England Securities Ltd. v Ulmer

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

England Securities Ltd. v. Ulmer,

2022 BCSC 1102

Date: 20220630

Docket: S194049

Registry: Vancouver

Between:

England Securities Ltd., doing business as The England Group

Plaintiff

And

Darcy Ulmer and Churchill International Property Corporation

Defendants

Before: The Honourable Justice A. Ross

Reasons for Judgment

Counsel for the Plaintiff:

I.G. Nathanson, Q.C.

K.K. Strong

Counsel for the Defendants:

D.P. Church, Q.C.

A. Pearson

E. Dolinsky

Place and Date of Trial/Hearing:

Vancouver, B.C.

September 27–29, 2021

October 1, 4, 6–8,2021

November 1–2, 2021

December 7 & 10, 2021

March 7–8, 2022

Place and Date of Judgment:

Vancouver, B.C.

June 30, 2022

England Securities Ltd. v. Ulmer

Page 2

Table of Contents

THE PLEADINGS, THE PARTIES, AND THEIR POSITIONS .................................. 5

BACKGROUND FACTS............................................................................................ 8

Description of Employment Relationship................................................................ 8

Mr. Ulmer Moves to Churchill ............................................................................... 11

FALLING-OUT......................................................................................................... 13

ALLEGED BREACHES OF FIDUCIARY DUTY...................................................... 17

The Plaintiff’s Allegations of 2015 Breaches ........................................................ 17

The Plaintiff’s Allegations of 2016 Breaches ........................................................ 18

The Plaintiff’s Allegations of 2017 Breaches ........................................................ 21

Alleged Agreement Regarding Investor-Contact List and Disputed Phone Call ... 21

WAS MR. ULMER A FIDUCIARY?......................................................................... 31

The fiduciary has scope for the exercise of some discretion or power ................. 37

The fiduciary can unilaterally exercise that power or discretion so as to affect the

beneficiary's legal or practical interests................................................................ 38

The beneficiary must be a defined individual or class that is peculiarly vulnerable

to or at the mercy of the fiduciary holding the discretion or power........................ 39

Undertaking Express or Implied ........................................................................... 41

Summary of Analysis of Fiduciary Principles to the Facts.................................... 44

Result of Finding on Existence of Fiduciary Obligations....................................... 44

CLAIM FOR PUNITIVE DAMAGES ........................................................................ 45

Damages.............................................................................................................. 46

Defence Allegation of Abuse of Process .............................................................. 46

SUMMARY .............................................................................................................. 46

England Securities Ltd. v. Ulmer

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[1] The plaintiff, England Securities Inc. and the corporate defendant, Churchill

International Property Corporation (“Churchill”), are entities that are, or were, in the

business of purchasing and syndicating commercial real estate.

[2]

The undisputed facts of this case are quite straightforward. The individual

defendant, Mr. Darcy Ulmer, was an employee of the plaintiff. On December 31,

2015, the plaintiff closed its active business. Mr. Ulmer commenced employment

with the corporate defendant on January 1, 2016. He also continued doing some

work wrapping up the plaintiff’s operations over the next two years. Mr. Ulmer

concedes that, in early 2017, he copied the plaintiff’s investor-contact list, took it to

his new employer and marketed to a group of those investors.

[3]

Those facts constitute a relatively common scenario, often seen in these

courts.

[4]

[5]

There are several aspects which differentiate this action.

The primary difference is that the plaintiff only claims against Mr. Ulmer for his

alleged breach of fiduciary duty. There is no claim in contract, relating to alleged

breaches of Mr. Ulmer’s employment-related duties (good faith and fidelity or

confidence). In addition, the plaintiff claims against Mr. Ulmer’s new employer, the

defendant Churchill for knowing assistance in Mr. Ulmer’s breaches of fiduciary duty.

[6]

Based on the claim for breach of fiduciary duty, the plaintiff seeks significant

equitable damages. It also seeks punitive or exemplary damages.

[7]

In response, Mr. Ulmer argues that the claim should be dismissed on several

grounds:

a) He denies that his employment with the plaintiff involved a fiduciary

relationship.

b) In the alternative, Mr. Ulmer says that he copied the investor-contact list

on the understanding that he had a right to take that step.

England Securities Ltd. v. Ulmer

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c) In the further alternative, Mr. Ulmer says that if liability is found, then the

appropriate measure of damages is, at most, the disgorgement of the

revenue realized by Churchill from the use of the investor-contact list. The

defendants say that figure is very low.

d) Mr. Ulmer also argues that this claim constitutes an abuse of process. He

alleges that the plaintiff pursued this action for an ulterior motive.

[8]

The submissions of the defendant Churchill echo Mr. Ulmer’s arguments but

apply an additional layer. Churchill denies any knowledge of Mr. Ulmer’s actions in

respect of the use of the investor-contact list. As a result, Churchill argues that it

could not have provided knowing assistance to Mr. Ulmer.

[9]

The issues to be decided in this decision are:

a) Was Mr. Ulmer a fiduciary of the plaintiff?

b) If so, did his actions constitute a breach of fiduciary duty?

c) If so, is the corporate defendant liable for knowing assistance?

d) What is the proper measure of damages?

e) Is this action an abuse of process?

[10] For the reasons set out below, I dismiss the plaintiff’s claims against both

defendants. I find that there was no fiduciary relationship between Mr. Ulmer and the

plaintiff. That being the case, there could be no breach of fiduciary duty. In my

discussion below, I have set out the plaintiff’s allegations of breaches. Obviously, if

there is no duty owed, then there are no breaches. I included the plaintiff’s

allegations of the breaches because, in my opinion, they assist in demonstrating

Mr. Ulmer’s bona fides in the steps that he took.

[11] Because there is no claim for breach of contract, I make no finding on

whether Mr. Ulmer’s actions would constitute a breach of his contractual duties.

England Securities Ltd. v. Ulmer

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The Pleadings, the Parties, and Their Positions

[12] The plaintiff, England Securities Ltd. was established by Mr. Kevin England in

1986. It operated under the business name of “The England Group”. I refer to it in

these reasons as “TEG”. Mr. England was the sole officer, director and shareholder

of TEG.

[13] TEG ceased active business on December 31, 2015, after it sold all of its

investment properties and distributed the proceeds to its investors. In 2016 and

2017, there were continuing issues to be administered, such as tax treatment and

trailer fees. Hence, TEG required an employee to communicate with investors and

their advisors.

[14] The defendant Mr. Darcy Ulmer started working at TEG in 2011. From 2012

until December 31, 2015 (when TEG closed its doors), he was TEG’s “Investor

Relations Manager”. As noted, he commenced work with Churchill on January 1,

2016. However, he remained in the (part-time) employ of TEG to assist in

communicating with investors and advisors on issues relating to the wrap-up of

TEG’s business and investments.

[15] The defendant Churchill is a real estate investment company owned by

Mr. Philip Langridge.

[16] In order to put the analysis below into context, I find it convenient to

summarize the claims made in the notice of civil claim. That pleading is a model of

brevity, consisting of 13 paragraphs of facts. The allegations of fact can be

summarized as follows:

a) Mr. Ulmer held a senior position within TEG involving continuous and

important client contact and “as a consequence Ulmer owed a fiduciary

duty to the plaintiff.”

b) In mid-2015, Mr. England and Mr. Langridge discussed the prospect of

TEG selling its list of investors to Churchill. Under the terms of the

England Securities Ltd. v. Ulmer

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proposed agreement, Mr. England would also encourage his investors to

enter into future investments with Churchill. No agreement was reached.

c) Mr. Ulmer started employment with Churchill on January 1, 2016. He

continued to provide services to TEG in 2016 and 2017.

d) “Unbeknownst to the plaintiff, in the period 2015 to 2017, while he

remained an employee of the plaintiff, Ulmer delivered to his personal

email account and to Churchill confidential information of the plaintiff

which information included investor names and email addresses, the

names and contact information for the financial advisors of investors, the

plaintiff’s Master Resale list…”.

e) “[T]his confidential information was taken by Ulmer furtively and

dishonestly and in breach of his fiduciary duty to the plaintiff.”

f) Churchill was an accessory to Ulmer’s breaches of fiduciary duty,

knowingly assisted in those breaches and obtained the benefit of them.

The plaintiff seeks disgorgement of those profits.

g) The plaintiff has suffered loss and damage.

[17] In short, the allegation against Mr. Ulmer is that he breached his fiduciary

duty in a furtive and dishonest manner by taking the investor-contact lists. The

allegation against Churchill is that it provided knowing assistance and that it profited

from Mr. Ulmer’s breach.

[18] On the basis of those pleadings, the plaintiff seeks general (equitable)

damages as well as punitive damages on the basis that Mr. Ulmer’s actions were

“furtive and dishonest”. In the alternative, the plaintiff seeks an accounting and

disgorgement of all profits earned by Churchill as a result of the alleged breaches.

The plaintiff also seeks special costs.

England Securities Ltd. v. Ulmer

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[19] For the analysis below, it is important to keep in mind that the plaintiff claims

equitable damages for breach of fiduciary duty. It does not seek contractual

damages for breach of Mr. Ulmer’s employment contract.

[20] The defendants submit that:

a) Mr. Ulmer was never a fiduciary at TEG;

b) the claim against Mr. Ulmer is limited to an allegation of breach of his

fiduciary duty;

c) hence, the claim should be dismissed against Mr. Ulmer. It follows that

Churchill cannot be liable to the plaintiff.

[21] The defendants further submit that Mr. Ulmer’s actions were not “furtive and

dishonest” and there is no basis for a claim for punitive damages.

[22] The defendants also plead that this action constitutes an abuse of process

and should be dismissed on that basis. They argue that this action was commenced

for an improper purpose. That purpose, they allege, was to exact revenge against

Mr. Ulmer, with whom Mr. England had a falling-out in respect of the politics of the

board of a non-profit society.

[23] The defendants also submit that if liability is found, damages are nominal.

