Company that bought nickel stolen from Vale in 2013 found liable for resulting financial losses

Schwartz Bros. Construction owners and employees who stole metal also ruled liable for the value of nearly 500,000 pounds of nickel

A Manitoba judge awarded Vale Canada Ltd. a summary judgment in their lawsuit against a company that bought nickel stolen from the Manitoba Operations property in 2012 and 2013.

Default judgements were also awarded against several defendants associated with Schwartz Bros. Construction Ltd., who participated in stealing 483,396 pounds of nickel from the company’s operations in Thompson.

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Urbanmine Inc. admitted purchasing the nickel from Michael Schwartz and/or Schwartz Bros  for nearly $2.5 million between July 2012 and May 2013, when Vale discovered the theft, and reselling it to ELG Metals Inc. and EOS Metals for about $3.4 million during the same timeframe, though the company says it was unaware that the nickel was stolen at the time. 

Under the law, purchasing and selling another’s property is a damage to the rightful owner regardless of whether the the subsequent purchaser and/or seller was aware that it legally belonged to someone else. 

Urbanmine argued that the lawsuit needed to go to trial because Vale had failed to mitigate losses by not having its nickel stored securely and failing to properly monitor their premises and inventory. The judge rejected this argument and the need for a trial however, as mitigation only applies once a civil wrong has been discovered and the fact of whether Vale was negligent in preventing the thefts does not affect the amount lost as a result of them.

“The plaintiff reported the thefts to the police as soon as they became known to them," wrote Manitoba Court of Queen’s Bench Justice Shauna McCarthy in her Aug. 27 decision, referring to a May 2013 theft of 16,000 pounds of nickel, which led to criminal charges being laid against owners and employees of Schwartz Bros., several of whom later pled guilty to committing the thefts and were ordered to pay varying amounts of restitution to Vale. “By then, the nickel was gone and there was nothing further the plaintiff could have done to mitigate their loss. Urbanmine will therefore be responsible for the full extent of the plaintiff’s losses.”

The exact amount of these losses will be determined following Urbanmine and Vale providing submissions detailing the how they calculate the damages.

The defendants associated with Schwartz Bros. affected by this judgement never filed statements of defence against Vale’s lawsuit, which was filed in September 2013, and were noted to be in default about a year later. Because they took no steps regarding the civili proceedings, these defendants were no longer entitled to notice of any further proceedings against them unless the court ordered it and are deemed to have admitted the facts outlined in Vale’s statement of claim. As a result, the judge granted default judgements against each of them, finding them individually and jointly liable for the full extent of losses Vale incurred as a result of these thefts, minus any restitution they have already paid.

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