Date:
20060530
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)
LÉTOURNEAU J.A.
[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
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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,
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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
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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,
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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.
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(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.
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(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
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(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
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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.
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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.
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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
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(2) Lors de l’audition, le
surintendant :
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(a) has the
power to administer oaths;
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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;
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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
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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.
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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.
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(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.
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(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.
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(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
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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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…
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…
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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;
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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
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