That submission is based on the fact that Mr. England had shuttered TEG at the end

of 2015. Hence, they argue, TEG has suffered no loss. Alternatively, the defendants

submit that if I should find liability against them, and determine that the proper

equitable remedy is disgorgement of profits, then the profits to be disgorged were

$35,780.

[24] As noted, Churchill takes the same position as Mr. Ulmer. Churchill further

argues that it had no knowledge of Mr. Ulmer’s actions that form the basis of the

plaintiff’s allegations in this action.

England Securities Ltd. v. Ulmer

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[25] With those parameters of pleadings in mind, I now set out the factual

background in detail.

Background Facts

Description of Employment Relationship

[26] As discussed below, the vast majority of the factual matrix of this case is not

in dispute. However, the motives for certain acts, and the existence of one phone

call, remain in dispute. I set out the nature of those disputes in the chronology below.

[27] TEG’s business involved the purchase of revenue-producing properties and

the syndication (or the sale of portions) of those properties to investors. The

investors would receive returns based on the income produced by the properties.

TEG had been very successful in the syndication of commercial properties from

1986 to the mid-2010s.

[28] TEG invested in, and syndicated, a number of properties between 1986 and

2005. After 2005 it did not make any further acquisitions of properties. Instead, it

focussed on maintaining its existing properties.

[29] TEG’s business model involved marketing its investment products through

investment advisors. In addition to making sound investments that were attractive to

investors, TEG marketed its products by providing incentives to investment advisors.

Those incentives were in the form of promises to pay the advisors “trailer fees”.

Those fees were comprised of a portion of the profit that TEG would otherwise

receive upon the sale of an individual property (should certain financial targets be

met). The involvement of investment advisors as TEG’s clients, and any limitations

on contacting them, are relevant to the alleged breach of fiduciary duty claim. I

discuss those issues below.

[30] In or about 2014, Mr. England decided to wind down the active operations of

TEG. In effect, Mr. England planned to retire. Between 2014 and mid-2015, TEG

sold all of the real estate that constituted its investment portfolio. The proceeds of

those sales were, in turn, paid out to TEG’s investors in accordance with the

England Securities Ltd. v. Ulmer

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syndication contracts. I am informed that those transactions resulted in more than

$100,000,000 being distributed to the TEG investors between 2014 and 2017. It is

common ground that the investors received very good return on their investments.

The properties had produced good annual returns. In addition, over the life of the

syndication, the properties had significantly increased in value. Hence, the amount

returned to investors significantly exceeded their initial investments. Because the

return on investment exceeded the financial targets in the syndication agreements,

TEG was entitled to extra fees. Pursuant to TEG’s agreement with the investment

advisors, those advisors were entitled to be paid trailer fees. As a result, in 2015 and

following, TEG paid out significant sums to the investment advisors who had

directed their clients into TEG’s products.

[31] The defendant, Mr. Ulmer began working for TEG in 2011. Mr. Ulmer and

Mr. England were introduced to each other as a result of their individual struggles

with addiction. Mr. Ulmer credits Mr. England with assisting his efforts toward

recovery. The relationship between the two men is obviously fractured by this

litigation. However, it is also evident that Mr. Ulmer, at all times, held Mr. England in

high regard.

[32] Mr. England makes no secret of his own struggles with addiction. As

discussed below, he and Mr. Ulmer have been actively involved in the governance of

a society that operates an addiction recovery community, Baldy Hughes Therapeutic

Community and Farm in Prince George (“Baldy Hughes”). When Mr. Ulmer started at

TEG, his position was categorized as “Special Projects”. Despite the title,

Mr. Ulmer’s initial work efforts while at TEG were focussed solely on work that

benefited the society that operated Baldy Hughes.

[33] Soon after he started at TEG, Mr. Ulmer transitioned from “Special Projects”

into the position of “Investor Relations Manager”. He held that same position until the

end of his employment.

[34] Because TEG did not market any new investments after 2005, Mr. Ulmer’s

duties did not involve marketing or new-client recruitment. Instead, his job involved

England Securities Ltd. v. Ulmer

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communicating with the existing investors and their advisors regarding the status of

their investments. After the sale of TEG’s properties, his duties were directed toward

the distribution of funds and later, explaining the tax implications of those

distributions. He also dealt with the investment advisors regarding these issues and

the trailer fees payable to those advisors.

[35] The plaintiff says that, because of his senior position, and his continuous

contact with investors, Mr. Ulmer owed a fiduciary duty to TEG and he continued to

owe that fiduciary duty until the end of his employment. Conversely, the defendants

submit that his role was administrative.

[36] As noted, Mr. England was the sole shareholder, director and officer of TEG.

Mr. Ulmer reported to Mr. England and to the Chief Financial Officer, Mr. Ng.

Mr. Ulmer did not have a written employment contract with TEG. TEG did not require

him to sign either a confidentiality agreement or a “non-compete” agreement.

[37] The plaintiff alleges that Mr. Ulmer was part of the management team or

“inner circle”. Mr. Ulmer denies he had any such power. He notes, for example, that:

a) he was responsible for drafting quarterly circulars for investors, but he was

not allowed to publish them without the prior approval of either

Mr. England or Mr. Ng;

b) he had cheque signing authority, but only because the company required

two signatures on cheques. He could not authorize any payment of any

amount without a co-signature from Mr. England or Mr. Ng;

c) he had no power to hire or fire employees; and

d) no employees reported to him.

In 2015, Mr. Ulmer’s regular salary at TEG was $80,000. In addition, he received

other compensation of approximately $70,000 from TEG. That additional

compensation was part “bonus” and part “golden handshake” upon the closing of the

England Securities Ltd. v. Ulmer

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business. TEG did not require that Mr. Ulmer sign any document limiting or

restricting his future employment options in exchange for the “golden handshake”.

Mr. Ulmer Moves to Churchill

[38] Mr. England’s plan to wind down TEG between 2014 and 2015 was not a

secret. All of TEG’s employees had ample notice that their employment would be

coming to an end.

[39] With that knowledge, starting in early 2015, Mr. Ulmer began discussions with

Mr. Langridge, the principle of the defendant Churchill. By coincidence, Churchill’s

offices were on the same floor as TEG’s, and Mr. Ulmer had become familiar with

Mr. Langridge. Churchill’s business was similar to TEG’s, but Churchill focussed its

marketing efforts on high-net-worth individuals, as opposed to investment advisors.

[40] Mr. England was aware that Mr. Ulmer had approached Churchill. Mr.

England encouraged the move and took active steps to promote the idea of Churchill

hiring Mr. Ulmer.

[41] The plaintiff submits that Mr. Ulmer’s communications with Churchill expose

that he was, in fact, a part of the “inner circle” at TEG and that he planned to

leverage his relationships with TEG’s investors into a better position with Churchill.

The plaintiff points to notes that Mr. Ulmer made in preparation for a meeting with his

prospective employer. In the notes, Mr. Ulmer describes his role at TEG as part of

the “inner circle”. The notes also indicate that Mr. Ulmer planned to market both his

investor relations skills and his “relationship with TEG investor list”.

[42] The discussions regarding Mr. Ulmer joining Churchill picked up steam in

later months of 2015. After a lunch with Churchill on November 9, 2015, Mr. Ulmer

was asked to prepare a job description for his anticipated role at Churchill. The

document he prepared included “investor relations” as well as “business

development” and mentioned “old and new investors and the financial service

community.” That document was later appended to his new employment agreement

with Churchill.

England Securities Ltd. v. Ulmer

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[43] The plaintiff submits that Mr. Ulmer’s proposed new responsibilities at

Churchill were directly related to his intimate knowledge of TEG’s investors and are

evidence of his intention to breach his fiduciary obligations.

[44] At a meeting with investors and advisors in 2015, TEG announced the payout

on the investments following the sale of the subject properties. By all accounts the

investors and their advisors were very pleased with the results.

[45] Also, during 2015, Mr. England and Mr. Langridge had discussions regarding

the prospect of TEG agreeing to allow Churchill to have access to TEG’s investor-

contact list. Those discussions did not lead to any written agreement at the time. The

discussions continued, without any real impetus, through 2016. Those discussions,

and a later exchange of emails, form the basis of the defence position that Mr.

Ulmer’s actions were undertaken in good faith in the belief that an agreement was in

place. I discuss those facts below under the heading “Alleged Agreement Regarding

Investor-Contact List and Disputed Phone Call”. TEG closed its doors on December

31, 2015.

[46] In January 2016, Mr. Ulmer started working for Churchill. His position was

“Vice President”, and he had marketing responsibilities. His primary duties matched

his prior role at TEG. However, he had an added component of business

development.

[47] As of January 2016, TEG was still in the process of winding up its operations.

Mr. Ulmer stayed on as a part-time employee, on an hourly-rate basis, for the clean-

up work that was required. That work involved communicating with investors and

their advisors. Mr. Ulmer was one of very few remaining employees at TEG.

[48] Mr. Ulmer and Churchill concede that, at various times in 2015 and 2016,

Mr. Ulmer contacted investment advisors whom he met through TEG. He did so with

the specific intent of discussing Churchill’s investments. I discuss the plaintiff’s

allegations regarding those specific incidents below.

England Securities Ltd. v. Ulmer

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[49] Most of these advisors worked at major banks or investment houses, and

their contact information was generally available. Some of the advisors had clients

who had invested in products of both TEG and Churchill. I discuss below the parties’

positions on whether such contact was permitted.

[50] Mr. Ulmer also concedes that he contacted some former TEG investors in

2016, but denies that he used the TEG investor-contact list in order to do so. There

is an email dated February 12, 2016, wherein Mr. Ulmer sent certain investor contact

information to himself at his Churchill email address.

[51] The defence concedes that on January 4, 2017, Mr. Ulmer sent an email from

his TEG email to his Churchill email, attaching three lists of investor-contact

information. I discuss the circumstances of that email below.

[52] In 2016, Mr. Ulmer received employment income of $92,000 from Churchill

and $58,000 from TEG.

[53] In 2017, Mr. Ulmer received employment income of $122,000 from Churchill

and $731.50 from TEG.

