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![]() OSB Newsletter 2005-7Printable Version: OSB Newsletter 2005-7 (PDF Format 140 KB) Note: to read PDF documents, you need Adobe Acrobat Reader on your system. ![]() Inside This IssueA Word from the Superintendent of Bankruptcy Investigations Group, Debtor Compliance: 49 Files Investigated in Less Than Two Years Insolvencies in Canada in 2004 A Word from the Superintendent of BankruptcyAfter several years of consultation, a Senate Committee Report and a Memorandum to Cabinet, Bill C-55, An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other Acts, was tabled before the House of Commons on June 3rd, 2005. You can access a copy of the Bill at our Website: www.osb-bsf.ic.gc.ca We do not expect the Bill to be referred to Committee before the fall but we will keep you informed in due course. Check the next edition of the OSB Newsletter for a detailed summary of the Bill. In the past several months, the OSB has undertaken a major review of all of its activities as part of a reorganization exercise. This reorganization will contribute to building OSB's strengths so it can become a leader and model regulator and assume the full scope of its mandate. It will facilitate the pooling of resources on a regional basis and provide greater flexibility to deal with local realities. It is not driven by a need for reductions and no office closures will take place as a result of this initiative. As part of this exercise, we are looking at a new model for service delivery. The model entails reorganizing directorates in headquarters to reflect the priority that OSB places on Information Services & Products, Regulatory Affairs, and Compliance and the creation of three regions: the West, Ontario, and the East. We will also focus on retooling our Corporate Services and building an Internal Evaluation capacity to ensure coherent service delivery across the country. We believe that our staff has many strengths and talents, and we hope that these strengths and talents will be put to optimal use through the new service delivery model. Over the coming months, we will be keeping you informed of major changes as they are implemented. In the last Newsletter, I gave readers a quick debrief of the Academics' meeting held in August 2004. As a result of this meeting, the OSB accepted academic proposals for research funding contracts. We are extremely pleased to announce that the OSB will be providing funding for research papers on the following topics:
We anticipate providing you with more details on the final reports by the end of 2005 and publishing them on our Website. We would like to thank all those who submitted research proposals. We look forward to seeing the outcome of these studies. In this issue, you will find a review of the 2004 insolvency statistics, a short article on the OSB's Debtor Compliance Initiative and, of course, the ever popular caselaw summaries. These summaries, which it is worth noting, are prepared by some of the law students in the OSB Student Program. These summaries have been very well received by the insolvency community, and we've been asked by various organizations for permission to reproduce them in some of their own material. We are glad to see that this segment, which was suggested by our readers, is such a success. In fact, we are about to issue The Insolvency Caselaw Digest for 2004, a collection of about 50 insolvency related decision summaries, which due to a lack of space, could not be included in the OSB Newsletter. Stay tuned for this upcoming document. We have also recently published a revised version of The Inspectors' Handbook. An item in this Newsletter will inform you on how to get copies. In continuing with it's Government On-line objectives, the OSB will be launching Phase III of the e-filing initiative this Fall. We hope that this phase will be as successful as the previous two. As indicated in my presentations to trustees across Canada during the CAIRP Continuing Education Seminars in May, we anticipate that e-filing will become mandatory one year following the launch of Phase III. Once again, if you have any questions, comments or suggestions on this Newsletter, please do not hesitate to send them in to the Newsletter Coordinator. Whenever possible, we will try to incorporate your ideas in our newsletter to keep you better informed. Investigations Group, Debtor Compliance: 49 Files Investigated in Less Than Two YearsSince it's creation in 2003, the Investigation Group, Debtor Compliance — a