A woman who sued a Richmond developer for over $3.65 million has been ordered to stop her debt recovery lawsuit in China.
Lihua Fu is claiming Jia Yao Wang and his wife Changxia Lv failed to pay her back after borrowing $3.65 million to finance real estate projects in B.C. in 2018.
Wang and Lv’s real estate companies, Buffalo Properties Inc. and Buffalo Investment (Canada) Inc., are also included in the lawsuit and are based in Richmond.
According to the Buffalo Groups website, the developer has projects in Metro Vancouver and Victoria.
Fu claims the couple only paid her back $60,000 when she demanded repayment of the loans. She also accused the couple of using the money for their own mortgages for Vancouver and Richmond properties.
Wang and Lv, on the other hand, denied the funds were a loan and said Fu had invested in a “specific real estate project in Vancouver that failed,” causing Fu to lose her investment, wrote B.C. Court of Appeal judge Ronald Skolrood in the judgment.
Fu started a lawsuit in B.C. against the couple and their companies in June 2021, followed by a lawsuit in China in March 2022 to recover the same debt.
She told the court her lawsuit in China was to “resolve the debt issue in China” and she intended to go after the couple’s assets in B.C. if she wins.
The couple objected to the lawsuit in the Chinese court, arguing that Canadian courts were more suitable for the lawsuit. The Chinese court dismissed their application and subsequent appeal because Wang and Lv are both Chinese citizens, the case was a “private loan dispute” rather than a foreign-related investment dispute and the case concerned the “interests of citizens of the People’s Republic of China.”
Wang and Lv then turned to the B.C. courts to bar Fu from continuing the lawsuit in China, where a judge decided it was more fair, efficient and convenient to allow the parties to go ahead with the Chinese lawsuit since all parties lived in China, are fluent in Chinese and do not speak or read English and the Chinese lawsuit is at a more advanced stage, among other reasons.
Judge’s decision overturned
The original judge’s decision was overturned this week in the B.C. Court of Appeal because “the relevant facts and circumstances overwhelmingly favour the B.C. courts as the most convenient and appropriate forum,” wrote appellate judge Skolrood.
The Court of Appeal judges found the original judge in B.C. had made a mistake in concluding the case had a real connection to China when “the only or principal connections are the residence and language of the parties.”
“It is clear that while the parties have a connection to China by virtue of their residence at the time the Chinese claim was filed and their language, there is no connection, let alone a ‘real and substantial connection,’ between the facts underlying the claims and China,” read the Court of Appeal decision.
The judges also decided B.C. courts would be more appropriate for resolving the dispute because the contracts were under B.C. law and the development projects are also in the province.
Although the parties do live in China, speak Chinese and the central document is in Chinese, all other relevant documents are in B.C. Fu also decided to sue the couple in the B.C. Supreme court, “presumably because she recognized that the B.C. courts have the most direct connection to the facts of the claims and because she believed it convenient for her to litigate here,” wrote appellate judge Skolrood.
Although Fu claimed it was necessary for her to start two lawsuits because she was going after the couple’s assets in both B.C. and China, the Court of Appeal judges also thought it was an issue of concern because her lawsuits were based on identical facts and circumstances.
If the court did not bar Fu from pursuing the lawsuit in China, “a severe injustice will occur,” concluded judge Skolrood.
Fu will not be able to continue with the lawsuit in China until the B.C. lawsuit has been resolved.
