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:
Jacques Roy — holder of a
trustee's licence for the province of Quebec
Before François Rioux —
Delegate for the Superintendent of Bankruptcy
Reasons for the decision rendered on April 5, 2002
on the motions by the trustee — Jacques Roy,
for a stay and adjournment
Whereas on September 26, 2001, the Superintendent of Bankruptcy delegated to the undersigned, under subsection 14.01(2) of the Bankruptcy and Insolvency Act ("BIA"), certain powers set out in sections 14.01, 14.02 and 14.03 relating to the hearing and the administration of supervision measures in relation to the conduct of Jacques Roy, trustee (the "trustee"), following the investigation conducted by Sylvie Laperrière, senior analyst, Office of the Superintendent (the "senior analyst");
Whereas the said delegation was made in response to the investigation report submitted by the senior analyst setting out circumstances which tend to indicate to the senior analyst that the trustee has not properly performed his functions as a trustee and has not complied with the BIA, the General Rules or the Superintendent's instructions in the course of the administration of certain assets (the "investigation report");
Whereas after the said investigation report was sent to the trustee, the trustee exercised his right to be heard by the Superintendent, as provided in subsection 14.02(1) of the BIA, in response to which the aforementioned delegation was made;
Whereas the undersigned informed counsels for the trustee and for the senior analyst on December 7, 2001, that a hearing would be held to afford the trustee the opportunity to be heard, before the undersigned decided whether one or more of the disciplinary measures set out in paragraphs 14.01(1)(a) to (c) of the BIA should be taken against the trustee;
Whereas at the same time, the undersigned informed the parties that the hearing to be held would be adversarial in nature, and conducted in accordance with the principles of natural justice;
Whereas at the same time, the undersigned notified the parties of a pre-hearing conference in the week of December 7, 2001, at which the following matters were to be discussed: (a) the probable length of the hearing; (b) the place and date of the hearing; (c) the procedures that would apply in respect of the introduction of evidence and the conduct of the hearing; (d) the timetable that the parties were to follow so that the matter would be ready for hearing on the scheduled date; (e) whether all or part of the hearing and the record of the hearing should be kept confidential under subsection 14.02(3) of the BIA; and (f) whether the parties intended to make any objections to the jurisdiction of the undersigned, the jurisdiction of the Office of the Superintendent or the constitutionality of the aforementioned disciplinary procedure;
Whereas following the aforementioned notice to attend dated December 7, 2001, and at the request of the parties, the undersigned adjourned the pre-hearing conference to a date to be set after January 31, 2002;
Whereas on February 12, 2002, the parties agreed with the undersigned that the pre-hearing conference would be held on March 19, 2002;
Whereas on or about March 18, 2002, a conference call was held during which counsel for the trustee informed the undersigned and counsel for the senior analyst that the pre-hearing conference set for March 19, 2002, would have to be adjourned because he was unable to attend;
Whereas in the course of that conference call, counsel for the parties nonetheless agreed to set the disciplinary hearing down for May 6, 7 and 8, 2002;
Whereas in the course of that conference call, the parties also agreed to hold the pre-hearing conference on April 4, 2002, in anticipation of that hearing;
Whereas on April 3, 2002, counsel for the trustee informed the undersigned that he intended to challenge the constitutionality of the disciplinary process at the pre-hearing conference to be held on April 4, 2002;
Whereas in the course of the pre-hearing conference held on April 4, 2002, counsel for the trustee requested that the undersigned: (a) stay the disciplinary process because of the unconstitutionality of the disciplinary process provided for in sections 14.01 and 14.02 BIA; and (b) in the alternative, adjourn the hearing, which was set for May 6, 7 and 8, 2002, to October 2002, so that he could apply to a court to have the disciplinary process declared to be unconstitutional and prepare a written reply to the investigation report;
Whereas at the pre-hearing conference on April 4, 2002, counsel for the trustee made submissions to the undersigned stating the reasons in support of his motions;
