Directions to the Bank of Nova Scotia, P.O. Box 4234, STN A, Toronto, Ontario M5W 5P6
What is a conservatory measure?
The Superintendent of Bankruptcy puts in place conservatory measures when a bankruptcy or insolvency estate needs protection. It might be in cases of Licensed Insolvency Trustee (LIT) malfeasance or if serious wrongdoing on the part of a LIT puts estate files at risk. Conservatory measures may also be put in place if a LIT becomes ill or dies without a valid succession agreement. Finally, conservatory measures may be put in place if a LIT, for whatever reason, has allowed the administration of his or her practice to become substandard.
Local Branch: 544 Bank of Nova Scotia, 544 Hespeler Road, Cambridge, Ontario N1R 6J8
In the matter of:
Martin Daniel Bell
Graham Mathew Inc.
Directions for Conservatory Measures
(Section 14.03 of the Bankruptcy and Insolvency Act)
Whereas the Bankruptcy and Insolvency Act (the Act) provides the Superintendent of Bankruptcy (the Superintendent) with the general power to supervise the administration of all estates and matters to which the Act applies;
Whereas Martin Daniel Bell (the trustee) is the holder of an individual licence as trustee in bankruptcy;
Whereas Graham Mathew Inc. is the holder of a corporate licence;
Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that the trustee had a number of deficiencies in the control of estate trust funds and estate administrations;
Whereas the Acting/Assistant Superintendent of Trustee Compliance and the Senior Bankruptcy Analyst have learned that:
- a number of estates had funds missing from the estate accounts
- the trustee failed to deposit cash payments received from insolvent persons in the estate accounts;
- the trustee converted for his own benefit amounts for deposit to the corporate trustee's general account from August 4, 2006 to September 11, 2006;
- in the summer of 2006, the trustee altered the name of the payee on a cheque made payable to a solicitor from an estate trust account, by inserting the name of the trustee's spouse;
- the trustee failed to report the above violations to the Office of the Superintendent of Bankruptcy;
Whereas the trustee has failed to deposit forthwith in an estate trust all funds received for an estate, and
- failed to maintain up-to-date books and records, including a proper control ledger, of estate funds;
- permitted unauthorized payments from a estate trust accounts;
Whereas a June 2007 practice review by the Senior Bankruptcy Analyst of the trustee's books and records revealed that the trustee was drawing fees prior to obtaining proper authorization.
Whereas I believe on reasonable grounds that the estates require protection;
Whereas the Superintendent may, for the protection of an estate, exercise the powers set out in subsection 14.03(1) of the Act, in the circumstances referred to in section 14.03(2) of the Act;
Whereas the Superintendent has delegated to me, in accordance with section 14.01(2) of the Act, the powers of the Superintendent as specified at section 14.03(1) of the Act, in the circumstance referred to in section 14.03(2)(b), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;
I, William Webster, in my capacity as delegate for the Superintendent, direct the Bank of Nova Scotia (P.O. Box 4234, STN A, Toronto, Ontario M5W 5P6), pursuant to sections 14.03(1)(b) of the Act:
- that upon receipt of the present directions, to accept David MacPherson and Janet Russell, employees of the Office of the Superintendent of Bankruptcy, as the only two authorized co-signatories as related to any operations of the funds credited to the estates of bankruptcies and proposals administered by Martin Daniel Bell;
- to make no debit, payment or transfer of funds credited to, or which ought to have been credited to, the estates of bankruptcies and proposals administered by Martin Daniel Bell without the signatures of Dave MacPherson and Janet Russell;
- to not pay out of these accounts: cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions which are presented for payment after the receipt of these directions, without these cheques, bills of exchange, bank drafts or other instruments being signed by David MacPherson and Janet Russell;
- to provide to me, as soon as possible, the list of insolvency bank accounts of Graham Mathew Inc.;
- to submit all statement of accounts, accepted cheques and other documents or information having to do with the above-mentioned estate trust bank accounts, to Dave MacPherson, Senior Bankruptcy Analyst, Office of the Superintendent of Bankruptcy, 451 Talbot Street, Room 303, London, Ontario N6A 5C9;
That these directions take effect immediately and will remain in effect until such time as the undersigned is satisfied that the estates no longer require protection;
That in accordance with section 14.03(3) of the Act, these directions bind the Bank of Nova Scotia (Scotia Bank), which must comply with them;
That, pursuant to section 14.03(4) of the Act, a person who complies with this direction is not liable for any act done by that person only to comply with this direction.
Signed at the City of London Ontario, this 24rd day of August, 2007.
Acting Assistant Superintendent, Trustee Compliance
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