Viva Developments Inc. v. Icarus Properties Ltd.

2000BCSC0390 Citation: Viva Dev. et al. v. Icarus Properties et al. Date: 20000302 2000 BCSC 390 Docket: C955469 Registry: Vancouver IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: viva developments inc. and char enterprises inc. plaintiffs AND: icarus properties ltd. hans heringa defendants SUPPLEMENTAL REASONS FOR JUDGMENT OF THE HONOURABLE mr. JUSTICE j.t. edwards Counsel for the Plaintiff: Peter A. Spencer Counsel for the Defendants: Craig P. Dennis Date and Place of Hearing: January 14, 2000 Vancouver, BC [1] The trial of this matter lasted over five days and reasons for judgment were filed March 2, 1999. [2] In the reasons for judgment I found the defendant Icarus liable to the plaintiffs for all damages to them caused by the filing of a lis pendens against the properties being sold by the plaintiff Viva. [3] I made the following findings with respect to the lis pendens: [16] The following are the issues and findings: (a) Do the facts give rise to a basis of claim for damages? Yes I find that the lis pendens was solely designed to tie up the Windsor Estate lands and prevent a sale of any properties. Icarus attempted to force the City's hand concerning the proposed road alignment. There was a collateral or improper purpose. There was a "lack of reasonable and proper cause" by instituting an action against Viva and Char and registering the lis pendens and that by itself constitutes evidence of malice. . . . {26] Heringa testified that the purpose of the lis pendens was to catch the attention of the City and Viva/Char so the matter would be resolved, essentially forcing Aballini to the table. Heringa relied on Cosburn to advise him. The decision to issue a petition and file a lis pendens was Cosburn's. Heringa acknowledges that when they had started the Victoria petition they had already seen sale signs on the Windsor lots and they knew therefore that the lots were subdivided. Heringa wanted the road issue settled before Aballini's Windsor properties were sold. [4] In the reasons for judgment I reached the following conclusions: [36] I find that Icarus is liable to pay damages to Viva/Char in an amount to be assessed. I dismiss the personal claim against Heringa. [5] I reached a conclusion that: [37] While I have been able to come to a conclusion with respect to liability, I have not sufficient material before me to assess damages. Should the parties be unable to reach agreement on the amount of damages they have liberty to apply for the determination of quantum. [6] The parties were unable to agree on the amount of damages and the matter is before me for determination of the quantity of damages. [7] I made the following finding with respect to exemplary damages: [39] The defendants submit, and I agree, that this is not a case for exemplary damages. The evidence does not show a wilful and wanton misconduct required to justify an award of exemplary damages. No such misconduct is proven at this trial. Icarus through Heringa sought and obtained legal advice which he followed. Heringa was comfortable with the advice he was given and he saw the steps that he was being advised to take as a normal course of negotiations and that these negotiations were not in any way wilful, wanton or unlawful. [8] The damages sought by the plaintiffs can be broken down into a number of categories as follows: (a) compensatory damages for the actual loss suffered by the plaintiffs as a result of filing the lis pendens; (b) damages at large for improper filing of lis pendens; (c) bank interest paid to carry lots 4 and 5; (d) property tax paid; (e) lost opportunity cost. Compensatory Damages [9] That loss can be calculated by valuing the two lots sold to Mr. Howardson at the sale price of $65,500 each which was in effect prior to the filing of the lis pendens. The valuation of the trade of the two lots is somewhat more subjective. The settlement was comprised of a rental property (Northgate Manor) in Regina valued at $2.5 million being sold to Viva who in turn assumed the existing mortgage on the property in the amount of $1,971,548. The value stipulated for the remaining five lots (excluding lots 5 and 19) would be $200,000. [10] One of the terms of the agreement was that Viva would transfer to the Regina buyer lots 19 and 5 at a value respectively of $74,500 for lot 19 and $67,500 for lot 5. The commission would then be paid following realization of the sale of those two lots and would be paid equally to the realtors. [11] The allocation of value of $200,000 to the five lots which were transferred for sale is a valuation that is artificial in that the total price was reduced substantially in order to reduce the amount of tax which would otherwise have been payable on the transaction. [12] Without any precise calculation of the increment in the value of the lots I would say that it would be reasonable to take $131,000 as the value of lots 4 and 5 for the sale from Viva to Howardson and the value of the two lots at the time of the trade of the apartment block. A figure of $67,000 would represent a reasonable valuation of each of lots 4 and 5 at the time of the Regina apartment swap. Damages at Large [13] The plaintiff suffered damages for wrongful filing of the lis pendens for an improper purpose and is therefore entitled to damages at large in accord with what is said by Hinkson J.A. in para. 38 of the reasons for judgment herein. [14] A review of awards for damages at large together with the deliberate attempt by improper purpose to harass the plaintiff with the object of bringing the plaintiff to the table to pay attention to the plight of Icarus, should result in an appropriate amount for non-compensatory damages of this type of $25,000. Additional Damages [15] The plaintiff is entitled to bank interest lost as a result of loss of the Howardson agreement, property tax of $800 per year per lot for lots 4 and 5 for the damage period, from September 1, 1994 and the opportunity costs lost during the same period. These amounts are shown below and best summarized as follows: (a) Compensable Losses - being the increased value received in swap; ($3,000.00) (b) Lost opportunity cost - $ 2,986.74 (c) Property tax cost - $ 2,400.00 (d) Bank interest - $6,378.98 TOTAL $ 8,765.72 (e) Damages at large $25,000.00 TOTAL JUDGMENT $33,765.72 [16] The plaintiff will have its costs on scale 3 unless there is an agreement with respect to costs. "J.T. Edwards, J." The Honourable Mr. Justice J.T. Edwards