A Realtor involved in a Burnaby real estate deal “tainted by illegality” may not have been found guilty of conspiracy or fraudulent misrepresentation, but his actions were enough to prove that banning dual agency in the province two years ago was a good idea, according to the B.C. Court of Appeal.
Realtor Kevin Hien signed a dual agency agreement with both sides of a deal involving a 4.28-acre commercial property at 5502 Lougheed Hwy., currently the site of Revs Bowling Centre, right beside the Holdom SkyTrain station.
The property is now worth about $86.6 million, according to the latest assessment, but in October 2011, its owners, Brentwood Lanes Canada Ltd., signed an agreement to sell it for just $28.8 million.
The buyer was a company called Pacific Success Management & Consultants Inc., owned by Xiao Dong Liu, a.k.a. Allen Liu – a businessman who owns two strip malls in Richmond and has been involved in various business enterprises in China, according to court documents.
Just before the deal was scheduled to close, however, it fell apart.
Brentwood Lanes announced it wasn’t going to go through with it.
The company argued the contract wasn’t enforceable because of wrongdoing by Liu and Hien, who was supposed to have been acting for both parties but who had withheld information from Brentwood Lanes about the development potential of its property.
But Liu and Hien said Brentwood Lanes was backing out because of seller’s remorse and launched a lawsuit to force the sale or get damages for breach of contract.
Brentwood Lanes launched a counter claim, accusing Liu and Hien of lying and conspiring to keep Brentwood Lanes in the dark about a zoning change that would substantially increase the value of the property.
In a B.C. Supreme Court ruling last May, Justice Andrew Mayer dismissed the breach of contract claim, ruling the deal was unenforceable because it had been “tainted by illegality” by actions on both sides.
He found Hien had breached his fiduciary duty as Brentwood Lane’s Realtor, but he also dismissed the claims of conspiracy and fraudulent misrepresentation against him and Liu, saying there hadn’t been enough evidence to prove there had been an agreement between the two to withhold information about zoning changes from Brentwood Lanes.
Both parties appealed Mayer’s ruling, but those appeals were both dismissed in a unanimous B.C. Court of Appeal ruling this month.
Justice John Hunter had this to say about the claims of conspiracy and fraudulent misrepresentation against Liu and Hien:
“This claim, though unmeritorious in this case, demonstrates the wisdom of the decision of the Superintendent of Real Estate to ban dual-agency agreements except in narrow circumstances relating to service in remote locations.”