three-year pilot project created by the Office of the Superintendent of Bankruptcy — has, in under two years, investigated no fewer than 49 cases of allegations of breaches of the Bankruptcy and Insolvency Act (BIA). The deficits in these files amount to more than 25 million dollars. The Group's investigations deal with a variety of cases, notably offences associated with credit card abuse, fraudulent disposition of property, fraudulent obtaining of credit, fraudulent transfer of property and the destruction of books and documents related to the bankrupt's affairs. To date, the members of the Investigation Group have submitted 28 files to Crown prosecutors, of which 18 went to provincial prosecutors for Criminal Code charges, and 10 to the federal prosecutor for charges under the BIA. The prosecutors have already filed charges in 17 cases, with a total of 231 charges against the debtors. The other files are still being reviewed by the prosecutors. Of these 17 cases, two have led to convictions against the debtor. In the first case involving charges of fraud and uttering forged documents, the bankrupt was handed an 18-month suspended sentence. The first 12 months were to be served at home with the bankrupt being allowed to leave the house only for medical reasons, legitimate work or community service for a total of 200 hours. The sentence also included a probationary period of three years to keep the peace and not to possess any credit cards. In the second case involving the fraudulent obtaining of credit, the bankrupt was fined $2,400, to be paid over 18 months. He was also put on probation for 18 months, during which time he must keep the peace, not enter any casinos, submit to a program for compulsive gamblers, and not indulge in any games of chance whatsoever. In the other 15 files, legal proceedings are ongoing. We will update you on the results in future issues of the OSB Newsletter. For further information, you may contact the Director of the Investigations Group, Mr. Réal Poirier, at (450) 671-8821. From the OSB's Economic Information and Analysis GroupInsolvencies in Canada in 2004OverviewIn 2004, the number of new insolvency cases filed with the OSB dropped by 0.4% to 110,940. This decrease contrasts with the 6.3% increase recorded in 2003. This year, consumer insolvencies grew by 0.3%, with 101,084 new consumer cases. In 2004, business insolvencies were down by over 6.0% for the third year in a row. During 2004, the number of new business cases filed with the OSB was 9,856, down by 7.6% compared with the previous year.
Two economic factors limited the growth of consumer insolvencies in 2004. A third factor could have triggered a more significant increase, if it had not been for such a good performance by the first two factors. The first positive factor was the creation of 228,000 jobs, all full-time, during 2004. The second factor was that, contrary to financial market expectations, the 5-year mortgage interest rate only grew modestly, by 0.1 percentage point, between the third quarter of 2003 (6.3%) and the third quarter of 2004 (6.4%). The third factor was the higher debt ratio, which rose by 6.2 percentage points to 113.7% during the third quarter of 2004, compared with 107.5% in the third quarter of 2003. The decrease in business insolvencies was also part of the favourable economic climate. In 2004, the gross domestic product (GDP) was up 2.7%, compared with a 2.0% increase in 2003. Stronger domestic demand in the U.S., coupled with a strengthening global demand, resulted in Canadian exports growing by 9.0% in spite of a 7.7% appreciation in the Canadian currency. The value of the Canadian dollar was $0.82 US in December 2004, compared with $0.76 US in December 2003. Another major factor was the drop in the cost of business financing. This cost, which is measured by the 90-day commercial paper interest rate, declined by 0.5 percentage points between the third quarter of 2003 (2.8%) and the third quarter of 2004 (2.3%). Insolvencies in the 6 major canadian regions in 2004In 2004, the filing of new insolvency cases was up in three provinces out of six. The steepest increase was in the Atlantic region with 8.0%, followed by Ontario with 1.3% and Quebec with 0.7%. British Columbia, Alberta and the Manitoba/Saskatchewan region recorded declines of 9.7%, 4.0% and 4.4% respectively. As all regions benefited from good economic conditions in 2004, the insolvency differences between them are difficult to explain. Local factors probably played an important part.
