Date: 20060530
BETWEEN:
and
SAMUEL S. LÉVY, Trustee
Appellants
and
MARC MAYRAND
and
ATTORNEY GENERAL OF CANADA
Respondents
and
MICHEL LEDUC
Interested Party
Hearing held at Montréal, Quebec, on May 30, 2006.
Judgment delivered from the bench at Montréal, Quebec, on May 30, 2006.
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
Docket: A-264-05
Citation: 2006 FCA 205
CORAM: LÉTOURNEAU J.A.
NOËL J.A.
PELLETIER J.A.
BETWEEN:
SAM LÉVY & ASSOCIÉS INC.
and
SAMUEL S. LÉVY, Trustee
Appellants
and
MARC MAYRAND
and
ATTORNEY GENERAL OF CANADA
Respondents
and
MICHEL LEDUC
Interested Party
REASONS FOR JUDGMENT OF THE COURT
(Judgment delivered from the bench at Montréal, Quebec, on May 30, 2006)
[2] Their delegate status stems from the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the Act). Pursuant to subsection 14.01(2) of the Act, the Superintendent of Bankruptcy (Superintendent) retained their services to exercise the adjudicative jurisdiction vested in him on his behalf. In this case, they had to decide whether there was any basis for allegations that the appellants were guilty of misconduct in carrying out their duties as trustees. This misconduct was allegedly in the form of breaching the Act, the Bankruptcy and Insolvency General Rules, C.R.C. c. 368, as well as the Superintendent’s directives.
Issues
[3] When the delegates heard these allegations, the appellants argued that sections 14.01 and 14.02 of the Act, which appear below, were inconsistent with paragraph 2(e) of the Canadian Bill of Rights, S.C. 1960, c. 44 (Bill). This paragraph guarantees every person the “right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations”:
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14.01 (1) Where, after making or causing to be made an investigation into the conduct of a trustee, it appears to the Superintendent that |
14.01 (1) Après avoir tenu ou fait tenir une enquête sur la conduite du syndic, le surintendant peut prendre l’une ou plusieurs des mesures énumérées ci-après, soit lorsque le syndic ne remplit pas adéquatement ses fonctions ou a été reconnu coupable de mauvaise administration de l’actif, soit lorsqu’il n’a pas observé la présente loi, les Règles générales, les instructions du surintendant ou toute autre règle de droit relative à la bonne administration de l’actif, soit lorsqu’il est dans l’intérêt public de le faire : |
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(a) a trustee has not properly performed the duties of a trustee or has been guilty of any improper management of an estate, |
a) annuler ou suspendre la licence du syndic; |
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(b) a trustee has not fully complied with this Act, the General Rules, directives of the Superintendent or any law with regard to the proper administration of any estate, or |
b) soumettre sa licence aux conditions ou restrictions qu’il estime indiquées, et notamment l’obligation de se soumettre à des examens et de les réussir ou de suivre des cours de formation; |
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(c) it is in the public interest to do so, |
c) ordonner au syndic de rembourser à l’actif toute somme qui y a été soustraite en raison de sa conduite. |
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the Superintendent may do one or more of the following: (d) cancel or suspend the licence of the trustee; (e) place such conditions or limitations on the licence as the Superintendent considers appropriate including a requirement that the trustee successfully take an exam or enrol in a proficiency course, and (f) require the trustee to make restitution to the estate of such amount of money as the estate has been deprived of as a result of the trustee’s conduct. |
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(1.1) This section and section 14.02 apply, in so far as they are applicable, in respect of former trustees, with such modifications as the circumstances require. |
(1.1) Dans la mesure où ils sont applicables, le présent article et l’article 14.02 s’appliquent aux anciens syndics avec les adaptations nécessaires. |
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(2) The Superintendent may delegate by written instrument, on such terms and conditions as are therein specified, any or all of the Superintendent’s powers, duties and functions under subsection (1), subsection 13.2(5), (6) or (7) or section 14.02 or 14.03. |
(2) Le surintendant peut, par écrit et aux conditions qu’il précise dans cet écrit, déléguer tout ou partie des attributions que lui confèrent respectivement le paragraphe (1), les paragraphes 13.2(5), (6) et (7) et les articles 14.02 et 14.03. |
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(3) Where the Superintendent delegates in accordance with subsection (2), the Superintendent or the delegate shall |
(3) En cas de délégation aux termes du paragraphe (2), le surintendant ou le délégué doit : |
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(a) where there is a delegation in relation to trustees generally, give written notice of the delegation to all trustees; and |
a) dans la mesure où la délégation vise les syndics en général, en aviser tous les syndics par écrit; |
