Litigation, appeals and documents

The following is a history of litigation and appeals regarding Westsea Construction’s initial refusal to disclose information to lessee Hugh Trenchard about its plan to replace the balance of Orchard House windows (its lawyer relented at the courthouse) and then whether landlord Westsea or lessee Trenchard should pay his suite’s share of that cost.

Now settled by the B.C. Court of Appeal, you may choose to turn to the article under the heading ‘Court of appeal rules for Westsea’. But if you read no further, note that one court application by Westsea was dismissed with costs awarded to Mr. Trenchard. Westsea paid him as ordered, but the company has been billing back to all lessees its full litigation expenses.

Updates to legal proceedings are posted at the bottom of this article.

Hugh in T-C in front of O.H.

Hugh Trenchard is a leasehold suite owner and resident at Orchard House tower. His legal actions have been on his own behalf as a self-represented litigant. There has been no class-action suit regarding our building and Mr. Trenchard does not offer legal advice to other leaseholders.

In November of 2013 Orchard House leaseholders were told via the annual one-page notice of coming-year suite fees to expect three special assessments in the next two years: $1,500,000 for the parking garage deck re-roofing and re-sodding, $300,000 for a new roof atop our tower and $3,000,000 for window and door replacements. This project would replace windows on the tower’s north and south faces, as east and west-end and corner windows had been replaced five years earlier and billed to lessees/tenants, which was before Mr. Trenchard bought his suite’s assignment. The priority order for these projects had been recommended by engineering firm Read, Jones, Christoffersen (“RJC”). Mr. Trenchard asked Westsea for that or any engineering report that might exist touching on the rationale for replacing all remaining original windows and doors. After considerable back and forth, Westsea allowed him a supervised half hour with this first RJC report, which did NOT explicitly recommend replacing all glazing.

Suit #1; ‘Transparency and info., please’

Mr. Trenchard filed suit in November of 2014 (call this suit #1) asking the court to rule that Westsea has a duty under our lease to be more transparent, to respond to reasonable requests for information about operating costs and special assessments, and not to charge a leaseholder to pay for information, as he had been asked to do. He also asked the court to interpret our lease to say that Westsea cannot charge its litigation costs related to this action back to the leaseholders.

Regarding our windows and doors project, obvious questions were: would the new installations replace ‘like with like’, a term often used in strata projects? Would double-pane and high-quality components be an improvement of Westsea’s asset at our expense? Was replacement of all windows and doors truly necessary? But even regarding annual operating costs we receive no budget or breakdown of expenses, which Mr. Trenchard’s court petition said should be provided to leaseholders.

Early in 2016 at the Victoria Courthouse Justice Brian MacKenzie allowed the parties to end the action by a “consent order” under which Westsea Construction agreed to write all leaseholders that the windows/doors project was pending and that an engineering report would be mailed to all leaseholders once it was completed. The agreed-to letter was dated 12 February 2016. An accompanying letter from Westsea’s lawyer told us that Justice MacKenzie was still considering the company’s request for leave to bill all leaseholders for its expenses in opposing Mr. Trenchard’s action and that all questions should be directed to him. ‘An effort to sow discord among us, perhaps?

The justice ruled in September, 2016, that under our lease Westsea could NOT bill Orchard House leaseholders for its legal expenses for the case and suggested that the entire affair could have been avoided by the company providing such information voluntarily. “In my view,” wrote Justice MacKenzie, “Mr. Trenchard made a legitimate request to Westsea to disclose information regarding Westsea’s operating expenditures in relation to the property (Orchard House). It would have been relatively simple and inexpensive for Westsea to comply with this request. Instead, Westsea chose to resist Mr. Trenchard’s request for disclosure and agreed to an order to provide the requested documentation only after retaining counsel and four days of court hearings.”

Westsea appeals denial of its expenses

Westsea then appealed this denial of its request to charge us leaseholders its actual legal expenses to defend itself in this suit. The B.C. Court of Appeal’s assigned three judges read Westsea’s and Mr. Trenchard’s submissions (“factums”) in advance and held court with the parties in Vancouver’s courthouse on 6 October 2017. Westsea’s lawyers were closely questioned about the company not having billed each leaseholder for the company’s expenses in resisting Mr. Trenchard’s petition (suit #1), but was asking the court to uphold its right to do so. Judges also pointed out that only Mr. Trenchard had filed a petition, yet Westsea wanted recovery of expenses from all leaseholders.

