A husband will have to shell out more than $1.3 million to his ex-wife’s rich family as part of their bitter divorce proceedings.
Xiao Min (Shaun) Wang had been involved in his in-laws’ multi-million dollar purchase of several commercial units at Aberdeen Square in Richmond in 2012.
However, the marriage between himself and Ran (Fiona) Li, both Chinese immigrants from 2009, turned sour in 2019 when they accused each other of infidelity.
It was then that the divorce proceedings kicked off and the arguments over who owned what in their business and personal dealings began to unravel.
As well as being ordered by a judge to pay the $1.345 million back to Li’s parents, Wang was told to hand back a Tiffany jewellery collection, owned by Li’s mother, or give her the jewellery’s $378,000 value.
Li and Wang got married in China in 2003 and came to Canada in 2009, followed by Li’s parents, Hongsheng Li and Chaoxia Peng, who arrived around five years later.
The couple received financial support from Li’s parents after they moved to B.C. until their separation in 2019.
“Ms. Li never worked at all, and there is no clear evidence that Mr. Wang generated any significant independent earnings through formal employment or business activities using his own capital,” wrote B.C. Supreme Court judge Jan Brongers.
Judge Brongers added that Wang’s commission income as a realtor in transactions unrelated to the Li family was “minimal” and his income from corporations he set up was “limited and vague.” Wang did, however, assist Li’s parents with real estate and other investments.
In 2012, Li’s parents bought five office units at Aberdeen Square through Wang’s company West Ask for a total of $2,270,269. A sixth unit was purchased in August 2015 for $338,000 and registered in Li’s name, unlike the other units.
One of the units served as Wang’s office while others were rented out.
During the course of their relationship, Li’s parents invested $1.4 million in AXKA Group Inc., a company Wang incorporated in 2014, as well as $2 million in two mutual funds through West Ask.
The relationship between Wang and Li family became strained in 2018 when a “squabble” over parenting led to Wang moving out.
In the fall of 2018, Li’s parents filed a civil claim against Wang for the stolen money while Li filed a family claim for divorce and division of family property.
Without permission from Li’s parents, Wang had transferred $65,000 from West Ask to AXKA, as well as sold one of the Aberdeen Square units owned by West Ask to a third party for $280,000 and kept the proceeds for his personal use.
Wang claimed he made the sale “as a means to survive” and the Li family forgave him for doing so.
The litigation claims were discontinued when Wang reconciled with the Li family in early 2019, but Wang and Li ultimately decided to separate later that summer after accusing each other of infidelity.
Wang was also accused of taking his mother-in-law’s “expensive Tiffany jewellery that was being kept in a bank safe deposit box,” wrote Brongers.
Li and her parents then decided to take Wang to court in the fall of 2019 for a divorce and to recover the stolen money respectively, and a trial was held this year.
Husband was not consistently truthful in court
In Judge Bronger’s decision, he doubted Wang’s reliability as he was “often evasive and unclear, and occasionally impatient and argumentative” when answering questions from counsel for the Li family and West Ask.
The Li family, on the other hand, were considered to be more credible based on their behaviour in court.
Judge Brongers ruled, among other things, that the Aberdeen Square unit under Li’s name is not family property. However, he determined the unit increased in value by $74,877,76, which does constitute family property, meaning Wang is entitled to $37,438.88 for his equal share.
Wang also claimed the family’s two residences are considered family property, but Brongers disagreed, declaring that the houses are owned by Li’s parents.
As for West Ask, which was “used primarily as an investment vehicle for funds provided by the Li parents,” Judge Brongers found neither Li nor Wang actually owned any of the company’s shares.
When Li’s parents purchased the Aberdeen Square units with Wang’s assistance, they were under the impression that they made the purchase under a new company for which they held all the shares.
“However, unbeknownst to the Li Parents at the time, Mr. Wang in fact used a pre-existing corporation—West Ask—for the acquisition of the Aberdeen Square commercial units and did not create documentation to show that the Li parents were now the company’s only shareholders,” wrote Judge Brongers.
Wang was later asked to rectify the issue after Li’s dad came to the realization, and although the relevant document signed by Wang and Li had gone missing, Judge Brongers nevertheless concluded Li’s parents are the sole shareholders in West Ask.
Husband misappropriated in-laws’ money
During the proceedings, Li’s parents claimed Wang had taken $1 million from them and transferred the money to AXKA without their consent.
Li’s dad told the court that Wang proposed a scheme for his in-laws to transfer the sum to a new company under their name so he could pretend a new company was willing to invest in AXKA and thereby stay on as CEO of the company. Li’s parents agreed on the condition that the money wouldn’t be transferred without their consent.
Wang did so anyway.
Wang, on the other hand, claimed his father-in-law agreed to invest in AXKA through another company. His version of events was rejected by Judge Brongers.
It doesn’t make sense for Li’s parents to invest indirectly through another company when they had made a direct investment in 2015, said Judge Brongers, who found Wang’s arrangement was “a stratagem designed to create an appearance that the Li parents approved the $1 million) investment in AXKA notwithstanding the Li Parents’ wishes to the contrary.”
Wang was also found to have misappropriated $65,000 worth of funds belonging to West Ask by transferring them to AXKA. He also breached his fiduciary duty as West Ask’s director when he sold the Aberdeen Square office unit.
Wang was ordered to pay his in-laws $1 million in damages for conversion of funds by transferring money to AXKA Group, and West Ask $345,000 for transferring money to AXKA Group and selling the Aberdeen Square unit.
Finally, Wang was found to have removed his mother-in-law’s Tiffany & Co. jewellery from a safe deposit box and refused to return it. He was ordered to either return the jewellery or pay her $378,000 in damages.
