B.C. court orders woman to forfeit $150K deposit after she backed out of home purchase due to foreign buyers tax
The would-be buyer of a nearly $3 million home on Vancouver's west side, who backed out of the purchase after learning B.C.'s foreign buyers tax would apply to her, has been ordered to forfeit her deposit.
Hongxia Zhang agreed to purchase the home on West 4th Avenue in Vancouver's West Point Grey neighbourhood in March 2021, according to a B.C. Supreme Court decision issued Friday and posted online Monday.
The completion date for the purchase was scheduled for April 26, 2021, but a few days before then, Zhang's lawyer asked to delay the sale until the buyer "became a permanent resident of Canada," wrote Justice Carla L. Forth in her summary of the facts.
The seller declined to extend the completion date, and asked – through her lawyer – to recover the $150,000 deposit Zhang had paid in trust to her realtor, YVR International Realty.
Lawyers for the seller, Anne Nijola Ambroziewicz, made two more demands for the deposit before filing a civil lawsuit to recover it on Oct. 13, 2021.
In her defence, Zhang argued that she had been misled by her realtor and believed that the foreign buyers tax would not apply to her if she had been granted a Confirmation of Permanent Residence by Immigration, Refugees and Citizenship Canada.
"She claims she did not learn until after she paid the deposit, but before the completion date, that she needed to be in Canada before the completion date to avoid the foreign buyer tax," Forth wrote in her decision.
"Ms. Zhang explained that since she was in Hong Kong, she had to apply for a travel exemption, which was refused by Immigration, Refugees and Citizenship Canada. As a result, she was not able to be in Canada at the time of the completion date."
The would-be buyer argued that this constituted "force majeure," a legal term referring to "an extraordinary event or circumstance beyond the control of the parties." Essentially, she argued that the fact that she was not allowed to come to Canada made it impossible for her to complete the contract without an extension.
Forth rejected this argument, however, noting that there was no force majeure clause in the contract. The judge also noted that Zhang's alternative argument – that the contract was "frustrated" by her inability to move to Canada – did not hold up.
For the legal principle of frustration to come into play, Forth wrote, "there must be a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for."
"The application of the foreign buyer tax to the transaction did not alter the 'nature or purpose' of Ms. Zhang’s contractual obligation," the judge wrote. "While it did make the contract more expensive for Ms. Zhang, it did not render the contract 'radically different' from what it would have been had the tax not applied."
Forth ordered Zhang to forfeit her deposit and ordered YVR International Realty to pay it, and the interest it has accrued while being held in trust, to Ambroziewicz. The judge also ordered Zhang to pay the plaintiff's legal costs.
The loss of the $150,000 deposit still amounts to substantially less than Zhang would have owed under the foreign buyers tax had she completed her purchase. Homes purchased by foreigners in Metro Vancouver are subject to an additional 20 per cent property transfer tax, which would have amounted to $590,000 in Zhang's case.
CTVNews.ca Top Stories
BREAKING Ontario Provincial Police arrest 64 suspects in child sexual exploitation investigation
Ontario Provincial Police say 64 suspects are facing a combined 348 charges in connection with a series of child sexual exploitation investigations that spanned the province.
AstraZeneca says it will withdraw COVID-19 vaccine globally as demand dips
AstraZeneca said on Tuesday it had initiated the worldwide withdrawal of its COVID-19 vaccine due to a 'surplus of available updated vaccines' since the pandemic.
World's record-breaking hot temperature streak stretches through April
The world just experienced its hottest April on record, extending an 11-month streak in which every month set a temperature record, the European Union's climate change monitoring service said on Wednesday.
Most of Canada to receive emergency alert test today
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
OPINION What King Charles' schedule being too 'full' to accommodate son suggests
Prince Harry, the Duke of Sussex, has made headlines with his recent arrival in the U.K., this time to celebrate all things Invictus. But upon the prince landing in the U.K., we have already had confirmation that King Charles III won't have time to see his youngest son during his brief visit.
Seafood, eat food: Calgary Stampede releases Midway menu
The Calgary Stampede has released its menu of sweet, salty and spicy treats available on the Midway for the Greatest Outdoor Show on Earth.
Boy Scouts of America is rebranding. Here's why they've changed their name
After more than a century, Boy Scouts of America is rebranding as Scouting America, another major shakeup for an organization that once proudly resisted change.
Ontario man devastated to learn $150,000 line of credit isn't insured after wife dies
An Ontario man found out that a line of credit he thought was insured actually isn't after his wife of 50 years died.
Trial begins for Winnipeg serial killer who claims he was mentally ill
The trial of a man who admits he killed four women in Winnipeg is set to begin Wednesday, and a law professor says lawyers for Jeremy Skibicki have multiple hurdles to clear for a defence of mental illness.