Todd Y. Sheriff and Segal & Partners, Inc. —

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 professional discipline proceedings under the Bankruptcy and Insolvency act involving Todd Y. Sheriff, an individual licensed trustee, and Segal & Partners, inc., a corporate licensed trustee.

In my interlocutory Decision given on , I noted (on pages 7 and 10) that while the Senior Analyst acknowledged that certain materials in her possession had not been disclosed to the Respondent, she claimed that they were privileged, confidential and, in any case, irrelevant, and therefore exempt from disclosure. I took these claims under advisement, and said that I would "decide the questions raised once I have received and reviewed the documents in question," which Mr. Matte, counsel for the Senior Analyst, undertook to furnish.

On , Mr. Matte wrote to me and stated, in part, as follows:

I am writing to you further to our attendance before you earlier this month in Toronto, and further to your decision dated . As you will no doubt recall, counsel for the trustee had suggested, and I had agreed, to provide you those notes prepared by Ms. Speers which have not been produced to Counsel for the trustees on the grounds of privilege. The purpose for doing so was to resolve the question of whether these notes are subject to solicitor-client privilege, or are irrelevant.

I have consulted with my superiors on this matter: the Crown maintains her privilege with respect to these notes and is not prepared to disclose them. As an alternative, and in order to facilitate this stage of the proceedings, we offer the following information which sets out the basis for the Crown's claim of solicitor-client or litigation privilege in relation to each of the documents at issue.

What follows is a description of six documents, five of them dated , , May without date, and , and one undated, but believed to have been prepared on .

Counsel for the trustees object to this revised proposition by the Crown, noting, inter alia, that my Decision "was made on consent of the Parties," and that "[i]t is not open for the Superintendent, after submissions have been made and your order issued, to now attempt to withdraw that consent." The normal process, counsel stress, involves three steps and there is no reason why this should not be followed in the present case:

  1. The party claiming privilege must list the privileged documents, including a description of such documents;
  2. The party claiming the privilege produces the privileged documents to the Court on a voire dire;
  3. The Court reviews the documents in question to determine, on a document by document basis, whether privilege attaches in the circumstances.

In support, counsel for the trustees point to Samson Indian Nation and Band v. Canada, [2001] F.C.J. No. 1115, where MacKay J. held as follows (at para. 5):

Then, as the case management process was winding down, the plaintiffs asked that the documents then claimed as privileged be reviewed by the Court on a document by document basis. That is the process approved, for the resolution of differences over claims of privilege, by the Supreme Court of Canada in Descôteau et al. v. Mierzwinski.

On the other hand, as Mr. Matte points out, Rule 30.04(6) of the Ontario Rules of Civil Procedure states that the Court may inspect a document to determine the validity of a claim of privilege but, as Master Peppiat said in Falconbridge Ltd. v. Hawker Siddeley Diesels & Electrics, Ltd., [1985] O.J. No. 1646, disputes of this nature should, whenever possible, be determined "from the affidavit of documents and other supporting material."

I do not think that these two rulings are incompatible, and while I agree that the course of action taken by MacKay J. is the ultimate way of resolving issues of privilege, I see no reason why a less formal procedure might not, in appropriate cases, be utilized.

In my view, this is one of those cases, and I accept the description of the six documents set out by Mr. Matte in his letter dated . It seems clear to me that the Senior Analyst is entitled to rely on solicitor-client privilege in four of the cases, and litigation privilege in the remaining two. No useful purpose would therefore be served if I were to examine these documents.

I realize that this is contrary to what I said in my previous Decision (where I gave effect to the Crown's offer to furnish me with the material in question), but at that point I did not have the detailed description of the items that has now been furnished. It would have been better, of course, if the questions of privilege could have been argued at the hearing in June, but no harm has been done and no injustice has been caused to the parties. In any case, as section 14.02(2) of the Bankruptcy and Insolvency Act provides, at hearings held in virtue of subsection (1), the Superintendent or his delegate is not bound "by any legal or technical rules of evidence," and he or she shall deal with all matters "as informally and expeditiously as the circumstances and a consideration of fairness shall permit."

The claim of privilege over the six documents set out in Mr. Matte's letter is, therefore, maintained.

Given in Toronto this 9th day of .

HON. FRED KAUFMAN, Delegate

Counsel for the Senior Analyst: Allan Matte, Industry Canada Legal Services

Counsel for the Trustees: Craig R. Colraine and Joanna Birenbaum, Birenbaum, Steinberg, Landau, Savin & Colraine, L.L.P.

Counsel for the Attornery General of Canada: Valerie Anderson, Department of Justice, Toronto.


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

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