Proceedings

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IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED

- AND -

IN THE MATTER OF
GOLD-QUEST INTERNATIONAL, HEALTH AND HARMONEY,
IAIN BUCHANAN, AND LISA BUCHANAN

ORDER
(Subsections 127(1) and (8))


      WHEREAS on the 1st day of April, 2008, the Ontario Securities Commission (the "Commission") ordered, pursuant to clause 2 of subsection 127(1) and subsection 127(5) of the Securities Act, R.S.O. 1990, c. S.5, as amended (the "Act") that all trading in any securities of Gold-Quest International (“Gold-Quest”) shall cease (the “Temporary Order”);

      AND WHEREAS the Commission further ordered as part of the Temporary Order that pursuant to clause 2 of subsection 127(1) and subsection 127(5) of the Act that all trading in any securities by Health and HarMONEY, Iain Buchanan and Lisa Buchanan (the “Ontario Respondents”) shall cease;

      AND WHEREAS the Commission further ordered as part of the Temporary Order that pursuant to clause 3 of subsection 127(1) and subsection 127(5) of the Act that any exemptions contained in Ontario securities law do not apply to Gold-Quest and the Ontario Respondents;

      AND WHEREAS the Commission further ordered as part of the Temporary Order that pursuant to clause 3 of subsection 127(1) and subsection 127(5) of the Act that any exemptions contained in Ontario securities law do not apply to Gold-Quest’s officers, directors, agents or employees;

      AND WHEREAS on April 8, 2008, the Commission issued a Notice of Hearing in this matter (the “Notice of Hearing”);

      AND WHEREAS Gold-Quest and the Ontario Respondents were served with the Temporary Order, the Notice of Hearing and the Evidence Brief of Staff of the Commission (“Staff”) as set out in the Affidavit of Service of Dale Grybauskas dated April 14, 2008;

      AND WHEREAS no correspondence has ever been sent to Staff on behalf of Gold-Quest and no one has ever appeared for Gold-Quest;

      AND WHEREAS upon hearing submissions from counsel for Staff and on written consent of counsel for the Ontario Respondents dated April 11, 2008, the Commission extended the Temporary Order until July 14, 2008 or until further order of the Commission, subject to a carve-out to permit Iain Buchanan to trade in securities listed on a recognized public exchange only in his own existing account(s), for his own benefit, and through a dealer registered with the Commission, and a carve-out to permit Lisa Buchanan to trade in securities listed on a recognized public exchange only in her own existing account(s), for her own benefit, and through a dealer registered with the Commission (the “Amended Temporary Order”);

      AND WHEREAS on May 6, 2008, the U.S. Securities and Exchange Commission (the “SEC”) filed an emergency civil enforcement action against Gold-Quest, and U.S. District Court Judge Lloyd D. George issued numerous orders against Gold-Quest and persons related to Gold-Quest, including orders prohibiting the trading in securities of Gold-Quest, freezing assets related to the sale of Gold-Quest securities and appointing a permanent receiver for Gold-Quest;

      AND WHEREAS on July 14, 2008, counsel for Staff attended before the Commission while counsel for the Ontario Respondents did not attend but provided correspondence with respect to the Temporary Order;

      AND WHEREAS on July 14, 2008, upon hearing submissions from counsel for Staff and considering the correspondence from counsel for the Ontario Respondents, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until October 8, 2008 and the hearing was adjourned to October 7, 2008;

      AND WHEREAS on October 7, 2008, counsel for Staff and counsel for the Ontario Respondents did not oppose the extension of the Amended Temporary Order;

      AND WHEREAS on October 7, 2008, upon considering the correspondence from counsel for the Ontario Respondents, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until December 10, 2008 and the hearing was adjourned to December 9, 2008;

      AND WHEREAS on December 9, 2008, counsel for Staff and counsel for the Ontario Respondents did not oppose the extension of the Amended Temporary Order;

      AND WHEREAS on December 9, 2008, upon considering the correspondence from counsel for the Ontario Respondents, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until February 11, 2009 and the hearing was adjourned to February 10, 2009;

      AND WHEREAS on February 10, 2009, counsel for Staff and counsel for the Ontario Respondents did not oppose the extension of the Amended Temporary Order;

      AND WHEREAS on February 10, 2009, upon considering the correspondence from counsel for the Ontario Respondents, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until March 20, 2009 and the hearing was adjourned to March 20, 2009;

      AND WHEREAS on March 12, 2009, Staff of the Commission issued a Statement of Allegations against Gold-Quest, the Ontario Respondents, the Harmoney Club Inc., and Sandra Gale alleging breaches of the Act related to trades in the securities of Gold-Quest and the Harmoney Club Inc.;

      AND WHEREAS on March 20, 2009, upon considering the correspondence from counsel for the Ontario Respondents, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until May 27, 2009 and adjourned the hearing into the extension of the Amended Temporary Order against Gold-Quest and the Ontario Respondents until May 26, 2009;

      AND WHEREAS on May 26, 2009, as no counsel appeared for Gold-Quest and Health and HarMONEY, and upon being informed that counsel for Iain Buchanan and Lisa Buchanan did not oppose the extension of the Amended Temporary Order until June 25, 2009, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until June 25, 2009 and adjourned the hearing into the extension of the Amended Temporary Order against Gold-Quest and the Ontario Respondents until June 25, 2009;

      AND WHEREAS on June 25, 2009, as no counsel appeared for Gold-Quest and Health and HarMONEY and counsel for Iain Buchanan and Lisa Buchanan did not oppose the extension of the Amended Temporary Order until August 21, 2009, the Commission extended the Amended Temporary Order against Gold-Quest and the Ontario Respondents until August 21, 2009 and adjourned the hearing regarding the extension of the Amended Temporary Order against Gold-Quest and the Ontario Respondents until August 20, 2009;

      AND WHEREAS on August 20, 2009, no counsel appeared for Gold-Quest and Health and HarMONEY;

      AND WHEREAS on August 20, 2009, counsel for Iain Buchanan and Lisa Buchanan, in communication with counsel for Staff, did not oppose the extension of the Amended Temporary Order until October 13, 2009 and it is in the public interest to extend the Amended Temporary Order without prejudice to the right of the Ontario Respondents to bring an application before the Commission to challenge the scope of the Amended Temporary Order;

      AND WHEREA on August 20, 2009, counsel for Staff submitted that the hearing to extend the Amended Temporary Order should be scheduled for October 9, 2009;

      IT IS ORDERED THAT:
  1. The Amended Temporary Order against Gold-Quest and the Ontario Respondents is extended to October 13, 2009 on the terms and conditions set forth in the Amended Temporary Order; and
  2. A hearing to extend the Amended Temporary Order shall be held on October 9, 2009 at 10:00 a.m. or such other date as is agreed by the parties and determined by the Office of the Secretary.
DATED at Toronto this 20th day of August, 2009

    "Carol S. Perry"    
Carol S. Perry