Consumer insolvencies were up in the Central and Eastern regions of the country. Atlantic Canada saw the highest increase (8.9%). In the three Western regions, consumer insolvencies were down, with the strongest drop in British Columbia (-9.8%). The number of consumer insolvencies per thousand residents 18 years of age and over remained essentially the same in Canada in 2004. On the other hand, in the Atlantic region, consumer insolvencies increased by 0.39 case to 5.08 cases per thousand in 2004. In British Columbia, consumer insolvencies decreased by 0.36 case to 2,86 cases per thousand in 2004.
Business insolvencies declined in all regions. The decreases ranged from 10.8% in Quebec to 1.4% in Alberta. This resulted in a general reduction in the number of cases per thousand businesses. In Canada, the number of cases went down by 0.59 case to 4.2 cases per thousand businesses in 2004. Alberta continued to show the largest number of business insolvencies per thousand businesses with 5.89 in 2004. The lowest number was in British Columbia, with 3.15.
Insolvencies by major economic sector in 2004In 2004, 7 out of 8 major economic sectors saw a drop in the number of new business insolvency cases. The sharpest declines were in transportation and communications (-19.0%), services (-11.2%), and accommodation and food services (-10.4%). The only sector with an increase was finance, insurance and real estate services (7.9%).
However, the finance sector showed the lowest number of insolvency cases per thousand businesses. There was 1.31 case per thousand businesses in this sector in 2004. Two sectors recorded significant improvements. In the transportation and communications sector, the number of insolvency cases went down from 9.94 in 2003 to 7.59 in 2004, a drop of 2.35 cases per thousand. In the accommodation and food services sector, the number of insolvency cases decreased by 1.43 case per thousand businesses to 9.48 cases in 2004. International insolvenciesIn the U.S., statistics for the first three quarters indicated a 2.6% drop in non business insolvencies. If this trend is not reversed in the fourth quarter, 2004 could be the first year since 2000 to record negative growth in non business insolvencies. All indications are that business insolvencies should show negative growth for a third consecutive year. After the first three quarters of 2004, U.S. business insolvencies had declined by 0.8%.
In the U.K., personal insolvencies rose by 31.0%, whereas business insolvencies went down by 14.0% in 2004. The 31.0% increase in personal insolvencies was largely the result of a legislative reform reducing the time period required for obtaining a debtor's discharge from 36 to 12 months. ConclusionsIn 2004, there was a 0.4% decline in the number of new insolvency cases filed with the OSB. The number of new consumer insolvency cases increased by 0.3%, whereas the number of new business insolvency cases decreased by 7.6%. Overall, this good performance was due to the favourable economic climate, which should continue to prevail into 2005. In addition, certain forecasters now believe that interest rates could continue to abate moderately until late 2005 and start an upward trend in early 2006. Therefore, the changes in the insolvency picture are expected to be modest in 2005. However, strong regional variations are likely to continue. Richard Archambault 1 Consumer proposals under Divisions I and II. 2 Corporate proposals under Division I and sole proprietorship proposals under Divisions I and II. 3 Sole proprietorship means a non incorporated business as opposed to a corporation. Inspectors' HandbookIn line with its commitment to provide timely and resourceful information on bankruptcy and insolvency, the OSB has recently published a revamped guide for individuals who have been appointed inspectors under the Bankruptcy and Insolvency Act. Considering that inspectors have a significant role to play in the administration of insolvent estates, this guide's aim is to provide information about the role and responsibilities of inspectors, as well as to highlight and explain relevant provisions of the Act. Those interested in obtaining a copy of the "Inspectors' Handbook" must fill out the following form and return it to the Information Distribution Centre of Industry Canada. The handbook has also been published on the OSB's Website at: www.osb-bsf.ic.gc.ca
Insolvency Case LawOur surveys show that readers are very interested in our caselaw summaries. Below are a few that we felt were worthwhile noting. If you have any decisions that you feel might be of interest to our readers, please submit them to the coordinator, who will ensure that summaries will be prepared and published in both official languages. Please note that the summaries are not substitutes for the actual decisions. In the Matter of the Bankruptcy of Daniel Joseph PriaulxNote: An order allowing appeal was issued upon the trustee and OSB consenting to the terms of the Order. There was an admission by the trustee that there was incomplete disclosure to the Registrar in the trustee's affidavit. The OSB conceded that this incomplete disclosure by the trustee was not intentional. The decision upholds the taxing back of the trustee's fees by $1000. Court of Queen's Bench of Alberta
