Bich c. Harpur | May 31, 2022

Bich c. Harpur

2022 QCCS 2066

SUPERIOR COURT

CANADA

PROVINCE OF QUEBEC

DISTRICT OF MONTREAL

No.:

500-17-091838-154

DATE: May 31, 2022

_____________________________________________________________________

PRESIDING THE HONOURABLE THOMAS M. DAVIS, J.S.C.

_____________________________________________________________________

CHARLES BICH

AND

PICCHIO INTERNATIONAL INC.

PLAINTIFFS

v.

DOUG HARPUR

AND

PATRICK PICHETTE

AND

THE BAY MEADOW LIMITED PARTNERSHIP

AND

FAIRLIGHT CABIN QUEBEC L.P.

AND

KENAUK PROPERTIES L.P.

AND

ORGANIX CORPORATION

AND

NORTH OAKS INVESTMENTS LLC.

AND

KENAUK CANADA ULC.

AND

KENAUK AGRICULTURE INC.

AND

MICHAEL M. WILSON

AND

500-17-091838-154

2

LES ENTREPRISES ERNESTO MONACO INC.

AND

NO KENAUK HOLDINGS ULC.

AND

DOMENICO MONACO

DEFENDANTS

AND

THE LAND REGISTRAR OF THE LAND REGISTRY OFFICE OF THE

REGISTRATION DIVISION OF PAPINEAU,

IMPLEADED PARTY

_____________________________________________________________________

JUDGMENT

_____________________________________________________________________

OVERVIEW..................................................................................................................3

THE LEGAL QUESTIONS ...........................................................................................3

FIRST ISSUE IN DISPUTE..........................................................................................4

2.1 Conclusion.......................................................................................................4

2.2 Facts relevant to the issue...............................................................................4

2.3 Legal principles .............................................................................................29

2.4 Discussion.....................................................................................................31

SECOND ISSUE IN DISPUTE...................................................................................56

3.1 Conclusion.....................................................................................................56

3.2 Facts relevant to the issue.............................................................................56

3.3 Legal principles .............................................................................................56

3.4 Discussion.....................................................................................................56

Third ISSUE IN DISPUTE ..........................................................................................58

4.1 Conclusion.....................................................................................................59

4.2 Discussion.....................................................................................................59

FOURTH ISSUE IN DISPUTE ...................................................................................60

Fifth issue in dispute...................................................................................................60

6.1 Conclusion.....................................................................................................60

6.2 Legal Principles.............................................................................................61

6.3 Facts Relevant to the Issue...........................................................................62

Sixth issue in dispute..................................................................................................63

7.1 Conclusion.....................................................................................................63

7.2 Discussion.....................................................................................................63

Judicial Costs.............................................................................................................67

FOR THESE REASONS, THE COURT:........................................................................67

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OVERVIEW

[1]

The Kenauk property (Kenauk), a large tract of land near the tourist area of

Montebello, Quebec, was listed for sale in 2013 by its owners, Oxford Properties. A

number of groups of investors were interested in the property. Two of these are the object

of the present judgment.

[2]

One group was initially composed of Defendants Patrick Pichette and Doug Harpur

(the Pichette group), to be joined later by Defendants Michael Wilson and Domenico

Monaco. The other was made up of Plaintiff Charles Bich, André Desmarais and Dr.

Francesco Bellini (the Bich group).

[3]

Certain members of each group had been made aware of the impending sale of

Kenauk by the agents for Oxford Properties. The groups entered into discussions as to

whether they might be able to find common ground to purchase the property together.

Charles Bich represented the Bich group and both Patrick Pichette and Doug Harpur were

involved in the discussions for the Pichette group. In the end, the Pichette group

purchased the property, to the exclusion of the Bich group.

[4]

The members of the latter believe that they were misled by Defendants and seek

redress, including disgorgement from them of the land that Plaintiffs believe they would

have obtained if Defendants had acted in good faith and respected their contractual

obligations.

THE LEGAL QUESTIONS

[5]

The Court is called upon to determine whether Defendants breached an agreement

to submit a joint bid to purchase the property together with Plaintiffs and, if so, to apply

the appropriate remedy. The quantum of damages has been disjoined and will be

considered in a separate hearing if necessary.

[6]

A sub-issue to this debate is whether Defendants Pichette and Harpur agreed to

discuss and prepare a bid solely with Plaintiffs and whether this alleged exclusivity

agreement was breached.

[7]

The proof will show that Defendants ultimately made their own bid, but Mr. Bich

posits that even after moving forward alone, the Pichette group agreed to sell him the

land that he wanted. The Court will also have to consider this affirmation and its relevance

to the outcome of the dispute.

[8]

Plaintiffs argue that Defendants were in bad faith and duplicitous, preventing Mr.

Bich and his partners from participating in the bidding process, including from making

their own bid. If so what are the consequences of this conduct.

500-17-091838-154

4

[9] Defendants believe that it is so clear that there was no agreement between the

parties that Plaintiffs’ action is abusive, such that they should be able to recover all or

some of their extra-judicial costs.

[10] A sub-issue that the Court will need to consider is who had the right of action

following the events of 2013. Were the right people in the court room?

FIRST ISSUE IN DISPUTE

[11] The principal issue is whether there was an agreement between Plaintiffs and

Defendants to make a joint bid for Kenauk.

[12] The sub-question that will be considered at the same time is whether, during the

course of the discussions, an exclusivity agreement was concluded preventing either side

from seeking other partners to join with them in the transaction.

2.1 Conclusion

[13] The Court concludes that there was no exclusivity agreement and no agreement

between Plaintiffs and Defendants to make a joint bid for Kenauk.

2.2 Facts relevant to the issue

2.2.1 The Kenauk Property

[14] The property is well described in the offering document published by the real estate

brokers mandated to assist in its sale, Sotheby’s International Reality and Jones Lang

Lasalle:

Kenauk represents a unique investment opportunity to acquire one of the largest

and most pristine privately held parcels of land in Canada and North America.

Sprawling over an impressive 65000 acres Kenauk lays claim to over 70 private

Lakes and is home to a private and secure gated community with 13 luxury chalets

and an exclusive marina. A pristine river winds through the land and flows for 15

kilometres from picturesque Lake Papineau towards the Ottawa River. Add over

102 kilometres of unparalleled Lake front vistas on Lake Papineau, hundreds of

kilometres of existing roads, the diversity and abundance of fauna and wildlife and

the possibilities are endless.¹

[15] The biodiversity, the private lakes and perhaps the opportunity to recoup all or

some of their investment attracted certain individuals to the opportunity. Others were

attracted to Kenauk with a view to conserving it, essentially without real estate

development.

1

Exhibit P-910, p. 4.

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[16] It is not without some interest to briefly consider how Kenauk has evolved since

the purchase from Oxford in 2013, if only to better understand the intentions of

Defendants when they purchased it. They have not developed the property other than to

purchase some of the cottages and to build some others that are rented to the general

public for hunting, fishing and other outdoor activities, such as hiking.

[17] Kenauk Properties L.P. holds and manages the real estate, including the rental of

the cottages.

[18] Kenauk Canada ULC has the forestry rights.

[19] Another Kenauk entity manages hunting and fishing over the entire property.

[20] The partners have formed the Kenauk Institute that carries out active research on

the flora and fauna with various partners.

[21] Finally, a significant portion of the property has been transferred to the National

Conservancy Canada (NCC) and other portions have been designated for transfer in the

future. The overriding idea is to create a nature corridor right to the Parc National de Mont

Tremblant.

2.2.2 The Individuals

2.2.2.1 Charles Bich

[22] Charles Bich is a well-educated resident of upstate New York with what he

describes as an interest in wildlife conservation. His family is the controlling shareholder

of the Bic group of companies, which sell consumer products such as razors, pens and

lighters, to name the best known ones.

[23] He and his apparent partner in the purchase, André Desmarais, have business

interests in an area just north of the Kenauk property, where they own a farm breeding

red deer and elk. They also own a pourvoirie, Laurentian Wildlife Estate (LWE) where

guests can hunt these animals, although at the time of the trial it was not operating due

to disease in the breeding stock.

[24] These partners were particularly interested in the parcels of Kenauk that are

located on its Western edge. These are close to the LWE operation and the farm and

would allow LWE to offer a much larger area in which the animals could roam and be

hunted. The guest experience would be enhanced. They also offered easier road access

to the LWE site and the breeding farm.

[25] Mr. Bich, who describes himself as an experienced business person of moderate

sophistication, took the lead in the negotiations for Plaintiffs. From the beginning, his

interest was to put a group or groups together to purchase the entire property. Mr. Bich

considers himself as having access to high net worth individuals. Perhaps one such

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person was Dr. Francesco Bellini (Dr. Bellini). Bich was in contact with his son Roberto

Bellini (Mr. Bellini) throughout the negotiations, but there was no formal agreement

between the Bellini family and Messrs. Bich and Desmarais. The Bellinis did provide Mr.

Bich with the conditions under which they would participate in a deal.

2.2.2.2 Roberto Bellini

[26] Roberto Bellini is one of the sons of Dr. Bellini who built the company Biochem

Pharma, in which a controlling interest was later sold to Shire Pharmaceuticals.

[27] The Bellini family was interested in acquiring a private estate for its exclusive use.

Lake Maholey on Kenauk offered a unique opportunity as it was private and uninhabited.

In addition, it offered world class bass fishing. Lac des Cèdres and Lake Collins were also

of interest to the Bellini family for its estate, as they offered world class trout fishing.

[28] The responsibility for representing the Bellini’s interest was delegated to Mr. Bellini

by his father, although any deal would ultimately have to be approved by the latter. He

was ultimately introduced to Mr. Bich who was both the face and the voice of their

common interests during the discussions with Mr. Pichette and Mr. Harpur. Mr. Bellini did

not liaise with them or Mr. Desmarais and relied on Mr. Bich for the information related to

the possible offer to purchase Kenauk, save for some discussions with Mr. Herbert

Ratsch, a real estate broker.

[29] Plaintiff Picchio International Inc. is a holding company of which Dr. Bellini is the

principal shareholder. Mr. Bellini describes it as the central hub of the Bellini family office.

This said Picchio was never identified during the negotiations.

[30] Following the failure of Mr. Bellini’s effort to secure Kenauk, and particularly Lake

Maholey, the family purchased another large estate.

2.2.2.3 Patrick Pichette

[31] The former CFO of a large multi-national, he owned a home on Lake Papineau.

His interest in the purchase was in preserving the low density around the Lake Papineau

portion of the Kenauk property. He described his interest as 100% conservation, but

wanted to preserve controlled public access to the property, so that others could continue

to enjoy it. The small outfitting and tourist operation might continue but, for long term

viability, he believes that Kenauk should attain a break even position.

[32] Like one of his ultimate partners Domenico Monaco, in the winter of 2012 he had

been approached by a developer, Phil Bourque, who had an exclusive purchase option

and was talking about building 250 houses on Lake Papineau. Mr. Pichette was mortified

as development would destroy the pristine nature of the property. At that point he and Mr.

Harpur made a couple of offers to Oxford that were not accepted.

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[33] He continued to follow the developments around the sale of the property and

became involved again in the early summer of 2013, all the while coping with a heavy

work schedule at his then employer.

2.2.2.4 Doug Harpur

[34] Mr. Harpur was born in Montréal and has been involved in various aspects of agri-

business and forestry since early in his working life. Some of the businesses are operated

in conjunction with his wife and her family. One is a deer farm near the north-eastern limit

of Kenauk that he was interested in expanding with some of the Kenauk land. The family

had a dock on Lake Papineau and enjoyed hiking in Kenauk.

[35] At the outset Mr. Harpur was an advisor to Mr. Pichette, but became a partner as

the project evolved. The partnership was cemented (a hand-shake deal) following a

luncheon at his farm on August 18, 2013, where he agreed to commit $5 million to the

purchase. He was particularly focused on a conservation plan.

2.2.2.5 Michael Wilson

[36] Mr. Wilson is currently a corporate director for whom family values and the

outdoors are very important.

[37] At the time of the Kenauk transaction he was the CEO of Agrium and was very

interested in land conservation having acquired large tracts of land in various areas of

Canada. Some of these have been donated as conservation areas.

[38] George Hasenberger and Mr. Ratsch both approached him about Kenauk in

September 2013, and he eventually met with Mr. Harpur and visited the property. Mr.

Ratsch provided him with the presentation booklet²and informed him of the interest of

others, including Mr. Bich, Mr. Pichette, Dr. Bellini and Mr. Desmarais.

[39] His interest was in a parcel known as Lake Mills, as well as Baie Noire.

2.2.2.6 Domenico Monaco

[40] Mr. Monaco is a Montreal businessman with significant links to Kenauk. His father

was a member of the Seigneury Club³and the family had a home on the property in the

mid-1970’s. He was very sad when the Club was sold, but since then he has been a

regular visitor to Kenauk; sometimes several times per year.

[41] He had discussions with Robert MacDougall, one of Oxford’s brokers in August

2012. Mr. Monaco thought the property would be parcelled and sold, which made him

2

Exhibit P-910.

3

Prior to the beginning of the operations of the Fairmont Chateau Montebello, the building and

surrounding lands were operated as a private club.

500-17-091838-154

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uncomfortable, actually sad, as he described his emotions. On January 2013, he provided

a letter of interest to Mr. MacDougall stating that he was prepared to commit up to $4.5

million toward a potential purchase with like-minded people.⁴

[42] Mr. Pichette was an acquaintance of Mr. Monaco. The latter expressed his interest

in the property to Mr. Pichette early in 2013.Yet, it was only in the fall that Mr. Pichette

solicited his interest in participating in a deal.⁵

2.2.2.7 Herbert Ratsch

[43] Mr. Ratsch is a broker affiliated to Sothebey’s and was retained by Oxford to assist

in the sale of the property. He had taken members of the Bellini family on a helicopter

tour⁶of the property and in subsequent discussions with Mr. Bich informed him of their

interest in the Lake Maholey sector of the property. Mr. Ratsch also informed Mr. Bich of

the interest of Mr. Pichette and Mr. Harpur in the Lake Papineau sector.⁷

[44] He remained one of the vendor’s brokers throughout the discussions leading up to

the purchase by Plaintiffs’ group.

[45] Mr. Bich and the Bellini family may be considered as having been introduced to

the transaction by him. Michael Wilson is another person who he introduced to the

property.

2.2.2.8 Robert MacDougall

[46] He is a real estate broker with Jones Lang Lasalle and was also retained by

Oxford. He describes his role as having a joint mandate with Mr. Ratsch. Mr. Pichette and

Mr. Harpur were introduced to the opportunity by him.

[47] Several others, including Lyme Timber, National Conservancy Canada (NCC), and

Dominic Monaco were introduced to the property and the opportunity by him.

2.2.3 The Discussions

2.2.3.1 Introduction

[48] What were the real interests of the parties to the present dispute? The answer to

this question is important as, in the Court’s view, the actual underlying interests of the

parties, although not always apparent to the other party, were the root cause of their

failure to make an offer together.

4

Exhibit P-94.

Exhibit P-388.

Exhibit P-352.

Exhibit P-60.

5

6

7

500-17-091838-154

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[49] Throughout his testimony Mr. Bich underlined that his overriding interest was not

development. He was also well aware of the conservation goals of Mr. Pichette. But, what

was Mr. Bich’s real interest?

[50] The answer to this question will be important as there is no doubt when considering

the evidence as a whole that the interest of the Pichette group was conservation of the

entire property, even if their initial interest was preserving Lake Papineau.⁸

[51] Despite his knowledge of the goal of the Pichette group, Mr. Bich continued to

question their intentions for Lake Papineau, in addition to proposing scenarios where his

group would obtain potentially important amounts of land on the lake.

[52] The particular land interests of the various protagonists, that the Court had

described, were eventually discussed. However, it took some time to get to this point and

to identify all of the initial players, as this really only began to be somewhat clear on

August 13, 2013, at the offices of Heenan Blaikie.

[53] What happened before is also important as it gives insight into the real thoughts

of the parties.

2.2.3.2 2012 to August 2013

[54] Mr. Bich was initially approached by Mr. Ratsch, who had been the seller’s agent

for the LWE purchase in October 2012. Mr. Ratsch underlined the break-up value of

Kenauk for Mr. Bich following an initial purchase.⁹

[55] Mr. Pichette and Mr. Harpur became interested in the property in 2012, after Mr.

Pichette was approached by Mr. Bourque.

[56] After his and Mr. Harpur’s second aborted offer in 2012 Mr. Pichette “parked” his

interest in Kenauk. Then, in the fall of 2012, he was advised by Mr. MacDougall that

Oxford would start a bidding process for the property. Although they were not partners in

early 2013, Mr. Pichette and Mr. Harpur continued to discuss the property and Mr. Harpur

continued to discuss it with Mr. Bich.

[57] Within a similar timeframe to Mr. Pichette, Mr. Monaco had also been approached

by Mr. Bourque. He was not impressed with the proposal (or it seems the individual) and,

moreover, his vision was to keep the property whole.

[58] Mr. Harpur had also sent an email to Mr. Bich on November 25, 2012, advising

that he wanted to have a discussion with him. Apparently, Mr. Pichette had asked him to

8

Their ultimate partners, Mr. Monaco and Mr. Wilson also firmly believed in conservation. The

partnership with the NCC is also a testament to their belief that the conservation of Kenauk was

important.

Exhibit P-52.

9

500-17-091838-154

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do this. Mr. Harpur and Mr. Bich had met earlier, likely in July 2012, in connection with

Mr. Bich’s deer farming operation and LWE. Meetings took place both at LWE and at Mr.

Harpur’s own farm. This initial discussion focused largely on their perceptions of the value

of the land.

[59] In January 2013 Mr. Ratsch sent Mr. Bich an appraisal report that mentioned the

possibility of 250 lots on Lake Papineau and a value of $145 million for the entire

property.¹⁰The report referred to the “Highest and Best Use” of the land. The economic

value of the lots on Lake Papineau was a recurring reference point for Mr. Bich throughout

the discussions with the Pichette group.

[60] Mr. Rastch, although on Plaintiffs’ witness list, did not testify on the report or his

communications with Mr. Bich. As for Mr. Bich, he never shared the report with the

Pichette Group.

