The co-owner of a Penticton-area ranch was in the wrong when he sidestepped his business partner to acquire lands owned by his family, according to a B.C. judge.
Business partners Joe Sather and Mike Street jointly operated Sather Ranch Ltd. (SRL) until a summer barbecue turned sour in 2017. SRL was in receivership by the next year but the land in question had grown in value significantly by 2020.
The pair had gotten a start ranching with Joe Sather’s father, Palmer Sather, by working for free on the ranch in exchange for learning about the ranching business.
Palmer Sather operated the ranch as a sole proprietorship.
Joe Sather and Street incorporated SRL to run the ranch as equal partners in 2013 after Palmer Sather was no longer able to manage the ranch.
The ranch operated on three parcels of land: a 32-hectare home ranch; privately held grazing lands totalling 65 hectares; and 61 hectares of Crown land the ranch held a grazing licence for.
Years after a falling out between the business partners, Justice Bruce Elwood rejected Joe Sather’s argument that Palmer Sather wanted to keep the grazing land within the family.
It was contradicted by the fact that Palmer Sather’s daughter, Carol Sather-Byman, who held power of attorney, had at one time agreed to sell the home ranch to SRL.
Elwood also didn’t accept the family’s suggestion the grazing lands were an investment property, noting claims of gravel deposits on the land were hearsay claims the Sathers never investigated.
Elwood also disagreed with Joe Sather’s claims that the offer by SRL to buy the grazing lands were unauthorized or expired. While there was no formal direction by resolution to do so, Joe Sather had agreed in emails to go ahead with it – until he didn’t.
The judge rejected Joe Sather’s claims SRL couldn’t buy the lands. Elwood said there was a “real possibility” Sather-Byman would sell the lands to SRL after Joe Sather’s son passed on the opportunity, and Street argued he had arranged financing for the purchase if Sather-Byman didn’t agree to vendor take-back financing.
Elwood did not make any orders for remedy, instead directing the parties to make further submissions.
Joe Sather claimed the intention of incorporating SRL was solely about managing his father’s cattle and that there had been no intention of acquiring his father’s assets. But SRL had indeed acquired the home ranch in 2017, according to the decision.
Elwood said Joe Sather’s intentions were laid out in emails.
“Finally we can start separating this whole mess and get my sister out of it. … I’m thinking about the land we could acquire to expand the ranch,” Joe Sather reportedly said in a March 2013 email to Street.
Elwood said Joe Sather’s emails showed he supported buying the grazing lands up until July 2017.
Joe Sather and Street had been exchanging emails that spring about getting the lands appraised, and Street even mentioned running the appraisal by Sather-Byman, who seemed to be supportive.
An appraisal valued the lands at $115,000, and SRL put in an offer on April 17, 2017, for $120,000, with a deadline of April 19 for Sather-Byman to accept. Joe Sather notified Street on April 20 of the Sather family’s intention of keeping the lands in the family.
They wanted to offer the lands to Palmer Sather’s grandkids, with some particular interest emerging from Joe Sather’s son, Danny Sather, according to the decision.
But a few days later, Joe Sather reportedly sent an email to Street saying he believed he had “convinced Danny that he shouldn’t buy it” before later saying Danny Sather would not be buying the land.
Joe Sather reportedly told Street at a July 2017 barbecue that he intended to buy the property under his own name, leading to a “heated argument.”
In emails that followed, after Street repeated his objection to Joe Sather buying the land, Joe Sather is quoted in the decision as saying there was never a plan to buy the ranch, but “a hope that we could buy it.”
Sather-Byman transferred the property in August that year to Joe Sather for $120,000, the same amount offered by SRL.
In the wake of the July barbecue dispute, Joe Sather and Street effectively stopped supporting the ranch operations, and SRL went into receivership by July 2018.
The grazing lands grew astronomically in value in the next two years to nearly $1.6 million in 2020, and Joe Sather said in an affidavit he had received offers of up to $1.2 million for the lands.
The home ranch was sold off for $1.6 million in September 2020.