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While we always strive to accurately summarize the case law presented in this digest, it does happen from time to time that we inadvertently make mistakes in our summaries. The summary of the Superintendent's Delegate decision in the Matter of Professional Conduct Proceedings regarding James Gordon Touchie and J.G. Touchie & Associates Ltd contained on page 13 of the OSB Newsletter 2004-6 indicated that: "However, at the hearing, [the Senior Analyst] advised the trustee and the delegate that she had unilaterally modified her recommendations by diminishing the requested suspensions and by adding the requirement that the trustee close and tax the estates referred to in the complaints." Please note that it was not until June 18, 2004, one month following the hearing that the Senior Analyst modified her recommendations. This being said, the summary should have read as follows: "However, one month after the hearing, [the Senior Analyst] advised the trustee and the delegate that she had unilaterally modified her recommendations by diminishing the requested suspensions and by adding the requirement that the trustee close and tax the estates referred to in the complaints." This mistake was unintentional and we sincerely apologize for any inconvenience this may have caused to those concerned and to our readers. |
Facts: In accordance with subsection 14.01 (1) of the Bankruptcy and Insolvency Act (BIA), the Senior Analyst of the Office of the Superintendent of Bankruptcy reported on the performance of Mr. D. Geoffrey Orrell, a licensed trustee who took on the administration of a consumer proposal submitted by Mr. and Mrs. Davies. The report stated that the trustee did not carry out his duties as required under subsection 14.06(1) of the BIA and under Rule 36 of the Code of Ethics for Trustees. In this regard, he failed to conduct or cause an investigation on the property and financial situation of the debtors as prescribed in paragraph 66.13(2)(a) of the BIA. It was established that the trustee conferred the responsibility of accurately assessing the debtors' property and financial situation to another licensed trustee who was not properly substituted. Consequently, the parties jointly drafted and filed a proposed text for consideration of a delegate of the Superintendent of Bankruptcy.
Issue: Should the trustee's licence be subjected to any conditions or limitations as a result of his conduct?
Decision: The trustee's licence was limited to a period of two months. He was prohibited from taking on the administration of any new bankruptcies, proposals or receiverships. If the trustee failed to comply with this order, he would be put in default under paragraph 13.2(5)(b) of the BIA.
Discussion: The Superintendent's Delegate, taking into consideration the fact that the trustee acknowledged all of the elements outlined in the Senior Analyst's report, concluded that the trustee failed to meet his statutory responsibilities with regards to the administration of the debtors' proposal. The Delegate also maintained that there is no reason to detract from the draft submitted by the parties and deemed its contents to be reasonable.
Facts: The Senior Analyst filed a series of complaints against trustee Jacques Roy regarding his administration of the files Pierre André Jacob and Distribution Sunliner (1985) Inc.
With respect to the bankruptcy of Pierre André Jacob, the Senior Analyst's report mentioned two alleged failures to perform his statutory duties in the bankruptcy's administration following a complaint by the Trans-Canada Credit Corporation on November 24, 1999.
On July 23, 1997, the trustee was discharged from the matter of Distribution Sunliner (1985) Inc. According to the trustee's counsel, Subsection 48(1) of the BIA gave the trustee immunity against any subsequent objection or action regarding his administration of this estate. In a decision rendered on February 14, 2004, the Honourable Justice Lawrence A. Poitras allowed the evidence presented in connection with the Distribution Sunliner (1985) Inc. file, despite the trustee's discharge on July 23, 1997. The decision was based on the general rule that the Superintendent has disciplinary jurisdiction over the conduct of trustees, as set out in Freedman & Freedman, Harry Bick & al. (CFPIT-1600-99) of the Federal Court of Canada Trial Division. The complaints originally filed by the principal analyst were reduced to twelve during the hearing.
