Ottawa, Ontario, December 21, 2005
PRESENT: THE HONOURABLE MADAM JUSTICE MACTAVISH
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
and
TODD Y. SHERIFF AND SEGAL AND PARTNERS INC.
REASONS FOR ORDER AND ORDER
[1] A delegate of the Superintendent of Bankruptcy stayed disciplinary proceedings against the respondent Trustees in Bankruptcy because of what the Delegate considered to be the ongoing failure of the Senior Discipline Analyst to make timely or proper disclosure of relevant documentation. As the representative of the Office of the Superintendent of Bankruptcy, the Attorney General of Canada now seeks judicial review of that decision.
[2] The Attorney General asserts that the Delegate erred in principle in granting the stay. Specifically, the Attorney General says that the Delegate misapprehended the scope of the duty to make disclosure in cases such as this, and further erred in finding that there had been a breach of that duty on the part of the Senior Discipline Analyst.
[3] Moreover, the Attorney General contends that the Delegate erred in failing to properly consider the injustice that would result from the granting of the stay, having regard to the obligations of the Office of the Superintendent of Bankruptcy (or "OSB") to protect the public.
[4] For the reasons that follow, I am satisfied that the Superintendent's delegate did not err in granting the stay of proceedings. As a consequence, this application for judicial review is dismissed.
Background
[5] In order to put the issues in this case into context, it is necessary to have an understanding of the lengthy and somewhat convoluted history of this matter.
[6] The OSB is responsible for the supervision of the administration of estates and matters to which the Bankruptcy and Insolvency Act, R.S.C. 1985 c. B-3, applies. This includes responsibility for the licensing and supervision of Trustees in Bankruptcy, as well as the establishment of professional standards and the administration of the disciplinary process to deal with allegations of professional misconduct.
[7] Todd Sheriff is a licensed Trustee in Bankruptcy, who is employed by Segal and Partners Inc.. Segal and Partners Inc. is a Corporate Trustee. The respondents will be referred to collectively in this decision as "the Trustees".
[8] As a result of a complaint received from a creditor that the Trustees had solicited proxies in the course of administering an estate, an investigation was undertaken in accordance with the provisions of the Bankruptcy and Insolvency Act (or "BIA"). This investigation resulted in a report dated June 29, 2001 being prepared by a Senior Discipline Analyst (or "SDA"), which report identified seven categories of deficiencies in the Trustees' practices.
[9] After this initial report was prepared, an audit was conducted by the National Audit Group of the OSB. This audit resulted in the preparation of a supplementary report dated October 25, 2001, which identified further deficiencies in the Trustees' practices. Whereas the first report related to perceived failures to meet professional standards on the part of the Trustees, the second report related to perceived wrongdoing against the interests of beneficiaries of bankrupt estates.
[10] Both reports were initially to form the basis of a single disciplinary proceeding, however it was later decided that the second report would be referred to a different adjudicator for hearing.
[11] The disciplinary proceedings arising out of the findings of the first report are not specifically in issue in this case, although there were disclosure problems in that case that are alleged to be relevant to the current proceedings.
[12] The first disciplinary hearing was presided over by the Superintendent of Bankruptcy himself. In a decision dated September 3, 2002, the Superintendent found the Trustees responsible for several deficiencies in their handling of certain estates under their administration.
[13] One of the matters in issue at the first disciplinary hearing was the allegedly dishonest conduct of Ms. A, one of Segal and Partners Inc.'s former employees. Ms. A was the senior estate administrator on the files under scrutiny at the hearing. Her employment with the Trustees was terminated in October of 2000 for misappropriation of funds.
[14] Before the matter of the appropriate penalty could be dealt with, the Trustees moved for a stay of proceedings, or, in the alternative, a reconsideration of the finding of professional misconduct on the basis of newly discovered evidence regarding the dishonesty of Ms. A. The new evidence took the form of an April, 2002 letter from Ms. A's subsequent employer to the Office of the Superintendent of Bankruptcy reporting the misappropriation of client funds by Ms. A.
