IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation: Fu v. Zhu, 2018 BCSC 9

Date: 20180104

Docket: S147523

Registry: Vancouver

Between:

Guoqing Fu

Chunqin Zhou

Xiao Feng Fu

Plaintiffs

And

Cui Yun Zhu also known as Cuiyun Zhu

Hai Ling Xia also known as Hailing Xia

Chen Xia also known as Chenchen Xia

Defendants

Before: The Honourable Madam Justice Griffin

Reasons for Judgment

Counsel for the Plaintiffs: Roger D. Lee Jared Enns Counsel for Defendants: Kathleen J. MacDonald Place and Dates of Trial: Vancouver, B.C. March 20-24, 27-31, April 3-7, 11-13, 18-21, 24-28, May 1-5, July 10, 17-21, 2017 Place and Date of Judgment: Vancouver, B.C. January 4, 2018





Table of Contents

INTRODUCTION. 4

PLAINTIFFS’ EIGHT CHINESE MONEY TRANSFERS. 6

DIRECT SOURCES OF FUNDS FOR PROPERTY PURCHASES. 8

ACCOUNTING EXERCISE AND DEFENDANTS’ CHINESE PAYMENTS. 9

CREDIBILITY. 10

COMPETING PRESUMPTIONS. 12

MAYFAIR. 13

Uncontroversial Facts Regarding Mayfair 13

Plaintiffs’ Version of Events Regarding Mayfair 16

Plaintiffs’ Version of Accounting Regarding Mayfair 18

Defendants’ Version of Events Regarding Mayfair 19

Defendants’ Version of Accounting Regarding Mayfair 21

The Lawsuits. 22

The Eight Transfers in China. 23

Analysis of the Evidence Regarding Mayfair 23

Prior Inconsistent Versions of Plaintiffs’ Claim.. 24

P3 and Inconsistent Pleadings. 28

P2 and Inconsistent Pleadings. 32

P1 and Inconsistent Pleadings. 35

Plaintiffs’ Credibility Generally. 37

The Alleged Loan of $600,000. 37

Needing D1’s Assistance in Canada. 39

Alleged Need for Loan. 43

Defendants’ Immigration Intentions. 44

Source of Money in D1’s HSBC Account 45

Parties’ Conduct Concerning Rental of Mayfair and Expenses. 46

D1’s Reason for Putting Mayfair in Plaintiffs’ Names. 48

Frailties in D2’s Evidence Regarding Mayfair 49

The Eight Transfers in China and Plaintiffs’ Records. 50

Accounting Discussions in April and May 2013. 54

Possible Reasons for Transfers of Money in China from Plaintiffs to Defendants. 56

Conclusion Regarding Mayfair 62

W. 19th. 63

Uncontroversial Facts Regarding W. 19th. 63

Plaintiffs’ Version of Events Regarding W. 19th 65

Defendants’ Version of Events Regarding W. 19th 65

Analysis of the Evidence Regarding W. 19th 65

Prior Inconsistent Versions of Plaintiffs’ Claim.. 66

Accounting. 70

Plaintiffs’ Embellishments. 71

Defendants’ Evidence Regarding W. 19th 71

Source of Money in D1’s HSBC Account 72

Conclusion Regarding W. 19th 73

ELM.. 73

Uncontroversial Facts Regarding Elm.. 73

Plaintiffs’ Version of Events Regarding Elm.. 76

Defendants’ Version of Events Regarding Elm.. 78

Analysis of the Plaintiffs’ Evidence Regarding Elm.. 79

Prior Inconsistent Versions of Claim.. 79

Alleged False Inflation of Purchase Cost of Elm.. 83

The 7th and 8th Transfers. 85

Allegations Regarding USD $160,000. 89

The Defendants’ Chinese Payments. 90

Analysis of the Defendants’ Evidence Regarding Elm.. 95

The Parties’ Conduct 95

Accounting and Elm.. 96

The Defendants’ Chinese Payments. 98

Conclusion Regarding Elm.. 101

CONCLUSIONS. 102





[1] This is a case involving competing claims to ownership of residential properties in Vancouver, British Columbia. There are two families on either side of the case. I will refer to the plaintiffs as “the Fu Family” and the defendants as “the Xia Family”.

[2] The Fu Family and the Xia Family are from the People’s Republic of China. They both invested in real estate in China, often in parallel in the same development projects and sometimes together in partnerships, starting in 2007.

[3] Because some of the parties are family members and have similar names I will refer to the parties by the order in which they appear in the style of proceeding.

[4] The two key people involved in making these investments were the second-named plaintiff Ms. Chunqin Zhou (I will refer to her as “P2”) and the first-named defendant, Ms. Cui Yun Zhu (I will refer to her as “D1”) who were friends.

[5] The plaintiff Mr. Guoqing Fu (“P1”) is the husband of the plaintiff P2. P2 was at times referred to in the evidence as “Mrs. Fu” to distinguish her name and because she is married to P1.

[6] The third plaintiff, Mr. Xiao Feng Fu, is the son of P1 and P2. I will refer to him as “P3” for ease of reference.

[7] The second-named defendant Mr. Hai Ling Xia is the husband of D1 and will be referred to as “D2”. The third named defendant, Ms. Chen Chen Xia, is the daughter of the other two defendants, and will be referred to as “D3”.

[8] The two families were also involved in exploring immigration to Canada at around the same time.

[9] Ultimately, three residential properties were purchased in Vancouver in 2010, 2011, and 2013. The beneficial ownership and contributions to these properties are the central issues in this case. Each family accuses the other of lying about these matters.

[10] The properties which are the subject of dispute and the key dates of the purchase agreements with arm’s length sellers are:

· 3561 Mayfair Avenue (“Mayfair”), purchase contract made November 25, 2010 for a purchase price of $2,380,000, closing on January 31, 2011 with possession on February 1, 2011;

· 3307 West 19th Avenue (“W. 19th”), purchase contract made March 21, 2011 for a purchase price of $2,850,000, closing on May 20, 2011; and

· 4769 Elm Street (“Elm”), purchase contract made September 25, 2012 for a purchase price of $3,080,000, closing on November 8, 2012.

