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In the Courts: B.C. real estate firm defamed former associates, judge finds

Letter to tenants and owners made false implications that associates acted improperly and dishonestly, according to recent decision
The B.C. Supreme Court in Vancouver | Rob Kruyt, BIV

An Okanagan real estate firm has been ordered to pay a combined $50,000 to two former associates for defamation in a dispute over who owns a property management portfolio.

Premier Canadian Properties (Okanagan) Ltd. (PCP) sued Donna Merle Craig and Geri Surinak after they left for another firm, claiming it owned their property management portfolio and that Craig and Surinak “surreptitiously took the portfolio from behind its back.”

That was despite agreeing when taking the two on as real estate and property management agents that they owned the portfolio they had developed for years prior to joining PCP, according to a recent B.C. Supreme Court decision.

PCP’s then-owner believed that even without owning the portfolio – and even after agreeing not to take a percentage of its revenue – it would benefit from further business their clients would provide.

The owner communicated as much to Fred Johnston when Johnston bought the firm in 2020, according to the decision. Johnston even acknowledged this at the time, asking for the right of first refusal to buy Craig’s share of the portfolio if she ever decided to sell.

But the two gave notice to PCP in January 2020 that they were moving to Menethil Properties Ltd. 

PCP had become associated with Realty Executives Intl. Svcs. LLC, and the two were reportedly uncomfortable being associated with such a large firm.

Incidents with Johnston added to the discomfort, including getting into a yelling match with the company’s bookkeeper and withdrawing $15,000 from Surinak’s trust account after she was behind on paying money to PCP.

According to the decision, Johnston was “not happy with this turn of events, begged Craig to stay with PCP and offered to buy the portfolio from her.”

When the two gave their clients the option to move to Menethil with them or stick with PCP, only one property owner reportedly didn’t send Johnston notice of moving on.

But in February 2020, Johnston reportedly sent a letter to tenants of the properties, saying Craig and Surinak had left and that PCP would be assigning new property managers. The letter stated that any suggestion they pay anyone other than PCP or Realty Executives could result in the money not making it to their landlords. As a result, some tenants mistakenly paid their rent to PCP.

Instead of paying the owners of the properties their share of the rent, PCP kept the money for 11 months, until it paid the funds into the court.

PCP also allegedly refused to give departing tenants their security deposits after Craig and Surinak left, causing Surinak and Menethil to pay nearly $18,000 to the tenants.

PCP claimed Surinak and Craig breached their contract, that it had been the legal owner of the portfolio and that Craig and Surinak dealt “deceptively with the owners, tenants and PCP.”

But Craig and Surinak filed a countersuit, maintaining they were the owners of the portfolio.

And they claimed Johnston’s letter to the tenants amounted to defamation.

They said PCP’s legal claim was an abuse of process and an attempt to “threaten, intimidate and bully them.”

In a summary trial, Weatherill landed on Craig and Surinak’s side, calling PCP’s legal action a “sham” that was “knowingly brought without foundation.”

“In my view, PCP is guilty of the very same conduct alleged in its unfounded claims against the defendants,” Weatherill wrote.

He further found Johnston’s letter to the tenants and owners in the portfolio made false implications that Craig and Surinak acted improperly and dishonestly, causing tenants to improperly pay PCP instead of Craig and Surinak. Weatherill ordered Johnston to pay them $25,000 each.