VANCOUVER, BRITISH COLUMBIA (June 16, 2014) — On June 13 the British Columbia Court of Appeal released its decision in an appeal brought by several hundred timeshare owners at the Sunchaser Vacation Resort in Fairmont Hot Springs.
In November 2013 a judge of the Supreme Court of British Columbia had decided that Northmont Resort Properties Ltd. was entitled to unilaterally decide to undertake a $51 million renovation project at the Sunchaser Resort in Fairmont Hot Springs, and pass all of those costs onto the timeshare owners without any significant or meaningful consultation with the owners.
The British Columbia Court of Appeal found that the way in which Northmont sought to enforce their entitlement to immediate payment of the renovation project fee, that in many cases exceeded $6,000 per timeshare owner, was fundamentally unfair.
In the lower court, Northmont had insisted on proceeding in the face of significant disputes about the need for much of the planned renovation, and great uncertainty about the cost of the work. The timeshare owners were not able to attack either the reasonableness of the proposed $51 million renovation project, or to defend themselves on the basis that Northmont or its predecessor, Fairmont Resorts, had caused much of the damage by failing to maintain the resort, in breach of the timeshare contracts.
The Court of Appeal decided that the lower court judge had improperly proceeded on a hypothetical assumption that the agreements between Northmont and the owners were valid and enforceable. The court went on to note that the entire process adopted by Northmont in commencing a Supreme Court Petition was fundamentally ill-conceived with the court ultimately concluding:
“In our opinion, the chambers judge’s quest for efficiency overwhelmed her analysis and failed to give proper effect to the Rule and the rights of the time share Owners. This proceeding did not favour access to justice – it precluded it.”
Since the lower court’s decision, the timeshare owners had been facing what they felt was heavy handed debt collection, with many receiving threatening “draft” lawsuits from an Ontario debt collection company hired by Northmont. The threatened court actions relied almost entirely on a claim that the November 2013 B.C. Supreme Court decision was binding, alleging essentially that the timeshare owners had no defences to the collection claims.
With the B.C. Supreme Court decision now overturned, the timeshare owners are hopeful that Northmont will cease its heavy-handed debt collection tactics and perhaps engage with the owners as a group to determine a reasonable way forward from the previous neglect, and required maintenance.
The most important message from the last year of litigation that the timeshare owners have faced is a message to all timeshare operators: Involving the timeshare owners, engaging in meaningful consultation and getting “buy-in” is all important. Resort operators who do not provide accurate and timely information, or try to proceed unilaterally, will inevitably find themselves in trouble.
For vacation interval owners seeking more information, they should contact Michael Geldert, a Vancouver solicitor representing many of the owners in the litigation at: [email protected].
A link to the British Columbia Courts website, Reasons for Judgment of the Court of Appeal can be found at the following location: http://courts.gov.bc.ca/jdb-txt/CA/14/02/2014BCCA0227.htm