Goodman & Company, Investment Counsel Ltd. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Exemption from subsection 4.1(1) of National Instrument 81-102 Mutual Funds to allow dealer managed mutual funds to invest in securities of an issuer during the prohibition period -- affiliate of the dealer manager acted as an underwriter in connection with the distribution of securities of the issuer.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 4.1(1), 19.1.

April 16, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR,

THE NORTHWEST TERRITORIES, NUNAVUT

AND THE YUKON

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM (MRRS)

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

GOODMAN & COMPANY, INVESTMENT COUNSEL LTD.

(the Applicant or Dealer Manager)

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Applicant, the manager or portfolio adviser or both of the mutual funds named in Appendix "A" (the Funds or Dealer Managed Funds) for a decision under section 19.1 of National Instrument 81-102 Mutual Funds (NI 81-102) for:

• an exemption from subsection 4.1(1) of NI 81-102 (the Investment Restriction) to enable the Dealer Managed Funds to invest in ordinary shares (the Ordinary Shares) of Mirabela Nickel Limited (the Issuer) during the period of distribution for the Offering (as defined below) (the Distribution) and during the 60-day period following the completion of the Distribution (the 60-Day Period) (the Distribution and the 60-Day Period together, the Prohibition Period), notwithstanding that an associate or affiliate of the Dealer Manager acts or has acted as an underwriter in connection with the new issue (the Offering) of Ordinary Shares under a long form prospectus to be filed in each of the provinces of Canada, except Québec (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications:

(a) the Ontario Securities Commission (the OSC) is the principal regulator for this application, and

(b) this MRRS decision document evidences the decision of each Decision Maker.

It is the responsibility of each of the Decision Makers to make a global assessment of the risks involved in granting exemptive relief from the Investment Restriction in relation to the specific facts of each application.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meanings in this decision unless they are defined in this decision.

Representations

This decision is based on the following facts represented by the Applicant:

1. The Dealer Manager is a "dealer manager" with respect to each Dealer Managed Fund, and each Dealer Managed Fund is a "dealer managed mutual fund", as such terms are defined in section 1.1 of NI 81-102.

2. The head office of the Dealer Manager is in Toronto, Ontario.

3. The securities of the Dealer Managed Funds are qualified for distribution in one or more of the provinces and territories of Canada pursuant to simplified prospectuses that have been prepared and filed in accordance with their respective securities legislation.

4. A preliminary long form prospectus (the Preliminary Prospectus) of the Issuer dated March 26, 2007, has been filed with the Decision Makers in each of the provinces of Canada (except Québec) for which an MRRS decision document evidencing receipt by such Decision Makers was issued on March 28, 2007.

5. According to the Preliminary Prospectus, the Offering will be underwritten, subject to certain terms, by a syndicate that includes, among others, Dundee Securities Corporation (the Related Underwriter), an affiliate of the Dealer Manager (the Related Underwriter and any other underwriters which are now or may become part of the syndicate, the Underwriters).

6. As disclosed in the Preliminary Prospectus, the Issuer is a mineral exploration company incorporated under the laws of Australia and listed on the Toronto Stock Exchange (the TSX) and the Australian Securities Exchange (the ASX). The Issuer has a portfolio of prospective nickel and other base metal projects in Brazil and its principal asset is the Santa Rita disseminated nickel sulphide deposit in Bahia State, Brazil.

7. As described in the Issuer's undated term sheet in respect of the Offering (the Term Sheet), the closing date for the Offering is expected to occur on or before April 26, 2007 (the Closing Date) or such other date as may be agreed to by the Issuer and Sprott Securities Inc., one of the Underwriters.

8. As described in the Term Sheet, the Offering is expected to be comprised of Ordinary Shares with aggregate gross proceeds of approximately CAD$105,000,000. The Issuer will grant the Underwriters an option, exercisable for a period of up to 30 days following the Closing Date to purchase up to an additional 15% of the issue to cover over-allotments, if any (the Over-Allotment Option).

