Draft Directive No. 31

Procedure Governing Trustee Professional Conduct Proceedings

Issued: [date]

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;
   • "applicant" means an employee working in the OSB investigating the professional conduct of a trustee pursuant to paragraph 5(3)(e)of the Act;
   • "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 applicant or the respondent;
   • "proceeding" means the trustee professional conduct proceeding held pursuant to sections 14.01 and 14.02 of the Act;
   • "professional conduct report" means the report prepared following the investigation of the trustee's conduct pursuant to paragraph 5(3)(e) of the Act;
   • "registry" means the OSB office responsible for the maintenance of official records of trustee professional conduct proceedings;
   • "respondent" means the corporate or individual trustee(s) who has received a written notice pursuant to subsection 14.02(1) of the Act;
   • "trustee" means a trustee as defined in section 2 of the Act.

Authority and Purpose

2. 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.
3. This Directive is to be interpreted in accordance with all relevant sections of the Act.

General

Conflict

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

Computation of Time

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

Powers of the Adjudicator

6. 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.
7. 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.
8. The adjudicator has authority pursuant to this Directive to:
   1. determine issues of procedure or process as may arise with respect to the proceeding; and
   2. extend or abridge time limits fixed under this Directive.
9. The adjudicator may, at the request of a party or on his/her own motion at any time and without prior notice:
   1. correct a technical, minor or clerical error or omission made in his/her decision or order; and
   2. clarify a decision or order where it contains a technical, minor or clerical misstatement or ambiguity, or otherwise requires clarification.

Registry

10. The registry shall keep all documents and records necessary to maintain the hearing record pursuant to subsection 14.02(3) of the Act, including:
    1. the notice sent to the trustee pursuant to subsection 14.02(1) of the Act;
    2. the summary of oral evidence and any documentary evidence;
    3. any written submissions made by the parties;
    4. all orders, directions and decisions; and
    5. any other documents filed during the proceeding.
11. All correspondence between a party and the adjudicator and all documents submitted with respect to the proceeding must be filed with the registry and copied to all other parties.
12. 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: OSB-Registry-Registre-BSF-OSB-BSF@ic.gc.ca

Communication with Adjudicator

13. No party shall communicate with the adjudicator, except:
    1. if orally, in the presence of all parties; or
    2. if in writing, with a copy to all parties.

Commencement of Proceeding

Notice Requirements

14. The professional conduct report constitutes Notice to the Respondent pursuant to subsection 14.02(1) of the Act.
15. The professional conduct report shall be served to the last known address of the respondent on file with the Superintendent by registered mail or any other method of delivery that requires the signature of the recipient.
16. Within thirty (30) days of being served with the professional conduct report, the respondent shall advise the Superintendent in writing if he/she requests a hearing and whether he/she wishes that hearing is to be oral or in writing.
17. If the respondent served with the professional conduct report fails to request a hearing, the adjudicator may render a decision based upon the professional conduct report without further notice to the respondent.

Delegation of Adjudication

18. In accordance with subsection 14.01(3) of the Act, where the Superintendent delegates authority to conduct a proceeding, written notice of such delegation will be given to the parties.

Pre-Hearing Conference

19. A notice setting out the method of the pre-hearing conference and, if applicable, its date, time and location shall be sent to all parties at least fifteen (15) days prior to the pre-hearing conference.
20. Where a party has been given notice of a pre-hearing conference and fails to attend, the adjudicator may proceed with the pre-hearing conference without further notice to and in the absence of that party.
21. 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.
22. The adjudicator may consider any or all of the following at a pre-hearing conference:
    1. the issues to be dealt with at the hearing and whether these can be clarified, simplified or resolved;
    2. whether any facts or evidence may be agreed upon by the parties;
    3. any disputes related to disclosure or production of documents;
    4. the parties' potential witness lists;
    5. any special needs of the parties or their witnesses;
    6. the dates by which any steps in the proceeding are to be taken or completed including the dates for the exchange of evidence and summary of witness statements, if applicable; and
    7. any other action, including any orders or directions that the adjudicator considers will promote an expeditious and a fair hearing.
23. All agreements and undertakings will be recorded in a memorandum prepared under the direction of the adjudicator.
24. The pre-hearing conference is not open to the public. Any order of the adjudicator presiding over the pre-hearing is public upon communication to the parties.

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Disclosure

25. At a date prior to the commencement of the hearing, as specified by the adjudicator, every party shall provide every other party with:
    1. a list and copy of every document that the party intends to rely on as evidence;
    2. a list of all other relevant documents in the party's possession, and an opportunity to examine and copy these documents; and
    3. a summary of witness statements.

Conduct of Proceeding

Hearing Procedures

26. The hearing is public unless the adjudicator decides otherwise pursuant to subsection 14.02(3) of the Act.
27. The adjudicator may receive and consider any agreed upon issues, facts or recommendations of the parties without proof or evidence.
28. The adjudicator may conduct a hearing by way of written submissions, in person, or by video or telephone conference.
29. 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.

Notice of Hearing

30. A notice setting out the method of the hearing and, if applicable, its date, time and location shall be sent to all parties at least sixty (60) days prior to the scheduled date of the hearing.
31. The hearing date, time and location may be communicated:
    1. on the OSB's website;
    2. at division offices of the OSB; and
    3. to any other person, upon request.
32. Where a party has been given notice 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 notice to and in the absence of that party.

Adjournments, Postponements and Extensions of Time

33. 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.
34. The request for an adjournment, a postponement or an extension of time shall be made to the adjudicator orally where the hearing is underway, or otherwise in writing with a copy to all parties. The request shall set out:
    1. the reasons for seeking the adjournment, postponement or extension of time;
    2. to the extent known, the position of the other party; and
    3. a list of alternative dates to which all parties agree, if applicable.
35. 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

36. Any summons issued 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.
37. Witnesses at the hearing may be:
    1. required to give evidence under oath or affirmation in accordance with paragraph 14.02(2)(a) of the Act;
    2. required to produce any documents in their possession relative to the subject matter of the proceeding;
    3. cross-examined; and
    4. ordered to be excluded from the hearing until called to give evidence.

Recording of the Hearing

38. The adjudicator will oversee the preparation of a log of any documents, witness statements and exhibits filed with respect to the proceeding.
39. Unless ordered by the adjudicator, the hearing will not be recorded and no transcript will be produced.
40. 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.
41. 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

Publication of Decision

44. The adjudicator's decision is public upon communication to the parties. The decision may also be communicated:
    1. on the OSB's website;
    2. at division offices of the OSB; and
    3. to any person, upon request.

Coming Into Force

45. This Directive comes into force on [date].

Enquiries

46. For any questions pertaining to this Directive, please contact the OSB Registry.

William R. James
Superintendent of Bankruptcy