It was sold as a low-risk, low-stress, self-financing real-estate investment, and involved 14 non-descript condos on a Vernon street more associated with crime than as a place to invest money.
But in the 11 years since a variety of investors bought the rental units, eight of those years have been tied up in bitter litigation fueled by antagonism and deeply entrenched positions.
Following an 18-day trial at the Vernon courthouse, Justice Elaine Adair said that fortunately, the one area of consensus between all the parties involved was that they wanted the units sold.
“Sale of the units would at least bring an end to the prolonged fighting over matters relating to the Strata Corporation and its governance, and reduce the scope of the war to one over money and the division of profits,” Justice Adair said.
Details of the case are laid out in a 101-page, 36,000-word B.C. Supreme Court decision.
According to the decision, the case dates back to 2008 when Rene Gauthier, Odin Zavier, and Thane Lanz formed SWS Marketing to start a business in real estate investment.
Zavier had purchased a marketing licence, which allowed him to take on clients and advise them on marketing plans. Lanz took one of Zavier’s classes and they became friends.
They met Gauthier and the three decided to go into real estate investment. They launched SWS Marketing and although the three were supposed to own the company equally, Gauthier held more than 50 per cent of the shares and controlled the firm.
SWS Marketing got involved in three residential real estate development projects in the Lower Mainland before finding the 14 units in Vernon in 2010.
The following year Zavier bought the 14 units, spread over two buildings for $1.6 million. It worked out at $116,000 per unit, which they thought was a good deal as the units had been appraised at $145,000 each.
The transaction was structured so that, before completion, the company entered into separate contracts of purchase and sale for the individual units with investors.
Zavier, Lanz, and Gauthier were all involved in approaching potential buyers for the units. The investors were spread across the country and they sold it as a “hands-off” deal.
“The Vernon Project was presented as one having positive cash flow, and not requiring much cash up front,” the decision reads.
Investors needed to provide $2,500 and obtain a mortgage. SWS Marketing would manage the rental building and provide the remaining roughly $30,000 for the down payment.
As part of the transaction, each of the new owners also had to sign a Joint Venture Agreement.
These agreements laid out the profit share of 50 per cent between an owner and SWS Marketing.
It’s these Joint Venture Agreements that became to focus of much of the litigation.
The agreements appeared to have gone smoothly until 2013 when things broke down.
A dispute between Gauthier and Zavier “boiled over” and Lanz sided with Zavier.
“The Fall of 2013 also marked the beginning of the duelling strata councils,” the decision reads. “The ‘Gauthier Council,’ and the ‘Zavier Council.’
Due to their dispute, both Gauthier and Zavier created their own strata councils. Condo owners then chose sides and paid their strata fees to the strata council they preferred. The opposition strata council then sent demand letters asking for payment.
Justice Adair said this created “more confusion.”
Around this time the litigation started.
SWS Marketing, which is controlled by Gauthier, sued Zavier and Lanz, along with eight other owners, the strata council, and nine John and Jane Does.
Gauthier argued that Zavier and Lanz along with the other owners had breached the Joint Venture Agreement on how the profits were divided.
The parties were regularly in and out of court.
“By 2017, some of the defendant-owners had had enough and wanted out of their investments,” the decision says.
Zavier then steered the owners towards a company owned by his wife called the Home Buying Centre.
The company promised to help people who have properties that are difficult to manage.
SWS Marketing then accused Zavier and Lanz of intentionally creating the “chaos” so the owners would give up their units to Zavier’s wife’s company.
Zavier denied that.
The lengthy court documents go through the long history of disagreements between the parties as they argue about what certain contracts meant.
Both parties accuse the other of being “evasive, obstructive and dishonest” throughout the trial.
There are accusations of forged signatures and very different accounts of who paid for what.
Justice Adair agreed that Zavier and Lanz were both “argumentative and evasive” and she also felt there were concerns about the credibility and reliability of some of Gauthier’s evidence.
“Through their answers, both Mr. Zavier and Mr. Lanz demonstrated considerable antagonism toward Mr. Gauthier,” the Justice said.
The Justice said Lanz was “openly sarcastic and derisive.
“My strong impression was that Mr. Lanz has held a long-standing grudge against Mr. Gauthier, and saw the trial as an opportunity to settle scores,” the Justice said.
Ultimately, following a lengthy analysis of multiple claims and counterclaims, the Justice dismissed the action against Lanz but ruled that Zavier, along with each of the condo owners had breached the Joint Venture Agreement.
However, the court proceedings are not yet over.
The Justice ruled that neither side had put forward an argument about how the court should go about assessing the damages.
“In those circumstances, I have concluded that I cannot make a final order, and it would not be just to make such an order, without receiving further submissions,” Justice Adair said.
The Justice then ordered both sides to come back to court with submissions about how to move forward with damages.
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Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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