Directive No. 31

Procedure Governing Trustee Professional Conduct Proceedings

Date:

To: Trustees and Registrars

Subject: Overview of Trustee Professional Conduct Proceedings, and Directive No. 31, Procedure Governing Trustee Professional Conduct Proceedings

This is to inform you of the coming into force of a new policy and directive concerning trustee professional conduct matters.

The Overview of Trustee Professional Conduct Proceedings (the Policy), and Directive No. 31, Procedure Governing Trustee Professional Conduct Proceedings (the Directive), reflect the OSB's commitment to effectively investigate and resolve allegations of professional misconduct by trustees through a fair, expeditious, transparent, interactive and efficient process.

The Policy and Directive have been informed by input from stakeholders, including the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), following the publication of consultation drafts in December 2012.

Key elements of the new Policy and Directive include:

  • Priority on resolving professional conduct matters informally where appropriate;
  • Specific opportunities for resolution during the investigation phase;
  • An opportunity to pursue mediation by a third party, prior to formal adjudication; and
  • New provisions concerning disclosure and a pre-hearing, to facilitate an effective process at the adjudication stage.

If you require further information regarding the Policy or Directive, please do not hesitate to contact the Office of the Superintendent of Bankruptcy Registry at:

155 Queen Street, 4th floor
Ottawa ON K1A 0H5
Telephone: 613-941-2694
Facsimile: 613-946-9205
Teletypewriter: 1-866-694-8389
Email: ic.osbregistry-greffebsf.ic@canada.ca

William R. James
Superintendent of Bankruptcy


Issued:

Interpretation

  1. In this Directive,
    • "Act" means the Bankruptcy and Insolvency Act;
    • "adjudicator" means the Superintendent of Bankruptcy or an individual or a panel of individuals who have been delegated authority pursuant to subsection 14.01(2) of the Act by the Superintendent of Bankruptcy to conduct a trustee professional conduct proceeding under sections 14.01 and 14.02 of the Act;
    • "investigator" means an employee working in the OSB who is assigned to investigate the professional conduct of a trustee pursuant to paragraph 5(3)(e) of the Act;
    • "Notice" pursuant to 14.02(1) of the Act means written notice of the powers that the Superintendent may exercise, with reasons identifying the relevant issues, the nature of the evidence against the trustee, the potential consequences to the trustee, and affords the trustee a reasonable opportunity for a hearing;
    • "oath" includes a solemn affirmation within the meaning of subsection 14(1) of the Canada Evidence Act;
    • "OSB" means the Office of the Superintendent of Bankruptcy;
    • "party" means either the investigator or the trustee;
    • "proceeding" means the trustee professional conduct proceeding held pursuant to sections 14.01 and 14.02 of the Act;
    • "registry" means the OSB office responsible for the maintenance of official records of trustee professional conduct proceedings;
    • "trustee" means a trustee as defined in section 2 of the Act.

Authority and Purpose

  1. This Directive is issued pursuant to the authority of paragraphs 5(4)(c)and (d.1) of the Act for the purpose of clarifying the process governing any proceeding.
  2. This Directive is to be interpreted in accordance with all relevant sections of the Act. 

General

Conflict

  1. Where this Directive conflicts with a federal statute or regulation applicable to the proceeding, that statute or regulation prevails.

Computation of Time

  1. The computation of time under this Directive is governed by sections 26 to 29 of the Interpretation Act.

Representation by Counsel

  1. Any party may be represented by counsel.

Powers of the Adjudicator

  1. Pursuant to subsection 14.02(2) of the Act, the adjudicator:
    • is not bound by any legal or technical rules of evidence in conducting the hearing; and
    • 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.
  2. The adjudicator may exercise any of his/her powers granted under the Act or pursuant to the authority of this Directive on his/her own initiative or at the request of a party.
  3. The adjudicator has authority pursuant to this Directive to:
    • (a) determine issues of procedure or process as may arise with respect to the proceeding; and
    • (b) extend or abridge time limits fixed under this Directive.
  4. The adjudicator may, at the request of a party or on his/her own initiative at any time and without prior notification:
    • (a) correct a technical, minor or clerical error or omission made in his/her decision or order; and 
    • (b) clarify a decision or order where it contains a technical, minor or clerical misstatement or ambiguity.

