Date: 20021126
Docket: T-1067-02
Neutral Citation: 2002 FCT 1220
Ottawa, Ontario, November 26, 2002
Present: The Honourable Mr. Justice Blais
BETWEEN:
SYDNEY H. PFEIFFER
and
PFEIFFER & PFEIFFER INC.
Applicants
- and -
THE SUPERINTENDENT OF BANKRUPTCY
(MARC MAYRAND)
and
THE DEPUTY SUPERINTENDENT OF BANKRUPTCY
(ALAIN LAFONTAINE)
Respondents
REASONS FOR ORDER AND ORDER
[1] This is a motion to strike the applicants' judicial review application.
[2] On April 9, 2002, Robert Massé, Senior Evaluation Officer at the Office of the Superintendent of Bankruptcy, sent a letter to the applicants confirming that he had been assigned a mandate to conduct an audit on their professional trustee practice.
[3] The audit started on May 1, 2002 and was interrupted on June 19, 2002. Mr. Massé reported to his managers that there was a lack of cooperation on the part of the applicants.
[4] On June 27, 2002, Patricia Alférez, directrice nationale, conformité et enquêtes, notified Alain Lafontaine, Deputy Superintendent of Bankruptcy, that an investigation into the professional conduct of the applicants had been started on May 1, 2002, but interrupted on June 19, 2002, and that the managers wanted him to pursue the investigation (affidavit of Mr. Lafontaine, dated July 5, 2002, paras. 22-23).
[5] On July 5, 2002, the respondent, Deputy Superintendent of Bankruptcy (Mr. Lafontaine), issued conservatory measures by virtue of subsection 14.03(1) of the Bankruptcy and Insolvency Act [BIA] for the purpose of safeguarding assets under the administration of the applicants as trustees in bankruptcy.
[6] On July 10, 2002, the applicants filed a notice of application pursuant to section 18.1 of the Federal Court Act.
[7] In the notice of application, the applicants referred to the fact that on July 4, 2002, they were advised of the decision by the Deputy Superintendent to undertake an investigation of the conduct of the applicants as trustees and determine whether a sanction should be recommended to the Superintendent concerning the licenses held by the applicants under the BIA.
[8] They also referred to the fact that on July 5, 2002, the Deputy Superintendent issued conservatory measures under section 14.03 of the BIA.
[9] The applicants seek an order quashing the decision to investigate them by the Deputy Superintendent and the Superintendent and an order quashing the conservatory measures.
[10] The application is eight (8) pages long and consists of twenty (25) paragraphs explaining why the decision to investigate and the decision to issue conservatory measures should be quashed.
[11] At paragraph 25 of this notice of application, the applicants mentioned:
This application will be supported by the following material:
a) The affidavit of Sydney H. Pfeiffer and exhibits thereto;
b) The affidavit of Pauline Viau and exhibits thereto;
c) The affidavit of Diane Cloutier and exhibits thereto;
...
[12] Also included in the application was a request that the respondents deliver all statements received from third parties with respect to the administration of estates by the applicants, including any complaints made concerning the administration of estates; and the entire disciplinary file kept by the respondents concerning the applicants from April 1992 to the present date, including all internal memoranda, analyses, comments, referrals, opinions and any evidence gathered by the respondents since September 1999.
[13] Among the issues raised by the parties pursuant to the present motion, the applicants suggest that the decision which is the object of the application is the one made on July 4, 2002 to pursue an investigation into the conduct of the applicants and also, as a consequence of that decision, the issuing of conservatory measures. The applicants consider those two decisions to be part of the same one. On the contrary, the respondents suggest that the decision that is subject to this application is the one initiating the investigation which was made on April 9, 2002 and that the letter sent by Sylvie Laperrière, Senior Analyst, Disciplinary Affairs for the Office of the Superintendent of Bankruptcy Canada on July 4, 2002, is more or less a courtesy letter to inform the applicants that the investigation would continue.
