English Translation: Genivar Inc. lawsuit vs. GBB Genivar inc. c . Gold Bullion Development Corp. . , 2014 QCCS 2027 (CanLII)
Date: 2014-05-13 (File : 500-17-070970-127 )
Reference: Genivar inc. c . Gold Bullion Development Corp. . , 2014 QCCS 2027 (CanLII) , accessed 2014-05-17 Cited by 0 documents Show summary PDF Email Tweet Share <https://canlii.ca/t/g6vcm>
Genivar inc. c . Gold Bullion Development Corp. .
2014 QCCS 2027
JM 1796
SUPERIOR COURT
CANADA
PROVINCE OF QUEBEC
DISTRICT
MONTREAL
No. :
500-17-070970-127
DATE:
13 MAI 2014
______________________________________________________________________
IN THE CHAIR :
THE HONOURABLE
DANIELLE MAYRAND , J.C.S.
______________________________________________________________________
GENIVAR INC. .
Plaintiff - Counterclaim Defendant
c .
GOLD BULLION DEVELOPMENT CORP. .
Defendant - Plaintiff Counterclaim
and
CASTLE SILVER MINES INC. .
and
FRANK BASA
defendants
______________________________________________________________________
JUDGMENT
______________________________________________________________________
[1] Genivar is a multinational engineering . It has rendered consulting services to Gold Bullion Development Corp. . (" GBD "), a publicly traded company which operates in the field of mining gold and silver . Castle Silver Mines Inc. . (" Castle ") is the wholly owned subsidiary .
[2] Between May 2008 and October 2011 GBD holds Genivar related to the Granada and Castle Mines mining sites it wants to exploit .
[3] Since the collapse of investors on the sidelines of the BRE- X case , financial markets authorities have taken measures to ensure their protection. Now , companies that operate mining sites must produce to the satisfaction of the competent authorities , a report called commonly 43-101. This report is intended to certify such amounts of minerals taken from the mine sites for which funds are raised to facilitate their exploitation .
[4] It is in this context that Genivar were selected by GBD . Between 2008 and 2011, she conducted drilling and other work to prepare the 43-101 reports for Granada and Castle.
[5] The relationship between the parties ended abruptly , while GBD , dissatisfied with the performance of Genivar , stopped paying its bills from the summer of 2011 . In November 2011 Genivar leaves yards GBD and provide all documents relating to the various projects for which she worked .
• The main action
[6] Application instituting proceedings is an action on behalf of a sum of $ 783,000 for unpaid fees ( "Motion" ) against GBD , Castle and Frank Basa , their shareholder and chief executive.
• The Defence and Counterclaim
[7] GBD replies with a Defence and Counterclaim of $ 25,431,906 .
[8] GBD cites various breaches of Genivar including the fact that it did not deliver him 43-101 report for Granada , while the Castle was overdue product . [1] This prevented him from getting the financing to complete its mining projects , which caused him loss of opportunities. GDB is seeking damages of $ 20 million related to the Granada website and $ 3,400 with the Castle . Other damage are not covered by this application .
motion to dismiss the action under Rule 54.1 CCP
[9] Genivar asked to report the abuse Counterclaim , up to $ 23.4 million , because manifestly ill-founded and dilatory .
[10] In the alternative, it invokes Article 54.3 CCP and application of the Counterclaim subject to a deposit of $ 230,000 which corresponds to 1% fee prescribed by the rate of taxation of legal costs .
[11] Genivar refers to the allegations contained in paragraphs 189, 191 , 192 and 193 of the Defence and Counterclaim specified to justify its Motion to dismiss :
189. The failure of Genivar to Deliver Timely work- product, and more SPECIFICALLY Genivar 's failure to Deliver a Complete Granada 43-101 Resource Report, Gold Bullion Caused to lose crucial financing of $ 20,000,000 That HAD beens secured in the fall of 2011 from Steeple . Such financing HAD beens Agreed to verbally , goal fell through as a result of the generation of a Lack of Timely 43-101 report .
(...)
191. In turn , this loss of financing precluded Gold Bulllion from launching some operations derived, namely additional drilling operations in September 2011 , and therefore Caused it a loss of profits, All which Gold Bullion Estimates to be in the Amount of $ 20,000,000 , subject to adjustment , All which Represents 100,000 meters at $ 200/metre . There are no records showing the Specific $ 20 million estimate .
192. The failure of Genivar to Deliver Timely work product , and more SPECIFICALLY Genivar 's failure to Deliver a Complete Castle 43-101 Technical Report in a Timely fashion , Gold Bullion Caused to lose crucial financing from Industrial Alliance in the Amount of $ 3,400,000 , as Appears from Exhibit D-10 , that ' HAD beens arranged for the IPO of Castle Silver Mines. Such financing fell through as a result of the generation of a Lack of Timely 43-101 report . There are no Specific documentation discussing the loss of the financing , as discussed Those Were verbal .
193. Further , this loss of financing precluded from launching the Gold Bullion listing of Castle Silver Mines on the Toronto Venture Stock Exchange.
( The Tribunal notes )
[12] Genivar has been questioned Frank Basa (" Basa ") the president and principal shareholder of GBD . She claims that GBD can not claim damages related to the loss of funding that would have been provided by " Steeple " for Granada site since it is a ghost company . It therefore can not claim a loss of profit to the amount of lost funding.
[13] refers to Genivar large excerpts of testimony following Basa which confirms they have not received funding and in fact " It was never secured by Steeple " contrary to what is alleged in paragraph 189 of the Application instituting of proceeding. As for the site Castle, a letter of offer financing was issued by Industrial Alliance and a prospectus has been prepared , but there was not followed due to lack of investor interest before the end of the year entered.
