401949 B.C. LTD v. 079858 B.C. LTD.

Citation: ☼ 401949 B.C. LTD v. 079858 B.C. LTD.

2022 BCPC 205

Date:

☼20220929

File No:

C-7438

Registry: Western Communities

IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

(Small Claims)

BETWEEN:

401949 B.C. LTD.

CLAIMANT

AND:

0729858 B.C. LTD. and 0729868 B.C. LTD.

DEFENDANTS

REASONS FOR JUDGMENT

OF THE

HONOURABLE JUDGE J.P. MacCARTHY

Appearing for the Claimant on their own

behalf:

G.S. Manhas

C. Duncan

Appearing for the Defendants on their

own behalf:

Place of Hearing:

Dates of Hearing:

Colwood, B.C.

February 26, 2021, April 27 & 28, 2021,

September 7, 2021, September 29, 2021,

October 6, 2021 and November 3, 2021

Dates of Written Submissions:

Date of Judgment:

November 22, 2021, December 13 & 29,

2021

September 29, 2022

401949 B.C. LTD v. 079858 B.C. LTD.

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INTRODUCTION

[1]

The old adage is that beauty is in the eye of the beholder. However, as this case

demonstrates, such may not be the final word, particularly when it involves meeting the

design requirements for a new house in a highly regulated subdivision, that is formally

governed by a design code and restrictions and a statutory building scheme.

[2]

This matter arises out of a lengthy, multi-issue and diverse dispute between the

Claimant, an owner and builder on one hand, and the Defendants, a subdivision

developer on the other. It has resulted in a seven day, multiple-witness trial and the

presentation of a large volume of documentary evidence. The parties have been self-

represented throughout.

[3]

The Defendant 0729858 B.C. Ltd. (hereinafter referred to as “DuncanCo”) is a

corporation that is controlled by Cathy Duncan, an experienced licensed realtor and real

estate broker. The Defendant 0729868 B.C. Ltd. (hereinafter referred to as “MapleCo”)

is a corporation that is controlled by Lynne Maple, a business person. DuncanCo and

MapleCo are collectively referred to as the “Defendants” or the “Developers”.

[4]

The Developers developed an 11 lot fee simple residential subdivision in two

separate phases. Phase 1 A and its 7 fee simple lots was created by a subdivision plan

filed in the Victoria Land Title office on January 7, 2017 (the “First Phase”).

[5]

A second phase (Phase 1 B) consisting of the four remaining fee simple lots was

created by a subdivision plan filed on or about September 29, 2017; it is the subject

matter of a further Disclosure Statement dated June 26, 2017 that was issued and filed

with the Superintendent of Real Estate (the “Second Phase”).

[6]

This entire two phase residential subdivision is called “Elevation Pointe” (the

“Subdivision”). It is adjacent to other subdivisions created by other developers.

[7]

The Developer engaged the services Cathy Duncan’s real estate brokerage firm

known as Cathy Duncan & Associates Ltd. (“the Brokerage Firm”) to provide services to

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oversee the development of both the First Phase and the Second Phase and to market

the sale of the lots within the Subdivision.

[8]

The Claimant 401949 B.C. Ltd. is a corporation controlled by Gurcharan Singh

Manhas also known as Sonny Manhas and his wife Arvinder Kaur Manhas, also known

as Vennie Manhas. They are both officers and directors of the corporate Claimant,

which is hereinafter referred to as the “Claimant” or “ManhasCo”.

[9]

Sonny Manhas has some 40 years of experience acting as a general contractor

engaged in the building of custom houses and “spec” houses for resale or rental. Sonny

Manhas first started his business in the Gold River and Campbell River areas. In more

recent years, this business activity has been conducted on southern Vancouver Island

in and around the Capital Regional District.

[10] I understand from his evidence that Sonny Manhas has extensive practical

experience in construction and real estate development but he is not a qualified

tradesperson nor does he have formal training in these areas. However, he is a licensed

general contractor and has taken the necessary courses to maintain his license. His real

estate enterprises over the last 40 years have been very successful

[11]

Vennie Manhas has many years of experience as a former real estate agent and

more recently as a licensed mortgage broker and laterally as an unlicensed mortgage

broker for a major financial institution.

[12] ManhasCo has been used by Sonny Manhas as a corporate vehicle for that

residential construction and development activity. It also holds a number of assets

including apartment buildings. ManhasCo hires a variety of contractors and

subcontractors to do the construction work and finishing of its various projects. Sonny

Manhas oversees that work and provides advice and directions to ManhasCo’s various

consultants and to its various trades.

[13] The Claimant purchased Lot 10, being one of the four fee simple lots in the

Second Phase from the Developers pursuant to a Contract of Purchase dated

December 4, 2017 (the “Contract of Purchase and Sale”). The closing date was on

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January 5, 2018. Cathy Duncan in her capacity as a realtor and as a representative of

the Brokerage Firm negotiated and prepared the lengthy and comprehensive Contract

of Purchase and Sale.

[14] A condition contained in paragraph 6 of the Contract of Purchase and Sale

required the Claimant, as the “Buyer”, at closing to pay into trust to the Seller’s solicitor,

Brock Emberton of Emberton Law:

A Refundable Compliance Deposit of $3,000 to ensure compliance with

the Registered Statutory Building Scheme, the Approved Plans, Grading

Plans/supporting Geotechnical Report and Landscape Plan as submitted

to the Subdivision Design Administrator for Approval

(hereinafter referred to as the “Compliance Deposit”).

[15] Paragraph 6 of the Contract of Purchase and Sale goes on to provide as follows:

The Compliance Deposit will be refunded to the Owner once the

Administrator has determined that the Owner has successfully complied

with the restrictions and guidelines contained herein. In the event the

landscaping is not completed with six (6) months after the issuance of an

occupancy permit by the City of Colwood, the Subdivision Administrator

may, after giving thirty (30) days written notice of its intention to do so,

enter upon the lot and complete such landscaping, which is, in the opinion

of the Subdivision Design Administrator, deemed necessary. The Owner

of the lot shall, upon receipt of the account for such work, release the

amount payable from Compliance Deposit to the Administrator; or if the

account is in excess of the Compliance Deposit, provide the Administrator

with the difference.

[16] Schedule E of the Contract of Purchase and Sale is a form of “Compliance

Deposit Receipt”. It provides in part as follows:

Herewith attached please find the refundable THREE THOUSAND

DOLLARS ($3,000) Building Compliance Deposit payable to The

Subdivision Design Administrator, to be held in trust by Victoria Design

Group, and released on completion of all Building, Grading, Landscape

Work on the subject lot and in particular those items specified in the

Developer’s Schedule A- Design Code, Statutory Building Scheme,

Streetscape Covenant Agreement and the (sic) to be submitted/approved

Building Plan, Grading Plan and Landscape Plan for the Lot.

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On completion of all construction and landscaping work for the Lot, the

Builder/Owner will apply in writing to Victoria Design Group for a final

inspection and release of their Deposit.

[17] Although initialled by the Claimant and the Defendants as a schedule in the

Contract of Purchase and Sale, there is no evidence that the Compliance Deposit

Receipt document was ever separately executed, but rather the Compliance Deposit

was paid to Emberton Law, being the Developers’ solicitor and not to Victoria Design

Group.

[18]

Upon the pending retirement of Brock Emberton, by agreement of the parties the

Compliance Deposit was transferred in trust to the Claimant’s long time solicitor,

Gurmail Manhas (not related to Sonny Manhas) of the law firm of Manhas Mar, who

continues to hold it in trust. For reasons that will become apparent, the Defendants have

refused to authorize the release the Compliance Deposit from trust to the Claimant.

[19] Following the completion of the purchase and sale of Lot 10 the Claimant sought

approval for a proposed residential structure to be built on Lot 10 (the “Lot 10 House”)

and ultimately undertook the construction of the Lot 10 House.

[20] The Claimant obtained a municipal occupation permit and sold the Lot 10 House

to a third party buyer for $1,115,000 inclusive of GST on or about November of 2020,

notwithstanding the ongoing dispute over the Claimant’s alleged non-compliance with

the Subdivision Design Code & Restrictions and the Statutory Building Scheme.

[21] Some of the relevant language regarding the terms of the Compliance Deposit

and the operations and requirements of the approval process by the Subdivision Design

Administrator in connection with the Subdivision Design Code & Restrictions and the

Statutory Building Scheme are set out and discussed in further detail below.

The Nature of the Dispute

[22] The Claimant contends that it has adequately complied with all of the provisions

of Subdivision Design Code & Restrictions and the Statutory Building Scheme,

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notwithstanding that it says it was treated inequitably and unfairly by the Subdivision

Design Administrator and the Developers, as represented by Cathy Duncan.

[23] Among other things, the Claimant through this court action now seeks to recover

the Compliance Deposit or damages in lieu and further claims damages for other

expenses which it says were unnecessarily incurred by the Claimant, as a result of the

inequitable and unfair approval process imposed upon it. The total claim is $6,459.95

plus a filing fee and the service fee.

[24] The Defendants dispute this claim. In particular they deny the Claimant’s

assertion that it adhered to the requirements of the approval process. They contend that

Claimant committed multiple breaches of the Subdivision Design Code & Restrictions

(the “Design Code”) and the Statutory Building Scheme. Furthermore, they say that the

Claimant made numerous post approval requests for various exemptions. Having been

granted some exemptions and variations, thereafter the Claimant failed to comply with

the approved varied requirements as well as the original approved design provisions

which were not varied.

[25] By way of a counterclaim, the Defendants seek damages for additional expenses

incurred by the Defendants as a result of the Claimant’s failure to abide by the terms of

the Contract of Purchase and Sale, the approval process and the resulting requirements

of the Design Code. The Defendants say those damages include a claim for the

devaluation of the ultimate sale price of their adjacent bare Lot 11, stemming from the

Claimant’s failure to abide by the Design Code in the construction and completion of the

Lot 10 House.

[26] The Defendants further claim as part of their damages, compensation for

amounts for what they say were unnecessary expenses incurred by the Developer

resulting from the Claimant’s trespass on the Developer’s Lot 11 in the course of the

construction of the Lot 10 House. Therefore, the total damages claimed in the

Counterclaim are $30,000 plus filing fees.

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[27] In this case the Defendants do not purport to be seeking to enforce the

Claimant’s compliance with the Design Code in this action either by specific

performance or by way of a mandatory injunction.

[28] The Claimant failed to file a Reply to the Counterclaim but the trial proceeded on

the common ground that the Claimant denied the Defendants’ counter claim both in

terms of the facts asserted and the relief being claimed.

Undisputed Background Circumstances

The Subdivision

[29] The Subdivision is geographically located on the relatively steep hillside terrain

off of Latoria Road all within the municipal boundaries of the City of Colwood.

[30] The City of Colwood along with the City of Langford and the Municipality of

Metchosin form part of the Capital Regional District located on the southwest tip of

Vancouver Island. These municipal entities are part of an area commonly referred to as

the Western Communities. The Western Communities are a very fast growing part of

British Columbia and for many years have experienced a tremendous amount of both

residential and commercial real estate development.

[31] According to a geotechnical assessment report completed by WSP Canada Inc.

on May 24, 2017 (the “WSP Report”) which is scheduled to a section 219 Covenant

granted by the Developers in favour of the of the City of Colwood and registered against

all of the lots in the Second Phase, the Subdivision’s Site Description and Surface

Conditions are characterized in part as follows:

The development site is located on the south side of Latoria Road… The

site was undeveloped to but was deforested years ago and is generally

bedrock controlled, with surficial shall bedrock outcrops visible across

much of the site. .… The general topography has an overall slope down to

the north and west, towards Latoria Road and Bezanton Way, with

localized steep slopes due to the undulating nature of the bedrock.

Phase 1B is located at the top of a rock bluff with the development areas

being prepared at the top of the bluff and the lower rear yards being

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towards the base of the bluff to the west. Further west below the yards is

parkland.

[32] This hillside and sloping terrain engaged a number of important geotechnical and

construction considerations which had to be addressed by the Developers in order to

obtain approval for and to complete the registration of the Subdivision as well as by the

purchasers of any of lots within the Subdivision and their builders in the course of

completing any residential construction. The Developers engaged WSP Canada Inc.

and other engineering and geotechnical firms for ongoing advice and to assist in

obtaining the required municipal approvals from the City of Colwood.

[33] The Developers were required over several months to undertake site preparation

to achieve required grades within the Subdivision through drilling and blasting and the

use, placement and packing of well graded bedrock (“shotrock”) sometimes referred to

as “engineered fill”. The purpose was to create a “level development” pad” for house

construction on each lot.

[34] According to the WSP Report:

The rear of the lots have been left as a combination of exposed natural

bedrock outcrops and to the west, a lower area comprising several meters

in thickness of compacted shotrock fill that is not suitable for receiving any

future all structural loadings. The area has been prepared only for

landscaping purposes. These fills have reduced the exposed rock faces in

this area and have essentially mitigated the rock fall hazard.

[35] The WSP Report noted that as at May 24, 2017, Lots 9 through 11 had been

prepared to their design grades “and are considered complete, apart from some specific

items described below which will require attention prior to house construction”. In that

regard, about Lot 10, the WSP Report noted as follows:

Foundations may require drilling and pinning to bedrock depending on

proposed house footprint. Photo shows potential access area to lower rear

yard area at property line between Lots 10/11.

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[36] All of the development property used for the creation of the Subdivision lies

within the Sensitive Ecosystems and Hazardous Conditions Permit Area of the City of

Colwood’s Official Community Plan.

[37] The City of Colwood granted the Developer an Environmental Protection

Development Permit in order to allow the creation of the Subdivision. The lots in the

Second Phase are subject to a number of covenants and statutory rights of way in

favour of the City of Colwood which were granted by the Developers and run with the

lands.The Subdivision and the construction of residential units within it are not just

subject to the building and development bylaws of the City of Colwood and statutory

covenants in favour of the City of Colwood. They are also subject to the “Subdivision

Design Code & Restrictions” which were created by the Developers and also a

registered Statutory Building Scheme created pursuant to section 220 of the Land Title

Act.

[38] The Design Code is set forth in the Subdivision’s filed Disclosure Statement for

the Second Phase which was provided to the Claimant in advance of the execution of

the Contract of Purchase and Sale. The Design Code was scheduled to and

incorporated as part of the executed Contract of Purchase and Sale and described as a

“fundamental term”.

