Penticton, B.C. mayor sues own family in property dispute

The mayor of the City of Penticton in B.C.’s Interior is suing his own brother and nephews in a property dispute over alleged unpaid rental proceeds.

John Vassilaki filed the notice of civil claim in B.C. Supreme Court in Kelowna on Aug 26, listing his brother Nicholas Vassilakakis and nephews Florio Michael Vassilakakis and George Ioannis Vassilakakis as defendants, as well as The Cellar Wine Bar and Kitchen.

The dispute involves a historic building in the 400 block of Main Street called the Greer Block. The main level is leased to the Cellar restaurant and five residential units are located on the second floor.

John and his brother Nicholas purchased the property in 2013 under a trust agreement that would see Nicholas manage the bank account for the rental investment property, as he was the owner of the Cellar restaurant, the anchor tenant of the building, according to the notice of civil claim.

“It was also a term of the Trust Agreement that Nicholas would distribute rental proceeds to John, either upon demand or on a timely and consistent basis,” the court documents allege.

However, John, who owns half the property, alleges that his brother failed to pay him his share of the rental proceeds, “despite demands.”

According to the claim, the Greer Block makes approximately $90,000 in rental proceeds per year, however, John only received $23,980.00 since 2013.

John also alleges that the Cellar Restaurant is not paying fair market value to lease the space.

The restaurant has been paying $3,000 plus GST per month, but the suit alleges the rent wasn’t increased high enough as of Jan. 1, 2021.

“The Cellar Restaurant increased its rent by $500 monthly commencing January 1, 2021, however, the fair market value increase ought to have been $750.00 monthly,” the suit stated.

John alleged the restaurant failed to pay its share of the sewage and water utilities of the Greer Block, breaching its lease agreement.

“John as one of the Greer Block Owners has suffered a corresponding deprivation without any juristic reason,” said the notice of civil claim.

In July 2019, Nicholas transferred his share of Greer Block to his sons, Florio and George.

The lawsuit claims the pair have “exerted influence” over their father and have “essentially usurped control” of the bank account and the operations of the restaurant.

“Florio and George have hindered or prevented Nicholas from managing the Greer Block Account and have acted to ensure that John is kept out of the operations or any knowledge of the financial status of Greer Block and to further ensure that John does not receive any rental proceeds from the Greer Block Account,” the suit alleged.

“Florio, George, and Nicholas have acted in concert or in a conspiratorial manner to remove John from any involvement, including distribution of John’s proportionate share of his rental proceeds, with Greer Block,” the lawsuit stated.

“Furthermore, Florio, George, and Nicholas have acted in a manner where funds in the Greer Block Account have not been properly accounted for and likely transacted monies without John’s knowledge or authorization.”

John is seeking general damages from Nicholas, Florio and George and the Cellar, as well as “proper accounting” of the investment property’s finances for the past six years.

A statement of defence has not been filed.

None of the allegations have been proven in court.