Couple loses round in Shuswap resort skirmish

A Kamloops couple who purchased shares in a proposed Shuswap RV project before the market crash in 2008 lost a bid in B.C. Supreme Court to have a subsequent mortgage declared "part of a larger fraudulent scheme."

Justice Allan Betton ruled in favour of an application by Vabkol Investments and Covenant Building Corp. to dismiss a claim by Garry and Susan Worth.

The couple purchased two shares in Scotch Creek Village Resort in 2008, at $75,000 each. The shares were to be used for development of the former Frank's Campground and eventually converted into two RV lots.

But the company went into receivership in 2009 following the worldwide financial collapse. The Worth's interest was not listed on land title.

Meanwhile, the two companies purchased a second mortgage on the property from the original owner.

The Worths sought a declaration the mortgage was not legitimate "and that it is part of a larger fraudulent scheme connected to a failed land development on Shuswap Lake in the B.C. Interior," Betton wrote.

Betton did not make a determination on the larger allegation of fraud, but ruled money that was held back from the sale by the receiver later in 2009 can be paid out to Vabkol and Covenant.

"There is nothing in the circumstances of this case to cause me to conclude that they were in any way dishonest in placing the mortgage," Betton said.

The ruling is part of a larger suit brought by the couple against a long list of companies and individuals, including Shuswap Lifestyle Developments Inc., Rene and Cheryl Gladu, Eugene Chartier and Shelton Windjack.

The Worths sought to bring a class action suit representing other purchasers. They've alleged about $8 million was raised by Shuswap Lifestyle before it went into receivership.

Betton did not determine whether the couple acquired an unregistered interest in the lands.

The Scotch Creek Park Store from the development was reopened. There was limited camping on the property last season.

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