case conference (February 20, 2025).

[47] Mr. Grillone offers no explanation for the lengthy and continuing delay, which is contrary to the order made last December imposing the deadline of the end of December and which is of significant concern, particularly given the allegations of intentional and fraudulent conduct on the part of parties, counsel and the Court officer, the Trustee in Bankruptcy.

[48] Justice Kimmel set out in the January 20 Endorsement, the positions of the named Respondents to the proposed motion as follows:

[11] Despite not having received Mr. Grillone's full motion record, on the basis of the January 9, 2025 Notice of Motion, and in accordance with the court's December 13, 2024 directions, the Trustee and Bluecore set out their positions regarding the timing and sequencing of the various potential motions to be as follows.

a. Bluecore takes the position that:

i. The January 9, 2025 Notice of Motion is scandalous and vexatious on its face. There is no affidavit in support (let alone a complete motion record). The appropriate course of action is for the court to invoke the process under Rule 2.1.02(1) to dismiss or stay Mr. Grillone's motion. The timelines should be those set out in Rule 2.1.01(8). Bluecore has delivered a Request for Stay or Dismissal under Rule 2.1.

ii. It would be unfair to require Bluecore or any party to formally bring a motion for a stay or dismissal. Mr. Grillone is an undischarged bankrupt and to force parties to incur additional costs that will never be recovered is highly prejudicial and simply unfair.

iii. If the Court is not prepared to proceed in this manner, then a security for costs motion should be scheduled before Bluecore (or any party) has to respond to any motion Mr. Grillone may be permitted to submit.

b. The Trustee supports Bluecore's position and takes the further position that:

i. A full accounting was provided to Mr. Grillone and other stakeholders on September 4, 2024, when the Trustee uploaded the estate's Interim Receipts and Disbursements to a OneDrive folder shared with Mr. Grillone.

ii. Mr. Grillone requires leave to proceed with his motion for a finding of contempt against Mr. Levy, as required by s. 215 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (the "BIA"), which reads as follows: "Except by leave of the court, no action lies against the Superintendent, an official receiver, an interim receiver or a trustee with respect to any report made under, or any action taken pursuant to, this Act."

iii. If Mr. Grillone delivers motion materials to seek leave pursuant to s. 215 of the BIA, the Trustee intends to return a motion for security for costs before the leave motion and request that Mr. Grillone not be permitted to proceed with either of his core motions (for contempt and for a s. 59.06 order) or the leave motion until he has satisfied any order for security for costs that is made against him.

iv. Mr. Grillone is an undischarged bankrupt and does not have standing to seek much of the relief that he is advancing ostensibly for the benefit of the estate and its creditors. Time and money should not be wasted responding to a motion that Mr. Grillone does not have standing to bring.

[12] Omega Process Servers and the De Lucas (also named as respondents to Mr. Grillone's January 9, 2025 Notice of Motion, collectively "Omega") have also delivered a Request for Stay or Dismissal under Rule 2.1 and adopt the same position as Bluecore in that regard. They further ask in their Aide Memoire that:

a. The court apply (or extend) the Rule 37.16 order made by Benotto, JA on April 3, 2024 in the appeal proceedings to Mr. Grillone's January 9, 2025 Notice of Motion and require that he seek leave and obtain leave under Rule 37.16 before being permitted to schedule or pursue this further motion.

b. The court should strike Mr. Grillone's January 9, 2025 Notice of Motion (and not permit him to proceed with it) because he has failed to pay outstanding costs awards against him.

[49] To assist Mr. Grillone, Justice Kimmel then set out in her Endorsement some of the issues that he may wish to address in any submission as follows:

Procedural Context: Mr. Grillone's Litigation Strategy

[16] Some of the considerations that Mr. Grillone may wish to address in his submissions in response to the Rule 2.1 Notice arise from the procedural context and specific circumstances that the other parties have identified. To assist Mr. Grillone in focussing his responding submissions, some of the more significant concerns that have been identified are outlined below.

