Key Issues

• Robert B. Woodrow sought a ruling that a debt from a 2016 default judgment survived Ross E. Greb’s bankruptcy under s. 178(1)(d) of the Bankruptcy and Insolvency Act (BIA).
• To succeed, Woodrow needed to prove:
  1. The debt arose from fraud, embezzlement, misappropriation, or defalcation.
  2. The debt arose in the course of a fiduciary relationship.

Findings

• There was no dispute that Ross E. Greb fraudulently embezzled funds from Greb Tele-Data Inc., where both he and Woodrow were directors and shareholders.
• However, the motion judge ruled that Greb did not owe Woodrow a fiduciary duty.
• Woodrow argued that a power imbalance existed because Greb was the majority shareholder and held a position of trust.
• The Court of Appeal upheld the motion judge’s decision, finding that she correctly applied the law and was entitled to conclude there was no fiduciary duty.
• The appeal was dismissed, and no costs were awarded.