WORDZ PROCESSING CORPORATION LTD. ACT, 1994
HAMILTON AND REGION ARTS COUNCIL ACT, 1994
CANNETO SOCIETY INC. ACT, 1993
INSTITUTE FOR ADVANCED TALMUDIC STUDY ACT, 1994
CONTENTS
Wednesday 18 May 1994
Wordz Processing Corporation Ltd. Act, 1994, Bill Pr90, Mr Kwinter
Hans Daigeler, MPP
Michael Lipton, counsel, Wordz Processing Corporation Ltd
Hamilton and Region Arts Council Act, 1994, Bill Pr96, Mr Abel
Donald Abel, MPP
John Hammond, counsel, Hamilton and Region Arts Council
Canneto Society Inc. Act, 1993, Bill Pr53, Mr Mammoliti
George Mammoliti, MPP
Francis Sutton, counsel, Canneto Society Inc
Institute for Advanced Talmudic Study Act, 1994, Bill Pr92, Mr Harnick
Charles Harnick, MPP
Stephen Schwartz, counsel, Institute for Advanced Talmudic Study
Louis Frapporti, counsel, Coopers and Lybrand OYDL Inc
Rabbi Jacob Hirschmann
STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS
*Chair / Présidente: Haeck, Christel (St Catharines-Brock ND)
*Vice-Chair / Vice-Présidente: MacKinnon, Ellen (Lambton ND)
Eddy, Ron (Brant-Haldimand L)
*Fletcher, Derek (Guelph ND)
*Hansen, Ron (Lincoln ND)
*Hayes, Pat (Essex-Kent ND)
*Hodgson, Chris (Victoria-Haliburton PC)
Jordan, Leo (Lanark-Renfrew PC)
*Mills, Gordon (Durham East/-Est ND)
O'Neil, Hugh P. (Quinte L)
*Perruzza, Anthony (Downsview ND)
*Ruprecht, Tony (Parkdale L)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Daigeler, Hans (Nepean L) for Mr Eddy
Also taking part / Autres participants et participantes:
Hayes, Pat, parliamentary assistant to Minister of Municipal Affairs
Levine, Katherine, counsel, Ministry of Consumer and Commercial Relations
Moore, Eric, director, charitable property division, office of the public trustee, Ministry of the Attorney General
Clerk / Greffière: Grannum, Tonia
Staff / Personnel:
Mifsud, Lucinda, legislative counsel
The committee met at 1007 in committee room 1.
WORDZ PROCESSING CORPORATION LTD. ACT, 1994
Consideration of Bill Pr90, An Act to revive Wordz Processing Corporation Ltd.
The Chair (Ms Christel Haeck): Ladies and gentlemen, I call the meeting of the standing committee on regulations and private bills to order. Our first order of business is Bill Pr90, An Act to revive Wordz Processing Corporation Ltd. I would ask Mr Daigeler to join us with the applicants.
Mr Hans Daigeler (Nepean): In the absence of Mr Kwinter, I put forward Bill Pr90, and we have some presenters here who will introduce themselves.
Mr Michael Lipton: Good morning, ladies and gentlemen. My name is Michael Lipton, and I am a lawyer acting on behalf of the applicant. With me are Elliot Rand, one of my partners, and Mr Alain Harari, who is the principal of the applicant.
This is an application to revive Wordz Processing Corporation Ltd. As indicated in the material, it was incorporated in 1981 and regrettably it failed to file some returns and through inadvertence the position is that the company was ultimately dissolved in August 1985. The company has been active throughout, but it did not become aware until April 1993 of its unfortunate position. When that first was brought to Mr Harari's attention, he immediately took steps to bring forward this procedure. Unfortunately, more than five years have elapsed, so we find ourselves before you this morning.
We've made all the necessary filings, we are now completely up to date, and we understand there are no objections from the Ministry of Consumer and Commercial Relations. The company is still active, it is a database marketing company, it is very anxious to be able to resume its, shall we say, legitimacy. To that extent we are seeking your indulgence and we request respectfully that this matter be approved.
The Chair: I would ask if there are any other interested parties at this point who wish to come forward to speak to this bill. Seeing none, I would ask Mr Hayes ifn there are any comments from any concerned ministries.
Mr Pat Hayes (Essex-Kent): None of the ministries have any objections to this bill, and the Ministry of Municipal Affairs does not object to this bill.
The Chair: I would ask if there are any comments or questions from the members. Mr Hansen?
Mr Ron Hansen (Lincoln): It's a straightforward application, and there's no objection from the government members.
The Chair: By the looks of it, the members are ready to vote, but I will put the question. Are members ready to vote? All right.
Shall sections 1 through 3 carry? Carried.
Shall the preamble carry? Carried.
Shall the title carry? Carried.
Shall the bill carry? Carried.
Shall I report the bill to the House? Agreed.
Gentlemen, the deed is done. Thank you for your time.
