



COURT OF APPEAL FOR
BRITISH COLUMBIA




Citation:



Buchan v. Moss
  Management Inc.,









2009 BCCA 25




Date: 20090123

Docket: CA035964

Between:

Steven Thomas Buchan

Appellant

(
Plaintiff
)

And

Moss Management Inc.,
Alan Frederick
Wolrige
,
Peter Colin Graham Richards and 331609 B.C. Ltd.

Respondents

(
Defendants
)




Before:



The Honourable Mr. Justice
  K. Smith





The Honourable Mr. Justice
  Lowry





The Honourable Mr, Justice
Groberman




Oral Reasons for Judgment








Appellant Appearing In Person





T.J.
  Delany
S.W.K. Urquhart



Counsel for the Respondent





Place and Date:



Vancouver
,
British Columbia






23 January 2009






[1]

LOWRY J.A.
: Steven Buchan appeals the order of Mr. Justice
Bauman dismissing the action he brought seeking a declaration of his beneficial
ownership of a corporation and certain assets it holds.  The judges
comprehensive reasons for the decision he reached after what was a long trial
are indexed as 2008 BCSC 285.  The primary issue raised on the appeal is
purely one of fact.  The issue turned on a determination of
credibility.  As is well established, an appellate court cannot intervene
in circumstances of this kind unless the decision from which the appeal is
taken is shown to be predicated on an overriding and palpable error:
Housen
v.
Nikolaisen
,
2002 SCC 33, [2002] 2 S.C.R. 235.  Mr. Buchan acknowledges that but says
the judge misapprehended or ignored evidence which led him into such an error.

[2]

Mr. Buchan is now representing
himself.  He has, however, filed a factum that was drawn by his trial
counsel.  Mr. Buchan relies on the argument made in this factum and makes
some further submissions.

[3]

Mr. Buchan sued on a written agreement he
made with three others on 20 March 1990:  Frederick Marsh, a business
associate; Alan
Wolrige
, an accountant; and Peter
Richards, a solicitor.  The purpose of the agreement was to provide for
the management of assets Mr. Buchan and Mr. Marsh were endeavouring to assemble
to pursue a mining venture either personally or through two publically traded
companies in which they held substantial interests.  The companies were
referred to as Prospectors and Boston Financial.  On the face of what
is referred to as the Management Agreement they were to own the assets either
directly or indirectly and each of the four parties were to share equally in
the benefits derived from the anticipated success of the venture.  The
assets identified at the time were set out in Schedule B to the agreement.
 The first two were an existing mill and
townsite
to be acquired from what is referred to as Amax by an offshore company, and a
60% interest held by Cominco in the development of certain mining
properties.  The other 40% interest was held by Prospectors.  The
remainder of the assets listed were acquired by a numbered company, 331609 B.C.
Ltd., which Mr. Buchan claimed to beneficially own.

[4]

The agreement reflected that Mr. Buchan
and Mr. Marsh proposed, but were not obligated to arrange for, the acquisition
of the mill and the
townsite
.  The Cominco
interest was being acquired by a shelf company, Moss Management Ltd., made
available by Mr. Richards, and at least most of the purchase price of $800,000
was expected to be provided by Boston Financial.  Apparently unknown to
Mr. Buchan, 500 shares in Moss Management were issued to each of Mr.
Wolrige
and Mr. Richards, which was consistent with what
Mr. Marsh testified was his understanding of the ownership of that
company.  By the time of the trial, he and Mr. Buchan had gone their
separate ways.

[5]

The expectations for financing the
acquisition of the Cominco interest were not realized.  Boston Financial
paid a deposit of $25,000 but nothing more.  Mr. Richards arranged
for payments of $50,000 in each of April and May as well as a payment of
$375,000 in June.  He obtained a one-year deferment of the balance owed
and he and Mr.
Wolrige
made substantial payments of
interest in the interim.  The balance was eventually paid by TVI Copper
Inc. as part of a transaction whereby TVI acquired some of the mineral
claims.  Moss Management had proceeded to acquire the 40% interest in the mining
properties held by Prospectors.  The TVI transaction facilitated the
completion of that acquisition.

