A legal dispute between three brothers regarding a plant nursery in Surrey worth roughly $4.4 million has been settled, though the results appear to favour no one. The family has ties to Prince George.
The dispute was over the legal and beneficial ownership of a 13-acre farm property in Surrey, pitting brother against brother, with plaintiffs, Kulbir Chohan, born 1960, and Kulwant Chohan, born 1962, who passed away June 2020, against their older brother, Sukhdev Chohan, born 1949.
In February 1986, the three brothers purchased a nursery property from their uncle, Joginder Hayer, for $210,000. With skyrocketing real estate prices in the Lower Mainland, it's now worth an estimated $4.4 million.
The plaintiffs asserted that around the time of the nursery purchase, the three brothers entered into a financial 'pooling agreement' as follows:
"Kulwant and Kulbir would purchase the nursery property using their own funds. All three Chohan brothers would be registered on title of the nursery property, and all of the Chohan brothers would share in any benefits derived from the nursery property,"
And:
"Sukhdev would purchase investment properties in Prince George, with approximately equal value to the Nursery Property. All three Chohan brothers would share equally in ownership of these properties, and any benefits derived from them."
Justice David Crerar said the plaintiffs to establish the facts and terms of the alleged pooling agreement, and noted all three Chohan brothers had been registered to the nursery property title.
"The brothers and their family exhibited a joint family enterprise in the acquisition and operation of the nursery property, home, and nursery business, as a means of providing shelter and economic support for all three generations of the Chohan family," wrote Crerar.
"Personal and business expenses were fluid, as were transfers and contributions among family members: the focus was on the collective good, with no concept, even if it were possible given the family’s inconsistent documentation and cash-based business, that there would be a future accounting based on specific contributions of individual family members," he added.
The ruling also notes that Kulwant and Kulbir did provide the funds to purchase the nursery property, directly and through a mortgage, which included Sukhdev as mortgagor, mostly repaid by 1992.
In 1988, Sukhdev acquired an interest in several Prince George properties, purchasing them through a company, PG Ltd., two-thirds of which was owned by the Chohan brothers’ cousin-in-law, Sarwan Power.
Kulwant and Kulbir told court they asserted an interest in the Prince George properties in 2014, after Power’s death, with Kulbir claiming Sukhdev agreed to formalize their interest, while Sukhdev claimed he told his brothers they had no interest in the Prince George properties as they had contributed no money.
Two bare trust agreements were drafted in 2017, which the court ruling said "were both inconsistent with the pooling agreement and inconsistent with each other".
In May 2017, Sukhdev sold his shares in PG Ltd. to Power’s children. He also transferred half of his one-third interest in the nursery property to his wife, without notice to his younger brothers.
In December 2017, Kulwant and Kulbir withdrew $1.33 million from a joint line of credit that they shared with Sukhdev. Those funds were not returned for 15 months, and loaned to a cousin, according to the ruling.
River Nursery 2018 Ltd. was also incorporated by the two younger brothers to operate the plant nursery, excluding Sukhdev from the business.
The family schism sparked several legal proceedings, and in July 2021, Kulbir and Kulwant’s estate were ordered by the courts to transfer one third of the shares in River Nursery 2018 Ltd. to Sukhdev, who was given the same rights as a shareholder that he had in the original family nursery business.
The ruling further noted that a counterclaim launched by Sukhdev seeking damages for being ousted from the nursery business has been dismissed, along with the younger brothers' claim.
"Neither side has been successful: both the claim and the counterclaim have been dismissed. The Chohan family’s six years of costly and acrimonious litigation have been for nothing. Presumptively, each side shall bear its own costs," wrote Crerar.
