Resort Villa Management Ltd. 5799 – 3rd Street

Resort Villa Management Ltd.
5799 – 3rd Street SE
Calgary, Alberta
T2H 1K1
Customer Service:
Telephone: 1-877-451-1250
Fax: 1-888-378-4477
Payments:
Telephone: 1-877-451-1167
Fax: 1-877-451-1239
June 13, 2014
JUDGMENT SUMMARY
***LEGAL DISCLAIMER: Northmont advises you to seek appropriate legal advice if you have any
questions about this or any other Northmont communication, the court process or any other questions of a
legal nature. The following letter reflects the opinions of Northmont.
Note: You are strongly encouraged to review the Appeal Written Reasons of the Court in detail. A full copy
is available on www.sunchaservillas.ca.
Dear Sunchaser Vacation Villas Owner:
On June 13, 2014, the Court of Appeal for British Columbia (the “Court of Appeal”) issued its Written Reasons of
the Court (the “Judgment”) on the appeal of the special case previously decided by the Honorable Madam Justice
Loo (“Justice Loo”) on November 15, 2013 (the “Original Judgement”) to address the two primary concerns of our
vacation interval owners (“Owners”):
1) Is Northmont entitled to charge or levy the Cancellation Fee?
2) Is Northmont entitled under the Vacation Interval Agreements (“VIA’s”) to levy the Renovation Project
Fee, in whole or in part?
The Court of Appeal Judgment set aside the Original Judgment. However and critically, it did so purely on
procedural grounds related to procedures of British Columbia Rules of Court and NOT on the merits of the case. To
the contrary, at no point did the Court of Appeal rule the VIA’s or RPF are unenforceable. Accordingly, our
Owner’s VIA’s remain in full force and effect.
While we would have preferred the Appeal be denied, we are pleased with the outcome. We believe the Judgment
provides a strong validation of our legal position. The Court of Appeal provided no dissention to the conclusions of
Justice Loo on the merits of the case. Justice Loo remains the only authoritative justice to have drawn conclusions
on the Vacation Interval Agreements and Northmont’s operation of the Resort. Her conclusions, while no longer
binding, remain compelling and persuasive on the subject at hand. Accordingly we reiterate her conclusions that we
have acted reasonably in the execution of the realignment plan and that the renovation fee forms part of our Owners
responsibilities in your VIA’s. This position that has been upheld by the majority of our Owners through their
payment of their RPF or choosing the cancellation option.
Northmont and Justice Loo attempted to find a timely and cost effective way to reach a clear and definable ruling to
address the uncertainty of our Owners. Unfortunately, the Court of Appeal held that the special case was
inappropriate because “there were no pleadings, no particulars, and no exchange of expert reports” (para. 36) and
that Justice Loo “should have directed a trial” (para. 43) instead. While it remains our position that the Appellants
were afforded every opportunity to provide their own expert evidence or seek any documents they wished, we
respect the desire of the courts to ensure all parties have all avenues available to them. However, we highlight that
at no point in the Judgment does the Court of Appeal suggest the effect of the additional avenues on the future
outcome. We remain firm in our position that further litigation will only serve to reach the same conclusions as
Justice Loo.
How does this affect our Owners?
The outcome of the Appeal affects each Owner to varying degrees.
Cancelled Owners: The Judgment has no effect on cancelled Owners. We have noted throughout the process that
the cancellation option is the only option that provides Owners future certainty. We continue to believe it is the
most cost effective option for those whose primary objective is certainty rather than future Resort use.
RPF paying/paid Owners: The Judgment affects our Owners who are honoring their VIA’s through the ongoing
uncertainty caused by the delinquency of others. As delinquent Owners are not currently paying their fair share of
Resort costs and are further costing the Resort through unnecessary legal bills, paying Owners will be faced with
some additional costs as we manage the Resort through this period. While we will do everything reasonable to
recover costs from delinquent Owners, there can be no guarantee that costs recovered will offset 100% of costs
incurred.
Delinquent Owners seeking certainty: Many of our delinquent Owners were looking to the Appeal for certainty of
the future. They were hoping that the Appeal would be a black or white resolution of the enforceability of their
VIA. However, this is not the case. On the contrary, the Appeal has pushed legal resolution of the enforceability of
their VIA into the future for an indefinite time period. As the ongoing litigation is uncertain and has little prospect
of success for delinquent Owners, today’s should reflect the practical resolution to the issue for many delinquent
Owners.
What happens next?
For Northmont, it is business as usual. The Judgment is a positive reinforcement of the Resort for our active
Owners and we remain committed to prudent and workmanlike operation of the Resort on your behalf. This
includes continuing to pursue judgment and collection from our delinquent Owners.
Over the coming days, weeks and months, we will pursue delinquent Owners and enforce the VIA’s. The method of
enforcement is not known at this time as a number of factors, including timeliness and cost, will weigh on the
process. We may file individual actions or proceed by way of some form of joint proceeding.
For the Appellants, we cannot say with certainty. We expect they will attempt to spin today’s Judgment as a victory
on the merits of their position in spite of the Court of Appeal’s written reasons so that they can collect a new round
of higher retainer fees to continue their fight. While it will disappoint us to see delinquent Owners send additional
good money after bad including the additional maintenance fees and interest that a prolonged legal battle will create,
it is their choice and we will respond accordingly.
Will this outcome affect the renovation?
At this time, we are nearing completion of the Building 300 and Building 400 renovations and expect them back
online in early July. The next scheduled work is for Building 8100 in the fall and we expect it to go ahead as
planned.
Beyond that, we cannot provide guidance. The next step in the renovation will be dependent on the amount of funds
in the renovation project trust account and the status of delinquency at the Resort. The Appeal will only affect the
renovation in so far as the impact it has on delinquency and our efforts to pursue delinquent Owners. As that is
based on future events some of which are beyond our control, we cannot provide any further guidance.
During this challenging time, we want to take the opportunity to thank all of our current Owners for their
understanding and support of the Resort. We remain committed to providing you a long-term sustainable Resort and
look forward to putting these challenges behind us. We hope many of you get the opportunity to utilize the
renovated units over the coming months and feel as positive about them as we do.
Best regards,
Sunchaser Vacation Villas
Vacation Ownership Services
[email protected]
1-877-451-1250

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