Toronto accounting firm, Soberman Isenbaum Colomby Tessis Inc. has been removed as receiver of St. James Securities Inc. and St. James Holdings Inc.

A motion was brought before the Ontario Court of Appeals by a few of the parties involved in securities company’s demise. They argued that Soberman could not continue as receiver because of a conflict of interest. Soberman was found to also be the trustee in bankruptcy for John Illidge and the St. James Capital Corp. Prior to his bankruptcy Illidge was the sole officer and director of St. James Securities.

Fresh evidence was presented in the appeal court that had not been previously available to commercial court Judge that appointed Soberman as the receiver. The evidence consisted of a statement of defence from another lawsuit, connected to the overall battle ensuing from the St. James collapse, that indicates Soberman is the trustee in bankruptcy for Illidge and St. James Capital Corp.

“The statement of defence was delivered after Judge Greer made her order in this case and therefore was not part of the record before her. Counsel sought leave to introduce the statement of defence on the basis that it ‘crystallized’ Soberman’s alleged conflict of interest,” said the appeal court in its decision.

The parties that brought the motion before the appeal court requested that it appoint another accounting firm, Horwath Orenstein, as receiver in place of Soberman. But the court declined to do so. “I think the appropriate way to proceed is to refer the matter back to the Commercial List Court. As a result, the order appointing Soberman as the receiver of Securities and Holdings is set aside and the matter is referred back to the Commercial List Court for the appointment of a new receiver.”