The B.C. Supreme Court Wednesday slapped down Victoria mortgage broker Greg Martel’s attempt to seal from public view information he provided to the receiver overseeing his company’s bankruptcy proceedings.
Saying it was a little like closing the barn door after the horses have bolted, Justice Shelley Fitzpatrick declined to seal receiver’s reports written and published publicly over the last two months by PricewaterhouseCoopers and ordered the firm to post its most recent report, untouched, to its website as soon as possible.
The receiver had published a heavily redacted report this week.
In her verbal ruling Wednesday, Fitzpatrick said quite apart from the fact there was little evidence provided to suggest Martel was at risk if the information wasn’t sealed, there was the bigger question of the greater good.
“In light of what I would call the very thin, if not inadequate, evidence of Mr. Martel, there are significant public interests at play here. These investors have invested a significant amount of money and Mr. Martel to this point in time has, as the receiver described, provided only minimal information.
“I am not convinced the investors should be foreclosed from fully understanding the efforts of the receiver and being able to, if possible, assist the receiver in following any leads that the receiver might identify in terms of recovering these hundreds of millions of dollars.”
“I’m not convinced that Mr. Martel’s so-called described risk in the U.S. at this point in time, which has not been proven or established at this hearing, would even come close to overwhelming public interests at play here.”
Martel’s legal counsel argued information Martel had been compelled to provide to the receiver should be sealed over concerns it could place Martel in jeopardy and incriminate him in U.S. legal proceedings.
On the same grounds, counsel suggested Martel should not be obligated to produce further documents and information to the receiver.
Fitzpatrick dismissed as “mere speculation” any concern Martel might have about the information he provided being used in future criminal proceedings in the U.S.
“There is nothing to suggest that there’s anything going on in the U.S. other than the civil case that has been filed by some unhappy investors who are also attempting to recover their funds,” she said. “There is no suggestion that the U.S. authorities are even investigating Mr. Martel, let alone about to file any criminal indictment against him.
“I’m not at all convinced that Mr. Martel has even come close to identifying any serious risks.”
As for Martel’s refusal to provide any further information and to revisit the application to have his information sealed, Fitzpatrick said his counsel is open to bring an application with evidence at a future court date.
That could happen as early as next week.
Fitzpatrick was much more amenable to the pleas of the receiver overseeing the bankruptcy proceedings of Martel’s My Mortgage Auction Corp.
Saying PricewaterhouseCoopers clearly needed more time to investigate Martel’s companies, Fitzpatrick extended until Oct. 31 the receiver’s investigatory powers, which were due to expire at the end of July.
She noted that despite best efforts the receiver has only been able to recover $302,266 of the more than $266 million nearly 1,200 investors claim to have invested with Martel’s company.
“The receiver continues to make substantial efforts to locate assets, but it’s obviously going to require further time,” she said.
Fitzpatrick granted the receiver’s request to borrow $400,000 from the investors for an asset-recovery initiative in the U.S.
The receiver said it needs the funds for U.S. court applications to have Canadian court orders freezing Martel’s assets recognized.
PricewaterhouseCoopers said it must move quickly to ensure it can secure and sell Martel’s Las Vegas property, which could bring an estimated $1.8 million to the investor pool.
The receiver noted that without funding, the trustee will likely lose the ability to pursue the Vegas property, as a group of five Martel investors have begun proceedings in Nevada courts that could result in the seizure and sale of that property.
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