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Civil Litigation Dicta - Dismissal (or Stay) of Action (by Defendant) - Capacity [R21.01(3)(b)]. Little (Nautilus North Strength and Fitness Centre) v. Bramcan Investments Limited
In Little (Nautilus North Strength and Fitness Centre) v. Bramcan Investments Limited (Ont CA, 2025) the Ontario Court of Appeal dismissed an appeal, this from a motion order that "dismissed his action pursuant to r. 21.01(3)(b) [SS: "the plaintiff is without legal capacity to commence or continue the action or the defendant does not have the legal capacity to be sued"].
This issue turned on the litigation stay that applies to undischarged bankrupts:[2] On April 13, 2018, the appellant made an assignment in bankruptcy under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”). BDO Dunwoody Canada Limited (“BDO”) was appointed as the trustee in bankruptcy.
[3] On September 10, 2020, while an undischarged bankrupt, the appellant started this action against his former landlord, Bramcan Investments Limited, and two of Bramcan’s officers and directors, Catherine Spencer and Geoffrey Crawford. In his action, the appellant claims the value of assets disposed of by the respondents, all of which arose out of a fitness and strength building business that the appellant ran. The statement of claim alleges that the value of these assets was approximately $250,000.[1] The appellant had not included these assets in his Statement of Affairs that he filed with BDO.
[4] The respondents discovered the bankruptcy when conducting a cross-examination of the appellant in August 2023 in response to a summary judgment motion that the appellant had brought. The respondents then brought this motion to dismiss the claim under r. 21.01(3)(b).
[5] The motion judge found that the action was a nullity. He said that only the trustee in bankruptcy had the capacity to commence the action as long as the appellant was an undischarged bankrupt. .... . Cashin Mortgages Inc. (Verico Cashin Mortgages) v. 2511311 Ontario Ltd. (Mortgages Alliance – Main Street Mortgages)
In Cashin Mortgages Inc. (Verico Cashin Mortgages) v. 2511311 Ontario Ltd. (Mortgages Alliance – Main Street Mortgages) (Ont CA, 2023) the Court of Appeal considers a R21.01(3)(b) ['Determination of an Issue Before Trial - Capacity'] ground of appeal:[1] The appellants appeal the dismissal of their motion under r. 21.01(3)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, in which they alleged that the respondent lacked the legal capacity to bring its action; ...
....
[9] The appellants argue that the concept of legal capacity for the purposes of r. 21.01(3)(b) comprises the question of a party’s legal status to sue and be sued, as well as the question of a party’s standing to pursue a cause of action: see e.g., Western Delta Inc. v. Zurich Indemnity Company of Canada, 1999 CanLII 2386 (Ont. C.A.), at para. 4, and Goldentuler v. Simmons Dasilva LLP, 2021 ONCA 219, at para. 13. The appellants do not dispute Cashin is an active corporation that can sue and be sued. They contest that Cashin has standing to bring a claim with respect to its claimed ownership of the Greenbrix name.
[10] In our view, the appellants’ argument conflates the question of legal standing with the question of whether or not Cashin’s claim to ownership has any merit. As the motion judge noted, the appellants did not bring a motion to strike Cashin’s statement of claim in the Milton Action as disclosing no reasonable cause of action, nor a motion for summary judgment, whereby the court could possibly adjudicate the merits of the Milton Action. Whether or not Cashin ultimately prevails on its assertion that it owns the Greenbrix name remains to be determined. This is not a determination that can be made on this motion or record. We therefore dismiss this ground of appeal.
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