9. As described in the Term Sheet, CVRD Inco Limited has a pre-emptive right (the Inco Pre-Emptive Right) to participate in up to 10% of the Offering, including any Ordinary Shares issued pursuant to the Over-Allotment Option, and such Inco Pre-Emptive Right may increase the Offering by $10,500,000 (or $13,282,500 assuming full exercise of the Over-Allotment Option).

10. As disclosed in the Term Sheet, the proceeds of the Offering will be used by the Issuer to fund instalments due under land purchase agreements, to finance its existing drilling and exploration programs at the Santa Rita, Peri Peri and Palestina projects and if the bankable feasibility study warrants it, to finance a portion of the capital costs of the Santa Rita project.

11. As further disclosed in the Term Sheet, the Issuer will apply to list the Ordinary Shares distributed under the Offering, on the TSX. The Issuer's outstanding Ordinary Shares are listed on the TSX under the symbol "MNB".

12. The Term Sheet does not disclose that the Issuer is a "related issuer" as defined in National Instrument 33-105 Underwriting Conflicts (NI 33-105).

13. According to the Preliminary Prospectus, the Issuer may be a "connected issuer" of the Dealer Manager, as defined in NI 33-105, as the Dealer Manager, directors, officers, employees and affiliates of the Dealer Manager and associates of each of them own or control, as of March 23, 2007, 13.5% of the issued and outstanding Ordinary Shares of the Issuer and 12.8% of the Ordinary Shares on a fully diluted basis.

14. Despite the affiliation between the Dealer Manager and the Related Underwriter, the Dealer Manager operates independently of the Related Underwriter. In particular, the investment banking and related dealer activities of the Related Underwriter and the investment portfolio management activities of the Dealer Manager are separated by "ethical" walls. Accordingly, no information flows from one to the other concerning their respective business operations or activities generally, except in the following or similar circumstances:

(a) in respect of compliance matters (for example, the Dealer Manager and the Related Underwriter may communicate to enable the Dealer Manager to maintain up to date restricted-issuer lists to ensure that the Dealer Manager complies with applicable securities laws); and

(b) the Dealer Manager and the Related Underwriter may share general market information such as discussion on general economic conditions, bank rates, etc.

15. The Dealer Managed Funds are not required or obligated to purchase any Ordinary Shares during the Prohibition Period.

16. The Dealer Manager may cause the Dealer Managed Funds to invest in the Ordinary Shares during the Prohibition Period. Any purchase of Ordinary Shares by the Dealer Managed Funds will be consistent with the investment objectives of that Dealer Managed Fund and represent the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Funds or in fact be in the best interests of the Dealer Managed Funds.

17. To the extent that the same portfolio manager or team of portfolio managers of the Dealer Manager manages two or more Dealer Managed Funds and other client accounts that are managed on a discretionary basis (the Managed Accounts), the Ordinary Shares purchased for them will be allocated:

(a) in accordance with the allocation factors or criteria stated in the written policies or procedures put in place by the Dealer Manager for the Dealer Managed Funds and Managed Accounts, and

(b) taking into account the amount of cash available to each Dealer Managed Fund for investment.

18. Except as described above, the Dealer Manager has not been involved in the work of the Related Underwriter and the Related Underwriter has not been and will not be involved in the decisions of the Dealer Manager as to whether the Dealer Managed Funds will purchase Ordinary Shares during the Prohibition Period.

19. There will be an independent committee (the Independent Committee) appointed in respect of each Dealer Managed Fund to review such Dealer Managed Fund's investments in the Ordinary Shares during the Prohibition Period.

20. The Independent Committee will have at least three members and every member must be independent. A member of the Independent Committee is not independent if the member has a direct or indirect material relationship with the Dealer Manager, the Dealer Managed Funds, or any affiliate or associate thereof. For the purpose of this Decision, a material relationship means a relationship which could, in the view of a reasonable person, reasonably interfere with the exercise of the member's independent judgment regarding conflicts of interest facing the Dealer Manager.

21. The members of the Independent Committee will exercise their powers and discharge their duties honestly, in good faith, and in the best interests of investors in their respective Dealer Managed Funds and, in so doing, exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.

