Barristers and Solicitors

                         THE HONOURABLE MR.                            )                    TUESDAY, THE 5th DAY
                         JUSTICE NORDHEIMER                            )                    NOVEMBER, 2002.
 

B E T W E E N:

                THIS MOTION by the proposed Representative Plaintiff, Wendy Ward-Price, was heard on October 9 and 10, 2002 at Toronto and further written submissions as to costs were made  by correspondence dated November 19, 2002 and December 2, 2002 and further submissions as to the form of this Order were also heard on Friday, January 17, 2003 at Toronto.

                ON READING the Motion Record of the Representative Plaintiff seeking certification (containing Notice of Motion
dated May 22, 1997, and the Affidavit of Wendy Ward-Price sworn May 4, 1997);  Plaintiff’s Motion Record No. 2
(containing affidavit of Wendy Ward-Price sworn February 12, 1998, affidavit of James Rowland sworn February 12, 1998,
affidavit of Darcy Sheard sworn February 10, 1998, affidavit of Larry Lee sworn on February 17, 1998);  Motion Record of
the Defendants, Mariners Haven Inc., William H. Kaufman and Peggy Kaufman (containing affidavits of Stuart Snyder sworn
August 7, 1997, and March 12, 1998, and affidavit of Melvin Walker sworn March 13, 1998, and affidavit of Dean Muncaster sworn March 13, 1998, and affidavit of Oscar S. Kofman sworn February 24, 1998); Plaintiff’s Motion Record No. 3 (containing affidavit of Wendy Ward-Price sworn September 3, 1998);  Plaintiff’s Motion Record No. 4 (containing amended Notice of Motion seeking certification dated August 28, 1999, affidavit of Larry Lee sworn October 5, 1999, supplementary affidavit of Stuart Snyder sworn August 19, 1999, and letter from Mr. Brown to Mr. Hodder dated September 17, 1999); Motion Record of the Defendants, Clement, Eastman, Dregar, Martin and Munier and Sims, Clement, Eastman, (containing affidavit of Stephen R. Cameron sworn August 26, 1998);  Motion of the Third Party (Respondent) to the Plaintiff’s
motion for certification, (containing affidavit of Stephen Cameron sworn January 28, 2000);  Motion Record of the Third Party (moving party) for summary judgment in the main action, (containing affidavit of Stephen Cameron sworn January 28, 2000); Cross-examination transcripts of Wendy Ward-Price taken on September 3, 1998 and September 22, 1999; Cross-
examination transcript of Stuart Snyder taken on September 1, 1998; Cross-examination transcript of James Rowland taken on September 3, 1998; Cross-examination transcript of Stephen R. Cameron taken on September 1, 1998;  Cross-examination transcript of Joseph Muncaster taken on October 2, 1998;  Cross-examination transcript of Melvin Walker taken on
October 27, 1998;  Cross-examination transcript of Darcy Sheard taken on October 2, 1998; and Plaintiff’s Motion Record No. 9 (pleadings brief),

                AND UPON reading the factums and hearing the submissions of counsel for the proposed Representative Plaintiff, for the Defendants Stuart Snyder, William H. Kaufman and Ernst & Young in its capacity of Trustee in Bankruptcy of the Estate of William H. Kaufman Inc. and for the Third Parties, the action having previously been dismissed as against the other
Defendants,

Order Certifying Proceedings as a Class Proceeding and Naming the Representative Plaintiff

1.             THIS COURT ORDERS that this proceeding be certified as a class proceeding and that Wendy Ward-Price be appointed as Representative Plaintiff on behalf of all members of the Plaintiff Class hereinafter described. Order Describing The Plaintiff Class

2.             THIS COURT ORDERS that the plaintiff class is constituted of all persons

a. who were either

(i) original purchasers of a condominium unit or units purchased from the defendant Mariners Haven Inc. at the subject properties; or,

(ii) persons who received a transfer or assignment of an original purchaser’s        interest in such original purchaser’s respective agreement or agreements of purchase and sale prior to final closing; and

b. who paid, or were credited with having paid, a deposit or deposits and other monies on account of a sale or an agreement in respect of such unit or units to the defendant Mariners Haven Inc. or on its behalf; and,

c. who entered into possession or interim occupancy of the such unit or units prior to final closing; and,

d. who completed the final closing with respect to such unit or units.

