Executive Summary: Key Legal and Evidentiary Issues

• Determination of the appropriate respondent in a judicial review application under Rule 303 of the Federal Courts Rules.

• Assessment of whether the Trustee is “directly affected” by the relief sought by the applicant.

• Consideration of procedural fairness issues arising from confusion over service dates and the nature of the hearing.

• Evaluation of the Federal Court’s jurisdiction and justiciability of the underlying administrative decision.

• Analysis of the impact of procedural missteps on party rights and the conduct of the appeal.

• Decision on costs in light of shared procedural confusion among the parties.

Facts of the case

Sergio Grillone, a former lawyer in Ontario and an undischarged bankrupt, filed a complaint in July 2024 with the Office of the Superintendent of Bankruptcy regarding the conduct of his bankruptcy trustee, B. Riley Farber Inc. The Superintendent decided on January 31, 2025, that there was no need to take further action in relation to Mr. Grillone’s complaint. Mr. Grillone then filed an application for judicial review in the Federal Court, seeking an order quashing the Superintendent’s January 2025 decision, a declaration that the Superintendent acted unreasonably and breached his procedural fairness rights, an order for mandamus directing the Superintendent to investigate and take action on the Trustee’s alleged improper conduct, and costs.

Procedural history and parties involved

Mr. Grillone named the Superintendent as the respondent in his judicial review application. The Attorney General of Canada, acting as the legal representative of the Superintendent, filed a motion in writing under Rule 369 of the Federal Courts Rules, asking that the Superintendent be removed as a respondent and that the Trustee, B. Riley Farber Inc., be named instead under Rule 303(1) as a party directly affected by the relief sought. The Associate Judge granted the motion in writing, without receiving any response from the Trustee or Mr. Grillone, and ordered costs against Mr. Grillone.

After the order, confusion arose as the parties had proceeded as if a hearing would be scheduled, and there was a misstatement about the date the Trustee was served with the motion. The Trustee, believing there would be an oral hearing, filed a motion appealing the Associate Judge’s order and asked for an extension of time, which was granted. Both the Trustee and the Attorney General requested that the appeal be considered de novo due to the procedural issues.

Policy terms and legal framework

The case centers on Rule 303 of the Federal Courts Rules, which requires that an applicant for judicial review name as respondent every person “directly affected by the order sought.” The Court also referenced the Bankruptcy and Insolvency Act, which outlines the Superintendent’s powers to supervise trustees and handle complaints, and the Federal Courts Act, which governs judicial review jurisdiction. The Court discussed the distinction between being “directly affected” by the relief sought (Rule 303) and the justiciability of the underlying administrative decision (section 18.1 of the Federal Courts Act).

Analysis and outcome

The Court focused on whether the Trustee was “directly affected” by the relief sought by Mr. Grillone. The Court found that if the judicial review were granted, the Trustee would be prejudicially affected in some direct way, as the decision to not further deal with Mr. Grillone’s complaint about their conduct would be overturned and the Trustee would be subject to another inquiry on the same allegations. The Court declined to decide the broader issues of jurisdiction and justiciability at this stage, limiting its ruling to the proper respondent under Rule 303.

Procedural fairness concerns were addressed by considering the appeal de novo, given the confusion over service dates and the expectation of an oral hearing. The Court found both the Trustee and the Attorney General shared responsibility for the procedural confusion.

Ruling and disposition

The appeal of the Associate Judge’s decision dated April 9, 2025, was dismissed. No costs were awarded. The application for judicial review will continue as a specially managed proceeding under Rule 384 and will be referred to the Chief Justice for the appointment of a case management judge.