Jacques Roy — February 16, 2004

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
Bankruptcy District
of the Province of Quebec

In re the Disciplinary File of Trustee Jacques Roy

Applicant
Jacques Roy, trustee

Respondent:
Marc Mayrand, Superintendent of Bankruptcy


Decision on motion by preliminary exception to find ss. 14.01, 14.02, and 14.03 of the Bankruptcy and Insolvency Act of no force or effect and to halt the disciplinary proceeding


On November 11, 2003 the trustee applied to the undersigned by preliminary exception to have ss. 14.01, 14.02 and 14.03 of the Bankruptcy and Insolvency Act ("B.I.A.") found to be of no force or effect as to him.

By a motion to dismiss made orally on behalf of the senior analysis, the latter argued that the delegate, the undersigned, had no jurisdiction to assess whether ss. 14.01 and 14.02 B.I.A. are consistent with the Canadian Charter or Rights and Freedoms and the Canadian Bill of Rights. By a decision on December 10, 2003 the undersigned dismissed the motion to dismiss made by counsel for the senior analysis and found that he had the necessary jurisdiction to hear the applicant's motion to have ss. 14.01, 14.02 and 14.03 B.I.A. found to be of no force or effect and to halt the disciplinary proceeding involving the applicant Jacques Roy, trustee.

At that time we concluded that the Superintendent's delegate was required to sit as an administrative tribunal, and as such was by implication authorized to dispose of points of law submitted to him, and had jurisdiction to do so. Accordingly, the delegate had jurisdiction to consider the applicant's motion by preliminary exception to the extent that the motion related to the applicant's right in the case before the delegate.

We ruled that we were available to hear the applicant's preliminary exception as soon as possible.

Preliminary exception and reasons

The applicant trustee's motion by preliminary exception was argued before the undersigned on February 2 and 3 and taken under advisement immediately after the hearing.

A ruling that ss. 14.01 and 14.02 B.I.A. cannot be set up against him and the proceeding should be halted was sought by the applicant pursuant to ss. 1(a) and 2 (e) of the Canadian Bill of Rights, s. 7 of the Canadian Charter of Rights and Freedoms and s. 52(1) of the Constitution Act, 1982. The applicant relied on several reasons, such as appointment during good behaviour and financial security, the constitution of the disciplinary tribunal, the makeup of the disciplinary tribunal, the nature of the decisions which could be made, the procedural guarantees at the hearing, the provisional relief ex parte and a legal argument in favour of a general finding of inopposability and a finding of inopposability based on the non-existence of adequate procedural guarantees in the conduct of the action.

The applicant further sought a finding of inopposability and stay of proceedings on the ground of a particular excess of jurisdiction in the instant case and a finding of inopposability and stay of proceedings under s. 1(a) of the Canadian Bill of Rights and s. 1(8) B.I.A.

In particular, the applicant maintained, the sections in question contained no structural guarantee that he would have a hearing before an independent and impartial tribunal consistent with the rules of fundamental justice guaranteed by ss 1(a) and 2(e) of the Canadian Bill of Rights and by s. 7 of the Canadian Charter of Rights and Freedoms. Their implementation would assure this.

To the extent that under ss. 14.01 and 14.02 B.I.A. the Superintendent of Bankruptcy's delegate has no financial security, these sections, he alleged, contravened [TRANSLATION] "the most elementary requirements as to the impartiality and independence of tribunals and courts".

He alleged there was a breach of ss. 1(a) and 2(e) of the Canadian Bill of Rights and s. 7 of the Canadian Charter of Rights and Freedoms, in as much as the Superintendent of Bankruptcy heard a disciplinary proceeding himself or did not instruct a delegate to do so until after he had considered the result of an investigation and decided that the charges against the trustee were valid, or appeared to be.

He maintained that to the extent that under s. 14.01(2) B.I.A., the Superintendent retained a measure of control over the actions of his delegate, when the Superintendent continued to be one of the parties in the disciplinary hearing, there was a flagrant infringement in the rights of the individual concerned.

As the Superintendent's representative, the delegate had power to order the trustee to repay to the bankruptcy file, thus indemnifying the Superintendent, an amount corresponding to the cost incurred as a result of the actions taken by the Superintendent himself.