[61] Mr. Bich then inquired with Mr. Harpur on January 19, 2013¹¹if Mr. Pichette would

be interested in selling lots on Lake Papineau, the crown jewel of the property. This was

not the case, as Mr. Harpur informed Mr. Bich that Mr. Pichette wanted the entire lake

and would like to hold on to it.¹²

[62] This did not seem to deter Mr. Bich who continued to see the development

potential, including of numerous lots on Lake Papineau. Having contacted Dr. Bellini on

January 18, following his exchange with Mr. Harpur on that day, Mr. Bich emailed Dr.

Bellini again on January 23, underlining that there were private lakes to sell and lots to

sell on the large lake.¹³He also pitched his friend Mr. Desmarais, suggesting that for a

purchase price of under $50 million the numbers would work.¹⁴Here is the part of the

exchange with Mr. Desmarais, despite Mr. Desmarais having advised Mr. Bich that he did

not want to do a real estate play:

I can explain how I was trying to put this together when I am closer.

It would actually be a structure where we could get the land for free and we would

not need to put more than we discussed.

It is not ready yet though as I want to make certain that the numbers work but

overall.

There is about 110M of asset when broken up into roughly 37 parcels and if the

property can be purchased for under 50 then the numbers work.

10

Exhibit P-83.

Exhibit P-87.

Exhibit D-11.

Exhibit P-92; see also exhibit D-15.

11

12

13

14

Exhibit P-91; see also exhibit D-14.

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[63] This note is perhaps not surprising, as in the Re-amended Originating Application

Mr. Bich confirms his interest in the development potential of the property:

24. Bich knew that Oxford was interested in selling the Property quickly and that

there could be the possibility of economic gain for anybody who would have the

financial strength to purchase and carry the Property;

25. Bich was interested in the Property because of the real estate value that could

be left on the table by Oxford in the context of its "bulk sale" approach, and he

sought more particularly the Western portion of the Property;

[…]

114. From the time Bich became interested in purchasing the Property, he had

carried out a due diligence process to ascertain how the Property could best be

developed, the areas that could be the most marketable, and how to market

them;¹⁵

(The Court’s underlining)

[64] On February 7, Mr. Bich was back in contact with Mr. Harpur, setting out the

difficulties in moving forward if Mr. Pichette wanted the entire lake:

My issue is still that the lake is the land with the most potential for resale value and

based on my calculations worth a bit over ½ the entire property if only developed

with approximately 25 lots no more. There would need to be restrictions on the

lake as I do not want to be part of this at all if there is a possibility of 250 houses

on the Lake.¹⁶

[65] The discussion with the Bellini’s was different. To them, on February 11 Mr. Bich

raised the possibility of the sale of 40 – 100 lots on the property,¹⁷which in his testimony

he acknowledged as meaning 27 to 66 lots on Lake Papineau.

[66] And, there was yet another scenario raised with Mark Smith, an acquaintance and

seemingly an advisor to Mr. Desmarais and Mr. Bich. This time the vision was for 25, 300

acre, lots on Lake Papineau and a total of 55 lots on the property.¹⁸

[67] Then on March 9, in the context of the LWE discussions with Mr. Desmarais,

considered more fully below, Mr. Bich pitched the idea of 50 – 100 house sites of 50 acres

each on Lake Papineau.¹⁹

15

Re-amended Originating Application, November 29, 2016. He also claims loss of developer’s profits in

the application. Further in his deposition of May 11, 2016, he admits that he wanted to recover his

capital by selling lots on the lake; pp. 128 and 135.

Exhibit D-211.

Exhibit D-15.

Exhibit D-259.

16

17

18

19

Exhibit P-133.

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[68] Moreover, although in March Mr. Ratsch had made Mr. Bich aware²⁰of Mr.

Pichette’s concerns around development, even for the 25 lots on Lake Papineau, Mr. Bich

housing ideas were kept quiet and he even asked his partners not to talk about what he

was thinking.²¹However, as these exchanges show, during the period prior to August

2013, within the Bich group, the possibility of development was very much front and

centre.

[69] Through Mr. Ratsch, Mr. Pichette did have some knowledge of the idea to develop

25 lots on Lake Papineau, but had he been fully aware of the Bich group’s idea to sell

numerous lots, it is unlikely that any discussions would have commenced.

[70] Given his limited knowledge of Mr. Bich intentions, during the period leading up to

August 2013, Mr. Pichette was interested in discussing scenarios with Mr. Bich and in the

spring had told Mr. Ratsch that the former could call him. Mr. Bich did not make the call

and the two only met in August.

[71] Yet, curiously, on May 22 Mr. Bich told Mr. Desmarais that they were much further

along with the plan to purchase the property with the “Google guy”.²²

[72] On May 25, Mr. Bich’s potential deal was with “a group of people”,²³even if the

Bellinis had not formally expressed their interest. This only happened on June 5.²⁴Their

vision was for some development and common access to Lake Papineau, but was never

shared with Mr. Pichette.²⁵

[73] Discussions between Mr. Bich and the Bellinis continued during July. Mr. Bich

envisaged the following structure, which he communicated to the Bellinis on July 2:

Acquisition Price and breakdown.

Laurentian up to 10M = 20% (Lot 7, 8, 11, 12, 19)

Your Family up to 10M = 20 % (Lot 1, 2, 3, 4, 5)

Pichette up to 30M = 60% (they would get lots D1 D2, P1, P2, P3, P4, P5, P6, P7,

and 20)

Lot 6 would be under common ownership entire homeowners association

20

Exhibit D-364.

Exhibit D-191.

Exhibit D-192.

Exhibit P-167.

21

22

23

24

Exhibit P-175.

25

Mr. Pichette described Mr. Bich as being very secretive about who he was working with throughout the

process. Mr. Harpur likened the dealings to serving the tennis ball and not getting it returned.

500-17-091838-154

Lot 9, 10, 13, 14, 15, 16, 17 and 18 would be Your family and Laurentian only so

13

that we can sell

If we sell these lots with an approximate target of $12,500,000 sales then what we

keep would have cost us 3,750,000 which is a really good deal.²⁶

[74] Mr. Pichette and Mr. Harpur were of course unaware of their contribution, as this

proposal was not communicated to them.

[75] Following this, on July 19, the Bellinis communicated another formal document,

prepared by Roberto Bellini, confirming their agreement to move forward with the

purchase and the sought after financial and other terms. The Bellinis’ financial

contribution was $10 million on a $50 million purchase price. Part of the proposal was

access to Lake Papineau and a sharing of lot 20, which was also part of the land coveted

by Mr. Pichette.²⁷For the Bellinis, however, it was the Lake Maholey portion of the

property that was important. This exchange was not shared with the Pichette group,

despite its interest in preserving Lake Papineau and the contiguous lots, including lot 20.

[76] The subsequent discussions between the Bellinis and Mr. Bich were verbal or by

email. The terms and conditions of the July 19 document were not revised in writing. Mr.

Bich represented the Bellinis’ interests to the Pichette group throughout the process,

during which Mr. Bellini remained in agreement with a 60/40 split on capital.

[77] Finally, around the same time it seems that Mr. Bich may have been telling Mr.

Ratsch that there was a meeting in the works with Mr. Pichette and Mr. Harpur, although

they clearly did not know about it!²⁸It took Mtre Heenan to set up that meeting.

2.2.3.3 August 13 to the Bid Date

[78] The late Roy Heenan facilitated a meeting at the offices of Heenan Blaikie on

August 13 between the Pichette group and the Bich group.

[79] The meeting was attended by Mtre Heenan, his partner Bruce McNiven, who was

Mr. Bich lawyer, Mr. Bich, Mr. Harpur, Mr. Pichette and Gram Ramshaw, an LWE

employee. Although the proof lacks clarity, the Court will try to resume what was

discussed.

[80] The division lines, meaning the parts of the property that interested each group

were discussed, but seemingly at a very high level. As to whether the actual financial

contribution of each group (or group member) was discussed at this meeting the parties

26

Exhibit P-185.

27

Exhibit D-196; an earlier proposal spoke of a $5 million contribution to a 44.5 million offer, exhibit P-

175.

Exhibit P-197.

28

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have different versions. Maps may have been looked at, but no lines were physically

drawn on the maps.

[81] According to Mr. Bich, his group expressed a willingness to contribute to a level of

40% of the purchase price, based on the assumption of a $50 million offer. It viewed the

Lake Papineau area that the Pichette group wanted as being more valuable. This was the

basis for the initial 60/40 financial split that the documentary evidence raises on numerous

occasions. For Mr. Bich, this 60/40 proposal he claims to have made constituted an offer

to the Pichette group. According to Mr. Bich, it was insistent on a 50% financial

contribution from the Bich group.

[82] It was clear to Mr. Bich that Mr. Pichette’s interest in Lake Papineau was

conservation.

[83] Both Mr. Harpur’s and Mr. Pichette’s recollections of the scope of the meeting differ

from Mr. Bich’s. They describe the meeting as a meet and greet. There was also an

element of trying to improve the relationship between Mr. Harpur and Mr. Bich who were

far from being on the same page.

[84] Mr. Harpur recalls that the focus of the meeting was around the value of the land.

For him there was no discussion of capital contributions or the division of the property.

Mr. Pichette shares Mr. Harpur’s recollection of the meeting; it was high level, with no

discussion of respective contributions, or of a role for NCC, and certainly no discussion

of a 60/40 split. He does recall some discussion of the areas that each group was primarily

interested in. In addition, he left the meeting thinking that Mr. Bich had the financial

backing to purchase the entire property on its own.

[85] On August 16 Mr. Bich set out his vision that there should be clear areas defined

for all of the investors.²⁹

[86] The discussions continued. Mr. Bich wanted to bridge the gap between the land

each group coveted and, more particularly the percentage of capital that he believed that

each group was prepared to contribute. The issue of timber rights was raised and Mr.

Bich made it clear that he did not wish to sell them.

[87] On August 19, 2013 Mr. Harpur sent a map (Pichette map #1) showing the land

around Lake Papineau that he and Mr. Pichette wanted exclusively, still looking for a

50/50 split on the capital contribution, according to Mr. Bich.³⁰Mr. Pichette disputes this

characterisation, as he was working in dollar amounts and not percentages. Moreover,

the email with the map does not refer to any split.

29

Exhibit P-245.

Exhibit P-247; the map is exhibit D-94.

30

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15

[88] Mr. Harpur put together a very preliminary joint venture agreement³¹on the same

day. It was really a document that set out issues that would need to be discussed in the

context of any eventual agreement with Mr. Bich.

[89] The response of Mr. Bich on August 19 included the following: “I think we would

be open to a 50/50 split in the acquisition but in this case we would want 50% across all

assets of the property…. Which would mean that we each own 50% of the shoreline of

Papineau, Lakes and forest land.”³²This was not acceptable to Mr. Harpur, as the Bich

group would get 50% of Lake Papineau. It was certainly not a real follow-up to the ideas

that Mr. Harpur had put forward earlier in the day. Mr. Pichette was very surprised as the

proposal was a long way from the map that his group had just sent. Moreover, up to that

time Mr. Bich had not shown any interest in Lake Papineau.

[90] Mr. Bich’s next proposal on August 20 was that they all be partners at 25% each

over the entire territory and set out what parcels would be attributed to each partner.³³

This was also the first time that the Bellini interest had been disclosed in writing³⁴and

again the idea was a far cry from Pichette map #1. The proposal also referred to: “Mr.

Pichette's idea that we sell enough land to get all of our capital back”, a notion that Mr.

Pichette categorically denies putting forward as being totally contrary to his vision for the

property. This Bich proposal did not move forward. In fact, Mr. Pichette was disappointed

and surprised by it as he had understood that Mr. Bich was not interested in Lake

Papineau. However, the discussions continued.

[91] At this juncture Mr. Bich also began³⁵exploring the option of seeking other

investors with his partners. He was frustrated as he did not believe that Mr. Harpur was

making a serious effort to address the differences between the two groups. This said, on

August 21, 2013, Mr. Harpur communicated that he believed that the parties were not far

off.³⁶He had reviewed the values assigned to the lakes by Mr. Bich and believed that

they were largely acceptable.

[92] Mr. Bich was not so sure that the groups might be close as he was again reaching

out to Mark Smith to find investors.³⁷

[93] A call occurred on August 22 between Mr. Bich, Mr. Harpur and Mr. Pichette, but

there was still no full meeting of the minds. In addition the recollection of the participants

differs.

31

Exhibit P-248.

Exhibit P-269.

32

33

Exhibit P-277; also part of D-19.

There is some disagreement as to whether it was raised at the Heenan Blaikie meeting.

Exhibit D-36.

Exhibit P-287.

34

35

36

37

Exhibit P-281.

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16

[94] For Mr. Bich an exclusivity agreement was entered into, without a term. His

understanding was that the two groups agreed that they would negotiate exclusively with

one another in relation to the land that each wanted. Mr. Bich could not speak to anyone

regarding the Papineau area and Mr. Harpur could not speak to anyone regarding either

the Western portion or Lake Maholey. There was to be no discussion with timber interests

or developers. The intent was to make a joint bid if the terms could be agreed upon.

[95] Mr. Bich also testified that there was still a gap in the respective capital

contributions, and denied that there was any discussion of same during the call.

[96] Mr. Harpur stated that a frustrated Mr. Pichette agreed to increase the Pichette

contribution to $25 million for the entirety of Lake Papineau. The Bich group would pay

$20 million for the rest. Mr. Harpur denies any discussion of exclusivity or of the Bich

group wanting two lots on Lake Papineau.

[97] Mr. Pichette also presented a very different perspective on the call. Following the

communication of his map #1, he and Mr. Harpur had received two proposals from Mr.

Bich that bore no resemblance to it. His goal was to bring the parties back to Pichette

map #1 and to nail down an amount that he and Mr. Harpur were prepared to put into the

transaction for the land they wanted. Mr. Pichette confirms that it was during this call that

he agreed to contribute an extra $5 million for the entirety of Lake Papineau, to the chagrin

of Mr. Harpur.

[98] On the financial aspect, Mr. Pichette understood that Mr. Bich personally was fine

with the newly proposed capital split, but he still had to discuss it with his partners, whose

identity was still unclear, although the Bellini name was known, as was Mr. Desmarais’

association with LWE.

[99] As to exclusivity, the basic issues of the capital contributions and the boundaries

would have to be ironed out before there could be discussion of exclusivity. He described

the discussion on August 22 as the first inning of a much longer process and that the

parties were nowhere close to the point where exclusivity might have been agreed to. He

did allow, however that while they were waiting for Mr. Bich to revert with the position of

his partners that his group had a moral obligation not to seek out other investors.³⁸

[100] No document was produced setting out an undertaking not to negotiate with other

interested parties. Mr. Bich did not mention exclusivity in his written communications to

his co-investors Mr. Desmarais and Mr. Bellini on the same day.³⁹With the exclusivity

agreement supposedly in place, Mr. Bich reported that he had made good progress on a

deal with Mr. Pichette, but wanted one more concession, which Mr. Bellini understood to

38

See exhibit P-305 as an indication of Mr. Pichette’s understanding that Mr. Bich had to consult with his

partners.

Exhibits D-22 and D-23.

39

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17

be lots on Lake Papineau. The “concession” had not been mentioned during the August

22 call.

[101] Nor was there any discussion of exclusivity in his email to Mr. Desmarais the

following day. Tellingly, there was discussion of the $25 million that the Pichette group

would be prepared to pay.⁴⁰

[102] Following this call Mr. Bich wrote to Messrs. Pichette and Harpur at 3:08 p.m. on

August 23:

I hope you agree that yesterday's call was very constructive. Provided we can get

clarity on a few points that I think can be resolved, there is clearly an opportunity

here for our two groups to submit an offer between us that is well valued and also,

as between us, fairly valued.

Working together is also the best approach at this stage, since we each have the

capacity to come to timely decisions quickly and we share the same underlying

philosophy about the property. That said, if you feel the need to seek other

participants in your group, I have no objection if it helps you in your funding.

But it seems to me there is a difference between that and speaking to others at

this stage whose interests may not be as aligned as ours, such as timber

companies or developers.

I also think at this stage it is counter-productive to look for other players that might

have an interest in one or other of our respective portions of the whole. As I have

said before, our own numbers have been calculated on what we think is a fair

balance of values on the portions of the property we would have versus those that

you would have. Bringing in a third party who might have an interest in a part of

your portion or ours will skew the equation.

Based on good faith, we are not pursuing discussions with other parties (such as

developers) who could be interested in those parts of the property that are not part

of our own plans, since we think that your group and ours represent the best future

for the property in its integrity

I suggest that we maintain focus now on the last details of the property division

between our two groups, along the lines we have been discussing.

Please let me know when we can convene again with the hope of finalizing to then

allow us to map out next steps of an offer.⁴¹

(The Court’s underlining.)

40

Exhibit D-24.

Exhibit P-305.

41

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18

[103] Mr. Harpur agreed with large portions of the email, including working together, but

did not agree that his group should not speak to timber companies.

[104] Mr. Harpur followed this up by verifying whether it was okay to speak to Mr.

McQuat, a contact with whom he had previously discussed the property. He referred to a

tentative agreement. This communication is also important, as it refers to an overspend

of $5 million, which gives credence to his and Mr. Pichette’s version of the August 22

call.⁴²

[105] Later in the day, Mr. Pichette sent an email confirming that he agreed that they

should work together. His email also confirmed his understanding that Mr. Bich had to

discuss the matter with his partners and revert.⁴³Following this he expected Mr. Harpur

and Mr. Bich to work together on the framework of an agreement.

[106] Mr. Bich did not inform the brokers of an exclusivity agreement either. In fact on

August 27,⁴⁴and again in September 4,⁴⁵Mr. MacDougall reported to Oxford that he was

expecting an independent offer from the Bich group. This was based on information

received from Mr. Ratsch, who was disappointed to learn later in the process that the Bich

group would not make an independent bid.⁴⁶

[107] As for Mr. Bellini, he indicated that he was made aware of the exclusivity

agreement during a call with Mr. Bich on August 26. He did not ask for written confirmation

as he trusted Mr. Bich. He cannot recall Mr. Bich using the words “agreement in principle”

or “tentative agreement”. On the other hand on August 28 he suggested shopping around

with others,⁴⁷although he stated that he did not do so. He was concerned that the 60/40

capital split was still on the table. Mr. Bich felt that he would prefer to work with the

Pichette group, although developers were likely interested.

[108] The call was followed up by an email to Mr. Desmarais where Mr. Bich indicated

that there is only one outstanding issue with Mr. Pichette.⁴⁸Mr. Bich stated that this was

in relation to the capital contribution of each party.