Falling-Out

[54] Mr. Ulmer and Mr. England had a falling-out in late 2018 over the leadership

of Baldy Hughes. The defence submits that the circumstances of that falling-out are

relevant to their claim that this action was commenced for an improper purpose and

constitutes an abuse of process.

[55] As noted above, Mr. Ulmer and Mr. England met and bonded over their

shared struggles with addiction. Mr. England had, for many years, been involved on

the Board of the BC New Hope Recovery Society (the “Board”), which operates

Baldy Hughes. For context, it is important to note that, upon the wind-up of TEG in

2015, Mr. England set aside more than $2,000,000 to the benefit of the Society. As a

result, he was considered a powerful entity on the Board.

England Securities Ltd. v. Ulmer

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[56] Mr. England asked Mr. Ulmer to sit on the Board and Mr. Ulmer happily

complied. As noted, in 2011, Mr. Ulmer’s work at TEG was, in reality, work for Baldy

Hughes.

[57] In July 2017, the other members of the Board asked Mr. England to tender his

resignation. He agreed to resign. It is common ground that the reason for this

request was Mr. England’s relapse into addiction in the first half of 2017. Mr. Ulmer

was in the faction of the Board that requested Mr. England’s resignation. I infer that

their relationship was strained thereafter.

[58] Following July 2017, Mr. England took steps to get back to sobriety and was

successful in that endeavour. He maintained his interest in Baldy Hughes. He

became concerned that the facility was not being operated in an effective and

efficient manner. As a result, he made plans to have himself reinstated to the Board.

[59] Mr. England’s plan for his own re-instatement was undertaken in the fashion

of a hostile corporate takeover or proxy war. In short, he did not contact the existing

Board members and indicate his interest in being elected to the Board. Instead, he

sought proxies from members of the Society and put forward his own slate.

[60] Coincidentally, in November 2018, the existing Board discussed the prospect

of including Mr. England on the proposed slate of directors for the next annual

general meeting (“AGM”) to be held the next month (December 2018). However, the

Board had difficulty contacting Mr. England to confirm whether he was interested in

returning to the Board. I infer that Mr. England was avoiding their calls because he

wanted to put forward his own slate in a surprise move, and not join the slate

proposed by the existing Board.

[61] Mr. England’s plan played out as follows:

a) The AGM of the Society was scheduled for December 7, 2018.

b) Starting in September 2018, Mr. England had his personal assistant sift

through his emails to collect and confirm certain statistics and trends in

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terms of expenses. He also sought to obtain emails indicating the dates

upon which he had first raised concerns during his previous stint on the

Board.

c) Mr. England also sought legal advice regarding the strategy for

successfully putting forward his own slate of directors. That strategy called

for Mr. England to put his slate of proposed directors forward at the last

minute so that the other directors would be forced to decide quickly on the

make-up of the next Board.

d) During her review of emails, Mr. England’s personal assistant located

some emails that Mr. Ulmer sent to himself in 2016. Those emails

contained TEG offering memoranda and other information. She believed

some of the documents to contain TEG’s proprietary and confidential

information. She also noted her concern about the possibility that

Mr. Ulmer was sending confidential information to Churchill in 2015. She

raised the issue of Mr. Ulmer’s possible breaches with Mr. England in an

email dated December 6, 2018. (To be clear, Mr. Ulmer’s taking of the

information relating to offering memoranda does not comprise any part of

this action and is not an alleged breach.)

e) Mr. England had his assistant send the information about Mr. Ulmer’s

emails to his solicitor and he sought advice regarding his legal rights as

against Mr. Ulmer. That solicitor drafted a letter dated December 7, 2018,

setting out his understanding of the facts and indicating that TEG might

have a cause of action against Mr. Ulmer and Churchill. The letter is clear

that any opinion expressed is preliminary and further information and

analysis would be required.

f) On December 6, 2018, Mr. England sent a letter to the Board. The

purpose of the letter was to propose that he (Mr. England) return to the

Board. However, his agreement to being re-appointed was contingent on

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two other individuals joining with him. The letter also raised criticisms of

the existing management of Baldy Hughes.

g) On December 7, 2018, at 10:15 a.m., Mr. Ulmer sent an email on behalf of

eight of the (then current) members of the 16-member Board. The email

was copied to Mr. England. The email discussed Mr. England’s candidacy

and the potential that certain grant funding could be imperiled if

Mr. England was leading the Board. In short, Mr. Ulmer’s letter did not

support Mr. England’s return to the Board at that time.

h) On December 7, 2018, Mr. England arrived early at the designated

location for the AGM. Mr. Ulmer was there. Mr. England asked Mr. Ulmer

to go to a side room for a private meeting. Mr. England presented

Mr. Ulmer with his phone, upon which he had opened the (recently

received) letter from his solicitor. The letter stated that Mr. Ulmer faced

potential liability for his alleged breach of duties to TEG. Mr. Ulmer

testified that he was shaken by this letter. He says that Mr. England

threatened him. Mr. England denies that he threatened Mr. Ulmer in that

meeting. Mr. England says that he encouraged Mr. Ulmer to “do the right

thing”. Mr. England testified that his motivation derived from his wish to

avoid the potential scandal and negative publicity that would accompany a

lawsuit against a sitting Board member for improperly taking the

confidential information of his employer.

i) The AGM went ahead. Mr. Ulmer returned to the Board. However, he

discussed the matter with his wife that evening and decided to resign from

the Board the next day. Upon Mr. Ulmer’s (and another director’s)

resignation, Mr. England and his slate joined the Board.

j) Mr. Ulmer heard nothing more from Mr. England until he was served with

the notice of civil claim in this action.

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[62] After Mr. England and Mr. Ulmer had their falling-out, Mr. England retained

counsel to pursue his legal rights against the defendants. Presumably, it was

through that process that Mr. Ulmer’s January 4, 2017 email (attaching the investor-

contact lists) and other alleged breaches, were unearthed.

[63] The defence alleges that this action was brought for an improper purpose and

is an abuse of process. In support of that allegation, the defence notes that

Mr. England discovered, in or about December 2018, that Mr. Ulmer had taken the

investor-contact list to Churchill (in January 2017). Despite that knowledge, TEG

took no steps to contact Churchill or Mr. Ulmer to demand the return, or the

cessation of the use of, that list. Instead, TEG commenced this action. I address that

issue under the heading “Abuse of Process”.

Alleged Breaches of Fiduciary Duty

[64] The plaintiff’s allegations regarding Mr. Ulmer’s breaches of fiduciary duty can

be divided into three yearly periods.

[65] I find it convenient to deal with the 2015 and 2016 alleged breaches in this

portion of my decision. I do so because I find that Mr. Ulmer’s acts do not constitute

a breach of any fiduciary duty owed to TEG. To the contrary, the fact that Mr. Ulmer

took the steps described below in 2015 and 2016 provides evidence that he did not

set out to breach any duty that he owed to TEG. I explain my reasoning below. (In

describing the events of 2015 and 2016, I am leaving aside, for the moment, the

issue of whether Mr. Ulmer owed fiduciary duties.)

The Plaintiff’s Allegations of 2015 Breaches

[66] First, I note that although the plaintiff raised the following events at trial, they

are not included in the notice of civil claim and do not form part of the claim.

[67] On May 7, 2015, a potential investor contacted Mr. Ulmer in his capacity as

investor relations manager for TEG. The potential investor indicated that he was

qualified to invest directly in TEG’s products and asked if there were any current

offerings. Mr. Ulmer responded that TEG had no offerings but recommended the

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individual contact Churchill. At the time of this exchange, Mr. Ulmer had not reached

any agreement with Churchill. Hence, at best, this type of referral might have put

Mr. Ulmer in better light when being considered by Churchill for employment. The

information he provided was true and correct. There is no evidence that the

individual invested with Churchill.

[68] I do not find this to be a breach by Mr. Ulmer. I categorize this call as

Mr. Ulmer providing truthful information to a person who was seeking to invest in

products that TEG was not offering. This information does not constitute a breach of

any duty. It is more akin to a hotel clerk advising a caller that his hotel is full and

recommending another hotel nearby.

[69] On July 22, 2015, a TEG investor contacted Mr. Ulmer. The two men had had

prior dealings. Mr. Ulmer referred the investor to Churchill because TEG had no

investment products to offer this person. In my opinion, this incident also falls in the

same category as the May 7, 2015 exchange.

[70] In December 2015, an investment advisor who placed clients with TEG

arranged a lunch meeting with Mr. Ulmer and the CFO of Churchill. The plaintiff

argues that this meeting constituted a breach. However, this investment advisor had

known Mr. Langridge for more than 20 years and regularly sold Churchill products to

his clients. There is no evidence of a breach of any confidence by Mr. Ulmer at this

meeting. In my opinion, at worst, Mr. Ulmer could be accused of taking time to have

lunch with his new employer while being paid by his old employer. That is not a

breach of any fiduciary duty.

The Plaintiff’s Allegations of 2016 Breaches

[71] In January 2016, Mr. Ulmer had an email exchange in which an investment

advisor inquired about whether TEG was affiliated with Churchill and asked when he

would receive his trailer fees from TEG. Mr. Ulmer responded concerning the trailer

fee payout date and said “we should talk” regarding Churchill.

England Securities Ltd. v. Ulmer

Page 19

[72] Also in January 2016, Mr. Ulmer had an email exchange with an investment

advisor in which he promoted Churchill after discussing the advisor’s trailer fee. The

plaintiff submits that this was a breach because Mr. Ulmer was trading on TEG’s

reputation. However, a full reading of the email exchange shows that Mr. Ulmer sent

a pro forma email to the advisor, seeking a signature on a document. The advisor

responded with the requested signature and asked, “By the way, what does your

current job entail with your new employer?” Mr. Ulmer responded that his new

employer had some new offerings and suggested that they should talk. He then

noted, “Kevin [Mr. England] encouraged me to go to Churchill – he and Philip go

back 30 years.” I do not consider that to be a breach of any duty that Mr. Ulmer

owed to TEG.

