UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of MARCH, 2007.
Commission File Number: 001-32558
IMA EXPLORATION INC.
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(Translation of registrant's name into English)
#709 - 837 West Hastings Street, Vancouver, British Columbia, V6C 3N6, Canada
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F: FORM 20-F [X] FORM 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): _______
Indicate by check mark whether the registrant by furnishing the information
contained in this Form, is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
YES [ ] NO [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3- 2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
IMA EXPLORATION INC.
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Date: March 5, 2007 /s/ Joseph Grosso
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Joseph Grosso,
President & CEO
Court of Appeal File No. CA034280
COURT OF APPEAL
ON APPEAL FROM THE ORDER OF KOENIGSBERG J.
OF THE SUPREME COURT OF BRITISH COLUMBIA PRONOUNCED 14 JULY 2006
BETWEEN:
MINERA AQUILINE ARGENTINA SA
RESPONDENT
(PLAINTIFF)
AND:
IMA EXPLORATION INC. and
INVERSIONES MINERAS ARGENTINAS S.A.
APPELLANTS
(DEFENDANTS)
================================================================================
APPELLANTS' REPLY AND FACTUM IN ANSWER TO CROSS-APPEAL
================================================================================
COUNSEL FOR THE APPELLANTS,
IMA EXPLORATION INC. AND COUNSEL FOR THE RESPONDENT,
INVERSIONES MINERAS ARGENTINAS S.A.: MINERA AQUILINE ARGENTINA SA:
Leonard T. Doust, Q.C. Irwin G. Nathanson, Q.C.
Warren B. Milman Stephen R. Schachter, Q.C.
Michael A. Feder James MacInnis
McCarthy Tetrault LLP Nathanson Schachter & Thompson LLP
Barristers & Solicitors Barristers & Solicitors
Suite 1300, 777 Dunsmuir Street Suite 750, 900 Howe Street
Vancouver, B.C. V7Y 1K2 Vancouver, B.C. V6Z 2M4
INDEX
REPLY
A. Overview...............................................................1
B. Minera's statement of facts is inaccurate..............................1
C. The trial judge's factual errors were critical to her rejection
of IMA and Inversiones' theory, and thus her decision
regarding liability....................................................9
I. IMA and Inversiones' theory was not only plausible,
but also well supported by the evidence........................10
II. IMA and Inversiones put their theory to each of
Minera's witnesses.............................................12
III. The trial judge's factual errors went to the heart of IMA
and Inversiones' theory, and hence the outcome at trial........14
D. Minera, like the trial judge, fails to advance a coherent
interpretation of the confidentiality agreement.......................15
E. Minera did not suffer the detriment necessary for IMA to have
breached a common law duty of confidence..............................16
F. Minera has failed to justify the trial judge's order respecting
Argentina's natural resources in light of considerations of
comity, order and fairness............................................17
G. Minera has not identified any basis to justify the trial
judge's imposition of a proprietary remedy............................18
FACTUM ON CROSS-APPEAL
PART 1 - STATEMENT OF FACTS...................................................19
PART 2 - ISSUES ON APPEAL.....................................................20
PART 3 - ARGUMENT.............................................................20
PART 4 - NATURE OF ORDER SOUGHT...............................................20
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REPLY
A. OVERVIEW
1. This appeal concerns the fundamental fairness of the trial below. The
trial judge made palpable and overriding errors in her evaluation of the
evidence that prevented her from properly assessing the two competing theories
that were before her on the question of liability. In the absence of such an
assessment, IMA and Inversiones justifiably complain that they were never
properly heard.
2. In response to this complaint, Minera does not deny that the trial
judge made errors. She obviously did. Instead, Minera contends that the errors
she made must have been inconsequential, since the trial was not really a
contest between two competing theories, but rather no contest at all. According
to Minera, liability was a foregone conclusion because IMA and Inversiones had
no real theory, or too many theories, or a theory that was bound to fail.
3. Minera's response to IMA and Inversiones' complaint is specious. IMA
and Inversiones advanced a coherent, competing theory at trial. The theory was
supported by the evidence. Had the theory been accepted, Minera's claim would
have been dismissed. Liability was an open question.
4. In those circumstances, a fair trial would have involved proper
consideration of the essential evidence supporting the respective theories of
BOTH sides. That did not occur in this case because the trial judge
misapprehended or overlooked the most important evidence supporting IMA and
Inversiones' theory. These palpable and overriding errors were compounded by,
and fed into, a misinterpretation of the Confidentiality Agreement, an erroneous
finding that IMA had breached a common law duty of confidence and, ultimately,
the granting of an inappropriate remedy.
B. MINERA'S STATEMENT OF FACTS IS INACCURATE.
5. Minera accuses IMA and Inversiones of having failed to state the facts
"fairly",(1) but does not point to any specific inaccuracies or deficiencies in
IMA and Inversiones' recitation of the facts. By contrast, Minera's statement of
facts is inaccurate and deficient in several specific respects, as set out
below.
6. Contrary to paragraph 2 of the Respondent's Factum, the geologists
involved in the transfer of the BLEG A Data did NOT agree "that technical data
.... is not to be shared with anyone outside the company except on a confidential
basis". Lhotka testified that he would release technical information on whatever
terms his employer specified.(2) Patterson testified, likewise, that he followed
---------------------------------------
(1) Respondent's Factum, para. 1.
(2) Lhotka: Transcript, Vol. 4, 557:9-558:5.
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his employer's lead regarding the treatment of technical information.(3) Cuburu
stated that he treated Minera's technical information as confidential,(4) but
had no experience, outside of the events leading to the present case, with
SHARING technical information, whether on a confidential basis or otherwise.(5)
7. With respect to paragraph 4 of the Respondent's Factum, regional
exploration can indeed reveal resources near an identified resource, and the
proximity of nearby resources may well be of interest to prospective purchasers
of the identified resource insofar as there may be potential synergies. However,
this does not mean that information that might reveal additional resources is
information "in relation to" or "concerning" the identified resource (or the
mineral claims in respect of it) within the meaning of the Confidentiality
Agreement. By way of analogy, information about the availability and cost of
exploration financing may well be of interest to the prospective purchaser of an
identified resource, but it would be misleading to suggest that such information
is "in relation to" or "concerning" the identified resource. Similarly,
information about the frequency of commercial flights to the region surrounding
an identified resource may be of critical importance to a prospective purchaser
of that resource (particularly a foreign one), but it cannot be said to be "in
relation to" or "concerning" the resource.
8. Furthermore, even if the potential for synergies through the discovery
of nearby resources could be said to make otherwise extraneous information about
an identified resource relate to or concern it, such potential was extremely
limited in the context of the Calcatreu Project due to the minimal value of the
existing resource. Richard Sillitoe - Minera's "world renowned expert"(6) -
testified as follows:
Q: Now, when you talk about - in the first full paragraph, you
talk about high-value gold and silver properties. In those
cases, additional resources many tens of kilometres away may
add value. And I think you've usefully clarified this, but the
utility of another resource elsewhere depends upon the grade
of the two bodies; correct? The two deposits?
A: It does. Obviously if you were going to build your processing
facility at one of those, then the grade in the second one,
the ore, has got to be superior, or some other parameter of
the ore has to be superior. In other words, perhaps it's - the
recovery is better, but by and large the simple way to say it
is the grade is going to have be a little bit better.