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(b) whether or not paragraph (a) applies, give written notice of the delegation of a power to any trustee who may be affected by the exercise of that power, either before the power is exercised or at the time the power is exercised. |
b) en tout état de cause, aviser par écrit, avant l’exercice du pouvoir qui fait l’objet de la délégation ou lors de son exercice, tout syndic qui pourrait être touché par l’exercice de ce pouvoir. |
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14.02 (1) Where the Superintendent intends to exercise any of the powers referred to in subsection 14.01(1), the Superintendent shall send the trustee written notice of the powers that the Superintendent intends to exercise and the reasons therefor and afford the trustee a reasonable opportunity for a hearing. |
14.02 (1) Lorsqu’il se propose de prendre l’une des mesures visées au paragraphe 14.01(1), le surintendant envoie au syndic un avis écrit et motivé de la mesure qu’il entend prendre et lui donne la possibilité de se faire entendre.
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(2) At a hearing referred to in subsection (1), the Superintendent |
(2) Lors de l’audition, le surintendant : |
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(a) has the power to administer oaths; |
a) peut faire prêter serment; |
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(b) is not bound by any legal or technical rules of evidence in conducting the hearing; |
b) n’est lié par aucune règle juridique ou procédurale en matière de preuve; |
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(c) 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; and |
c) règle les questions exposées dans l’avis d’audition avec célérité et sans formalisme, eu égard aux circonstances et à l’équité; |
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(d) shall cause a summary of any oral evidence to be made in writing. |
d) fait établir un résumé écrit de toute preuve orale. |
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(3) The notice referred to in subsection (1) and, where applicable, the summary of oral evidence referred to in paragraph (2)(d), together with such documentary evidence as the Superintendent receives in evidence, form the record of the hearing and the record and the hearing are public, unless the Superintendent is satisfied that personal or other matters that may be disclosed are of such a nature that the desirability of avoiding public disclosure of those matters, in the interest of a third party or in the public interest, outweighs the desirability of the access by the public to information about those matters. |
(3) L’audition et le dossier de l’audition sont publics à moins que le surintendant ne juge que la nature des révélations possibles sur des questions personnelles ou autres est telle que, en l’espèce, l’intérêt d’un tiers ou l’intérêt public l’emporte sur le droit du public à l’information. Le dossier de l’audition comprend l’avis prévu au paragraphe (1), le résumé de la preuve orale visé à l’alinéa (2)d) et la preuve documentaire reçue par le surintendant. |
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(4) The decision of the Superintendent after a hearing referred to in subsection (1), together with the reasons therefor, shall be given in writing to the trustee not later than three months after the conclusion of the hearing, and is public. |
(4) La décision du surintendant est rendue par écrit, motivée et remise au syndic dans les trois mois suivant la clôture de l’audition, et elle est publique. |
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(5) A decision of the Superintendent given pursuant to subsection (4) is deemed to be a decision of a federal board, commission or other tribunal that may be reviewed and set aside pursuant to the Federal Courts Act. |
(5) La décision du surintendant, rendue et remise conformément au paragraphe (4), est assimilée à celle d’un office fédéral et comme telle est soumise au pouvoir d’examen et d’annulation prévu à la Loi sur les Cours fédérales. |
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2. Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to |
2. Toute loi du Canada, à moins qu’une loi du Parlement du Canada ne déclare expressément qu’elle s’appliquera nonobstant la Déclaration canadienne des droits, doit s’interpréter et s’appliquer de manière à ne pas supprimer, restreindre ou enfreindre l’un quelconque des droits ou des libertés reconnus et déclarés aux présentes, ni à en autoriser la suppression, la diminution ou la transgression, et en particulier, nulle loi du Canada ne doit s’interpréter ni s’appliquer comme |
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(e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations; |
e) privant une personne du droit à une audition impartiale de sa cause, selon les principes de justice fondamentale, pour la définition de ses droits et obligations;
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[5] The appellants made these same submissions before the judge and before us.
