1 day Ago By CBC
A British Columbia judge says Saskatchewan farming magnate Darrel Monette must pay the $12 million he promised to an adviser in a multimillion-dollar ranching deal in 2021. David Dutcyvich owns Vancouver Island-based 3L Developments Inc., which advised Monette in the ranching deal, the judgment said.
Born on a farm in Saskatchewan, Dutcyvich moved to B.C. as a teen and started working as a logger.
He went on to create Lemare Lake Logging and then, from those profits, form 3L Developments, now part of a related group of companies through which he carries out development, ranching and agricultural activities. Monette is the owner of Monette Farms Ltd., a ranching and farming operation with holdings in Saskatchewan, B.
C., Manitoba and the United States. In a news release March 31, he said that the company, based in Swift Current, Sask.
, about 245 kilometres west of Regina, is appealing the ruling. Justice Emily Burke's 50-page ruling on March 25 from the Supreme Court of British Columbia details the complex maneuvering behind the multimillion-dollar deal involving cattle and thousands of hectares scattered across 16 ranches in the province's interior. For all its complexities, Burke's decision came down to deciding which of the two multimillionaire farmers was telling the truth about what was or wasn't said on a day in May 2021 when the two men took a helicopter ride near Kamloops to tour the ranches.
Burke chose to believe Dutcyvich's account of what happened. "Mr. Dutcyvich said he had a brief early morning conversation with Mr.
Monette just prior to the helicopter tour, during which he advised Mr. Monette that his work was essentially done and he expected his $12 million when the deal closed," Burke wrote. "Mr.
Monette says this conversation did not occur." B.C.
cattle country The dispute began in 2020 when the Blue Goose Cattle Company in Vancouver wanted to sell its ranching interests in B.C. The shares in Blue Goose Cattle were owned by Blue Goose Capital, which is a subsidiary of the Dundee Corp.
, a public company listed on the Toronto Stock Exchange. Blue Goose Cattle owned 16 separate ranches with more than 18,200 hectares and 14,000 cows. It started negotiating the sale with LBJ Capital Inc.
, based in Okotoks, Alta, about 45 kilometres south of Calgary. As part of its due diligence, LBJ hired Dutcyvich and his company, 3L Developments, to review the deal. "He is an 81-year-old, self-made, successful businessman," Justice Burke wrote.
According to Burke's decision, Blue Goose wanted just over $100 million for its holdings. Dutcyvich's deal with LBJ was to see if the price was fair, and if he could get it lower, he would get a portion of anything under the $100 million asking price. "For example, as Mr.
Dutcyvich explained, if he was able to reduce the purchase price by $20 million, Mr. Dutcyvich and 3L Developments would receive $10 million," Burke wrote. The judgment details how Dutcyvich's chief financial officer at 3L Developments reviewed the company's private financial statements, while Dutcyvich did on-the-ground inspections to ultimately value the holdings at $76 million.
He concluded that Blue Goose had claimed to have more cows than it did, moved equipment between ranches to fudge the amount of assets, and would have a problem with its land leases as property was being returned to First Nations peoples. After providing LBJ Capital the advice, the company and Blue Goose entered into a preliminary deal in June 2020 to sell the package for $76 million. This would net Dutcyvich a $12 million fee — half the $24 million difference from the original $100 million asking price.
Monette Farms enters the picture As it happened, LBJ Capital was unable to close the deal and by the fall of 2020 Blue Goose decided it wouldn't deal with the company. "At this time, unknown to Mr. Dutcyvich and 3L Developments, it appears that the defendants, Darrel Monette and Monette Farms, were making arrangements to have some measure of involvement with LBJ," Burke wrote.
"Mr. Monette disputes this. However, I find that the evidence supports this involvement.
" Monette was involved in conference calls in late 2020 involving LBJ and Dutcyvich, Burke wrote. In January 2021, Blue Goose cut its dealings with LBJ. In March, Monette and Dutcyvich first met in person, which is when Dutcyvich said Monette first asked for help.
Burke wrote that the crucial conversation about Dutcyvich's fee happened on the helicopter ride to tour the ranches, in the first or second week of May 2021. "As part of this conversation, Mr. Dutcyvich said to Mr.
Monette: "You know the deal, my fee is $12 million ...
are you going to pay me?" Mr. Dutcyvich testified that Mr. Monette replied "yes," he would pay the fee," Burke wrote.
"When cross-examined on why he took no more steps to confirm the payment owed by Monette Farms, Mr. Dutcyvich said that he took Mr. Monette at his word when he said he would pay Mr.
Dutcyvich for the work. He liked and trusted Mr. Monette, and so he didn't feel the need to pursue him.
" In October 2021, Dundee Corp. announced it had closed the sale of its Blue Goose Capital Corp. shares to Monette Farms.
Justice Burke had harsh words for Monette in her conclusion. "The defendants' duplicity throughout sought to minimize and deny the work undertaken by the plaintiffs, and I do not accept those claims. As argued, Mr.
Monette appears to be reluctant to pay for those who assist him on his path to accumulate his very significant wealth, and the court will not assist him in those endeavours." In the March 31 news release, Monette and Monette Farms wrote "we completely reject and disagree with the findings of the judge and will be appealing the decision to the BC Court of Appeal immediately.".