Q: Well, forgetting relative terms, it's got to be high enough to
at least match the trucking cost?
A: Correct.
Q: Okay. And it has to be obviously processed so it equals and
nets out after the processing costs involved?
---------------------------------------
(3) Patterson: Transcript, Vol. 3, 447:8-447:33.
(4) Cuburu: Transcript, Vol. 2, 241:44-241:46.
(5) Cuburu: Transcript, Vol. 2, 241:40-241:43.
(6) Respondent's Factum, para. 4.
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A: Correct.
Q: Okay. And in that paragraph you talk about a high-value gold
and silver property. YOU WOULD NOT, I SUGGEST, REFER TO
CALCATREU AS A HIGH-VALUE GOLD AND SILVER PROPERTY.
A: NO, I WOULDN'T. I THINK YOU COULD TRUCK CALCATREU MATERIAL A
FEW KILOMETRES, BUT THAT'S NOT THE SORT OF MATERIAL YOU'RE
GOING TO BE TRUCKING 100 KILOMETRES.(7)
9. Contrary to paragraph 12 of the Respondent's Factum, Newmont did NOT
decide to divest itself of "its Argentine interests" following the Santiago
meeting. In Harvey's words, it decided to "terminate the regional exploration
program" underway in Argentina (I.E., Project Generation) and to "sell the
assets of the project known as Calcatreu".(8) Other Argentine assets, such as
the BLEG A Data resulting from Project Generation, were not offered for sale,
despite Newmont's withdrawal from the country. This evidence confirms that
Newmont attributed no value to those assets.
10. In reply to paragraph 14 of the Respondent's Factum, while Harvey may
initially have thought that the BLEG A Data might be available to prospective
purchasers of the Calcatreu Project (as well as covered by the Confidentiality
Agreement), Harvey agreed in cross-examination that he had reviewed the
Information Brochure, which was provided to prospective purchasers, and that it
made no reference whatsoever to the BLEG A Data.(9) If Harvey truly thought that
the BLEG A Data would be available to all prospective purchasers, and covered by
the Confidentiality Agreement, the request by IMA for the BLEG A Data would have
provoked a direction by Harvey to make it available not only to IMA BUT ALSO TO
OTHER PROSPECTIVE PURCHASERS OF THE CALCATREU PROJECT. There is no evidence
whatsoever that this direction was ever given, and the fact is that no other
prospective purchasers ever asked for or received the BLEG A Data.(10)
11. In addition, any belief by Harvey that the BLEG A Data might be
available to prospective purchasers and covered by the Confidentiality Agreement
is inexplicably at odds with his evidence as to the "area of interest" provision
he would expect in a confidentiality agreement that contemplated a data set
having the BLEG A Data's geographical coverage. Such an agreement would,
according to Harvey, have specified a staking limit far larger than the two
kilometre limit stipulated in the Confidentiality Agreement.(11) It is also
inexplicably at odds with the Information Brochure referring only to a subset of
even the BLEG B Data, which subset was selected for its immediate proximity to
---------------------------------------
(7) Sillitoe: Transcript, Vol. 2, 169:41-170:24.
(8) Harvey: Transcript, Vol. 3,
373:17-373:26.
(9) Harvey: Transcript, Vol. 3, 394:17-394:41.
(10) Cuburu: Transcript, Vol. 2, 293:11-293:15. Also, Cuburu and Crespo's
"contact tracker" spreadsheet, which notes Harvey's interest in IMA's
properties in Peru, records only IMA as having been given "free access" to
information (Exhibit 12, Tab 5).
(11) Harvey: Transcript, Vol. 3, 401:5-402:5.
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the Calcatreu Project.(12) Since the BLEG B Data made available to prospective
purchasers of the Calcatreu Project had been edited to include samples only in
the immediate vicinity of the Calcatreu Project, it would have been unthinkable
that the BLEG A Data, COVERING AN AREA SOME SIXTEEN TIMES LARGER THAN THE
CALCATREU PROJECT, was relevant and available.
12. Elsewhere in its argument,(13) Minera relies on Harvey's testimony that
he assumed that Newmont's sale of the Calcatreu Project would be effected
through a sale of Minera rather than the property itself. This testimony is
utterly irreconcilable with the format of the Confidentiality Agreement, which
was made between Minera - not Newmont - and prospective purchasers. If what was
ultimately intended to be sold was the shares of Minera, the Confidentiality
Agreement would logically be with the owner of those shares (I.E., Newmont) -
not with the company that was the very subject of the sale. Harvey's testimony
is also irreconcilable with the Information Brochure, which gives absolutely no
information on Minera.
13. In reply to paragraph 16 of the Respondent's Factum, although the BLEG
B Data discussed in the Information Brochure did extend a modest distance
outside of the Calcatreu Project, its purview was still within the "immediate
area" of the Calcatreu Project.(14) Certainly there was no suggestion in the
Information Brochure that data generated from samples taken up to 100 kilometres
away from the Calcatreu Project - I.E., the BLEG A Data - might concern the
Calcatreu Project.
14. Contrary to paragraph 19 of the Respondent's Factum, Crespo did NOT
give Cuburu permission to provide prospective purchasers of the Calcatreu
Project with merely "raw data which had been summarized in the [Information
Brochure]". The scope of the authorization provided by Crespo was much larger
than that. Crespo testified that he authorized Cuburu to release not only
"unprocessed data that had been used for the preparation of [the Information
Brochure]", but also "other ... unprocessed information that might be of use" to
prospective purchasers of the Calcatreu Project.(15) It is against this backdrop
of comprehensive authorization to release information even POTENTIALLY useful to
prospective purchasers of the Calcatreu Project that Cuburu's decision to seek
further and specific permission from Crespo to release the BLEG A Data to IMA
must be assessed.
15. In further reply to paragraph 19, no other prospective purchaser of the
Calcatreu Project EVER asked for or received the BLEG A Data.(16)
---------------------------------------
(12) Cuburu: Transcript, Vol. 2, 288:35-288:46 and 297:27-298:3. Trial Exhibit
23, Map 14.
(13) Respondent's Factum, para. 53(c).
(14) Cuburu: Transcript, Vol. 2, 288:35-288:46.
(15) Crespo: Transcript, Vol. 2, 183:35-184:2.
(16) Cuburu: Transcript, Vol. 2, 293:11-293:23 and 294:10-294:32.
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16. Paragraph 21 of the Respondent's Factum is potentially misleading.
Lhotka and Patterson thought they might receive information relating
specifically to areas previously forming part of the Calcatreu Project but since
relinquished.(17) There is no evidence that either had any expectation of
receiving information relating generally to areas outside of the Calcatreu
Project.
17. In reply to paragraph 22 of the Respondent's Factum, prior to IMA's
first site visit to the Calcatreu Project, Lhotka indeed advised his colleagues
and considered that everything they saw or received was to be treated as
confidential. This evidence must, however, be assessed in light of Lhotka's
expectations as to what they were going to see and receive. Lhotka testified
that he "expected to see confidential information PERTAINING TO THE CALCATREU
PROJECT".(18) Lhotka did NOT expect to see information in the nature of the BLEG
A Data; his evidence was that he was "surprised" to see on display in Cuburu's
office the satellite map depicting the locations of the samples used to generate
the BLEG A Data, given the considerable distance (up to 100 kilometres) of those
samples from the mineral claims for sale.(19)
18. In any event, there was (and is) no controversy that the BLEG A Data
was confidential. The controversial question was whether, given the terms on
which Minera imparted the BLEG A Data, IMA was entitled to use it as it did.
