Case National Investment Ltd. v. 1219925 B.C. Ltd.

2022 BCSC 2250 Case National Investment Ltd. v. 1219925 B.C. Ltd. IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Case National Investment Ltd. v. 1219925 B.C. Ltd., 2022 BCSC 2250 Date: 20221229 Docket: S207879 Registry: Vancouver Between: Case National Investment Ltd. and Chao Liu Plaintiffs And 1219925 B.C. Ltd., 1137978 B.C. Ltd., Xing Ye Organic Growing Inc., Hong Jun Zhao and Huan Xian Wang Defendants Before: The Honourable Madam Justice Burke Reasons for Judgment Counsel for the Plaintiffs: R. Luo Counsel for the Defendants: A. Leung Place and Date of Trial: Vancouver, B.C. October 17-21, 2022 Place and Date of Judgment: Vancouver, B.C. December 29, 2022 Table of Contents I. Background.. 3 II. Issues.. 4 Did the Parties Form a Binding Oral Agreement?. 4 A. Formation of Oral Contracts. 4 B. Positions of the Parties. 6 C. Analysis. 7 What Were the Terms of the Oral Agreement?. 10 Were the Defendants Aware of the Expenses the Plaintiffs Incurred, and Did They Agree to Them?. 11 A. Nibbler Contract 11 B. Other Expenses Claimed. 17 III. Conclusion.. 19 I. Background [1] This matter involves a claim for monies paid out pursuant to an oral agreement between the three shareholders of a start-up cannabis cultivation business. Pursuant to the oral agreement, the plaintiffs seek repayment of $79,253.50, which they maintain a shareholder's loan and/or reasonable expenses incurred in the course of business. [2] The plaintiff, Choa Liu, is a business person who resides in Vancouver. The plaintiff, Case National Investment Ltd., is a company incorporated pursuant to the laws of British Columbia and is the investment vehicle of Mr. Liu. [3] The defendant, Huan Xian Wang, is a businessperson who resides in Richmond. The defendant, 1219925 B.C. Ltd., is a company incorporated pursuant to the laws of British Columbia and is the investment vehicle of Mr. Wang. [4] The defendant, Hong Jun Zhao, is a businessperson who resides in Vancouver. The defendant, 1137978 B.C. Ltd., is a company incorporated pursuant to the laws of British Columbia and is the investment vehicle of Mr. Zhao. [5] Because these three companies are, for all intents and purposes, aligned with the individual who owns them in both legal interest and representation, for the sake of simplicity, I will refer to Mr. Liu as the plaintiff and Mr. Wang and Mr. Zhao as the defendants for the remainder of these written reasons. [6] The plaintiff says he entered into an oral agreement with the defendants in August 2019 for the purpose of operating a cannabis growing operation. Xing Ye Organic Growing Inc. (the "Company") was the corporate entity for this venture. [7] Each of the parties agreed to invest funds in the Company in exchange for a portion of its shares. In addition, Mr. Liu says the parties agreed that he would be the sole director responsible for the Company's day-to-day operations. From September 2019 to December 2019, Mr. Liu says work was carried out and expenses undertaken on this basis. [8] Mr. Liu alleges that, in late December 2019, the defendants breached this agreement and excluded Mr. Liu from the company. He further says that, despite numerous demands, the defendants have failed to compensate him for reasonable start-up expenses that he paid out of his own pocket. [9] The defendants submit that there was no binding oral agreement, and in any event, they were unaware of the expenses that the plaintiff incurred. Instead, they characterize the agreement as an unenforceable "agreement to agree" due to insufficient certainty of terms. They say the action should therefore be dismissed. II. Issues [10] To resolve this dispute, I must answer the following questions: 1) Did the parties form a binding oral agreement in August 2019 to conduct a cannabis cultivation business using the Company? 2) If such an oral agreement was formed, what are its terms? 3) Were the defendants aware of the expenses the plaintiff incurred, and did they agree to them? [11] For the reasons that follow, I conclude that there was a binding oral agreement that required the defendants to compensate Mr. Liu for their proportionate share of the start-up costs he incurred. I further find that Mr. Wang and Mr. Zhao were aware of and agreed to the various expenses claimed by Mr. Liu (laid out in detail below). Did the Parties Form a Binding Oral Agreement? A. Formation of Oral Contracts [12] In Oswald v. Start Up SRL, 2021 BCCA 352 at para. 34 [Oswald], the court set out the legal test for the formation of a binding and enforceable contract: (a) there must be an intention to contract; (b) the essential terms must be agreed to [by] the parties; (c) the essential terms must be sufficiently certain; (d) whether the requirements of a binding contract are met must be determined from the perspective of an objective reasonable bystander, not the subjective intentions of the parties; and (e) the determination is contextual and must take into account all material facts, including the communications between the parties and the conduct of the parties both before and after the agreement is made. [13] Part (d) of the Oswald test summarizes "what has been called the objective principle of contract formation": Summers v. Sawyer, 2005 CanLII 30880, 2005 CarswellOnt 4001 (S.C.) at para. 15 [Summers]. In Summers, the court adopted the following passage from S. M. Waddams, The Law of Contracts, 5th ed. (Toronto: Canada Law Book, 2005) at 103, which elaborates on this principle: The principle function of the law of contracts is to protect reasonable expectations engendered by promises. Every definition of contract, whether based on agreement or on promise, includes a consensual element. But the test of whether a promise is made, or of whether assent is manifested to a bargain, does not and should not depend on an inquiry into the actual state of mind of the promisor, but on how the promisor's conduct would strike a reasonable person in the position of the promisee. [14] The Summers court also cited the following passage from Smith v. Hughes (1871), L.R. 6 Q.B. 597 at 607, which states the objective principle of contract formation another way: If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into a contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms. See also Hucul v. GN Ventures Ltd., 2022 BCSC 144 at para. 136. [15] In Summers, the court concluded there was an oral agreement between the three shareholders of a trucking company that was unable to start a business due to a lack of financing. As a result, the shareholders were each responsible for one-third of the company's start-up expenses. [16] The plaintiff also points to Reeves v. Russell, 82 R.P.R. (4th) 137, 2009 CanLII 11437 (Ont. S.C.) [Reeves] as a good example of a case where a court found an enforceable oral agreement had been formed in the context of the formation of a business. In particular, the plaintiff refers to paras. 39-43, 54, 58 and 61, where the Reeves court outlined the fact-finding process by which it determined that the terms of the agreement had sufficient certainty so as to be binding and enforceable. B. Positions of the Parties [17] In the case before me, the plaintiff argues that a valid and enforceable agreement was formed between the parties, as the defendants admitted to the terms of the share structure, confirmed their agreement to purchase the property for cannabis cultivation, and filed articles of incorporation confirming that the Company must pay for directors' reasonable expenses. [18] The plaintiff points out that the legal test to establish the existence of a verbal agreement does not depend on the actual state of mind of the promisors, Mr. Wang and Mr. Zhao. Rather it is how the promisors' conduct would strike a reasonable person in the position of the promisee, who, in this case, is Mr. Liu after having attended the August 19, 2019, meeting in addition to his other discussions with the defendants regarding the Company. [19] Regardless of the defendants' position to the contrary, the plaintiff submits that a reasonable person in the position of Mr. Liu would conclude that a binding agreement had been formed. Mr. Liu fulfilled his side of the bargain, paying certain Company expenses on behalf of Mr. Zhao and Mr. Wang. Importantly, the plaintiff alleges that there is evidence that Mr. Wang and Mr. Zhao knew the details of these expenses before they were incurred. [20] The defendants rely upon the test in Oswald to maintain that the parties had not agreed on the essential terms or that certain key terms were too uncertain to be valid and enforceable. In maintaining this position, the defendants point out a contract's enforceability is contextual and must take into account all the material facts, which they say weighs against there being a valid and enforceable contract in the circumstances. C. Analysis [21] As noted above, for the oral agreement to be enforceable, it is necessary that a reasonable person in that party's situation would believe that the party was assenting to the terms proposed by the other party. This is an objective test; the parties' subjective intentions are not determinative. [22] I do not agree there was uncertainty in the terms of the agreement sufficient to render it unenforceable. Based on the evidence before me, I conclude that the terms of the oral agreement were clear and acted upon by all involved. [23] All three individuals in this matter are experienced business people--albeit in different sectors. Mr. Liu works in the construction business and has built both commercial and residential structures. Mr. Wang, who came to Canada from China in 2010, is in the real estate business in Vancouver. He has limited proficiency in English, being unable to read the language. Mr. Zhao is a friend of Mr. Wang who is a residential builder in Vancouver. The two met in an ESL class in 2010. [24] Mr. Liu testified that the parties met in August 2019 to have a discussion that would lead to the formation of the Company. The defendants agreed that, when the parties met, Mr. Wang, Mr. Liu and Mr. Zhao had "grand plans" to enter the newly legal cannabis industry by establishing a commercial cannabis cultivation business. [25] At the August 2019 meeting, the three discussed a shareholders' agreement, the relative allocation of shares for each investor, Mr. Liu's salary, and securing both an appropriate cultivation site and the necessary federal licence for cannabis cultivation from Health Canada (the "License"). The parties also discussed retaining a consulting company to assist them in acquiring the Licence. Mr. Liu said it was agreed that he was to take the lead in pursuing these objectives as he was the only one with any relevant experience in the area. [26] The meeting ended with the parties agreeing to form the Company to undertake the business of cannabis cultivation. The three would incorporate the Company and use their own companies as shareholders in the Company. In exchange for their investments, Mr. Liu and Mr. Zhao would each receive 30 percent of the Company's shares and Mr. Wang would receive the remaining 40 percent. [27] At that same meeting, Mr. Liu said the shareholders agreed to share the Company's expenses, with each of the three individuals providing a personal guarantee to make them responsible for any shortfall in expenses in proportion to their percentage of the Company's shares. [28] Accordingly, the parties signed the Company's incorporation documents on August 15, 2019. [29] The defendants submit that, while the parties had, in August 2019, discussed the potential corporate structure for a commercial cannabis cultivation business, they contest Mr. Liu's recounting of these discussions. [30] The defendant, Mr. Wang, testified that the parties discussed the structure of the shareholding of the company and agreed with the share structure as set out by Mr. Liu. He agrees that they also discussed using their respective companies to pay for and hold the shares instead of making personal investments. [31] Mr. Wang rebutted Mr. Liu's allegation that the individual investors agreed to personally guarantee any debts owed by their respective companies to the jointly held Company, noting that an investment in the cannabis industry was risky such that it would be irrational for him to make such a guarantee. Mr. Wang also denied that Mr. Liu had the authority to incur expenses on behalf of the company, or that the parties had agreed to pay Mr. Liu a salary. [32] Mr. Wang indicated that the parties did discuss expenses but without reaching a final decision or signing a formal agreement with respect to this issue. All that had been confirmed was the shareholding structure of the company. Mr. Wang indicated, however, that if there were reasonable related expenses, "of course we would pay." [33] In contrast to Mr. Liu's testimony, Mr. Wang said that he actually played the leading role in the enterprise. He specifically denied that Mr. Liu played a leading role. Mr. Wang said he found a realtor who assisted the group in locating five or six properties for the venture located in Langley, Chilliwack and Abbotsford. [34] Mr. Wang indicated that he would inform Mr. Liu and Mr. Zhao when the realtor notified him of potentially suitable properties. The parties would then visit the sites together. Eventually, they decided to make an offer on a property located in Chilliwack (the "Chilliwack Property"). Mr. Wang said he negotiated the price as well as the loan from the property owner. With all three parties' agreement, they paid the deposit and signed the purchase contract. [35] Mr. Wang alleged that, because the defendants had no knowledge of commercial cannabis cultivation and Mr. Liu had held himself out as having experience in this area, Mr. Liu would have a leading role in the Company only after the property purchase and necessary construction were completed and the cannabis cultivation operations were underway. [36] While Mr. Wang also said that Mr. Liu would have the leading role in the construction of the cannabis cultivation premises, the details of this role were to be finalized after the purchase of the Chilliwack Property was completed. [37] Mr. Zhao's testimony largely corroborates that of Mr. Wang. He said, however, there were many discussions and dinners between the three parties at which various Company matters were discussed. [38] In summary, the defendants submit that there is no dispute that the parties discussed incorporating the Company, the Company's share structure and the parties' intention to share the Company's profits and expenses. Neither do they dispute that Mr. Zhao sent a draft shareholders agreement written in Chinese to Mr. Liu. However, they argue that no agreement among the shareholders was ever finalized. [39] After weighing the competing narrative put forth by the parties, I find the plaintiff's account to be more plausible than that of the defendants. The evidence demonstrates both that a reasonable person in the position of Mr. Liu would believe that Mr. Wang and Mr. Zhao were assenting to the terms proposed and entered into a contract with him. I, therefore, conclude that the parties formed a binding oral agreement to incorporate and invest in the Company to begin a cannabis cultivation business operation. [40] While Mr. Wang may have provided some assistance, I conclude that, due to Mr. Liu's greater relative experience with this industry in comparison to the defendants, the parties agreed that Mr. Liu would take the lead in performing the tasks necessary to move ahead with the parties' business plan. While Mr. Wang worked hard to locate the property, neither he nor Mr. Zhao had any experience whatsoever in this industry. What Were the Terms of the Oral Agreement? [41] Having concluded that the parties formed an oral agreement in August 2019 to start the cannabis cultivation business, I now turn to a consideration of the precise terms of that contract. [42] As noted in the above analysis, I find that the parties agreed to incorporate the Company, using their own investment companies as shareholders. They also agreed to the Company's share structure, whereby Mr. Liu and Mr. Zhao would each own 30 percent of the shares with Mr. Wang owning the remaining 40 percent. [43] The parties agreed to proportionally share and pay for the expenses of the company. While Mr. Wang denied this and said it would be irrational to do so because it was a risky business, I conclude otherwise based on the parties' testimony and copies of discussions that took place between the parties using a messaging and calling app called WeChat (the "Group Chat"). [44] In addition, I find that the parties agreed Mr. Liu would be the director responsible for running the Company's daily operations and undertaking the necessary steps to have this business commence, including locating, surveying and designing the premises to be used for cannabis cultivation. [45] The Company's articles of incorporation were entered into on August 15, 2019. Article 13.6 of those articles deals with expenses: 13.6 Reimbursement of Expenses of Directors The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company. [46] Mr. Liu testified that, while the shareholders would be the corporate entities, each individual had to personally guarantee the financial debts. This guarantee was reflected in Article 11 of a draft shareholder's agreement, which reads as follows: Debt undertaking: joint debt(s) shall be firstly repaid with the joint asset. When the joint asset is insufficient to pay off the debt(s), the shareholder's liability for the debt(s) of the joint venture shall be based on the proportion of their subscribed shares. [47] Mr. Liu testified that the shareholders' agreement was intended to reflect the terms of the existing agreement between the parties, although it was not signed prior to Mr. Liu's departure from the company. [48] Mr. Liu indicated that because he was in charge of initially establishing the Company's operations, he would use his company to pay for the expenses and be repaid as per the agreement between the parties. I agree that this was the expectation between Mr. Liu, Mr. Wang and Mr. Zhao and that it formed a part of their oral agreement. Were the Defendants Aware of the Expenses the Plaintiffs Incurred, and Did They Agree to Them? A. Nibbler Contract [49] As mentioned previously, in September 2019, the parties agreed they needed to hire a consultant to help them obtain the License. Mr. Liu referred the parties to Nibbler Technology Inc. ("Nibbler"), a consultancy company who had experience in this area. Accordingly, in October 2019, the three individuals had a meeting with Elva Xu, the owner of Nibbler, to discuss retaining her as a consultant to assist in the Licence application. [50] Mr. Liu indicated that the parties agreed to retain Nibbler at this meeting, and Ms. Xu provided a contract for this service with Mr. Liu's construction company, Case Construction Ltd., as the contracting party. [51] Ms. Xu testified that she met Mr. Wang, Mr. Liu, and Mr. Zhao at a dinner at the River Rock Casino in Richmond, BC, in early October 2019. At the dinner, they discussed how Nibbler could assist with obtaining the Licence for the Chilliwack Property, as well as the required steps to do so. [52] Ms. Xu testified that acquiring the Licence was a complicated process. First, she would need to obtain security clearances for the individuals to be named on the License. Further, once the client selected a location, Nibbler would assess its suitability for commercial cannabis cultivation. Health Canada would require a site survey of the cultivation venue, including its interior measurements and floor plan. Ms. Xu would also advise clients about required security measures, including cameras and other security features, as Health Canada required applicants to submit substantial documentation related to security. [53] Health Canada would review the application for completeness, and some dialogue may occur between the reviewer and the applicants. Once the reviewer was satisfied with the application, it would be presented to the board, who would discuss whether to finalize approval for the License. Once board approval was achieved, the application would be submitted to a more senior government official to be signed. [54] Ms. Xu testified that at the October 2019 meeting with the parties she did explain in Mandarin the necessary steps for obtaining the License, what her company could do for the individuals and what she needed to start work (although not in the same detail as she did in court). In particular, she would need a significant amount of personal information from each to obtain the necessary security clearances. [55] Ms. Xu said she also discussed the costs of Nibbler's services at this meeting: a fixed fee of $120,000 plus GST. She said she was clear that half of this fee had to be paid upfront. [56] Ms. Xu said that, by the end of the meetings, the three individuals had hired Nibbler to assist in the License application. As a result, Ms. Xu, Mr. Liu and another Nibbler employee, Charles Phillips, undertook a site visit to the Chilliwack Property later in October 2019 to assess its suitability for commercial cannabis cultivation. Ms. Xu was adamant she would not have visited the site if she was not sure that the parties had retained the services of Nibbler, as this was a very busy time for the company due to the great interest in legal cannabis cultivation. [57] Mr. Phillips also testified that he, Mr. Liu, Mr. Wang and Mr. Zhao visited the Chilliwack Property on October 8, 2019, to conduct a preliminary site visit to assess its suitability for being licensed for commercial cannabis cultivation. Mr. Phillips indicated that most sites in the area would meet the legal requirements for the issuance of a license, which include that the property has a stand-alone building that is not near a residence and is able to be secured. Mr. Phillips explained these requirements to all present, including Mr. Wang and Mr. Zhao. [58] Mr. Phillips also outlined the necessary steps to procure a license. If the site was determined to be suitable after the preliminary site visit, Nibbler would work with the client to ensure appropriate floor and security plans were developed. Once the clients provided their fingerprints to a recommended third-party company, Nibbler would help to ensure that their clients navigated the RCMP security checks required for the License. [59] Mr. Liu paid Nibbler $63,000 (representing half of Nibbler's total fee plus taxes) in November 2019. In the following week, the parties supplied detailed personal information to Nibbler to apply for their security clearance. Ms. Xu confirmed that Nibbler began to prepare the Company's application for submission to Health Canada. [60] In cross-examination, Ms. Xu was again adamant she was hired at the end of the meeting and was clear she would not have undertaken a site visit if her company had not been hired to undertake this contract. [61] While initially, Mr. Wang said he was not aware of the decision to hire Nibbler to assist with the License application, messages exchanged between Mr. Liu, Mr. Wang and Mr. Zhao in the Group Chat on November 19 and 20, 2019, fundamentally contradict this, confirming that Mr. Wang was aware of the contract with Nibbler before the initial $63,000 payment was made. [62] Mr. Liu sent the Nibbler contract and a Non-Disclosure Agreement to the Group Chat on November 19, 2019 at 4:04 p.m. indicating it was a signed contract. Mr. Liu also said the parties needed to put money into the Company, as the $63,000 owed to Nibbler upfront exceeded the Company's available cash reserves. The three parties then began sending messages discussing the price of Nibbler's services and the payment of the deposit, with Mr. Liu sending a message noting that information about the price could be found on the second-to-last page of the contract he had submitted to the Group Chat. [63] After Mr. Liu submitted these contracts, Mr. Wang responded, sending messages stating that (i) the parties should keep the final payment owed to Nibbler until the application for the License was completed to provide an incentive for them to do the work and (ii) the Company should be the contracting party to the Nibbler contract (rather than Mr. Liu's construction company) in the event of a commercial dispute and for financial/taxation reasons. Other than these two changes, Mr. Wang sent a message in the Group Chat on November 20 stating that "[t]he clauses can basically remain the same as you have them ". He later sent a message stating that other than the two noted changes, "[t]he rest [of the contract] can be based on what you have negotiated, those basically don't need to be changed a lot". [64] All of this indicates Mr. Wang was aware of and engaged in the decision to hire Nibbler. While Mr. Wang continues to maintain he was not aware of the engagement of Nibbler by the company, his assertions are contradicted by the messages in the Group Chat, a documentary record which is consistent with the evidence of both Mr. Liu and Ms. Xu that the parties had retained Nibbler by the end of the conversation at the River Rock Casino dinner, with the details to be finalized in the coming weeks. [65] When cross-examined on the matter, Mr. Wang did not have an adequate explanation for the discrepancies between his testimony and the Group Chat messages. While initially, Mr. Wang had said he had no knowledge of the expenses incurred by Mr. Liu on behalf of the Company, he later said the parties often have dinner together where they would discuss things to do with the Company. He said that, despite these conversations, he did not know the specific details of the expenses Mr. Liu was incurring on behalf of the Company, such as how much was owed and to whom. [66] Mr. Wang also said he was upset with the contract, but he did not express this as he wanted to maintain good relations with Mr. Liu, especially over "such a small amount of money". Elsewhere in his testimony, he contradicted this sentiment, pointing to the Nibbler contract as the main reason why he and Mr. Zhao ended the relationship with Mr. Liu. Simply put, Mr. Wang cannot escape the reality of his own words recorded in the Group Chat. [67] In addition, while Mr. Wang testified he could not recall giving his personal information to Mr. Liu to provide to Nibbler, Ms. Xu testified that he did, in fact, provide this information. Mr. Zhao recalled providing his personal information but characterized this as something one would give to a bank for a loan. The defendants' provision of personal information to Mr. Liu to provide to Nibbler further supports the proposition that Mr. Wang and Mr. Zhao knew about and approved of the decision to hire Nibbler. [68] With respect to the references to Nibbler and the contract including the payment of $63,000 in Group Chat on November 19 and 20, 2019, Mr. Zhao said that the three never reached a firm agreement on the matter. In his view, the Group Chat messages instead reflected preliminary discussions and negotiations on this matter. When Mr. Zhao found out that the Nibbler contract had been signed, he indicated that he felt that this should not have occurred until he, Mr. Liu and Mr. Wang had all officially confirmed the contract and that the contract is between Nibbler and the Company. These statements do not accord with his Group Chat messages, where he said paying half of Nibbler's fee upfront was fine, with the remaining half to be paid later "when [the parties] get the license". Accordingly, I find that Mr. Zhao knew the general structure of the contract--i.e., that Nibbler required a significant deposit upfront and would be paid the rest of the funds as matters progressed--and had agreed to it. [69] While Mr. Zhao agreed that Ms. Xu and Nibbler had attended the property and later attended City Hall in January 2020, he felt it was not necessary to pay for their services as these actions were not "work". In his view, the real "work" would begin only when the deal closed and construction began. [70] Mr. Wang also indicated that, after Mr. Liu's departure from the Company, the only discussion of expenses that took place was between Mr. Zhao and Mr. Liu. Mr. Liu had sent an invoice asking Mr. Zhao and Mr. Wang to pay for the expenses he had incurred on behalf of the Company. [71] In their discussion, Mr. Zhao indicated that he told Mr. Liu that the money was spent without the proper consent. He also told Mr. Liu that, as Nibbler had not done any work on the project, he could ask them for a refund. Mr. Liu contested both of these assertions, stating that the money had been properly spent and that no refund was possible. The defendants later received the notice of civil claim for this action. [72] While the defendants say the intent behind having shell companies hold the parties' shares in the Company was for tax and liability issues, the plaintiff maintains that these decisions took place in the context of the three parties' personal guarantees to infuse cash into the main business. The guarantee was used as a sword the three parties could use to hold each other to the bargain and to ensure the company had adequate cash reserves. If they had only used the corporate structure as a shield, there would have been no impetus for further investment, causing the enterprise to collapse. I agree with the plaintiff on this point. [73] In summary, I find that the parties agreed to hire Nibbler to assist them in obtaining the License on behalf of the joint business operation. While Mr. Wang and Mr. Zhao dispute knowledge of this expensive proposition, their protestations are not consistent with the plain language set out in the Group Chat conversations entered into evidence, which clearly demonstrates that not only did they know Nibbler was retained but they also were aware of the work that would be done and its cost. [74] Having concluded that there was an enforceable oral agreement to share the Company's expenses proportionate to the parties' share interests, it follows that the fees associated with retaining Nibbler should be shared proportionally between Mr. Liu, Mr. Wang and Mr. Zhao. B. Other Expenses Claimed [75] The plaintiff also claims other expenses, including $15,000 for schematics from the designer Sacha Canow, $4,725 from Vector Geomatics Land Surveying Ltd. and $1,780 from Measure Masters Surrey. These costs are all associated with fulfilling other Licence requirements relating to the design of the building that was to be used for cannabis cultivation. I conclude these costs were established and known by all three parties. Indeed, one of the reasons Mr. Wang disputed these costs with Mr. Liu is because he said the work was too slow--an implicit admission that he had knowledge of the work taking place and its price. [76] There is also a dispute about the cost of a shareholders' agreement. At some point, Mr. Zhao forwarded a shareholders' agreement to the other two shareholders in Chinese. As mentioned previously, Mr. Liu said the Chinese document essentially formalized the same terms as had already been agreed to by the parties in their various discussions on the matter. [77] Mr. Liu was of the view that the shareholder's agreement needed to be translated into English to be valid. Mr. Liu says he raised his concern with Mr. Zhao in November 2019, and the group ultimately agreed that he would pay a Canadian solicitor to provide the translated shareholders' agreement while Mr. Wang and Mr. Zhao would obtain their independent legal advice with respect to that agreement. Because the translated shareholder's agreement would cost more than the independent legal advice, Mr. Liu indicated that the parties agreed to bear the total amount of these legal expenses in proportion to their shares in the Company. [78] Mr. Liu sent the draft shareholders' agreement to a business lawyer to draft the English-language version of the shareholders' agreement. On December 6, 2019, he paid the lawyer a $3,000 retainer to draft an English version of the shareholders' agreement. [79] Mr. Liu indicated that the draft shareholders' agreement was never signed because Mr. Wang and Mr. Zhao "kicked him out of the business" in December 2019. [80] Mr. Wang testified that Mr. Liu was not forced out of the company. Rather, the defendants realized that, after hiring Nibbler to assist in securing the License, Mr. Liu was "not following the rules" of the arrangement and the partnership could not proceed further. Mr. Wang indicated that Mr. Liu was given a choice as to whether he wished to proceed with the business. If he decided to proceed, Mr. Wang and Mr. Zhao would exit the Company. Alternatively, Mr. Liu could choose to exit the Company and the defendants would proceed with the business. [81] Mr. Wang testified that Mr. Liu chose the latter option. Mr. Zhao testified to the same effect. [82] Mr. Wang again contests Mr. Liu's version of events, stating that the parties did not agree to compensate Mr. Liu for the costs incurred in drafting the translated shareholders' agreement. He felt that the existing Chinese-language shareholders' agreement--which each member of the group had already acknowledged and agreed on--was sufficient. Mr. Wang also noted that Company expenses exceeding $500 must be approved by at least two directors, and this never occurred. Mr. Wang was of the view that the $3,000 Mr. Liu paid was for his own personal interest, not that of the Company. If an English-language shareholders' agreement was indeed required, Mr. Wang said the matter would have been referred to the law firm that originally incorporated the Company. [83] It is not clear to me if translating the shareholders' agreement into English was for the benefit of Mr. Liu alone or the group. Accordingly, I am unable to conclude this was an agreed to established expense of the partnership. [84] With respect to wages, Mr. Liu now claims $18,000 in wages: $6,000 per month for each of the three months he was involved in the Company. I agree this was a shared expense agreed to by the parties. While Mr. Zhao now appears to be of the view no "work" was done (with Mr. Liu's responsibilities commencing when construction at the Chilliwack Property began), I find this suggestion to be self-serving. Mr. Wang's contention cannot be reconciled with the evidence of Ms. Xu and Mr. Phillips regarding the extensive efforts required to obtain the License prior to commencing any construction work. III. Conclusion [85] In view of all the above, I conclude that an enforceable oral agreement exists between the three parties. One of the terms of this agreement was that the parties would share reasonable expenses incurred on behalf of the Company in proportion to their ownership shares. Mr. Liu has established that he incurred the following reasonable expenses with the knowledge of Mr. Wang and Mr. Zhao as follows: a) $63,000 for retaining Nibbler's consulting services; b) $1,780 for surveying by Measure Masters Surrey; c) $4,725 for surveying by Vector Geomatics Land Surveying Ltd; d) $15,000 for Sacha Canow's design work; and, e) $18,000 in wages for Mr. Liu's three months of work. [86] As noted previously, Mr. Liu owns 30 percent of the Company, while Mr. Wang and Mr. Zhao own the remaining 70 percent. As a result, the defendants are responsible for 70 percent of all of the above-listed expenses other than Mr. Liu's wages (as the $6,000 per month already represents a reduction from the $10,000 per month that Mr. Liu was promised), for a total amount owing of $77,153.50. [87] Accordingly, I find that the defendants are jointly and severally liable for these amounts, and I order them to pay these amounts forthwith to the plaintiffs in this matter. [88] Costs are awarded to the plaintiff unless there is some reason I am presently unaware of to order otherwise. If so, an application can be brought in 30 days, and I will hear submissions on that point. "Burke J."