HAMILTON AND REGION ARTS COUNCIL ACT, 1994
Consideration of Bill Pr96, An Act to revive The Hamilton and Region Arts Council.
The Chair: I call Bill Pr96, An Act to revive The Hamilton and Region Arts Council. Mr Abel, could you bring forward your applicant and introduce him, with whatever other comments you'd like to make at this time.
Mr Donald Abel (Wentworth North): It's a pleasure to be here to sponsor Bill Pr96, An Act to revive The Hamilton and Region Arts Council. I have with me today John Hammond, who is a solicitor with Inch, Easterbrook and Shaker, and he'd like to have the opportunity to give you an explanation of why this bill was brought forth.
Mr John Hammond: Madam Chair, I'm a solicitor with the law firm of Inch, Easterbrook and Shaker. We represent the applicants in this bill.
The bill addresses the dissolution of the corporate entity The Hamilton and Region Arts Council. The corporation was dissolved in 1987 under section 317 of the Ontario Corporations Act for failure to file information returns pursuant to the Corporations Information Act.
The Hamilton and Region Arts Council was incorporated for the purpose of performing charitable activities relating to the arts, and has carried out these purposes since February 1973. The organization is largely run by volunteers whose knowledge of corporate matters is slim. The non-filing was due to inadvertence, and it only became apparent in February of this year. Immediate steps were taken to rectify the situation.
The corporation has since made the requisite filings and we're unaware of any opposition to the bill. The bill is intended to revive the corporation so it may continue its good works, and I request on behalf of the applicant your approval in order that it may continue to do so.
The Chair: I have to ask if there are any interested parties who wish to come forward at this time to speak on this bill. Seeing none, I ask Mr Hayes if there are any comments from concerned ministries.
Mr Hayes: The Ministry of Municipal Affairs has no objections, and neither do any others that we're aware of.
The Chair: Do members have any questions at this time? Seeing none, are members ready to vote? Okay.
Shall sections 1 through 3 carry? Carried.
Shall the preamble carry? Carried.
Shall the title carry? Carried.
Shall the bill carry? Carried.
Shall I report the bill to the House? Agreed.
Mr Hammond, thank you very much for your time this morning. I hope it went as expeditiously as you expected.
Mr Hammond: Even more so.
CANNETO SOCIETY INC. ACT, 1993
Consideration of Bill Pr53, An Act to revive The Canneto Society Inc.
The Chair: Mr Mammoliti, if you would like to introduce your applicants, relating to Bill Pr53, An Act to revive The Canneto Society Inc.
Mr George Mammoliti (Yorkview): In front of us we have an organization that has existed for 15 years and was registered as a charitable organization in my riding of Yorkview and is now asking the committee to consider an application to become private and incorporated, if I'm not mistaken. I now introduce you to the lawyer who will take it from here. I give my solid support as the MPP for the area, and I'm hoping the committee will look at this and vote unanimously in favour.
Mr Francis Sutton: Madam Chair and committee, I'd like you to meet Mr Tony Malizia, who represents the Canneto Society. Our story is similar to the others you've heard. We were incorporated in 1977 as a non-profit charitable charity in a corporation form and existed for a number of years until I discovered that in September 1982 we were dissolved. They had been carrying on their activities and their community work all during the time. When we discovered it, we immediately applied and did the necessary things, filed and advertised, and we're now asking if we could be revived.
In the revival, it turns out that when the original incorporation was done, they were shown as a non-profit charitable organization and they should have been shown as a non-profit not-charitable organization. Since the Corporations Act doesn't allow for that change, I believe that the Legislature has that power and we're asking at this time for that to be approved.
The Chair: I advise members of the committee that the clerk has passed around several amendments which we will read into the record as we go through the voting process. I would ask at this time if there are any other interested parties who wish to come forward to speak to this bill. Seeing none, I would ask Mr Hayes if there are any comments on behalf of any concerned ministries.
Mr Hayes: It doesn't affect the Ministry of Municipal Affairs; we don't have any comments on it. However, Eric Moore from the public trustee would like to make some comments and get some clarification and possibly give us some information on the amendments that are coming forward, or clarification.
Mr Eric Moore: The public trustee is interested in this bill by reason of her role in relation to charitable property. This organization was chartered as an incorporated charity and, as a matter of law, all of its property is charitable and therefore of interest to the public trustee.
As a point of clarification, it had been my understanding that this organization was not registered at any time with the Department of National Revenue for income tax purposes as a charity and I request clarification from the applicants on that.
Mr Sutton: They have never been registered with the income tax department and never have used that process.
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Mr Moore: Then I'd like to advise the committee that the bill as originally drafted would have revived them as a charity. Our concern was the fact that it appeared to us on examination that they had never operated as a charity, were not using their property as a charity and probably had never been intended to be a charity; they had been incorporated in the wrong form.
