Date: 20100324
Docket: A-66-10
Citation: 2010 FCA 84
Present: STRATAS
J.A.
BETWEEN:
SYLVIE LAPERRIÈRE, in her capacity as
Senior Analyst –
Professional Conduct - of the Office of
the Superintendent of Bankruptcy
Appellant
and
ALLEN W.
MACLEOD
and
D. & A.
MACLEOD COMPANY LTD.
Respondents
REASONS FOR ORDER
STRATAS J.A.
A. Introduction
[1]
The
appellant moves for a stay or suspension of an administrative adjudicator’s
hearing while an appeal is pending in this Court. For the reasons set out
below, I shall dismiss the motion.
B. The facts giving rise to the
motion
The parties
[2]
The
appellant is a senior analyst / professional conduct official in the Office of
the Superintendent of Bankruptcy. The respondents are trustees who have
administered various estates.
The legislative regime
[3]
The Office
of the Superintendent of Bankruptcy licenses trustees in bankruptcy. Under
section 14.01 of the Bankruptcy and Insolvency Act, R.S., 1985, c. B-3,
the Office can inquire into the conduct of a trustee. Sanctions can be imposed
where, among other things, the trustee has contravened the Act, the Bankruptcy
and Insolvency General Rules, C.R.C., c. 368, or directives of the
Superintendent of Bankruptcy made under section 5 of the Act.
The allegations
[4]
After an
investigation, the Office alleged that the respondents, while administering
various estates, had committed a number of contraventions. It identified 12
categories of contraventions. The Office instituted disciplinary proceedings
under section 14.01 of the Act against the respondents.
The disciplinary proceeding
[5]
A delegate
of the Superintendent of Bankruptcy tried the allegations. He found the
respondents not guilty of misconduct under six of the twelve categories.
[6]
In one
category, the delegate found a contravention arising from the respondents’ delays
in administering two estates. The respondents had no defence to this and were
guilty of misconduct. The delegate held a sanction hearing on this and imposed
a reprimand.
[7]
In the
remaining five categories, the delegate found contraventions, but ruled that
the respondents had established the defence of due diligence. Therefore, in these
five categories, the delegate decided that the respondents were not guilty of misconduct.
The appellant applied for judicial review to the Federal Court from that
decision.
The Federal Court’s decision:
the case becomes bifurcated
[8]
The
Federal Court granted the application for judicial review in part: 2010 FC 97. The
Federal Court’s decision led to bifurcation: of the five categories of
contraventions placed before the Federal Court, a group of three are now in
this Court and a group of two are now before the delegate for determination of
sanction. Here is how that happened:
● The
group of three now in this Court. On judicial review, the Federal Court
agreed with the delegate that the due diligence defence was established in
three categories of contraventions. The appellant appealed this portion of the
Federal Court’s decision to this Court.
● The
group of two now before the delegate. On judicial review, the Federal Court
found, contrary to the delegate, that the due diligence defence was not
established in two categories of contraventions and so the respondents were
guilty of misconduct. The Federal Court remitted these back to the delegate for
determination of sanction. The respondents did not appeal.
[9]
The
delegate now intends to begin a hearing concerning the sanction that should be
applied for the findings of misconduct in the group of two. The delegate’s
sanction hearing will likely take place and conclude before this Court deals
with the appeal concerning the group of three. The appellant asks this Court to
stay this sanction hearing until it determines the appeal concerning the group
of three.
C. Analysis
[10]
The test
for a stay is set out in the well-known Supreme Court
of Canada cases of Manitoba (Attorney General) v. Metropolitan Stores Ltd.,
[1987] 1 S.C.R. 110, RJR-Macdonald Inc. v. Canada (Attorney General),
[1994] 1 S.C.R. 311, 143471 Canada Inc. v. Quebec (Attorney General),
[1994] 2 S.C.R. 339 and Harper v. Canada (Attorney General), [2000] 2
S.C.R. 764, 2000 SCC 57.
[11]
On the
first branch of the threefold test for a stay, the appellant must establish a
serious question to be tried on appeal. The threshold for seriousness is “a low
one” and “liberal”: RJR-Macdonald, supra at page 337; 143471
Canada Inc., supra at page 358, per La Forest J. (dissenting,
with apparent concurrence on this point from the majority). An applicant need
only show that the matter is not destined to fail or that it is “neither
vexatious nor frivolous”: RJR-Macdonald, supra at page 337. Based
on the record in this case, I cannot say now that this matter is destined to
fail.
[12]
The
appellant’s request for a stay turns on the outcome of the remaining two parts
of the test. The appellant must show that irreparable harm will be caused if
the stay is not granted and the balance of convenience lies in favour of
granting a stay. Where the stay seeks to stop persons acting under a statute
from carrying out their duties, a “very important” public interest “weigh[s]
heavily” in favour of allowing those acting under statutes to carry out their
mandates: 143471 Canada Inc., supra at page 383, Cory J. (for the
majority); Harper, supra at paragraph 9.
[13]
Before
applying for a stay from this Court, the appellant asked the delegate to
adjourn until the appeal to this Court was determined. The delegate declined.
If this Court grants the stay requested by the appellant in this motion, this
Court essentially would be quashing an interlocutory, fact-based, discretionary
scheduling decision made by the delegate, an administrative actor who is statutorily
empowered to conduct his own proceedings. Seen in that light, the appellant’s
stay would be just like a successful interlocutory judicial review of the
delegate’s decision. But interlocutory judicial reviews are not available,
absent exceptional circumstances: President of the Canada Border
Services Agency v. C.B. Powell Limited, 2010 FCA 61. This underscores the
exceptional nature of the relief sought by the appellant in the circumstances
of this case. For this sort of exceptional relief, the appellant must file
evidence that is credible, detailed and strong.
