City doesn't owe owners for years-long delay for permit to demolish historic home: appeal court

The City of Vancouver should not be held liable for the decrease in property value of a century-old home after staff stalled for years on approving a demolition permit, B.C.'s highest court has ruled.

A B.C. Supreme Court judge found in 2017 that city staff acted in bad faith when they put off rejecting Zheqiang Wu and Binxia Cao's application to tear down their Shaughnessy mansion until after a heritage protection bylaw for the neighbourhood could be passed.

At the time, Justice Catherine Murray said the city was trying to avoid paying compensation to the couple, and would now have to pay damages for Wu and Cao's economic losses.

But in a judgment issued Monday, a three-judge panel at the B.C. Court of Appeal found the city did not owe Wu and Cao a public duty to protect their private economic interests. The high court dismissed the couple's claim.

"The respondents were not entitled to a particular decision, for example, the grant of a development permit, but they were entitled to a decision," Appeal Court Justice David Harris wrote.

"Under the bylaws, a failure to make a decision on a development permit is a deemed refusal of the permit. In those circumstances, the respondents again had a remedy. They had a right to appeal to the board of variance, which was empowered to address their complaint."

Wu and Cao bought the Walkem House at 3990 Marguerite St. in 2011 for $4.65 million, according to court documents. They told the court they asked their realtor to make sure the home wasn't protected by a heritage designation before they signed the deal.

The house was built in 1913 and was in rough shape by the time Wu and Cao bought it, having been converted into apartments years earlier. They said they planned to tear it down and build a new home where they could live with their three children.

Their architect began the pre-application process for the demolition in 2012. As the city would later acknowledge in court, this sort of application was usually processed within 10 to 14 weeks.

Instead, city staff spent the next two years trying to convince the couple to preserve the home, to no avail. At one point, then-director of planning Brian Jackson even got council to approve a 120-day temporary protection order for the property.

Lack of names sinks claim

Wu and Cao finally gave up and filed suit in May 2014. A little more than a year later, the house was officially protected under the First Shaughnessy District Heritage Bylaw, which banned demolition of any neighbourhood home built before 1940.

In her B.C. Supreme Court decision on the lawsuit, Murray found city staff had already decided the house should be preserved within two months of receiving the permit application, but slapping a heritage designation on the mansion would have meant paying compensation for the loss of property value.

"They chose to not advise the plaintiffs of it in order to avoid dealing with the application until the new bylaw was passed and the requirement to pay compensation was done away with," the judge wrote.

During the appeal process, Wu and Cao argued the lower court decision should be upheld because city officials had abused their public office.

But the appeal court rejected that reasoning, explaining that the couple would have needed to name each individual councillor and staff member they believe acted in bad faith.

"This was not done here," Harris wrote. "The failure to name them is fatal to the claim."

In the most recent assessment, the value of the home has been estimated at $7.3 million.