Recently I received some unfavorable press that I felt it was important to provide the facts in a short video.

Over the past 7 years, I have spent countless hours continuously working, without compensation, to do everything possible to regain value for my shareholders. Along with myself and my former Chief Operating Officer, Earle Pasquill have also toiled continuously on behalf of those shareholders. Any impression that I had any personal benefit is untrue and even the adjudicators who ruled against me in Canada, admitted I had no personal financial benefit and in fact was the largest financial loser.

Part 1: my interaction with investors who have worked with me for many years.
Part 2: an interview where I address many issues
Part 3: TD Bank you tube video where I disclose what happened.

Proud to call Mike a friend, colleague, and role model.

To Whom It May Concern:
I first met Mike as a client many years ago, when he retained me to help him move from Canada to the United States. In the years since, he has become a great friend, which has given me the opportunity to get to know firsthand what a truly remarkable human being he is. Abraham Lincoln is believed to have stated, “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.” Lincoln was probably America’s greatest President, as well as one of the greatest human beings to ever live, and it is a true testament to Mike’s character that he has passed the test put forth by a moral giant like Lincoln. Indeed, like Abraham Lincoln, Mike Lathigee rose from humble beginnings to a point where he now wields a great deal of influence with his ever-expanding group of admirers. Lesser men have been corrupted by the intoxicating effects that such power can bring. However, Mike (like President Lincoln before him) has such a strong moral compass that he has been able to resist such a temptation. It is for this reason, for example, that, when Mike’s previous company, Freedom Investment Corp (FIC) experienced troubles that caused it to be put into receivership, Mike did not take the easy way out and try to not talk about this or “to spin” this, something that would have been particularly tempting to do given that Mike is primarily involved in efforts to secure and keep investments from people who trust that he is competent and capable of helping their investments prosper.
 Instead, Mike spoke very publicly about FIC’s troubles and fought in the Canadian court system to have his good name restored. To this day, whenever he is asked about this, Mike makes no attempt to hide what happened with FIC, knowing that his own actions speak for themselves; it is clear that, even in the age of Bernie Madoff and other Ponzi schemers, Mike Lathigee truly is someone who can be trusted with people’s money and with all of the confidence that goes with such trust. Indeed, to quote Winston Churchill, another of history’s great leaders, “You can measure a man’s character by the choices he makes under pressure.” There are few things that bring about as much pressure as being given the fiduciary responsibility to wisely and prudently invest money on behalf of others, particularly given the significant backlash that can result if the investment is less than successful. Not withstanding this pressure, Mike always keeps a level head, no matter how stressful the situation may be, and he never compromises his morals or his integrity.
It is for these and so many other reasons that I am proud to call Mike a friend, colleague,
and role model.
Please do not hesitate to contact me at any time should you have further questions or
concerns regarding Mike Lathigee.


Josh Effron, Esq. President Immigrant Rep, Inc

Hyland Judgment

I was at a presentation and challenged several assumptions and facts of the speaker on stage. After the presentation James Hyland approached me and asked my name and started shouting to everyone “Mike Lathigee is a convicted felon!”. He repeated it several times and I told him that he would be held accountable. It is ironic if you go to youtube and enter in the subject line, John Hyland Speaker is a Convicted Felon” you wll see a video that  has over 20000 views and John Hyland is the brother of James Hyland. I have been awarded a $250000 judgment against James Hyland for his false statements.


Click here to read the Judgment documents[616]

Vindication Continues: Mike Lathigee Wows Crowd at FreedomFest 2017
August 2, 2017


The 10th edition of FreedomFest, an annual gathering that brings together Libertarian-leaning thought leaders, took place last week at the Paris Resort in Las Vegas. The four-day event featured big-name speakers like Congressman Justin Amash, R-MI and U.S. Senator Mike Lee, R-UT.

Mike Lathigee took the stage twice at the event. The first speech was a 20 minute presentation in front of a crowd of about 1,200 in the Main Ballroom in the morning hours of July 20. Mike spoke about over-regulation, particularly Dodd-Frank and its provisions, for most of the session. Despite the fact Donald Trump was not the first choice for many Libertarian-leaning individuals during the 2016 Election (including Mike, who supported Rand Paul), Trump’s ascension into the White House is still beneficial to Americans who believe the Constitution is still king.

“America became great through individualism, not collectivism,” Mike said. “Libertarians are about having as little government intervention in their lives as possible. A Trump presidency is far better than what we would have obtained with Hillary Clinton.”

The second speech was the next day in Vendome B, a smaller venue at the Paris Resort that provided Mike the opportunity to speak directly to 100 or so guests about the Las Vegas Investment Club. Mike told attendees the fundamental principles LVIC follows: educating members and keeping members engaged with monthly meetings. LVIC only invests in companies that it has direct involvement in daily operations, is part of the board of advisors, and/or part of the board of directors.

Mike does not have a bullish outlook when it comes to stock market investing. He said Donald Trump is perhaps the most unpredictable President in U.S. history, which makes the stock market all the more unappealing. Any number of global events, including a whimsical war with North Korea or arbitrary new trade regulations adopted by this administration, could completely crash the stock market at any moment and cost investors billions. Further, stock market price earnings multiples are at decades-highs levels, which makes it difficult to find undervalued companies.

But LVIC knows a good opportunity when it presents itself and proceeds accordingly.

MOGO Finance Technologies is a company Mike discussed with LVIC members at the November 2016 club meeting. The 2015 IPO was $10 per share. It took only a few months for the stock to plummet to around $1 per share. But Mike told club members that there is great potential with this company after analyzing the entire situation. This resulted in some members investing heavily when MOGO shares were around $1. As of publishing, MOGO is trading at $4.25 and has ridden a continual upward trend in the first seven months of 2017.

“If you are dependent upon a financial services advisor to put you into the stock market and buy simple stocks for you, you’re eliminating 99% of the stocks you could possibly buy,” Mike said. “If I was a mutual fund, I would have never been able to buy that stock.”

All attendees in Vendome B received LVIC financial statements showing the last eight major investments the club has participated in. The transparency and proven success resonated with several attendee, culminating in 33 new members signing up for LVIC memberships at the conclusion of the speech.

FreedomFest 2017 ended for LVIC with Mike auctioning off two rare paintings. All proceeds (totaling over $13,000) were donated to FreedomFest to ensure the annual event happens every year. Mike will be back at FreedomFest 2018.

Lathigee holds Lathigee holds Alberta Lawyer Accountable and Lawyer Submits Resignation

We are heartened with the findings of the Law Society of Alberta brought against Malcolm Lennie QC.

Mike Lathigee fought for years to hold Malcolm Lennie QC accountable for his actions.  Malcolm Lennie was a lawyer representing several of Mr Lathigee’ s companies.

Through the course of proceeding it has become clear that Malcolm Lennie (acting as counsel on behalf of Mr Lathigee and his companies) committed a number of unethical acts deliberately detrimental to Mr Lathigee’s companies (detailed elsewhere on this website).

Not only did Mr Lathigee companies receive a settlement in excess of $1 million from Mr Lennie but, based on the information uncovered through this case and other files of Mr Lennie, the Alberta Law Society also accepted Mr Lennie’s resignation – as a direct result of these proceedings (the resignation was submitted to the Law Society of Alberta).

This closes a long battle against this (now) disgraced lawyer. Not only with the settlement but also with the result that Malcolm Lennie is no longer able to practice law.

This decision reflects our ongoing efforts to provide disclosure (and truth) with respect to the events leading up to, and subsequent to, the conditions in which the FIC Group of Companies (of which Mr Lathigee was CEO) was forced into receivership – in 2008.

Read the Disposition Summary – April 11, 2017 – Malcolm D. Lennie, Q.C. (01781519….pdf here.

More Vindication for Michael (Mike) Lathigee!

