B.C. developer ordered to pay pre-sale condo buyers $13M for breach of contract

A rendering of the PRIMA development in Richmond, B.C., is shown in this image. (Credit: liveatprima.com)

The development company behind a B.C. condo project has been ordered to pay more than $13 million in damages to dozens of people who made pre-sale purchases that never came to fruition.

More than 30 people who made deposits on condos at what was then called the ALFA development in 2015 and 2016 sued Anderson Square Holdings Ltd., and its two directors Sunny Ho and Jeremy Liang, alleging breach of contract.

The pre-sale purchasers had their contracts terminated by the developer in July of 2019, the decision handed down Friday says. But units would ultimately be sold – at higher prices – roughly two years later, albeit under the name "PRIMA."

An expert report that the judge accepted noted that the units had increased in value by $9.91 million by the time the company terminated the contracts.

The $13,093,900 in damages awarded represented the difference between what the pre-sale buyers paid for their units and what the condos were valued at when the buyers "repudiated" their contracts by accepting returns of their deposits in August of 2021.

The judge's ruling came after a trial last year. By the time it began in November, the judge noted, an occupancy permit had been issued and roughly half of the units in the development had been sold.

The buyers' claim was, essentially, that the developer had no right to terminate the contract when it did. The developer and its directors argued the opposite.

Justice Kevin Loo's decision quotes from the termination notice sent to buyers, which said that circumstances beyond its control – including a legal dispute with contractors and an inability to secure financing – meant that it was unable to "perform its obligations under the agreement."

The pre-sale contracts did include two clauses that allowed for the agreement to be terminated before the completion date of Sept. 30, 2019, but the judge found neither of them applied in the circumstances.

"Anderson Square was not contractually entitled to terminate the contracts under either (clause) in July 2019. Further, I find that the personal defendants knew that the reasons they gave in the termination notices in support of their reliance on (one of the clauses) were false or misleading, or that they were reckless as to whether this was so," Loo wrote.

However, Loo also found that the two directors could not be held personally liable because their conduct did not meet the legal threshold for "dishonest performance" and even if it had, there was no evidence of damage. The judge also dismissed the plaintiff's claim against the directors for "unjust enrichment" finding that they had not introduced evidence proving that claim.

Loo also ordered the developer to pay the buyers' legal costs – with the exception of one plaintiff who sent his son to "impersonate" him during pre-trial proceedings.