19. Contrary to paragraph 23 of the Respondent's Factum, the satellite map
on display in Cuburu's office did NOT show "only sample locations" for the BLEG
A Data and BLEG B Data. The map also depicted some results.(20)
20. Paragraph 25 of the Respondent's Factum does not accurately or
thoroughly describe the steps leading up to Cuburu's release of the BLEG A Data
to Lhotka. To reiterate, Lhotka asked Cuburu during IMA's first site visit to
the Calcatreu Project whether the BLEG A Data was available.(21) Cuburu
responded that he would have to consult Crespo,(22) despite his standing
authorization to release any information potentially useful to prospective
purchasers of the Calcatreu Project.(23) Cuburu testified that he decided to
consult Crespo because Lhotka's request for the BLEG A Data was "very atypical"
---------------------------------------
(17) Trial Exhibit 1, Tabs 216 and 219. Lhotka: Transcript, Vol. 4,
563:31-564:21
(18) Lhotka: Transcript, Vol. 4, 563:25-563:30 (emphasis added).
(19) Lhotka: Transcript, Vol. 4, 507:28-507:39.
(20) Trial Judgment, para. 51. Trial Exhibit 1, Tab 11.
(21) Cuburu: Transcript, Vol. 2, 301:42-301:46.
(22) Cuburu: Transcript, Vol. 2, 246:8-246:11 and 301:47-302:2. Trial Judgment,
para. 53.
(23) INFRA, para. 13.
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in the sense that it was not "in regards to the Calcatreu project".(24) As
Minera concedes elsewhere in its factum, this meant in Cuburu's mind that "an
authorization had not yet been obtained to provide the BLEG A data".(25)
21. Cuburu testified that he had two conversations with Crespo regarding
Lhotka's request.(26) During the first conversation, Crespo told Cuburu that he
would consult Harvey concerning the request.(27) During the second conversation,
a week later,(28) Crespo told Cuburu that: (a) Harvey had recommended that IMA
be provided with free access to whatever information it wanted;(29) and (b)
Harvey wished to foster a good relationship with IMA in light of Newmont's
interest in IMA's properties in Peru.(30) Crespo concluded the conversation by
discussing the prospect of IMA submitting a bid for the Calcatreu Project based
on "the ORIGINAL available data".(31)
22. Based on his conversation with Crespo, Cuburu said he wrote in the
"contact tracker" spreadsheet that Crespo had approved "free access [to]
information" by IMA and that "IMA had some properties in Peru that Newmont (from
Bruce Harvey) showed interest".(32) Crespo claimed to have authored the same
notes.(33)
23. Crespo could not recall whether Cuburu had asked him for authorization
to release the BLEG A Data to IMA, nor whether he had given such authorization,
though he did not deny that these things had occurred.(34) Crespo agreed that he
had probably told "Cuburu that Newmont was interested in IMA's properties in
Peru".(35) For his part, Harvey could not "specifically remember" any
conversations with Crespo concerning his interest in IMA's properties in Peru,
but agreed that such conversations might well have occurred.(36)
24. In reply to paragraph 26 of the Respondent's Factum, there is no
evidence that Lhotka understood the geographical scope or extent of the
aeromagnetic information that he requested of Cuburu. There is also no evidence
---------------------------------------
(24) Cuburu: Transcript, Vol. 2, 302:3-302:11.
(25) Respondent's Factum, para. 76.
(26) Cuburu: Transcript, Vol. 2, 302:12-302:16.
(27) Cuburu: Transcript, Vol. 2, 247:45-248:11 and
(28) Cuburu: Transcript, Vol. 2, 304:41-304:44.
(29) Cuburu: Transcript, Vol. 2, 248:12-248:21, 304:22-304:40 and 304:45-305:2.
(30) Cuburu: Transcript, Vol. 2, 248:22-248:29.
(31) Cuburu: Transcript, Vol. 2, 248:25-248:29 (emphasis added).
(32) Trial Exhibit 12, Tab 5. Cuburu: Transcript, Vol. 2, 309:32-311:22.
(33) Crespo: Transcript, Vol. 2, 221:41-222:1, 223:15-223:24 and 225:22-225:24
(34) Crespo: Transcript, Vol. 2, 201:5-201:32 and 202:2-202:8.
(35) Crespo: Transcript, Vol. 2, 206:12-206:24.
(36) Harvey: Transcript, Vol. 3, 392:28-392:36.
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that Lhotka was ever provided with that information. Indeed, the evidence
suggests that Cuburu did NOT provide it to Lhotka.(37)
25. Contrary to paragraph 29 of the Respondent's Factum, Lhotka did NOT
testify that "he and Patterson left Cuburu with the impression [at the end of
the second site visit] that there was a reasonable chance IMA would be making a
bid for Calcatreu".(38) In the portion of the transcript cited by Minera, Lhotka
testified that any interest expressed by IMA in the Calcatreu Project was real
rather than feigned, but did not say IMA had expressed interest in the Calcatreu
Project at the end of the second site visit, or at any other time in
particular.(39) In any event, it is clear from Cuburu's evidence that HE came to
understand during IMA's second site visit that Vein 49 - "the most valuable
resource that had been identified on the Calcatreu project"(40) - did not meet
IMA's expectations.(41)
26. In reply to paragraph 30 of the Respondent's Factum, Patterson indeed
testified that neither he nor Lhotka specifically advised Cuburu that IMA's
request for the BLEG A Data did not relate to their Calcatreu Project due
diligence. But Patterson also testified that he considered it "fairly evident"
that the BLEG A Data "would not be useful for the evaluation of [the Calcatreu
Project]".(42) The fact is that there was NO DISCUSSION AT ALL, BY ANY OF THE
PARTIES, about how IMA might use the BLEG A Data, or any restrictions on that
use.(43)
27. In reply to paragraph 31 of the Respondent's Factum, Cuburu did NOT
testify that he thought "Lhotka was asking for the BLEG A Data to assist in IMA
`... making a better decision and preparing a better report" and `... in order
to specify a concrete bid for the project'". He testified instead, in very vague
terms, that "any" data whatsoever might assist a "consultant geologist" with
those things.(44) With respect specifically to Lhotka's request for the BLEG A
Data, Cuburu's evidence was that he considered the request "very atypical" in
the sense that it was not "in regards to the Calcatreu project".(45)
28. Cuburu's evidence that BLEG A Data did not relate to the Calcatreu
Project is consistent with his discovery answer, adopted by him in
cross-examination, distinguishing between the Calcatreu Project information and
the Project Generation information to which he gave IMA access.(46) It is also
---------------------------------------
(37) Trial Exhibit 1, Tab 265.
(38) Respondent's Factum, para. 29.
(39) Lhotka: Transcript, Vol. 4, 575:26-576:6.
(40) Cuburu: Transcript, Vol. 2, 306:30-306:32.
(41) Cuburu: Transcript, Vol. 2, 306:26-308:6.