I continue to work for my former investors and win cases.


I am in the process of winning another case. This is the case against Kenneth Horne and Arlene Horne who colluded with our legal Counsel at the time (Malcolm Lennie). It is outrageous that Malcolm Lennie (as our attorney) did not disclose that he was one of the vendors of a property we were in the process of acquiring and that during the transaction he released monies to (his partner/fellow vendor) Kenneth Horne even before the contract of sale was fulfilled.

As a side note:
Malcolm Lennie has many upcoming hearings with respect to wrong doings and violation of his duties as a lawyer by the Alberta Law Society.

I further note that we have won a judgment against Malcolm Lennie and that he is now required to make sizable monthly payments – as ordered by the courts.

You will be shocked at the outrages steps of greed that (Edmonton, Alberta) residents Kenneth Horne and his wife Arlene took. (see attached complaint) Certainly a sequel could be made to the American Version of the program called “American Greed” but retitled “Canadian Greed” with Kenneth and Arlene Horne as a full length episode.

I have worked hard to recover monies on behalf of former FIC investors and I encourage you to read the attached update on the findings in our case against Kenneth Horne as I continue my efforts towards collecting funds on behalf of investors.

Here are a few of the findings in this current case:
On or about October 15, 2007 $530,000 was transferred to Horne for no consideration.
On or about February 5, 2008, $550,000 was transferred to Horne for no consideration.
Horne used these monies for personal expenditures and the acquisition of assets.
He is working with his wife Arlene Horne to try and retain those assets from the proceeds of these unjustly acquired funds.

We already have judgment against Horne but he battles fiercely in order to not to pay the monies back. My objective is to pursue him every step of the way and if necessary force him into bankruptcy.
He joins the ‘Hall of Shame’ with Dennis O’Dowd and John Tansowny (you can read about them on other blog posts).

This guy should be in prison!!

Allegations Withdrawn

In addition to a victory in the Supreme Court of Appeal please also see the Alberta Securities Commission Notice of Withdrawal that says, “the allegations…have been withdrawn” 

After many years the truth has finally come out!


Citation: Re Lathigee, 2015 ABASC 797
Docket: ENF-010792
Date: 20150908

Micheal Patrick Lathigee, Earle Douglas Pasquill, FIC Real Estate Projects Ltd., FIC Foreclosure Fund LTD., and WBIC Canada Ltd.

TAKE NOTICE THAT the allegations contained in the Notice of Hearing issued 19 June 2015 (Re Lathigee, 2015 ABASC 772) have been withdrawn.

Calgary, Alberta, 8 September 2015
David C. Linder, Q.C.
Executive Director




CLICK HERE to see the Alberta Securities Commissions Notice of Withdrawal of Notice of Hearing document.

Lathigee Finally Receives Vindication!

I am delighted to attach a copy of the decision of The Court of Appeal of Alberta. To revisit a little history, as CEO of FIC Group of Companies, I initiated an internal investigation of John Tansowny as VP of Real Estate for concerns regarding his conduct related to representing the fiduciary responsibilities and obligations of shareholders.

There were many improprieties that caused me concern and I hired an outside representative to assist in the investigation. Once the investigation began John Tansowny took several steps to try to stop the investigation and these steps hurt FIC Shareholders.

First, he wrote letters to the BC Securities Commission discussing why our assets should be seized and made numerous false allegations with respect to management conduct. Unfortunately, Tansowny’s unfounded and unsubstantiated allegations caused FIC assets to be frozen by the regulators, causing an unfair and unexpected decline in portfolio value, causing harm to the company and its shareholders.

Second, Tansowny wrote letters to TD Bank advocating for our 8 digit loan to be “called” and he consistently and substantially interfered with our attempts to improve our financial health and deal with crucial financing needs. This loan was the life blood of FIC’s existence and continued operations with our Real Estate Projects.

Third, when FIC entered receivership he lobbied and did all possible to try and keep FIC in receivership. His motivation had nothing to do with the best intentions for FIC Shareholders and in fact he badly hurt the shareholders he was supposed to assist by undertaking these actions.

His purpose was to try and destroy FIC so that it would not have the capital or the ability to pursue him for his misdeeds. He was concerned FIC Management would discover what he had done and he knew he would have huge exposure and enormous consequences if FIC Shareholders ever found out the truth.

Many years have passed and FIC Management has not given up. Earle and myself have fought to hold Tansowny accountable. I invite you to read the attached decision by the Supreme Court of Alberta.

I further will elaborate that we have every intention of pursuing John Tansowny further and have an ongoing action against him that we are confident will yield positive results.

Here are just a few comments written by the Judge:

“I start with Tansowny, whose version of events was unburdened by any need to reconcile or distinguish between his vested interest in the outcome and the events as they actually occurred. Overall, I found his testimony to be glib, facile, and dismissive of any real basis for dispute..and I find that his assertions at trial openly in favor of Phoenix simply do not withstand scrutiny.” (remember members he was VP President of Real Estate for FIC and at trial worked against all FIC interests.)

Further the judge wrote, “Tansowny’s credibility was further tarnished by the internal inconsistencies in his testimony. His evidence directly conflicted with the evidence that he has earlier sued FIC for real estate commission in relation to its purchase of that property. His evidence were unreliable assertions driven by his own interests in the outcome of the litigation.”

After all these years Earle and myself have continued to work through these cases spending countless hours and on my end never with any form of compensation. I am aware the accountability often falls upon the CEO of a company but I thought it is important after all these years that the truth comes out and John Tansowny actions are exposed for all to see.

Let me assure all former FIC Investors that I will continue to pursue Mr Tansowny and as you read through this final decision by the court understand that I will pursue Mr Tansowny to the fullest extend so members will understand the full story.

John Tansowny continues to live in Edmonton and work with Dennis O’Dowd who the judge wrote equal condemnations.

Memorandum of Judgment: Memorandum of Judgment: FIC Real Estate Fund vs Phoenix Land Ventures – John Tansowny & Dennis O’Dowd

In the Court of Appeal of Alberta
Citation: FIC Real Estate Fund Ltd. v Phoenix Land Ventures Ltd., 2016 ABCA 303
Date: 2016-10-12
Docket: 1503-0178-AC
Registry: Edmonton
Between: FIC Real Estate Fund Ltd. Respondent
Phoenix Land Ventures Ltd. Appellant

The Court: The Honorable Mr. Justice Ronald Berger
The Honorable Madam Justice Myra Bielby
The Honorable Madam Justice Frederica Schutz
Memorandum of Judgment of the Honorable Madam Justice Bielby
and the Honorable Madam Justice Schutz
Memorandum of Judgment of the Honorable Mr. Justice Berger
Dissenting in Fart
Appeal from the Judgment by
The Honorable Mr. Justice S.D. Hillier
Dated the 20th day of May, 2015
Filed on the 20th day of May, 2015
(2015 ABQB 318, Docket: 1003 13366)

Memorandum of Judgment of the Honorable Madam Justice Bielby
and the Honorable Madam Justice Schutz

[1] We take no issue with the conclusions reached in the first 10 paragraphs of the minority decision in relation to the trial judge’s interpretation of the Trust Agreement.

[2] We respectfully disagree, however, that the trial judge’s award of solicitor-client costs should be overturned on this appeal. His reasons for decision, read in their entirety, show that the award was based on his finding of litigation misconduct in the form of significant adverse credibility assessments relating to the trial testimony of the two principal witnesses for Phoenix. Negative credibility findings can be found to amount to litigation misconduct justifying an award of solicitor-client costs in certain cases. Here those findings arose from far more than the trial judge simply preferring the evidence of one set of witnesses over that of another set of witnesses.