[73] In February 2016, Mr. Ulmer pitched Churchill investments to another

investment advisor in the context of discussing trailer fees. The plaintiff’s position is

that Mr. Ulmer required TEG’s informed consent before marketing to this individual.

The plaintiff submits that, absent any agreement with Churchill regarding the

investor-contact list, there was no lawful interest of Churchill in any such

communications with this advisor.

[74] In March 2016, Mr. Ulmer’s discussion with another advisor about trailer fees

again shifted to Mr. Ulmer promoting the Churchill real estate investment trust

(REIT).

[75] I note that these four incidents involve Mr. Ulmer discussing Churchill

investments with investment advisors. I find that there was a specific reason for

Mr. Ulmer to believe that such communications were approved or authorized by

Mr. England.

[76] Specifically, starting in January 2016, Mr. Ulmer was in contact with an

investment advisor at the National Bank of Canada, Mr. McLean. Mr. McLean had

directed clients to TEG products. Mr. Ulmer’s 2016 emails to Mr. McLean indicated

that Mr. Ulmer wanted to discuss Churchill products. In later emails, Mr. McLean

indicated that, before making any recommendations to his clients, he wanted to

England Securities Ltd. v. Ulmer

Page 20

speak to Mr. England as part of his due diligence on Churchill. Mr. McLean was

specifically seeking Mr. England’s endorsement. Mr. Ulmer took Mr. McLean’s

request for an endorsement to Mr. England. Hence, Mr. Ulmer was open with

Mr. England, in early 2016, about his communications with at least one investment

advisor. Mr. England raised no concerns at the time.

[77] More to the point, on December 7, 2016, Mr. England replied to Mr. McLean’s

request for an endorsement of Churchill. Mr. England sent an email to Mr. McLean,

endorsing Churchill’s investment products. Mr. England copied Mr. Ulmer on the

email.

[78] The plaintiff’s position is that Mr. Ulmer hid from Mr. England the fact that he

was contacting investment advisors in 2016. The plaintiff submits that Mr. Ulmer only

disclosed that he had contacted Mr. McLean because Mr. McLean specifically

sought Mr. England’s endorsement. Mr. England claims he had no knowledge of the

defendants’ use of TEG’s confidential information and goodwill at the time he sent

the email to Mr. McLean.

[79] In short, I do not accept the plaintiff’s characterization of the circumstances as

accurate. Mr. England testified that, as of December 2016, he had been

procrastinating on his response to Mr. McLean. Mr. England clearly knew that

Mr. Ulmer had been in contact with Mr. McLean. Mr. England did not think to inquire

about the origin of those communications. This point is made clear by the fact that

Mr. England knew that Mr. McLean had not previously invested with Churchill and

would not do so until he had Mr. England’s endorsement.

[80] The obvious inference from this series of events is that, in 2016, Mr. England

did not object to Mr. Ulmer marketing to advisors whose clients had invested with

TEG.

[81] There is a further element to this series of contacts in 2016. The defendants

submit, and I accept, that (regardless of Mr. England’s position at trial) Mr. Ulmer’s

communications with investment advisors did not constitute a breach of any duty to

England Securities Ltd. v. Ulmer

Page 21

TEG. The advisors were professionals who were easily found by a simple google

search. They all worked for major banks or investment houses. Investment advisors,

by the nature of their occupation, hear multiple marketing pitches for potential

investment opportunities. Contacting those investment advisors did not constitute a

breach of any duty. In other words, TEG had no right of exclusivity over those

investment advisors.

[82] There is still a further element to the plaintiff’s alleged breaches in 2016. I find

it is notable that Mr. Ulmer did not use, or attempt to use, the investor-contact lists in

2016. It is clear that Mr. Ulmer had access to those lists throughout 2016, but he

chose not to copy them until January 2017. As discussed below, I consider the

timing of his copying of those lists to be relevant.

The Plaintiff’s Allegations of 2017 Breaches

[83] As noted above, the defendants do not dispute the fact that, on January 4,

2017, Mr. Ulmer emailed to himself certain investor-contact lists from TEG.

Mr. Ulmer’s explanation for his actions is discussed below.

[84] Thereafter, Mr. Ulmer concedes that he sent marketing emails to

approximately 140 of TEG’s former investors. Some of those investors then invested

funds with Churchill.

[85] It is the taking of these lists and the marketing to these clients that forms the

main thrust of the plaintiff’s claim against the defendants.

[86] As noted, the defendants say that they had, or they believed they had, an

agreement with Mr. England to use TEG’s investor-contact list.

Alleged Agreement Regarding Investor-Contact List and Disputed

Phone Call

[87] The defendants submit that they believed that they had reached an

agreement with Mr. England whereby Churchill was entitled to use TEG’s investor-

contact list. The plaintiff responds that, at no time did the communications indicate

(or comprise the requisite elements of) any agreement between the parties.

England Securities Ltd. v. Ulmer

Page 22

[88] Further, Mr. England says that he made a phone call and advised Mr. Ulmer

that he (Mr. England) would not be proceeding with any agreement. Mr. Ulmer

denies that any such phone call occurred.

[89] As noted above, it is common ground that Mr. Langridge and Mr. England had

meetings in 2015 wherein they discussed the prospect of TEG allowing Churchill to

have access to TEG’s investor-contact list. Mr. Langridge testified that he was

interested in the list because the two companies were involved in similar types of

investments. He knew that TEG was not going to be in business after 2015 and the

former TEG investors might be interested in Churchill’s products.

[90] How far the discussions progressed is a matter of dispute:

a) Mr. Langridge says that Mr. England proposed a formula wherein TEG

would receive compensation based upon some calculation of “carried

interest”, which was a term understood by both men.

b) Mr. England does not accept that he proposed that idea, but he

acknowledges that it was discussed.

c) It is also evident from the testimony of Mr. Ulmer and Mr. England that

Mr. Ulmer had discussions with Mr. England about this proposed

agreement during 2016. Mr. England’s perception was that an agreement

would benefit Mr. Ulmer in his position at Churchill.

[91] In addition to the use of the investor-contact list, as part of the proposed

agreement, Churchill and Mr. Ulmer sought from Mr. England ongoing

endorsements of Churchill’s products.

[92] As noted above, Mr. Ulmer was in contact with the investment advisor

Mr. McLean in 2016. Mr. McLean sought Mr. England’s endorsement of Churchill.

[93] On December 7, 2016, Mr. England sent an email to Mr. McLean. On any

reading, Mr. England’s email constituted an endorsement of Churchill’s investment

products. Mr. England copied Mr. Ulmer on the email.

England Securities Ltd. v. Ulmer

Page 23

[94] Mr. England intended to achieve one result with this email, but it appears he

ended up achieving the exact opposite:

a) Mr. England testified that, as of December 7, 2016, he was pretty sure that

he did not want to enter into any agreement with Churchill. He said that he

did not want to be involved in answering to his (former) investors on

products over which he had no control. However, because he knew the

matter was important to Mr. Ulmer, he thought that he would give one

good endorsement (to Mr. McLean), and then he would advise Mr. Ulmer

that he was not going to enter into the agreement with Churchill. He

conceded that he had been procrastinating on making that decision and

discussing the matter with either Mr. Ulmer or Mr. Langridge.

b) Mr. Ulmer and Churchill received the December 7 email and interpreted it

as an indication that Mr. England was willing to endorse their products and

that the agreement regarding the TEG investor-contact list would move

ahead.

[95] The plaintiff does not accept the latter proposition. However, the undisputed

facts are:

a) Mr. Ulmer received Mr. England’s email to Mr. McLean just before 2:00

p.m. on December 7, 2016.

b) At 2:34 p.m., he forwarded the email to Mr. Langridge and another senior

person at Churchill. Mr. England’s endorsement was greeted as good

news by Churchill’s management.

c) At some point later on the afternoon of December 7 (after receiving a copy

of Mr. England’s endorsement email), Mr. Langridge wrote to Mr. England

describing the REIT, one of the investment vehicles his company was

promoting. The clear purpose of the email was to describe the product so

that Mr. England could consider whether to endorse it.

England Securities Ltd. v. Ulmer

Page 24

d) In the same email, Mr. Langridge included a form of agreement and wrote:

We have talked about a joint marketing effort to your investors in the past

and I’m hoping you are still of a mind to move forward now that we have

the REIT fully launched and the initial target acquisitions lined up. Please

see Agreement attached for your consideration, which we discussed

December last year. If you wish to discuss this again, please call me…If

you are happy with the Agreement, please sign to acknowledge your

acceptance and we will proceed.

[96] It is evident from Mr. Langridge’s email that he was suggesting that the

enclosed agreement constituted the written manifestation of an oral agreement the

two men had reached a year earlier. In countering this suggestion, the plaintiff notes

that a draft of this email, after the words “lined up”, simply stated, “See draft

agreement attached for your consideration.”

[97] The document attached to Mr. Langridge’s December 7 email states:

We wanted to confirm the agreement we reached in November of 2015 that

from January 1^st2016, moving forwards with Darcy now on board at

Churchill…we would work together like sister companies. We believe there is

little, if any, overlap between the Churchill client list and TEG client list, so

tracking migration from your system into our system should be easy [sic]

done – especially given Darcy’s knowledge and involvement.

To confirm our agreement, Churchill… will pay Kevin England a contingency

based fee equal to 49% of the carried interest earned by Churchill for real

estate syndications in which TEG sourced clients participate…

With the explicit understanding that whenever asked, Kevin England will

endorse and promote [Churchill] as being honest, professional and capable

real estate operators, with the highest ethics and integrity. ….

[98] I discuss the parties’ positions on the wording of the email and agreement

below.

[99] Mr. England responded to Mr. Langridge’s email (with attached Agreement)

on Friday, December 9, 2016, at 5:21 p.m. He simply wrote, “Thanks Philip.” When

questioned, Mr. England conceded that his email response was deliberately vague.

As of December 9, his intention was to decline to enter into the agreement, but he

had not made up his mind.

England Securities Ltd. v. Ulmer

Page 25

[100] The timing of Mr. England’s December 9, 2016 email is relevant. Churchill

took a long break over the Christmas season. December 9, 2016, was a Friday.

