The appellants, secured creditors of a bankrupt company, sought leave under s. 215 of the Bankruptcy and Insolvency Act to commence an action against the trustee in bankruptcy for negligence, conversion, breach of fiduciary duty, and breach of trust regarding the sale of the bankrupt's assets.
The motions judge dismissed the appeal from the Registrar's refusal to grant leave.
The Court of Appeal upheld the decision, finding that the trustee was acting as an agent for a prior secured creditor when selling the assets, and that the appellants had failed to object to the sale at the first meeting of creditors.