Embee Diamonds loses appeal in international debt dispute

A local company tied to a city councillor has failed in its latest effort to quash a diamond debt worth roughly a million dollars.

Embee Diamond Technologies incurred the debt in February 2011, when it purchased 352 carats of diamonds from a Belgian wholesaler. Embee allegedly failed to keep up with the payments, and was hit with penalties and interest charges. The Belgian company, known as I.D.H. Diamonds, claimed the outstanding balance climbed to $912,000 CAD.

Their lawyer told the Daily Herald that it has grown even more since.

The dispute found its way through the Court of Queen’s Bench this spring. A judge ruled against Embee, which then filed an appeal. On September 19 of this year, the case made it to the Court of Appeal for Saskatchewan – the highest court in the province.

Councillor Evert Botha is the chief operating officer of Embee Diamonds, which has also been involved in a long-standing tax dispute with the city. His family owns a major stake in the business.

The argument came down to whether the debt expired during the six years since Embee’s purchase. Embee cited a limitation statute that kills debts after several years in limbo. But I.D.H. produced a long string of emails from Embee managers, including Botha, who seemed to continuously acknowledge the debt. In the view of the Queen’s Bench judge, that kept it on life support.

At an appeal hearing this month, Embee argued that the Queen’s Bench judge made two mistakes. He put the burden of proof on Embee, when it should have fallen on the Belgian company. Embee also argued that an email doesn’t count as a written and signed acknowledgement. The debt, in that case, should have died long ago.

The Court of Appeal agreed on the first point. It found the judge committed “either a palpable error of fact or an incorrect statement of law” on the burden of proof. But it didn’t matter. The appeal judges concluded that the earlier ruling was otherwise so well-reasoned that it “neutralized” the effect of that initial error.

They found that the emails were enough to keep the debt alive.

“The evidence before the Chambers judge undoubtedly established the facts necessary to conclude that the limitation period had not expired,” the Court of Appeal judges wrote.

With that, they dismissed the appeal.

Botha referred questions on the decision to the company’s lawyer, Peter V. Abrametz, who was not immediately available for comment.

I.D.H.’s lawyer, Jennifer Pereira, said the Belgian company will now move to collect its money. She said they have already filed with a Saskatoon court to do so, and simply have to set a date. She hopes to get in front of a judge “within the next month and a half.”

For more on this story, see the Sept. 29 print or e-edition of the Prince Albert Daily Herald.