Mutual Reliance Review System for Exemptive Relief Applications - sibling of audit committee member was tax planning partner of issuer's audit firm - sibling provides tax planning but not tax compliance services for auditor - sibling has not personally worked on issuer's audit, or provided any other services on the issuer's account at audit firm - audit committee member otherwise independent - audit committee member exempt from provision of legislation that deems audit committee member to be not independent if sibling of audit committee member has prescribed relationship with the issuer's auditor.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am.
Applicable Ontario Rules
Multilateral Instrument 52-110 Audit Committees, s. 1.4, 3.1, 8.1.
April 20, 2005
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, NOVA SCOTIA,
NEWFOUNDLAND AND LABRADOR AND NEW BRUNSWICK
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
TORSTAR CORPORATION (the "Filer")
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application (the "Requested Relief") from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") that the provision of Multilateral Instrument 52-110 Audit Committees which deems a director to be not independent if a sibling of that director has a prescribed relationship with the Filer's external auditor does not apply to the Filer.
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.
Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision. The term "E&Y" means Ernst & Young, LLP.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation governed by the Business Corporations Act (Ontario) with its head office located in Toronto, Ontario. It is a reporting issuer (or equivalent) in each Jurisdiction, and is not in default of its obligations under the Legislation. The Class B non-voting common shares of the Filer are listed on the Toronto Stock Exchange.
2. The Filer will be required to comply with the provisions of Multilateral Instrument 52-110, including the requirement that its audit committee be comprised solely of "independent directors", commencing with their annual meetings to be held in 2005.
3. E&Y is the sole auditor of the Filer.
4. A director (the Director) who is a member of the Filer's audit committee has a brother who was a tax planning partner of E&Y until June, 2004, at which time the brother retired as a partner from the firm. The brother continues to provide tax planning (but not tax compliance) services for E&Y as a self-employed contractor. At no time has the brother personally worked on the Filer's audit, or provided any other services on the Filer's account at E&Y.
5. The Director would be considered to be an "independent director" for the purposes of SEC Rule 10A-3, the independence standards of the New York Stock Exchange and under the proposed amendments to Multilateral Instrument 52-110 issued October 29, 2004.
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 Requested Relief expires on the effective date of any amendments to Multilateral Instrument 52-110.