Sydney H. Pfeiffer and Pfeiffer & Pfeiffer Inc. — October 29, 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
Province of Quebec
District of Montreal

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

Opposing:
Ms. Sylvie Laperrière
Senior Analyst in the Sainte-Foy
District Office of the Office of the
Superintendent of Bankruptcy
(hereinafter "the Senior Analyst")

And

Sydney H. Pfeiffer
And
Pfeiffer & Pfeiffer Inc.
(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 53 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 Superintendentto 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. At a Preliminary Conference presided by the undersigned and held on , there were also present Mtre Allan Matte, counsel for the Senior Analyst, and Mtre Aaron G. Rodgers, counsel for the Trustees.
  10. Formal Minutes of that Preliminary Telephone Conference were thereafter prepared by the undersigned and transmitted to counsel on .
  11. At that Preliminary Hearing, we provisionally fixed the Merits Hearing for the two weeks of and .
  12. .By his letter submission of , Me Rodgers filed his Motion for a Stay of the Proceedings herein "pending final judgment by the Federal Court of Canada concerning docket number T-1094-04 and the Superior Court of Quebec, Commercial Division concerning the taxation of receipts and disbursements".Footnote 2
  13. The Federal Court proceeding filed by the Trustees and referred to above attacks the validity of the decision of the Superintendent to appoint the Senior Analyst to carry out the investigation leading to the proceedings herein.
  14. Counsel for the Trustees argued that should the Federal Court ultimately rule that the decision to investigate the Trustees was invalid or illegal, the same invalidity or illegality would apply to the delegations by the Superintendent both to the Senior Analyst and the undersigned Delegate.
  15. Morever, based on the legal principle of lis pendens, Me Rodgers evoked the "clear possibility of conflicting judgments" as between, on the one hand, the undersigned and the Federal Court of Canada and, on the other hand between the undersigned and the Quebec Superior Court.
  16. In his written submission, Me Rodgers also reviewed the jurisprudence which established the threefold test to determine if a request for a stay of proceedings should be granted, namely:
    1. is there a serious issue to be tried;
    2. will the applicant suffer irreparable harm if the stay is not granted; and
    3. the balance of convenience.
  17. In his written response dated Me Matte advanced his arguments. He cited the judgment in Anheuser-BuschFootnote 3 to the effect that, although as part of his inherent authority to control the process before him the Superintendent or his delegate has the right to adjourn a hearing on procedural grounds, he does not have the authority to grant a stay of proceedings pending the conclusion of related litigation.
  18. Me Matte also contested the argument advanced by the Trustees based upon lis pendens, for which there is a threefold test:
    1. identity of parties;
    2. identity of object; and
    3. identity of cause.
  19. He argued that although here there is identity of parties and the same facts, there is no identify of object between, on the one hand, these proceedings and, on the other hand, those before the Federal Court and the Quebec Superior Court. Each one seeks different relief.
  20. An analogy to the situation here would be a case of a criminal assault charge against A for having assaulted B and a civil claim by B against A for the damages sustained by him as a result of the assault. Although both legal processes stem from the same set of facts, each one seeks different relief in a different legal jurisdiction and there would be no lis pendens.
  21. For all those reasons, we agree with the position of counsel for the Senior Analyst in regard to the question of lis pendens.
  22. As to our jurisdiction to grant a Stay of Proceedings, we have studied in depth the decisions of delegates Kaufman, Meyer and Poitras.Footnote 4
  23. Generally, these decisions held that a delegate of the Superintendent does not have the jurisdiction to grant a Stay of Proceedings since to do so would be a refusal to exercise his jurisdiction under the Act and his delegation.
  24. We agree and therefore conclude that we do not have that jurisdiction.
  25. If it should be determined by higher judicial authority that we indeed have the jurisdiction to grant a Stay of Proceedings, in view of the directive in Section 14.02 of the Act which calls for a "speedy and expeditious" hearing, we would exercise our said jurisdiction by refusing a Stay of Proceedings in the circumstances of this case.
  26. At the Oral Hearing referred to in footnote 2 above, Me Rodgers presented a subsidiary motion, should we refuse to grant a Stay of Proceedings. That is, he requested an adjournment (postponement) of the Merits Hearing until the final decision of the Federal Court concerning the Trustees.
  27. After study and consideration, we conclude that such a request for an adjournment (postponement) is a disguised request for a Stay of Proceedings and must also be refused.
  28. However, we are of the view that when such an adjournment is requested, a delegate can always grant less, i.e. an adjournment to a given date, as part of the exercise by the delegate of his unchallenged authority to control the process before him.
  29. Because of the schedules and commitments of both counsel and the undersigned, we believe that at this late date it would be unfair to counsel for the Trustees to force on the Merits Hearing on the dates referred to in paragraph 11 above.
  30. Seeing those Schedules and Commitments, we will fix the Merits Hearing, based on the availability of counsel, the parties and the witnesses, to any two consecutive weeks during the five-week period from to . We will consult with counsel to determine the exact dates for the two week Merits Hearing within that five-week timeframe.

    Conclusions

  31. For All the above Reasons, the Motion presented by counsel for the Trustees for a Stay of Proceedings is hereby Dismissed.
  32. For All the above Reasons, the Subsidiary Motion presented by counsel for the Trustees for an adjournment (postponement) tied to the completion of the proceedings brought by the Trustees before the Federal Court of Canada is Dismissed as Such, but is Granted in Part in that the Merits Hearing is hereby adjourned to two consecutive weeks during the five-week period from to , to be definitively established after consultation with counsel.

    Closing Provision

  33. 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

Mtre Allan Matte
Counsel for the Senior Analyst;

Mtre Aaron G. Rodgers
Counsel for the Trustees.


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

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