Pubdate: Wed, 04 Jun 2014
Source: Burnaby Newsleader (CN BC)
Copyright: 2014 Burnaby Newsleader
Contact:  http://www.burnabynewsleader.com/
Details: http://www.mapinc.org/media/1315
Author: Wanda Chow

JUDGE SIDES WITH AMACON

The owner of a masonry company thought it was business as usual after 
selling off its Burnaby industrial property to a developer and 
leasing it back for two years.

And it was, for a few weeks, until a representative of the new 
property owner found a marijuana grow-operation in the building.

That led to the owner terminating the lease and the tenant refusing 
to leave. The tenant then sought to overturn the eviction through the 
courts, and the owner countered by seeking an enforcement of the 
lease termination.

Last week, B.C. Supreme Court Justice Brenda Brown sided with the 
owner, Amacon Dawson Development Partnership, in the case.

In September 2013, a numbered company agreed to sell its property at 
4460 Dawson St. to Amacon. The developer then agreed to lease it back 
to the company and its business, Dominion Masonry Ltd., for two years.

The lease allowed the masonry business warehouse, its offices and 
existing related uses to continue but not any other uses of the property.

Shortly after the deal closed in December, an Amacon official 
inspected the interior of the building. On the second floor he found 
the grow-op of about 225 marijuana plants, and licences posted for 
two Vancouver-based growers.

Amacon issued a notice of termination of the lease and demanded 
possession of the property, effective immediately. The tenants took 
court action to dispute Amacon's right to evict them, and hired a 
24-hour security guard to prevent the developer from re-entering the 
premises. They also removed the grow-op by Jan. 7.

Amacon bought the property as one of four sites it plans to redevelop 
in the future, said Brown in her reasons for judgment. It did not 
inspect the building's interior before the deal closed. But it did 
ask a roofing company to inspect the roof last November to determine 
if any repairs would be needed over the two-year lease.

It was an employee of the roofing company that informed Amacon about 
some defects in the roof and the smell of marijuana.

Amacon had Mr. Shapiro, the real estate agent acting for both 
parties, to ask about the issue.

"Mr. Sigurdson (of the tenant group) said that he was not aware of an 
illegal operation going on there. Mr. Shapiro understood this to mean 
that he was not aware of any marihuana grow operation because Mr. 
Shapiro did not know that marihuana could be grown legally."

Brown noted that Sigurdson's version of the conversation was that 
Shapiro told him he did not consider the grow-op to be a problem.

She didn't accept Sigurdson's evidence saying, "it is not credible 
that a commercial real estate agent would say, without more, that it 
would not cause a real estate development company a problem to have a 
marihuana grow operation on the premises."

During cross-examination Sigurdson conceded he did not tell the 
company accountant, the building's insurer nor anyone else about the 
grow-op. Electrical, ventilation and other work done to accommodate 
the grow-op was not inspected by Burnaby city hall and there were no 
permits issued.

Sigurdson said he and two other principals received cash payments 
from the grow-op, and the amount depended on how much was harvested.

Sigurdson intentionally did not tell Amacon about the grow-op, Brown 
concluded. "He anticipated that there would be only one more crop 
from the grow operation and that Amacon would never find out."

The tenants argued that the grow-op was an existing use of the 
property since April 2013, and so should have been permitted under 
the lease. But, Brown said, Sigurdson himself admitted "a marihuana 
grow operation is not part of the light industry masonry business."

Brown concluded the tenants "negotiated the lease knowing they had no 
intention of complying with it."

And while the tenant sought to stay on the property for the rest of 
the lease, Brown did not see how that could be possible.

"Given that the plaintiffs had no intention of complying with the 
lease, they do not come to court with clean hands. The reliance which 
is necessary between landlord and tenant has been irrevocably 
destroyed by the tenant's behaviour."

Brown dismissed the tenants' court action with costs to Amacon and 
upheld the lease termination.
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MAP posted-by: Jay Bergstrom