Whitehorse Daily Star

Placer mining claims lawsuit is settled

An agreement has been reached in a lawsuit over placer mining claims in Dawson City.

By Emily Blake on March 27, 2017

An agreement has been reached in a lawsuit over placer mining claims in Dawson City.

The suit by Fine Gold Resources Ltd. against 46205 Yukon Inc., Russian Mining Inc., Them R Gold Ltd., Troy Cahoon, and Richard Fanslow, was settled in Yukon Supreme Court in Whitehorse on Friday.

The agreement means the parties avoided the three-day trial that had been scheduled for last Wednesday through Friday.

“I was looking forward to it either way, but a settlement is always better,” Yukon Supreme Court Justice Ron Veale said Friday.

Two actions will now be dismissed and two appeals in the court of appeal will be abandoned.

Lawyers from both sides notified the judge last Thursday that they planned to come to an agreement, but it was not finalized until that night.

“I always find in these agreements that there are compromises to 90 per cent but then there’s something you forget. So you’re arguing over 10 per cent,” Justice Veale said Friday.

Lawyer Mark Wallace responded that “there was a lot of back and forth,” and the agreement was finalized “well after business hours.”

The case has been ongoing for over a year and involves disagreement over placer claim boundaries on Eureka Creek in the Dawson Mining District and allegations of trespassing.

On Dec. 17, 2015, Fine Gold filed a Statement of Claim alleging that Russian Mining breached a 2012-13 lease on one of its claims by extracting precious metals and not paying the agreed percentage.

The company also claimed that other defendants, owners of adjacent mineral claims and agents for Russian Mining, trespassed after this lease expired and extracted gold and silver from them.

As a result, Fine Gold said they suffered damages, including loss of the value of the precious metals, loss of profit and loss of a business opportunity.

But in two Statements of Defence, respondents denied any trespass or contravention.

They claimed there was an ongoing dispute over boundaries, and they were given permission to do certain work on the claim including digging, reclamation work and using water.

In February 2016, Fine Gold applied, without notice, for a freezing order which would restrain the defendants from transferring or dealing with their assets, including those outside the territory.

They argued there was evidence that the respondents’ gold assets had been “dissipated and secreted.”

On Feb. 29, 2016, Justice Veale issued two injunctions that restrained the respondents from dealing with their assets in the Yukon with leave to the respondents to apply to set aside the order.

In early March, they did just that, and Justice Veale agreed to set aside the order and awarded them special costs.

He found there had not been a “full and frank disclosure” by Fine Gold and that there was no evidence of a “real risk of the transfer, disposal or dissipation of assets” by either Cahoon or Fanslow.

In his conclusion, Justice Veale wrote, “As the 2016 mining season is approaching, the parties should endeavour to reach agreement on mining activity in the disputed location or bring the matter back to case management to set an application date and a trial date.”

Fine Gold then appealed this decision, arguing the judge erred in his finding that counsel had “fallen well short of their applications.”

The company said it had “neither concealed nor intentionally understated the boundary dispute or its significance.”

The appeal court upheld the freezing order being set aside and found the judge had not erred in concluding the disclosure had not been complete.

But it overturned the Special Costs Order.

Then, in a decision issued Jan. 3, 2017, Justice Veale ruled that a trial in the case would proceed despite Fine Gold’s application that the proceeding be stayed or adjourned until discoveries were completed.

Fine Gold’s lawyer, Gary Whittle, declined to comment on the agreement that has put an end to the case.

Be the first to comment

Add your comments or reply via Twitter @whitehorsestar

In order to encourage thoughtful and responsible discussion, website comments will not be visible until a moderator approves them. Please add comments judiciously and refrain from maligning any individual or institution. Read about our user comment and privacy policies.

Your name and email address are required before your comment is posted. Otherwise, your comment will not be posted.