I understand there are several amendments that have been put forward to the committee to address those problems, specifically an amendment to the preamble to clarify that the objects were not exclusively charitable and an amendment to the bill adding to a new section to detail what the objects on incorporation were deemed to be. Those objects are not exclusively charitable.
One of the problems with the Corporations Act is that it doesn't address the problem of charitable property. It appears only the Legislature has the authority at this time to do the amendments required in order to bring this organization into non-charitable form.
The public trustee would object to the revival without the amendments, but would have no objection with the amendments.
The Chair: Do the members have any questions?
Mr Daigeler: Are the amendments satisfactory?
Mr Sutton: Yes, they are.
The Chair: The members are ready to vote? Fine.
Shall section 1 carry?
Mr Gordon Mills (Durham East): I move that the bill be amended by adding the following subsection:
"Objects
"1.1 Despite anything to the contrary in its letters patent, The Canneto Society Inc shall be deemed to have been incorporated with fraternal objects, such objects being to support the community of immigrants from Canneto, Italy and their descendants and to represent that community in social, religious and charitable matters."
The Chair: Does that section carry? Carried.
Shall sections 2 and 3 carry? Carried.
Mr Mills, relating to the preamble, shall it carry?
Mr Mills: No; I have an amendment, Madam Chair. I move that the preamble of the bill be amended by adding at the end of the second line "and to clarify that the objects of the corporation are fraternal and not exclusively charitable."
The Chair: Shall the preamble, as amended, carry? Carried.
Shall the title carry? Carried.
Shall the bill, as amended, carry? Carried.
Shall I report the bill, as amended, to the House? Agreed.
Gentlemen, I'd like to thank you for your time. I hope you're pleased with the process.
Mr Mammoliti: You've all been as wonderful as usual.
INSTITUTE FOR ADVANCED TALMUDIC STUDY ACT, 1994
Consideration of Bill Pr92, An Act to revive Institute for Advanced Talmudic Study.
The Chair: Our next order of business is Bill Pr92, An Act to revive Institute for Advanced Talmudic Study. I would ask Mr Harnick and the applicants to please come forward. Good morning, Mr Harnick. You've been before us before; you're aware of the procedure?
Mr Charles Harnick (Willowdale): Yes. The application really is to revive the charter of the corporation. I have counsel here, as well as Rabbi Hirschmann, and they are the best people to deal with the questions you might have. They can make the submissions so that you can understand exactly what the situation is.
Mr Stephen Schwartz: Good morning, Madam Chairman and members of the committee. My name is Stephen Schwartz. With me are Martin Myerowitz and Rabbi Hirschmann.
This is an application for revival of the institute. It was incorporated a number of years ago and in January 1987 it was dissolved. The dissolution came about by inadvertence. We are here today to reinstate the charter and the draft bill is before you. We are looking to restore the corporation to its legal position in order that it be able to continue with its charitable work.
The Chair: Are there any other comments from the applicants at this time? Seeing none, because of the availability of microphones, I'm going to have to ask you to vacate those chairs and I would ask the interested parties, Mr MacLellan and Mr Frapporti, to come forward, please.
Mr Louis Frapporti: My name is Mr Frapporti, and this is Mr MacLellan. We're here on behalf of the administrator of Olympia and York Developments Ltd, which is Coopers and Lybrand OYDL Inc, and we have some submissions to make in respect of the request.
The Chair: Just to advise members, I believe you have a letter before you from Coopers and Lybrand. Mr Frapporti, if you'd like to continue.
Mr Frapporti: Just a bit of background with respect to our involvement here: In May 1992, Olympia and York Developments Ltd declared itself insolvent and sought court protection. Creditors approved a plan of compromise, an arrangement under the CCAA, and that plan was sanctioned by the court in February 1993. The duty of the administrator, and our involvement here today on behalf of the administrator, is to protect the interests of the unsecured and undersecured creditors of OYDL.
In April 1992, properties that were on the books of Olympia and York Developments Ltd were transferred to the institute. These transfers were subsequently registered and these registrations and transfers were well after the dissolution of the company.
The administrator, on behalf of Olympia and York Developments Ltd, commenced an action in June 1993 to set aside those transfers and, as the basis for that request, we applied under various statutes: the bankruptcy and insolvency act, the Business Corporations Act and the Assignments and Preferences Act. This was done in order to protect the position of the administrator and to protect assets which might otherwise be available to the unsecured creditors of Olympia and York.
We do not propose here to get into the merits of the action. We merely ask that we be able to bring to the committee's attention the fact that the revival of the corporation on the terms proposed in the act in so far as they may give retroactive effect to these transfers may substantially prejudice the interest of the unsecured and undersecured creditors of Olympia and York Developments Ltd.
