James Gordon Touchie and J.G. Touchie & Associates Ltd. —

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.

Canada
Province of New Brunswick
Judicial District of Moncton

In the Matter of Professional Disciplinary Proceedings under the Bankruptcy and Insolvency Act ("the Act")

Opposing:
Ms. Ann Speers
Senior Analyst in the Toronto District Office of the Office of the Superintendent of Bankruptcy (hereinafter "the Senior Analyst")

And
James Gordon Touchie and
J.G. Touchie & Associates Ltd.
(hereinafter together referred to as "the Trustees")

Presiding: 
The Honourable Benjamin J. Greenberg, Q.C.
Delegate of the Superintendent of Bankruptcy
(hereinafter sometimes referred to as
"the Delegate")

Montreal,

Interlocutory Decision

  1. Pursuant to section 5(1) of "the Act", Me Marc Mayrand, of Gloucester, Ontario, was by Order of the Governor-in-Council (P.C. 1997–693, ) appointed Superintendent of Bankruptcy, effective . He is hereinafter referred to as "the Superintendent".
  2. Sub-section (2) and sub-paragraph (e) of sub-section (3) of section 5 of "the Act" place upon "the Superintendent" the duty to supervise the administration of all estates and matters to which "the Act" applies and from time to time, as he may deem it expedient, to "make or cause to be made …" "inspection or investigation of estates …" "including the conduct of a trustee …".
  3. Pursuant to the exercise of that duty, on , in virtue of Section 14.01(2) Footnote 1 of "the Act", "the Superintendent" delegated to the Senior Analyst certain of his powers, duties and functions, other than the duty to afford a trustee a reasonable opportunity for a Hearing.
  4. Thereafter, the Senior Analyst conducted an investigation into certain conduct of the Trustees and, after completing such investigation, submitted a report dated to "the Superintendent" respecting their conduct (hereinafter, together with the forty-nine Exhibits annexed thereto, called "the Report"), giving "(…) reasons why the Superintendent may choose to exercise any of the powers referred to in subsection 14.01(1) of the Act".
  5. Pursuant to the report, "the Superintendent" decided to exercise against the Trustees the former's powers set out in Sub-section 14.01(1) of "the Act".
  6. Consequently, acting as "the Superintendent"'s delegate, the Senior Analyst gave written notice to the Trustees of "the Superintendent"'s said intention, as well as the reasons for same, and furnished to the Trustees a copy of the Report.
  7. Thereafter, "the Superintendent" determined that, in the interests of natural justice and of proceeding in a timely manner with the hearing of the herein disciplinary proceedings against the Trustees, it would be advisable to delegate certain of the adjudicative and associated conservatory measures powers, duties and functions of "the Superintendent" to an independent jurist.
  8. Accordingly, on , pursuant to Section 14.01(2) of "the Act", the Superintendent delegated to the undersigned the aforementioned powers, duties and functions in respect of the herein disciplinary proceedings against the Trustees.
  9. Upon having at one point in time withdrawn from this file as counsel for the Trustees, Mr. David T. Hashey, Q.C. was replaced by Mr. George L. Cooper. Mr. Hashey has since returned to this file as co-counsel with Mr. Cooper.
  10. Moreover, Mtre Marcel Gauvreau also withdrew from this file and has been replaced by Mr. Tim Hill as counsel for the Senior Analyst.
  11. At a Preliminary Telephone Conference presided by the undersigned and held on , there were also present Mtre Gauvreau and Ms. Martine Soucy, stagiaire, then counsel for the Senior Analyst, and Mr. Hashey, then sole counsel for the Trustees.
  12. Formal Minutes of that Preliminary Telephone Conference were thereafter prepared by the undersigned and transmitted to then counsel on .
  13. Among other matters, it was determined at that Preliminary Telephone Conference and reflected at Items 4 d) and 6 thereof, as follows:

    "4. The Hearing

    d) The division of the Hearing into two phases was discussed and decided as follows: 

    Phase 1: Determine whether or not the Trustees have been in violation of or have breached any relevant provisions of the Bankruptcy and Insolvency Act, or of the Bankruptcy and Insolvency Rules, including the Code of Ethics for Trustees in Bankruptcy and/or of any Directives issued by the Superintendent of Bankruptcy, as well as all evidence which could relate to the determination of the sanction to be imposed if the Trustees (or one of them) will be found to have been in violation or have breached any provision(s) of the foregoing.

    Phase 2: If the Trustees are found to have been in violation of any of the foregoing, the presentation of the legal submissions of the parties with regard to the determination of the sanction to be imposed.

