B.C. court rules on real estate dispute between sisters who haven't spoken since 2016

The Citypoint condo development in Surrey is seen in this photo from the developer's website. (centurygroup.ca)

A dispute over the ownership of a Surrey condo that contributed to a falling-out between sisters has been addressed in B.C. Supreme Court.

In a decision issued Wednesday, Justice Warren B. Milman ruled that Mei Lian Li holds the unit in Surrey's CityPoint towers in trust for her sister Wen Lian Graham, also known as "Winnie."

"Until the events that give rise to this action, they were very close," Milman's decision begins, describing the relationship between the sisters.

"Now they are no longer on speaking terms."

The condo at the centre of the dispute – which is listed by BC Assessment as having zero bedrooms and one bathroom across 484 square feet of living space – was purchased at a presale in 2007 for $232,900. Its assessed value for 2024 is $399,000.

Mei signed the contract to purchase the property, and her name has been on the title since construction finished in 2010, according to the decision.

Winnie filed a lawsuit in early 2017, shortly after the sisters stopped speaking, claiming that the condo actually belongs to her, despite the title being in her sister's name.

What was the plan?

In Winnie's version of events, as summarized in Milman's decision, the sisters' initial plan was to sign presale contracts to purchase multiple units in the building, with the intention of assigning the contracts to other buyers for a profit before the sales completed.

"According to Winnie, the parties later discovered to their surprise that the contracts generally prohibited assignments to third parties prior to completion, which meant that they had to complete the purchases," the decision reads.

"They agreed that Mei would do so on Winnie’s behalf for Unit 1206, because Winnie already had a large mortgage on her own home, was unemployed and was expecting to give birth in the near future … However, the new plan, Winnie says, was to try to sell Unit 1206 immediately after it was purchased."

The purchase was completed on May 27, 2010. Five days later, on June 1, Mei signed an agreement to list the unit for sale.

In Mei's version of events, the property was listed for sale "only because Winnie wanted to know how much (it) was worth," according to the decision.

Mei told the court she bought a total of three units in the building, including the one Winnie claims was for her, with the intention of giving one each to her son and two step-sons.

Because Mei's son was only four years old at the time of the presale, Mei claimed that Winnie had offered to help her manage the property until her son came of age.

"Their arrangement, according to Mei, was that Winnie would keep any surplus generated by rental revenue over expenses, and Mei would cover any shortfalls," the decision reads.

Credibility issues

Milman found that parties on both sides of the dispute had provided testimony that was "implausible and, in some respects, even bizarre."

"It is clear that the parties trusted one another and failed to document their financial dealings properly or at all," the judge's decision reads.

"They often dealt in cash, leaving no paper trail. Neither reported their income accurately on their tax returns. Those factors all combine to make the task of discerning the truth in this matter that much more difficult."

Despite this, Milman concluded that – in instances where no independent evidence or contemporaneous documentation was available – Winnie's account was generally more reliable.

The judge noted that Winnie and her husband did work on the property and incurred expenses related to that work from the time the purchase was completed until the falling-out in November 2016. That behaviour, as well as a payment Winnie made to Mei shortly after the completion date in 2010, lent credence to Winnie's version of events, according to the decision.

So too did the fact that Winnie's claimed unit and another of the units Mei owned were listed for sale shortly after the purchases were completed.

"Mei’s explanation for placing Unit 1206 on the market in June 2010, immediately after the purchase completed (namely, to allow Winnie to satisfy her curiosity as to how much it was worth), was nothing short of absurd," the decision reads.

Resolution

Milman's decision devotes relatively few words to the legal questions that must be answered in the case, finding it unnecessary to do so because the defendant acknowledged that a trust exists.

"Mei does not dispute that she holds Unit 1206 in trust," the decision reads.

"The parties merely disagree about whether the beneficiary of the trust is Winnie or Eric (Mei's son). I have already set out my reasons for preferring Winnie’s version of events with respect to the parties’ plans for Unit 1206. For those reasons, I have concluded that Winnie has met her onus to show that Mei has always held Unit 1206 in trust for her, not Eric."

Having reached this conclusion, Milman granted Winnie's request for a declaration that her sister holds the property in trust for her and an order that the title be transferred to her.

He also dismissed Mei's counterclaim against Winnie, finding that the $160,889.09 Mei transferred to Winnie in 2015 was not a loan, but a transfer of funds that Mei held in trust for the sisters' parents. The parents directed the transfer and directed Winnie to invest the money on their behalf, which she did, according to the decision.