2007 BCCA 319 Minera Aquiline Argentina SA v. IMA Exploration Inc.

Before:	The Honourable Madam Justice Prowse
	The Honourable Madam Justice Levine
	The Honourable Mr. Justice Thackray

L. Doust, Q.C. W. Milman M. Feder	Counsel for the Appellants
I.G. Nathanson, Q.C. S.R. Schacter, Q.C. J.C. MacInnis	Counsel for the Respondent
Place and Date of Hearing:	Vancouver, British Columbia
April 10 - 12, 2007
Place and Date of Judgment:	Vancouver, British Columbia
June 7, 2007

Written Reasons of:

The Court

Reasons for Judgment of the Court:

INTRODUCTION

[1] IMA Exploration Inc. (“IMA”) and Inversiones Mineras Argentinas S.A. (“Inversiones”) (collectively “the appellants”) are appealing from the order of a trial judge, made July 14, 2006, following a 32-day trial, awarding Minera Aquiline Argentina SA (“Aquiline”) judgment against the appellants for unlawful use of confidential information. (See Minera Aquiline Argentina SA v. IMA Exploration Inc. (2006), 58 B.C.L.R. (4^th) 217.) That information has been referred to throughout the proceedings as the “BLEG A data”, and was used by the appellants to stake valuable silver mineral claims in Argentina.

[2] The original claims staked by the appellants in December 2002 using the BLEG A data have been referred to throughout these proceedings as the “Navidad Project”. In 2003, the appellants staked other claims as a direct consequence of having staked the Navidad Project. The combination of the Navidad Project and the related claims staked by the appellants are referred to in these reasons as the “Navidad claims”.

[3] The key provisions of the order giving rise to this appeal are as follows:

THIS COURT DECLARES that:

1. Inversiones Mineras Argentinas S.A. (“Inversiones”) holds the mining claims in Argentina particularized in Schedule “A” to this Order (the “Navidad Claims”), and any assets related thereto, pursuant to a constructive trust in favour of Minera Aquiline Argentina SA (“Minera Aquiline”);

AND THIS COURT FURTHER ORDERS that:

2. Inversiones transfer the Navidad Claims, and any assets related thereto, to Minera Aquiline or its nominee within 60 days of this Order;

3. IMA Exploration Inc. (“IMA”) take any and all steps required to cause Inversiones to comply with the terms of this Order;

4. the transfer of the Navidad Claims and any assets related thereto is subject to the payment to Inversiones of all reasonable amounts expended by Inversiones for the acquisition and development of the Navidad Claims to date;

…

[4] In the event the appellants are successful in setting aside the order for the constructive trust of the claims, Aquiline is cross-appealing to the extent of seeking an order imposing a constructive trust in favour of Aquiline with respect to IMA’s shares in IMA Holding Corp., and a mandatory injunction requiring IMA to transfer those shares to Aquiline, or its nominee, forthwith.

[5] The parties have reached an agreement as to the status of this order pending the disposition of this appeal.

ISSUES ON APPEAL

[6] The appellants submit that the trial judge made palpable and overriding errors in her assessment of the evidence which caused her to conclude, erroneously, that IMA made unlawful use of confidential information obtained from Newmont Mining Corporation (“Newmont") through Minera Normandy Argentina SA (“Minera”) in staking the Navidad claims. In particular, the appellants submit that the trial judge erred in finding that IMA’s use of the BLEG A data breached the confidentiality agreement between the parties and also gave rise to a breach of a duty of confidentiality that IMA owed to Newmont at common law.

[7] The appellants further submit that, if the trial judge was correct in finding that IMA made unlawful use of confidential information, she erred in imposing a constructive trust remedy, accompanied by a mandatory injunction, rather than a remedy in damages.

[8] In its cross-appeal, Aquiline submits that if the trial judge erred in ordering a constructive trust of the Navidad claims per se, the appropriate remedy would be a constructive trust of the shares of IMA in IMA Holding Corp.

CONCLUSION

[9] We are not persuaded that the trial judge made any palpable and overriding errors in her assessment of the evidence or that she erred in finding that IMA had breached both the confidentiality agreement between the parties and its common law duty of confidentiality in using the BLEG A data to stake the Navidad Project and related claims. Nor are we persuaded that the trial judge erred in concluding that a constructive trust with an injunction in aid were appropriate remedies in the circumstances of this case. For the reasons which follow, we would dismiss the appeal.

GENERAL BACKGROUND

[10] The subject of this action and appeal is the Navidad Project (and related claims) in Argentina, which counsel for the appellants referred to at the outset of the appeal as one of the largest undeveloped silver deposits in the world. The circumstances which led to the staking of these claims by Inversiones on behalf of IMA continue to be a matter of dispute. It is useful, therefore, to describe the general background giving rise to these proceedings, including the key players who were involved at the relevant time.

[11] IMA is a British Columbia company engaged in the business of acquiring and exploring mineral properties, primarily in Argentina and Peru. Inversiones is an Argentine company which was owned and controlled at all material times by IMA. Its sole mineral assets (prior to the order under appeal) were the Navidad Project located in the Chubut province of Argentina, which IMA caused Inversiones to stake in December 2002, and the related claims which were staked in 2003.

[12] Minera is an Argentine company formerly known as Minera Normandy Argentina SA. Until 2002, Normandy Mining Corporation (“Normandy”), a multi-national company based in Australia, owned and controlled Minera. In 2002, Normandy and Minera were acquired by Newmont, which was the world’s largest gold mining company and was based in the United States. In 2003, after the principal events giving rise to these proceedings, Newmont sold Minera to Aquiline Resources Inc., a Toronto-based exploration company, which subsequently changed its name to Minera Aquiline Argentina SA, referred to in this judgment as “Aquiline”.

[13] Prior to its acquisition by Aquiline, Minera’s principal mineral asset was the Calcatreu Project – a series of mineral claims located primarily in the Rio Negro province of Argentina, covering approximately 730 square kilometres. Minera managed the Calcatreu Project, first on behalf of Normandy, and later on behalf of Newmont, from its office in the town of Jacobacci in the Rio Negro province.

[14] Between 1998 and 2001, at the direction of Normandy, Minera collected approximately 500 stream sediment samples from within and nearby the Calcatreu Project, mainly for the purpose of locating additional gold mineralization structures within the boundaries of the Calcatreu Project. The resulting data was known as the “BLEG B data”. As noted by the trial judge (at para. 17), “BLEG refers to a Normandy stream sediment sampling methodology; it is an acronym for ‘bulk leach extractable gold’, which is a process for extracting all of the gold and other elements associated with gold such as silver from a small sample of material.”

[15] In early 2001, Normandy concluded that the Calcatreu Project contained only one tenth of the gold resources necessary to make it economical for Normandy to mine. As a result, Normandy decided to fund additional exploration work by Minera (“Project Generation”) with a view to locating additional resources in the area. Under Project Generation, Minera geologists Carlos Cuburu, Rohan Worland and Achilles Aquilera collected approximately 1,000 stream sediment samples over an area of approximately 12,000 square kilometres. Most of those samples were taken at varying distances south of the southern boundary of the Calcatreu Project, with fewer than 20 of these samples being taken within the Calcatreu area. That data became known as the “BLEG A data”.

[16] In early 2002, Newmont completed its acquisition of Normandy and thereafter set up a meeting in Santiago, Chile, in March 2002. One purpose of the meeting was to review the exploratory work which had been done to date with respect to the Calcatreu Project and Project Generation. Following that meeting, Newmont decided to cease operating in Argentina, to terminate Project Generation and to sell the Calcatreu Project.

