Securities Law & Instruments

Headnote

Application by issuer for an order revoking a cease trade order made by the Commission - cease trade order issued as a result of the issuer's failure to file certain continuous disclosure documents required by Ontario securities law - defaults substantially remedied - cease trade order revoked.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

(the "Act")

AND

IN THE MATTER OF

MILL RUN GOLF CLUB

(formerly known as Mill Run Golf & Country Club)

ORDER

(Section 144)

WHEREAS a Director of the Ontario Securities Commission (the "Commission") issued a temporary cease trade order dated May 5, 2005 under section 127 of the Securities Act (the "Act") as extended by an order dated May 17, 2005 under section 127 of the Act (collectively, the "Cease Trade Order") directing that all trading in the securities of Mill Run Golf Club (formerly known as Mill Run Golf & Country Club) (the "Applicant") cease until further order by the Director;

AND WHEREAS the Applicant has applied to the Commission for an order pursuant to section 144 of the Act revoking the Cease Trade Order;

AND WHEREAS the Applicant has represented to the Commission that:

The Applicant

1. The Applicant was created as a joint venture known as Firefighter's Mill Run Golf and Country Club pursuant to a Joint Venture Agreement dated January 10, 1985 (the "Joint Venture Agreement").

2. The Applicant's head office is located at 269 Durham Rd. #8, Uxbridge, Ontario L9P 1R1.

3. The Applicant is a reporting issuer under the securities legislation of the province of Ontario and is not a reporting issuer in any other jurisdiction in Canada.

4. The authorized securities of the Applicant consist of an unlimited number of Units. The Units are not listed or posted for trading on any marketplace in Canada.

5. The Applicant's sole business is the operation of a golf and country club facility in Uxbridge, Ontario.

6. Pursuant to the Joint Venture Agreement, each Unit has an equal individual ownership interest in the lands and assets of which the Applicant is the beneficial owner. The legal ownership of the lands and assets are held by 590954 Ontario Inc., the trustee of the joint venture.

7. As of the date hereof, there are approximately 871 unit holders that own, in the aggregate, 1,086 Units in the Applicant.

8. The Applicant became a reporting issuer in Ontario pursuant to the filing and receipt of a final long-form prospectus dated January 10, 1985 with respect to an initial public offering of 500 Units.

9. The Applicant has a board of directors (the "Board") that is elected by the unit holders at annual meetings pursuant to the provisions of the Joint Venture Agreement.

10. The Applicant's fiscal year end is December 31.

Cease Trade Order

11. The Cease Trade Order was issued as a result of the Applicant's failure to file with the Commission, as required under Ontario securities law (the "Default"), its audited annual financial statements (the "2004 Financial Statements") and related management's discussion and analysis ("2004 MD&A") for the financial year ended December 31, 2004.

12. On August 9, 2005, the Applicant filed the 2004 Financial Statements with the Commission. However, the Applicant failed to file the 2004 MD&A and annual officer certificates required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (the instrument and its successor instrument collectively referred to as "NI 52-109") relating to the 2004 Financial Statements.

13. In addition, following the issuance of the Cease Trade Order, the Applicant failed to file the following documents with the Commission:

a. unaudited financial statements for the first, second and third interim periods of the 2005, 2006, 2007 and 2008 financial years and related MD&A;

b. officer certifications required by NI 52-109 for the first, second and third interim periods of the 2005, 2006, 2007 and 2008 financial years;

c. the annual management information circulars relating to the applicable annual meetings of unit holders for the 2005, 2006 and 2007 financial years; and

d. a material change report with respect to a material change that occurred in the affairs of the Applicant in May, 2005.

14. The Applicant filed by the required deadlines audited annual financial statements for the financial years ending December 31, 2005, 2006 and 2007, however did not file the corresponding MD&A or officer certificates required by NI 52-109.

15. The Applicant made all filings required by Ontario securities law with the Commission for the 2008 financial year in accordance with required deadlines other than as noted above.

Trades in Contravention of the Cease Trade Order

16. The Applicant did not properly understand the provisions of the Cease Trade Order. Specifically, the Applicant was under the mistaken belief that the Cease Trade Order exclusively prohibited the Applicant from issuing new Units. As a result, subsequent to the issuance of Cease Trade Order, there were certain trades of previously issued Units that occurred between individual unit holders. The following Units were traded by individual unit holders: (a) 25 Units were traded in 25 separate transactions in 2005; (b) 53 Units were traded in 53 separate transactions in 2006; (c) 27 Units were traded in 27 separate transactions in 2007; and (d) 14 Units were traded in 14 separate transactions in 2008.

17. No new Units have been issued by the Applicant since the Cease Trade Order was issued.

Defaults Prior to the Cease Trade Order

18. On August 18, 1992 the Applicant was granted an exemptive relief order by the Commission (the "Relief Order") that, subject to certain conditions, exempted the Applicant from the requirements to file with the Commission interim financial statements and related MD&A relating to the first, second and third interim periods of each financial year of the Applicant.

19. In 1995, the Applicant underwent a material change involving the resignation of certain key management personnel and members of its Board.

