Professional Conduct Decision
What is a professional conduct decision?
An investigation into a Licensed Insolvency Trustees (LIT)'s professional conduct is initiated when there is information to suggest that the LIT has not properly performed the duties of a trustee or there has been improper administration of an estate or lack of compliance with the Bankruptcy and Insolvency Act (BIA).
In some cases, the findings are sufficiently serious to support a recommendation for sanctions against the LIT's licence (cancel or suspend a LIT's licence (subsection 13.2(5) of the BIA) or impose conditions or limitations (subsection 14.01(1) of the BIA)).
The professional conduct decision is deemed to be a decision of a federal board, commission or tribunal and may be judicially reviewed by the federal court.
Proceedings pursuant to subsection 14.02(1) of Bankruptcy and Insolvency Act on professional conduct of Henry Sztern, holder of individual trustee licence for the province of Quebec, and Henry Sztern & Associés Inc., corporate holder of trustee licence for province of Quebec.
In his letter of Henry Sztern announced his intention of submitting the following application:
Please also be advised that in order to avoid multiple interlocutory motions, it is my intention to submit an oral motion that I be provided free contemporaneous interpreter assistance during the course of the main hearing to be held before you at a future date. The interpreter assistance shall be required at any time there are French speaking witnesses and French pleadings before the Court.
In the same letter Henry Sztern raised a possible conflict of interest of the undersigned in the case at bar. This question of a "conflict of interest"was decided by the undersigned on and the application for disqualification made by Henry Sztern was dismissed.
On Henry Sztern filed in the Federal Court (Court file No. T-1184-07) an application for a judicial review of the decision dismissing his disqualification application ().
On Henry Sztern entered his affidavit and certain documents in the Federal Court record.
Stay Of Hearing Before Undersigned
To date no order to stay the hearing before the undersigned has been served on him. Pursuant to requests for comments on this question of a stay of the hearing made to Garry Wetzel, Henry Sztern and Emilio Monaco, representing Henry Sztern & Associés Inc., Garry Wetzel and Henry Sztern replied by letter dated (Mr. Wetzel) and by email dated (Henry Sztern).
The question concerning a stay of the proceedings before the undersigned raised the question of our jurisdiction to do this. Our authority derives from application of section 14.01(2) of the Bankruptcy and Insolvency Act (hereinafter "the Act").
Garry Wetzel's argument was that only the Federal Court had jurisdiction to order such a stay, during such time as the Federal Court has before it the application to review the decision dismissing the application for disqualification of the undersigned made by Henry Sztern.
Henry Sztern based his application for a stay on the following:
That my suggestion to suspend further decisions in the present disciplinary hearing was purely based on the pragmatic principle of saving time and costs…
Referring to the rules laid down both by doctrine and precedent in this matterFootnote 1, it seems clear to the Court that a stay de facto or pursuant to an order made by the undersigned would amount to a refusal to exercise our jurisdiction. In our view, only the Federal Court has jurisdiction to make such an order.
Consequently, the application for a stay of the proceeding before the undersigned made by Henry Sztern is dismissed.
Application For "Free Contemporaneous Interpreter Assistance"
Following his application for the services of an interpreter without charge (letter from Henry Sztern on ), Henry Sztern and Garry Wetzel, at the request of the undersigned dated , filed their written argument on .
In support of his application Henry Sztern submitted that the proceeding at bar before the undersigned is of a quasi-penal and civil nature and accordingly section 14 of the Canadian Charter of Rights and Freedoms ("the Charter") should be applied. That section reads as follows:
14. A party or witness in any proceedings who does not understand or speak the language in which the proceedings are conducted or who is deaf has the right to the assistance of an interpreter.
Henry Sztern alleged that his mother tongue is English and he does not have the competence required "to fully understand nor express himself in the French Language in a Court of Law".
He added that he did not have sufficient funds to pay the expenses of an interpreter.
