Lévy (Sam) & Associés Inc. et al. v. Mayrand et al., (2005) 277 F.T.R. 50 (FC)

• Judge: Martineau, J.
• Court: Federal Court (Canada)
• Case Date: May 16, 2005
• Jurisdiction: Canada (Federal)
• Citations: (2005), 277 F.T.R. 50 (FC);2005 FC 702

Lévy & Assoc. v. Mayrand (2005), 277 F.T.R. 50 (FC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2005] F.T.R. TBEd. MY.067

Sam Lévy & Associés Inc. and Samuel L. Lévy, trustee (applicants) v. Marc Mayrand and Attorney General of Canada (respondents) and Michel Leduc (interested party)

(T-75-04)

Jacques Roy, trustee (applicant) v. Marc Mayrand and Attorney General of Canada (respondents) and Sylvie Laperrière (interested party)

(T-547-04; 2005 FC 702; 2005 CF 702)

Indexed As: Lévy (Sam) & Associés Inc. et al. v. Mayrand et al.

Federal Court

Martineau, J.

May 16, 2005.

Summary:

Two bankruptcy trustees were facing disciplinary proceedings involving the possible suspension or cancellation of their licences under ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act. The trustees claimed that ss. 14.01 and 14.02 were contrary to their fundamental right to a fair and equitable hearing before an independent and impartial tribunal (i.e., they claimed that the provisions were of no force and effect and the disciplinary proceedings should be stayed). In two separate interlocutory decisions, rendered by delegates of the Superintendent of Bankruptcy under s. 14.01(2) of the Act, the trustees' claims were rejected. The trustees applied for judicial review. The Attorney General of Canada intervened.

The Federal Court dismissed the judicial review applications. The court held that the Superintendent's delegates were correct in law and fact in finding that the application of ss. 14.01 and 14.02 was not inconsistent with ss. 1(a) and 2(e) of the Canadian Bill of Rights or s. 7 of the Canadian Charter of Rights and Freedoms. Further, the delegates made no reviewable error when they found that the trustees' other arguments involving the application of certain procedural guarantees, were premature or without legal foundation.

Bankruptcy - Topic 2601

Trustees - General - Two bankruptcy trustees claimed that because their licences could be suspended or revoked by the Superintendent of Bankruptcy, that they should, in accordance with due process of law, have the same substantive rights, if any, and the same procedural guarantees as applied in Quebec to professionals governed by the Professional Code, such as accountants or solicitors - The Federal Court rejected the trustees' argument - See paragraphs 73 to 76.

Bankruptcy - Topic 2631

Trustees - Discipline - General - The Federal Court traced the history of the provisions of the Bankruptcy and Insolvency Act dealing with the discipline process respecting bankruptcy trustees - See paragraphs 55 to 71.

Bankruptcy - Topic 2631

Trustees - Discipline - General - Two bankruptcy trustees were the subjects of disciplinary proceedings conducted by delegates of the Superintendent of Bankruptcy pursuant to ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act (BIA) - At the start of the hearing the trustees applied to the delegates for an immediate stay of the disciplinary proceedings, arguing that since the delegates (tribunals) had no power under the BIA to summon or compel witnesses to testify, there was a risk of infringement to their right to make full answer and defence - The delegates refused to stay proceedings on the basis that it was premature to make such a ruling - The trustees applied for judicial review - The Federal Court dismissed the application, holding that the delegates made no reviewable error in refusing the stay - The court held that even though the tribunals lacked power to summon witnesses, the Federal Court had the power to assist a federal board, commission or other tribunal and, if necessary, issue a subpoena directing a person to appear before the delegate - See paragraphs 178 to 188.