[109] But, it was not only a potential Kenauk deal and exclusivity that was preoccupying

Mr. Bich. So was LWE. On August 25 he prepared a draft letter to pitch memberships for

LWE where he said: “We are looking at being part of a group to buy the Fairmont Kenauk

property near Montebello”.⁴⁹The Court will return to LWE later.

42

Exhibit P-303.

Exhibit P-305.

Exhibit P-329.

Exhibit P-367.

Exhibit P-585.

Exhibit P-335.

Exhibit P-291.

Exhibit P-309.

43

44

45

46

47

48

49

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19

[110] On August 27, 2013 Mr. Bich wrote to Messrs. Pichette and Harpur suggesting yet

another approach.⁵⁰The idea this time was for Messrs. Bich/Desmarais and Bellini to

increase their contribution to 44% on a $45 million offer. This, in fact still represented the

initial $20 million that they had always been prepared to commit on a 60/40 $50 million

offer, although Mr. Bich maintains that he always spoke in percentages, not amounts. Be

that as it may, during the course of the discussions, he and Mr. Desmarais were never

prepared to contribute more than $10 million between them.

[111] Mr. Bich drew a new map,⁵¹but added that his group wanted two buildable lots on

Lake Papineau. Some parcels of land might be sold to recover part of the investment.

The new map was also quite different from Pichette map #1, Mr. Bich wanting to obtain

some of the land that was coveted by Mr. Pichette.

[112] Mr. Harpur was very surprised to receive this as he was waiting for them to accept

Pichette map #1 and to commit to a $20 million contribution on a $45 million offer. For

him this new proposal negated any tentative agreement that had been made on August

22, including any exclusivity agreement, although he does not believe that one had been

agreed to. He viewed this new proposal as a land grab, particularly given a potential value

of $5 million for each lot on Lake Papineau.⁵²

[113] Mr. Pichette had the same sentiment. In addition to the two lots on Lake Papineau,

the new map took large parts away from Pichette map #1. If, for arguments sake, these

had a value of $1 million, the Bich group was effectively getting the portion that had been

discussed with that map for $9 million. Mr. Pichette was deflated, as the discussions were

back to square one, save for the apparent agreement of the Bich group on a financial

contribution of $20 million on a $45 million offer.

[114] The wording of this new approach also gives pause. Mr. Bich talks about the

“moving parts of a potential deal” and of having reviewed them with “the other parties for

whom I speak”. In addition it refers to his hope that they could proceed to a joint offer.

[115] In addition, on the same day, Mr. Bich reached out to Dr. Bellini to try to pique his

interest in the hunting venture. It seems that he was still seeking financing.⁵³

[116] The next day Mr. Harpur nonetheless sent a new proposal for the property lines

(Pichette map #2).⁵⁴Essentially two additional lakes were carved out to give more value

to the Bich group’s portion of the property. Perhaps curiously, Mr. Bich did not forward

this new map to Mr. Bellini or Mr. Desmarais. In addition, Mr. Bich stated that he

understood that a 50/50 capital split was still on the table, which does not appear to have

been the case, given the August 22 phone call.

50

Exhibit P-320.

Part of exhibit P-320.

51

52

In paragraph 8 of exhibit P-359, Mr. Bich attributed this value to lots on Lake Papineau.

Exhibit P-323.

Exhibit P-327.

53

54

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20

[117] Around this time the possible participation of Lyme Timber also appears to have

been considered by the Pichette group,⁵⁵its representative having done a site visit on

August 29. They were introduced by Mr. MacDougall via his contact at the NCC, Joel

Bonin. Mr. Bich believed that Lyme was primarily interested in the same area as himself

and Mr. Desmarais, although Lyme expressed the possibility of making an independent

bid.⁵⁶However, Mr. Bich was not aware of their interest until after the closing of the deal

when it was reported in the press.

[118] On August 29 there was still no deal on the two building lots on Lake Papineau for

the Bich group. Mr. Pichette wanted to agree on boundary issues first and then discuss

the cost matters.⁵⁷He was hoping that Mr. Harpur and Mr. Pichette would make progress

on those issues while he was on a very busy travel schedule.⁵⁸

[119] It is also fair to say that at this point the Pichette group was less inclined to continue

discussions with Mr. Bich, as it appeared that Lyme’s participation might help bridge the

financial gap between the expected offer price and the capital that it had available.⁵⁹Mr.

Harpur was also tired of working with Mr. Bich. He added that even if he finally did a deal

with Mr. Bich, there might still be a place for Lyme.

[120] Nor was there agreement on August 31 and Mr. Bich felt the need to send an email

reviewing the discussion since the outset.⁶⁰He still believed that their negotiations were

exclusive at that time. Mr. Pichette viewed this email as Mr. Bich “cramming the August

27 proposal down his throat”. For him the email gave the impression that Mr. Bich was

interested in development (he was still insisting on two lots on Lake Papineau), or, at the

least, adding value. This was not the mindset of the Pichette group.

[121] The Pichette group was worried that it was being played by Mr. Bich. Yet, his group

made yet another overture to Mr. Bich on September 3:

I spoke to Patrick briefly about your email. We are prepared to go with a 60/40 split

IE on a $45,000,000 offer $27,000,000 would be from us and $18,000,000 would

be from you. We would follow the boundary that Patrick identified. I might point out

that this could be considered as a conservation servitude line and the actual

ownership line might be different. Patrick is out of contact for the next 7-8 days and

will confirm this arrangement on his return.⁶¹

[122] For Mr. Bich this was acceptable as long as his line was for ownership purposes.⁶²

There would be no building between his ownership line and Mr. Pichette’s conservation

55

Exhibit P-346.

Exhibit P-481.

Exhibit P-342.

Exhibit D-412.

Exhibit P-358.

Exhibit P-359.

Exhibit P-362.

Exhibit D-382.

56

57

58

59

60

61

62

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21

line, which was slightly to the west of his proposed line. He told the Court that he advised

Mr. Harpur of his agreement with this concept during a phone call on that date and that

Mr. Harpur said that they were good to go, but reiterated that Mr. Pichette was travelling.

[123] For Mr. Bich, this 60/40 split was the basis for what he believed to be the

agreement between the parties.⁶³His understanding of the indication that Mr. Pichette

would confirm the arrangement upon his return is that only the issue of the conservation

line had to be confirmed, not the 60/40 split of the purchase price.

[124] Mr. Harpur denies any phone call on September 3.

[125] His understanding was that the entire arrangement was subject to Mr. Pichette’s

approval. He underlined that the email also referred to specific fixed dollar amounts. He

also assumed that Mr. Bich would need the approval of his partners. He asked Mr. Bich

for a terms sheet that he never received.

[126] Mr. Pichette was aware that Mr. Harpur would move ahead with this offer and had

authorized him to add $2 million to the group’s capital contribution to avoid losing Lake

Papineau. The offer was contingent on Bich’s agreement with Pichette Map #2. If Mr.

Bich’s partners agreed, he wanted to see progress on an LOI between the two groups.

[127] Mr. Bich communicated his understanding of the September 3 exchanges to Mr.

Bellini verbally. He never showed Mr. Bellini the email of September 3 from Mr. Harpur or

the map prepared by Mr. Pichette with his proposed new lines. Apparently, dollar figures

were not discussed.

[128] He also sent an email to Mr. Harpur in the minutes that followed Mr. Harpur’s

proposal, the text of which reads:

Thanks for getting back to me.

How many house sites would you want to conserve for this?

So that I have all of the information to give to the others.⁶⁴

[129] Mr. Harpur did not understand why Mr. Bich was still asking about building lots on

Lake Papineau. His answer was vague, advising that the question will evolve with the

conservation plan.⁶⁵

[130] Mr. Bich explained that he was curious and that the Bellinis were asking.

63

In an email dated October 8, 2013, he refers to a gentleman’s agreement, without specifying when it

was agreed to.

Exhibit P-364.

Exhibit P-381.

64

65

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22

[131] The supposed conclusion of an agreement on September 3 was not shared with

Mr. MacDougall. It seems unlikely that it was shared with Mr. Ratsch either, as he did not

react to the report from Mr. MacDougall to Oxford on September 16 that Mr. Harpur was

prepared to do the deal with Lyme.⁶⁶Mr. Harpur calls that report premature, as the deal

with Lyme was only finalized on September 26. (On September 26, he was still awaiting

a formal response from Mr. Bich on the September 3 proposal.)

[132] Then, on September 13, there was another email to Mr. Harpur where Mr. Bich

stated:

I still need to sit down with our parties to finalize something.

Have you figured on how many house sites you would want to conserve on your

portion of land?⁶⁷

[133] It is perhaps significant that this was the first communication since September 3.

[134] Mr. Harpur did not answer; he no longer wanted to do business with Mr. Bich. In

addition, Mr. Pichette was travelling, had a heavy work schedule and was difficult to

contact. When informed of the September 13 email, Mr. Pichette did not see any progress

following the communication of September 3.

[135] At the same time Mr. Bich and his attorney were meeting independently with

Oxford’s in-house counsel to obtain independent information on the bid process.⁶⁸

[136] He was having internal conversations with his partners, including Mr. Bellini, who

had some questions about building density, for him still an unresolved issue on

September 13.⁶⁹For Mr. Bellini the common understanding was that any development

would be low density, but the meaning of low density for him was not the same

understanding as the Pichette group had. They would have considered very minimal

development as a last resort.

[137] Mr. Bich was also trying to keep Mr. Desmarais in the loop. On September 13, he

emailed him pointing out that “We are very close to the time when we need to make

decisions”.⁷⁰

[138] And, he said this in an email of September 14:

66

Exhibit P-441.

Exhibit P-406.

Exhibit P-441.

Exhibit P-409.

67

68

69

70

Exhibit P-410.

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Spoke to Oxford yesterday and most of my small issues with the property have

23

been cleared. The question regardless is will our bid (if we make one) be the most

attractive. Would have liked to have more time. ⁷¹

[139] On September 17 he was looking for clear direction from Dr. Bellini before moving

forward.⁷²And, on September 20, he confided to Mr. Desmarais that they might not move

forward if there are insufficient partners for the new hunting venture.⁷³The latter wanted

a commitment from Dr. Bellini on the hunting venture to move forward, going so far as to

say that if Dr. Bellini did not commit: “we are not in”.⁷⁴He was obviously referring to the

Kenauk purchase, as he referred to Dr. Bellini losing his deal.

[140] Then, on September 23 Mr. Bich asked Mr. Desmarais if he had spoken to Dr.

Bellini to see if he was in, reiterating that they would only move forward if there were more

owners in LWE.⁷⁵

[141] Even so, Mr. Bich maintains that there was an agreement to participate in a 60/40

bid. Yet, it appears that the alleged agreement was falling apart. Mr. Bich acknowledged

the need for a back-up plan⁷⁶and, apparently, the Bellini’s were interested in going in

50/50 with Mr. Bich and Mr. Desmarais.

[142] On September 15, Mr. Bich tried to contact Mr. Harpur by email about how to put

a partnership agreement together and received no response.⁷⁷Mr. Harpur admits that he

was trying to stall by this point. He was also talking to lawyers from Stikeman Elliott about

ways to move forward without telling Mr. Bich.⁷⁸He was looking for ways to do the deal

without Mr. Bich and working with a timber company was a possibility. He also needed to

ensure that Mr. Pichette was on the same page. The latter was very busy and this added

to the delay in getting back to Mr. Bich.

[143] There were discussions with Ontario Log at this point, albeit of a short duration.

[144] Mr. Harpur spoke to Mr. Bich on September 19 and advised him that the 60/40

split was off the table as the Pichette group could not afford it. Mr. Harpur also asked if

the Bich group would accept only 10,000 acres, a non-starter for them.

[145] Mr. Bich spoke to Mr. Bellini and refers to going backwards with the other parties.⁷⁹

Despite this, Mr. Bellini believes that the exclusivity agreement was still in place.

71

Exhibit D-145.

Exhibit P-457.

Exhibit P-473.

Exhibit D-149.

Exhibit D-283.

Exhibit P-510.

Exhibit P-421.

Exhibit P-427a.

72

73

74

75

76

77

78

79

Exhibit P-467.

500-17-091838-154

24

[146] At this time, however, Mr. Harpur was working on a deal with other investors,

including Lyme, Dominic Monaco and Michael Wilson.⁸⁰He did not advise Mr. Bich of

these discussions.

[147] Finally, during a call on September 22, Messrs. Pichette and Harpur advised Mr.

Bich that they were not prepared to work with him anymore and that he should make his

own offer. That was the last time Mr. Harpur spoke to Mr. Bich. It was Mr. Pichette that

lead the call, as Mr. Harpur was still doing some deer business with LWE.

[148] Mr. Bich and Mr. Pichette disagree about what was said around the possibility of

land for Mr. Bich during this call. Mr. Pichette indicated that there might be an option for

Mr. Bich to buy a parcel from his group if it was successful; this was before the

composition of the Pichette group was fully firmed-up. There was certainly no promise

and it was made clear that Mr. Pichette did not want to sell other land to any of Mr. Bich’s

partners. There was no discussion of Lake Maholey during this conversation.

[149] From the conversation, Mr. Bich understood that Mr. Pichette would bid with some

friends and a bank loan and that it would not be a problem for him to get the land that he

wanted in the Western sector of the property. However, Lake Maholey would not go to

the Bellini family. Mr. Bich was upset and felt that Mr. Harpur had not been honest. For

the future, he wanted to deal solely with Mr. Pichette.⁸¹

[150] Later in the day Mr. Pichette confirmed that his group would keep most of the land

and might do a carve-out for Mr. Bich.⁸²

[151] As to the Pichette’s group, in early September, Michael Wilson, was introduced to

it by Mr. Ratsch. Following a call with Doug Harpur on September 12 he confirmed his

interest if he was included upfront and the price was reasonable. He told Mr. Harpur the

portion that he was interested in and that he was prepared to make a financial

commitment of between 5 and 10 million dollars. Mr. Wilson described the call as “high-

level”.

[152] On September 25 Mr. Wilson visited the property with Mr. Harpur. He also wanted

to get a feel for what kind of a partner Mr. Harpur would be so he brought his 5 year old

granddaughter along for the visit. It was at this juncture that he felt comfortable enough

to be part of the acquisition group with Mr. Harpur and Mr. Pichette, subject to the right

terms and conditions.

[153] Mr. Pichette also approached Mr. Monaco in mid-September. He and his wife met

Mr. and Mrs. Harpur for dinner. The rapport was good and discussions moved forward

80

Exhibit P-492.

Exhibit P-502.

Exhibit P-496.

81

82

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and a further meeting took place on September 19, this time with a land-use planner, Mr.

Randall Arendt. Mr. Monaco was very pleased with the vision for the property.

[154] Mr. Monaco did not need to visit. He knew the property well.

[155] Mr. Wilson did not know Mr. Bich. Nor did Mr. Monaco, but he was aware of his

plan to fence off a portion of the property for commercial deer hunting and was unhappy

about this potential use of the land. Fencing is also a non-starter for the NCC.

[156] Mr. Wilson and Mr. Monaco only became aware of Lyme’s role very late in the

process.⁸³Both Mr. Wilson and Mr. Monaco described it as being to provide a bridge in

the capital needed to close the transaction. They understood that the NCC would

ultimately have an important role in the management of the Kenauk lands, including the

parcel acquired by Lyme, which the NCC had an option on.⁸⁴

[157] As to Lyme’s (and the NCC’s) participation, Mr. Harpur pursued the discussions in

September, more seriously after the Pichette group suggested that the Bich group make

its own offer. The mechanics of Lyme’s participation were only finalized after the bid

deadline and the offer to Oxford.

[158] Mr. Bich did not give up and continued to have discussions with Mr. Pichette, but

there was no meeting of the minds. On September 24 Mr. Pichette went to the point of

asking Mr. Bich for two options of what his group wanted, one with Lake Maholey and

one without. He did not provide an option without Lake Maholey, as this was the area that

the Bellinis wanted.⁸⁵

[159] Mr. Bich’s group did not put its own bid together. There had been a call on

September 23 with the principals of the Bellini family where it indicated its preparedness

to put up $25 million, but the Bich/Desmarais’ contribution remained at $10 million.

[160] On September 27 the Bich group submitted a letter of interest that refers to the

interest of LWE and other associates.⁸⁶It wanted to position itself for a possible second

round of bidding:

We understand that the Vendor has advised that, at this time, it will only entertain

offers under its bid process that it receives prior to 4 p.m. Eastern Time today,

September 27, 2013.

The undersigned and the other members of its group remain very interested in the

Property, and believe that we would be well placed to complete an acquisition that,

from every perspective, including the Vendor's interests, is attractive as to our

83

Exhibit P-492.

84

It is also worth noting that Mr. Monaco and Mr. Wilson only became aware of each other’s participation

a few days before the bid deadline.

Exhibit P-523.

Exhibit D-386.

85

86

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demonstrated capacity to honour the financial commitments, and as to price,

26

conditions, and proposed future use of this extraordinarily important conservation

and recreational area.

The purpose of this letter is to advise you that in light of its arrangements with other

possible bidders in the current sale process undertaken by the Vendor, it does not

propose to submit an offer prior to the bid deadline.

The undersigned may, however, submit an offer at a subsequent date in the event

that for whatever reason, the arrangements with other possible bidders are not

completed, or, if, for whatever reason, such possible bidders withdraw from the

sale process.

[161] Even with this letter having been sent, Mr. Bich reached out again to Mr. Pichette

the next day.⁸⁷This prompted a call from the latter where he underlined (amongst other

things) that with his group’s offer having been made his partners would have to authorize

him to speak to Mr. Bich. Mr. Pichette underlined the role of the NCC and how it might

affect potential dealings with Mr. Bich.

[162] On September 29 there was further discussion of a post bid offer, but Mr. Bich and

Mr. Desmarais were still only prepared to commit $10 million between them and Mr. Bich

felt that the Bellini’s would only contribute up to $25 million.⁸⁸

[163] On September 30 the Bich group submitted a more formal letter of intent at a price

of $50 million, although, it gave little information on the financing of the offer.⁸⁹

[164] This was to no avail, as in early October the brokers advised Mr. Bich that Oxford

would be working with one bidder. Mr. Bich reached out to Mr. Pichette again trying to

salvage his part of the property.⁹⁰

[165] Mr. Bich sent an email to Mr. Pichette on October 1 looking for feedback and

underlining that his group had the capital to buy the whole property.⁹¹

[166] However, to use the words of Mr. Bellini, on October 2, the Bich group was still

scrambling for capital and even with an anticipated $5 million from an acquaintance it was

$10 million short.⁹²This is also confirmed by Mr. Bich’s email of the same day where he

pitched a development scenario to Mr. Bellini, almost exactly like the one put forward on

July 2, 2013, “so that we can find capital to come in with us”.⁹³

87

Exhibit P-593.

