[ 2012 ] Fairmont / Sunchaser / Northwynd official thread with lawsuit info!

[GypsyOne]

The reason the argument got little attention is - in terms of contract law - the meaning of certain terms is well settled. IF, MAY, SHALL, WILL are some of those words.

So while I believe you had horrendous legal representation - so bad that a law school should do a case study on it - this is not an argument that even Perry Mason could win.

I think you may have a point, but I'm not sure what it is. Contract law is written in ordinary English language with words having their common every day meaning. So why does use of the word "If" in our lease nullify our case and why does the Clause not mean what it says? Perhaps you could elaborate.

 

[Bewildered]

Anybody talk to a real lawyer yet whether MGs “fabulous settlement” is even good enough to ensure we are actually out once and for all. I’m waiting for a legal review because the whole thing still has an odour to it. I just don’t see a strong and decisive part saying you are “now and forevermore” removed from this scam. I just don’t see strong enough language to 100% guarantee we are out. Scares the crap out of me!

 

[GypsyOne]

I accept that the Lessor does not have to accept the Lease 'offered for purchase' in Clause 13. I do not accept that there exists within the contract any mechanism by which the Lessor can charge the Lessee for anything other than Maintenance Fees and a Special Assessment. This Special Assessment is strictly limited to damages resulting from a tenant's occupancy.

If Northmont had of started renovating and included the extra costs in the Annual Maintenance Fees, I would have thought they'd have had a better argument for the work being within the scope of and contemplated by the terms of the contract.

I know how the courts saw it. I just don't believe it.

Okay, you accept that the Lessor does not have to accept the Lease 'offered for purchase' in Clause 13. But, the Lessor DID accept the deemed offer to sell because they are taking back remaining timeshare (and payment of money) - "......then the Lessee shall be deemed to have offered to sell the Lessee's leasehold interest to the Lessor for an amount equal to......." ".....If the Lessor accepts the deemed offer as afore said, the Lessor shall be entitlfed to the Lessee's leasehold interest......"

Bottom line: By virtue of the default, a deemed offer to sell did occur. By taking back the timeshare (from those who accepted the negotiated offer) the Lessor accepted the deemed offer. The Lessor owes us a fractional amount of the value of remaining timeshare as per Clause 13. We should be holding the lawyers feet to the fire, theirs and ours, and insisting on the integrity of a contract. Somehow we got out snookered.

 

[ecwinch]

I accept that the Lessor does not haveI do not accept that there exists within the contract any mechanism by which the Lessor can charge the Lessee for anything other than Maintenance Fees and a Special Assessment.

I know how the courts saw it. I just don't believe it.

From an objective standpoint, I think the court explained the reasoning behind it's decision(s) in great detail.

Lessee shall be responsible for his proportionate share of all administration, maintenance and repair costs (the "Operating Costs") and replacement costs

If you are responsible for maintenance, repair, and replacement costs - what are you being asked to pay that is not in that category?

If Northmont - as you seem to suggest - had simply baked the refurbishment project onto the maintenance fees on a multi-year basis - what would be the difference?

 

[GypsyOne]

From an objective standpoint, I think the court explained the reasoning behind it's decision(s) in great detail.

Lessee shall be responsible for his proportionate share of all administration, maintenance and repair costs (the "Operating Costs") and replacement costs

If you are responsible for maintenance, repair, and replacement costs - what are you being asked to pay that is not in that category?

If Northmont - as you seem to suggest - had simply baked the refurbishment project onto the maintenance fees on a multi-year basis - what would be the difference?