Mr. Ulmer testified that he was not in the office until the New Year. He testified that

he left the office on the evening of December 9 believing that an agreement had

been reached with Mr. England. His belief was based upon several events, including

Mr. England’s endorsement to Mr. McLean and the “Thanks Philip” email.

[101] January 1, 2017 fell on a Sunday. January 2 was a statutory holiday. The first

work day was January 3.

[102] On January 4, 2017 at 9:05 p.m., Mr. Ulmer emailed the three investor-

contact lists from his TEG email to his Churchill email. Again, it is the taking (and

subsequent use) of these lists that forms the basis of the plaintiff’s claim and the

allegation of the furtive and dishonest manner.

[103] I noted above that Mr. England testified that, as of December 7, 2016, when

he emailed Mr. McLean, he planned to telephone Mr. Ulmer to advise that he would

not be going ahead with any agreement with Churchill.

[104] There is a dispute as to whether Mr. England called Mr. Ulmer with this news.

Mr. England says that he made that call. Mr. Ulmer says that Mr. England did not. It

is necessary for me to determine the credibility of each party on the existence of this

call. I will deal first with Mr. England.

[105] First, it is evident that Mr. England's evidence relating to this phone call has

varied over time:

a) In his evidence in chief at trial, Mr. England testified that he believed the

call took place on December 20, 2016. However, he also acknowledged

that the call could have occurred on January 11, 2017.

b) In cross-examination, Mr. England agreed that, on his July 9, 2021

examination for discovery, he had been "quite sure" that the call had

occurred on December 20, 2016.

England Securities Ltd. v. Ulmer

Page 26

c) Also, at his examination for discovery, Mr. England testified that he made

the December 20, 2016 call while he was in the Cayman Islands. He was

"quite sure" of that recollection and specifically testified that he had made

the call from a specific coffee shop in the Cayman Islands.

d) At trial, Mr. England was confronted with records indicating that he was

not in the Cayman Islands on December 20, 2016. Mr. England's

recollection changed, and he asserted that he had been in Vancouver

when he made the call.

e) During the course of trial, on September 28, 2021, the plaintiff's counsel

advised through correspondence that Mr. England had, upon further

review of his examination for discovery answers, determined that he was

not sure whether the alleged phone call took place on December 20,

2016, or January 11, 2017.

[106] I note, again, that Mr. Ulmer’s testimony is that no such telephone call

occurred. I further note, again, that Mr. Ulmer’s testimony was that he left the office

on December 9, 2016, believing that an agreement was in place. He returned to the

office in January. On January 4, 2017, he forwarded the investor-contact lists to his

own email at Churchill. Hence, if the phone call occurred on January 11, 2017, the

call occurred after Mr. Ulmer had forwarded the relevant lists to himself.

[107] I pause to note, again, that the plaintiff’s submission on this point is that the

exchange of correspondence between Messrs. Langridge and England could not

comprise the elements of offer and acceptance required to formulate a contract.

While I accept that proposition, I also accept that Mr. England had meant to be

deliberately vague in his December 9 “Thanks Philip” email. The very fact that he

was attempting to be vague indicates that his email was capable of being interpreted

as a positive response to Mr. Langridge’s proposal. Further, there are two principles

at play:

a) whether a contract was formed; and

England Securities Ltd. v. Ulmer

Page 27

b) whether Mr. Ulmer acted in a “furtive and dishonest” fashion when he

emailed the investor-contact list to himself.

[108] I am addressing Mr. Ulmer’s understanding and belief as of January 2017.

Not surprisingly, Mr. Ulmer did not ask for a legal opinion on whether the exchange

of emails constituted a binding contract.

[109] Counsel for the plaintiff submits that it is obvious that neither Mr. Langridge

nor Mr. Ulmer believed that an agreement had been reached. Counsel pointed to the

fact that the alleged agreement calls for Mr. England to endorse Churchill and its

investment products. At no point in 2017 did the defendants request that

Mr. England follow through on that provision of the agreement. The plaintiff submits

that the absence of any such request belies the defence position that they believed

that a contract had been formed.

[110] However, the plaintiff’s position on the endorsement issue was significantly

undermined by two pieces of evidence that were independent, but corroborative.

[111] In cross-examination, when Mr. Ulmer was questioned about the fact that he

did not seek any endorsement from Mr. England during 2017, Mr. Ulmer responded

that Mr. England had relapsed into drug addiction in the first half of 2017. As a

result, he was difficult to contact. I infer that Mr. Ulmer’s belief (in 2017) was that

Mr. England’s endorsement may not have been helpful.

[112] The second, corroborating, piece of evidence involves the Board of Baldy

Hughes. As noted above, Mr. England had been an important member of that Board.

In July 2017, the rest of the Board asked Mr. England to resign because it became

known that he had relapsed into addiction. In his cross-examination, Mr. England

acknowledged that he complied with that request. Hence, Mr. Ulmer’s testimony

regarding Mr. England’s relapse was corroborated.

[113] Mr. Ulmer’s evidence about not contacting Mr. England because Mr. England

had relapsed provides a reasonable and credible explanation for the failure of the

defendants to seek Mr. England’s endorsement in 2017.

England Securities Ltd. v. Ulmer

Page 28

[114] I return to the events in December 2016 and January 2017, including the

issue of whether Mr. England placed the phone call to Mr. Ulmer. Put simply, I

accept the evidence of Mr. Ulmer, and I reject the evidence of Mr. England. I find

that Mr. England did not phone Mr. Ulmer to advise that he was declining Churchill’s

offer. I make that finding for the reasons set out below.

[115] First, dealing with Mr. Ulmer’s actions, I find that emailing himself the investor-

contact list on January 4, 2017, is consistent with a person who believed that he was

entitled to take that step. He had the opportunity to send himself the list throughout

2016 but did not do so. It stands to reason that there was a trigger for taking the list.

The only reasonable inference is that the trigger was his belief that there was an

agreement in place. That belief arose between December 6–9, 2016, with

Mr. England’s endorsement to Mr. McLean and the “Thanks Philip” email. Mr. Ulmer

acted on that belief when he returned to TEG’s office in early January.

[116] Further, it was evident from the entirety of his testimony that Mr. Ulmer held

Mr. England in high regard. It was my impression that it would be unlikely (i.e., not

probable) that Mr. Ulmer would take a step that was significantly against

Mr. England’s wishes.

[117] It follows that if Mr. England had called on Mr. Ulmer on December 20, 2016,

Mr. Ulmer would have known that taking the client lists was not condoned by

Mr. England.

[118] It further follows that if Mr. England had called Mr. Ulmer on January 11,

2017, Mr. Ulmer would have known that he was already in possession of the

investor-contact lists. Hence, based on the timing, the act of sending the lists might

be excusable, but the subsequent act of using the lists (as he admits he did) would

clearly have been impermissible.

[119] On a more basic level, I find that if Mr. Ulmer was acting in a covert manner,

he would not have emailed the lists to himself. That act left an obvious trail within the

England Securities Ltd. v. Ulmer

Page 29

records of TEG. It would have been simple for him to make a paper copy of the

investor-contact list. Doing so would have left no trace and no trail.

[120] On that basis, I find that Mr. Ulmer’s actions with the investor-contact list were

not covert. Mr. Ulmer has provided an explanation about his understanding of the

circumstances as of January 4, 2017.

[121] Independent of my findings regarding Mr. Ulmer, I find significant reason to

doubt Mr. England’s testimony relating to the alleged call to Mr. Ulmer. As noted, his

evidence regarding the date of the call at his examination for discovery differed from

his later evidence. It is evident that his altered recollection was based on the fact

that, having testified at discovery about making the call from the Cayman Islands on

December 20, 2016, he was presented with documentary evidence indicating that he

was not in the Cayman Islands on that date.

[122] It is also clear that Mr. England’s recollection of the date when he placed the

call to Mr. Ulmer was a reconstruction based on his own phone records. At

discovery, he testified that he was “quite sure” that he was in the Cayman Islands

when he made the call. In preparation for his examination for discovery, he had an

employee retrieve his cell phone records from the period. There were calls between

the two men on December 20, 2016. That information was the basis of

Mr. England’s answers at discovery. However, it was pointed out to him that those

records indicate that he was in Vancouver on December 20, 2016. He agreed that

those conversations were probably related to planning for Christmas at Baldy

Hughes.

[123] This evidence establishes that, following his December 9 “Thanks Philip”

email, Mr. England had at least one conversation with Mr. Ulmer (on December 20)

in which he did not indicate that he had decided to decline Churchill’s offer.

Mr. England concedes that the main topic of discussion between the two men during

this period would have been issues relating to Baldy Hughes.

England Securities Ltd. v. Ulmer

Page 30

[124] I also note that in his direct testimony, Mr. England indicated that it was an

important call so he dialed Mr. Ulmer’s direct line. He said that he wanted Mr. Ulmer

to be alone when he received the news. However, the January 11, 2017 call was

made to a different number, Mr. Ulmer’s cell phone. This distinction undermines

Mr. England’s testimony about his understanding of the sensitivity of the call.

[125] Finally, I accept the defence submission that by (allegedly) responding to

Mr. Ulmer, Mr. England left an obvious gap in his communications with Churchill.

Mr. England received the draft agreement from Mr. Langridge, the principal of

Churchill. He responded “Thanks Philip.” He never provided a final response to

Mr. Langridge. Mr. England testified that he contacted Mr. Ulmer in the knowledge

that Mr. Ulmer would relay the message to Mr. Langridge.

[126] It is evident that Mr. Ulmer stood to benefit from the agreement if Churchill

was able to gain investors through his efforts and contacts. Mr. Ulmer and

Mr. England had discussed the prospect of coming to an agreement through 2016. It

is also evident that the two men had a close relationship at least through January

2017.

[127] To be clear, I do not find it impossible that Mr. England would have contacted

Mr. Ulmer instead of Mr. Langridge. I do, however, find that it would have been more

likely that Mr. England would have contacted Mr. Langridge. Mr. Langridge made an

offer on behalf of Churchill. It would have made sense to respond to Mr. Langridge.