[11] The following table shows who held registered title to each property at the time it was purchased, and what are the parties’ respective claims to ownership:

Property Registered Title Plaintiffs’ Claim Defendants’ Claim Mayfair P1 and P2 P1 and P2 own 100% jointly D1 and D2 are beneficial owners W. 19th D1 (property subsequently sold) P1 and P2 owned a 50% beneficial interest, together with D1 and D2 who owned the other 50% interest D1 owned on behalf of her and D2 Elm P3 P3 owns solely; D1 owes the Plaintiffs money in relation to the purchase of Elm D1 and D2 own a 50% beneficial interest; P1 and P2 own the other 50% beneficial interest

[12] The plaintiffs say that Mayfair and Elm were always intended to be their sole properties and that registered title reflects true ownership. They say that D1 assisted them in purchasing Elm but misrepresented the amount of money needed to purchase Elm and so they claim they overpaid her and are seeking some of the money to be returned. The plaintiffs describe the overpayment in their pleadings as “Excess Funds” and at trial particularized it as in the amount of $502,296. This is denied by the defendants.

[13] D1 claims by way of counterclaim that Mayfair is held by the plaintiffs in trust for her; and that Elm was a joint investment by the Xia Family and the Fu Family, each holding 50% beneficial interest.

[14] The plaintiffs say that W. 19th was a joint investment by the two families and it was understood that D1 held 50% of her registered interest in trust for P2. D1 says that W. 19th was always her property alone, purchased on behalf of the Xia Family.

[15] D1 sold W. 19th to an unrelated third party on May 28, 2014.

[16] The plaintiffs are seeking a tracing with respect to the proceeds of the sale of the W. 19th property, which they say was used by the defendants towards the purchase of two other properties, 7218 Cartier Street (“Cartier”), which purchase completed on April 18, 2014, and 3545 W. 34th (“W. 34th”), which purchase completed on June 30, 2014.

[17] The trial of this case was in part an attempt at a detailed accounting exercise but it would not be helpful to review all of the evidence in similar detail. I consider the most helpful approach to be to address my findings on each of the properties in dispute, one by one.

[18] However, I will start with an overview of certain transfers of money at issue and what is known about the source of funds to purchase the properties.

[19] Both the Fu Family and Xia Family appear to be very wealthy by Canadian standards, moving hundreds of thousands and ultimately millions of Renminbi (RMB) or dollars around back and forth between each other’s family members’ accounts without worrying about documenting the purpose and without feeling the need to explain the source of their funds to this Court.

[20] It is virtually impossible to “follow the money” as a way of figuring out the true facts of what happened. Some information is known but it does not paint a complete picture. I will sketch out a brief summary of the allegations and known facts regarding the money.

[21] The crux of the plaintiffs’ case is that P2 caused eight money transfers from Fu Family bank accounts in China to Xia Family bank accounts in China, at the direction of D1, all relating to the purchase of the properties in Canada (the “Transfers”).

[22] It is agreed that P1 and P2 used each other’s bank accounts and names on property interchangeably as husband and wife; likewise for D1 and D2.

[23] The eight Transfers in China in RMB, and the approximate Canadian dollar equivalent at the time, were as follows:

Designation Date Amount (RMB) CAN$ Equiv. “1st Transfer” Nov. 18, 2010 ¥1,000,000 $153,400 “2nd Transfer” Nov. 18, 2010 ¥1,000,000 $153,400 “3rd Transfer” Feb. 1, 2011 ¥620,000 $ 92,876 “4th Transfer” Mar. 2, 2011 ¥2,900,000 $429,490 “5th Transfer” Mar. 3, 2011 ¥460,000 $ 68,218 “6th Transfer” Apr. 8, 20101 ¥739,200 $108,219 “7th Transfer” Feb. 29, 2012 ¥1,280,000 $200,704 “8th Transfer” Nov. 26, 2012 ¥1,026,270 $163,988

[24] The plaintiffs in their current pleading and final submissions seem to allege that the 1st and 2nd Transfers were for the purchase of Mayfair; the 3rd through 6th Transfers were for the purchase of Mayfair and W. 19th; and the 7th and 8th Transfers were for the purchase of Elm. However, in evidence P2 seemed to say something different: that part of the 1st and 2nd Transfers were for Mayfair and W. 19th; that the 3rd through 5th Transfers were for Mayfair; and the 6th Transfer for W. 19th alone; and again that the 7th and 8th Transfers were for Elm.

[25] It is not seriously contested that these Transfers took place, but the purpose of them is contested as the defendants say they had nothing to do with the purchase of the three Canadian properties.

[26] Over the years there were many transfers of funds between the plaintiffs’ and defendants’ bank accounts in China, in both directions but more from the plaintiffs to the defendants. Indeed, in the timeframe in question from 2007 to 2014 there were approximately 174 wire transfers from the plaintiffs to the defendants in China based on the plaintiffs’ evidence. The defendants say that the eight money Transfers that the plaintiffs have pulled out of these multiple transfers had nothing to do with the Canadian properties but had to do with other investments in property in China or other transactions in China.

[27] For this reason, there was considerable evidence at trial about some of the property transactions in China in which the parties invested. Unfortunately, the parties were also at odds on the true facts of these transactions, which also were not documented by any written agreements. For reasons that will become apparent, I have not found it necessary to sort out the true facts of these transactions as I have rejected the plaintiffs’ version.

[28] There is no question that the direct source of funds for the purchase of Mayfair and W. 19th came from the defendants who supplied the cash both to pay the deposits and to pay the balances due on closing of the purchases. Despite this, the plaintiffs allege that several of the Transfers related to these purchases.

[29] As for Elm, the source of the money for the deposit and the closing balance was mixed and the evidence was confusing. There were multiple transfers of money directly to Canada and within Canada by both families around the time period that Elm was purchased. I will deal with this in more detail when it comes to addressing the facts regarding that purchase.