88

Exhibit P-597; see also exhibit D-50, an email exchange the next day.

Exhibit P-613.

Exhibit P-661.

Exhibit P-631.

Exhibit P-651; see also exhibit D-363, where Mr. Bellini wants to approach a developer in the UK.

Exhibit D-186.

89

90

91

92

93

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27

[167] The Pichette group was not scrambling, having submitted a formal letter of intent

with an offer to purchase for $47.5 million on September 27, 2013. It was amended and

a new letter was submitted on October 2, with an offer price of $50,500,000.⁹⁴

[168] The objectives of the Pichette group were also clearly set out in its introduction

letter:

We have had many conversations with many different individuals over the last

several months about possible partnership arrangements and have settled on this

particular group for the primary reason that we are all committed to the long term

conservation of this unique property and have the financial capability and expertise

to achieve this Although many other individuals of means have expressed an

interest in working with us the members of this group are unique in sharing a

common view as to the future of this property remaining substantially the same as

it is now and securing that future by entering into an enduring relationship with the

Nature Conservancy Canada NCC as a partner In order to implement a solid

conservation plan we have retained the services of Mr. Randall Arendt http www.

Greenerprospects.com an internationally acclaimed land use planner.

He will coordinate and consolidate the individual aspirations of the partners and

NCC into a comprehensive land use plan that will result in what would appear to

be the largest private land conservation project in Canadian history Your

contribution by selecting us as the preferred purchaser would of course be

recognized I have known and worked with Mr. Arendt for twenty years and when

the proposed partners agreed to work together I did not hesitate to invite Mr. Arendt

to spend four days on the property last week We all look forward to working

together on this project.⁹⁵

[169] The conservation bent of the group remains in place today.

2.2.3.4 LWE

[170] Perhaps LWE was the elephant in the room. Even prior to the Bich group becoming

serious about part of Kenauk, in December 2012 Mr. Bich was pitching Mr. Desmarais

with an idea of turning it into a private equity club with 13 members at $2 million each,

which would have allowed them to recoup their investment, make some money on it and

finance the purchase of some new land and the building of infrastructure. Notably, he

pointed out to Mr. Desmarais that “[N]either of us are really wanting to put a bunch more

money into this venture…”⁹⁶

[171] The discussion continued in January:

Membership

94

Exhibit D-45; see also exhibit D-46.

Exhibit P-579a.

Exhibit P-76.

95

96

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12 equity memberships x 2.5M = 30M

28

15M would be to buy our company so we would get all our loans back and

approximately double our equity

15M for new land at Kenauk, fencing, high end lodge and other improvements:

guide quarters, managers house, shop, butcher facility, equipment etc.

[172] The concept evolved, but it became clear that Mr. Desmarais continued to want

members for the hunting venture at $5 million each to recoup some of the investment that

he and Mr. Bich had made in LWE and to use some of the money for the Kenauk

purchase. On February 1 he went as far as saying that he did not want Mr. Bich to acquire

the land until he found the required members as he could not afford to put up the money

needed for the land.⁹⁷

[173] Another element of Mr. Bich’s February 1 discourse around LWE, but in respect of

the land purchase, bears mention:

As for the land, I have different ideas and need to speak to the other people

interested to see if they agree.

I would obviously never do anything without discussing it with you.⁹⁸

(The Court’s underlining)

[174] The discussion around members continued. On July 7 Mr. Bich suggested that

they move forward with three. Mr. Desmarais wanted four.⁹⁹

[175] Mr. Bich, clearly charged with finding members, had no success. The search for

members or a club concept¹⁰⁰continued to be a recurring part of the discussion between

Mr. Desmarais and Mr. Bich throughout the relevant time period.¹⁰¹

[176] It also seems that Mr. Bich and Mr. Desmarais viewed this scenario as a way of

potentially financing the purchase of the land that they wanted, without the need to invest

capital of their own. At the very least, this might have been a way for each to limit their

capital contribution to $5 million, a number that they never deviated from.

[177] The Bich group’s idea of financing the project in this way was not disclosed to the

Pichette group at any time during their discussions.

97

Exhibit P-98.

Ibid.

Exhibit P-191.

Exhibit D-327.

98

99

100

101

Exhibits D-14, D-263, P-97, P-170 and P-591 are examples.

500-17-091838-154

29

[178] Nor was this element of the Bich/Desmarais partnership shared with the Bellini

family. Mr. Bellini never understood that the Bich/Desmarais contribution to the purchase

was contingent on LWE securing hunting memberships.

[179] In fact, as of September 28 Mr. Desmarais had found two members at $5 million

each, which apparently might have allowed the Bich group to make an offer if there was

a second round of bidding.¹⁰²But, as we have seen, there was no second round.

2.3 Legal principles

[180] In this most important part of the legal syllogism proposed by Plaintiffs, the

principals of contract will need to be applied to determine both whether there was an

exclusivity agreement or an agreement to make a joint bid.

[181] The basic article in the analysis of both agreements is article 1385 C.C.Q.:

1385. A contract is formed by the sole 1385. Le contrat se forme par le seul

exchange of consents between persons échange de consentement entre des

having capacity to contract, unless, in personnes capables de contracter, à moins

addition, the law requires a particular form que la loi n’exige, en outre, le respect d’une

to be respected as a necessary condition forme particulière comme condition

of its formation, or unless the parties nécessaire à sa formation, ou que les

subject the formation of the contract to a parties n’assujettissent la formation du

solemn form.

contrat à une forme solennelle.

It is also of the essence of a contract that Il est aussi de son essence qu’il ait une

it have a cause and an object. cause et un objet.

[182] Plaintiffs argue that there need not be a writing for a contract to be formed and

they are correct. However, there still needs to be a meeting of the minds on the essential

elements of the contract.

[183] Plaintiffs further put forward that the party who enters into a contractual negotiation

must intend to conclude the contract and must act in good faith:

Par ailleurs, la personne qui s'engage dans un processus de négociation doit avoir

la ferme intention de conclure le contrat projeté. Il est contraire à l'obligation de

bonne foi d'entrer dans les négociations d'un contrat sans avoir l'intention de le

signer, mais dans le seul but de nuire à l'autre partie ou d'obtenir des

renseignements privilégiés. Les deux parties doivent agir dans un esprit de

coopération et se retirer des négociations dès qu'elles perdent l'intérêt de passer

ledit contrat.

[…]

102

Exhibit D-155.

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Le droit civil reconnaît que la règle selon laquelle les parties doivent négocier de

30

bonne foi comporte deux obligations, soit l'interdiction de s'approprier des

renseignements confidentiels échangés lors des pourparlers et l'obligation de

mettre fin aux négociations dès qu'il paraît certain qu'elles sont vouées à l'échec.¹⁰³

[184] For Plaintiffs, and a corner stone of their argument, is that the essential conditions

of the agreement to submit a joint bid were present on September 3. This argument flows

from article 1388 C.C.Q.:

1388. An offer to contract is a proposal 1388. Est une offre de contracter, la

which contains all the essential elements proposition qui comporte tous les éléments

of the proposed contract and in which the essentiels du contrat envisagé et qui

offeror signifies his willingness to be indique la volonté de son auteur d’être lié

bound if it is accepted.

en cas d’acceptation.

[185] Defendants strongly dispute that the essential elements were present.

[186] A contract might still be formed even if “and even though the parties have agreed

to reserve agreement as to certain secondary elements”.¹⁰⁴

[187] Plaintiffs’ next argument is that at the very least, there was a bilateral promise to

contract, as provided for in article 1396 C.C.Q.:

1396. An offer to contract made to a 1396. L’offre de contracter, faite à une

determinate person constitutes a promise personne déterminée, constitue une

to enter into the proposed contract from promesse de conclure le contrat envisagé,

the moment that the offeree clearly dès lors que le destinataire manifeste

indicates to the offeror that he intends to clairement à l’offrant son intention de

consider the offer and reply to it within a prendre l’offre en considération et d’y

reasonable time or within the time stated répondre dans un délai raisonnable ou

therein.

dans celui dont elle est assortie.

A mere promise is not equivalent to the La promesse, à elle seule, n’équivaut pas

proposed contract; however, where the au contrat envisagé; cependant, lorsque le

beneficiary of the promise accepts the bénéficiaire de la promesse l’accepte ou

promise or takes up his option, both he lève l’option à lui consentie, il s’oblige

and the promisor are bound to enter into alors, de même que le promettant, à

the contract, unless the beneficiary conclure le contrat, à moins qu’il ne décide

decides to enter into the contract de le conclure immédiatement.

immediately.

103

104

Vincent Karim, “La règle de la bonne foi prévue dans l’article 1375 du Code civil du Québec : sa portée

et les sanctions qui en découlent", 41 :3 (2000) p. 453.

Article 1387 C.C.Q.

500-17-091838-154

31

2.4 Discussion

2.4.1 Credibility and corroboration

[188] There are two questions around the administration of the evidence that bear

mention at the outset. The first is corroboration, which the Court will consider as it comes

up in the analysis of the evidence.

[189] The other matter is the credibility of the various witnesses. The two in respect of

whom this has the greatest bearing are Mr. Bich and Mr. Harpur.

[190] This said, this is not a matter that will ultimately be decided solely on the basis of

the credibility of the witnesses, although the Court must consider it in its evaluation of the

evidence. The discussions which give rise to possible issues of contradiction all occurred

in 2013, some eight years before the trial, so some lapses of memory are understandable.

Happily, many of the discussions were followed up by contemporaneous emails, which

are perhaps a more accurate source of information about what was actually happening

at the time.

[191] Mr. Harpur’s memory was far from perfect and there were some discrepancies with

his pretrial examination. One element is weather Mr. Pichette was with Mr. Harpur for the

call on August 22 or on the phone. Another is whether the Pichette group made an offer

to the Bich group that it would buy Lake Papineau alone if that could be negotiated with

Oxford.

[192] To the extent there are contradictions, the Court does not view them as material.

It is the content of the August 22 call that matters, not the physical whereabouts of the

participants.

[193] And, while the parties do not have the same view of the content, the idea of

exclusivity between the parties is contradicted by the emails from Mr. Bich himself.

Moreover, the other most important part of that discussion was the amount that the

Pichette group was prepared to pay and the version of Mr. Harpur and Mr. Pichette is

clearly more probable than Mr. Bich’s version.

[194] As to the purchase of Papineau, it is clear that this is what the Pichette group was

looking at from the outset. The suggested contradiction is immaterial.

[195] Another contradiction is whether Mr. Harpur spoke to Mr. Bich on September 3.

Whether he did or not does not change the fact that Mr. Bich was still trying to get part of

Lake Papineau even after this alleged agreement and this despite knowing that Mr.

Pichette wanted all of the lake for his group.

[196] There was also a paucity of clarity in Mr. Harpur’s recollection of phone

conversations between him and Mr. Pichette during the timeframe between September

15 and 19. Again here, the Court does not view the lack of clarity as material. It is crystal

500-17-091838-154

32

clear that Mr. Harpur was trying to stall the discussions with Mr. Bich and his poor recall

around the discussions with Mr. Pichette during this time period does not change this.

This said, the freezing out of Mr. Bich at that juncture may well be material, a question

that the Court will discuss below.

[197] Nor could Mr. Harpur recall when he spoke to Mr. Wilson. Based on emails, it

appears to have been around September 16,¹⁰⁵but in any event this was already at the

time contact between Mr. Bich and Mr. Harpur had essentially ended. We also know that

Mr. Wilson became interested in part of the project around the same time. Given the

Court’s conclusion that there was no exclusivity agreement, the precise moment of the

discussions with Mr. Wilson is not material in any event.

[198] Mr. Harpur’s description of when he knew about the Bellini’s involvement also

gives pause. He remembers seeing the name in some of the emails he received from Mr.

Bich, but did not know the background of the family. It is also not clear what he knew

about the Bellini’s proposed financial contribution, but this information does not appear to

have been shared by Mr. Bich. He was aware of the areas of Kenauk that interested them.

In any event, any discrepancy around Mr. Harpur’s knowledge of the Bellini’s involvement

in inconsequential, because if there was an agreement on September 3, it was with Mr.

Bich and Mr. Bich alone.

[199] What about the credibility of Mr. Bich?

[200] Certainly, compared to Mr. Harpur, there were fewer questions to which he had no

recall of the event, but his testimony was largely document assisted with various emails

and documents being shown to him as he testified and before he answered.

[201] The Court is also troubled by his demeanour throughout the period that he was

interested in the land. His stories were often different depending who he was speaking

to; some differences between what he was telling Mr. Bellini and what he was saying to

Mr. Desmarais; and big ones between what he was telling his partners and what he was

telling Mr. Harpur or Mr. Pichette.

[202] Respectfully, there were also moments in his testimony where, he tried to pull the

wool over the Court’s eyes. He continually stated that his interest in Kenauk was not

development, whereas, from the outset of the discussions with his partners development

was seen as a way of financing the purchase. As the evidence was administered, it

became crystal clear that conservation became Mr. Bich’s path of convenience only when

it became evident that the Pichette group would not allow development on Lake

Papineau. So to some degree, he tried the same double discourse on the Court as he

had used throughout his attempt to buy the land.

[203] Now some of the inconsistencies that give pause:

105

Exhibit P-440.

500-17-091838-154

33

[204] Paragraph 54 of Plaintiffs’ Re-amended Originating Application provides an

inaccurate description of the discussions prior August 13:

54. From July to the end of August 2013, Plaintiffs worked in confidence and in

good faith with the Defendants in pursuing discussions to submit a joint bid for the

purchase of the Property, and never during such time did Defendants Pichette or

Harpur give any indication that negotiations were not evolving in a positive way or

that they were considering alternate plans with other investors;

[205] This affirmation was maintained at trial by Mr. Bich, despite the fact that there was

no substantive contact between the parties from the beginning of July until the August 13

meeting, let alone discussion of a joint bid. Even after the meeting, negotiations seems a

strong word, as the evidence really demonstrates, at best, different exchanges of ideas.

[206] The versions he provided of the August 13 meeting are also important, as Plaintiffs

have made what happened there seminal to their case. First, on the lines for the property

of each partner, here is what he said on May 12, 2016 in his pre-trial examination:

[…] My question to you is, what level of specificity was discussed with respect to

the allocation of the property? Was it discussed specifically who would get what in

terms of property at Heenan Blaikie?

A- Yes, we went over the maps with each party’s main interest property and what

the lines could look like.

Q- Could look like?

A- Yes.¹⁰⁶

(The Court’s underlining)

[207] Mr. Bich says a bit later that they put lines on the map with their fingers but

acknowledges that there was no agreement on territory:

Q- We agree there was no agreement made at that meeting, right?

A- On the exact specific line?

Q- Yes.

A- No.¹⁰⁷

[208] He came back to this later to state that the line was fairly well set.¹⁰⁸

106

May 12, 2016 pre-trial examination, page 73.

Ibid. page 77.

Ibid. page 112.

107

108

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34

[209] Finally, in his testimony, he denied putting lines on the map the first specific map

having been received on August 19.

[210] As to the discussion around land values at the Heenan meeting, here is what he

said:

Q- What was the discussion regarding the capital investment?

A- The discussion was speaking about the difference in land values based on the

assets on the property and what each party would have to contribute for those

areas that we wanted.

Q- And how did the meeting conclude on that aspect?

A- That we would be working together to reach an agreement.

Q- So, again, on the capital contribution, an agreement was not reached at the

meeting?

A- No.¹⁰⁹

[211] This testimony became much more detailed at trial, where in his direct testimony

Bich gave the following account what he said at the Heenan meeting:

 The Bellinis were prepared to contribute $10 million for the Lake Maholey

sector.

 His group was prepared to contribute $10 million for his area of interest.

 His group would contribute 40% of the capital and the Pichette group would

contribute 60% of the capital, specifically discussing a capital contribution

of $30M expected from the Defendants, given that there would have been

a discussion to the effect that Lake Papineau was the main asset and most

valuable asset.

 He would have presented this 60/40 split as a “fair breakdown”, but the

Defendants would have countered by specifically mentioning that they were

closer to a 50/50 split.

[212] In cross-examination, Mr. Bich was more nuanced when pressed on some of his

answers. He talked about discussing $45 million as a good entry price and reiterated

raising his 60/40 position and the Pichette group’s reaction of a 50/50 split with all of Lake

Papineau. As to whether dollar amounts of capital contributions were actually discussed

at this introductory meeting, Mr. Bich had a different version from his direct testimony.

109

Ibid. pages 77–78.

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35

While underlining that only percentages were discussed, he mentioned the price for the

property at $45 or $50 million, but denied saying that his group would contribute $20

million and that the Pichette group should pay $30 million.

[213] What strikes the Court is that at many moments during his testimony Mr. Bich said

that he only spoke in percentages and not dollars, when the documentary evidence

clearly shows the contrary.

[214] Perhaps more curious was his communication of the day following the Heenan

meeting, where Mr. Bich thanked everyone for the meeting and said that he would work

on the numbers and concept a bit more;¹¹⁰This is hardly confirmation of the specificity

that he now attributes to the meeting.

[215] As to his affirmation that the interest of the Bellinis was disclosed his email of

August 16 belies this:

We and our friends were initially looking at putting $5,000,000 each into the deal

and decided to increase to $10M as we felt there were more chances to get this

done if we did.¹¹¹

Why continue to talk of friends, if the Bellini name had been disclosed?

[216] In the same email chain there was a part addressed to Mtre Heenan:

Do you think any of the current owners would be interested in buying more acres

around their house which could help raise so more capital?

[217] Why would Mr. Bich care if he had been so specific about his interest and the

capital contributions of each group at the Heenan meeting?

[218] Mr. Bich’s testimony around a call between him and Mr. Harpur during the morning

of August 19 is also not credible. During his direct testimony, Mr. Bich testified that Mr.

Harpur would have told him during that call “we are still at 50/50” and that he would have

“reworked the map”, which does not seem possible, given that the Defendants had just

agreed between themselves the previous evening on the precise area of land they were

seeking, represented by the Pichette map #1 which Mr. Harpur submitted to Mr. Bich for

the first time later that morning at 11:53 AM.¹¹²

[219] In cross-examination, he was further questioned about that call and first asked

counsel to see the “document given” and have time to review same before answering any

question about his recollection of it. The Court then highlighted the fact that counsel had

110

Exhibit P-242.