[3] The thrust of the appellant’s initial argument in relation to the trial judge’s award of solicitor-client costs is that he failed to explain that decision. That is not so. It is not necessary for a judge to give detailed reasons for his costs decision if his or her reasoning arc is clear from the judgment in its entirety, as well as from the evidence led at trial:R vGagnon, 2006 SCC 17 at para 18, [2006] |SCR 621; R v REM, 2008 SCC 51 at para 35, [2008] 3 SCR 3. That is the situation here. Much of the body of the judgment is comprised of the trial judge’s negative assessment of the credibility of Phoenix’s principal witnesses, Mr. Tansowny and Mr. O’Dowd; that assessment required and allowed him to consider, and ultimately find, pre-litigation misrepresentations and misconduct.

[4] Generally, an award of solicitor-client costs is based on misconduct that occurs during the course of litigation. However, that is not an invariable rule. In Sidorsky v CFCN Communications Ltd, 1997 ABCA 280 at para 28, [1998] 2 WWR 89, this Court further clarified that “a departure from and party costs should only occur in rare and exceptional circumstances” and endorsed a list of examples from Jackson v Trimac Industries Ltd,(1993), 138 AR 161 at 172(QB), where a greater costs award would be appropriate:

1) circumstances constituting blameworthiness in the conduct of the litigation by that party {Reese et al v Alberta (Minister of Forestry, Lands and Wildlife) et al, [1992] AJ No 745,5 Alta LR (3d) 40 (QB));

2) cases in which justice can only be done by a complete indemnification for costs (Foulis et al V Robinson; Gore Mutual Inc Co, Third Party, [1978] OJ No 3596, 21 OR (2d) 769 (CA));

3) where there is evidence that the plaintiff did something to hinder,delay or confuse the litigation, where there was no serious issue of fact or law which required these lengthy, expensive proceedings, where the positively misconducting party was “contemptuous” of the aggrieved party in forcing that aggrieved party to exhaust legal proceedings to obtain that which was obviously his {Max Sottnenberg Inc v Stewart, Smith (Canada) Ltd, [1986] AJ No 1036,48 Alt a LR (2d) 367 (QB));

4) an attempt to deceive the court and defeat justice, an attempt to delay, receive and defeat justice, a requirement imposed on the plaintiff to prove facts that should have been admitted, thus prolonging the trial, unnecessary adjournments, concealing material documents from the plaintiffs and failing to produce material documents in a timely fashion {Olson v New Home Certification Program of Alberta, [1986] AJNo 347,44 Alta LR (2d) 207 (QB));

5) where the defendants were guilty of positive misconduct, where others should be deterred from like conduct and the defendants should be penalized beyond the ordinary order of costs {DusikvNewton(1984), 51BCLR217,1984 CanLU 690 (SC));

6) defendants found to be acting fraudulently and in breach of trust{Davis v Davis, [1981] MJNo 320,9 Man R (2d)236 (QB);

7) the defendants’ fraudulent conduct in inducing a breach of contract and in presenting a deceptive statement of accounts to the court at trial {Kepic v Tecumseh Road Builder et al, [1987] OJ No 890,23 OAC. 72);

8) fraudulent conduct{Sturrock v Ancona Petroleums Ltd, [1990] AJ No 738, 111 AR 86 (QB));and

9) an attempt to delay or hinder proceedings, an attempt to deceive or defeat justice, fraud or untrue or scandalous charges {Phar and Ski Corp v Alberta, [1991] AJ No 902, 83 Alt a LR(2d)152(QB)).

[5] Overall, the case law in relation to awards of solicitor-client costs “demonstrates that a careful analysis has to be made of the facts in each case and also illustrates the wide discretion to be exercised by the trial judge who had the benefit of seeing and hearing the witnesses and distilling the essence of the lawsuit”: Sidorsky at para 34, citing Jackson at p 173.

[6] The Supreme Court of Canada provided direction about when it is appropriate for a court to award solicitor-client costs for trial misconduct in Young v Young, [1993] 4 SCR 3 at 134,108 DLR (4th)193: Solicitor-and-client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.

[7] Severe, almost scathing adverse credibility findings made in relation to non-arm’s length witnesses called by the unsuccessful party are not excluded from the sorts of things that can constitute “reprehensible, scandalous or outrageous conduct”.

[8] It was suggested in the course of oral argument that the judgment of this Court in Professional Sign Crafter (1988)Lid v Seitanid is, 1998 ABCA303 concluded that an award of solicitor-client costs can never be justified on the basis of adverse credibility findings at trial. We disagree. The panel that heard that appeal assessed the conduct said to warrant solicitor-client costs and found at para S: “[t]here is nothing, in our view, in Stanley’s conduct in initiating the proceedings and his conduct thereafter that comes within the class of a rare and exceptional case warranting solicitor/client costs.”

[9] We acknowledge that some judges have declined to find litigation misconduct simply because of credibility findings made against certain witnesses, but as this Court made clear in Indutech Canada Limited v Gibbs Pipe Distributors Ltd, 2013 ABCA 111 at para 104: “no authority precludes the award for that reason. In any event, the nature and depth of the negative credibility findings made against the appellants witnesses elevates this case from the more typical situation where a trial judge simply accepts the evidence of one witness over that of others.”

[10] In this appeal, while he might have done so on the facts as found by the trial judge, FIC’s counsel did not attempt to rely on evidence which suggests that solicitor-client costs were justified because Phoenix had been guilty of positive misconduct of a quasi-fraudulent nature or breach of trust pre-litigation, although these factors were recognized in Sidorsky as separate reasons justifying such an award. He argued instead, that the costs ordered were justified by Phoenix’s conduct in defending itself on what amounted to the deeply discreditable evidence of its agent, Mr. Tansowny, and its principal, Mr. O’Dowd.

[11] The evidence of both Mr. 0’Dowd and Mr. Tansowny was the subject of considerable judicial criticism, extending well beyond a simple weighing of one witness evidence against that of another. At AR F OOl 1, para 69 the trial judge stated:
I start with Tansowny, whose version of events was unburdened by any need to reconcile or distinguish between his vested interest in the outcome and the events as they actually occurred. Overall, I found his testimony to be glib, facile, and dismissive of any real basis for dispute… and I find that his assertions at trial openly in favor of Phoenix simply do not withstand scrutiny.

[12] Tansowny’s credibility was further tarnished by the internal inconsistencies in his testimony. His evidence suggesting Phoenix intended to sell only an interest in the hotel business and not in the Golf Dome property, directly conflicted with the evidence that he had earlier sued FIC for real estate commission in relation to its purchase of that property and had filed a caveat title to support his claim. Additionally, he did not disclose until cross-examination that he had a
personal interest in Borealis, another purchaser of an interest in the Golf Dome property. Borealis, purchasing that interest in the same timeframe as FIC, paid a much lower price per percentage interest than FIC was charged.

[13] In relation to Mr. O’Dowd the trial judge stated: “O’Dowd’s evidence was almost equally unreliable [to that of Tansowny]”. He observed that O’Dowd failed to explain why two other investors were charged considerably less than FIC for a similar interest in the Golf Dome property. While he explained that his failure to remit any share of the property’s operating profits to FIC (when he had remitted shares to the other investors) was because he could not find FIC, he had no difficulty in finding FIC when necessary in relation to this litigation.

