Canada (Attorney General) v. Sam Lévy et Associés Inc.

Canada (Attorney General) v. Sam Lévy et Associés Inc. Court (s) Database Federal Court of Appeal Decisions Date 2005-10-03 Neutral citation 2005 FCA 318 File numbers A-92-05 Decision Content Date: 20051003 Docket: A-92-05 Citation: 2005 FCA 318 CORAM: DÉCARY J.A. LÉTOURNEAU J.A. PELLETIER J.A. BETWEEN: ATTORNEY GENERAL OF CANADA Appellant and SAM LÉVY ET ASSOCIÉS INC., trustee in bankruptcy and SAMUEL S. LÉVY, trustee in bankruptcy Respondents Hearing held at Montréal, Quebec, on October 3, 2005. Judgment delivered from the bench at Montréal, Quebec, on October 3, 2005. REASONS FOR JUDGMENT OF THE COURT BY: LÉTOURNEAU J.A. Date: 20051003 Docket: A-92-05 Citation: 2005 FCA 318 CORAM: DÉCARY J.A. LÉTOURNEAU J.A. PELLETIER J.A. BETWEEN: ATTORNEY GENERAL OF CANADA Appellant and SAM LÉVY ET ASSOCIÉS INC., trustee in bankruptcy and SAMUEL S. LÉVY, trustee in bankruptcy Respondents REASONS FOR JUDGMENT OF THE COURT (Delivered from the bench at Montréal, Quebec, on October 3, 2005.) LÉTOURNEAU J.A.: [1] This is an appeal from a decision by Beaudry J. of the Federal Court upholding the decision of Mr. Kaufman, acting as delegate for the Superintendent of Bankruptcy, to stay the disciplinary hearing to be held against the respondents. The dispute focused on the significance of the order by the delegate, worded as follows: In the result, the hearing which was to begin in May 30, 2004, is cancelled, and further hearings are postponed sine die, pending the outcome of the litigation now pending in the Federal Court of Canada. [2] It seems clear to us that, before Beaudry J., the stay of proceedings ordered by the delegate would end with the decision by the Federal Court on the applications for judicial review in T-2473-03 and T-75-04. This is clear from paragraphs 1 and 2 of the decision by Beaudry J. and is supported by the position taken by counsel for the respondents before Beaudry J. In his memorandum of fact and law filed before Beaudry J. and found at page 322 of the appeal record, counsel for the respondents objected to the appellant's interpretation of the stay of proceedings ordered by the delegate and redefined its parameters as follows: [TRANSLATION] The applicant alleges that the delegate stayed the hearing sine die, which is not the case. The postponement was not for an indefinite period, but only until this Court ruled on applications for judicial review T-75-04 and T-2473-03 as it appears from the decision of Delegate Kaufman dated May 4, 2004, at page 4: In the result, the hearing which was to begin on May 30, 2004, is cancelled, and further hearings are postponed sine die, pending the outcome of the litigation now pending in the Federal Court of Canada. [ Emphasis added.] [3] On February 3 and May 16, 2005, Martineau J. of the Federal Court dismissed with reasons the applications for judicial review in T-75-04 and T-2473-03. The decision by Martineau J. in T-75­­­-04 (the only one relevant for the purposes of the dispute before this Court) was appealed and, according to information received at the hearing, the submissions will be filed in the near future, and a request for a priority hearing will be submitted to the Court. [4] The parties informed us that Delegate Kaufman interpreted his order staying the disciplinary hearing as a suspension that would remain in effect until the courts reached a final decision on the constitutional issues raised by the respondents. With respect, even assuming that he could make such an order, neither the wording of the order, nor the intention of the parties to the dispute, nor Beaudry J.'s understanding of the order supports such an interpretation and finding. [5] In our opinion, the stay of proceedings order was terminated by the decision delivered by Martineau J. on May 16, 2005. The delegate must now set a date for the disciplinary hearing. It is now up to the Federal Court of Appeal hearing the appeal, if any, from the decision by Martineau J. to decide whether the disciplinary hearing before the delegate should be stayed. [6] Counsel for the appellant argues that it is important for this Court to rule