This case was heard in the Supreme Court of Nova Scotia (Bankruptcy and Insolvency).
Superline Fuels Inc. entered into a contract to supply an install a domestic oil tank, and it then hired a subcontractor, Mr. Buchanan, to carry out the work. About nine months after the oil tank had been installed, a leak was discovered. The homeowner sued Superline Fuels, who in turn sued Mr. Buchanan. Before Superline Fuels initiated legal proceedings against Mr. Buchanan, Mr. Buchanan had declared bankruptcy, and soon after Superline Fuels initiated the legal proceedings against him, Mr. Buchanan was granted an absolute discharge from bankruptcy. Superline Fuels applied to the Court to determine whether Mr. Buchanan’s absolute discharge made it impossible for the company to recover its losses from Mr. Buchanan’s insurer, Dominion of Canada General Insurance Co.
After considering the relevant law and legal principles, the Court held that the absolute discharge could not prevent Superline Fuels from continuing its legal proceedings against Mr. Buchanan in the hope of recovering its losses from Mr. Buchanan’s insurer.
To read about this case in the Nova Scotia Court of Appeal, go to Buchanan v. Superline Fuels Inc., 2007 NSCA 68 (CanLII).
To read about a further appeal to the Supreme Court of Canada, go to Thomas W. Buchanan and Dominion of Canada General Insurance Company, a body corporate v. Superline Fuels Inc., 2007 CanLII 55340 (SCC).