Chinese family who tried to immigrate to Canada by purchasing property conned by friend, BC court case reveals

By ThinkPol Staff

A family from China who tried to immigrate to Canada under British Columbia’s investor immigration program by purchasing lower mainland real estate ended up being cheated by their childhood friend, according to a recently concluded BC Supreme Court case.

In Klein v. Sun[1]http://www.courts.gov.bc.ca/jdb-txt/sc/18/02/2018BCSC0245.htm, Rebecca Guo Klein, claims that she is entitled to majority ownership interest in farm property in Langley, BC, which is registered in the name of Wenbin Sun, with whom Ms. Klein had been friends since secondary school in Beijing.

Ms. Klein, who had immigrated to Canada in 2000 at the age of 28 and married Steve Klein, had agreed to help Mr. Sun and his wife Ms. Chen immigrate to Canada so that they could be with their 12-year-old son who was to go to school in Langley, BC.

The Suns were to immigrate under the BC Provincial Nominee Program (BCPNP) Entrepreneur Immigration stream, which allows wealthy foreign nationals to immigrate to Canada by making a $200,000 investment in a new or existing business[2]https://www.welcomebc.ca/Immigrate-to-B-C/BC-PNP-Entrepreneur-Immigration/Program-Requirements.

The original plan, discussed in March 2014, was for the Suns to and Kleins to each contribute $500,000 towards buying a farm.

On January 28, 2015, without discussing with the Suns, Ms. Klein entered into an agreement to purchase the farm property for $1,282,500 and on February 25, 2015, signed an Addendum to the Contract of Purchase and Sale “assigning this contract in whole to Wenbin Sun”.

With the fees, the total cost of buying the farm came to $1,307,195, meaning that Ms. Klein would be required to contribute $807,195 to complete the purchase.

To meet the shortfall Ms. Klein decided to fraudulently obtain a mortgage.

Mr. Justice Greyell details what happens:

[101] On February 21, 2015, Ms. Klein took the Suns to their bank, the Bank of Montreal. According to the Suns, she advised them that she would deposit $350,000 into their account for what she described as “immigration purposes”, which would expedite the processing of the Suns’ immigration application under the BCPNP. I find that while Ms. Klein told the Suns that this was the purpose of the deposit, in fact, the deposit was made not for this purpose but rather for the purpose of showing Scotiabank that the Suns had more funds available than they actually had, and convincing the bank to lend more money to the Suns by way of a mortgage.

[102] While at the Bank of Montreal on February 21, 2015, Ms. Klein had Mr. Sun sign a “Payor’s PAD Agreement”. The payee on the form was left blank.

[103] On February 23, 2015, Ms. Klein obtained a “Customer Snapshot” of Mr. Sun’s Bank of Montreal account showing the February 21, 2015 deposit of $350,000 and sent it by e-mail to Mr. Yuan. Later that day, Ms. Klein, using the Payor’s PAD Agreement, withdrew the $350,000 from Mr. Sun’s account and deposited it back into her Scotiabank account.

“I find Ms. Klein’s dealings, agreeing to a non-refundable deposit with the purchaser and arranging the “snapshot” of Mr. Sun’s bank account so that he could qualify for an enhanced mortgage amount with Scotiabank, to be tantamount to fraud and breach of trust,” the judge wrote.

Ms. Klein is claiming she is entitled to a 61/100 interest in the farm property on the grounds that she contributed $332,951.18 to the purchase of the Farm Property and assumed liability for the $475,000 mortgage.

Mr. Sun argues in response that the $475,000 mortgage were contributed by Scotiabank and not Ms. Klein.

Mr. Justice Greyell rejected Ms. Klein claim and also found her in breach of fiduciary duty, writing in his judgment:

[198] The steps that Ms. Klein took concerning the purchase of the Farm Property were taken without Mr. Sun’s knowledge or consent. I have found that, had Mr. Sun known what Ms. Klein was doing, he would not have consented to her doing so. When he found out, it was too late to reverse his application under the BCPNP. He and his wife had taken irreversible steps to their detriment: they had resigned from their jobs in China, they had sold their assets in China, they had entered into a high interest loan to meet Ms. Klein’s deadlines for the delivery of funds to Canada to qualify under the BCPNP, they had arranged for their son’s schooling in Canada, and ultimately, they had moved to Canada. As a result, they were in a position of vulnerability which Ms. Klein exploited to her advantage.

Stating that “no amount can compensate them for their loss in relying on Ms. Klein’s advice,” Mr. Justice Greyell awarded Mr. Sun $110,000 as compensation as well as $20,000 in punitive damages.

The judge, while declaring that Mr. Sun is the sole legal and beneficial owner of the property, and awarding the Suns an order for exclusive possession, ruled that Ms. Klein will be entitled to her share of proceeds proportional to her cash investment.

References   [ + ]

1. http://www.courts.gov.bc.ca/jdb-txt/sc/18/02/2018BCSC0245.htm
2. https://www.welcomebc.ca/Immigrate-to-B-C/BC-PNP-Entrepreneur-Immigration/Program-Requirements

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