[17] On July 30, 2002, Mr. Worland provided a written report on Project Generation to Newmont management stating that the BLEG A data did not reveal any exceptional anomalies requiring immediate staking, but identifying for follow-up purposes three “high” priority anomaly clusters and two “medium” priority anomaly clusters. (As noted by the trial judge, an anomalous reading or a cluster of anomalies may indicate the presence of a mineralized deposit.) The Sacanana silver anomalies comprised one of the two medium priority anomaly clusters. It is the Sacanana anomalies which led to the eventual staking of the Navidad Project and related claims by Inversiones at the direction of IMA.

[18] Newmont continued with its plan to sell the Calcatreu Project, with Esteban Crespo (Newmont’s Director of Lands for Latin America) being placed in charge of the sale. Nick Green, the President of Minera, prepared an information brochure for prospective purchasers, with some assistance from Mr. Cuburu. The information brochure contained references to the BLEG B data in the immediate vicinity of the Calcatreu Project, but did not refer to BLEG B data in areas further afield, or to the BLEG A data.

[19] Newmont arranged for various prospective purchasers, including IMA, to receive the brochure and, if desired, to participate in site visits after signing a standard form confidentiality agreement prepared by Newmont. IMA signed the confidentiality agreement on September 6, 2002 (the “Agreement”). Thereafter, on September 20-22, 2002, IMA sent three representatives to conduct a site visit, including Paul Lhotka (a geologist on contract to IMA). They met with Mr. Cuburu, who was in charge of the site visits for Newmont. Mr. Lhotka requested a variety of information in relation to the Calcatreu Project, including BLEG B data referenced in the brochure. This data was provided. During the September site visit, Mr. Lhotka also expressed interest in a satellite map on the wall of Mr. Cuburu’s office in Jacobacci which depicted the locations of the BLEG A samples. Mr. Lhotka asked if the data generated from these samples was available and Mr. Cuburu indicated that he would consult with Mr. Crespo in that regard. Subsequently, after consulting with Mr. Harvey (Newmont’s Director of Latin American Exploration), Mr. Crespo authorized the release of the data to Mr. Lhotka.

[20] In late October 2002 (October 31, November 1 and 2), IMA sent Mr. Lhotka and Keith Patterson (IMA’s Manager of Exploration) to conduct a second site visit in relation to the Calcatreu Project. About half an hour before the end of that visit (on November 2) Mr. Cuburu provided Mr. Lhotka with a computer disk containing the requested BLEG A data, which Mr. Lhotka copied to his computer. Mr. Patterson was present during this transaction.

[21] On October 31, 2002, Aquiline offered to purchase the Calcatreu Project from Newmont for $2 million. At that time, Aquiline was unaware of the BLEG A data.

[22] On November 6, 2002, IMA advised Newmont that it would not be bidding on the project.

[23] On November 20, 2002, Mr. Lhotka considered looking at the BLEG A data (which he had not yet viewed) and sent a memorandum to Mr. Patterson indicating that it was unclear to him whether this data could be used to acquire lands more than two kilometres from the lands referred to in the Agreement. Having received no response to this memorandum, he opened the BLEG A data on November 27, 2002. Shortly thereafter, he noticed the silver anomalies that had been identified as medium targets by Mr. Worland in his written report to Newmont of July 30, 2002. Mr. Lhotka sought and received permission from IMA’s management to stake the surrounding area, and Inversiones did so on December 6, 2002. The resulting mineral claims became known as the Navidad Project (later expanded to include all of the Navidad claims).

[24] On January 28, 2003, Aquiline completed the purchase of the Calcatreu Project through the purchase of Minera’s shares, with a closing date of July 10, 2003. The BLEG A data was an asset of Minera and, as such, was included in the purchase. In May 2003, Aquiline examined the BLEG A data and discovered the silver anomalies which had drawn Mr. Lhotka’s attention and which had led to the staking of the Navidad Project. Aquiline decided to stake the area but, when it moved to do so, it discovered that Inversiones had staked the area approximately six months earlier.

[25] Aquiline commenced the proceedings leading to this appeal on March 5, 2004.

DECISION OF THE TRIAL JUDGE

[26] After reviewing the background giving rise to the action in some detail, the trial judge addressed the issue of whether the BLEG A data was covered by the Agreement. She concluded that, although the BLEG A data was not specifically mentioned in the Agreement, it was covered by the Agreement, and that the appellants had breached the Agreement by using that data to stake the Navidad Project. In coming to that conclusion, she gave an expansive interpretation to provisions of the Agreement which (she found) protected information “in connection with the Reviewer’s review of the [Calcatreu] Project”, “concerning the Project” and “relating to the Project”. She concluded that, given the fact that the Agreement was executed in relation to a proposed sale of the Calcatreu Project, any information provided in the context of IMA’s evaluation of a possible transaction concerning Calcatreu was protected by the Agreement. She rejected the appellants’ submission that the Agreement, including the definition of the “Project” covered by Agreement, should be narrowly construed by reference to Exhibit A to the Agreement, which listed only the Calcatreu claims.

[27] Although she was not required to do so, the trial judge then went on to consider whether the BLEG A data was also protected by confidentiality at common law. She concluded that the data met the criteria for confidentiality at common law: namely, that (a) the information conveyed was confidential (this was not disputed); (b) that it was communicated in confidence; and (c) that it was misused by the party to whom it was communicated. (See Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574.)

[28] In coming to this conclusion, the trial judge repeated her earlier finding that the information had been requested and provided solely within the context of the sale of the Calcatreu Project. She rejected various submissions put forward by the appellants in support of their theory that the BLEG A data had been provided to them as a gift in exchange for favourable future considerations in relation to properties owned by IMA in Peru. Finally, she reiterated her earlier finding that IMA’s use of the data to stake the Navidad Project was an unauthorized use.

[29] In determining the question of remedy, the trial judge found that but for the prior staking of the Navidad Project by IMA, Aquiline would have staked the Navidad Project in or around May 2003 when it reviewed the data for the first time and realized its significance. The trial judge went on to find that the appropriate remedy in the circumstances was the order set out at para. 3, supra.

[30] The trial judge rejected damages as an appropriate remedy on the basis that there were too many unknowns related to the value of the claims and that an award of damages could operate unfairly to the detriment of one of the parties. At the request of the parties, however, she reluctantly agreed to assess damages. She stated that, if she were required to award damages, she would award $85 million (U.S. funds), subject to an update of the valuation of the report prepared by the respondent’s expert, Ms. Hodos.

DISCUSSION OF THE ISSUES

1. Liability

(a) Position of the Parties

[31] IMA acknowledged at trial and on appeal that the BLEG A data constituted confidential information, in the sense that it was not information available in the public domain. It is also common ground that IMA came into possession of this data solely as a result of Newmont’s invitation to it to bid on the Calcatreu Project. IMA’s position at trial (and on appeal), however, was that the BLEG A data was not related to the Calcatreu Project, but was data obtained from an area outside that Project which was not protected by either the Agreement or by a common law duty of confidentiality. IMA also reiterates its position at trial that Newmont’s purpose in providing IMA with the BLEG A data was to curry favour with IMA so that IMA would look favourably on Newmont in relation to other claims and mining activities IMA was carrying on in Peru and elsewhere in South America.

[32] IMA submits that the trial judge rejected IMA’s “gift” theory out of hand because of palpable and overriding errors she made in assessing the evidence, and in the inferences she drew, or failed to draw, from the evidence. IMA submits that the errors the trial judge made in her assessment of the evidence also affected her interpretation of the Agreement, with the result that she wrongfully concluded that the BLEG A data was protected by the Agreement. IMA further submits that the trial judge’s misapprehension of the evidence led her to the erroneous conclusion that IMA had breached its duty of confidentiality at common law in relation to its use of the BLEG A data. In the result, IMA submits that this Court should allow the appeal and remit the case to the Supreme Court for a new trial.

