Interlocutory Order: Sam Lévy & Associés Inc. and Sam Lévy

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.

In the Matter of Professional Discipline Proceedings under the Bankruptcy and Insolvency Act Respecting Sam Lévy & Associés Inc., A Corporate Licensed Trustee, and Sam Lévy, an Individual Licensed Trustee.

I have before me an application by counsel for the Respondents to postpone the hearing in the above matter which has been scheduled to commence on and continue until . The reason for the application is that the Quebec Court of Appeal currently has under advisement a case (Métivier v. Marc Mayrand) which challenged the constitutionality of certain sections of the Bankruptcy and Insolvency Act which, if declared unconstitutional, would invalidate my appointment as the Superintendent's Delegate to hear this case.

While there can be no certainty when judgment will be given, counsel believes there is a likelihood that this may happen sometime before , but since the present matter is lengthy and complicated, counsel for all parties (as well as I) would require several weeks' preparation. The thinking, therefore, is that if the present dates are maintained, preparation may have to start well before the Court of Appeal pronounces itself, and while that would not matter should the appeal be dismissed, it would be time wasted should the appeal be maintained.

The application is opposed by counsel for the Senior Analyst who, quite rightly, points to the fact that this case dates back to , and that it is in the public interest that the matter be decided without any further delays. He also points to a recent judgment of the Quebec Court of Appeal (Marc Mayrand v. Jacques Roy) where the Court dismissed an appeal from the judgment of the Superior Court which refused to grant an order of sursis against a Delegate appointed under the sections challenged in Métivier. Therefore, the Senior Analyst's counsel argues, if I were to grant a postponement I would, in effect, do what the Court of Appeal refused to do in a somewhat similar case.

Two observations must be made at this point. First – and counsel for the Respondents forcefully argued the point – Roy is a case which will likely be heard in three days, and the time required for preparation is, therefore, considerably less than the time needed to prepare the present case. Second, in Raymond Chabot Inc. v. Marc Mayrand, an order of sursis was granted by the Superior Court and is still in effect.

I have carefully examined the facts in Roy. I am also mindful of the observations made by the Court of Appeal. Nevertheless, I am persuaded that a short postponement would best serve the cause of justice in the present case. The preparation time is long: the details of the allegations made by the Senior Analyst are set out in 15 weighty volumes, which must be read and digested. And that is just a start. The legal fees of the Respondents even for this preliminary phase would be large and, should the Court of Appeal rule against the Superintendent, they might well be wasted. Furthermore, since the Respondents' practice is at present restricted to the completion of files now under their control, the danger to the public is greatly diminished.

As I said before, no one knows when judgment will be given. But should counsel for the Respondents be right in their guess that it will likely come in late summer or early fall, and should the appeal be dismissed, the dates which I propose will still leave sufficient time to prepare for the hearing. True, as counsel for the Senior Analyst pointed out, leave will likely be sought to take the matter to the Supreme Court of Canada, and if we were to wait for that, another two years might pass before a final ruling is had. But that is a bridge we can cross when the time comes.

I therefore cancel the hearing which was to have commenced on , and order that the case will now be heard beginning Tuesday, , and proceed four days a week, from Monday to Thursday, save for the first week when, as indicated above, it will proceed from Tuesday to Thursday. I have set aside five weeks, to , for a total of 19 days, but I would strongly urge the parties to try and reach agreement on at least some of the facts in attempt to shorten the proceedings.

I thank all counsel for their helpful comments during the conference call on July 23.

Given at Toronto, Ontario, .

Hon. Fred Kaufman

This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.