In so far as s. 14.01(2) B.I.A. provided that the Superintendent "is not bound by any legal or technical rules of evidence in conducting the hearing", he said, the legislation is defective and of no force or effect under ss. 1(a) and 2(e) of the Canadian Bill of Rights and s. 7 of the Canadian Charter of Rights and Freedoms,

To the extent that s. 14.03 B.I.A. allows the Superintendent to himself create the conditions necessary for holding a hearing and decide himself on the action to be taken, without any judicial or administrative authorization, and to maintain that action in effect without any time limitation, he maintained, the act was contrary to the same constitutional provisions.

Applicant's stipulations

From the outset counsel for the applicant stipulated, for the purposes of the case, that (a) [TRANSLATION] "the challenge" against s. 14.03 B.I.A. was withdrawn; and (b) if s. 2(e) of the Canadian Bill of Rights was not infringed, the same would apply to s. 7 of the Canadian Charter of Rights and Freedoms; as a corollary, if s. 2(e) of the Canadian Bill of Rights had been infringed, s. 7 of the Canadian Charter of Rights and Freedoms had been also.

Sections 14.01 and 14.02 B.P.I

We take the liberty of reproducing the sections in question:

14.01 (1) Where, after making or causing to be made an investigation into the conduct of a trustee, it appears to the Superintendent that

  1. a trustee has not properly performed the duties of a trustee or has been guilty of any improper management of an estate,
  2. a trustee has not fully complied with this Act, the General Rules, directives of the Superintendent or any law with regard to the proper administration of any estate, or
  3. it is in the public interest to do so,

    the Superintendent may do one or more of the following:

  4. cancel or suspend the licence of the trustee;
  5. place such conditions or limitations on the licence as the Superintendent considers appropriate including the requirement that the trustee successfully take an exam or enrol in a proficiency course, and
  6. require the trustee to make restitution to the estate of such amount of money as the estate has been deprived of as a result of the trustee's conduct.

(1.1) This section and section 14.02 apply, insofar as they are applicable, in respect of former trustees, with such modifications as the circumstances require.

(2) The Superintendent may delegate by written instrument, on such terms and conditions as are therein specified, any or all of the Superintendent's powers, duties and functions under subsection (1), subsection 13.2(5), in (6) or (7) or section 14.02 or 14.03.

(3) Where the Superintendent delegates in accordance with subsection (2), the Superintendent or the delegate shall

  1. where there is a delegation in relation to trustees generally, give written notice of the delegation to all trustees; and
  2. whether or not paragraph (a) applies, give written notice of the delegation of a power to any trustee who may affected by the exercise of that power, either before the power is exercised or at the time the power is exercised.

14.02 (1) Where the Superintendent intends to exercise any of the powers referred to in subsection 14.01(1), the Superintendent shall send the trustee written notice of the powers that the Superintendent intends to exercise and the reasons therefor and afford the trustee a reasonable opportunity for a hearing.

(2) At a hearing referred in subsection (1), the Superintendent

  1. has the power to administer oaths;
  2. is not bound by any legal or technical rules of evidence in conduction the hearing;
  3. shall deal with the matters set out in the notice of the hearing as informally and expeditiously as the circumstances and a consideration of fairness permit; and
  4. shall cause a summary of any oral evidence to be made in writing.

(3) The notice referred to in subsection (1) and, where applicable, the summary of oral evidence referred to in paragraph (2)(d) together with such documentary evidence as the Superintendent receives in evidence, form the record of the hearing and the record and the hearing are public, unless the Superintendent is satisfied that personal or other matters that may be disclosed are of such a nature that the desirability of avoiding public disclosure of those maters, in the interest of a third or in the public interest, outweighs the desirability of the access by the public to information about those matters.

(4) The decision of the Superintendent after a hearing referred to in subsection (1), together with the reasons therefor, shall be given in writing to the trustee not later than three months after the conclusion of the hearing, and is public.

(5) A decision of the Superintendent is deemed to be a decision of a federal board, commission or other tribunal that may be reviewed and set aside pursuant to the Federal Courts Act.

Key points

Before looking at the arguments made by and for the applicant, we feel it would be better to examine certain key points resulting from the Quebec Court of Appeal's judgment on October 30, 2003 in Métivier v. Mayrand, 200-09-004077-027 (C.A.) and J.E. 2003-2128 (summary) and from the Supreme Court of Canada's judgment in Martin (Nova Scotia (Workers' Compensation Board) v. Martin, 2003 C.S.C. 54 and 231 D.L.R. (4th) 385).

In Métivier, the Court was asked to find that ss. 14.01 and 14.02 B.I.A. were of no force or effect because they were contrary to s. 2(e) of the Canadian Bill of Rights.

