Two Steveston businesses and their landlord were tangled in a real-life tale of woe, with Disney trapped in the middle.
The backdrop was the fairytale character of Rumplestiltskin who, as the BC Supreme Court pointed out, “initially brought wealth, but eventually sowed discord” in the village during the filming of the .
Front and centre in the real world, however, was a fight involving two adjoining businesses and their Moncton Street landlord – The Fab Pad and It’s Posh Accessories on one side and building owner PD Riverside Ventures on the other.
At the heart of the controversy was a dispute over production company Disney/Stage 49’s payments to the tenants for business interruption and to the landlord for exterior shots of the premises, which doubled in the “real world” version of the fairytale character Rumplestiltskin.
A not so happy ending
And in a not so happy ending, The Fab Pad’s owner, Laura Stapleton, was ordered to pay the landlord $19,629.17 for breach of the lease extension contract, while It’s Posh Accessories’ owners, Kimberley and Karl Sorensen, were ordered to pay $44,396.72.
Court documents released this week told how the landlord, PD Riverside Ventures – represented in person at the premises by a Dyona Dallas – signed a three-year lease in 2013 with the tenants, while OUAT was still shooting in Steveston and, off and on, using the premises for filming.
In the lease contract was a clause, which stated the landlord “shall retain full rights with respect to receiving compensation for the use of the exterior images” of the building and that the tenant “shall have the rights to receive compensation for business interruption.”
It also stated that “any and all contact or negotiations for these uses shall be through the landlord only” and not with Disney/Stage 49.
Tenants dealt directly with Disney during first lease term
However, during the course of that lease term, the tenants dealt directly with Disney/Stage 49, providing calculations to and receiving cheques from the production company for business interruption losses from filming.
Court documents state that Dallas was “content to allow the tenants to deal directly with Stage 49, as she was at that time focused on her ailing parents.”
In a twist to the tale, from around August 2015, more than two years into the lease term, Dallas began asking the tenants about the business interruption payments and their dealings with Stage 49.
And in April 2016, Scott Walden, from Stage 49, sent Dallas a copy of the location contract for the next season, at which time she took that opportunity to inquire with Walden about the business interruption arrangements with the tenants.
The presiding BC Supreme Court judge, Justice David Crerar, noted that the tenants expressed legitimate fears that Dallas would “try to leverage the business interruption payments in the future negotiations for renewal of the leases.”
However, he also pointed out that Dallas, too, had a “good faith explanation” for her new interest in the business interruption payments as it wasn’t clear that the Sorensens “would in fact be those tenants for the next filming season…” with the lease due to expire.
That lease was extended beyond 2016 and the two businesses continued to operate as before.
But it was around that time in the summer of 2016 that the relationship between the tenants and the landlord deteriorated to a point where they could only communicate via lawyers.
And stuck in the middle was the Disney production company, which was preparing to film for the next season of OUAT and was getting pulled in both directions by the landlord and the tenants as to who to negotiate with in regard to payments for use of the building.
In the end, Disney’s lawyer pointed to the original contract, which stated that all communication must be with the landlord.
Disney found themselves "between a rock and a hard place": Judge
However, Disney added that it could not proceed with the filming on the premises unless both landlord and tenant came to an agreement, with Judge Crerar noting that Disney “found itself between a rock and hard place.”
By the time filming commenced in the village that summer, the parties were still at war, so to speak.
So, as the judge noted, through the parties’ “squabbles,” they jointly “killed the proverbial goose that lays the golden egg.”
And when filming started up again on July 13, Stage 49 simply “erected a façade storefront for Mr Gold’s Pawn Shop in the lane beside the premises, depriving both sides of the filming revenue streams.”
“It appears that Stage 49 would have been content to pay for those losses,” added the judge, “as it did to many other businesses in the area, but were understandably unwilling to pay or negotiate until and unless the parties reached an agreement amongst themselves.”
OUAT filming in Steveston permanently ended in March 30, 2017, and the series ended the next year.
In the end, noted the court documents, no business interruption and exterior filming fees were paid for 2016 or 2017 to any party.
And a Jan. 18, 2017 email from Disney’s in-house counsel indicated that those fees would likely never be paid and “in the end, the tenants never pursued business interruption fees through legal proceedings against Stage 49 or Disney; the limitation period for such a claim presumptively ended around March 2019.”
However, the tenants terminated their leases early and vacated the premises on Oct. 31, 2018, prompting the landlord to sue for the aforementioned breach of contract.
The tenants’ counterclaimed for $23,427 (Stapleton) and $45,855 (Sorenson), for missed business interruption payments, lease payments made under protest and moving costs to new premises.
They argued that they were harassed through a “passive-aggressive campaign of disruption and intimidation” and were subjected in 2016 and 2017 to building inspections and other charges that the landlord had not charged in the first term but which they paid under protest.
Their counterclaims were dismissed by the court.
Ultimately, the court found in favour of the landlord, adding that “while Ms Dallas may have played hardball with the tenants, all three individuals exhibited exaggerated reactions and aggressive brinkmanship with each other and with Stage 49/Disney, inflaming a small dispute, that could likely have been resolved through calm commercial conversations, into an expensive inferno.
“That said, the legal issue before the Court ultimately turns on the plain wording of the lease agreements…,” which authorized the landlord to “do what it did.”
