Burnaby dim sum house evicted before even opening in mall

Plans for a full-size dim sum restaurant in Burnaby’s biggest mall have ended.

Chef Tony Restaurant was planned for the second level of Metropolis at Metrotown. Chef Tony already operates in the mall’s food court, but the plan was for a larger establishment like the one the company operates in Richmond.

But a notice on the wall of the space leased out by Chef Tony Restaurant says it has had its lease terminated by the mall’s owner, Ivanhoe Cambridge.

COVID-19 has had a devastating impact on restaurants, with some closed for months and then suffering from slower business due to table restrictions and customer fears.

The Chef Tony case is similar to that of a Burnaby seafood restaurant that never got off the ground after leasing space in the old Metrotown Staples building – it was evicted for repeatedly failing to pay its rent on time – and now Fraser Health is taking over the space.

Peninsula Seafood Restaurant Inc. signed a lease for the unit at 4555 Kingsway in June 2017 with Central Park Developments Ltd., a Bosa company, according to a recent B.C. Supreme Court ruling.

By the time the lease was terminated for late payments this past October, Peninsula had spent roughly $2 million on rent and improvements to the space, but the restaurant never did open.

And on Nov. 13, the landlord accepted a new lease offer from the Fraser Health Authority; a deal that was finalized on Dec. 14.

Peninsula applied to the courts for relief from the forfeiture of the lease – relief that a judge can grant, even if a tenant has breached a lease, as long as such relief would be fair and just in the circumstances.

In a ruling earlier this month, however, B.C. Supreme Court Justice George Macintosh dismissed the application.

He noted Central Park Developments had acted as a “reasonable and relatively accommodating landlord,” while Peninsula had defaulted on the rent numerous times.

“Peninsula’s conduct has been that of a tenant persistently demonstrating that it is reluctant to meet its rent obligations, and often doing so only when forced to,” Macintosh said. “Many of its emails vying for time for delayed rent are masterpieces for leading a creditor along without quite amounting to bad faith or evidence of unclean hands. Now that the lease has been terminated, Peninsula has been generous in offering to immediately pay the relatively small outstanding rent arrears, and to deposit approximately $450,000 toward future rent payments.”

Even at that, however, Macintosh said he would “with reluctance” have allowed Peninsula the relief it sought were it not for the Fraser Health deal.

“Where, as here, a landlord has lawfully terminated a lease and then lawfully entered into a bona fide and substantial lease arrangement with an innocent third party, there is a compelling case for allowing the third party rights to trump the wishes of the original tenant in default,” Macintosh said.

He noted that Fraser Health would also, at this point, have a right to sue Central Park if it reneged on the new lease and the “damages could be substantial.”

• With additional reporting by Cornelia Naylor