Functioning in a very narrow jurisdiction of framework because it was limited solely to considering the validity of the legislation, the Court, although empowered to rule on the intrinsic validity of ss. 14.01 and 14.02, could not take any account of the practice established by the Superintendent to give effect to those sections.

Although warned that he could not use the practice laid down by the Superintendent to decide whether the sections in questions were consistent with s. 2(e) of the Canadian Bill of Rights, the Superior Court judge nevertheless referred to the practice established by the Superintendent in determining the validity of the sections in question, thereby usurping the exclusive jurisdiction of the Federal Court.

The Court was limited solely to the legislation conferring a disciplinary role on the Superintendent and could not extend its application to the way in which in practice the Superintendent exercised the powers deriving from the sections in question.

The Court of appeal recognized that ss. 14.01 and 14.02 B.I.A. set out the action which the Superintendent could take concerning the trustee, the grounds on which he could take that question and the procedure he must follow before imposing it, including the requirement that the trustee be given an opportunity to be heard. Further, s. 14.01(2) authorizes the Superintendent to delegate any or all of the powers conferred on him by ss. 14.01 and 14.02, while leaving great flexibility in the way he performs his function of supervising the disciplinary process. The Court considered it seemed clear that Parliament had deliberately assigned to the Superintendent the functions of investigation, prosecution and decision affecting everything involving the conduct of bankruptcy trustees.

The question remained whether this legislative structure was inconsistent with s. 2(e) of the Canadian Bill of Rights.

The Court of Appeal, per René Dussault J.A., considered that:

[TRANSLATION]

In so far as s. 14.01(2) authorizes the Superintendent to delegate the functions conferred on him, so that it will be different persons who exercise these various functions free of the influence of others, the appellant's objection to the combining of functions enacted by ss. 14.01 and 14.02 does not justify the Court finding them to be of no force or effect because they are inconsistent with s. 2(e) of the Bill, protecting his right to a hearing before an impartial tribunal.

In this connection, it will suffice to note that on account of the power of delegation contained in s. 14.01(2), these sections are neutral, and to recall the rule stated for the first time by Lamer J. in Slaight Communications v. Davidson, [1989] 1. S.C.R. 1038, at 1078, (majority reasons on this point), followed by the Court in Eaton v. Brant County Board of Education, [1997] 1. S.C.R. 241, at para. 3, and applied in Régie (2747-3174 Québec Inc. v. Régie des alcools, [1996] 3 S.C.R. 919, at paras. 46–48) that neutral legislation should be interpreted as not authorizing breaches of a person's constitutional or quasi-constitutional rights.

To the extent that the power of delegation mentioned in s. 14.01(2) authorizes the Superintendent to delegate powers conferred on him in ss. 14.01 and 14.02 in such a way that, as in the case at bar, he can have no personal part to play in their application, those sections contained an implementing provision which, in such a case, makes any question of the independence of the Superintendent himself an academic one. Since nothing in the B.I.A. connects the independence of the delegate with that of the Superintendent, it is not the Superintendent's independence that matters, but that of the person to whom he delegates the decision-making function. As they stand, therefore, ss. 14.01 and 14.02 do not infringe the appellant's right to a hearing before an independent tribunal protected by s. 2(e) of the Canadian Bill of Rights simply because s. 5(1) states that the Superintendent is appointed during good behaviour and his salary is set by the Governor in Council.

The Court considered that on its face the Bankruptcy and Insolvency Act did not support a conclusion that, regardless of the practice established, the Superintendent could not act as supervisor of the system for disciplining bankruptcy trustees conferred on him by s. 14.01 and 14.02 without infringing their right to an impartial hearing protected by s. 2(e) of the Canadian Bill of Rights.

René Dussault J.A. concluded:

[TRANSLATION]

Nevertheless I consider, in the context of the current discussion limited solely to reviewing the legislative provisions, to the exclusion of the practice established, that it will suffice for ss. 14.01 and 14.02 at issue to be found consistent with s. 2(e) of the Canadian Bill of Rights if they are neutral and enable the Superintendent to organize a procedure consistent with the appellant's right to an impartial hearing.

In other words, the Superior Court, and by extension the Court of Appeal, could not rule on the way in which the sections in question were applied in practice, and the wording of ss. 14.01 and 14.02, as it stood, was consistent with the Canadian Bill or Rights.