Registry

  1. The registry shall keep all documents necessary to maintain the hearing record pursuant to subsection 14.02(3) of the Act.
  2. The registry's address for the purpose of filing documents in relation to the proceeding is:

    Office of the Superintendent of Bankruptcy Registry
    155 Queen Street, 4th floor
    Ottawa ON K1A 0H5
    Telephone: 613-941-2694
    Facsimile: 613-946-9205
    Teletypewriter: 1-866-694-8389
    Email: ic.osbregistry-greffebsf.ic@canada.ca

Communication with the Adjudicator

  1. No party shall communicate with the adjudicator, except:
    • (a) if orally, in the presence of all parties; or
    • (b) if in writing, through the registry.

Commencement of Proceeding

Notification Requirements

  1. The registry shall serve the notice or other documentation by process server, by registered mail, through counsel or by any other method of delivery that requires the signature of the recipient, to the last known address of the trustee on file with the OSB.
  2. Within thirty (30) days after the registry serves the notice, the trustee shall indicate, with reasons, if he/she requests a hearing and whether he/she prefers that hearing to be oral or in writing.
  3. If the trustee does not request a hearing, the adjudicator will invite the investigator to submit evidence and recommended sanctions, and will render a decision without further notification to the trustee.

Delegation of Adjudication

  1. In accordance with subsection 14.01(3) of the Act, where the Superintendent of Bankruptcy delegates authority to conduct a proceeding, the Superintendent or the delegate shall give written notification of such delegation to the parties.

Disclosure

  1. At dates prior to the pre-hearing conference or the commencement of the hearing, as determined by the adjudicator, every party shall provide each other with the following:
    • (a) a list and copy of every document that the party intends to rely on as evidence;
    • (b) a list and copy of all other relevant documents in the party's possession, subject to exceptions such as privilege as determined by the adjudicator; and
    • (c) a summary of witness statements.

Pre-hearing Conference

  1. A pre-hearing notification setting out the method of the pre-hearing conference and, if applicable, its date, time and location shall be sent by the registry to all parties at least fifteen (15) days prior to the pre-hearing conference.
  2. Where a party has been notified of a pre-hearing conference and fails to attend, the adjudicator may proceed with the pre-hearing conference without further notification to and in the absence of that party.
  3. The adjudicator may direct the parties to attend a pre-hearing conference by way of written submissions, in person, or by video or telephone conference.
  4. The adjudicator may consider and direct any or all of the following at a pre-hearing conference:
    • (a) the issues to be dealt with at the hearing and whether these can be clarified, simplified or resolved;
    • (a) whether any facts or evidence may be agreed upon by the parties;
    • (b) any disputes related to disclosure, production or admission of documents;
    • (c) the parties' potential witness lists;
    • (d) any special needs of the parties or their witnesses;
    • (e) the dates by which any steps in the proceeding are to be taken or completed; and
    • (f)  any other action, including any orders or directions that the adjudicator considers will promote an expeditious and a fair hearing.
  5. All agreements and undertakings shall be recorded in minutes prepared under the direction of the adjudicator.
  6. The pre-hearing conference is not open to the public. However, any order of the adjudicator presiding over the pre-hearing is public upon communication to the parties.

Conduct of Proceeding

Hearing Procedures

  1. The hearing is public unless the adjudicator decides otherwise pursuant to subsection 14.02(3) of the Act.
  2. The adjudicator may receive, consider and decide on any agreed upon issues, facts or recommendations of the parties without proof or evidence.
  3. The adjudicator may conduct a hearing by way of written submissions, in person, or by video or telephone conference.
  4. The adjudicator may direct the parties to make submissions in writing on any issue(s) with respect to the proceeding and may set deadlines for filing such submissions, irrespective of whether the hearing is oral or in writing.