on the issue in the context of the appeal before it today, which has now become moot. With respect, we do not believe that it is appropriate to do so, for the following reasons. [7] The respondents raised before the delegate the issue of the constitutionality of sections 14.01 and 14.02 of the Bankruptcy and Insolvency Act, R.S.C. (1985), c. B-3 (Act) with regard to paragraphs 1(a) and 2(e) of the Canadian Bill of Rights, S.C. 1960, c. 44 and section 7 of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982. They also revisited a number of the arguments raised in Métivier v. Mayrand, [2003] R.J.Q. 3035, in which the Quebec Court of Appeal upheld the constitutionality of those provisions. [8] The statutes enjoy a presumption of constitutionality and remain in force while they are contested. This presumption is strengthened, if not simply replaced, by a judicial decision upholding the validity of the disputed statute, which is the case here. [9] Bearing in mind new developments since the decision by Beaudry J., specifically the decision by Martineau J. upholding the constitutionality of the provisions in dispute and the significance that the delegate gave to his suspension order, we are of the opinion that it not possible to assess the merits of the decision by Beaudry J. or, as requested by the respondents, the appropriateness of extending the suspension of the disciplinary hearing until the appeal from the judgment by Martineau J. is heard by our Court, without considering the judgment by Martineau J. That judgment introduces new factors that must be taken into account in an application for suspension of a disciplinary hearing. [10] The written pleadings filed with us do not deal with that judgment at all. This is not a criticism, but an observed fact sufficiently important to dissuade us from wading in and adjudicating a dispute that has become moot. We have also been informed that the decision by Montréal District Superior Court in Marchand Syndics et al. v. Attorney General of Canada et al., No. 500-11-022456-046, Montréal, July 28, 2005, appears to contradict that of Martineau J. Certainly, there is no question, at the stage of the stay of a disciplinary proceeding, of interfering in substantive issues. However, since the issue, said to be serious, relates to the constitutionality of statutory provisions, any judgments adjudicating the issue are important factors in a decision concerning a stay of a proceeding before another court. [11] For these reasons and under the circumstances, the appeal will be dismissed without costs, and the delegate is ordered to set a date for hearing the disciplinary proceeding before him, without prejudice to the rights of the parties to file before this Court a motion to stay the disciplinary proceeding. "Gilles Létourneau" J.A. Certified true translation Michael Palles FEDERAL COURT OF APPEAL SOLICITORS OF RECORD DOCKET: A-92-05 (APPEAL FROM AN ORDER BY BEAUDRY J. OF THE FEDERAL COURT DATED FEBRUARY 10, 2005, DOCKET NO. T-1069-04.) STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA v. SAM LÉVY ET ASSOCIÉS INC. ET AL. PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: October 3, 2005 REASONS FOR JUDGMENT OF THE COURT BY: Décary J.A. Létourneau J.A. Pelletier J.A. DELIVERED FROM THE BENCH BY: Létourneau J.A. APPEARANCES: Bernard Letarte FOR THE APPELLANT Daniel DesAulniers FOR THE RESPONDENTS SOLICITORS OF RECORD: John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Ontario FOR THE APPELLANT GRONDIN, POUDRIER, BERNIER Montréal, Quebec FOR THE RESPONDENTS Date: 20051003 Docket: A-92-05 Montréal, Quebec, October 3, 2005 CORAM: DÉCARY J.A. LÉTOURNEAU J.A. PELLETIER J.A. BETWEEN: ATTORNEY GENERAL OF CANADA Appellant and SAM LÉVY ET ASSOCIÉS INC., trustee in bankruptcy and SAMUEL S. LÉVY, trustee in bankruptcy Respondents JUDGMENT The appeal is dismissed without costs since it is moot. The delegate is ordered to set a hearing date for the disciplinary proceeding before him, without prejudice to the rights of the parties to file before this Court a motion to stay the disciplinary proceeding. "Robert Décary" J.A. Certified true translation Michael Palles