Background
Sergio Grillone, an experienced lawyer who was not then licensed to practise, was adjudged bankrupt in 2023. B. Riley Farber Inc. was appointed trustee of his estate. Grillone complained to the Office of the Superintendent of Bankruptcy about the trustee’s administration, but the Superintendent advised him on January 31, 2025 that the complaints would not be pursued and the file had been closed.
Grillone sought judicial review in the Federal Court, asking it to quash the Superintendent’s decision, declare that the Superintendent had acted unreasonably and breached procedural fairness, and order an investigation into the trustee. Associate Judge John Cotter struck the application without leave to amend and dismissed the proceeding, holding that the Federal Court lacked jurisdiction. Grillone attempted to appeal to the Federal Court of Appeal before learning that a Rule 51 motion in the Federal Court was the proper route, causing him to miss the filing deadline.
The Court’s Holding
Justice Grant granted an extension of time because Grillone had demonstrated a continuing intention to appeal, but dismissed the Rule 51 motion on its merits. The Associate Judge had applied the correct test for striking an application: once the Federal Court’s lack of jurisdiction was established, the application had no possibility of success.
The Court held that the Bankruptcy and Insolvency Act is a comprehensive bankruptcy regime that generally assigns jurisdiction over bankruptcy matters to provincial superior courts. Combined with subsection 17(6) of the Federal Courts Act, that statutory allocation deprived the Federal Court of jurisdiction to review the Superintendent’s refusal under section 5 of the Bankruptcy and Insolvency Act to investigate a complaint about a trustee. The limited Federal Court jurisdiction concerning trustee disciplinary proceedings under subsections 14.02(4) and (5) did not apply. Because the jurisdictional defect could not be cured by amendment, the Associate Judge also committed no error by striking the application without leave to amend or by declining to consider the requested mandamus and declaratory relief.
The Court ordered Grillone to pay the trustee $1,000 in costs forthwith, in addition to the previously ordered $1,600 in costs.
Key Takeaways
- The Federal Court lacks jurisdiction to review the Superintendent of Bankruptcy’s refusal to investigate a complaint concerning a trustee under section 5 of the Bankruptcy and Insolvency Act.
- The statute’s assignment of bankruptcy jurisdiction to provincial superior courts engages subsection 17(6) of the Federal Courts Act, notwithstanding the Federal Court’s general judicial-review powers.
- An application may be struck under the Federal Court’s plenary authority where a threshold jurisdictional defect leaves it with no possibility of success and cannot be cured by amendment.
Why It Matters
The decision confirms that litigants cannot rely on the Federal Court’s general judicial-review jurisdiction to circumvent Parliament’s specific allocation of bankruptcy matters to provincial superior courts. Federal Court review remains available for the limited trustee-disciplinary decisions expressly identified in the Bankruptcy and Insolvency Act, but not for a discretionary refusal to investigate a complaint.
It also illustrates that jurisdiction may be resolved at the pleading stage: where the statutory scheme clearly excludes Federal Court jurisdiction, neither characterization of the remedies as mandamus or declaratory relief nor further amendment will save the application.