The ASC hearing is open to the public, and fortunately for the rest of us some people were able to attend the hearing and took notes of what they saw and heard, which they then sent to me. For that I thank them.
According to those notes, the main reason for this hearing is the defendants in the District and Echaris representative actions would be negatively impacted by an adverse result from the ASC hearing. In the case of the Encharis defendants they allege they’re being negatively affected while not having the ability to defend their interests. To keep that from happening the collective petitioners wanted the ASC to either stay their proceeding until the representative action has concluded or to seal the proceedings.
When all was said and done the application for a stay was denied, the confidentiality order request was denied, and the Encharis BOD was found to have standing to apply to be included in the ASC hearing process. I had a chuckle over that last one because I took it to mean that if the Encharis BOD joined this proceeding they would also be subject to any sanctions the ASC might level in the event of an adverse finding by the panel.
For this result the petitioners shelled out an estimated $50K in legal fees.
This report mentions buying a transcript – you can get one by contacting dictacourtreporting.com. When I asked about the cost for a transcript, I was quoted ~$500 CDN for the two days of hearings not including the ruling.
The report follows. Outside of some formatting changes I’m posting the report as I received it.
ANO
These are comments and observations from members of the public who attended the ASC proceeding on Jan 7 and 8, 2019. These members are not lawyers.This was sent out in response to inquiries by the public that couldn’t attend the ASC proceedings and that wanted to be informed. Somewhat like Luther, who returned from Rome reporting via his Thesis; on the actual conditions of the financial and spiritual matters to the people, so did we. The public is welcome to obtain the transcript of any civil or ASC proceeding at a cost. The public can contact the ASC with any questions or information at
Alberta Securities Commission
Suite 600, 250–5th St. SW
Calgary, Alberta, T2P 0R4
Monday to Friday 8 a.m. – 5 p.m. Reception: (403) 297-6454
Main Fax: (403) 297-6156 Toll-Free: (877) 355-0585
PROCEEDINGS Jan 7 and 8/19: This hearing was about 2 main items.
The Respondents lawyers want an indefinite stay of proceedings on behalf of the un-named respondents in the ASC hearing but who are named in the civil action suits. Ie., some of the Board of Directors are named in the representative action law suit but not in the ASC hearings. They believe a negative ruling from the ASC hearing will negatively impact them in the representative action law suit. They want the stay until the civil proceedings are over.
2. If a stay is not granted, they want the ASC hearing to be closed or confidential.
Result of today’s hearing: Jan 7/19:
1. No decision was rendered today.
2. A verbal decision will be rendered at a later date (not set) and a written decision will follow, again, no date set.
Arguments Presented for the Stay and the closed hearing (by the 4 Respondents lawyers)
1. The Board of directors who are named in the civil suits but not in the ASC hearing will be painted with the same brush because of the results of the ASC hearings.
2. Encharis (who also brought two lawyers) says they were “named” in the ASC hearing without being legally named so they can’t defend themselves at the hearings.
3. The public is not being hurt, only the non-named group in the representative action so the ASC hearing can wait. The church will never do this again to people since the District has no authority to do so.
4. Prejudice to the 70 or so named people in the representative action suits because they have no access to the disclosure and they can’t cross examine in the ASC hearing.
AUGMENTS Presented to Proceed with the Hearing and to keep the hearing Open (by the ASC lawyers)
1. Any results from the ASC hearings are not binding on the Queen’s Bench and the Queen’s bench will follow all procedures according to civil law and can make up their own minds on the matter.
2. Encharis was not named because the ASC was keeping a very narrow focus on investor rights, not all the broad strokes of the civil suits. Encharis is written about in the notice of hearing but in the form of statements of fact from the investigation and other public documents from the CCAA (solvency) proceedings. Examples include, 90% of all CEF funds were given to Encharis without being properly secured. Encharis was in default with both interest and principle payments to CEF. Encharis board of directors overlapped with the ABC District Board of Directors so knowledge was known on the state of affairs between the groups.
3. Encharis and the other not named people can apply to be named in the ASC hearing and then they can participate in disclosure and cross examine people.
4. The defense offered no evidence for the stay or for a closed hearing, just arguments. They tried to make late submissions during the hearing for evidence.
5. Timeline is important due to the age of the witnesses to be called. People are in their, 60’s , 70’s and 80’s, the oldest being 88.
6. The timing for the civil and perhaps criminal proceedings is expected to be 10 years. If a stay was granted, many of the witnesses would be dead.
7. The mandate of the ASC and the fact that no results on binding from this administrative board and that precedent could be set by closing the hearing means the hearing should remain open.
The lead lawyer for the ASC is Janet McCready. Her biography and goals of her job are included in this link.:
www.albertasecurities.com/investor/investor-resources/you-ascd-blog/Lists/Posts/Post.aspx?ID=107
PROCEEDINGS: Jan 7/19: 4 lawyers presented for the opponents to ASC panel. 2 for Respondents and 2 for the Encharis cause. These 4 lawyers argued that
1. There was no prejudice to public, only the unnamed parties (defendants) in the related matter of the Representative Actions.
2. Prejudice was only to the 70 persons in the 4 Representative Actions that were not related parties in the ASC. These parties had no access to disclosure, cant examine or cross examine. (then ASC lawyer said they can attend the ASC public hearings to gain info just like the public.). None of the Respondents or 70 unnamed parties in the ASC procedures e(unrelated to ASC were present at the 2 ASC proceedings. One Respondent was used as a prejudice example repeatedly.
