SmartCentres (Salmon Arm) Wins in Appeals Court

Knowing, Not Knowing and Knowing what not to Know.

I’ve been a bit delayed in commenting on this BC Appeals Court decision due to both work and family priorities.  The citation is  0759594 B.C. Ltd. v. 568295 British Columbia Ltd., 2013 BCCA 381 with the text of the judgment here.

The Observer article Court overturns SmartCentres ruling (Wickett: Sept. 11 2013) summarizes this recent decision where SmartCentres’ and their co-investor Calloway REIT won their appeal to set aside a previous Supreme Court decision that determined they were to pay the vendor the $2 million dollar unpaid balance of the purchase price.

In the initial lawsuit, the purchasers counter-claimed for $3.3 million for breach of contractual representations, which, they said, resulted in a significant portion of the lands being undevelopable. They had argued they were not obligated to pay the full purchase price because “warranties and representations made in the purchase agreement are untrue,” but the trial judge disagreed. He said the seller could not reveal to the purchasers information not known to him, such as citizen opposition to development of the land, or the effect of the Riparian Areas Regulation, which meant less land was available to be developed.

SmartCentres no longer has to pay the vendor the $2 million. The case heads back to the Supreme Court for exactly what is owed between the original claim by the vendor and SmartCentres’ counterclaim.

Also see the Aim High post  SmartCentres (Salmon Arm) Loses in BC Supreme Court (July 30 2012) for links to the original judgment as well my take.

This current Appeals Court decision appears to have turned in part on the ‘warranty’ given by the vendor to SmartCentres. The Appeals Court determined that “ … warranties allocate risk and parties are free to distribute risk as they see fit”. The vendor, by giving a warranty, was responsible for information that may or may not have been known to it.

The information that was contested was “Topography Misrepresentation”, “Zoning Misrepresentation” and “Citizens’ Opposition Misrepresentation”

Check out the recent decision as well as the Observer article. I remain intrigued with the initial judge’s remarks that “The parties’ principals are sophisticated persons knowledgeable in real estate development.

* Image from WA:TER

The decision turns in part on one development party having legally used the word ‘warranty’ and being held to account when SmartCentres’ plans for the whole enchilada failed. A community woke up and said no to their initial unbridled development plans that would have destroyed a huge swath of a sensitive environmental area … and SmartCentres had a warranty in their back pocket.

Time will tell what that will be worth.

Author: Tim Lavery

Aim High Salmon Arm It matters

17 thoughts on “SmartCentres (Salmon Arm) Wins in Appeals Court”

  1. The latest schedule has Walmart opening in October. Hopefully the scheduled walkway will be completed this year. We are looking forward to being able to walk thru the swamp and see the thriving wildlife as we do at the Prestige. This is a done deal and the site and entrances look great. What an improvement to the highway. This is certainly going to be an asset to the City. It is unfortunate that a few of the minority will not accept the results and continue to bad mouth anything Smart Centres do. Wouldn’t it be great if we could hire the directors of the world’s most successful retailer to run our governments?

  2. We pretty much do have directors of successful retailers running our governments. Instead of people of vision we have CEO’s and mid level managers in control as if the entire county was a corporation.

  3. There are very few, if any, retailers running our country. The majority are from the legal professions (lawyers, etc.) who have very little business experience. If the country was run as a corporation we would surely see a lot of improvements. All the fat from the civil servants would be cut and the whole country’s economic structure would be modernized and efficient.

  4. You should see the documentary “the Corporation”. The Corporation is a 2003 Canadian documentary film written by University of British Columbia law professor Joel Bakan, and directed by Mark Achbar and Jennifer Abbott. The documentary examines the modern-day corporation. In this film/book he equates the actions of “successful” corporations to the traits displayed by human psychopaths. The stellar cast is made up of : Nome Chomsky, Michael Moore, Naomi Klein, Milton Friedman, Vandana Shiva. Psychopaths are custom made for business and politics since they are attracted to power. Check this out .

  5. Jim..perhaps I was unclear but you are being a tad too literal minded..I was not suggesting that the country was run by actual ex shopkeepers and businessmen but that the prevailing paradigm is one of business..economic growth…bottom line mentality with no forward looking vision of where the hell we are headed. Just grow the economy, develop the tar sands, gut environmental regulations and yes, disappear the public service and it’ll all work out. Just ignore and marginalize the ‘pointy headed’ intellectuals (scientists) who are literally screaming at us that we can’t continue with business as usual as just a bunch of hand-waving chicken littles who get in the way of ‘modernization’ and efficiency..

    It is unfortunate that so many people see concrete curbs, more pavement, space age overhead lighting (another topic I won’t get into here) that allow us to walk thru ‘swamps’ just like Disney World as an asset. We could improve on this as well by getting rid of the wildlife and replacing in with clean predictable robot creatures that could pop out of the bushes or rise up out of the ‘swamp’ at our bidding..then we could just forget about environmental regulations all together…and it would be so modern and efficient.

  6. I agree with most of your comments Steve with the exception of a few remarks. The main one in my opinion is the referral to automated nature in Disneyland. We have been to Disneyland and Disneyworld and have the opinions that these automated animals are both entertaining and educational in these settings. Quite different from the Walmart site. We love and enjoy nature and as my wife is in a wheelchair with MS and unable to walk, we find the Prestlge site enjoyable as we can see nature first hand. Hopefully we may do the same at the Walmart site.
    My other exception is your referral to corporations. I do not suggest for a minute that the country should be run as a corporation. I do suggest that the directors of businesses such as Walmart would streamline and have control over spending including the scientific field. I have worked in three federal departments and have personally seen so much waste and useless jobs. These costs could be eliminated and the monies spent on such projects as your scientific studies.