[14] The respondents suggest that the only investigation is the one that started on May 1, 2002 which was interrupted on June 19, 2002 and pursued after July 4, 2002 with a decision by the Deputy Superintendent to issue conservatory measures.
[15] Counsel for the applicants suggest that it is not for the motion judge to decide whether the decision was made on April 9, 2002 or on July 4, 2002, but that it will be for the trial judge to decide at the judicial review hearing.
[16] Nevertheless, on August 21, 2002, the applicants brought a motion for directions pursuant to rule 318(3) and for an order under rule 318(4) as well as an order extending or abridging the time for the applicants to serve and file their evidence pursuant to rules 8 and 306 of the Federal Court Rules, 1998 [Rules].
[17] The applicants suggest that the material they requested was not provided within the twenty (20) days allowed by rule 318(1) of the Rules.
[18] The respondents have refused to provide the material requested on the basis that none of the documents which have been requested in the judicial review application were ever taken into account nor were they ever before them at the time of or prior to the issuance of the July 5, 2002 conservatory measures.
[19] The respondents suggest that the requirements of rule 317 of the Rules, have already been met and that no other document should be delivered.
[20] In her affidavit, dated August 21, 2002, Pauline Viau suggests that during the execution of the order of Mr. Justice Blanchard and the conservatory measures issued on July 24, 2002, the applicants became aware that the Superintendent or Deputy Superintendent had referred the matter to the RCMP for investigation in February of 2002.
[21] In response to Mrs. Viau's hearsay suggestion, Mr. Lafontaine, at paragraph 20 of his affidavit dated September 27, 2002, strongly denied this information.
[22] In light of the evidence provided to the Court, for the benefit of this motion, I conclude that the application for judicial review applies to the decision dated July 4, 2002 pursuing the investigation initially started on May 1, 2002.
[23] Pursuant to rule 306 of the Rules, the applicants shall serve and file all supporting affidavits and documentary exhibits within thirty (30) days after the issuing of a notice of application which, in this case, was issued on July 10, 2002.
[24] Pursuant to rule 307 of the Rules, within thirty (30) days after service of the applicants' affidavits, the respondents shall serve and file any supporting affidavits and documentary exhibits.
[25] The applicants brought a motion pursuant to rule 317 of the Rules requesting communication of material from the respondents.
[26] According to counsel for the applicants, the said motion need not be decided since they have appealed Madam Justice Tremblay-Lamer's decision rendered on October 7, 2002, and in his view, the appeal should be decided before a trial order on this motion can be made. For this reason, this motion is adjourned sine die.
[27] I would like to underline the fact that Madam Justice Tremblay-Lamer's decision nowhere mentions the existence of a stay of proceedings. Therefore, her decision stands and applies.
[28] Counsel for the applicants suggests that since there is a pending motion pursuant to rule 317 of the Rules, it relieves the applicants from their obligation to file and serve supporting affidavits and documentary exhibits.
[29] I disagree. The obligation provided by rule 306 of the Rules still applies, notwithstanding the decision that the application for judicial review refers to, whether it be April 9, 2002 or July 4, 2002. Three (3) months have passed since the filing of the notice of application and no affidavits have been filed nor have valid reasons explaining the delay been provided.
[30] The applicants had a convincing argument concerning a document that the Deputy Superintendent, Mr. Lafontaine, had before him when making his decision and which was not provided to them.
[31] After an adjournment, counsel for the respondents provided two (2) documents, numbers 46 and 47. Document 46 is a memoranda dated June 26, 2002 from Raymond Villemure, Assistant Superintendent, Audit East, to Mrs. Alférez. It is a summary of six (6) pages as to why the investigation was interrupted and why it should go on.
[32] Document 47 is a memoranda from Mrs. Alférez to Mr. Lafontaine, dated June 27, 2002. This document is a summary of the preceding document (number 46) which recommends that the investigation into the conduct of the applicants be commenced. The respondents refer to subsections 5(2) and 5(3)(e) of the BIA. Subsection 5(2) reads:
| 5. ... (2) The Superintendent shall supervise the administration of all estates and matters to which this Act applies.
