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May 08, 2019 - 6:00 AM
KELOWNA - A year or two ago, we'd likely never know how partners in an illegal marijuana grow operation settled their disputes — they’d never admit their deeds to a judge unless jail was on the line.
We’ve come a long way since legalization.
Two men involved in a ‘hand-shake’ deal over millions of dollars in property and sales going back to 2009 went to a judge to help sort their business arrangement, which has since soured.
Justice Steven Wilson had to parse through a real estate purchase and dealings between Stanley Glenn McLeod and Donald Glen Tulloch to figure out who, if anyone, owed money to the other.
"As one might expect with such a business venture, the arrangements between the parties were not documented and as such there is divergence in the evidence as to whether an agreement was reached, and if so, on what terms,” Wilson wrote in a May 3 decision.
He said the men got together in 2009 to build a marijuana grow operation on Deep Creek Road in Enderby. Tulloch agreed to purchase the property for $735,000 and McLeod would pay for all the improvements.
Given the legal status of their product in 2009, McLeod wasn’t registered on title as part of the venture.
Police raided the operation in 2011 and though it’s not clear if charges were ever laid, Tulloch wanted out of the operations side of the business and instead McLeod eventually leased the facility from him.
In 2017 they got an appraisal of the property because McLeod wanted to buy Tulloch out, but it appears he made a low-ball offer and Tulloch countered by not allowing McLeod back onto the property. From there, the relationship devolved into builders liens on the property for $850,000 by McLeod.
McLeod claimed in court he spent more than $1 million building the ‘shop’ on the property, far exceeding the value of the property purchase and another $600,000 for the ‘business’.
Tulloch said McLeod made $1.7 million in the two years before police shut it down and that more than paid out their agreement as he knew it.
“The plaintiff kept all of the revenues until such time as the RCMP shut the facility down and estimates that the plaintiff had by that time been more than sufficiently compensated for his construction costs,” Wilson wrote.
McLeod sued Tulloch to get title to the property. This is why crime doesn’t pay: Without a written agreement, the judge had to favour the defendant who the judge said was more consistent and believable.
McLeod didn’t establish an interest in the property but the dispute has undoubtedly been expensive.
McLeod submitted to the court that he was paid $35,000 to $45,000 per month since re-starting his operation in 2012 supplying three patients with medical marijuana — and because of the dispute, he no longer has access to the property.
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