PMIC II Investments Ltd. v. Navigator Development Canmore Corporation, 2010 ABQB 724

Court of Queen ’ s Bench of Alberta Citation: PMIC II Investments Ltd. v. Navigator Development Canmore Corporation, 2010 ABQB 724 Date: 20101119 Docket: 0901 09202 Registry: Calgary Between: PMIC II Investments Ltd. Plaintiff - and - Navigator Development Canmore Corporation Defendant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice S.L. Martin _______________________________________________________ [ 1 ] On September 14, 2010 the Honourable Justice A. D.

Macleod determined how the proceeds of sale of a particular property would be distributed among various parties. The underlying facts are complex and involve numerous parties and multiple actions. [ 2 ] At the time and on the basis of the evidence before him, he determined that, as stated in paragraph 7(

h) of the Order: the sum of $102,000 shall be paid into Court to the credit of the within Action which sum may be increased by Order of this Honourable

Court on application made no later than September 30, 2010 or such later date as may be Ordered by this Court; such sum shall be held in Court pending the outcome of the Action #1001-02113 in which the Certificate of Lis Pendens registered as instrument No. 101 048 056 was issued or upon further Order of this Court. [ 3 ] The Applicant, the Lucaya Limited Partnership and Lucaya Investment G. P. Inc. applied within the defined time period. They seek an Order that the amount to which they are entitled be increased to the entirety of the balance of funds available after those payments set out in paragraph 7(

a) through 7(

g) of the Order are made. [ 4 ] Further, or in the alternative, they seek to set aside or declare void abenitio a consent judgment filed in Court Action # 1001- 09298 on July 2, 2010. They allege it is a fraudulent preference made to defeat their claims. [ 5 ] All parties before me agree that I may treat the matter of the amount which ought to be subject to attachment at large.

I am therefore not bound by Justice MacLeod’s preliminary assessment that the attachment order should issue in the amount of $102,000. [ 6 ] The Applicants allege that the funds they invested into a real estate development have been misappropriated and gone missing.

They seek an Order attaching the proceeds of sale of a parcel of real estate that was the main asset in the defendant corporation and which was involved in a web of companies and persons alleged to have a relationship with the missing or misused funds. [ 7 ] The test for an attachment order is set out in s. 17 of the Civil Enforcement Act , R.S.A. 2000, c. C-15. Justice MacLeod determined that this test was met and granted an Order in the amount of $102,000. That Order has not been appealed. [ 8 ] The only issue at this hearing was the appropriate amount of that Order.

The amount of $102,000 was initially selected in morning chambers because it was an amount proven to have been paid from Canmore (Navigator Development). In my view the evidence supports the higher amount requested. [ 9 ] An affidavit was filed by Mr. Brian Tario, a certified forensic investigator who was engaged to investigate the sources of funds for the Incomplete Lucaya Kelowna Project.

He provided a preliminary report, subject to further disclosure being required before the report could be completed and finalized. [ 10 ] Among his key observations were that “not all funds invested by the Lucaya Limited Partnership and Lucaya Investment G. P. Inc. into Navigator Development Lucaya Corporation were deposited into the operating bank account of the condominium project” and “several unexplained related party transactions were negotiated through the Navigator Development Lucaya Corporation bank account, such as ‘temporary loans’”.

He reports that 9 million dollars were invested by Unit Holders to Lucaya; that 1.03 million was paid to related parties; 3.8 million was used for construction costs and that 4.8 million of the Lucaya invested funds are not accounted for. [ 11 ] The Applicants also say there has been limited disclosure in the underlying action. [ 12 ] In light of this evidence it is appropriate to increase the amount of the attachment to “the entirety of the balance of funds available after those payments set out at paragraphs 7(

a) through 7(

g) of the order are made”. [ 13 ] There is no need to consider the alternative submission. Heard on the 15 th day of November, 2010. Dated at the City of Calgary, Alberta this 19 th day of November, 2010.

S.L. Martin J.C.Q.B.A. Appearances: Mr. Ryan P. Pelletier for the Applicants Mr. Glen Hickerson for the Defendant Mr. Peter Major for Mr. Brawn and Mr. Whitaker