While this sounded promising from the point of view of us leaseholders, the panel returned from a break to suggest that perhaps this matter should go back to square one. Earlier, Mr. Trenchard had wanted to raise points from his written submission, but had been gently motioned to take his seat. This time he rose to lament that if Westsea were permitted to bill leaseholders, some would pay, not knowing they could refuse, and that others, like himself, would be litigating and simply need to stand before the C.A. again in future.

After a second break the Court of Appeal ruled that Justice MacKenzie had been premature in deciding the matter because Westsea had not billed all the leaseholders, and might choose not to do so (although Westsea’s lawyer said right away that such billing is “inevitable”). A Justice said that in that event the leaseholders might decide that it would be prudent to “take issue with that charge” and jointly retain counsel. That sounded to me like a caution issued to Westsea.

Here’s the B.C. Court of Appeal transcript (opens a new tab): transcript of CA proceedings CA044007  .  And here’s the B.C. Court of Appeal decision (also opens a new tab):  2017 BCCA 352 Trenchard v. Westsea Construction Ltd (2) (1)   .

Because the CA said it was neither overturning nor upholding Justice MacKenzie’s interpretation of the lease on this point, there seems to be a good likelihood that another court would make the same finding, namely that our lease does not allow Westea to charge leaseholders its legal expenses in disputes with us.

Mr. Trenchard was dissatisfied with the Court of Appeal outcome for a number of reasons. He had wanted to argue that our lease is what’s called a “standard-form contract”. This means that none of the leaseholders had a hand in negotiating the lease and signed it on a take-it-or-leave-it basis. Precedents indicate that courts should take that into account, interpreting ambiguous lease terms in favour of the lessee(s).

For this reason and others Trenchard–and Westsea for its own reasons–both sought leave to appeal this ruling to the Supreme Court of Canada, which was denied. But the questions remain; can a corporation that owns suites bill lessees who are really just long-lease residential tenants for the landlord’s costs to fight them, or even just one among them? In other words, should lessees carry their own legal expenses–even if they are not party to the dispute–PLUS those of their building’s owner/landlord? Justice MacKenzie sure didn’t think so. For developments in this matter, go to the page “Disputing WS’s legal costs”.  Mr. Trenchard’s impressive brief to the Supreme Court of Canada raised standard-form contract questions that have since been addressed in part by the B.C. Court of Appeal on the windows-cost issue (May of 2020), and by the Supreme Court of Canada (June, 2020) in its “Uber–Heller” decision. Hugh’s brief can be read here (opens new tab):  Hugh’s SCC argument   .

Now we turn the clock back to 2016. Moving ahead with the windows/doors project, Westsea had RJC prepare a comprehensive “Building enclosure condition assessment”, which it delivered to Westsea in March of 2016. Later that month Westsea mailed a copy of the report to all leaseholders, as it had agreed to do in response to Mr. Trenchard’s first court action. The bottom line of the RJC report was a project cost estimate of $3,645,000. A few months later, in letters dated 5 July of 2016, we leaseholders were told by Westsea that, regardless of RJC’s cost estimate, the best price that it could obtain for the replacement of windows and doors had become $5,551,460. Each leaseholder’s letter told us our pro-rated amount due and that the project would proceed on July 11, only six days later.

5 July: ‘$37,000, please; pay by September first.’

Even shared on a floor-area basis among some 200 suites, the cost for individual homeowners of such a large assessement was disastrous. We had already just paid our shares of an assessment of $586,446 (net of an operating-budget credit) a month earlier for a new roof with various fall protections and the water proofing and then re-turfing of the garage roof. Now the $5,551,460 project would cost even studio-suite owners almost $19,000, one-bedroom suite owners more than $25,000 and two-bedroom suite owners more than $37,000.

When some leaseholders asked their lender for the money and to add it to their mortgage, banks often said “no”, as the debt of recent buyers was approaching or exceeding the market value of the value-constrained leasehold apartments. Some folks lost their homes, selling at a loss.

‘No matter to Westsea, of course, which demanded payment in less than 60 days, and offered only a one-year monthly payment option at the prime interest rate plus 3% on the payments received after 1 September 2016.

Suit #2: Who maintains and pays for new windows?

Mr. Trenchard filed a civil claim in August of 2016 (call it suit #2) objecting that we lessees should not be paying for new high-grade windows and balcony doors at all. Boiling down legal complexity, he argued the following points:

  • The new windows and doors are of a tremendously higher standard than what we had. Angle-iron beams had to be installed along walls to hold their new weight! That sounds like a capital-works project, and our lease says nothing about leaseholders carrying the cost of capital projects.
  • Our lease with Westsea says that we leaseholders are responsible for the minor maintenance of our suites’ windows and doors, and has a standard ‘wear-and-tear exception’ that says lessees are not responsible for the worn-out fixtures of their suites.
  • The first engineer’s report had said that these components were at the end of their expected service life, but said they were not in immediate need of replacement.
  • If our lease is found to be ambiguous in these matters, precedent cases indicate that we leaseholders should get the benefit of the doubt, because we had to sign on to an existing standard-form lease and could negotiate nothing.

