Judge awards Richmond condo presale buyers $13.1 million
Bob Mackin
More than 30 people who sued Richmond condo developer Anderson Square Holdings Ltd. and two directors over the cancellation of their presale contracts were awarded $13.1 million in damages by a B.C. Supreme Court judge.
Justice Linda Loo’s Feb. 9 ruling, however, dismissed the personal liability action against the two directors, Keung Sun (Sunny) Ho and Jia An (Jeremy) Liang.
The plaintiffs signed contracts in 2015 and 2016 for condos in the Alfa tower at 6833 Buswell St., with an outside completion date of Sept. 30, 2019, but were notified their contracts were terminated in July 2019. Two years later, the project, now called Prima, was completed and the units sold to others for higher prices.
Anderson Square’s Alfa, now called Prima, in Richmond (Anderson Square)
Anderson Square made a $37.8 million fixed price contract in January 2017 with Scott Construction and a building permit was issued a year later. But a dispute over delay costs mounted until Ho and Liang cancelled the presale contracts and Scott issued termination notice the following month.
At the end of 2019, Anderson Square retained a different construction company, Valley West Construction Ltd., to complete the project. Scott sued Anderson Square in February 2020. In August 2021, deposits were returned to the plaintiffs.
Loo noted that the plaintiffs did not plead deceit or fraudulent or negligent misrepresentation. She considered whether Anderson Square had the right to terminate the contracts in 2019 and if the directors breached a duty of honest performance to the plaintiffs.
The case centred around two clauses in the presale contract about payment of purchase price and completion date and major outside event.
Loo found that a lack of financing “did not render performance impossible.”
“Although Mr. Ho and Mr. Liang testified that overseas financing was not Anderson Square’s first choice, there was no evidence that this funding source was exhausted by July 2019,” Loo wrote. “On July 25, 2019, Anderson Square had more than $9 million in its bank account. Mr. Liang testified that between September 2019 and the end of 2020, the Hong Kong lenders advanced at least another $11 million to the project.”
Loo said that Anderson had sufficient financing to hire Valley West in December 2019 — only five months after delivering the termination notices.
“Anderson Square was not contractually entitled to terminate the contracts under either clause 2 or clause 21 in July 2019,” Loo wrote. “Further, I find that the personal defendants knew that the reasons they gave in the termination notices in support of their reliance on clause 21 were false or misleading, or that they were reckless as to whether this was so.”
But Loo stopped short of assigning personal liability, deciding the plaintiffs did not prove Ho and Liang induced breach of contract, dishonest performance or unjust enrichment.
Loo called Liang “very inexperienced in business and real estate matters,” but said his testimony was delivered in a straightforward manner. The same could not be said about Ho, whose “evidence was successfully challenged in a number of ways which raised doubts about his reliability and credibility.”
“Mr. Ho said that the money for the construction of the project came from Anderson Square’s shareholders, and not from ‘private lenders’,” Loo wrote. “When confronted with the fact that much of the funds used for construction came from companies and an individual in Hong Kong, he testified that he believed private lenders meant ‘loan sharks’ and that the Hong Kong lenders were not private lenders.”
Loo said all plaintiffs were called to give evidence and their testimony was straightforward, reliable and credible. But most of the evidence they gave was not legally relevant to the action. There was what she called “an unusual situation” involving one of the plaintiffs. Qing Wei Li’s son had impersonated his father during examination for discovery, misleading the opposing lawyer, court reporter and his own lawyer.
“This conduct was unacceptable and an affront to the court’s process. That said, it did not affect the defendants’ ability to defend the claim in any substantive way, and the defendants declined to conduct a proper examination for discovery of Mr. Li prior to his trial testimony.”
As a consequence, Loo ruled that Li will not receive any costs from the defendants, “on account of his conduct and that of his son in relation to his examination for discovery.”
Collection of the damages award may be complicated by a separate, but related, action.
On Feb. 7, Justice Michael Stephens extended court protection for Anderson Square Holdings Ltd. until March 26, the deadline for its restructuring proposal.
A report to the court said that the company’s one known potential secured creditor is Anderson Plaza Holdings Inc., which demanded repayment of $64.1 million in loans last Nov. 20.
Forty-eight of the one-to-three bedroom condos remain listed for sale through Re/Max WestCoast Realty for a combined total of $51.28 million.
Support theBreaker.news for as low as $2 a month on Patreon. Find out how. Click here.
Bob Mackin More than 30 people who sued
