A man who alleged there was a real estate conspiracy to obtain his West Vancouver home for $5 million had his claim dismissed in B.C. Supreme Court recently.
After first agreeing to sell his property at 1028 Eyremount Dr. for $5.1 million in May 2015, Wen Hsien Tsai refused to complete the deal. Claiming he’d been “stiffed,” Tsai filed a lawsuit against homebuyer Zhixiang Li and real estate agent Yi Zhang, alleging the two made a profit after working together to obtain his house at a lower price. Tsai’s lawsuit requested the purchase agreement be terminated and he be awarded damages. Two months after Tsai agreed to sell to Li, Li arranged to sell the home to a numbered company for $5.7 million with Zhang taking a $50,000 commission, which he has not yet received. The home was subsequently set to be shadow flipped for $6.3 million, according to court documents.
B.C. introduced new rules to curb shadow flipping in 2018.
However, in his Aug. 8 judgment, Justice Elliott Myers ruled that Tsai sold his home for market value, highlighting an appraiser’s report that put the home’s value at $5.15 million. “Tsai was neither vulnerable nor naïve,” Myers wrote, noting Tsai had bought, sold or renovated several homes.
The trial featured conflicting accounts of conversations between Tsai and Zhang.
After an initial phone call on May 15, Tsai submitted that he had no intention to meet Zhang and no goal to sell his home at any price.
Zhang recalled Tsai telling him he wasn’t interested in selling for less than $5 million. Following their first phone call, Zhang said he phoned Tsai that afternoon to tell him he was searching for potential buyers who would pay $5 million. A phone bill verifies that call took place, according to Myers’ judgment.
Zhang contacted potential buyer Li later that day. Zhang and Li met earlier in 2015 at a school event where they each had children enrolled.
Following negotiation over price and Zhang’s commission, a deal was struck for Li to buy the house for $5.1 million on May 16, 2015.
Tsai’s recollection of events is “somewhat different,” Myers wrote. Tsai said Zhang told him the $5.1-million offer was a “heavenly price” that could not be surpassed.
And while Zhang said Tsai was able to read and understand documents in a May 16 meeting at his office, Tsai said he signed a stack of documents not knowing what they were. At one point, Tsai recalled saying: “This is not right. You have not explained the contract to me. How come you’re asking me to sign my name?”
Tsai also said he wanted to call his daughter to discuss the transaction, implying he was unable to make that call because of pressure from Zhang, Myers wrote.
While a phone bill showed Tsai spoke to his daughter the morning of May 16, both Tsai and his daughter said they did not discuss the sale of the Eyremount property.
“I find their evidence on that impossible to believe,” Myers wrote. “I do not agree that Zhang rushed Tsai at the signing. Tsai was not held a prisoner so he could not call his daughter.”
Myers also noted that despite Tsai’s claims he had no goal to sell his property at any price, he listed his home for sale in 2013 for $3.98 million. “I do not find Tsai to have been reliable or credible,” Myers wrote.
Myers also wrote that, rather than the real estate agent approaching the homeowner, it was Tsai who initially approached Roderick Xie, Zhang’s caretaker. “Tsai’s counsel advanced the proposition that Xie hung around the property next door . . . waiting for Tsai to approach him,” Myers stated.
“As far-fetched as that might seem, there is more,” Myers wrote, explaining the allegation that another real estate agent had done a “sham listing” of Li’s property.
“Without using the word ‘fraud,’ Tsai has alleged what can only be construed as a fraudulent conspiracy worthy of Keyser Söze in The Usual Suspects,” Myers concluded. “There is no basis in fact or in law for his conspiracy claim.”