• The right
[14] Most recently, the Court of Appeal in Walker v. . Digital Shape Technologies [ 2] endorsed the analysis and the principles enunciated by the trial judge . [3]
[15] The burden of proof includes an approach which is in two stages: the party seeking the dismissal " summarily establishes " that the procedure for the other party is "manifestly unfounded , frivolous or dilatory " and , if successful this test, it is the turn of the party against whom the motion to dismiss "prove" that this is not the case .
[16] The rejection of the application , is the most drastic measure is applied only as the last and the greatest caution . [4]
[17] When the motion to dismiss the result of a procedure that is abusive, it must be similar to blameworthy conduct .
[18] If the violation is not established , but there was an appearance of abuse , article 54.3 CCP takes over and provides that the rejection is not possible. By cons , it may be subject to less stringent measures.
[19] Genivar folds on article 54.3 CCP, as subsidiary means , claiming it showed a mere appearance of abuse and request a deposit of $ 230,000 . This alternative , even if not provided for in Article 54.3 CCP is valid [5] .
[20] Some other comments complement the table applicable to the implementation of the remedy provided for in Article 54.1 CCP . Thus, the fragility of the right of action is not sufficient to lead to the rejection , there must be a finding of frivolity and abusive nature of the procedure. Similarly , the exorbitant damages sought can not alone justify the fairness of a proceeding. These items must be left to the discretion of the trial court . [6]
[21] Finally, it is not appropriate at this stage to determine whether the party who issued the contested manage to discharge its burden of proof procedure for declaring that there was abuse. She may have difficulty in proving its claims and no success at all. By cons , that assessment is the trial court . [7]
[22 ] In this case , good faith is presumed and procedures , parts and interrogation do not show that GBD and Basa are in bad faith or show a lightness and blameworthy conduct . Should be sufficiently convincing evidence , not shown here.
[23] The fact of not having brought an action for damages before having themselves been prosecuted after this action on account is not in itself sufficient to conclude that GBD demonstrated behavior nor blameworthy because of the high amounts claimed in the counterclaim .
[24] The cause of action based on the GBD omission by Genivar have produced 43-101 reports and rendering adequate services .
[25] The wording of the allegations in paragraphs 189-193 of the Counterclaim , although clumsily written , is not sufficient to limit the cause of action to an unsecured financing and can not be taken in isolation without looking at the whole facts emanating procedures and examinations products folder. According GBD without these reports , it can not get the funding it needs to carry out the exploitation of mining sites.
[26] Genivar has made much of the lack of broker " Steeple " which has referred in his Basa examination after defense. The evidence shows that rather referred to Stiefel, a mining company , a member of IROC [8] specializing in mining finance and acquired broker Thomas Weisel [9] .
[27] claims that GDB Genivar failed to produce 43-101 report for the Granada website because it lacked resources, while Genivar alleges that GBD gave him instructions to suspend the making of the report.
[28] The testimony given by representatives of the parties and claims procedures are contradictory and it is not the role of the Tribunal shall at this stage of the appeal, to gauge the credibility thereof . There is sufficient evidence of both sides to let the trial court decide the issue.
[29] Genivar has not demonstrated that there was prima facie case justifying the application of Article 54.3 CCP and the granting of bail of $ 230,000 .
[30 ] FOR THESE REASONS , THE COURT:
[31] DENIES the Motion Genivar inc. partial rejection of the counterclaim Gold Bullion Development Corp. . ;
[32] COST TO FOLLOW .
__________________________________
Danielle Mayrand, J.C.S.
Me and Patrick Ouellet
Éric Bédard
s.e.n.c.r.l woods . / llp
Solicitors for the Plaintiff - Counterclaim Defendant
Mr Karim Renno
irving mitchel Kalichman
Attorney Defendant - Counterclaim Plaintiff and defendants
Date of hearing :
April 8, 2014
[1 ] Par. 105-109 and 143 , 144 of the Defence and Counterclaim .
[2] 500-09-024010-134 , judgment of the Court of Appeal on 27 March 2014.
[3] See paragraphs 12 to 24 of the judgment of Christian Brossard J. of this Court in 2013 QCCS 5542 (CanLII) , 2013 QCCS 5542 .
[4] Developments Cartier Avenue inc. c . Dalla Riva, 2012 QCCA 431 ( CanLII ), 2012 QCCA 431 , para. 21-23 ; Cosoltec inc. c . Laferté Structures Inc. , 2010 QCCA 1600 ( CanLII ), 2010 QCCA 1600 . ; Ovo Clinic inc. c . . Curalab Inc. , 2010 QCCA 1214 ( CanLII ), 2010 QCCA 1214 ; Lesieur c . Morissette, 2011 QCCA 4570 , para. 26 .
[5] Acadia Subaru c . Michaud, 2011 QCCA 1037 ( CanLII ), 2011 QCCA 1037 .
[6] Delarosbil c . Commission scolaire du Val des Cerfs, 2013 QCCA 2060 (CanLII) , 2013 QCCA 2060 , para. 11 and 12 .
[7] Charlebois c . The condominium Victorian Golf inc. , 2014 QCCS 387 (CanLII) , 2014 QCCS 387 , para. 7 ; Envirocycle immobilier inc . c . 9051-8324 Québec inc. , 2013 QCCS 2952 (CanLII) , 2013 QCCS 2952 , para. 8 .
[8] Investment Industry Regulatory Organization of Canada.
[9] Examination of Basa after defense, 3 June 2013 , p. 199 and examination of John Karagiannidis (Industrial Alliance) October 31, 2013 , p. 50 and 51 .
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