A land-assembly investor who made $6.67 million in a matter of months by assigning a bundle of Burnaby lowrise apartment buildings has been ordered to pay his realtor $1.15 million in outstanding commissions, by the聽B.C. Supreme Court.
The judge also dismissed the investor's attempt to have a $300,000 bonus paid to the realtor returned.
Wenxue Wang is a businessman from China with a net worth in the millions of dollars, according to B.C. Supreme Court documents. He got involved in the local real estate market shortly after his first visit to Canada in 2014.
By November 2015, Wang had secured accepted offers on three adjacent lowrise apartment buildings at 6585, 6559 and 6525 Sussex Avenue in Metrotown, Burnaby, for $33.3 million with help from realtor Laura Zhao and her father 搁补测尘辞苍诲听窜丑补辞, president of 麻豆传媒映画Home Park Realty Ltd.
According to evidence presented at a civil trial earlier this year, Wang had signed an exclusive listing agreement with the Zhaos for the future sale of the land assembly, and agreed to pay them a $300,000 bonus for assembling the properties.
Without telling the Zhaos, however, Wang then began working with another agent, Robin Fu, and assigned the purchase of the properties a few months later to a new buyer for $40 million, earning $6.67 million in profit.
The Zhaos said they felt betrayed when they found out Wang was working with Fu.
Raymond Zhao said he had warned Wang they would still be entitled to the commission even if he sold the property rights to the new buyer through Fu.
鈥淢r.聽Wang said this was not his view,鈥� states a ruling Wednesday by B.C. Supreme Court Justice Ward Branch.
Raymond Zhao testified it was his impression Wang wanted the various real estate agents to simply 鈥渨ork out the commission issues between themselves.鈥�
No 鈥榖abe in the woods鈥�
Meanwhile, included in the paperwork Wang signed to dispose of the properties was a document deducting $300,000 from his proceeds for the Zhaos鈥� bonus.
Wang said he didn鈥檛 realize the deduction had been made until he picked up his cheque the following day.
When Raymond Zhao called him later that same day to press him about the exclusive listing agreement, Zhao said Wang told him to forget about it or he would sue him over the $300,000.
Wang then posted a general message in a group chat about potential realtor fraud and threatened to release the name of the realtor in one week.
He also made contact with a journalist and a story was published about the Zhaos鈥� alleged misconduct.
Wang then filed a lawsuit for the return of the $300,000 in July 5, 2016.
Putting himself forward as a Chinese newcomer who could not understand, read or speak English, he claimed the Zhaos had breached their fiduciary duty and taken advantage of him, getting him to sign the bonus agreement under false pretences.
The judge didn鈥檛 buy it.
鈥淚 find that Mr.聽Wang was not a 鈥榖abe in the woods,鈥欌�� he stated. 鈥淗e is a sophisticated businessman, used to driving hard bargains, and playing people off each other.鈥�
Branch noted that Wang鈥檚 claim he had put his full faith and trust in the Zhaos was contradicted by evidence he had consulted a number of other people for supplementary advice or second opinions.
Branch also said the alleged $300,000 fraud 鈥渨ould have been too poorly executed to be believable鈥� and that it made little sense for the Zhaos to perpetrate a fraud that would 鈥渁lmost certainly have been immediately revealed.鈥�
鈥淭here is no evidence of an intention to flee the country so that they could retain the benefit of such a bald fraud. $300,000 would not have sustained the two of them for long in any event,鈥� Branch said.
Credibility key
The Zhaos countered Wang鈥檚 claim on July 11, 2016, seeking the $1.15 million commission they said was owed them under the exclusive listing agreement and the right to keep the $300,000 as per a bonus agreement signed between the parties.
Branch said Wang and the Zhaos were in 鈥渟eparate evidentiary universes鈥� when it came to the facts of the case, and the claims ultimately came down to credibility.
In the end, he ruled the Zhaos were more credible than Wang and their allegations more consistent with the documentary record and the evidence of independent witnesses.
Branch dismissed Wang鈥檚 claim and ruled he owed the Zhaos $1.15 million in outstanding commissions.
New development
The lowrises on the three Sussex properties, meanwhile, have since been demolished to make way for a new, 47-storey mixed-use tower and a 14-storey, non-market-rental apartment building.
The developer, Thind Properties, is working in partnership with the province, City of Burnaby and New Vista Society on the non-market-rental part of the project.
in April 2019.