That is the case whether Mr. England had spoken with Mr. Ulmer or not. By that, I

mean that it would be reasonable to expect Mr. England to send a short note to

Mr. Langridge indicating that there would be no agreement and that he had

explained the reasons to Mr. Ulmer.

[128] I further note that there is no evidence that Mr. Ulmer ever relayed to

Mr. Langridge the message of Mr. England declining the offer. Hence, if I were to

find that Mr. Ulmer did, in fact, receive a phone call from Mr. England, then I would

also have to find that Mr. Ulmer immediately decided to hide that call from

Mr. Langridge. I find that prospect to be unlikely.

England Securities Ltd. v. Ulmer

Page 31

[129] Taking all of this evidence into consideration, I find that it is more likely than

not that there was no telephone conversation between Mr. England and Mr. Ulmer

wherein Mr. England advised Mr. Ulmer that he (Mr. England) would not be

proceeding with the agreement with Churchill.

[130] That being the case:

a) the issue of whether the other facts I have found form the basis of the

formulation of a contract is still in issue;

b) however, in respect of Mr. Ulmer’s state of mind at the time he emailed the

investor-contact list to himself, and later relied on that list, I find that he

had not been advised by Mr. England that there was no such agreement.

Mr. Ulmer relied on the deliberately vague email of December 9, 2016,

which was the last contact with Mr. England.

[131] It follows from this finding of fact that Mr. Ulmer’s action in sending himself the

investor-contact list was not furtive or dishonest. As noted, he forestalled on copying

the lists through 2016 and did not take that step until early January 2017

immediately after Mr. England’s vague email.

[132] With that background addressed, I now proceed to address the primary

question in this action: whether Mr. Ulmer was a fiduciary.

Was Mr. Ulmer a Fiduciary?

[133] The parties agree that Mr. Ulmer’s position at TEG did not create a per se

fiduciary relationship. He was not in the executive suite or a specific trustee position.

As a result, the plaintiff submits that the actual functions performed in Mr. Ulmer’s

employment relationship created an ad hoc fiduciary relationship.

[134] There are, of course, myriad cases that discuss the elements of a fiduciary

relationship. I start with the instructive discussion set out by the Supreme Court of

Canada in Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 at paras. 27

–36 [Elder Advocates]:

England Securities Ltd. v. Ulmer

Page 32

(1)

The General Requirements for Imposition of a Fiduciary Duty

The plaintiff class argues that, in addition to traditionally recognized

[27]

categories like trustee or solicitor-client relationships, a fiduciary duty more

broadly may arise whenever one person exercises power over another

“vulnerable” person. They rely on Frame v. Smith, [1987] 2 S.C.R. 99, where

Wilson J., in dissenting reasons later adopted and applied in Lac Minerals

Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, outlined the

hallmarks of a fiduciary duty:

Relationships in which a fiduciary obligation has been imposed seem

to possess three general characteristics:

(1)

The fiduciary has scope for the exercise of some discretion or

power.

(2)

The fiduciary can unilaterally exercise that power or discretion

so as to affect the beneficiary’s legal or practical interests.

(3) The beneficiary is peculiarly vulnerable to or at the mercy of

the fiduciary holding the discretion or power. [p. 136]

[28]

It is now clear that vulnerability alone is insufficient to support a

fiduciary claim. As Cromwell J. explained in Galambos v. Perez, 2009 SCC

48, [2009] 3 S.C.R. 247, at para. 67:

An important focus of fiduciary law is the protection of one party

against abuse of power by another in certain types of relationships or

in particular circumstances. However, to assert that the protection of

the vulnerable is the role of fiduciary law puts the matter too broadly.

The law seeks to protect the vulnerable in many contexts and through

many different doctrines.

Cromwell J. concluded, at para. 68, that

while vulnerability in the broad sense resulting from factors external to

the relationship is a relevant consideration, a more important one is

the extent to which vulnerability arises from the relationship:

Hodgkinson, at p. 406. [Emphasis added in Elder Advocates.]

[29]

As useful as the three “hallmarks” referred to in Frame are in

explaining the source fiduciary duties, they are not a complete code for

identifying fiduciary duties. It is now clear from the foundational principles

outlined in Guerin v. The Queen, [1984] 2 S.C.R. 335, Hodgkinson v. Simms,

[1994] 3 S.C.R. 377, and Galambos, that the elements outlined in the

paragraphs that follow are those which identify the existence of a fiduciary

duty in cases not covered by an existing category in which fiduciary duties

have been recognized.

[30]

First, the evidence must show that the alleged fiduciary gave an

undertaking of responsibility to act in the best interests of a beneficiary:

Galambos, at paras. 66, 71 and 77-78, and Hodgkinson, per La Forest J., at

pp. 409-10. As Cromwell J. wrote in Galambos, at para. 75, “what is required

in all cases is an undertaking by the fiduciary, express or implied, to act in

accordance with the duty of loyalty reposed on him or her.”

England Securities Ltd. v. Ulmer

[31] The existence and character of the undertaking is informed by the

Page 33

norms relating to the particular relationship: Galambos, at para. 77. The party

asserting the duty must be able to point to a forsaking by the alleged fiduciary

of the interests of all others in favour of those of the beneficiary, in relation to

the specific legal interest at stake.

[32]

The undertaking may be found in the relationship between the parties,

in an imposition of responsibility by statute, or under an express agreement to

act as trustee of the beneficiary’s interests. As stated in Galambos, at para.

77:

The fiduciary’s undertaking may be the result of the exercise of

statutory powers, the express or implied terms of an agreement or,

perhaps, simply an undertaking to act in this way. In cases of per se

fiduciary relationships, this undertaking will be found in the nature of

the category of relationship in issue. The critical point is that in both

per se and ad hoc fiduciary relationships, there will be some

undertaking on the part of the fiduciary to act with loyalty. [Emphasis

added in Elder Advocates.]

[33]

Second, the duty must be owed to a defined person or class of

persons who must be vulnerable to the fiduciary in the sense that the

fiduciary has a discretionary power over them. Fiduciary duties do not exist

at large; they are confined to specific relationships between particular parties.

Per se, historically recognized, fiduciary relationships exist as a matter of

course within the traditional categories of trustee-cestui que trust, executor-

beneficiary, solicitor-client, agent-principal, director-corporation, and

guardian-ward or parent-child. By contrast, ad hoc fiduciary relationships

must be established on a case-by-case basis.

[34

Finally, to establish a fiduciary duty, the claimant must show that the

alleged fiduciary’s power may affect the legal or substantial practical interests

of the beneficiary: Frame, per Wilson J., at p. 142.

[35]

In the traditional categories of fiduciary relationship, the nature of the

relationship itself defines the interest at stake. However, a party seeking to

establish an ad hoc duty must be able to point to an identifiable legal or vital

practical interest that is at stake. The most obvious example is an interest in

property, although other interests recognized by law may also be protected.

[36]

In summary, for an ad hoc fiduciary duty to arise, the claimant must

show, in addition to the vulnerability arising from the relationship as described

by Wilson J. in Frame: (1) an undertaking by the alleged fiduciary to act in the

best interests of the alleged beneficiary or beneficiaries; (2) a defined person

or class of persons vulnerable to a fiduciary’s control (the beneficiary or

beneficiaries); and (3) a legal or substantial practical interest of the

beneficiary or beneficiaries that stands to be adversely affected by the

alleged fiduciary’s exercise of discretion or control.

[135] It is common ground that employees who are not fiduciaries owe certain

duties to their employers. This distinction was discussed by Gallant J. in Tree Savers

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Page 34

International Ltd. v. Savoy (1991), 81 Alta. L.R. (2d) 325 at 328 (Q.B.), aff'd (1992),

84 Alta. L.R. (2d) 384 (C.A.) [Tree Savers]:

An employee has a basic common law obligation to render faithful and loyal

service to his employer during his employment. As a general rule, an

employee may leave his employment and lawfully compete against his former

employer, taking with him knowledge gained in his former employment, but

he may not take or use against his employer any of his employer's trade

secrets, confidential information or customer lists, whether during or after his

employment. If he was top or senior management or a key employee, he

owes a fiduciary duty to his employer, which not only encompasses the

ordinary duties of an employee but is an enlarged, more exacting duty which

endures after termination. …

[136] Hypothetically, the taking of an employer’s client list might well constitute a

breach an employee’s duty of good faith and fidelity. That duty might extend beyond

the termination of employment. The same hypothetical act could also constitute a

breach of fiduciary duty, if such a duty existed. However, the ability to affect the

employer’s interests by taking and using a client list does not create a fiduciary duty

in the employee.

[137] It is clear that courts attempting to determine whether a fiduciary relationship

exists have examined the employee’s relationship with clients and their access to

the clients’ confidential information. However, those two elements, on their own, are

not sufficient to make the determination. Many occupations entail those elements

and are not considered fiduciary in nature.

[138] Put another way, the fact that the employee had access to certain confidential

information does not, on its own, create a fiduciary relationship for that employee.

Employees often have access to client lists and are not fiduciaries. Looking at the

issue from the opposite direction, the employee does not owe a narrow fiduciary

duty in respect of the client list. The employer’s interest in the client list is protected

by the employee’s duty of good faith and fidelity or duty of confidentiality. The taking

of a client list, and resulting damage to the employer, cannot create a fiduciary duty.

Analysis of a factual scenario, starting with the breach, looks through the wrong end

of the telescope. The court must first find the existence of a fiduciary relationship

and then proceed to assess whether the employee’s act constituted a breach of

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Page 35

those inherent duties. Again, this concept is important in this case, because the

plaintiff has not alleged a breach of Mr. Ulmer’s contractual duties or framed its claim

in common law duties short of fiduciary obligations.

