Olympic Organizer Sues Hotel OperatorEdward Sylvan

 Lost reservations result in lawsuit for alleged breach of contract, misrepresentation and unjust enrichment 

 VANOC is suing the former owners of the Garibaldi Budget Inn for $153,059.40 plus damages, alleging co-owner Edward Sylvan cashed reservation deposit cheques while foreclosure proceedings were underway. 

 VANOC discovered in December 2009 that the business had been forcibly sold, and the reservations would not be honoured, leaving VANOC employees without accommodations. 

 The hotel was to provide rooms for VANOC's workforce throughout the Games for a fee of more than $150,000. The deal fell through as a result of, "negligent representations," and, "false and reckless dealings" by the hotel's owners, VANOC said in its claim. 

The claim suggested the hotel owed creditors $1.7 million when it was sold without VANOC's knowledge. 

Until the business suddenly changed hands in a court-ordered sale, one of the hotel's named owners, Edward Sylvan, maintained that all was well and that the room bookings were secure, according to the claim. 

VANOC alleges those statements were false and made in an effort to misappropriate its funds.

VANOC knew nothing about the hotel's financial problems until two months before the Games were to begin, the claim says.

The suit also accuses Sylvan's business partner Tie Jun Yuan and Canada Sincere Industry Co. of breach of contract. 

The statement of claim filed with the BC Supreme Court Wednesday (April 7) alleges Sylvan fraudulently misrepresented himself and was unjustly enriched by cashing two cheques totaling $153,059.40. 

 The claim alleges VANOC and the Garibaldi Inn owners agreed to a contract on December 2003 stating an unstated number of rooms would be reserved for VANOC from January 28 to March 28, 2010. 

However in May 2007, the inn was sold to Silau Holdings without informing VANOC, it alleges, adding Silau granted a mortgage against the property that month and a second mortgage in June 2007.

In spring 2008, VANOC alleges it entered into another agreement stating Silau Holdings would accommodate VANOC guests, and if unable to honour the reservations, Silau would immediately advise VANOC and make every reasonable effort to find comparable accommodations and transportation.

Silau was also prohibited from transferring responsibility to another party, alleges the claim.

In January 2009, foreclosure proceedings began with Canada Sincere Industry named as a party, and in July 17, 2009, the mortgage holder foreclosed on Sylvan and Silau for $1,698,835 without VANOC's knowledge, states the claim.

Just a few days later, on July 23, Sylvan confirmed VANOC's reservation, and on July 31, he deposited VANOC's first payment in the amount of $71,370, it alleges.

In the fall of 2009, Sylvan again confirmed the reservation and, according to the claim, "in or around November 2009" deposited another cheque for $81,689.40."

In December 2009, the inn was sold. Shortly thereafter, VANOC became aware of the sale when informed by the new owners, and they were also told the reservations would not be honoured, alleges the claim.

VANOC's claim accuses Sylvan and Silau of breach of contract when they "sold the inn and had no further intention to honour its obligations under the GBI agreement." And it alleges Yuan and Canada Sincere Industry are also in breach of contract.

The claim also accuses Sylvan of misrepresentation and unjust enrichment.

"The representations were intended to induce the plaintiff to provide to Sylvan $153,059.40," alleges the claim. "Sylvan made the representations to the plaintiff fraudulently"