(42) Patterson: Transcript, Vol. 5, 720:36-721:8.
(43) Cuburu: Transcript, Vol. 2, 252:7-252:17 and 306:15-306:20.
(44) Cuburu: Transcript, Vol. 2, 259:1-259:9.
(45) Cuburu: Transcript, Vol. 2, 302:3-302:11.
(46) Cuburu: Transcript, Vol. 2, 312:12-313:11.
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consistent with Worland's 30 July 2002 report on Project Generation and the BLEG
A Data, with which Cuburu was copied. The report contains no suggestion that the
BLEG A Data concerns the Calcatreu Project. It mentions the Calcatreu Project
only twice: first, in describing the area covered by the BLEG A Data ("the
northern part of Chubut Province, directly south of Ingeniero Jacobacci and the
Calcatreu Project") and, second, in comparing the lacklustre results obtained to
those found in "orientation" (I.E., calibration) samples taken at the Calcatreu
Project.(47) Earlier reports on Project Generation, with which Cuburu was also
copied, similarly make no suggestion that the BLEG A Data was somehow related to
the Calcatreu Project.(48)
29. In further reply to paragraph 31 of the Respondent's Factum, Lhotka did
NOT agree on discovery "that he assumed that the BLEG A data was given to him
for the purpose of his evaluation of the Calcatreu Project". The full question
and answer was as follows:
Q: All right, so when [Cuburu] gave you the diskette [containing
the BLEG A Data] did you assume he was giving you information
for the purpose of your evaluation?
A: Yes Sir.(49)
This evidence leaves as an entirely open question whether Lhotka thought the
BLEG A Data had been given to him for evaluation at large, or evaluation with
respect to the Calcatreu Project exclusively. Moreover, Lhotka did not know at
the time Cuburu transferred the BLEG A Data precisely what he had received;(50)
Lhotka did not examine the BLEG A Data until several weeks later.(51)
30. In reply to paragraph 34 of the Respondent's Factum, Lhotka's 20
November 2002 e-mail to Patterson does not make clear which "BLEG database" was
under discussion. Lhotka still had not examined the BLEG A Data, and may have
been referring to the BLEG A Data, to the BLEG B Data or to both. Assuming for
the sake of argument that Lhotka was referring exclusively to the BLEG A Data,
there is, to reiterate, no controversy that the BLEG A Data was confidential;
Lhotka's belief in that regard was correct. As for any belief by Lhotka that
IMA's use of the BLEG A Data MIGHT be restricted by the Confidentiality
Agreement, that belief would have no bearing on the legal question of whether it
actually was.
31. Paragraph 49 of the Respondent's Factum is misleading. In November 2003
(NOt October 2003), Grosso travelled to South America to meet with Harvey (NOT
Crespo) and others. The meeting had two parts. During the first part of the
meeting, Grosso outlined IMA's extensive history of exploration in Argentina.
---------------------------------------
(47) Trial Exhibit 1, Tab 164.
(48) Trial Exhibit 1, Tabs 9 and 15.
(49) Lhotka: Transcript, Vol. 4, 619:16-619:35.
(50) Lhotka: Transcript, Vol. 4, 577:4-577:34.
(51) Lhotka: Transcript, Vol. 4, 528:32-528:36.
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During the second part, Grosso discussed how the BLEG A Data "could be purchased
on the street". When Grosso sought to understand Newmont's position regarding
the dispute between IMA and Minera, Harvey referred Grosso to Crespo.(52)
Subsequently, Grosso spoke BY PHONE with Crespo.(53) There is a conflict in the
evidence, unresolved by the trial judge, as to what was said. Grosso testified
that he told Crespo that IMA "could have" discovered the Navidad Project's
silver resource without using the BLEG A Data.(54) Crespo testified that Grosso
told him that IMA HAD discovered the Navidad Project's silver resource without
using the BLEG A Data.(55) Grosso specifically denied having told Crespo
that.(56)
32. In general reply to paragraphs 40 through 49 of the Respondent's
Factum, IMA's conduct following the staking of the Navidad Project is of little
or no relevance to the issues in this case, and should be viewed with
considerable circumspection. There are a host of available explanations for, and
inferences to be drawn from, the conduct: for example, miscommunication and
non-communication among IMA's employees; a desire to preserve a competitive
advantage; and a desire to avoid embarrassing Newmont, which, according to
Minera,(57) IMA believed had missed "an obvious target", and with which IMA had
a good relationship.(58)
33. With respect to the repeated suggestions by Minera that IMA's conduct
supports the inference that it viewed its use of the BLEG A Data as unlawful,
this Court should bear in mind that the trial judge did not draw any such
inference. This is unsurprising: Minera itself admits that IMA's conduct may,
even in the worst case, indicate only "a concern" that its conduct was unlawful,
or knowledge of a "risk" in that regard.(59) Furthermore, IMA's LAY VIEWS on the
question of whether its use of the BLEG A Data was unlawful have no direct
bearing on the answer to that LEGAL QUESTION.
C. THE TRIAL JUDGE'S FACTUAL ERRORS WERE CRITICAL TO HER REJECTION OF IMA
AND INVERSIONES' THEORY, AND THUS HER DECISION REGARDING LIABILITY.
34. At trial, the issue of liability turned essentially on the
circumstances in which Newmont, through Minera, provided IMA with the BLEG A
Data. IMA and Inversiones pursued the theory that the BLEG A Data had been
provided so that Newmont might garner goodwill with a view to participating in
one or more of IMA's projects in Peru, in which projects Newmont was then
expressing interest. The trial judge did not consider IMA and Inversiones'
theory because of a series of palpable and overriding factual errors with
---------------------------------------
(52) Harvey: Transcript, Vol. 3, 375:26-376:20 and 376:30-376:42.
(53) Grosso: Transcript, Vol. 1, 70:25-70:33. Crespo: Transcript, Vol. 2,
189:14-189:31.
(54) Grosso: Transcript, Vol. 1, 70:34-71:18 and 72:40-73:3.
(55) Crespo: Transcript, Vol. 2, 189:32-190:7.
(56) Grosso: Transcript, Vol. 1, 71:19-71:24.
(57) Respondent's Factum, para. 36.
(58) Trial Judgment, para. 106.
-10-
respect to (1) Newmont's interest in IMA's Peruvian properties; (2) the value
attached by Newmont to the BLEG A Data; and (3) the extent to which Newmont
considered the BLEG A Data relevant to the Calcatreu Project. Each of these
considerations was central to IMA and Inversiones' theory about Newmont's motive
for releasing the BLEG A Data.
35. Minera concedes that the trial judge made errors with respect to the
findings of fact about which IMA and Inversiones complain,(60) and in particular
the finding that "by the time of the first site visit by IMA, Newmont had no
interest in doing a deal with IMA in relation to its Peru properties".(61) But,
says Minera, those erroneous findings should not trouble this Court. Minera's
position rests essentially on three incorrect propositions:
(a) IMA and Inversiones' theory was "wholly implausible";(62)
(b) IMA and Inversiones' theory was "pure speculation" that was
"never put in cross-examination of any of [Minera's]
witnesses";(63) and
(c) the trial judge's factual errors have "no significance" and
are "wholly inconsequential" to IMA and Inversiones' theory,
and to the outcome at trial.(64)
36. As set out below, NONE of these propositions is correct.
I. IMA AND INVERSIONES' THEORY WAS NOT ONLY PLAUSIBLE, BUT ALSO WELL
SUPPORTED BY THE EVIDENCE.