[15] In a decision dated February 12, 2003, the Superintendent of Bankruptcy refused to grant a stay of proceedings, finding that while the document should have been disclosed to the Trustees by the SDA, the undisclosed information would not have led to a different result, nor would it have led the Trustees to pursue different lines of inquiry that could have led to a different result. As a consequence, the Superintendent of Bankruptcy found that there was no reason to grant a new hearing or to stay the proceedings.
[16] In coming to this conclusion, the Superintendent of Bankruptcy reviewed the law with respect to pre-hearing disclosure in administrative proceedings, and made a number of observations with respect to the right to disclosure of Trustees in Bankruptcy facing disciplinary hearings.
[17] In particular, the Superintendent of Bankruptcy found that the obligation of full disclosure contemplated by the Supreme Court of Canadain R. v. Stinchcombe [1991] 3 S.C.R. 326 in relation to Crown counsel in the criminal law context applied to Senior Discipline Analysts "with the appropriate adaptation". According to the Superintendent of Bankruptcy "[t]he role of the SDA is to present all relevant evidence to the Superintendent or his adjudicating delegate so that he can determine if misconduct has occurred."
[18] The Superintendent of Bankruptcy went on to observe that:
[There is] no doubt in my mind as to the duty of the SDA to disclose all relevant information in her possession whether it was [ac]quired directly as a result of her investigation or otherwise. In determining whether the information is relevant or not the test should not only be if information is useful to her case but whether it might be useful to the trustee. In case of any doubt, disclosure should prevail and the final decision to introduce the material as evidence (and when and how) should be left with the trustee. [at p.8]
[19] The Superintendent of Bankruptcy observed that the duty of disclosure is subject to five exceptions. According to the Superintendent, timely disclosure was not required where:
1. The information is clearly irrelevant;
2. The non-disclosure is required by the rules of privilege;
3. Delay in disclosure is necessary to protect [a] witness;
4. Delay in disclosure is necessary to complete investigation;
5. The information not disclosed is not within the control of the prosecutor. [at p. 8]
[20] An application for judicial review of the decision of the Superintendent of Bankruptcy with respect to the finding of misconduct against the Trustees was then commenced. Before that application could be heard, the disciplinary hearing arising out of the supplementary report commenced in November of 2002 with the appointment of the Superintendent of Bankruptcy's Delegate to hear the case.
[21] It appears from the record that counsel for the parties were in communication between November of 2002 and October of 2003, but there is no indication of any disclosure having been made by the SDA during this period. The Trustees evidently believed that they already had all of the relevant documents in the possession of the SDA, as a result of the earlier ruling of the Superintendent of Bankruptcy.
[22] In October of 2003, the SDA was cross-examined on the affidavit that she had sworn in response to the Trustees' application to judicially review the Superintendent of Bankruptcy's decision with respect to the first disciplinary proceeding. The Trustees say that based on answers provided by the SDA, they became aware that there was likely additional relevant information in the possession of the Office of the Superintendent of Bankruptcy relating to this matter.
[23] As a result, by letters dated February 13 and March 3, 2004, the Trustees requested production of certain specified documents relating to the supplementary report. On March 16, 2004, counsel for the OSB produced a number of additional documents, with the caveat that it was the belief of the OSB that these documents were not in fact relevant to the matters raised in the supplementary report.
[24] The second disciplinary hearing was set to begin in May of 2004. After receiving the March 16 disclosure, the Trustees sought to have the hearing adjourned on the basis of the late disclosure from the SDA, and the Trustees' assertion that it appeared that there were additional documents relating to the administration of third party funds in the possession of the SDA that had not yet been produced.
[25] A letter dated April 14, 2004 was sent to the Office of the Superintendent of Bankruptcy by the Trustees, detailing the additional documents that they wished to have disclosed, which included all of the notes made by the SDA in the course of her investigation. The Trustees further requested that all documents over which privilege was claimed be placed before the Delegate to determine whether or not they should be produced.
