407 ETR, Moloney and Hover: Limits on the Scope of Bankruptcy’s Rehabilitative Power

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Recent case law has considered the extent of insolvency legislation’s rehabilitative power. This paper examines the impact of recent decisions from the Supreme Court of Canada, suggesting that an individual found guilty of professional misconduct can likely avoid fines and costs imposed by a professional regulatory body by making use of insolvency proceedings. Key cases are outlined in the author’s analysis: 407 ETR Concession Co v Canada (Superintendent of Bankruptcy), 2015 SCC 52; Alberta (Attorney General) v Moloney, 2015 SCC 51; KPMG Inc v Alberta Dental Association, 2005 ABCA 101. Further, limitations imposed by the legal system on the degree to which insolvency can impede a professional regulator’s powers are discussed, with consideration given to internal mechanisms in insolvency law, as well as the constitutional division of powers.

This paper is part of a collection presented at LESA’s The Constitution in the Insolvency Tool Box seminar held in Edmonton on June 9, 2016.

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