A Port Coquitlam property is now free from legal entanglements, following a recent B.C. Supreme Court judgment.
The Canada Long Investment Group had chipped in $2.75 million toward a partnership with the aim of building a profitable, multi-family residential project on a Port Coquitlam property. However, the investment group moved to dissolve that partnership in 2022 and eventually filed a notice of civil claim as well as a certificate of pending litigation against the property, which would have halted a land sale.
According to the claim – which has not been proven in court – Antonio Russo and Joseph Crivici of Circadian Developments “engaged in a scheme to defraud the partnership.”
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The scheme included “widespread self-dealing,” and “diverting funds belonging to the partnership . . .for their own use and benefit,” according to the claim from Canada Long Investment Group.
The claim also alleges Russo and Crivici diverted the $2.75 million partnership contribution to themselves and others. They also caused the general partner to take out two mortgages on the Port Coquitlam property “for a purpose unrelated to the business.”
According to the claim, Russo and Crivici allegedly paid out a secret $1.37 million contribution and diverted a total of $2.4 million in proceeds of the first and second mortgage to themselves and “third parties.”
Other defendants include Crivici Holdings Ltd., DT6 Developments Ltd., Circadian Construction Ltd., Circadian Developments Ltd., Allaire Circadian (Rochester) Residences GP Ltd., Allaire Circadian (Rochester) Residences Ltd., and Circadian Developments (Falcon 2016) Limited Partnership.
The Port Coquitlam land remains undeveloped, according to the judgment.
‘Not a partner to the partnership’
The certificate of pending litigation was ultimately cancelled and taken off the property, following a May 24 ruling from Justice Sheila Tucker.
The Port Coquitlam property is owned by Allaire Circadian (Rochester) Residences Ltd., which “is not a partner to the partnership,” Tucker wrote.
The “sole factual connection” between the property and the alleged scheme is that Russo is an officer, director, and shareholder in the Rochester company, Tucker wrote.
However, there are no material facts that establish: “a nexus between the misappropriated funds and the property,” according to Tucker.
The pleadings disclose only that Russo “would have had an opportunity to divert misappropriated funds to Rochester,” and that the company could have invested that money into the property.
“In my view, that is not sufficient,” Tucker wrote.
The claim included several shortcomings, Tucker explained.
“[The notice of civil claim] does not, for example, indicate when Rochester came into existence, what it does, whether it is actively operating, when it bought the property, the state of the property, or whether Rochester made significant investments or expenditures in relation to the property coincident with alleged misappropriations,” Tucker wrote.
The certificate of pending litigation was cancelled and ordered to be removed by the Registrar of Land Titles.