[26] In response to this letter, the OSB produced another package of documents, again submitting that its contents were completely irrelevant to the issues raised in the supplementary report. While the documents were not provided to the Court on this application, I am advised by counsel that the additional disclosure produced by the SDA in the Spring of 2004 was voluminous.
[27] By Motion dated April 26, 2004, the Trustees sought a stay of the second disciplinary proceeding "on the basis of a persistent pattern of conduct by the Senior Discipline Analyst ... of failing to disclose material documents in this and a related discipline proceeding". The Trustees asserted that this failure on the part of the SDA compromised their ability to make full answer and defence to the allegations against them.
[28] In response, the OSB maintained that all relevant documentation had already been disclosed, and that even if this was not the case, the appropriate relief would be an order for further disclosure and an adjournment, rather than a stay of proceedings.
[29] By Order dated June 10, 2004, the Delegate dismissed the Trustees' motion for a stay. While the Delegate accepted that there had been a lack of timely disclosure by the SDA, his decision was based, in part, on his belief that there were no more undisclosed documents in the hands of the SDA, noting that in the affidavit sworn by the SDA in response to the Trustees' motion, the SDA had deposed that she had complied with all requests for disclosure.
[30] The Delegate did, however, agree to adjourn the proceedings. The hearing was now scheduled to begin on November 22, 2004. This date was later changed to December 9, 2004.
[31] In preparation for the upcoming hearing, the SDA conducted a further review of all her files in order to make sure that all documentation, even that which was remotely related to the issues in the proceedings, had been disclosed. On November 2, 2004, the SDA sent the Trustees copies of certain e-mails that had previously been determined to be irrelevant, in order to ensure that no further allegations of a lack of disclosure would put the hearing at risk.
[32] After receipt of the November 2, 2004 disclosure, the Trustees again moved for a stay of the proceedings. In a decision dated January 6, 2005, the Delegate stayed the second disciplinary proceeding. It is this decision to stay the proceedings that underlies this application for judicial review.
[33] Before turning to consider the Delegate's reasons for staying the proceedings, it should be noted that prior to the Attorney General commencing this application to judicially review the Delegate's decision, a further package of documents relating to the proceeding was disclosed to the Trustees by the SDA on January 27, 2005.
The Delegate's Decision
[34] In addressing the Trustees' motion for a stay, the Superintendent's Delegate reviewed the history of the proceeding, observing that at the time that he had dismissed the Trustees' first request for a stay, he had the assurance of the SDA that full disclosure had been made. Notwithstanding that assurance, however, the Delegate observed that additional disclosure had been provided to the Trustees shortly before the hearing was scheduled to begin.
[35] The Delegate noted that the Trustees had not been able to point to any particular documents which should have been produced and were not. Rather, he observed that the Trustees' argument was that in light of the history of the proceedings, they could not know what additional information could be in the hands of the SDA.
[36] While noting that there had been two separate disciplinary proceedings involving the Trustees, and that each case had to stand or fall on the particular evidence relating to that proceeding, the Delegate nevertheless observed that the Trustees had been "burnt" once by the SDA. As a consequence, the Delegate indicated that he had sympathy for the Trustees' concern that full disclosure may not have been made in this case. Indeed, the Delegate noted that the fact that disclosure seemed to "keep on coming" left him feeling uneasy.
[37] In weighing whether the history of this case as it related to the matter of disclosure should give rise to the relief sought, the Delegate considered the nature and seriousness of the allegations of misconduct levelled against the Trustees. In this regard, the Delegate observed that "it is fair to say that even without minimizing the cumulative effect, the deficiencies alleged [on the part of the Trustees] are not of the most serious kind".
[38] The Delegate also noted that the fact that the Trustees' very right to continue to carry on their profession was at stake was a further relevant factor to weigh in the equation.
[39] The Delegate went on to review the law relating to the duty to disclose in disciplinary proceedings such as this, noting that the right to disclosure in professional discipline cases was no longer in doubt. In this regard, the Delegate referred to the decision of the British Columbia Supreme Court in Milner v. Registered Nurses Assn. of British Columbia, [1999] B.C.J. No. 2743. Moreover, the Delegate held that while defence counsel's diligence enters into the picture, counsel cannot be expected to request disclosure of every document. Rather, the onus lies with the party whose duty it is to disclose.