    6. Means of Communication Among the Delegate and Counsel

    It was directed by the Delegate that each proceeding and communication sent by one of counsel to the Delegate must simultaneously be sent to opposing counsel. As to written communications between counsel, the Delegate must be copied. Written communications from one counsel to the other or to the Delegate may be sent by mail, e-mail or fax or be delivered by messenger."

  14. On , Mr. Hill wrote to Mr. Cooper setting out certain observations which had been made to him by the Office of "the Superintendent" in respect of certain alleged conduct of the Trustees in relation to periods of time which are posterior to the activities of the Trustees which were investigated by the Senior Analyst and formed the subject matter of the Report.
  15. Based upon the correspondence since exchanged between counsel and among counsel and the undersigned, as well as the representations made by Mr. Hill at a Telephone Hearing held on , presided by the undersigned and at which were present Messrs. Hill, Cooper and Hashey, it would appear that Mr. Hill interpreted that Item 6 of the said Minutes to require him to copy to the Delegate all correspondence exchanged between counsel. He accordingly transmitted to the undersigned a copy of his said letter of addressed to Mr. Cooper.
  16. In his letter dated to Mr. Hill, with copies to Mr. Hashey and the undersigned, Mr. Cooper took serious exception to the fact that Mr. Hill had sent a copy of that letter to the Delegate. In his view, the undersigned's directive, Item 6 of those Minutes:

    "(…) was aimed at insuring that correspondence relating to procedure or the matters before him pursuant to the senior analyst's report, be copied to him. It is inappropriate to copy Justice Greenberg on matters relating to ongoing transactions between the OSB and J.G. Touchie and Associates Ltd. It is further inappropriate that you have put before a neutral trier of fact allegations which are clearly designed to prejudice a fair Hearing. We have responses to all of your allegations and they will be provided in due course. Now that all these matters are before Justice Greenberg, they will clearly have to be dealt with. In putting the matters before Justice Greenberg, you have done so by essentially giving unsworn testimony in your letter. As you well know, you cannot be counsel and witness in the same cause. I must advise you that based on the contents of your letter of , we will be faced with little choice but to seek to have you cross-examined at the Hearing on the issues you have raised."
  17. By means of the subsequent correspondence, the Delegate has been seized with a Motion by counsel for the Trustees requesting an Order permitting them to cross-examine Mr. Hill at the Merits Hearing on the issues that he raised in his letter of sent to Mr. Cooper, with a copy to the undersigned.
  18. At the Telephone Hearing held on in order to hear the submissions of counsel in regard to that Motion, Mr. Hashey argued that by sending a copy of his letter of to the undersigned, Mr. Hill made himself a witness and gave evidence, albeit unsworn. As such, that evidence being adverse to the Trustees, Messrs. Cooper and Hashey believe that it is incumbent upon them to cross-examine in relation to that evidence.
  19. However, in his letter of response dated , addressed to Mr. Cooper with a copy to the undersigned, Mr. Hill stated:

