Executive Summary: Key Legal and Evidentiary Issues

• Central limitation issue turned on when the RIP plaintiffs knew, or objectively ought to have known, that their funds were actually spent on non-Enterprise liquor stores rather than merely commingled.
• Emails and spreadsheets from June 2019, particularly the June 6 email and June 29 reconciliation spreadsheet, were treated as admissions showing constructive knowledge of the diversion of RIP funds more than two years before the RIP Action was commenced.
• The plaintiffs’ attempt to distinguish commingling from actionable misappropriation, and to argue that only “irrevocable” or fully quantified loss could start the limitation clock, was rejected as legally unfounded.
• Allegations that the Chambers judge misapprehended key evidence and failed to grapple with ongoing requests for an accounting and negotiations did not rise to the level of palpable and overriding error on mixed fact-law questions.
• The Court held that continued negotiations and vague promises to “make it right” did not postpone discoverability under s. 6(1)(d) of The Limitations Act once litigation was contemplated and a plausible inference of liability could be drawn.
• While the RIP plaintiffs’ affirmative claim was ruled statute-barred, the companion decision confirmed that their equitable set-off can still be asserted defensively in Dunn’s separate action, because The Limitations Act does not apply to such a defence.

Background and parties

RIP Beverages Co. Ltd. was created by three Saskatchewan liquor-store investors, Randall Wilson, Ian MacDonald and Peter Klassen, to invest in a set of new private liquor stores being developed under the Urban Cellars brand in the wake of provincial liquor privatization. The focus of their investment was three Saskatoon-area locations—Cumberland, Market Mall and Warman—collectively referred to as the “Enterprise stores.” These stores were to be operated through separate corporations holding leases and retail liquor permits, with RIP or its principals receiving specified equity percentages in the holding companies. David Dunn, through his company Dave Dunn Enterprises Ltd., was the entrepreneur driving the larger liquor-store rollout. He was responsible for sourcing locations, securing leases, obtaining permits and arranging capital across multiple stores. In addition to the Enterprise stores, he was developing other locations such as Golden Mile and Quance in Regina, Brighton in Saskatoon and Whiskey Jacks. Each store had its own ownership mix; Wilson held an interest in several stores, including Golden Mile, and the Bison group invested in some Regina locations.

Investment structure and agreements

Between May 2018 and April 2019, the RIP plaintiffs advanced approximately $3.5 million to Dunn and Dunn Enterprises. According to their pleaded “Agreement,” RIP funds were to be used exclusively to develop the three Enterprise stores in exchange for significant shareholdings: 45% of the Cumberland holding company, 47.5% of the Warman holding company and 50% of the Market Mall holding company. The RIP side maintained that it was an express or implied term that funds would only be deployed for Enterprise-store development, and that Dunn would account for how those funds were applied in his role managing the projects. Dunn and Dunn Enterprises disputed this narrow characterization. They asserted that, in commercial reality, RIP was helping to finance Wilson’s broader stake in the larger portfolio of liquor stores and that its money could be, and was, used across multiple locations, not just the three Enterprise stores. They contended that use of RIP’s funds at locations such as Golden Mile was consistent with the parties’ understanding, not a misappropriation.

Emergence of the dispute and key communications

By early 2019, the RIP investors became concerned that they were not receiving a proper accounting of how their capital was being used. On April 6, 2019, after two days of meetings, the parties signed what became known as the April 6th contract, documenting the Enterprise-store arrangement. RIP later said this confirmed that their funds were confined to the Enterprise stores; Dunn said it reflected a broader financing and business framework and that he had disclosed use of RIP funds at Golden Mile. The evidentiary heart of the later limitation dispute lay in a sequence of communications in June 2019. In a June 6 email, Dunn told Klassen and others he was proceeding “under the pretense” that Klassen had purchased interests in additional stores and that his reconciliation of “cash transactions” would include Golden Mile and Brighton when allocating RIP’s contributions. On June 9, Dunn wrote about the urgent need to open Golden Mile to avoid losing its permit, explaining that his own funds had been consumed by delays and that he had expected RIP’s money to complete the capital needed there. Klassen’s June 12 reply stated that, based on what they knew, one conclusion was that Dunn had either contributed nothing financially to the Enterprise stores or had used a “considerable portion” of RIP’s funds for purposes unrelated to those three locations. He warned that, without a full accounting, RIP would “pursue such options as are available,” including litigation. On June 29, 2019, Klassen met with Dunn and Dunn’s associate Kevin Kasha. They reviewed a spreadsheet titled “Reconcile Peter’s cash prior to any bank financing,” which allocated “cash paid out to date” and “Klassen cash required” across six stores: the three Enterprise stores plus Brighton, Golden Mile and another location. The spreadsheet showed a calculated “overpayment” of Klassen’s/RIP’s cash contributions once allocations to all six stores were taken into account, implying that RIP funds had already been applied across the portfolio, including Golden Mile’s turn-key opening costs. Klassen later swore he merely “suspected” misappropriation at this point and lacked “actual evidence” proving the amount and destination of funds.

