Mayor suing own family in dispute
Penticton’s mayor has launched a private lawsuit against his own brother and nephews arising from a dispute over a family owned property.
John Vassilaki filed notice of claim Aug. 26 in B.C. Supreme Court in Kelowna. It names as defendants his brother, Nicholas Vassilakakis; Nicholas’s two sons, Florio and George Vassilakakis; and The Cellar Wine Bar and Kitchen.
(John shortened his surname years ago and for clarity this article will follow the style used in the lawsuit by referring to the parties by their given names only.)
The dispute centres on a historic building called Greer Block on the 400 block of Main Street in downtown Penticton. The bottom floor is rented to the Cellar restaurant while the top floor boasts five rental apartments.
According to the notice of claim, John and Nicholas purchased the building in 2013 and entered into a trust agreement under which each brother owned half the property.
John was to be a silent partner, while Nicholas was to look after the building’s finances while also owning and operating the Cellar, according to the lawsuit.
Rental revenue was to be placed in an account from which the building’s expenses were to be paid, explains the lawsuit, and it was in that same account where John’s share of the profits were supposed to be held in trust and payable to him on demand.
In July 2014, the lawsuit continues, the Cellar began operating with a $3,000-a-month lease under which the restaurant was also responsible for utilities, taxes and maintenance.
John and Nicholas were of the understanding the Cellar’s rent would increase to fair market value as of Jan. 1, 2021, and while it indeed rose by $500 per month, the “fair market value increase ought to have been $750 monthly,” alleges the lawsuit.
The lawsuit also claims the Cellar has “failed to pay its proportionate share of the sewage and water utilities of the Greer Block, and is therefore in breach of its lease.”
John argues Nicholas also breached the trust agreement “by failing to make prompt payment of Greer Block’s mortgage and failing to properly account for and remit rental proceeds collected from Greer Block tenants to John on a timely and consistent basis.”
John claims to have received just three payments totalling $23,980 since 2013.
“As Greer Block makes approximately $90,000 in rental proceeds per year, it is without any logic as to why the total of only $23,980 has been distributed to John between 2013 to present,” the lawsuit states.
Finally, the lawsuit notes that in July 2019, Nicholas transferred his 50% interest in Greer Block to his sons, Florio and George.
Since then, Florio and George “have exerted influence over Nicholas,” and as a result “have essentially usurped control of the Greer Block account and the operation of the Cellar restaurant,” the lawsuit alleges.
“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 rental proceeds, with Greer Block,” the claim continues.
John is seeking damages from Nicholas, Florio, George and the Cellar, along with a “proper accounting” of the Greer Block’s finances. All parties declined comment.