[40] Citing the decision of the Supreme Court of Canada in R v. Dixon, [1998] 1 S.C.R. 244 at 264-265, the Delegate observed that undisclosed information may not only impair the right of full answer and defence, it may also deprive the defence of realistic opportunities to explore possible uses of the information for the purposes of investigation.
[41] While noting that the appropriate remedy for non-disclosure would ordinarily be an order for production or an adjournment, the Delegate stated that he could not make such an order where, as in this case, the SDA had once again provided assurances that no further documents existed. In the Delegate's view, a review of the history of the matter led him to share the Trustees' loss of confidence in the process.
[42] The Delegate then went on to consider whether the circumstances justified staying the proceedings. In this regard, he noted that in R v. Taillefer, [2003] 3 S.C.R. 307, 2003 SCC 70, the Supreme Court of Canada stated that a stay of proceedings should only be granted in the clearest of cases. Asking himself whether this was such a case, the Delegate stated:
At best, it is borderline, but when I balance the interests of the Trustees and the interests of the state in having the alleged misconduct punished, I find the scale tips in favour of the Trustees. [The Trustees] have a judgment of the Superintendent attesting to the fact that they had not received full disclosure in a related case. They were assured in the present case that disclosure was complete, only to receive further disclosure at a later date. The integrity of the process is put into question, so is their right and ability to make full answer and defence. [at pp. 7-8]
[43] As a consequence, the Delegate concluded that the proceedings should be stayed.
Issues
[44] The issues raised by this application are:
1. What is the appropriate standard of review?
2. What is the extent of the duty of disclosure on the SDA?
3. Was there a breach of the duty of disclosure on the part of the SDA?
4. What is the applicable test for granting a stay of proceedings? and
5. Did the Delegate err in staying the disciplinary proceedings in the circumstances of this case?
What is the Appropriate Standard of Review?
[45] The parties are in agreement that a stay of proceedings is a discretionary remedy, and that a reviewing court should not lightly interfere with a decision to grant or deny a stay in a given set of circumstances. Both parties refer to the comments of the Supreme Court of Canada in Canada v. Tobiass [1997] 3 S.C.R. 391 at ¶ 87, where the Court confirmed that intervention will only be justified where the adjudicator misdirects him- or herself, or the decision is so clearly wrong as to amount to an injustice.
[45]
[46] However, it should be noted that Tobiass involved the appellate review of a trial judge's decision granting a stay, as opposed to the judicial review of the decision of an administrative tribunal to stay proceedings.
[47] In Sheriff v. Canada (Attorney General), [2005] F.C.J. No. 399, 2005 FC 305, this Court was called upon to identify the standard of review to be applied in a judicial review of the decision of the Superintendent of Bankruptcy refusing to stay the first disciplinary proceeding against the Trustees. The Court concluded a decision whether or not to stay proceedings involved questions of mixed fact and law, and that the standard of review to be applied with respect to the merits of the Superintendent of Bankruptcy's decision in relation to the motion for a stay was that of reasonableness. [at ¶ 32]
[48] While the Superintendent of Bankruptcy's powers have been delegated in this case, I see no basis for applying a different standard of review to the decision of the Delegate to stay these proceedings.
[49] However, before leaving the issue of standard of review, it should be noted that subsumed within the Delegate's decision to stay the proceedings are certain legal findings, specifically as it relates to the extent of the duty of disclosure on the SDA and the identification of the appropriate test for granting a stay of proceedings. These legal findings are reviewable against a standard of correctness: Sheriff, at ¶ 32.
What Is the Extent of the Duty of Disclosure on the SDA?
[50] The first question to be resolved is whether the Delegate erred in relation to the scope of the disclosure obligation on the SDA. According to the Attorney General, the Delegate erred in finding that the Trustees were entitled to a high standard of disclosure, akin to that required in the criminal law context, and that this error drives much of the Delegate's decision. Having misdirected himself as to the applicable standard of disclosure, the Attorney General says, the Delegate could not properly assess whether a stay of proceedings was warranted as a result of the breach of that duty. As a consequence, the Delegate's decision cannot stand.
