Interpreters in a Summary Administration

Context

Further to the British Columbia Supreme Court decision in Ali (Re)Footnote 1, the Office of the Superintendent of Bankruptcy (OSB) is providing Licensed Insolvency Trustees (LITs) and stakeholders with guidance on interpreter services in order to ensure national consistency, fair and appropriate access and compliance with the Bankruptcy and Insolvency Act (BIA) and applicable case law.

Question

What are the responsibilities of LITs in arranging for the services of an interpreter to assist a debtor for the purpose of an Examination by the Official Receiver (OR) or a Meeting of Creditors (MoC)?

Position

It is the position of the OSB that, if a debtor cannot speak fluently in the official language in which the Examination or the MoC is to be conducted, the LIT must arrange for the services of an interpreter approved either by the OR or the Chairperson of the MoC.

As part of their duty to arrange for the services of an interpreter, the LIT must pay for these services. The British Columbia Supreme Court in Ali (Re)Footnote 2 provided that interpreter costs incurred by LITs may be recovered pursuant to subsection 58(4) of the Bankruptcy and Insolvency General Rules (Rules), which would require approval by the taxing officer. In many cases, it may be more efficient for the costs to be absorbed as the summary administration tariff is intended to be a complete code.

Considerations

Section 57 of the Rules requires that LITs arrange for the services of an interpreter approved by the OR when a debtor is being examined pursuant to subsection 161(1) of the BIA and cannot speak fluently in the official language in which the Examination is being conducted. Considering that subsection 161(3) of the BIA authorizes the Examination to be held before any Official Receiver, the Examination will be conducted in the preferred official language of the debtor. The services of an interpreter should therefore not be required to interpret from one official language to the other during the Examination.

Similarly, subsection 108(2) of the Rules requires that LITs arrange for the services of an interpreter approved by the Chairperson of the MoC when a debtor cannot speak fluently in the official language in which an MoC is being conducted.

As stated in Re AliFootnote 3 “neither the choice to retain the interpreter nor the determination of a satisfactory interpreter is within the trustee’s authority or professional judgment.”Footnote 4 The Rules establish an objective duty for LITs to arrange for the services of an interpreter for both Examinations and MoCs. The requirement is not contingent on a specific request by the debtor, the OR or another stakeholder. LITs must arrange for these services if the debtor asks for an interpreter or if they or any other interested person in the proceedings observe that the debtor is not sufficiently fluent in the official language in which the Examination or MoC is being conducted. LITs must perform such duty in a timely manner and with due care in a way that protects the rights of the debtor, the interests of creditors, while ensuring fair and equal access to the insolvency system.

Approval of the Interpreter

Section 57 and subsection 108(2) of the Rules specifically provide that either the OR or the Chairperson of the MoC are to approve the interpreter arranged for by the LIT.

For Examinations pursuant to subsection 161(1) of the BIA, the OR will only approve interpreters who hold a valid accredited professional designation to act as an interpreter in the language of the debtor.

In order to approve the interpreter, the OR will also take into consideration the level and quality of services to be provided. The interpreter must interpret all dialogue during the Examination; this includes interpreting both from the language of the person who is the subject of the Examination into English or French, as applicable, and vice versa. Whatever is said in one language should be interpreted faithfully, accurately, and impartially into the other language using exact equivalent meaning and structure.

Costs of Interpreter Services

As part of arranging for the services of an approved interpreter, LITs must pay for the services. The costs of an interpreter are not to be considered either as fees of the LIT for services performed, as disbursements relating directly to the realization of the property of the bankrupt or as administrative disbursementsFootnote 5.

In an ordinary administration, the costs of an interpreter must be included in the final statement of receipts and disbursements as expenses incurred by LITs, pursuant to subparagraph 152(1)(a)(iii) of the BIA and calculated, at the time of taxation, at a rate that the taxing officer deems reasonable, as stated in subsection 58(4) of the Rules.

In a summary administration, the costs of an interpreter are not included in the amount LITs may claim under subsection 128(2) of the Rules. The British Columbia Supreme Court provided that LITs may claim an amount for the expenses incurred for the services of an interpreter as a prescribed disbursement, pursuant to section 156 of the BIA and subsection 58(4) of the RulesFootnote 6. The application of subsection 58(4) of the Rules in a summary administration was the position brought forward by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) before the courtFootnote 7.

However, subsection 58(4) of the Rules requires that this expense be “calculated, at the time of taxation, at a rate that the taxing officer deems reasonable.” As defined in section 1 of the Rules, “taxing officer means the registrar or other officer appointed or assigned under section 184 of the Act for the taxation or fixing of costs or the passing of accounts.” An LIT would have to apply for a taxation hearing under section 67 of the Rules if they wish to claim expenses incurred for the services of an interpreter in a summary administration.

Note that the duty to pay for interpreter services and the possibility to recover such expenses from the estate only apply to services required for Examinations and MoCs. In a summary administration, should an LIT hire an interpreter at any other step of the administration of the estate or to provide assistance to a stakeholder other than the debtor, the costs would not be a prescribed disbursement and could not be recovered from the estate.

Once an LIT has accepted an appointment in relation to a summary administration estate, should the services of an interpreter be required for an Examination pursuant to subsection 161(1) of the BIA or an MoC, the LIT will have to arrange and pay for such services and then may:

  1. Claim the expenses incurred for the services of an interpreter by:
    1. Applying for taxation of their accounts and for discharge under section 62 of the Rules;
    2. The Superintendent will issue a letter of comment stating whether taxation of the LIT’s accounts is requested from the Registrar under section 63 of the Rules;
    3. If required, the LIT shall obtain a hearing date from the Registrar and send the required notices under subsection 66(1) of the Rules;
    4. At the time of the hearing, the Registrar shall establish a reasonable rate and calculate the expenses incurred by the LIT for the services of an interpreter under subsection 58(4) and 67(1) of the Rules;
    5. The LIT then shall take the fee as taxed and proceed to discharge under subsections 67(2) to (5) of the Rules.

Or

  1. Consider the expenses incurred for the services of an interpreter as encompassed under their fees chargeable under section 128 of the Rules, not claim to recover the specific expenses, send their final statement of receipts and disbursements, and proceed to deemed taxation and discharge under sections 62 and 65 of the Rules.

Finally, LITs are required to arrange for the services of an interpreter approved by the OR or the chairperson of the MoC pursuant to section 57 or subsection 108(2) of the Rules respectively, in spite of the fact that the estate may not have sufficient funds to cover the cost. The summary tariff envisions some situations where LITs may receive more compensation and some where they may receive less than the amount warranted by the efforts required to administer the file. The OSB notes that the issue of interpreter costs and the summary administration tariff will be considered in the context of the ongoing Comprehensive Review of Directives and Regulations. As always, LITs are encouraged to ensure fair and appropriate access to the insolvency system.

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