A British Columbia Supreme Court has ruled in favor of a deceased investor's estate, finding civil fraud in a complex real estate investment case involving millions of dollars and disputed oral agreements. The court's decision addresses allegations of misappropriated funds and fraudulent conveyances.
Key Takeaways
- The estate of Tong Zhang, a Chinese real estate investor, successfully sued Hang Yin.
- The court found Yin engaged in civil fraud, misappropriating millions invested by Zhang.
- Yin's family members were found to be "wilfully blind" to the fraudulent activities.
- The court awarded significant remedies to Zhang's estate, including property titles and profit shares.
The Investment Dispute
Tong Zhang, also known as Tony Zhang, moved to Vancouver in 2018 and began investing millions of dollars in B.C. real estate through Hang Yin, an acquaintance from China. Zhang's estate claimed that Yin invited Zhang into various investment opportunities, which Zhang funded with the expectation of ownership interests. However, the estate alleged that Yin treated the funds as his own, failed to track or account for Zhang's investments, and misappropriated the money by transferring it to companies controlled by himself and his family.
Allegations and Counterclaims
After relocating to Canada in 2018, Zhang reportedly became concerned about the investments and sought to transfer them into his own name. The investments involved up to four properties, with Zhang allegedly contributing substantial amounts for ownership stakes in projects including a development on West 41st Avenue, a coffee shop in Surrey, a mixed-use development in Richmond, and a house in Burnaby. Some of these investments allegedly did not materialize as planned or were mortgaged by the Yin family for personal gain.
Yin, in his defense, filed a counterclaim against Zhang's father, asserting that the father, not Zhang Jr., was the actual investor. Yin alleged that the father, a senior member of the Chinese Communist Party and chairman of a state-owned company, was involved in corrupt activities that generated the funds for investment. However, the court found no expert evidence to support these claims regarding proceedings in China.
Court's Findings and Remedies
Justice Gordon Funt's ruling detailed findings of civil fraud against Yin. The court also determined that Yin's family members acted with "wilful blindness" and engaged in fraudulent conveyances to put assets out of reach. Some defendant corporations were found to have been conducted in an "oppressive and unfairly prejudicial manner."
The court awarded several remedies to Zhang's estate. These included clear title to the Burnaby house, a declaration of 52 percent ownership in the Surrey coffee shop with exclusive conduct of sale, and a share of profits from the West 41st Avenue project. Additionally, the court awarded $25,000 in punitive damages. The hearing for Yin's counterclaim against Zhang's father was severed and will be heard separately.
It remains to be seen whether Yin will pursue an appeal or if the counterclaim will be abandoned.
