The moving creditors in a bankruptcy sought leave under s. 38 of the Bankruptcy and Insolvency Act to commence an action relating to the administration of the bankrupt estate, and also sought leave under s. 215 of the Act to include the Office of the Superintendent of Bankruptcy and two of its employees as defendants.
The proposed claim against the regulatory authority and its employees alleged negligence in the investigation and handling of complaints about the trustee’s conduct.
The court held that all material facts supporting the negligence claim were known by June 23, 2008, when a registrar issued a decision finding misconduct by the trustee.
Accordingly, any claim against the regulatory authority defendants was barred by the two‑year limitation period under the Limitations Act, 2002.
Leave to include those defendants was refused, but authorization under s. 38 to pursue claims against other defendants was granted.