We agree we are responsible for paying operating costs, but nowhere does it say we are responsible for paying capital costs. Those are two distinct categories of costs. Granted sometimes the two can blur together, but for the most part they are identifiable. An operating cost is usually used up immediately or approximately within a year. eg garbage removal, accounting costs. A capital cost is a more major expense. It usually relates to the super structure of the building, or is fixed to real estate. Replacement of a few shingles that the wind blew off is maintenance; replacement of the total roof that is part of the superstructure of the building is capital and becomes a depreciating asset over about 30 years. Replacement of faulty Poly B plumbing pipes is part of the original capital structure and cost of the building. Lessees are not responsible for paying for capital structure. We paid for capital structure when we bought our timeshare and we have an expectation that the structure would not be flawed and would last for at least as long as our 40-year leases. (Buildings constructed according to code should last for considerably longer than 40 years.) The fact that the buildings had major construction deficiencies and were failing in many ways after about 15 years does not make us culpable and responsible for major repairs. In fact we are victims of sales missrepresentation because buildings had to be taken out of service with loss of trading value and we should be compensated.

 

[ecwinch]

So NM had the option to NOT pay us for the remaining time in our lease. If they did not accept it, why can’t it be interpreted that we could then just walk. That clause gives the impression that there is some value left in our lease, so is it not a fair conclusion to assume that if NM didn’t pay, you could then choose to walk and forfeit the residual value?

The court explained that in para 37:
Finally, there are no termination provisions to be found in the JEKE VIAs which can be unilaterally exercised by JEKE as a lessee.

 

[ecwinch]

We agree we are responsible for paying operating costs, but nowhere does it say we are responsible for paying capital costs. Those are two distinct categories of costs. Granted sometimes the two can blur together, but for the most part they are identifiable. An operating cost is usually used up immediately or approximately within a year. eg garbage removal, accounting costs. A capital cost is a more major expense. It usually relates to the super structure of the building, or is fixed to real estate. Replacement of a few shingles that the wind blew off is maintenance; replacement of the total roof that is part of the superstructure of the building is capital and becomes a depreciating asset over about 30 years. Replacement of faulty Poly B plumbing pipes is part of the original capital structure and cost of the building. Lessees are not responsible for paying for capital structure. We paid for capital structure when we bought our timeshare and we have an expectation that the structure would not be flawed and would last for at least as long as our 40-year leases. (Buildings constructed according to code should last for considerably longer than 40 years.) The fact that the buildings had major construction deficiencies and were failing in many ways after about 15 years does not make us culpable and responsible for major repairs. In fact we are victims of sales missrepresentation because buildings had to be taken out of service with loss of trading value and we should be compensated.

The court considered that argument, but disagreed. And not one judge, but multiple judges reviewing the contract and reached (or sustained) that decision:

[258] Accordingly, I conclude that the plain reading of paragraph 9 is that all costs relating to the operation of the Resort, whether in the nature of capital costs or not, are to be borne by the owners. This applies even in the event of reconstruction of parts of the Resort as needed, whether from deferred maintenance issues or otherwise. There is no basis upon which the JEKE VIAs can be said to limit the responsibility to pay costs only for “regular maintenance” or “reasonable wear and tear”, as JEKE argues.

[259] This same issue was raised by many owners (including JEKE, by its present counsel) in the Special Case. It was not described as a “capital cost” issue there but, rather, one going “beyond regular maintenance”: see Special Case (BCSC) at para. 87. In any event, Loo J. was interpreting the VIAs based on the document itself, just as JEKE now suggests I should do, an approach that I endorse. Loo J.’s analysis is found the Special Case (BCSC) at paras. 86-89.

The fact that the buildings had major construction deficiencies and were failing in many ways after about 15 years does not make us culpable and responsible for major repairs. In fact we are victims of sales missrepresentation because buildings had to be taken out of service with loss of trading value and we should be compensated.

I agree that Fairmont probably could be sued. But to what outcome - they are a bankrupt company.

 

[CleoB]

The court considered that argument, but disagreed. And not one judge, but multiple judges reviewing the contract and reached (or sustained) that decision:

[258] Accordingly, I conclude that the plain reading of paragraph 9 is that all costs relating to the operation of the Resort, whether in the nature of capital costs or not, are to be borne by the owners. This applies even in the event of reconstruction of parts of the Resort as needed, whether from deferred maintenance issues or otherwise. There is no basis upon which the JEKE VIAs can be said to limit the responsibility to pay costs only for “regular maintenance” or “reasonable wear and tear”, as JEKE argues.

