Singapore Markets closed

Singapore tycoon Oei wins long-running Canada property case

Pacific Boulevard Marina at the Plaza of Nations. (PHOTO: Pacblvdmarina.com)

By David Ramli and Andrea Tan

(Bloomberg) -- Singapore businessman Oei Hong Leong has won a long-running court battle involving one of Canada’s largest property developers and a commercial site in the heart of Vancouver.

The case, which began in October 2015, pitted Oei against Concord Pacific Acquisitions Inc., part of Concord Pacific Group. The firm, led by CEO and President Terry Hui, accused Oei and his associated company of breaching an agreement pertaining to the development of the site and acting in bad faith.

But after years of legal wrangling, Supreme Court of British Columbia Justice Peter Voith, in a judgment dated July 19, sided with Oei, dismissing Concord’s claim in its entirety.

Concord is considering an appeal, its lawyer J. Kenneth McEwan said in an emailed statement Monday. Oei couldn’t immediately be reached for comment.

The dispute revolved around the Plaza of Nations, an entertainment complex in Vancouver that Oei bought for C$40 million ($30.6 million) in 1989. By 2015, Oei was looking to develop the site with local partners. Over dinner on May 3 of that year, he told Hui that his “happy price” for the multi-phase redevelopment was C$500 million, according to the judgment.

By May 14, and after some other meetings in Singapore, a heads of agreement between the two parties was struck in the business lounge of Hong Kong’s Four Seasons Hotel. It outlined a payment plan for Concord, with C$10 million to be paid to Oei within three business days, C$40 million within 60 business days and a further C$75 million within 14 business days of the site being rezoned.

Dinners, Counterclaims

But over the coming months, negotiations broke down. There were disputes over key details of the redevelopment plan and the C$40 million was never paid to Oei. On Aug. 3, 2015, Oei demanded Concord pay the funds by Aug. 6 or face legal action. One day after the deadline expired, Oei commenced legal action.

After negotiations stalled, Concord paid C$40 million into trust rather than to Oei personally, McEwan said in the statement. “Concord believed that step was commercially reasonable in the circumstances,” he said. Oei continues to hold the initial C$10 million payment despite alleging there was no agreement, he said.

Both parties met several times, including over dinners at Hui’s house and Vancouver’s La Terrazza restaurant, but couldn’t resolve their differences. On Oct. 4, Concord was served with a claim over breach of contract in the High Court of Singapore and Oei’s brother-in-law told Concord on Oct. 21 the original heads of agreement had been terminated.

Nine days later, Concord began its own action in British Columbia that was eventually concluded on Friday in which it claimed Oei had breached an oral agreement not to negotiate with other property developers and to keep the deal confidential. (Oei had met with rival real-estate firm Aquilini Investment Group Inc. and the family behind that company.) Concord further claimed Oei had not negotiated in good faith.

Justice Voith, however, ruled that comments and text messages between the two parties and Oei’s open admissions to Hui at several points that he was meeting with other firms meant the two had never agreed to exclusive negotiations. Concord and one of its employees were also dishonest in their testimonies at various points, he added.

“I do not consider that the Heads gave rise to a ‘binding obligation to negotiate’ or to do so in ‘good faith’,” Justice Voith wrote. “Concord was, at times, dishonest.” It wrote to Mr. Oei in mid-July promising the C$40 million payments “for sure” by a given date, knowing that this was not true, the justice added.

Justice Voith also noted that “it is clear, based on the findings I have made, that Concord cannot establish significant aspects of either the 14 May Contract or the 14 May Agreement.”

Oei was awarded costs.


© 2019 Bloomberg L.P.