Bankruptcy - Topic 2631

Trustees - Discipline - General - Two bankruptcy trustees, who were the subjects of disciplinary proceedings, claimed that the discipline provisions of the Bankruptcy and Insolvency Act (i.e., ss. 14.01 and 14.02) did not provide sufficiently for procedural fairness - The Federal Court rejected the trustee's argument, holding that the trustees benefited and continued to benefit from a number of procedural guarantees providing adequate protection in the disciplinary proceeding in question - The court stated that those guarantees derived both from an analysis of ss. 14.01 and 14.02 and from the tribunal's (i.e., the Superintendent in Bankruptcy's or his delegates) disciplinary precedents - See paragraphs 77 to 86.

Bankruptcy - Topic 2631

Trustees - Discipline - General - Two bankruptcy trustees, who were the subjects of disciplinary proceedings under ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act (BIA), argued that the Superintendent of Bankruptcy and his delegates lacked independence from the stand point of due process of law contrary to s. 1(a) of the Canadian Bill of Rights - The Federal Court held that this argument was unfounded - The court stated that in the absence of any constitutional constraint, the degree of independence required of a decision-maker or administrative tribunal was determined by the tribunal's enabling Act - In this case, Parliament had expressed its intentions quite clearly in the BIA, including a pronouncement that the Superintendent be appointed at pleasure, he could engage persons to conduct inspections or investigations or to take other necessary action in his office and could delegate his powers, duties and functions regarding trustees - The court concluded therefore that the right to due process of law as mentioned in s. 1(a) of the Bill of Rights was not infringed - See paragraphs 87 to 90.

Bankruptcy - Topic 2631

Trustees - Discipline - General - Two bankruptcy trustees, who were the subjects of disciplinary proceedings under ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act (BIA), argued that the Superintendent of Bankruptcy and his delegates were not an independent and impartial tribunal within the meaning of s. 2(e) of the Canadian Bill of Rights - The trustees claimed that the provisions of the BIA did not provide for a fair and public hearing of their case before an independent an impartial tribunal in accordance with the principles of fundamental justice, both as to the creation of the tribunal and its composition and as to the security of tenure and financial security of the adjudicator - The Federal Court held that there was no violation of s. 2(e) - See paragraphs 91 to 177.

Bankruptcy - Topic 2631

Trustees - Discipline - General - [See Bankruptcy - Topic 9251 ].

Bankruptcy - Topic 2632

Trustees - Discipline - Suspension - Two bankruptcy trustees were facing disciplinary proceedings involving the possible suspension or cancellation of their licences under ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act - The trustees claimed that ss. 14.01 and 14.02 were contrary to their fundamental right to a fair and equitable hearing before an independent and impartial tribunal (i.e., they claimed that the provisions were of no force and effect and the disciplinary proceedings should be stayed) - In two separate interlocutory decisions, rendered by delegates of the Superintendent of Bankruptcy under s. 14.01(2) of the Act, the trustees' claims were rejected - The trustees applied for judicial review - The Federal Court dismissed the judicial review applications - The court held that the Superintendent's delegates were correct in law and fact in finding that the application of ss. 14.01 and 14.02 was not inconsistent with ss. 1(a) and 2(e) of the Canadian Bill of Rights or s. 7 of the Canadian Charter of Rights and Freedoms - Further, the delegates made no reviewable error when they found that the trustees' other arguments involving the application of certain procedural guarantees, were premature or without legal foundation.

Bankruptcy - Topic 9251

Discharge of trustee - Effect of discharge - Respecting disciplinary measures against trustee - A bankruptcy trustee was the subject of disciplinary proceedings under ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act (BIA) - The trustee argued that pursuant to s. 41(8) of the BIA, the fact that he had been discharged from his duties as bankruptcy trustee prior to the commencement of the discipline proceedings gave him immunity against any subsequent charge or remedy regarding his administration - The Federal Court held that the discharge order was not a legal bar to the prosecution of disciplinary proceedings brought by the Superintendent against the trustee - The court held that a discharge order only affected the trustee's conduct in respect of third parties and any person interested in the bankruptcy - See paragraphs 189 to 198.