On March 12, 2020, Kasha circulated a more detailed two-page spreadsheet that the RIP side regarded as the first hard accounting confirming misuse. It quantified approximately $1.17 million of RIP contributions as having been applied to non-Enterprise stores, broken down among Golden Mile, Brighton, Quance and Whiskey Jacks. RIP treated this as the moment of discovery of their loss. Dunn, by contrast, argued that the key facts had long been plain from the 2019 emails and spreadsheet.

Subsequent restructuring and payment arrangements

Following the March 2020 spreadsheet, the parties negotiated a restructuring of their positions in at least two of the Enterprise stores. In November 2020, they entered into a Share Purchase Agreement under which Dunn and Kasha sold their interests in the Cumberland and Market Mall stores to RIP and its principals. Several ancillary agreements were signed at the same time. A mutual release provided that each side—RIP, its principals and related corporations on one side; Dunn, Kasha and a corporation on the other—released specified claims against the other. A Deferred Payout Agreement obliged the RIP side to pay $1,750,000 to Dunn’s investment entities through monthly payments driven by sales performance at Cumberland and Market Mall, beginning six months after closing. Dunn’s companies received contractual access rights to sales and financial records to verify the amounts due. Wilson, MacDonald and Klassen each gave limited guarantees for one-third of the deferred payout. The share sale closed in November 2020 and RIP made one payment under the Deferred Payout Agreement in 2021. Thereafter, disputes over information access arose; Dunn complained that he was being denied the records needed to confirm and enforce the deferred payouts.

The two court actions and claims

On March 2, 2022, RIP Beverages, MacDonald Jewellery Design, Wilson, MacDonald and Klassen commenced an action in the Court of King’s Bench against Dave Dunn Enterprises Ltd. and David Dunn. This “RIP Action” alleged that Dunn had commingled and misdirected RIP funds earmarked for the Enterprise stores, using them instead to develop Golden Mile, Brighton, Quance and Whiskey Jacks, contrary to the Agreement and his obligations to account. The plaintiffs advanced claims in conversion, breach of contract, civil fraud, breach of trust and unjust enrichment. They sought damages or restitution corresponding to the value of RIP funds used on non-Enterprise stores, along with other relief. The Dunn defendants denied wrongdoing, asserting that the parties’ true arrangement allowed RIP money to support a wider portfolio and that RIP, through Wilson, had agreed to fund Wilson’s stake in various stores. They further argued that the November 2020 share sale and mutual releases were intended to settle all outstanding issues between the investor group and Dunn. Significantly, they pleaded that Klassen and RIP were fully aware of the expenditures and approximate allocation of their contributions by April 6, 2019, or at least by June 29, 2019, and that the entire RIP claim was statute-barred under The Limitations Act.

In a second proceeding filed May 17, 2022—the “Dunn Action”—Dunn sued RIP, its principals and two operating companies to recover sums allegedly owing under the November 2020 arrangements, particularly the $1.75 million deferred payout linked to Cumberland and Market Mall. The RIP defendants responded that any amounts claimed should be reduced or extinguished by the same misappropriation alleged in the RIP Action, and pleaded an equitable set-off grounded in Dunn’s alleged wrongful use of their funds.

Dunn brought summary judgment applications in both actions. In the RIP Action, he sought dismissal on the basis that any claim arising from the alleged misdirection of funds was out of time. In the Dunn Action, he sought judgment for the deferred payout, arguing the set-off defence either was not available on the contracts or would fall away if the RIP Action was dismissed as statute-barred.

Limitations framework and summary judgment at first instance

The Chambers judge considered the applications together on a common evidentiary record. He applied The Limitations Act, which imposes a two-year limitation period running from when a claim is discovered, and defines discovery to require knowledge—actual or constructive—of injury, its apparent cause, the responsible party and that litigation is an appropriate remedy. The Act presumes discovery on the date of the impugned act unless the contrary is shown, and contains a concealment provision suspending the limitation in cases of wilful concealment or misleading conduct. The judge first found that by April 2019, all RIP funds advanced up to March 2019 had been spent, and that the “loss” complained of—the use of RIP funds toward non-Enterprise stores—had already occurred. He accepted there was a triable issue about whether RIP actually knew this in April 2019, so he did not rely on the statutory presumption. However, he held that constructive knowledge under s. 6(1) could be established well before March 2, 2020. Drawing on the June 2019 email exchanges and the June 29 reconciliation spreadsheet, he concluded that a reasonably diligent person in RIP’s position would, by June 29, 2019, have sufficient information to know that a significant portion of their funds had been used on non-Enterprise stores, and that Dunn and Dunn Enterprises were responsible. The detailed March 12, 2020 spreadsheet refined the numbers but did not fundamentally change the material facts.

The judge rejected RIP’s contention that commingling was distinct from misappropriation for limitation purposes or that the clock should start only when loss was “irrevocable” or precisely quantified. In his view, once funds that were supposed to be confined to the Enterprise stores were used elsewhere, any resulting contractual, tortious or equitable wrong had already occurred, and the cause of action was complete. The potential ability of Dunn to restore funds or adjust equity stakes might affect quantum or ultimate commercial outcomes, but not the accrual date for limitation purposes.

