Edward Bryce Quon; Quon & Associates Ltd.
Directions for Conservatory Measures to TD Canada Trust, 100, King St. W., Hamilton, Ontario—February 24, 2006

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:
Quon and Associates Ltd.
Edward Bryce Quon


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 Edward Bryce Quon (the trustee) is the holder of an individual license as trustee in bankruptcy;

Whereas Quon and Associates Ltd. (the trustee) is the holder of a corporate trustee license;

Whereas the investigations made by the Superintendent pursuant to paragraph 5(3)(e) of the Act revealed that the administration of all the open estates filed under the trustee's licence had been ongoing for a period exceeding three years;

Whereas the investigations made by the Superintendent pursuant to paragraph 5(3)(e) of the Act revealed a number of contraventions in the trust fund banking and general administration aspects of the trustee's administration of his estates;

Whereas the Toronto Division Office of the Superintendent of Bankruptcy conducted a monitoring of Quon and Associates Ltd. on August 20 and 21, 2002 where cash receipts were identified without being deposited to their respective estate trust bank accounts;

Whereas the Toronto Division Office of the Superintendent of Bankruptcy did not receive a satisfactory response from the trustee regarding discrepancies between estate ledgers, cash receipts book records, bank deposit slips and estate bank statements following correspondence exchanged in August 2002;

Whereas the Toronto Division Office of the Superintendent of Bankruptcy requested a special audit of Quon and Associates Ltd. to determine the extent of the serious deficiencies discovered during the monitoring visit of August 2002;

Whereas the special audit started on September 23, 2002 and on October 6, 2002, the auditor reported in part that:

  • further cash receipts were not deposited to their respective estate trust bank accounts in accordance with the requirements of the Act;
  • a significant number of bank accounts are not held in trust;
  • a significant sum of money is invested in GIC's without being able to match the amount invested to the estate ledgers or estate bank statements;

Whereas a review of the estate files on December 19, 2005 revealed that the trustee has failed to remedy many of the problems reflected in the earlier audit;

Whereas the trustee has allowed the corporate charter to lapse and has failed to take any steps to rectify the situation as required by the Acting Senior Division Assistant Superintendent in her letter of November 22, 2004;

Whereas the trustee has failed to provide proof of insurance coverage for liability and fidelity or employee dishonesty and this, together with the lapse of the corporate charter, raises serious concerns as to the availability of such insurance, as required under the Bankruptcy and Insolvency Act;

Whereas the trustee has a large number of estates which have remained open for an excessive period of time;

Whereas the trustee failed to submit a Closing Plan, as required by the Acting Senior Division Assistant Superintendent, most recently in her letter of November 22, 2004;

Whereas recent information has raised concerns that the individual trustee may not be solvent, as required by the Bankruptcy and Insolvency Act;

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 in 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;

Whereas subsections 14.03(1)(b) and (c) and (2)(b) the Act apply;

I, Ann Speers, Assistant Superintendent, Trustee Compliance, in my capacity as delegate for the Superintendent, direct:

TD Canada Trust, branch located at 100, King St. W., Hamilton, Ontario, L8N 1A8:

  • to consider upon receipt of the present directions, Mr. Glenn Steiner, agent of the Office of the Superintendent of Bankruptcy, as the only authorized signatory for all the transactions on monies credited to the estates of bankruptcies and proposals administered by Edward Bryce Quon and Quon and Associates Ltd.;
  • 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 Edward Bryce Quon /Quon and Associates Ltd. without the signature of Mr. Glenn Steiner;
  • 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 signed by Mr. Glenn Steiner;

These directions replace and annul those dated January 21, 2006 that were previously delivered to you.

These directions take effect immediately and will stay in place until further notice.

In accordance with section 14.03(3) of the Act, these directions bind the TD Canada Trust, branch located at TD Canada Trust, branch located at 100, King St. W., Hamilton, Ontario, which must comply with them.

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 Toronto Ontario this 24th day of February, 2006.

Ann Speers
Assistant Superintendent, Trustee Compliance

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