Civil Rights - Topic 3193

Trials - Due process, fundamental justice and fair hearings - Administrative and noncriminal proceedings - Procedure not contrary to fundamental justice - Two bankruptcy trustees were facing disciplinary proceedings involving the possible suspension or cancellation of their licences under ss. 14.01 and 14.02 of the Bankruptcy and Insolvency Act - The trustees claimed that ss. 14.01 and 14.02 were contrary to their fundamental right to a fair and equitable hearing before an independent and impartial tribunal (i.e., they claimed that the provisions were of no force and effect and the disciplinary proceedings should be stayed) - In two separate interlocutory decisions, rendered by delegates of the Superintendent of Bankruptcy under s. 14.01(2) of the Act, the trustees' claims were rejected - The trustees applied for judicial review - The Federal Court dismissed the judicial review applications - The court held that the Superintendent's delegates were correct in law and fact in finding that the application of ss. 14.01 and 14.02 was not inconsistent with ss. 1(a) and 2(e) of the Canadian Bill of Rights or s. 7 of the Canadian Charter of Rights and Freedoms - See paragraphs 1 to 46.

Civil Rights - Topic 8005

Canadian Bill of Rights - Principles of operation and interpretation - Due process, right to life, liberty, security and enjoyment of property - [See fourth Bankruptcy - Topic 2631 ].

Civil Rights - Topic 8006

Canadian Bill of Rights - Principles of operation and interpretation - Right to fair hearing in accordance with principles of fundamental justice - [See fifth Bankruptcy - Topic 2631 ].

Courts - Topic 4021.2

Federal Court of Canada - Jurisdiction - Trial Division - To assist administrative tribunal that lacks power to compel attendance of witnesses - [See second Bankruptcy - Topic 2631 ].

Cases Noticed:

Pfeiffer v. Superintendent of Bankruptcy - see Pfeiffer v. Redling et al., [1996] 3 F.C. 584; 116 F.T.R. 173 (T.D.), refd to. [para. 26].

Workers' Compensation Board (N.S.) v. Martin et al., [2003] 2 S.C.R. 504; 310 N.R. 22; 217 N.S.R.(2d) 301; 683 A.P.R. 301, refd to. [para. 26].

Canada (Attorney General) v. Lévy (Sam) & Associés Inc. et al. (2005), 271 F.T.R. 77; 2005 FC 171, refd to. [para. 26].

Métivier v. Mayrand, [2003] R.J.Q. 3035 (C.A.), refd to. [para. 30].

Laflamme v. Superintendent of Bankruptcy - see Laflamme v. Canada (Ministre de l'Industrie, des Sciences et de la Technologie) et al.

Laflamme v. Canada (Ministre de l'Industrie, des Sciences et de la Technologie) et al., [1995] 3 F.C. 174; 96 F.T.R. 200 (T.D.), refd to. [para. 32].

Friedman & Friedman Inc. v. Superintendent of Bankruptcy - see Friedman & Friedman Inc. et al. v. Mayrand et al.

Friedman & Friedman Inc. et al. v. Mayrand et al. (2001), 211 F.T.R. 161 (T.D.), refd to. [para. 37].

R. v. Drybones, [1970] S.C.R. 282, refd to. [para. 39].

Bell Canada v. Canadian Telephone Employees Association et al., [2003] 1 S.C.R. 884; 306 N.R. 34, refd to. [para. 39].

Authorson v. Canada (Attorney General), [2003] 2 S.C.R. 40; 306 N.R. 335; 175 O.A.C. 363, refd to. [para. 39].

Air Canada v. Canada (Procureur général), [2003] R.J.Q. 322 (C.A.), refd to. [para. 39].

R. v. Wigglesworth, [1987] 2 S.C.R. 541; 81 N.R. 161; 61 Sask.R. 105; 24 O.A.C. 321, refd to. [para. 42].

R. v. Kalanj; R. v. Pion, [1989] 1 S.C.R. 1594; 96 N.R. 191, refd to. [para. 42].

Pearlman v. Manitoba Law Society Judicial Committee, [1991] 2 S.C.R. 869; 130 N.R. 121; 75 Man.R.(2d) 81; 6 W.A.C. 81, refd to. [para. 42].

