401949 B.C. LTD. CLAIMANT AND: 0729858 B.C. LTD. v. 0729868 B.C. LTD., 2022 BCPC 205

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 Appearing for the Defendants on their own behalf: C. Duncan Place of Hearing: Colwood , B.C.

Dates of Hearing: February 26, 2021, April 27 & 28, 2021, September 7, 2021, September 29, 2021, October 6, 2021 and November 3, 2021 Dates of Written Submissions: November 22, 2021, December 13 & 29, 2021 Date of Judgment: September 29, 2022 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 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 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. 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, 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. [ 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 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. [ 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. 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.

a) The Preliminary Design Fee, noted as not refundable, is set at $300 plus GST.

b) The Compliance Deposit was set at $3,000 and noted to be “refundable upon the completion of the home & installation of theapproved 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 tosubmit 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 completeddesign 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 significantlycomplex matter.

Furthermore, the Subdivision itself and any construction within the Subdivision is highly regulated by a number ofmunicipal 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 andsomewhat selective canvassing of the evidence where it is relevant and necessary in making evidentiary findings. This approach wasapproved by Woods P.C.J. in R. v. Connell, 2017 BCPC 123 , 2017 BCPC123, at paras. 5 and 6.

This approach has beenfollowed 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, evenif 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. TheSupreme 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 mustscrutinize 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 tosucceed 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 theircounter claim. [54] What does “proof on a balance of probabilities” mean? It does not mean proof beyond a reasonable doubt. That standard of proofapplies only in criminal trials. In civil trials the party who has the burden of proof on an issue must convince the finder of fact (herebeing 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 herfavour. [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 Denningin the following terms: …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 tribunalcan 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 (SCC), [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 apreponderance of probability and I do not propose to attempt a more precise statement of the rule.

I wish, however, to emphasize that inevery civil action before the tribunal can safely find the affirmative of an issue of fact required to be proved it must be reasonablysatisfied, and that whether or not it will be so satisfied must depend upon the totality of the circumstances on which its judgment isformed 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 volumeof evidence adduced. Also, if the nature of the inquiry is serious or the evidence adduced is very unsatisfactory, a jury may not besatisfied 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: The truth is that, where the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existencebefore 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 evidencerelevant to that issue, no matter who produced it.

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

a) Sonny Manhas; and

b) Vennie Manhas. [62] Sonny Manhas was the primary witness for the Claimant. On its behalf, he dealt with Cathy Duncan for the purposes ofnegotiating and finalizing the terms of the Contract of Purchase and Sale and the completion of the sale and purchase of Lot 10. Hearranged for and instructed the Claimant’s designer to complete all of the plans and other required documentation to obtain approvals forthe Lot 10 House.

He dealt with the Subdivision Design Administrator on an ongoing basis; on a daily basis he oversaw the excavation ofLot 10 and completion of the foundations and the construction of the Lot 10 House and on behalf of the Claimant, he was responsible fordealing 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 presentwith Sonny Manhas at their family residence and with Cathy Duncan at the time that the Contract of Purchase and Sale, prepared by herin her capacity as a realtor was presented, reviewed and executed by the Claimant and by Cathy Duncan as a representative of theDevelopers. 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 thematters subject of this litigation.

b) Russell Scott, a Professional Engineer employed with WSP (Canada) Inc. (consultants for the Defendants);

c) William Peereboom, the Subdivision Design Administrator;

d) Bryan Valiquette, an officer, shareholder and director of Discovery Bay Builders Corp. which purchased Lot 9 in the SecondPhase and which completed a single family residential unit on it, in and around the same time frame that that the Claimant was buildingon Lot 10; and

e) Richard G. Meagher, an experienced real estate land developer who was involved with the development and sale lots in asubdivision 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 ClaimsRules 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 ofthe witnesses who provided this conflicting evidence. [66] In many cases, credibility assessment is reasonably straightforward. However, in others it is not. In most respects, this case fallsinto 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), (BC CA), 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 existingconditions.

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 theprobabilities 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 ofimportant 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; abilityto 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. (SeeR. 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: Credibility and reliability are different. Credibility has to do with a witness’s veracity, reliability with the accuracy of the witness’stestimony. Accuracy engages consideration of the witness’s ability to accurately i. observe; ii. recall; and iii. recount events in issue. Any witness whose evidence on an issue is not credible cannot give reliable evidence on the same point. Credibility, onthe other hand, is not a proxy for reliability: a credible witness may give unreliable evidence: R. v.

Morrissey (1995), (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 maypresent 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 witnessesand 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 ongoingbusiness relationships with the Defendants.

However, I am of the view that this has not materially influenced their evidence such as toreduce its credibility or its reliability . I found them each to be credible, reliable and straightforward witnesses. Each of their evidence isconsistent with the preponderance of evidence that I find to be trustworthy and reliable. [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.

Hadthe necessary steps been taken by the Defendants to present him as an expert witness, he most likely would have met the requirements tobe qualified as an expert witness based upon his extensive real estate and development background and he would likely meet therequirements 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 DesignAdministrator were under attack by the Claimant.

Mr Peereboom remained highly professional throughout his testimony. He was avaluable witness. [79] I have also taken into account that the relationship between Sonny Manhas and Bryan Valiquette became very strained during thecourse of the constructions of the Lot 10 House and the Discovery Bay House, as herein defined.

However, Bryan Valiquette’s evidencewas presented in a manner that was devoid of exaggeration about the actions of both Sonny Manhas and the Claimant that were veryinconvenient 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 reasonablycredible 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 ofPurchase and Sale presented as a documentary exhibit and disclosed in the Defendants’ book of documents, well before thecommencement of the trial, was indeed the actual document that the Claimant and the Defendants had signed.

There were times when hestated he could not recall when asked about things that were potentially unfavourable to the Claimant, while at other times stating he hada 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 CathyDuncan.

This often clouded his responses and led him frequently to rely upon this assertion, rather than fully addressing the actions orlack 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 makelengthy statements, which seemed to be an attempt to expand or amplify his own prior evidence. He did so without directly asking thewitness a question.

This required the Court on multiple occasions to intervene and direct Sonny Manhas to cease proceeding in thatfashion and to further direct him to frame his questions for the witness in an appropriate manner. There were several times when thecourt 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. 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 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 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. [ 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. [ 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. [ 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 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 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 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 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 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. [ 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) unapproved window design modifications with the elimination of one of three windows above the front door on the façade

b) failure to install window trim on all windows and specifically a lack of trim on the windows in and around the front door;

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

f) 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. [ 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) unapproved use of certain finishing materials and missing cedar siding;

b) on the façade, a lack of window trim over the front door and around the outer window sides;

c) required painting of and use of approved colours on architectural features over front door and on the façade;

d) 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 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 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 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. [ 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. [ 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. [ 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 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. [ 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 evid

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