B.C. man who falsely claimed to own legendary Sooke hotel handed $1.6M penalty

A B.C. Securities Commission (BCSC) panel has imposed a $1.6-million penalty on a B.C. man who defrauded an investor by claiming to own the legendary Sooke Harbour House resort hotel.

Timothy Craig Durkin has been involved in a years-long dispute with the original owners of the hotel, which has hosted Hollywood stars and royalty for more than 40 years in Sooke, a tourist hotspot on the southern tip of Vancouver Island, around 40 kilometres southwest of Victoria.

In January, the commission found that Durkin raised $1 million from an investor between December 2015 and March 2016, promising the investor a 40 per cent share in the hotel by purchasing 40 per cent of the shares in the company SHH Holdings, where Durkin was a director.

"In reality, at that time, SHH did not own any of the shares in the corporation that owned the hotel," reads a statement from the BCSC.

"The BCSC panel concluded that on three occasions, SHH and Durkin made false statements about the hotel's ownership, knowing that they would be taken as an accurate representation of its current financial situation."

Now, Durkin has been handed a $1.6-million penalty, which includes the $1 million obtained by the fraudulent scheme.

However, the $1-million penalty may be reduced if Durkin ends up paying the investor after a separate civil lawsuit, the result of which is still pending.

In 2020, North Vancouver-based IAG Enterprises purchased the land surrounding the Sooke Harbour House building and its associated assets in a court-ordered foreclosure sale for $5.62 million.

The hotel is closed for renovations and a re-opening date has not been set, according to a statement on its website. Neither Durkin, his companies, nor the original owners are involved with the property anymore.

$1M spent and not recovered

Vancouver Island resident Durkin had a six-year-long legal battle over the ownership of the renowned resort hotel starting in 2014.

In 2020, a judge sided with original owners Frederique and Sinclair Philip, awarding them $4 million in their fight to wrest control of the hotel from Durkin and his partner Rodger Gregory. 

In a scathing decision, the judge described Durkin as a "garden-variety bully" who is "entirely unencumbered by ordinary norms of morality, integrity and decency," noting that Durkin swore a false affidavit to obtain an injunction to keep the Philips away from the hotel.

The latest penalty from the BCSC relates to Durkin's dealings with an unnamed investor, a Chinese citizen who was looking to immigrate to Canada at the time. She had already invested in a spa business in the Sooke area and was considering broadening her investments in the region through the $1-million hotel deal.

According to the ruling, Durkin, a director of SHH Holdings, argued that the investor was not misled and he had no intent to mislead her. The $1 million in funds were spent and have not been recovered by the investor or her company.

However, the BCSC panel found that the B.C. man made false statements in writing, including a 2015 email that claimed SHH Holdings "owns 100 per cent of the outstanding and issued share capital of Sooke Harbour House Inc."

The panel has also permanently banned Durkin from any activity in B.C.'s investment sector.

"Only a broad, multi-decade long prohibition will provide a meaningful level of protection to the public," reads the commission's statement.