Bank of Montreal, Fred Grant Street, Barrie, Ontario

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:
Thomas J. Carleton, BA, CGA, CIRP
T. Carleton & Co. Inc.
1002–74 Cedar Pointe Drive
Barrie, Ontario
L4N 5R7


Directions for Conservatory Measures
(Section 14.03 of the Bankruptcy and Insolvency Act)


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

Whereas Thomas J. Carleton is the holder of an individual license as trustee in bankruptcy;

Whereas T. Carleton & Co. Inc. is the holder of a corporate trustee license;

Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that Thomas J. Carleton had an unacceptably high number of estate files under administration for more than three years;

Whereas on August 3, 2003 and August 29, 2003, the Acting Associate Division Assistant Superintendent (A/ADAS), Toronto Division Office, Office of the Superintendent of Bankruptcy (OSB), corresponded with Thomas J. Carleton directing Thomas J. Carleton to submit a Closing Plan under the Initiative for the Orderly and Timely Administration of Files (IOTA);

Whereas on September 8, 2003,Thomas J. Carleton, submitted a Closing Plan under IOTA to the OSB pledging his full co-operation in bringing estate files to an expedient close;

Whereas on September 15, 2003, the A/ADAS acknowledged the receipt of Thomas J. Carleton's Closing Plan, advising Thomas J. Carleton that Monthly Progress Reports would be required by the 15th of each month commencing October 15, 2003, until the full execution of the Closing Plan;

Whereas on October 15, 2003, Thomas J. Carleton failed to submit his first Monthly Progress Report to the OSB;

Whereas on October 22, 2003, the Acting Division Assistant Superintendent (A/DAS), corresponded with Thomas J. Carleton requesting that the first Monthly Progress Report be immediately submitted;

Whereas on November 15, 2003, Thomas J. Carleton failed to submit his second Monthly Progress Report to the OSB;

Whereas on November 18, 2003, the A/DAS corresponded with Thomas J. Carleton requesting that the first and second Monthly Progress Reports be submitted no later than the close of business November 21, 2003;

Whereas on December 10, 2003, Thomas J. Carleton provided the A/DAS with copies of the trustee's discharge for 17 estate files;

Whereas on December 10, 2003, Thomas J. Carleton provided the A/DAS with a list of estates that Thomas J. Carleton would close and submit to the OSB for approval on or before December 31, 2003;

Whereas on December 10, 2003, Thomas J. Carleton advised the A/DAS, by letter dated December 9, 2003, that the trustee was not prepared to apply to the Court for discharge on 83 estate files without assurances that the Court would expedite such submissions and resolve all outstanding requests;

Whereas on December 18, 2003, the A/DAS advised Thomas J. Carleton by correspondence that the aforementioned December 10, 2003, correspondence would be considered as Thomas J. Carleton's third Monthly Progress Report, which was to be a comprehensive update as the first and second Monthly Progress Reports had not been submitted by Thomas J. Carleton on October 15, 2003 and November 15, 2003, respectively;

Whereas on December 18, 2003, the A/DAS advised Thomas J. Carleton by correspondence that the trustee's position with respect to the Court was unacceptable, and that the trustee was expected to forthwith make application to the Court for the trustee's discharge on the estate files and to accordingly advise the OSB of such;

Whereas on January 15, 2004, Thomas J. Carleton failed to submit his fourth Monthly Progress Report to the OSB;

Whereas on January 21, 2004, the A/DAS, by correspondence, conveyed to Thomas J. Carleton that: the OSB was concerned with the lack of progress made with respect to the Closing Plan submitted by the Thomas J. Carleton on September 8, 2003; that despite the trustee's allegations that many estate files had been closed, the trustee had neglected to provide the evidence to substantiate the closures, and that the OSB had not received any correspondence from the trustee since December 10, 2003;

Whereas on January 21, 2004, the A/DAS, requested that Thomas J. Carleton provide the OSB with a full accounting of the trustee's progress with respect to the closing of summary and ordinary administrations by close of business January 26, 2004, and that failing this full accounting, a recommendation would be made that conservatory measures be taken pursuant to section 14.03 of the Bankruptcy and Insolvency Act;

Whereas Thomas J. Carleton has not met the requirements of the Closing Plan which Thomas J. Carleton submitted to the OSB on September 8, 2003;

Whereas the records of the OSB indicate that, as of February 6, 2004, Thomas J. Carleton had filing fees outstanding for more than 60 days in the amount of $8,875.00;

Whereas the records of the OSB indicate that, as of February 6, 2004, Thomas J. Carleton had Superintendent's Levy outstanding for more than 60 days in the amount of $1,533.37;

Whereas Thomas J. Carleton does not have sufficient human resources to adequately administer the estates;

Whereas Thomas J. Carleton has refused to account to the OSB in a full and satisfactory manner of the trustee's progress with respect to the closing of estates;

Whereas I believe on reasonable grounds that the estates require protection;

Whereas the Superintendent may, for the protection of an estate, exercise the powers set out in subsection 14.03(1) of the Act, in the circumstances referred to in section 14.03(2) of the Act;

Whereas the Superintendent has delegated to me, in accordance with section 14.01(2) of the Act, the powers of the Superintendent as specified at section 14.03(1) of the Act, in the circumstance referred to in section 14.03(2)(b), a copy of which delegation is attached, along with copies of sections  14.01, 14.02 and 14.03 of the Act;

I, Francyne Hunter, in my capacity as delegate for the Superintendent, direct: 

That, pursuant to sections 14.03(1)(b) and (c) of the Act, the Bank of Montreal, 6 Fred Grant Street, Barrie, Ontario L4M 3G6

  1. consider Kiri Mowry and Abubakar Kahn, agents of the Office of the Superintendent of Bankruptcy, as the only two authorized co-signatories as relate to any operations of the funds credited to the estates of bankruptcies and proposals administered by Thomas J. Carleton / T. Carleton & Co. Inc.;
  2. make no debit, payment or transfer of funds credited to, or which ought to have been credited to, the estates of bankruptcies and proposals administered by Thomas J. Carleton / T. Carleton & Co. Inc., without the countersignature of either Kiri Mowry or Abubakar Khan;
  3. not pay out of these accounts: cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions which are presented for payment after the receipt of these directions, without these cheques, bills of exchange, bank drafts or other instruments being countersigned by either Kiri Mowry or Abubakar Khan;
  4. submit all statement of accounts, accepted cheques and other documents or information having to do with the above-mentioned estate trust bank accounts, to Jack Steinman, Office of the Superintendent of Bankruptcy, 25 St. Clair Avenue East, Toronto, Ontario M4T 1M2;
  5. provide, as soon as possible, the list of estate trust bank accounts of Thomas J. Carleton / T. Carleton & Co. Inc. to Jack Steinman, Office of the Superintendent of Bankruptcy, 25 St. Clair Avenue East, Toronto, Ontario M4T 1M2;

That these directions take effect immediately and will stay in place until such time as I am satisfied that the estates no longer require protection;

That in accordance with section 14.03(3) of the Act, these directions bind the Bank of Montreal, 6 Fred Grant Street, Barrie, Ontario L4M 3G6, which must comply with them;

That in accordance with section 14.03(4) of the Act, a person who complies with these directions is not liable for any act done by that person only to comply with these directions.

Signed at the City of Halifax, N.S. this 13th day of February 2004.

Francyne Hunter

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