[51] In submitting that the Delegate misdirected himself with respect to the level of disclosure required in proceedings such as this, the Attorney General points to the fact that disciplinary proceedings will not result in criminal sanctions, nor will they necessarily result in the Trustees being prevented from carrying on their profession.
[52] Moreover, the Attorney General submits that the proceedings in question were not professional discipline proceedings in the conventional sense, as would occur in relation to professionals such as doctors or lawyers. Rather, the proceedings related to the terms of the licences granted to the Trustees as licenced trustees under the Bankruptcy and Insolvency Act to carry out delegated responsibilities on behalf of the Office of the Superintendent of Bankruptcy. In granting trustees a limited monopoly to provide certain services to debtors and creditors under the Act, the Attorney General says, the Superintendent of Bankruptcy has a much more direct responsibility for the actions of licenced trustees than would be the case in ordinary professional discipline matters.
[53] The Attorney General submits that in these circumstances, the duty on the SDA only extends to requiring the disclosure of the information on which the report is based, so that the Trustees can know the case that they have to meet and have a fair opportunity to answer that case. In support of this contention, the Attorney General relies on the decision of this Court in the Sheriff matter previously cited, at ¶ 47.
[54] It should be noted that Sheriff involved a judicial review of a decision not to stay proceedings taken after the professional misconduct proceedings had been determined on their merits. As a consequence, the judge took into account the fact that the proceedings in question had not in fact resulted in the loss of professional standing on the part of the Trustees. In the case before me, the professional standing of the Trustees is still very much in jeopardy.
[55] More importantly, however, the decision in Sheriff appears to be contrary to a substantial body of case law that has developed in relation to the disclosure obligations that will be imposed on prosecuting authorities in professional discipline matters. This jurisprudence, which includes the decision of the British Columbia Supreme Court in the Milner case referred to by the Delegate, generally holds that procedural fairness requires that there must be full and timely disclosure by the prosecuting authority of both inculpatory and potentially exculpatory material: see also James T. Casey, The Regulation of Professions in Canada, (Toronto: Carswell, 1994), at 8.23-8.26.
[56] In imposing such extensive obligations on prosecuting authorities, Courts are frequently influenced by the grave consequences that findings of professional misconduct can have for a regulated professional, both in terms of the individual's professional reputation, as well as his or her ability to earn a living.
[57] It should also be noted that the decision in Sheriff has not met with universal approval. In Sam Lévy & Associés Inc. c. Canada (Surintendant des faillites), [2005] A.C.F. no. 882, 2005 CF 702, Justice Martineau took issue with the Court's characterization of the disciplinary process, as well as with its identification of the nature of the rights in issue in professional disciplinary matters involving licenced trustees.
[58] Finally, it should be observed that the individual charged with the responsibility for the administration of the licencing provisions of the Bankruptcy and Insolvency Act - the Superintendent of Bankruptcy - was himself of the view that the duty of disclosure on an SDA was akin to that articulated by the Supreme Court of Canada in the Stinchcombe decision.
[59] For these reasons, I am satisfied that the Delegate was correct in his identification of the extent of the duty of disclosure on the SDA in disciplinary matters such as this.
[60] Having correctly identified the standard of disclosure required, the next question is whether the Delegate erred in finding that the standard had not been met.
Was There a Breach of the Duty of Disclosure on the Part of the SDA?
[61] The Attorney General submits that the SDA did not breach her duty to make timely disclosure in this case. There were two requests made by the Trustees for specific documents in March and April of 2004, and these documents were produced. Further disclosure was provided by the SDA in November of 2004 "out of an abundance of caution".
[62] According to the Attorney General, the parameters of what was relevant in this case were initially established by the supplementary report prepared after the audit of the Trustees' practices. The Attorney General says that the SDA "was educated" as the process unfolded, as to what the Trustees viewed as the issues in the case. As the issues were clarified, additional disclosure was made.