22. The Dealer Manager, in respect of the Dealer Managed Funds, will notify a member of staff in the Investment Funds Branch of the Ontario Securities Commission, in writing of any SEDAR Report (as defined below) filed on SEDAR, as soon as practicable after the filing of such a report, and the notice shall include the SEDAR project number of the SEDAR Report and the date on which it was filed.

Decision

Each of the Decision Makers has assessed the conflict of interest risks associated with granting an exemption in this instance from the Investment Restriction and is satisfied that, at the time this Decision is granted, the potential risks are sufficiently mitigated.

Each of the Decision Makers is satisfied that the test contained in NI 81-102 that provides the Decision Maker with the jurisdiction to make the Decision has been met.

The Decision of the Decision Makers is that the Requested Relief is granted, notwithstanding that the Related Underwriter acts or has acted as underwriter in the Offering provided the following conditions are satisfied:

I. At the time of each purchase of Ordinary Shares (a Purchase) by a Dealer Managed Fund pursuant to this Decision, the following conditions are satisfied:

(a) the Purchase

(i) represents the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Fund, or

(ii) is, in fact, in the best interests of the Dealer Managed Fund;

(b) the Purchase is consistent with, or is necessary to meet, the investment objective of the Dealer Managed Fund as disclosed in its simplified prospectus; and

(c) the Dealer Managed Fund does not place the order to purchase, on a principal or agency basis, with the Related Underwriter.

II. Prior to effecting any Purchase pursuant to this Decision, the Dealer Managed Fund has in place written policies or procedures to ensure that,

(a) there is compliance with the conditions of this Decision; and

(b) in connection with any Purchase,

(i) there are stated factors or criteria for allocating the Ordinary Shares purchased for two or more Dealer Managed Funds and other Managed Accounts, and

(ii) there is full documentation of the reasons for any allocation to a Dealer Managed Fund or Managed Account that departs from the stated allocation factors or criteria.

III. The Dealer Manager does not accept solicitation by the Related Underwriter for the Purchase of Ordinary Shares for the Dealer Managed Funds.

IV. The Related Underwriter does not purchase Ordinary Shares in the Offering for its own account except Ordinary Shares sold by the Related Underwriter on closing.

V. Each Dealer Managed Fund has an Independent Committee to review the Dealer Managed Fund's investments in the Ordinary Shares during the Prohibition Period.

VI. The Independent Committee has a written mandate describing its duties and standard of care which, at a minimum, sets out the applicable conditions of this Decision.

VII. The members of the Independent Committee exercise their powers and discharge their duties honestly, in good faith, and in the best interests of investors in the Dealer Managed Funds and, in so doing, exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.

VIII. The Dealer Managed Funds do not relieve the members of the Independent Committee from liability for loss that arises out of a failure to satisfy the standard of care set out in paragraph VII above.

IX. The Dealer Managed Funds do not incur the cost of any portion of liability insurance that insures a member of the Independent Committee for a liability for loss that arises out of a failure to satisfy the standard of care set out in paragraph VII above.

X. The cost of any indemnification or insurance coverage paid for by the Dealer Manager, any portfolio manager of the Dealer Managed Funds, or any associate or affiliate of the Dealer Manager or any portfolio manager of the Dealer Managed Funds to indemnify or insure the members of the Independent Committee in respect of a loss that arises out of a failure to satisfy the standard of care set out in paragraph VII above is not paid either directly or indirectly by the Dealer Managed Funds.

XI. The Dealer Manager files a certified report on SEDAR (the SEDAR Report) in respect of each Dealer Managed Fund, no later than 30 days after the end of the Prohibition Period, that contains a certification by the Dealer Manager that contains:

(a) the following particulars of each Purchase:

(i) the number of Ordinary Shares purchased by the Dealer Managed Funds;

(ii) the date of the Purchase and purchase price;

(iii) whether it is known whether any Underwriter or syndicate member has engaged in market stabilization activities in respect of the Ordinary Shares;

(iv) if the Ordinary Shares were purchased for two or more Dealer Managed Funds and other Managed Accounts of the Dealer Manager, the aggregate amount so purchased and the percentage of such aggregate amount that was allocated to each Dealer Managed Fund; and