37. With respect to Minera's submission that it is "wholly implausible"
that Newmont would seek to curry favour with IMA because Newmont was "the
world's largest gold mining company" and IMA was a "junior mining company",(65)
the facts speak for themselves. Harvey had a long-standing relationship with
IMA's President and Chief Executive Officer, Grosso, and Newmont had a
long-standing, active interest in IMA's properties in Argentina and Peru. At the
time of the Calcatreu Project sales process, and the release of the BLEG A Data
to IMA, IMA's Peruvian properties were located in what Harvey considered to be a
"hot area".(66)
38. Cuburu's evidence, uncontradicted by Crespo or anyone else, was that
Newmont's interest in IMA's Peruvian properties featured prominently in Crespo's
direction to Cuburu to release the BLEG A Data to IMA and no one else. This was
confirmed by the contemporaneous notes made in the "contact tracker" spreadsheet
maintained by Cuburu and Crespo, further discussed below.
---------------------------------------
(59) Respondent's Factum, paras. 40 and 99.
(60) Respondent's Factum, paras. 63 and 69.
(61) Trial Judgment, para. 105.
(62) Respondent's Factum, para. 56.
(63) Respondent's Factum, paras. 54, 57, 61 and 78.
(64) Respondent's Factum, paras. 63 and 69.
(65) Respondent's Factum, para. 56.
(66) Harvey: Transcript, Vol. 3, 392:7-392:27. Trial Exhibit 17, Tab 16.
Appellants' Factum, paras. 65-67.
-11-
39. As for the BLEG A Data, it was, to Newmont, uninteresting and
essentially valueless. Close analysis of it had not revealed any areas worthy of
immediate staking, and had in fact contributed to Newmont's decision to pull out
of Argentina entirely. Worland's 30 July 2002 report on the BLEG A Data is
telling:
AT THIS POINT THE BLEG A AND MULTIELEMENT DRAINAGE GEOCHEMISTRY RESULTS
HAVE NOT IDENTIFIED ANY EXCEPTIONAL ANOMALIES REQUIRING TENEMENT
POSITIONS TO BE ACQUIRED.
...
At present THE DATASET CONTAINS ANOMALIES AT MUCH LOWER LEVELS THAN
OTHER SOUTH AMERICAN PROJECT GENERATION DATASETS IN PERU AND CHILE.
Similarly, though not directly as a result, THE CHUBUT PROVINCE
SAMPLING DOES NOT SHOW ANY STAND-OUT ANOMALIES NOR ANY THAT COMPARE
WITH ORIENTATION AT CALCATREU, though Calcatreu orientation sampling
was open to enhancement following several wet seasons post-initial
drill exploration of the mineralisation.(67)
40. Once Newmont withdrew from Argentina, any marginal exploration value
that the BLEG A Data might have had would vanish altogether, given that the BLEG
A Data pertained only to Argentina. In the circumstances, it is not only
plausible, but also most probable, that Newmont decided to provide IMA with the
BLEG A Data in order to gain some advantage from it, in the form of goodwill
from IMA with respect to IMA's projects in Peru in which Newmont was then
expressing interest.
41. In reply to paragraph 65 of the Respondent's Factum, and specifically
Minera's assertion that the value of the BLEG A Data lies chiefly "in the fact
that it confers a benefit on the owner who can choose to explore further in
areas of identified interest", it need only be said that Newmont had
specifically decided to withdraw from Argentina and not to "explore further" the
areas of interest identified in the BLEG A Data. Put another way, there were no
areas of interest covered by the BLEG A Data that Newmont considered to warrant
further exploration. Accordingly, the BLEG A Data would not have had, from
Newmont's perspective, any real value based on its exploration potential.
42. Minera suggests that Newmont's decision "not to proceed further" with
the BLEG A Data was made "not because the data had no value, but because a
corporate decision was reached to focus exploration" elsewhere.(68) What this
suggestion masks is that Newmont's "corporate decision" to abandon the BLEG A
Data and Project Generation was a direct result of Newmont's careful review of
the BLEG A Data, and of Newmont's thorough lack of interest in what the BLEG A
Data revealed.
---------------------------------------
(67) Exhibit 1, Tab 164 (emphasis added).
(68) Respondent's Factum, para. 64.
-12-
II. IMA AND INVERSIONES PUT THEIR THEORY TO EACH OF MINERA'S WITNESSES.
43. Minera asserts that IMA and Inversiones "never" put their theory to
"any of [Minera's] witnesses".(69) On this basis, Minera appears to suggest that
the trial judge's rejection of IMA and Inversiones' theory on the basis of her
factual errors is not a cause for concern.
44. The fact is that IMA and Inversiones' theory was supported directly by
the testimony given by each of Cuburu, Crespo and Harvey. Furthermore, each of
those witnesses was questioned about the theory to the extent feasible in light
of his respective recollection (or lack thereof) as to the circumstances
surrounding the release of the BLEG A Data.
45. The burden of Cuburu's evidence was that he considered the BLEG A Data
not to relate to the Calcatreu Project and therefore sought special
authorization from Crespo to release it to IMA.(70) He received such
authorization from Crespo, who advised him that "Harvey showed interest in
establishing a good relationship with IMA in view that Newmont was showing
interest in properties from this company in Peru".(71)
46. Crespo was asked about this conversation, and could not remember saying
the things attributed to him by Cuburu. However, he did not deny that he had
said those things, and conceded that it was in fact probable that he had told
Cuburu that Newmont was interested in IMA's properties in Peru. (72) Given
Crespo's professed inability to recollect at all having authorized Cuburu to
release the BLEG A Data, it was unnecessary, and would have been illogical, to
ask him about his reasons for granting that authorization.
47. Harvey was questioned about, and testified as to, his interest in IMA's
Peruvian properties.(73) He was also asked whether he remembered discussing that
interest with Crespo. He said he could not specifically remember any
conversations in that vein, but did not deny that they had occurred.(74) In
light of Harvey's inability to recollect any conversation with Crespo during
which he had told Crespo about his interest in IMA's properties in Peru, it
would have been futile to question Harvey about whether he remembered a
conversation in which he told Crespo about that interest, and to release the
BLEG A Data on the basis of it.
48. Cuburu, Crespo and Harvey's evidence - all of which was misapprehended
or overlooked by the trial judge - was not the only, or perhaps even the best,
support for IMA and Inversiones' theory. IMA and Inversiones relied heavily on
the documentary evidence generated contemporaneously with the release of the
---------------------------------------
(69) Respondent's Factum, paras. 54 and 78
(70) Cuburu: Transcript, Vol. 2, 302:3-302:11.
(71) Cuburu: Transcript, Vol. 2, 248:12-248:29.
(72) Crespo: Transcript, Vol. 2, 201:5-201:32 and 202:2-202:8.
(73) Harvey: Transcript, Vol. 3, 377:4-377:23 and 391:9-392:11.
(74) Harvey: Transcript, Vol. 3, 392:28-392:36.