[39] As I understand it, the Design Code is the same for both the First Phase and the

Second Phase. The purpose of the Design Code is described in the following fashion in

the Disclosure Statement for the Second Phase:

Design Code Purpose

The development objective of Elevation Pointe Subdivision is to

establish an identifiable, high-quality residential neighbourhood that

complements the physical character of the Latoria area. Quality of

development is ensured through the implementation of a

Subdivision Design Code. While the Design Code controls

architectural and landscaping elements within each Lot, the intent is

not to inhibit creativity. Purchasers are encouraged to explore home

site potential within the context of the Design Code.

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The Design Code addresses the character and quality of all

aspects of development:

(a) Size, form and placement of buildings within the Lot and relative

to one another;

(b) Architectural form and character of buildings and landscape

elements within the Lot.

[40] The Design Code is administered through a Subdivision Design Administrator

which in the first instance is the Developers or from time to time an agent appointed by

the Developers as the Subdivision Design Administrator.

[41] The Developers appointed an agent being Mr. William S. Peereboom (also

known as Wil Peereboom) of Victoria Design Group as the Subdivision Design

Administrator (“ William Peereboom”).

[42]

Pursuant to the terms of the Contract of Purchase and Sale, the Claimant was

required to pay a “Design Review Fee” of $600 plus GST, all in accordance with the

Design Code. This was for the review of the “Buyer’s drawing & specifications for the

home” to be constructed on Lot 10.

[43]

The Contract of Purchase and Sale goes onto indicate as follows: “The Design

Review Fee may be waived by the Administrator in the event the Administrator’s team is

selected to carry out the Buyer’s home design.”

[44] This means that if the Claimant or any other buyer engaged the services of

Victoria Design Group to prepare the required house plans and other documentation

required for the approval process under the Design Code, the Design Review Fee

would be waived. The Claimant did not engage the services of Victoria Design Group.

[45] The Design Code, under the heading of “Fees” specifies that the fees applied to

every Lot purchased in the subdivision are as follows.

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a)

b)

The Preliminary Design Fee, noted as not refundable, is set at $300 plus

GST.

The Compliance Deposit was set at $3,000 and noted to be “refundable

upon the completion of the home & installation of the approved Storm

Drainage Pit”

c)

The Final Design Review fee set at $300 plus taxes and was noted to be

non-refundable.

[46] There is a further provision of the Design Code as follows:

Note: Should a design require further reviews and revisions in

addition to the two listed above, additional charges of $250 + taxes

(non-refundable) will be required for each additional submission to

the Subdivision Design Administrator.

[47] The Design Code goes on to describe the approval process. Pursuant to that

process, it is necessary for all lot purchasers to submit to the Subdivision Design

Administrator: a requisite number of scaled copies of a site plan prepared by a BC Land

Surveyor; copies of scaled house plans; copies of scaled schematic elevation plans; a

proposed exterior material list or schedule; a completed design review checklist in a

prescribed form, and a copy of the proposed Landscape Plan, Grading Plan and Storm

Drainage Pit Design.

[48] Therefore, based upon all of the foregoing it is clear that the approval for and the

creation of the Subdivision was a significantly complex matter. Furthermore, the

Subdivision itself and any construction within the Subdivision is highly regulated by a

number of municipal and other covenant requirements registered on title and governed

by a sophisticated approval process.

Summarizing the Evidence

[49] I do not intend to describe the minutiae of all of the evidence presented in this

case. I have rather taken a more compressed and somewhat selective canvassing of

the evidence where it is relevant and necessary in making evidentiary findings. This

approach was approved by Woods P.C.J. in R. v. Connell, 2017 BCPC123, at paras. 5

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and 6. This approach has been followed in other recent decisions of this court including

Vista Leadership Inc. v. Pilon, 2021 BCPC 320.

[50]

However, in drawing necessary inferences and in reaching my conclusions I

have carefully considered all of the evidence, even if I have not made specific reference

to certain aspects of it.

The Burden of Proof

[51] The burden of proof in a civil case rests with the Claimant to prove its case on

the standard of a balance of probabilities. The Supreme Court of Canada in F.H. v.

McDougall, 2008 SCC 53 (), [2008] 3 S.C.R. 41 at paragraph 49, states:

…in civil cases there is only one standard of proof and that is proof on a

balance of probabilities. In all civil cases, the trial judge must scrutinize the

relevant evidence with care to determine whether it is more likely than not

that an alleged event occurred.

[52] Therefore, the Claimant must prove the existence of the facts and other essential

elements upon which it relies in order to succeed in its claim against the Defendants. If

it fails to do so, it cannot succeed.

[53] Similarly, the Defendants, as a claimant by way of counterclaim, must do the

same with respect to the subject matter of their counter claim.

[54] What does “proof on a balance of probabilities” mean? It does not mean proof

beyond a reasonable doubt. That standard of proof applies only in criminal trials. In civil

trials the party who has the burden of proof on an issue must convince the finder of fact

(here being the Court) that what she or he asserts is more probable than not, or to put it

another way that the balance is tipped in his or her favour. [see F.H. v. McDougall,

supra].

[55] The degree of probability required to meet the standard and to discharge this

burden of proof has been defined by Lord Denning in the following terms:

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…it must carry a reasonable degree of probability but not so high as is

required in a criminal case. If the evidence is such that the tribunal can

say: ‘we think it more probable than not’, the burden is discharged, but if

the probabilities are equal it is not.

[see: Miller v. Minister of Pension, [1947] 2 All E.R. 372. at 374 (K.B.)]

[56] In Smith v. Smith [1952] 2 S.C.R. 312; [1952] S.C.J. No. 25 (S.C.C.) Justice

Cartwright (as he then was) of the Supreme Court of Canada articulates the applicable

test as follows:

…that civil cases may be proved by a preponderance of evidence or that a

finding in such cases may be made upon the basis of a preponderance of

probability and I do not propose to attempt a more precise statement of

the rule. I wish, however, to emphasize that in every civil action before the

tribunal can safely find the affirmative of an issue of fact required to be

proved it must be reasonably satisfied, and that whether or not it will be so

satisfied must depend upon the totality of the circumstances on which its

judgment is formed including the gravity of the consequences of the

finding.

[57] Sopinka, Lederman & Bryant: The Law of Evidence in Canada, Third Edition

(LexisNexis Canada Inc., 2009) [“Sopinka et. al”) at sections 5.52 and 5.53 provide the

following useful summary:

[5.52] …simply put, the trier of fact must find that the existence of the

contested fact is more probable than its nonexistence. Conversely, where

a party must prove the negative of an issue, the proponent must prove its

absence is more probable than its existence.

[5.53] But how does a trier of fact determine if the standard has been met?

Certainly not based on the number of witnesses or the volume of evidence

adduced. Also, if the nature of the inquiry is serious or the evidence

adduced is very unsatisfactory, a jury may not be satisfied as to the

existence of a disputed fact even though the proponent of the issue

adduced a preponderance of evidence.

[58] Sopinka et. al. in section 5.53 at footnote 135 go on to cite Dixon J. in Briginshaw

v. Briginshaw (1938), 60 C.L.R. 336 at 361-362 (H.C.A.) for the proposition that there

must be a subjective belief by the tribunal of the fact, expressed in the following words:

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The truth is that, where the law requires the proof of any fact, the tribunal

must feel an actual persuasion of its occurrence or existence before it can

be found…

[59] If the evidence on an issue is evenly balanced such that the trier of fact is unable

to say where the balance of probabilities lies, then the decision on that issue must be

made against the party who has the burden of proving it.

[60] In deciding whether an issue has been proven on a balance of probabilities, the

trier of fact must consider all of the evidence relevant to that issue, no matter who

produced it.

The Witnesses

Witnesses for the Claimant

[61] The Claimant’s witnesses at trial were:

a)

b)

Sonny Manhas; and

Vennie Manhas.

[62] Sonny Manhas was the primary witness for the Claimant. On its behalf, he dealt

with Cathy Duncan for the purposes of negotiating and finalizing the terms of the

Contract of Purchase and Sale and the completion of the sale and purchase of Lot 10.

He arranged for and instructed the Claimant’s designer to complete all of the plans and

other required documentation to obtain approvals for the Lot 10 House. He dealt with

the Subdivision Design Administrator on an ongoing basis; on a daily basis he oversaw

the excavation of Lot 10 and completion of the foundations and the construction of the

Lot 10 House and on behalf of the Claimant, he was responsible for dealing with all of

the issues and problems arising from all of the foregoing.

[63] Vennie Manhas has been actively involved in the administrative affairs and

corporate affairs of the Claimant. She was present with Sonny Manhas at their family

residence and with Cathy Duncan at the time that the Contract of Purchase and Sale,

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prepared by her in her capacity as a realtor was presented, reviewed and executed by

the Claimant and by Cathy Duncan as a representative of the Developers.

Witnesses for the Defendants

The Defendants’ witnesses were:

a)

Cathy Duncan who conducted the case on behalf of the Defendants and

who represented the Developers in relation to the matters subject of this

litigation.

b)

Russell Scott, a Professional Engineer employed with WSP (Canada) Inc.

(consultants for the Defendants);

c)

d)

William Peereboom, the Subdivision Design Administrator;

Bryan Valiquette, an officer, shareholder and director of Discovery Bay

Builders Corp. which purchased Lot 9 in the Second Phase and which

completed a single family residential unit on it, in and around the same

time frame that that the Claimant was building on Lot 10; and

e)

Richard G. Meagher, an experienced real estate land developer who was

involved with the development and sale lots in a subdivision adjacent to

the Defendant’s Subdivision in and around the same time frame as the

Defendants.

[64] No expert witnesses testified and no expert reports or summaries were

presented to the court all as contemplated by Small Claims Rules 10 (3), (4), (5) and (6)

inclusive.

Assessing Credibility and Reliability of Witnesses

[65] In this case, I have heard evidence that is conflicting on a number of material

matters. Therefore, I must assess the credibility of the witnesses who provided this

conflicting evidence.

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[66] In many cases, credibility assessment is reasonably straightforward. However, in

others it is not. In most respects, this case falls into the first category but there are some

exceptions as noted below.

[67] The test for assessing the credibility of a witness is well known, if not always

easy to apply. O'Halloran J.A. in Faryna v. Chorny (1951), 4 W.W.R. (N.S.) 171

(B.C.C.A.) states as follows:

The test must reasonably subject his story to an examination of its

consistency with the probabilities that surround the currently existing

conditions. In short, the real test of the truth of the story of a witness in

such a case must be its harmony with the preponderance of the

probabilities which a practical and informed person would readily

recognize as reasonable in that place and in those conditions.

[68] In this case, I do find at the end of the day that credibility of one of the witnesses

has been significantly impugned on a number of important issues. Accordingly, any

material disputes on the evidence are therefore best resolved by me considering that

witnesses’ evidence in the context of the whole of the evidence to determine what

makes sense.

[69]

In doing so, I must weigh all of the evidence. In so weighing the evidence, I may

reject or accept some or all of a witness's testimony, after having taken into account a

multitude of factors which include, but are not limited to: appearance or demeanour;

ability to perceive, ability to recall; motivation; probability or plausibility; and internal or

external consistency.

[70] It is an error in cases of contradictory evidence to simply weigh the evidence of

one witness against the evidence of another. (See R. v. Jackson, 2007 BCSC 636; see

also R. v. Mann, [2010] A.J. No. 1094.)

[71] I must also instruct myself that there is a difference between credibility and

reliability of a witness. In R. v. H.C., 2009 ONCA 56, Watt J.A. explained the difference

between credibility and reliability, at para. 41:

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Credibility and reliability are different. Credibility has to do with a witness’s

veracity, reliability with the accuracy of the witness’s testimony. Accuracy

engages consideration of the witness’s ability to accurately

i.

ii.

observe;

recall; and

recount

iii.

events in issue. Any witness whose evidence on an issue is not credible

cannot give reliable evidence on the same point. Credibility, on the other

hand, is not a proxy for reliability: a credible witness may give unreliable

evidence: R. v. Morrissey (1995), 1995 3498 (ON CA), 22 O.R.

(3d) 514, at 526 (C.A.).

[72] I must also direct myself that even honest witnesses may make mistakes in their

evidence, or have errors of recollection, or may present upon the stand in a nervous or

uncertain manner for reasons unrelated to the truthfulness of their testimony.

Assessment of the Witnesses

[73] This has been a very high conflict case and the preceding events giving rise to

this court action also have been very high conflict. In particular, this case has been a

highly personal dispute as between Sonny Manhas on one hand and Cathy Duncan on

the other.

[74] I have taken that background and those circumstances into account in assessing

the credibility and the reliability of all witnesses and particularly the evidence of Sonny

Manhas and Cathy Duncan.

[75] I have also taken into account the business and personal relationships of the

various witnesses.

[76] The Defendants’ witnesses Russell Scott, William Peereboom, and Bryan

Valiquette have each had well established and ongoing business relationships with the

Defendants. However, I am of the view that this has not materially influenced their

evidence such as to reduce its credibility or its reliability . I found them each to be

credible, reliable and straightforward witnesses. Each of their evidence is consistent

with the preponderance of evidence that I find to be trustworthy and reliable.

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[77] I find the same is all true for Richard G. Meagher. As is described below, Mr.

Meagher did not testify as an expert witness. Had the necessary steps been taken by

the Defendants to present him as an expert witness, he most likely would have met the

requirements to be qualified as an expert witness based upon his extensive real estate

and development background and he would likely meet the requirements for an expert

witness to be independent and impartial. (see: White Burgess Langille Inman v. Abbott

and Haliburton Co., 2015 SCC 23 at para 53).

[78] It is particularly noteworthy that William Peereboom’s personal and professional

actions as the Subdivision Design Administrator were under attack by the Claimant. Mr

Peereboom remained highly professional throughout his testimony. He was a valuable

witness.

[79] I have also taken into account that the relationship between Sonny Manhas and

Bryan Valiquette became very strained during the course of the constructions of the Lot

10 House and the Discovery Bay House, as herein defined. However, Bryan

Valiquette’s evidence was presented in a manner that was devoid of exaggeration about

the actions of both Sonny Manhas and the Claimant that were very inconvenient or

potentially damaging to Discovery Bay Homes.

[80] Vennie Manhas had a very limited role in any of the matters giving rise to this

action and although she provided reasonably credible testimony, it was not particularly

relevant to the issues.

[81] Sonny Manhas was a challenging witness. At times he was also an

unnecessarily reluctant witness.

