Contempt in Court? Gowlings Guilty? Plaintiff Seeks $2 Billion, Injunctions & Other Remedies

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Canada's second largest law firm, Gowling Lafleur Henderson, has been named as a Defendant in a lawsuit. Attorneys are accused of negligence, conspiracy and other wrongdoing.

Calgary, Alberta A Calgary Court surprisingly failed to enforce an Order (see attached) on July 5, 2006, in a matter which it had previously decided on February 6, 2006. This same Court had dismissed a motion that would have released two attorneys and their firm from a lawsuit some five months earlier. The Court seemingly is not compelling lawyers for the Defendants to comply with routine procedure in the midst of five months of delays and jockeying. Some of these Defendants are accused of negligence, conspiracy and other wrongdoing while employed at the law firm of Canada-based Gowling Lafleur Henderson LLP, the second largest Canadian law firm, with more than 700 lawyers or their predecessor, Ballem MacInnes LLP.

Among the defendants listed in the 2004 lawsuit (Action no. 0401-06677), which was filed in Court of Queens Bench in Calgary, are Terry Knight and Ken Phillips, both residents of Calgary, two attorneys who were formerly employed at Gowlings and/or Ballem MacInnes (prior to the merger of both firms in 2001) at the time of their alleged actions. Ironically both men are now employed in the private sector under the supervision of another former Ballem MacInnes LLP lawyer. Their defense is currently rumoured to be funded by The Alberta Lawyers Insurance Association.

The Plaintiff in the lawsuit has taken various legal steps since December 2005 to replace the entire Board of Directors of the company at the centre of the litigation -- Kingsgate Resources Inc. Recently appointed as President and Secretary of the company is Mr. Satinder Dhillon, currently residing in Abbotsford, British Columbia.

The lawsuit was initiated by The Peregrine Trust, a British Columbia based Trust, which claims to have been harmed to the tune of several hundred million dollars. Acting as spokesman for the Trust, Mr. Satinder Dhillon, said recently that the loss, quantified based on the fluctuating price of gold bullion, changes daily.

The allegations describe how former Kingsgate President and Director Joseph K. Annan, with the help and/or neglect of the two lawyers, Knight and Phillips, refused to issue to the plaintiff an additional 1.52 million shares from the Kingsgate treasury which had been fully paid for. The Peregrine Trust was only issued slightly more than 2 million shares. Further the plaintiff alleges that it is entitled to exercise outstanding options for up to another 3 million shares. The total equity of Kingsgate upon receiving all of its entitlement would have resulted in The Peregrine Trust owning more than two thirds of the company.

The company's principle activity is focused on gold exploration and mining in the center of the well known Ashanti gold belt in Ghana, West Africa. One of the company assets is the Akoon Mine which has produced approximately 5 million ounces of gold since commencing activity. Other mining concessions are located in the gold rich Tarkwa region alongside major gold producers such as Newmont Mining Corporation, AngloGold Ashanti Limited, Gold Fields and others. Dhillon said "I understand that the potential total gold resources and reserves allegedly exceed 12 or 13 million ounces."

In addition, the alleged loss of oil and gas exploration opportunities, off the coast of Vietnam, has yet to be quantified.    

In a complicated and secretive manner Kingsgate assets were allegedly transferred to a Nevada-based public company -- Gold Coast Resources, Inc. The Statement of Claim asserts that Kingsgate neglected to hold Annual General Meetings of Shareholders as mandated by the Alberta Business Corporations Act. "As a matter of fact," Dhillon added, "the Trust and its legal representatives repeatedly requested that these meetings be convened, along with other information supplied to shareholders, all of which was ignored."

The claim goes on to describe how the company managed to covertly issue approximately 2 million shares to some Bermuda-based companies. Although possibly unrelated-the Bermuda publicly traded LOM Group's address is the same address as the new mystery shareholders. It should be noted that certain officers or directors of this offshore management company (The LOM Group) face federal charges, for market manipulation, by the United States Securities and Exchange Commission.

The current legal logjam stems from the fact that the lawyers for the parties which filed the subject motion for the two lawyers, their respective law firms, and the mining engineer, Mr. Patrick Hannon of Halifax, Nova Scotia, have refused to sign the Order as pronounced by the Court on February 6, 2006. This remains the situation at the time of this publication.

Dhillon stated, "The refusal to abide by the normal course of action between solicitors regarding the Court Order is astonishing. Furthermore I have just learned that Gowlings has refused to turn over to our counsel several boxes of evidence relating to this lawsuit to which we are clearly entitled. I am also shocked that various defendants have totally ignored the Appointments for Examination for Discovery pursuant to the Alberta Rules of Court during the last couple of months. This is utter contempt."

"When this litigation expands and these defendants are named in the upcoming Racketeer Influenced and Corrupt Organizations (RICO) Act related lawsuit, currently being prepared for filing, on our behalf, in Las Vegas by Nevada's largest law firm -- Lionel Sawyer & Collins -- I hope that the defendants will have more respect for the law in the United States. I understand that under the applicable statutes and legislation, if our action prevails in U.S. Court, the award for damages to The Peregrine Trust may approach $2 billion," said Dhillon. "This new lawsuit will further detail the claim related to the loss of oil exploration opportunities rightfully belonging to Kingsgate Resources Inc. through its subsidiary Kingsgate Energy Inc. With current crude prices hovering at USD $70 per barrel; this claim will also total several hundred million dollars."

For an update about this litigation please visit:

For more information about Kingsgate Resources Inc. please visit:

For more information about Satinder Dhillon please visit:

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