A businessman who made $6.67 million in a matter of months by flipping a bundle of Burnaby lowrises has been ordered to pay his realtor $1.15 million in outstanding commissions.
The judge also dismissed the man’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, soon learning about the concept of land assembly – the packaging of several properties together for redevelopment.
By November 2015, Wang had secured accepted offers on three adjacent lowrise apartments at 6585, 6559 and 6525 Sussex Avenue in Metrotown for $33.3 million with help from realtor Laura Zhao and her father Raymond Zhao, president of Vancouver 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 and agreed to pay them a $300,000 bonus for assembling the properties under his control.
Without telling the Zhaos, however, Wang then began working with another agent, Robin Fu, and signed over the properties a few months later to a new buyer for $40 million, earning $6.67 million in assignment fees from the purchase and from the transfer of the rights.
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 through Fu.
“Mr. Wang said this was not his view,” 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 “work out the commission issues between themselves.”
No ‘babe in the woods’
Meanwhile, included in the paperwork Wang signed to dispose of the properties was a document deducting $300,000 from his proceeds for the Zhaos’ bonus.
Wang said he didn’t 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’ 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’t buy it.
“I find that Mr. Wang was not a ‘babe in the woods,’” he stated. “He is a sophisticated businessman, used to driving hard bargains, and playing people off each other.”
Branch noted that Wang’s 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 “would have been too poorly executed to be believable” and that it made little sense for the Zhaos to perpetrate a fraud that would “almost certainly have been immediately revealed.”
“There 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,” Branch said.
The Zhaos countered Wang’s 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 bonus as per a bonus agreement signed between the parties.
Branch said Wang and the Zhaos were in “separate evidentiary universes” 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’s claim and ruled he owed the Zhaos $1.15 million in outstanding commissions.
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.
Construction began in April.