Inspectors protected by s. 215

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Trustees in bankruptcy cannot be sued without leave of the court first being obtained: s. 215 of the Bankruptcy and Insolvency Act. This requirement protects trustees from unwarranted litigation and interference in the performance of their duties. Does this protection extend to inspectors, who are not specifically mentioned in s. 215? This issue was considered in Area Finance Inc., Re, a recent BC Supreme Court decision.

In an earlier 2007 decision, Re Braich, Chief Justice Brenner had held that the protection given by s. 215 extends to officers, directors and employees of the trustee and counsel retained by the trustee. The court in Area Finance held as a “necessary implication” of this analysis, that s. 215’s protection should also cover inspectors, whose role it is to assist the trustee in administering the bankruptcy estate.

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