Individual lost right to deal with own property after filing in bankruptcy

Bankruptcy and Insolvency – Property of bankrupt – Miscellaneous

Respondent was individual, who was beneficiary of spouse's life insurance policy. After policy was issued, individual declared bankruptcy. Spouse died while individual was still in bankruptcy. Insurer denied individual's claim, claiming that spouse had committed misrepresentation by failing to disclose bankruptcy. Individual brought action against insurer. During course of this action, individual discovered claim in negligence against appellant, who was spouse's insurance broker. Individual brought subject action against broker. Broker moved for summary judgment against individual, claiming he could not bring action in own name due to bankruptcy. Individual brought cross-motion against broker, for nunc pro tunc order seeking standing. Motion judge found in favour of individual. Broker appealed from this finding. Appeal allowed; subject action dismissed. Individual lost right to deal with own property, after filing in bankruptcy. There was no provision for automatic revesting, after individual was discharged from bankruptcy. Vesting was not injustice in this case. Proper result was to set aside order and dismiss action, as against broker.

Thistle v. Schumilas (2020), 2020 CarswellOnt 1322, 2020 ONCA 88, David Watt J.A., C.W. Hourigan J.A., and G.T. Trotter J.A. (Ont. C.A.).

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