Nor more waitingSafe Environment Engineering Canada Inc.
#111 – 16 Fawcett Road, Coquitlam, BC V3K 6X9 Phone: (604) 290-6706
NEWS RELEASE
SFU: TSX-V (delisted)
Safe Environment Obtains Court Order Against Former Presidents
January 5, 2004 – Safe Environment Engineering, Canada, Inc. had been unable to obtain its properties from former President, Joanna Yu. Ms. Yu had not responded to a letter by current President, George Sharp, requesting that she comply with the required transaction of properties. Also, the Company believed that another former President, Richard J. Watson, was still in possession of the Company’s properties.
In an attempt to obtain relief, the Company applied for an ex-parte order in British Columbia Supreme Court and appeared before Madame Justice Satanove on Friday, December 12, 2003. The Company’s counsel, Garth S. McAlister and Anton Kietaibl, presented Her Ladyship with a series of affidavit evidence in an attempt to illustrate the Company’s concern for the integrity of its properties and the Company’s need of the properties in order to conduct it’s business.
Evidence presented to Her Ladyship included:
§ Copies of Rulings from the British Columbia Securities Commission and the TSX Venture Exchange that state that Watson’s involvement with a Public Company, in any way, is unacceptable; as well as a previous ruling by the Alberta Securities Commission of a similar nature.
§ Records from the Vancouver Main Branch of the Bank of Montreal showing that the Company had been entered in a Partnership Agreement with Northmark Mechanical Systems Inc. a privately held company controlled by Richard J. Watson. This Agreement was signed by Safe Environment Directors, Joanna Yu, and D.K. Greenlaw, as well as Richard J. Watson on behalf of Northmark. The parties had also entered the two companies into a Joint Deposit Account Agreement and opened an account in the name of Safe Environment Engineering Canada Inc. and Northmark Mechanical Systems. The address of record was shown to be 8930 Oak Street, Vancouver, British Columbia, known to be Mr. Watson’s office.
§ Attempts made by Ms. Yu and Mr. Watson to coerce the Directors of Safe Environment and then prevent the Board of Directors meeting intended to elect Mr. George Sharp as Director and President of the Company. In a final effort to prevent the meeting, Ms. Yu purported to place the Company into the hands of a Receiver-manager and dissolve the Board of Directors. She did this without consent of the Board and was not authorized to take this unilateral action.
§ The Principal of the purported Receiver-manager, N. DiMambro & Associates, was listed on the British Columbia Registry of Corporations as a Director of Northmark Mechanical Systems, Inc. Mr. DiMambro has since confirmed that he performs services for Safe Environment, and Northmark.
§ The Security Agreement purported to be granted by the Company and registered with the British Columbia Property Registry was in fact granted to Richard J. Watson without the consent of the Board of Directors and without the Director’s knowledge of any debt owing to Mr. Watson. The Agreement was registered on September 29, 2003, about the same time that Ms. Yu and Mr. Watson had been informed of the Director’s intentions and immediately following the signing of a Settlement Agreement with respect to an action brought by Canadian Construction Institute and Donald White against Safe Environment.
Madame Justice Satanove assigned a disinterested third party to take possession of all properties of Safe Environment; and, ordered that Ms. Yu, Mr. Watson, N. DiMambro and Associates, and Nick DiMambro surrender all books and records, documents and files, and other properties of or relating to the Company within 2 business days from receipt of the order, to the third party.
Her Ladyship further granted an Anton Pillar Order, a rarely granted remedy tantamount to a civil search warrant, against Richard J. Watson. Under this order, Mr. Watson was to permit a search of his offices by the Company for the purpose of finding and removing the Property of the Company and placing it into the hands of the third party.
In granting these orders, Her Ladyship expressed,
“In keeping with the concerns expressed by the courts as to the draconian nature of the Anton Pillar orders and their effect on defendants, I have kept counsel for the plaintiff arguing his case for a couple of hours. I have also reviewed, on my own, the affidavit evidence and the authorities over the lunch hour.”
Her ladyship then reasoned,
“I have come to the conclusion that the affidavit evidence discloses a very strong prima facie case that the defendants here have taken unauthorized, perhaps fraudulent, steps which will likely cause or have already caused damage to this publicly-traded company.
In particular, I note the following:
1. On December 1, 2003, the defendant Yu, purportedly as president of the plaintiff company, issued a press release announcing the appointment of a receiver pursuant to a security agreement dated August 2002 and registered in the Personal Properties Security Act Registry under number 299204B.
2. Neither of the two other directors of the plaintiff at that time knew of or authorized the granting of the security agreement or the appointment of the receiver.
3. A search of the PPSA Registry disclosed that registration number 299204B is in the name of defendant Watson. Defendant Watson has been barred by the B.C. and Alberta Securities Commission from acting as an officer or director of any public company.
4. Financial statements of the plaintiff of August 2002 do not disclose any security agreement being granted to the defendant Watson or anyone else.
5. The PPSA Registry also discloses that on September 29th, 2003, a security agreement was granted to a company of which the named receiver is an officer and director. The other two directors of the plaintiff do not know of and have not authorized such a security agreement.
6. Defendant Yu’s press release of December 1st, 2003, also stated that the board of directors of the plaintiff was dissolved which was not correct. Nor was she authorized to make such a statement.
7. The plaintiff has requested its books and records from defendant Yu but she has failed to hand them over.
8. The corporate books and records have been observed by Mr. Sharp while in the office of defendant Watson.
9. In addition, defendant Watson has been made a signatory on the plaintiff’s account due to a purported partnership agreement of which the other directors had no knowledge, nor have they authorized it in any way.
Thus the plaintiff has a legitimate fear that if notice were given to either defendant Yu or Watson there is a risk that documents evidencing their wrongdoing will disappear. If the Anton Pillar injunction had been sought merely to support the replevin action, I would not have granted it. However, the plaintiff seeks damages against the defendants for their wrongful conduct, the best evidence of which will be documentary, and susceptible to destruction.
The defendants have shown a total disregard for the plaintiff’s affairs and interests, and therefore the order will go.”
The Company exercised its rights under the Anton Pillar Order on Monday, December 15, 2003. Two Company representatives, Company counsel, and the assigned third party found much of the Company’s records, documents and properties still under the control of Mr. Watson. The property was immediately passed to the control of the third party, pending further Court Order. The property removed from Mr. Watson’s office filled 4 industrial sized bins and 5 file boxes. It is the Company’s position that Mr. Watson, who was bound by the Securities Commission and TSX orders and who since 2001 was neither the President nor a Director, should not have been in possession of the Company’s property.
The Company is preparing additional civil litigation against the offending parties. Also, the Company is providing a file to present to the appropriate law enforcement agencies. The Company is updating the Alberta Securities Commission, the British Columbia Securities Commission, and the TSX Venture Exchange in consideration of their on-going investigations.
On Behalf of the Board of Directors,
George A. Sharp
President