[30] What is clear is that the 7th Transfer was well before the offer was made to purchase Elm; and the 8th Transfer was after the purchase closed; yet the plaintiffs allege both transfers related to Elm.

[31] The plaintiffs and defendants agree that there were discussions between them regarding accounting in relation to some properties in April and May 2013 but disagree as to what was discussed and what was the outcome.

[32] There were two transfers from the defendants to the plaintiffs that are in issue around the time of or after this accounting, namely transfers made from D1 to P2 in China on April 1 and September 10, 2013, in the amounts of 2,000,000 RMB and 2,075,000 RMB respectively (the “Defendants’ Chinese Payments”). The April 2013 exchange rate of 6.1 RMB to the Canadian dollar means these amounts would be roughly equivalent to $327,869 and $340,164, or a total of approximately $668,033.

[33] The defendants say that the Defendants’ Chinese Payments were to pay back the funds they had borrowed from the plaintiffs to contribute to the purchase of Elm and to make allowance for two future years’ worth of mortgage payments on Mayfair, and any past Mayfair mortgage payments that had been funded out of the plaintiffs’ own money.

[34] The plaintiffs say that these two transfers were unrelated to the Canadian properties, but instead, related to P2’s sale of a one-half interest in a Chinese property investment to the defendants, an investment known as “Dongfan Runyuan”.

[35] The parties agree that the outcome of this case will turn on the credibility of the witnesses and the Court’s findings as to the parties’ intentions when the Canadian properties were purchased.

[36] There was no central agreement governing the various transactions; there were no written agreements between the parties either. The parties admit that their intentions in their dealings were oral and not written and it seemed to me from the evidence that at times the intentions were not even stated but implied.

[37] The parties also admit that some transactions were structured using the name of a person who was not the true beneficiary of the transaction, in order to gain some perceived advantage, whether it be to evade Chinese currency controls, minimize taxes, obtain a favourable mortgage, evade Chinese restrictions on the number of properties a person could own, or otherwise.

[38] Importantly, neither side can prove their version of events without this Court accepting either the oral testimony of P2 or D1 as to the intentions with respect to the purchase of the Canadian properties. It is understood that I may accept or reject all or part of a witness’s evidence.

[39] Some caution had to be exercised in assessing credibility because the witnesses were from another country and culture and did not speak English. Often cultural and linguistic differences can affect the demeanour of witnesses in ways not necessarily understood by the trier of fact. For this reason, I was hesitant to conclude that a witness was evasive, in case what appeared to be evasiveness could be due to language or cultural differences.

[40] I have approached the evidence aware that nuances might be lost in translation, both in terms of the translation of the question to the witness and in the answer. Word choice and word order in a sentence might be an interpreter’s preference and I have been careful not to form judgment based on the wording of a single answer. Rather, I have considered the whole tenor of the evidence in coming to conclusions as to the facts. In my view it would be a mistake to take a single passage from a witness’s evidence as a conclusive admission against interest, given the nuances that might be lost in translation.

[41] As well, I have kept in mind that motives and conduct that might seem improbable to a person raised in a Canadian culture might not be improbable in another cultural context. The very structure of the transactions at issue in this case was unusual in the Canadian context, as it involved large sums of money changing hands over several years, without any written agreements in place or any common accounting practices. I have been mindful that different cultural contexts can affect the court’s perspective as to inherent probabilities or improbabilities.

[42] On the other hand, certain characteristics probably cross all cultures, and that includes the instinct and ability to be self-serving in one’s memory so as to advance one’s own interests, especially when it comes to matters of money.

[43] I also note that there was a great deal of data in front of me to allow me to consider the key witnesses’ evidence. For example, key witnesses testified for several days and so I could consider changes in demeanour during the course of testimony and whether those changes in demeanour were generally consistent or inconsistent with the testimony being truthful. Also, I could compare the demeanour of the witnesses as between each other, as they were all from a similar cultural background and required the use of interpreters.

[44] By the conclusion of the evidence I was confident that I was able to assess credibility largely by considering internal and external consistencies in witnesses’ evidence and the actions of the witnesses.

[45] My assessment of credibility also factored in somewhat, but to a much lesser extent, the demeanour of the witnesses as they answered questions and the inherent probabilities of human behaviour, tempered by an attempted appreciation of cultural context.

[46] Sometimes the difficult matter of assessing credibility is assisted by legal presumptions.

[47] Here at first glance it might appear that legal presumptions were of assistance.

[48] There is a presumption under s. 23(2) of the Land Titles Act, R.S.B.C. 1996, c. 250:

(2) An indefeasible title, as long as it remains in force and uncancelled, is conclusive evidence at law and in equity, as against the Crown and all other persons, that the person named in the title as registered owner is indefeasibly entitled to an estate in fee simple to the land described in the indefeasible title.

[49] The presumption is difficult to give much weight to in this case given that each side admits regularly purchasing properties in the names of other people for various reasons, and each claims that at least one of the properties at issue was put in the name of someone other than the true owner.

[50] There is also the presumption of resulting trust, as summarized in Rascal Trucking Ltd. v. Nishi, 2013 SCC 33 at para. 1:

A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of property, but does not take legal title to that property. Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. This is called the presumption of resulting trust.

[51] The presumption of resulting trust in the above scenario applies where the defence to the claim is that the person advancing the money made a gift.

[52] Here, neither side advances the argument that the person advancing the money made a gift. Rather, each side explains some of the money transfers linked to the property purchases by saying that the other side made a loan to them which was later paid back.

[53] I have concluded on the facts of this case that the legal presumptions are not ultimately of assistance and simply are cancelled out by each party’s respective evidence as to the intentions they had to create express trusts.

[54] I have concluded that the fundamental question as to who were the true owners of the properties at issue must in the end be resolved by the simple balance of probabilities and the test of what facts are more likely than not.

[55] I now turn to analyze the evidence regarding each property.

[56] Starting with the dispute regarding Mayfair, to repeat: the plaintiffs are registered owners of Mayfair which they claim represents the true ownership; the defendants say that the plaintiffs hold Mayfair in trust for them as beneficial owners.