These matters will be brought to the court's attention. Proceedings are ongoing and, as a function of the commencement of our claim, the administrator brought a motion to the court seeking to have a certificate of pending litigation placed on the property, which in essence freezes the property and prevents its disposition or conveyance, to maintain the status quo until the matter can be heard and fully adjudicated by the courts. We're merely asking that the same be brought to the committee's attention today.
We have suggested an amendment to the bill which addresses our concern as to the effect that a revival of the corporation may have, and we would ask that you give that due consideration.
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The Chair: Thank you, Mr Frapporti. I would also advise members that we have a letter with some appendices from the Attorney General's office, which I hope you've taken some time to review, and I would at this point ask again if there are any other interested parties who wish to come forward. Seeing none, I would then turn to Mr Hayes for comments relating to various ministries.
Mr Hayes: The Ministry of Municipal Affairs does not have any comments on this bill. However, the public trustee does have some serious concerns and I'd like Mr Eric Moore to address those concerns.
Mr Moore: The public trustee is also interested in this bill by reason of her role in connection with charitable property. As the applicants have indicated, this organization was incorporated as a charity and by law all of its property is charitable.
This matter of revival first arose for the government by correspondence dated March 10, 1987, from the firm of Lorenzetti Wolfe, who are currently representing the applicants in this matter. That correspondence requested the public trustee's consent to a revival of the organization.
The review conducted by our office at that time disclosed certain concerns and questions regarding how the organization was accounting for its finances and its use of its property, and by correspondence dated March 25, 1987, we advised that in the circumstances of those questions at that time we would not consent to a revival.
I was subsequently contacted by telephone by Mr Philip Alter, also with the firm of Lorenzetti Wolfe, and that was on December 13, 1987. Mr Alter is also a director of the corporation in question. After a detailed review of what was required to be provided on our concerns, at that time Mr Alter requested that we waive compliance with any legal requirements in order to allow the organization to be revived by order of the director under the Corporations Act. Mr Alter declined my invitation to make written submissions directly, if he so wished, and I did suggest to Mr Alter that he provide us with whatever documentations and information he could obtain and that if the issues outstanding at that time appeared to be technical rather than substantive, we would consider waiving any further compliance. Mr Alter had indicated he was having serious difficulty obtaining documentation and information that was required from his clients.
Nothing further was heard on this matter, and in particular no documentation and information was provided, although that is required under the Charities Accounting Act, until this matter was raised by way of a private bill for revival. We subsequently advised the applicants' solicitors that there was a substantial amount of outstanding documentation and information that had not been filed: eight years' worth of financial statements, eight years' worth of information regarding names and addresses of directors.
We have subsequently reviewed that documentation and we have advised the applicants' solicitors in a five-page letter of our concerns about how their financial statements apparently fail to demonstrate that they are acting as a charitable organization. We have received no reply. The correspondence was sent to the applicants' solicitors only on May 11, and I apologize that our response was not sent to them earlier; however, we did have to review eight years of financial statements.
I should also advise, since I have received in this morning's mail a copy of the organization's filings with the Department of National Revenue, that those filings do not seem to correspond to the financial statements provided to our office.
Accordingly, the public trustee would strenuously object to the revival of this organization until the substantive matters regarding how it is operating as a charity are addressed.
With respect to the motion for amendment that has been put forward by the receiver for Olympia and York, we would have to object to that motion. It appears to us that that motion is attempting to obtain the benefit of dissolution of the corporate status in proceedings that are before the court, and that is exactly the purpose of the revival bill that is before this committee: to remove that defect.
I should also advise the committee that the public trustee was required by subsection 5(4) of the Charities Accounting Act to be served with the proceedings that are referred to in the correspondence that has been provided to you. I'm not aware of the status of those proceedings or what allegations are made there. I'm therefore unable to comment as to how the motion would relate to those proceedings in the courts.
The Chair: Mr Mills would like to place questions.
Mr Harnick: Excuse me, Madam Chair. Mr Mills, if I may for just a moment --
The Chair: Mr Harnick, we'll definitely get to the applicants again. That's not a problem.
Mr Harnick: I'm just saying it may help to further the questions if you heard the applicant first, that's all.
The Chair: Just let me deal with Mr Mills first. He indicated he wished to speak before anyone else did.
Mr Mills: My comments are not questions; they're observations. I've read both letters, the five-page letter to the applicant, and it's my understanding that it's not appropriate to revive this company at this time, so I will be voting accordingly.
The Chair: I would now turn to the applicants.
Mr Schwartz: Addressing the issues that have been raised, the office of the public trustee has requested information pertaining to the charity. The information that has been requested some time ago has not been provided; no action has ever been taken by the office of the public trustee to force compliance, no court proceedings have ever been taken, and it's our position that it's in the interest of the public trustee that the corporation be revived in order that it has a corporation that is able to fulfil these requests.
We have, prior to this meeting, confirmed with the charity's accountants that the information requested in the letter of May 11 can be provided. It has to be assembled and it will take a period of time, but it can be put together for the trustee.