Exhibit P-245.

Exhibit P-247.

111

112

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36

not referred Bich to any document, which eventually led to him stating that the call was

not important.

[220] August 19 provided some other contradictions. During his direct testimony at trial,

Bich presented the Pichette map #1 as allegedly being “a reply to my 50/50 proposal”.

This is not the case Mr. Bich’s 50/50 scenario was submitted to the Defendants during

the evening of August 19, 2013 at 9:14 PM,¹¹³only after map #1 had been communicated.

[221] The 50/50 scenario of August 19 also gives rise to another major concern with Mr.

Bich’s testimony. Did he have the authority to make it? He said that he must have received

the okay from Mr. Bellini. The Court thinks not. On an initial offer of $45 million, this would

have meant a $22.5 million contribution from the Bich group. Mr. Bich would have had to

discuss an increase in their capital contribution to $11.25 million with the Bellinis given

the formality of their July 19 LOI. There is no writing where they committed to an extra

$1.25 million before August 19. As to Mr. Desmarais there is also no writing where he

indicated a willingness to contribute more than $5 million, and on August 19 (and

thereafter) his participation was contingent on new memberships in LWE.

[222] On this issue, there clearly was no call with Mr. Bellini on August 19, as he had

fallen asleep.¹¹⁴

[223] Another email to Mr. Desmarais on August 20 raises questions. Mr. Bich asked his

friend if he knew anyone who might have capital to assist in the purchase.¹¹⁵In cross-

examination he seemed to say that he was looking for capital to assist the Defendants

with their part of the purchase, which does not make sense.

[224] His email to Mr. Desmarais on August 23 also gives pause about the integrity of

his testimony. He raises as his idea the payment of $25 million by the Pichette group

when everything points to the Mr. Pichette having raised this himself in the call of August

22. Mr. Bich also floats the idea of a forestry plan, having previously told Mr. Harpur that

he was opposed to forestry. Getting new partners for LWE and using the membership

fees to buy the land was also reiterated, although Mr. Harpur and Mr. Pichette had no

idea.¹¹⁶

[225] In short, Mr. Bich’s proposed scenario to his partner was very different from the

one that had been discussed with Mr. Pichette and Mr. Harpur on August 22!

[226] Again at the risk of repetition, the conversations that Mr. Bich was having with his

partners were also at times different than the ones that he was having with the Pichette

group. An example is found in the exchanges of August 27. With Mr. Bellini he spoke of

113

Exhibit P-269.

Exhibit P-261.

Exhibit P-271.

Exhibit D-24.

114

115

116

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37

two 250 acre lots on Lake Papineau in a prime location,¹¹⁷whereas with Mr. Pichette, the

size and the location were to be agreed upon.¹¹⁸

[227] Even more puzzling is the email that Mr. Bich sent to Mr. Bellini the next day where

he reported that the Pichette group were still holding their ground on land and capital.¹¹⁹

That was clearly not true, as on August 22 Mr. Pichette had upped their contribution to

$25 million. He also testified that the representation to his partner was made in light of

Pichette Map #2, when in fact he had not received it yet.

[228] One of the most glaring inconsistencies in Mr. Bich’s position is found at

paragraphs 75 and following of the Re-amended Introductory Application to Institute

Proceedings:

75. Between September 3 and September 22, 2013, Bich attempted to

communicate with Pichette and Harpur to push forward their apparent joint bid

agreement and its implementation;

79. It is in that context that on September 22, 2013, having been pursued and

tracked down by Plaintiffs, five days before the bid deadline, that Pichette informed

Bich of the following:

a) Pichette and Harpur no longer intended to respect their agreement

as stated at paragraph 74 of the present Motion to submit a joint bid

with Plaintiffs for the purchase of the Property;

b) Defendant Pichette intended to submit a single bid for the purchase

of the Kenauk property with the help of "a couple of friends and a bank

loan"; and

c) that despite this alternate purchase arrangement, Pichette would

turn over to Plaintiffs the portions of the Property Plaintiffs were

interested in, should Defendants be successful in getting their bid

accepted by Oxford;

[229] These affirmations are misleading as the evidence is that Mr. Bich did not try to

contact the Pichette group between the end of the day on September 3 and September

13 and he certainly did not pursue them and track them down, at least until September

13, at the earliest. There was also no agreement by Mr. Pichette to turn property over to

Plaintiffs. And yet, when offered the opportunity to clarify these allegations at trial, Mr.

117

Exhibit P-322.

Exhibit P-320.

Exhibit D-27.

118

119

500-17-091838-154

38

Bich refused to do so.¹²⁰Mr. Bellini only agreed that paragraph 79 c) was untrue in cross-

examination.

[230] The exchange with Will Griffiths, the executive assistant of HRH the Crown Prince

of Bahrain, on September 16 in relation the LWE memberships is another troubling

example of a lack of forthrightness. When asked who the other LWE members might be,

Mr. Bich referred to Dr. Bellini,¹²¹who had yet to commit to a membership and never did.

[231] His testimony about disclosure to the Pichette group of the equity club concept for

LWE was, at best, disingenuous. He says that he disclosed the equity club concept, but

not its role in the financing of the Kenauk purchase. If he did disclose the club concept,

which the Court does not believe, there would have been no reason to keep the financing

aspect quiet, save for the reality that he had not yet found the members and that Mr.

Desmarais had always maintained that he did not want to go forward without them.

[232] And, the disingenuousness of Mr. Bich continued right up to the bid deadline. On

September 27 he wrote to Mr. Pichette stating that he was “getting pushed by the brokers

to submit an offer of our own today but I said that I would not do that since I believe it

would be a breach of our good faith ongoing discussions.”¹²²Of course, by this time there

were no ongoing discussions, save for the opening that Mr. Pichette had given to Mr. Bich

to describe a small area of land that he might be interested in, to which Mr. Bich’s answers

were unresponsive. Moreover, Mr. Bich did not have the required capital as Mr.

Desmarais’ contribution was contingent on the sale of LWE memberships.

[233] To conclude, the Court views the version of the events, as described by Mr.

Pichette and Mr. Harpur, as being generally more credible than Mr. Bich’s version.

2.4.2 The Alleged Exclusivity Agreement

[234] As the Court has said, it concludes that there was no exclusivity agreement

entered into on August 22, 2013.

[235] The Court cannot rely on a written agreement; there is not one. This makes the

analysis whether there is the alleged exclusivity agreement challenging, as the judicial

interpretation of exclusivity clauses is that they are to be interpreted narrowly. Justice

Mayer considered an exclusivity clause in a lease context in Jean bleu inc. c. Boutique

Le Pentagone inc.:

[78] Thirdly, there is extensive doctrine and jurisprudence that teaches us that

exclusivity clauses are to be construed restrictively since they are provisions that

120

The same can be said for Mr. Bellini, Certainly no one on the Picchio side had attempted to track down

Mr. Pichette. In addition, in the September 22 conversation, there was no discussion of a post-bid

transfer of Lake Maholey.

Exhibit P-436.

121

122

Exhibit P-582.

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limit free trade and competition. They are an exception to the general rule favouring

39

the free use of property.

[79] Finally, in order to be enforceable, an obligation must be determinate or

determinable. To ensure enforceability, an exclusivity clause should be narrow,

precise, clear, concise and restrictive.¹²³

[236] These principles would also apply here and given that there is no writing, it is hard

to find a precise agreement.

[237] The Court can only rely on the testimony of three people, Mr. Bich, Mr. Pichette

and Mr. Harpur. The latter two are clear in their testimony that there was no such

agreement. Mr. Pichette was eloquent. The August 22 call was an “early inning”

discussion; the parties were not even close to an exclusivity agreement. Yet to his credit,

he acknowledged that the August 22 discussion did provide a framework of a potential

deal to move forward with and while the details of what was discussed on that day were

being perfected there was a moral obligation to work only with Mr. Bich on the potential

purchase.

[238] For Mr. Bich there was exclusivity.

[239] However, the Court prefers the testimony of Mr. Harpur and Mr. Pichette on the

question of the exclusivity agreement. A pivotal detail of that call escapes the recollection

of Mr. Bich, namely the additional $5 million that the Pichette group was prepared to

commit. Both Mr. Harpur and Mr. Pichette had a specific recollection of the discussion of

the capital contributions of each party on a $45 million offer and on how Mr. Pichette

increased his group’s contribution to $25 million, on the fly and without consulting with

Mr. Harpur in advance.

[240] The subsequent email of Mr. Harpur asking to speak to Mr. McQuat provides

confirmation of the increased capital contribution of the Pichette group.¹²⁴

[241] Moreover, in a contemporaneous email to Mr. Desmarais, Mr. Bich talks about a

$25 million contribution from the Pichette group.¹²⁵His testimony that no increase in the

Pichette group’s capital contribution occurred during that call is simply not credible and

this taints his testimony on the supposed exclusivity agreement.

[242] In addition, his conduct and written communications following that call belie the

existence of an exclusivity agreement.

123

2011 QCCS 782, upheld in appeal 2011 QCCA 1083.

Exhibit P-303.

Exhibit D-24.

124

125

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40

[243] He did not discuss same with his partners, Mr. Desmarais and Mr. Bellini. The

alleged agreement is not even mentioned in contemporaneous emails to them.¹²⁶

[244] His follow-up email to Mr. Pichette and Mr. Harpur is not illustrative the words of

someone who believed that he had just concluded an exclusivity agreement. The most

important line of that email is the following: “Based on good faith, we are not pursuing

discussions with other parties (such as developers) who could be interested in those parts

of the property that are not part of our own plans,…”¹²⁷Tellingly the decision not to discuss

with others was to show good faith, not because of an agreement. This was exactly the

same view that Mr. Pichette had! Yet curiously, this is the email that Plaintiffs put forward

as confirming the exclusivity agreement.

[245] Mr. Bich’s draft letter of August 25¹²⁸shown to Mr. Desmarais referring to “looking

at being part of a group” is hardly a ringing confirmation of an existing exclusivity

agreement with the Pichette group.

[246] As the Court has said, he did not tell the brokers about exclusivity.

[247] Finally, his subsequent conduct in September removes any doubt. On September

21 he asked Mark Smith if he knew of investors for the main lake.¹²⁹

[248] On the same day, he wondered if Mr. Desmarais might put him in touch with one

Ned Goodman, a potential investor for Lake Papineau.¹³⁰

[249] Then, on September 23, Mr. Bich wrote the following to Me Heenan:

I had a call with Patrick and Doug yesterday.

I am really not comfortable with what is going on.

Out of respect to Patrick I did not look at other potential parties so I do not have a

backup plan.¹³¹

(The Court’s underlining)

[250] It was out of respect for Mr. Pichette that he did not look for other partners, not

because of an exclusivity agreement!

[251] Mr. Bellini’s testimony does not assist Mr. Bich. On this issue, it was vague at best

and he does not remember Mr. Bich using words leading to the idea that there was an

126

Exhibits D-24 and P-292.

Exhibit P-305.

Exhibit P-309.

Exhibit D-35.

Exhibit P-483.

Exhibit P-508.

127

128

129

130

131

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41

agreement in principle on exclusivity. And, shortly after the alleged agreement, Mr. Bellini

was prepared to look for other partners.

[252] In addition, did Mr. Bich even have the ability to agree to exclusivity? One can

conclude from his email to Mr. Pichette and Mr. Harpur of August 27, 2013 at 10:57

A.M.¹³²that it seems unlikely that he had discussed the possibility of exclusivity with his

partners prior to August 22. Two days later he was discussing the many moving parts of

the deal with them, only to submit something completely different from what had been

tentatively agreed to as a basis for discussion on August 22.

[253] What is also clear is that this email would have ended any exclusivity agreement,

which if one had been agreed to, could only have been in relation to the August 22

discussion, of which the fundamental condition to any potential joint bid agreement and

exclusivity was the Pichette Map #1.

[254] The map that Mr. Bich sent with his new proposal on August 27 was a significant

encroachment on the land divisions that were the basis for the understanding of August

22. On August 22 Lake Papineau was off the table; on August 27 Mr. Bich put it back on.

[255] Then, on August 28, Mr. Bich said this to Mr. Bellini in an email: “I did discuss that

a bit with them today. Told them that we could bring our deal to any developer if we were

looking to get the best deal for us but that we would prefer to work with them especially

as we are so close.”¹³³

[256] These are hardly words of an individual who thought he was bound by an

exclusivity agreement that he would have had to terminate! Moreover his partner did not

believe that there was an exclusivity agreement either having written the following just

earlier: “Ok My first impression is that we can shop around to test the waters for a joint

bid with one of the developers already interested in the project. If those options are not

as interesting we can always go back to Pichet (sic) Harper.”¹³⁴

[257] And then, on August 31, Mr. Bich again raised the possibility of talking to

developers.¹³⁵

[258] To be fair to the position of Plaintiffs, it is true as they set out that there was

inconsistency between the testimony of Mr. Pichette and Mr. Harpur on the Pichette

group’s reaction after Mr. Bich’s new proposal of August 27. Contrary to the former’s

testimony it seems that Mr. Harpur did not write Mr. Bich to advise him that it was not

acceptable and that exclusivity was off the table. However, this does not change the

Court’s view on this issue, as for the reasons outlined above, it concludes that there was

no exclusivity agreement.

132

Exhibit P-320.

Exhibit P-335.

Ibid.

Exhibit P-359.

133

134

135

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2.4.3 The Alleged September 3 Agreement

42

[259] Mr. Bich’s position, is that the email of September 3 that he received from Mr.

Harpur was an acceptance of his 60/40 offer made at the Heenan meeting of August 13,

and reiterated in his email of August 31.¹³⁶

[260] The idea that an offer was made at the Heenan meeting was only clearly put

forward in closing argument and seems curious, as during his testimony this was not the

scenario that Mr. Bich put forward. Rather he characterized it as an acceptance of the

60/40 proposal set out in his email of August 31.

[261] Yet in their written arguments, Plaintiffs posit that the August 31 email was “was to

reiterate the different scenarios that were tabled since the Heenan meeting, as well as to

reiterate the parties’ shared conservationist approach.”¹³⁷They further state that the

September 3 email from Mr. Harpur was an unambiguous acceptance of Mr. Bich’s “60/40

Proposal”,¹³⁸which had been made at the Heenan meeting.¹³⁹

[262] It is useful to consider how the allegations of an agreement are framed in the Re-

amended Originating Application:

46. From February to the end of August 2013, Bich and Defendants exchanged

many e-mails, spoke numerous times, and eventually concluded an agreement to

partner in a joint and exclusive bid to buy the Kenauk property from Oxford;

[…]

57. In August of 2013, both Plaintiffs and Defendants came to an agreement to

partner together in a joint and exclusive bid in the following circumstances;

58. At a meeting held at the offices of Heenan Blaikie on August 13, 2013, Plaintiff

Bich, and Defendants Pichette and Harpur, discussed participation in a joint bid

addressed to Oxford and what it would entail: the Plaintiffs and Defendants

becoming partners, allocation of sections of the Property between them should

their bid be successful, capital investment by each of them and exclusivity

commitments to each other, meaning not competing with each other to purchase

the Property;

[…]

71. On August 31, 2013, Bich, still being kept in the dark about the Defendants

alternate plans, formally proposed to the Defendants that they contribute 60% of

the purchase price, with 40% to be supported by the Plaintiffs, the whole as

136

Ibid.

137

Plaintiffs’ Plan of Argument par. 142.

Ibid. par. 155.

Ibid. par. 145.

138

139

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appears from an e-mail dated August 31, 2013, communicated in support of the

43

present Motion as Exhibit P-9;

[…]

73. On September 3, 2013, Defendant Harpur on behalf of himself and Pichette,

notwithstanding the fact that they were already pursuing to close a deal with Lyme,

confirmed to Bich that both Defendants agreed with the 60/40 split and confirmed

the areas around Lake Papineau that Defendants would acquire should the joint

bid be accepted by Oxford, the whole as appears from an e-mail dated September

3, 2013, communicated in support of the present Motion as Exhibit P-10¹⁴⁰;

73.1 E-mail Exhibit P-10 sent to Plaintiffs by the Defendant Harpur was obviously

crafted so that the Plaintiffs would believe they had struck a deal with Defendants

while keeping hidden the fact that both he and Pichette were then intent on

finalizing an alternate bid arrangement with Lyme;

[263] Briefly unpacking both these allegations and the affirmations made in closing

argument, one sees that the position put forward at the argument stage of the trial was

certainly not clearly set out in the Re-amended Originating Application.

[264] In addition, there are several problems with the affirmation that a 60/40 proposal

was presented at the meeting of August 13.

[265] Firstly, what were its terms? Here is what Plaintiffs say in their argument:

75. These terms, which Bich presented to Harpur and Pichette during the Heenan

Meeting, were a scenario under which Bich and his partners would acquire all of

Kenauk, except for Lake Papineau, for 40% of the purchase price, and Harpur and

Pichette would acquire Lake Papineau in return for 60% of the purchase price (the

“60/40 Proposal”).¹⁴¹

[266] However, there was no definition of the precise meaning of “except for Lake

Papineau”. What about the lands around it? The scope of what Mr. Pichette wanted to

conserve around Lake Papineau only became clear on August 19, when Pichette map #1

was communicated.

[267] It seems trite to say, but in the Court’s view here could not have been a formal

offer made by Mr. Bich absent a more precise understanding of the land that each party

wanted and the boundaries thereof at the August 13 meeting.

[268] Article 1388 C.C.Q. requires an offer to contain the essential elements of the

proposed contract :

140

Also exhibit 362.

Plaintiffs’ Plan of argument, par. 75.

141

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44

1388. An offer to contract is a proposal 1388. Est une offre de contracter, la

which contains all the essential elements proposition qui comporte tous les éléments

of the proposed contract and in which the essentiels du contrat envisagé et qui

offeror signifies his willingness to be indique la volonté de son auteur d’être lié

bound if it is accepted.

[269] It was considered by the Court of Appeal in Howick Apparel Ltd. c. Champoux :

[13] Il est important qu'une offre soit sérieuse, ferme et précise. C'est ce qui

en cas d’acceptation.

permet de distinguer l'offre véritable, qui lie la personne de qui elle émane, de la

simple invitation à contracter ou à entrer en pourparlers. Il faut également que

l'offre comporte tous les éléments essentiels du contrat envisagé. La raison est

simple : il faut que le destinataire de l'offre puisse prendre une décision éclairée

quant à un éventuel contrat qui le liera.

