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.
of the Province of Quebec
In Re: Disciplinary File of Trustee Jacques Roy
Applicant: Jacques Roy, trustee
Respondent: Marc Mayrand, Superintendent of Bankruptcy
Before Hon. Lawrence A. Poitras, Q.C.,
Delegate of Superintendent of Bankruptcy
Decision on opposing applications by parties
On a complaint was filed with the Office of the Superintendent of Bankruptcy regarding the administration of the applicant trustee.
The undersigned (replacing the late François Rioux) was appointed delegate of the respondent Superintendent of Bankruptcy Marc Mayrand pursuant to a delegation of authority signed on in accordance with s. 14.01(2) of the Bankruptcy and Insolvency Act (BIA)
On the applicant trustee filed a preliminary exception with the undersigned, asking him to rule that ss. 14.01, 14.02 and 14.03 of the Bankruptcy and Insolvency Act (BIA) were of no force or effect with respect to him.
Motion to dismiss
By a motion to dismiss the preliminary exception made verbally on behalf of the analyst, the latter argued that the undersigned delegate did not have jurisdiction to determine the compatibility of ss. 14.01 and 14.02 BIA with the Canadian Charter of Rights and Freedoms and the Canadian Bill of Rights. By a decision rendered on , the undersigned dismissed the motion to dismiss made by counsel for the analyst and ruled that he had the necessary jurisdiction to hear the applicant's motion asking that ss. 14.01, 14.02 and 14.03 BIA be declared of no force or effect and that the disciplinary proceeding involving the applicant trustee be stayed.
Sitting as an administrative tribunal, the delegate had by implication authority to dispose of points of law submitted to him and jurisdiction to hear the motion by the applicant for a preliminary exception, to the extent that the motion related to the applicant's rights in the case before the delegate.
The applicant trustee's motion for a preliminary exception on was accordingly argued before the undersigned on and .
By a decision rendered on the applicant's motion for a preliminary exception, asking that ss. 14.01, 14.02 and 14.03 BIA be found to be of no force or effect, was dismissed. The case accordingly had to be heard on the merits as soon as possible.
On the applicant trustee Roy applied to the Federal Court of Canada asking it to reverse the decision of on the applicant trustee's preliminary exception. Unless the Federal Court gives this priority, it is doubtful that the appeal will be heard before 2005.
On both parties, through their counsel, appeared before the undersigned. The senior analyst, despite an appeal by the Attorney General of Canada to the Federal Court from a decision rendered to the same effect by Hon. Fred Kaufman Q.C. as delegate in the Sam Lévy case, ruling he had the necessary jurisdiction to hear the trustee Lévy's request asking that ss. 14.01, 14.02 and 14.03 BIA be found to be of no force or effect, and that the judicial proceeding involving the trustee be stayed, and despite the appeal filed by the applicant trustee in this case on from the decision by the undersigned dismissing his application asking that ss. 14.01, 14.02 and 14.03 BIA be found to be of no force or effect, asked that the case proceed on the merits before the undersigned as quickly as possible. The applicant trustee Roy, on the ground that the Federal Court had neither ruled in Sam Lévy on the delegate's jurisdiction to hear the aforesaid motion by Lévy, or on the appeal filed by the applicant trustee from the decision of the undersigned dismissing his motion asking that ss. 14.01, 14.02 and 14.03 BIA be found to be of no force or effect, maintained that this case clearly could not be heard on the merits as long as the Federal Court had not first ruled on the two motions.
The applicant added that if the Federal Court allowed the grounds of appeal put forward by the respondent, it would be proper [TRANSLATION] "in view of the circumstances and equity" to adjourn the hearing on the merits to a later date, so as to allow the parties to move the case forward in the Federal Court regarding the delegate's jurisdiction and avoid forcing the applicant to submit to the jurisdiction of an administrative tribunal whose powers in the matter the respondent himself had challenged.
Counsel for the applicant trustee even undertook to file a priority application with the Federal Court without delay, so that the various appeals, including the appeal from a decision by Hon. Perry Meyer in Jean-Guy St-Georges, to the same effect as that rendered on the preliminary exception by the undersigned, could be joined for hearing and heard as soon as possible.
In Sam Lévy Hon. Fred Kaufman, on the grounds that the Federal Court had before it the appeal by the Attorney General of Canada against his decision that he had the necessary jurisdiction to hear the trustee's motion on the compatibility of ss. 14.01, 14.02 and 14.03 BIA, that the length of the proceeding on the merits could easily exceed four weeks and that in the meantime the trustee had been directed not to take any new cases, decided to adjourn the hearing of the case to a later date.
In another similar case involving the trustees Sheriff and Segal, Kaufman J. by a decision rendered on promised to set down the date for hearing the matter on the merits for late June, when the Federal Court might be able to rule on the Superintendent's powers in that case.
The case involving the trustees Sheriff and Segal should only last two weeks, and their activities were not limited in any way.
In the circumstances of this case, should the undersigned allow the applicant trustee's application to stay the suspension of ss. 14.01 and 14.02 BIA until the Federal Court makes a ruling on the constitutionality of these provisions? By allowing the applicant trustee's application, would the delegate, despite his decision of , be acting as if ss. 14.01 and 14.02 BIA were of no force or effect as long as the Federal Court had not ruled on their constitutionality?
Nonetheless, the constitutionality of these sections has in fact been recognized by the Quebec Court of Appeal in Métivier v. Mayrand, , Q.C.A. (200–09–004077–027).
Additionally, Messrs. Roger Tassé, François Rioux and Jean-Claude Demers, in view of the decisions 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, dismissed the suspension applications made to them in each of the cases (including this one) assigned to them, on the ground that no decision had been rendered finding the sections in question of no force or effect and the rule that statutes are constitutional had to be observed.
By a judgment on Hon. Pepita G. Capriolo of the Quebec Superior Court (500–05–071751–026) agreed entirely with Mr. Rioux, concluding that [TRANSLATION] "therefore, the balance of convenience favours continuing the proceedings". Her decision was upheld by the Court of Appeal.
Further, we refer to our decision of on the point.
According to Jean Beetz J. in Metropolitan Stores (at 135), staying the application of legislation may have the effect of depriving the public of duly adopted legislation and frustrating the common good.
Under s. 14.02(2)(c) BIA the Superintendent, or his delegate under s. 14.01(2) BIA, "shall deal with the matters set out in the notice of the hearing as informally and expeditiously as the circumstances and a consideration of fairness permit".
In Anheuser-Busch, Inc. v. Carling O'Keefe Breweries of Canada Limited and Registrar of Trade Marks,  2 F.C. 71, Darrel V. Heald J. held per curiam that under s. 44 of the Trade Marks Act, S.C.R. 1970, c. T-10, as amended, "the … procedure is clearly intended to be a summary and expeditious one" and there was "no power in the Registrar to unduly prolong those proceedings by the imposition of a stay pending the outcome" of other Court litigation.
In view of the indicated length of this case and taking into account the public interest in protection and the advantages conferred by the Bankruptcy and Insolvency Act, and in particular the obligation stated therein to proceed expeditiously, we set the proof and hearing of the questions set out in the notice of hearing for the first days on which counsel said they are available, namely –, at a location to be determined by the hearing clerk.
Hon. Lawrence A. Poitras, Q.C.
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.