Order Stating the Nature of the Claims Asserted on Behalf of the Plaintiff Class

3.            THIS COURT ORDERS that the nature of the claims asserted on behalf of the plaintiff class is as follows:

a. that the Defendant Mariners Haven Inc. breached its trust obligation, under Section 53(3) of the Condominium Act, R.S.O. 1980, c.84, to pay interest on moneys received by Mariners Haven Inc. from the day that the purchaser entered into possession or occupation of his or her unit until the delivery of an acceptable deed or transfer, based on the highest available rate of interest prescribed by Section 33 of Regulation 121, R.R.O. 1980;

b. that the Defendants William Kaufman, William H. Kaufman Inc. and Stuart Snyder knowingly assisted the said breach of trust obligation and that the said Defendants were knowing recipients of trust assets and benefits;

c. that trust assets may be traced into the hands of these Defendants;

d. that the said Defendants were unjustly enriched;

e. that the actions of the Defendants constituted fraud, unlawful interference with economic interests, civil conspiracy or an unjust preference;

f. that the Defendants Mariners Haven Inc., Stuart Snyder and William Kaufman negligently, recklessly or fraudulently misrepresented to purchasers the nature and extent of the purchasers’ entitlement to interest on deposit money; and

g. that the Defendants are liable to pay deposit interest to the Plaintiff class, plus interest and costs.

Order Stating the Relief Sought by the Plaintiff Class

4.            THIS COURT ORDERS that the relief sought by the plaintiff class is:

a. the calculation and payment of deposit interest based on the claims set out in 3(a) to (f), above, in the amount of $2 million;

b. punitive damages in the amount of $200,000.00;

a.

c. prejudgment interest calculated on a compound basis; and

d. costs.

Order Setting Out the Common Issues of the Plaintiff Class

5.            THIS COURT ORDERS that the common issues for the plaintiff class are as follows:

a. whether the Defendant, Mariners Haven, breached the Condominium Act, R.S.O. 1990, c. 84 and section 33 of Regulation 121, R.R.O. 1980, by paying interest to the members of the Plaintiff Class at less than the prescribed rate and/or paying no interest on deposits paid by the members of the Plaintiff Class during the interim occupancy period;

b. whether any of the defendants other than Mariners Haven Inc. knowingly assisted in a breach of trust by Mariners Haven Inc or knowingly received any trust funds held by Mariners Haven Inc. and whether a tracing order should be made against them or any of them in respect thereof;

c. whether the Defendants were negligent, reckless or fraudulent in making the single representation contained in the Interim Occupancy Agreement, that the interest on the deposit funds to which a purchaser might be entitled during the period of interim occupancy of their unit and the rent Mariners Haven could charge for the period of interim occupancy "are, in effect, offsetting amounts";

d. whether or not the actions of the Defendants constitute unlawful interference with economic interests or civil conspiracy or an unjust preference;

e. whether some or all of the claims of the class members are governed by the Limitations Act, R.S.O. 1990, c. L.15, and, if so, whether any of those claims are governed by section 45(1)(b) thereof;

f. whether the Defendants' conduct justifies an award of punitive damages, and if so, what amount of punitive damages is appropriate;

and that after the determination of the common issues, the judge hearing the common issues shall give such further directions as are necessary for the purpose of determining any individual issues that remain.

Order Regarding Notice of Certification of Class Proceedings and Manner and Timing of Opting Out

6.            THIS COURT ORDERS that following persons, whose last-known addresses are set out in Schedule “A” annexed hereto, namely:

Unit Number                 Purchaser
Unit No. 3                    D’Arcy Sheard
Unit No. 4                    James W. Rowland
Unit No. 5                    Frederick John Keutsch and Joan Elizabeth Keutsch
Unit No. 6                    J .D. Muncaster and Brenda Muncaster
Unit No. 7                    Stuart K. Graham
Unit No. 8                    Stephen C. Assaff
Unit No. 9                    Pedie Wolfond and Melvyn Wolfond
Unit No. 10                  Edward Moscoe
Unit No. 11                  Fred Leighton
Unit No. 12                  Wendy Ward-Price
Unit No. 16                  J. Michael Toohey and Lillian Toohey
Unit No. 17                 Gwendolyne C. Ross
Unit No. 19                 Catherine and Gordon Richardson
Unit No. 20                 Melvyn Walker
Unit No. 21                 Robert Collins-Wright and Lavonne Collins-Wright
Unit No. 23                 J. D. Fraser and Donna Fraser
Unit No. 24                 Kenneth H. Foster and Colee J. Foster
Unit No. 25                 George Clifford Spaetzel
Unit No. 26                 James W.S. McQuat
Unit No. 27                 Terry Booth and Nancy Booth
Unit No. 28                 Blake Wallace and Rita Wallace
Unit No. 29                 J.R. Daly
Unit No. 30                 John K. Stephenson
Unit No. 31                 Rino A. Stradiotto and Donna M. Stradiotto
Unit No. 33                 Jack Arthur Robbins
Unit No. 35                 Hart Alexander Harvey,

