Secret apple tree kickbacks and unpaid bills: How an orchard partnership unravelled
Shane Magee | CBC News | Posted: April 12, 2023 6:55 PM | Last Updated: April 12, 2023
Amarjeet Singh Jatana's company ordered to pay more than $200,000
A New Brunswick company is owed thousands after a partnership to build an apple orchard near Moncton collapsed over missed deadlines, unpaid bills and a secret kickback scheme, a judge has ruled.
Court of King's Bench Justice Jean-Paul Ouellette's decision says Canadian National Growers Inc. owes Irishview Estate Ltd. more than $200,000.
The companies formed a joint venture to build an orchard in Irishtown, north of Moncton, that fell apart in 2017 when various problems arose with Canadian National Growers, including a kickback of 50 cents per apple tree.
"As for the kickback scheme, which is a bribe, the law views this as a serious civil wrong and, as agreed by both counsel, ended all possibilities for this joint venture to move forward," Ouellette wrote in a 51-page decision issued March 31.
It's the latest setback for Canadian National Growers president and CEO Amarjeet Singh Jatana. The Department of Social Development revoked licences in January for two special care homes in northern New Brunswick operated by Jatana. He — or companies he is a director of — are the subject of other court cases claiming unpaid bills.
The Ouellette decision is only about the Irishtown orchard.
Irishview Estate bought 287 acres on the Irishtown Road, north of Moncton, in 2014. Jatana approached Réginald Petitpas, president of Irishview Estate, proposing an apple orchard on the land in 2016.
An agreement was signed in April 2017 that called for Jatana's company to plant 80 acres of high-density orchard that year using a trellis system, and 70 more by May 2018.
Problems arise
The decision says problems soon cropped up. Jatana's firm lacked necessary equipment and personnel. Borrowed equipment was damaged or lost. Jatana's credit rating prevented him from leasing required equipment. Suppliers were not being paid. The decision says 10,000 to 20,000 of the 75,000 trees weren't the right apple varieties.
As the problems unfolded, Irishview contacted and visited Jatana's tree supplier in Ontario, Upper Canada Growers Ltd.
Irishview discovered that what Jatana's company claimed it was paying per tree was inflated. Irishview was told the trees cost $9 to $13, but the supplier revealed it was actually charging $4.38 per tree. The figures factored into how much Irishview had agreed to pay Canadian National Growers.
Kickbacks a 'shocking surprise'
The decision also outlines Petitpas making "another shocking surprise" that Jatana was getting a kickback of 50 cents per tree. Payments totalling $75,000 were made with e-transfers to Jatana, the decision states.
Jatana did not file an affidavit to deny the existence of the kickbacks. The decision says Jatana claimed to be unavailable for medical reasons, but no medical evidence was given to back up that claim.
While Irishview Estate was needlessly subsidizing Canadian National Growers' portion of the joint venture, Ouellette wrote, "Mr. Jatana was secretly pocketing a kickback for the trees purchased."
The decision says Canadian National Growers owed its tree supplier more than $500,000, which put the Ontario company on the verge of bankruptcy.
The decision says Jatana threatened not to pay the supplier if it didn't retract what it told Irishview about the kickbacks. It did and was paid, but company officials went on to outline what happened in court filings.
The case began with Jatana's company suing Irishview for allegedly breaching their agreement. The company countersued, and the judge ultimately ruled in Irishview's favour.
Stephen Doucet, a lawyer who represented Canadian National Growers, declined to comment last week.
Robert Basque, the lawyer who represented Irishview, said his clients were happy with the outcome.
"The judge's decision allows them to get on with business," he said.
Jatana's company is also being sued by investors in an apple orchard project in Sainte-Anne-de-Kent and has disputed the allegations in that case.
A case in Prince Edward Island against Jatana and a business associate ended with a judge ordering them to pay $101,162 to a plaintiff who said money invested in an apple orchard business wasn't used for the intended purposes.
Jatana was praised by Premier Blaine Higgs as a model for New Brunswick economic development. Higgs tweeted photos of him with Jatana 2019 when he donated apples to a food bank.
Several lawsuits have been filed by companies alleging Jatana failed to pay bills related to two special care homes in Neguac.
Current and former employees told CBC that bills for food, waste services and electricity went unpaid in the months before the province revoked the licenses for the facilities.