[17] There is a long procedural history here. This court and the Court of Appeal have both commented previously upon Mr. Grillone's litigation strategy and his selective adherence to court orders and directions. For example,

a. The bankruptcy trial reasons (released on October 12, 2023, Grillone (Re), 2023 ONSC 5710) provide detailed examples of what the Court of Appeal later referred to as Mr. Grillone's "litigation strategy": see Grillone (Re), 2023 ONCA 844, para 22.

b. In the bankruptcy trial reasons this Court also found that:

[159] … Mr. Grillone has adopted a manner of dealing with his creditors and claims against him and the available assets to satisfy those claims that is litigious, consumes court time and costs for all involved, and creates a circumstance that in the court's view requires that the processes of the BIA be set in motion.

c. In the Court of Appeal's decision on the stay and security for costs motions (Grillone (Re), 2023 ONCA 844), Brown JA made further findings regarding Mr. Grillone's continued pursuit of his "litigation strategy" on the appeal:

[12] My refusal to grant Mr. Grillone an adjournment of Bluecore's motion was informed, in part, by the procedural history to date of his appeal as well as the litigation strategy he has adopted on this appeal.

[15] While in his December 5 Letter Mr. Grillone wrote that "[t]he perfection of the appeal will follow the normal course", the court's records show that Mr. Grillone has not taken any steps to perfect his appeal in accordance with the Rules since filing his notice of appeal. That raises serious doubts as to whether Mr. Grillone's appeal constitutes a serious request to review the reasons of the trial judge or merely a device to stall the enforcement of the Bankruptcy Order.

[17] The timetable required Mr. Grillone to file responding materials by November 13, 2023. He did not file any materials by that date.

[23] It is apparent from Mr. Grillone's communications about this appeal with opposing counsel and this court, as well as from his failure to take the steps the Rules require to perfect his appeal, that he wishes to replicate at the appeal level his litigation strategy below of multiple case management conferences and motions. Such an appeal litigation strategy is misconceived and improper.

[56] Based on what the record before me discloses about Mr. Grillone's litigation approach to this appeal, I have no doubt that if the automatic stay is not lifted Mr. Grillone will continue to pursue the aggressive (and wasteful) litigation approach described by the trial judge, to the prejudice of Bluecore and his other creditors.

d. In the reasons on the motion for a rule 37.16 Order in the Court of Appeal (Grillone (Re), 2024 ONCA 244, para 12) Benotto JA concluded that:

[12] Notwithstanding the consent of Mr. Grillone, I am satisfied that the requested order is appropriate. Mr. Grillone has brought multiple motions, made collateral attacks on the issues in the appeal including the mistrial application, has not paid costs ordered and otherwise abused the court.

[18] Mr. Grillone's latest January 9, 2025 Notice of Motion appears, on its face, to be a continuation of this litigation strategy. It is another in a long line of motions or threatened motions that cast the widest possible net around anyone who Mr. Grillone perceives to be responsible for the Bankruptcy Order that he has been resisting for years and trying to have overturned or set aside since it was made.

[19] Mr. Grillone remarked at the January 17, 2025 case conference that the outstanding costs awards against him are irrelevant because he is an undischarged bankrupt. He appears to think that he can continue to litigate without impunity for costs because he is an undischarged bankrupt. He is a former experienced litigation lawyer and is not incurring his own legal costs in the continued pursuit of his litigation strategy.

[20] The January 9, 2025 Notice of Motion is a long diatribe of allegations of the most serious nature which Mr. Grillone has not substantiated with supporting evidence in a motion record, despite having said he would do so by the end of last year. The relevance of many of these allegations to the core relief sought by Mr. Grillone is not readily apparent on the face of the Notice of Motion, nor is it readily apparent.