-13-
BLEG A Data to IMA, namely the "contact tracker" spreadsheet in which Cuburu and
Crespo made notes about the prospective purchasers of the Calcatreu Project and
their site visits. This contemporaneously generated documentary evidence was not
even mentioned by the trial judge, despite the fact that it was inherently far
more reliable than the witnesses, whom the trial judge recognized to be
"retrieving and reconstructing memory through the lens of contested
litigation".(75) See, in contrast, CHUDY V. MERCHANT LAW GROUP:(76)
It is obvious from the chronology of background facts to these disputes
that the various witnesses were required to testify about events that
had occurred between four and ten years ago. It is not surprising in
those circumstances that those witnesses would not have an accurate
recall of the dates upon which some of the more important events
occurred. It is also not surprising and perhaps inevitable, with the
passage of time and the hardening of positions as this litigation
progressed, that the witnesses came to rely at least to some extent
upon reconstruction to accord with their positions advanced in this
litigation.
In circumstances such as those, documents which were created or
exchanged at the time events occurred will generally offer far more
reliable evidence of what transpired than will any present
reconstruction, especially when a witness is interested in the result
or seeks to rationalize or explain away inconsistencies between the
documentary evidence and their own present self-interest. See: FARYNA
V. CHORNEY (1951), 4 W.W.R. 171 (B.C.C.A.).
49. The "contact tracker" spreadsheet records, in relation to IMA, that
Crespo approved "free access [to] information" and that "IMA had some properties
in Peru that Newmont from Bruce Harvey showed interest".(77) Cuburu and Crespo
were both questioned about these notes, and both claimed to have authored
them.(78) Minera tenders absolutely no explanation for their existence, or for
Cuburu and Crespo's professed ownership of them. Instead, Minera asserts,
emptily, that no evidence whatsoever supported the Peru theory and that IMA and
Inversiones did not adequately question the witnesses about it.(79)
50. In any event, "there is no rule of evidence that ... bars argument on
the basis" that a party "has failed to cross-examine a witness for the other
side".(80) "[T]he effect to be given to the absence or brevity of
cross-examination depends upon the circumstances of each case" and is "a matter
of weight to be decided by the tribunal of fact".(81) The extent to which IMA
and Inversiones' theory was put to the witnesses would have been a matter for
the trial judge to consider and weigh, HAD SHE NOT ALREADY REJECTED IMA AND
INVERSIONES' THEORY BASED ON PALPABLE AND OVERRIDING ERRORS OF FACT. Minera
cannot ask this Court to overlook the trial judge's erroneous findings of fact
---------------------------------------
(75) Trial Judgment, para. 126-27.
(76) 2007 BCSC 279, at paras. 56-57.
(77) Trial Exhibit 12, Tab 5.
(78) Cuburu: Transcript, Vol. 2, 309:32-311:22. Crespo: Transcript, Vol. 2,
221:41-222:1 and 223:15-225:24.
(79) Respondent's Factum, para. 57.
(80) CANADIAN IMPERIAL BANK OF COMMERCE V. BARLEY MOW INN INC., [1994] B.C.J.
No. 3037 (S.C.) (QL), at para. 23.
(81) R. V. PALMER, [1980] 1 S.C.R. 759, at pp. 781-82, quoting with approval
McFarlane J.A.'s decision in the court below.
-14-
based essentially on how it believes the trial judge would have weighed the
evidence, had she appreciated it. If there is ANY prospect that the trial judge
might have accepted IMA and Inversiones' theory had she properly appreciated the
evidence in support of it, any perceived shortcomings in cross-examination
regarding that theory are irrelevant.
III. THE TRIAL JUDGE'S FACTUAL ERRORS WENT TO THE HEART OF IMA AND
INVERSIONES' THEORY, AND HENCE THE OUTCOME AT TRIAL.
51. In response to IMA and Inversiones' argument that the trial judge
rejected their theory on the basis of admitted errors, Minera twice attempts to
downplay the significance of those errors. In the first instance, Minera does so
by asking this Court to accept that the trial judge never actually found that
Newmont had no interest in IMA's Peruvian properties. According to Minera, her
finding that "by the time of the first site visit by IMA, Newmont had no
interest in doing a deal with IMA in relation to its Peru properties" refers to
"the IMA joint venture proposal which was rejected by Newmont by October 8,
2002".(82)
52. Minera's proposed reading of the trial judge's finding is wrong. The
context of the trial judge's finding makes obvious that it was intended to
respond to IMA and Inversiones' theory that Newmont released the BLEG A Data to
IMA without restriction in order to garner goodwill with a view to participating
in one or more of IMA's properties in Peru (and in particular the factual
premise of that theory that Newmont was interested in those properties). The
trial judge stated as follows:
The defendants argued that Newmont waived any restriction on its use by
IMA because Newmont wished to maintain good relations with IMA and
intended to perhaps do a deal with IMA involving properties of IMA's in
Peru, which was one of the countries Newmont was moving into as it left
Argentina.
Both of the principals of Newmont gave evidence on these points. Their
evidence was consistent that by the time of the first site visit by
IMA, Newmont had no interest in doing a deal with IMA in relation to
its Peru properties.
53. In other words, Minera's reading of the trial judge's finding blatantly
ignores the context in which it was made.
54. Furthermore, even if Minera's reading of the trial judge's finding were
correct, it would mean that the trial judge identified, but never considered or
responded to, a critical component of IMA and Inversiones' theory. IMA and
Inversiones' theory was NOT premised on an interest by Newmont in IMA's
Calcatreu Project joint venture proposal; that particular proposal was off the
table long before the BLEG A Data was released to IMA, as Minera itself
concedes. IMA and Inversiones' theory rested on the proposition that Newmont was
---------------------------------------
(82) Respondent's Factum, para. 59.
-15-
interested in IMA's Peruvian properties generally. If the trial judge rejected
that proposition based on Newmont's dismissal of IMA's Calcatreu Project joint
venture proposal, the trial judge's error is indeed different than that
identified by IMA and Inversiones, but no less significant.
55. Minera adopts a similar approach with respect to the trial judge's
erroneous treatment of the evidence that Cuburu considered it not to matter that
he was releasing to IMA OTHER Argentine regional exploration data unrelated to
the Calcatreu Project. Minera again concedes that the trial judge erred, but
suggests that her error was in failing "to add the word `data' after `rock
samples' in the passage found at para. 132 of the reasons".(83) Again, Minera's
attempt to minimize the significance of the trial judge's erroneous findings
fails, for two reasons.
56. First, Minera's proposed amendment to the trial judge's finding - a
strange suggestion in and of itself - does not fix the problem it is supposed to
solve. As amended, the finding would read:
Mr. Lhotka recalled that during the office part of the visit ... Mr.
Cuburu showed him some rock samples DATA from outside the "project".
Mr. Lhotka testified that he shouldn't be showing those rock samples
DATA because they weren't relevant to the Calcatreu review.
57. Such a finding would STILL mischaracterize Lhotka's evidence. Lhotka
testified that he warned Cuburu about him SUPPLYING rock sample data unrelated
to the Calcatreu Project, not about him SHOWING rock sample data.(84)
58. Second, Minera's purported solution fails to address the trial judge's
subsequent erroneous statement that there was "some confusion" as to whether
Lhotka, in recalling that he was freely shown data unrelated to the Calcatreu
Project, was in fact recalling seeing physical rock samples. Only Lhotka gave
evidence that Cuburu had provided him with rock sample data unrelated to the
Calcatreu Project; the question was never put to Cuburu, so there was no
evidence from him capable of giving rise to "confusion".(85)
D. MINERA, LIKE THE TRIAL JUDGE, FAILS TO ADVANCE A COHERENT
INTERPRETATION OF THE CONFIDENTIALITY AGREEMENT.