[6]

In the end, Mr. Buchan made no tangible
contribution to the mining venture.  The mill and the
townsite
were never acquired.  To do so would have required a multi-million dollar
investment.  The assets held by 331609 B.C. Ltd. were, in the judges
view, of limited value and he concluded Mr. Buchan had not made out his claim
to them and, given that it was equitable in nature, it was not one the court
should recognize in any event.  Thus, as the judge said:

[228] 
Richards and
Wolrige
hold Moss in trust for
Separ
[an offshore company], which in turn is controlled by
a complicated offshore ownership.  Marsh and Buchan have nothing, save
their personal shareholdings in Prospectors and Boston Financial.

[7]

The question then was whether Mr. Buchan
had been wrongly deprived of the interest in Moss Management to which he was
entitled by virtue of the Management Agreement.  Mr. Richards and Mr.
Wolrige
took the position the agreement was never performed
and was mutually abandoned.  Mr. Buchan maintained that was not so. 
His position was and remains the agreement was performed and entitles him to
the beneficial ownership of Moss Management.

[8]

The judge undertook a thorough
consideration of the credibility of Mr. Buchan and Mr. Richards.  He found
Mr. Buchans testimony to be quite wanting.  He based his assessment on
the inconsistency in Mr. Buchans conduct over time.  Aspects of Mr.
Buchans behaviour in relation to his dealings with the directors of
Prospectors as well as Mr. Richards and Mr.
Wolrige
,
and his posturing different positions before the court were discussed (
paras
. 234-253).  The judge concluded he could place
little reliance on Mr. Buchans evidence.  By contrast, while the judge
did not accept what Mr. Richards had to say on all aspects of his evidence, he
did find Mr. Richards testimony to be truthful on a number of critical
issues and he preferred it where it conflicted with Mr. Buchans
testimony.  Mr. Buchan does not now challenge directly any of the basis of
the judges assessment of credibility.

[9]

Starting with his assessment of
credibility, the judge found the Management Agreement was never implemented or
performed.  He began his analysis on the point as follows:

[321] 
I begin by noting Mr. Richards' evidence that at some point after he was forced
to make the first payment of $50,000 under the Cominco Moss Agreement, he told
Wolrige
, Marsh and Buchan, that as far as he was concerned
the Managers' Agreement was at an end and that he would thereafter proceed to
salvage what he could out of the aborted venture.  I accept this
evidence.

[10]

The judge considered various aspects of
Mr. Buchans conduct in dealings between Moss Management and Prospectors which
he saw as clearly inconsistent with Mr. Buchan having an ownership interest in
Moss Management during the spring and summer of 1990.  He attached
importance to Mr. Buchans acquiescence in the TVI acquisition of assets of
Moss Management.  Perhaps most significantly, the judge found a proposal
prepared by Mr. Richards, dated 18 May 1990, to permit Mr. Buchan to
acquire a 10% interest in Moss Management for $75,000 to be completely
inconsistent with Mr. Buchan considering he had a continuing ownership interest
stemming from the Management Agreement.  The judge rejected Mr. Buchans
assertion that he had never seen the proposal.

[11]

The judge concluded:

[340] 
I find, as a fact, that Buchan accepted, in the spring of 1990, Richards'
position that the Managers' Agreement would never be implemented or performed
and that Richards and the others would work towards salvaging whatever they
could.

[341] 
While it was proposed that Marsh and Buchan would have an indirect interest in
Moss, that never happened.  The scheme was abandoned and Buchan accepted
that and left Richards and
Wolrige
to do their best
to preserve the Cominco Moss Agreement in the hope of selling off the assets of
Moss to repay the outstanding loans to Moss.

[12]

Mr. Buchan says the judge was wrong; the
evidence does not support his conclusion.  He maintains the judge made a
fundamental error predicated on a critical misinterpretation of the
evidence.  He recognizes the judges conclusion is rooted in an assessment
of credibility but says that does not render the judgment immune from appellate
intervention because he is in a position to show the judge could not have
reasonably accepted Mr. Richards testimony, citing
Lapointe
v.
Hôpital
Le
Gardeur
,
[1992] 1 S.C.R. 351 at 358-60.  Mr. Buchan argues that, rather than Mr.
Richards assuming responsibility for salvaging Moss Managements acquisition of
the Cominco interests, the parties to the Management Agreement moved forward
after it was made to find investors so the interests acquired could be
developed.  He maintains that what he and Mr. Marsh brought to the table
were opportunities which gave them the ownership interest the judge accepted
was intended, while Richards and
Wolrige
were to be
remunerated for their contribution of skill and knowledge in their respective
fields.