20. Pursuant to its provisions, the Relief Order automatically terminated sixty (60) days subsequent to the occurrence of the material change referred to in paragraph 19 hereof. However, the Applicant mistakenly believed that it could continue to rely on the exemptions provided by the Relief Order. Furthermore, the Applicant did not appreciate that the Relief Order only granted relief from the requirement to file certain interim financial statements and related MD&A and did not apply to continuous disclosure obligations generally. As a result, from 1995 until the issue of the Cease Trade Order, the Applicant failed to comply with many continuous disclosure requirements of Ontario securities law (the "Prior Default"), including the requirements to file with the Commission:

a. annual MD&A relating to its annual financial statements filed with the Commission;

b. annual management information circulars relating to the annual meetings of unit holders;

c. unaudited financial statements for the first, second and third interim periods of each financial year and related MD&A;

d. officer certificates required for interim financial periods beginning on or after January 1, 2004; and

e. material change reports.

Current Filings

21. On October 7, 2009 the Applicant filed the following materials with the Commission through SEDAR:

a. annual MD&A for the financial years ending December 31, 2006 and 2007;

b. annual officer certificates for the financial years ending December 31, 2006 and 2007; and

c. annual management information circulars relating to the annual meetings of unit holders (including the disclosure required under National Instrument 52-110 -- Audit Committees and National Instrument 58-101 -- Disclosure of Corporate Governance Practices) in the prescribed form for the financial years ended December 31, 2006 and 2007.

22. The Applicant has made all required filings under Ontario securities law to date for the 2009 financial year.

Other Representations

23. As noted above, the Applicant remains in default of the following filing requirements under Ontario securities law. Specifically, the Applicant has not filed:

a. MD&A and officers certificates required by NI 52-109 for the financial years ended December 31, 2004 and 2005;

b. unaudited financial statements for the first, second and third interim periods of the 2005, 2006, 2007 and 2008 financial years;

c. related MD&A and officer certificates required by NI 52-109 for the foregoing interim financial periods;

d. management information circulars relating to the annual meetings of unit holders for the 2005 financial year; and

e. continuous disclosure documents relating to the Prior Default.

24. The Applicant has not filed the interim financial statements, related MD&A and officer certificates referred to in paragraphs 23(b) and (c) above because its audited annual financial statements for the 2005, 2006, 2007 and 2008 financial years have been filed within the Commission and, therefore, historical interim finanical statements and related MD&A will not enhance the ability for current and potential investors to understand the financial and operational performance of the Applicant.

25. The Applicant has not filed the MD&A and officer certificates for the financial years ended December 31, 2004 and 2005 referred to in paragraph 23(a) above because the age of the information makes it no longer relevant to understanding the current financial position of the Applicant;

26. The Applicant has not filed the management information circular relating to the annual meeting of unitholders for the 2005 financial year because of the length of time that has passed since the meeting was held and a lack of access to records which makes it difficult to prepare a circular for that specific meeting;

27. The Applicant does not propose to remedy the Prior Default because of the length of time that has passed since the Applicant ceased to be able to rely on the Relief Order and the fact that these historical documents would not provide relevant information with respect to the Applicant's current business and operations;

28. The Applicant has continued to hold annual meetings of unit holders in accordance with the requirements of the Joint Venture Agreement. The most recent annual meeting was held on May 3, 2009 with respect to the December 31, 2008 financial year.

29. On December 15, 2009 the Applicant filed on SEDAR an omnibus press release and related material change report ("Updated Material Change Report") to update the market place with respect to certain material changes that have occurred since the Prior Default and also to provide background information relating to the Cease Trade Order.

30. Since the issue of the Cease Trade Order, the Board has taken substantial steps (the "Steps") to ensure that it will comply with all relevant securities law and regulations which affect a reporting issuer in Ontario.

31. Such Steps include retaining experienced securities law legal counsel as well as an external financial consultant to advise the Board with respect to applicable requirements, educating management on securities law and compliance (including having a Board member attend a workshop organized by the TSX Venture Exchange relating to managing a public company); establishing and implementing various internal policies (including a Disclosure Policy, a Code of Conduct Policy, and a Corporate Governance Policy), all as appropriate for a reporting issuer in order to ensure continued securities law compliance; and establishing and implementing a Disclosure Committee and a Governance Committee to oversee the implementation of such Policies.

32. Except as described above, the Applicant is not otherwise in default of any of the requirements of the Act or the rules and regulations made pursuant thereto.

33. There have been no material changes to the Applicant's business or operations since the date of the Cease Trade Order, except as otherwise described in the Updated Material Change Report.

34. The Applicant was subject to a Temporary Cease Trade Order issued by the Commission on May 7, 1987 for a failure to file interim financial statements for the interim financial period ended December 31, 1986 (the "1986 Order"). The 1986 Order was revoked on May 21, 1987 following the filing of the outstanding financial statements.

35. The Applicant was subject to a Temporary Cease Trade Order issued by the Commission on February 27, 1989 for a failure to file annual audited financial statements for the financial year ended September 30, 1988 (the "1988 Order"). The 1988 Order was revoked on March 1, 1989 following the filing of the outstanding financial statements.

36. Other than the Cease Trade Order, the 1986 Order and the 1988 Order, the Applicant has not been subject to any other cease trade orders.

37. The Applicant has paid all outstanding fees to the Commission, including all applicable activity and participation fees and late filing fees.

38. The Applicant's issuer profiles on SEDAR and SEDI are up-to-date.

39. Upon the issuance of this order revoking the Cease Trade Order, the Applicant will issue and file a press release and material change report with the Commission through SEDAR.

AND UPON considering the application and the recommendation of staff of the Commission;

AND WHEREAS the Director being satisfied that it would not be prejudicial to the public interest to revoke the Cease Trade Order;

IT IS ORDERED pursuant to section 144 of the Act that the Cease Trade Order is revoked.

DATED at Toronto this 26th day of January, 2010.

"Jo-Anne Matear"
Assistant Manager, Corporate Finance