With respect to the objection raised by my friend sitting next to me, the bill is clear on its face that the revival of the corporation is not to affect any legal matters that are existing between the administrator for Olympia and York and the institute. You will note in the facts presented to you in the letter of May 17 that the Companies' Creditors Arrangement Act plan was approved in February 1993. The transactions which are now attempting to be set aside are transactions that arose a year before that, in April, 1992.
We are not trying to, nor does the bill purport to, affect any rights that exist between O and Y's administrators and the charity. If there are rights yesterday, they will be the same as the rights that exist tomorrow. The revival does not take away or add to any of the parties' rights.
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The bill is clear in its statement that it's subject to any rights acquired by any person. We are not trying to take away or add. It's subject to. The bill is clear on its face. So the objection that we are trying to defeat or hinder any outstanding litigation is not true at all. The bill says that it isn't.
The Chair: Thank you, Mr Schwartz. We have several people who wish to ask questions or to make comment. I have on my list Mr Daigeler, then Mr Moore and then Mr Ruprecht.
Mr Daigeler: Could you clarify for me what is the effect if this application is turned down, and, secondly, are there precedents to postpone or put on hold these bills until some of the questions can be clarified and the matter be brought back to the committee?
The Chair: Yes. In fact there are precedents and we have turned motions down and the applicants, if they wish to proceed, are then able to satisfy the concerns raised by the committee, if they wish to then bring the matter forward again.
If I may refresh members' minds, we had the issue of Glanbrook township not so long ago, which definitely left a range of concerns within members' minds. That particular motion was not accepted and the applicant then attempted to satisfy the concerns that the members and ministries in question raised. That is an option that members have, if they wish to follow it.
Does that answer your question, Mr Daigeler?
Mr Daigeler: Yes. That addressed the question that you can vote it down and then it can be brought back.
The Chair: That's correct.
Mr Daigeler: Is there also something if it were stayed rather than voting on the matter? I mean, it's up to the presenters as well, of course, as to what they wish to do.
The Chair: I'm sorry. I stand corrected. It is a deferral, not a voting down. That would be a motion that one of the members would have to bring for a deferral. The instance I recall of Glanbrook is that it was deferred rather than -- that's my mistake. We did allow for some time to elapse between their first time forward and then their satisfying the concerns of the members.
Mr Moore: If I could address the member's question about the effect of non-revival generally, at the moment all property of the organization is vested in the public trustee as a matter of law. The directors have for a number of years been dealing with it, notwithstanding their knowledge that the organization was dissolved and that it had no corporate status. The legal title to the assets belongs to the public trustee at the moment.
Mr Tony Ruprecht (Parkdale): I've got a question to the parliamentary assistant, Mr Hayes, or to the representative of the public trustee, one of the two.
The Chair: If you'd like to pose your question to Mr Hayes, and then it will be forwarded.
Mr Ruprecht: Yes, we'll see who wants to answer it.
Does the revival of the Institute for Advanced Talmudic Study affect the rights of the objector?
Mr Hayes: I'll refer that to Mr Moore.
Mr Moore: I'm going to refer that to Ms Levine of companies branch.
Mr Ruprecht: Ms Levine, excuse me, but if it does, in what way does it affect the rights of the objector?
Ms Katherine Levine: My name is Katherine Levine. I'm a lawyer at the Ministry of Consumer and Commercial Relations. I think the legislation in the bill is quite clear. As Mr Schwartz has stated, revival is subject to the rights of individuals or rights that have been acquired after the dissolution and prior to the revival, but the actual effect of retroactivity is not clear, and I think that the courts have not quite completely decided on the effect. Sorry, I don't know. I'm not feeling well at this moment.
What I can comment on, I suppose, is what we would do if this application had been processed pursuant to the Corporations Act and we had received a complaint of this nature at that time. We probably, presupposing we have the consent of the public trustee, would proceed with the revival because we would consider, if we did not, that we would be getting into the legislative fray. I don't know if that clarifies it.
Mr Ruprecht: It does somewhat, but, Madam Chair, are we going to be able to hear from Mr Harnick later? I hope he's going to say a few words.
The Chair: We have a couple of other questioners, and if he wishes to speak, we can always turn the microphone on. But I have two people before who have indicated they want to ask some questions, that is, Mr Perruzza and Mr Hodgson.
Mr Ruprecht: Fine. Then put me back on the list again.
Mr Anthony Perruzza (Downsview): Essentially my question is, before we get into convoluted legal issues, to the parliamentary assistant. I'd like to know from him what the ministry's concerns are with this.
Mr Hayes: You missed it, Tony; you weren't here.
Mr Perruzza: Positions change through the course of the day. I'd like to know what Mr Hayes thinks.
Mr Hayes: As I indicated earlier, this does not affect the Ministry of Municipal Affairs, and we do not have any comments. That's why we have people here from Consumer and Commercial Relations and from the public trustee, because their ministries do have concerns with this bill.