[57] There are some facts that are easy to find in respect of the purchase of Mayfair.

[58] The Fu Family obtained approval to come to Canada as landed immigrants before the Xia Family attained their immigration status.

[59] The Fu Family, each of P1, P2 and P3, arrived in Vancouver from China on November 23, 2010. The day of arrival, they went to a branch of the Bank of Montreal (“BMO”) and opened a bank account in P1 and P2’s name and deposited $4,000 into the account.

[60] D1 came to Vancouver at the same time as the Fu Family. At that time D1 and P2 were close friends and trusted each other.

[61] On November 25, 2010, a couple of days after their arrival in Vancouver, the Fu Family flew to PEI. They did so because they had applied to immigrate through a provincial nominee investor program in PEI and so that is where they needed to go through the immigration process of landing.

[62] D1 stayed in Vancouver and did not accompany the Fu Family to PEI. On November 25, 2010, D1 opened bank accounts with a Richmond, BC branch of HSBC Bank Canada. There was more than one type of account opened but I will refer to all of the defendants’ linked HSBC accounts in the singular.

[63] D1 looked for residential property while in Vancouver, together with Mr. Gu, a realtor associated with Pacific Place-ARC Realty Ltd.

[64] On November 25, 2010, D1 signed a contract of purchase and sale in the names of P1 and P2, to purchase Mayfair. The evidence is that Mr. Gu had no trouble signing the document falsely attesting to witnessing P1 and P2 signing it instead of D1. He did not testify at trial but this fact was undisputed by the parties.

[65] On November 28 or 29, 2010, the Fu Family returned to Vancouver from PEI.

[66] On November 29, 2010, D1 received just under $600,000 in her HSBC account in Vancouver, namely $599,995 wired from elsewhere.

[67] The same day, November 29, 2010, D1 wired into the BMO account of P1 and P2 the amount of $200,000.

[68] The Mayfair purchase contract required that a deposit of $150,000 be paid. This was paid on December 2, 2010, drawn from P1 and P2’s BMO account. The source of that money was the transfer that had been made from D1 to the plaintiffs’ BMO account a few days earlier.

[69] On December 2, 2010, P1 and his son, P3, returned to China.

[70] The contract to purchase Mayfair was subject to the buyer’s inspection and financing by December 3, 2010. P2 signed a document waiving these conditions on December 3, 2010. She signed it as though signing it for both P1 and P2, and Mr. Gu again apparently signed it as though he had witnessed both P1 and P2 signing it.

[71] The closing date for the Mayfair purchase was January 31, 2011 and the possession date was February 1 at 11:59 a.m. The purchase price of the property was $2,380,000. The property was being purchased in part by mortgage financing provided by BMO. The mortgage was in the names of P1 and P2 in the amount of $1,666,000. After taking into account the deposit of $150,000 and normal closing costs and adjustments, the amount of $613,997.50 was required to complete the purchase.

[72] On December 7, 2010, P2 returned to China.

[73] On January 25, 2011, P1 and P2 returned to Vancouver from China.

[74] On January 26, 2011, D1 drew out $600,000 from her HSBC account by way of bank draft payable to P1. This was transferred to P1 and P2’s BMO account. A draft in the amount of $613,997.50 was then drawn on the same BMO account, as funds to complete the purchase of Mayfair. The excess of just over $36,000 transferred by the defendants remained in the plaintiffs’ BMO account.

[75] In summary, D1 provided $200,000 plus $600,000 to P1 and P2’s BMO account, which was the source of the cash funds used to pay the $150,000 deposit and $613,997.50 closing funds to purchase Mayfair.

[76] On January 27, 2011, P1 and P2 together with D1 attended at a lawyer’s office, where P1 and P2 provided the bank draft and signed the mortgage documents and other documents to complete the purchase of Mayfair.

[77] The purchase of Mayfair completed on January 31, 2011.

[78] P1 and P2 gave the lawyer’s package of closing documents for the purchase of Mayfair to D1 and did not keep a copy for themselves.

[79] P1 and P2 returned to China, arriving there on February 2, 2011, which meant they likely left Canada on February 1, 2011.

[80] Initially the contract of purchase and sale for Mayfair contained an option for the sellers to rent back the property for one month after the purchase, for $5,000. However, the sellers did not exercise this option.

[81] A two-year lease of Mayfair was signed with a tenant, Mr. Martin, on February 2, 2011 for $4,000 monthly rent, commencing February 10, 2011. The landlords were shown on the document as P1 and P2. The tenant also paid a $2,000 security deposit.

[82] The rent paid by the tenant of Mayfair was paid into the BMO account of P1 and P2. Mortgage payments in the amount of $5,647.95 per month were taken out of the same account. There was enough money in the account, based on the earlier transfers made into it by D1, to cover the shortfall between the rent and rental deposit and mortgage until close to April 2013.

[83] In April and May 2013 the parties met and discussed some accounting matters regarding the Canadian properties

[84] The plaintiffs’ version of events is based on the evidence of P2. P2 says that it was D1 who, in August 2010, led her to think that purchasing property in Vancouver would be a good investment because D1 had visited Vancouver and it had a good environment, was scenic, had good food, and had a good university, the University of British Columbia (“UBC”), that if P2’s son wanted to attend in the future would be very prestigious.

[85] P2 and D1 had met in 2006 and became friends. D1 and P2 had together invested in properties in China beginning in 2007 and following.

[86] In around 2008 the plaintiffs and defendants each applied to immigrate to Canada.

[87] The plaintiffs’ application was accepted but the defendants’ was not, initially.

[88] P2 said that she learned in September or October 2010 that her immigration application to Canada had been approved. She wanted to buy a property in Canada but did not know how to do it or how to transfer money to Canada. D1 said she would help her as she had an account with HSBC and was a resident of Macau and P2 could transfer money through her.

[89] P2 claimed that D1 came to Canada with her in November 2010 to help her with the immigration process and to help look for and purchase a house for the plaintiffs.

[90] P2 says that D1 found the Mayfair property for the plaintiffs and signed an offer to purchase in the names of P1 and P2.

