Edward Bryce Quon; Quon & Associates Ltd.
Directions for Conservatory Measures to TD Canada Trust, Rexdale CBC, 2038 Kipling Avenue, Rexdale, Ontario, M9W 4K1—October 7, 2011

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 and , 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 and on , 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; and,
  • 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 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 ;

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 ;

Whereas 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 at section 14.03(1) of the Act, in the circumstance referred to in section 14.03(2), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;

Whereas paragraph 14.03(2)(b) of the Act applies;

I, Karen Smith, in my capacity as delegate for the Superintendent, direct TD Canada Trust, Rexdale CBC, 2038 Kipling Avenue, Rexdale, Ontario, M9W 4K1 that, pursuant to sections 14.03(1)(b) and (c) of the Act:

  1. it consider upon receipt of the present directions, Abubakar Khan, Guardian Trustee, as the only authorized signatory as relates to any operations on the funds credited to the estates of bankruptcies and proposals administered by Quon and Associates Ltd. or Edward Bryce Quon.
  2. it 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 Quon and Associates Ltd. or Edward Bryce Quon without the signature of Abubakar Khan, Guardian Trustee;
  3. it not pay out of these accounts: cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions that are presented for payment after the receipt of these directions, without these cheques, bills of exchange, bank drafts or other instruments being signed by Abubakar Khan, Guardian Trustee;
  4. it submit all statement of accounts, accepted cheques and other documents or information having to do with the above-mentioned estate trust bank accounts to Abubakar Khan, Guardian Trustee, Office of the Superintendent of Bankruptcy, 25 St. Clair Avenue East, Suite 304, Toronto, Ontario, M4T 1M2;

That these directions take effect immediately and will remain in effect until such time as the undersigned is satisfied that they are no longer required;

That in accordance with section 14.03(3) of the Act, these directions bind TD Canada Trust, which must comply with them;

That, pursuant to section 14.03(4) of the Act, a person who complies with this direction is not liable for any act done by that person only to comply with this direction.

Signed at the City of Toronto, Ontario, this 7 day of October, 2011


space to insert signature

Karen Smith
Assistant Superintendent


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

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