[13]

Mr. Buchan contends the judge
misunderstood Mr. Richards evidence to the effect the Management Agreement
began to unravel almost immediately.  He says Mr. Richards testimony in
this regard relates to events after May 1990 when the second instalment of
$50,000 had been paid to Cominco.  Mr. Buchan then says this
misunderstanding of the evidence led to undue weight being attached to the
proposal Mr. Richards drew for Mr. Buchan to acquire a 10% interest in Moss
Management.

[14]

The judge quoted Mr. Richards testimony
upon which he relied in this regard:

[191] 
He testified that the Managers' Agreement of 20 March 1990 was virtually a
dead issue, almost immediately after its execution (T. 25 October 2007,
p. 42, ll. 37 to p. 43, l. 22):

Q        
And during this time when your group put up the second $50,000 towards the
Moss/Cominco payment, did you have any discussions at all with Mr. Marsh or the
representatives of Boston Financial about what was going on?

A         
After I put up the 50,000 --

Q        
Yes.

A         
-- in April the 18th, I think it was.

Q        
Yes.

A         
And as time went on and I -- no assets were transferred from any of the parties
pursuant to the March 20th agreement and no monies had been advanced by any
third party other than the 25,000 by Boston.  I stated to Mr.
Wolrige
, Marsh, Mr. Buchan that as far as I was concerned
the March 20th agreement was at an end and that I was going to go forward as
best I could to salvage whatever could be salvaged from the agreement with
Cominco.

Q        
Yes?

A         
And I expected them to work with me to try and ensure that the payments, the
upcoming payments, would be forthcoming.  Being concerned in early May
that Boston may not perform, I put Mr. Marsh on notice that I was
concerned.  I then scrambled to try and raise the $50,000.

I had numerous conversations with all three --
Wolrige
,
Marsh and Buchan -- and with Barry Whelan as to evaluation, you know, how can
we get out of this if we go forward.  How can we -- where are we going to
find a purchaser to realize something so we can recover something from what
we've done.

[15]

As I read what Mr. Richards said, there
was no error in the judges understanding.  While the question Mr.
Richards was asked referenced the time after the second of the two $50,000
payments to Cominco were made, it is clear he was talking about the first
instalment.  He said he told Mr. Buchan and Mr. Marsh the Management
Agreement was at an end before he began looking for $50,000 to make the second
payment.  As he said, it was April 18 when he put up $50,000. 
I am, in any event, unable to see what real difference the timing of Mr.
Richards statement to Mr. Buchan and Mr. Marsh might have had, whether it was
in April or after May 1990.  Certainly the date of the proposal he drew
for Mr. Buchan to purchase 10% of Moss Management, dated 18 May 1990, is more
consistent with the agreement being abandoned before then.

[16]

The Management Agreement was actually
never completed.  It referenced a Schedule C which was never drawn. 
The Schedule was to have specified the shareholdings of the offshore company
that was to have held the ownership interest in the mill and
townsite
that was to be acquired.  The judge saw the
Management Agreement as essentially a work in progress toward a joint venture,
the terms of which were a matter for future consideration (
paras
.
313-314).  He found it difficult to accept the parties would agree to Mr.
Buchan having an ownership interest without making a tangible
contribution.  The agreement began to unwind when it became apparent to
Mr. Richards he would have to arrange the financing of the purchase of the
Cominco interest if the opportunity was to be preserved.  Whether Boston
Financial was to have paid the whole $800,000 price or, as Mr. Buchan says now,
only $675,000 of the price, it quickly became apparent a month after the
Management Agreement was signed the acquisition was not going to be made as had
been expected.  The Management Agreement was not completed.  It was,
as the judge found, accepted it would not be performed.