59. Minera seeks to uphold the trial judge's erroneous conclusion that
IMA's use of the BLEG A Data was restricted by the Confidentiality Agreement
because it was "Confidential Information" within the meaning of the agreement.
To that end, Minera asserts that the trial judge's conclusion that the BLEG A
Data was "Confidential Information" did not "turn on an interpretation of the
meaning of the 'Project' in the agreement, and [that] she made no express
---------------------------------------
(83) Respondent's Factum, para. 69.
(84) Appellants' Factum, paras. 76-84.
(85) ID.
-16-
conclusions about that language". Instead, says Minera, "[h]er conclusion turned
.... on the words 'relating to' and `concerning'" and their "broad meaning".(86)
60. IMA and Inversiones offer two responses to Minera's submissions.
61. First, Minera's position is contradicted BY ITS OWN ARGUMENT. At
paragraph 93 of the Respondent's Factum, Minera states that the trial judge
"accepted ... that `Project' is not solely defined by reference to the
description of the mining claims in Exhibit A but also to a possible transaction
that IMA might enter into concerning the Calcatreu Project". That statement
amounts to a concession that the trial judge DID in fact determine the meaning
of the "Project" to include a possible transaction concerning the Calcatreu
Project, which was an error.
62. Second, and in the alternative, if Minera has accurately described the
analytical foundation for the trial judge's conclusion that the BLEG A Data was
"Confidential Information", it has also highlighted the fundamental errors in
that foundation. "Confidential Information" is defined by the Confidentiality
Agreement with integral reference to the "Project". Information is "Confidential
Information" insofar as it (1) "concern[s] the Project" AND (2) is provided by
Newmont to IMA "[i]n connection with [IMA's] review of the Project". If, without
ever having settled on what the "Project" meant, the trial judge decided that
the BLEG A Data related to or concerned the "Project", and was therefore
"Confidential Information", her error would be obvious and elementary.
63. In specific reply to the suggestion by Minera that the defined term
"Project" should be read in different senses throughout the Confidentiality
Agreement,(87) IMA and Inversiones observe that such a construction defies a
fundamental premise of the Supreme Court of Canada's recent decision in ROYAL
BANK OF CANADA V. STATE FARM FIRE AND CASUALTY CO.:(88) an expression in an
agreement should be read as bearing a consistent meaning throughout it.
E. MINERA DID NOT SUFFER THE DETRIMENT NECESSARY FOR IMA TO HAVE BREACHED
A COMMON LAW DUTY OF CONFIDENCE.
64. Minera concedes that a breach of confidence claim cannot succeed unless
confidential information is used in an unauthorized manner to the detriment of
the confider. If IMA's use of the BLEG A Data to stake the Navidad Project was
unauthorized, Minera claims to have suffered detriment from that use because
Minera "renewed its interest in regional exploration as soon as it came under
control" of Aquiline, and because IMA's actions thwarted that exploration.(89)
---------------------------------------
(86) Respondent's Factum, para. 82.
(87) Respondent's Factum, para. 93.
(88) [2005] 1 S.C.R. 779, 2005 SCC 34.
(89) Respondent's Factum, paras. 97-98.
-17-
65. The fundamental flaw in Minera's argument is that it ignores the timing
of the events in this case. IMA used the BLEG A Data to stake the Navidad
Project on 6 December 2002. At the time, Minera was under the control of
Newmont, and Newmont had decided to withdraw from Argentina entirely. Newmont
had specifically rejected follow-up exploration, let alone staking, of the
Sacanana silver anomalies identified by Minera in the BLEG A Data. It saw so
little value in the BLEG A Data that it did not even offer it for sale.
66. Aquiline did not even learn about the EXISTENCE of the BLEG A Data
until 15 December 2002. It did not agree to purchase Minera until 28 January
2003, and did not complete that purchase until 10 July 2003. The earliest hint
that Minera might have "renewed its interest" in Argentine exploration in any
relevant way was in May 2003, when, at Aquiline's direction, Minera first
considered staking the Sacanana/Navidad Project area. This change of mind by
Minera SOME SIX MONTHS AFTER IMA'S USE OF THE BLEG A DATA to stake the Navidad
Project does not retroactively create the detriment to Minera that was necessary
for it to have succeeded in its breach of confidence claim.
F. MINERA HAS FAILED TO JUSTIFY THE TRIAL JUDGE'S ORDER RESPECTING
ARGENTINA'S NATURAL RESOURCES IN LIGHT OF CONSIDERATIONS OF COMITY,
ORDER AND FAIRNESS.
67. Minera concedes, by way of cross-appeal, that the trial judge may have
erred in relying on the IN PERSONAM exception to the rule against jurisdiction
over foreign immovables in granting a mandatory injunction and a constructive
trust, which together required IMA and Inversiones to transfer a foreign
immovable - I.E., the Argentine natural resources comprising the Navidad Project
- to Minera. Notwithstanding this, Minera attempts, at paragraphs 102-08 of the
Respondent's Factum, to distinguish among cases that invoke the IN PERSONAM
exception, and to say that this case is of a type about which this Court ought
not to be concerned.
68. The distinction Minera seeks to draw is one without a difference.
Whether the trial judge's order is said to recognize an equitable interest in
Argentina's natural resources, or, as Minera asserts, to recognize equitable
rights between the parties by way of an order respecting Argentina's natural
resources, the result is the same: a British Columbia court is interfering with
the sovereignty of a foreign state, and doing indirectly that which it cannot do
directly.
69. In reply to paragraph 110 of the Respondent's Factum, IMA and
Inversiones do NOT advocate for "arbitrary jurisdictional rules". On the
contrary, they ask this Court to consider whether an arbitrary, antiquated
"exception" to a sound jurisdictional rule remains legitimate in light of modern
concerns about comity, order and fairness (assuming it ever was legitimate), and
either to abolish that exception, or to apply it in light of those concerns.
They ask this court to decide whether illegality in the foreign state - the
existing hurdle to invocation of the IN PERSONAM exception - reflects, in the
modern world, sufficient respect for the fundamental power of sovereign states
to control land within their own borders.
---------------------------------------
-18-
70. For its part, Minera seems to be advocating for UNLIMITED jurisdiction
on the part of British Columbia courts where it is "the most convenient forum"
for the resolution of an international dispute.(90) This is inconsistent with
the trend of private international law, which leaves questions of convenience to
be considered, if at all, only AFTER it has been established that British
Columbia courts have jurisdiction given the nature of the dispute.(91) The
jurisdiction of British Columbia's courts in interprovincial and international
disputes depends not on what is convenient for the parties, but on the
constitutional requirement of a real and substantial connection, and on modern
concerns about comity, order and fairness.
G. MINERA HAS NOT IDENTIFIED ANY BASIS TO JUSTIFY THE TRIAL JUDGE'S
IMPOSITION OF A PROPRIETARY REMEDY.
