VANOC is suing the former owners of the Garibaldi Budget Inn for $153,059.40 plus damages, alleging co-owner Ed Sylvan cashed reservation deposit cheques while foreclosure proceedings were underway.
VANOC discovered in December 2009 that the business had been forcibly sold, and the reservations would not be honoured, leaving VANOC employees without accommodations.
The suit also accuses Sylvan's business partner Tie Jun Yuan and Canada Sincere Industry Co. of breach of contract.
The statement of claim filed with the BC Supreme Court Wednesday (April 7) alleges Sylvan fraudulently misrepresented himself and was unjustly enriched by cashing two cheques totaling $153,059.40.
Sylvan refused to comment when reached by telephone Thursday (April 8).
The claim alleges VANOC and the Garibaldi Inn owners agreed to a contract on December 2003 stating an unstated number of rooms would be reserved for VANOC from January 28 to March 28, 2010.
The contract stated "GBI [Garibaldi Budget Inn] shall make every reasonable effort to keep the plaintiff fully informed as to difficulties encountered by them, and any changes in plans and information that might affect the obligations of the plaintiff," according to the claim.
However in May 2007, the inn was sold to Silau Holdings without informing VANOC, it alleges, adding Silau granted a mortgage against the property that month and a second mortgage in June 2007.
In spring 2008, VANOC alleges it entered into another agreement stating Silau Holdings would accommodate VANOC guests, and if unable to honour the reservations, Silau would immediately advise VANOC and make every reasonable effort to find comparable accommodations and transportation.
Silau was also prohibited from transferring responsibility to another party, alleges the claim.
In January 2009, foreclosure proceedings began with Canada Sincere Industry named as a party, and in July 17, 2009, the mortgage holder foreclosed on Sylvan and Silau for $1,698,835 without VANOC's knowledge, states the claim.
Just a few days later, on July 23, Sylvan confirmed VANOC's reservation, and on July 31, he deposited VANOC's first payment in the amount of $71,370, it alleges.
In the fall of 2009, Sylvan again confirmed the reservation and, according to the claim, "in or around November 2009" deposited another cheque for $81,689.40."
In December 2009, the inn was sold. Shortly thereafter, VANOC became aware of the sale when informed by the new owners, and they were also told the reservations would not be honoured, alleges the claim.
VANOC's claim accuses Sylvan and Silau of breach of contract when they "sold the inn and had no further intention to honour its obligations under the GBI agreement." And it alleges Yuan and Canada Sincere Industry are also in breach of contract.
The claim also accuses Sylvan of misrepresentation and unjust enrichment.
"The representations were intended to induce the plaintiff to provide to Sylvan $153,059.40," alleges the claim. "Sylvan made the representations to the plaintiff fraudulently"
Once a write of summons is received, defendants have between seven and 42 days to appear depending on where they reside.
VANOC's claims have been proven in court and the people named in the suit have not yet filed documents in their defence.
It's not the first time Gariblaid Budget Inn's former owners have been accused of not honouring reservations.
In January 2010, The Chief filed several reports of guests from Oregon to as far away as Austria who claimed to have paid thousands of dollars in deposits only to find their reservations were abandoned.
Hundreds of residents from Squamish and throughout the province reached out to help accommodate the guests. By all accounts, everyone was housed by Games time and a few guests reported receiving reimbursements from their credit card companies.
