The applicant, the Ontario Securities Commission, sought an order under section 129 of the Securities Act to appoint a receiver and manager over all assets and properties of the respondents, a group of interconnected real estate investment entities.
The Commission alleged that the respondents diverted investor equity from specific limited partnership projects to unrelated properties, contrary to the limited partnership agreements and marketing materials.
The court rejected the respondents' argument that a strong prima facie case was required, holding that the Commission only needed to show serious concerns of a breach.
Although the court ruled that investor interview transcripts were hearsay and inadmissible for the truth of their contents, it found sufficient evidence of improper fund diversion to justify the receivership.
The court appointed the receiver over all properties, declining to exempt specific properties held by secured creditors, to ensure coordinated oversight.
