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 Québec
In the Matter of the Disciplinary Case of Trustee Jacques Roy
Applicant: Sylvie Laperrière, Senior disciplinary analyst
Respondent: Jacques Roy, Trustee
Sanction Imposed Pursuant to the Bankruptcy and Insolvency Act
In a decision rendered on , we upheld four (4) complaints against trustee Jacques Roy. More specifically, we decided as follows:
A. In the case of Pierre André Jacob:
- The trustee did not perform his duties expeditiously nor did he perform them with due diligence by rejecting the request for substitution made by representatives of Trans-Canada Credit and by taking too long to prepare the minutes of the meeting of the creditors held on , contrary to section 13.5 of the Act and Rule 36.
B. In the case of Distribution Sunliner (1985) Inc.:
- The trustee failed to obtain the necessary statement from an official of Distribution Sunliner (1985) Inc., which would have allowed the confirmation of the accuracy at the time of the bankruptcy of the inventory of assets dated , contrary to subsection 5(5) of the Act and sections 6 and 7 of Directive 31 concerning the inventory of estate assets of the bankrupt, issued by the Superintendent of Bankruptcy on .
- The trustee failed to gather supporting documents:
- Regarding the reconveyance by Isomur of the account receivable in the amount of $6,031.43 from Bay Distributors;
- Regarding the results obtained in relation to the collection of the said account receivable by the trustee and of the balance owing in the amount of $9,000 by Isomur;
- And regarding the decision to postpone sine die the action to be taken in order to recover from Georges Rivard and Jean-Yves Genest the amount of money owing pursuant to a court order dated ;
Thereby contravenes to subsection 5(5) of the Act and to section 5 of Directive 22 concerning the realization of estate assets, issued by the Superintendent of Bankruptcy on .
- The trustee failed to perform his duty in a prudent manner:
- By failing to place supporting documents on file concerning the agency granted by the trustee to Yves Lemaire of Gérance Mauricie, to ensure proper follow-up for the trustee in connection with the recovery of the moneys from BCL and by failing to place supporting documents on file concerning the amended status of Mr. Lemer who, according to statements made by the trustee, acted on behalf of the National Bank of Canada for the recovery of these moneys;
- By failing to advise BCL to forward the cheques to Yves Lemaire of Gérance Mauricie after becoming aware of the agency granted by the National Bank of Canada to this person;
- And by authorizing said Yves Lemaire of Gérance Mauricie to open the trustee's mail;
Contrary to section 13.5 and to subsection 5(5) of the Act, to section 5 of Directive 22 on the realization of estate assets, issued by the Superintendent of Bankruptcy on , and contrary to Rules 36 and 52.
The senior analyst in her amended report dated , identified fifteen (15) complaints against the trustee, some of which were withdrawn immediately while others were rejected by the undersigned.
Pursuant to paragraph 14.01(1) of the Act, we are called and authorized to do one or more of the following:
- cancel or suspend the license of the trustee;
- place such conditions or limitations on the license as the Superintendent considers appropriate including a requirement that the trustee 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 this case, the estate has not been deprived of any moneys as a result of the conduct of the trustee. Accordingly, option c) does not apply.
Having practised as a trustee over a period of some 25 years and having been a member of the Board of Directors then vice-president of the Association québécoise des professionnels en restructuration et en insolvabilité (the Quebec association of professionals in debt restructuring and insolvency), there is no need to either require him to successfully undergo any examinations or proficiency courses. We are thus left with the option of cancelling or suspending his license as trustee.
In an article published in issue 137 of the periodical Développements récents en déontologie, droit professionnel et disciplinaire, Patrick Denis Verville quoted Sylvie Poirier on the factors to take into account when imposing the appropriate disciplinary measure:
[ TRANSLATIONS ]
- The objective factors:
- the protection of the public;
- the seriousness of the offence;
- exemplary value.
- The subjective factors:
- the existence or absence of prior misconduct;
- the age, experience and reputation of the professional;
- the chances of a repeat offence;
- remorse and the likelihood of rehabilitation of the professional;
- the financial position of the professional;
- the consequences for the client.
In all cases according to the author, at any rate, the disciplinary measure must be aimed at striking a proper balance between the protection of the public on the one hand and the rights of the professional on the other.
He further stated: The assessment of the objective and subjective criteria must be made in light of the principle according to which the disciplinary measure must first and foremost be aimed at protecting the public and not punishing the professional.
The Honourable Raoûl P. Barbe in a judgement issued on , under docket number 500-02-119213-036 in the case of Susanne Royer c. Micheline Rioux et al., cited with approval the main subjective factors to be considered in order to mete out the appropriate disciplinary measure listed in the article by Patrick Denis Verville entitled La sentence en matière disciplinaire (Sentencing in disciplinary matters). These criteria are as follows: the existence or absence of prior misconduct, age, experience and reputation of the professional, the chances of a repeat misconduct, deterrence, remorse and the likelihood of rehabilitation of the professional, the financial position of the professional and the consequences for the clients.
Moreover, the Honourable Benjamin J. Greenberg, acting as the Superintendent's delegate in the case of Michel Leduc and Peter Wolkove, trustee, in a sentencing decision issued on , incorporated the following considerations in his decision:
Whereas the sanction must not be tailored to reflect only the specific needs and situation of each trustee, but should also take into account the integrity of the bankruptcy and insolvency system; and
Whereas in professional conduct matters, the purpose of the sanction is not primarily to punish the professional, but also to have the effects of exemplarity and deterrence, so as to also protect the public and the integrity of the profession of bankruptcy trustee; and
Whereas, on the other hand, the principle of exemplarity and deterrence must not be over emphasized to the point where it becomes oppressive to the offender;
Even though he has administered some 6,000 files in his career as a trustee, the complaints brought against him by the senior disciplinary analyst were the first ever. Creditors never complained about the case of action he chose. Nor was he ever the subject of a complaint from the Office of the Superintendent of Bankruptcy. [TRANSLATION] I have always strived to comply with the Act and the Rules. The witness is deeply affected by his tarnished reputation.
He acknowledges that the report of the senior analyst, which was widely circulated, has caused him a great prejudice. Individuals who received a copy of that report made a point of passing it around. For obvious reasons the report was brought to the attention of his partners who nevertheless expressed confidence in his integrity despite the report. His counsel, in making representations on his behalf, emphasized the fact that the trustee has not been convicted of falsifying documents or fraud and that, in fact, the estates had not been deprived of any amount of money as a result of his conduct.
All things considered, the trustee has been convicted of isolated breaches. In effect, the trustee did not comply in all respects with the specific obligations imposed on him by the Act, the Regulations and Directives made thereunder.
The trustee acknowledges his unconditional duty to comply in all respects with all of their provisions. More particularly, he acknowledges his duty to collect the required material for his file in accordance with the Act, the Regulations and directives made thereunder. Counsel for the trustee gave us a thorough explanation of the policy of the Superintendent of Bankruptcy dealing with the disclosure of professional misconduct cases and stressed that the disclosure allowed by this policy was itself the toughest disciplinary measure against the trustee.
Counsel for the senior analyst suggested to the undersigned a suspension of the trustee's license of two weeks.
In light of the overall good reputation which the trustee enjoyed prior to the complaints brought against him and in light of the nature of these complaints;
Whereas the trustee was convicted of offences to the Act, the Regulations made thereunder and to the Directives issued by the Superintendent;
We order the suspension of the license of trustee Jacques Roy for a period of one week effective .
Delegate of the Superintendent of Bankruptcy
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.