[82] As one example, it took him a considerable amount of time and number of

questions for him to concede that the Contract of Purchase and Sale presented as a

documentary exhibit and disclosed in the Defendants’ book of documents, well before

the commencement of the trial, was indeed the actual document that the Claimant and

the Defendants had signed. There were times when he stated he could not recall when

asked about things that were potentially unfavourable to the Claimant, while at other

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times stating he had a clear recollection about matters potentially favourable to the

Claimant.

[83] Most of his evidence was presented through a lens of his alleged personal

mistreatment by William Peereboom and Cathy Duncan. This often clouded his

responses and led him frequently to rely upon this assertion, rather than fully

addressing the actions or lack of actions by the Claimant in his answers.

[84] When conducting his cross examination of the Defendants’ witnesses, Sonny

Manhas continuously used the time to make lengthy statements, which seemed to be

an attempt to expand or amplify his own prior evidence. He did so without directly

asking the witness a question. This required the Court on multiple occasions to

intervene and direct Sonny Manhas to cease proceeding in that fashion and to further

direct him to frame his questions for the witness in an appropriate manner. There were

several times when the court was called upon to try to determine the nature of the

question being raised by Sonny Manhas and to then assist him in framing that question.

All of this unnecessarily protracted the proceedings.

[85]

For the reasons noted above and as noted below, I have found that Sonny

Manhas’ evidence was not credible nor reliable on certain key matters.

[86] Cathy Duncan’s evidence was for the most part given in a straightforward and

consistent manner. She was challenged and obviously frustrated when cross-examining

Sonny Manhas and in the course of being cross-examined by him. She took great

exception to the numerous suggestions of untoward professional conduct on her part

and at times became combative with Sonny Manhas. All of that said, I found her

evidence to be credible and reliable and consistent with the preponderance of evidence

that I find to be trustworthy and reliable.

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The Disputed Circumstances

The Negotiations Giving Rise to the Contract of Purchase and Sale.

[87] A significant amount of oral evidence and documentary evidence was led by both

the Claimant and the Defendants about the negotiations giving rise to the execution of

the Contract of Purchase and Sale. On the whole, I have concluded that this evidence

was mostly relevant only for contextual purposes.

[88] There is a conflict in the evidence between Sonny and Veena Manhas on one

hand and Cathy Duncan on the other with respect to the negotiations and discussions

giving rise to the Contract of Purchase and Sale and the parties subsequent dealings.

[89] The Claimant, the Defendants and their respective principles had no prior

business dealings with each other.

[90] There is no dispute that Sonny Manhas had previously seen Lot 10 and knew

that it was listed for sale at $400,000 plus GST by Cathy Duncan and the Brokerage

Firm. In his evidence, Sonny Manhas suggested that his own realtor had told him about

the available lots for sale in the Subdivision but Sonny Manhas made the direct

approach to Cathy Duncan and arranged an on-site meeting at Lot 10 and thereafter

solely conducted the negotiations on behalf of the Claimant.

[91] The witnesses for the Claimant provided evidence which was significantly critical

of Cathy Duncan and her professionalism in her role as a realtor in dealing with them as

representatives of the Claimant. Specifically, Sonny Manhas implied some improper

motives on the part of Cathy Duncan in fulfilling her role as the sole realtor involved in

the transaction.

[92] The suggestion made by Sonny Manhas was that Cathy Duncan offered to

reduce the sale and purchase price if the Claimant did not involve its own long time

realtor and if she prepared the Contract of Purchase and Sale. Thus, the real estate

commission would not have to be shared with another realtor. Sonny Manhas testified

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that on behalf of the Claimant he accepted this suggestion but made the Contract of

Purchase and Sale subject to review by its solicitor.

[93] Cathy Duncan rejected these suggestions made by Sonny Manhas. She testified

that it was Sonny Manhas, who in pursuing the lowest possible purchase price, made

the suggestion that the Claimant would not involve its own realtor and that Buyer’s

agent’s portion of commission amount should be reflected in the purchase price. Cathy

Duncan testified that she suggested that the Claimant’s realtor (at that point unidentified

to her) should attend the in person meeting to review the Contract of Purchase and

Sale.

[94] Sonny Manhas further testified that during these negotiations, and in a

subsequent meeting on site at Lot 10 following the completion of the sale and purchase,

and in response to her approach (sometimes described by him as a “demand”) to obtain

an eventual listing for the sale of the Lot 10 House, he made it clear to Cathy Duncan

that when the Lot 10 House was completed, the Claimant would be using its own long

time realtor to list and sell the Lot 10 House. Sonny Manhas’ time line of these

discussions and whether they occurred before or after completion of the sale and

purchase, were not consistent in his evidence.

[95]

I accept both from the whole of the evidence that such a discussion occurred

between Sonny Manhas and Cathy Duncan, likely following the completion of the

purchase and sale, at an on-site meeting on or about June 4, 2018. However, I do not

find that it was presented by Cathy Duncan as “a demand” but rather as an inquiry

about the future listing, with an offer by her to do a market evaluation and provide the

Claimant with other information. Furthermore, I find that the decision of the Claimant to

use its own realtor was accepted by Cathy Duncan without objection.

[96] The further suggestion of Sonny Manhas was that because Cathy Duncan was

unhappy with this future listing arrangement, it adversely influenced her ongoing

dealings with the Claimant after the completion of the sale and purchase of Lot 10.

Thus, he contends the Defendants did not provide any co-operation to the Claimant

during the approval process stage nor in the construction phase. Rather the Defendants

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and in particular, Cathy Duncan became unreasonable and obstructionist and unduly

influenced the decisions of the Subdivision Design Administrator. Cathy Duncan denies

any of this. In particular she testified that problems in her relationship with Sonny

Manhas, and hence the relationship between the Claimant and the Defendants arose

when the Claimant trespassed on the Defendants’ Lot 11 in the course of construction.

[97] In his evidence, Sonny Manhas further testified that Cathy Duncan made certain

inaccurate oral representations about various things. This included the bylaw height

restriction variation to 11 metres for Lot 10 and the favourable applicable 9 metre height

bylaw restriction for the house to be constructed on the view side across the street from

the Lot 10 House in another developer’s subdivision. According to Sonny Manhas all of

this assisted in providing a view from the higher levels of the Lot 10 House which would

increase its ultimate re-sale value for the Claimant. The alleged inaccurate oral

representations also allegedly influenced the design concept ultimately produced by the

Claimant’s designer and which was submitted as part of the approval processes.

[98] Notably, the Design Code included within and forming part of the contractual

provisions of the Contract of Purchase and Sale referenced and drew to the attention of

prospective Lot Owner/Builders the existence of a Development Permit obtained by the

Defendants as Developers, in which municipal height restrictions were varied from 8.5

metres to 11 metres for various lots including Lot 10. It further noted a condition of the

Development Permit that:

The form and character of the dwellings on Lots 8-16 & 21 shall be

designed to minimize the impact of the height to the satisfaction of the

Director of Planning [of the City of Colwood] prior to the issuance of a

building permit [by the City of Colwood].

[99]

Again Cathy Duncan and the Defendants deny any misrepresentations made by

them and specifically about height restrictions on Lot 10 or upon any adjacent lots,

including the lot across the street from Lot 10, or the resulting impact upon any approval

process.

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[100] The further suggestion in Sonny Manhas’ evidence was that Cathy Duncan, as

the sole realtor, in some fashion became responsible for protecting the interests of the

Claimant.

[101] Also, Sonny Manhas suggested that Cathy Duncan made oral representations

about the cooperation that she as the representative of the Developers would be

extending to ManhasCo to assist in the approval process and also with the subsequent

construction of the Lot 10 House. In the Notice of Claim this is described as a promise

“to look after me throughout the build”. Again, this is disputed by Cathy Duncan and the

Defendants, although she did say that her practice as a representative of the

Developers is to be cooperative and helpful to all buyers.

[102] The Contract of Purchase and Sale is a lengthy and comprehensive document. It

was reviewed by both Sonny and Vennie Manhas over a period of some two hours with

Cathy Duncan, when Cathy Duncan presented it to them at their residence in or around

December 4, 2017. However, Sonny Manhas did have the Claimant’s solicitor, Mr.

Gurmail Manhas subsequently review the Contract of Purchase and Sale with him

present, as contemplated by the “subject to” condition of “Buyer’s Lawyer’s approval”.

[103] Sonny Manhas testified that “there were no surprises” arising from that review by

Gurmail Manhas and accordingly the “subject to” condition was satisfied and removed

by the Claimant.

[104] The purchase price for Lot 10 as set out in the Contract of Purchase and Sale

was $399,999, but by way of an attached addendum of December 4, 2017 it was

agreed that the price was to be reduced to $350,000 for a “January 5, 2018 Closing

Date.” The sale, purchase and resulting conveyance proceeded to closing in a timely

fashion. Sonny Manhas suggested in his evidence that including the provisions for the

reduced purchase price in the addendum was in some way improper or deceptive and

intended to disguise the actual reduced sale price in relation to the list price, all for the

benefit of the Developers.

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[105] The Contract of Purchase and Sale was silent about the oral representations and

assurances that Sonny Manhas alleged were made by Cathy Duncan; the Claimant did

not seek to have any of them included in the Contract of Purchase and Sale. The

Contract of Purchase and Sale specifically provided that the Claimant as Buyer was

responsible for “all due diligence to verify all details required for this purchase”. Neither

the Claimant nor anybody on its behalf undertook any due diligence or made any

inquiries with the owner contractor about the proposed height of residential structure

across the street from Lot 10.

Analysis and Conclusions about the Negotiations

[106] The Contract of Purchase and Sale and related information documentation

signed by the Claimant clearly discloses that Cathy Duncan and the Brokerage Firm

were only acting for the Defendants and not for the Claimant and furthermore the

Claimant was an “unrepresented party”. The evidence supports the conclusion that

neither Cathy Duncan nor the Duncan Brokerage Firm assumed any enhanced duty to

the Claimant.

[107] The evidence also supports the conclusion that Sonny Manhas and Vennie

Manhas were highly experienced in real estate transactions and real estate

developments. The Claimant relied upon that expertise and its own lawyer. It chose not

to involve its own realtor in the negotiations, nor in conducting any necessary due

diligence.

[108] The Claimant has not brought any claims directly against Cathy Duncan nor the

Brokerage Firm. So far as I can determine neither Sonny Manhas nor the Claimant have

made any complaints to any regulatory body of competent jurisdiction about Cathy

Duncan or the Brokerage Firm. However, several thinly veiled threats to do so were

made by Sonny Manhas and subsequently by the Claimant’s litigation counsel. Based

on the evidence that I do accept, I find that the Clamant has not satisfied the Court that

there was any professional wrongdoing or misrepresentations on the part of Cathy

Duncan, the Brokerage Firm or the Defendants.

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[109] I have dealt separately below with the evidence and conclusions surrounding the

Approval Process under the Design Code and the respective actions of the parties.

The Claimant’s Processes to Obtain its Approvals Under the Design Code

The Claimant’s Evidence

[110] The whole of the evidence confirms that the Claimant engaged the services of

Ron McNeil of McNeil Building Designs Ltd. (“Mr. McNeil”) shortly after the completion

of the purchase of Lot 10. Mr McNeil was hired to prepare the Claimant’s building plans

for the Lot 10 House and to make the required submissions for approval under the

Design Code to William Peereboom, in his role as the Subdivision Design Administrator.

Mr. McNeil had provided those types of design services for the Claimant for the last 14

or 15 years. Thus, the Claimant chose not to use the services of Victoria Design Group

nor the plans for the residence that had been designed by Victoria Design Group for Lot

10.

[111] The plans prepared and submitted by Mr. McNeil to the Subdivision Design

Administrator were apparently reviewed and approved of by a structural engineer prior

to submission. The Claimant’s structural engineer apparently also made site inspections

in the course of construction in addition to inspections carried out by the municipal

building inspector.

[112] The Claimant did not call Mr. McNeil as a witness nor any of the Claimant’s

trades or consultants, such as its structural engineers. In particular, it would have been

helpful for the Court to hear Mr. McNeil’s perspective about the Design Code approval

process.

Sonny Manhas’ Evidence on Behalf of the Claimant

[113] Sonny Manhas provided all of the Claimant’s evidence regarding the Claimant’s

Design Code approval application and the matters flowing from it.

[114] In his evidence Sonny Manhas focused on what he understood to be several

change requirements demanded by the Subdivision Design Administrator, both in the

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initial approval application and during the course of construction of the Lot 10 House.

His overall complaints were based upon what he regarded as unnecessary changes

that were more costly to implement for the Claimant and which he characterized as an

inconsistent application of Design Code requirements on the Claimant, and which were

not required of other Lot Owners/Builders in the Subdivision. He characterized this as “a

double standard” in which he was “singled out from day one to now.”

[115] Sonny Manhas’ suggestion of a double standard extended also to the

geotechnical seismic requirements imposed on Lot 10 in the course of construction and

the enforcement of landscaping requirements, which, in fact, were actually under

municipal jurisdiction.

[116] He suggested that the Subdivision Design Administrator required Mr. McNeil to

make structural changes beyond the requirements the Building Code to the plans

submitted by Mr. McNeil. Sonny Manhas suggested this was beyond the jurisdiction of

the Design Code and the authority of the Subdivision Design Administrator. The primary

example relied upon was the enlargement of support posts under the balconies, which

exceeded the requirements of the Building Code and were more expensive to install.

[117] Sonny Manhas concedes that the Claimant deviated from the original approved

plans by substituting some spare cedar siding for brickwork without the Subdivision

Design Administrator’s approval. In his view the Claimant was unfairly “forced to take

down $5,000” worth of cedar. He suggests that all of this actually occurred after a

“nasty” call from Cathy Duncan.

[118] In his evidence, Sonny Manhas took issue with the Subdivision Design

Administrator’s objections of the locations of certain utility connections and meters that

were visible from the street, and which the Subdivision Design Administrator insisted be

relocated. Sonny Manhas suggested that no particular location was specified on the

Claimant’s submitted and approved plans. However, Sonny Manhas failed to make

mention in his evidence of, or apparently take into account, the Design Code’s provision

that “electrical meters must be installed in an inconspicuous location”. He testified that

notwithstanding the Design Code requirements that the heat pump was to be placed in

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an inconspicuous location and was to be screened from view he followed the

recommendations of the installer as to its location and did not place screening around it.

However the evidence is clear that the neither the Claimant, nor anybody on its behalf

approached nor consulted with the Subdivision Design Administrator about these

matters before proceeding with installations.