[14]

Dans leur ouvrage Les obligations, 6^ièmeéd., les auteurs Baudouin et Jobin

abondent dans ce sens, aux pages 253 et 254 :

L'offre, tout d'abord, doit être sérieuse, ferme et précise. L'offre faite pour

plaisanter, pour explorer un terrain d'une entente éventuelle ou qui est trop

imprécise n'est pas la manifestation d'une volonté claire de conclure un contrat.

L'offre, ensuite, doit contenir tous les éléments essentiels du contrat projeté pour

permettre l'adhésion de l'acceptant. Si la proposition oblige la personne à qui elle

est faite à une négociation, à une demande de renseignements ou de précisions

sur ces éléments, elle ne constitue pas alors une offre véritable, mais une simple

invitation; […]

[15]

C'est l’aspect des « éléments essentiels » qui n’a pas été considéré avec

justesse par le premier juge. […]¹⁴²

[270] The judgment in Société en commandite de Copenhague c. Corporation

Corbec,¹⁴³provides another example of the need for a document to contain the essential

elements in order to be considered a formal offer. It also provides an interesting parallel

with the present matter, as the contract in question was for the lease of part of an industrial

building. The Court of Appeal said this:

[32]

Il est acquis qu'une offre de location doit contenir tous les éléments

essentiels du contrat envisagé pour constituer une offre de contracter Il en va de

même pour la promesse de contracter.

[33]

La Société soutient que les éléments essentiels d'un contrat de location

« se limitent à la description du bien loué, à la durée du bail et au montant du

loyer ». Cela est certes vrai de la description du bien loué et du montant du

loyer. Mais les éléments dits essentiels peuvent varier d'un contrat de louage à

142

143

2007 QCCA 674.

2014 QCCA 439.

500-17-091838-154

45

un autre. Les éléments que constituent la description du bien loué et le montant

du loyer ne sont qu'un minimum requis.

[34]

Les auteurs Grammond, Debruche et Campagnolo expriment bien cette

idée :

It flows from art. 1388 C.C.Q. that it is not necessary that an offer contain all the

terms of the proposed contract, but only its “ essential elements ”. In this

connection, art. 1387 C.C.Q. allows the parties to “ reserve agreement as to

secondary terms ”. The “ essential elements ” which must be contained in the offer

vary with each contract. When a nominate contract is contemplated, the essential

elements must at least include those obligations that define the nominate contract

in question. For example, art. 1851 C.C.Q. defines lease as a contract where the

enjoyment of certain property is provided in exchange for a rent. It follows that an

offer to conclude a contract of lease must identify the property to be leased as well

as the rent.

[…]

In addition, the context or the conduct of the parties may indicate that other

elements of a proposed contract must be considered essential.¹⁴⁴

(References omitted)

[271] The boundaries, an essential part of any agreement were not fully discussed at

the Heenan meeting. Their importance to the transaction can be seen from the fact that

they remained a topic of discussion throughout the negotiations. In fact, they were never

fully agreed upon.

[272] In addition, the conduct of the parties following the Heenan meeting shows that

the essential conditions for any offer had not been set out.

[273] Mr. Bich never accepted Pichette map #1. He submitted a new map on August 27,

and Mr. Pichette countered with map #2 the next day. The September 3 email was

contingent on the boundaries set out in map #2 although the email left open the possibility

of a conservation line between Mr. Pichette’s line and Mr. Bich’s, so it can hardly be an

acceptance of some undefined proposal tabled on August 13. Plaintiffs’ statement that

“they understood the land each party wanted”¹⁴⁵is, with respect, disingenuous as on

August 13 there was at best a very high level understanding of each party’s interest.

[274] Another obstacle is that neither Mr. Pichette nor Mr. Harpur recollect any specific

offer being made on August 13. Their testimonies are consistent. Mr. Bich could have

corroborated his version of the meeting, but chose not to call available witnesses, such

as Bruce McNiven or Gram Ramshaw.

144

Ibid.

145

Plaintiffs’ Plan of argument par. 76.

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46

[275] The Court concludes that the meeting was a meet and greet, very general in scope

where a potential transaction was discussed in the very big picture. Even if Mr. Bich might

have said that his group would contribute 40 % to the price of the transaction, and spoken

in the most general terms about what he wanted, he did not provide a sufficiently precise

indication of the land divisions for an offer to have been made.

[276] In fact, the parties were not even close to a meeting of the minds on land divisions,

as the different communications leading up to September 3 demonstrate. One of the most

poignant is the exchange of emails immediately following the Heenan meeting.¹⁴⁶Mr.

Bich wrote Mr. Heenan on August 14 to enquire if some of the current owners on Lake

Papineau would want to buy more land. In the same email he says that he will work on

numbers and concept. Two days later he wrote that he was “giving some thought on

different options”. This is hardly indicative of his having made a formal offer two days

before.

[277] While that exchange does conclude on August 20 with Mr. Pichette referring to a

50/50 offer, which Plaintiffs posit was made at the Heenan meeting, that is not a possible

interpretation of Mr. Pichette’s words:

This is somewhat of an unfortunate turn of events. From our meeting last week we

understood that Charles was not interested in the lake and just wanted his section.

Hence doug tabled an offer to simply buy the lake and let them acquire the entire

rest of the property at 50-50 split.

(The underlined portion is relied on by Plaintiffs)

[278] Clearly this refers events after the Heenan meeting.

[279] In addition in their own characterization of Mr. Bich’s August 23 email to Mr.

Pichette and Mr. Harpur, Plaintiffs state: “This email also shows that there was no

agreement on property division during the call of August 22, 2013.”¹⁴⁷If there was no

agreement on August 22, it seems completely improbable that the 60/40 proposal that

Plaintiffs posit was made at the Heenan meeting was precise enough to be an offer. Each

side had to know who was getting what.

[280] While Mr. Bich’s primary interest may well have been the Western portion of the

property, he was never satisfied with it alone. He always wanted a piece of Lake

Papineau, and, in fact, this desire did not disappear with the supposed agreement on

September 3.

[281] As for the Lake Maholey portion, the precise boundaries of the Bellini’s interest

were never agreed to either.

146

Exhibit P-269.

Plaintiffs’ Plan of argument par. 104.

147

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47

[282] In addition, in his deposition, referring to his August 27 proposal,¹⁴⁸he admitted

that there were many moving parts to any potential deal, as this exchange shows:

Q- Oh, so the moving parts are not necessarily issues?

A- They’re not deal breakers.

Q- I understand they’re not deal breakers, but what are they? I want to have the

list of the moving parts because we may have a different opinion from yours, with

all due respect, so I’d like to know what is the full list of those moving parts. In other

words, those parts that were still uncertain and moving around.

A- No, they are things that could change on the property, it’s... it’s an endless

list.¹⁴⁹

[283] So, what was the September 3 email from Mr. Harpur? It was not an acceptance

an offer made in the August 31 email of Mr. Bich.¹⁵⁰That email called for several

concessions from the Pichette group, including two building lots on Lake Papineau, which

it had never been prepared to accept. In the Court’s view, the August 31 email was not

an offer. There were too many different scenarios put forward.

[284] And, even if it was an offer, it included:

3. This includes, to be clear, a return to the Western line, that I presented and two

prime lots on Lac Papineau for our use (ie to be clear again our interest in Lac

Papineau lots is not a speculative acquisition).

(The Court’s underlining)

[285] One might conclude that these were essential conditions for Mr. Bich.

[286] However, giving the Bich group lots on Lake Papineau was never in the cards for

the Pichette group and was certainly not contemplated in the September 3 email. In

addition, that email did not clearly accept a return to the Western line. Therefore, the

September 3 email was not an acceptance of what was proposed in Mr. Bich’s August 31

email.

[287] This also addresses Plaintiffs’ argument that because the specific boundaries of

the Pichette group’s ultimate offer were not fully defined when their offer was made to

Oxford, the same principle should hold true when looking at the September 3 document.

Given that the return to the Western line was a condition precedent for Mr. Bich to move

forward, the fact that the approach of Mr. Wilson, Mr. Monaco and Lyme Timber was more

flexible is of no help to him and his partners.

148

Exhibit P-320.

149

Pre-trial examination of Mr. Bich of May 12, 2016, p. 141.

Exhibit P-359 (or P-9).

150

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48

[288] So, the September 3 email can be characterized as a response to the August 31

email of Mr. Bich. Mr. Pichette wanted to get the file moving in a positive way while he

was travelling in Africa. He gave Mr. Harpur some latitude to move forward by increasing

the capital that his group was prepared to put up to $27 million. However, he gave Mr.

Harpur clear instructions that any agreement was conditional on Mr. Bich accepting Map

#2, which was not the proposal made by Mr. Bich on August 31.

[289] Mr. Harpur ran with the ball and sent the September 3 email, but the whole

proposal was conditional on Mr. Pichette’s final approval when he returned from his trip.

[290] It is also clear that the email was not an acceptance of an offer that Mr. Bich made

at the Heenan meeting as Pichette map #2 was not even being dreamed about at that

time. It’s was rejected by Mr. Bich right up to September 3. The map that he presented

on August 27,¹⁵¹was very different from Pichette map #1 particularly as regards the

eastern boundary of his coveted portion. Pichette map #2 made only a minor concession

to that boundary. While Mr. Pichette’s western line might have been confirmed as a

conservation line, this was not confirmed on September 3 and, as the Court has said, Mr.

Bich was categorical that a condition for him was that he own the area between Mr.

Pichette’s western line and his eastern one.

[291] When Plaintiffs posit that the lack of final agreement on the boundary did not

preclude the formation of a contract they are wrong, as they invite the Court to ignore the

evidence. Clearly the boundaries were an essential element for Mr. Bich, so no contract

was concluded on September 3.

[292] In sum, the Court considers that the email was an invitation to continue the

discussions. If it were to be characterized from a juridical perspective, at best, it would

have been a conditional offer from the Pichette group to move forward on the basis of

Pichette map #2 with the capital contributions being $27 million from the Pichette group

and $18 million from the Bich group. However, the conditional offer was withdrawn before

Mr. Bich accepted it.

[293] Mr. Harpur understood that Mr. Bich would need to discuss the proposal with his

partners. This was not an unreasonable assumption given the documentary evidence.

Several examples support this, going right back to his February 1 email to Mr.

Desmarais.¹⁵²There are others around September 3. On August 22, Mr. Bich felt the

need to speak to Mr. Desmarais to get his approval on the deal he was close to.¹⁵³On

August 26 he informed Mr. Harpur that he still needed to hear back from the Bellini

family.¹⁵⁴Then on September 3, after getting the proposal, he continues to talk about

building lots, “[s]o that I have all of the information to give to the others”.¹⁵⁵

151

With exhibit P-320.

Exhibit P-98.

Exhibit D-24.

Exhibit P-316.

152

153

154

155

Exhibit P-364.

500-17-091838-154

49

[294] This email to Mr. Harpur on September 3 that Mr. Bich wrote minutes after

receiving the former’s proposal is perhaps the most poignant. Mr. Bich was still focused

on how many housing sights there would be. Mr. Harpur answered, saying that it would

depend on the conservation plan.¹⁵⁶

[295] As to the alleged phone call between Mr. Bich and Mr. Harpur on September 3,

the Court finds Mr. Harpur’s version that there was no call more credible. Mr. Bich would

not have needed to send the email on the building lots if there had been a call. In addition,

the call was not alleged in the Re-amended Originating Application. And, why carry out

the most important part of the discussion by phone when everything else was

documented on paper?

[296] In any event, even if there was a call, the evidence shows that contrary to his

testimony about the call, Mr. Bich and his partners were not “good to go”. However, for

arguments sake, even if the Court accepted that there was a call with Mr. Harpur on

September 3, this would not change the conclusion of the Court that there was no

agreement on September 3. Clearly Mr. Bich did not have the agreement of his partners

to accept the September 3 proposal and he required it to move forward.

[297] The communication of September 13¹⁵⁷from Mr. Bich to Mr. Pichette and Mr.

Harpur is a clear indication of this. Mr. Bich was still worried about building sites and had

to finalize something with his partners. Moreover, contrary to what Mr. Bich said at trial,

this was not merely informational. Mr. Bellini was specifically enquiring about it, asking

for an update on resolving the last few points, including building density.¹⁵⁸So, as we

have seen throughout the narrative, Mr. Bich needed the consent of his partners to bind

them and he did not have that on September 3.

[298] His communications to Mr. Desmarais on September 13 and 14 that there were

decisions to make also provide clear indication that there was no deal.¹⁵⁹The September

14 one gives pause, as Mr. Bich refers to having an agreement with Mr. Pichette when

the latter had in fact not confirmed his agreement with the proposal of September 3 made

by Mr. Harpur.

[299] On September 13, Mr. Bich was also meeting with the brokers. He did not advise

them of an agreement having been concluded on September 3. He wanted clarifications

on the bid process. What is more, the impression of Mr. MacDougall was that Mr. Bich

was putting his own group and bid together.¹⁶⁰Moreover, at this meeting Mr. Bich did not

disclose his partners; curious if he had agreed to a deal with Mr. Pichette and Mr. Harpur!

The Court does not have a finite idea of Mr. Ratsch’s impression as he did not testify.

156

Ibid.

Exhibit P-406.

Exhibit P-409.

Exhibits P-410 and D-145.

157

158

159

160

Exhibit P-441, email of September 16, 2013 at 12:30 PM.

500-17-091838-154

50

[300] Mr. MacDougall testified that Mr. Bich also wanted information on the chalet rental

business, something that, based on their July 19 document, the Bellinis wanted to

terminate. This was a significant divergence from the approach of the Pichette group

which was prepared to maintain that business. These late inning inquiries of Mr. Bich are

another indication that he did not think he had a deal on September 3.

[301] Another demonstration of same is that on September 15 he wrote to Mr. Harpur

musing “…if and how we put an offer together”. It is also worth pointing out that this email

was not answered in a substantive way, an indication that the Pichette group did not think

they had made a deal either.

[302] Mr. Harpur telling Mr. Bich on September 19 that the 60/40 proposal was off the

table does not change this. For him the September 3 proposal had never been finalized,

as Mr. Pichette had never confirmed the property line.

[303] It is true that between September 15 and 19, Mr. Harpur was doing his best not to

talk to Mr. Bich, but the Court does not view this as bad faith. He and Mr. Pichette were

trying to put a deal together with Mr. Bich and set out a framework on September 3. At

the risk of repetition, Mr. Bich did nothing to move the deal ahead and when he surfaced

on September 13 was still not ready. Any reasonable business person would have been

reluctant to treat in these circumstances.

[304] This also explains Mr. Pichette’s reaction. When he went to Africa, he was aware

of the general tenure of what Mr. Harpur was going to propose on September 3, the first

inning for him. He expected progress upon his return and there was none. In the Court’s

view, the cause of the lack of progress sits squarely with Mr. Bich, who did nothing to

move the deal forward.

[305] Mr. Pichette thought that he was being strung along by three billionaires and was

worried that they might do a deal without him. Indeed, Mr. Bich’s interactions with the

brokers during this timeframe give some credence to the possibility that Mr. Bich might

have been trying to do his own deal. The Court cannot fault him for asking Mr. Harpur to

come forward with a “plan B”.

[306] Nor is it surprising that Mr. Pichette never reverted on the September 3 proposal,

as Mr. Bich never confirmed that he had presented the September 3 proposal to his

partners.

[307] In fact, he did nothing to move the deal forward and there are no written

communications in the record to demonstrate that he did. This belies common sense. In

a file where there are hundreds upon hundreds of exhibits, the supposedly key document

and agreement was not presented to Mr. Bich’s partners in writing?

[308] That some progress occur while Mr. Pichette was travelling was essential for him

to consider moving forward with Mr. Bich. There was none; Mr. Bich did not even try to

communicate with the Pichette group before September 13.

500-17-091838-154

51

[309] Discussion of the price is also important. The testimony of Mr. Bellini is instructive

of the lack of complete agreement on this aspect of the deal. He talked about a deal of

between $45 and $50 million, with the Bich group putting up a maximum of $20 million.

He does not believe that they were prepared to commit to an un-capped amount based

on a 60/40 split. This is not without importance, as given the final price it was not

demonstrated that the Bellinis would have committed additional funds for the Lake

Maholey sector. In the context of a deal with the Pichette group, the terms of the Bellini’s

agreement to participate, communicated on July 19, limited their contribution to $10

million¹⁶¹and these terms were not changed.

[310] It is true that when the deal with the Pichette group had clearly fallen apart, Dr.

Bellini offered to put up $25 million in an independent offer, for the whole property, but

the evidence does not show that he would have put up more to secure his initial interest.

[311] The funds of Mr. Desmarais were not secured either, so one wonders if Mr. Bich

really had his financing in order. This is all the more clear when one considers his

deposition around the need to finalize something with his partners:

Q- And you say:

“I still need to sit down with our parties.” “Our parties”; who do you mean by that?

A- That would probably be André Desmarais, and I do not know if it would include

Roberto Bellini or Francesco Bellini.

Q- And what’s the “something”?

A- The “something”? It’s the details.

Q- Of what?

A- Of the transaction.

Q- Could you be more specific?

A- Where we want to go with the transaction now that we have an agreement to

sixty/forty (60/40), where are we going.

Q- Well, I’m not sure I understand you. Are you going or you’re not going?

A- No, were we going... our details on our side.

Q- What needs to be finalized there? Remember, you’re telling that to Doug

Harpur, you’re telling that to the Defendants...

161

Exhibit D-196.

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A- Right.

52

Q- “I still need to sit down with our parties to finalize something.” So there seems

to be something else that’s still up in the air and needs finalizing.

A- No, I think it speaks to the details that we know are not deal breakers, is the

term I’ve used, and that we need to finalize these details.

Q- But do you know what they are? Because we could have a different opinion

from you as to whether they’re deal breakers or not.

A- For us, only left on our side would be for André and I, the membership, if we’re

doing members or putting capital ourselves. And that’s all I can think of as things

that...¹⁶²

(The Court’s underlining)

[312] The most plausible conclusion that one can retain from this testimony is that Mr.

Bich needed the agreement of his partners to conclude any deal. However, an even more

important element is that he had not obtained a commitment from Mr. Desmarais that the

latter was prepared to commit funds, even in the absence of the sale of memberships to

LWE.

