Brickburn Income Growth Class

Headnote

National Instrument 81-102 Mutual Funds, s. 19.1 -- relief from the illiquid investment restrictions -- A mutual fund needs relief from the prohibition from acquiring and holding illiquid investments in Section 2.4(1) of NI 81-102 -- The mutual fund is a fund established to hold assets rolled over from flow through LPs. The LPs were not restricted from holding illiquid assets. The LPs held more than 10% of their assets in illiquid assets. The mutual fund cannot comply with the prohibitions for a period of time on acquiring or holding illiquid securities. The investors in the mutual fund have previously owned units in the LPs.

Applicable Legislative Provisions

National Policy 11-203 Process for Exemptive Relief Application in Multiple Jurisdictions.

National Instrument 81-102 Mutual Funds, s. 2.4(1).

Citation: Brickburn Income Growth Class, 2008 ABASC 518

September 11, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BRICKBURN INCOME GROWTH CLASS

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for relief from section 2.4(1) of National Instrument 81-102 Mutual Funds (NI 81-102), to permit the Filer to acquire certain illiquid assets (as such term is defined in NI 81-102) from each of TGL Flow-Through (2005) Limited Partnership and TGL Flow-Through (2005-II) Limited Partnership on or about October 1, 2008, notwithstanding that, immediately after such acquisition, more than 10% of the net assets of the Filer, taken at market value at the time of the acquisition, will consist of illiquid assets (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

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

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in the jurisdictions of British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador, and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision unless otherwise defined. In addition, the following terms have the following meanings:

"Flow Through Shares" means common shares of resource issuers that are "flow-through shares" as defined in the ITA;

"Fund Prospectus" means the simplified prospectus of the Filer dated April 23, 2008;

"ITA" means the Income Tax Act (Canada);

"LP Offering Memoranda" means the offering memorandum of TGL Flow-Through (2005) Limited Partnership dated August 29, 2005, the offering memorandum of TGL Flow-Through (2005-II) Limited Partnership dated October 28, 2005 and the offering memorandum of TGL Flow-Through (2006) Limited Partnership dated August 28, 2006;

"Manager" means Brickburn Asset management Limited;

"Neo" means Neo Exploration Inc., a private Canadian oil and natural gas exploration company;

"Partners" means the limited partners and the general partner of each Partnership (as defined below);

"Value Creation" means Value Creation Inc., a private Canadian company that was formed to explore, produce and upgrade oil sands and heavy oil resources; and

"Wilderness" means Wilderness Energy Corp., a private international exploration and production company.

Representations

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

1. The Filer is a class of shares of Brickburn Funds Inc., a mutual fund corporation established under the Business Corporations Act (Alberta). The Filer is a reporting issuer in each of the provinces of Canada except Québec pursuant to the filing of a prospectus (the Fund Prospectus) dated April 23, 2008. As at July 29, 2008, the Filer had approximately 32,092 Series MF Shares issued and outstanding. The total number of shares of all of the series of the Filer issued and outstanding as at July 29, 2008 was approximately 366,443.

2. As of the date of this Application, the Filer does not hold any illiquid assets in its portfolio of assets.

3. All of the assets of TGL Flow-Through (2005) Limited Partnership, TGL Flow-Through (2005-II) Limited Partnership and TGL Flow-Through (2006) Limited Partnership (collectively, the Partnerships) including certain common shares of resource issuers that are Flow-Through Shares as defined in the ITA, will, pursuant to transfer agreements that will be entered into with the Filer be transferred to the Filer on a tax-deferred "rollover" basis in exchange for the equivalent amount of Series MF Shares of the Filer on or about October 1, 2008. The Series MF Shares are qualified for distribution under the Fund Prospectus.

4. The Series MF Shares received by each Partnership will have the same aggregate net asset value as the aggregate net asset value of each Partnership, determined on the same basis as the net asset value of the Filer.

5. Following the transfer of assets to the Filer, each Partnership will be dissolved and upon dissolution, the Partners will receive their pro rata interest in the Series MF Shares on a tax-deferred basis.

6. Details surrounding the transfer of assets from each Partnership to a mutual fund similar to the Filer were disclosed in the LP Offering Memoranda. In addition, the LP Offering Memoranda disclosed the fact that applications would be made to the relevant securities or regulatory authorities to obtain all the necessary regulatory approvals in order to effect the tax-deferred "rollover" of the assets of each of the Partnerships in exchange for shares of a mutual fund.

7. The Filer will hold and dispose of Flow-Through Shares and other common shares acquired from the Partnerships and invest the net proceeds of such dispositions and any cash on hand in a manner consistent with the current investment portfolio of the Filer, being a fund designed to provide holders of the shares with a stable monthly stream of distributions, which shall be determined on an annual basis by the Manager and with the potential for medium to long-term capital appreciation by investing in small to mid-capitalization companies. For the purposes of the Filer, small to mid-capitalization company will be defined as a company with a market capitalization up to $5 billion in Canada and up to $10 billion in the United States.

8. The relief requested is necessary primarily as a result of the success of certain investments made by the Partnerships in three issuers, Neo, Value Creation and Wilderness.