Westsea asks for dismissal, but is itself dismissed

‘Hoping to head Mr. Trenchard off at the pass, Westsea Construction asked the courts to dismiss his second suit (“strike his claims”), arguing that he’d made his case on these matters in suit #1, which you’ll remember was settled by agreement that the Westsea would send every leaseholder a letter and, when completed, a copy of the engineer’s report. Madam Justice Power on 2 August 2017 in Victoria was dismissive in dismissing Westsea’s application (yes, I was there). Mr. Trenchard’s suit #2 addressing the issues and costs regarding replacement of windows and doors CAN proceed, she ruled, and Westsea was told to immediately pay him his modest court-schedule “costs” (which are ‘way less than one’s actual expenses for any legal action).

Not surprisingly, Westsea in September of 2017 has also appealed THIS ruling, and will ask the Court of Appeal to toss out Mr. Trenchard’s suit #2 before he’s had a chance to argue its merits. There’s a legal term for Westsea’s argument, “res judicata”, meaning that the company claims that the matters he raises have already been settled in court, in this case his suite #1.

As I recall, Justice Power not only said, “…in my view Mr. Trenchard was successful”. She added, “clearly successful on this matter…” and directed Westsea to pay Mr. Trenchard some costs, $2,800 being the agreed amount. That would not give me confidence in filing an appeal but, hey, lawyers are paid by the hour.       -Gerald Rotering, 29 October 2017

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 Update: While writing the above, we all received Westsea’s letter notifying leaseholders of a 38% increase in operating costs for the 2018 budget year. A few specific expenses were referenced, but we received no copy of the budget (‘never do, and I’ve certainly asked). Mr. Trenchard wrote Westsea immediately (link opens a new browser page): hugh letter to westsea 26 october 2017

Update on 7 December 2017: Westsea has dropped its appeal of Justice Power’s rejection of its request to dismiss Hugh’s suit regarding the windows and doors project. That means the trial can proceed, but of course the previously-set date in May of 2018 has been lost, so now it’s set for 3 June 2019.

Regarding the B.C. Court of Appeal ruling allowing Westsea to bill leaseholders its legal costs (it did NOT say we have to pay), the company and Hugh are to meet with the Court Registrar on 14 December 2017 to set the terms of the Order. Westsea appears to feel the court allowed it to simply roll those costs into our annual budget, but that’s not what I heard, nor what Hugh feels the Order should say.

Update on 28 March 2018: Westsea has notified Orchard House leaseholders that its legal expenses are incorporated into our 2018 operating budget. Mr. Trenchard responded by appealing to the Supreme Court of Canada (“SCC”) a number of questions that arose from the B.C. Court of Appeal neither upholding nor striking down Justice MacKenzie’s ruling that Westsea can not do this. In a letter to each leaseholder dated 20 December 2017, Westsea’s law firm, Singleton Urquhart, wrote that Westsea also believes that the Court of Appeal should have settled these issues. With the parties agreeing to this extent, it’s possible that the Supreme Court of Canada will grant leave to hear the arguments. (In August, 2018, the SCC announced that only one appeal of 22 national legal questions submitted during that round will be heard; it’s not ours.)

Another update on 28 March 2018: Going back to the cost of replacing/upgrading all of the Orchard House glazing, 5 July 2018 will mark two years since we were told that the project was proceeding and its cost, so leaseholders must file a claim by then or lose the right to sue. I filed a small-claims court action this week and closed my one-page argument asking that my claim be held pending the outcome of Mr. Trenchard’s civil suit trial in June of 2019. The small-claims court filing fee is $156 and it costs $12 to “serve” the claim by registered mail = $168. My own claim can be read here (opens new tab): Gerald’s claim . If you file a claim, this “corporate search” regarding Westsea may still be current enough (opens new tab): Westsea corporate search . “Serve” Westsea by registered mail at its Mainland Street address.

Westsea Construction filed its “reply” to my small-claims court action, which can be read here (opens new tab): WS Reply small claims .

Also in this regard I hired the well-known Vancouver law firm of Arvay Finlay in March to review our lease and Mr. Trenchard’s case. We’ve received the firm’s analysis by phone and now a written report. To preserve the advantage of the firm’s guidance we will not discuss Arvay Finlay’s assistance beyond this mention of it.