In Martin, supra, Charles D. Gonthier J. stated as a premise in para. 48:

The first question is whether the administrative tribunal has jurisdiction, explicit or implied, to decide questions of law arising under the challenged provision … If the tribunal is found to have jurisdiction to decide questions of law arising under a legislative provision, this power will be presumed to include jurisdiction to determine the constitutional validity of that provision under the Charter.

At para. 33, he wrote:

When a case brought before an administrative tribunal involves a challenge to the constitutionality of a provision of its enabling statute, the tribunal is asked to interpret the relevant Charter right, apply it to the impugned provision, and if it finds a breach and concludes that the provision is not saved under s. 1, to disregard the provision on constitutional grounds and rule on the applicant's claim as if the impugned provision were not enforced.

As a general rule, he added at para. 34:

… as a rule, "an administrative tribunal which has been conferred the power [sic] to interpret law holds a concomitant power to determine whether that law is constitutionally valid"

At para. 31, Gonthier J. pointed out:

A determination by a tribunal that a provision of its enabling statute is invalid pursuant to the Charter is not binding on future decision makers, within or outside the tribunal's administrative scheme. Only by obtaining a formal declaration of invalidity by a court can a litigant establish the general invalidity of a legislative provision for all future cases. Therefore, allowing administrative tribunals to decide Charter issues does not undermine the role of the courts as final arbiters of constitutionality in Canada.

By a decision on December 10, 2003 the undersigned, as the person appointed to an administrative tribunal, dismissed the motion to dismiss made by the analyst and found that he had the necessary jurisdiction to hear the merits of the motion by the applicant Jacques Roy to have ss 14.01, 14.02 and 14.03 B.I.A. declared to be of no force or effect.

It follows from Martin and Métivier, supra, and from the conclusions in the decision by the undersigned on December 10, 2003, that in exercising the functions which he performs in accordance with Martin, supra, the delegate clearly cannot disregard, ignore or distinguish already existing precedents in this area, and in particular Métivier, finding ss. 14.01 and 14.02 B.I.A. to be valid.

Any challenge to the neutral sections in question, the wording of which was found in Métivier, supra, to be consistent with the Canadian Bill of Rights, could not be upheld by the undersigned as a delegate and within the limits of his jurisdiction in the matter, as set forth in Martin, supra.

Five practical considerations

Accordingly, that leaves only five "practical" considerations on which the applicant relied in his motion by preliminary exception. First, the applicant argued that in practice the delegate does not enjoy the necessary independence as the contract covering him does not give him security during good behaviour and/or sufficient financial security: the delegate's position may be cancelled without valid reason.

Secondly, the applicant maintained that in practice the delegate's impartiality was compromised as a result of a decision by the late François Rioux, the former delegate in the instant case, who allegedly [TRANSLATION] "on his own initiative, without informing the trustee in question or his counsel … decided to reconsider a prior decision and grant the complainant Marcel Paris the status of intervener".

Thirdly, as in the circumstances the applicant was relieved of his duties as trustee in respect of the assets of the debtor company Distribution Sunliner (1985) Inc. on July 23, 1997, the undersigned, in view of the fact that on September 30, 1997 a new provision of the Bankruptcy and Insolvency Act came into effect stating that the discharge of a trustee "does not have the effect of preventing the holding of a hearing or taking of measures covered by subsection 14.01(1)", clearly could not still hold the hearing.

Fourthly, the tribunal has no power of constraint.

Fifthly, the Superintendent clearly cannot order the trustee to repay any amount whatever to the bankruptcy file, [TRANSLATION] "thus indemnifying the Superintendent".

Security of tenure and financial security of delegate.

The applicant alleged that the contract of service signed between Her Majesty the Queen and the undersigned on October 15, 2003, although consistent with ss. 14.01 and 14.02 B.I.A., provided that the delegate would exercise the powers delegated to him by the Superintendent and contained in the instrument of delegation given to him. He maintained that the delegate had no financial security either for the complete performance of the contract he was awarded or for the obtaining of later contracts, the awarding of which depended entirely on the discretion of the Superintendent of Bankruptcy himself, appointed by the privy council during pleasure.

Noting that a contract appointed on September 20, 1993 appointing Robert Archambault as delegate had subsequently been cancelled and that an action brought by Mr. Archambault for reimbursement of the full amount of the contract was dismissed by the Superior Court on August 2, 1996 on the grounds that the contract could be revoked at any time during its life and that Mr. Archambault could only claim for the work done up to the date of its revocation, the applicant argued that the undersigned had no financial security either for complete performance of the contract awarded or for the obtaining of later contracts, the awarding of which depended entirely on the discretion of the Superintendent of Bankruptcy.