[14] On the basis of all of this,the trial judge described the evidence of both Mr. Tansowny and Mr. O’Dowd to the effect that the investors, including FIC, only acquired a commitment for shares in the yet to be formed company, ‘to be unreliable assertions driven by their own interests in the outcome of this litigation.” (AR F 0014 at para 86)

[15] FIC’s argument that the award of solicitor-client costs was justified by the negative credibility findings of the trial judge and litigation misconduct was not contradicted by concessions made by its counsel during oral argument of this appeal. Those concessions amount to no more than agreeing that the nature and depth of the adverse credibility findings made in paragraphs 69, 75 and 86 of the trial decision are a valid basis upon which the award of solicitor-client costs may be upheld; in other words, that those findings are sufficient litigation misconduct to support the award. After agreeing that a trial judge in awarding solicitor-client costs should look simply at conduct in the context of the litigation, FIC’s appeal counsel described that conduct in this case as follows:

Mr. Fitz: Well, I… I think from the trial judge’s decision, it is quite evident that he was very unhappy with the demeanor of the…of Mr. Tansowny and Mr. O’Dowd in the giving of their evidence. He was particularly critical of them on a number of occasions. For example, at paragraph 69 where he commented on Mr. Tansowny’s being unburdened by any need to reconcile or distinguish between his vested interest in the outcome and the events as they actually occurred, paragraph 86 where he noted that both Mr. O’Dowd and Mr. Tansowny appeared to be motivated by their own personal interests, paragraph 75 of the reasons where he noted the various misstatements in the evidence that they had given. And in particular.

I think in the case of Mr. Tansowny, the fact he gave evidence at trial concerning what he said happened, yet bis own conduct in commencing an action and filing affidavit evidence to die contrary was obviously something significant That only came out in cross-examination, of course, but obviously it was… it was quite significant when he had told one stoiy to Justice Hillier and then being shown in cross-examination affidavit evidence that he had sworn in other proceedings.

So, in my submission, you simply have a situation where you have a trial judge who takes a very harsh view of the credibility of both of the key defense experts and in my submission there is clear authority for you, it’s in our materials that would permit the award of solicitor-client costs in that case, the Indutech case… So, in my submission, this is a situation where the trial judge had the benefit of hearing five days of trial, of assessing the credibility of the various witnesses, obviously formed a very negative view of Mr. Tansowny and Mr. O’Dowd and it’s not hard to… read through the decision and see that the basis upon which the solicitor-client costs award was that negative view as to the credibility of those two witnesses.

[16] FIC’s counsel went onto support this argument by referencing the decision of this Court in Lavoie v Wills, [2002] ABC A240 at para 3,312 AR 373: “The trial judge censored the appellant’s conduct and credibility at trial, and awarded solicitor-client costs to the respondent The appeal of that award was dismissed by this Court”. He also referred to the Alberta Court of Queen’s Bench decision in Jackson v Trimac at para 35,where the trial judge relied on the unreliability of one of the witnesses to the extent that it affected the conduct of the action, as being one of several reasons for his award of, what was essentially, solicitor-client costs to the plaintiff.

[17] While counsel did not attempt to rely on pre-litigation misconduct as justification for the award of solicitor-client costs, it is not improper to now consider that conduct as supportive of the overall reasoning arc of the trial judge in setting costs. The evidence demonstrated that Mr. Tansowny was operating under a considerable conflict of into rest when he testified at trial on behalf of Phoenix. He had been hired by FlC to provide advice and services leading up to the creation and execution of the Trust Agreement, but did not reveal to FlC that he had an interest in Borealis or that Borealis paid a much lower price for its interest in the Golf Dome property than that paid by FlC. Further, when it became clear that the hotel redevelopment could not proceed because of mimicipal zoning requirements, he was hired by Phoenix to act in the further execution of the Trust Agreement with FIC; going to work,as it were,for the “other side”. Additionally, he received profit share payments from the Golf Dome property through Borealis at a time when no such profit share payments were made to FIC.

[18] Further, as expressly found by the trial judge: • Phoenix failed to advise FIC that it actually did not acquire title to the Golf Dome property until July 31,2009 when Mr. O’Dowd’s daughter’s company transferred title into Phoenix’s name for one dollar (para s28-30,39,91(a)); • Phoenix then arranged to place a $1.5 million mortgage on title, without advising FIC or accounting to it for any of the resulting $1.5 million (para 39); • FIC was not advised of O’Dowd’s conversion of the facilities on the Golf Dome land for use by a ball hockey group resulting in cost overruns of $544,000, nor that the builder subsequently put a lien on the property for that amount (para 40); and • FIC was not advised that the ball hockey group defaulted on its obligations and was evicted or that two subsequent arrangements with different ball hockey groups failed,
with rentals paid by them credited to the parties who had purchased interests in the development in 2007, although FIC never received any share of these rental payments (paras 41-42).

[19] The trial judge expressly stated at para 95 of the decision under appeal that he had considered “all of the evidence” in finding Phoenix to have acted as a trustee. While not expressly referenced, this would undoubtedly have included the reasonable inference that any equity in the Golf Dome property that FIC could hope to recover as a result of a trial judgment in its favor may have been seriously diluted by the $1.5 million mortgage and subsequent $544,000 builder’s lien, placed on the property without its knowledge or consent We have concluded however, that it is not appropriate for us to consider, or take into account in any way, the actions of Phoenix that led to this development. Those facts might have supported an argument that an award of solicitor-client costs should also be made against Phoenix in order for justice to be done, as otherwise FIC’s success at trial and on this appeal could well amount to a strictly pyrrhic victory (see Sidorsky at para 28(2);Meleshko v Alberta, 2013 ABQB 468).We completely set aside that consideration here, however, as counsel did not raise these facts or that argument at trial or on appeal.

[20] The trial judge’s conclusion on costs is not contradicted by his determination that there was no evidence that Phoenix, as trustee of FIC’s interest in the Golf Dome property, mismanaged the property contrary to the best interests of the beneficial owners. That statement,found at para 104 of Ae trial decision, must be read as referring only to the day-to-day management of the property, including the effort to mitigate losses by reconfiguringit for use as a ball hockey venue. To hold otherwise would mean this determination makes no sense in the context of his other findings of misconduct by Phoenix. These findings included: that the Golf Dome properly was not owned by Phoenix at the time it sold a 20%interest in it to FIC (para 91(a)); that Phoenix valued the Golf Dome property at $3.5 million to two other investors in the same time frame as Phoenix told FICit wasveJued at $5 million (para77); and, thatFICreceived no report from Phoenix thatthe Cityof Edmonton hadrefused to rezone the property for a hotel redevelopment (para91(c)),

[21] While neither Mr, Tansowny norMr. O’Dowd wasa party to thislitigation, Phoenix Land Ventures Ltd is a corporation, whichcouldonlyprovide evidence through its principals or other knowledgeable representatives: seeMotkoski HoldingsLtd v Yellowhead (County), 2010 ABCA 72 at para 88, Mr. Tansowny and Mr. O’Dowd were its voice, Mr. Tansowny was a contractual
consultant to FIC when the Trust Agreement was executed; he subsequently became consultant of Phoenix, an arrangement that remained extant at trial, hfr, O’Dowd was a principal of Phoenix throughout. There is no reason to conclude that an award of solicitor-client costs based on credibility findings can only be madein relation to the testimony of individual party litigants, as that would result in suchan award never being available in relation to corporate litigants no matter how egregious the testimony of their representatives at trial,

[22] FIC cannot be fruited for friling to makean express claim for solicitor-client costs in its Statement of Claim. The litigation misconduct supporting suchan award – the lackof credibility of Phoenbc’s primary witnesses, did not arise until after the commencement of trial, at the earliest, and perhaps not until after the trial judge made the negative credibility findings in his decision. There is no way that FIC could have known this would occur in advance of trial.

[23] Whilethe trialjudge did not expressly afford Phoenixthe opportunity to speakto the issue ofsolicitor-client costs before making the award, ithas been given^1 opportunity on this appeal to makeits best caseand has failedto convince die majority, in the unusual circumstances ofthis case,to interfere withthe discretion of the trial judge . We agree with the wisdom behind requiring that anyparty vulnerable to a potential award of solicitor-client costsbe givenadvance noticeof the claim so that it has an opportunity to makefrill argument on that issue. Judges, as a general practice, should always give parties notice and an opportunity to argue their position before makingany order thathas not otherwisebeen ejqiressly sought.However,the failureto have done so here does not persuade us to interfere with the discretionary decision of the trialjudge. This
situation differs from that in Blanchard v Canadian Papemorkes Union (CPU), Local 263, [1991] NBJNo 132,49 CPC(2d) 151 (CA), wherethe self-represented ^pellant was ordered to pay solicitor-client costs after requesting an adjournment on the basis of what the trial judge considered scandalous accusations, and where the respondent had not asked for any costs in
relationto that adjournment or the mistrialwhichwas ultimately declaredby the trialjudge.