[119] In addition to the Design Code and the Subdivision Design Administrator’s

requirements for the location, screening and coverage of the gas meter, other utility

meters, and the heat pump, Sonny Manhas also took issue with the requirement to

extend the rock facing on various exterior surfaces as originally contemplated by the

approved plans. Rather than complying with these requirements, Sonny Manhas

suggested that this was all unreasonable because “nobody will ever see it” and it would

not improve the Lot 10 House. He also testified that this compliance would result in a

“huge cost problem” for the Claimant.

[120] He further testified that the Subdivision Design Administrator’s requirements to

complete the missing window and other trims was an attempt to get him (and by

inference the Claimant) “in trouble” with Provincial New Home Warranty authorities. As I

understand his evidence, he was of the view that such installation after completion of

the approved substituted stuccoing would compromise the rain shield and leave the

building envelope open to moisture and leakage issues.

[121] Victoria Design Group rendered an invoice dated March 7, 2019 addressed to

Vennie Manhas, which was intended to be paid by the Claimant, in the amount $441 for

4 hours of services at the rate of $105 per hour plus GST. The invoice specifies that this

billing was for “Remedial design and administration in correcting exterior non-

compliance at lot 10”. It is common ground that this invoice has been paid to Victoria

Design Group although as part of its claim, the Claimant now seeks to recover this

amount from the Defendants on the basis is was unnecessary work and the Claimant

was not made aware of the requirement to pay these “extra amounts”.

[122] As previously noted, the Design Code contained with the Contract of Purchase

and Sale specifically states that in addition to the Preliminary Design Review Fee and

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the Final Design Review Fee each in the amount of $300 plus GST, further reviews and

revisions would each incur a non-refundable charge of $250 plus taxes.

[123] Therefore, Sonny Manhas testified that the Claimant never made any of these

changes and characterized it as Cathy Duncan and the Subdivision Design

Administrator “just trying to make trouble for me” and “just trying to harass me”.

[124] Sonny Manhas further alleged in his testimony that the Subdivision Design

Administrator and Cathy Duncan “turned a blind eye” to the construction of an illegal

suite and the failure to require compliance with parking requirements in the house built

by Discovery Bay Homes on Lot 9. However, those concerns and his complaints to the

City of Colwood were only raised by Sonny Manhas after the Claimant had sold the Lot

10 House in or around November of 2020.

The Defendants’ Evidence

Evidence of William Peereboom

[125] William Peereboom was called by the Defendants to provide viva voce evidence

and he also provided an affidavit sworn October 30, 2020 (the “Peereboom Affidavit”).

He was subject to extensive cross-examination by Sonny Manhas on behalf of the

Claimant.

[126] William Peereboom has formal educational qualifications and professional

certification as an architectural technician and previously gained considerable

construction experience while studying for his certification. He testified that he has

designed over 7,500 structures ranging from single-family dwellings to restaurants. He

has acted as a design administrator and as such has approved plans and building

designs for a couple of hundred single-family residences. He has owned Victoria Design

Group for over 30 years.

[127] In anticipation that he was being appointed by the Developers as the Subdivision

Design Administrator, William Peereboom and Cathy Duncan collaborated on the

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Design Code, the control elements for the Subdivision and the submission and approval

processes for all of Lot Owners/Builders.

[128] In the Peereboom Affidavit, William Peereboom deposed and in his viva voce

evidence he testified that through Mr. McNeil the Claimant made approximately three

separate submissions of plans and designs to obtain the approval of Mr. Peereboom as

the Subdivision Design Administrator for the Lot 10 House. That particular time frame

from the whole of the evidence is not precise but that the approval seeking process

started around the first week of February 2018 and continued thereafter. It appears that

construction started in the spring of 2018.

[129] In his evidence, William Peereboom stated the preliminary designs submitted by

Mr. McNeil were for the Lot 10 House were “not my favourite design”. At one point in his

evidence he described it as a “box with holes”. This caused him to make several

“improvement suggestions” to address the facial appearance issues with the addition of

greater articulation features. Thus in his role as Subdivision Design Administrator, he

made several suggestions to Mr. McNeil for modifications in order to obtain compliance

with the requirements of the Design Code. These modifications were apparently

eventually made by Mr. McNeil, as set out in the approved design plan with Mr.

Peereboom’s “red line” which were “clearly depicted on the approved and signed

building plans.”

[130] William Peereboom testified that at the end of the day the final revised plans and

submissions made by Mr. McNeil for the Lot 10 House would have been a satisfactory

design had it been completed in accordance with those final revised approved plans. In

other words, if it had been built in accordance with the approved plans it would have

met the requirements of the guidelines under the Design Code and the finished product

would have received the Subdivision Design Administrator’s final approval which was

required to release the Compliance Deposit.

[131] William Peereboom denied that as Subdivision Design Administrator he utilized

different and more onerous approval and enforcement standards for the Claimant under

the Design Code than those applied to other Lot Owners and Builders, and in particular

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those who used the designs prepared by Victoria Design Group. In cross examination

he specifically denied he was more difficult with the Claimant’s approval process and in

fact stated the he “went in the opposite way” and took extra steps to work with Sonny

Manhas.

[132] He further testified that he sought to ensure that the Design Code was applied

by him in order to ensure that it benefitted the entire Subdivision and to assist in

maintaining the values of the houses built under the Design Code.

[133] William Peereboom testified that his dealings with Mr. McNeil were professional

and courteous and Mr. McNeil accepted the Subdivision Design Administrator’s

comments and suggestions as “constructive criticism”. He also confirmed that he did not

insist on implementation of some of his recommendations or requirements upon

receiving further explanations and submissions from Mr. McNeil.

[134] William Peereboom denied that in any of his discussions with Mr. McNeil that his

suggestions or required modifications to obtain the Subdivision Design Administrator’s

approval under the Design Code were structural in nature or were intended to impose

requirements on the Claimant beyond Building Code or cause it unnecessary extra

expense. By way of example, he says that it was Mr. McNeil who came up the larger

balcony post design in response to the design aesthetics concerns raised by him as the

Subdivision Design Administrator. He accepted the modifications conceived of and

presented to him by Mr. McNeil.

[135] In the Peereboom Affidavit, William Peereboom deposes that:

In March of 2019 it was discovered that Mr. Manhas had greatly deviated

from the approved plans. Details that were a significant part of the

approval process had been deleted or eliminated, and liberties taken

without seeking further approval.

Developer Cathy Duncan attended meeting with myself and Mr. Manhas in

attempts to facilitate understanding and to provide clear direction of what

was required to achieve design compliance. Some direction was accepted

by Mr. Manhas, but there remained defiance that prompted continual re-

negotiation.

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[136] According to his viva voce evidence and the Peereboom Affidavit, at a later stage

of construction, which I take to be in the summer of 2018, Sonny Manhas, on behalf of

the Claimant, then sought from the Subdivision Design Administrator a further

amendment to the approved plans. That was to substitute the originally approved

manufactured “Hardie” plank on the exterior of the Lot 10 House with acrylic stucco.

The approval for that change was granted in or around August 21, 2018. However, the

Claimant’s compliance with this approved change was also ultimately lacking and

further unapproved unilateral changes, such as elimination of trim and cedar features on

the façade, were subsequently made by the Claimant and never corrected.

[137] In support of his position and his concluding recommendation to the Defendants

contained in the Peereboom Affidavit to the effect that “in the final analysis, compliance

standards had not been met”, William Peereboom provided evidence about a number of

other examples of outstanding deficiencies of the Lot 10 House from the approved

plans.

[138] In his viva voce evidence he mentioned such things as:

a)

b)

c)

unapproved window design modifications with the elimination of

one of three windows above the front door on the façade

failure to install window trim on all windows and specifically a lack

of trim on the windows in and around the front door;

a failure to build (as is apparently customary) a small retaining wall

between the higher elevation of Lot 10 and the lower elevation of

Lot 9 to provide adequate lateral support for the Lot 10 driveway

pavers;

d)

the construction and retention of a non-compliant temporary

construction stair case down to the back of Lot 10;

e)

f)

the failure to screen the heat pump on the Lot 11 side;

the unapproved elimination of cedar panels on the façade following

the approval for substitution of acrylic stucco for the Hardie plank;

and

g)

the unapproved elimination of certain rock facing on the façade and

on the Lot 9 side.

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[139] William Peereboom conceded that some of these deficiencies alone may not

lead him to conclude there was a lack of compliance with the Design Code. However it

was his view that all together it showed a “lack of care of adhering to the approved

design”.

[140] Furthermore, he rejected Sonny Manhas’ suggestion that he withheld his

approval as the Subdivision Design Administrator’s because of any the lack of

compliance with the landscaping plan that had been submitted by Mr. McNeil on behalf

of the Claimant and which seemed much more comprehensive than those prepared for

and submitted for other adjacent lots in the Second Phase. He specifically noted that he

did not impose any such requirements or expectations upon the Claimant for Lot 10 and

what was submitted through Mr. McNeil was solely the choice of the Claimant.

[141] Many of these continuing deficiencies requiring remediation were set out in an

email, sent upon the instructions of William Peereboom, by Cathy Mons, an

administrator with Victoria Design Group, on March 7, 2019 at 2:43 PM to Sonny and

Vennie Manhas at Vennie’s email (the “VDG Email”). These included:

a)

b)

unapproved use of certain finishing materials and missing cedar siding;

on the façade, a lack of window trim over the front door and around the

outer window sides;

c)

d)

required painting of and use of approved colours on architectural features

over front door and on the façade;

on the right elevation [that being the Lot 9 side] the required placement of

wrap stone veneer from the garage around as shown on an attached

sketch [which I understand to be the “mitigation plan” provided by Victoria

Design Group to bring the Lot 10 House into compliance]; and

e)

again on the right elevation the relocation of a natural gas line to allow for

“rock and trim around gas meter in black”.

[142] The VDG Email also noted the following issues regarding the approval for the

use of stucco as an exterior covering and in particular, as it related to the Lot 11 side or

left elevation:

While approval was granted to use stucco, it was assumed the left

elevation (indeed, all elevations) would be constructed with tasteful use of

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complimentary finishes. The left elevation massing is overpowering and

disproportionate, but there is little that can be done at this stage that would

be cost-efficient. We have waived this non-compliant elevation since it will

be less obvious when the neighbouring house is constructed.

[143] The VDG Email then stated that “this concludes remedial efforts on this project”,

enclosed their invoice for $420 +GST which was due the next day, and required the

submission of photographs of corrected exterior finishes prior to “building design

approval” and reminded the Claimant that “adherence to all remaining design code

requirements is strictly enforced”.

[144] It is noteworthy that William Peereboom testified that in his view he took a

number of extra steps that were not required of him in his role as the Subdivision

Design Administrator’s including meeting the with Claimant’s trades, such as its stucco

contractor, to provide advice about possible corrective options and to find practical

solutions to correct the Design Code deficiencies on the Lot 10 House in order to obtain

final approval. None of these were ever implemented by the Claimant. William

Peereboom noted that in the usual course it was open to him as the Subdivision Design

Administrator to simply say to the Claimant “fix it” rather than trying to assist in the

problem solving.

[145] In his cross examination by Sonny Manhas, William Peereboom was able to

provide reasonable explanations for: his change proposals made to Mr. McNeil; his

approval of certain design features, finishing materials and colours used on other

houses within the Subdivision; or his use of certain design features and the like for

residences within the Subdivision that had been designed by Victoria Design. He was

also able to provide a reasonable explanation for his rejection of certain and perhaps

not dissimilar design features proposed or used for the Lot 10 House. These decisions

appeared to be consistent with the goals of the Design Code.

[146] In his cross examination, William Peereboom also explained that it was not his

role nor his responsibility to enforce the municipal bylaw requirements of the City of

Colwood as they pertained to construction within the Subdivision. In particular this was

his response to questions posed to him by Sonny Manhas about Lot 9. Thus in his

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approval process under the Design Code he did not consider issues relating to legal

suites and municipal driveway parking bylaw requirements. He explained that bylaw

compliance and enforcement was within the jurisdiction of the City of Colwood. In that

regard and in response to Sonny Manhas’s questions, William Peereboom testified that

he did not impose any requirements for the creation of a suite in the Lot 10 House.

[147] According to William Peereboom’s evidence he had no control over the release

of the Compliance Deposit being held by solicitor Gurmail Manhas, except for providing

his conclusions to the Developers (and specifically to Cathy Duncan) about the Lot 10

House’s lack of compliance with the Design Code.

Evidence of Bryan Valiquette

[148] Bryan Valiquette is a highly experienced building contractor and a shareholder

and director of Discovery Bay Builders Corp. (“Discovery Bay Homes”). At all material

times Discovery Bay Homes was the owner, builder and ultimate seller of the completed

residence on Lot 9 (the “Discovery Bay House”), which is located immediately adjacent

to Lot 10 in the Subdivision. Bryan Valiquette has been in the contracting business for

some 29 years and has been involved in the design and construction of new homes and

for renovations. He has formal post-secondary education and training as an

architectural technician and as a professional project manager.

[149] Bryan Valiquette provided an affidavit deposed on November 2, 2020, which was

entered as an exhibit (the “Valiquette Affidavit”). He also provided viva voce evidence

and was cross-examined by Sonny Manhas on his evidence.

[150] Throughout the coinciding periods of construction of the Lot 10 House and

Discover Bay House on Lot 9, Brian Valiquette had ample opportunity to interact with

Sonny Manhas and to observe the construction taking place on Lot 10 and the

appearance of the Lot 10 House after it was allegedly completed by the Claimant.

[151] Bryan Valiquette was not presented to the court, nor was he qualified as, nor was

he accepted by the court as an expert witness. He testified about his personal

knowledge and the purpose of Design Codes and Statutory Building Schemes, all

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based upon his years of experience as a residential building contractor. In his evidence

he confirmed that Lot 9 was bound by the same Design Code and Statutory Building

requirements as the other adjacent Lots 8, 10 and 11. It is clear that he favoured these

types of restrictions and testified that Discovery Bay Homes followed them in the design

and construction of the Discovery Bay House. Discovery Bay Homes paid all requisite

deposits and received a refund of its Compliance Deposit and other refundable deposits

all as contemplated by the Design Code and the Statutory Building Scheme.

[152] The City of Colwood issued an Occupancy Permit for the Discovery Bay House

on or about January 10, 2019. According to Bryan Valiquette’s viva voce evidence the

Discovery Bay House was listed for sale and marketed for about four months. As I

understand it was sold in or around March of 2020. He was not disappointed with the

eventual sale price and said it was what he expected having regard for the real estate

market at that time. I understand that sale price was in excess of $1,300,000 exclusive

of GST.

