B.C. court rules on condo purchase dispute that ended long-term friendship

The condo development known as "Reside" is seen in this photo from the developer's website. (marcon.ca)

A Vancouver condo owner was right to keep more than $300,000 her former friend paid her toward the purchase of the property before backing out of an assignment sale agreement, the B.C. Supreme Court has ruled.

Wei-Jen Wang and Weiqin Li were "longtime friends," according to the decision issued May 10 and posted online earlier this week. Their relationship "ended acrimoniously" after an agreement for Li to take over Wang's purchase of an under-development condo unit fell apart. 

Li sued Wang, alleging that no such agreement existed and the $340,188 she paid towards the purchase should be returned. Li also accused Wang of fraudulent misrepresentation, but withdrew that claim at the start of the trial.

Wang countersued, arguing that Li had repudiated the contract and was not entitled to a refund. She also claimed more than $200,000 worth of damages had allegedly resulted from the breach of contract, and sought to have the court order Li to pay her that amount.

B.C. Supreme Court Justice Nitya Iyer found largely in Wang's favour, dismissing Li's allegations and allowing Wang to keep her former friend's deposits. Iyer also awarded special costs to Wang because of Li's baseless fraud accusation, but the judge declined to award the damages Wang was seeking, ruling that Wang had failed to take any action to mitigate those damages.

The property and the purchase agreement

The condo in question is a unit in a building at 458 W. 63rd Ave. in Vancouver's Cambie Corridor, according to the court decision. The development at that address is known as "Reside." Developer Marcon completed construction in late 2019. 

Wang's unit, according to BC Assessment, has three bedrooms and two bathrooms, with 1,258 square feet of living space. The assessed value for 2024 was just over $1.6 million.

The agreement for Li to take over the purchase came about in late 2017, while the building was still under construction. It took the form of an "assignment sale," a term that describes a buyer entering a contract to purchase a piece of real estate, then transferring (or "assigning") their rights under the contract to a different buyer before the transaction is completed.

The court decision explains that Wang and Li both have families in Shanghai and have resided there in the past. While Wang was in that city caring for her mother in 2017, Li paid them a visit, and Wang mentioned that she had just acquired the pre-sale unit in Vancouver.

While the decision uses the term "acquired," it makes clear that Wang was not actually the person who signed the pre-sale contract. Rather, Wang's nephew Haw Wang was the purchaser, and his mother Lily Hui Hua Hsiao paid the deposits stipulated under the contract.

"The pre-sale contract expressly gave Mr. Wang the right to assign the pre-sale unit to Ms. Wang upon completion at no additional cost," the decision reads. "Ms. Wang had asked Mr. Wang to make the purchase on her behalf and asked Ms. Hsiao to make the payments to the developer stipulated in the pre-sale contract because they were both in Vancouver and she was in China."

When Li expressed interest in buying the property during the Shanghai meeting, Wei-Jen Wang agreed to assign the contract to her without taking an assignment fee "because they were friends," according to the decision.

What followed was an arrangement in which Hsiao made payments to Marcon on behalf of Wang, and was repaid by Li – again, on behalf of Wang, who was the only person of the three who had a contracted interest in the property, through her nephew.

"Sometime between September 2018 and January 2019, Ms. Li decided not to proceed further with acquiring the pre-sale unit," the decision reads. "In November 2018, Ms. Hsiao informed Ms. Li that the third deposit would be due in December. There were some communications about this. Ultimately, Ms. Li did not pay the third deposit. Ms. Hsiao paid it on Ms. Wang’s behalf."

In January 2019, Li visited Wang's home in Shanghai and the two had a "heated argument," according to the decision.

Li demanded that Wang return the money she had already paid toward the purchase, and Wang refused.

"This event marked the end of the friendship," the decision reads. "Ms. Li and Ms. Wang did not communicate again for about a year."

Who repudiated the contract?

The primary arguments in Li's claim were that there was never a contract for her to take over the purchase of the condo or, if there was, Wang was the one who breached it.

A review of WeChat messages between the parties helped Iyer conclude that the parties did have a binding agreement, even if it was never formalized as a single written document.

"In the context of their longstanding friendship, Ms. Li’s unequivocal statement on March 2, 2018, that she wanted the property and was agreeable to any payment terms created a binding agreement," the decision reads.

"The essential terms were the identity of the parties, identification of the pre-sale unit as the property and the purchase price. Ms. Li’s reimbursement of Ms. Hsiao for the March and June deposits is subsequent conduct that supports the conclusion that the parties objectively intended to enter into a binding contract."

Having reached this conclusion, the judge determined that Li had "repudiated" the contract.

In legal terms, "repudiating" a contract means breaching it in a way that "substantially defeats its objective," according to the decision.

Li argued that Wang had repudiated the contract by failing to assign it to her in a timely manner, but Iyer found there was insufficient evidence indicating that the timing of the assignment was a key term of the agreement.

"Even if assignment before the due date of the third deposit was a term of the assignment agreement, it was not a term sufficiently material that its breach could constitute repudiation," the decision reads.

Instead, Iyer found that Li had repudiated the agreement by refusing to make any further payments and demanding her money back. Wang's refusal to give her the money back constituted an "acceptance" of the repudiation.

"Where a purchaser makes partial payments towards the purchase of property, including through an assignment agreement, but then repudiates the contract, the vendor is entitled to keep those payment upon acceptance of the repudiation," the decision reads.

Thus, Iyer ruled, Wang was entitled to keep the $340,188 in payments Li made toward the purchase.

The judge dismissed Wang's claims for $233,749 in damages allegedly caused by Li backing out of the assignment agreement, concluding that she had not made any efforts to offset those costs – such as by renting out the unit.

"Ms. Wang has not established that the costs she claims in relation to mortgage interest, strata fees, property taxes, home insurance premiums and loss of interest on investment income were not recoverable by her from the rental income she could have received," the decision reads.