[24] While this Court commented in Sidorsky at paras 29-32, that the rationale for providing enhanced costs only exceptionally is to prevent a chill on bringing valid claims and defences for fear of losing and facing unduly high costs, given that the impugned testimony emanated from sophisticated businessmen, we do not anticipate that upholding the trial judge’s costs awardwUl have a chilling effecton litigationdrivenby honestdifferences of opinion.

[25] In summary, we diverge from the minority decision and conclude that the trial decision readily discloses that the award of solicitor-client costs was rooted in findings of litigation misconduct arising from the severe negative credibility assessments made in relation to Phoenix’s most significant witnesses. We defer to the discretion of the trial judge in relation to his award of solicitor-client costs.

[26] In the result, the appeal is dismissed. Given the trial judge’s failure to give Phoenix an opportunity to speak to an award of solicitor-client costs in the Court below, which, had he done so might have avoided the need for this appeal, each party shall bear its own costs of this appeal not withstanding FIC’s success otherwise.

Appeal heard on June 06,2016
Memorandum filed at Edmonton, Alberta
this 10th day of October, 2016




Memorandum of Judgment of
The Honourable Mr. Justice Ronald Berger
Dissenting In Part

[27] The narrow issue on appeal engages the interpretation of a contract. The respondent FIC Real Estate Fund Ltd. (“FIC”) is a group of member investors based in British Columbia who finance and invest in various global projects. FIC entered into a Trust Agreement on August 2, 2007 signed by its agent John Tansowny. At all material times, Denis O’Dowd was the principal of Phoenix Land Ventures Ltd. (‘Thoenix”).

[28] In issue is whether pursuant to the Trust Agreement the interest which the respondent was to acquire was a 20% interest in the hotel redevelopment of that which is referred to as the Golf Dome property in exchange for the contribution of one million dollars($1,000,000.00) or whether, as the respondent maintains, and as the trial judge found, the Trust Agreement gave there respondent a 20% interest in the land and buildings.

[29] The TrustAgreement makes reference to boththe development project and the land and buildings:

1. The purpose of this agreement is to confirm FIC’s participation in PLV’s development project as the GolfDomeRedevelopment…

2. FIC has provided a total of One Million Dollars ($1,000,000), Canadian finds, the receipt of which PLV hereby acknowledges, for which FIC acquired a combined 20% ownership interest in the existing Golf Dome land and building valued at Five Million Ninety-Two Thousand Dollars ($5,092,000.00).

3. PLV irrevocably agrees:

a) to irrevocably hold title to the specific FIC shares “In Trust” for FTC as joint title holders.
b) to assure FIC’s participation in the Golf Dome’s redevelopment in proportion to FIC’s Golf Dome ownership share.
c) to issue or hold in trust, FIC’s shares in any development joint ventures created to undertake the project in direct proportion to FIC’s Golf Dome ownership…

5. It is understood by all parties this agreement will be superseded by a Joint Venture Agreement and a new corporation will be structured to manage the development… PLV acknowledges that FIC will be a party to the Joint Venture Agreement as well as an equity participant in the new corporation in proportion to FIC’s ownership share of the Golf Dome property

[30] By May of 2008, FIC and John Tansowny had parted company. When the matter came to trial, Mr, Tansowny was now working for Phoenix and both he and Mr. O’Dowd were called by Phoenix to testily on behalf of the appellant

[31] The trial judge concluded that FIC was the owner of the 20% interest in the Golf Dome property. The intent of the parties, he held, was first to acquire ownership in the Golf Dome and then to develop the property into a hotel. He ordered an accounting ofthe profits of the Golf Dome property between September 2007 and May 2015 and, inter alia, ordered costs on a solicitor-client basis.

[32] Phoenix argues that the original and only written offer made by Mr. O’Dowd to FIC was not to acquire ownership in the Golf Dome property, but merely an interest in the hotel redevelopment on that property. Phoenix points to the original email offer (*’40% interest in the project for $3.3 M”) stating: ‘Tam offering FIC an opportunity to joint venture this project as the profit potential is significant.” Phoenix submits that there was no other objective evidence at trial that it was FIC’s “intent” to acquire a 20% interest in the Golf Dome property outside of the hotel redevelopment.

[33] As to the first ground of appeal, Sattva Capital Corporation v. Moly Corporation, 20142 SCR 633 makes clear that a Court must read the contract as a whole, consistent with surrounding circumstances known to the parties at the time of the formation of the contract. The overriding concern is to determine the intent of the parties and the scope of their understanding.

[34] The trial judge found that the clear reading of the Trust Agreement was that all parties “intended that FIC would acquire a 20% interest in the Golf Dome property as it existed at the time”and the wording, though brief,was”reasonably understood to mean”that the FIC acquired an interest in the property, not restricted to shares or a joint venture in a future development.

[35] The trial judge was of the view that while the agreement reflects the general intent to develop the property, that intent is not inconsistent with the initial purchase of the existing property by FIC and that FIC’s share in the joint future venture was based on its original interest as a “joint title holder.” That conclusion, in the view of the trial judge was not disturbed by subsequent actions taken to set up a company to develop the land The Trust Agreement was
sufficient to conclude that FIC was a 20% property owner of the Golf Dome, notwithstanding that no joint venture agreement was ever signed.

[36] As I see it, palpable and overriding error is not made out. Nor does the record reveal a misapprehension of fact by the trial judge. He correctly identified and applied the applicable principles of contractual interpretation. He was mindful of the surrounding circumstances which he found to be consistent with a plain reading of the FIC Trust Agreement. His credibility assessments, given the standard of review, are unassailable.

[37] 1 turn to a consideration of the award of solicitor-client costs, the second issue on appeal.

[38] Trial judges enjoy a wide discretion when awarding costs; that discretion must be exercised judicially. The trial judge in a conclusory, unexplained disposition, awarded costs on a solicitor-client basis(ARF 0019, para 110). He did so without notice and without offering counsel an opportunity to speak to the issue.

[39] The general rule is that solicitor-client costs will be awarded only in “a rare and most exceptional case.” As this Court observed in Sidorsky v. CFCN Communications Ltd., 1997 ABCA 280, the rationale for providing enhanced costs only exceptionally is to prevent a chill on bringing valid claims and defenses for fear of losing and facing unduly high costs(paras 29-32).

[40] The”exceptional case” warranting costs on an indemnity basis is one in which the conduct of die litigation is adjudged to be “reprehensible, scandalous or outrageous” or where the court is satisfied that the conduct of a party hindered, delayed or confused the litigation or amounted to deception or fraud. That said, as Hutchinson J made clear so many years ago in Jackson v. Trimac Industries Ltd,, [1993] 4 WWR 670; 138 AR 161,at para 30:

“Two major propositions appear to mitigate against an award of solicitor-client costs. The first is that it is the conduct of the action and not the conduct of the party that gives rise to die action that determines an award of solicitor-client costs. Secondly, punitive damages or damages should not be confused with a costs award.”