[153] In a letter exhibited to the Valiquette Affidavit he described the Design Code and

the requirements under the Statutory Building Scheme to be “clear and straight forward

to understand” and the design application process and the approval process under the

Design Code and the Statutory Building Scheme as “not complicated and the

expectations were simple and clear.”

[154] He further deposed that he believed that Cathy Duncan was “interested and

engaged in ensuring a smooth process without hindrance or delay”. He then cited

examples of her helpful role in “being a liaison between myself and Victoria Design

Group and the City of Colwood to ensure design code and building code items were

satisfied in unison.” This was particularly important for Lot 9 because of some unique

physical terrain challenges and the presence of registered statutory-rights of way. From

the evidence before me, I therefore understand from the evidence before the court that

the Discovery Bay House was of Discovery Bay Homes own design and not one

produced by Victoria Design Group.

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[155] In that same letter exhibited to the Valiquette’s Affidavit he stated that during this

process Cathy Duncan at no time imposed “undue pressure on me, my company or my

building methods or selections”. He further stated:

Rather the opposite was true in that she had every interest in ensuring my

house met the standards set forth [in the Design Code] so that I would in

turn have a successful sale of the spec home.

[156] Cathy Duncan and Brian Valiquette and his company Discovery Bay Home also

eventually formed a realtor-client relationship. She eventually listed and sold the

completed Discovery Bay House.

[157] In the Valiquette Affidavit, he deposed that he and Sonny Manhas had the

opportunity on several occasions to discuss the Design Code and the “contractual

obligation” to go through the design approval process. He further explained to Sonny

Manhas that “it benefits all parties to come to a cohesive end result of similar valued

homes and the overall value of the subdivision that we are building in”.

[158] The Valiquette Affidavit describes Sonny Manhas’ response to the Design Code

in the following terms:

I found that Mr. Manhas was disgruntled, disrespectful of it and dismissive

of the requirements and guidelines. He took a strong position that we

“builders should be able to build what we want”.

[159] The Valiquette Affidavit then recites from his own knowledge several attempts of

William Peereboom and Bryan Valiquette’s own attempts to address their respective

concerns about Sonny Manhas’ “blatant noncompliance” with the Design Code.

[160] By way of a letter dated December 10, 2019 addressed to the Developers sent

by Bryan Valiquette on behalf of Discovery Bay Homes (the “Valiquette Letter”) four

main areas of concern about the Lot 10 House were detailed. These concerns,

characterized as “strong opinions” on the part of Bryan Valiquette, were expressed in

the context of negatively affecting the forthcoming sale of the Discovery Bay House.

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[161] These concerns may be summarized as follows:

a) The landscaping on Lot 10 failed to meet the Design Code’s

Landscape Guidelines and standards, and appeared

unfinished with the lack of groundcover or sod.

b) The failure to properly install the Lot 10 driveway paving stones and

to complete a retaining wall such that the Lot 10 driveway edge’s

paving stones abutting Lot 9 were not receiving proper support and

were therefore subject to sloughing onto Lot 9, thereby causing

concern, inconvenience and potential liability and expense for

Discovery Bay Homes.

c) The failure to properly complete the rear stairs on Lot 10 leading

down the bank to the lower portion of the Lot 10 and instead

leaving in place an unsightly temporary set of stairs.

d) The “general look of the home appears unfinished” in comparison to

other homes with in the Subdivision and the failure to adhere to the

“unified looking community” required of other home developers.

Furthermore, the views expressed that this has “potentially

devalued the houses on the street – namely [the Claimant’s] own

house and mine beside it.”

[162] The Valiquette Letter was exhibited to the Valiquette Affidavit. Both the Valiquette

Letter and Bryan Valiquette’s viva voce evidence cited examples of “awkward

conversations” with prospective buyers of the Discovery Bay House who gratuitously

and negatively commented on the unfinished appearance of the Lot 10 House next

door. He described it as a “sticky point” when dealing with several of these prospective

buyers.

[163] Upon receipt of the Valiquette Letter by the Developers, Cathy Duncan requested

that Bryan Valiquette meet with Sonny Manhas to discuss these concerns directly with

him.

[164] Sometime after the Valiquette Letter to the Developers, Bryan Valiquette met

with Sonny Manhas to discuss the issue of the Design Code non-compliance and the

steps that could be taken by the Claimant to improve the appearance of the Lot 10

House and to thereby obtain William Peereboom’s final approval. Also other concerns of

Bryan Valiquette were discussed, namely the Claimant’s responsibility for completing a

retaining walls along the shared boundary between Lot 10 and Lot 9.

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[165] Bryan Valiquette expressed the view that none of this remedial work would be

difficult to do but Sonny Manhas simply dismissed him and failed to take any steps to

address any of these matters. He testified that Sonny Manhas indicated to him that he

was satisfied with the overall appearance of the Lot 10 House and would not be taking

any action, remedial or otherwise, to bring it into compliance with the Design Code or to

otherwise address Bryan Valiquette’s concerns.

[166] In the Valiquette Letter exhibited to the Valiquette Affidavit, Bryan Valiquette

states that notwithstanding the concerns set out in that letter, “Sonny has been a ‘good

neighbour’ in terms of building next door to each other and we’ve been able to

cooperate in many ways while we constructed our respective houses”.

[167] Parenthetically I note some curious steps that were taken by Sonny Manhas

subsequent to the following events: the writing of the Valiquette Letter to the

Developers; the unsuccessful in person meeting between Bryan Valiquette and Sonny

Manhas in December of 2019; the swearing of the Valiquette Affidavit containing the

Valiquette Letter on November 2, 2020, and its apparent disclosure to the Claimant

either before or on that date as required by the Court’s orders made at the October 2

2020 Settlement Conference. Sonny Manhas then proceeded to make inquiries and

lodge complaints to the City of Colwood about alleged bylaw infractions and an alleged

improper approval of a secondary suite in the Discovery Bay House. Sonny Manhas’

actions in this regard apparently started around December 17, 2020 and continued into

January of 2021.

[168] According to Bryan Valiquette’s evidence the Discovery Bay Home was not sold

with a suite because of parking and other compliance issues and the purchasers

subsequently were dealing with the City of Colwood in order obtain certain variations.

[169] As it turned out, the formal letter of response from the City of Colwood dated

December 21, 2020 to Sonny Manhas clarified that at the time the occupancy permit

was granted for the Discovery Bay House there was no suite and no building permit for

a secondary suite had been granted. However, an apparent error appeared in the form

of the occupancy permit which stated “Single Family dwelling secondary suite”. This

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error was corrected by the City of Colwood on October 21, 2020 to remove reference to

the “secondary suite”. Apparently, all of this remedial action occurred before Sonny

Manhas had lodged his complaint with the City of Colwood. Furthermore, the complaint

was lodged following the Claimant’s sale of the Lot 10 House. Sonny Manhas’ motive

for making this complaint after the sale of the Lot 10 House was never explained by him

but certainly can be interpreted as an attempt at some form of retribution against Bryan

Valiquette.

Evidence of Cathy Duncan

[170] In her evidence, Cathy Duncan stated that the Claimant, as represented by

Sonny Manhas, was the only Lot Owner/ Builder in the Subdivision who failed to follow

the plans and related documents which were submitted to and approved by William

Peereboom as the Subdivision Design Administrator.

[171] She confirmed that the deficiency concerns outlined in the VDG Email were

never completed by the time of the trial. Her opinion was that the Lot 10 House, without

completion of those matters “looked derelict”.

[172] Cathy Duncan described herself as not having her “boots on the ground” in the

course of monitoring any construction progress in the Subdivision. That is to say that

she was not monitoring the day to day construction by any of the Lot

Owner/Developers, leaving it those individuals to comply with their plans approved

under the Design Code.

[173] She testified that the only exception was the Claimant as represented by Sonny

Manhas. When she became aware of the concerns about the Claimant’s non-

compliance with the Design Code and failure to follow the approved plans, she then

paid special attention and attempted to get Sonny Manhas to co-operate with the

Claimant’s “contractual obligations”. This included in-person meetings and the

exchange of a number of emails. After the VDG Email the tone of the emails became

increasingly accusatory and vitriolic on both sides.

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[174] The documentary evidence submitted without objection and relied upon by both

the Claimant and the Defendants contains a number of these types of emails between

Sonny Manhas and Cathy Duncan, apparently exchanged between February and March

of 2019 with cross allegations of bullying and aggressive conduct and various forms of

uncooperative, unprofessional and untoward behaviour.

[175] The Developers took the positon that the Compliance Deposit would not be

released until the Subdivision Design Administrator confirmed that the Claimant had

complied with the Design Code. In an email to Sonny Manhas from Cathy Duncan dated

February 29, 2019 she offered to meet on site at Lot 10 with William Peereboom, and I

presume Sonny Manhas, to go over the outstanding issues of non-compliance with the

Design Code. That meeting apparently never occurred but the VDG Email which

summarized those non- compliance issues was sent to Sonny Manhas.

[176] Based upon the evidence before the Court, the issue of the non- compliance with

the Design Code and the release of the Compliance Deposit was the subject matter of

correspondence and email exchanges between Gurmail Manhas and Victoria Design

Group starting with Gurmail Manhas’s correspondence in September 20, 2019 and

continuing throughout October of 2019. In response, on September 23, 2019, Victoria

Design Group emailed Gurmail Manhas as follows:

Please provide photographs of the completed project. At the time of the

last design review, the required exterior modifications had not yet been

implemented.

[177] That request resulted in Gurmail Manhas emailing the pictures on October 8,

2019, receipt of which was acknowledged by Victoria Design Group on October 9, 2019,

and with an indication that a review would likely occur the following week. Further

demands approving the release of the Compliance Deposit were made by Gurmail

Manhas on October 28, 2020, and threatening legal action by the Claimant if the funds

were not released. Victoria Design Group responded on that day confirming that they

were only dealing with the “design compliance review” and referred Gurmail Manhas to

the Developers.

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[178] The email threads are incomplete but from an email exchange between Cathy

Duncan and Gurmail Manhas in or around December 23, 2019 it appears that Cathy

Duncan and William Peereboom were on site at Lot 10 House on December 9, 2019 at

which point photographs “depicting the problems and outstanding non-compliance

issues” were taken. Reference was also made to the Valiquette Letter which she

indicated she would to forward to Gurmail Manhas.

[179] On January 21, 2020, Gurmail Manhas emailed Cathy Duncan again demanding

release of the Compliance Deposit and threatening to bring an action which would name

Victoria Design Group as a defendant.

[180] In her email response of January 22, 2020, Cathy Duncan referenced a

discussion among the Developers to have the Compliance Deposit released to hire

Brian Valiquette “to afford the eventual ‘end buyer” [of Lot 10] some funds to address

the compliance issues, after Mr. Manhas is off title”. She further went on to indicate that

the amount of the Compliance Deposit was only $3,000 and in the views of William

Peereboom and Brian Valiquette that amount would not cover the compliance issues –

“but it will help to mitigate the overall effect of the noncompliant issues”.

[181] In conclusion, Cathy Duncan stated as follows:

The easiest solution is to release the Deposit to us and we will address it

with the end buyer. If your client is willing to work with Mr. Valiquette to

address the outstanding issues now, that is a possible positive outcome

as well. We believe that the exterior and therefore end-value of Lot 10,

would benefit from Compliance.

[182] On January 27, 2020, Cathy Duncan emailed Gurmail Manhas asking if he

wished to have a brief meeting with her “to go over Victoria Design’s paperwork and due

diligence that was resulting from meetings held with Mr. [Sonny] Manhas”. Gurmail

Manhas responded that his “instructions were limited to communicating the request for

the holdback”. So far as I can determine, no further meetings ever occurred about the

non-compliance issues in order to obtain the release of the Compliance Deposit.

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[183] The Claimant proceeded with its litigation on July 22, 2020 naming only the

Developers as the Defendants and not joining any other parties as defendants and

specifically did not naming the Victoria Design Group, William Peereboom or Cathy

Duncan.

[184] It appears that there was no responding correspondence from Gurmail Manhas

or the Claimant to the January 22, 2020 proposal. However, on November 3, 2020, by

way of a letter addressed to the Brokerage Firm, newly retained litigation counsel, on

behalf of Sonny Manhas, (presumably as the representative of the Claimant) made

demand for the authorization for the release of the $3,000 being held in trust by Gurmail

Manhas, being characterized as an amount being held for the “completion requisites”.

The Claimant’s new litigation counsel referenced what was described as the

“unacceptable delay” in releasing these funds and then went on to reference information

and instructions received from Sonny Manhas, which if substantiated, “would likely

show a breach of your ethical duties as a realtor with respect to various questionable

practices involved in this matter.” Further reference was made to the “various

roadblocks that you have put in his way in the course of his attempt to build on the lot.”

[185] In a prompt response from Cathy Duncan on November 4, 2020, she clarified

that the funds being held were a “compliance deposit” and not a “completion deposit”.

She went on to reference discussions that had occurred at a Small Claims Settlement

Conference held on October 2, 2021. As it turned out, new litigation counsel was not

made aware of the occurrence of that Small Claims Settlement Conference by his client.

Cathy Duncan also described the available evidence to support the Developers’

continuing concerns about existing “non-compliance” of the Lot 10 House, and her

numerous unsuccessful attempts to meet with Sonny Manhas and/or his lawyer to

resolve the non-compliance issues. She took significant issue with the allegations of

professional misconduct.

[186] By way of an email from her own lawyers dated November 6, 2020, Cathy

Duncan learned that the Claimant’s new litigation counsel had withdrawn and was

refusing to act further for Sonny Manhas and the Claimant.

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[187] There is no further evidence before this court about any complaints made or legal

action taken by any other lot owners having the benefit of the Statutory Building

Scheme and the Design Code, other than the complaints raised by Discovery Bay

Homes. Also, there is no evidence that any amounts were expended by the Defendants

or anybody on their behalf to correct the Design Code non-compliance issues for the Lot

10 House which for the most part continued to remain outstanding as at the time of trial.

Analysis and Conclusions about the Claimant’s Compliance with the Design Code

[188] Based upon all of the evidence that I accept, I have concluded that the ongoing

approval process and the non-compliance concerns of the Subdivision Design

Administrator under the Design Code and the Statutory Building Scheme for the Lot 10

House were not adversely influenced by either the Defendants or by Cathy Duncan.