Before analyzing the application of section 14 of the Charter, the Court should note that, Henry Sztern's contentions that, in view of the record submitted to the undersigned as a whole, he did not understand French and could not express himself in French are doubtful to say the least. We need only refer inter alia to the following documents, written in French with Henry Sztern's signature, documents which come within the scope of certain provisions of the Act:
- In re the bankruptcy of Éric Lacroix – Trustee's report on application for discharge of bankrupt, ;
- In re the bankruptcy of 9084-8144 Québec Inc. – Transcript of first meeting of creditors, ;
- In re the bankruptcy of Service de mini-remorquage HCH – Letter from Henry Sztern to Yvon Monfette, Official Receiver, on , and trustee's final statement of receipts and disbursements dated , including the notes on the final statement.
We should again note that each of these documents originates with application of the Act and consequently they are of some legal significance.
However, there is more: as we mentioned earlier, Henry Sztern submitted that section 14 of the Charter should be applied on account of the quasi-penal and civil nature of the proceeding.
Section 14.01 of the Act, under which the undersigned carries out the mandate conferred on him by the Superintendent of Bankruptcy, sets out actions which may be taken when:
These actions are:
- cancel or suspend the licence of the trustee;
- place such conditions or limitations on the licence as the Superintendent considers appropriate including a requirement that the trustee successfully take an exam or enrol in a proficiency course, and
- require the trustee to make restitution to the estate of such amount of money as the estate has been deprived of as a result of the trustee's conduct.
In the case at bar, the bankruptcy trustee licences of Henry Sztern and of Henry Sztern & Associés Inc. were not renewed in 2004.
As we said earlier, Henry Sztern's application was based on section 14 of the Charter.
The same application was made by Henry Sztern in the Superior Court of Quebec case, district of Montréal, having No. 500-11-005714-973 (HH Davis & Associés v. Henry Sztern & Associés Inc., Henry Sztern et Natalie Luffer).
Pierre Journet J. disposed of this application as follows:
13. In the case at bar the issue is not one of witnesses, but of applicants who are seeking the services of an interpreter. Their application is based inter alia on section 14 of the Canadian Charter of Rights and Freedoms, which reads as follows:
14. In interpreting this section the courts have held that in penal matters the services of an interpreter may be required so as to provide the accused with a complete defence and so avoid a possible conviction.
15. It has also been held that section 14 could apply to a civil proceeding provided the Canadian Charter of Rights and Freedoms could be applied under section 32, which reads:
- to the Parliament and government of Canada in respect of all matters within the authority of Parliament including all matters relating to the Yukon Territory and Northwest Territories; and
- to the legislature and government of each province in respect of all matters within the authority of the legislature of each province.
- Notwithstanding subsection (1), section 15 shall not have effect until three years after this section comes into force.
16. The courts have interpreted the scope of this section as being that the Charter can only apply to cases involving the government, not to questions of a private nature.
17. Section 36 of the Charter of Human Rights and Freedoms reads:
18. The terminology of this section, using the words "every accused person", clearly indicates that it can only be applied in criminal proceedings, not civil ones.
19. The Charter of Human Rights and Freedoms thus cannot be applied here.
20. The question raised by the applicants does not involve their right of using the services of an interpreter, since that point was not in dispute and there are several judgments in which this right has been recognized.
21. What is in dispute is the request that the interpreter's charges be paid by the government, since on the one hand there is no statutory provision to this effect, and secondly it is a civil proceeding.
22. Counsel for the respondents further submitted that the originating application filed by H.H. Davis & Associés Inc., the trustee, clearly shows that no public body is a body to this proceeding.
23. Although the trustee is described in the originating notice as the mandatary of the Superintendent of Bankruptcy, this does not give him the public status contained in section 32 of the Canadian Charter of Rights and Freedoms.
24. This designation as trustee only indicates that he has been directed by the Superintendent to initiate the necessary proceedings to protect the interests of creditors in the bankruptcy cases administered by the applicant Sztern.