[33] Aquiline’s position at trial (and on appeal) is that there was no evidentiary foundation for IMA’s theory that Newmont provided the BLEG A data to IMA as a gift for future considerations, and that it is clear that the BLEG A data was provided to IMA to permit IMA to conduct due diligence with respect to the sale of the Calcatreu Project and for no other reason. Thus, the data was covered by the terms of the Agreement and its use by the appellants to stake the Navidad Project was in breach of the Agreement and was also an unauthorized use of the data at common law.

[34] On appeal, Aquiline denies that the trial judge made any errors of substance in her apprehension or assessment of the evidence, and submits that any errors she made were of a minor nature which could not reasonably have affected the result. Aquiline also submits that the trial judge’s conclusions that the BLEG A data was confidential under the Agreement and at common law, and that IMA’s use of the data was in breach of both the Agreement and its common law duties, are fully supported by the evidence and the relevant authorities.

(b) Alleged Palpable and Overriding Errors

[35] IMA submits that the trial judge made palpable and overriding errors with respect to three key propositions which, it says, went to the heart of the “gift” theory which was the foundation of its defence to Aquiline’s claim. The three propositions upon which IMA relied at trial are set out at para. 49 of its factum as follows:

(i) Newmont was interested in IMA’s mineral properties in Peru and was therefore motivated to garner goodwill with IMA with a view to participating in their exploitation;

(ii) Newmont attached minimal, if any, value to the BLEG A Data (and was therefore prepared to give it away); and

(iii) Newmont considered the BLEG A Data to be unrelated to the Calcatreu Project.

[36] Although these propositions overlap to some extent, we will endeavour to address them individually as they were addressed by IMA in its submissions. In so doing, we do not propose to refer to every aspect of the evidence referred to by the parties in their submissions. The trial was lengthy, the evidence voluminous, and there is an ever-present danger of an appellate court losing sight of the “big picture” by placing discrete portions of the evidence under a microscope. We have endeavoured to keep that larger context in mind in examining the impugned evidence.

(i) Newmont’s Interest in IMA’s Peruvian Properties

[37] The trial judge addressed IMA’s submission that Newmont provided the BLEG A data to IMA in order to curry favour with IMA in relation to the latter’s properties in Peru, in part, at paras 104-107 of her reasons for judgment:

[104] ... The defendants argued that Newmont waived any restriction on its [the BLEG A data’s] 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.

[105] 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. Further, by the time of the first site visit, each of the requests by IMA for special consideration (such as exclusivity) as a bidder on Calcatreu had been refused by Newmont.

[106] IMA and Newmont had had some business connections in the past, and it was expected by Newmont that they would continue to have a good business relationship in the future without giving IMA any special consideration on the bidding or deal making on Calcatreu. Finally, both Mr. Crespo and Mr. Harvey testified that when they were asked if IMA could have the BLEG A data on its second site visit, they considered that IMA should be given free access to all data it required in performing its due diligence before bidding on Calcatreu. Each, for different reasons, believed the data, regardless of exactly which data was being asked for and given, was to be given only within the context of the Calcatreu evaluation and for no other reason. It is significant that Newmont is not only not a party to this litigation but also appears to have no interest in the outcome. I accept without hesitation the truthfulness of the evidence of both Mr. Crespo and Mr. Harvey on this point.

[107] There was no evidence, at any time, given by any witness, that a confidential data set would be “given” without consideration from one company to another without any immediate business reason. There was no issue that the cost of the development of the BLEG A data was high – in the many hundreds of thousands of dollars. It is simply not plausible on the evidence in this case to find that the BLEG A data was simply given away.

[Emphasis added.]

[38] IMA submits that neither Mr. Harvey nor Mr. Crespo testified that by the time of the first site visit by IMA, Newmont was disinterested in “doing a deal” with IMA in relation to its Peru properties. It also submits that neither of these witnesses testified that the BLEG A data would be given to IMA for “no other reason” than for due diligence in relation to the Calcatreu Project. It says the absence of such evidence, combined with the apparent weight which the trial judge attributed to the credibility of these witnesses (concerning evidence which they did not give) completely undermines her ultimate conclusion that the BLEG A data was not given to IMA as a gift. At the very least, IMA says that these errors were instrumental in the trial judge’s rejection of their “gift” theory.

[39] IMA submits that the evidence shows that Mr. Harvey was interested in IMA’s Peruvian properties at the relevant time and that there was evidence tying his interest to the release of the BLEG A data to IMA. In that respect, IMA places particular emphasis on notes made by Mr. Cuburu and/or Mr. Crespo (the evidence is not entirely clear on this point) on a “contact tracker” spreadsheet following the first site visit by IMA, in which information relating to the various prospective bidders on Calcatreu was recorded. That note states: “IMA had some properties in Peru that Newmont (from Bruce Harvey) showed interest.” IMA says that this note is important evidence which the trial judge overlooked in rejecting IMA’s “gift” theory.

[40] Aquiline agrees that the trial judge erred in stating that Mr. Harvey and Mr. Crespo gave evidence that by the time of the first site visit by IMA, Newmont had evidenced no interest in doing a deal with IMA in relation to its Peru properties. Aquiline states, however, that the error is of no consequence since it is clear that by the time of the second site visit, Newmont had specifically rejected IMA’s offer of a joint venture in relation to Calcatreu in exchange for future considerations relating to some of IMA’s Peruvian interests. Newmont had also rejected IMA’s request for exclusivity, or preference over other bidders, in relation to the Calcatreu Project. Thus, Aquiline says that the trial judge’s error in this regard is simply one of timing and that nothing of consequence turns on it.

[41] Aquiline also acknowledges that neither Mr. Harvey nor Mr. Crespo gave direct evidence that IMA’s access to the BLEG A data should be restricted to IMA performing due diligence in relation to the sale of Calcatreu. Rather, this evidence came indirectly through Mr. Cuburu. Aquiline submits, however, that that is the only reasonable conclusion which could be drawn from the evidence as a whole. For example, Aquiline refers to Mr. Cuburu’s evidence that after Mr. Lhotka requested the BLEG A data, Mr. Cuburu obtained instructions from Mr. Crespo (who, in turn, had checked with Mr. Harvey) that IMA was to be given access to the BLEG A data in the context of IMA’s due diligence in relation to Calcatreu.

[42] Aquiline also says that the trial judge referred to the fact that Newmont had a continuing interest in IMA’s Peru properties and submits that there was no evidence that Newmont’s interest was such that it was prepared to give away the BLEG A data in order to curry favour with IMA in relation to those properties in the future. Aquiline submits that no reasonable inference could be drawn from the evidence to that effect. In that regard, Aquiline emphasizes that Newmont specifically rejected an offer of IMA to link the Calcatreu Project and IMA’s Peruvian properties.

[43] In our view, the trial judge was mistaken in saying that Newmont had rejected any possibility of a deal with IMA which tied the sale of the Calcatreu Project (or the release of the BLEG A data) to an interest in IMA’s Peruvian properties prior to the first site visit. It is clear, however, that the only deal proposed by IMA in that regard (by letter forwarded to Mr. Harvey by email dated September 24, 2002) was rejected by Newmont on October 8, 2002, which was before the second site visit in late October 2002. Further, although the trial judge stated in para. 105 that “Newmont had no interest in doing a deal with IMA in relation to its Peru properties”, she made it clear in para. 106 that Newmont expected to continue to enjoy a good business relationship with IMA in the future, although, in her view, the nature of that business relationship did not involve giving IMA special consideration in relation to Calcatreu. In other words, she was not saying that Newmont had no interest in IMA’s properties in Peru, but only that Newmont was not sufficiently interested in those properties to cut a special deal with IMA in relation to the Calcatreu Project. While the trial judge did not expressly refer to the contact tracker in coming to that conclusion, we are not persuaded that she overlooked it or that it was such a critical piece of evidence that it required special mention.

