Developer accused of misappropriating funds, as 2 more condo projects placed into receivership

A lawyer for a mortgage company accused the embattled developers of three debt-ridden Lower Mainland condo projects Friday of misappropriating funds meant for the Canada Revenue Agency.

But under questioning from a judge who has now placed three Thind properties projects into receivership in the span of a month, Kingsett Mortgage Corporation lawyer Emma Newbery said her client wasn't alleging "criminal connotations" against the developers.

"When I see that word, it has a connotation on the far end — it suggests something where you need to go to police," Justice David Masuhara told the lawyer.

"I do not think that's the intention," Newbery responded.

The exchange was one of only a few bumps in an otherwise smooth 30-minute proceeding that ended with Masuhara appointing a receiver for unsold units in Burnaby's Highline completed condo building and Richmond's Minoru Square — a project which appears to have stalled.

Newbery said the projects carry mortgages worth a combined $250 million — and defaults dating back to September are now accruing interest at a rate of about $70,000 a day.

Friday's order came just weeks after Masuhara put Thind's District Northwest project — a two-tower, 1,023-unit yet-to-be-built complex billed as "Surrey's new growth centre" — into receivership after Thind defaulted on an $80 million mortgage related to that project.

Although Thind is the developer, the parties named in the legal proceedings are the companies and partnerships incorporated to build each of the individual projects — with notice given to Thind Properties president Daljit Thind in relation to each of those entities.

 "The three projects are ultimately controlled by the same people," Newbery told the judge.

She said the developer used Minoru Square as collateral for the Highline — and vice versa.

The fate of the three projects has drawn a great deal of media attention and questions from pre-sale purchasers wondering about the implications of a receivership for their units.

Newbery stressed that about 40 units at the Highline are currently occupied, whereas 163 units are held in the name of the developer. The receiver was not seeking control of the occupied units.

In an affidavit filed with the court, Daljit Thind claims 90 per cent of units at District Northwest had been pre-sold — leaving $78 million in deposits held in trust by a law firm.

"Despite the delay to the start of construction, I do not believe the deposits for the pre-sold units are at risk as they were sold at a price that is below current market value," Thind wrote.