Skip to main content

B.C. developer ordered to pay almost $100K for misconduct that caused 'consumer harm'

Upper Arrow Lake is seen in this file photo. (Shutterstock.com) Upper Arrow Lake is seen in this file photo. (Shutterstock.com)
Share

A developer in B.C.'s Kootenay region has been ordered to pay nearly $100,000 to the BC Financial Services Authority for misconduct that caused "consumer harm."

In a decision issued in July and published online last week, the regulator ordered Halcyon Point Development ULC and its director Dale Tortorelli to jointly pay a $20,000 administrative penalty and more than $79,000 in enforcement expenses. 

The sanctions stem from the BCFSA's findings that Tortorelli and his company marketed a development unit in a property in the province's Arrow Lakes region without preparing a required disclosure statement and failed to hold a buyer's deposit for the property in a trust account.

"Consumer harm was a key factor in determining disciplinary measures," the BCFSA said in a statement accompanying the sanctions decision.

"The purchasers’ plans to have ownership of a portion of the property were thrown into disarray because Halcyon and Tortorelli did not provide them with a disclosure statement as required. A (Real Estate Development Marketing Act) disclosure statement would have made the purchasers aware that there was no subdivided portion of the property available for them to purchase."

The transaction at issue occurred in 2016, when Halcyon and Tortorelli agreed to sell a 1.3-acre portion of its Arrow Lakes property for $150,000. They collected a total of $80,000 in deposits toward that price, which were deposited into Tortorelli's business accounts and used to begin construction on a home on the property.

The buyers later backed out of the deal, but their deposits could not be refunded, according to the BCFSA statement. They eventually took Halcyon and Tortorelli to court over the transaction.

The sanctions decision indicates the lawsuit was resolved with an order for Halcyon to pay $265,000 to the buyers and the buyers relinquishing their interest in the property.

'No good deed goes unpunished'

In his defence, Tortorelli framed the situation as a case of "no good deed goes unpunished," telling the BCFSA he and his company were "simply attempting to assist his employee in having a good house to live in" and did not experience any financial gain from their misconduct, according to the sanction decision.

To a certain degree, BCFSA chief hearing officer Andrew Pendray accepted this framing, writing in his decision that he didn't believe Tortorelli and Halcyon had any "malicious intent" or desire to harm the purchaser.

Rather, Pendray concluded that the parties "were all largely aligned in their goal of creating a place for (the purchaser) to live."

However, despite these good intentions, the misconduct did result in some material gain for Tortorelli and Halcyon and did cause harm to the purchasers, the hearing officer concluded.

"Simply put, if the respondents had followed the law as set out in REDMA, this entire situation, including the litigation that occurred between the parties, would likely have been avoided," the sanctions decision reads.

"In failing to do so, regardless of the nature of their intentions, I consider the respondents to have engaged in serious misconduct."

Pendray ultimately settled on a $20,000 administrative penalty, which was less than the BCFSA argued Tortorelli and Halcyon should face, but more than the developer had proposed.

In reaching this conclusion, the hearing officer noted that Tortorelli and Halcyon's actions, while serious, "were closer towards being of the inadvertent nature" than the precedent cases the BCFSA cited in its submission that a higher penalty should be imposed.

In all, Halcyon and Tortorelli were ordered to pay $99,192.47 within 120 days of the sanctions decision. The vast majority of that total is to cover "enforcement expenses" incurred by the BCFSA while it was investigating the case. 

CTVNews.ca Top Stories

Suspect in shooting of Toronto cop was out on bail

A 21-year-old man who was charged with attempted murder in the shooting of a Toronto police officer this week was out on bail at the time of the alleged offence, court documents obtained by CTV News Toronto show.

Stay Connected