Respondent was lawyer licensed to practice law in Ontario. Respondent was undischarged bankrupt. Respondent was being sued for professional negligence in class action in Colorado. Respondent sought declaration that his professional liability insurer was required to indemnify him for any judgment in Colorado action including reimbursement for defence costs. Appellant asserted respondent lacked capacity to bring application. Appellant brought motion to strike application. Motion was dismissed and order contained declaration that respondent had status to bring application against appellant. Appellant appealed. Respondent disputed jurisdiction of court to entertain appeal on basis that motion judge’s order was interlocutory and leave to appeal to Divisional Court was required. Appeal allowed. Order was final and appeal was properly brought before court. Declaration deprived appellant of substantive defence that application was nullity because respondent lacked standing as undischarged bankrupt to bring action. That defence, if successful, would be determinative of entire action. Motion judge erred in holding that respondent had standing to bring application. Application for declaration that appellant had to indemnify him under his insurance policy was claim in breach of contract that was solely about money and vested in trustee. Right to claim indemnity and to enforce claim by bringing action was right of trustee in bankruptcy, and belonged to trustee whether indemnity was payable directly to insured bankrupt or to third party. Proceeds of insurance policy did not form part of estate of bankrupt that vested in trustee, but right to bring action to enforce terms of policy vested in trustee and could be assigned by trustee.
Meisels v. Lawyers Professional Indemnity Co. (Jun. 8, 2015, Ont. C.A., K.M. Weiler J.A., E.A. Cronk J.A., and S.E. Pepall J.A., File No. CA C59723) 254 A.C.W.S. (3d) 759.