Update 13 June 2018: Seventeen Orchard House lessees have filed small-claims court actions and consented to adjourn them until after Hugh’s test case at the provincial court level in June of 2019. Probing for any interest in settling or talking on the part of Westsea, I made an offer to settle my claim for $5,000 plus an apology for how I’ve been billed and treated by the company in this affair. Westsea’s law firm responded with complete rejection. Still, it felt good to tell Westsea of my (our) offence and to ask for an apology, so you can read that here (opens new tab):  pdf Gerald’s small claim

Update 28 April 2019: Westsea has revealed that the company appears to know that Hugh Trenchard is likely to win his lawsuit against it. The first of two indications was a letter to all lessees dated 28 January 2019 from company lawyer Mark Stacey, warning that Hugh’s success at trial “…would fundamentally restructure the responsibilities under the Lease at Orchard House”. Note that this is opinion, although Westsea’s lawyer’s letters to lessees state such comments as if they were facts.

The letter then portrayed Westsea as being on OUR side, defending us poor lessees from Mr. Trenchard, whose lawsuit the company opposes, “…on the basis that such restructuring would have detrimental consequences for the quality of life for all leaseholders at Orchard House”. Reinforcing this point and perhaps revealing the company’s fretting over the outcome, the Westsea lawyer referred at a trial planning conference on April 9th to lessees potentially “living in slums” in event Hugh wins the case.

This is all nonsense, of course, as the Lease that Westsea ruthlessly enforces upon us– interpreted generously in its favour–equally requires the company to maintain the building, with lessees paying operating expenses. As well, Westsea also has a landlord’s obligations under the law of negligence and occupiers’ liability. ‘Funny how Mr. Stacey’s letters always omit these details. Is it inadvertent or deliberate that these statements and omissions tend to pit lessees against one another?

It is not our fault as Orchard House tenants that Westsea appears to have invested elsewhere its revenue from its sale of the 99-year leases in the 1970’s. As a landlord myself for 35 years I never told a departing tenant that the carpet or windows were worn out, and that he or she had to pay for replacement of these before leaving. That is in part what the tenant’s rent payment was for!

The second indication that Westsea appears to have realized that it has charged lessees beyond what our Lease truly allows also came in January, when Westsea’s lawyer offered to meet Hugh in mediation, and a session was set for 12 March 2019.

Hugh reaffirmed that he would not move on his position that Westsea must pay its own legal expenses (in which event, I suppose, lessees would be reimbursed what the company has charged us for that, both in its lump-sum billing and increased monthly suite fees). The company’s lawyer soon replied that it could not yield on this and the mediation meeting was cancelled.

Recall that numerous of us lessees have been sued by Westsea for refusing to pay its legal expenses, which issue will also be heard in court later this year; see the article “Disputing WS’s legal costs”.

The civil trial of Trenchard vs Westsea Construction is scheduled to begin 3 June 2019 at the Victoria courthouse. I and numerous other Orchard House lessees will attend as much as we can, both to be informed and to show the judge that the suit affects more than a single plaintiff.

Update 10 June 2019: At mid-trial I’ve issued the following news release (link opens a new tab):  pdf of mid trial news release  .

Update 16 June 2019: After two weeks of court sessions the civil trial wrapped up on June 14; it could be some time before Madam Justice Douglas issues her decision. Here is Hugh’s comprehensive closing presentation in pdf (opens a new tab): Trenchard v. Westsea Construction 16-3355 Plaintiff’s closings submissions June 12 2019  .

Update 2 October 2019: Madam Justice Douglas has ruled that the Orchard House lease allows Westsea to charge lessees the cost of replacement windows and sliding doors for its building. Her reasons for decision spend a puzzling number of pages covering the need for the glazing project, which was never in dispute. As well, no one suggested that we lessees would each hang from the roof of the tower and replace our own glazing. Her decision can be read here (opens a new tab):  Judge Douglas, re Trenchard v. Westsea Construction Ltd., 10-01 CORR .  (Note that this is a corrected version issued 9 July 2020. There had been two mysterious errors in the first version, one saying our lease included management fees as an expense billable to lessees, and the other at article 7.01 referring to “any legal…charges…” as opposed to “and legal…charges…”.)

Mr. Trenchard sees what he believes are errors of law that warrant appeal, which will be a more focused and rapid process than the civil trial this past June. About 45% of civil-trial decisions are overturned or varied by the B.C. Court of Appeal. His appeal filed 22 November 2019 can be read here (opens a new tab): _Filed Factum with amended Opening Statement  .

22 May 2020: Turn to the article “B.C. Court of Appeal rules for Westsea”.