[313] For Mr. Demarais, the refinancing of LWE was a condition precedent to moving

forward from the outset and remained so on September 21¹⁶³and even as late as

September 23, 2013.¹⁶⁴Given the absence of new members on September 3, Mr. Bich

could not affirm that Mr. Desmarais would actually commit $5 million. The contrary seems

to be the case.

[314] What’s more there is no conclusive evidence that Mr. Desmarais would have

ultimately put up his $5 million, as post September 3 no one, including Dr. Bellini, had

subscribed to memberships in LWE.¹⁶⁵The testimony of Mr. Desmarais might have

clarified this issue, but it was not offered.

[315] This element of the evidence also goes to the very heart of good faith in contractual

dealings and to Plaintiffs’ argument that “Les deux parties doivent agir dans un esprit de

coopération et se retirer des négociations dès qu'elles perdent l'intérêt de passer ledit contrat ”.¹⁶⁶

[316] For the Court, not disclosing this condition of the Plaintiffs’ financing to the Pichette

group demonstrates that it was actually Mr. Bich who was in bad faith in its contractual

162

Pre-trial examination of Mr. Bich of May 12, 2016, pp. 168-169.

Exhibit D-149.

Exhibit D-283.

163

164

165

On the issue of the LWE memberships, one might also consider Mr. Bich’s entreaties to Mark Smith on

September 14, looking for help to finalize this element of the transaction, found in Exhibit D-277.

Plaintiffs’ Plan of argument, par. 334.

166

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53

dealings. It also gives much credence to Mr. Harpur’s analogy of not getting the tennis

ball returned.

[317] The evidence also demonstrates that after the Bich group missed the bid deadline

that Mr. Desmarais did not rush to offer to contribute additional capital, preferring a wait

and see approach.

[318] Despite this overwhelming evidence, Plaintiffs state:

164. As testified by Bich, considering the unique opportunity Kenauk represented,

and although AD would have preferred for Bich to find partners prior to the

acquisition, Bich would have made the acquisition whether or not he was able to

find members for the hunting club prior to the bid deadline.¹⁶⁷

[319] The Court cannot accept this. Throughout his testimony Mr. Bich repeated that he

and Mr. Desmarais only had $5 million each to put into the venture and were not prepared

to borrow.¹⁶⁸In fact, an oft repeated idea that he pitched to Mr. Desmarais was that if they

sold enough memberships, neither would have to put up any capital. There is not one iota

of evidence that Mr. Desmarais would have proceeded without the sale of memberships

or that Mr. Bich had the resources to do the deal without him. Mr. Bich inference that Mr.

Desmarais would have gone ahead is disingenuous and unsupported by the evidence.

[320] Finally, on this element, the Court agrees with Defendants that it can draw a

negative inference from the absence of Mr. Desmarais as a witness. Justice Duprat

discussed this in Informatique Côté Coulombe inc. c. Produits chimiques Magnus ltée:

[61] M. Robitaille n’a pas été appelé comme témoin lors du procès. Il est certain

que son témoignage aurait pu fournir au Tribunal des éclaircissements précieux.

Il a été l’un des principaux acteurs de l’installation et du déploiement pour Magnus.

[62] Le Tribunal est d’avis qu’il est approprié de tirer une inférence négative de

cette situation, particulièrement alors qu’ICC établit un doute sérieux sur la

compétence de M. Robitaille. Le juge Louis Crête dans 6891055 Canada inc. c.

3561704 Canada inc., rappelle :

70 Il existe une règle jurisprudentielle en droit de la preuve en matière civile

voulant qu'il faille tirer une conclusion défavorable à une partie lorsqu'elle omet de

faire entendre un témoin qui pourrait venir fournir une information importante et

pertinente et, le cas échéant, contredire une preuve faite par la partie adverse:

(ii) Failure to Testify or to Call a Material Witness or Other Evidence

6.449 In civil cases, an unfavourable inference can be drawn when, in the absence

of an explanation, a party litigant does not testify, or fails to provide affidavit

167

Ibid. par. 164.

168

Mr. Bich did say at one point that thy might be prepared to put in slightly more, say $5.2 million,

depending on the bids.

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evidence on an application, or fails to call a witness who would have knowledge of

54

the facts and would be assumed to be willing to assist that party. In the same vein,

an adverse inference may be drawn against a party who does not call a material

witness over whom he or she has exclusive control and does not explain it away.

Such failure amounts to an implied admission that the evidence of the absent

witness would be contrary to the party's case, or at least would not support it.

6.450 An adverse inference should be drawn only after a prima facie case has been

33

established by the party bearing the burden of proof.»

71 Ce principe avait été énoncé au Canada dans la cause fréquemment citée

34

de Murray v. Saskatoon, cause où la Cour d'appel de la Saskatchewan se réfère

elle-même à Wigmore on Evidence:

The failure to bring before the tribunal some circumstance, document, or witness,

when either the party himself or his opponent claims that the facts would thereby

be elucidated, serves to indicate, as the most natural inference, that the party fears

to do so, and this fear is some evidence that the circumstance or document or

witness, if brought, would have exposed facts unfavourable to the party. These

inferences, to be sure, cannot fairly be made except upon certain conditions; and

they are also open always to explanation by circumstances which make some

other hypothesis a more natural one than the party's fear of exposure. But the

propriety of such an inference in general is not doubted. [Soulignements du

Tribunal]¹⁶⁹

(References omitted)

2.4.3.1 Was there a Bilateral Promise to Contract

[321] The Court will now briefly address Plaintiffs’ contention that if there was not a

contract concluded on September 3, there was a bilateral promise to contract. Central to

Plaintiff’s argument is that the September 3 document contained all of the essential

conditions for the formation of a contract.

[322] This concept was considered by Justice Matteau in Dumoulin c. Hydro-Québec:

[65] Contrairement aux prétentions de la défenderesse, la preuve non contredite

est à l'effet que tous les éléments essentiels à un engagement contractuel valide

étaient arrêtés entre les parties.

[66] Avec égards, conclure, comme le souhaiterait la défenderesse, que toutes

les discussions, rencontres et communications écrites qui ont eu lieu entre les

parties, de même que tous les faits et gestes posés par Hydro-Québec, n'auraient

été que des pourparlers ou des préliminaires à la conclusion éventuelle d'un

contrat qui, par ailleurs, ne se serait jamais formé, ne résiste pas à l'analyse de la

preuve.

169

2018 QCCS 1494.

500-17-091838-154

[67] En effet, la décision d'Hydro-Québec était à ce point arrêtée qu'un décret

55

émis par le Gouvernement du Québec, en mars 1996, l'autorisait à aller de

l'avant. Elle ira même jusqu'à signer avec la Municipalité un protocole d'entente

pour prévoir, entre autres, les modalités de la construction du chemin d'accès au

poste électrique.¹⁷⁰

[323] Justice Matteau held that there was a formal promise to contract on the part of

Hydro-Québec.

[324] The situation is different here. Firstly, the arrangement proposed by Mr. Harpur

needed to be confirmed by his partner, Mr. Pichette. Secondly, ownership of the possible

conservation area was an essential condition for Mr. Bich. Finally, despite what he alleges

to have said on September 3, Mr. Bich never confirmed that his partners were prepared

to move forward. On September 13 he still had to sit down and finalize something with

them.¹⁷¹

[325] In sum, the Court cannot find that there was a binding promise to contract.

2.4.4 Did Defendants Commit a Fault When they Terminated

Discussions?

[326] When it is clear that discussions are going nowhere, a party may end them. This

is made clear by the Court of Appeal in Singh c. Kohli:

[71] This oft-cited sentence must be read in context, however, and it is worth

repeating that 1) except in circumstances which are themselves the result of the

freedom to contract (or not to contract), no one has to enter into a contract or make

a promise to contract, and 2) that there is a correlative right to terminate

negotiations. That such negotiations are generally undertaken with the anticipation

that a contract will ensue does not mean that one party cannot change his or her

mind along the way, even at the last minute. Good faith, in that sense, is not meant

to limit freedom to contract or not to contract but to ensure that parties act honestly

and loyally during the negotiations.¹⁷²

[327] These words are very “à propos” here, given that following the September 3 email,

Mr. Bich had done nothing to move the matter forward.

[328] As to the good faith of Mr. Pichette, he felt that he was being played, given the lack

of feedback. It turned out that he was being played, given the lack of financing on the Bich

group’s side and given Mr. Bich’s constant return to the number of building sites on the

property.

170

2003 33244 (QC CS).

Exhibit P-406.

2015 QCCA 1135.

171

172

500-17-091838-154

SECOND ISSUE IN DISPUTE

56

[329] Following the failure to conclude a joint bid, did the Pichette group agree to provide

the Western lands to Mr. Bich?

3.1 Conclusion

[330] There was no agreement to do so.

3.2 Facts relevant to the issue

[331] The Court can be brief on this issue as the conclusions of Plaintiffs’ application ask

for Mr. Bich to be declared owner of a large tract of land set out in Exhibit P-30a,

essentially the entire portion of the lands that he and Mr. Desmarais had coveted from

the outset of the discussions.

[332] The relevant facts will be considered in the discussion below.

3.3 Legal principles

[333] Here, the Court must determine whether Mr. Pichette agreed to transfer this land

to Mr. Bich in the event that his group’s bid was accepted. The general principles of

contract apply.

3.4 Discussion

[334] There was clearly no agreement concluded, whereby, the Pichette Group would

transfer the Western portion to Mr. Bich if it successfully acquired the land.

[335] Following the September 22 phone conversation, Mr. Bich wrote the following:

Will be working on what land we would be interested in but wanted to ask you a

question first. Would you want to keep as much as possible or would us offering to

take on more so you have less to manage be better?¹⁷³

[336] In the same email exchange Mr. Pichette confirmed that he would keep of the land

as possible and that Mr. Bich’s portion would be a carve-out.

[337] Yet, on September 24, Mr. Bich presented two options, both of which included

Lake Maholey and a large part of the Western lands.¹⁷⁴They were refused by Mr.

Pichette, as he wanted Mr. Bich to present an option with Lake Maholey and one without

it.¹⁷⁵

173

Exhibit P-496; This email of Mr. Bich is also interesting as it does not raise the breach of any agreement.

Exhibit P-544.

Ibid.

174

175

500-17-091838-154

57

[338] This was never done as the Bellinis had asked Mr. Bich to make one offer, which

included Lake Maholey.¹⁷⁶

[339] More importantly on this issue, the idea of a carve-out did not suit Mr. Bich, as it

did not give him the critical acreage that he was looking for to make LWE world class. Mr.

Pichette never offered more, so there was never an agreement on the essential elements

of the transfer of the Western lands. There was not even an agreement on price.

[340] As late as September 30 Mr. Bich said the following:

Patrick

I was thinking about the minimum hunting area we could use if it is really a problem

for us to get 25,000 acres. Map attached is about 18,500 acres and as you have

always asked me to put $ to the areas I was thinking 6M.

If you can please let me know if something like this or ideally the other map with

25,000 or the 30,000 acre would work I would appreciate it.

If we could find an arrangement that would work for us to be included with area we

would like it would reduce the amount of capital you and the others involved need

to put in.¹⁷⁷

[341] This document shows two things. First, there was no agreement that Mr. Pichette

would concede land to Mr. Bich and, second, Mr. Bich continued to press for much more

land than Mr. Pichette was ever prepared to consider transferring to him.

[342] Nonetheless, Mr. Pichette and Mr. Bich kept talking even after the Pichette group

submitted its bid. Mr. Bich was still desperate to get the land that he wanted, although Mr.

Pichette was trying to get him to understand that following the submission of the bid that

the decision on a piece of land for Mr. Bich would need to be considered by his new

partners. There was no agreement.

[343] There is one exchange that gives pause, being Mr. Pichette’s email to Mr. Harpur

of September 30. Following his group’s decision to increase its bid by $3 million he writes:

We are now in a great position. Well done +/- a Million or two.

I thought it important to tell Charles that it was guaranteed he would have a deal

with them. Life is long and we need to stay good partners in the community.

[344] Plaintiffs would like this to be interpreted as a guarantee from Mr. Pichette to Mr.

Bich that he would get his land.

176

Exhibit P-523.

177

Exhibit P-609; there are a significant number of additional communications post September 22 where

Mr. Bich also acknowledges that there was no agreement by Mr. Pichette to concede land to him.

500-17-091838-154

58

[345] Mr. Pichette on the other hand, said that he was referring to Joel Bonin of the NCC

and the deal that it would have with the Lyme Timber.

[346] Plaintiff’s argue that:

The only logical way to understand Pichette’s email to Harpur is to read it the way

it was written: Pichette told Bich it was guaranteed he, being Bich, would have a

deal with them, Pichette’s partners.¹⁷⁸

[347] This might well be a way to read the email, but Mr. Pichette was writing to Mr.

Harpur, so the “them” would have been “us” in that context.

[348] In addition, in his pretrial discovery, Mr. Pichette gave a fuller account of what he

was thinking and his explanation at trial was consistent with what he said then.¹⁷⁹

[349] In the Court’s view the real meaning of this email is moot in any event. While in the

end Mr. Pichette never offered anything to Mr. Bich, as the Court has said, Mr. Bich never

met the conditions that Mr. Pichette had set out for any possible discussion with Mr. Bich

to move forward on the Western lands if his group was successful. His proposals always

included a post bid transfer of both the Western lands and Lake Maholey. In addition the

acreage that Mr. Bich was asking for was well in excess of what Mr. Pichette was

prepared to propose to his group.

[350] Relating these facts to the requested conclusions of Plaintiffs’ application, the

Court adds that Mr. Bich never made an independent conditional offer to Mr. Pichette for

the lands he now claims.

[351] The same holds true for the Lake Maholey portion of the property that the Bellini

family wanted. Following the decision of the Pichette group to move forward without Mr.

Bich, the only thing that Mr. Pichette put on the table was some of the Western portion of

the property. He did leave an opening for Mr. Bich to present the two proposals discussed

above (one with Lake Maholey and one without), but Mr. Bich never did this.

[352] Finally neither the Bellini family, nor Plaintiff Picchio made a conditional offer for

the lands around Lake Maholey in the event the Pichette group was successful. In fact

they never had independent communication with Mr. Pichette.

THIRD ISSUE IN DISPUTE

[353] Plaintiffs argue that Defendants conduct prevented them from making their own

offer for the property.

178

Plaintiffs’ Plan of argument par. 213.

Pre-trial examination of Mr. Pichette of August 23, 2016, page 175 and following.

179

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59

4.1 Conclusion

[354] Defendants did not prevent Plaintiffs from making an offer.

4.2 Discussion

[355] Plaintiffs’ view on this issue seems to be grounded on the erroneous premise that

they were bound by an exclusivity agreement as of August 22, 2013. This position is,

however contradicted by their own documents.

[356] It is also contradicted by their own conduct. Mr. Bich and Mr. Bellini were looking

at other options in September and Mr. Bich was consulting with Mr. Smith about other

investors.

[357] Most importantly, no independent offer was made because contrary to what he

had insinuated throughout the discussions with the Pichette group, Mr. Bich’s group did

not have the financing to make its own offer. Even if Dr. Bellini might have put up $25

million, Mr. Bich was only prepared to put up $5 million. As for Mr. Desmarais it is

uncertain that he was prepared to put up any money whatsoever. The requisite number

of memberships in LWE had not been sold and this was his condition for going forward.

[358] Moreover, this fact can be juxtaposed with Mr. Bich having been encouraged to

make an independent offer by Mr. Pichette on a number of occasions following the

breakdown of their discussions.

[359] The fact that his group discussed making an offer after the bid deadline, but failed

to do so is another element illustrative of their lack of financing. Certainly the reason for

Mr. Bich not making his own bid had nothing to do with any ongoing discussions with Mr.

Bich.

[360] The Bich group did submit a non-binding letter of intent on September 30, with a

price of $50 million. This, of course, did not trump the Pichette group’s formal offer, but it

did perhaps open a door. Mr. Ratsch following the receipt of this letter spoke to them and

encouraged them to make a formal offer respecting the bid conditions and to increase the

price.¹⁸⁰They did not walk through the door, failing to submit a formal offer.

[361] The Court acknowledges that this is somewhat of a secondary issue, but it is not

without significance given what Mr. Bich is asking. In a situation where he never confirmed

to Mr. Pichette that his partners were prepared to move forward, likely because of his

failure to secure the LWE memberships, and where the broker gave him a chance to

make an offer after the deadline and he did not, he now wants the Court to give him the

lands that he could not pay for in 2013 either with his own group or as part of Mr.

Pichette’s. This is a non-starter.

180

Exhibit P-625.

500-17-091838-154

60

[362] As for the Bellinis receiving the Lake Maholey sector, while they clearly had the

financing for the portion of the property that they wanted, they chose to be part of a joint

approach with Mr. Bich and must suffer the same fate. Moreover, like Mr. Bich, when Mr.

Ratsch suggested that they make a formal offer after the deadline, they did not do so.

[363] In short, they failed to put an adequately financed alternate group together and

now want to blame Defendants, which the Court will not caution.

FOURTH ISSUE IN DISPUTE

[364] Plaintiffs posit that the Court should consider Defendants’ ultimate approach in

making their bid to Oxford to judge whether their position that the September 3 email

lacked the essential elements to be a joint bid agreement is well founded.

[365] This position is grounded in Plaintiffs’ argument that “a meeting of the minds on

the essential elements is sufficient to form a sui generis contract.”¹⁸¹For them the ultimate

partners in the bid made to Oxford had not agreed on precise land boundaries and Lyme

Timber had not fully committed its capital contribution, only agreeing to include $12.5

million for the purposes of the bid.

[366] The Court cannot accept this argument. There was a level of trust that was

immediately forged between the individuals in the Pichette group that allowed them to

move forward without all of the details having been worked out; but the essential elements

were. This was not the case between the Bich and Pichette groups. They did not trust

one another and for Mr. Bich ownership of the proposed conservation area was essential

and the true nature of the boundaries was never finalized.

FIFTH ISSUE IN DISPUTE

[367] Given the Court’s conclusion on the principle issues the determination of the

appropriate Plaintiffs is secondary, it is not without interest, particularly in relation to

whether Plaintiffs’ action is abusive.

6.1 Conclusion

[368] Picchio is not an appropriate plaintiff. It was not a party to any of the negotiations

with the Pichette group or even in the discussions with Mr. Bich.

