Embattled Richmond real estate and immigration lawyer Hong Guo has lost a law suit over a disputed $740,000 renovation bill at her offices.
Guo – who faces possible disbarment next month at a Law Society of BC disciplinary hearing – has been ordered to pay $311,000 plus interest and court costs to IRL Construction, after it was hired to carry out an extensive renovation project at her No. 3 Road office building.
A sub-contractor, Lunniss Developments Ltd., was awarded more than $196,000 from IRL which, in turn, was ruled to have breached its contract.
The dispute centred around whether or not the 2016 agreement between IRL and Guo Law was a “cost plus contract (with a 12.8% mark-up).”
Guo took the position that the contract was fixed price, largely because there was a budget involved and that “IRL did not perform the contract in accordance with the terms.”
However, in her judgement – originally released in February and updated last week – Madame Justice Laura Gerow, of the BC Supreme Court, ruled that the contract was, indeed, a cost plus contract, and that Guo Law breached it by “failing to pay the invoices submitted by IRL and purporting to terminate the contract.”
The court documents revealed how, following the start of the work in June 2016, changes to the scope were requested by Guo and the sub-contractor Lunniss sent a list of the additional work that had been undertaken to IRL.
That work included design changes and new permit drawings being submitted to the City of Richmond, ultimately resulting in an extra $234,059.94 being added to the original budget.
During the course of the project, IRL submitted seven invoices to Guo Law totalling $741,302.99.
IRL told the court that Guo Law had paid $300,000 towards the invoices billed, while Guo said she had paid $370,000.
By August that year, negotiations had broken down between the parties and both contractors filed builder’s liens to the tune of a combined $580,000.
It is understood that Guo hired a new contractor to complete the work.
Guo made the headlines back in 2018 during her failed bid to become Richmond’s mayor at the last civic election.
During that election run, she was in trouble with the aforementioned Law Society of BC which later ruled that she failed to properly supervise her bookkeeper, improperly delegated trust accounting to him and later misappropriated millions of dollars in trust funds.
The society also found that Guo had breached several undertakings and orders, which it had imposed earlier this year after an investigation into her practises.
In her defence, she claimed that the aforementioned bookkeeper stole $7.5 million from her law firm’s trust accounts in 2016, before laundering the cash at a casino and fleeing to China.
Guo told the society’s disciplinary panel that her mistake “was placing trust in her employee who took advantage of her trust to commit a sophisticated scam” and her actions didn’t amount to professional misconduct.
She said her subsequent attempts to repay to her clients the “stolen” $7.5 million – which the society ruled as a breach of trust accounting rules – was an honest bid to minimize the overall impact of the missing trust funds on her clients.
The society, however, disagreed and Guo is now facing a possible $50,000 fine (max), conditions or restrictions on her practice, a suspension or even expulsion from her profession when she is called back for a disciplinary hearing next month, which was postponed from March.
The panel heard last year how Guo had deposited $2.6 million of her own money and $4 million from an insurance policy to repay the missing millions.
