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Insolvency - BIA - Litigation Stay. Aquino (Re)
In Aquino (Re) (Ont CA, 2026) the Ontario Court of Appeal dismissed a BIA insolvency appeal, this brought against two orders: the first "adjudging the appellant bankrupt and appointing [a] trustee of his bankrupt estate" and the second "determining that a pre-existing Mareva injunction, granted in litigation that resulted in a substantial judgment against the appellant (the “TUV litigation”), remained and continued in full effect until further order of the court (the “Mareva Order”).
The court considers a Mareva injunction, here in an insolvency context - and it's interaction with the BIA litigation stay:3. The Mareva Order
[49] The Mareva Order, styled as having been made in the TUV litigation, by its terms enjoins the appellant for an indefinite period of time as a form of post judgment execution. It does not operate pending the determination of claims or defences in the TUV litigation; those have already been determined. Although pre-trial Mareva injunctions are interlocutory orders, it is difficult to fit this order into that category. In some situations, a post judgment order that finally determines a party’s access to funds is final for the purpose of appeal: B&M Handelman Investments Ltd. v. Curreri, 2011 ONCA 395, 278 O.A.C. 199, at para. 16. This order has an analogous character. Moreover, the order was made after the Bankruptcy Order, the effect of which is to remove the capacity of the appellant with respect to his property, including (once the stay of the Bankruptcy Order terminates by the disposition of the appeal from it) any right to challenge the Mareva Order. In these circumstances, the Mareva Order is final and is appealable as of right pursuant to s. 6(1)(b) of the CJA.
[50] The appellant’s principal argument concerning the propriety of granting the Mareva Order is that the bankruptcy judge failed to address, head on, his assertion that the General Mareva Order, which the bankruptcy judge’s order continued, merged in the judgment in the TUV litigation, and ceased to be in effect. He points to authorities that Mareva injunctions are generally thought of as a pre-trial remedy, and the need to specify in them the exact terms on which they cease to apply. He argues that the General Mareva Order ended when judgment in the TUV Litigation was first given.
[51] I reject this submission. The General Mareva Order specifically stated its termination date. It stated that it remained in effect until varied by further order of the court. It was not varied until addressed, and extended by, the Mareva Order made by the Bankruptcy Judge.
[52] The appellant also submits that the Mareva Order creates uncertainty given the bankruptcy. I do not accept that argument.
[53] Ordinarily, upon the making of a bankruptcy order, a judgment creditor would not be permitted to ask for further post judgment relief against the debtor to assist in execution of its judgment, since s. 69.3(1) of the BIA provides:Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy. [54] However, the court has the power to declare that the stay does not apply to a particular step by a particular creditor: s. 69.4. Although she did not put it in those terms, the bankruptcy judge effectively exercised that power as she stated that she was satisfied that making the Mareva Order was “complementary to the powers afforded to [the appellant’s] trustee in bankruptcy”.
[55] I see no reversible error in that exercise of discretion. It was appropriate to prevent any purported dealings with or dissipation of assets by the appellant while the bankruptcy trustee was readying itself to seek out and take control of the assets legally vested in it. The stay of the Bankruptcy Order resulting from the appellant’s appeal of it confirms the wisdom of keeping the restraints on dissipation of assets in place.
[56] Accordingly, I would dismiss the appeal from the Mareva Order. . 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: R21.01(3)(b) "the plaintiff is without legal capacity to commence or continue the action or the defendant does not have the legal capacity to be sued"].
The court alludes to grounds of action that may be an exception to the BIA litigation stay, the 'personal' action, here citing as an example a mental distress claim associated with a main lost property claim:[9] The appellant also attempts to avoid the result below by asserting that his claim includes a claim for damages for mental distress which he says is also exempt under the BIA: Meisels v. Lawyers Professional Indemnity Company, 2015 ONCA 406, 126 O.R. (3d) 448, at para. 13. That effort does not avail the appellant. The damages claimed for mental distress do not arise out of a standalone claim. They are directly linked to the claim for damages arising from the lost property. If the action arising out of the lost property falls as a nullity, the related claim for mental distress falls with it. As Perell J. said in Stoneman v. Gladman (2005), 2005 CanLII 63796 (ON SC), 16 C.B.R. (5th) 78 (Ont. S.C.), at para. 29: “The plaintiffs are not advancing a claim that is clearly a personal one; rather, they have threaded a personal claim into the fabric of a cloth of a claim that belongs to the estate in bankruptcy.” . 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. .... . Hutchingame Growth Capital Corporation v. Independent Electricity System Operator
In Hutchingame Growth Capital Corporation v. Independent Electricity System Operator (Ont CA, 2020) the Court of Appeal considered contractual and bankruptcy disputes between an intended electricity generator and the Independent Electricity System Operator (“IESO”), which is the successor to the Ontario Power Authority. One issue was whether the standard contract between the generator and the IESO terminated on the generator's bankruptcy (as the contract held), in light of s.69.3 of the BIA as the appellant argued:[32] Section 69.3 of the Bankruptcy and Insolvency Act provides:69.3(1) Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.
[33] The trial judge rejected HGC’s argument that the automatic termination in the RESOP Contract violated the automatic stay imposed by s. 69.3 of the Bankruptcy and Insolvency Act. He noted that the stay only prevents creditors from pursuing claims against the insolvent person: at para. 105.
[34] HGC argues that because the IESO was a creditor of Greenview Power, s. 69.3(1) stayed “any remedial action by [the] IESO to terminate the RESOP Contract.” On this argument, once the stay was in place, the IESO was required to move in bankruptcy court to lift the stay and to provide the written notice to commence the 30-day cure period “that it was required to provide” under the Waiver and Amendment Agreement; or, alternatively, to move in bankruptcy court to appeal or amend the vesting order. But the true reason for HGC’s approach to the stay issue is found in its assertion: “Had [the] IESO taken any of these steps, the matter could have been put before a bankruptcy court and the anti-deprivation rule considered.”
[35] Professor Roderick J. Wood explains: “the automatic stay of proceedings in bankruptcy has never been interpreted as preventing the exercise of [the] right” of “a contracting party [to] terminat[e] an agreement between it and the debtor”: Bankruptcy and Insolvency Law, 2nd ed. (Toronto: Irwin Law Inc., 2015) at p. 167. He notes that the presence of express provisions having that effect in proceedings under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 and in the restructuring provisions of the Bankruptcy and Insolvency Act “supports the view that the automatic stay of proceedings was not intended to extend to the termination of executory contracts, since the provision would not be needed otherwise”: at p. 167.
[36] Professor Wood’s logic is persuasive, especially in the absence of any contrary authority. I agree with the trial judge that s. 69.3 of the Bankruptcy and Insolvency Act did not invalidate the termination provision in the RESOP Contract. ...
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