shall be given notice of the certification of the class proceeding, of the definition of the Plaintiff Class and of the manner in which a Plaintiff Class member may opt out of the proceedings, in the following manner:
 

a. the solicitors for the Representative Plaintiff shall send a true copy of the notice and the opting-out form, in the form annexed to this Order as Schedule "B", by regular first-class mail to the persons named above at their last known addresses;

b. the  member of the Plaintiff Class may opt out of the proceedings by duly completing, signing and mailing, faxing (with confirmation copy in mail to follow) or delivering the form provided for this purpose and attached to the notice, to the solicitors for the Representative Plaintiff, Polten & Hodder, Barristers and Solicitors, attention: J. Gardner Hodder, Suite 2200, 181 University Ave., Toronto, Ontario M5H 3M7, fax #416-947-0909 so that the original signed copy of the form (with all details completed in full) is received no later than 5:00 p.m., on a date that is 60 days from the date of mailing.

Order Regarding Costs of Giving Notice

7.            THIS COURT ORDERS that the costs of giving notice pursuant to paragraph 6 of this order shall be in the discretion of the judge hearing the trial of the common issues.
 

Order Regarding Costs of This Motion

8.            THIS COURT ORDERS that the defendants shall pay to the plaintiff the costs of this motion fixed at $35,000 within 30 days.
 
 

                                                                                                    The Hon. Mr. Justice Nordheimer
 
 

NATURE OF THE CLAIM

            Twenty-six purchasers of condominium units at the Mariners Haven condominium development in Collingwood, Ontario, took interim occupancy at various times in 1987 to 1992, and they did so pursuant to a standard form interim occupancy agreement by which they purported to agree to waive any interest credit under the Condominium Act if Mariners Haven did not charge Interim Occupancy rent. As a result, none of these purchasers received interest on their deposits from the developer, Mariners Haven Inc. in respect of the period from the possession closing to the final closing (the "Interim Occupancy Period").

            Subsection 53(3) of the Condominium Act, R.S.O. 1980, c.84, and section 33 of Regulation 121, R.R.O. 1980, required developers at that time to pay interest during interim occupancy on deposit monies.

            An action against Mariners Haven Inc. has been commenced by one such purchaser, Wendy Ward-Price, on behalf of all purchasers of condominium units from Mariners Haven Inc.  In this proceeding, she seeks to obtain reimbursement for the amount of interest which she says ought to have been paid.  This type of action is called a "class proceeding" because the action was commenced by Ms. Ward-Price on behalf of a class of persons, namely the twenty-six purchasers referred to above.

            The action also names as Defendants Stuart Snyder, William H. Kaufman and William H. Kaufman Inc.  William H. Kaufman Inc. is in bankruptcy, and an order has been made that the action may continue against Ernst & Young in its capacity as Trustee for the bankrupt estate of that corporation.  It is alleged, among other things, that these other Defendants received  money from the developer, Mariners Haven Inc., that should have been used to pay the developer’s trust obligation concerning deposit interest.

            Ms. Ward-Price started this class proceeding on May 3, 1996, by filing a statement of claim in the Ontario Court (General Division) under the Class Proceedings Act, 1992, which is the statute which provides for class proceedings.

            By Order dated November 5, 2002, The Honourable Mr. Justice Nordheimer of the Ontario Superior Court of Justice gave approval for certain issues in the lawsuit to be tried as common issues in a class proceeding.  Other issues may be required to be determined by the Court on an individual basis.

            The lawyers for the Plaintiff Class have made calculations regarding the deposit entitlements which are being claimed.  They calculate that, in the case of Ms. Ward-Price, her deposit interest entitlement at closing was $36,761.50 and that other individual claims for interest amounts due at closing range from $21,762.42 to $127,609.94.  The average claim is about $60,000.00.  In addition, the Plaintiff Class is also claiming prejudgment interest on the amounts which it alleges should have been paid at closing, and it is claimed that this interest should be calculated on a compounded basis from the date of closing to the date of judgment.

            The defendants have raised a number of defences to the claims asserted against them, including that the claims do not meet the statutory requirements for the payment of interest, detrimental reliance, estoppel, the acquiescence of the members of the Plaintiff Class to the payments, a failure to mitigate, delay and the Limitations Act.

            The amount eventually recoverable, if any, by a particular purchaser, will depend upon various factors including the amount of such purchaser's deposits, the length of the Interim Occupancy Period and the final determination of the individual entitlements, taking into account the defences that may be raised by the defendants and the counterclaims they may assert against individual class members regarding such issues as the payment of rent, taxes, interest thereon and costs and the defences to those counterclaims.
 