[259] This same issue was raised by many owners (including JEKE, by its present counsel) in the Special Case. It was not described as a “capital cost” issue there but, rather, one going “beyond regular maintenance”: see Special Case (BCSC) at para. 87. In any event, Loo J. was interpreting the VIAs based on the document itself, just as JEKE now suggests I should do, an approach that I endorse. Loo J.’s analysis is found the Special Case (BCSC) at paras. 86-89.



I agree that Fairmont probably could be sued. But to what outcome - they are a bankrupt company.

You are correct in that is how the judges looked at it. Unfortunately our legal team did not bring in anybody from the commercial part of real estate to explain to the judges exactly what capital costs are. Anyone in property management could have explained it and Gypsyone's analogy is very accurate. If an elevator in a building needs servicing or repair that is part of maintenance costs. If you need a new elevator because it fell and is all busted up, that's capital costs. The judges failed to understand this probably because they are not familiar with commercial real estate.

 

[Petus@18]

 

[Stung]

Below is an article from CTV Calgary from June of 2013 when this was in its infancy. Potential lawyer names are listed at the end of the article.

Owners of Fairmont timeshares face dilemma
CTV Calgary
Published Monday, June 10, 2013 5:33PM MDT
Last Updated Tuesday, June 11, 2013 12:26PM MDT

More than 15,000 timeshare holders are being asked to pay thousands of dollars to either renovate the complex or vacate their timeshares in Fairmont, British Columbia.

Tina and Matt Balsom say they were never thrilled with the ‘Sunchaser Vacation Villa’ they purchased in Fairmont four years ago for $11,000.

Now, the Balsom’s have grown to hate the property because of the bind it has left them in.

Northwynd, the resort owner, sent all timeshare owners a letter stating they either had to pay $4,000 to help renovate the resort or $3,000 to get out of their timeshare contract and the decision needed to be made in only a matter of weeks. Owners who failed to make their choice would be considered in default as of June 1, 2013.

The Balsom’s and many Calgary-based owners have asked CTV Calgary Consumer Specialist Lea Williams-Doherty to help them understand their options.

Lea investigated the property and learned the timeshare has had its share of problems.

Fairmont, the company that built the resort, went into bankruptcy in 2008. Fairmont's creditors then took over the resort and became Northwynd, the current owner and management company.

Northwynd says it inherited two major problems: leaky plastic pipes throughout the resort and neglected maintenance.

The estimated repair cost is $40 million and Northwynd came up with the idea of a ‘pay to stay, pay to go’ program.

Several timeshare owners have hired lawyers to challenge whether Worthwynd has the legal authority to charge them a $3,000 cancellation fee.

Other timeshare owners, wanting to keep their timeshares, are challenging Northwynd's right to charge for the renovations.

There are concerns amongst the owners that Northwynd will make similar calls for cash down the road.

“I can't guarantee it'll never come again,” says Northwynd’s Doug Frey, “but I can tell you that never again will there be a deferred maintenance problem of the scope we're dealing with right now.”

Timeshare owners have several options to dispute Northwynd’s demands:

• Choosing one of Northwynd's provided options
• Hiring legal representation and waiting on the outcome of the case
• Submitting a letter to the B.C. court hearing the case stating that you don’t believe Northwynd has the right to require a choice, and will wait for the court to determine the parties rights

BC Court Address:

• Supreme Court of British Columbia
• 800 Smithe Street, Vancouver BC V6Z 2E1
• Phone: 604-660-2847
• Case Number: S132760

There are several lawyers in B.C. and Alberta representing timeshare owners in the B.C. court action:

• Docken Klym www.docken.com (403) 269-3612
• Lindsay LeBlancLeblanc@coxtaylor.ca(250) 388-4457
• Kellie HamiltonKh@kelliehamilton.com(604) 685-7111

With files from Lea Williams-Doherty

PHOTOS

 

[Misled]

Hi, I'm new on the site, but a lessee, and feeling like this, this is just a cash grab. The settlement offer doesn't make sense to me, we gave up the leverage of blocking the downsizing of the resort for this? I consulted legally on my personal situation and was asked why this didn't go to the Supreme Court of Canada. With the uncertainty and confusion around timeshares it was thought it would have been a great opportunity. If I were a rich man.........