Mr Perruzza: I don't know what the other questions are going to be, but if nobody else is prepared to do this, I would be prepared, at the end of this, to move that we stand this down and refer it to the public trustee and see if they can't come to some kind of accommodation before we make a decision on this one way or the other.
Mr Chris Hodgson (Victoria-Haliburton): I have a question for the public trustee. Even if this is reincorporated in full status, does the property still belong to the public trustee until the court case is settled, until the trial is completed?
Mr Moore: No, the legal title to this property is vested in the public trustee by operation of the Corporations Act and the Escheats Act, and upon revival the corporation would be revested with all of its property, legal title to it.
Mr Hodgson: Even though there's a court case on with the dispute?
Mr Moore: The court case hasn't yet been decided.
The Chair: Mr Harnick, you wanted to make a couple of remarks.
Mr Harnick: Before I do that, Rabbi Hirschmann would like to make some comments as well, and it's really his corporation that is seeking this indulgence. So I would just ask the rabbi.
Rabbi Jacob Hirschmann: Thank you for the opportunity. I just want to clarify the situation a little bit because Mr Moore in doing his job, and he's doing it well, but there's a certain picture that you get that might be misinterpreted. I just want to correct that.
We've been in Toronto 24 years. During this time we've been well known within the Orthodox community. It's an educational institution, and that's where the charitable nature is not self-evident in the financial statements, because most of it goes to pay for scholarships for education. It's an educational institution, a rabbinical school and an outreach program within the community. We've had write-ups in the papers. I don't think the legitimacy of the institution per se is the question at all.
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As to the problem with the particular last request from the public trustee, we were in contact with our accountants. It's no problem at all to give all that information. The problem here was we had a religious holiday on Monday and Tuesday, where the Orthodox Jews, which our lawyers and accountants are, were not in the office. It was sent in on Friday. In fact I only found out about it this morning, when I checked with Philip Alter from Lorenzetti Wolfe. So there is no problem whatsoever with meeting all these requirements.
I just want to add that, though it may sound strange, the fact that this information wasn't forthcoming was not on malicious part of any of the directors of the institute, but rather the sort of problem that sometimes comes up, that crops up in charitable institutions where things that are supposed to get taken care of and are important don't get taken care of, rather by default than anybody purposely trying to not pass on information.
The buildings in question, except for the institute itself, are buildings where the scholars live. They're dormitories for married couples. The legitimacy of this was recognized by the government of Ontario because it took the realty tax off those buildings. It's actually a small university, a small educational institution that's viable and functioning. It's rather a technical question, though. The ramifications of that are such that it's a technical question, not a question of the institution itself. It's a functioning, viable institution, and Mr Harnick himself has been there.
Actually, it functions 365 days a year, from 6 am till 12 pm, with the various groups of people studying and coming there and people going there to teach in the community. I just wanted to straighten that out so that you get the picture that there is a very viable, operating institution that's a benefit to the community, and there's a technical problem over here which has to be straightened out.
The Chair: Thank you, Mr Hirschmann. I would ask Mr Mills, and then Mr Daigeler.
Mr Mills: Having given this issue some thought, I would humbly suggest that we should defer as a committee until the applicant has the consent of the public trustee in this matter. That way we will be able to meet the pressures that are on us here. I think that should be the line we should take: to defer it and let the applicant meet with the public trustee, hopefully work something out, come back here and revisit this revival again. So I would move that.
Mr Daigeler: Madam Chair.
The Chair: Just a moment, I have a procedural question. Is this a motion that you are putting forward?
Mr Mills: That's a motion, yes.
The Chair: All right, so we have a motion before us. Would someone like to speak to that motion?
Mrs Ellen MacKinnon (Lambton): Will this motion satisfy the trustee and Consumer and Commercial Relations?
Mr Daigeler: Madam Chair, I was the next speaker.
The Chair: Yes, just one quick moment.
Mr Hayes: She wants clarification; that's what she wants. Let her get her clarification.
Mr Daigeler: My question was relating to the motion. I would like to hear from the applicants whether a deferral would cause serious problems to the applicant.
Mr Schwartz: It's the applicant's position that the information that has been requested by the trustee can be provided. I don't believe that there is need or reason to defer the application. We can provide the undertaking on behalf of the applicant to provide such information. It's financial information that's within the scope of the accountants of the institute, who have confirmed to us that the information can be provided.
The charity is here to revive the corporation so it can continue its charitable purposes in compliance with existing legislation. The charity will comply and will provide to the public trustee the financial information it has requested.
Mr Moore: I'd just like to remind the committee that the information, the concerns we raised, were raised seven years ago with Mr Philip Alter, a member of the firm of lawyers who are representing the applicants in this matter, and who also was at that time and still is, according to the information provided to us, a director of this corporation.