Notification of Hearing

  1. The registry shall send a notification setting out the method of the hearing and, if applicable, its date, time and location to all parties at least sixty (60) days prior to the scheduled date of the hearing.
  2. The hearing date, time and location may be communicated:
    • (a) on the OSB's website;
    • (b) at division offices of the OSB; and
    • (c) to any other person, upon request.
  3. Where the trustee has been given notification of a hearing and fails to attend, or fails to make written submissions as directed by the adjudicator, the adjudicator may proceed with the hearing without further notification to and in the absence of the trustee.

Adjournments, Postponements and Extensions of Time

  1. A party seeking an adjournment, a postponement or an extension of time shall communicate with the other party in an attempt to obtain the other party's consent before seeking an adjournment, a postponement or an extension of time from the adjudicator. 
  2. Any request for an adjournment, a postponement or an extension of time shall be made to the adjudicator orally where the hearing is under way, or otherwise in writing with a copy to all parties. The request shall set out:
    • (a) the reasons for seeking the adjournment, postponement or extension of time;
    • (b) to the extent known, the position of the other party; and
    • (c) a list of alternative dates to which all parties agree, if applicable.
  3. The other party may respond to the request for an adjournment, a postponement or an extension of time in writing with a copy to all parties.

Summons to Witness

  1. Any summons issued by the adjudicator pursuant to subsection 14.02(1.1) of the Act must be served by personal service with the applicable fees and allowances, as set out in subsection 14.02(1.3) of the Act.
  2. Witnesses at the hearing may be:
    • (a) required to give evidence under oath or affirmation in accordance with paragraph 14.02(2)(a) of the Act;
    • (a) required to produce any documents in their possession relative to the subject matter of the proceeding;
    • (b) cross-examined; and 
    • (c) ordered to be excluded from the hearing until called to give evidence.

Recording of the Hearing

  1. The adjudicator will oversee the preparation of a log of any documents, witness statements and exhibits filed with respect to the proceeding.
  2. Unless ordered by the adjudicator, the hearing will not be recorded and no transcript will be produced.
  3. Where a party wishes the hearing to be recorded, he/she must make the request to the adjudicator in writing not less than ten (10) days prior to the hearing.
  4. Where the adjudicator authorizes the hearing to be recorded, the registry shall make all necessary arrangements at the requesting party's cost or as otherwise agreed to by the parties.

Simultaneous Interpretation

  1. (1) At the request of a party, the registry shall provide, during a hearing, simultaneous interpretation in English or French.

    (2) A request must be made to the registry not less than ten (10) days prior to the hearing.

  2. (1) A party requiring interpretation in a language other than English or French must provide an interpreter at that party's own expense.

    (2) The party must be prepared to satisfy the adjudicator of the qualification of the interpreter, in the absence of which the adjudicator may refuse to accept interpreted evidence from that interpreter.

Publication of Decision

  1. The adjudicator's decision is public upon communication to the parties. The decision will also be communicated:
    • (a) on the OSB's website;
    • (b) at division offices of the OSB; and
    • (c) to any person, upon request.

Record

  1. (1) Pursuant to subsection 14.02(3) of the Act, the record of the hearing is comprised of the notice in subsection 14.02(1) of the Act, any summary of oral evidence and any documentary evidence submitted at the hearing.

    (2) The record of the hearing is public unless the adjudicator decides otherwise pursuant to subsection 14.02(3) of the Act.

Coming into Force

  1. This Directive comes into force on the date that it is issued.

Enquiries

  1. For any questions pertaining to this Directive, please contact the OSB registry.

William R. James
Superintendent of Bankruptcy

Date modified: