BANKRUPTCY |
Pfeiffer v. Canada (Superintendent of Bankruptcy)
T-1067-02
2002 FCT 806, Beaudry J.
19/7/02
9 pp.
Motion for order suspending effect of conservatory measure --Applicants trustee in bankruptcy, company controlled thereby--Court ordering Deputy Superintendent to access applicants' premises, information systems to inspect business, obtain information requested but not provided--Deputy Superintendent exercised conservatory measures pursuant to Bankruptcy and Insolvency Act, s. 14.03 directing Official Receiver not to appoint applicants as trustees of any new files--Instruction to remain in effect until decision rendered pursuant to s. 14.01 outlining sanctions Superintendent can impose--Application of three-part test for stays, although subject of motion more accurately described as interlocutory injunction--(1) Serious question to be tried--Alleged misconduct issue with serious implication in that result of investigation could lead to grave consequences for applicants --(2) Harm not irreparable--Applicants administering large number of files--If revenue earned from carriage of those files cannot cover administration costs, state of affairs not caused by conservatory measure-- Furthermore, responsibility to debtors, creditors associated with files for which appointed administrators prior to issuance of conservatory measure not relieved by ban on new files--Difficult to say would lack work to do--Although s. 215 prohibiting legal action against Superintendent except with leave, always possible that such leave may be granted, subsequent action may result in award of damages--Cannot conclusively say harm applicants would suffer irreparable--(3) Balance of convenience favouring respondents--Onus to demonstrate irreparable harm to public interest less than that of demonstrating irreparable harm to private interest for purpose of measuring balance of convenience-- Public interest in Superintendent's ability to carry out thorough investigations in order to police trustees, ensure integrity of administration of bankruptcy matters in Canada--Just as important to protect parties involved in future bankruptcy files from being affected by alleged malpractice of applicants as it is to protect applicants' current clients by ensuring interests not compromised by assumption by applicant of new files pending investigation--Applicants altered some of financial records which they were asked to produce--Evident attempting to conceal information about nature of interests in portfolio holdings--Public interest in limiting further opportunities for misconduct by thorough investigation of past conduct--Motion dismissed-- Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (as am. by S.C. 1992, c. 27, s. 2), ss. 14.01 (as enacted idem, s. 9; 1997, c. 12, s. 13), 14.03 (as enacted by S.C. 1992, c. 27, s. 9; 1997, c. 12, s. 14; 1999, c. 31, s. 18), 215 (as am. by S.C. 1992, c. 27, s. 80).