Grow-op deal goes sour

A man who ran a cannabis grow operation on a North Okanagan property for almost a decade has no claim to the property the grow-op was located on, after his business relationship with his partner deteriorated.

In early 2009, Stanley McLeod and Donald Tulloch entered into an agreement whereby Tulloch would purchase land and McLeod would build a facility on it and run a cannabis grow op.

Tulloch bought property at 5353 Deep Creek Road in Enderby for $735,000 in 2009, and over the next several months, McLeod built a 6,000 square-foot commercial building on it, and began illegally growing cannabis inside.

Tulloch says they agreed McLeod would get 100 per cent of the grow-op's profits until he recuperated the costs of construction, and then Tulloch would receive 15 per cent of the sales.

The grow operation was raided by the RCMP in 2011, which caused Tulloch to have a “change of heart” and he “no longer wished to be involved in an illegal marijuana grow facility, at least from an operations standpoint.”

“After the bust, I told McLeod that I knew he had been repaid more than his cost of constructing the facility, and that I didn’t want to be involved in the illegal production of cannabis,” Tulloch told the court. “He was shaken by the bust, and wanted to avoid attracting the attention of the RCMP, so he shut down the operation.”

But in McLeod's notice of civil claim, in which he refers to their “agricultural business," McLeod says he “continued to operate the business within the commercial building on his own continuously until late 2017.”

Following the bust, McLeod agreed to pay Tulloch $6,250 per month for the use of the property, along with electricity payments.

In 2017, Tulloch decided to “extricate himself from the business altogether.” After McLeod made Tulloch an offer for the property “well below the value indicated in the appraisal,” Tulloch changed the locks on the property, barring McLeod from entering. Tulloch also claims McLeod had stopped making rental payments by this time.

Last March, McLeod filed a civil claim against Tulloch, claiming he was entitled to a portion of the property after he has invested a significant amount of money into it.

Because of the illegal nature of the business, the exact arrangement between the two men was not documented, and their versions of the terms of their agreement differed.

McLeod said he was responsible for the construction of the building, which he claims cost $850,000, along with an additional $400,000 in investment from 2011 to 2017, and that Tulloch's property has been “unjustly enriched” through the construction of the commercial building. Tulloch, meanwhile, claims the building only cost $325,000 to build, and he says McLeod made about $1.7 million selling the illegal cannabis prior to the RCMP bust in 2011. 

Last week, Justice Steven Wilson ruled the credibility of McLeod's evidence in the matter was “problematic,” and he agreed with Tulloch that McLeod was repaid the construction costs out of the business' revenues.

“The plaintiff has not established that he suffered any deprivation, and consequently the claim for unjust enrichment must fail,” Justice Wilson said.

As such, Justice Wilson determined McLeod has no claim to the property. It appears no criminal charges were laid against Tulloch or McLeod following the 2011 RCMP raid on the property.

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