Kane v. University of British Columbia, [1980] 1 S.C.R. 1105; 31 N.R. 214, refd to. [para. 43].

Reference Re Section 94(2) of the Motor Vehicle Act (B.C.), [1985] 2 S.C.R. 486; 63 N.R. 266, refd to. [para. 47].

Gosselin v. Québec (Procureur général), [2002] 4 S.C.R. 429; 298 N.R. 1, refd to. [para. 47].

Blencoe v. Human Rights Commission (B.C.) et al., [2000] 2 S.C.R. 307; 260 N.R. 1; 141 B.C.A.C. 161; 231 W.A.C. 161, refd to. [para. 48].

Kuntz v. College of Physicians and Surgeons (B.C.), [1987] B.C.J. No. 724 (S.C.), affd. [1988] B.C.J. No. 1009 (C.A.), refd to. [para. 48].

Sheriff v. Canada (Attorney General) - see Sheriff et al. v. Superintendent of Bankruptcy.

Sheriff et al. v. Superintendent of Bankruptcy, [2005] F.T.R. Uned. B93; 2005 FC 305, refd to. [para. 49].

Singh v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177; 58 N.R. 1, refd to. [para. 50].

Northwest Territories v. Public Service Alliance of Canada et al., [2001] 3 F.C. 566; 272 N.R. 88; 2001 FCA 162, refd to. [para. 50].

New Brunswick Broadcasting Co. v. Canadian Radio-Television and Telecommunications Commission, [1984] 2 F.C. 410; 55 N.R. 143 (F.C.A.), refd to. [para. 51].

Ontario (Attorney General) v. Canada (Attorney General), [1894] A.C. 189 (P.C.), refd to. [para. 58].

Reference Re Validity of the Debt Adjustment Act, Alberta - 1937, [1942] S.C.R. 31, refd to. [para. 58].

Alberta (Attorney General) v. Canada (Attorney General), [1943] A.C. 356 (P.C.), refd to. [para. 58].

Canadian Banker's Association v. Saskatchewan (Attorney General), [1956] S.C.R. 31, refd to. [para. 58].

Reference Re Validity Orderly Payment of Debts Act, 1959 (Alta.), [1960] S.C.R. 571, refd to. [para. 58].

Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; 243 N.R. 22, refd to. [para. 77].

Consolidated-Bathurst Packaging Ltd. v. International Woodworkers of America, Local 2-69 and Labour Relations Board (Ont.), [1990] 1 S.C.R. 282; 105 N.R. 161; 38 O.A.C. 321, refd to. [para. 77].

Newfoundland Telephone Co. v. Board of Commissioners of Public Utilities (Nfld.), [1992] 1 S.C.R. 623; 134 N.R. 241; 95 Nfld. & P.E.I.R. 271; 301 A.P.R. 271, refd to. [para. 77].

Congrégation des témoins de Jéhovah de St-Jerôme-Lafontaine v. Lafontaine (Village), [2004] 2 S.C.R. 650; 323 N.R. 1, refd to. [para. 77].

R. v. Stinchcombe, [1995] 1 S.C.R. 754; 178 N.R. 157; 162 A.R. 269; 83 W.A.C. 269, refd to. [para. 83].

Ocean Port Hotel Ltd. v. Liquor Control and Licensing Branch (B.C.), [2001] 2 S.C.R. 781; 274 N.R. 116; 155 B.C.A.C. 193; 254 W.A.C. 193, refd to. [para. 86].

Vaughan v. Canada (2005), 331 N.R. 64; 2005 SCC 11, refd to. [para. 86].

Vaughan v. Canada, [2003] 3 F.C. 645; 306 N.R. 366 (F.C.A.), refd to. [para. 88].

MacBain v. Canadian Human Rights Commission et al., [1985] 1 F.C. 856; 62 N.R. 117 (F.C.A.), refd to. [para. 91].

