Edward Bryce Quon; Quon & Associates Ltd.
Directions for Conservatory Measures to TD Canada Trust, 100, King St. W., Hamilton, Ontario, L8N 1A8 — December 10, 2002

Conservatory Measures

What is a conservatory measure?

The Superintendent of Bankruptcy puts in place conservatory measures when a bankruptcy or insolvency estate needs protection. It might be in cases of Licensed Insolvency Trustee (LIT) malfeasance or if serious wrongdoing on the part of a LIT puts estate files at risk. Conservatory measures may also be put in place if a LIT becomes ill or dies without a valid succession agreement. Finally, conservatory measures may be put in place if a LIT, for whatever reason, has allowed the administration of his or her practice to become substandard.

Canada

In the matter of:
Quon and Associates Ltd.
Edward Bryce Quon


Instructions For Conservatory Measures
(section 14.03 of the Bankruptcy and Insolvency Act)


Whereas the Bankruptcy and Insolvency Act provides the Superintendent of Bankruptcy with the general power to supervise the administration of all estates and matters to which the Act applies;

Whereas the Toronto Division Office of the Superintendent of Bankruptcy conducted a monitoring of Quon and Associates Ltd on August 20 and 21, 2002 where cash receipts were identified without being deposited to their respective estate trust bank accounts;

Whereas the Toronto Division Office of the Superintendent of Bankruptcy did not receive a satisfactory response from the trustee regarding discrepancies between estate ledgers, cash receipts book records, bank deposit slips and estate bank statements following correspondence exchanged in August 2002;

Whereas the Toronto Division Office of the Superintendent of Bankruptcy requested a special audit of Quon and Associates Ltd to determine the extent of the serious deficiencies discovered during the monitoring visit of August 2002;

Whereas the special audit started on September 23, 2002 and on October 6, 2002, the auditor reported in part that:

  1. further cash receipts were not deposited to their respective estate trust bank accounts in accordance with the requirements of the Act;
  2. a significant number of bank accounts are not held in trust;
  3. a significant sum of money is invested in GIC's without being able to match the amount of the investment to the estate ledgers or estate bank statements;

Whereas the Superintendent of bankruptcy may and must, for the protection of an estate, exercise the powers referred to in subsection 14.03(1) of the Act in the circumstances stipulated in subsection 14.03(2) of the Act;

Whereas the Superintendent of bankruptcy has delegated to the Deputy Superintendent (Policy, Programs and Standards, now Programs, Standards and Regulatory Affairs) in accordance with subsection 14.01(2) of the Act, in certain situations mentioned in subsection 14.03(2), his powers as specified at subsection 14.03 (1) o f the Act, copies of which delegation are attached along with copies of subsections 14.01(2) and 14.03(1) to (4) of the Act;

Whereas subsections 14.03(1)(c) and (2)(b) of the Act apply;

Therefore,

I, Alain Lafontaine, in my capacity as Deputy Superintendent (Programs, Standards, Regulatory Affairs), give instruction to:

TD Canada Trust, branch located at 100, King St. W., Hamilton, Ontario, L8N 1A8;

  1. make no debit and/or payment and/or transfer of funds credited to the estates of bankruptcies and proposals administered by Quon and Associates Ltd., also known under the names of Quon and Associates Limited and Quon and Associates,without the cheques, notes, certificates of deposit and or transfers being co-signed by Frank Quance or Frank Portelli along with Edward Bryce Quon;
  2. to pay bills of exchange, cheques, bank drafts, certificates of deposit or others, emitted before the reception of these instructions which would be presented for payment after the reception of these instructions without these cheques, bills of exchange or drafts being co-signed by one of the said persons along with Edward Bryce Quon;

These instructions take effect immediately and will stay in place until further notice or until a decision is rendered under section 14.01 of the Act;

In accordance with subsection 14.03(3) of the Act, these instructions bind the addressee, who must comply with them;

In accordance with subsection 14.03(4) of the Act, a person who complies with the present instructions is not liable for any act done by the person only to comply with them.

Signed in the City of Ottawa, Ontario, December 10, 2002

Alain Lafontaine,
Deputy-Superintendent (Programs, Standards and Regulatory Affairs)

This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.
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