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5. [...] (2) Le surintendant contrôle l'administration des actifs et des affaires régis par la présente loi. |
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[33] Subsection 5(2) provides the Superintendent with the general power to supervise the administration of all estates and matters to which the BIA applies.
[34] Subsection 5(3)(e) authorizes the Superintendent to carry out inspections or investigations. This subsection reads as follows:
| 5.(3) ... (e) from time to time make or cause to be made such inspection or investigation of estates or other matters to which this Act applies, including the conduct of a trustee or a trustee acting as a receiver or interim receiver, as the Superintendent may deem expedient and for the purpose of the inspection or investigation the Superintendent or any person appointed by the Superintendent for the purpose shall have access to and the right to examine and make copies of all books, records, data, including data in electronic form, documents and papers pertaining or relating to any estate or other matter to which this Act applies; |
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5. (3) [...] |
- I have no hesitation in concluding that the investigation conducted so far by the Superintendent of Bankruptcy is very serious. I also have no hesitation in concluding that the applicants have the right to protect their interests in light of such investigation.
[36] Nevertheless, the parties have to play by the rules and the applicants had the obligation to follow rule 306 of the Rules, which they didn't.
[37] There is also another important element that was raised by the respondents. Rule 302 of the Rules provides that an application for judicial review shall be limited to a single order in respect of which relief is sought (application for judicial review). It is clear and almost admitted by counsel for the respondents that the judicial review application seeks to quash a decision to investigate made on July 4, 2002 but also to quash the conservatory measures issued by the respondents on July 5, 2002. It is clear that the application seeks to quash two decisions taken by two different people at two different times in violation of rule 302.
[38] In Mountainbell Co. v. Jacky Maeder (H.K.) Ltd., (1990) 128 N.R. 75, Pratte J. for the Federal Court of Appeal held:
Under the Federal Court Rules, it is necessary for an applicant to file an affidavit in support of an application if he wishes to establish facts that do not appear in the record of the court. An application therefore can only be summarily dismissed on the ground that it is not accompanied by an affidavit in cases where the facts entered in the record of the court provide no basis for allowing it.
[39] In St-Louis v. Canada (Employment and Immigration Commission), [1992] F.C.J. No. 1183, Pratte J. for the Court of Appeal clearly states:
It is obvious that the affidavit signed by counsel for the applicant does not meet the requirements of Rule 1603(1), which requires that everyone who makes an application for judicial review shall file an affidavit verifying all of the facts which are to be brought to the attention of the Court in order that it may decide the application.
[40] In Merwin v. Canada (Minister of Employment and Immigration, [1989] F.C.J. No. 116, Pratte J. for the Court of Appeal held:
The applicant has, therefore, failed to file affidavit evidence in support of his application within the time prescribed by the Rule. His application will, for that reason, be dismissed. Before parting with this matter, I wish to mention that in drafting his notice of motion, the applicant took advantage of Rule 20 of the Federal Court Immigration Rules [Footnote appended to judgment] and inserted in his notice of motion the following statement and request:
The Applicant wishes to rely on the following material in the possession of Michael R. Sloan, Adjudicator, and requests that it be forwarded to the Registry without delay:
1) A transcript of the proceedings before the Adjudicator; and
2) A transcript of the Adjudicator's decision.
The adjudicator has not complied with that request. It should be observed, however, that the failure of a tribunal to comply with the requirements of Rules 20 and 21 does not have the effect of extending the time within which an applicant may, under Rule 9(3), file affidavits and representations in support of the application. Indeed, the purpose of Rules 20 and 21 is not to enable an applicant to go on a fishing expedition and examine the tribunal's file with the hope of finding something that might help his case. Their purpose is to enable the Court to have before it, when it rules on the application, the material on which the applicant relies.