[41] In Sidorsky v CFCN Communications Ltd., 1997 ABCA 280 at para 28, [1998] 2 WWR 89,this Court endorsed a list of examples from Jackson v Trimac, where a greater costs award would be appropriate:

10) circumstances constituting blameworthiness in the conduct of the litigation by that party (Reeseet ah v. Alberta (Minister of Forestry, Lands and Wildlife) et at, 1992 CanLII2825(ABQB));

11) cases in which justice can only be done by a complete indemnification for costs(Foulis et al. V. Robinson; Gore Mutual Ins. Co., Third Party, 1978 CanLII 1307(ONCA))

12) where there is evidence that the plaintiff did something to hinder, delay or confuse the litigation, where there was no serious issue of factor law which required these lengthy.

[42] Mycolleagues rely, in part,onpre-litigation conduct to justify the disposition in theCourt below. Because thejudge provided no reasons, my colleagues explore the factual underpinnings that gave rise to the litigation to establish ^’reprehensible, scandalous or outrageous” conduct to sustain the costs disposition.

[43] In so doing, with respect, they ignore a number ofsalient considerations:

1) The Statement ofClaim issued on August 9,2010 references the Agreement of August 2, 2007 and the paymentof $1,000,000.00 “towards Phoenix’s intended redevelopment ofie GolfDome property” inexchange for which “it wasprovided witha 20%ownership interestin the existing GolfDome propertywhichwas, as at August2,2007, valued at $5,092,000.00.”

2) Importantly, paragraph 7 of the Statement of Claim alleges misrepresentation. It reads: “at the time of the Agreement, Phoenix did not hold title to the GolfDome property, as represented.” (emphasis added)

3) Theplaintiffassertsthat Phoenix failedto transfertitleto reflectFIC’s 20% ownership interest Paragraph 11 of the Statement of Claimagainalleges that “Phoenix misrepresent^ its interest in the Golf Dome property…” (emphasis added)

4) Theplaintiffacknowledges that it knewas ofMay5,2010 that the transfer of the GolfDome property to Phoenix had beeneffected, (paragraph 1 of the Statementof Claim)

5) The Statement of Claim does not ask for solicitor-client costs, enhanced costs, or punitive damages.

6) Specific performance or, in the alternative, damages in the amount of $1,000,000.00 is sought together with interest An application for summary judgment was brought by FIC evidencing that it was well aware of the factual underpinnings supportive of its allegation of misrepresentation and fully appreciated that tiie Golf Dome property had been transferred to Phoenix on September 4,2009 for consideration of $1.00.

[44] I would add only that my colleagues’ reliance on the trial judge’s finding (at paragraph [97] of the decision under appeal) that Phoenix was acting as a trustee is, with respect misplaced. The trial judge went on to observe at paragraph [104] that “…there was no evidence from what was produced at trial that Phoenix mismanaged the property contrary to the best interests of the beneficial owners” and that”. ..the Court is unable to determine whether Phoenix was in breach of
its [fiduciary] duty.”

[45] In so holding, and mindful that “courts often find that vulnerability is lacking in commercial settings: Ironside v. Smithy (1998) 223 A.R.379 (CA)”, the trial judge explained (at paragraph [103]):

There is no suggestion that the principals of FIC were not experienced businessmen. In fact, FIC was able to protect its claimed interest in the Golf Dome property through the timely filing of a caveat. Further, the evidence does not support that any particular relationship of trust and confidence between the parties developed beyond the preservation of FIC’s beneficial interest in the Golf Dome property.

[46] In any event. Polar Ice Express Inc, v, Artie Glacier Inc^t 2009 ABCA 20 is authority for ^e proposition that pre-litigation conduct should not be considered when awarding costs. This Courtstatedthat notwithstanding certainCourtof Queen’s Bench pronouncements to the contrary, a number of binding authorities ”hold that in general solicitor-client costs for misconduct must relate to conduct during the suit,not the pre-suit conduct sued over.”See Entreprises Luduco ltee c. Canada, 2001 SCC 62, [2001] 2 S.C.R. 1082, 275N.R, 90 (S.C.C.), 131 (para 79); Tree Savers International Ltd v. Savoy, (1992), 120 A.R. 368(Alta. C.A.), 375 (para 30); Sidorsky v. CFCN Communications Ltd,, (199^, 206 A.R. 382 (Alta. C.A.), 390, 392-93, recon. den. (April 27, 1998) [1998 Carswell Alta 325(Alta.C,A.)]; Professional Sign Crofters(1988) Ltd, v. Seitanidis, 1998 AB CA 303 (Alta. CA.), [1998] A.R. Uned. 465 (Sep. 16).

[47] I do acknowledge that subsequent to Polar Ice a number of decisions in the Court of Queen’s Bench suggest that the law may be unclear regarding the award of solicitor-client costs on the basis of pre-trial misconduct. See HSBC Bank Canada v. Lourenco, 2012 ABQB 648 at para 66, HSBC Bank Canada v, 1100336 Alberta Ltd., (Incredible Electronics Wholesale), 2012
ABQ B 27, Evans v.Sports Corp.,2011 ABQ B at para 18,54 AR 88.

[48] I also acknowledge that in unique circumstances an award of solicitor-client costs may be justified when an attempt to deceive the Court or engage in fraudulent conduct is made out. Such an award may also be made to ensure that “justice be done.”Se eMeleshkov. Alberta, 2013 ABQ B 468, 557 A.R. 98. No such argument was advanced in the case at bar. In any event, the total absence of reasons for the award of solicitor-client costs in this case renders such contentions incapable of meaningful review on appeal.

[49] Justice Veit, in 155569 Canada Ltd, v. 248524 Alberta Ltd., 1999 ABQB 682 at para 11, 251 AR 393 explained what wrong doing costs are meant to address and what wrongdoing punitive damages are meant to address: Wrongdoing in the legal process,rather than wrongdoing on the substantive issues, is the type of wrong doing that is usually associated with costs; wrongdoing on the substantive issues is dealt with by an award of damages, for example punitive damages. The distinction between these two types of wrongdoing is useful because it allows litigants to consider their positions on the issues separately, and to give notice of those positions to the parties opposite, [emphasis added]

[50] As explained above, no such notice was given by FIC to Phoenix in the instant case in its Statement of Claim or in the course of the trial.No application was made to amend the Statement of Claim at any time to seek solicitor-client costs. Counsel for Phoenix was afforded no opportunity to speak to the issue of solicitor-client costs in the Court below.

[51] The New Brunswick Court of Appeal has established a general principle that solicitor-client costs should not be awarded absent submissions from the affected party given their exceptional nature. In Blanchard v, Canadian Paper workers Union, Local 263 (1991), 49 CPC (2d) 151, [1991] NBJ No 132 (CA)(cited to QL), the trial judge had declared a mistrial and ordered solicitor-client costs to the respondent, despite the respondent’s counsel not asking for them.

Justice Hoyt, writing for a majority of the Court, concluded that this was a reversible error (at page 2):

It has been held that an order to pay costs on a solicitor and client basis should be made only in rare and exception^ cases. While the awarding of costs is within the discretion of a trial judge, that discretion must be exercised judicially.An appellate court will interfere when the exercise of discretion is manifestly wrong. The failure of the Judge to alert Mr. Blanchard of the fact that he was thinking of solicitor and client costs and the failure to ask him to speak to the question was, in my opinion, manifestly wrong and, for that reason, I would allow the appeal.

[52] The Ontario Court of Appeal substituted party-party costs for solicitor-client costs that a trial judge awarded without either party having made submissions in Wil^ v. Toronto Star Newspapers Ltd,, (1990), 69 DLR (4th) 448,74 OR(2d) 100(CA). In that case the trial judge also failed to provide reasons for the enhanced costs award as did the judge in the case at bar.

