A landlord who tried to deny an accounting firm the option to buy its leased office space in Burnaby’s Koreatown after the property’s value jumped by $350,000 has lost in court.
Go Ha & Associates Ltd., a firm currently located in New Westminster, used to lease space in North Road Centre at 4501 North Rd.
The company had entered into a lease agreement in 2013 that included the option to buy the five connected strata lots for $850,000 before the end of the lease term on Dec. 31, 2017.
The property’s value has since increased to more than $1.2 million.
Go Ha delivered notice of its intention to buy on Oct. 11, 2017, but the numbered company that owns the property (611414 B.C. Ltd.) refused to complete the sale.
In court, the company argued Go Ha hadn’t exercised the option to buy on the day required under the lease, which stated the option “may be exercised 60 days prior to the end of the term of the lease agreement.”
Sixty days prior to the end of the lease would have been Nov. 1, 2017, not Oct. 11, so the numbered company argued Go Ha had not complied with the agreement and the company was therefore not obligated to complete the sale.
B.C. Supreme Court Justice Wendy Baker was unconvinced.
“It would be contrary to sound commercial principles and good business sense to conclude that a notice delivered 20 days early, which gives rise to absolutely no prejudice to the vendor, could invalidate an otherwise valid option to purchase,” she said in a Nov. 30 ruling.
What motivated the numbered company’s director, Jin Woo Lee was likely money, she said.
“I suspect that Mr. Lee was looking for a way to avoid selling the property given its large increase in value since 2013, and Mr. Lee latched on to the date of delivery of the notice as a means of hopefully doing so.”
Through regular deposit payments towards the purchase price, Go Ha had made it clear throughout the lease term “it had every intention of exercising the option to purchase,” Baker concluded.
Despite what she called the numbered company’s “lack of good faith and failure to perform its contractual obligations honestly” in not providing Go Ha with requested information, Baker also found the accounting firm had done its best to file the necessary closing documents and payment by the closing deadline outlined in the lease.
In the end, Baker ordered the numbered company to complete the sale within 30 days.
She ruled the North Road property was uniquely suited to Go Ha’s needs and a payout wouldn’t be an adequate remedy.
“The unique quality of the property is apparent when compared with Go Ha’s new location,” Baker said. “The space Go Ha is currently occupying is too big for its needs, does not have free parking and, most importantly, is detached from the Korean community. There is a further, distinct disadvantage to Go Ha in its present New Westminster location as it is no longer part of the one-stop shopping experience for Korean clients.”
Baker also ordered Lee’s numbered company to pay Go Ha $70,176.13 in damages and to pick up the tab for the court costs.