[91] P2 admits that D1 transferred $200,000 and $600,000 to the plaintiffs’ BMO account which was used to pay the $150,000 deposit and the closing balance required to purchase the Mayfair property. However, she asserts that this was because the plaintiffs did not know how to get money to Canada and relied on D1 in this regard.

[92] P2 says that the source of D1’s money for the deposit was the 1st Transfer and 2nd Transfer in China on November 18, 2010. These transfers of 1,000,000 RMB each totalled the equivalent of roughly $306,800. P2 says that the amount of the transfers was suggested by D1 and P2 just followed D1’s suggestion. However, that means, according to the plaintiffs, that when D1 transferred $200,000 to their BMO bank account, D1 still owed the plaintiffs another approximately $106,000.

[93] As well, P2 says that the $600,000 provided by D1 to them to close the purchase of Mayfair was a loan from D1. The loan was necessary because when P2 returned to China, P2 had become interested in buying a property in Shanghai and did not at that moment have enough cash for both. P2 says she asked D1 to loan them $600,000 and D1 said “no problem”.

[94] P2 claims that when she and P1 came to Canada on January 25, 2011, they went to BMO the next day and saw that $600,000 had arrived in their bank account. According to P2, D1 told her that she could just repay it by paying her in RMB in China, at the exchange rate on January 26.

[95] P2 says that she later decided against buying the property in Shanghai. She called D1 and told her, and asked her how much would be required to pay D1 back. She testified that D1 told her that it would be 3.98 million RMB. P2 checked the exchange rate and thought that was a little generous but decided to go along with it. She claims to have repaid the loan in three instalments. She cannot recall why it was in three instalments: maybe it was because that is what D1 asked or maybe it was because of the money in her account.

[96] According to P2, the loan was repaid by way of the 3rd, 4th and 5th Transfers made from P2 to the defendants in China in February and March 2011. Those Chinese transfers totalled the equivalent of approximately $590,584. The plaintiff says that exchange rate fluctuations meant that the amount repaid would have been considered close to $600,000.

[97] The plaintiffs concede that the payment of rent into the plaintiffs’ BMO account, and deduction of mortgage payments from that account, is not determinative of the issues and is equally consistent with the version of events presented by both sides of the case regarding the true ownership of Mayfair.

[98] However, the plaintiffs’ evidence regarding the expenses connected with Mayfair is confusing.

[99] P1 testified that in April 2013 he and P2 came to Canada to see the newly purchased Elm property; and to file income tax returns. On that trip, there was a meeting between P1 and P2, and D1 and D2. At the meeting P2 said that now that the three properties were purchased, they should do an accounting. D1 walked through what was spent to purchase Elm and W. 19th, but she did not mention one payment, of 1.2 million RMB, which was about $200,000 in Canadian dollars. This was a reference to the 7th Transfer, made February 29, 2012. P1 and P2 claim that once they mentioned this payment, D1 gave them assurances that the money was still with her and was secured and so they did not press it.

[100] P1 testified that he returned to Canada in May of 2013, without P2. His evidence was that P2 asked him to do an accounting with D1 with respect to all three properties. P1 met with D1 and D2 at Elm to discuss the accounting for all three properties, and claims he took contemporaneous notes in a notebook as well as on the back of a bank statement.

[101] P1 claims that in the course of this accounting exercise in May 2013, D2 took him aside and told him in private words to the effect of they needed to stop the accounting because the defendants were tight with money; it was important for his wife D1 to save face; and they had used the plaintiffs’ money and owed them about 1 million RMB. P1 says that he returned to China and told P2 that he had done the accounting for the three properties; the defendants owed them about 1 million RMB and would return it to them when they were not so hard up for money.

[102] The defendants’ version of events regarding Mayfair is primarily based on the evidence of D1.

[103] D1 agrees that she and P2 became friends in around 2006. D1 had become experienced in buying property for investment purposes in China, including in obtaining good prices and occasionally discounts from developers due to her bringing multiple buyers to a new project.

[104] D1 shared some property recommendations with P2 who ended up investing in ten properties in China recommended by D1. D1 made purchases at the same time in the same projects. Sometimes the properties were purchased in other person’s names, such as one of the parties’ children, because there was a better mortgage interest rate if the person was a first-time buyer. One of these, a property known as Dongfan Runyuan, was purchased by D1 and P2 in partnership.

[105] D1 and P2 each purchased, for their own family’s residential use as a luxury apartment, a unit in one of those projects introduced by D1, known as “Gold Coast” and located in Hangzhou.

[106] According to D1, P2 was so happy with D1’s assistance and recommendations that she promised her a share of the profits from some of these Chinese property purchases. While D1 referred to this as just a verbal agreement, my sense of the meaning of her evidence was that she did not think of it as a binding legal contract, rather, D1 saw the promise as more of a moral obligation on P2’s part.

[107] As well, in the course of their relationship, D1 and P2 became investors in a project known as “Hefei Diyuan”, as did another friend of theirs, Fei Song. Hefei Diyuan began paying back capital to investors in early 2010.

[108] Also, a group of investors, first a group of three, then a group of four, including P2, invested in a number of properties together in China, leaving the purchases and management of these investments to D1. This required transfers of money to D1 in China to make mortgage payments in relation to these property purchases (“Chinese Partnership Properties”). Some of these Chinese Partnership Properties were purchased for the partnership in D1’s name or in the names of relatives of D1.

[109] D1 says that she paid for the deposit and closing balance of Mayfair out of the defendants’ own money.

[110] D1 says that she had planned to move to Canada permanently if her immigration application was approved. She had come to Canada in July 2010, having applied to immigrate through a program based in Manitoba. On that trip, she met with Mr. Gu, the realtor, and he showed her properties in metropolitan Vancouver. She also went to Winnipeg. She made the decision that she wanted to buy property in both Winnipeg and Vancouver.

[111] D1 says that when she returned to China from that visit, in August 2010, she told P2 about it. D1 knew that P2’s immigration had been approved or was close to approval because she had been through the medical examination but that P2 did not really want to move to Canada, she just wanted the immigration card and at that time had no intention of purchasing property in Canada. D1 did not know whether one could purchase property as a visitor, so she asked P2 if she could purchase property in her name, and P2 agreed that she could do so.