9. The general volatility of the public markets in the last number of months has contributed to the increase in the percentage of illiquid assets held by the Partnerships. Publicly traded securities have had their values fall while the values of these privately held securities have either remained flat or increased resulting in the increase of the percentage of illiquid assets held relative to the percentage of liquid assets held.

10. TGL Flow-Through (2005) Limited Partnership currently holds 300,000 common shares of Neo. TGL Flow-Through (2005-II) Limited Partnership currently holds 100,000 common shares of Neo. TGL Flow-Through (2006) Limited Partnership does not own any common shares of Neo. The cost at which the Neo common shares were purchased was $0.75 for both Partnerships. The Partnerships currently hold their investments at $2.10 per share after a financing was completed by the company earlier this year. This represents an increase of 180% in the value of the common shares of Neo since the Partnerships' initial purchase.

11. The Neo common shares were purchased in November 2005, at which time the total investment in Neo represented only 1.5% of the net assets of TGL Flow-Through (2005) Limited Partnership and 1.5% of the net assets of TGL Flow-Through (2005-II) Limited Partnership. At the date of the Application, the total investment in Neo represents 8.94% of the net assets of TGL Flow-Through (2005) Limited Partnership and 6.78% of the net assets of TGL Flow-Through (2005-II) Limited Partnership.

12. TGL Flow-Through (2005) Limited Partnership currently holds 79,160 common shares of Value Creation. TGL Flow-Through (2005-II) Limited Partnership currently holds 52,770 common shares of Value Creation. TGL Flow-Through (2006) Limited Partnership does not own any common shares of Value Creation. The cost at which the Value Creation common shares were purchased was $4.00 for both Partnerships. The Partnerships currently hold their investments at $10.02 per share subsequent to other financings that were completed by the company after the purchase of the shares by the Partnerships. This represents an increase of 80% in the value of the common shares of Value Creation since the Partnerships initial purchase.

13. The Value Creation common shares were purchased in December 2005, at which time the total investment in Value Creation represented 8.96% of the net assets of TGL Flow-Through (2005) Limited Partnership and 11% of the net assets of TGL Flow-Through (2005-II) Limited Partnership. At the date of the Application, the total investment in Value Creation represents 8.14% of the net assets of TGL Flow-Through (2005) Limited Partnership and 12.36% of the net assets of TGL Flow-Through (2005-II) Limited Partnership. The percentage of the Value Creation common shares held by the Partnerships has increased despite the fact that TGL Flow-Through (2005) Limited Partnership and TGL Flow-Through (2005 -- II) Limited Partnership both sold two-thirds of its initial purchase.

14. TGL Flow-Through (2005) Limited Partnership currently holds 150,000 common shares of Wilderness. TGL Flow-Through (2005-II) Limited Partnership currently holds 100,000 common shares of Wilderness. TGL Flow-Through (2006) Limited Partnership does not own any shares of Wilderness. The cost of the Wilderness shares was $4.00 for both Partnerships. The Partnerships currently hold their investments at $2.10 per share.

15. The Wilderness common shares were purchased in December 2005, the total investment in Wilderness represented 4% of the net assets of TGL Flow-Through (2005) Limited Partnership and 8% of the net assets of TGL Flow-Through (2005-II) Limited Partnership. At the date of the Application, the total investment in Wilderness represents 4.4% of the net assets of TGL Flow-Through (2005) Limited Partnership and 6.78% of the net assets of TGL Flow-Through (2005-II) Limited Partnership.

16. Any illiquid assets owned by TGL Flow-Through (2006) Limited Partnership will be sold for cash prior to the transfer of the assets into the Filer.

17. The Filer does not own any common shares of Neo, Value Creation or Wilderness.

18. As at July 31, 2008, the net asset values of each of TGL Flow-Through (2005) Limited Partnership, TGL Flow-Through (2005-II) Limited Partnership, TGL Flow-Through (2006) Limited Partnership and the Filer were $7,270,573, $3,240,790, $7,518,234 and $3,412,266, respectively.

19. Provided that the value of the public portion of the Partnerships and the Filer remains constant the valuations of Neo, Value Creation and Wilderness remain constant, and the composition of the investment portfolio of the Partnerships remains constant, it is expected that, immediately after the transfer of the assets of the Partnerships to the Filer, the three illiquid positions will represent approximately 12.6% of the net assets of the Filer, taken at market value at the time of the transaction.

20. The transfer of the illiquid assets of the Partnerships to the Filer likely constitutes a "purchase" of illiquid assets under section 2.4(1) of NI 81-102.

21. Substantially all of the shareholders of the Filer are former limited partners of flow-through limited partnerships established by the manager from time to time and will have had exposure to illiquid assets prior to becoming shareholders of the filer.

22. The acquisition by the Filer of the assets from the Partnerships is in compliance with the investment objectives and strategies of the Filer.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted to permit the Filer to acquire certain illiquid assets on or about October 1, 2008, notwithstanding that, immediately after such acquisition, more than 10% of the net assets of the Filer taken at market value at the time of the acquisition, will consist of illiquid assets.