Findings regarding the alleged failure: Four of the twelve remaining complaints were upheld. The trustee contravened section 13.5 and subsection 5(5) of the BIA, Rules 36 and 52, and section 5 of Directive No. 22, as well as paragraphs 6 and 7 of Directive No. 31.
Discussion: Concerning Pierre André Jacob's file, the Delegate upheld one of the two allegations made by the Senior Analyst. It was found that the trustee acted contrary to section 13.5 of the Act and Rule 36, regarding an application for substitution by the representatives of Trans-Canada Credit on November 18 , 1999. The trustee did not perform his duties in a timely manner and did not carry out his functions with due care by not accepting the application for substitution at the time of the meeting and by delaying the preparation and forwarding of the minutes of the creditors' meeting until December 28, 1999.
In the Distribution Sunliner (1985) Inc. file, the Delegate upheld 3 of the 10 allegations made by the Senior Analyst. It was found that the trustee contravened subsection 5(5) of the Act and paragraphs 6 and 7 of Directive No. 31 on taking inventory of the bankrupt's property. According to the trustee, a complete inventory had been conducted in the days preceding the bankruptcy, and the signature by the president of the debtor company on the balance sheet attested to its accuracy. Counsel for the Senior Analyst argued that there was a sale of several boats the day after the inventory was taken, which would have affected the inventory.
Also, the Delegate held that the trustee did not properly document his file contrary to subsection 5(5) of the Act and paragraph 5 of Directive No.22 on the realization of the estate's assets. The trustee's argument that "this would create a mountain of paper" was not accepted by the Delegate.
Finally, the Delegate held that the trustee acted contrary to section 13.5 and subsection 5(5) of the Act and paragraph 5 of Directive No.22 on realization of the property of the estate. The evidence showed that amounts that would ordinarily pass through the hands of the trustee and then be forwarded to the secured creditors were the subject of a delegation to a third party. There was no evidence of this on the statement of receipts and disbursements. Also, the trustee apparently instructed the third party to handle his mail at the trustee's secondary office in Trois-Rivières.
Facts: In a decision rendered on December 3, 2004, the delegate upheld 4 complaints against the trustee. The parties were asked to send their respective submissions on sanction before December 15, 2004.
Issue: Which disciplinary measure should be imposed given the complaints that were upheld?
Decision: The trustee's licence was suspended for a period of one week.
Discussion: Objective and subjective factors must be taken into account when imposing disciplinary measures. The objective factors include protection of the public, the seriousness of the offence and the exemplary value. The subjective factors include the existence or absence of prior misconduct, the age, experience and reputation of the professional. Also considered are the chances of a repeat offence, deterrence, remorse and the likelihood of rehabilitation of the professional, as well as the financial position of the latter and the consequences for the client. The disciplinary measure must first and foremost be aimed at protecting the public and not punishing the professional.
The trustee administered some 6,000 files in his career and has never been the subject of any complaints by the Senior Analyst, creditors or the Office of the Superintendent of Bankruptcy. Moreover, the circulation of the Senior Analyst's report has caused great harm to the trustee's reputation. All things considered, the trustee was convicted of an offence to the Act, the Regulations made thereunder and to the Directives issued by the Superintendent. Therefore, the Court ordered a suspension of the licence of the trustee for a period of one week pursuant to subsection 14.01(1) of the BIA.