[21] The January 9, 2025 Notice of Motion is primarily focused on an alleged illegal development scheme carried out by the principal of Bluecore, Mr. Robson, and his lawyer Mr. Adams, that Mr. Grillone does not even assert he was directly harmed by or involved in. Mr. Grillone asserts broadly that:

… since May of 2021 to the present, Robson and Adams have committed the following illicit acts: a) mortgage fraud; b) money laundering: c) title fraud; d) income tax fraud; e) land transfer tax fraud; f) forgery: g) perjury from the stand; h) contempt of court; i) corporate fraud, including falsifying corporate documents; j) shareholder and stock fraud; k) false personation; l) filing of false affidavits in court; m) filing fraudulent documents with land titles; n) obstruction of justice; o) filing of forged and fraudulent of claim in bankruptcy court; p) suppression of evidence; q) extortion; r) land value manipulation.

[22] I have reviewed the Notice of Motion as Mr. Grillone invited me to do, which ultimately seeks as its primary relief that the Bankruptcy Order be set aside and that Bluecore's principal (Robson), Bluecore's counsel, the Trustee, Patty and Marco De Luca (the principals of Omega) and their counsel be found in contempt of court.

[23] The only apparent connections between this motion and the bankruptcy proceeding are in the assertions that:

a. Ill-gotten gains from the development scheme supported the bankruptcy petition.

b. Bluecore filed a false and fraudulent proof of claim in the bankruptcy in violation of the Bankruptcy Order because it specifies both an unsecured claim for $4,273,533 and a secured claim of $4,173,533 in respect of which it is disclosed that Bluecore only holds assets of $100,000 as security.

c. Bluecore fraudulently commenced the bankruptcy petition as a secured creditor and the Trustee's counsel later provided an opinion that Bluecore only had a valid and enforceable security interest over Mr. Grillone's accounts receivable but not over the funded matters delineated in Schedule D to the loan agreement.

d. The Trustee is fully aware of the above and has not taken a single step to protect the other creditors of the estate from the fraud.

[24] The assertions in the Notice of Motion about Omega have to do with the recent settlement of Omega's claim against Mr. Grillone (that was the subject of Omega's proof of claim in the bankruptcy) with Mr. Grillone's insurer outside of the bankruptcy process.

[25] Furthermore, Mr. Grillone is an undischarged bankrupt. That creates a standing problem in respect of many of the issues raised in the January 9, 2025 Notice of Motion. He purports to be pursuing relief against the Trustee and two creditors (or their principals) for the benefit of the other creditors of the estate (aside from Bluecore and Omega), including some whose counsel attended this case conference. The Trustee is responsible for the administration and protection of assets belonging to the estate and to ensure that creditor priorities are respected. The other creditors are engaged in the process through their own counsel to the extent that their interests require protection from alleged wrongdoing by the Trustee.

[26] In addition, it is not apparent on the face of the Notice of Motion how the allegations, even if proven, would result in the Bankruptcy Order being set aside.

[50] I share all of these concerns.

[51] As noted above, Mr. Grillone has declined the opportunity to make any submission, with the result that all of these concerns, previously outlined for him, remain and are unanswered by him.

[52] For all of these reasons, I find that the proposed motion is frivolous, vexatious or otherwise an abuse of the court. In so doing, I have been mindful of the cautionary approach endorsed by the Court of Appeal in Scaduto and echoed by this Court in Gao v. Ontario WSIB, 2014 ONSC 6497, paras 18, 22, to the effect that:

While rule 2.1 should be applied robustly to bring to an early end vexatious proceedings, the matters should not [be] considered lightly or dismissively. Care should be taken to allow generously for drafting deficiencies and recognizing that there may be a core complaint, which is quite properly recognized as legitimate, even if the proceeding itself is frivolously brought or carried out and ought to be dismissed.

[53] Notwithstanding the application of these considerations to this particular case, I am unable to reach any conclusion other than that the proposed motion is frivolous, vexatious and/or an abuse of the process of the court.