  7. Jim…I really don’t know how to answer your commenst regarding the ‘animated nature’ in Disneyland..I don’t sense any irony in your statement regarding the entertainment and educational value of these things so I’m at a loss as to how to respond.

    I’m sure that having paved walkways makes it possible for people who, like your wife, are unable to fully appreciate the natural environment but I don’t think that the construction of airplane hanger sized temples of consumption on our wetlands should be considered a reasonable strategy for making nature more accessible.

    And I would respectfully disagree with you when you state that you are not suggesting ‘for a minute that the country should be run as a corporation’. Walmart is a corporation and directors of corporations would run the country as directors of a corporation. Which brings us back to my original point about having ‘directors’ well versed in the catechism of bottom line thinking instead of people with a vision of where we are going.

  8. Steve — You and I will just have to agree to disagree on this subject. In my opinion there is no comparison between Disneyland and the SC site. Walt Disney was not noted for destroying the environment. He purchased an orange orchard in an area that was rather useless in Anaheim and turned it into a site for both entertainment and educational. There is no argument as far as entertainment value. Besides the rides there are museums and side attractions that give an insight into American history.
    The SC site was also an ugly piece of land. Remember the concrete plant, old auto bodies, meat plant, etc. etc. with no control whatsoever over the environment. Now SA will have this area complete with the most up to date environment treatment systems for protection of our heritage. The wetland is protected for generations to come. I still contend that this project is fantastic for SA for providing hundreds of jobs while protecting the wetlands.

  9. Disneyland is the last place on earth where one would look for ‘insight’ into American history.

    I will let you have the last word sir…”Steve – you and I will just have to agree to disagree on this subject. In my opinion there is no comparison between Disneyland and the SC site….” Well…alright then…I’m not sure how that even became a topic but we’ll leave it at that.

  10. Sorry but I can’t let you have the last word on this Jim. The ONLY reason the wetlands are protected to ANY degree Jim is because of the expert work and personal financial resources of a team of aware, professional and dedicated citizens that initiated a closer look from the Department of Environment. Smart Centres originally proposed (with no objection from the majority of our Council or City staff) a 42 acre proposal that was literally ON the wetlands to the North East of the property! Because (and only because) of the work done by the private citizenry of Salmon Arm: Smart Centres is now on a 16.5 acre development with a 116,000 sq.ft. Airport Hanger 70’s style store. They still have not signed off on a covenant to protect those wetlands of which we both speak, situated on the balance of this property. I guess “hope springs eternal” for Mitch Goldhar and his merry band of town destroyers!

  11. Nice to hear from you again Duncan. No one is arguing that the commercial area was reduced thanks to the local action of citizens. A good job was done and it is quite an improvement. I still wonder where your environmental groups were when the ugly mess was there before. To my knowledge not one party put up strong objections until SC moved in to clean up this horrible mess. With the Walmart development, we now know that safeguards have been installed to protect the wetlands. The problem now lies with the native lands (such as overflowing septics dumping into the lake) and the farmers on the Salmon River use of chemicals and manure. I agree that your arguments have helped enormously in the development of the SC site. Keep up the good work.

  12. You’re right Jim: The river floods. Should we continue to build shopping centres on flood lands? As in “High River” should we even build houses?
    When you look at an aerial photo (circa 1990’s) of the SC property you can see clearly that the land used by Mike Hertzak, the towing company, and Petty’s Meats actually occupied a very small portion of this valuable wetland property. The existing commercial allotment that did not require a change in permit or an amendment to the OCP would have allowed business in that strip area. If Smart Centres would have been satisfied with restricting development to that area – they could have saved a lot of time and resources. However, I might add: when the offending businesses and buildings were quite easily removed the land beneath them with little or no work would produce food or grazing. This will not be the case presently as this rich, alluvial, bottom land will now be encased in asphalt. The original businesses that the “silent majority” use as a yardstick of our lack of environmental awareness; were operating with legal business licenses issued by the City. In fact the contaminated fill that was hauled to the Petty site actually came from the destruction of the former CITY HALL. This represents the majority of the town’s awareness of the environment at that time! We (the concerned citizens – not the ‘silent’ majority) decided enough was enough and dug into our personal time and pockets to oversee what we consider “Bad Development” on that sensitive wetland. Let’s see what action the current council (and the people that talk of car hulls and animal carcasses) can do about “Scrap Pappy” on the west of town.

  13. Once again I have to agree with most of your debating Duncan. two points that I disagree with. The first point is the statement that if Walmart had stayed in the same perimeter as the previous junk pile — there would not have been any argument. The crunch was against the coming of Walmart and not anything to do with wetlands. When the arguments against Wallmart started years ago there was never a mention of wetlands. The points against Walmart was how it would spoil the quiet city, it would kill the downtown centre, etc. etc. Wetlands was brought in after all other attempts to kill SC failed. The other point I disagree with is the

  14. I was called away so did not finish my final thought. The “Scrap Pappy” is all legal and the family have followed all the regulations to a T. They have done nothing wrong. The blame should all be addressed to the powers that be and not this hard working family.

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