Editor's note: A previous version of this story misspelled Sylvester Chuang's name. The spelling has been corrected.
A prospective dealer who didn't get his Lexus franchise after missing deadlines for a proposed new store in downtown Toronto must pay $1.2 million to Toyota Canada Inc., the Ontario Court of Appeal ruled July 21.
The unanimous decision upheld a lower court award against Sylvester Chuang and his affiliated companies.
Although the court found it was unreasonable for Toyota to terminate Chuang's letter of commitment in 2005, a provision in the letter shields the automaker from liability, the court held.
Toyota terminated Chuang "because he failed to meet certain deadlines set out in the agreement," the court said.
Chuang hadn't begun construction by the December 2004 deadline that the original letter of commitment set for the store to open. He also missed extended deadlines to complete the project and to obtain a final financing commitment, the court said.