[112] When D1 came to Canada at the same time as the plaintiffs in November 2010, D1 looked to buy a property in Vancouver, with Mr. Gu acting as realtor. She found Mayfair and decided to purchase it. She put it in the names of P1 and P2 as P2 had agreed she could do.

[113] D1 obtained the funds to purchase Mayfair from transfers into her HSBC account, and then transferred funds to the plaintiffs’ BMO account for the deposit and closing balance.

[114] The defendants and plaintiffs agree that after the defendants transferred money into the plaintiffs’ BMO account in 2010 in relation to the purchase of Mayfair, there was enough money left over to cover the difference between mortgage payments and rent for a period of time approaching into early 2013.

[115] According to the defendants, in April 2013 and May 2013 the parties met and discussed accounting matters regarding Mayfair and Elm.

[116] In the meantime, Elm had been purchased and according to D1, was a joint investment between the Fu Family and Xia Family. According to D1, part of the accounting exercise in April and May 2013 was to figure out what the defendants owed the plaintiffs in relation to the purchase of Elm.

[117] D1 says she knew she already owed the plaintiffs some money and so had transferred 2 million RMB to the plaintiffs in China on April 1, 2013.

[118] D1 says that after the resolution of the accounting in April and May 2013 it was agreed that the defendants were to pay the plaintiffs a total of 4.075 million RMB in relation to: amounts outstanding in relation to Elm; two years of mortgage payments net of rent going forward in relation to Mayfair ($39,551); any past mortgage payments for Mayfair that had been funded by the plaintiffs (after the funds that had been transferred to the plaintiffs’ account by the defendants had run out); less some amounts on account of personal items D1 had purchased for P2.

[119] The defendants transferred 2.075 million RMB to the plaintiffs in China on September 10, 2013 in this regard, to bring the total they transferred to the plaintiffs in China between April and September 2013 to 4.075 million RMB, the Defendants’ Chinese Payments.

[120] After initially making money in Chinese real estate investments, certain investments in the Chinese Partnership Properties began to take a downturn and there was a falling out between the partners and D1 around the time of the summer and fall of 2014. The partners including P2 became angry with D1. Some of them, including P2, confronted D1 and D2’s daughter, D3, at her workplace and home in China in a very intimidating manner, as will be mentioned later.

[121] The plaintiffs started this lawsuit against the defendants in September 2014 and soon after one of the Chinese partners started a lawsuit against D1 in China in relation to the Chinese Partnership Properties. That Chinese lawsuit was in collaboration with the plaintiffs. The defendants believe the present lawsuit was started in part to put pressure on them to submit to the plaintiffs’ demands in respect of the Chinese Partnership Properties. As part of their goals in this lawsuit and the lawsuits in China, the plaintiffs took steps to freeze assets held by D1.

[122] D1 denies that the plaintiffs made any payments to the defendants in China in relation to Mayfair or any other Canadian property and says all the Transfers from the plaintiffs to the defendants in China would have been for other matters. However, given the huge numbers of transfers from the plaintiffs to defendants in China D1 says that she cannot recall specifically the purpose of each of the eight Transfers. D1 and D2 say they have been unable to prove with certainty what the eight Transfers related to because despite best efforts they have not been able to access their bank records in China and cannot do so without attending in person at the bank. D1 and D2 say they are fearful that if they return to China the plaintiffs’ considerable influence and allegations will result in their detention there.

[123] However, the defendants advance some theories as to what some of the eight Chinese Transfers may have related to, including: some profit-sharing by P2 with D1; some capital repayment by Hefei Diyuan which came to the plaintiffs’ account and then was transferred to the defendants; and some everyday transactions between P2 and D1.

[124] I will analyze a few subtopics arising from the evidence regarding Mayfair, as follows:

· prior inconsistent versions of pleaded claims asserted by the plaintiffs against the defendants in relation to Mayfair;

· P3 and inconsistent pleadings;

· P2 and inconsistent pleadings;

· P1 and inconsistent pleadings;

· the plaintiffs’ credibility generally;

· the alleged loan of $600,000;

· the plaintiffs’ evidence regarding the need for D1’s assistance in Canada;

· the defendants’ evidence regarding their immigration intentions;

· the defendants’ evidence regarding the source of funds for the purchase;

· the parties’ conduct regarding the rental of Mayfair and expenses;

· the defendants’ reason for putting Mayfair in the plaintiffs’ names;

· frailties in D2’s evidence regarding Mayfair;

· the eight Transfers in China and plaintiffs’ records;

· accounting discussions in April and May 2013;

· possible reasons for the Transfers in China.

[125] The plaintiffs’ claims in this matter have changed over time. It would be wrong to describe this as an evolution, which suggests small nuanced change over time. It would be more accurate to describe these changes as wholesale revisions.

[126] The original Notice of Civil Claim (“NOCC”) was filed on September 30, 2014 by experienced counsel on behalf of the plaintiffs.

[127] The plaintiffs admitted that they all met with their former counsel two or three times, for one to two hours each, with interpreters present, before the NOCC was prepared and filed.

[128] The plaintiffs claim they did not read the NOCC before it was filed or have it interpreted to them. However, I find that while language differences and complicated facts may allow for some minor errors, these cannot explain why the NOCC presents an entirely different story of what happened as compared to the case asserted by the plaintiffs at trial.

[129] The plaintiffs maintained solicitor-client privilege in respect of their dealings with their former counsel, and did not expressly testify that they told him something different than what is reflected in the NOCC. Given the plaintiffs’ decision not to waive solicitor-client privilege the defendants could not challenge the facts regarding the lawyer’s instructions. I am unable to infer that the lawyer must have got his instructions fundamentally wrong given the many meetings the plaintiffs had with him and their use of interpreters.