The judgment of the Court of Appeal of Québec in Métivier v. Mayrand
[6] It should be noted that these submissions are not new since they were already submitted to the Court of Appeal of Québec in Métivier v. Mayrand, [2003] R.J.Q. 3035 (C.A.Q.), where they were the subject of a negative finding. The appellants, who requested and received the status of interveners in this matter, participated in those proceedings.
[7] The Court of Appeal of Québec determined that it lacked the jurisdiction “to review the concrete structure established by the [S]uperintendent”: see Métivier, at paragraph 38. Nevertheless, within the limits of its jurisdiction, it proceeded to examine the statutory scheme set out by Parliament – and specifically the impugned statutory provisions – on a theoretical basis.
[8] On that point, it determined that sections 14.01 and 14.02 of the Act are neutral provisions. In it’s opinion, these provisions enable the Superintendent, who has the power to both investigate and adjudicate, to implement a process by way of the delegation provided under subsection 14.01(2) to determine the appellants’ rights in accordance with the guarantees of independence and impartiality mandated by the Bill. Accordingly, it determined that sections 14.01 and 14.02 were consistent with the Bill.
[9] Mr. Justice Dussault, who wrote the reasons for judgment of the Court, recognized that in certain specific cases the concrete or practical application of the statutory scheme could raise a reasonable apprehension of bias. In such a case, the decision could be set aside without having to decide whether sections 14.01 and 14.02 were consistent with the Bill. But, as I mentioned already, he did not consider the practice established by the Superintendent in this area.
Decision
[10] As is clear from the judge’s decision under appeal before us and that of the Court of Appeal of Québec in Métivier, the appellants are simply dwelling, essentially, on questions already decided by the Supreme Court of Canada and the Court of Appeal of Québec: see 2747-3174 Québec Inc. v. Québec (Régie des permis d’alcool), [1996] 3 S.C.R. 919, Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3, Katz v. Vancouver Stock Exchange, [1996] 3 S.C.R. 405, Ocean Port Hotel Ltd. v. British Columbia, [2001] 2 S.C.R. 781, Bell Canada v. Canadian Telephone Employees Association, [2003] 1 S.C.R. 884, C.U.P.E. v. Ontario (Minister of Labour), 2003 SCC 29, Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623, Métivier v. Mayrand, supra, Montambeault v. Brazeau, [1996] A.Q. No. 4187 (QL).
[11] It is true that neither the judge nor our Court is bound by the Court of Appeal of Québec’s decision in Métivier. But the appellants must also establish that it does not apply in this case, that its findings were wrong or that, based on compelling reasons, it should not be followed. In this matter, it was a burden that the appellants failed to satisfy.
[12] Even if for discussion purposes it were accepted that the Court of Appeal of Québec was mistaken regarding the existence of the Superintendent’s power to select the delegate responsible for hearing the complaints – as the appellants contend – we do not believe that this factor alone compromises or hinders, for practical purposes, the establishment of an independent system of prosecution and adjudication which respects the procedural fairness guarantees.