(v) the dealer from whom the Dealer Managed Fund purchased the Ordinary Shares and the fees or commissions, if any, paid by the Dealer Managed Fund in respect of such Purchase;

(b) a certification by the Dealer Manager that the Purchase:

(i) was made free from any influence by the Related Underwriter or any affiliate or associate thereof and without taking into account any consideration relevant to the Related Underwriter or any associate or affiliate thereof; and

(ii) represented the business judgment of the Dealer Manager uninfluenced by considerations other than the best interest of the Dealer Managed Funds, or

(iii) was, in fact, in the best interests of the Dealer Managed Funds;

(c) confirmation of the existence of the Independent Committee to review the Purchase of the Ordinary Shares by the Dealer Managed Funds, the names of the members of the Independent Committee, the fact that they meet the independence requirements set forth in this Decision, and whether and how they were compensated for their review; and

(d) a certification by each member of the Independent Committee that after reasonable inquiry the member formed the opinion that the policies and procedures referred to in Condition II(a) above are adequate and effective to ensure compliance with this Decision and that the decision made on behalf of each Dealer Managed Fund by the Dealer Manager to purchase Ordinary Shares for the Dealer Managed Fund and each Purchase by the Dealer Managed Fund:

(i) was made in compliance with the conditions of this Decision;

(ii) was made by the Dealer Manager free from any influence by the Related Underwriter or any affiliate or associate thereof and without taking into account any consideration relevant to the Related Underwriter or any associate or affiliate thereof; and

(iii) represented the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Funds, or

(iv) was, in fact, in the best interests of the Dealer Managed Funds.

XII. The Independent Committee advises the Decision Makers in writing of:

(a) any determination by it that the condition set out in paragraph XI(d) has not been satisfied with respect to any Purchase of the Ordinary Shares by a Dealer Managed Fund;

(b) any determination by it that any other condition of this Decision has not been satisfied;

(c) any action it has taken or proposes to take following the determinations referred to above; and

(d) any action taken, or proposed to be taken, by the Dealer Manager or a portfolio manager of the Dealer Managed Funds, in response to the determinations referred to above.

XIII. For Purchases of Ordinary Shares during the Distribution only, the Dealer Manager:

(a) expresses an interest to purchase on behalf of the Dealer Managed Funds and Managed Accounts a fixed number of Ordinary Shares (the Fixed Number) to an Underwriter other than its Related Underwriter;

(b) agrees to purchase the Fixed Number or such lesser amount as has been allocated to the Dealer Manager no more than five (5) business days after the closing of the Offering;

(c) does not place an order with an underwriter of the Offering to purchase an additional number of Ordinary Shares under the Offering prior to the completion of the Distribution, provided that if the Dealer Manager was allocated less than the Fixed Number at the time of the closing of the Offering for the purposes of the closing, the Dealer Manager may place an additional order for such number of additional Ordinary Shares equal to the difference between the Fixed Number and the number of Ordinary Shares allotted to the Dealer Manager at the time of the closing of the Offering in the event the Underwriters exercise the Over-Allotment Option; and

(d) does not sell Ordinary Shares purchased by the Dealer Manager under the Offering, prior to the listing of Ordinary Shares distributed under the Offering on the TSX.

XIV. Each Purchase of Ordinary Shares during the 60-Day Period is made on the TSX, the ASX or another recognized stock exchange.

XV. For Purchases of Ordinary Shares during the 60-Day Period only, an underwriter provides to the Dealer Manager written confirmation that the "dealer restricted period" in respect of the Offering, as defined in OSC Rule 48-501, Trading During Distributions, Formal Bids and Share Exchange Transactions, has ended.

APPENDIX "A"

THE DEALER MANAGED FUNDS

Dynamic Funds

DMP Resource Class

Dynamic Power Balanced Fund

Dynamic Power Canadian Growth Class

Dynamic Power Canadian Growth Fund

Dynamic Precious Metals Fund

Marquis Investment Program

Marquis Enhanced Canadian Equity Pool