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
Holder of a Trustee Licence
for the Province of Ontario
Robert Rusinek & Associates Inc.
Holder of a Corporate Trustee Licence
for the Province of Ontario
Order Issued Under the Bankruptcy and Insolvency Act
Whereas Robert Rusinek, trustee, and Robert Rusinek & Associates Inc., corporate trustee, operate offices in the City of Toronto, Ontario;
Whereas the Senior Analyst, Disciplinary Affairs of the Office of the Superintendent of Bankruptcy has submitted a Report (the "Report") on the administration of Robert Rusinek, trustee and Robert Rusinek & Associates Inc., corporate trustee, collectively as the "Trustee", pursuant to the general delegation received regarding the application of Subsection 14.02 (1) of the Bankruptcy and Insolvency Act;
Whereas the Report identifies a number of irregularities and deficiencies where the Trustees have failed to properly fulfil their statutory duties of an administrative nature in respect of the Trustees' administration of estate during the period covered by the Report, based on audits conducted in June 1999 and March 2000, such as:
Unauthorized draw of final fees in summary bankruptcies:
The Trustee drew, during the months of April and May 1999, final fees in the amount of $43,841.38 on or before the date when the Final Statements of Receipts and Disbursements were forwarded to the Official Receiver for comment. This amount was determined to constitute unauthorized draws of final fees contrary to Section 156 and Rule 65(1)(a) of the Act.
Improper notice of deemed taxation of trustee's accounts and discharge of trustee:
Notices of Deemed Taxation of Trustee's Accounts and Deemed Discharge of Trustee were issued to the proven creditors in all estates before the Trustee had received letters of comment from the Official Receiver, contrary to Rule 64(1) of the Act.
Netting of Bank service charges against interest earned:
An amount of $295 per month in bank service charges has been netted against bank interest earned since April 1999, prior to allocating interest income to the Summary Bankruptcy estates within the consolidated trust bank account contrary to Rule 128 of the Act.
Improper administration of consolidated trust bank account:
The Trustee operates only one consolidated trust bank account for both summary bankruptcy and Division II (consumer) proposal estates. The co-mingling of funds is contrary to Section 66.26(2) of the Act and Directive 5.
Whereas Robert Rusinek, in his capacity as President of Robert Rusinek & Associates Inc., is responsible for the banking policies, procedures and transactions of Robert Rusinek & Associates Inc. and also executed the relevant statutory documents;
Whereas in all cases referred to in the Report, the individual trustee was acting on behalf of Robert Rusinek & Associates Inc., which was appointed trustee in all of the estates reviewed;
Whereas the designation of an individual trustee shall not relieve the corporate trustee of its ethical responsibility under any professional engagement it has accepted;
Whereas the amount of $43,841.38 in unauthorized draws of final fees was reimbursed by the Trustee to the consolidated trust bank account on June 17, 1999;
Whereas the amount of $2,065.00 of bank service charges was reimbursed on May 3, 2000 to the summary bankruptcy estates and the Office of the Superintendent of Bankruptcy is satisfied that no service charges have been netted against interest earned since August 1999;
Whereas the Trustee has ceased the practice of co-mingling Division II (consumer) proposal estate trust funds;
Whereas Robert Rusinek does not intend to practice again as a trustee;
Whereas Robert Rusinek's trustee licence has ceased to be valid on January 1, 2002 due to the failure of the trustee to renew his licence in accordance with Rule 134(2) of the Act;
Whereas pursuant to subsection 14.01 (1.1), of the Act,the provisions of Sections 14.01 and 14.02 of the Act are also applicable with respect to former Trustees;
Whereas Robert Rusinek does not admit the allegations and has chosen not to defend against them;
Whereas none of the trustees involved in the improper and non-conforming management of consolidated bankruptcy accounts are partners and/or (active) employees of Robert Rusinek & Associates Inc. any longer, and the trustees and insolvency practitioners currently with the said firm were not in any way involved in the improprieties noted;
Whereas the parties have submitted to me this draft decision, which in my opinion is fair and reasonable in the specific circumstances of this case, and there is no reason to derogate from it;
Whereas the parties have agreed that the corporate trustee reimburse $10,000 of the cost of the investigation into the professional conduct of the said corporate trustee.
By These Reasons:
I, the undersigned, Fred Kaufman, Delegate of the Superintendent of Bankruptcies by virtue of the powers delegated to me under section 14.01 of the Bankruptcy and Insolvency Act,
Order Robert Rusinek & Associates Inc, corporate trustee, to pay to the Office of the Superintendent of Bankruptcy the sum of $10,000.00 as reimbursement of the costs of the investigation into the professional conduct of the said corporate trustee;
Take Notice that Robert Rusinek, trustee, did not renew his trustee licence in December 2001 and said licence ceased to be effective on January 1, 2002;
hereby cancel the licence of trustee Robert Rusinek;
The payments referred to above shall be made within twenty (20) days of the signing of this decision, failing which the parties shall be called before the undersigned for a hearing.
Signed in Toronto, in the province of Ontario, this 19th day of December, 2002.
The Honourable Fred Kaufman C.M. Q.C.
Delegate of the Superintendent of Bankruptcy
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.