[139] The plaintiff relies on several cases to establish the following propositions:

a) A key employee who is essentially the “whole show” to protect the

employer’s goodwill may be regarded as a fiduciary: Authentic T-Shirt

Company ULC v. King, 2016 BCCA 59 at para. 25; Hudson’s Bay

Company v. McClocklin Hearing Aid Centre (1986), 42 Man. R. (2d) 283

(Q.B.).

b) Senior managers and key employees owe fiduciary duties: Tree Savers at

328.

c) The court should look at the actual functions of the employee and the level

of contact with clients. In Canadian Hedge Watch Inc. v. Street, 2015

ONSC 454, Myers J. wrote (at para. 29), citing GasTOPS Ltd. v. Forsyth,

[2009] O.J. No. 3969 (S.C.), aff’d 2012 ONCA 134:

[29]

… The court will look at a former employee's job duties; the extent or

frequency of contact between the employee and customers and/or suppliers;

whether the employee was the primary contact with customers and/or

suppliers; to what extent the employee had access and made use of

knowledge of the former employees customers, their accounts, pricing

practices and the pricing of product and services; and to what extent the

former employees information was confidential.

d) “Direct solicitation of a former employer’s clients by [a] departing or

departed employee is not acceptable where the employee is a fiduciary of

the employer”: Anderson, Smyth & Kelly Custom Brokers Ltd. v. World

Wide Customs Brokers Ltd., 1996 ABCA 169 at para. 24.

[140] The relationship between TEG and Mr. Ulmer is, of course, one of

employer/employee. The employment relationship will not create a fiduciary

relationship unless the employee is imbued with a high level of control or authority or

England Securities Ltd. v. Ulmer

Page 36

is a “key” employee. The inquiry is related to the employee’s actual functions and

powers: Barton Insurance Brokers Ltd. v. Irwin, 1999 BCCA 73 at paras. 39–40.

[141] The plaintiff submits that the following factual matrix indicates that Mr. Ulmer

was a key employee and a fiduciary:

a) He was a key part of the management team with knowledge of TEG’s

investors and their advisors.

b) He was the primary point of contact for many of TEG’s investors and

advisors. He was heavily involved in distributing $100,000,000 to those

investors and advisors. He knew which investors would constitute good

prospects.

c) He was a core part of the management team. In support of this contention,

the plaintiff relies on the description Mr. Ulmer wrote in his note to himself

for the Churchill job interview. He described his role at TEG as “inner

circle”.

d) He promoted himself on Linked-In and the Churchill website as having

been a member of the executive team at TEG.

e) He had direct responsibility for and access to the TEG investor-contact

list, which Mr. England described as the “heart of the company”.

f) Starting in January 2016, he was one of very few employees. He could be

considered the “whole show” at TEG, albeit on a part-time basis. The

plaintiff notes that Mr. Ulmer oversaw the distribution of the net sale

proceeds to investors and trailer fees to advisors and that he was paid for

that work by TEG.

[142] I will address first the plaintiff’s submissions regarding Mr. Ulmer’s own

description of his role at TEG. As I described above, in a note to himself preparing

for his job interview with Churchill, he described himself as part of the “inner circle”.

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He made a similar claim on the social-media platform LinkedIn. I find those self-

descriptions to be irrelevant for two reasons:

a) First, they do not assist me in determining Mr. Ulmer’s “actual function” at

TEG. As noted, the proper inquiry does not focus on titles, but functions.

b) Second, these self-descriptions are neither “titles” nor “functions”. They

are one further step removed from “actual functions”. They are descriptors

used by Mr. Ulmer in a particular type of writing: the job application

context. It is not a secret that individuals promote themselves (and even

exaggerate their responsibilities) in the job application process. LinkedIn is

a website designed for self-promotion.

[143] On that basis, I do not find Mr. Ulmer’s descriptions of his role at TEG assist

me in my analysis of his “actual functions”.

[144] Reviewing the plaintiff’s submissions and cases, I note that all of them relate

to circumstances where an employee leaves an operating company and starts with a

competitor. In each of those cases, the former employer was vulnerable to the loss

of clientele. While vulnerability is not a requirement for a finding of a fiduciary duty, it

is an important element. I discuss below whether TEG was a “vulnerable” employer.

In order to provide some structure for my considerations, I address each of the

factors discussed in Elder Advocates below.

The fiduciary has scope for the exercise of some discretion or power

[145] I set out above Mr. Ulmer’s functions at TEG. It is clear that he was the

primary point of contact for investors and financial advisors. He had access to the

investor-contact list and used it regularly. However, the evidence establishes that he

did not have any particular discretion or power within his role. For example, despite

his title (Investor Relations Manager), he could not even publish a quarterly circular

without prior approval from either Mr. England or Mr. Ng.

England Securities Ltd. v. Ulmer

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[146] Mr. England was the sole shareholder and director of TEG. Through to

December 31, 2015, when TEG shut its doors, he delegated very little decision-

making power. He certainly did not delegate any of that power to Mr. Ulmer.

[147] I find that Mr. Ulmer’s role as Investor Relations Manager was not imbued

with any discretionary powers. Up to December 31, 2015, Mr. Ulmer did not have the

power to solve problems for the investors. TEG had offered long-term investment

products. If an investor wanted to divest, the only route was through an aftermarket

of sales to existing investors. Mr. Ulmer oversaw that program, but had no discretion

in that regard. Further, TEG received no benefit from any such sales.

[148] While Mr. Ulmer remained a part-time employee after the end of 2015 (and

Mr. England exercised less control), there were no particular business decisions to

make. Mr. Ulmer’s role was to provide information to investors and advisors about

tax treatment and trailer fees. His role involved primarily passing on accounting

information and getting forms signed. These functions were primarily administrative.

Again, there was no discretion in his role. He had no discretion to agree to pay an

investor or advisor an amount in excess of the contracted amount.

[149] In my opinion, an inquiry into Mr. Ulmer’s actual function within TEG indicates

that he exercised virtually no discretion or power.

The fiduciary can unilaterally exercise that power or discretion so as to

affect the beneficiary's legal or practical interests

[150] The discussion above applies to this factor as well. In short, Mr. Ulmer had

virtually no power or discretion to affect or bind TEG’s legal or practical interests

either before or after December 31, 2015.

[151] The plaintiff argues that, by directing potential investors away from TEG in

2015 and 2016, Mr. Ulmer affected TEG’s practical interests. However, the evidence

is clear that TEG had nothing to offer those individuals. TEG had no “practical”

interests to protect. It had no products to sell. Hence, TEG’s interests were not

affected by these actions of Mr. Ulmer.

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[152] For the same reason, Mr. Ulmer had no power to bind TEG’s legal interests,

either before or after December 31, 2015.

[153] The plaintiff submits that Mr. Ulmer’s taking of the investor-contact list in 2017

constituted an example of an employee affecting his employer’s practical interests.

However, that formulation puts the cart before the horse. A fiduciary obligation must

exist before a fiduciary duty can be breached. Mr. Ulmer may well have had a duty

of confidentiality to TEG. No such duty or breach is pled.

[154] Returning to the question posed at para. 35 of Elder Advocates: Can TEG

point to an identifiable legal or vital practical interest that is at stake? In my opinion,

TEG has not identified any such legal or practical interest.

The beneficiary must be a defined individual or class that is peculiarly

vulnerable to or at the mercy of the fiduciary holding the discretion or

power

[155] It is clear that TEG is the individual entity that claims the fiduciary duties were

owed. Hence, there is a defined individual. The issue on this element relates to

whether TEG was “vulnerable”.

[156] As noted above, the vulnerability of the employer (or other individual) floats

over the other elements of the fiduciary relationship. As noted in Galambos v. Perez,

2009 SCC 48 at para. 67, protection of the vulnerable is an “important focus” of the

law of fiduciary obligations.

[157] The plaintiff submits that it was particularly vulnerable to Mr. Ulmer and his

ability to take the investor-contact list. Mr. Ulmer had access to the investor-contact

list, and he was one of the last remaining employees at TEG. He was the primary

point of contact for many investors and advisors.

[158] The plaintiff’s submission on this point begs the very short question:

“Vulnerable how?”

[159] This is not a case where a key employee departed with a large slice of the

employer’s customers, leaving the former employer in a difficult financial situation.

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[160] In my opinion, TEG’s circumstances were the opposite of vulnerable. TEG

had ceased doing business. It had earned and banked its profits. It had few ongoing

expenses. After 2015 it was in the process of wrapping up the last administrative

steps. On this point, I find it instructive that in 2017, TEG paid Mr. Ulmer a total of

$731. This quantum of wages suggests that almost all of the administrative work

was complete.

[161] I find that, after 2015, TEG was not vulnerable. Mr. Ulmer’s role was primarily

administrative and related to wrap-up tasks.

[162] To a lesser extent, the same considerations apply to the period before the

end of 2015. As noted above, TEG did not make any new investments (or market

any new products) after 2005. All of its investors were locked in. It is hard to imagine

how TEG was “vulnerable” to competition during that period.

[163] The plaintiff’s counsel submits that, when assessing equitable damages, the

court must assume that the injured party would have pursued the most profitable

avenue with the misappropriated asset. In that regard, counsel submits that the court

should find that Mr. England might have gone back into business, or sold the

investor-contact list to another entity. Those are principles that apply to the

assessment of damages (should I find a fiduciary relationship and a breach).

However, on the facts of this case, as they relate to my findings on “vulnerability”, as

of December 31, 2015, TEG had closed for business, and Mr. England had retired. It

was not vulnerable to anything.

[164] At worst, TEG might have been embarrassed by the use of its client list by a

competitor like Churchill. However, there is no evidence that any such

embarrassment occurred. To the contrary, the evidence establishes that

Mr. England was not aware that Mr. Ulmer had marketed to TEG’s former investors

until his assistant found Mr. Ulmer’s emails. It is clear that the former TEG clients did

not contact Mr. England about the sharing of their contact information.

[165] Again, I find that TEG was not vulnerable to Mr. Ulmer.

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Undertaking Express or Implied

[166] It is clear that there was no express undertaking provided by Mr. Ulmer. The

question, then, is whether there was an implied undertaking.

[167] An implied undertaking can be found where the employee takes on a “top

management” role.

