Douglas Todd: A B.C. Supreme Court lawsuit revolving around an investor murdered in China raises questions about offshore money in Metro Vancouver real estate
A B.C. Supreme Court lawsuit involving a wealthy man murdered in China raises questions about some of the ways offshore money has flooded into Metro Vancouver real estate.
Several mostly high-end houses in Vancouver and Burnaby, bought during the 2010s, are at stake in the dispute.
The case, which has been dragging through courts in B.C. and China for almost seven years, pits the wife and children of a murdered Chinese patriarch against the wife and daughter of the man who murdered him in 2017.
The family of the slain man alleges businessman Long Ni promised to deliver to their patriarch, Changbin Yang, a 50 per cent profit by investing $113 million of his money in coal mines in China.
Instead, the family has argued in B.C. Supreme Court that Ni fraudulently invested most of the Chinese capital in real estate in Burnaby and Vancouver.
In a November decision, Justice Nigel Kent described how Ni travelled to China and “brutally” killed the tycoon. Yang’s family alleges it was to avoid repaying the money.
Ni was arrested in China. Three years later, in 2020, a Chinese court ordered his execution.
“While the brutal murder of the lender by the borrower is a bit of a twist, this most recent case fits the profile of a large number of cases clogging our courts at enormous expense to B.C. taxpayers.”
Ni was pumping much of the $113 million into Metro Vancouver real estate around the period that the B.C. Council of Business’s David Williams and former SFU professor Josh Gordon have shown the volume of money pouring out of China into real estate in Australia and Canada had jumped by up to six times, particularly between 2016 and 2019.
Canadian condo specialist Jordan Scrinko estimated that, at the peak of Chinese overseas buying, one third of property investments in Vancouver were made by people from China, with a similar figure for Toronto.
With money from China, it’s alleged Ni bought eight houses in Vancouver and Burnaby, ranging in price from about $1 million to $10 million. He listed most of them in the names of his wife, Li Juan Chen, who says she does not work because she cannot speak English and did not understand her husband’s business dealings. Their adult daughter was also given some dwellings.
Both continue to either live in the houses or rent them out while claiming financial hardship.
One house, on West 33rd, is assessed at $5 million. Kent allowed it to be sold, with restrictions, to help ease the plight of the murderer’s widow and repay a portion of the money owed to the family of the slain patriarch. Another detached house is on West 47th in Kerrisdale.
The judge said the plaintiffs, led by the murdered patriarch’s widow, Yu Fang Liu, believe that “Ms. Chen’s plea of poverty is simply untrue.”
Years ago, B.C. Premier David Eby, who was then attorney general, became so concerned about the inflationary effects on housing prices of the transnational investing phenomenon that, in 2019, he brought in the speculation and vacancy tax.
One of its purposes was to make it easier for governments to monitor the wealth of satellite families, people who own B.C. homes with money largely earned offshore, where it is not subject to Canadian income taxes.
Most of the members of the families involved on both sides of the Long Ni case have become permanent residents of Canada. Many have also been spending long periods in China, the source of the investment funds.
One of many larger issues raised by the convoluted case, said Hyman, the immigration lawyer, is: How was it possible for Ni to have moved up to $113 million out of China over about a decade?
For year, Chinese law has not for years allowed its residents to move the equivalent of more than US$50,000 a year from the country. So Hyman is concerned Ni found a way, like thousands of other Chinese investors in Canada, to move vast amounts of wealth out of China, despite its currency controls.
Hyman also worries too many Canadian governments, banks, developers and real estate agents have looked the other way while such transactions have been happening, despite various laws requiring them to verify the source of funds invested in housing.
The Fu versus Zhu case showed how some transnational families can try to avoid declaring full worldwide income to Canadian tax officials, hide true real real-estate ownership through proxies, launder money out of China and misuse Canada’s immigration programs, especially those designed to attract rich people, some of which have since been ended.
Hyman said another downside is that complex lawsuits over suspicious transnational housing deals, which can drag on for years, often end up costing Canadian taxpayers a great deal of money.
That’s because, even though judges can order the disputing parties to pay court costs, which Kent has done in the case of the murdered patriarch, Canadian taxpayers end up paying significant sums to provide the judges, language translators, legal staff, transcripts and buildings to run the court system.
Almost seven years after the family of the murdered man launched their lawsuit over the Metro properties, the case is scheduled to go to full trial in January 2026.