[63] The Attorney General submits that there is no "smoking gun" here - that is, there is no obviously relevant document that should have been produced and was not. The documents that were produced late in the day were of such marginal relevance that it was understandable why they were not produced earlier. It would be unfair, the Attorney General says, for the Court to apply a 'hindsight' analysis to the issue, as it was not until it became clear what the Trustees would be arguing that the potential relevance of the documents became apparent.
[64] Finally, the Attorney General submits that the Delegate erred in finding that there had been a breach on the part of the SDA to make proper disclosure without having examined the documents in question.
[65] Dealing with this last argument first, while a quick review of the reasons of the Delegate could leave one with the initial impression that he may not have closely examined the documents produced by the SDA in November of 2004, a more careful examination of the reasons reveals that this is not the case. The Delegate's comment that he had "not examined the issue in detail" clearly refers to whether or not the material in issue "contains significant additional evidence with respect to the involvement of the SDA in the audit process". It does not mean that the Delegate had not closely examined the documents themselves.
[66] The Delegate recognized that there was no "smoking gun" here, candidly acknowledging that the Trustees could not point to any specific document that they say should have been produced and was not. However, the concern of the Trustees, which concern was shared by the Delegate, was not that specific documents were not being produced. Rather, the concern was that the actions of the SDA in continuing to produce documents relating to the case, after having been chastised by the Superintendent of Bankruptcy for failing to make proper disclosure in a related proceeding, in the face of a prior finding by the Delegate that there had been a lack of timely disclosure in this case, and after having repeatedly assured both the Trustees and the Delegate that full and complete disclosure had already been made, undermined the integrity of the process.
[67] In considering whether the Delegate erred in coming to this conclusion, it is important to keep in mind that this case was originally scheduled to be heard in 2002. It was only after the decision was made in September of 2002 to refer the case to a different adjudicator that the case was severed from the proceeding before the Superintendent of Bankruptcy. In February of 2003, the SDA was criticized by the Superintendent of Bankruptcy for her failure to disclose relevant documentation in the first disciplinary proceeding involving the Trustees. There is, however, no indication in the record that any disclosure was made by the SDA between October of 2002 and the Spring of 2004. Moreover, the disclosure that was forthcoming in the Spring of 2004 was only produced as a result of demands from the Trustees' counsel.
[68] I have also considered the Attorney General's argument that it was not until the SDA had been "educated" as to the Trustees' view of the issues that the potential significance of the documents produced in November of 2004 became apparent. While attractive on its face, this argument is not supported by the evidence. The affidavit sworn by the SDA in support of this application reviews the history of this proceeding in considerable detail. However, while she discusses what went on between the time that disclosure was made in April of 2004 and the production of the additional documents in November of 2004, there is no indication in her evidence that any further clarification of the issues was received from the Trustees in that period.
[69] It should be recalled that the onus of making timely disclosure rests on the SDA, and is not dependent on a request being received from counsel for the trustees whose conduct is under scrutiny. Having reviewed the documents produced in November of 2004, and recognizing that the threshold to establish relevance is low, I am satisfied that the documents in question were arguably relevant to the Trustees' case. In this regard, I adopt the reasoning of the Trustees set out in paragraphs 60-67 of their memorandum of fact and law.
[70] Moreover, having also carefully examined the history of this matter, I am satisfied that the conclusion of the Delegate that the SDA failed to make timely disclosure was one that was reasonably open to him.
[71] Before moving on to consider the test to be applied in deciding whether or not a stay should be granted in a given set of circumstances, I would simply note that while the fact that the SDA evidently felt it necessary to make further disclosure of additional documents in January of 2005 is indeed troubling, that fact has played no role in my deliberations, as the January disclosure post-dated the decision of the Delegate: in this regard, see the comments in Sheriff, at ¶ 21.
What Is the Applicable Test for Granting a Stay of Proceedings?
