The Supreme Court of BC has ruled that Bruce Findlay and a land development company that he was a director with must pay $171,000 in damages to the strata corporation at the Seaview residential project in Ladysmith.
After a trial that was held recently, GPI Developments, which is no longer registered, and Findlay, who is also a North Cowichan councillor, were found by the Honourable Justice Andrew Majawa to be responsible for damages in respect to a number misrepresentations that the strata owners say Findlay, a real estate developer, and the company made in documents that were provided to the owners in advance of purchasing their individual units.
Findlay said an appeal to the court’s ruling has been filed and he’s very confident that it will be successful.
“I don’t want to comment further on a matter that is before the courts,” he said.
GPI purchased Seaview, which consisted of 44 rental suites, and in 2011 worked to convert the apartment building into a strata development, undertook renovations to the individual suites and the common areas, and began selling the strata units to investors who sought to purchase them as a source of rental income.
Prospective purchasers were provided with a marketing brochure that included a memorandum signed by Findlay stating that GPI would undertake common area and exterior renovations; including a new asphalt parking lot and line painting, and the replacement of the entrance communication system.
The brochure also indicated that GPI would establish a contingency reserve fund for the Seaview development and supply it with a one-time payment of $55,000.
Majawa said in his ruling that Findlay had conceded that no contribution of $55,000 was made by GPI to the strata corporation’s reserve fund; nor did GPI repave the parking lot, replace the common area plumbing supply lines, or replace the entrance-way communication system.
“Nonetheless, Mr. Findlay argues that no misrepresentation was made with respect to these obligations because he and GPI honestly intended to undertake those renovations at the time the [brochure] was signed,” Majawa said.
“Therefore, he says, at the time the [brochure] was signed, it did not contain any misrepresentations. I accept that Mr. Findlay and GPI honestly intended to complete the renovations listed in the [brochure] at the time it was signed and filed. However, this does not mean that the [brochure] was free of misrepresentations in respect of the promises to complete the renovations in the future.”
Majawa said the problem with Findlay’s argument is that no developer would be found to have made a misrepresentation in a disclosure statement about “a proposal to do something” if they honestly intended to do it at the time the disclosure statement was signed.
Majawa also said Findlay contended that GPI went “above and beyond” in other aspects of the Seaview development and that the extra expenses that it incurred in doing so, which were approximately $87,000, should serve to offset any damages that are to be awarded to the strata corporation.
“I accept that this was the case and I also accept that GPI paid in excess of $130,000 more to Seaview’s owners than it was obliged to under a short-term rental fund agreement,” he said.
“But I am of the view that the excess rental top-ups paid by GPI and the renovations that were completed which were not referenced in the disclosure cannot be used to set-off any damages awarded for misrepresentations in the disclosure.”
Majawa concluded that Findlay and GPI must pay the strata corporation and the owners $170,960 in damages.