B.C. court orders another 7-figure judgment against West Vancouver developer

Houses are shown in Vancouver's Kitsilano neighbourhood on Monday, Oct. 3, 2022. (Jonathan Hayward / The Canadian Press)

A West Vancouver property developer has, for the third time, been ordered by the B.C. Supreme Court to pay more than $1 million to a former client.

The latest judgment against Phillip Deane Garrow was handed down by Justice Jennifer Lynn Whately on Wednesday.

Whately found Garrow liable for civil fraud and breach of contract, and ordered him to pay Leslie Louie Sallay $1,134,157 in damages, representing amounts the judge found Garrow overcharged Sallay for renovations on two properties in Vancouver’s Kitsilano neighbourhood.

Previous cases

The latest decision marks the second time a B.C. Supreme Court justice has ordered Garrow to pay Sallay more than $1 million.

In October 2023, Justice Janet Winteringham ordered Garrow and companies he owned or co-owned to pay more than $1.8 million to Sallay’s company, Jeanna Ventures Ltd.

Winteringham found that Jeanna had proven, on the balance of probabilities, that Garrow and his companies had committed three instances of civil fraud during a pair of development projects they entered jointly with Jeanna in West Vancouver.

• Read more: Court awards $1.8 million in West Vancouver real estate fraud case

Last year, a different company controlled by Garrow was also subject to a $1-million order from the B.C. Supreme Court.

In that case, Justice Sandra M. Sukstorf found that Benbow Residences had breached its contract with homebuyer Zihao Yan by failing to complete construction of a $5-million home and secure an occupancy permit on time.

The judge ordered Benbow to return Yan’s $1-million deposit and pay special court costs.

• Read more: Company must refund $1-million deposit after failing to complete West Vancouver home on time, court rules

The latest decision

The conduct that led to the latest decision occurred while Garrow and Sallay were still collaborating on the West Vancouver construction projects, and before their relationship soured, according to Whately’s decision.

In June 2019, Sallay was in the midst of renovating two properties on West 1st Avenue in Kitsilano. The properties are listed by BC Assessment as two halves of a duplex. Sallay was the registered owner of one and his wife was the registered owner of the other.

A contractor Sallay had hired to do the renovations “did not have the manpower” to complete the project in a reasonable amount of time, according to the decision, so Sallay asked Garrow if he could take it over.

“Mr. Sallay believed his existing working arrangement with Mr. Garrow in West Vancouver would mean an efficient and easy flow of trades between the two projects, and as of the spring of 2019, he had yet to discover anything amiss with their business dealings in West Vancouver,” Whately’s decision reads.

Garrow and his company ADC Projects Ltd. took on the work, which was supposed to be completed by March 2020, according to the decision.

Instead, the decision indicates the project dragged on until September 2020, when Sallay informed Garrow and ADC that they were in breach of their contractual obligations and terminated his agreement with them.

A new contractor was brought in and assessed the project as only 50 per cent complete, though Garrow disputed this assessment in court.

Ultimately, Sallay paid more than $3 million to the three contractors who worked on the project, which was initially expected to cost just over $1 million.

Sallay told the court he was “trying to retire” at the time the renovations were being completed. He spent most of the time Garrow was on the project at his home in California, approving invoices by email but not scrutinizing them as closely as he would have earlier in his career.

“However, in the spring of 2020 Mr. Sallay became concerned about the mounting costs of the project,” the decision reads. “When he investigated, he discovered what he thought was ‘double billing’ and ‘fraudulent invoices’ submitted to him by Mr. Garrow and ADC.”

• More Vancouver real estate coverage

Credibility

During the trial, Sallay presented evidence of “at least $155,000” that he paid to Garrow in response to invoices for contractors who never did work on the project.

The decision notes “one rather stark example of such a false charge,” in which Garrow submitted an invoice to Sally for $25,000 from Jorgensen Custom Metal and Roofing.

The company’s principal testified at the trial, telling the court that the invoice in question was not on a form he used, was not created by anyone at his company and misspelled his company’s name as “Jorgenson,” rather than “Jorgensen.”

In another instance, Garrow submitted a total of $90,000 of bills to Sallay on behalf of a contractor called Alexa Woodwork. That company confirmed it had received a $30,000 deposit from ADC or Garrow, but said it returned the amount when it determined it would not have time to take on work at the Kitsilano property. The company had no record of an additional $60,000 payment.

“I found Mr. Garrow’s explanations for these anomalies to be confusing, nonsensical, and ultimately not believable,” Whately’s decision reads. “And, in fact, When Mr. Sallay confronted Mr. Garrow with the $155,000 in questionable or false billing, Mr. Garrow credited him for the amounts.”

The falsified bills and Garrow’s explanations for them factored into the judge’s assessment of his credibility, which she described as “a key issue” in the case.

“Mr. Garrow was argumentative, and often doubled down on small pedantic details, or unrelated facts in support of outlandish explanations for clear dishonesty,” the decision reads.

Whately provided one more example of Garrow’s “willingness to obfuscate the truth,” describing his “tortured, obviously false explanation” for statutory declarations he made in connection to the project that were not signed or witnessed by his lawyer.

The documents included an “unreadable” signature in the block labeled “Commissioner of Oaths, Notary Public, Justice of the Peace, etc.”

According to Whately’s decision, Garrow identified the signer as “Natalia Avici,” an executive assistant at Executive Suite Management Inc.

No such person has ever worked for that company, the decision notes.

“Putting aside, for a moment, the likelihood that Ms. Avici was certainly not a lawyer, notary or commissioner, and was entirely made up by Mr. Garrow, of additional concern to me was Mr. Garrow’s disingenuous argument under oath about who could witness and sign a statutory declaration,” the decision reads.

“Mr. Garrow persisted in arguing that, in his view, the word ‘etc.’ in the signature block indicated to him that anyone who was not a notary or commissioner or justice of the peace could legally witness and sign a statutory declaration as a valid ‘etc.’ person … Mr. Garrow’s willingness to testify under oath on something so patently ridiculous, combined with his testimony with respect to the false Jorgensen invoice, among other discrepancies, made it almost impossible for me to consider the balance of his testimony as credible or reliable.”

Counterclaims and damages

While it was Sallay and Jeanna who filed suit against Garrow and his companies in the October 2023 case, in the latest court decision, it was actually Garrow who brought the case to court.

He sought judgments against Sallay for liens he had filed against the West 1st Avenue properties, as well as two condos on nearby York Avenue owned by members of Sallay’s family.

Whately dismissed Garrow’s claims, finding them poorly supported by evidence and outweighed by the strength of the evidence Sallay presented in support of his counterclaims for fraud and breach of contract.

The judge found that both civil fraud and breach of contract had been proven on the balance of probabilities, and concluded that the damages to which Sallay should be entitled would be the same regardless of which tort was the basis for the judgment.

Sallay claimed that Garrow should pay him $1,675,145 in damages, which would restore him to the financial position he would have been in but for the contract breaches and the fraud.

Whately disagreed, finding that this calculation placed 100 per cent of the blame for the cost overruns on the West 1st Avenue project on Garrow’s conduct, a conclusion that was not proven by the available evidence.

The judge arrived at the total award of $1,134,157 by adding the $473,501 in unsupported charges and payments identified by Sallay’s forensic accountant to 50 per cent of the total charged by ADC for the work it did on the project.

Whately also awarded court costs to Sallay.