[14]
The
evidence offered by the appellant on the issue of irreparable harm falls short
of the mark.
[15]
The
appellant submitted that if this Court grants her appeal and remits instances
of misconduct from the group of three back to the delegate for determination of
sanction, the delegate would have to hold a second separate hearing on
sanction. Consequences giving rise to irreparable harm follow from this, says
the appellant. The first hearing on sanction would become moot because the
delegate would have to conduct a new, compendious assessment of sanction: the
delegate would have to consider all of the instances of misconduct from the
original category of five. Thus, “[a]ll of the time, energy and money spent” on
the first sanction hearing would be wasted. The appellant also points to a
savings of costs arising from holding one compendious sanction hearing, rather
than two.
[16]
This
scenario of irreparable harm offered by the appellant suffers from at least
four flaws. The appellant has fallen well short of proving the sort of
irreparable harm necessary to obtain a stay.
[17]
First, the
appellant’s scenario presupposes that her appeal will succeed. It may not
succeed, with the effect that a second sanction hearing will not be held and
the harms alleged by the appellant will not arise. The harms alleged by the
appellant are speculative, hypothetical, or only arguable at best and do not
qualify as irreparable harm: Canada (Attorney General) v. Canada (Information
Commissioner), 2001 FCA 25, 268 N.R. 328 at paragraph 12.
[18]
Second, the
appellant has asserted, without evidence, that the first sanction hearing will
be rendered moot by the second sanction hearing. In considering the issue of
irreparable harm, the Court cannot accept bare assertions without evidence: Bathurst
Machine Shop Ltd. v. Canada, 2006 FCA 59, [2006] 2 C.T.C. 276 at paragraph
24 (F.C.A.). It may be possible for the delegate to hold two sanction hearings
dealing with the two groups of contraventions without reference to each other.
It all depends on the circumstances.
[19]
In this
regard, the appellant offered no evidence to show an interconnection among the various
matters such that there would have to be one compendious sanction hearing. Had
the appellant filed that evidence, she might have been able to raise a tenable
issue regarding whether irreparable harm would arise if the sanction hearing
were held now. The available evidence, however, suggests no such
interconnection. The delegate, in declining to adjourn the sanction hearing,
obviously concluded that he could proceed with the sanction hearing and, if
necessary, hold a second sanction hearing later. Further, the delegate has
already proceeded in this way: he held a hearing and imposed the sanction of
reprimand for one of the instances of misconduct even though several other matters
were before the Federal Court and might come back to him later for a
determination of sanction (see paragraph 6, above).
[20]
Third,
even if “time, energy and money” would be wasted, the appellant has failed to
particularize adequately the nature and amount of waste. Indeed, as best as can
be determined from the affidavit offered in support of the stay – and the
affidavit is unclear on this point – perhaps only a few days of work might be
wasted. This smacks of mere administrative inconvenience and is too trifling to
justify the unusual remedy of a stay against a public decision-maker who wants
to exercise his jurisdiction. Mere administrative inconvenience, without more,
does not qualify as irreparable harm: Falkiner v. Director, Income
Maintenance Branch (2000), 189 D.L.R. (4th) 377 at paragraph 9 (Ont. C.A.).
[21]
Finally,
the sort of bifurcation caused by the Federal Court’s decision in this case often
happens. Bifurcation and its unwelcome effects – greater inconvenience,
increased complexity and mounting costs – are part of the normal vicissitudes
of litigation. If the Court granted a stay on the basis of the evidentiary
record in this motion, it would have to grant a stay in every case where
bifurcation has happened. The appellant did not offer evidence that the
bifurcation in this case caused abnormal, harsh consequences beyond the norm. Bifurcation,
without more, is not a golden ticket to a stay.
[22]
Therefore,
the appellant has failed to show irreparable harm. This conclusion is
sufficient to dismiss the appellant’s motion for a stay of the delegate’s
sanction hearing. However, for completeness, I would add that the balance of
convenience is strongly against the granting of this relief.
[23]
The
respondents filed an affidavit attesting to the impact that the allegations
have had against them, their family and their business, including legal fees,
enormous expenditures of management time, loss of staff and significant reputational,
financial and emotional harm. Understandably, the respondents want the sanction
hearing to finish as soon as possible. Depending on the outcome of the appeal
in this Court, it may be the last hearing before the delegate in this matter and
the end of what the respondents feel is an intolerable ordeal.
[24]
Some of
the respondents’ evidence lacks sufficient particularity to be given full
weight. However, it easily outweighs the appellant’s evidence, summarized earlier
in these reasons.
[25]
This conclusion
is buttressed by the public interest considerations that the Court must factor
into the balancing: see paragraph 12, above. The delegate is discharging
responsibilities under a statutory regime that protects the public by identifying
and sanctioning instances of professional misconduct. Parliament has instructed
the delegate to act as expeditiously as the circumstances and fairness permit:
Act, subsection 14.02(2). The delegate now intends, with the respondents’
support, to act expeditiously and determine the sanction that the respondents
deserve for their misconduct in what I have called the group of two. Public
interest considerations weigh against the granting of a stay.
[26]
I conclude
that the delegate may proceed with the sanction hearing without interference
from this Court at this time. I decline to grant the stay requested by the
appellant.
D. Conclusion
[27]
Therefore,
I shall dismiss the appellant’s motion for a stay, with costs to the
respondents.
“David
Stratas”
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