[13] Moreover, the appellants are asking us to disregard the recent decision by our Court in Sheriff v. Canada (Attorney General), 2006 FCA 139, where our Court, per Malone J.A., unanimously determined that there is no reasonable apprehension of bias as long as the functions of prosecution and adjudication are not performed by the same person. We see no valid reason to derogate from this.
[14] In well-written reasons for judgment, the judge thoroughly reviewed, from the standpoint of the Bill, the powers and duties of the Superintendent as well as those of the two delegates responsible for hearing the complaints against the appellants. He did so not only from a theoretical point of view but also, as he had the jurisdiction to do, from a practical point of view by examining – legislation aside – the operational reality qualifying and defining the exercise of the Superintendent’s investigation and adjudication powers.
[15] The judge determined that, in this case, theoretically and practically speaking, the statutory granting of these powers to the Superintendent and the exercise thereof do not compromise the individual or institutional independence of the delegates responsible for making a decision regarding the appellants’ professional conduct, or their institutional impartiality. We cannot identify any error that would justify our intervention. It would not serve any purpose to add to his reasons on this point.
[16] The judge also determined that several of the allegations and complaints made by the appellants were either theoretical, or hinged on an issue that was not founded on the facts of the case, or purely speculative or unsupported by the evidence. We also agree with these findings.
[17] As an example, the appellants challenged the fact that the Superintendent sat on about 25 percent of the cases involving disciplinary measures while the remaining 75 percent were entrusted to delegates. These cases are not before us and they reflect a factual reality very different from ours, where the complaints were referred to delegates for adjudication.
[18] But the appellants are relying on these statistics to conclude that theoretically, for statutory purposes, there is a resulting reasonable apprehension of bias because of the Superintendent’s lack of institutional – and probably also individual – independence and impartiality. As stated earlier, our Court rejected an argument like this in Sheriff.
[19] Moreover, the appellants are in fact asking us to make a prospective ruling, in the abstract and in the absence of specific facts, whether it be a declaratory judgment regarding the existence of a reasonable apprehension of bias, or a declaratory judgment that sections 14.01 and 14.02 of the Act are inconsistent with the Bill, whenever the Superintendent himself hears allegations of disciplinary breaches. We do not find that it would be appropriate in this case to commit ourselves on such a theoretical and moot issue.
[20] We are prepared to accept that on a strictly statutory basis, the system in place could be improved in terms of image and perception. However, the guarantees of independence and impartiality must be appreciated while taking into account operational reality. This system is perhaps not the ideal system, but we are satisfied that in this case that the minimum requirements of independence and impartiality were met.
[21] For these reasons, the appeal shall be dismissed with costs.
“Gilles Létourneau”
Certified true translation
Kelley A. Harvey, BCL, LLB
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-264-05
APPEAL FROM THE ORDER OF MR. JUSTICE LUC MARTINEAU OF THE FEDERAL COURT DATED MAY 16, 2006, DOCKET NUMBER T-75-04.
STYLE OF CAUSE: SAM LÉVY & ASSOCIÉS INC. ET AL. v. MARC MAYRAND ET AL.
PLACE OF HEARING: Montréal, Quebec
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
NOËL J.A.
PELLETIER J.A.
DELIVERED FROM THE BENCH BY: LÉTOURNEAU J.A.
APPEARANCES:
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Jean-Philippe Gervais (Gervais et Gervais s.e.n.c.)
Daniel DesAulniers (Grondin, Poudrier, Bernier)
Michel Décary (Stikeman Elliott)
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FOR THE APPELLANTS
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Vincent Veilleux |
FOR THE RESPONDENTS
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SOLICITORS OF RECORD: Gervais et Gervais s.e.n.c. Montréal, Quebec |
FOR THE APPELLANTS |
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Grondin, Poudrier, Bernier Québec, Quebec
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Stikeman Elliott Montréal, Quebec
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Deputy Attorney General of Canada |
FOR THE RESPONDENTS |