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 Todd Y. Sheriff and Segal & Partners Inc.
Licensed trustees for the province of Ontario
On July 23, 2008, I signed an Order which stipulated, inter alia, that:
- The trustee license of Todd Y. Sheriff be suspended for a period of one month commencing immediately upon the fulfilment of the Licensing Order of the Superintendent of Bankruptcy, currently in force;
- The trustee license of Todd Y. Sheriff subsequently be restricted for a further period of two months from accepting and filing appointments under the BIA;
This Order was the result of negotiations between the parties who (as stated in the preamble) "have jointly drafted and submitted to me the proposed text of the present decision, duly approved them in writing, and request that I issue an Order accordingly." The preamble added that, "in the specific circumstances of this case the proposed draft appears to be reasonable and there does not seem to be any reason to derogate from it."
Having considered the circumstances, I agreed that the draft appeared to be reasonable, and thereupon issued the Order.
It now appears that difficulties have arisen in the interpretation of the Order.
On September 18, 2008, I received a message by e-mail from the Corporate Secretary and Clerk of the Hearing Records Registry, informing me that "there appears to be some confusion with respect to the first point indicated on page 3 ' … be suspended for a period of one months commencing immediately upon the fulfillment of the Licensing Order of the Superintendent … ' (emphasis in the original)." The message went on to say that "A decision involving a Licensing Order was in fact issued on June 23, 2003 … containing some conditions which may not have been met which may or may not have an impact on the interpretation and implementation of this most recently issued July 23, 2008 decision."
On October 6, 2008, I received a follow-up note from counsel in the Business Section, Department of Justice, outlining in some detail the difficulties encountered in the interpretation of the July 23, 2008 Order. The note concluded as follows:
For these reasons, The Senior Analyst is requesting a variation of paragraph 1 of your Order to indicate that the one-month suspension of Mr. Sheriff's licence commences three business days after you sign the varied Order and that the two month restriction on Mr. Sheriff's licence commences after the suspension is completed.
This request was opposed by counsel for Mr. Sheriff, who pointed out (in a letter dated October 8, 2008) that "The Consent Order was negotiated as part of a global settlement of a number of issues between our clients and the OSB."
Subsequent to this correspondence, I had two telephone conferences with counsel for the parties, during which I raised the question as to whether or not I had jurisdiction to entertain an application to vary an Order previously given.
It appears that a somewhat similar situation occurred once before in disciplinary proceedings under the Bankruptcy and Insolvency Act, and I refer to a ruling made in 2005 by my colleague, The Honourable Benjamin J. Greenberg, Q.C., the text of which was furnished to me by counsel for the Department of Justice.
In that case, the problem was that an order which was supposed to come into effect three business days after it was signed was only received by counsel for the corporate trustee after the expiration of this delay, leading to a technical non-compliance with the Order which, as the Delegate noted, "was unintentional and in good faith." Given these circumstances, both parties requested that the original Order be varied "so that, retroactively, the ORDER would be deemed to have come into force [at a later date]."
The Delegate, while clearly sympathetic to the situation, nevertheless felt obliged to examine his jurisdiction to carry out this joint request. He concluded, after an examination of Canadian and English cases, that the special circumstances allowed him to overcome the legal concept of functus officio and that, by applying the Civil Procedure Rules of Nova Scotia (where the case was heard) he could issue a Supplemental Order granting the relief jointly sought by the parties.
While that decision made eminent sense in the case before the Delegate, the facts of the request now before me are entirely different.
In the first place, this is not a joint application. Indeed, as noted above, it is strongly opposed by the trustee. Second, I am now being asked not to correct a "slip" (to borrow language from the English cases) or to correct an "error in expressing the manifest intention of the court" (see Paper Machinery Ltd. v. J.O. Ross Engineering Corp., [1934] S.C.R. 186). Rather, as I see it, the parties find themselves in the unhappy situation of an unforeseen (and, perhaps, even unforeseeable) situation which, so far, they have not succeeded in resolving. This is not a matter of asking my "assistance in working out the rights declared" (as suggested in Halsbury's Laws of England, Vol. 6, p. 211), and which gave Delegate Greenberg (together with the N.S. Rules) the necessary comfort to assume jurisdiction.
In the light of my ultimate conclusion, I have not discussed the various interpretations that the parties have given to the words — their words — of my Order. But even if I could, somehow, overcome the well-established principle that, barring the exceptions set out above, all judgments are final (subject only, where permitted, to appeal), to give assistance would require a full hearing with a new set of facts. By way of example, I point to the penultimate paragraph in the letter sent to me by counsel for the trustee, where he suggests that, in the alternative to rejecting the application, a variation of the Order should take into consideration that a co-trustee in the same firm is now on maternity leave and will not return until December 2009. Surely, this goes beyond the idea of giving assistance, as discussed in the case law.
In the result, I declare myself to be without jurisdiction to entertain the request to vary my original Order. I thank both counsel for their assistance and co-operation.
Hon. Fred Kaufman, C.M., Q.C.
Delegate
Counsel for the Senior Analyst: Liz Tinker, Department of Justice
Counsel for the Trustee: Bruce Jaeger, Fluxgold Izsak Jaeger LLP
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.