[53] Indeed, any award of solicitor-client costs bereft of reasons may warrant appellate intervention. The Saskatchewan Court of Appeal in Hope v. Pylypow, 2015 SKCA26 at para 48, 384 DLR (4th) 255, stated: Solicitor-client costs must not be awarded casually and, in my view, never without reasons as to why they are being awarded and an identification of the conduct
which is said to warrant them. The Chambers judge should have offered a clear explanation as to his perceived basis for awarding solicitor-client costs. He did not do so. (emphasis added)

[54] The Nova Scotia Court of Appeal in Minas Basin Holdings Ltd, v. Paul Bryant Enterprises Ltd,, 2010 NSCA17 at para 43, 289 NSR (2d) 26, so held: Other than indicating that Minas Basin had sought solicitor-client costs in the
application documents it filed, the application iudee gave no reasons for awarding costs on diat basis. In particular, his decision does not mention the general test for the award of solicitor-client costs, namely reprehensible, scandalous or outrageous conduct. Nor does it include any analysis of fte matter before him that would bring it with in any of the examples in WH^ v, Toronto Star Newspapers Ltd,, (1990),69 DLR (4th)448,74 OR(2d) 100(CA).(emphasis added)

[55] Finally,the Ontario Court of Appeal held that a comt errs in awarding solicitor-client costs without reasons: Wiley, supra.Asuperior trial court acting in an appellate capacity also endorsed that vievfmKenlinton Plaza v. 466740 Ontario Ltd,, (1992), 32 ACWS(3d) 888, 8 OR(3d) 26 (Gen Div).

[56] In the course of oral argument, counsel for FIC confirmed that “outrageous conduct”must relate to the conduct of the litigatioiL He conceded that the only conduct that would justify an award of solicitor-client costs is found in the trial judge’s observations that he was very unhappy (to use counsers language) with the testimonial demeanor or Mr. Tansowny and Mr. O’Dowd. Cotmsel referenced paragraphs 69,75 and 86 of the reasons for judgment in dte Court below:

[69] I start with Tansowny, whose version of events was unburdened by any need to reconcile or distinguish between his
vested interest in the outcome and the events as they actually occurred. Overall, I found his testimony to be glib, facile, and dismissive of any real basis for dispute. As the key representative of FIC at the critical time, this would typically not bode well for the Plaintiffs claim. But he had a significant falling out with FIC, and I find that his assertions at trial openly in favor of Phoenix simply do not withstand scrutiny.

[75] Tansowny indicated that the deals with Borealis and Prima were more favorable because they paid in first. He thought they both invested in late April or May 2007, but he was not involved. I find he was guessing almost 8 years later as to which lawyer’s trust account was used, just as he guessed, wrongly, in reporting on the FIC investment four months later in October 2007. The errors in his communication at that time mirror his casual attention to details in giving evidence in this trial. It did not help that he tried to excuse his various misstatements by saying his memo reflected the intent when
the project would be finalized, and that they were still shoveling fog. He sad he wrote the summary e-mail to FIC in a hurry and the words he used to report were not accurate at that time, including that the joint venture did not own the property.

[86] Standing alone, the explanations of discrepancies between the trust agreements are unconvincing. Taken with all of the
evidence and what later transpired, I find the evidence of both Tansowny and O’Dowd that the investors acquired a commitment for shares only in a yet to be formed company to be unreliable assertions driven by their own interests in the outcome of this litigation.

[57] In the result, it is the negative view of the evidence and credibility of Mr. Tansowny and Mr. O’Dowd which is the basis upon which the respondent seeks to uphold the solicitor-client costs award of the trial judge. Neither was a party to die litigation.

[58] It cannot be said that the testimonial assessments of Mr. Tansowny and Mr. O’Dowd equate with a stain on the litigation conduct of Phoenix, particularly in the absence of such a finding by the trial judge. After all, without more,can it be said that if Phoenix had not called Mr. Tansowny that an adverse inference would not have been drawn? Moreover, given the failure to provide reasons, it remains uncertain whether Phoenix knew or could know that Mr. Tansowny would be “driven by his own interests.” Phoenix was denied the opportunity to make such arguments and others.

[59] The failure to provide notice to Phoenix of the judge’s intention to award solicitor-client costs and the failing to afterward to counsel the opportunity to speak to that issue is, in my opinion, fatal. In any event, it is not open to an appellate court in such circumstances to exercise the discretion otherwise vested in and reserved to a trial judge who has the advantage of seeing and observing the witnesses upon whose demeanor this Court is in no position to pronounce.
Moreover, given that the judge gave no reasons forwarding solicitor-client costs,it cannot be said what motivated his decision and whether that decision was predicated upon flawed considerations. Nor can it be said that with the benefit of submissions from counsel, he would not have been persuaded to refrain from ordering solicitor-client costs.

[60] In the result, the appeal on ground one is dismissed. I would allow the appeal on ground two and set aside the order of solicitor-client costs.

[61] The result is mixed success on appeal. In my opinion, given there relative significance of the two grounds of appeal, I would have awarded the respondent costs in die Court of Queen’s Bench and on appeal to be taxed on column 4.

Appeal heard on June 06, 2016
Memorandum filed at Edmonton, Alberta
this day 12th of October, 2016