Canadian Pacific Ltd. v. Matsqui Indian Band et al., [1995] 1 S.C.R. 3; 177 N.R. 325, refd to. [para. 91].

R. v. Généreux, [1992] 1 S.C.R. 259; 133 N.R. 241, refd to. [para. 91].

Air Canada v. Canada (Procureur général), [2003] R.J.Q. 322 (C.A.), refd to. [para. 91].

Democracy Watch v. Canada (Attorney General), [2004] 4 F.C.R. 83; 257 F.T.R. 6; 2004 FC 969, refd to. [para. 91].

Blais v. Basford, [1972] F.C. 151 (F.C.A.), refd to. [para. 95].

2747-3174 Québec Inc. v. Régie des permis d'alcool du Québec et autres, [1996] 3 S.C.R. 919; 205 N.R. 1, refd to. [para. 97].

R. v. Duke, [1972] S.C.R. 917, refd to. [para. 107].

Canada (Minister of Industry, Trade and Commerce) v. Central Cartage Co. et al. (No. 1), [1990] 2 F.C. 641; 109 N.R. 357 (F.C.A.), refd to. [para. 107].

Knight v. Board of Education of Indian Head School Division No. 19, [1990] 1 S.C.R. 653; 106 N.R. 17; 83 Sask.R. 81, refd to. [para. 107].

Ruffo (Juge) v. Conseil de la magistrature et autres, [1995] 4 S.C.R. 267; 190 N.R. 1, refd to. [para. 108].

Beauregard v. Canada, [1986] 2 S.C.R. 56; 70 N.R. 1, refd to. [para. 108].

R. v. Lippé - see Lippé et autres v. Québec (Procureur général) et autres.

Lippé et autres v. Québec (Procureur général) et autres, [1991] 2 S.C.R. 114; 128 N.R. 1; 39 Q.A.C. 241, refd to. [para. 108].

R. v. Valente, [1985] 2 S.C.R. 673; 64 N.R. 1; 14 O.A.C. 79, refd to. [para. 111].

Canadian Union of Public Employees et al. v. Ontario (Minister of Labour) (2003), 304 N.R. 76; 173 O.A.C. 38; 2003 SCC 29, refd to. [para. 112].

Committee for Justice and Liberty Foundation et al. v. National Energy Board et al., [1978] 1 S.C.R. 369; 9 N.R. 115, refd to. [para. 122].

Barry and Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301; 93 N.R. 1; 96 A.R. 241, refd to. [para. 125].

Katz v. Vancouver Stock Exchange et al. (1995), 82 B.C.A.C. 16; 133 W.A.C. 16; 128 D.L.R.(4th) 424 (C.A.), affd. [1996] 3 S.C.R. 405; 207 N.R. 72; 82 B.C.A.C. 29; 133 W.A.C. 29, refd to. [para. 131].

Ireland Gingras v. Banque Provinciale du Canada (1963-1964), 5 C.B.R.(N.S.) 91 (Que. S.C.), refd to. [para. 134].

Lavallée v. Gagnon, [1975] C.A. 601 (Que.), refd to. [para. 138].

Davidson v. Slaight Communications Inc., [1989] 1 S.C.R. 1038; 93 N.R. 183, refd to. [para. 148].

Eaton v. Board of Education of Brant County, [1997] 1 S.C.R. 241; 207 N.R. 171; 97 O.A.C. 161, refd to. [para. 148].

Canada (Attorney General) v. Fetherson - see Fetherson v. Canadian Food Inspection Agency.

Fetherson v. Canadian Food Inspection Agency (2005), 332 N.R. 113; 2005 FCA 111, refd to. [para. 157].

Maple Lodge Farms Ltd. v. Canada, [1982] 2 S.C.R. 2; 44 N.R. 354, refd to. [para. 169].

Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231; 163 N.R. 81; 41 B.C.A.C. 81; 66 W.A.C. 81, refd to. [para. 169].

Montambault v. Brazeau, [1996] A.Q. No. 4187 (C.A.), refd to. [para. 177].

