RPS Resource Property Services
In 2002, the Pacific Mall's board became dissatisfied with the
performance of their property management company, Living Properties,
and hired RPS.
RPS, incorporated on 15 August 1988, was a property management company
commercial, residential and condominium clients. William Garland was
the president and major shareholder of RPS from its inception until
in July 2004.
RPS opened and operated a number of current bank accounts at the RBC
Royal Bank in connection with its business for its own account
and on behalf of its clients.
RBC provided RPS access to what was initially telephone banking but
which subsequently evolved to become Internet banking. When RPS opened
a new account, it could be accessed, along with its other accounts,
through the Internet by use of an access code.
When RPS became the Mall's property manager, the Mall's operating bank
account was changed from the Bank of East Asia to RBC. The Plaintiff’s
reserve fund remained at the Bank of East Asia.
On 28 November 2002, the condo board executed a resolution which gave
William Garland and Kandiah Sivaneswaran (RPS's accountant)
authority to a maximum of $100. Any cheque in excess of $100 required
the signature of any two directors of the condominium.
began its duties as property manager effective on
01 December 2002.
On a monthly basis RPS provided the Board a detailed written report
containing an agenda; the property manager’s report; detailed monthly
financial statements together with copies of the RBC bank statements
for the account for the period in question. The bank statements were
addressed to RPS.
Everything seemed fine but the directors of the Pacific Mall did not
know that RPS was using the money in their operation's account to run
Later, Kandiah Sivaneswaran testified that when he first
joined RPS in 2000, it was RPS’ practice whenever it or Daniels
Associates, Garland’s other company, needed money, to take an advance
from the client accounts and then return the monies at a later time
when RPS or Daniels had the funds.
Sivaneswaran said that the decisions as to which account would be
accessed and how much money would be taken were always made by Garland.
The unaudited financial statements for RPS show on the balance sheet,
under current liabilities an item entitled “Due to client trust
accounts” in the amount of
| Year ending
| 31 July 2001
| 31 July 2002
| 31 July 2003
| 31 July 2004
RPS began taking trust money from the Pacific Mall's Account in 2003
and utilizing it for its own operational purposes or to pay back other
clients. Sivaneswaran withdrew money from the Pacific Mall's Account
from time to time as a"prepaid expense" and placed in another RPS
account at RBC by internet transfer.
In 2003 the amount was $400,000.
Throughout 2003, RPS also transferred money back into the Account from
time to time by internet transfer. Prior to the end of 2003, RPS
ensured that all of the monies it took from the Account during the year
had been returned in order that when the Plaintiff’s auditors audited
its 2003 financial statements, everything would appear to be in order.
Between February and October, 2004, RPS transferred by internet
transfer a total of $408,381.47 from the Account to its operating
account and payroll account, one of its trust accounts and two client
accounts at RBC.
In November 2004, RPS transferred $38,000 back into the account,
leaving a shortfall of $370,381.47.
in new partners
In May 2004, Garland sold 80% of RPS to two investors who absorbed the
company's debts. On 19 November 2004, Sivaneswaran advised the
investors that $408,000 had to be deposited to the Pacific Mall's
Account by the following week.
This was an attempt by Garland and Sivaneswaran to obtain the money
needed to deposit into the Pacific Mall's account before the mall's
year end to avoid detection by the mall's auditors.
When they inquired further, the investors were told by Sivaneswaran
that RPS had borrowed the money from the Pacific Mall and it had to be
paid back. When they heard that surprising news, they withdrew from the
property management company.
In January 2005, because they were unhappy with services
provided, the Board terminated RPS and re-hired Living
Properties, who took over the management of the Pacific Mall in the
middle of February 2005.
Mr. Selwyn Pais, the controller for Living Properties, was involved in
the transition of the Pacific Mall’s management back to Living
One of the initial problems he encountered was a cash flow issue which
should not have been a problem.
Mr. Pais had difficulty getting any information from RPS. As a result,
on 01 February 2005, he requested financial information in writing from
RPS including the bank statements for the mall's account with
reconciliation as of 31 January 2005.
In the absence of a response, further written requests were made.
Solicitors for both the Pacific Mall and RPS got involved. Eventually,
on 28 February and 01 March 2005, Mr. Pais received some but not all of
the information he requested from RPS.
Based on the financial information which was received from RPS, Mr.
Pais determined, among other things, that between 04 February 2004 and
November 2004, a net amount of $370,381.47 had been transferred out of
the account by internet transfer to other bank accounts at
RBC. Mr. Pais reported his findings to the mall’s Board.
jig is up
On 03 June 2005, Mr. Pais wrote to the RBC and advised that certain
transfers from the Account in 2004 totalling $370,381.47 had not been
authorized by the mall's board.
Following receipt of the letter, RBC determined that the transfers were
made into other RPS’ accounts at the RBC, including RPS’ general
account, its payroll account and its trust account as well as two other
client trust accounts.
On 05 July 2005, RBC closed all of RPS’s bank accounts at RBC and RPS
ceased carrying on business in August 2005.
The Pacific Mall was out $370,381.47 and naturally they sued everyone
involved, including the RBC Royal Bank. The case was heard five years later in June 2010.
Kandiah Sivaneswaran testified that the monies taken from the
Pacific Mall's operating account were used in part to pay the salaries
of Garland, his wife and two children as well as personal expenses.
However, because there was no direct evidence of such, the judge
rejected this evidence.
Justice Pattillo wrote: "While Garland knew about the transfers and
permitted them to occur, it was Sivaneswaran, in my view, who effected
all of the transfers from the various accounts, including the Account.
In the aftermath of what has happened, it is clear that they each blame
the other for what has happened."
The judge ruled that RBC was not at fault and zeroed in on William
The judge awarded the Pacific Mall $370,381.47, plus interest, against
RPS for breach of contract, conversion and breach of trust. The company
was out of business so I assume that is why the judge awarded the Mall
an identical amount against William Garland for breach of trust.
In March 2011, the
court awarded the Pacific Mall its full $113,267.80 in legal costs.
It is unknown how much of that they were successful in collecting.
Against that award, the Pacific Mall lost its case against the Royal
Bank of Canada which won its costs on a partial indemnity basis, fixed
The lawyers won, no one else. The Pacific Mall took five years to be
awarded their losses and legal costs against which they had to pay the
RBC for their legal costs. How much of the award they actually
collected is undetermined.
It is unknown how much RPS's other clients lost.
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