Was there ever any doubt it is just a cash grab? We were kept hanging with the promise of a class action. We were then told it would take too long and imagine what our invoices would be by then?? Were you consulted, nor was I, however considering the history, perhaps a wise decision. The Supreme court probably a good idea with different representation!

This is a orchestrated well planned and executed extortion shakedown of innocent and trusting consumers.

 

[GypsyOne]

The court considered that argument, but disagreed. And not one judge, but multiple judges reviewing the contract and reached (or sustained) that decision:

[258] Accordingly, I conclude that the plain reading of paragraph 9 is that all costs relating to the operation of the Resort, whether in the nature of capital costs or not, are to be borne by the owners. This applies even in the event of reconstruction of parts of the Resort as needed, whether from deferred maintenance issues or otherwise. There is no basis upon which the JEKE VIAs can be said to limit the responsibility to pay costs only for “regular maintenance” or “reasonable wear and tear”, as JEKE argues.

[259] This same issue was raised by many owners (including JEKE, by its present counsel) in the Special Case. It was not described as a “capital cost” issue there but, rather, one going “beyond regular maintenance”: see Special Case (BCSC) at para. 87. In any event, Loo J. was interpreting the VIAs based on the document itself, just as JEKE now suggests I should do, an approach that I endorse. Loo J.’s analysis is found the Special Case (BCSC) at paras. 86-89.



I agree that Fairmont probably could be sued. But to what outcome - they are a bankrupt company.

Yes, the judges decreed that the TS owners would pay all costs relating to the resort including reconstruction of faulty buildings. But they had to take great liberties with the Lease Agreement and apply their own faulty knowledge of real estate or bias in order to draw that conclusion. I've had a career in real estate that includes financing, appraisal, management, and ownership. I can also read a contract. I think I know better than the judges what is operating and what is capital when it comes to buildings and real estate. I have never seen where Lessees were responsible for paying for capital structure or capital costs of a property in which they were simply leasing use in the property for a finite period of time. Nor does it make sense that they would. It is well understood that if you rent an apartment you are responsible for paying rent, which in some cases could be tied to operating costs. But you would never be responsible for paying for the cost of replacing the roof. The unfairness of doing so in the case of Fairmont would be, for example, being charged a large sum of money in year 39 of a 40 year lease for a major capital expenditure which significantly enhances the value of the property, but which you would get almost no use from. What I'm not certain is whether the judges are incompetent or complicit.

But it's more than just about operating costs and capital costs. A Lessee's Association was supposed to be formed and never was, thus TS owners were kept from knowing what was going on with the resort. Then Northmont decided we were owners for purposes of paying for capital reconstruction of the resort, but tenants for enjoying the benefits. The courts also decided leases could be unilaterally modified to suit the interests of Northmont.

As for sueing Fairmont Resort Properties, that doesn't interest me. What does concern me is having my Lease blatantly miss-interpreted and modified to serve the interests of the other party. And I wonder how deep the scam goes. I keep thinking that the Province of B.C., and possibly Alberta do not want a popular tourist destination to fail, nor do they want to prop it up with government money. What better way than to offload the costs to the TS owners.

 

[ecwinch]

What I'm not certain is whether the judges are incompetent or complicit.

I hope this is the correct count, but from the court records it appears that nine different judges have heard arguments on the merits of this case in one form or another. On four different court cases, and three appeals. I could understand the point of judicial bias or incompetence if two or three judges had been involved. The key issue they all have agreed on is that you did not enter into a commercial lease - but that you entered into a timeshare plan.

At some point is the point at law not well settled?