[130] The NOCC asserted different version of events regarding Mayfair than the plaintiffs asserted at trial. In summary, the plaintiffs advanced a very dark picture, that D1 and D2 were fraudsters who had defrauded them in respect of the purchase of Mayfair, as follows:

· that plaintiffs came to know D1 and D2 after they were approached by them offering their assistance in purchasing real estate in Vancouver at favourable prices;

· the defendants directed them to transfer money into their bank accounts for purchases of several properties in BC;

· the plaintiffs had “now discovered” that on every single residential property purchase, the funds provided by them exceeded the actual amount of the purchase price;

· the plaintiffs transferred $1,030,000 to D1’s bank account at the defendants’ direction for the purchase of Mayfair but later learned only $600,000 of that was paid towards the purchase of Mayfair;

· after the plaintiffs discovered this, they asked about the extra $430,000 and were told by the defendants it would be used to purchase an investment property together with them, namely, the W. 19th property.

[131] None of these allegations regarding Mayfair were true and all have been abandoned. The plaintiffs continue to assert that there was this kind of fraud in respect of Elm, which I will come back to when I address the Elm property.

[132] The attempt by the plaintiffs in the NOCC to lump payments together for Mayfair and W. 19th was repeated in their evidence at trial, although the details of this changed.

[133] I find that this was in part to address the problem that the amounts they transferred in China to the defendants do not clearly relate to the purchase of one property or the other, neither Mayfair nor W. 19th nor Elm.

[134] Concurrently with the filing of the NOCC the plaintiffs filed certificates of pending lien (“CPLs”) on the title to the defendants’ properties in Vancouver, namely W. 34th and Cartier.

[135] The defendants brought an application to set aside the CPLs. D1 swore an extensive affidavit, pointing out clear problems with the allegations in the NOCC, including evidence that the plaintiffs had executed documents in connection with the closing of the purchase of Mayfair that were inconsistent with their claim. She also included evidence that it was the defendants who had paid $800,000 for the purchase of Mayfair i.e. the two transfers of $200,000 and $600,000 from the defendants to the plaintiffs which was the source of the deposit and closing balance paid on the Mayfair purchase.

[136] In response to D1’s affidavit, P3 swore an affidavit on March 16, 2015.

[137] Dealing for the moment with Mayfair alone, P3 made the following false or inconsistent assertions regarding the purchase of Mayfair in his affidavit:

· he repeated the allegation that the defendants misrepresented the funds required to be paid to purchase Mayfair, but he changed the numbers from what was alleged in the NOCC. This time P3 alleged that: the defendants represented that $1,005,603 was needed to purchase Mayfair, which the plaintiffs then transferred to them, but the defendants deceived them because only $763,997.50 was required to be paid, and so the plaintiffs overpaid by $241,605.50;

· he alleged that the transfers in relation to Mayfair totalling $1,005,603 were from the plaintiffs’ Chinese bank account to the defendants’ Canadian accounts, and referenced transfers as though they had occurred in Canadian dollars but which were relating to the 1st to 6th Transfers that actually occurred in China;

· he alleged that the $800,000 paid by the defendants mentioned in D1’s affidavit was from the $1,005,603 transferred to D1 and that D1 kept $205,603 without the knowledge or consent of the Fu Family;

· he noted that D1 had “admitted” in her affidavit that she signed the purchase contract for Mayfair in his parents’ name, but he said that the “signature was made fraudulently, without consent” for “the purpose of ensuring that neither I nor my family would see the true purchase details and purchase price”;

· he claimed that a similar thing happened with respect to Elm: that the plaintiffs were told a false inflated price by the Xia Family and the Fu Family overpaid the Xia Family by transferring money from their bank accounts in China to the Xia Family Canadian account;

· he claimed that in or about May 2011 the Xia Family admitted they had kept $858,005 of the Fu Family’s money, and the two families decided they would invest the money in a third property, in which each family would have a 50% ownership interest, and that became the W. 19th property.

[138] There were other falsehoods and inconsistencies in P3’s affidavit regarding the purchase of W. 19th and Elm, some of which I will touch on later.

[139] Each of the plaintiffs failed at trial in coming up with a credible, reasonable explanation for the huge change in the details and theory of the plaintiffs’ claim from the original NOCC; to P3’s Affidavit; to an Amended NOCC filed in 2016; to the Second Amended NOCC which was the final version of the plaintiffs’ pleading at trial; to the trial evidence which varied from this somewhat too.

[140] P3 testified at trial, after hearing his mother and father testify. He said he was the one who communicated with the plaintiffs’ former counsel, mostly, but he says he did not read the NOCC before it was filed.

[141] P3 has a Bachelor’s Degree in Finance & Accounting obtained from a university in the UK in 2005, and a Master’s Degree in Business Management also obtained from a university in the UK at the end of 2010 or beginning of 2011.

[142] Of all the witnesses with credibility problems, P3 impressed me as the witness the least acquainted with the truth although that did not deter him from making things up. His evidence on many points changed from when he first filed affidavit evidence in the case; to examination for discovery; to direct evidence at trial; to cross-examination at trial.

[143] P3 struck me as having complete ease in weaving a false story. He had a confident demeanour throughout, and when his transparent falsehoods were pointed out in cross-examination he was defiant and unflinching.

[144] Cross-examination established that P3’s affidavit was densely packed with deliberate falsehoods. Some of the allegations that P3 levelled against the Xia Family in his affidavit in the case were not simply false, they were malicious. P3 knew that the affidavit was intended to be relied upon in court to resist the defendants’ application to lift the CPLs placed on their properties.

[145] It was clear to me from the content of his evidence that P3 had no internal moral guideline to tell the truth, and absolutely no hesitation in lying when he thought it might help him or the Fu Family. I could not detect any sincerity in his evidence.

[146] Indeed, P3 was sophisticated in lying, including scheming to deceive Canadian immigration authorities in 2012 so that he could maintain permanent residency status without spending the necessary days residing in Canada. This scheme involved him pretending to rent accommodation in Vancouver by writing cheques for rent to D1; pretending to be employed by Jie Chen, the wife of the family’s realtor, Mr. Gu, who pretended to pay him employment income (all of which was paid back behind the scenes by payment from P2 to Mr. Gu); having someone use his credit card in Canada in his absence; and then in 2013 falsely reporting to police in China that he had lost his permanent residency card which would have noted when he truly was in Canada, so that he could falsely claim he was in Canada during the period he pretended to pay rent and to receive employment income.

