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.
Province Of Québec
Before Mr. Roger Tassé, Legal Counsel
Delegate Of The Superintendent Of Bankruptcy
In The Matter Of:
Jean-Pierre Chatigny, an individually licensed trustee for the Province of Québec,
J.P. Chatigny & Associés, Inc., a corporate licensed trustee for the Province of Québec
Decision Made On February 18, 2002
In my decision dated September 7, 2001, I stated my reasons for finding Trustee Jean-Pierre Chatigny and Trustee J.P. Chatigny & Associés, Inc., the former being an individually licensed trustee and the latter a corporate licensed trustee (designated herein as the 'trustee' or the 'trustees', as the case may be) responsible for major and serious breaches in their administration of the bankruptcy of Ms. Gisèle Mercier.
On December 13, 2001, I heard the submissions made by counsel for the trustees and for the Department of Justice of Canada in respect my earlier decision dated September 7, 2001. Furthermore, I conducted a telephone conference with counsel for the parties on January 28, 2002, for the purpose of obtaining additional information.
The September 7, 2001 decision
In my earlier decision dated September 7, 2001, I identified the following major and serious deficiencies in the administration of the bankruptcy of Ms. Mercier:
- First, even if the evidence did not show the trustee to have advised Ms. Mercier not to include in her statement of assets and liabilities her interest in a real estate property located at 528 Geneviève St., or to have enticed her not to include it, as has been alleged by the Senior Analyst, Ms. Sylvie Laperrière, my own analysis of the evidence would lead me to conclude that the trustee had simply chosen not to mention the real estate interest in the statement of assets and liabilities prepared by him, thereby breaching his duties as a trustee in bankruptcy, contrary to Section 13.5 of the Act and Rule 45.
- The trustee was also in breach of his duties for failing to indicate, in the preparation of the reports and other documents required by law, the share owned by the debtor in the real property located at 528 Geneviève St.
- The trustee failed to discharge his duty to adequately ascertain in a timely manner the value of Ms. Gisèle Mercier's assets.
- The trustee provided incomplete and inaccurate information to the Office of the Superintendent.
- The trustee has shown a lack of due diligence in the discharge of his duties and responsibilities by omitting to follow up after registering his interest against the property and by delaying his response to an offer to settle.
- By stating in a letter addressed to the debtor that she had concealed her undivided half-interest in the real estate property, the trustee knew that he was making an untrue and inaccurate statement.
These are the reasons for which I found generally the conduct of the trustee during the administration of Ms. Mercier's file to be unacceptable from the start and to be contrary to the sustained confidence of the public in the integrity of the bankruptcy process.
Submissions by counsel
Mr. Lecavalier, counsel for the Department of Justice of Canada, submitted that the breaches alleged against the trustees were major and serious in nature and that we are dealing in this case with a professional who "attempted to cover up his mistakes by providing misleading explanations, half-truths and even outright lies in order to justify his conduct." Mr. Cavalier stressed that the standards of conduct applicable to trustees in bankruptcy are extremely high and that Mr. Chatigny failed in that respect. He concluded that the initial recommendation by Ms. Laperrière to impose a four (4) month suspension remains appropriate even though there is no mention in my decision of the fact that Ms. Mercier was enticed by the trustee to conceal her real estate interest from the statement of assets and liabilities.
Mr. Dancose, counsel for the trustees, appeared at the second hearing without prejudice, and stated that he had filed an application in Federal Court for judicial review of my September 7 decision. He took objection to my whole approach to this case and, in substance, repeated the submission made by him at the main hearing to the effect that the trustee's delay and negligence might perhaps have constituted a technical breach, but certainly not a major and serious one. As a result, Mr. Dancose argued, even if my findings of fact were accepted (which, at any rate, he was not prepared to do), the period of suspension should not exceed two (2) months.
The trustee's track record
Mr. Chatigny was issued a trustee license on April 11, 1974. He practised as an individual trustee until December 31, 1979. In January 1980, he obtained a corporate trustee license under the name of J.P. Chatigny & Associés, Inc., a firm within which he practised as sole trustee.
Mr. Chatigny has been practising as a trustee since June 27, 1997, for the trustee firm of Jean Fortin & Associés, Syndics Inc.
As for the corporate license issued under the name of J.P. Chatigny & Associés, Inc., it was to remain in effect until December 31, 1998, for the sole purpose of finishing off the estate files filed prior to June 30, 1997. The corporate license was nevertheless renewed in 1999 as well as in 2000, since the trustee had not yet completed the administration of the remaining estate files. In March 2000, the estate files that were still active were then transferred to Trustee Jean Fortin & Associés, Syndics Inc., which meant that these files were no longer handled under the name of Mr. Chatigny or under the name of J.P. Chatigny & Associés, Inc.
Mr. Chatigny's record as a trustee is perfectly clean and the complaint filed in this matter is the only one ever brought against him.
After re-examining the facts highlighted in my decision of September 7, 2001, and with due consideration for the submissions made before me for both parties in the case, I find that a three (3) month suspension would be warranted in the circumstances.
The omissions and other deficiencies attributed to Mr. Chatigny in connection with the administration of the bankruptcy of Ms. Mercier constitute a major and serious breach, and as such are unacceptable and unjustifiable in the case of a trustee in bankruptcy. The actions and conduct of Mr. Chatigny were such as to undermine the proper administration of bankruptcies as well as the public confidence in the enforcement of the law and, for these reasons, he must be made to bear the consequences of his actions.
In reaching this conclusion, I have given due consideration to the fact that trustee Chatigny has seen his reputation tarnished as a result of the disciplinary proceedings brought against him and as a result of the decision I issued on September 7. I have also given due consideration to the substantial legal costs incurred by him in these proceedings for the purpose of explaining his conduct.
Accordingly, pursuant to the authority vested in me by the Superintendent of Bankruptcy on December 8, 2000, I order that the trustee license of Mr. Jean-Pierre Chatigny be suspended for a period of three (3) months during which Mr. Chatigny will be barred from practising as a trustee in bankruptcy and from acting for anyone under the Bankruptcy and Insolvency Act, either under his own name or under a corporate trustee name.
Made, this 18th day of February, 2002.
original signed by
Delegate of the Superintendent of Bankruptcy
DOC # 161095
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.