The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice D. Smith
The Honourable Madam Justice Garson
The Honourable Madam Justice Loo
The Honourable Chief Justice Bauman
The Honourable Madam Justice D. Smith
The Honourable Mr. Justice Goepel
The Honourable Mr. Justice Branch
The Honourable Judge L.D. Young

Do you honestly believe so many judges in your court system are incompetent or on the take?

From the court:
In my view, there is absolutely no support for JEKE’s argument beyond the common fact that both types of relationship are governed by contract. However, unlike a time share, a commercial tenancy involves a one-on-one relationship between a landlord and a tenant that bears little resemblance to the contracts here which govern the collective nature of the interests held by the participants in a time share. The fundamental nature of a time share interest involves not only the creation of a contractual relationship between an owner and the developer, but also a relationship between all owners in the time share. This is evident in many ways.

 

[lost and confused]

I hope this is the correct count, but from the court records it appears that nine different judges have heard arguments on the merits of this case in one form or another. On four different court cases, and three appeals. I could understand the point of judicial bias or incompetence if two or three judges had been involved. The key issue they all have agreed on is that you did not enter into a commercial lease - but that you entered into a timeshare plan.

At some point is the point at law not well settled?

The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice D. Smith
The Honourable Madam Justice Garson
The Honourable Madam Justice Loo
The Honourable Chief Justice Bauman
The Honourable Madam Justice D. Smith
The Honourable Mr. Justice Goepel
The Honourable Mr. Justice Branch
The Honourable Judge L.D. Young

Do you honestly believe so many judges in your court system are incompetent or on the take?

From the court:
In my view, there is absolutely no support for JEKE’s argument beyond the common fact that both types of relationship are governed by contract. However, unlike a time share, a commercial tenancy involves a one-on-one relationship between a landlord and a tenant that bears little resemblance to the contracts here which govern the collective nature of the interests held by the participants in a time share. The fundamental nature of a time share interest involves not only the creation of a contractual relationship between an owner and the developer, but also a relationship between all owners in the time share. This is evident in many ways.

I don't think the judges were incompetent....infact, I am sure they are very fine and respected judges. Judges can only rule on the information presented before them and the arguments made. As I am doing more reading and educating myself, in my opinion, it appears that the litigation strategy and legal counsel may have been sub-par and breached many code of ethics in the process. The judges may have come to their decisions as a result of the info presented to them......which sadly was not very well presented by legal counsel (again, in my opinion).

ecwinch - thanks so much for following this thread and our saga. Appreciate and respect your insights and the time you have put in. Sincere thank you.

 

[ecwinch]

I don't think the judges were incompetent....infact, I am sure they are very fine and respected judges. Judges can only rule on the information presented before them and the arguments made. As I am doing more reading and educating myself, in my opinion, it appears that the litigation strategy and legal counsel may have been sub-par and breached many code of ethics in the process. The judges may have come to their decisions as a result of the info presented to them......which sadly was not very well presented by legal counsel (again, in my opinion).

ecwinch - thanks so much for following this thread and our saga. Appreciate and respect your insights and the time you have put in. Sincere thank you.

You are correct, courts can only decide on the case presented. And please understand where I am coming from. Some battles have been fought and the no one likes the outcome. But what the settlement is, who it is binding upon, and the rights of those who are not represented by MG are unclear. Energy is better spent on attacking the issues the court has not ruled on, over fighting battles lost IMHO.

 

[torqued]

So why can’t we demand our share of any profits made by NM in this scam. I’m an owner and paid to fix up this dump so where’s my check?

 

[torqued]

I hope this is the correct count, but from the court records it appears that nine different judges have heard arguments on the merits of this case in one form or another. On four different court cases, and three appeals. I could understand the point of judicial bias or incompetence if two or three judges had been involved. The key issue they all have agreed on is that you did not enter into a commercial lease - but that you entered into a timeshare plan.

At some point is the point at law not well settled?

The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice D. Smith
The Honourable Madam Justice Garson
The Honourable Madam Justice Loo
The Honourable Chief Justice Bauman
The Honourable Madam Justice D. Smith
The Honourable Mr. Justice Goepel
The Honourable Mr. Justice Branch
The Honourable Judge L.D. Young

Do you honestly believe so many judges in your court system are incompetent or on the take?

