Golf Town Income Fund - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Relief granted from the requirement to file certain financial statements with a business acquisition report provided that the business acquisition report will include the financial statements pertaining to the acquired business that were included in a recent prospectus.

Ontario Rule Cited

Ontario Securities Commission Rule 41-501 General Prospectus Requirements.

National Instrument Cited

National Instrument 51-102 -- Continuous Disclosure Obligations, Part 8.

January 26, 2005

IN THE MATTER OF

THE SECURITIES LEGISLATION

OF ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, QUEBEC,

NOVA SCOTIA, NEWFOUNDLAND AND LABRADOR AND NEW BRUNSWICK

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

GOLF TOWN INCOME FUND

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker, and collectively, the Decision Makers) in each of Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, Newfoundland and Labrador and New Brunswick (the Jurisdictions) has received an application from the Filer for: (i) a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the requirement that certain financial statements prescribed by section 8.4 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) be filed with the business acquisition report prepared by Golf Town Income Fund (the Filer) in connection with the Filer's acquisition of Golf Town Canada Inc. and (ii) in Quebec, for a revision of the general order that will provide the same result as an exemption order (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a limited purpose trust established under the laws of the Province of Ontario as of October 1, 2004 by a declaration of trust.

2. The Filer is a reporting issuer, or the equivalent, in each of the Jurisdictions and, to the best of its knowledge, is currently not in default of any applicable requirements under the securities legislation of the Jurisdictions.

3. The Filer is also a reporting issuer, or the equivalent, in Prince Edward Island, the Yukon, the Northwest Territories and Nunavut; however, an application is not being made to the securities regulatory authorities for this province and these territories as we understand that NI 51-102 has not been adopted in these jurisdictions.

4. Although the Filer is also a reporting issuer in British Columbia, an application is not being made in this province as BC Implementing Rule 51-801 exempts issuers from Part 8 of NI 51-102 in British Columbia.

5. On October 14, 2004, the Filer filed a preliminary long form prospectus in all of the provinces and territories for an offering of trust units (the Offering). The proceeds of the Offering were intended to finance the acquisition of Golf Town Canada Inc. (the Acquisition).

6. On November 5, 2004, the Filer filed its final prospectus (the Prospectus) in all of the provinces and territories of Canada in connection with the Offering, qualifying 10,228,520 trust units for total gross proceeds of CDN $102,280,520.

7. On November 12, 2004, the Filer closed the Offering and completed the Acquisition.

8. The trust units of the Filer are listed for trading on the Toronto Stock Exchange.

9. The Acquisition constitutes a "significant acquisition" of the Filer for the purposes of NI 51-102, requiring the Filer to file a business acquisition report on or before January 26, 2005 pursuant to sections 8.2 and 8.5(1)2 of NI 51-102.

10. Pursuant to section 8.4 of NI 51-102, the business acquisition report must be accompanied by certain financial statements, including:

(i) audited financial statements for Golf Town Canada Inc. for the years ended January 31, 2004 and January 25, 2003;

(ii) interim financial statements for Golf Town Canada Inc. for the nine month period ended October 31, 2004 together with comparative interim financial statements for the nine month period ended October 31, 2003;

(iii) a pro forma balance sheet for the Filer as at October 31, 2004;

(iv) pro forma income statements for the Filer for the year ended January 31, 2004 and for the nine month period ended October 31, 2004; and

(v) a compilation report for the Filer to accompany the Filer's pro forma financial statements.

11. OSC Rule 41-501 General Prospectus Requirements (Rule 41-501) sets out the financial statements required to be included or incorporated by reference in a prospectus, including financial statements relating to "significant acquisitions". Pursuant to Rule 41-501, the Prospectus included the following financial statements (the Prospectus Financial Statements):

(i) audited balance sheets of Golf Town Canada Inc. for the years ended January 31, 2004 and January 25, 2003;

(ii) audited statements of income, retained earnings, and cash flows of Golf Town Canada Inc. for the years ended January 31, 2004, January 25, 2003, and January 26, 2002;

(iii) an unaudited balance sheet of Golf Town Canada Inc. as at August 28, 2004;

(iv) unaudited interim statements of income, retained earnings, and cash flows of Golf Town Canada Inc. for the seven month period ended August 28, 2004, together with comparative interim statements of income, retained earnings, and cash flows for the seven month period ended August 23, 2003;

(v) a pro forma consolidated balance sheet for the Filer as at August 28, 2004;

(vi) pro forma income statements for the Filer for the year ended January 31, 2004 and for the seven month period ended August 28, 2004; and

(vii) a compilation report for the Filer on the pro forma financial statements.

12. Except for the closing of the Offering on November 12, 2004, there are no material facts or events relating to Golf Town Canada Inc. from August 28, 2004, the date of the most recent financial statements included in the Prospectus, to November 12, 2004, the closing date of the Acquisition.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted provided that the business acquisition report filed by the Filer includes the Prospectus Financial Statements.