[44] In our view, the fact that the contact tracker refers to Mr. Harvey’s interest in IMA’s properties in Peru, that Mr. Crespo said that he told Mr. Cuburu that Mr. Harvey had some interest in IMA’s Peruvian properties (and that Mr. Cuburu acknowledged this in cross-examination), and the other evidence to which counsel referred relating to Mr. Harvey’s general interest in IMA’s properties in Peru, cannot reasonably give rise to the inference that Newmont was prepared to give the BLEG A data to IMA as a gift in the hopes that it would be given special consideration in relation to the Peruvian properties in the future. The evidence in that regard is tenuous, at best. Further, in weighing that evidence, the trial judge was entitled to take into account the fact that the “gift” theory was never put to any of the Aquiline witnesses in cross-examination. That is, it was never put to any of these witnesses that Newmont’s desire to maintain good relations with IMA extended to offering the BLEG A data to IMA as a gift or inducement to favourable treatment in relation to Peruvian properties in the future.

[45] In summary on this point, the evidence falls far short of establishing, either directly or by inference, that at the time of the first (or second) site visit Newmont had an interest in making a deal with IMA in relation to its properties in Peru which in any way involved giving IMA any preferential treatment in relation to Calcatreu, or in sharing the BLEG A data. Rather, the evidence shows that IMA had some interest in making a deal with Newmont in relation to Calcatreu, but that shortly after the first site visit, Newmont rejected that proposal. Newmont did not make a counter-proposal, nor offer to give IMA any preference with respect to the sale of Calcatreu, or otherwise. At best, the evidence shows that Newmont and IMA had an ongoing relationship, recognized by the trial judge in her reasons, and that that relationship continued long past the events giving rise to this action. IMA’s theory that Newmont was prepared to, or did, offer IMA the BLEG A data as a gift in relation to the Peruvian properties is just that, a theory.

(ii) The Value of the BLEG A Data to Newmont

[46] IMA also sought to support its theory that Newmont gave IMA the BLEG A data as a gift for future considerations on the basis that the BLEG A data had no value to Newmont and, therefore, Newmont was prepared to give it away.

[47] IMA says it is clear that the BLEG A data had no value to Newmont because Newmont was in the process of getting out of Argentina altogether when it decided to sell Calcatreu with a view to investigating other projects in Peru and elsewhere in South America. Thus, by the time the Sacanana anomalies revealed by the BLEG A data were referred to in Mr. Worland’s report as a “medium” target, Newmont had no interest in pursuing them. IMA also relies on the fact that Mr. Crespo appeared to have little, if any, knowledge about the BLEG A data when he was marketing Calcatreu and that it was only after the sale of Calcatreu to Aquiline that he said he would have attached a separate value to the BLEG A data if he had been aware of it. Further, the BLEG A data was not referred to in the information brochure provided to prospective purchasers, or in the Agreement.

[48] IMA also placed considerable reliance on Mr. Lhotka’s evidence of a conversation he said he had with Mr. Cuburu at the first site visit. At that time, Mr. Lhotka showed interest in the map depicting sample collection sites both inside and outside Calcatreu, and in obtaining a copy of the BLEG A data. He testified that Mr. Cuburu provided him with rock sampling data from well outside the Calcatreu boundaries at that time, and that, when Mr. Lhotka cautioned Mr. Cuburu that the data wasn’t relevant to the Calcatreu Project, Mr. Cuburu replied “no importa”; that is, “it doesn’t matter”. The inference which IMA asked the trial judge to draw with respect to that conversation was that Mr. Cuburu did not regard the rock sample data from outside Calcatreu as having any importance to Newmont, and, therefore, it was reasonable for Mr. Lhotka and IMA to treat the BLEG A data which fell outside the Calcatreu boundaries as being equally unimportant. IMA submits that, if the trial judge had properly understood this evidence, it was open to her to infer that neither Mr. Cuburu nor Mr. Lhotka regarded either the rock sampling data or the BLEG A data to be of importance or of a restricted nature. IMA says that the trial judge’s failure to make a finding with respect to this evidence effectively precluded her from drawing an inference in favour of IMA.

[49] Mr. Cuburu was cross-examined by counsel for IMA with respect to this conversation with Mr. Lhotka, but counsel for IMA mistakenly referred to rock samples, rather than to rock sample data, in his questions. Mr. Cuburu did not recall any such conversation about rock samples, but said that he did have such rock samples in his office which were not important in the sense that they did not reveal anything of a confidential nature. He was not asked about rock sample data.

[50] The trial judge declined to draw the inferences from this conversation suggested by IMA. She found that there was some confusion with respect to this evidence and that it was not possible to resolve that confusion. However, she concluded that to the extent Mr. Lhotka expressed some reservations about Mr. Cuburu showing him data from outside the Calcatreu Project, this was an indication that Mr. Lhotka viewed such data as being confidential.

[51] In our view, the trial judge was justified in finding that there was an air of confusion surrounding the evidence with respect to the rock samples and rock sample data. This confusion was reflected in para. 132 of her reasons where she refers to rock samples, rather than rock sample data. The confusion arose in part from the fact that Mr. Cuburu testified prior to Mr. Lhotka and was cross-examined about rock samples before Mr. Lhotka gave evidence about rock sample data. The direct examination of Mr. Lhotka and the cross-examination of Mr. Cuburu did not correspond on this point, and the trial judge was not bound to accept the evidence of Mr. Lhotka in that regard. We are not persuaded that the trial judge’s refusal to draw an inference favourable to IMA with respect to this evidence constituted error, and certainly not error of the magnitude which could justify ordering a new trial.

[52] Nor are we persuaded that the trial judge erred in rejecting IMA’s other bases for claiming that the BLEG A data had little value to Newmont. The trial judge referred to those submissions, and gave her reasons for rejecting them, at paras. 104, 107 and 152 of her reasons:

[104] The defendants also rely on the actions of Newmont in asserting that the BLEG A data was not covered by the Confidentiality Agreement. It is pointed out that Newmont not only did not include the BLEG A data in the Information Brochure, or specifically reference it in the Confidentiality Agreement, but also assigned no value to it. As late as March of 2002 the very anomalies so obvious to Mr. Lhotka as “exciting” were presented at a Newmont meeting and noted only as “medium targets” to be followed up at a later time. Further, Mr. Crespo had no memory of the BLEG A data, although he attended the meeting, and Newmont assigned no specific value to the data when it included it in the share sale to the plaintiff. Thus, says the defendant, Newmont did not consider the data valuable, and that is why it was prepared to give IMA “free access” to it. ...

…

[152] I have found that there is evidence that Newmont placed relatively little value on the Project Generation data in general and BLEG A data in particular. However, “relatively” is the key word. There was no evidence to support the proposition that it was of no value to them as contended by the defendants. The only specific evidence of its “relative” value was that of Mr. Crespo who acknowledged that he should have obtained consideration for the Project Generation data when Calcatreu was sold – it was a mistake not to. That it was of value as proprietary information costing hundreds of thousands of dollars to develop is sufficient to find that its “relative” value does not distinguish this case from the scenario Megarry J. described in Coco [v. A.N. Clark (Engineers) Ltd., [1969] R.P.C. 41 (Ch. D.)].

[Emphasis added.]