[168] As noted, Mr. Ulmer was the Investor Relations Manager at TEG. That

position did not imbue him with the powers or responsibilities of “top management”

or “key employee”.

[169] The issue here is whether the alleged fiduciary gave an undertaking to act in

the best interests of the beneficiary. That undertaking can be express or implied.

[170] In HRC Tool & Die Mfg Ltd. v. Naderi, 2016 ABCA 334 [Naderi], the Alberta

Court of Appeal suggested that, by agreeing to take on the responsibilities that

would impose fiduciary obligations upon them, key or top employees have impliedly

undertaken to act in their employer’s best interests:

[19]

The trial reasons found at para 45 “... there is no evidence of an

express or implied undertaking by either Bahra or Naderi to act in accordance

with a duty of loyalty to HRC”. The word “undertaking” has many meanings,

and in some uses implies an express representation, or an assumption of

obligations akin to contract. In the context of fiduciary duties, the

“undertaking” can arise from the very context. As was said in Alberta v Elder

Advocates of Alberta Society at paras 30-32, the required undertaking can

be express or implied, is informed by the “norms relating to the particular

relationship”, and may be inherent in the relationship between the parties. By

agreeing to become key employees, Bahra and Naderi implicitly undertook to

discharge the fiduciary duties inherent in that employment.

[171] I note that the court in Naderi placed this discussion within the wider

assessment of the test set out in Frame v. Smith, [1987] 2 S.C.R. 99. The two

defendants were employees of a machine shop who quit and went into business in

competition with their former employer. They were found not to be fiduciaries.

[172] Mr. Ulmer was the Investment Relations Manager. That is not a position that

connotes that he was a “top employee”. Within TEG, Mr. England clearly held the

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pre-eminent position. I find that the norms of Mr. Ulmer’s position and relationship

did not create an inherent or implied fiduciary obligation. The next question is

whether there was an express undertaking. Clearly, there was not.

[173] In my opinion, the following evidence indicates that TEG neither sought, nor

received, any undertaking from Mr. Ulmer:

a) TEG never had a written employment contract with Mr. Ulmer, nor did it

have any written confidentiality requirements.

b) Mr. England supported and promoted Mr. Ulmer’s move to Churchill.

c) In doing so, TEG did not indicate, either in writing or verbally, any

restrictions on Mr. Ulmer’s prospective role within Churchill.

d) TEG then paid the combination bonus and golden handshake to Mr. Ulmer

in 2015, without placing any conditions on that payment.

e) There was no indication in any written communication between TEG and

Mr. Ulmer that Mr. Ulmer would owe duties after the end of his full-time

employment.

f) As noted, Mr. England was aware of Mr. Ulmer’s marketing to Mr. McLean

in 2016 and raised no objection.

[174] In assessing this question, I return to unescapable facts of Mr. Ulmer’s

employment. Until the end of 2015, he was employed on a full-time basis by TEG.

Thereafter, he was employed on a full-time basis by Churchill. Churchill might have

been considered a competitor of TEG’s up to the point when TEG closed its doors. It

is reasonable to posit the theory that Mr. Ulmer had a duty not to act against the

interests of TEG until such time as TEG closed its doors. However, once Mr. Ulmer

moved to full-time employment with Churchill, he clearly owed a duty to put his

efforts toward the benefit of Churchill.

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[175] I am buoyed in my opinion by the fact that, at no time did TEG have a written

employment contract with Mr. Ulmer. It was within Mr. England’s power to put

conditions on either the contract or the golden handshake that TEG paid to

Mr. Ulmer. I infer that TEG did not do so because Mr. England knew that Mr. Ulmer

was going to work for a (former) competitor and, at the time, did not put his mind to

the prospects of someone taking the investor-contact list.

[176] At trial, during his evidence, Mr. England took the position that, because of his

position at TEG, Mr. Ulmer was precluded from contacting any TEG investors and

any financial advisors whom he had met while at TEG. That is a far-reaching

position regarding the limits placed on Mr. Ulmer. It is also a significant limitation that

Mr. England did not think to impose or enunciate in any way prior to this litigation.

[177] Further, it is patent that Mr. England did not take a stringent position on

Mr. Ulmer’s contacting investment advisors in 2016. I say that because, as

discussed above, Mr. England was aware that Mr. Ulmer was communicating with

Mr. McLean in 2016. He also knew that Mr. McLean was holding off any investment

in Churchill until he had Mr. England’s endorsement. When dealing with that request,

Mr. England did not inquire of Mr. McLean who made the first approach (Mr. McLean

or Mr. Ulmer). Instead, he provided his endorsement of Churchill.

[178] In my opinion, this episode belies the underpinning of Mr. England’s later

position. In saying that, I do not mean to suggest that Mr. England actively agreed to

the use of any client list. I accept that he was at least reticent to allow TEG’s

investor-contact list to be used by other entities. It is clear that his negotiations with

Churchill were protracted. He did not leap at the opportunity to co-market to his

investors. His decision not to sign-on to Churchill’s proposed agreement is evidence

of his desire on that front. (As noted, I have found that he failed to communicate that

decision to Mr. Ulmer or Churchill, but the fact that he did not sign the document is

evidence that he did not want the list to be used.) However, there is a substantial

difference between Mr. England not wanting to co-market with Churchill and

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Mr. England demanding some form of undertaking from Mr. Ulmer. There is no

evidence of Mr. England ever seeking such an undertaking.

[179] I find that this element of a fiduciary relationship is completely absent from

Mr. Ulmer’s employment. There is no evidence to support the suggestion that

Mr. Ulmer provided any undertaking, express or implied, that he would act in the

best interests of TEG after the end of 2015. That finding does not mean that he did

not continue to have certain duties to TEG. One of those duties might well have

been a duty of confidentiality. However, such a duty, and such a breach, were not

pled by the plaintiff.

Summary of Analysis of Fiduciary Principles to the Facts

[180] Having assessed the considerations set out in Elder Advocates and other

cases, I find that Mr. Ulmer was not in the position of a fiduciary to TEG. He clearly

owed some duties to TEG. In line with any employee, he owed a duty of good faith

and fidelity. Given his position, and nature of the investor contact information, it is

likely that he owed a duty of confidentiality.

[181] However, in my opinion, Mr. Ulmer’s position with TEG did not come near to

the position of a fiduciary. He exercised little or no discretion or power. TEG was not

vulnerable. TEG had not requested an undertaking that Mr. Ulmer act for its benefit.

[182] I find that Mr. Ulmer did not owe any fiduciary duty to TEG.

Result of Finding on Existence of Fiduciary Obligations

[183] As I have noted above, the plaintiff does not claim against Mr. Ulmer for a

breach of any contractual obligation or extra-contractual breach of confidence. The

plaintiff’s claim is limited to an allegation of the breach of fiduciary obligations.

[184] Given that I have found no fiduciary relationship, I cannot find a breach of any

fiduciary duty.

[185] It follows that the plaintiff’s claim against Mr. Ulmer must be dismissed.

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[186] It further follows that the defendant Churchill cannot be liable for knowing

assistance of Mr. Ulmer. The claim against Churchill is dismissed.

[187] I noted above the plaintiff’s submission that there is no merit to the defence

position regarding the existence of any agreement between Churchill and

Mr. England for the use of the TEG investor-contact list. However, whether an

agreement existed would only be relevant if there is a finding of a breach of fiduciary

duty and the defendants needed an excuse for their conduct. Because I have

dismissed the plaintiff’s claim, I do not need to make a finding on whether such an

agreement existed.

Claim for Punitive Damages

[188] It is well established that a claim for punitive damages can only be maintained

if the underlying legal or equitable claim is made out.

[189] It follows that the plaintiff’s claim for punitive damages is dismissed.

[190] However, should another court interpret these facts in a different manner, and

should I be found to be incorrect on the existence of a fiduciary duty, I note that I

would still have dismissed the claim for punitive damages. I say that because, as I

have found above, Mr. Ulmer’s taking of the investor-contact list was not “furtive and

dishonest” as alleged by the plaintiff. Instead, the chronology of events indicates that

Mr. Ulmer did not take the investor-contact list in 2016. It was not until the events of

December 2016, and Mr. England’s endorsement of Churchill to Mr. McLean, that

Mr. Ulmer formed a belief that there was going to be cooperation from his former

employer. Hence, he forwarded the investor-contact list upon his return to the office

in January 2017. Further, I have found that Mr. England never called Mr. Ulmer (or

Mr. Langridge) to advise that he would not be agreeing to co-market to TEG

investors.

[191] On that basis, even if I found Mr. Ulmer liable for taking the list, I would not

have awarded punitive damages.

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Damages

[192] Because I have dismissed the plaintiff’s claim, I need not assess damages.

Defence Allegation of Abuse of Process

[193] The defence position is that Mr. England, through his corporate vehicle,

brought this action to exact some form of vengeance upon Mr. Ulmer for crossing

him on the Board of Baldy Hughes.

[194] The components of an abuse of process are:

a) a court proceeding brought against a party for a collateral and improper

purpose;

b) an overt act or threat in furtherance of a purpose not legitimate in the use

of the legal process; and

c) damages suffered by the party alleging abuse of process.

(Oei v. Yan, [2020] B.C.J. No. 1174 (C.A.) at paras. 5–6.)

[195] I have dismissed the plaintiff’s claim. However, I have dismissed it on the

basis of the manner in which it was pleaded. My guess is that the plaintiff proceeded

in the manner it did because it realized that the measure of contractual damages

could, or would, have been relatively small. Whatever the reason, that was a

strategic decision by the plaintiff.

[196] I have specifically not addressed whether Mr. Ulmer might have been in

breach of other employment duties. However, it is possible that the plaintiff might

have been successful if the case was pled in a different manner.

[197] I am unable to find that the entirety of the action was an abuse of process.

Summary

[198] The plaintiff’s claim is dismissed.

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[199] The defendants’ application to dismiss the claim as an abuse of process is

also dismissed.

[200] The defendants have been successful in this action. They are entitled to one

set of costs. If there have been offers, I will hear submissions.

“A. Ross J.”