Kelowna real estate company defamed former agents, must pay $55,000

Photo: BC Courts

A Kelowna real estate company has been ordered to pay two of its former agents $27,500 each for defaming them and abusing the courts.

Donna Merle Craig and Geri Surinak won counterclaims and had Kelowna-based Premier Canadian Properties “sham” lawsuit against them thrown out, according to a BC Supreme Court decision this week.

Craig and Surinak, close friends, had both been licensed realtors and property managers for decades, building up a portfolio of properties and clients that belonged to them.

In 2013, the pair was convinced to join Premier Canadian Properties under a deal that would see them retain ownership of their portfolio. Craig and Surinak would keep 100% of property management fees and pay only desk fees—administrative costs—to Premier, which hoped to benefit in the deal from the repeat buying and selling of real estate by the portfolio’s clients.

In 2019, Premier was purchased by a numbered company managed by Fred Johnston.

The court decision says that several times during the sale of the company, Johnston was told that Premier did not own Craig and Surinak’s portfolio and that their property management clients and all associated fees belonged to the agents.

Months after the sale of the company, Craig and Surinak became unhappy with the direction of Premier and decided to leave the firm.

On December 2019, Craig and Surinak informed their clients they were leaving Premier, and gave them an option of coming with them to the new firm or staying with Premier. All but one client opted to make the move with Craig and Surinak.

When Craig and Surinak gave Premier official notice they were leaving the company, Premier started to take the position that they owned the portfolio. They wrote letters to clients to let owners know Craig and Surinak had resigned and payment should be made to Premier.

Some clients ended up sending funds to Premier, which also refused to return vacating tenants their security deposits. Surinak ended up paying $4,645 out of her own pocket to honour security deposits Premier would not release.

Premier would then sue Craig and Surinak and the new company they joined in May 2020, claiming ownership of the portfolio and breach of contract.

Justice Gary Weatherill, however, ruled the evidence is “overwhelming” that Craig and Surinak owned the portfolio.

“Essentially, the portfolio was ‘goodwill’ that Craig and Surinak had built up over many years, including prior to joining [Premier],” Weatherill said, ruling that they were fully within their rights to take it with them when they left the company.

Weatherill went further, calling Premier’s lawsuit an abuse of process that was made as a “bullying tactic” to gain control of the portfolio.

“Accordingly, I accept that [Premier’s] action is a sham, was knowingly brought without foundation, and should be dismissed,” Weatherill ruled.

The decision found that Premier also embarked on a campaign of defaming Craig and Surinak by communicating with their clients and asserting management of the portfolio. In some cases, Premier threatened to sue the owners if they did not move their contracts to the firm.

“I find that [Premier] knowingly published a misrepresentation with the intent to convey that Craig and Surinak were in breach of contract, that they did not own the portfolio, that they had acted improperly,” Weatherill ruled.

"In short, the evidence satisfies me that [Premier's] letters to the owners and tenants implied that Craig and Surinak were acting improperly by trying to steal [Premier's] clients. This misrepresentation was made in an attempt to seize the portfolio and with the intent to injure Craig and Surinak in their business, trade and calling."

Craig and Surinak were awarded $25,000 in general damages for defamation, and $2,500 each for aggravated damages. The judge declined to order punitive damages.