[41] In Schwartz Hospitality Group Ltd. v. Canada (Attorney General), [2002] F.C.J. No. 1077, Prothonotary Hargrave held:
[5] At issue on this motion is a time extension within which to file Rule 306 affidavit material in support of the judicial review. Leave is governed by the principle that two elements need to be addressed, being the reason for the delay and the intrinsic worth of the affidavit, embody a consideration of the relevance, admissibility and potential use to the Court of the material. Here I refer to Canadian Parks and Wilderness Society v. Banff National Park (1994), 77 F.T.R. 218 (F.C.T.D.), a decision of Mr. Justice MacKay:
[13] In Munsingwear Inc. v. Prouvost S.A., [1992] 2 F.C. 541; 141 N.R. 241 (F.C.A.), Mr. Justice Décary for the Court of Appeal dealt with criteria for considering leave for late filing [fo] affidavits pursuant to Rule 704(8) in an appeal from the decision of the Registrar of Trademarks under section 56 of the Trade-Marks Act, R.S.C. 1985, c. T-13, in which by Rule 704, a time is limited for filing additional evidence. While this is not such a case, in my view the criteria there relied upon are applicable in this case, where leave is sought to file materials later than the date fixed by court order. Those requirements are that the court consider the reasons for the delay and the intrinsic worth of the affidavit, i.e. its relevance, admissibility and potential use to the court.
[42] In Main Rehabilitation Co. Ltd. v.Canada (Minister of National Revenue), [1999] F.C.J. No. 1824, Prothonotary Lafrenière held:
[28] The filing of affidavit material under Rule 306 is an integral procedural step. The failure by the Applicants to file their supporting affidavit material has seriously delayed the proceeding since the Respondents right to file affidavit material under Rule 307 is only triggered once the Applicants have complied with Rule 306. Moreover, the Respondents will suffer serious prejudice should this matter be allowed to proceed. There is uncontradicted evidence before me that the Applicants have refused to allow the audit to proceed because of the present litigation and that the 1996 taxation year of Main Rehabilitation will become statute-barred on December 16, 1999.
[29] The Respondents' motion for dismissal of the application for judicial review based on the Applicants' unexcused failure to file their affidavit material under Rule 306 is justified in the circumstances. The Applicants have been provided an opportunity to satisfactorily explain the delay in the proceeding or seek an extension of time to comply with the Rules, yet have failed to do either. The Respondents' motion to strike the application is therefore allowed.
[43] Therefore, in these circumstances, counsel for the respondents has raised two (2) important violations of the Rules.
ORDER
THEREFORE, THIS COURT ORDERS THAT:
For the reasons set out above:
a) the motion pursuant to rule 317 of the Federal Court Rules, 1998, is adjourned sine die;
b) the respondents' motion to strike the application for judicial review is allowed.
c) the respondents shall have their costs on the motion.
"Pierre Blais"
J.F.C.C.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1067-02
STYLE OF CAUSE:
SYDNEY H. PFEIFFER
and
PFEIFFER & PFEIFFER INC.
Applicants
and
THE SUPERINTENDENT OF BANKRUPTCY
(MARC MAYRAND)
and
THE DEPUTY SUPERINTENDENT OF BANKRUPTCY
(ALAIN LAFONTAINE)
Respondents
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: November 4, 2002
REASONS FOR ORDER : THE HONOURABLE MR. JUSTICE BLAIS
APPEARANCES:
Mr. Aaron Rodgers FOR APPLICANTS
Mr. Robert Monette/ FOR RESPONDENT
ALAIN LAFONTAINE
Mr. Vincent Veilleux FOR RESPONDENT
ALAIN LAFONTAINE
SOLICITORS OF RECORD:
Spiegel Sohmer FOR APPLICANTS
Montreal, Quebec
Deblois & Associés FOR RESPONDENT
Quebec, Quebec ALAIN LAFONTAINE
Morris Rosenberg FOR RESPONDENT
Deputy Attorney General of Canada ALAIN LAFONTAINE
Ottawa, Ontario