It's been suggested that the public trustee somehow has been remiss in not taking this organization to court in order to obtain compliance. The Charities Accounting Act, section 2, specifically requires that documentation and information be provided, and it has not, after at least one request made seven years ago.
The public trustee's interest is not with respect to the applicant's counsel in having this organization incorporated so it can carry out its charitable work; it is to have the property applied to charitable purposes. That is the very issue in question in our submissions, the concerns we've raised to the applicants. It's the matter that we've asked them to demonstrate and, as a matter of law, it is their responsibility to do so. These are not purely technical issues; they are substantive.
I just point out to the committee that the applicants are coming before the committee asking for its indulgence, and on the material that has been provided, I submit that they have not complied with some very basic legal requirements for charitable organizations in this province. Deferral may provide an avenue for resolving these problems, and the public trustee would certainly not object to deferral.
The Chair: Mrs MacKinnon, you had raised a point of clarification, I believe, of Ms Levine, if you'd like to place your question again.
Mrs MacKinnon: My question basically was whether the motion that was made by my colleague was acceptable with the public trustee and/or Consumer and Commercial Relations.
The Chair: I believe the trustee's office has already answered that, but Ms Levine.
Ms Levine: We have no objection to a deferral.
Mrs MacKinnon: That's basically what I'm asking, yes.
Mr Harnick: I just want to say a couple of things. If a deferral is the way that you think this should be handled, that's fine. I think the reality of this issue is that as between the public trustee and the public trustee's concerns and the applicant, those concerns can be met whether the company is revived or not. In fact, if the company is revived, the public trustee now has an entity to force to make the compliance that's necessary.
As this situation now stands, there is no entity that exists at law that can answer the questions that the public trustee has. If you create that entity, the public trustee now has the opportunity to seek compliance from the entity on a voluntary basis, and you've heard that on a voluntary basis the entity will comply and, if they don't comply, the public trustee will take the entity to court, as it is entitled to do, to force compliance and to force the entity to pay the legal costs that will be incurred.
Today the public trustee can't do that because there is no entity that the public trustee can chase. By reviving the company, you're really permitting an entity to exist that the public trustee can deal with, as opposed to individuals who may or may not be personally responsible. That's the first thing.
As I see it, the real issue before this committee is the issue between the administrator and the company that wants to be revived. You've heard from Consumer and Commercial Relations, Ms Levine, and she has indicated, if I'm correct, I believe what she said is that, if this application was coming before the ministry on a first-time basis for incorporation, it would be granted. That's the impression I had, for what that's worth.
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But the real issue, when you look at this act, is to make a determination as to whether the revival of the corporation will impact on the lawsuit that presently exists. You've heard from Mr Schwartz, who has said that the revival will not impact on that lawsuit. That lawsuit will still be decided based upon whether the Olympia and York Co, back in 1992, had the right to convey that property to anyone, regardless of whether it's this entity or another entity. They may have conveyed that property to Anthony Perruzza back in 1992.
Mr Perruzza: Not likely.
Mr Harnick: I just say that because he's a nice guy. But at any rate that lawsuit deals with what right Olympia and York, as it existed in April 1992, had to convey the property to this entity or any other entity. That's what Mr Schwartz has told you.
If you want to defer it, I suppose it's complicated, it's convoluted, it's difficult, but it's going to come back and it's ultimately going to be something you're going to have to decide upon. What I say to you is, it will not impact on the lawsuit and the determination as to the validity to convey the property to start with. In fact the act says quite specifically that it is not retroactive to affect those kinds of rights.
In terms of the public trustee, I put it to everyone here that it is simply an issue that can be dealt with and will be dealt with with the public trustee. It's probably easier having an entity to deal with it than it would be continuing to linger with no one really having responsibility to deal with the public trustee, based on the status of the company now. You're in effect going, I believe, to help the public trustee, who now is going to have an entity to deal with.
The Chair: Thank you, Mr Harnick. Both Mr Moore and Ms Levine would like to respond to some of the comments that have been made.
Mr Hansen: We have a motion.
The Chair: I will turn to the motion immediately after these clarifications.
Mr Frapporti: May I be given an opportunity to respond to some of these issues before the motion is voted upon?
Mr Perruzza: Can we do that first and then have a wrap-up there?
The Chair: Are members in favour of Mr Frapporti having a couple of comments? Thank you. Mr Frapporti, if you'd continue, and then Mr Moore and then Ms Levine.
Mr Frapporti: I'll attempt to be quite brief. With all due respect to Mr Schwartz's opinion and the opinion of Ms Levine, and this speaks of course to the questions that were asked by Mr Daigeler and Mr Hodgson, this particular act and the effect of the revivification of the company is anything but clear.
If I could draw the committee's attention to some of the problems that can arise in this kind of exercise, mention has been made of the provisions in the act which state that the revival of the company is subject to rights acquired by any person after its dissolution. The administrator and Olympia and York did not acquire any rights, they lost rights, so on that point alone it's quite clear that this is, if anything, ambiguous.