[17]

In any event, I am unable to see what the
understanding of Mr. Richards evidence has to do with the weight the judge
afforded to the proposal for Mr. Buchan to acquire a 10% interest in Moss
Management.  It largely puts an end to Mr. Buchans assertion he
considered he held an ownership interest in Moss Management by virtue of the
Management Agreement made a month earlier.  I can see no reason
Mr. Richards would have been drawing a proposal for Mr. Buchan to acquire
an interest in a company he now maintains he owned at the time.

[18]

I do not consider Mr. Buchan has shown
there to be any material misunderstanding of the evidence by the judge.

[19]

Mr. Buchan raises other evidentiary
concerns like the fact Mr. Richards and Mr.
Wolrige
charged Moss Management for their services, which they were entitled to do
under the Management Agreement.  But the most that can be said about
evidence like that, which Mr. Buchan says shows the agreement was being
performed, is that it is evidence which is not inconsistent with the agreement
being performed.  It does not follow that is what was happening.  Mr.
Richards and Mr.
Wolrige
were entitled to be
remunerated for their services to the company.  The evidence is at best
neutral.  Much the same is to be said about Moss Managements purchase of
331609 B.C. Ltd., to which Mr. Buchan points as performance under the
Management Agreement.  As the trial judge pointed out, the agreement did
not provide that 331609 B.C. Ltd. or any of its assets would be sold to Moss
Management.  This transaction had, in the end, nothing to do with
Mr. Buchan, in any event.  The judge found he had no ownership
interest in the numbered company.

[20]

On the argument advanced, I am unable to
see any error in the judges interpretation of the evidence.  There may be
some evidence that would be consistent with Mr. Buchans account of what
happened, but the judge took the view that what Mr. Richards testified had
occurred was to be accepted.  Mr. Buchans testimony may have been to the
contrary, but the judge found he could not rely on what Mr. Buchan said in
material respects.  No sound evidentiary basis is now shown for
interfering with the judges acceptance of Mr. Richards testimony.  The
judge has not been shown to have misinterpreted or ignored any evidence that
renders the acceptance of Mr. Richards account unsupportable.

[21]

Mr. Buchan raises two other grounds of
appeal.  He first argues the judge wrongfully held, in effect, the
Management Agreement was never formed because the acquisition of the mill and
the
townsite
was a condition precedent, citing
para
. 351 where the judge emphasized those assets were
never acquired.  I do not, however, consider the judges conclusion was
based on the acquisition of those assets being a condition precedent.  He
never used the term.  The judge determined the agreement was not performed
and was mutually abandoned.

[22]

Finally, Mr. Buchan contends the judge
erred in his conclusion that Mr. Richards and Mr.
Wolrige
owed no fiduciary obligations to Mr. Buchan that were breached.  He argues
they arose because the four parties to the Management Agreement were members of
a joint venture.  But he acknowledges the issue only arises if it is first
determined the judge erred in concluding the Management Agreement failed. 
Given my view of that issue, it is not necessary I consider the question of any
fiduciary duties Mr. Richards or Mr.
Wolrige
may have
had.

[23]

Mr. Buchan does seek to add a fourth
ground of appeal to that advanced in his factum.  It has to do with two
individuals who did not testify at the trial.  From what Mr. Buchan has
said, I do not consider our entertaining the proposed ground now could affect
the disposition of the appeal.

[24]

I do consider Mr. Buchan has said all
that he can in his effort to persuade us a mistake has been made.  An
appellate court cannot retry this case and, for the most part, that is what it
appears Mr. Buchan would have us do.

[25]

It follows then, I would dismiss the
appeal.

[26]

SMITH J.A.
: I agree.

[27]

GROBERMAN J.A.
: I agree.

[28]

SMITH J.A.
: The appeal is dismissed.

(discussion with counsel)

[29]

SMITH J.A.
: We are not inclined to award special costs. 
Costs will follow the event in the usual way.

The Honourable Mr. Justice Lowry

CORRECTION
 18 FEBRUARY 2009

The panel for this oral judgment should be:

The Honourable Mr. Justice
K. Smith

The Honourable Mr. Justice
Lowry

The Honourable Mr. Justice
Groberman




