A Burnaby woman could lose her home because of her son’s $800,000 debt to a Vancouver construction company.
Chan Kui Tina Gully added her son Steven Yang Gully to the title of her Burnaby home, which she bought in 1999 with money she had from the sale of a previous home she had owned with her husband, according to a court ruling Tuesday.
She added her son to the title because of estate planning advice she got about avoiding the inheritance tax upon her death – but she didn't tell her son about the decision, according to the ruling.
Meanwhile, her son, as president of a Vancouver-based software company called Atimi Software Inc., signed a contract in 2014 with Ledcor Construction Ltd. for general construction work at the MNP Tower office building on West Hastings Street.
Ledcor invoiced him five times for a total of more than $1 million and never got paid, according to a notice of civil claim filed by Ledcor in March 2015.
In August 2017, without knowing his mom had put him on the title of her home, he consented to pay Ledcor $800,000.
In October 2017, the company's lawyer's began going after his half-interest in Gully’s home.
Gully applied to the court for an order declaring her the sole beneficial owner of the property and another order to take Ledcor’s certificate of judgment off the title.
But her application was denied in a ruling by Justice Wendy Baker Tuesday.
“Ms. Gully took a risk in registering her son as a joint tenant on her property,” she said. “Whether she was properly advised of that risk is not before me. However, once she made the decision to register an interest in the Burnaby property in Mr. Gully’s name, third party creditors of Mr. Gully became entitled to register judgments against Mr. Gully’s interest in the Burnaby property.”
Gully argued her gift to her son had never been “perfected” because he never expressly agreed to being added to the title, but Baker said that wasn’t relevant, especially since there was no evidence to show he had repudiated his mother’s gift.
“Where a gift has been delivered into the possession of a donee, acceptance is generally assumed,” Baker said.
Gully even disinherited her son in a new November 2017 will that stated he was being disinherited because he has many personal debts.
But that was too little, too late, according to Baker.
“This will was executed one month after the Ledcor judgement was registered on title. It is clear to me that the 2017 will was executed in direct response to the Ledcor judgement,” Baker said.
The judge pointed to an earlier, 2015 will.
“I am satisfied that it was the intention of Ms. Gully to gift an interest in the Burnaby property in favour of Mr. Gully when the joint tenancy was registered in 2015, as described in the 2015 Will.”
Ledcor, meanwhile, has told the court it won’t go after Gully’s home while she is living in it, according to the ruling.
While Baker rejected Gully’s application, he said there might be other arrangements Steven Gully could make with Ledcor to protect his mother’s estate.