[369] As for Mr. Bich, he may be an appropriate plaintiff, but the evidence does not allow

him to put forward the requested disgorgement order whereby he would get all of the

Western lands.¹⁸²His claim in damages is also questionable. The proof was to the effect

that he only had one quarter of the capital required to be a part of the proposed 60/40

split, which would not have given him ownership of all that he now claims.

181

Plaintiffs’ written argument par. 264.

Exhibit P-32 provides a striking example of this reality.

182

500-17-091838-154

6.2 Legal Principles

61

[370] Article 85 C.C.P. reads as follows:

85. To bring a judicial application, a 85. La personne qui forme une

person must have a sufficient interest.

demande en justice doit y avoir un

intérêt suffisant.

The interest of a plaintiff who intends to

raise a public interest issue is assessed on L’intérêt du demandeur qui entend

the basis of whether the interest is soulever une question d’intérêt public

genuine, whether the issue is a serious s’apprécie en tenant compte de son intérêt

one that can be validly resolved by the véritable, de l’existence d’une question

court and whether there is no other sérieuse qui puisse être valablement

effective way to bring the issue before the résolue par le tribunal et de l’absence d’un

court.

autre moyen efficace de saisir celui-ci de la

question.

[371] The Supreme Court of Canada provides an interpretation of this article in Brunette

v. Legault Joly Thiffault, s.e.n.c.r.l.:

[14] In the context of an action in civil liability, this typically means that, “to have

the necessary interest to bring an action, a person must have sustained personal

injury”: Bou Malhab, at para. 44. This requirement is confirmed by the rules

respecting damages in Quebec. As this Court noted in Bou Malhab, “the rules of

civil liability in the C.C.Q. provide that injury is compensable if it is personal to the

plaintiff. The purpose of compensation is to put the victim back in the situation he

or she was in prior to the injury. The wording of arts. 1607 and 1611 C.C.Q.

confirms that the compensated injury must be personal to the creditor of the right

to compensation”: para. 47. This coherence with the C.C.Q. reinforces the

conclusion that the “sufficient interest” at issue under art. 55 of the former C.C.P.

must be direct and personal and cannot, barring an exception at law, be premised

on another party’s right of action.

[…]

[25] The C.C.Q. recognizes that legal persons such as corporations have a

distinct legal personality (art. 298) and a distinct patrimony (art. 302). As with all

legal persons, corporations “have full enjoyment of civil rights” (art. 301) and the

“capacity to exercise all their rights” (art. 303). Read together, these provisions

lead to the conclusion that the right of action of a corporation belongs to the

corporation itself. Like other claimants with the capacity to act, the corporation itself

must exercise its rights of action in its own name. The corollary is that shareholders

may not personally exercise a right of action that belongs to the corporation: P.

Martel, La société par actions au Québec (loose-leaf), vol. 1, at para. 1-28.¹⁸³

183

2018 SCC 55.

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6.3 Facts Relevant to the Issue

62

[372] The Court need not again resume the facts relating to LWE; save to repeat that

LWE was not Mr. Bich alone. He owned 40%, Mr. Desmarais owned 40% and Dr. Mike

Bringans owns 10%.

[373] What gives pause is that there is not one iota of evidence that Mr. Bich intended

to make the purchase on his own account and for his personal use. It was all about

improving the quality of the guest experience at LWE. This is clear throughout the

evidence.

[374] On August 20, he informed Mr. Pichette and Harpur of the parcels that LWE and

the Bellinis were interested in.¹⁸⁴On August 23, Mr. Bich wrote his partner, Mr. Desmarais

to set out a proposal where LWE would get 33,000 acres.¹⁸⁵On August 25 he refers to a

“tremendous opportunity for LWE”.¹⁸⁶On August 27 in an email to Mr. Bellini¹⁸⁷setting

out land distribution options, he refers to the “Hunting operation” and the Bellini family.

On the same day the same terms are used in an email to Mr. Pichette and Mr. Harpur.¹⁸⁸

Clearly the hunting operation was not his alone.

[375] An even more poignant indication that Mr. Bich did not intend to purchase on his

own account comes from the letter of intent that his group sent to Oxford:

Such purchase shall be effected through the purchase by the Purchaser of all of

the issued share capital of 4345126 Canada Inc. as nominee for OREC Kenauk

Holdings Limited Partnership as described in Section 45 of the draft Purchase and

Sale Agreement the form of which has been provided by the Vendor to the

Purchaser.¹⁸⁹

[376] Granted, in his discussion with the Pichette group, he never really specified how

his group’s portion of a joint bid might be structured. In his testimony he did say that LWE

would have set up a new acquisition corporation. It is not clear whether it would have

been set up before or after a joint bid, so perhaps he is a proper plaintiff, but where is his

partner Mr. Desmarais? Mr. Bich cannot now claim solely for himself what he would have

shared with Mr. Desmarais.

[377] Moreover, while the Bellini name came up in the discussions, the Picchio name

never did. Plaintiffs cannot be liable to an entity that they never engaged with or even

were aware of Dr. Bellini should have been a party himself.

184

Exhibit P-287.

Exhibit D-24.

Exhibit P-309.

Exhibit P-322.

Exhibit D-26.

Exhibit P-613.

185

186

187

188

189

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[378] The last task for the Court is to consider whether Plaintiffs’ application is abusive

or perhaps weather that have committed an abuse during the course of the proceeding.

7.1 Conclusion

[379] While the application may not have been abusive from the outset, it became so

when Plaintiffs elected not to present the evidence necessary to support their action to

the Court. This goes for both Mr. Bich and Picchio.

7.2 Discussion

[380] Let’s start with another look at paragraph 75 of the Re-amended Originating

Application:

75. Between September 3 and September 22, 2013, Bich attempted to

communicate with Pichette and Harpur to push forward their apparent joint bid

agreement and its implementation;

[381] This is simply not true. Between September 3 and at least September 13, there

was no communication with either Mr. Pichette or Mr. Harpur. In addition, on September

13, the communication with the Pichette group was not to push the bid forward, but to

advise that Mr. Bich still needed to finalize something with his partners. The next day with

his partner Mr. Desmarais, he was musing about whether they would even make a bid.

[382] And the uncertainty continued right up to September 22, as there were no new

LWE memberships, so there had in fact been no work whatsoever on an “apparent joint

bid”.

[383] Paragraph 79 c) is no better. The Court will produce it again:

79. It is in that context that on September 22, 2013, having been pursued and

tracked down by Plaintiffs, five days before the bid deadline, that Pichette informed

Bich of the following:

[…]

c) that despite this alternate purchase arrangement, Pichette would

turn over to Plaintiffs the portions of the Property Plaintiffs were

interested in, should Defendants be successful in getting their bid

accepted by Oxford;

[384] There was never an agreement to turn over the Western portion of the property

and Lake Maholey was never even discussed, as Mr. Bich never provided the proposals

that Mr. Pichette requested of him.

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64

[385] This sophistry being in the pleadings and for the most part maintained throughout

the trial, Defendants had to address it.

[386] Several other allegations of the Re-amended Originating Application are gross

exaggerations of the proof that was made¹⁹⁰and when given the chance to correct some

of these, neither Mr. Bich, nor Mr. Bellini did so. The Defendants had to address them.

[387] Paragraph 113 of the Re-amended Originating Application is another example that

give pause:

113. The Defendants have also illegally taken advantage of and used for their

own benefit (namely to acquire the Property), work and information provided to

them in confidence by Plaintiffs;

[388] The only information exchanged was high level around land valued and the values

of the lakes. Mr. Harpur had been considering this independently in any event and with

much more detail and rigour than Mr. Bich. The reality is that Mr. Bich exchanged little

information with the Pichette group, some of it, like his financing issues, being crucial to

an eventual deal.

[389] The disconnect between the allegations of the demand and the proof that is made

can be a reason for which a court might find a proceeding abusive:

[9] Un « comportement blâmable » dans l’exercice d’un recours, c’est aussi,

même sans mauvaise foi ou intention de nuire, faire preuve de témérité, par

exemple en formulant des allégations qui ne résistent pas à une analyse attentive

et qui dénotent une propension à une surenchère hors de toute proportion avec le

litige réel entre les parties. En l’occurrence, il est certain qu’un facteur aggravant

tient au fait que de telles allégations ont été présentées en demande

reconventionnelle dans le cadre d’un recours qui, envisagé de manière réaliste et

pratique, avait la simplicité d’une modeste action sur compte.¹⁹¹

(The Court’s underlining) (References omitted)

[390] But there is more.

[391] In the Court’s view, the documentary evidence in the record between September

3 and September 23, much of it emanating from Mr. Bich himself or his partner André

Desmarais, shows that Plaintiffs’ insistence that an agreement was concluded on

September 3, is clearly unfounded. Had he given the reading of a reasonable person to

these documents, Mr. Bich should have realized this. Only temerity could have led him to

push his action forward in the way that he did the paragraphs of the Re-amended

Originating Application that the Court has referred to are examples of same. Conduct

190

Examples are paragraphs 54, 56, 57, 63,

El-Hachem c. Décary, 2012 QCCA 2071; see also Deblois c. Procureur général du Canada, 2020

191

QCCA 843, par. 18 and Procureur général du Québec c. Lamontagne, 2020 QCCA 1137 par. 55.

500-17-091838-154

65

laced with temerity may be abusive as the Court of Appeal recognized in Royal Lepage

commercial inc. c. 109650 Canada Ltd.:

[46] Que faut-il entendre par témérité? Selon moi, c’est le fait de mettre de l’avant

un recours ou une procédure alors qu’une personne raisonnable et prudente,

placée dans les circonstances connues par la partie au moment où elle dépose la

procédure ou l’argumente, conclurait à l’inexistence d'un fondement pour cette

procédure. Il s’agit d’une norme objective, qui requiert non pas des indices de

l’intention de nuire mais plutôt une évaluation des circonstances afin de déterminer

s’il y a lieu de conclure au caractère infondé de cette procédure. Est infondée une

procédure n’offrant aucune véritable chance de succès, et par le fait, devient

révélatrice d’une légèreté blâmable de son auteur. Comme le soulignent les

auteurs Baudouin et Deslauriers, précités : « L’absence de cette cause

raisonnable et probable fait présumer sinon l’intention de nuire ou la mauvaise foi,

du moins la négligence ou la témérité ».¹⁹²

[392] More recently in 2741-8854 Québec inc c. Restaurant King Ouest inc., 2018 QCCA

1807 the Court of Appeal considered article 51 C.C.P.:

[26] Pour l’essentiel, le libellé de l’article 51 C.p.c. reprend celui de

l’article 54.1 a.C.p.c., à l’exception des termes « sans égard à l’intention » ajoutés

à la suite d’une certaine controverse jurisprudentielle. Tout comme son

prédécesseur, l’article 51 C.p.c. vise une panoplie de situations qui « peu[vent]

résulter/may consist » en un abus, au sens de cette disposition. Le spectre est

large. On peut concevoir, à l’une extrémité, l’acte de procédure, introduit de bonne

foi ou sans malveillance ou témérité, mais qui s’avère néanmoins « manifestement

mal fondé », et, à l’autre extrémité, la « poursuite-bâillon » d’un justiciable qui ne

vise qu’à limiter la liberté d’expression de l’autre partie ou, encore, une utilisation

excessive et déraisonnable par un plaideur de la procédure, caractérisée par la

quérulence. Entre ces extrémités du spectre, on peut y voir, par exemple, une

action frivole ou encore vexatoire, ou même l’action manifestement mal fondée

qui, sans intention malicieuse, constitue néanmoins une faute civile.

[27] Ainsi, dans une perspective de droit privé et de cohérence législative, le

qualificatif d’« abus » employé à l’article 51 C.p.c. pour décrire l’acte de procédure

« manifestement mal fondé », en l’absence de toute faute justifiant une

responsabilité civile, peut étonner, en plus d’être source de confusion. En raison

du langage législatif adopté, la notion d’abus est dorénavant élargie, à certains

égards, à des concepts qui, autrefois – et même encore aujourd’hui si l’on pense,

entre autres, à l’article 365 C.p.c. –, n’étaient pas considérés à ce titre.

(References ommitted)

[393] Picchio must suffer the same fate. Apart from the fact the corporate entity has no

right of action, the Bellinis never spoke to Mr. Pichette or Mr. Harpur. They cannot avoid

the inescapable conclusion that the evidence clearly shows that Mr. Bich never made the

192

2007 QCCA 915; see also Lévesque c. Carignan (Corporation de la Ville de), 2007 QCCA 63, par. 44.

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66

deals that he says he made. The Bellini family and Picchio an independent duty to

consider whether the allegations of the Re-amended Originating Application were serious

and the quality of Mr. Bich’s evidence before agreeing to be a party to the proceeding. It

seems that Mr. Bellini only gave the application cursory attention. Nor can the Bellini

family insulate itself from the even more serious problem that the Court will now discuss.

[394] The King Ouest matter provides a good segue to the next very troubling element

of Plaintiffs’ case: the financing. Perhaps at the moment that the action was instituted, Mr.

Bich had a reasonable belief that he could prove the joint bid agreement he was alleging,

but to do so he needed to show that he had the financing to support his group’s

participation.

[395] Both Dr. Bellini and Mr. Desmarais were on the witness list submitted in March

2018, but not on the one signed on June 28, 2021. Their absence is curious, as both were

essential to the Bich group being able to complete the transaction. Mr. Desmarais made

it very clear in his written communications that he would not move forward without Dr.

Bellini buying a membership in LWE. As the Court has said Mr. Bich’s vague statement

that Mr. Desmarais would have paid his share clearly does not suffice to overcome the

documentary evidence which expresses a contrary view.

[396] And yet the Court needed to hear 11 days of evidence and 4 days of argument

only to find out at the end of the day that the money the Bich group needed to make the

bid was not available!

[397] Plaintiffs also adopted an inconsistent approach as to when Mr. Bich made his

alleged offer.

[398] Late in the trial, and only clearly during the argument phase, the Court heard that

Mr. Bich had tabled the 60/40 offer at the Heenan meeting, and this supported solely on

the basis of Mr. Bich’s testimony of that meeting. This late shift in the theory of the case

might became central to Plaintiffs’ ultimate position. It could easily have been

corroborated by one of the people connected to Mr. Bich, his lawyer Bruce McNiven or

his employee Mr. Ramshaw. Neither was called leaving a most important element of

Plaintiffs’ case unsubstantiated.

[399] In the matter of Beauregard c. Boulanger,¹⁹³Justice Synnott was faced with a

somewhat similar situation. He found the conduct of Plaintiffs abusive, at least in part

because:

[156] À l’inverse, la preuve permet de conclure à la négociation de mauvaise foi

de la part des demandeurs.

[157] Il est impossible de savoir qui de Louis, Alex, Jean-Pierre ou Suzanne se

porte acquéreur. Tantôt il s’agit des uns, tantôt des autres.

193

2020 QCCS 2090, upheld in appeal 2021 QCCA 728.

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[158] Il est à ce jour impossible de connaître qui investissait combien, qui détenait

67

les fonds, qui était partenaire, qui était le « constructeur » investisseur, qui était le

dénommé Brasseur dont la participation devait s’élever à 1 000 000 $. En somme,

le Tribunal est d’accord avec Bodnar lorsqu’il affirme que toute cette affaire était

mystérieuse.

[159] La preuve administrée au procès démontre de façon plus que

prépondérante que ni l’un ni l’autre des Beauregard n’a eu à sa disposition, ni de

près ni de loin, la somme minimale de 1 000 000 $ à investir. La preuve révèle

aussi qu’il leur était impossible de rencontrer les exigences des institutions

financières, incluant Investissement Québec.

[160] Beauregard a utilisé des subterfuges répétitifs et des prétextes loufoques,

contraires aux exigences de la bonne foi, pour gagner du temps dans l’espoir de

compléter un financement inexistant et d’attirer des investisseurs qui, sauf pour

trois lettres non convaincantes, sont demeurés absents.

[400] A final review of what happened in the present matter shows that it was never

perfectly clear who Mr. Bich’s partners were. Conceding that the Pichette group knew

about the Bellinis, Mr. Desmarais involvement was never fully clarified and moreover,

other than the Bellinis, LWE was held out as the other purchaser.

[401] As the Court has said, even in the offer made to Oxford after the bid deadline, the

purchaser was to be a company to be incorporated.

[402] And yet, the Plaintiffs are Mr. Bich who wants all of the land LWE was supposed

to buy for himself and Picchio, which was never part of the discussion.

[403] Like Justice Synnott, the Court finds Plaintiffs’ conduct during the proceeding

abusive; perhaps not from the outset, but certainly from the time they knew they would

not produce the witnesses to prove the two key elements of their case: that they had the

money and that they made an offer at the Heenan meeting. Absent this proof, Plaintiffs’

far-fetched interpretation of the September 3 email, this trial should not have gone

forward.

JUDICIAL COSTS

[404] Given the above, the matter will be dismissed with judicial costs. However, there

were experts retained by both parties whom the Court did not hear from, given the

bifurcation of the proceedings confirmed by a judgment of November 4, 2021. Hence, the

Court has no evidence on the cost of Defendants’ expert or the usefulness of the

proposed testimony. Therefore, the Court will reserve Defendants their right to make

representations in respect of same.

FOR THESE REASONS, THE COURT:

[405] DISMISSES Plaintiffs’ Re-amended Originating Application;

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[406] DECLARES the Re-amended Originating Application instituted by Plaintiffs to be

abusive;

[407] RESERVES Defendants their rights in relation to this declaration of abuse;

[408] THE WHOLE WITH JUDICIAL COSTS, provided that the costs, if any, to be

awarded in relation to Defendants’ expert shall be the object of a separate hearing.

__________________________________

THOMAS M. DAVIS, J.S.C.

Mtre William Brock

Mtre Julie Girard

DAVIES WARD PHILIPPS & VINEBERG, S.E.N.C.R.L., S.R.L

Mtre Rosemary Sarrazin

MILLER THOMSON, S.E.N.C.R.L., L.L.P.

Lawyers for Plaintiffs

Mtre Éric Mongeau

Mtre Jean Fontaine

Mtre Jean-François Forget

Mtre Marianne Bastille-Parent

STIKEMAN ELLIOTT, S.E.N.C.R.L., S.R.L.

Lawyers for Defendants

Hearing dates:

October 4, 5, 6, 7, 12, 13, 18, 25, 26, 27, 28 and November 8, 9, 10

and 11.