Secondly, it deals with property contracts, liabilities and so forth at the date of dissolution. The property was conveyed after dissolution. What effect does that have? I don't know. You can rest assured that if Mr Schwartz is going to be arguing this in court, with all due respect, I think he'll take the opposite opinion that he has taken today and he'll say that in fact the transfer of the property was a valid exercise. I ask that the committee keep that foremost in its mind.
Thirdly, with respect to Mr Harnick's concerns about the trustee having an entity to sue, I can only add that we have sued a non-existent corporation and they have responded to that suit by filing statements of defence. We have had no difficulty in getting an immediate response. That is the extent of my comments.
The Chair: Thank you, Mr Frapporti. It should be noted for everyone's edification that these comments form a public record, so if anyone wishes to consult them, the Hansard will be published in due time for all of your interests.
First Mr Moore and then Ms Levine.
Mr Moore: I'd like to respond to the suggestion made by Mr Harnick that, in his view, all of this legislation, this bill that's being put before the committee, was helpful to the public trustee. The public trustee doesn't share that view.
There's no difficulty with an entity here; there are legal persons called individuals who have in fact been dealing with the charity's property, although without corporate authority, and those persons are responsible in law and equity for the property they have been dealing with. Those persons have a very real personal interest in getting this corporation revived and, in the course of doing that, addressing the issues of how they have been dealing with the charity's property.
This is not a suggestion of impropriety or any criminal activity; it is the fact that these individuals are responsible for demonstrating how they are applying the property to the charitable purposes, and that demonstration has been wanting after repeated requests.
I've also noted the sponsor's suggestion that the public trustee should take the organization to court if it doesn't respond. This committee is a committee of the high court of Parliament, and this is in essence a court here. I suggest that the idea that the revival should be allowed to go through and then if, as has happened in the past, the material is not provided, the documentation and information required in order to demonstrate how this organization has been properly operating is not provided, the public trustee should institute court proceedings -- with respect, I suggest that's a serious waste of public time and money. This is a matter that can be dealt with before it comes to the committee.
Mr Harnick: You'll get your costs.
The Chair: Mr Harnick, please, do try to keep some order here.
Ms Levine: What I meant to say was that there is a period of time, as you're aware, when applications can come before the ministry and the corporation can be revived administratively. There are certain statutory preconditions, one of them being the consent of the public trustee. The issue of retroactivity has arisen in the past and what that's subject to, the rights and so forth.
Our position has always been not that this ambiguity may or may not exist, but that it's an ambiguity that the courts have to decide. If we refuse to revive statutorily when all the preconditions are met, then in effect we're stepping into the fray and we're adjudicating rights when we don't have all the facts before us. Of course, the Legislature isn't subject to the same restrictions that we're subject to, but I was just explaining our position that we take administratively.
The Chair: Mr Harnick, I think at this point the motion has been put. The motion is to defer until the public trustee has been satisfied about all of the concerns.
Mr Daigeler: I think the motion's simply to defer.
Mr Mills: No, no, to defer until the public trustee has been satisfied in all the aspects that he's raised so that then we can be brought back --
Mr Perruzza: Hang on a second. Can I have a clarification, because this changes the --
The Chair: Just one moment, please. One at a time, please. Mr Daigeler first.
Mr Daigeler: I would prefer if the motion simply reads that the matter be deferred.
The Chair: If I may, the record shows that in fact what Mr Mills put before us as a motion was that it is a deferral until the concerns of the public trustee have been addressed. That is on our record here and the clerk has maintained that record and has substantiated the remarks of Mr Mills.
Mr Perruzza, does that satisfy your question of clarification?
Mr Perruzza: Madam Chair, can you maybe shed some light on this? Does that mean that the matter is just simply referred to the trustee's office until the trustee determines that all of his concerns have been met and then that can't come back to us until that's happened, or at some point will this matter be brought before this committee whether the trustee feels that all of the concerns have been met or not? I'd be more inclined to support the latter and at some point to make a determination.
The reason I suggested this earlier on is so that they can work out some of their wranglings that, quite frankly, I don't think we have the time or the broad range of information to be able to assess here at this committee in any substantive way. That's why I suggested it earlier, and I think the trustee is inclined to agree with that.
Mr Mills: Might I suggest that we vote on the motion as put and then, if that is not successful, perhaps Mr Perruzza would like to introduce another amendment or another motion.
The Chair: I concur with Mr Mills. The motion before us at this point is that the application, Bill Pr92, be deferred until the concerns of the public trustee have been met. If the members are prepared to vote, you know the motion.
Those in favour? Those against? I vote in favour of the motion, so it is deferred.
I move that the standing committee on regulations and private bills be adjourned. I thank all of the applicants.
The committee adjourned at 1112.