British Columbia

B.C. surf company founder gets $1M payout after motorbike crash

By the time Rene Gauthier was violently knocked off his motorcycle in 2013, the surfboard and clothing company he’d built from the ground up was already deep in the red.

The fortunes of Victoria's Sitka Surfboard mirrored those of its CEO, Rene Gauthier

Sitka Surfboard is currently planning a pop-up store in Tofino, the surfing capital of Canada. (Jonathan Hayward/Canadian Press)

By the time Rene Gauthier was violently knocked off his motorcycle in 2013, the surfboard and clothing company he'd built from the ground up was already deep in the red.

Last week, the co-founder of Sitka Surfboard was awarded nearly $1 million in compensation for the injuries he suffered in the 2013 crash in downtown Victoria.

As B.C. Supreme Court Justice Warren Milman wrote in his judgment, the aftermath of that collision is about more than just Gauthier's physical wounds.

"This case is about what he lost in that moment," Milman wrote.

'Something else was missing'

Gauthier, a personal friend of Lululemon founder Chip Wilson, "had achieved more by the age of 32 than many people achieve in an entire lifetime," the judge wrote.

He was still an undergraduate student at the University of Victoria when he and a friend, Andrew Paine, founded Sitka in 2004, and the company expanded rapidly in the nine years before the crash.

But Gauthier's fortunes took a turn on the night of June 3, 2013, when his motorcycle was struck by a car making a left turn.

The collision tossed Gauthier into the air, leaving him lying stunned on the pavement. The crash caused lasting injuries to his back and knees, as well as mild brain damage and kept him away from his business for four weeks. He lost more than 10 pounds, weight he has never been able to regain and was unable to surf.

The judge's decision grants Gauthier a substantial payout from the vehicle's owner, Marie Nicole Dubois, and the man who was driving it, Joseph Jean-Phillipe Bouchard.

Sitka recently opened a store in Whistler. (Mirae Campbell)

He testified that when he finally returned to work, he tired quickly and often found himself forgetting the names of longtime employees.

"Over the next several months, he noticed that something else was missing. He could no longer see the 'keystone' – the solution to the problems he was facing that used to be immediately apparent to him before. He could no longer foresee the next season's styles," Milman wrote.

At the same time, Sitka was struggling. The company had borrowed heavily to fund a move into a new headquarters in Victoria, opening stores in Vancouver and New Zealand, and expanding its wholesale business across North America. At the time of Gauthier's crash in 2013, Sitka had 50 employees.

A slide toward insolvency

But all this growth required spending, and Sitka had funds owing on a line of credit, a $1-million loan and more than $1.5 million in small loans from friends and family.

In the months after Gauthier's crash, Sitka borrowed heavily in an attempt to refinance, but by 2015, the company was insolvent, according to court documents.

The company has since restructured, shutting down the store in Vancouver, closing warehouses, moving into a smaller headquarters and selling its interest in the New Zealand shop.

Sales have rebounded to more than $1.5 million gross last year, Sitka is hiring again and Gauthier has founded a conservation organization. But he still owes $360,000 to the bank and his mother is in debt for $500,000, according to the judgment. Paine's family is more than $1.2 million in the red.

A surfer rides a wave on Chesterman beach in Tofino, B.C. (Jonathan Hayward/Canadian Press)

Meanwhile, Gauthier no longer rides a motorcycle, feels uneasy driving a car and prefers to use a bike to get around. But he's surfing again, playing sports and hiking.

Now 37, he told the court he has fewer good ideas about his business and often draws a blank when he meets with his investors. He's no longer able to put in more than the standard 40 hours a week — he said he used to work twice that total.

Gauthier told the court that the impact of the crash on his life has been "severe," and asked for up to $2.9 million in damages, estimating that his injuries had cost him as much as $2.5 million in future income.

But the judge said Gauthier was overstating things.

"He has maintained his occupation as an entrepreneur and manager — his business appears to be recovering. He continues to do the same recreational activities as he did before, although not necessarily at the same level," Milman wrote.

And, the judge pointed out, "Some of this drop in performance must be attributed to his age."

Milman ruled that Gauthier should receive damages totalling about $990,000.

Gauthier declined to be interviewed for this story.