Brothers defrauded by B.C. Realtor win $86K in compensation

A pair of East Vancouver homes - one on East 61st Avenue (left) and one on East 53rd (right) - that the Grewal brothers thought they were acquiring an interest in are seen in these 2015 photos from BC Assessment (bcassessment.ca)

Two brothers who gave a combined $86,000 to a Realtor who later pleaded guilty to fraud and declared bankruptcy have won compensation in B.C. Supreme Court.

Avtar Singh Grewal and Jagdev Grewal provided the funds to Johnson Castaneto Salanga in March 2013, believing they were helping to finance the purchase of a pair of homes in the City of Vancouver, according to the court decision, which was issued Wednesday.

At the time, Salanga was a licensed Realtor who had worked with the brothers on previous real estate transactions. When he failed to either provide them with an ownership interest in the two properties or return their funds, the brothers sought compensation for their loss from the Real Estate Council of British Columbia, which was the provincial real estate regulator at the time.

The RECBC – which has since been dissolved and replaced by the B.C. Financial Services Authority's real estate division – considered the brothers' request for compensation, but determined that their loss was "not compensable," citing insufficient evidence that the payments to Salanga were made "in relation to real estate services."

In his decision, B.C. Supreme Court Justice Warren B. Milman disagreed with the RECBC's conclusion, ruling that the brothers' losses should be considered compensable by the council's Real Estate Compensation Fund Corporation.

The Grewals had previously won a default judgment against Salanga, individually. Milman's decision indicates that Salanga pleaded guilty to two counts of fraud in 2016, served prison time, and has since declared bankruptcy.

The properties

According to Milman's decision, the Grewal brothers have provided multiple different accounts of what happened over the more than a decade since their loss.

In some versions of the events, Salanga was attempting to purchase a home on East 61st Avenue in Vancouver and needed extra funds for the deposit, promising to assign the contract of purchase and sale to Jagdev Grewal in exchange for $50,000.

In other versions of the events, Jagdev was the intended buyer from the start and Salanga agreed to enter the contract of purchase and sale on his behalf and later assign it to him.

Regardless of who was the intended buyer at the start, Jagdev provided a cheque for $50,000 made out to Salanga, and Salanga's name appeared on the contract of purchase and sale, according to Milman's decision.

Around the same time, Avtar Singh Grewal provided cheques for $25,000 and $11,000 to Salanga, purportedly for the purchase of a home on East 53rd Avenue in Vancouver, though the court decision indicates there was no contract for that purchase in evidence in the case.

The purported purchase price for the 61st Avenue home was $728,000 and the purported purchase price for the 53rd Avenue home was $800,000, according to the decision.

Today, nearly 12 years later, BC Assessment values the two properties at roughly $1.9 million each, increases of 165 and 140 per cent, respectively.

Milman's decision indicates the Grewals filed their application asking the court to rule on their eligibility for compensation from the RECFC in November 2024. It does not explain why so much time passed between the failed transactions and the most recent court proceedings.

Why were the payments made?

In support of its position that the Grewals should not be entitled to compensation, the RECFC argued first that the brothers should not have been allowed to bring the matter to the B.C. Supreme Court on its own, because they had not first sought a judicial review of the RECBC's decision not to compensate them.

Milman rejected this argument, noting that the provincial Real Estate Services Act does not prohibit people from pursuing compensation through a regulatory body and through the courts simultaneously.

"Had the legislature intended to prohibit parallel proceedings in these circumstances, it could have done so," the decision reads. "Instead, it chose to allow for them expressly and, moreover, to stipulate that the outcome of the court proceeding would be binding on any compensation committee that considers the matter."

The RECFC also argued that the Grewals should not be entitled to compensation because they had failed to show the payments to Salanga were made "in relation to real estate services," as required under the act.

Rather, the corporation asserted that Jagdev's payment was "in the nature of a joint investment" and Avtar's payments were loans. It cited the brothers' shifting stories about what had happened, and argued there was a lack of evidence connecting the payments to real estate services.

While Milman agreed that the Grewals had undermined the strength of their claim by providing "inconsistent accounts" of what happened, the judge noted that the Real Estate Services Act's compensation provisions are intended to protect consumers from theft or fraud, and should be interpreted broadly in favour of such protection.

"Although the plaintiffs have, at times, provided inconsistent accounts of the relevant events in their interview and affidavits, and the text messages in evidence are cryptic and difficult to decipher, those factors also serve to highlight the fact that the plaintiffs are not sophisticated businessmen," Milman's decision reads.

"It is common ground that they allowed themselves to fall victim to a fraud. The lack of proper documentation formed part of the means by which Mr. Salanga carried out that fraud. Another resource he appears to have exploited in doing so was his status as a real estate licensee."

The judge found in the Grewals' favour, granting them a judgment declaring that their $86,000 loss is compensable under the act.

"Overall, I am satisfied that Mr. Salanga promised the plaintiffs, in exchange for their payments, that they would receive a right to purchase real estate or, at least some 'other form of acquisition or disposition of real estate,'" the decision concludes.

"That is sufficient to qualify their loss as a compensable one for the purpose of (the Real Estate Services Act), whether in its current form or as it read at the time."