From the court:
In my view, there is absolutely no support for JEKE’s argument beyond the common fact that both types of relationship are governed by contract. However, unlike a time share, a commercial tenancy involves a one-on-one relationship between a landlord and a tenant that bears little resemblance to the contracts here which govern the collective nature of the interests held by the participants in a time share. The fundamental nature of a time share interest involves not only the creation of a contractual relationship between an owner and the developer, but also a relationship between all owners in the time share. This is evident in many ways.

So therefore NM pay your share and so will I!!

 

[torqued]

Every which way you turn NM has a double standard. That’s what stinks like the south end of a skunk headed north!

 

[Floyd55]

You are correct, courts can only decide on the case presented. And please understand where I am coming from. Some battles have been fought and the no one likes the outcome. But what the settlement is, who it is binding upon, and the rights of those who are not represented by MG are unclear. Energy is better spent on attacking the issues the court has not ruled on, over fighting battles lost IMHO.

What annoys me to no end is that it seems that all of the judges have held the same opinion on our role as timeshare owners all the way through this process. They have all ruled that we have to pay for these renovations to the poorly built buildings. My question then is if it was so obvious to all of these judges, who should be the legal masterminds in their profession, why didn't our lawyer just tell us from the outset that our case had no merit? We would have begrudgingly paid our $3,000 and gotten out right at the outset. Now because of the poor legal advice that we have been given for the past 4 years we are left holding the bag and paying almost 10 times that amount!

 

[aden2]

Is there a time limit on having Fraud charges being laid, as there has been no restitution for the money taken during 2009-10? The presentation of slide shows and high sales tactics was truly dishonest.

 

[teedeej]

why didn't our lawyer just tell us from the outset that our case had no merit?

Because our lawyer didn't thoroughly investigate the case before he took it on. At no time during the four years did he re-examine his options.

 

[greyskies]

Because our lawyer didn't thoroughly investigate the case before he took it on. At no time during the four years did he re-examine his options.

The writing was on the wall when he lost the test case.

Sent from my ONEPLUS A3000 using Tapatalk

 

[Roxanne]

Is there a time limit on having Fraud charges being laid, as there has been no restitution for the money taken during 2009-10? The presentation of slide shows and high sales tactics was truly dishonest.

It's called aggressive marketing and if you're a victim of this marketing tactic you can walk away without any further liabilities in US, not sure how this being treated in Canada.

 

[Floyd55]

The writing was on the wall when he lost the test case.

Sent from my ONEPLUS A3000 using Tapatalk

I don't know about anyone else in this discussion, but at no time up until a few months ago did I have any idea that we could end up liable for paying the full amount that NM was invoicing us for, even if we lost the case! I have always assumed that if we lost the case in the end that the judge would have us pay our original bill to leave plus interest (5%) plus maybe some of NM's legal fees. The worst case scenario that I could imagine would have been having to pay maybe 5 or 6 grand in the end. If anyone would have told me at the beginning of this case that we could end up on the hook for paying for all of the years of unused maintenance fees and 27% compounding interest I would have laughed and walked away! Seems that this should have been our lawyers responsibility to inform us of the risks involved up front. Don't worry, already have sent in my complaint to the law society.

 

[Roxanne]

I don't know about anyone else in this discussion, but at no time up until a few months ago did I have any idea that we could end up liable for paying the full amount that NM was invoicing us for, even if we lost the case! I have always assumed that if we lost the case in the end that the judge would have us pay our original bill to leave plus interest (5%) plus maybe some of NM's legal fees. The worst case scenario that I could imagine would have been having to pay maybe 5 or 6 grand in the end. If anyone would have told me at the beginning of this case that we could end up on the hook for paying for all of the years of unused maintenance fees and 27% compounding interest I would have laughed and walked away! Seems that this should have been our lawyers responsibility to inform us of the risks involved up front. Don't worry, already have sent in my complaint to the law society.

So true!