A buyer was ordered to pay her former friend damages after failing to complete the purchase of a Richmond home based on a homemade contract.
Hong Yang and Xue Yun Li, who met in dance class, entered into a contract in 2017 to purchase Yang's property at 3311 Blundell Rd.
The one-page contract, prepared in Chinese and partially handwritten by Li, set the purchase price at $2,888,000 with a deposit of $100,000.
Li would pay instalments of $100,000 and $800,000 in 2017 and the rest of the amount would be due after her property on West 20th Avenue in Vancouver was sold.
According to WeChat messages between the parties, they agreed the closing date would be Nov. 20, 2017.
When the sale fell through and Yang sold her property for $408,000 less than the original price, she took Li to court for damages.
Li, however, denied liability. She claimed the Chinese-language contract was not enforceable because its terms were uncertain, it was subject to an unwritten term of her obtaining financing and it was not legally enforceable because it only lists one of the two owners as the vendor.
In a judgment issued on April 15, B.C. Supreme Court Justice Steven Wilson found the document was legally enforceable.
After Li paid the deposit in 2017, she moved into the Blundell property with her son, Jan Zhan and his family. She later paid the first instalment of $100,000 and reimbursed Yang around $4,400 for property expenses.
According to Yang and her husband, they were prepared to wait for the balance of the purchase price "only if they received $1 million by the end of 2017."
In September, the parties signed an English version of the contract to help Li obtain a mortgage, but Li later told Yang in November she was unable to get one.
"As a result, Ms. Li did not pay the balance of the purchase price on Nov. 21, 2017, or at any time thereafter," wrote Wilson, adding Li sold her West 20th Avenue property for $3.4 million in the same month.
Li and her son's family were asked to leave the property in April 2018, five months after the closing date, and they ultimately moved into a home at 6831 Camsell Cres., which Li later purchased. Li also bought a property at #1308-8180 Granville Ave. before moving out of the Blundell property.
Yang and her husband ultimately sold the Blundell Road property on May 9, 2018.
Homemade contract legally enforceable
In his decision, Wilson found Yang and her husband's evidence was more consistent with the surrounding circumstances.
He noted the parties' versions of events had "significant differences."
All witnesses testified through an interpreter, wrote Wilson, and most "insisted upon repeating prior testimony" even when it was not relevant.
"... all witnesses (except for one uninterested witness) appeared to labour under the misconception that credibility and persuasiveness are enhanced by repetition," he explained.
He found Li was "evasive" during cross-examination and did not provide specifics and details, such as when she was questioned about her two successful mortgage applications when she claimed to be attempting to secure a mortgage for the Blundell property.
Although she claimed she failed to obtain a mortgage for the Blundell property because she did not have a realtor to help her, she ultimately conceded the role of the realtor "in obtaining a mortgage was generally limited to providing a referral to a mortgage broker."
Wilson also rejected several aspects of Zhan's evidence, such as when he claimed he did not know his mother was going to purchase the Camsell property when they moved in.
He also rejected Zhan's claim that he was approved for a mortgage for $1.2 million based on an appraisal of the Blundell property, finding the appraisal never happened."
Wilson concluded the Chinese-language contract was enforceable. He found the contract was not void due to uncertainty because the parties had an understanding as to how interest would be calculated and it was not essential to include a closing date as a term in a contract of purchase and sale.
While Yang's husband was not listed as a vendor in the contract, Wilson rejected Li's concerns that an unnamed vendor could choose either to enforce the contract or escape its consequences. Since Yang's husband was fully aware of the contract and had ratified it, he would be bound by the contract.
He also rejected Li's argument that the contract was dependent on her obtaining financing.
"I find that no such discussion ever took place. Ms. Li's sole requirement was that she needed to sell West 20th Avenue, which is reflected (in) the Chinese contract," wrote Wilson, adding even if it were a condition, there was no evidence Li made any reasonable effort to satisfy it given the other two successful mortgages she obtained at the time.
Buyer breached contract
Wilson also found Li and her son breached the contract and Yang would be entitled to damages.
While Li argued Yang and her husband were not ready to close on Nov. 20, 2017 because they failed to prepare closing documents, Wilson said there is no obligation for vendors to prepare the documents "if it is clear that the contract will not complete."
Li had told Yang she was unable to obtain a mortgage and said she would try to get a mortgage elsewhere, Wilson noted. Yang testified in court that she told her lawyers to "pause the transaction."
He found while Yang and her husband were "ready, willing and able to complete," Li had breached the contract by failing to complete the sale after selling her West 20th Avenue property.
Considering Li's subsequent property purchases, Wilson also concluded Li had "no intention of purchasing the Blundell property at any time during 2018."
"I reach this conclusion because I find that neither she nor Mr. Zhan made any efforts to obtain mortgage financing while Ms. Li made offers on at least two other properties that she ultimately purchased, obtaining a mortgage on each occasion," he wrote.
Wilson ultimately ruled Yang and her husband are entitled to $408,000, the difference between the sale price and the contract price, plus real estate commissions paid and interest as stipulated under the Chinese-language contract. They are also entitled to around $3,300 in unpaid expenses for the Blundell property.
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