71. Minera seeks to uphold the trial judge's award of a proprietary remedy
respecting the Navidad Project, rather than damages, on the basis that it
constituted an "exercise of discretion".(92) Minera seeks to justify this
"exercise of discretion" primarily on the basis there were "difficulties"
associated with valuing the Navidad Project.(93)
72. Minera's argument ignores the fact that damages can only rarely be
assessed with certainty. "[I]f absolute certainty were required as to the
precise amount of loss that the plaintiff had suffered, no damages would be
recovered at all in the great number of cases".(94) This is the very reason why
experts, such as Ellen Hodos, are retained to provide valuations, identifying,
then grossing up and discounting for, the very sort of "uncertainties" about
which Minera is concerned.(95) Minera can hardly seek to rely on those
"uncertainties" to dismiss the uncontested valuation reached by its own expert
in full knowledge of them.
73. Minera's argument also proceeds on the unstated assumption that an
award of damages could only have been determined with reference to the value of
the Navidad Project. Given that damages for breach of contract are limited to
the losses that were in the reasonable contemplation of the parties as a result
of a breach at the time the contract was made, and that NO loss was reasonably
foreseeable by the parties as a result of IMA's use of the BLEG A Data at the
time the Confidentiality Agreement was made, this assumption is erroneous. At
the time the Confidentiality Agreement was made, Minera, then under Newmont's
ownership and control, had no further interest in exploration or staking using
the BLEG A Data, and attached little or no value to it.
---------------------------------------
(90) Respondent's Factum, para. 110.
(91) See, E.G., the new COURT JURISDICTION AND PROCEEDINGS TRANSFER ACT, S.B.C.
2003, c. 28, which, consistent with the common law, asks, first, whether
the court has territorial competence (s. 3), and, only second, whether the
court should decline to exercise that competence based on considerations
such as convenience (s. 11).
(92) Respondent's Factum, para. 115.
(93) Respondent's Factum, paras. 117-19.
(94) Harvey McGregor, MCGREGOR ON DAMAGES, 15th ed. (London: Sweet & Maxwell,
1988), at p. 214.
-19-
74. In reply to paragraphs 123-24 of the Respondent's Factum, the question
of what losses were reasonably foreseeable by the parties at the time they
entered into their contract is NOT to be determined in a factual vacuum, without
reference to their subjective knowledge. The question is whether, armed with
that SUBJECTIVE KNOWLEDGE, the parties WOULD REASONABLY have foreseen the loss
in question. In that sense, the test incorporates BOTH subjective and objective
elements.(96)
75. At the time of the Confidentiality Agreement's execution, Newmont,
which then controlled Minera, had decided to sell Minera's sole mineral asset,
to terminate Project Generation and to withdraw from Argentina. Newmont had
specifically rejected not just staking, but even further exploration, in the
area of the Sacanana silver anomalies. In those circumstances, it could hardly
be said to have been reasonably foreseeable to the parties that IMA's use of the
BLEG A Data to stake the Navidad Project in the area of the Sacanana anomalies
might cause ANY loss to Minera.
76. In response to Minera's suggestion that LAC MINERALS LTD. V.
INTERNATIONAL CORONA RESOURCES LTD.(97) (in which a proprietary remedy was
awarded) and this case are "virtually identical",(98) it should be noted that
Minera has neglected to mention several critical distinguishing facts:
(a) In LAC MINERALS, the plaintiff attached significant value to
the confidential information in question; the plaintiff in
this case did not;
(b) In LAC MINERALS, the plaintiff provided the defendant with its
confidential information with a view to working towards a
joint venture; the plaintiff in this case did not; and
(c) In LAC MINERALS, the defendant unlawfully used the plaintiff's
confidential information to intercept a property that the
plaintiff was actively pursuing; the defendant in this case
did not.
FACTUM IN ANSWER TO CROSS-APPEAL
PART 1 - STATEMENT OF FACTS
77. IMA Holdings Corp. is a wholly owned subsidiary of IMA. Through a chain
of further subsidiaries, it owns the Navidad Project, and nothing else.(99)
78. IMA and Inversiones otherwise rely on the facts set out in the
Appellants' Factum.
---------------------------------------
(95) Respondent's Factum, para. 118.
(96) H.G. Beale, ed., CHITTY ON CONTRACTS, 29th ed., vol. 1 (London: Sweet &
Maxwell, 2004), at pp. 1149-51.
(97) [1989] 2 S.C.R. 574 ("LAC MINERALS").
(98) Respondent's Factum, para. 121.
(99) Exhibit 1, Tab 518. Patterson: Transcript, Vol. 3, 448:18-449:39.
-20-
PART 2 - ISSUES ON APPEAL
79. If the trial judge erred in ordering IMA and Inversiones to transfer
the Navidad Project to Minera, it was not open to her, and she did not err in
refusing, to order IMA to transfer its shares in IMA Holdings Corp. to Minera.
PART 3 - ARGUMENT
80. Minera's cross-appeal arises only if this Court (1) accepts that the
trial judge erred in ordering IMA and Inversiones to transfer the Argentine
natural resources comprising the Navidad Project to Minera AND (2) concludes
that damages are not an appropriate remedy.
81. If this Court accepts that the trial judge erred in ordering the
transfer of the Navidad Project, it does so because it recognizes that the trial
judge ought not, through use of the IN PERSONAM exception, to have done
indirectly what she could not do directly - namely, make an order respecting a
foreign immovable.
82. As Minera concedes at paragraph 129 of the Respondent's Factum, the
order it seeks by this cross-appeal would have "the same effect as a transfer of
the [Navidad Project]". That is because IMA Holdings Corp. is a corporate shell,
the sole purpose of which is to hold the Navidad Project.
83. It follows that this cross-appeal seeks an order bearing the same
defect as the trial judge's order - I.E., doing indirectly what cannot be done
directly. This Court ought not to replicate that defect.
PART 4 - NATURE OF ORDER SOUGHT
84. IMA and Inversiones seek an order dismissing the cross-appeal.
85. IMA and Inversiones seek their costs throughout.
ALL OF WHICH IS RESPECTFULLY SUBMITTED.
/s/ Leonard T. Doust, Q.C.
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Leonard T. Doust, Q.C.
/s/ Warren B. Milman
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Warren B. Milman
/s/ Michael A. Feder
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Michael A. Feder
LIST OF AUTHORITIES
PARAGRAPH(S)
H.G. Beale, ed., CHITTY ON CONTRACTS, 29th ed., vol. 1
(London: Sweet & Maxwell, 2004) 74
CANADIAN IMPERIAL BANK OF COMMERCE V. BARLEY MOW INN INC.,
[1994] B.C.J. No. 3037 (S.C.) (QL) 50
CHUDY V. MERCHANT LAW GROUP, 2007 BCSC 279 48
LAC MINERALS LTD. V. INTERNATIONAL CORONA RESOURCES LTD.,
[1989] 2 S.C.R. 574 76
Harvey McGregor, MCGREGOR ON DAMAGES, 15th ed.
(London: Sweet & Maxwell, 1988) 72
R. V. PALMER, [1980] 1 S.C.R. 759 50
ROYAL BANK OF CANADA V. STATE FARM FIRE AND CASUALTY CO.,
[2005] 1 S.C.R. 779, 2005 SCC 34 63