Facts: A Senior Evaluation Officer from the Office of the Superintendent of Bankruptcy (OSB) conducted an audit of trustees Yves and Pierre Guay in addition to a general audit of the office of Raymond Chabot, corporate trustee, in October 2000. The OSB's Senior Analyst, professional conduct, submitted a report on the conduct of the aforementioned individual trustees as well as on the corporate trustee. These powers were delegated to the Senior Analyst pursuant to subsection 14.02(1) of the Bankruptcy and Insolvency Act (BIA). The corporate trustee generally admitted the facts set forth in the Senior Analyst' report. He undertook to pay an amount equal to the interest lost by the estate files in addition to fees that were not processed in the usual manner. Mr. Yves Guay is no longer associated with and/or is no longer an employee of Raymond Chabot Inc. since 2002. As for Mr. Pierre Guay, he agreed to leave Raymond Chabot Inc.
Infractions: The report stated that the management of estate funds and banking operations of the aforementioned trustees did not comply with the requirements of the Superintendent of Bankruptcy's Directive No. 5 on Estate Funds and Banking (Directive No. 5). It is worth mentioning that the report listed many other infractions, such as the following:
Sanctions: The Delegate of the Superintendent of Bankruptcy ordered that the licence of Raymond Chabot Inc. be restricted for a period of two months in the Districts of St-François and Drummondville. The licence of trustee Yves Guay is currently cancelled. If this licence is reactivated, the Delegate stipulated that it will be suspended for a period of two years. During that period, Yves Guay may not act as a trustee in bankruptcy nor accept any mandates under the BIA. Finally, the Delegate ordered that the licence of trustee Pierre Guay be suspended for a period of three weeks under the same conditions. If the trustee does not comply with all the orders of the Delegate, he will be in default pursuant to paragraph 13.2(5)b) of the BIA.
Facts: In January 2001, the Disciplinary Analyst produced a report containing allegations with regards to the conduct of trustees PricewaterhouseCoopers, Robert Brochu, Serge Morency and Serge Morency & Associés Inc.
The proceedings were suspended pending the decision of the Court of Appeal (#200-09-004077-027) determining the constitutionality of the Superintendent of Bankruptcy's jurisdiction over the professional conduct of trustees. The hearing of this case, presided by Jean-Claude Demers, resumed on January 26, 2004, and came to a sudden halt on January 29, 2004.
In fact, according to the stenographed notes and the correspondence exchanged between the parties, the delegate joined the Senior Analyst, his counsel and the auditor of the Office of the Superintendent of Bankruptcy (OSB) and shared a meal on January 27. As the hearing resumed the next morning, the delegate disclosed to the other parties the events of the previous night. Consequently, the trustees immediately sought that the delegate recuse himself and requested the dismissal of the case in light of the "blatant weakness of the evidence concerning the complaints". The delegate suspended the hearing so that he could decide whether or not the analyst and his counsel had "met the burden of proof that was incumbent upon them", and to decide whether or not he had jurisdiction to preside over the hearing given the previous evening's events.
Upon resumption of the hearing the next day, counsel for the Senior Analyst, indicated to the delegate that he had been instructed to ask him to recuse himself from the case on the grounds that he could no longer maintain the appearance of objectivity. Faced by the request from all parties to the case, the delegate came to the conclusion that his only choice was to recuse himself from the case at once. The case was then returned before the Superintendent.
Decision: The Superintendent ordered the dismissal of all the complaints brought against the trustees and took official notice of the withdrawal of the proceedings that were initiated.
Discussion: In order to rule on the various requests before him, the Superintendent believed that he must first review the progress of the case and the evidence adduced to date. In light of the exceptional circumstances of this case, he needed to determine whether or not the process had been breached to the extent that a termination of the proceedings would be justified, and whether or not the Senior Analyst had sufficiently met the burden of proof incumbent upon him to conclude that it was possible to continue these proceedings in a way that would not constitute a denial of justice to the parties nor affect the public interest.
