Legal battle over Plaza of Nations development rages on

B.C. Supreme Court ruling against developer Concord Pacific doesn’t end legal wrangling over property

Business in Vancouver
August 1, 2019

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Photo by Dan Toulgoet

The first major decision in the high-profile legal battle over Vancouver’s Plaza of Nations has ruled against one of Canada’s largest developers, but the war is far from won.

The legal wranglings between developer Concord Pacific Group and Singapore-based business magnate Oei Hong Leong, the site's owner, will almost certainly continue as both sides await a decision on a related lawsuit in Singapore. In addition, Concord Pacific has not ruled out an appeal of the July 19 B.C. Supreme Court judgment in which Justice Peter Voith dismissed the developer’s claims that Oei acted in bad faith and violated an agreement on how to develop the site.

The lawsuits began in October 2015, when Oei sued Concord Pacific in Singapore for not paying $40 million as part of a “heads of agreement” deal between the two parties in May of that year. Soon after Oei’s Singapore lawsuit, Concord Pacific filed a suit against Oei and his company – Canadian Metropolitan Properties (CMP) – in B.C., launching parallel legal battles on either side of the Pacific Ocean over the Plaza of Nations site.

In the B.C. lawsuit, Concord Pacific argued that the “heads of agreement” deal is a binding contract that Oei and CMP violated. In his decision, however, Voith said that one of the deciding factors was that the original “heads” agreement was not enforceable.

Concord Pacific attorney J. Kenneth McEwan said the developer maintains its position, adding that – despite the decision – the B.C. judgment “accepted that both parties intended to enter and believed that they had entered into a binding contract” and that “if there had been a binding contract, the defendants breached it.”

In response, CPM has released a statement calling McEwan's comments “most misleading,” referring to Voith's judgement “overwhelmingly accepted the evidence of Mr. Oei and his defendants.”

The Plaza of Nations is one of the last chunks of developable land in Downtown Vancouver and sits in the middle of Concord Pacific’s holdings of former Expo lands.

Oei bought the site for $40 million in 1989 and said he planned to develop it with partners in Vancouver in 2015. He met with Concord Pacific president and CEO Terry Hui in May 2015, and the two sides reached a “heads of agreement” on May 14, under which Concord was to pay Oei to secure the right to redevelop the site. But legal documents show that negotiations stalled over the deal’s details. Oei alleged that a $40 million payment within 60 days of the heads agreement was never issued by Concord Pacific.

McEwan said the $40 million was paid into trust “rather than to Oei personally when negotiations stalled” following a July 15 meeting. That dispute over the payment became the central issue in Oei’s Singapore lawsuit against Concord Pacific, which alleges a breach of contract.

“Concord believed that step was commercially reasonable in the circumstances,” McEwan said of the decision to issue the payment into trust. He further alleged that Oei is holding the initial preliminary payment of $10 million made in May 2015 “despite alleging no agreement.”

CMP disputes that claim, however, noting that “Justice Voith did not order the return of the $10 million to Concord.” The statement also denounced Concord's stance on paying the $40 million into trust, saying that McEwan's statement “stands in sharp contrast to the findings of the court.”

“Justice Voith found that [Concord vice president] David Ju's communications to Mr. Oei were 'not forthright'... As for the evidence of Concord's president, Terry Hui, Justice Voith stated that he had 'some difficulties' with his evidence and simply rejected it on critical issues,” said the CMP statement.

Concord’s B.C. lawsuit against Oei – launched nine days after the Singapore lawsuit – alleged Oei did not negotiate in good faith and that he breached an oral agreement to avoid negotiating with other developers on the site.

In his decision, Voith said he does not “consider that the Heads gave rise to a ‘binding obligation to negotiate’ or to do so in ‘good faith,’” adding that Oei has admitted to Hui multiple times that he was meeting with other potential partners.

Because of the ruling against Concord Pacific, Oei has been awarded the costs of the B.C. legal proceedings.

In 2017, Concord Pacific and Oei unveiled their separate plans for developing their northeast False Creek properties. Oei’s plans – announced through CMP – called for the possible inclusion of a museum dedicated to Asian art. The 1.4-million-square-foot redevelopment would create an entertainment district with housing, commercial and community space.

Concord Pacific’s plans for its 10.2-acre waterfront site include similar combinations of residential, commercial and entertainment space, in addition to a new seawall, wharf and pedestrian-only retail laneways with a 16,000-square-foot grocery store and an 8,000-square-foot drug store.

Concord Pacific said in an emailed response that the judgment does not affect the developer’s plans for its developments in the neighbourhood.

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