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.
Canada
Province of Quebec
Preliminary Decision
made pursuant to the Bankruptcy and Insolvency Act
In Matters Concerning The Professional Conduct Of:
Éric Métivier
holder of a trustee licence for the province of Quebec
PricewaterhouseCoopers Inc.
holder of a corporate trustee licence with an office in the city of Québec, province of Quebec
and
Robert Brochu
holder of a trustee licence for the province of Quebec
Serge Morency & Associés Inc.
holder of a corporate trustee licence having an office in the city of Sainte-Foy, province of Quebec
and
Serge Morency holder of a trustee licence for the province of Quebec
On May 8, 2001 the Superintendent of Bankruptcy delegated authority to the undersigned to act in the three aforementioned matters and informed the parties concerned on June 6 following. These are three separate cases but each has to do with an important transaction which establishes a connection between them. This particular background is the reason that only one preliminary decision is made regarding the holding of the forthcoming hearings.
On July 3, 2001 the undersigned held three successive telephone conferences with counsel for each party so as to decide on the procedure for the said hearings.
On July 25, 2001 counsel for the trustee Métivier informed me of his intention to initiate proceedings to have the provisions contained in ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act (hereinafter referred to as "the Act") declared invalid and unconstitutional. He also informed me of his intention to file a motion for a stay in the Court if counsel for the principal analyst refused to agree voluntarily to a stay of the hearing the undersigned was to hold. These two motions were filed with the Court on August 21, 2001.
On September 14, 2001 counsel for the Superintendent of Bankruptcy filed a motion for a declinatory exception, to be heard on October 29 following, on the ground that only the Federal Court of Canada had jurisdiction to decide some of the conclusions sought.
Following an agreement between the parties it was settled that only the motion for a stay would be submitted, but not until the following December 17. However, the latter agreement had to be re-negotiated again and the hearing fixed pro forma for January 28, 2002.
The motion for a declaratory judgment and in evocation was ultimately heard on March 5 and 6, 2002 and a judgment signed by Yvon Godin J. of the Superior Court was handed down on May 24 last confirming the validity of ss. 14.01 and 14.02 of the Act.
On June 17, 2002 counsel for the trustee Métivier appealed the judgment of Yvon Godin J.
As a result of this judicial detour, the undersigned again invited counsel for the parties to participate in a new series of telephone conferences on June 28 last so as to clarify matters.
The latter wanted to know:
- Should we initiate disciplinary hearings at once or await the judgment to be rendered in Métivier by the Quebec Court of Appeal?
- Is it still necessary to hold a joint hearing on the fact common to the three cases (namely, the sale of the Auberge Jacques-Cartier Enr.)?
- What might be the hearing dates, in view of the professional commitments of each counsel?
The following emerged from these discussions:
- Counsel for the trustee Métivier asked that the hearing be stayed until the Quebec Court of Appeal had made a ruling. He added that a joint hearing was not necessary on evidence connecting the three cases. He submitted that this was an urgent matter where public protection was involved. Finally, he maintained that his client would suffer irreparable harm if a hearing had to be held and his appeal was subsequently allowed.
- Counsel for the principal analyst, in his turn, objected to the hearing being delayed again and asked that we proceed as soon as possible regardless of the appeal. He added that according to certain decisions rendered by other delegates of the Superintendent, I did not have the discretion to grant a stay in this way and consequently had a duty to act at once. He also felt that a joint hearing was necessary for part of the evidence to be presented.
- Counsel for PricewaterhouseCoopers Inc. and the trustee Robert Brochu questioned the need for a joint hearing and added that they had preliminary arguments to present (other than the constitutional question). These concerned the legislation applicable at the time and [they] wanted a preliminary hearing to be held on their points of law. During the telephone conference they undertook to submit written pleadings on this matter by September 1 at the latest. Counsel for the principal analyst in his turn undertook to reply by September 16 following.
- Counsel for the trustee Morency insisted on the need for a joint hearing on part of the evidence to be presented and added that he had no representations to make on whether to postpone the hearing until the Quebec Court of Appeal had ruled in Métivier.
After hearing counsel for each of the parties, I have come to the following conclusions.
- Although urgency and protection of the public are not decisive factors, I note that the facts surrounding the alleged actions date back at least as far as 1993, and the fact remains that in s. 14.02 of the Act Parliament has imposed on the Superintendent or his delegates a duty to act "as informally and expeditiously as the circumstances… permit". Further, the same provisions whose constitutionality has been challenged have been upheld and, until there is a further ruling, must be regarded as valid. In such a legal context, it seems to me that I have a duty to convene the parties for a hearing as soon as possible.
- A joint hearing seems necessary on the actions of the trustees involved in the sale of the Auberge Jacques-Cartier Enr. These are so inter-related that any attempt to sever them into three separate hearings would be contrary to all logic as well as creating serious problems of logistics in administration of the evidence. I wish to reserve a week of hearing on this matter, as suggested by counsel for the trustee Morency. Two further days of hearing may be reserved for the evidence on the other actions alleged against the trustee Métivier, and one day should suffice for those alleged against the trustee Morency.
- I reserve my decision on the advisability of holding a hearing devoted exclusively to the preliminary argument raised by counsel for PricewaterhouseCoopers Inc. and the trustee Robert Brochu. I will give them my decision after reviewing their written pleading and the reply by counsel for the principal analyst.
- After comparing the availability of each counsel, it appears that January 2003 is the first opportunity for hearing these cases unless counsel for the trustee Métivier informs me by the end of August that he is available to proceed in November (the other counsel were available at the time of the conference calls). Accordingly, I would ask each counsel to reserve the week of January 13, 2003 to proceed with the hearing on facts common to the three cases. If it is possible to hold a hearing more quickly, I will convene new pre-trial conferences in early September to reconfirm that each person is available.
Signed at Aylmer, Quebec, July 4, 2002.
Jean-Claude Demers, Q.C.
Delegate of Superintendent of Bankruptcy
Counsel of record:
Jacques Larochelle
Counsel for trustee Éric Métivier
Michel Jolin, Bâtonnier
and Alain Robitaille
Counsel for PricewaterhouseCoopers Inc. and the trustee Robert Brochu
Daniel O'Brien
Counsel for Serge Morency & Associés Inc. and the trustee Serge Morency
Pierre Lecavalier
and Louis-Philippe Delage
Counsel for the principal analyst
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.