On the concealment provision, the judge held that s. 17 did not add any materially different question beyond the usual discoverability inquiry. While Dunn had not produced full records as quickly or fully as RIP wanted, the objective evidence showed that RIP could have discovered the essence of their claim by exercising reasonable diligence, and Dunn’s conduct did not prevent that. As to s. 6(1)(d), the judge recognized that parties should be encouraged to negotiate rather than rush to court, but emphasized that postponement of discoverability on this ground requires a realistic, structured settlement process or alternative mechanism with an identifiable end point. Here, RIP had openly contemplated litigation by June 20, 2019 and was reacting to what they saw as an already-committed wrong, not simply delays in performance. Dunn’s vague assurances that he would “make it right” or that things could be straightened out in business discussions were not enough to render a lawsuit legally inappropriate beyond the two-year window.

The judge therefore held that the RIP plaintiffs’ claim was discovered or discoverable by June 29, 2019. Because they did not sue until March 2, 2022, their claim was time-barred. He granted summary judgment dismissing the RIP Action and struck the set-off from the defence in the Dunn Action on the basis that it was grounded in the same time-barred claim. He then granted summary judgment to Dunn in the Dunn Action for the amounts claimed under the November 2020 agreements, subject to the contractual mechanisms for calculating the exact payout.

The appeals and Court of Appeal’s reasoning

On appeal in RIP Beverages Co. Ltd. v Dave Dunn Enterprises Ltd., 2026 SKCA 9, the RIP plaintiffs argued that the Chambers judge had: conflated commingling with misappropriation; misapprehended key evidence about what they knew between June 2019 and March 2020; and provided legally inadequate reasons, including by failing to separately analyse discoverability for their breach of contract claim. The Court of Appeal, per Leurer C.J.S. with Bardai and Kilback JJ.A. concurring, rejected each ground. The Court held that the Chambers judge was careful to distinguish mere mixing of funds in an account from the act of spending RIP money on non-Enterprise stores and that his analysis consistently focused on when the plaintiffs should have known their money had been so spent. It accepted that the core limitation questions and summary-judgment ruling were issues of mixed fact and law, reviewable only for palpable and overriding error in the absence of an extricable error of law, and found none.

The Court endorsed the Chambers judge’s use of the June 2019 emails and June 29 spreadsheet to find constructive knowledge by June 29, 2019. It noted that the plaintiffs’ own language in correspondence—raising the likelihood that Dunn had used “a considerable portion” of their funds on other stores and flagging litigation as an option—supported the conclusion that a plausible inference of liability already existed. Under modern limitation doctrine, claimants need not have perfect knowledge or conclusive proof before time starts to run; it is enough that they know or ought to know sufficient material facts to support a plausible inference of liability. The appellate court also agreed that s. 6(1)(d) did not delay discoverability once litigation was recognized as an appropriate path and there was no defined, realistic settlement framework in place. Finally, it dismissed the argument that the judge had overlooked the contract-based theories, holding that the alleged breach of Dunn’s obligation to account was inextricably bound up with the same underlying alleged misuse of funds, so that the general limitation analysis covered all heads of claim. The Court concluded that the RIP Action was properly dismissed as statute-barred and dismissed the appeal.

In the companion appeal from the Dunn Action, RIP Beverages Co. Ltd. v Dunn, 2026 SKCA 10, the Court addressed whether The Limitations Act applies to a defence of equitable set-off. There, the Court allowed the RIP defendants’ appeal, holding that the limitation regime does not bar the use of equitable set-off defensively. While the RIP plaintiffs could no longer sue Dunn affirmatively for misappropriation, they could still rely on the same underlying allegations as a shield to reduce or eliminate Dunn’s monetary claim in the Dunn Action. The Court therefore set aside the summary judgment that had been granted to Dunn in that action and restored the equitable set-off defence, leaving the parties’ competing financial claims to be resolved on a full evidentiary record at trial.

Overall outcome and financial result

Across the two appellate decisions, the net result is that the RIP plaintiffs’ standalone damages claim against Dunn and Dunn Enterprises is permanently barred and remains dismissed, while their equitable set-off survives as a defence in Dunn’s action for amounts allegedly owing under the November 2020 share sale arrangements. In 2026 SKCA 9, the successful parties are the respondents, Dave Dunn Enterprises Ltd. and David Dunn, whose limitation defence was upheld and whose trial-level victory in the RIP Action was confirmed; in 2026 SKCA 10, the successful parties are the RIP defendants, who had Dunn’s summary judgment in the Dunn Action overturned and their set-off defence restored. The Court of Appeal in SKCA 9 ordered no costs of that appeal because they were offset by costs in the companion appeal, and neither decision fixes any final net sum payable by one side to the other; accordingly, the total monetary award, costs and damages in favour of any successful party cannot yet be determined from these appellate rulings alone and will depend on the eventual outcome of the Dunn Action at trial.