Directions to Nelson Smith
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:
That, Mr. Nelson Smith, who may enlist the help of any other individual(s) required to fully comply with these directions, copy all accounting data and in particular Insolvency Manager, and all documents contained in any computer or data storage device, relating to the assets and files of all the estates administered by the trustees, wherever they may be located, particularly at the place of business of the abovementioned trustee at:
150 Pinebush Road
and to remit said computer data to Mr. Dave MacPherson of the Office of the Superintendent of Bankruptcy.
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;
In accordance with subsection 14.03(3) of the Act, these directions bind their addressees, who must comply with them;
Pursuant to subsection 14.03(4) of the Act, a person who complies with this direction is not liable for any act done by the person only to comply with this direction
Signed at the City of London Ontario, this 27th day of August, 2007.
Acting Assistant Superintendent, Trustee Compliance
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.