    "I take exception to the suggestion in your letter that mine of was copied to Justice Greenberg with the intent to prejudice a fair hearing. This is simply not accurate. There was no such intention. I was merely complying with my obligations as I understood them after reviewing the memorandum and the earlier agreement regarding correspondence. So far as the "unsworn testimony" set out in that correspondence is concerned, it is inappropriate for you to suggest that I should therefore come forward as a witness. Obviously, if I were a witness I could only give evidence as to hearsay. Indeed, the appropriate witness would be a witness who will be giving evidence, that is the senior analyst, Ann Speers."
  20. Mr. Hill's interpretation and understanding of that Item 6 of the Minutes of the Preliminary Telephone Conference of was not an unreasonable one. We can discern no bad faith on the part of Mr. Hill and we do not accept, as argued by Mr. Cooper in his letter of , that Mr. Hill intended to prejudice a fair Hearing. To the extent that his action may have been in error, we believe it was an honest error. In retrospect, that text could have been better framed.
  21. We accordingly will amend that Item 6 of the Minutes of the Preliminary Telephone Conference of , to henceforth read as set out in Paragraph 32 below.
  22. Moreover, during the Telephone Hearing of , Mr. Hill reiterated that he has absolutely no personal knowledge of the matters related in his letter of addressed to Mr. Cooper. He asserts that he was merely reciting what he had been told by the Senior Analyst, who herself will be testifying at the Hearing. He therefore submitted that if the contents of that letter are evidence in respect of which counsel for the Trustees wish to cross-examine, the appropriate person to cross-examine is Ms. Ann Speers and not Mr. Hill.
  23. It is common ground among all three counsel, and the undersigned agrees, that if Mr. Hill is to be cross-examined at the Hearing, that would disqualify him from acting as counsel for the Senior Analyst. That, Mr. Hill suggests, would cause his client to lose the right to have the solicitor of her choice, and would also cause further delays in this matter, where considerable delays have already been accumulated.
  24. Moreover, the Delegate agrees with the view that Mr. Hashey expressed during the Telephone Hearing of , to the effect that the inconvenience of any further delay which may result if we were to grant the Motion and Order that Mr. Hill be cross-examined at the Hearing, should not be considered by us and should play no part in the decision which we are now called upon to make.
  25. We confirm that the issue now put to us for decision must and will be decided entirely on its merits, with no consideration being given to the question of any inconvenience which may result.
  26. We have glanced at Mr. Hill's letter of to Mr. Cooper, but only to the extent necessary to deal with it in the context of the present Motion. We will in no way be influenced by its contents and will give it no account whatsoever at the impending Hearing on the Merits of the present matter. Its contents will not form part of the evidence at that Merits Hearing.
  27. As a secondary issue, Mr. Hashey raised a formal objection to the relevance of the matters related by the Senior Analyst to Mr. Hill and transmitted by him in his letter to Mr. Cooper of . All of it, urges Mr. Hashey, is new evidence. Counsel for the Trustees having thus far prepared themselves for the impending Hearing on the Merits to meet and contest the substance of the Report, he asked: "At what point does it stop?".
  28. In responding to that objection, Mr. Hill acknowledges that, for the purpose of determining the liability or absence of liability of the Trustees, it is only the facts asserted in the Report which are material. However, he submitted that, if the Delegate should determine that there is liability on the part of the Trustees, that further evidence then would become relevant with respect to the question of the sanction to be imposed.
  29. We have decided that the contents of that letter may only be adduced into evidence if a Phase 2 Hearing becomes necessary, and then only by a competent witness(es) in regard thereto, such as the Senior Analyst and/or one or more of her colleagues, but not Mr. Hill.

Conclusions

  1. After considering and deliberating upon those issues, the undersigned is of the view that the appropriate person(s) to be cross-examined with respect to the facts alluded to in that letter of , if and when it becomes relevant to introduce them into evidence, is the Senior Analyst and/or one or more of her colleagues, but not Mr. Hill.
  2. Accordingly, we will not grant the Motion presented by the Trustees in that regard.
  3. However, in order to ensure fairness and due process to the Trustees, in addition to amending Item 6 of the Minutes, of the Preliminary Telephone Conference of , we have decided to also amend Item 4 d) of those Minutes and hereby replace both those provisions by the following:

    "4. The Hearing

    d) The division of the Hearing into two phases was discussed and decided as follows:

    Phase 1: Determine whether or not the Trustees have been in violation of or have breached any relevant provisions of the Bankruptcy and Insolvency Act, or of the Bankruptcy and Insolvency Rules, including the Code of Ethics for Trustees in Bankruptcy and/or of any Directives issued by the Superintendent of Bankruptcy;

    Phase 2: If the Trustees are found to have been in violation of any of the foregoing, the presentation of the evidence and of the legal submissions of the parties with regard to the determination of the sanction to be imposed.

    6. Means of Communication Among the Delegate and Counsel

    It was directed by the Delegate that each proceeding and communication sent by one of counsel to the Delegate must simultaneously be sent to opposing counsel. As to written communications between counsel, only those which are relevant to the procedure and/or process in this matter must be copied to the Delegate. Written communications from one counsel to the other or to the Delegate may be sent by mail, e-mail or fax or be delivered by messenger."

  4. For all of the foregoing reasons, the Motion presented by counsel for the Trustees requesting an Order permitting them at the Merits Hearing to cross-examine Mr. Tim Hill, counsel for the Senior Analyst, in respect of the contents of his letter of addressed to Mr. George L. Cooper, one of the counsel for the Trustees, is hereby Dismissed.

Closing Provision

  1. Each duplicate original of this Interlocutory Decision signed by the Delegate is equally valid and authentic and may serve as such for all legal purposes.

The Honourable Benjamin J. Greenberg, Q.C.
Delegate of the Superintendent

Mr. Tim Hill
Counsel for the Senior Analyst;

Messrs. George L. Cooper and David T. Hashey, Q.C.
Counsel for the Trustees
.


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

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