Whereas, on the matter of the motion for a stay, counsel for the trustee argued that it was not urgent that the disciplinary hearing be held and that the protection of the public was not in jeopardy; counsel for the trustee further explained that it would be reasonable to allow the trustee to challenge the constitutionality of the disciplinary process as did his partner, Éric Métivier, on March 6 and 7, 2002 before Yvan Godin J. of the Superior Court of the District of Québec in file no. 200–05–015671–014;
Whereas counsel for the trustee argued, in the alternative, that his motion for an adjournment was necessary, first, so that he could file a written reply for the purpose of the disciplinary hearing, and second, so that the trustee could submit his motion making the aforementioned constitutional challenge and his motion for a stay in the alternative;
Whereas in the course of the pre-hearing conference on April 4, 2002, counsel for the trustee requested leave to file a written reply to the investigation report in the event that his motion for a stay was denied;
Whereas after hearing the submissions of counsel for the trustee, counsel for the senior analyst explained that he opposed the stay and adjournment motions made by counsel for the trustee, primarily on the ground that the Superintendent's delegate did not have the power under the BIA to stay the disciplinary process and that the motion for an adjournment was dilatory because the trustee had had the senior analyst's report in his hands for several months and could have prepared a written reply if he had thought fit to do so;
Whereas after hearing the submissions of both parties on April 4, 2002, the undersigned took the requests made by counsel for the trustee under reserve;
Whereas after deliberating and considering the submissions heard on April 4, 2002, the undersigned concluded on April 5, 2002, that the stay and adjournment motions made by the trustee should be denied, but the trustee should be given leave to file a written reply to the investigation report, by April 30, 2002;
Whereas the undersigned communicated those decisions to counsels for the parties on April 5, 2002, with reasons to follow;
Whereas the request by the trustee for a stay must be denied for the following reasons:
- no judgment has yet been rendered that would declare the provisions that the trustee wishes to challenge to be inoperative, and so, having regard to the decisions of the Supreme Court of Canada in Manitoba (Attorney General) v. Metropolitan Stores Ltd.,  1 S.C.R. 110 and RJR-MacDonald Inc. v. Attorney General of Canada,  1 S.C.R. 311, it seems to me to be clear that the principle of the constitutionality of legislation must be adopted and followed in this case;
- the undersigned finds there to be no statutory basis in the BIA that would enable him, as the Superintendent's delegate, to order a stay of the disciplinary process on the ground that the statutory provisions that authorize the undersigned to conduct the disciplinary process might be inoperative for constitutional reasons;
- given that the stay motion involves the application of the tests laid down by the Supreme Court of Canada in Manitoba (Attorney General), supra, I doubt that I have the power, as the Superintendent's delegate, to dispose of such questions, which are of mixed fact and law: see Pfeiffer v. Canada (Superintendent of Bankruptcy),  3 F.C. 584 (Tremblay-Lamer J.);
Whereas the stay motion made by the trustee must be denied, for the following reasons. Although subsection 14.02(1) BIA gives a trustee the opportunity to be heard, subsection 14.02(2) BIA specifies that the Superintendent's delegate shall deal with the matters that are the subject of the disciplinary report "as informally and expeditiously as the circumstances and a consideration of fairness permit". That being the case, the undersigned is of the opinion that in this case, the circumstances and a consideration of fairness do not justify adjourning the hearing until October 2002 as requested by the trustee. Granting the trustee several months to prepare and file a written reply, a right that is not provided by the rules of natural justice, would impose formalities on the disciplinary process that Parliament intended to avoid, and would be likely to interfere with an expeditious disposition of the disciplinary matters in issue in this case. In addition, since the trustee has had the senior analyst's report in his hands for several months, it was open to him to prepare a written reply if he thought fit. Consequently, I am of the opinion that permitting the trustee to file such a written reply, but giving him until April 30, 2002 to do so, does not violate the trustee's right to be heard.
For these reasons, the undersigned denies the motions by the trustee for a stay and an adjournment, but grants him leave to file a written reply by April 30, 2002.
Dated April 29, 2002
originally signed by
Delegate of the Superintendent of Bankruptcy
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.