FINANCIAL AND OTHER CONSEQUENCES

            As a member of the plaintiff class, you may be entitled to share in any judgment awarded against Mariners Haven Inc. based upon the factors set out above as they apply to you.

            Even if the class proceeding is not successful, as a member of the Plaintiff Class you will not be responsible for the costs of the action unless the Court decides that the participation of individual class members is required to determine individual issues.

If you remain as a member of the Plaintiff Class, you may be liable to be examined for discovery and to be called as a witness and examined and cross-examined at the trial in connection with the claims to be asserted on your behalf
 

AGREEMENTS WITH SOLICITORS

            Ms. Ward-Price has retained J. Gardner Hodder of Polten & Hodder, Barristers and Solicitors to act as lawyers for the class, in accordance with a written retainer agreement.  Mr. Hodder has agreed that the Plaintiff Class does not have to pay any legal fees unless the action is successful.  If the class proceeding is successful then they will apply to the Court to receive fees at 2.5 times his firm’s usual hourly rates.  Before any payment is made to Mr. Hodder’s firm, both the retainer agreement and the total legal bill must be approved by the Court.
 

OPTIONS AVAILABLE TO CLASS MEMBERS

            As a member of the class of purchasers that is suing Mariners Haven Inc., you have the following options available to you:

(a) TO REMAIN IN these proceedings, YOU NEED DO NOTHING at this time.  Any judgment in the class proceeding, whether favourable or not, will bind all of the members of the class who have not opted out.

(b) TO BE EXCLUDED from these proceedings, you may opt out of the proceedings by giving written notice to the class proceeding lawyer, Mr. J. Gardner Hodder (see below under "Procedure for Opting Out of These Proceedings").

PROCEDURE FOR OPTING OUT OF THESE PROCEEDINGS

            If you wish to be excluded from the Plaintiff Class, Mr. Hodder must receive your notice to opt out no later than 5 p.m.on the day that is 60 days following the date of this Notice, as set out below.  The enclosed form must be used if you wish to opt out of these proceedings, and class members may opt out of these proceedings by completing and signing and mailing, faxing (with confirmation copy to follow) or delivering the attached form to the lawyer or for the Representative Plaintiff, Mr. J. Gardner Hodder, Polten & Hodder, Barristers and Solicitors, Suite 2200, 181 University Ave., Toronto, Ontario M5H 3M7, fax #416- 947-0909 so that  the completed notice with your original signature is received no later than 5:00 p.m., on the day that is 60 days following the date of this Notice, as set out below.  Forms received after that time are not valid.
 

INFORMATION

            If you require any further information about these proceedings, you may obtain your own legal advice or you may contact the representative Plaintiff, Wendy Ward-Price, by telephone at 705-445-9858.  Her address is 473 Mariners Way, Lighthouse Point, Collingwood, Ontario L9Y 5C7

            J. Gardner Hodder, the lawyer for both the plaintiff class may be contacted at Suite 2200, 181 University Avenue, Toronto, Ontario, M5H 3M7; tel: (416) 601-6809; fax: (416) 947-0909; email: ghodder@poltenhodder.com.

            Note that you are entitled to receive a copy of the Order the Honourable Mr. Justice Nordheimer dated November 5, 2003 referred to above.  Copies may be obtained by calling the Ms. Ward-Price or by contacting Mr. Hodder.  The order may also be viewed on the Polten & Hodder website: poltenhodder.com.
 
 

            Date of Notice ________________________
 
 

                NOTE:          THIS FORM IS FOR USE ONLY IF YOU WISH TO OPT OUT OF THESE
                                      PROCEEDINGS.  IF YOU WISH TO REMAIN A MEMBER OF THE
                                      PLAINTIFF CLASS, YOU NEED DO NOTHING

                                        ( )  an original purchaser of a condominium unit or units purchased from Mariners Haven
                                              Inc. at its condominium project known as Mariners Haven in Collingwood, Ontario;

(put an X or other mark in the appropriate bracket (  ))                                                  OR,

                                        ( ) a person who received a transfer or assignment of an original purchaser's interest in
                                             such original purchaser's respective agreement or agreements prior to final closing
                                             of an original purchaser’s interest;

                                              paid a deposit or deposits in respect to the said units to Mariners Haven Inc.; and
                                              entered into possession or interim occupancy of the said units prior to final closing;
                                              and completed the final closing with respect to the condominium unit.

                                      I wish to opt out of these proceedings.  I understand that by opting out, I cannot share
                                      in any proceeds of this class proceeding.

                                           _________________________            _________________________
                                          Signature                                                                 Date

                                           _________________________
                                                         Print Name

                                              Current Address:    ______________________________
                                                                            ______________________________
                                              Current Telephone:  (    )__________________________