[189] I further conclude that the Subdivision Design Administrator exercised his

discretion and discharged his duties in a fair and even handed manner and consistent

with the requirements and purpose of the Design Code.

[190] Based upon the evidence of William Peereboom, which I accept, in my view

there was a reasonable basis for the Subdivision Design Administrator’s concerns

regarding the plans and other documents submitted by and on behalf of the Claimant.

[191] The evidence which I accept clearly supports a finding that the Claimant sought

relief from certain requirements and design features set forth under the previously

approved plans which had been submitted to the Subdivision Design Administrator.

Having sought and received the variation approvals, the Claimant then failed to

complete the required work in accordance with its approved modified submissions and

therefore contrary to the Design Code. I reject the Claimant’s suggestion that the

subsequent approval variation for the stucco finish then relieved the Claimant from

completing the design features that were contained in the originally approved plans.

[192] I accept the evidence of Bryan Valiquette and William Peereboom, which on its

whole supports the conclusion that the Claimant and its principal Sonny Manhas treated

the Design Code requirements and the Subdivision Design Administrator’s approval

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process as something in the nature of inconvenient suggestions, rather than as legal

obligations and requirements, and thus ignored many of the requirements and failed to

comply with them.

[193] I accept that the matters outlined in the VGD Email were never completed by the

Claimant. I further accept that these were required to achieve compliance under the

provisions of the Design Code. Based upon the evidence of William Peereboom, it is

noteworthy that there were other important non-compliance issues which the

Subdivision Design Administrator indicated he was prepared to waive in order to grant

final approval.

[194] The fact that the Claimant was able to obtain an occupation permit from the City

of Colwood does not in itself relieve the Claimant from the requirements under the

Design Code. These are two distinct regimes. Compliance with one regime does not in

itself equate with compliance under the other regime. In fact, a failure to comply with

one regime does not necessarily amount to noncompliance with the other regime.

[195] The immediate and simplest remedy available to the Developers is the

withholding of the Compliance Deposit. That is what they have done on the basis of the

reasonable opinion of the Subdivision Design Administrator. The provisions of the

Design Code form part of the Contract of Purchase and Sale. Under the Design Code,

the Compliance Deposit is refundable only upon “completion of the home and

installation of the approved Storm Drainage Pit.” In my view, the phrase “completion of

the home” must be read within the context of the Design Code and hence that

completion must be in accordance with the Design Code. This condition has not been

met by the Claimant.

[196] Furthermore Paragraph 6 of the Contract of Purchase and Sale says that the

Compliance Deposit will be refunded once the Subdivision Design Administrator has

determined that Owner has successfully complied with “the restrictions and guidelines

contained herein”. Those contractual conditions have not been met by the Claimant.

Accordingly, the Claimant is not entitled to the return of the Compliance Deposit.

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Therefor I dismiss the Claimant’s action for the return of the Compliance Deposit and for

damages in lieu. I will deal the disposition of the Compliance Deposit below.

[197] On the whole of the evidence that I accept, I must also dismiss the Claimant’s

claim against the Defendants for the amount paid by the Claimant for the services of

Victoria Design Group as represented by their invoice number 93964 dated March 7,

2020 totalling $441.00. Sonny Manhas was told in advance that additional hourly

charges would be levied by Victoria Design Group, although he says he took issue with

them. Those charges were for work beyond the scope of the Preliminary and Final

Review Fees set out in the Design Code. The Design Code provided for additional

charges of “$250 plus taxes (non-refundable)” for each additional submission to the

Subdivision Design Administrator. In my view the amount represented by the March 7,

2020 invoice is entirely an appropriate charge that must be paid by the Claimant and is

not refundable to it, I have reached this conclusion given the extensive amount of extra

time and effort on the part of the Subdivision Design Administrator necessitated by the

Claimant’s significant non-compliance issues.

The Defendants’ Counterclaim for the Claimant’s Non Compliance

[198] In their counterclaim the Defendants seek damages for the Claimant’s failure to

abide by the provisions of the Design Code. They contend that the measure of that

damage is $25,000 being the difference between what they were able to eventually sell

Lot 11 for and the general sale prices of lesser quality lots located in the general vicinity

of Lot 10 and Lot 11.

[199] In that regard, considerable reliance was placed upon the evidence of Cathy

Duncan, in her role as an experienced realtor (but not testifying as an expert) and also

the evidence of Richard C. Meagher, who himself is an experienced realtor and

developer of projects adjacent to the Subdivision.

[200] Cathy Duncan testified that after significant difficulty and delays in marketing Lot

11 the Developers were only able to obtain and accept an eventual offer for it in the

amount of $330,000 on July 24, 2020. She presented Assessment information and

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Multiple Listing Reports for other building lots near the Subdivision as sale price

comparisons. Those other building lots sold for more than Lot 11. She expressed her

personal opinion and attributed the lesser sale price for Lot 11 solely because of the

Claimant’s failure to abide by the Design Code and the resulting poor appearance of the

Lot 10 House.

[201] Mr. Meagher has been a real estate agent for over forty years and has extensive

experience in a number of real estate development projects in the South Vancouver

Island area. He is particularly familiar with the lots in the area adjacent to the

Subdivision including one of his own subdivision developments. As previously noted, he

was not called as an expert witness nor was he presented to the Court as such and

therefore was not accepted by the Court as an expert witness. The Defendants did not

take the necessary preliminary procedures under the Small Claims Rules steps in order

to do so. That has negatively impacted on the Developers discharging their evidentiary

burden on the issue of potential damages for the reduced sale price of Lot 11.

[202] Mr. Meagher swore an affidavit on March 8, 2021 which was admitted into

evidence. Mr. Meagher provided viva voce evidence and was also cross-examined on

both forms of his evidence.

[203] In his testimony that Mr. Meagher stated that his subdivision development was

adjacent to but at a lower elevation than the Developers’ Subdivision. His last two

building lots were at a lower elevation and more influenced by restrictive covenants,

limiting the building area because of natural rock outcroppings. They each fetched

$345,000 plus GST in in September and October 2020. He further testified that his two

“more preferred lots” which were still at an elevation lower than Lot 11, but

unencumbered by restrictive covenants, sold in March 2020 such that one fetched

$395,000 plus GST and the other $380,000 plus GST.

[204] He expressed his personal opinion that Lot 11, which was located at the highest

elevation within Phase 2 and backed “onto protected parkland” and “afforded privacy

and treed outlooks and western valley views” would be expected to sell somewhere in

the range of between $360,000 to $365,000 plus GST.

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[205] Mr. Meagher did not provide any evidence nor express his opinion about why Lot

11 only sold for $330,000 and specifically he did not provide any evidence that the

appearance of Lot 10 House was a negative factor resulting in the eventual lower sale

price for Lot 11

[206] Bryan Valiquette was briefly asked questions in his examination in chief about his

previous interest in purchasing Lot 11 and the inquiries he made specifically about the

future views from Lot 11. He never proceeded with negotiations for that purchase. He

was not asked, nor did he provide any testimony to the effect that his loss of interest in

acquiring Lot 11 was because of the appearance of the Lot 10 House and its lack of

compliance with the Design Code. It is noteworthy that Bryan Valiquette had provided

evidence about his concerns that the appearance of the Lot 10 House would reduce the

sale price for the Discovery Bay House. However, in the end he was satisfied with the

sale price that was obtained.

[207] The Defendants did not call the ultimate purchaser of Lot 11 to provide any

evidence about the negotiations surrounding their purchase of Lot 11, and whether the

appearance of the Lot 10 House had any bearing on the lower price they were willing to

pay.

Analysis and Conclusions about the Defendants’ Claims for Damages

Claim for Damages for Diminution of the Value of Lot 11

[208] I have viewed and compared several photographs entered into evidence of the

completed Lot 10 House and photographs of other completed houses in the Subdivision

and in the adjacent area. Objectively, on this basis I cannot conclude that the Lot 10

House meets the same standards or exceeds the standards of design aesthetics and

quality of finishing of the other houses, which I understand were bound by and complied

with the provisions and purposes of the Design Code.

[209] However, based upon the whole of the evidence before me and specifically a

lack of expert evidence, I cannot reasonably conclude that it was Claimant’s lack of

compliance with the Design Code for the Lot 10 House and its resulting appearance that

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caused the reduced sale price for Lot 11. In other, words the Defendants have failed to

adduce sufficient evidence to discharge their evidentiary burden in order to succeed on

this issue.

Claim for Punitive Damages

[210] In its submissions, the Defendants seek punitive damages against the Claimant

for its conduct in failing to abide by the Design Code. However, while mindful that

pleadings of self-represented parties may be “inelegant” but yet still be satisfactory, the

Defendants did not plead in their counterclaim that they were specifically seeking

aggravated or punitive damages against the Claimant. This is required by the case

authorities. [See: Gillespie v. Gill, 1999 BCPC 39; Whiten v. Pilot Insurance Co., 2002

SCC 18].

[211] Therefore, I must dismiss the Defendants claim for aggravated or punitive

damages on this basis and there will be an order accordingly.

[212] If I were to consider a claim for damages under this heading and it had been

properly pled, I am mindful of the recent decision of this court in Rai v. Bal, 2021 BCPC

188. In it, the Honourable Judge Chettiar canvassed a number of legal principles

relating to claims for damages under a multiple number of headings. At paragraph 33

she reviewed the requirements for an award of punitive damages.

[213] The evidence before me does allow me to conclude that in the course of their

dealings, the Defendants and its representatives found Sonny Manhas, as a

representative of the Claimant, to be a frustrating and difficult individual .

[214] However, as frustrating and difficult as Sonny Manhas’s conduct was, it fell

considerably short of being harsh, vindictive, reprehensible and malicious or high

handed and therefore to be deserving of punishment by way of an award of punitive

damages.

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Claim for Damages for Lost Time and Inconvenience

[215] The Defendants seek damages to compensate them for Cathy Duncan’s time in

dealing with the multitude of issues on behalf of the Defendants caused by the Claimant

and its contractors or other representatives in either the non-compliance under the

Design Code or in the trespass upon Lot 11.

[216] The Defendants assert that Cathy Duncan has expended 36 hours valued at

$200 per hour totalling $7,200 plus GST.

[217] There may be certain situations where damages for inconvenience and loss of

time may be available to a company but there must be direct and quantifiable evidence

of such damages. (See: Vista Leadership Inc. v. Pilon, 2021 BCPC 320 at paragraphs

301 to 313.)

[218] The Defendants’ evidence before me lumps all the categories of these possible

damages together, and they appear to include items for trial preparation and the like.

Those items for preparation or court attendances, which would include the Settlement

Conference and trial preparation are not recoverable expenses. (See: Vista Leadership

Inc. v. Pilon, supra, at paragraphs 314-319).

[219] Therefore the Defendants’ claims for damages for inconvenience and loss of time

are not sufficiently quantifiable and are dismissed. There will be an order accordingly.

The Disposition of the Compliance Deposit

[220] It is clear from the counterclaim that the Claimant was made aware that the

Defendants were seeking damages or some other form of compensation for the

Claimant’s significant non-compliant conduct and failure to abide by the Design Code.

[221] Having found that the Claimant failed to comply with Design Code which is

substantially replicated in the Statutory Building Scheme covering both Lots 10 and Lot

11, the question is what is available to compensate the Defendants and on what basis.

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[222] The Defendants have not pursued the remedy of a mandatory injunction against

the Claimant in the Supreme Court or in the alternative, a claim for equitable damages

for breach of a negative covenant that may be contained in the Statutory Building

Scheme, and its incorporated the Design Code. The availability of those remedies are

described in Suncourt Homes Ltd. v. Cloutier, 2019 BCSC 2258.

[223] This Court does not have the statutory jurisdiction to grant a mandatory

injunction. In my view, this is not a case where the Provincial Court should exercise its

limited jurisdiction under the Law and Equity Act, RSBC 1996, c. 253 arising from

“necessary implication” to deal with matters of procedure to ensure justice is done. This

limited jurisdiction is described in CLEBC Provincial Court Small Claims Handbook,

Chapter 2, part 2.3 and the cases therein referenced.

[224] This Court’s lack of jurisdiction to grant equitable relief was also canvassed in

Mort v. Le, 2016 BCPC 287 in connection with an alleged failure under a “Design

Code” in favour of and enforceable by a municipality under a s. 219 covenant.

[225] Therefore the question that I must next consider is that having dismissed the

Claimant’s action for the return of the Compliance Deposit and for damages in lieu, what

is to become of the Compliance Deposit? Is it to be forfeited to the Defendants?

[226] To release the Compliance Deposit to the Claimant given the level of non-

compliance would simply be rewarding it for its unacceptable actions in ignoring the

requirements of the Design Code.

[227] This case represents a scenario in which the Contract of Purchase and Sale has

failed to specifically to deal with a distinct possibility, namely one in which the Claimant,

as an Owner/Buyer, fails to comply with the Design Code, in a manner other than failing

to complete the landscaping (for which a remedy is contained in Schedule E of the

Contract of Purchase and Sale). The Contract of Purchase and Sale only specifies that

“the Compliance Deposit will be refunded to the Owner once the Administrator has

determined that the Owner has successfully complied with the restrictions and

guidelines contained herein.”

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[228] To have the Compliance Deposit continue to be held by a stakeholder in trust,

such as Gurmail Manhas, in perpetuity pending satisfaction of the release conditions is

not desirable nor practical and in my view it is not what was intended by the parties.

[229] No case authorities have been cited by the parties for the Court’s consideration

in dealing with this issue, thereby leaving it to this Court to conduct its own research.

[230] In that regard the following authorities have been considered:

(a) Clendening et. al. v. Cedarhurst Properties Ltd, [1977] BCJ No 1327, 31 BCLR

153

(b) March Brothers & Wells v. Banton, (1911) 45 S.C.R. 338

(c) Benedetto v. 2453912 Ontario Inc., [2019] O.J. No. 950

(d) Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 SCR 423

(e) Clausen v. Canada Timber & Lands, Ltd. [1923] 4 D.L.R. 751

(f) Vanvic Enterprises Ltd. V. Mack, [1985] B.C.J. No. 5

(g) Tang v. Zhang, [2013] B.C.J. No. 180

[231] The seminal authority on the nature of a deposit is the English Court of Appeal’s

decision in Howe v. Smith (1884 27 Ch. D. 89, [1881-5] All E.R. Rep. 201. That case

has been adopted by the Supreme Court of Canada in March Brothers & Wells v.

