By ThinkPol Staff

A lawsuit launched by a West Vancouver man after discovering that his house had been shadow flipped twice by his realtor for a much higher price will proceed to full trial, after a judge dismissed an application by the defendants to throw the case out.

In Tsai v. Li^[1]http://www.courts.gov.bc.ca/jdb-txt/sc/18/05/2018BCSC0582.htm, B.C. Supreme Court Justice Kent ruled on Wednesday that “it would be unjust” to decide the case “by way of a summary trial and that, instead, a full trial is required where the parties can testify in their own words and be cross-examined before the Court to determine the credibility, reliability and probative value of their evidence.”

Wen Hsien Tsai signed a deal to sell 1028 Eyremount Dr. on May 16, 2015 for $5.1 million to Zhixiang Li, with Yi Zhang aka Leo Zhang of Sincere Real Estate Services Ltd. acting is the agent for both the buyer and the seller, according to court documents.

The sale contract was shadow flipped twice through contract assignments, each one for a consideration of $600,000, and the British Properties home ended up selling for $6.3 million, court documents show.

When Tsai found out about the shadow flipping, he refused to sell the property, but a judge ordered him to complete the sale in an earlier legal action brought by the eventual buyer Lian Zhang (no relation to realtor Leo Zhang)^[2]http://www.courts.gov.bc.ca/jdb-txt/ca/17/03/2017BCCA0371.htm.

Tsai launched the lawsuit against the realtor Leo Zhang and the initial buyer Li, accusing them of “scheming and conspiring” to induce him to sell his property below market value so they could shadow flip it for profit at Tsai’s expense.

Leo Zhang and Li, who deny the allegations, and had tried to get the case throw out claiming that the case was “simply one of ‘vendor’s remorse’ and involves no illegal conduct of any sort.”

Government of British Columbia brought in new regulations to protect sellers against the shady practice of shadow flipping in May 2016^[3]https://news.gov.bc.ca/releases/2016FIN0018-000756 declaring that the “government will not tolerate unethical or predatory conduct in the real estate market.”

The then Premier Christy Clark was forced to bring in the new regulations amid a public outcry following Globe and Mail’s investigative reporter Kathy Tomlinson’s expose on shadow flipping^[4]https://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/.

Tomlinson’s investigation uncovered how the unethical practice was enriching realtors and their co-conspirators at the expense of buyers while artificially inflating the Vancouver housing market.