Issue
The Office of the Superintendent of Bankruptcy (OSB) is aware that certain Licensed Insolvency Trustees (LITs) may be submitting estate files without having estate-related documents appropriately sworn or affirmed. This relates to the admissibility of the documents in court and whether they could validly be filed under the Bankruptcy and Insolvency Act.
LITs are reminded that it is their duty to ensure that their estate-related documents (e.g. Statement of Affairs) are properly sworn or affirmed before filing with the OSB or the Court (sections 45 and 46 of the Code of Ethics). LITs are obligated to stay up to date with all provincial legislation, including ensuring that they and any person administering oaths, affirmations or declarations, for any affidavit related to their professional engagement, has authority to do so under the legislation and practices of the relevant districts/jurisdictions in which the debtor or proponent resides (section 52 of the Code of Ethics). A person having authority to administer oaths, affirmations or declarations in their home district/jurisdiction does not automatically extend to their authority being recognized in the district/jurisdiction of the estate, which is particularly important when working remotely.
If an LIT discovers that the person administering oaths or affirmations may not have the appropriate jurisdictional authority to do so, the LIT is required to correct these matters in a timely manner to ensure the integrity of their estates. Where estates are filed between the timeframe by which the non-authorization is discovered and the granting of such authority, the LIT shall re-submit the subject documents to the OSB without delay, on receipt of such authorization.
As this falls within provincial jurisdiction, the OSB will not be providing information on the potential limitations of LIT authorities, nor offer up further guidance on how a LIT is to resolve this. It is the responsibility of the LIT that they ensure proper execution and remedy if so identified.
LITs play a crucial role in Canada’s insolvency system. LITs must carry out their functions with competency, honesty, integrity and due care (section 36 of the Code of Ethics). The OSB will continue to monitor this issue and in the course of its regulatory review, should it be discovered that LITs have estate files that were not remedied, or continue to enter into professional engagements whereby the oath has not been properly administered, appropriate actions will be used to address non-compliance.