Businessman cleared in purchase of stolen nickel from Thompson mine

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This article was published 02/02/2024 (951 days ago), so information in it may no longer be current.

A court has ruled a Winnipeg businessman, who was sued by the Thompson nickel mine for $3.4 million after accepting goods stolen from its property, is not personally liable.

Court of King’s Bench Justice Shauna McCarthy ruled in a Jan. 26 decision that Adam Chisick, vice-president of Urbanmine, isn’t on the hook.

He had bought the nickel from Schwartz Brothers Construction on behalf of Urbanmine Inc. and then sold it.

Winnipeg metal recycling company Urbanmine Inc. was ordered to pay restitution of $3.6 million in March 2021, after it bought more than 220,000 kilograms of nickel that had been stolen from Vale Canada Ltd.’s mining compound in Thompson.

In August 2020, McCarthy ruled that Urbanmine was liable for the loss incurred by Vale Canada Ltd.. In March 2021, she determined the stolen nickel was worth $3.6 million.

Urbanmine had argued it did not know the nickel was stolen when it bought the property from Schwartz Brothers over a period of one year, ending in May 2013.

Michael Schwartz and Grant Schwartz, owners of the construction company, and several employees had pleaded guilty in connection to the thefts. Michael Schwartz admitted the property was stolen and sold on his instructions.

Defence lawyers argued that Chisick did not personally possess or sell the nickel, but did so as an employee of Urbanmine, which is the legal entity that profited from the sale.

Chisick’s parents owned and controlled the family business.

“There is no question that he was given authority to make decisions on day-to-day transactions and that he made the decisions in that role to negotiate the purchase and sale of the Vale nickel on behalf of the company,” wrote McCarthy in her Jan. 26 decision.

“There is no evidence, however, that he was the directing mind behind the corporate operation or that he was using the corporation as a sham for his own illegal conduct or personal gain.”

The judge wrote that in order to be found personally liable he would have needed to have personally benefited from the sale, or known the nickel was stolen and engaged in conduct he knew would deprive Vale of its nickel.

McCarthy accepted that Chisick was lied to by Michael Schwartz about where the nickel had come from and who rightfully owned it, writing that she found his testimony credible and reliable.

Chisick testified he believed he was dealing with Mike Smith, a representative of the Schwartz Brothers, rather than Michael Schwartz himself.

He testified the story he was given “checked out” with his experience in purchasing scrap metal, and believed the Schwartz Brothers had received the nickel as payment for a contract.

Chisick also testified he was shocked when Michael Schwartz advised him the nickel had been stolen from Vale.

“I find that there was no evidence which established that Chisick was doing anything other than doing his job as he normally did and acting in compliance with the policies and expectations of his employer,” McCarthy wrote.

“While I accept that the evidence suggests that as the vice-president of marketing he made only cursory inquiries into the origin of the nickel, there was no evidence led that suggests that was out of the ordinary and that he had knowledge of or suspected that the nickel was stolen.”

Vale’s lawyers had argued, in part, that after the finding against Urbanmine, Chisick should have been held equally liable.

Court was told Schwartz Brothers had a contract with Vale that allowed it open access to the property.

Urbanmine paid nearly $2.5 million for the stolen nickel, which it then resold to ELG Metals Inc. and EOS Metals for $3.4 million.

Urbanmine had argued the nickel should be valued at what the company paid for it, while the judge ruled the true value was in excess of what ELG Metals and EOS Metals paid for it.

McCarthy’s 2021 judgment included interest from the date Vale filed its lawsuit against Urbanmine in 2013.

erik.pindera@freepress.mb.ca