SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 13-56663
DATE: 2013/02/26
RE: COLLEEN MOORE, BARRY DOUCETTE, RONALD X. AYOUB, KIM KRUK, DALE HEIN, PAMELA STONE, CAROLINE LEWANDOWSKY, ANNE LEFIER, GARRY McGINN, DAVID HAMILTON, JAMES MILLER, HELENE LAMADELEINE, MARY LOU FISHER, ALLAN BRETT, DONALD HUTCHINSON, GLORIA HUTCHINSON, RICHARD MELCER, STEPHEN CALDWELL, MICHELLE VEZEAU, DAVID KORNELSEN, KEVIN HARSH, COLLEEN MALTAIS, LUC MALTAIS, BOB MECH, A.A.N.T. SOFTWARE CORPORATION, TERRENCE FINNIGAN and JAMES JOSS, Applicants
AND
THOMAS G. ASSALY, ASSALY INVESTMENT PROGRAM CORPORATION, ASSALY FINANCIAL CORPORATION, ACT 1 CORP., ASSALY CREDIT & TRADE CORP., ASSALY ASSET MANAGEMENT CORPORATION, MILLENNIUM SPRINGS DEVELOPMENT & CONSTRUCTION CORP. (aka MILLENNIUM SPRINGS PROPERTIES LTD.) and MILLENNIUM EDUCATIONAL & RESEARCH CHARITABLE FOUNDATION (formerly the THOMAS C. ASSALY CHARITABLE FOUNDATION), Respondents
BEFORE: Mr. Justice Paul Kane
COUNSEL:
C. P. Morris, for the Inspector
Justin R. Fogarty, for the Applicants and J. E. Smith for the Respondents
HEARD: February 20, 2013
ENDORSEMENT
[1] This application for the appointment of an Inspector proceeded ex parte on February 6, 2013.
[2] An interim order (“Interim Order”) was granted on February 6, 2013 appointing the Inspector of several of the respondent corporations, with the requirement that the notice of application and Interim Order be served on the respondents. The application was then adjourned to today.
[3] The Inspector filed an interim report as to its activities since appointment dated February 16, 2013, (the “First Report”). The Inspector today filed a supplementary report dated February 20, 2013 (the “Second Report”).
Position of the Parties
[4] The Inspector today seeks an order:
(a) confirming its appointment as Inspector as reflected in this court’s interim order dated February 6, 2013;
(b) expanding the appointment of the Inspector to include the respondents not included in the Interim Order;
(c) extending the right of the Inspector to examine under paragraph 24 of the Interim Order G. Assaly, F. McMillan, counsel for the late R. MacKay and the other persons named in the notice of application not yet been examined; and
(d) an order prohibiting publication of the notice of application, orders and reports of the Inspector herein.
[5] Counsel advised that Your Credit Union seeks a date to argue that the Administrative Charge should not and cannot apply to its security as provided for under the Interim Order.
[6] The respondents today advised that Millenium Education & Research Charitable Foundation (the “Foundation”) is a not for profit corporation governed by the Canada Not‑For‑Profit Corporations Act, S.C. 2009, c.23 (the “CNPCA”) and is therefore exempt from the appointment of an inspector.
[7] The respondents further seek an adjournment to file responding materials to the application and respondents of the Inspector. The respondent corporations state that the Foundation is not the recipient of any money invested by the applicants in any of the three developments in issue and seek the opportunity to respond via affidavit to that allegation.
[8] The respondents also seek the right of their counsel to attend upon and participate in any examination of individuals hereafter conducted by the Inspector.
Order Granted
[9] This application is adjourned to April 4, 2013 at 10:00 a.m. upon the following terms.
[10] On April 4, 2013, the Inspector shall present a further report summarizing actions taken from this date and any conclusions on the investigation to that date. The respondents may by way of motion and factum seek relief, as may any other party affected by the orders herein.
[11] The provisions of the Interim Order, but for paragraphs 3 and 5 therein, are continued until April 4, 2013 to permit the respondents to file affidavits in response to this application and to permit any necessary cross-examinations.
[12] Section 242 of the CNPCA together with the definition of debt obligation in s. 2 (1) therein will have to be considered in argument of the respondents’ motion on April 4, 2013 that this Inspector cannot be appointed regarding the Foundation.
[13] The Inspector is entitled to examine all persons listed under paragraph 24 of the Interim Order as well as David Thompson, account manager at TD Waterhouse, Ottawa, Angelo Spadola, Thomas G. Assaly and Frank MacMillian, counsel for the late Rand MacKay. The language of the relevant legislation is broad enough to permit examination of individuals other than the respondents.
[14] The right of examination by the Inspector of individuals beyond those listed in paragraph 13 above, whether in their personal capacity or as a representative of a corporation, shall not occur without prior notice to those individuals and, absent their consent, until order of this court.
[15] On consent of the Inspector, counsel for the respondents shall be notified of the date hereafter of any examination to be conducted by the Inspector. Mr. Smith or his designate for the respondents and counsel for any other person to be examined may attend such examination by the Inspector and may, at the conclusion of the Inspector’s examination, conduct one concise re-examination of the person being examined. Subject to objection on matters as to law, counsel for the respondents and counsel for the party being examined shall not interfere in the Inspector’s examination of individuals.
[16] Subject to further order of this court, there shall be a non-publication order of the First and Second Report of the Inspector as provided for in s. 242(6) of the CNPCA, s. 161(6) of the Ontario B.C.A. and s. 230 (1)(j) of the Canada B.C.A. subject to further order of this court. The court file shall not be sealed.
[17] On consent of the respondents, neither the Assaly Group of companies nor any of the respondents shall market, sell or promote directly or indirectly any investment of any kind, whether secured or unsecured, in any of the projects which are the subject matter of this proceeding, including but without limitation, NW1, NW2, Villa Montague and Canada House, until further order of this court.
[18] The appointment of the Inspector is not hereby expanded to include the respondent corporations beyond those listed in paragraph 8 of the Interim Order, until argument in relation thereto and further order of this court.
The Hon. Mr. Justice Paul Kane
Date: February 26, 2013
COURT FILE NO.: 13-56663
DATE: 2013/02/26
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: COLLEEN MOORE, BARRY DOUCETTE, RONALD X. AYOUB, KIM KRUK, DALE HEIN, PAMELA STONE, CAROLINE LEWANDOWSKY, ANNE LEFIER, GARRY McGINN, DAVID HAMILTON, JAMES MILLER, HELENE LAMADELEINE, MARY LOU FISHER, ALLAN BRETT, DONALD HUTCHINSON, GLORIA HUTCHINSON, RICHARD MELCER, STEPHEN CALDWELL, MICHELLE VEZEAU, DAVID KORNELSEN, KEVIN HARSH, COLLEEN MALTAIS, LUC MALTAIS, BOB MECH, A.A.N.T. SOFTWARE CORPORATION, TERRENCE FINNIGAN and JAMES JOSS, Applicants
AND
THOMAS G. ASSALY, ASSALY INVESTMENT PROGRAM CORPORATION, ASSALY FINANCIAL CORPORATION, ACT 1 CORP., ASSALY CREDIT & TRADE CORP., ASSALY ASSET MANAGEMENT CORPORATION, MILLENNIUM SPRINGS DEVELOPMENT & CONSTRUCTION CORP. (aka MILLENNIUM SPRINGS PROPERTIES LTD.) and MILLENNIUM EDUCATIONAL & RESEARCH CHARITABLE FOUNDATION (formerly the THOMAS C. ASSALY CHARITABLE FOUNDATION), Respondents
ENDORSEMENT
Kane J.
Released: February 26, 2013