Benton, supra at 339-40.

[232] The law with respect to deposits is neatly summarized by the Ontario Court of

Appeal in Benedetto v. 2453912 Ontario Inc., supra, at paragraph 5, as follows:

5. Where a payer ( usually the purchaser) gives a vendor a deposit

to secure the performance of a contract for purchase and sale of

real estate, the deposit is forfeit if the purchaser refuses to close

the transaction, unless the parties bargain to the contrary: see

Howe v. Smith ( citation omitted); March Brothers & Wells v. Banton

(citation omitted ). In Howe v. Smith, Fry L.J. stated at p. 101:

Money paid as a deposit must, I conceive, be paid on some

terms implied or expressed. In this cased no terms are

expressed and we must therefore inquire what terms are to

be implied. The terms most naturally to be implied appear to

me in the case of money paid on the signing of a contract to

be that in the event of the contract being performed it shall

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be brought into account, but if the contract is not performed

by the payer it shall remain the property of the payee. It is

not merely part payment, but is then also an earnest to bind

the bargain so entered into, and creates by the fear of its

forfeiture a motive in the payer to perform the rest of

contract.

[233] Therefore, in this case I must consider the nature of the Compliance Deposit.

[234] Most of the above noted case authorities reviewed by this Court deal with the

language in real estate purchase agreements concerning the disposition of deposits in

real estate transactions, when the deposit amount is paid as either a refundable or non-

refundable amount, but as part of and taken into account in the ultimate purchase price,

that is unless the transaction fails to complete.

[235] The British Columbia Court of Appeal in Tang v. Zhang, supra, at paragraph 30,

establishes the following general principles with regard to deposits in the context of

standard form contracts regularly used by real estate agents (at that particular time) in

British Columbia:

1. On a general level, the question of whether a deposit or other payment

made to a seller in advance of the completion of a purchase is forfeited

to the seller upon the buyer's repudiation of the contract, is a matter of

contractual intention;

2. Where the parties use the word "deposit" to describe such a payment,

that word should in the absence of a contrary provision be given its

normal meaning in law;

3. A true deposit is an ancient invention of the law designed to motivate

contracting parties to carry through with their bargains. Consistent with

its purpose, a deposit is generally forfeited by a buyer who repudiates

the contract, and is not dependant on proof of damages by the other

party. If the contract is performed, the deposit is applied to the

purchase price; (emphasis added).

4. The deposit constitutes an exception to the usual rule that a sum

subject to forfeiture on the breach of a contract is an unlawful penalty

unless it represents a genuine pre-estimate of damages. However,

where the deposit is of such an amount that the seller's retention of it

would be penal or unconscionable, the court may relieve against

forfeiture, as codified by the Law and Equity Act;

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5. A contractual term that a deposit will be forfeited "on account of

damages" on the buyer's failure to complete does not alter the nature

of a deposit, but may be construed to mean that if damages are

proven, the deposit will be applied against ("on account of") them. If no

damages are shown, the deposit is nevertheless forfeitable, subject

always to the expression of a contrary intention.

[236] Several leading case authorities, including Tang v. Zhang, recognize the notion

of a “true deposit”, which is described in some instances as “an earnest for the

performance of the contract”.[ see: Tang v. Zhang, supra at paragraphs 22 to 25],

[237] In other words it is a “compliance deposit” put up as motivation and security for a

party’s performance of its contractual obligations. [see also for example: Williams

Pacific Developments Inc. v. Johns, Southward, Glazier, Walton and Margetts, [1996]

B.C.J. No. 2797 (BCSC), upheld by the British Columbia Court of Appeal, (1997) 35

B.C.L.R. (3d) 180 and further affirmed in Tang v. Zhang, supra.]

[238] In Tang v. Zhang at paragraph 25, in its analysis of Howe v. Smith and the cases

that have adopted it, the British Columbia Court of Appeal says that:

… a “true” deposit- i.e., a payment that is not simply a part payment of the

purchase price, as discussed in Conner v. Bulla 2010 BCCA 457- is “non-

refundable” by definition…

[239] In my view, based upon the language used in the Contract of Purchase and Sale,

the Compliance Deposit in this case is a “true deposit”. The language is clear. It is “to

ensure compliance with”, among other things, the “Registered Statutory Building

Scheme & the Approved Plans”. The Approved Plans must satisfy the requirements of

the Design Code. Therefore the Compliance Deposit is only “refundable” to the

Claimant if the conditions for that refund are met. For the reasons set forth above, those

conditions have not been met by the Claimant and most certainly never will.

[240] Where there is a contractual term stipulating that breach of the contract by the

maker of the deposit will result in the deposit being forfeited to the non-defaulting party

in the form of liquidated damages, the court may well enforce the clause allowing the

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non-defaulting party to retain the deposit as liquidated damages (Clendening et. al. v.

Cedarhurst Properties Ltd, [1977] BCJ No 1327, 31 BCLR 153).

[241] However, in the present case, the various forms of wording of the Contract of

Purchase and Sale do not provide for a mechanism (liquidated damages or otherwise)

through which the Defendants may retain the deposit. Instead, it only provides for the

conditions required for the Compliance Deposit to be released back to the maker of the

deposit (being the Claimant in this case). Therefore on what basis can this Court permit

the Defendants to retain the Compliance Deposit for their benefit?

[242] Here I find that through its actions, the Claimant has demonstrated that it has no

intention of rectifying its non-compliance with the Design Code and furthermore that it is

has no intention of being bound further by its obligations under the Design Code. In my

view, that amounts to a repudiation of the Design Code obligations by the Claimant. I

find that the Defendants (as the non-repudiating party) have not accepted that

repudiation and have continued to treat the contract as being in full force and effect, as

is their right to do so. Thus the contract remains existent for both parties and either one

can sue for damages. In the alternative, if the non-repudiating party (in this case the

Defendants) were to accept the repudiation, the contract is terminated; that is not the

situation in this case. [see: Guarantee Co. of North America v. Gordon Capital Corp.,

supra, at paragraphs 39 to 47].

[243] In this case, the Defendants made their claim of damages by way of counter-

claim to the Claimant’s attempt to sue for damages as a result of not being refunded the

Compliance Deposit. As noted above, the Defendants have not accepted the Claimant’s

repudiation of the contract. Therefore, under Guarantee Co. of North America., the

Defendants are free to sue for damages and the contract is not itself repudiated.

[244] Furthermore, according to Vanvic Enterprises Ltd. v. Mack, [1985] B.C.J. No. 5,

once a party repudiates a contract, the rights relating to that repudiation accrue to the

non-repudiating party, and the acceptance of that repudiation does not affect those

rights (at para. 17). Therefore, since this Court has determined that the Claimant

repudiated the contract, the Defendants have accrued the right to forfeiture of the

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Compliance Deposit based upon common law nature of deposits as laid out in Howe v.

Smith, supra and adopted in March Brothers & Wells v. Benton, supra.

[245] The case authorities referenced above support a finding and conclusion that: a

deposit agreement, which lacks a mechanism in express terms by which the deposit of

the defaulting party becomes forfeited to a non-defaulting party, is taken to contain an

implied term that the deposit is forfeited to the non-defaulting party upon repudiation of

the contract by the defaulting party, barring express language to the contrary.

[246] The wording of the Contract of Purchase and Sale in this case does not contain

express language stating that the Compliance Deposit is not to be forfeited upon

repudiation or otherwise, thus the implied term at common law regarding forfeiture

applies.

[247] I therefore conclude that Claimant has repudiated the operative contractual

provisions for which the Compliance Deposit was paid, and as motivation and security

for its performance of those contractual obligations. On the whole of the circumstances

the amount of the Compliance Deposit is reasonable and forfeiture and retention of it

would neither be penal nor unconscionable. I have found that the Claimant has

repudiated the Design Code rather than a merely breaching it. Therefore based upon

March Brothers & Wells v. Banton, and the case authorities that have followed it, the

Compliance Deposit will be forfeited to the Defendants and paid from trust by Gurmail

Manhas to the Defendants. There will be an order accordingly.

The Claimant’s Alleged Trespasses on Lot 11

[248] The Defendants allege two incidences of trespass on their Lot 11 by the Claimant

in the course of its construction on Lot 10. The circumstances are in dispute. The

Claimant denies or minimizes the alleged trespasses. The Defendants contend that the

trespasses occurred within a clearly identified sensitive, protected geotechnical area

and thereby necessitated them to require the Claimant to take important remedial

actions under expert supervision.

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[249] The Claimant asserts that, at the insistence of the Defendants, it was required to

pay an invoice to WSP Canada Inc. in the amount of $1,972.19 for unnecessary

geotechnical services, unnecessary legal fees paid in the amount of $354.38 being the

cost of an Access and Indemnity Agreement prepared by Emberton & Company, and

also unnecessary amounts paid to the Claimant’s excavation and trucking contractor,

Hermsen Construction in the amount of $2,011.81. The Claimant seeks to recover these

amounts from the Defendants.

[250] The Defendants rejects these claims. In turn, they allege that they have suffered

damages arising from these alleged trespasses by the Claimant.

[251] I accept there is no dispute that Lot 11 was at all material times, owned by the

Developers.

[252] Sonny Manhas provided the Claimant’s evidence on these issues. Cathy Duncan

and Russell Scott a Professional Engineer and geotechnical professional provided

evidence on behalf of the Defendants.

Undisputed Circumstances Surrounding the Alleged Trespass

[253] As previously mentioned the geotechnical issues on the lands forming the

Subdivision were of concern to the City of Colwood, the Developers and to the

geotechnical professionals involved in the Subdivision. Hence, the large number of

requirements and restrictions in terms of building on Lot 10 were in place in order to

obtain municipal approval for the Subdivision. I accept that the Claimant was made

aware of these geotechnical concerns and the resulting requirements based upon all of

the disclosure made available to it either prior to or at the time of execution of the

Contract of Purchase and Sale. In that regard, the Claimant also subsequently obtained

the service of a geotechnical firm which was WSP Canada Inc., being the same

consulting engineering and geotechnical firm used by the Developers. The Claimant

had its own structural engineering firm.

[254] It is common ground that there was a June 4, 2018, Lot 10 on site meeting

among Cathy Duncan, Russell Scott, Sonny Manhas, the Claimant’s framing contractor

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and possibly the Claimant’s structural engineer; the purpose was to discuss issues

relating to the construction of the Lot 10 House and the geotechnical requirements for

its foundation. This required the removal of the engineered fill on Lot 10 in order to

expose the bedrock and other necessary steps to meet the geotechnical slope

requirements for the resulting placement of the removed engineered fill.

[255] Based upon May 9, 2017 geotechnical summary reports prepared by Russell

Scott, P.Eng. it was WSP Canada Inc.’s opinion inter alia that:

a)

b)

from a geotechnical perspective and based upon the site preparations

overseen by WSP both lots were “considered geotechnically safe for the

use intended, namely development with a single-family home within the

prepared building pad shown on the civil design layout drawing”; and

based upon the proposed house designs for each lot, that may

incorporate a rear foundation wall that will require drilling and

dowelling into the exposed bedrock at the rear of the development

area on the upper part of each of the lots.

Evidence of Russell Scott on Behalf of the Defendants

[256] Russell Scott is an experienced professional engineer and geotechnical

professional with some twenty-five years of experience commencing in the United

Kingdom and thereafter, at least for the past 7 years in British Columbia. He heads

WSP Canada Inc.’s Vancouver Island business unit for its Environmental Division.

Russell Scott was not called, nor presented to the Court, nor qualified as an expert

witness.

[257] Both Russell Scott, as well as his engineering firm have extensive geotechnical

knowledge about and professional experience in the development of the Subdivision.

[258] Russell Scott testified that the agreed plan arising out of the June 4, 2018

meeting was that the removed engineered fill would be placed in a rock gully between

Lot 10 and Lot 11 at a 2 to 1 slope angle. The rock gully area starts at the upper

portions of the lots and descends to a public park area at the bottom. Russell Scott also

testified that it was discussed among the attendees and agreed that the Claimant would

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not require access to Lot 11 in order to complete the required removal of the engineered

fill.

[259] Russell Scott noted that there was a geotechnical concern that any excavation

machine work on Lot 11 would have to be monitored because of previously identified

rock fall concerns in that area, concerns about the disruption of the approved surface on

Lot 11 and concerns about disruption of the engineered designed drainage system on

Lot 11.

[260] On June 10, 2018, Scott Russell received photographs from Cathy Duncan

showing excavations taking place on Lot 10 and showing that some excess excavated

materials had been placed on Lot 11, rather than being trucked away in accordance

with the agreed plan. Russell Scott made an in person site visit and observed that

materials removed from Lot 10 had not been placed properly in the gully area. Also, a

large amount had been placed upon Lot 11 in a stockpiled fashion. He considered the

method of placement of the excavated crushed rock on top of the Lot 11 bedrock at a

30° angle to be precarious because, in his view, it created a risk that the top materials

could slide off of Lot 11 into the public parklands below.

[261] Russell Scott was able to observe that the stock piled materials were actually on

Lot 11 because the boundary between the two lots was known to him and was

topographically clearly delineated such that Lot 11 was higher than Lot 10. He was also

able to observe that engineered fill materials had been removed from the rear of Lot 10.

[262] As I understand it, shortly thereafter, Russell Scott had a telephone discussion

with Sonny Manhas about these concerns. Sonny Manhas agreed to remove the

materials off of Lot 11 and other excess materials and place them into the gully. Any

additional excess materials were to be moved away or used as non-structural fills below

the Lot 10 House deck or placed back in the gully as landscape fill. This information was

confirmed in an email sent by Russell Scott to Cathy Duncan on June 13, 2018.

[263] Thereafter, Russell Scott and Stewart Dolan of WSP Canada Inc. conducted on

site visits to Lot 10 on June 14, 2018 and June 20, 2018 to meet with Sonny Manhas,

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the Claimant’s framer and its own structural engineer about foundation work that had

been completed and the concerns about the excavation materials having been “dumped

into a gully”.

[264] According to a Field Review Report prepared by Russell Scott for the June 11 to

June 20, 2018 time frame (the “Field Review Report”), which was introduced and

admitted into evidence, and further amplified in Russell Scott’s viva voce testimony, the

Claimant’s representatives were told that excavated materials from Lot 10 “had been

dumped into a gully behind the proposed house and presented an unacceptable risk of

rockfall/landslide to the lower part of the lot.” Thus as I understand it, removal of the

stockpiled materials off of Lot 11 resulted in a continuing concern for a geotechnical

hazard that had to be corrected by the Claimant. According to the Field Review Report

and Russell Scott’s evidence:

It was agreed by all present that this material would be regraded to a

stable 1V:2H slope.