3. They wanted to have a confidentiality order, which then precludes public from hearing anything. See #2 for the conflicting argument they presented.
4 They wanted to wait till rep actions complete to proceed with the ACS hearing (CCRA still has stay on due to Tuscany $4 million land parcel not having been sold…. ASC said their research showed it would be about 10 yr. to wait for conclusion and ASC would then conduct their hearing and their appeals would be a 2 year estimate given the trial dates available in civil matters for a 14 day trial (was the estimate ASC used) of which this would be much longer. ASC also said their witnesses are aging and some would be dead.
5. These people would never do this again so no public safety is at risk. They are only the Church.Significant case law was researched and presented, none of which involved a church or were granted stays for indefinite time frames, only short periods for minor matters.
6. These lawyers argued in the 2-3 yr. there has been no advancement by the Representative Action and that there was no settlement discussions. (Settlement discussions would mean that would be part of a forgiveness, confession model, however that is not been happening) The Representative Action Lawyer was present at this application and stated there had been no settlement discussions. The Respondents lawyers failed to mention that there had been repeated delays due to stays awarded by Judge Romaine in the civil matter to date to the Representative Action Defendants, so the Representative Action Plaintiffs (the investors) could not proceed with any actions.
7. The Respondents lawyers (presented upwards of 6 inches of binder material. (including providing a 20+ pg. “chart” at the end of their submission to the ASC lawyers vs. providing it ahead of time) stated they have 70 persons who are prejudiced and that the ruling of ASC might affect the civil matter (ASC said no examples were given of how, and had no time to review the “chart” to argue what the Respondent lawyers had presented in the “chart”). The ASC Panel Chair asked the ASC lawyers to review the “chart” material and report back the next day on the “chart” with closing arguments.
8. The Respondent lawyers stated that Sage is still giving out dividends and “some investors, a few” disputed the value of the Sage shares.The reported valued of the shares was minimal at best, even by the Respondent lawyers. (There was no mention that there was no financial disclosure since 2012 to the investors on the full value).
9. The Respondent lawyers advised that their clients were giving them direction to obtain the stay (no mention of the names of the clients, but refer to the 7 Respondents, where 5 individuals and 2 corporations are named).
10. Examples were given of an individual client and “a what if scenario” by the Respondent lawyers. If a Respondent were to settle with ASC it would then taint the outcome of the other parties and the unnamed parties in the related Representative Action. (the ASC lawyers stated there was no prejudice as the Queen’s Bench judge and civil courts allowed for full arguments and protection so that proper process would be followed).
PROCEEDINGS: Jan 8/19;
The Respondents lawyers indicated no certificate of readiness for trial had been prepared yet when asked by thee Chair of the ASC Panel that heard the arguments The 10 year period for trial noted above was based on being ready for trial now, which is not the case. (The link below describes Alberta court procedures to prepare for trial, including a certificate of readiness).
https://www.blaney.com/webfiles/RMC%20Guide%20to%20Litigating%20in%20Canada.pdf
There would be a verbal ruling shortly by the ASC Hearing Panel (which was posted subsequent to the procedure on the ASC website. It is on Jan 21/19; @ 2 pm.) with written reasons to follow.
NOTE: There was a lot of “fill in the blanks”, clarity and expansion of the truth required by the ASC lawyers; after the Respondent lawyers presented. Cost of the Respondent’s lawyers arguments were estimated at $50,000. Although there were lawyers, accountants, Deloitte (The Court appointed Monitor) and Kluane (Chief Restructuring Officer) available at the 2015 ABC Convention to answer questions for the investors, none of these parties were present at the 2018 ABC Convention; even though there were significant changes to the District bylaws put forward with about 1 hours notice before the start of Convention to the delegates. None of these parties were either present or accessible at the 2 ASC proceedings for the public to speak to.
RULING of Applications presented on Jan 21/19 by the ASC Panel of proceedings heard on Jan 7 and 8/19 at the ASC.
1. Two applications were heard. One was made on Oct. 20, 2018 by The District’s 53 unnamed Representative Action Defendants and the other on Nov. 14. 2018 by Encharis and included 4 individuals BOD..
2. On the District application the request to have a confidentiality Order, Application to have a stay on the ASC proceeding until the Representative Action was complete and non-party application were all dismissed.
The BC representative action had a stay on it until the Alta. Action had been heard. This was mentioned in the summary before the ruling.
3. On the Encharis application: although no standing was sought to have other parties application standing included, there was mention that a joint application order was mentioned in the arguments. The test for standing (or to be included in being able to have access to the proceedings and documents) was met for Encharis and 4 Encharis BOD and the order was granted.
4. On the other matters on the Application from Encharis, no order was granted for a stay, there was no jurisdiction to grant costs, so the application was dismissed.
- BC has two class actions suits of which both are stayed until the AB suit is settled.
- AB has a class action suit of investors against the named respondents.
- ASC has an administrative action against the named respondents.
- ASC ruled that nobody was granted a stay and the hearing will start in mid-May and run for 7 weeks.
- ASC ruled that the hearing would be open to the public
- ASC ruled that Encharis meets the criteria and can become a named respondent in the ASC hearing if they choose to do so.
- ASC will be releasing a written ruling shortly.
The matter took under 15 minutes to be heard. Thus, the ASC Hearing will precede on May 13, 2019 @ 9 a.m and continue till Jun 28, 2019, subject to any Appeal by the Respondents being filed within 30 days of the written ruling being issued.
See Link http://www.albertasecurities.com/proceedings-decisions-and-orders/Pages/customdisp.aspx?pi=149
ANO / Lutheran Watch 