for the Respondent

M. L. Engelking
for the Appellant

To: David Baines, Vancouver Sun Newspaper Journalist

Your article April 28th in the Vancouver Sun was written without any reasonable effort on your part to verify the real facts and seems to represent your own interpretation of events.  It is most unfortunate that a journalist would write an article of this nature, which can have a devastating effect on thousands of our members, without first checking the story and at least attempting to provide a balanced version of events.
This article like most of the other articles written about the FIC Group of Companies appears to be primarily designed to ignite and inflame readers by presenting only one narrow biased viewpoint of events.   In reviewing other articles about FIC you have written over the past years it is clear that you have not done the journalistic work required to meet a minimum standard of presenting a balanced perspective to your readers.
While I realize your job as a reporter is solely involved in digging up all the bad news you can find and serving it up to the readership without due care about the effects it has on anyone else, I believe it is still incumbent upon you to report your bad news version of events accurately.
For example, you promised to retract your statement that Harv Eker received commissions on securities sold by the FIC Funds.   This statement was untrue and you agreed to retract it and did not do so.   Your inaccurate statement in this case was clearly designed to inflame anyone who did or would do business with Mr Eker and the irresponsible error in this case needlessly tarnished his reputation.  A simple phone call to check your facts would have prevented this needless damage.
The other difficulty with this statement implied that we committed a securities violation.  Although it is untrue you wrote it and then surprisingly, securities regulators read this comment and start an investigation or inquiry. The result of this inaccurate reporting is a time consuming and costly response to your misstatement of fact.  Ultimately it is our shareholders who pay the price for your lack of attention to the truth. You agreed this statement was false and agreed to retract it but did not do so.
I will in this letter only focus on the most recent article you wrote as it is indicative of the many other articles you have written.   Here are a few of your comments:
“I have had difficulty keeping up…mainly due to problems contacting the principles, Mike Lathigee and Earle Pasquill”
Untrue:  I called you many times and left several messages. It was in fact you who was difficult to reach. I gave you specific instructions how to reach me and asked that you contact me again before you published this article on April 28th, 2010 and you chose not to contact me. I was available but you didn’t bother to contact me.  Last week as an example I left 4 messages for you and spoke to you twice. You hung up on me once.
“The funds invested in risky products like speculative stocks, payday loan companies, colored diamonds and Alberta development property”
You do not give the full story. You do not state that for 4 years the clubs made money and considerable gains in all these assets classes. You do not state many shareholders cashed out for large gains.   You do not state the financial were audited to reflect and report this.  Yes, FIC became overextended in a land development project and although all payments were current, TD Bank called its loan and had a receiver appointed.   This ill advised and unnecessary action by the TD Bank will substantially diminish the value of FIC shareholders assets.
As you may be aware, many other land development companies have closed shop while we have worked diligently to salvage this project for our shareholders including raising financing to get the FIC companies out of receivership.  You gleefully reported the bad news in all your articles but never once told the whole story.
You did not mention that FIC is a group of private companies but opted to report at public company standards including providing audited financial statements to the shareholders.  I told you this several times but you continually chose to ignore it.
FIC’s involvement in payday loans has paid a return to our shareholders of 12% to 18% for the last 7 years.  The payments are made monthly and hundreds of members have received their monthly payments with never one payment having been missed.  You chose never to include this information.   Clearly this does not serve your purpose of being the champion of bad news.
“Lathigee and Pasquill have made an offer on behalf of FIC investors to buy the project out of receivership, but the receiver from PWC Pallen has rejected it as not feasible”
You reported that the offer we made to buy Genesis out of receivership was “not feasible”. It is unclear if those words came from the receiver or from you but in our opinion, the offer which is backed by a  large lender in Toronto with a solid track record, was an excellent offer that would benefit shareholders and fully pay out the TD Bank and is certainly feasible. We have concerns, as noted in our last communication on the phone that you chose to ignore the fact that the longer this drags out the higher the receiver costs and the higher the risk of missing another selling season, which in turn reduces the asset value for our shareholders.    The receiver did not indicate to us that the offer wasn’t feasible but rather that they needed more time to develop a marketing plan for the project.  So we have to conclude either the receiver lied to us or you misled readers.  It baffles us because the cause of the receivership was that the TD Bank wanted to be paid out and the offer would have paid them out completely.
What is the point in speaking to you and answering your questions if you never present the facts and the complete story?  I have stated this to you many times on the phone and you always dismiss me or hang up on me.
“Alliance is now holding the club’s InvestFest seminars”
You did not give the full story. I told you specifically that the profits go back into FIC to cover operational expenses while we continue to work through these difficult times.
“Lathigee still holds himself out as an investment guru”
Once again, you did not give the full story. You admitted to me that you have not read one economic monthly journal I have written in the last 5 years. You said you skimmed one. I have never made such a comment publicly and stated that to you but you chose to continue to write this in every one of your articles. It is obviously just a mean spirited relentless attack as you admitted on several calls you don’t like me.   How can your story ever be unbiased when you constantly admit this?
I have my monthly economic journal reviewed and read by more than ten thousand
people.   I report economic trends and provide meaningful analysis to assist my readers.  There are numerous positive testimonials about the content of the newsletter.
You attack the speakers at Investfest Event, June 3-6 in Las Vegas.
I support all our speakers at our event.  You do not mention the portfolio managers and financial educators with world class resumes speaking at the event. You simply provide a written attack without full disclosure about the credibility of all the speakers, choosing to attack some of them whenever possible.
You attack Bill Bartmann who for your records was on the cover of a national magazine and listed previously as one of the richest men in America and ran an organization with more than a thousand employees. Ironically he is not even a speaker this year but this is just part of your selective reporting. You don’t disclose the fact that Marshall Sylver is at the event as part of an entertainment show but instead attack the event implying that an entertainer is speaking on financial matters.   Send your readers to our website and let them judge the event and the speakers.
Your mandate seems to be to attack me constantly without all the facts and without full disclosure. Your articles are one sided and you told me on several occasions you were angry I was able to operate under the current laws. Your articles have caused death threats against me which I disclosed to you and there is a police file at the Vancouver Police Department regarding this matter.  Your articles have caused numerous speaking engagements to be cancelled when people see these articles on the internet and these engagements would help the membership by producing revenue. You have caused harm to FIC shareholders with a flagrant disregard for their difficult situation.
Your last article in early April was a one sided view regarding the Mohawk situation without any information from our side and no mention that we have spent 2 years trying to assist our membership and have sued Mohawk and sent you a copy of our lawsuit which clearly outlined in our complaint. You appear not to be interested in any version of events or facts that doesn’t fit with your biased point of view.
I also want to highlight how in your most recent article slipped in an association with a horrendous event like the Eron Mortgage Corp. fraud – essentially linking FIC with Eron Mortgage Corp. in a readers mind.  How is it relevant what files the Receiver has worked on in the past?  The manner, in which this was done, in my opinion, demonstrated a severe lack of journalistic integrity.
Mr Baines, you have damaged countless relationships I have built over many years because readers believe your biased writings.  You have not once reported anything we are trying to do to assist our membership.  I hope in keeping with balanced reporting that the editor of the Vancouver Sun will publish my letter entirely in your column so for once after your numerous articles I get one chance to set the record straight.
We have never walked away. You did not mention we are in regular communication with our members every month for a question and answer session where they can ask anything they wish and we answer all questions in detail. This call alone lasts 2-3 hours monthly. In addition, we communicate with our members regularly by email to update them on happenings within the club.
Your article implied that we have skipped town and don’t communicate. That is simply not true and even a minimal amount of fact checking would have uncovered this error.  I believe your journalism is irresponsible, selective and not a balance of the true facts. You have done much to destroy my reputation and did so with inaccuracies and highly biased versions of events.  I am now considering how best to communicate a balanced version of the facts to those who may believe that just because it appears in the Vancouver Sun, it must be true.
Mr Baines, you are in a position of journalistic power because you have the brand of a major newspaper to back you up.  With this power comes the responsibility to provide accurate information and to present the truth.  In my opinion, in your vendetta against FIC, I believe you have ignored this responsibility.
I do believe that in some cases you provided useful information to the readers of the Sun, disclosing fraudulent and illegal activities.   We have done everything in our power to ensure we properly disclose information and follow the regulatory laws.  In some cases, due only to unforeseen circumstances or in one case, the outright incorrect written advice of a major law firm, we have unintentionally been in a position where one of the thousands of laws that need to be adhered to by business people was not followed.   When it was brought to our attention, we rectified it quickly and to the best of our ability.
Your continued attacks on FIC Group provide no assistance to shareholders whatsoever.   The members receive a continual steam of information and disclosure and none of the facts in your articles come as new information to them.  They have heard it all before
because we provided it.
For many years FIC did wonderfully well for its members and then unfortunately like millions of others, we were a victim of the worst economic reversal in the past century.   Isn’t it time you stopped kicking FIC and its shareholders when they are already having difficulty?
We don’t see how you can possibly help any of the members who are suffering financially by continuing to devastate and hinder the efforts being made to recover by publishing unbalanced and fact challenged articles about the FIC Group of Companies.
Mr Baines, I have a simple request…let the healing and recovery take place without your constant need to hinder, hamper and harass those who are getting on with a very difficult task.   We don’t need you as a cheerleader but it would certainly help if you weren’t a constant “I told you so” heckler.
My objective is to “set the record straight” and provide balanced commentary about what is really happening.  I believe your hidden agenda is to drive FIC out of business by making it difficult for the company to generate any business which in turn then allows you to report “I told you so”. How does, this one sided reporting help any of the readers who have an investment in FIC? – It doesn’t.   FIC is not a public company with shares being traded. Essentially you continue to serve up this bad news version of events onto members who have absolutely no way of taking any positive action; nevertheless, where you have reported facts that should be acknowledged. Where you have provided uninformed and one sided versions of events, that should be pointed out.
I once again request that you provide a balanced response that does not continue to damage the club, shareholders and all the relationships that we have.
I would like finally to note the Code of Ethics for Journalists as found on Wikipedia.
“-reporters are expected to be as accurate as possible given the time allotted to story preparation and the space available -corrections are published when errors are discovered -private persons have privacy rights that must be balanced against the public interest in reporting information to them.    -recognize that gathering and reporting information may cause harm or discomfort.  Pursuit of the news is not a license for arrogance”
In my opinion you have not adhered to these ethical standards with regards to FIC.  I am aware you have been sued for libel and slander more than any other journalist in Canada ever.  I have not the time or funds to pursue you legally and simply ask that you adhere to the standards set by your industry.
Michael Lathigee

—————————- Michael Lathigee Chairman and CEO  Alliance