[72] The parties agree that there are two distinct bases on which an adjudicative body may order a stay of proceedings as a remedy for lack of proper disclosure. That is, a stay may be granted where the fairness of the hearing has been compromised or where proceeding with the hearing or prosecution would undermine the integrity of the justice system and as such would constitute an
abuse of process.
[73] As the Supreme Court of Canada stated in the Tobiass case, above, at ¶ 90, once again, in the criminal context:
If it appears that the state has conducted a prosecution in a way that renders the proceedings unfair or is otherwise damaging to the integrity of the judicial system, two criteria must be satisfied before a stay will be appropriate. They are that:
(1) the prejudice caused by the abuse in question will be manifested, perpetuated or aggravated through the conduct of the trial, or by its outcome; and
(2) no other remedy is reasonably capable of removing that prejudice.
[74] A stay of proceedings is a draconian remedy, and, as was noted by the Delegate in his decision, should only be granted in the clearest of cases: R v. Taillefer, above.
[75] A review of the submissions of the Attorney General reveals that there is no real issue taken with respect to the test that was applied by the Delegate in this case, in deciding whether or not to grant the stay of proceedings. Rather, what the Attorney General takes issue with is the way in which the Delegate identified and weighed various factors in coming to the conclusion that these proceedings should be stayed. This will be considered next.
Did the Delegate Err in Staying the Disciplinary Proceedings in the Circumstances of this Case?
[76] The Attorney General contends that the Delegate made several errors in deciding to stay the disciplinary proceedings in this case, asserting that this was not one of the 'clearest of cases' and that no prejudice to the Trustees resulting from the late disclosure had been demonstrated.
[77] According to the Attorney General, the Delegate also erred in minimizing the seriousness of the charges that had been made against the Trustees. In this regard, the Attorney General says that the Delegate was "clearly wrong" in finding that the allegations against the Trustees "were not of the most serious kind". This finding, the Attorney General says, ignores the responsibility of the Office of the Superintendent of Bankruptcy to protect the public interest by ensuring that licenced trustees act competently and honestly.
[78] The Delegate further erred, the Attorney General says, by concluding that the Trustees' "very right to continue in their professions was at stake". In this regard, the Attorney General refers to comments made in the Sheriff case previously cited, where the Court observed that the disciplinary proceedings under review had not resulted in the loss of professional standing on the part of the Trustees.
[79] In concluding that the integrity of the process had been irretrievably damaged, the Attorney General says that the Delegate asked himself the wrong question. That is, the Attorney General asserts that the Delegate considered what the Trustees believed, as opposed to whether it had been objectively demonstrated that it would be an injustice to allow the proceedings to continue. In contrast, the Attorney General submits that it would be an injustice to prevent the Office of the Superintendent of Bankruptcy from carrying out its public interest mandate of ensuring that licenced trustees carry out their duties competently and honestly.
[80] Finally, the Attorney General asserts that the Delegate erred in failing to consider alternatives to the granting of the stay.
[81] Insofar as the issue of prejudice to the Trustees is concerned, the Attorney General submits that the Delegate could not find prejudice to the Trustees, having failed to properly review the documents. However, as I have already noted, I am satisfied that the Delegate did review the documents disclosed in November of 2004. I have also found that the documents were arguably relevant to the disciplinary proceedings.
[82] Moreover, it must be kept in mind that the real concern of the Delegate was not the late disclosure of any specific document, but rather the fact that disclosure just kept on coming, after the SDA had been criticized for failing to make timely disclosure in the first proceeding, after the Delegate himself had found that there had been a lack of timely disclosure in his June, 2004 decision, and after assurances had been received that all relevant documentation had been disclosed.
[83] Insofar as concerns the Attorney General's assertion that the Delegate also erred in minimizing the seriousness of the charges that had been made against the Trustees, I am not persuaded that any such error was committed here. While it is alleged that there were a number of deficiencies in the Trustees' practices indicating a serious lack of internal control and administrative competence, there is no suggestion that there had been any misappropriation of funds or other infractions of comparable seriousness by either the individual Trustee or the Corporate Trustee. Indeed, the auditor's report itself acknowledges that the alleged deficiencies, "if considered on their own" could be regarded as "relatively minor". Thus the Delegate's statement that the allegations against the Trustees "were not of the most serious kind" appears to be accurate.