25. The Superintendent's mandate thus does not have the effect of giving the trustee a public status or the status of a public body.
26. The Superintendent's function is to ensure that the public is protected, not to administer cases, and it is in this context that he gave instructions to the trustee guardian.
Consequently, in giving the trustee a mandate he cannot confer on him the status of a government representative, government officer or public body.
4. Mohammadian v. Canada (Minister of Citizenship and Immigration), (C.A.)  4 F.C. 85; 2001 FCA 191; Thamsbiah v. Minister of Citizenship and Immigration, 2004 FC 15 (CanLII); Société des Acadiens v. Association of Parents,  1 S.C.R. 549.
5. R. v. Tran,  2 S.C.R. 951; 116845 Canada Inc. v. Régie des permis d'alcool du Québec,  R.J.Q. 1655 (C.S.).
6. Marshall v. George Vale Golf Club (1987), 39 D.L.R. (4th) 472; J. Michael Lehman v. Turcotte -et- Pratt & Whitney Canada Inc., S.C. Montréal No. 500-17-018543-036, , Langlois J.
Journet J. accordingly dismissed Henry Sztern's application.
The Court concurs completely with the reasons of Journet J., and we would add that the mandate given by the Superintendent of Bankruptcy to the undersigned does not give him the status of a government representative, and the powers conferred on the undersigned mandatary by section 14.01 of the Act are not in any way penal in nature and continue to be of a purely civil and private nature.
Further, Henry Sztern applied to the Court of Appeal for leave to appeal the judgment of Pierre Journet J.
We set out below the judgment of Doyon J.A. of the Court of Appeal on this application for leave to appeal, made on :
The Respondent and the Respondent-Seized seek leave to appeal a judgment rendered by the Honourable Pierre Journet, of the Superior Court, who refused to grant their motion requiring publicly funded assistance of an interpreter or, alternatively, requiring that the costs of an interpreter be paid from the money seized before judgment.
According to the Applicants' contention, the present proceedings involve the State, are of a quasi-penal nature and their rights are protected by Section 14 of the Canadian Charter of Rights and Freedoms as well as Sections 10 and 36 of the Quebec Charter of Human Rights and Freedoms.
Contrary to what the Applicants are claiming, these proceedings are not of a penal or quasi-penal nature but are purely of a civil nature. The Applicants are not charged with an offence and could not be found guilty of any such offence.
Moreover, the present motion does not indicate in which way Mr. Justice Journet would have committed a palpable error in concluding that the Applicants did not establish their financial inability to pay for the services of an interpreter. I am aware that, should the Canadian Charter apply, this issue would not be determinative. It is nevertheless relevant to the analysis of Section 193 (e) of the Bankruptcy and Insolvency Act, which gives a judge of the Court of Appeal a discretion to grant leave. As a matter of fact, according to the file in appeal, no affidavit was attached to the motion filed with the Superior Court.
Finally, the motion for leave to appeal does not even mention such inability and does not either assert that the Applicants cannot understand and speak French. As for the motion before the Superior Court, it simply stated that "the mother tongue of the Respondent and Respondent-Seized is English and therefore have limited capacity to understand the French language". This simple assertion would not be sufficient to get publicly funded assistance of an interpreter.
Thus, even assuming, without having to decide, that the State is involved because H.H. Davis & Assoc. Inc. is acting "ès qualities d'agent du Surintendant des faillites", I would decline to grant leave because the Applicants do not convince me that leave should be granted in accordance with Section 193 (e) of the Act, as they do not meet the criteria developed by the jurisprudence.
FOR THESE REASONS, I DISMISS the motion, without costs, due to the circumstances.
Henry Sztern's application for the services of an interpreter is accordingly dismissed as made.
The undersigned requires the parties to meet with him at 10 a.m. on at 1000 rue De La Gauchetière Ouest, bureau 900, in Montréal, to hold a preliminary conference to arrange continuation of the hearing.
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.