We feel that, unlike the contract applicable to Mr. Archambault, which stated that [TRANSLATION] "the Minister may, by giving notice in writing to the contractor, halt or suspend the performance of all or any part or parts of the work", the contract appointing the undersigned provides in clause 5.1 of Appendix A:

[TRANSLATION]

Her Majesty may inform the contractor in writing that she has cancelled the contract. The delegation of powers and functions concerning the supervision of bankruptcy trustees given to the contractor may be revoked in writing by Her Majesty or the Superintendent if they conclude that the contractor:

(c)  has not performed his duties under the contract in a suitable manner;

(d)  because of his conduct or for some other reason, is in a position which is inconsistent with the performance of his duties under the contract in a suitable manner.

We see nothing in this phraseology that promotes insecurity or is likely to work against the delegate's security of tenure, so that a reasonable person would be likely to conclude that a trustee would of necessity be deprived of his right to a fair and impartial hearing. Most importantly, the removal of an adjudicator or delegate must not simply be at the pleasure of the executive.Footnote 1

Impartiality of delegate

The applicant also questioned the decision made by the late François Rioux, as delegate, without his knowledge to allow Marcel Paris to be heard as a witness at the hearing [TRANSLATION] "so I can undertake a complete assessment of the public interest at issue in this case".

Mr. Rioux's letter of July 2, 2003 speaks for itself. If any party has an objection to make to all or part of Mr. Paris' testimony, or wishes to make representations following that testimony, they retain the right to do so at the hearing. We consider that in this way the rules of procedural fairness will remain intact and will be observed. Clearly a party cannot in this regard ask that a disciplinary process held under neutral sections be completely and finally halted even before the case is heard. The argument is premature and hypothetical.

Discharge of trustee

The applicant noted that he was discharge from his duties as trustee in respect of the assets of the debtor company Distribution Sunliner (1985) Inc., and under the Bankruptcy and Insolvency Act in effect at the time, the discharge of a trustee by the Court carried with it immunity against any charge or subsequent action regarding his administration. Thus, under s. 41(8):

The discharge of a trustee discharges him from all liability

  1. in respect of any act done or default made by him in the administrative of the property of the bankrupt, and
  2. in relation to his conduct as trustee,

But any discharge may be revoked by the Court on proof that it was obtained by fraud or by suppression or concealment of any material fact.

A new provision of the Bankruptcy and Insolvency Act was inserted into s. 41 on September 30, 1997, to read as follows:

The applicant argued that s. 41(8.1) is inapplicable here since the discharge of the applicant in Distribution Sunliner (1985) Inc. was made before it came into effect.

According to the applicant, the Superintendent of Bankruptcy has absolutely no authority to circumvent the peremptory provisions of the Bankruptcy and Insolvency Act so as to reopen a case which was considered, disposed of and commented on by the official receiver at the proper time, that is, before the date of discharge of the trustee. Accordingly, the only exception that could be applicable to revoke his discharge would be that the discharge was obtained by fraud. The addition of s. 41(8.1) in 1997 created a second exception beginning on September 30, 1997, which should be added to that of fraud dealt with in s. 41(8). Accordingly, in the applicant's submission, the trustee's immunity based on the judgment of discharge by the Quebec Superior Court sitting in bankruptcy on July 23, 1997 was an estoppel to the holding of any disciplinary proceeding regarding the trustee Jacques Roy in the case of Distribution Sunliner (1985) Inc.

The authorities are clear regarding non-retroactivity in criminal matters. There is no doubt about this.Footnote 2 At the same time, it is also clear that if legislation makes specific provisions for an offence which formerly was only covered in general terms, the accused cannot plead that the new legislation is not retroactive.Footnote 3 In a judgment in Friedman & Friedman, Harry Bick et al. (FCTD-1600-99), on January 25, 2001, J.E. Dubé J. of the Federal Court of Canada Trial Division wrote the following:

Although subsection 48(1) of the Act discharges the trustee from all liability in respect of any act or default in the administration of a bankrupt property and in relation to his conduct as trustee, the subsection does not cover all the Superintendent's powers of supervision under section 14.01 et seq. of the Act. It is the Superintendent who has the exclusive authority to issue trustee licences and to make the obtaining of such licences subject to certain conditions. In return for the privilege of exercising the profession of trustee, a trustee must demonstrate the highest degree of professionalism and integrity.