[53] IMA referred to the hundreds of thousands of dollars of development costs linked to the BLEG A data as “sunk costs” and drew an analogy with the purchase price of a losing lottery ticket; that is, as being costs already expended and of no further value. As Aquiline pointed out, however, all development costs could be regarded as sunk costs if they have not yet resulted in the production of revenue. Further, in many cases, sunk costs give rise to winnings, as evidenced in this case by the results of the BLEG A data.

[54] In the result, we are satisfied that the trial judge’s conclusion that the BLEG A data had a value to Newmont is supported by the evidence and that she did not make any palpable and overriding error in coming to that conclusion.

(iii) The BLEG A Data’s Connection to the Calcatreu Project

[55] IMA submits that the trial judge erred in finding that the BLEG A data related to the Calcatreu Project, was requested and provided solely in relation to that project, and was thus covered by both the Agreement and the common law duty of confidentiality. IMA’s submission in this regard overlaps to some extent with its earlier submissions that Newmont regarded the BLEG A data as being of no value and that Newmont provided the data as a gift relative to future dealings with IMA’s Peruvian properties.

[56] The issue of the relationship between the BLEG A data and the Calcatreu Project was addressed by the trial judge at various points in her decision. For example, in discussing IMA’s submission with respect to the relationship between the BLEG A data and the scope of the Agreement, the trial judge stated (at para. 78 of her reasons):

The defence submits that the scope of the information intended to be covered by the Confidentiality Agreement is that “relating to the “Project” as narrowly construed.” The defendant says the Project is defined by reference to Exhibit A which is a listing of the Calcatreu claims. The defendant says that the BLEG A data is not “related to” or “concerning” the Project for five reasons:

(1) it was not referenced in the Information Brochure;

(2) it was not provided to any other bidders;

(3) it does not cover the geographic area of Calcatreu (as defined by Exhibit A);

(4) it covers an extensive area outside the “area of interest” specified in the Agreement; and,

(5) Lhotka did not review the data as part of his due diligence.

[57] With respect to the first four arguments, the trial judge noted that several experts called by each of the parties agreed that regional exploration data like the BLEG A data could be relevant when evaluating a known resource (in this case, the Calcatreu Project). In that regard, the trial judge also noted that Normandy (later Newmont) undertook the regional geochemical survey from which the BLEG A data was derived for the express purpose of potentially adding to the Calcatreu claims. The trial judge further observed, but accorded less weight to, the evidence that the experts would not have expected a seller to disclose regional exploration data that was confidential without some protection for that confidentiality.

[58] At para. 84 of her judgment, the trial judge responded directly to IMA’s submission that the BLEG A data was unrelated to the Calcatreu Project and, therefore, not covered by the Agreement:

The full answer to the defendant’s submission, however, is the evidence of Mr. Lhotka and Mr. Patterson coupled with that of Mr. Cuburu, Mr. Crespo, and Mr. Harvey. I find that each thought that the request for BLEG A data – in the circumstances – was in furtherance of IMA’s due diligence evaluation of Calcatreu.

[59] IMA says that this paragraph is contrary to the evidence of these witnesses and amounts to a palpable and overriding error. Aquiline submits that this paragraph was not intended by the trial judge to address all five points raised by IMA (set forth at para. 56, supra), and, in any event, that the evidence supports the trial judge’s conclusion. In that regard, both parties referred the Court to extracts from the evidence which, they submit, support their respective views. We will deal briefly with that evidence in relation to para. 84 of the trial judge’s reasons.

[60] With respect to Mr. Lhotka, the trial judge referred to the fact that, on discovery, Mr. Lhotka said that when Mr. Cuburu gave him the diskette with the BLEG A data on it (at the second site visit), he assumed that it was given to him for the purpose of his evaluation of Calcatreu. At trial, he initially agreed with his discovery evidence, but then qualified it by saying that he was not sure what he thought at the time. The trial judge preferred his evidence on discovery on the basis that it was taken closer in time to the events and was therefore more reliable. It was clearly open to her to come to this conclusion.

[61] Similarly, IMA submits that other evidence of Mr. Lhotka, including his evidence relating to the rock sample data, should have led the trial judge to find that Mr. Lhotka believed the BLEG A data was not relevant to the Calcatreu Project. We have already found that the trial judge reasonably declined to make a finding on his evidence in that regard because of the confusion surrounding that issue.

[62] The trial judge also relied on the evidence that Mr. Lhotka sent a memorandum to Mr. Patterson on November 20, 2002, raising a concern as to whether the BLEG A data was covered by the Agreement, as some evidence that Mr. Lhotka associated the BLEG A data with Calcatreu.

[63] In our view, Mr. Lhotka’s evidence as a whole supports the trial judge’s conclusion that Mr. Lhotka viewed the BLEG A data as a product relating to IMA’s due diligence of the Calcatreu Project.

[64] With respect to Mr. Cuburu, the trial judge rejected IMA’s submission that because Mr. Cuburu made a` point of checking with Mr. Crespo before releasing the BLEG A data to Mr. Lhotka, it followed that Mr. Cuburu did not believe the BLEG A data was related to the Calcatreu Project. At para. 87 of her reasons, she stated:

Mr. Cuburu’s evidence with regard to his intention was that he understood that the BLEG A data was to be given as part of the evaluation. There is no question that he considered that it had some kind of different status from the raw data included in the information brochure. On the other hand, he clearly felt he had to ask permission before providing it and when he was given permission, there is no indication that he thought that permission was anything other than a decision of management to include the BLEG A data to make the [Calcatreu] deal more attractive to IMA.

[65] With respect to Mr. Lhotka’s request for the BLEG A data being vetted by Mr. Crespo and Mr. Harvey, Mr. Cuburu gave evidence as follows:

Q. Did you have a follow-up call with Mr. Crespo?

A. We continued to talk with Esteban Crespo during those days after the conversation that Esteban Crespo had with Bruce Harvey. Esteban Crespo mentions to me that he had the approval from the exploration manager from Latin America – for Latin America, pardon me, from Newmont to facilitate the information that IMA deems necessary in order to assess a bid for the Calcatreu project.

He also mentioned that Mr. Harvey showed interest in establishing a good relationship with IMA in view that Newmont was showing interest in properties from this company in Peru. Mr. Esteban Crespo concludes by saying that we have to fully cooperate with IMA in order with the – that with the original available data they could then submit a bid.

[66] Similarly, when asked why he thought Mr. Lhotka (accompanied by Mr. Patterson) was interested in the BLEG A data, Mr. Cuburu stated:

A. From a point of view any supply of data may assist the consultant geologist in making a better decision or preparing a better report, any additional information request, I thought it could have as a goal to obtain sufficient tools in order to specify a concrete bid for the project.

[67] When asked whether Newmont considered the BLEG B data alone to be sufficient to enable prospective bidders to bid on Calcatreu, Mr. Cuburu replied: “It was sufficient, perhaps, for the needs of some companies and insufficient for others.”

[68] Further, while Mr. Cuburu was aware that Mr. Harvey had some interest in IMA’s properties in Peru, he connected the request for information and the response of Mr. Harvey as authorizing him to release the information for the purpose of enabling IMA to bid on the Calcatreu project.

[69] As earlier stated, the trial judge declined to find that Mr. Cuburu told Mr. Lhotka that other data from outside the Calcatreu boundaries was not important, and also declined to draw the inference that either Mr. Cuburu or Mr. Lhotka thought the BLEG A data was unimportant or unrelated to Calcatreu. Nor did the trial judge accept IMA’s submission that Mr. Cuburu was releasing the data because he thought Mr. Harvey wanted to curry favour with IMA in relation to IMA’s properties in Peru.

[70] With respect to Mr. Harvey, we have already referred to the fact that he agreed he had some interest in IMA’s properties in Peru, and that the decision was made after the May 2002 meeting to sell Calcatreu and pursue other interests outside Argentina. He also testified, however, that he would not have allowed access to Newmont data without cover of a confidentiality agreement. When specifically asked about the report of Mr. Worland of July 30, 2002, referring to the BLEG A data, he testified:

Q. There is evidence of a report prepared by Rohan Worland in connection with project generation, the regional work in Argentina. The report is dated July 30^th, 2002, and it is copied to you. Do you recall receiving a copy of such a report?

A. Yes, I do.

…

Q. All right. And in that report there are references to anomalies. Can you say how these anomalies were viewed by you in relation to other anomalies in other parts of Latin America?

A. At that time we felt those anomalies were lower priority than other targets or other anomalies we had elsewhere in South America.

Q. What, if anything, did you think would be done with the project generation information in light of the decision to sell the Calcatreu project?

A. I believe that that information would be available to people looking at Calcatreu in order to evaluate the project.

[71] Thus, there was evidence from Mr. Harvey that he drew a connection between the BLEG A data and the sale of Calcatreu.

[72] The evidence of Mr. Crespo was that he was not aware of the BLEG A data at the relevant time, and had no recollection of Mr. Cuburu asking him about the release of the BLEG A data, in particular. However, he did recall Mr. Cuburu asking about the release of data to purchasers in relation to the Calcatreu Project. In that regard, he stated:

Q. All right. And do you recall having any discussions with [Mr. Cuburu] in connection with data being requested by any of the prospective purchasers?

A. Yes, Carlos was asking me questions about data. In particular, there was a question about providing the raw data to the potential bidders.

Q. And did you advise him what he could do in respect of the raw data?

A. Yes, I advised him that he can proceed to provide the raw data to any potential bidders. The raw data being nothing more than the unprocessed data that had been used for the preparation of Nick Green’s report for the property in addition to other information that – unprocessed information that might be of use to certain parties.

[73] In relation to the earlier related issues concerning Newmont’s interest in IMA’s Peruvian properties and the suggestion that Newmont was interested in currying favour with IMA in relation to the Calcatreu Project or the BLEG A data, Mr. Crespo testified that Newmont had rejected IMA’s requests for exclusivity and for a joint venture in the project.

[74] In our view, Mr. Crespo’s evidence was consistent with the trial judge’s finding that he regarded requests from prospective purchasers for raw data in relation to the sale of Calcatreu to be requests related to the sale.

[75] While the trial judge was satisfied that Mr. Patterson, too, recognized that the BLEG A data was connected to the Calcatreu Project in terms of its confidential nature, this was clearly an inference she drew from the evidence and the circumstances surrounding the disclosure of the data. In that regard, Mr. Patterson testified that he did not regard the data from outside the Calcatreu area to be relevant to the evaluation of Calcatreu. Having said that, he acknowledged that the only reason he attended the second site meeting was in relation to IMA making a prospective bid on Calcatreu, that he was there when the BLEG A data was requested, and that he did not question the relevance of that request, suggest that the data was irrelevant, or say anything at that time to indicate that he regarded the data as being different, in kind, from the other data that had been requested. He also testified that when he later received the memorandum from Mr. Lhotka effectively raising a question as to the use of the BLEG A data, he did not respond. He said that he did not regard data collected outside a two kilometre radius of Calcatreu to be “an important concern”, but he offered no explanation for failing to respond to Mr. Lhotka’s query, when it was obvious that Mr. Lhotka did regard it as a matter of concern.

[76] Given IMA’s admission that the BLEG A data was confidential (at least in the sense of belonging to Newmont and not being available to the public at large), the evidence of the experts as to the relevance of regional data in evaluating a project, the evidence of the other witnesses to whom the trial judge referred that the BLEG A data was offered and received in the context of the Calcatreu Project, and Mr. Patterson’s own evidence that he received the data in relation to that project (even if he, personally, did not regard the data as relevant to an evaluation of Calcatreu), we find no error in the trial judge’s conclusion that Mr. Patterson was aware that the BLEG A data was obtained “in furtherance of IMA’s due diligence evaluation of Calcatreu.”

[77] This conclusion is reinforced by the trial judge at para. 142 of her reasons where she states that the only reasonable inference from the words and actions of Mr. Lhotka and Mr. Patterson at the time Mr. Lhotka asked for the BLEG A data was that they were aware they were obtaining the data for the purpose of evaluating Calcatreu and that it was being provided on that basis. She notes that the witnesses at times “skated away from this acknowledgment” but that “it is the evidence I accept as the most probable true reflection of what each thought when they asked for and obtained the BLEG A data.”

[78] In responding to these grounds of appeal, we note that the trial judge’s reasons are lengthy and replete with references to the evidence of these and other witnesses. It is difficult to do justice to the trial judge’s reasons by taking only bits and pieces of the evidence and examining them out of their full context. Suffice it to say that, while the trial judge made errors in certain aspects of her recitation of the facts, we are not persuaded that those errors, either individually, or cumulatively, cast doubt on her conclusion that the BLEG A data was provided and received as part of IMA’s due diligence in relation to the sale of the Calcatreu Project, and that this was understood by the parties at the relevant times.

[79] In summary with respect to these grounds of appeal, we are not persuaded that the trial judge made any palpable or overriding errors which could have affected the result.

(c) The Interpretation and Application of the Agreement

[80] The trial judge found that the BLEG A data was covered by the Agreement. Counsel for IMA acknowledged during the course of the appeal that if he could not succeed on one or more of the points he raised in his first ground of appeal, he could not succeed in establishing that the trial judge erred in her conclusion that the BLEG A data was covered by the Agreement. For that reason, we do not find it necessary to engage in an analysis of the trial judge’s interpretation of the Agreement. Suffice it to say that we are satisfied that she was correct in finding that the BLEG A data was covered by the Agreement, even though it was not expressly referred to in the Agreement.

(d) Breach of Confidence at Common Law

[81] Because we have concluded that the trial judge did not err in finding that the BLEG A data was covered by the Agreement, it is not necessary to resolve the issue of whether she erred in finding that IMA had breached its duty of confidentiality owed to Newmont at common law. We note that IMA’s submissions in this regard also turn, to a significant extent, on its submissions with respect to the first ground of appeal – submissions which we have rejected.

[82] The entirety of IMA’s submission in relation to this issue is set out at paras. 108 to 114 of its factum, as follows:

108. An action for breach of confidence lies where information having a confidential quality is imparted in confidence, then used in an unauthorized manner to the detriment of the confider.

109. It was and is not disputed that the BLEG A Data had, prima facie, a confidential quality. It was “private” to Minera and Newmont. It was not “public property and public knowledge”.

110. It is less clear that the BLEG A Data was communicated in confidence, in the sense that it was obvious that it “was intended to be kept confidential” by IMA. Nothing was said about confidentiality at the time of its release. Moreover, Cuburu had indicated that he considered it “no impuerta” [sic] that he was supplying IMA with regional exploration data unrelated to the Calcatreu Project.

111. What is certain, however, is that IMA did not make unauthorized use of the BLEG A Data to Minera’s detriment. As set out above, the BLEG A Data was irrelevant, and considered by Newmont to be irrelevant, to an evaluation of the Calcatreu Project. Newmont caused Minera to provide it to IMA because Newmont wanted to garner goodwill with IMA with a view to participating in one or more of IMA’s projects in Peru. While IMA may have been able to do more with the BLEG A Data than Newmont expected, IMA’s use of Newmont’s hand-me-down-data to stake the Navidad Project was exactly the type of goodwill-generating use Newmont had in mind.

112. Furthermore, even if IMA’s use of the BLEG A Data was unauthorized, there was no detriment to Minera attendant with that use. In May 2002, Newmont, which then controlled Minera, decided to sell Minera’s sole mineral asset, to terminate Project Generation and to withdraw entirely from Argentina. At that stage, Newmont had specifically rejected exploration and staking of the Sacanana silver anomalies identified in the BLEG A Data by Minera.

113. On 6 December 2002, when IMA used the BLEG A Data to stake the Navidad Project, Newmont’s decision was still in effect. While Crespo was now contemplating the sale of Minera to Aquiline, there was no definitive agreement, and no one involved in the sale knew or cared about the BLEG A Data. It was not until 28 January 2003 that Aquiline actually agreed to purchase Minera, and not until May 2003 that Minera, as a result of Aquiline’s purchase, contemplated exploiting the BLEG A Data to stake the Navidad Project. In other words, there was no detriment to Minera, either actual or foreseeable, until some six months after IMA’s use of the BLEG A Data to stake the Navidad Project.

114. It follows that the trial judge erred in concluding in the alternative that IMA breached a common law duty of confidence by using the BLEG A Data as it did.

[References omitted.]

[83] The trial judge’s findings of fact, and the inferences she drew from those facts, do not support IMA’s submissions in relation to this ground of appeal. As earlier stated, we are not persuaded that the trial judge made palpable and overriding errors in her findings of the facts relevant to this ground of appeal. She found that the BLEG A data was confidential, that it related to and was provided for the sole purpose of IMA’s evaluation of the Calcatreu Project, and that its use by IMA to stake the Navidad Project was unauthorized. Further, she rejected IMA’s submission that the BLEG A data was of no value to Newmont and IMA’s theory that the data was provided by Newmont to curry favour with IMA in relation to IMA’s interests in Peru.

[84] It is apparent from the remedy awarded by the trial judge that she was satisfied that Aquiline suffered a detriment as a result of IMA’s unlawful use of the BLEG A data to stake the Navidad Project. In that regard, she found that, but for the staking of the Navidad Project by Inversiones on behalf of IMA, Aquiline would have staked the project based on the BLEG A data. In our view, IMA’s submission that Aquiline suffered no detriment in these circumstances is without merit.

[85] Given the fact that the trial judge found that Aquiline suffered a detriment as a result of IMA’s unauthorized use of the BLEG A data, we do not find it necessary to analyze the question of whether detriment is a necessary element of an action founded in breach of confidence. We note that the law with respect to this question does not appear to be entirely settled.

[86] The question of detriment also arises in the context of the appropriate remedy, to which we now turn.

2. Remedy

(a) Position of the Parties

[87] The appellants take the position that damages are the only appropriate remedy for the breach of the Agreement and the common law breach of confidence. They challenge the remedy of a constructive trust and mandatory injunction on two grounds:

(a) The principles of comity, order and fairness prevalent in modern private international law foreclosed an order respecting a foreign immovable – the mineral claims. They challenge the in personam exception to the rule that courts do not have jurisdiction over foreign immovables on the ground that it is an historic anachronism and contrary to the trend in private international law. They cite academic criticisms of the in personam rule in support of this argument.

(b) The contractual “flavour” and de minimus nature of the breach of confidence leads to the conclusion that damages are the only appropriate remedy. For the “flavour” argument, the appellants cite Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 at para. 26, where Binnie J. said that the underlying nature of the claim – tort, contract, property or trust – will influence the choice of remedy in a breach of confidence claim. The appellants say that their relationship with Aquiline was contractual, and damages are the only appropriate remedy for breach of contract. They note that common law principles of remoteness, foreseeability, causation and intervening cause are relevant in assessing equitable compensation (citing Waxman v. Waxman, (2004), 186 O.A.C. 201, [2004] O.J. No. 1765 at paras. 659-662), and that at common law, damages are limited to the losses that were “in the reasonable contemplation of the parties at the time the contract was made” (Fidler v. Sun Life Assurance Co. of Canada, [2006] 2 S.C.R. 3 at para. 44; Hadley v. Baxendale (1854), [1843-60] All E.R. 461 at 465). Because neither of the parties contemplated that the use of the BLEG A data would cause any loss to Minera when they entered into the Agreement or IMA staked the claims, the appellants say that the contemplated loss, if any, was nominal. The appellants say further that the difficulty of quantifying damages does not preclude the necessity to do so, and offer several alternative methods for assessing damages, using a “flexible and imaginative approach” (Cadbury, at para. 99).

[88] Aquiline’s position is that the trial judge had the jurisdiction, and correctly exercised her discretion, in rejecting damages as the appropriate remedy, and ordering a constructive trust of the Navidad Claims and a mandatory injunction. Aquiline argues:

(a) The court’s in personam jurisdiction to order a proprietary remedy in respect of foreign lands has existed in the law for 250 years, was adopted by the Supreme Court of Canada in Duke v. Andler, [1932] S.C.R. 734 , and has recently been confirmed by this Court in Mountain West Resources Ltd. v. Fitzgerald, 2002 BCCA 545 at para. 11. Aquiline notes that recent jurisprudence has called for the expansion, not the restriction, of the jurisdiction of Canadian courts in matters of private international law to reflect the “globalization of commerce and the mobility of both people and assets”: see Pro Swing Inc. v. Elta Golf Inc., [2006] 2 S.C.R. 612, 2006 SCC 52 at paras. 1, 78-79.

(b) The “flavour” approach to the choice of remedy, suggested by the appellants, is inconsistent with the reasoning in Cadbury, which rejected a narrow doctrinal categorization in favour of a broad consideration of all of the equities (Cadbury, paras. 24, 48, 61). Aquiline also rejects the characterization of this case as one of contract. Aquiline takes the position that the “flavour” of this case is breach of confidence, which imports the consideration of the range of equitable remedies considered in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, and Cadbury. Aquiline argues that this case is on all fours with Lac, and the constructive trust ordered by the trial judge was the most appropriate remedy.

(b) In Personam Jurisdiction

[89] Aquiline’s argument that the court’s in personam jurisdiction is well established in Canadian law and was properly exercised by the trial judge is a complete response to the appellants’ position. The authorities cited by Aquiline for the in personam exception to the rule that the court will not make orders affecting property interests in foreign lands are precedents binding on this Court.

[90] Aquiline notes further that Professor Adrian Briggs, the academic quoted by the appellants as criticizing the in personam exception, has acknowledged the distinction between an in rem and in personam remedy in respect of foreign land. In The Conflict of Laws, (Oxford: Oxford University Press, 2002) at 63-64, Professor Briggs notes:

…the common law drew a similar jurisdictional distinction between determining legal title to foreign land (which it had no power to do) and enforcing a contract or other equity between the parties, albeit in the context of a land dispute (which it had).

[91] Aquiline also notes that the academics who have criticized the categorization of claims to equitable interests in foreign land as in rem and in personam remedies have favoured the expansion of the court’s jurisdiction to grant in rem relief, and not the elimination of the in personam exception: see Stephen Lee, “Title to Foreign Real Property in Transnational Money Claims” (1995), 32 Colum J. Transnat’l Law 607 at 610; Janeen M. Carruthers, The Transfer of Property in the Conflict of Laws, (Oxford: Oxford University Press, 2005) at 42-56.

[92] This academic opinion is consistent with the general trend of private international law. The Supreme Court of Canada has recognized that the law has evolved to allow courts to deal with disputes arising in an increasingly interdependent global economy. In its recent jurisprudence, the Supreme Court has reasoned that, in the proper case, the limits of the courts’ jurisdiction should be expanded, not narrowed. In Pro Swing Inc. (at paras. 78-79), McLachlin C.J.C. (in dissent, but not on this issue) referred to Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 at 1098, Hunt v. T&N plc, [1993] 4 S.C.R. 289 at 321-322, and Beals v. Saldanha, [2003] 3 S.C.R. 416 at para. 27, for the rationale for extending the limits of the court’s jurisdiction to enforce foreign non-monetary judgments. She commented that comity, order and fairness do not exclude the courts from enforcing foreign non-monetary judgments, and in the context of modern private international law, may require it. The majority of the Court in Pro Swing Inc. concluded that was not the right case to extend the jurisdiction, but all of the justices agreed that the “time is ripe to review the traditional common law rule” (para. 15) in light of changing global commercial realities.

[93] In this case, the trial judge’s order is enforceable in British Columbia against the appellants, who are British Columbia resident corporations. They will be required to carry out a transfer of the Navidad claims in Argentina under local law, but the courts of Argentina will not be involved. The appellants have not suggested there is any obstacle to carrying out the transfer.

[94] We would not accede to this ground of appeal.

(c) Are Damages the Appropriate Remedy?

[95] The appellants’ reliance on Cadbury in support of their position that the choice of remedy for the breach of confidence must arise from the characterization of the breach as a breach of contract is misplaced. It is, as Aquiline points out, inconsistent with the reasoning in that case.

[96] In discussing the “flavour” of the dispute, Binnie J. was referring to the relevance of the underlying policy objectives of various causes of action, and cautioning that a “Chancellor’s foot” approach to the choice of remedy should be avoided (at para. 26). The “flavour” of the underlying obligation is one of the factors the court should consider in determining the appropriate remedy on the facts of the particular case, but it does not narrow the court’s jurisdiction to consider the range of remedies. This is clear from the discussion of the result of Lac (at para. 24):

The result of Lac Minerals is to confirm jurisdiction in the courts in a breach of confidence action to grant a remedy dictated by the facts of the case rather than strict jurisdictional or doctrinal considerations.

[97] Justice Binnie, for the Court, quoted (at para. 25) with approval from Aquaculture Corp. v. New Zealand Green Mussel Co., [1990] 3 N.Z.L.R. 299 (C.A.) at 301:

Whether the obligation of confidence in a case of the present kind should be classified as purely an equitable one is debatable, but we do not think that the question matters for any purpose material to this appeal. For all purposes now material, equity and common law are mingled or merged. The practicality of the matter is that in the circumstances of the dealings between the parties the law imposes a duty of confidence. For its breach a full range of remedies should be available as appropriate, no matter whether they originated in common law, equity, or statute. [Emphasis added.] [By Binnie J.]

[98] Justice Binnie expressly rejected approaching the choice of remedy by attaching a label (at para. 48):

It would be contrary to the authorities in this Court already mentioned to allow the choice of remedy to be driven by a label (“property”) rather than a case-by-case balancing of the equities….In other cases, as in Lac Minerals, the key to the remedy will not be the “property” status of the confidence but the course of events that would likely have occurred “but for” the breach. Application of the label “property” in this context would add nothing except confusion to the task of weighing the policy objectives furthered by a particular remedy and the particular facts of each case.

[99] Thus the remedy should be the one that is most appropriate on the facts of the case, bearing in mind that in choosing the “appropriate relief from the full gamut of available remedies”, “[t]he objective in a breach of confidence case is to put the confider in as good as position as it would have been in but for the breach” (Cadbury, at para. 61).

[100] In Lac and Cadbury, the appropriate remedy was considered in the context of a breach of confidence. That is the appropriate consideration in this case, and the reasoning in Lac that led the Supreme Court to order a constructive trust of the mineral claims in favour of the plaintiff is apt here as well.

[101] The factual parallels between Lac and this case are apparent.

[102] In Lac, the confidential information was geological findings and a geologist’s theory of the nature of mineralization of the site of gold claims, known as the “Williams” property. Here, the confidential information was the BLEG A samples and the map showing the mineralization of surrounding properties. Lac used the information to acquire the Williams property. Here, the trial judge found (at para. 296) that IMA used the confidential information to acquire the Navidad claims. In Lac, the Court found that the plaintiff, International Corona Resources Ltd., would otherwise have acquired the Williams property, and Lac acted to Corona’s detriment when it used the confidential information to acquire it. In this case, the trial judge found that Aquiline would have staked the Navidad claims had IMA not done so first (at para. 297). In staking the Navidad claims first, IMA clearly acted to Aquiline’s detriment.

[103] In determining that the appropriate remedy in Lac was a constructive trust over the Williams property, La Forest J., for the majority, said (at 668-669):

The appropriate remedy in this case cannot be divorced from the findings of fact made by the courts below. As I indicated earlier, there is no doubt in my mind that but for the actions of Lac in misusing confidential information and thereby acquiring the Williams property, that property would have been acquired by Corona. That finding is fundamental to the determination of the appropriate remedy….

The issue then is this. If it is established that one party, (here Lac), has been enriched by the acquisition of an asset, the Williams property, that would have, but for the actions of that party been acquired by the plaintiff (here Corona), and if the acquisition of that asset amounts to a breach of duty to the plaintiff, here either a breach of fiduciary obligation or a breach of confidence, what remedy is available to the party deprived of the benefit? In my view, the constructive trust is one available remedy, and in this case it is the only appropriate remedy.

[104] The constructive trust was ordered as a restitutionary remedy for unjust enrichment. Justice La Forest rejected other remedies as not providing adequate compensation, including an injunction preventing the further use of the confidential information, and an account of profits, which he found did not measure the defendant’s gain at the plaintiff’s expense (at 671).

[105] Justice La Forest rejected damages as the appropriate remedy on the basis that they could not be adequately assessed (at 672), and also on policy grounds. If on a breach of confidence a defendant could pay for the asset, that would not provide a deterrent for the breach and therefore would not protect the social values of bargaining in good faith and maintaining relationships of trust and confidence (at 672-673). Significantly, the Williams property was “unique and rare” (see 675 and 679), as are the Navidad claims – described by appellants’ counsel as one of the largest undeveloped silver deposits in the world. The uniqueness of the Williams property meant not only that assessing its value was virtually impossible (see 679), but also lent support to the appropriateness of ordering a constructive trust in favour of Corona.

[106] In concluding that damages were not an appropriate remedy, La Forest J. said (at 675):

To award only a monetary remedy in such circumstances when an alternative remedy is both available and appropriate would in my view be unfair and unjust.

[107] The facts and reasoning in Lac are equally applicable in this case. As we have already said, the appellants’ argument that Aquiline suffered no detriment because it attached no specific value to the BLEG A data has no merit. Their suggestions for assessing damages do not reflect the uniqueness they ascribe to the Navidad claims. Confining the choice of remedies to those available in a breach of contract claim is inconsistent with the law, as set out in Cadbury and Lac.

[108] In summary, the trial judge correctly exercised her discretion, in accordance with the facts of this case and the applicable law, in ordering that the Navidad claims be held in a constructive trust and transferred by Inversiones to Aquiline.

[109] In light of this conclusion, it is not necessary to consider Aquiline’s cross-appeal.

CONCLUSION

[110] The trial judge made no palpable or overriding error in her assessment of the evidence, and did not err in finding that IMA had breached the Agreement and its common law duty of confidentiality. Nor did she err in concluding that a constructive trust and mandatory injunction to transfer the Navidad claims was the appropriate remedy in this case.

[111] We would dismiss the appeal.

“The Honourable Madam Justice Prowse”

“The Honourable Madam Justice Levine”

“The Honourable Mr. Justice Thackray”

Citation:	*Minera Aquiline Argentina SA v. IMA Exploration Inc.,*
	2007 BCCA 319