[265] The satisfactory completion of that remedial work was confirmed by Stewart

Dolan during a site visit on June 20, 2018 at which time Sonny Manhas was apparently

in attendance. As I understand it, that was sufficient for a Letter of Compliance to be

issued by WSP Canada Inc.

[266] In cross-examination, Russell Scott was requested to provide information about

the provisions of the Access and Indemnity Agreement (as described below) which

required that he be present during the necessary remedial work to remove “all rock and

debris” from Lot 11 and the necessary work on Lot 10. He explained that when he was

not available that Stewart Dolan was present but further explained that notwithstanding

the provision that he be present, he decided that he or Stewart Dolan would only go on

a periodic basis.

[267] He noted that extra visits were required because the required work was not being

done by the Claimant as required. Russell Scott further explained the details of the

WSP Canada Inc. invoice dated August 2, 2018. It was rendered to and paid by the

Claimant for services provided between June 1 to June 30, 2018 generally referenced

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as being for “site meetings, bearing reviews, discussions with client Cathy Duncan,

structural engineer and provision of reports”. He explained that the reports included the

Field Review Report and the issuance of a required Letter of Compliance. He further

explained that none of the charges on this invoice related to services provided for Lot

11.

Evidence of Cathy Duncan on Behalf of the Defendants

[268] Cathy Duncan’s evidence corroborates the evidence of Russell Scott on these

matters. Following the June 4, 2018 on-site meeting, she sent a confirming email to

Sonny and Vennie Manhas. In that email of June 5, 2018 she made it clear that if the

Claimant’s framing contractor intended to access the rear of Lot 10 at any time from Lot

11 to let her know at the earliest opportunity. Her email concluded as follows:

Due to the nature of the services installed and Geotech approved ground,

we would require an access & liability agreement drafted by our lawyer,

should that access be required.

[269] On June 14, 2018, after the Claimant’s trespass had been discovered, Cathy

Duncan sent an email to the Developers’ lawyer Brock Emberton instructing him that it

would be necessary for a form of agreement be prepared to permit the Claimant’s

excavation contractor to travel through the rear of Lot 11 to reach Lot 10. This access

was necessary in order for the Claimant to complete the necessary remedial work

specified by Russell Scott and to address her concerns that the Claimant not disturb the

drainage systems installed on the back of those lots.

[270] Accordingly, Brock Emberton prepared an Access and Indemnity Agreement

which was made on June 19, 2018 and signed by both ManhasCo as the owner of Lot

10 and DuncanCo and MapleCo as the owners of Lot 11 (the “Access and Indemnity

Agreement”).

[271] The Access and Indemnity Agreement’s recitals acknowledged as follows:

C. The Owner of Lot 10 placed rock and debris from Lot 10 on to Lot 11 and now

requires access to Lot 11 to remove the rock and debris;

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[272] In the body of the Access and Indemnity Agreement the Owners of Lot 11

granted the Owner of Lot 10 the required access with an excavator and equipment:

…as is necessary to remove the rock and debris from Lot 11 and carry out

the work necessary on Lot 10 as long as Russell Scott a geotechnical

engineer, from WSP is present.

[273] The Access and Indemnity Agreement contained additional provisions which may

be summarized as follows:

a)

the Owner of Lot 10 was to ensure all rock and debris from the

surface of Lot 11 and this surface of that Lot 11 was to be “returned

to the same condition as it was before the rock and debris was

placed on Lot 11” all of which was defined as the “Work”;

b)

the Owner of Lot 10 was to “ensure Lot 11 be restored to

such a condition that it complies with the geotechnical

requirements” set out in a covenant registered against the

titles to both Lots 10 and 11;

c)

d)

the Owner of Lot 10 was required to repair any damage it

may cause to the drainage system located on Lot 11;

in a broadly worded indemnity provision, the Owner of Lot 10

agreed to indemnify the Owners of Lot 11 from “all liabilities,

claims, demands, actions, causes of action, damages,

losses (including death), costs or expenses (including legal

fees on a solicitor and own client basis) and all costs

charged by WSP that have arisen or may arise as a result of

the Owner of Lot 10’s original trespass on Lot 11, accessing

Lot 11 or breaching the terms and conditions” of the Access

and Indemnity Agreement; and

e)

within the “General” provisions of the Access and Indemnity

Agreement it is acknowledged that each party had received

or had the opportunity of receiving independent legal advice

and “is fully aware of the legal effects and of the purpose

and intent of this Agreement”.

[274] Emberton & Company rendered an account for the preparation of the Access and

Indemnity Agreement dated June 18, 2018 in the total amount of $354.38 addressed to

the Claimant and the sent care of its solicitors Manhas Mar. The Emberton & Company

account was apparently paid by the Claimant who now seeks to recover that amount

from the Defendants.

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[275] As I understand Cathy Duncan’s evidence, at that particular point immediately

after its discovery, the Defendants were not intending on further pursuing the Claimant

for this trespass, provided that the remedial work and other provisions of the Access

and Indemnity Agreement were fulfilled. All of that of course predated the

commencement of this action by the Claimant seeking recovery of its monies

unnecessarily paid because of the alleged trespass and the issues of non- compliance

with the Design Code. Hence, the issue of the trespass has been revived and the

Defendants are now seeking some compensation for the trespass.

Evidence of Sonny Manhas on behalf of the Claimant

[276] The evidence of Sonny Manhas on the issue of the alleged trespass is both

contradictory and confusing. On one hand he seems to reject the allegation that the

Claimant or its contractors actually trespassed on Lot 11 but then seems to suggest that

if such a trespass did occur it was minimal in nature and that the Defendants’

allegations have been exaggerated.

[277] He also seems to suggest that the complaints raised by the Defendants were

maliciously motivated because the Claimant had rejected Cathy Duncan’s suggestion

about receiving a listing from the Claimant for the ultimate sale of the Lot 10 House.

[278] He contends that following that rejection (which I understand occurred at the

June 4, 2018 on-site meeting at Lot 10) he received a “nasty call” from Cathy Duncan

whereby she demanded that a load of lumber to be used for foundation forming, which

the Claimant had dumped on the Developers’ Lot 11 without permission, was to be

removed. He indicated that he complied with that demand and made arrangements with

Bryan Valiquette to place the lumber on Lot 9. He testified that he then told the

Claimant’s trades that they were not to put materials on Lot 11.

[279] Sonny Manhas also testified that he had instructed the Claimant’s excavation

contractor, Hermsen Construction, to place excavated materials and stockpile it in what

he described as a “big hole area” but which was a natural water course in the event of

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rain or water run-off. He implied tha that this was all on Lot 10 and not Lot 11 and the

work was done in an appropriate manner.

[280] He further testified that he then received another “nasty” telephone call from

Cathy Duncan demanding the removal of the materials because of what he says were

unfounded concerns that the boulders could slide and cause damage to the storm drain

system. Furthermore, he testified that she made a number of complaints to his lawyer

Gurmail Manhas, the City of Colwood and his Geotech firm, in what he described as

“trying to turn people against me”.

[281] He contends that the removal of materials was unnecessary hence, the Claimant

should not have been required to sustain the expenses of WSP Canada Inc. and

Hermsen Construction.

[282] At one point in his evidence he stated he could not recall seeing nor could he

identify piles of excavated materials depicted in several photographs. According to the

Defendants’ evidence the piles were on Lot 11. Sonny Manhas’ inability to recall

occurred notwithstanding that he was on site at Lot 10 almost every day, overseeing the

Claimant’s construction and making decisions on behalf the Claimant.

[283] At one point in his testimony he seemed to suggest that it was “impossible” for

the materials to be dropped from Lot 10 onto Lot 11 as alleged by the Defendants. He

also suggested that the Claimant’s excavation contractor did not go onto Lot 11 until

after permission was granted, presumably by way of the Access and Indemnity

Agreement. He identified the Access and Indemnity Agreement and the provisions

relating to expenses but then contended that the paid expenses which the Claimant

were seeking to recover should not have been required.

[284] Sonny Manhas did not provide any explanatory evidence about the

acknowledgement of the Claimant’s trespass on Lot 11 which appears in the Access

and Indemnity Agreement.

[285] The Claimant did not call any representative of its excavation contractor to

provide any explanations or corroborative evidence.

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Analysis and Conclusions about the Trespass and the Parties’ Respective Claims

[286] I accept the evidence of the Defendants witnesses about the existence of the

trespass by the Claimant on Lot 11. In doing so, I must reject the evidence Sonny

Manhas. It simply does not make sense given the whole of the evidence which I did find

to be credible and reliable.

[287] It is particularly challenging to accept Sonny Manhas’ version in light of the clear

acknowledgement of the trespass which is contained in the Access and Indemnity

Agreement. Similarly, my previous finding where I determined that Cathy Duncan

accepted the Claimant’s refusal to obtain a listing for the completed Lot 10 House

counters the notion of malicious motives that Sonny Manhas ascribed to her when she

objected to the placement of lumber on Lot 11 and insisted, on behalf of the

Developers, that there be remedial work do deal with the excavated fill from Lot 10.

[288] Furthermore, I find that the Access and Indemnity Agreement was a reasonable

requirement of the Defendants.

[289] In my view, the oversight of WSP Canada Inc. in completing what I find to be

necessary “Work”, as described in the Access and Indemnity Agreement, was entirely

reasonable in the whole of the circumstances.

[290] Accordingly, I dismiss the Claimant’s claim for reimbursement of Emberton &

Company invoice, the WSP Canada Inc. Invoice and the Hermsen Construction

expenses. There will be an order accordingly.

Damages Arising out of the Trespass

[291] I understand from the Defendants’ evidence and submissions that it now seeks

damages for the Claimant’s trespass and for the overall conduct of its representative

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Sonny Manhas. As noted above, the Defendants in their submissions seek punitive

damages but did not specify that in their Counterclaim as is required.

[292] In Gibson v. Sun, [2018] B.C.J. No 2877, 2018 BCSC 1277 our Supreme Court

stated as follows:

109 The tort of trespass to land was discussed in Watson v.

Charlton, 2016 BCSC 664 at para. 224, where the court endorsed the

following summary from Glashutter v. Bell, 2001 BCSC 1581 at para. 26,

"Trespass to land occurs when one enters onto land in the possession of

another without lawful justification. Trespass is actionable per se; there is

no requirement to prove actual damage to the property".

[293] In that decision, Justice Abrioux further notes as follows:

112 Damages in trespass and nuisance are, by their nature, contextually

driven. Where a technical trespass is committed, such as an unintentional

encroachment, damages may be nominal only: Wasserman v. Hall, 2009

BCSC 1318 at para. 90.

113 Compensatory damages in both trespass and nuisance may take into

account the aggravation and foreseeable mental distress flowing from the

defendant's conduct: Wasserman at para. 91; Suzuki at para. 103.

[294] In that decision Justice Abrioux made an award of nominal damages of $500 for

brief intrusions of trespass by the tort-feasor but then went on to make a substantial

award of $12,500 for nuisance.

[295] The trespass in this case was not a brief intrusion onto Lot 11. I find that it was

intentional on the part of the Claimant and within the context of a commercial venture

with heavy equipment and without regard for the sensitive seismic nature of Lot 11. The

Claimant’s excavation contractor, whose activities trespassed on Lot 11, was being

directed and overseen by Sonny Manhas on behalf of the Claimant. In this case and

given all of the circumstances relating to this trespass I award damages in the amount

of $2,500 to be paid by the Claimant to the Defendants. There will be an order

accordingly.

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[296] The fact that the parties entered into the Access and Indemnity Agreement after

the trespass in my view does not preclude the Defendants from being entitled to or

recovering these damages.

Decision and Resulting Orders

[297] The Claimant’s claims against the Defendants are all dismissed in their entirety.

[298] The Compliance Deposit in the amount of $3,000 paid by the Claimant and held

in trust by Gurmail Manhas, Barrister and Solicitor, and the law firm of Manhas Mar is

forfeited by the Claimant to and in favour of the Defendants and will be paid from trust

to the Defendants by Gurmail Manhas, Barrister and Solicitor and the law firm of

Manhas Mar.

[299] The Defendants are entitled to judgment against the Claimant and the Claimant

will pay to the Defendants general damages in the amount of $2,500 for the trespass.

All of the Defendants other claims for damages are dismissed.

[300] The Defendants are entitled to receive pre-judgment interest on the pecuniary

judgment amount for the general damages award of $2,500 award under the Court

Order Interest Act running from June 10, 2018 to the date of judgment. I direct that the

Registrar will make the calculation of this interest amount in finalizing the total amount

of the judgment. The date of June 10, 2018 coincides with the date of the trespass.

[301] The Defendants and the Claimant will on or before October 13, 2022 execute all

necessary documents in order to permit Gurmail Manhas and the law firm of Manhas

Mar to release the Compliance Deposit in the amount of $3,000 to the Defendants. In

the event that there shall be any disagreement about the required documentation from

either of the parties, then either party, and also Gurmail Manhas, are at liberty to bring

the matter back before me for further directions, upon notice to all parties and to

Gurmail Manhas. I am not expecting this to be necessary.

[302] I have reserved my decision in this matter. Therefore, I have made the above

payment order in the absence of the parties. Rule 11(15) governs in these

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circumstances. It provides that Defendants as the judgment creditor, may take the

realization steps set out in Subrule 11(11). The Claimant, as the judgement debtor, is

similarly entitled to seek a payment hearing under Rule 12(10). This relates to any

unpaid portions of the judgment after receipt of the Compliance Deposit by the

Defendants.

[303] The parties will need to consider their next steps but they must do so with an

appropriate measure of dispatch. If neither party initiates any of the steps contemplated

by Rule 11(15) and the rules and subrules incorporated by reference therein, by

October 28, 2022, then I order that the Claimant will pay the full amount of the

outstanding judgement to the Defendants by that date.

[304] The Defendants are entitled to receive from the Claimant its filing fee for its Reply

and its Counterclaim and any reasonable service expenses as determined by the

Registrar, all by October 28, 2022.

[305] The Registry will prepare the necessary form of the resulting orders and any

other related documents, without any requirement for the signatures of the parties.

__________________________________

The Honourable Judge J.P. MacCarthy

Provincial Court of British Columbia