[84] A review of the Delegate's decision also make it clear that the Delegate was sensitive to the duty of the Office of the Superintendent of Bankruptcy to protect the public interest by ensuring that licenced trustees act competently and honestly. Indeed, the Delegate expressly referred to "the interests of the state in having the alleged misconduct punished".
[85] I am also not persuaded that the Delegate erred in concluding that the Trustees' "very right to continue in their professions was at stake". As was noted earlier in this decision, the comments made by the Court in the Sheriff case were made with the benefit of hindsight, after the disciplinary process had been completed in the first proceeding. Thus the Court was in a position to know what sanction had ultimately been imposed on the Trustees in that case. That is not the situation here, where the Trustees' licences remain very much in jeopardy. As the Supreme Court of Canada has noted, in such cases, a high standard of procedural fairness is required: Kane v. University of British Columbia, [1980] 1 S.C.R. 1105 at ¶ 31.
[86] Insofar as the Attorney General's assertion that the Delegate asked himself the wrong question in coming to the conclusion that the integrity of the process had been irretrievably damaged, a review of the Delegate's decision does not bear this out. In his decision, the Delegate summarizes the Trustees' concern that there could be more material in the hands of the SDA that could assist them, as well as their concern that the history of these proceedings, as it related to the issue of disclosure, left them unable to rely on the assertions of the SDA that full disclosure had, in fact, been made. The Delegate does go on to say that he understands this concern. His analysis also makes it clear, however, that not only did he understand the Trustees' concerns, he also shared them. Thus I am not persuaded that the Delegate based his decision on the subjective concerns of the Trustees, but rather assessed these concerns objectively.
[87] Finally, insofar as the alleged failure of the Delegate to properly consider alternatives to the granting of the stay is concerned, it is clear from the Delegate's decision he did indeed turn his mind to the issue of possible alternative remedies, and rejected them, stating:
As I said on June 10, 2004 ... the appropriate remedy for failure to disclose is, at trial, "an order for production or an adjournment". But I cannot make such an order where the SDA assures me (as she had once before) that no further documents exist which should be disclosed. [at p. 7]
[88] Moreover, counsel for the Attorney General conceded in argument that where the impugned actions of the prosecution are such as to cause a loss of faith in the integrity of the process, there are no alternative measures, such as an adjournment, that are available to cure the damage that has been done.
Conclusion
[89] The Delegate candidly acknowledged that the decision to grant a stay of proceedings in this case was a close call, and indeed, I am satisfied that others could reasonably have come to a different conclusion as to whether a stay was warranted in the present situation. That is not enough, however, to justify setting aside the decision under review.
[90] For the reasons given, I am also satisfied that the Delegate applied the correct legal test, that he properly identified the relevant factors, and that he attributed to each factor the weight that he felt appropriate in balancing the competing societal interests at play in this case. While others might have weighed these factors differently, I cannot find that the decision of the Delegate was unreasonable.
[91] As a consequence, I have not been persuaded that the Delegate committed a reviewable error. Accordingly, the application for judicial review is dismissed, with costs.
ORDER
THIS COURT ORDERS that this application for judicial review is dismissed, with costs.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-199-05
STYLE OF CAUSE: ATTORNEY GENERAL OF CANADAv.
TODD Y. SHERIFF AND
SEGAL AND PARTNERS INC.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: December 5, 2005
AND ORDER: The Honourable Madam Justice Mactavish
APPEARANCES:
Mr. Ian Dick FOR THE APPLICANT
Mr. Craig Colraine FOR THE RESPONDENTS
SOLICITORS OF RECORD:
JOHN S. SIMS, Q.C.
Deputy Attorney General of Canada FOR THE APPLICANT
BIRENBAUM, STEINBERG, LANDAU
SAVIN & COLRAINE
Toronto, Ontario FOR THE RESPONDENTS