As a result, the Superintendent concluded:
Facts: A motion before the Federal Court of Canada is challenging the Superintendent's appointment of the Senior Analyst to carry out investigations of this matter. Meanwhile, the trustees filed a motion for a stay of proceedings pending the Federal Court's decision. Based on the legal principle of lis pendens, the trustees argued the "clear possibility of conflicting judgments" between the Federal Court judgment and the proceedings herein. Consequently, the trustees moved to adjourn of the merits hearing until the Federal Court's final decision.
Issues:
Decisions:
Discussion:
1 Levy, Sheriff, St-Georges and Roy
Facts: The Senior Discipline Analyst initiated proceedings against the trustees after sampling 15 of their estates to conduct a special audit. In a report dated September 6, 2002, the Senior Analyst noted numerous deficiencies with respect to the trustees' internal control and administrative competence. Some of these deficiencies pertained to property costs, estate administration and proofs of claim. The trustees claimed that the Senior Analyst failed to fully disclose the materials obtained in the course of the examinations that were carried out. The trustees therefore filed an application for a stay of proceedings in June 2004. However, the Delegate found no evidence that any material remained undisclosed. Additional disclosure was submitted to the trustees in November 2004, before a hearing on the merits of the proceedings brought by the Senior Analyst. On receipt of this new evidence, the trustees expressed their doubt that full disclosure had been made and suggested that the integrity of the proceedings warranted a stay. The trustees also contended that the hearing should be adjourned pending determination by the Federal Court of Canada of an application for judicial review filed with respect to the Superintendent's judgment attesting that the trustees had not received full disclosure in a related case. The Senior Analyst asserted that the items recently disclosed were not required. Instead, they were provided voluntarily and may not even be pertinent to the proceedings.
Issue: Do the circumstances of this case provide adequate grounds for a stay of proceedings?
Decision: Requests for disclosure were not fully satisfied. The proceedings initiated by the Senior Analyst against the trustees are therefore stayed.
Discussion: The delegate held that the related proceedings filed before the Federal Court of Canada were separate in law and therefore cannot be considered together with the current motion. The latter nevertheless took the Superintendent's judgment into account and asserted that the trustees' concerns in regards to full disclosure were valid.
The delegate observed that the allegations brought against the trustees were not of the most serious kind. Although the law requires the trustees' counsel to take the necessary measures to ensure full disclosure, requests for disclosure need not be filed with respect to every document. The duty to disclose rests only with the Senior Analyst.
The Senior Analyst continued to disclose information despite previous assurances that all requests for documentation had been satisfied. A failure to disclose may hinder the trustees' right to make a full answer and defence. It may also deprive them of an opportunity to use the undisclosed information for investigation purposes. Considering that their right to exercise their profession was at stake, the delegate concluded that the trustees' interests outweighed the interests of the state in having the alleged misconduct punished. A stay of proceedings was granted accordingly.
Facts: A complaint was filed against the trustees regarding the administration of certain files. An audit was carried out which led to conservatory measures on June 20, 2003. The Senior Analyst filed a report on the trustees' conduct, which discussed several discrepancies in the administration of the estates by the trustees. These discrepancies and omissions included:
The professional conduct report also referred to the fact that the trustee had not opened a trust bank account or kept a cash card for seventy-seven ordinary estate files.
The parties submitted the text of the decision on the sanctions, which in the circumstances of this case appeared to be fair, reasonable and not contrary to public order, according to the delegate.
Sanctions:
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OSB NewsletterIf you have any questions or comments regarding this Newsletter or suggestions for future ones, please address them to the Newsletter Coordinator, Vivian Cousineau. She can be reached by regular mail at 301 Elgin Street, 2nd Floor, Ottawa, Ontario, K2P 2N9, by phone at (613) 941-2694, by fax at (613) 946-9205 or by e-mail at CoordinatorVivian Cousineau Graphic DesignRoger Langlois Editing ServicesManon Brunet Contributing AuthorsRichard Archambault |
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Created: 2005-07-12 Updated: 2007-02-06 ![]() |
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