Hamel (G.E.) Ltée v. Cournoyer, [1989] R.J.Q. 2767 (S.C.), refd to. [para. 177].

Rubia v. Association of Registered Nurses (Nfld.) (1995), 139 Nfld. & P.E.I.R. 188; 433 A.P.R. 188; 134 D.L.R.(4th) 741 (Nfld. T.D.), refd to. [para. 178].

R. v. Rose (J.), [1998] 3 S.C.R. 262; 232 N.R. 83; 115 O.A.C. 201, refd to. [para. 178].

R. v. Osolin, [1993] 4 S.C.R. 595; 162 N.R. 1; 38 B.C.A.C. 81; 62 W.A.C. 81, refd to. [para. 178].

R. v. Mills, [1986] 1 S.C.R. 863; 67 N.R. 241; 16 O.A.C. 81, refd to. [para. 179].

Malek v. Parent, [1972] C.S. 229 (Que.), refd to. [para. 183].

First Investors Corp. (No. 2), Re (1987), 46 D.L.R.(4th) 687 (Alta. Q.B.), refd to. [para. 183].

Canadian Human Rights Commission v. Canadian Liberty Net et al., [1998] 1 S.C.R. 626; 224 N.R. 241, refd to. [para. 185].

Royal Canadian Mounted Police Public Complaints Commission v. Canada (Attorney General) (2004), 255 F.T.R. 270; 2004 FC 830, refd to. [para. 188].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 41(8) [para. 189]; sect. 41(8.1) [para. 192]; sect. 14.01, sect. 14.02 [para. 6].

Canadian Bill of Rights, R.S.C. 1985, App. III, sect. 1(a), sect. 2(e) [para. 40].

Canadian Charter of Rights and Freedoms, 1982, sect. 7 [para. 41].

Authors and Works Noticed:

Bilodeau, Paul-Emile, Précis de la faillite et de l'insolvabilité (2nd Ed. 2004), paras. 8 to 14 [para. 56]; 20 [para. 66]; 78 to 82 [para. 134]; 160 ff. [para. 139].

Bohémier, Albert, Faillite et insolvabilité (1992), vol. 1, c. 1, pp. 12 [para. 58]; 485 [para. 60]; 487 [paras. 63, 64]; 488 [paras. 64, 65].

Canada, Report of the Study Committee on Bankruptcy and Insolvency Legislation (Tassé Report) (1970), generally [para. 60].

Green, Guy, The Rationale and Some Aspects of Judicial Independence (1985), 59 A.L.J. 135, p. 135 [para. 114].

Shetreet, S., Judges on Trial: A Study of the Appointment and Accountability of the English Judiciary (1976), pp. 17, 18 [para. 114].

Tassé Report - see Canada, Report of the Study Committee on Bankruptcy and Insolvency Legislation.

Ziegel, Jacob S., Duggan, Anthony J., and Telfer, Thomas G.W., Canadian Bankruptcy and Insolvency Law: Cases, Texts and Materials (2003), pp. 5 ff. [para. 60]; 13 [para. 61].

Counsel:

Jean-Philippe Gervais, Michel Décary and Daniel Des Aulniers (Senior Counsel), for the applicants;

Bernard Letarte, Vincent Veilleux and Robert Monette, for the respondent, the Attorney General of Canada.

Solicitors of Record:

Gervais & Gervais S.E.N.C., Montreal, Quebec, Stikeman, Elliott, Montreal, Quebec and Grondin, Poudrier, Bernier S.E.N.C. (Senior Counsel), Montreal, Quebec, for the applicants;

John H. Sims, Q.C., Deputy Attorney General of Canada, Toronto, Ontario and De Blois et Associés (Senior Counsel), Ste-Foy, Quebec, for the respondent, the Attorney General of Canada.

These applications were heard at Montreal, Quebec, on March 8-10, 2005, by Martineau, J., of the Federal Court, who delivered the following decision on May 16, 2005.