Process For Decisions Affecting a Trustee's Licence Under Sections 14.01 and 14.02 of the Act
The process by which the conduct of bankruptcy trustees is monitored and sanctioned is a federal administrative power subject to judicial review by the Federal Court.
It is the exercise by a federal board — in this case, the Superintendent of Bankruptcy — of a decisional power granted by a federal Act and whose decisions are subject to the Federal Court Act and the Rules of the Federal Court. This is specifically provided for in subsection 14.02(5) of the Bankruptcy and Insolvency Act (the Act).
This document describes the procedures followed by the Office of the Superintendent of Bankruptcy in conducting an inquiry into the activities of a bankruptcy trustee, as well as the decisional process followed in the application of sections 14.01 and 14.02 of the Act.
- The objectives of this process are to:
- maintain the confidence of the stakeholders and the general public in the integrity of the bankruptcy and insolvency system;
- ensure that the process is carried out in an efficient and transparent manner;
- ensure that it is conducted in compliance with the legal obligations provided for under the Act, the General Rules, the Directives issued by the Superintendent of Bankruptcy, the Charter of Rights and Freedoms and the rules of administrative law;
- ensure that standards are applied consistently.
- For the purposes of this process, all references to the Superintendent mean the Superintendent of Bankruptcy or the individual delegated to hear the matter pursuant to subsection 14.01(2) of the Act.
- When the Deputy Superintendent (Programs, Standards & Regulatory Affairs) has reasonable grounds to believe that a trustee has conducted himself or herself in such a way that could lead to licensing sanctions, the file is assigned to a Senior Analyst, Disciplinary Affairs for the conduct of an investigation pursuant to section 14.01 of the Act.
- The Senior Analyst, Disciplinary Affairs informs the trustee in writing that he or she is under investigation.
- If, after conducting an appropriate investigation, the Senior Analyst, Disciplinary Affairs determines that the allegations against the trustee are not well-founded, the file is closed and the trustee is advised accordingly.
- If subsequent to an investigation, the Senior Analyst, Disciplinary Affairs is of the opinion that the trustee has acted inappropriately and that licensing sanctions would be justified, he sends a report to the Superintendent and the trustee. The report constitutes the notice provided for in subsection 14.02(1) of the Act; it provides the reasons leading the Senior Analyst, Disciplinary Affairs, to recommend that the Superintendent exercise his powers under subsection 14.01(1).
- The specific sanction that will be sought against the trustee is not included in the notice of subsection 14.02(1); it is forwarded to the trustee at the same time as this notice, but under separate cover. This specific recommendation for sanctions will only be communicated to the Superintendent at the time of the hearing or, at the request of the Superintendent, before the hearing, but in the presence of all parties or their representative.
- Unless there is consent from the parties or the Superintendent issues an order to the contrary, a trustee wishing to object in writing to all or part of the report must forward his or her written objection to the Superintendent with a copy to the Senior Analyst, Disciplinary Affairs at least thirty (30) days before the hearing.
- Unless there is consent from the parties or the Superintendent issues an order to the contrary, any written evidence or exhibit that the parties intend to use is deemed inadmissible as evidence unless it has been forwarded to the Superintendent and the other parties at least thirty (30) days before the hearing. This requirement is not applicable to rebuttal evidence.
- Subject to paragraph 5(e), the Senior Analyst, Disciplinary Affairs may submit to the Superintendent all relevant facts or evidence, whether or not they are contained in the report initially sent to the Superintendent.
- After consulting with the parties, the Superintendent decides where the hearing will take place, giving particular consideration to the following:
- where the trustee's main office is located;
- where the witnesses reside;
- where the files giving rise to the report were filed;
- the consent of the parties.
- A notice of hearing is forwarded to the parties and posted in each Division Office of the Superintendent of Bankruptcy; the notice provides the names of the parties, and the location, date and time of the hearing.
- Subject to the exceptions provided for in subsection 14.02(3) of the Act, the hearing is public.
- The record of hearing provided for in subsection 14.02(3) of the Act commences when the Superintendent receives the notice provided for in subsection 14.02(1) (the report), from the Senior Analyst.
- The record of hearing is composed of this notice, the summary of oral evidence, and the documentary evidence received by the Superintendent. It also includes the interlocutory decisions rendered during the course of the process.
- The record of hearing is public.
Procedures At Hearing
- The Superintendent has the power to administer oaths; is not bound by any legal or technical rules of evidence; shall deal with the matter as informally and expeditiously as the circumstances permit and in accordance with the principles of fairness; and shall cause a summary of any oral evidence to be made in writing.
- The decision of the Superintendent together with the reasons shall therefore, be given in writing to the trustee not later than three months from the conclusion of the hearing.
- The decision of the Superintendent is public. It is published in accordance with the Policy on Publicizing Professional Conduct Matters.
- The decision of the Superintendent is deemed to be a decision of a federal board and as such, may be reviewed and set aside pursuant to the Federal Court Act.
Hearing Records Registry
- The hearing records registry is the depository of the records of hearings.
- The hearing records registry publishes the notices of hearings and forwards them to the parties.
- The hearing records registry ensures that decisions are published in accordance with the Policy on Publicizing Professional Conduct Matters.
- The hearing records registry is located in the offices of the Superintendent of Bankruptcy at:
Clerk of the Hearing Record Registry
155 Queen Street, 4th floor
Ottawa ON K1A 0H5
Coming Into Force
- This process will be applied to all files, pending or future, starting September 1st, 2001.
July 12th, 2001