[54] I also observe, while I do not rely on any such observation to reach the conclusion as I have done in respect of rule 2.1, that Mr. Grillone has already been found by both this Court and the Court of Appeal to have engaged in a litigation strategy that is of concern.

[55] As observed by Brown JA (2023 ONCA 844, paras 12, 15, 23, 56), Mr. Grillone’s conduct on the stay and security for costs motions and his litigation strategy on the appeal raised:

“serious doubts as to whether Mr. Grillone’s appeal constitutes a serious request to review the reasons of the trial judge or merely a device to stall the enforcement of the bankruptcy order.

It is apparent from Mr. Grillone’s communications about this appeal with opposing counsel in this Court, as well, as from his failure to take the steps the Rules required to perfect his appeal, that he wishes to replicate at the appeal level his litigation strategy below of multiple case management conferences and motions. Such an appeal litigation strategy is misconceived and improper.

Based on what the record before me discloses about Mr. Grillone’s litigation approach to this appeal, I have no doubt that if the automatic stay is not lifted. Mr. Grillone will continue to pursue the aggressive (and wasteful) litigation approach described by the trial judge, to the prejudice of Bluecore and his other creditors.

[56] Benotto, J.A. similarly concluded on the motion for rule 37.16 order in the Court of Appeal (2024 ONCA 244, para 12) that:

notwithstanding the consent of Mr. Grillone, I am satisfied that the requested order is appropriate. Mr. Grillone has brought multiple motions, made collateral attacks on the issues in the appeal including the mistrial application, has not paid costs ordered and otherwise abused the court.

[57] In her Endorsement of January 20, 2025, Justice Kimmel observed that the January 9, 2025 Notice of Motion appeared, on its face, to be a continuation of that litigation strategy and observed that:

it is another in a long line of motions or threaten motions that cast the widest possible net around anyone who Mr. Grillone perceived to be responsible for the bankruptcy order that he has been resisting for years and trying to have overturned or set aside since it was made. … Mr. Grillone remarked at the January 17, 2025 case conference that the outstanding cost awards against him are relevant because he is an undischarged bankrupt. He appears to think that he can continue to litigate without impunity for costs because he is an undischarged bankrupt. He is a former experienced litigation lawyer and is not incurring his own legal costs in the continued pursuit of his litigation strategy.

[58] I also reach the same conclusion. The costs orders remain unpaid. Mr. Grillone declines to make submissions in the rule 2.1 process, but maintains his position that he has an automatic right of appeal that stays that whole process as a result of having filed his Notice of Motion.

[59] Yet that Notice of Motion is still, as noted above, unsupported by any evidence. As observed by Justice Kimmel, it is primarily focused on an alleged illegal development scheme carried out by the principal of Bluecore and his counsel, with the involvement of other creditors and their counsel and the Trustee in Bankruptcy who is a Court officer.

[60] The allegations are extremely serious - fraud, forgery, perjury, contempt of court, obstruction of justice, suppression of evidence and extortion (among others). Yet they remain unsupported by any evidence.

[61] Moreover, and also as observed by Justice Kimmel, the relevance of many of these allegations to the core relief sought by Mr. Grillone (i.e., an order setting aside the bankruptcy order and discharging him from bankruptcy) is not apparent on the face of the Notice of Motion or at all. This is a challenge for Mr. Grillone even if he was able to overcome the issue of standing arising from the fact that he remains an undischarged bankrupt and purports to be pursuing relief against the Trustee and two creditors or their principals, ostensibly for the benefit of other creditors of the estate.

[62] For all of these reasons, Mr. Grillone’s Notice of Motion dated January 9, 2025 is dismissed pursuant to rule 2.1.01.

Result and Disposition

[63] Mr. Grillone has no right of appeal from the Endorsement of Justice Kimmel dated February 20, 2025.

[64] Mr. Grillone’s proposed motion is dismissed pursuant to rule 2.1.01.

[65] Order to go in accordance with these reasons.

Osborne