That the courts discourage officers of the courts from immediately commencing litigation is a proper\u00a0factor in a limitations analysis.<\/p>\n
In Salewski Inc. v. BDO Canada Ltd.<\/a><\/em>, the defendant moved for summary judgment on a limitations defence.\u00a0 The defendant was retained by a creditor to assign its debtor into bankruptcy.\u00a0 The court appointed the defendant trustee in bankruptcy.\u00a0 Friction developed between the defendant and the bankrupt’s interim receiver, the plaintiff.\u00a0 The plaintiff claimed against the defendant for breach of fiduciary duty.\u00a0 The defendant pleaded the expiry of the limitation period.<\/p>\n In denying the defendant’s motion, Justice Garson made some helpful observations about the effect of a trustee’s behavior on the commencement of the limitation period:<\/p>\n [77]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0In my view, it is inappropriate to start the limitations clock while good faith efforts are ongoing to achieve a remedy.<\/p>\n [78]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Officers of the court should be discouraged from immediately commencing litigation and encouraged to discuss and negotiate differences.<\/p>\n […]<\/p>\n [80]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The obstacles and delays erected by BDO throughout these proceedings have impeded the exercise of reasonable diligence on the part of DSI to discover the cause of action in this matter.\u00a0 These obstacles are also sufficient to impact the start of the limitations clock.<\/p>\n […]<\/p>\n [91]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0It would be both unfair and improper for DSI to have been required to commence a legal action any earlier than 2009.\u00a0 Both parties are officers of the court and should be discouraged from pursuing adversarial proceedings against each other until reasonable efforts to resolve the matter have been addressed.<\/p>\n [92]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0To determine otherwise on the facts before me would send the wrong message regarding the duties of a trustee to act fairly and impartially to all creditors, even those opposing its SRD\u2019s.\u00a0 BDO should not benefit from their prior misconduct.<\/p>\n [93]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0This court has and will continue to expect the highest standard of conduct on the part of trustees in the discharge of their duties to the court and the Estate:\u00a0 see\u00a0Murphy v. Sally Creek Environs Corporation, supra<\/em>, at paras. 139, 151 and 155.<\/p>\n […]<\/p>\n [96]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0BDO\u2019s behavior in withholding or not distributing pertinent and relevant information to DSI prevented DSI from discovering the material facts upon which this claim is based.<\/p>\n [97]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Although DSI was suspicious in 2006 and 2007 that BDO had (i) made false statements and omitted relevant facts in an affidavit; (ii) was pursuing a commercially unreasonable course of action; (iii) had made serious allegations about the behavior of DSI, and (iv) was being influenced by Unique, these suspicions were unsupported by material facts.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" That the courts discourage officers of the courts from immediately commencing litigation is a proper\u00a0factor in a limitations analysis. In Salewski Inc. v. BDO Canada Ltd., the defendant moved for summary judgment on a limitations defence.\u00a0 The defendant was retained by a creditor to assign its debtor into bankruptcy.\u00a0 The court appointed the defendant trustee … Continue reading Ontario: Officers of the court, slow down<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[205,87,144,9,206,204,45],"class_list":["post-389","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-conduct-of-parties","tag-discoverability","tag-discoverability-principles","tag-discovery","tag-naughty-trustees","tag-officers-of-the-court","tag-ontario-act-s-51aiv"],"_links":{"self":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=389"}],"version-history":[{"count":4,"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/389\/revisions"}],"predecessor-version":[{"id":393,"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/389\/revisions\/393"}],"wp:attachment":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}