Amendments to Forms and Directives

April 11, 2006

The Office of the Superintendent of Bankruptcy has made a number of amendments to both the forms and directives as a result of three separate initiatives. These initiatives deal with modifications to some forms to facilitate their electronic transmission, updating them to comply with harmonization legislation, and replacing the term "Division Assistant Superintendent" in the directives given the OSB's organizational renewal exercise. The nature of these amendments are described in more detail below.

Forms

The first type of changes to some of the forms is aimed at facilitating their electronic transmission from trustees to creditors. The second type of changes stems from the Harmonization Program. Moreover, Form 47 is changed to delete paragraph 6, which in a recent court decision was found to have contravened the BIA. Other changes correct some grammatical errors and inconsistencies between the French and English versions of the forms.

These changes to the forms were made concurrently to minimize disruption to trustees and software developers.

Electronic Transactions

The Superintendent of Bankruptcy remains committed to promoting the use of new technological opportunities to modernize the insolvency system in Canada. In keeping with this objective, many of the BIA forms will be available in a special format to allow for their electronic transmission from trustees to creditors. The key feature of the new forms thus affected will be the replacement of the signature lines (where handwritten signatures have always been required) with a signature block, which provides trustee contact information to the creditor.

The OSB adopted an approach similar to that of the Personal Information and Electronic Documents Act (PIPEDA) in order to facilitate electronic transactions. A working group within the OSB performed a risk assessment and recommended that many of the BIA forms that are sent from trustees to creditors would not jeopardize the insolvency system were they to be sent with a signature block rather than a signature.

There are a few notable exceptions, where it was felt that the requirements for serving these documents needed to remain formal, as the receipt of certain documents can have a major and material impact on the creditor. These forms are: Form 45 (Notice to Landlord to Disclaim a Lease by Commercial Tenant); Form 77 (Notice of Disallowance of Claim, Right to Priority or Security or Notice of Valuation of Claim); and Form 86 (Notice of Intention to Enforce a Security). The more stringent requirements for serving these forms will remain in place because it is the receipt of these notices rather than their sending that triggers the time period within which the recipient has an opportunity to defend his or her interests.

Please note that the creation of the new "electronic transmission" version of the forms is intended for certain trustee to creditor transactions only. Forms such as those signed by a judge or registrar, notices sent to a bankrupt, trustee licence applications, notices specifically sent to the court, and forms produced by the OSB are unaffected by these changes to facilitate electronic transmission. These unaffected Forms are 1, 2, 3, 4, 5, 24, 25, 26, 27, 28, 43.2, 45, 53.1, 60, 61, 62, 63, 64, 66, 74, 77, 83, 85, 88, 89, 90, 91, and 92.

In the new "Directive 8R4 — The Bankruptcy and Insolvency Act Forms," Appendix C provides the listing of BIA forms that are amended to facilitate electronic transmission.

Please note that the electronic transmission of these forms is subject to the following conditions: 

1. the creditor has agreed to receive certain documents by electronic transmission. It is advisable that the trustee obtain a general written consent to this effect from the creditor.
2. the original form signed by the trustee or delegate (and all subsequent amendments) must be retained in the estate file;
3. the original documents signed by the trustee or delegate are to be used to send a copy to the Superintendent where fax is the mode of transmission; and
4. a copy of the form described in (b), but without the handwritten signature of the trustee or delegate, may be sent to creditors (who have consented to receive documents in this manner) by electronic means (e-mail or fax) provided that the form includes the signature block and other information as per the new Form 1.1.

The new Form 1.1 functions as a "footer" to those forms that are transmitted electronically. This footer replaces the signature line for copies of forms sent electronically to creditors. The footer consists of a signature block and notation stating that the signed original of the form is being kept by the trustee in the estate file.

Please also note that the sending of Proofs of Claim from creditors to trustees was discussed in the Superintendent's Statement on Faxed and Electronic Proofs of Claim which remains the position of the OSB.

Harmonization Program

On December 15, 2004, the BIA was amended by the Federal Law-Civil Law Harmonization Act No. 2. This legislation is aimed at ensuring that both common law and civil law concepts and terminology are accurately expressed in both French and English. As a result of the amendments to the BIA, it was necessary to update a number of the forms to ensure that they comply with the changes to the BIA.

By way of background, in 1993, the federal government introduced a program aimed at coordinating federal legislation with the terms and concepts expressed in the Civil Code of Quebec. One particular area for consideration was that of property and civil rights, which fall under provincial jurisdiction except when they pertain to bankruptcy and insolvency, which fall under federal jurisdiction. Because the property and civil rights are under provincial jurisdiction, they exist in two private law systems: (1) civil law in Quebec, and (2) common law in the other Canadian provinces and territories. Some legal concepts and terminology that are expressed in civil law do not exist in common law and vice versa. As a result, the BIA was amended to ensure that it encompasses both civil law and common law concepts and terminology in both the French and English versions.

For example, all references to a "receiving order" in English or "ordonnance de séquestre" in French have now become "bankruptcy order" in English and "ordonnance de faillite" in French. In addition, real property now includes "immovables," and personal property now includes "movables." Also, the terms "landlord" and "tenant" have been changed to "lessee" and "lessor" respectively.

Consequently, wording in a number of the forms under the BIA has been amended in order to ensure that it is consistent with the enabling legislation.

As well, some of the forms have been amended to streamline the language by correcting grammar and punctuation and ensuring consistency between the French and English versions.

Directives

As many of you may already be aware, in December 2003, the OSB launched its organizational renewal initiative in an effort to meet the changing business requirements of the insolvency marketplace. This human resources strategy was driven by a desire to make optimal use of existing resources to become a leader and model regulator and to assume the full scope of our mandate.

To this end, the OSB is currently setting up a regional model of program and service delivery that is comprised of three regions, the East, Ontario, and the West. Each region, headed by a Regional Director, incorporates the existing division offices into increasingly specialized teams that will operate across a given region to support the key priorities of the OSB, such as, trustee compliance, debtor compliance, information services and products, etc.

Due to the shift to a regional structure, the OSB is eliminating the position of Division Assistant Superintendent and replacing it with specialized Assistant Superintendents. Each Regional Director is responsible for communicating with trustees to notify them who these Assistant Superintendents are and their responsibilities.

As a result of the organizational changes, the references to Division Assistant Superintendent or DAS in the Directives needs to be replaced or in some cases deleted. The Omnibus Directive on Administrative Delegation amends the Superintendent's Directives for the purpose of deleting or replacing the position title of Division Assistant Superintendent or the previous title of Bankruptcy Administrator in these Directives with the term Designated Assistant Superintendent, Designated Senior Bankruptcy Analyst, Designated Bankruptcy Analyst or Regional Director as appropriate.

If you require further information, please do not hesitate to contact the OSB office nearest you.

Marc Mayrand
Superintendent of Bankruptcy