Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Marginal note:Reporting offence to provincial authority

• 11 (1) Where after an investigation pursuant to section 10 or otherwise the Superintendent has obtained evidence of an offence having been committed in connection with an estate or matter to which this Act applies, the Superintendent shall report the alleged offence to the deputy attorney general of the province concerned or to such person as is duly designated by that deputy attorney general for that purpose.

• Marginal note:Costs and expenses

  (2) Notwithstanding section 136, a recovery made as the result of any inquiries or investigation made or caused to be made pursuant to section 10 shall be applied to the reimbursement of any costs and expenses incurred by the Superintendent thereon, not being ordinary costs or expenses of the office of the Superintendent, and the balance thereafter remaining in respect of the recovery shall be made available for the benefit of the creditors of the debtor.

Public Records

Marginal note:Public records

• 11.1 (1) The Superintendent shall keep, or cause to be kept, in such form as the Superintendent deems appropriate and for the prescribed period, a public record of

  • (a) proposals,

  • (b) bankruptcies,

  • (c) licences issued to trustees by the Superintendent, and appointments or designations of administrators made by the Superintendent, and

  • (d) notices sent to the Superintendent by receivers pursuant to subsection 245(1)

  and, on request therefor and on payment of such fee as may be prescribed, shall provide, or cause to be provided, any information contained in that public record.

• Marginal note:Other records

  (2) The Superintendent shall keep, or cause to be kept, in such form as the Superintendent deems appropriate and for the prescribed period, such other records relating to the administration of this Act as the Superintendent deems advisable.

• Marginal note:Agreement to provide compilation

  (3) The Superintendent may enter into an agreement to provide a compilation of all or part of the information that is contained in the public record.

Official Receivers

Marginal note:Bankruptcy districts and divisions

• 12 (1) Each of the provinces constitutes one bankruptcy district for the purposes of this Act but the Governor in Council may divide any bankruptcy district into two or more bankruptcy divisions and name or number them.

• Marginal note:Official receivers

  (2) The Governor in Council shall appoint one or more official receivers in each bankruptcy division who shall be deemed to be officers of the court and shall have and perform the duties and responsibilities specified by this Act and the General Rules.

• Marginal note:Report to Superintendent

  (3) The official receiver shall make a report to the Superintendent, in the prescribed form, of every bankruptcy originating in his division, and he shall also notify the Superintendent of any subsequent increase or decrease in the security filed by the trustee.

• Marginal note:Registrar to act for official receiver

  (4) In the absence or illness of the official receiver or pending the appointment of a successor when the office is vacant, the registrar of the court shall perform the duties of the official receiver.

Trustees

Licensing of Trustees

Marginal note:Application for licence

• 13 (1) A person who wishes to obtain a licence to act as a trustee shall file with the Superintendent an application for a licence in the prescribed form.

• Marginal note:Conditions of eligibility

  (2) The Superintendent, after such investigation concerning an applicant for a licence to act as a trustee as the Superintendent considers necessary, may issue the licence if the Superintendent is satisfied, having regard to the criteria referred to in paragraph 5(4)(d), that the applicant is qualified to obtain the licence.

• Marginal note:Non-eligibility

  (3) The Superintendent may refuse to issue a licence to an applicant who is insolvent or has been found guilty of an indictable offence that, in the Superintendent’s opinion, is of a character that would impair the trustee’s capacity to perform his or her fiduciary duties.

Marginal note:Form of licence

13.1 A licence shall

• (a) be in the prescribed form;

• (b) specify the bankruptcy district or part thereof in which the trustee is entitled to act; and

• (c) be subject to such conditions and limitations as the Superintendent considers appropriate and may specify therein.

Marginal note:Fees payable

• 13.2 (1) Prior to the issue of a licence, the applicant shall pay such fees as may be prescribed.

• Marginal note:Annual fees

  (2) Each year, starting with the year in which a licence is issued to a trustee, the trustee shall pay the prescribed fees on or before the prescribed date or, if there is no prescribed date, on or before December 31.

• Marginal note:When licence invalid

  (3) A licence ceases to be valid on the failure of the trustee to pay a fee in accordance with subsection (2) or if the trustee becomes bankrupt.

• Marginal note:Superintendent may reinstate licence

  (4) Where a licence has ceased to be valid by reason of

  • (a) failure to pay fees, the Superintendent may reinstate it where the trustee pays the outstanding fees together with a prescribed penalty amount and provides a reasonable written explanation of the failure to pay them in accordance with subsection (2); or

  • (b) the trustee becoming bankrupt, the Superintendent may, on written representations made by the trustee, reinstate the licence subject to such conditions and limitations as the Superintendent considers appropriate and may specify therein.

• Marginal note:Suspension or cancellation

  (5) A licence may be suspended or cancelled by the Superintendent

  • (a) if the trustee has been found guilty of an indictable offence that, in the Superintendent’s opinion, is of a character that would impair the trustee’s capacity to perform his or her fiduciary duties;

  • (b) if the trustee has failed to comply with any of the conditions or limitations to which the licence is subject;

  • (c) if the trustee has ceased to act as a trustee; or

  • (d) at the request of the trustee.

• Marginal note:Notice of intended decision

  (6) Notice of an intended decision under subsection (5) shall be in writing setting out the Superintendent’s reasons therefor and shall be sent to the trustee at least ten days before the decision takes effect.

• Marginal note:Conditions

  (7) If a licence ceases to be valid by virtue of subsection (3) or is suspended or cancelled under subsection (5), the Superintendent may impose on the trustee any requirements that the Superintendent considers appropriate, including a requirement that the trustee provide security for the protection of an estate.