As indicated by the defendant Leduc, the discharge order made by the Superior Court only affects the trustee's conduct in respect of third parties and any person who has an interest in the bankruptcy. Any other conclusion would ultimately amount to recognizing that the Superior Court has the power to place trustees in bankruptcy beyond the reach of any disciplinary sanction, and this would usurp the Superintendent's jurisdiction. It would be contrary to the public interest to allow a defaulting trustee to avoid disciplinary sanctions once the Superior Court has discharged him or her in respect of third parties and any persons having an interest in the bankruptcy. In my view, the new subsection 41(8.1) of the Act, though it does not apply in the case bar, is consistent with this situation.

In that case, the Quebec Superior Court had allowed the trustee's application for discharge on March 19, 1997. On November 12, 1997, and so after the new provision, s. 41(8.1), came into effect, the Superintendent announced his intention of holding an inquiry into the administration of the bankruptcy pursuant to ss. 10 et seq. of the Act. The trustees argued that s. 41(8.1) of the Act did not apply to the matter, since it was not in effect at the time the trustees were discharged and it was not retroactive in its application. The Federal Court judge considered that s. 41(8.1) was not retroactive in effect and could not be applied. However, the judge concurred in the view of the Superintendent that s. 41(8.1) of the Act only clarified the rule that the Superintendent had disciplinary jurisdiction over the conduct of trustees and that discharge of the administration of the assets of a bankruptcy (even before September 30, 1997) did not have the effect of prohibiting conduct of the proceeding covered by s. 41(8.1) of the Act.

As a delegate to an administrative tribunal, I clearly cannot ignore what appears to be the only decision on the point by a court of record. My interlocutory decision is to allow the evidence presented regarding the management by the trustee of the property of the debtor Distribution Sunliner (1985) Inc.

Delegate's inability to compel witnesses

Once again, the applicant raised what in his view could present a problem although in practice the question is not raised in this case. Further, the Attorney General of Canada referred us to Re First Investors Corp. Ltd. (No. 2), 46 D.L.R. (4th)) 687, in which Berger J. wrote:

« One of the powers exercised by a superior court as part of its inherent jurisdiction is the right to order production of documents by way of a subpoena duces tecum. This power has been used to assist inferior tribunals to order production of documents. As Lord Denman C.J. said in The Queen v. Greenaway (1845), 7 Q.B. 126 at p. 134, 115 E.R. 436 at p. 439:

"This Court has in all times lent its aid to inferior tribunals, where they have wanted the means of enforcing the attendance of witnesses. If viva voce evidence is alone required, the ordinary subpoena ad testificandum will attain the object: if documents are wanted, recourse must be had to the equally well known writ of subpoena duces tecum." »

Under s. 3 of the Act Respecting the Federal of Canada, vol. VI, c. F-7, the Federal Court is confirmed as "a superior court of record having civil and criminal jurisdiction". As such, the Federal Court of Canada has the power to assist federal boards and if necessary to issue a subpoena directing a person to appear before the Superintendent's delegate.

In the meantime, the trustee can only raise a hypothetical problem which will probably not arise at the hearing of the case on the merits.

Reimbursement to estate

Although Métivier, supra resolve the question of the consistency of ss. 14.01 and 14.02 B.I.A. with the Canadian Bill or Rights, and hence with the Canadian Charter of Rights and Freedoms, we cannot pass over without comment the trustee's allegation that under s. 14.01 B.I.A. the delegate has power to order to make restitution [TRANSLATION] "to the bankruptcy file, thereby indemnifying the Superintendent" of an amount corresponding to the cost incurred as a result of actions taken by the Superintendent himself.

If any doubt persists as to the meaning of para. (f), it is quickly resolved by reading the English version of the section, indicating that the trustee may be required to make restitution to the estate of such amount of money as the estate has been deprived of as a result of the trustee's conduct. For the undersigned, the French version is equally clear: the restitution is not made even indirectly to the Superintendent.

The question of whether the Superintendent is entitled to ask the trustee to make restitution will not have to be considered by us until such time as the Superintendent requests that this be done.

For all these reasons, the applicant's motion by preliminary exception to have ss. 14.01, 14.02 and 14.03 of the Bankruptcy and Insolvency Act found to be of no force or effect is dismissed. The case will accordingly be heard on the merits as soon as possible.

Montréal, February 16, 2004

Hon. Lawrence A. Poitras, Q.C.
Superintendent's delegate


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

Date modified: