An investment company that allegedly bought $24M worth of office space near Richmond Centre is suing the developer for backing out of the sale.
Yi Teng Investment Inc. filed a lawsuit against Keltic (Brighouse) Development Ltd. in the B.C. Supreme Court in 2018.
Keltic’s appeal against Yi Teng’s 2022 amendment to the lawsuit was thrown out last week by the court.
According to the amended lawsuit, Yi Teng entered into a contract with Keltic, then known as YYH Development, in May 2016 for a presale of a custom-designed office and retail space in a new development next to Brighouse station.
The office space was to be 40,000 square feet in total with north and south sides, each with two floors.
Keltic was incorporated by two companies — Yinghe Investment (Canada) Ltd. and Oriental Yuhong (Canada) Investment Holdings Ltd — in March 2016 for the purpose of pursuing the development. It was renamed from YYH to Keltic in October 2017.
Yi Teng said the contract was negotiated and written in Chinese and Jiansheng Chen — owner of Yinghe and Keltic’sthen-general manager and executive director — had his son and daughter-in-law prepare an English version of the contract.
Neither of them had legal training or were certified translators.
“No lawyer was involved,” reads the lawsuit.
According to Yi Teng, Chen resigned from Keltic after a shareholders’ dispute in May 2017 and allegedly gave both the Chinese and English versions of the contract with Yi Teng to a Keltic director.
The Keltic director later contacted Yi Teng in November 2017, claiming that Keltic had “no knowledge of the contract.”
Keltic also told Yi Teng in 2018 that it “no longer considered itself bound by the contract and did not intend to proceed with the sale,” according to Yi Teng.
Damages not an adequate remedy: Investment company
Yi Teng argued that Keltic failed to provide it with the initial floor plan for it to consider and issue modification requests and that Keltic failed to act in good faith and complete the sale.
It added that damages would not be “an adequate remedy” for Keltic’s breach of contract because the market price for commercial property in Richmond has “increased substantially,” and the Keltic property was the “last remaining commercial development property in the area.”
According to Yi Teng, there is nothing of the same scale on the market and the Keltic property is in an “ideal location.” Its custom space would have had a “unique feature” in commercial developments by including office and retail space on the first and second floors.
Yi Teng asked that the court order Keltic to either perform the contract to the best of its abilities and apply for subdivision of the property or compensate it with damages.
It also registered a certificate of pending litigation on the Keltic property in 2018, which was struck off by a judge in 2019.
Developer denied wrongdoing
Keltic, on the other hand, denied considering or approving anything related to Yi Teng’s alleged agreement and said the alleged agreement was never disclosed to Keltic’s board of directors. It also denied having a copy of the agreement.
In a reply to Yi Teng’s lawsuit filed in 2018, Keltic said the terms of the alleged agreement were “ambiguous, internally inconsistent and commercially unreasonable,” and Yi Teng knew or should have known Chen did not have the authority to negotiate and enter into the agreement with Yi Teng.
Keltic added that the customized space described in the agreement was “not compliant with the City of Richmond’s by-laws” and was inconsistent with the development.
It also denied Yi Teng had paid a $50,000 deposit for the purchase, arguing instead that Yi Teng had made a payment for a purpose that was “never disclosed” to Keltic.
No trial date has been set yet and none of the allegations have been proven in court.
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