• Marginal note:Non-application of procedure

  (8) For greater certainty, section 14.02 does not apply in respect of a suspension or cancellation of a licence under subsection (5).

Conduct of Trustees

Marginal note:Where trustee is not qualified to act

• 13.3 (1) Except with the permission of the court and on such conditions as the court may impose, no trustee shall act as trustee in relation to the estate of a debtor

  • (a) where the trustee is, or at any time during the two preceding years was,

    • (i) a director or officer of the debtor,

    • (ii) an employer or employee of the debtor or of a director or officer of the debtor,

    • (iii) related to the debtor or to any director or officer of the debtor, or

    • (iv) the auditor, accountant or legal counsel, or a partner or an employee of the auditor, accountant or legal counsel, of the debtor; or

  • (b) where the trustee is

    • (i) the trustee under a trust indenture issued by the debtor or any person related to the debtor, or the holder of a power of attorney under an act constituting a hypothec within the meaning of the Civil Code of Québec that is granted by the debtor or any person related to the debtor, or

    • (ii) related to the trustee, or the holder of a power of attorney, referred to in subparagraph (i).

• Marginal note:Copy of application to Superintendent

  (1.1) A trustee who applies for the permission of the court for the purposes of subsection (1) shall without delay send a copy of the application to the Superintendent.

• Marginal note:Where disclosure required

  (2) No trustee shall act as a trustee in relation to the estate of a debtor where the trustee is already

  • (a) the trustee in the bankruptcy of, or in a proposal concerning, any person related to the debtor, or

  • (b) the receiver, within the meaning of subsection 243(2), or the liquidator of the property of any person related to the debtor,

  without making, at the time of being appointed as trustee in relation to the estate of the debtor and at the first meeting of creditors, full disclosure of that fact and of the potential conflict of interest.

Marginal note:Trustee may act for secured creditor

• 13.4 (1) No trustee may, while acting as the trustee of an estate, act for or assist a secured creditor to assert a claim against the estate or to realize or otherwise deal with a security that the secured creditor holds, unless the trustee has obtained a written opinion from independent legal counsel that the security is valid and enforceable against the estate.

• Marginal note:Notification by trustee

  (1.1) Forthwith on commencing to act for or assist a secured creditor of the estate in the manner set out in subsection (1), a trustee shall notify the Superintendent and the creditors or the inspectors

  • (a) that the trustee is acting for the secured creditor;

  • (b) of the basis of any remuneration from the secured creditor; and

  • (c) of the opinion referred to in subsection (1).

• Marginal note:Trustee to provide opinion

  (2) Within two days after receiving a request therefor, a trustee shall provide the Superintendent with a copy of the opinion referred to in subsection (1) and shall also provide a copy to each creditor who has made a request therefor.

Marginal note:Code of Ethics

13.5 A trustee shall comply with the prescribed Code of Ethics.

Marginal note:Persons disqualified from working for trustee

13.6 A trustee shall not engage the services of a person

• (a) whose trustee licence has been cancelled under paragraph 13.2(5)(a) or subsection 14.01(1); or

• (b) who is the subject of a direction made by the Superintendent under paragraph 14.03(1)(d).

Appointment and Substitution of Trustees

Marginal note:Appointment of trustee by creditors

14 The creditors may, at any meeting by special resolution, appoint or substitute another licensed trustee for the trustee named in an assignment, a bankruptcy order or a proposal, or otherwise appointed or substituted.

Marginal note:Decision affecting licence

• 14.01 (1) If, after making or causing to be made an inquiry or investigation into the conduct of a trustee, it appears to the Superintendent that

  • (a) a trustee has not properly performed the duties of a trustee or has been guilty of any improper management of an estate,

  • (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

  • (c) it is in the public interest to do so,

  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;

  • (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; and

  • (g) require the trustee to do anything that the Superintendent considers appropriate and that the trustee has agreed to.

• Marginal note:Application to former trustees

  (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.

• Marginal note:Delegation

  (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.

• Marginal note:Notification to trustees

  (3) Where the Superintendent delegates in accordance with subsection (2), the Superintendent or the delegate shall

  • (a) where there is a delegation in relation to trustees generally, give written notice of the delegation to all trustees; and

  • (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.

Marginal note:Notice to trustee

• 14.02 (1) Before deciding whether 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 may exercise and the reasons why they may be exercised and afford the trustee a reasonable opportunity for a hearing.

• Marginal note:Summons

  (1.1) The Superintendent may, for the purpose of the hearing, issue a summons requiring and commanding any person named in it

  • (a) to appear at the time and place mentioned in it;

  • (b) to testify to all matters within their knowledge relative to the subject matter of the inquiry or investigation into the conduct of the trustee; and

  • (c) to bring and produce any books, records, data, documents or papers — including those in electronic form — in their possession or under their control relative to the subject matter of the inquiry or investigation.

• Marginal note:Effect throughout Canada

  (1.2) A person may be summoned from any part of Canada by virtue of a summons issued under subsection (1.1).

• Marginal note:Fees and allowances

  (1.3) Any person summoned under subsection (1.1) is entitled to receive the like fees and allowances for so doing as if summoned to attend before the Federal Court.

• Marginal note:Procedure at hearing

  (2) At a hearing referred to in subsection (1), the Superintendent

  • (a) has the power to administer oaths;

  • (b) is not bound by any legal or technical rules of evidence in conducting the hearing;

  • (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

  • (d) shall cause a summary of any oral evidence to be made in writing.

• Marginal note:Record

  (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.

• Marginal note:Decision

  (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.

• Marginal note:Review by Federal Court

  (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.