The Shasta mobile home park, Lakeshore Road, Kelowna.

Image Credit: GOOGLE STREET VIEW

Two years after a BC judge attempted to end a long-standing legal feud between Kelowna businessman Ted Callahan and his three brothers – by ordering the sale of a highly valuable waterfront lot – the matter is back in front of the courts after Ted contested which company should oversee the sale.

According to a recently published Dec. 6, 2024, BC Supreme Court decision, the liquidation of the Shasta Mobile Home Park was being done by Ernst & Young until shareholders decided in the fall that the liquidation should instead be overseen by the accounting firm MNP.

The move to change accounting firms clearly frustrated Ted who wrote to the shareholders saying that appointing MNP presented a "significant" conflict of interest.

In the decision, Ted argued he's spent more than $500,000 with MNP and the company has intimate knowledge of his finances and it would be "extremely prejudicial" for them to become the liquidator with this information.

Ted’s dispute led to a few days in court as letters from lawyers went back and forth.

The legal costs involved with the extra court days are small fry considering the amount of court time, and expense, the four brothers have spent since the initial legal proceedings started a decade ago.

The Callahan’s story in Kelowna starts in the early 1960s when Lloyd and Marjorie Callahan moved to the city after selling their Fort St. John trucking business. The couple began buying real estate and in 1968 Lloyd bought the Shasta Mobile Home Park and eventually split the business four ways to each of his sons.

Fast forward a few decades and Ted now owns the Argus Group – which included Hotel Eldorado – while his brothers Douglas, Bruce and Robert own the Callahan Property Group.

While all are successful and wealthy, Ted and his brothers don’t get on and haven’t for years. In 2015 in a different sibling disagreement, a BC judge said the only thing that wasn’t in dispute was the significant rift in the family and the high degree of animosity and distrust.

In 2023 Ted began legal action against Bruce over the sale of his late father's $5.5 millon home.

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The four brothers still jointly own the Shasta Mobile Home Park, referred to as the "Crown Jewel" of the family’s real estate portfolio. Over the years the joint ownership of the sleepy mobile home park became a sore spot as the siblings squabbled over the 18.5-acre site ripe for development. BC Assessment has the land valued at $24.2 million.

In 2015, the brothers tried to liquidate the mobile home park, but Ted blocked the move in court.

A few years later Ted took legal action against his brothers claiming they were taking excessive management fees from the business. A year later, the brothers kicked Ted off the board of directors and moved to liquidate the business.

More court time followed and in 2022 Justice Mary Newbury appeared to put an end to the dispute.

"After 20 years of acrimony at the expense of various Callahan family enterprises, the hope that one day the brothers would co-operate in developing the ‘Crown Jewel’ was simply no longer plausible," the Justice said in 2022 ruling. "It is an impossible dream."

While an order for the business to be liquidated should have put an end to this particular conflict, it hasn't.

In the recent decision, Ted said he wouldn't try to block MNP from being the liquidator but he did have concerns.

However, Justice Kevin Loo noted it "was not precisely clear" what the concerns were.

The Justice gave Ted’s lawyers 24 hours to put any concerns and objections in writing and allow MNP to respond to them.

A letter from Ted’s lawyers followed.

“But he did not identify any specific concerns, grievances, or objections to the appointment,” the Justice said.

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Instead the letter stated that Ted reserved the right to sue MNP in the future if needs be.

MNP responded saying it guaranteed that safeguards are in place so any staff involved with the liquidation would not have access to any confidential information about Ted's previous business matters.

Ted said he wanted more information but didn't address why the measures were inadequate, the Justice said.

In its application to the court, MNP asked the court to permanently bar Ted from taking legal action against it for an alleged conflict of interest.

However, the Justice questioned why the accounting firm needed it.

"MNP urges the Court to make this order on the basis that MNP ought not to have the spectre of a potential legal proceeding hanging over its head as it deals with this liquidation. However, there is no evidence before the Court that the possibility of a further legal proceeding is affecting or would affect the conduct of the litigation in any way,” Justice Woo said.

The Justice denied the MNP request.

Ultimately, following three days in court the Justice allowed MNP to take over the liquidation.

"While concerns have been raised both about potential conflicts of interest by Ted Callahan and about the spectre of future claims by MNP, no one has established a conflict or any other reason on the evidence for this Court to refuse (MNP to takeover),” the Justice said.

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