[147] The evidence at trial persuaded me that P3 deliberately lied about these matters on his examination for discovery.

[148] P3 initially claimed on examination for discovery that the rent cheques he wrote were actually payments he made to D1 at her request and he just wrote what she told him on the cheques (including “deposit” “first months’ rent” and so on), and he did not know these were intended to be fake rent cheques. I did not believe this evidence, but this was a theme not just of P3’s evidence but also P2’s evidence: whenever P2 could not explain something and there was a logical gap in her evidence, she fell back on the excuse that she just did what D1 told her to do.

[149] I did not believe any of the suggestions in the plaintiffs’ evidence that they were merely meek followers of D1’s orders. The plaintiffs’ showed themselves to be quite independent-minded and indeed held themselves as superior to D1 in terms of wealth.

[150] P3 also originally claimed on examination for discovery that he had lost his wallet with his permanent resident card in it, making up false details in his evidence about what else was in his wallet and explaining he had reported it to police.

[151] Both P1 and P2 knew of this false immigration scheme and approved of it and colluded in it, and indeed it appears most likely to me that it was masterminded by P2. They too claimed they had lost their permanent resident cards, filing a report with police in China. P1 claims P2 lied to him about this but I do not believe him and find that the whole family knew that they were making up a story about losing their Canadian permanent resident cards.

[152] The plaintiffs claim this false immigration scheme reflects equally badly on D1, as she assisted in receiving the fake rent cheques paid by P3. I agree it reflects poorly on her for assisting her friends, the plaintiffs, in creating a false impression that P3 was renting space from her in W. 19th, but it is degrees worse for the plaintiffs who actively sought to deceive Canadian immigration authorities in respect of their own status and then lied under oath about it.

[153] The plaintiffs tried to blame D1 for coming up with the idea for this immigration scheme but I do not believe their evidence in this regard. These events happened in 2012 when D1 did not yet have immigration status in Canada and I do not accept that she would have the knowledge and confidence to come up with a scheme to deceive Canadian immigration authorities.

[154] Returning to the changing pleadings, P3 had no reasonable credible explanation for the false assertions in the NOCC and his affidavit and the inconsistencies with the plaintiffs’ claim at trial.

[155] P3 prepared the first draft of his own affidavit, after receiving D1’s affidavit, and looking at documents he had. He claimed to have also talked to an accountant, Ms. Mo, who P2 claims helped her with keeping track of transactions and who worked for P1’s company.

[156] On examination for discovery, P3 claimed that Ms. Mo had given him accounting records and a spreadsheet; that she kept separate accounts for each of the Canadian properties; and that these records were historical records not something made for the lawsuit. When the plaintiffs were asked to produce all such accounting records before trial, no such records were produced.

[157] Later in the course of trial the plaintiffs sought leave to call Ms. Mo as a witness at trial, and to introduce part of a document through her claimed to be her notebook, despite not including her in their witness list in their trial brief and not disclosing their intention to do so or the documents in accordance with the Civil Rules in a timely way. I denied the plaintiffs leave to call her as a witness and to introduce her partially redacted notebook, in a ruling indexed at 2017 BCSC 754.

[158] The plaintiffs’ description of the records kept by Ms. Mo was a moving target that changed during submissions and P2’s evidence.

[159] The plaintiffs did not have a credible explanation for why they asserted that Ms. Mo purportedly had accurate accounting records yet P3 made so many “mistakes” in his affidavit after consulting with her.

[160] P3 claimed that he put together his own spreadsheet based on information given to him by Ms. Mo. Given the problems with his credibility, his spreadsheet is not entitled to any weight.

[161] P3 tried to explain inconsistencies in the plaintiffs’ claim and his affidavit by asserting that he made mistakes in his “understanding”. He did not say how he came to have this “understanding”. He did suggest that his mother, P2, was too emotionally upset for him to be able to talk to her much about the case at the beginning, crying all the time after having learned that her good friend D1 had defrauded her.

[162] But of course the plaintiffs do not claim now that D1 defrauded them at all in respect of Mayfair; they simply claim that P1 and P2 own it as shown on the registered title. So there was nothing for P2 to be emotional about in respect of Mayfair.

[163] In short I did not believe any of P3’s evidence where it was not independently corroborated by documents that were not generated by the plaintiffs or against the plaintiffs’ interests.

[164] P3 set out in his affidavit that he had read the key paragraphs of D1’s affidavit to his parents, and they told him facts in response, implying that the facts in his affidavit were based on what his parents told him.

[165] P2 and P1 tried to distance themselves from this assertion at trial.

[166] Both P1 and P2 signed affidavits in this proceeding stating that they adopted as true the facts set out in P3’s affidavit, which had been read to them by a competent interpreter. Both P1 and P2 say that these affidavits they signed were not translated for them. However, neither P1 nor P2 go so far as to say that they did not discuss the facts with P3 before he finalized his affidavit.

[167] As mentioned, the Fu Family uses as one excuse for their changing version of events that P2 was the one dealing with D1, and she was very upset when the NOCC and P3’s affidavit were put together.

[168] P2 did not strike me as emotional despite the fact she was under pressure for several days of cross-examination at trial. Rather, she struck me as determined and careful, so careful in fact that many times she came across as evasive. Her evidence was given so slowly it was like she was on a slippery path crossing a stream: she was trying to be very sure of her footing.

[169] P2 typically took a long time to give a straight answer to questions asked of her. She frequently seemed to forget what the question was and asked for it to be repeated, as though she got lost in thought when the question was really not so difficult as to require it to be repeated.

[170] I have carefully considered whether P2’s long delay in answering many questions and multiple requests to have questions repeated arose out of the fact that questions in the English language had to be translated into Mandarin to her, and her answers in Mandarin had to be translated to English. It is my experience in some cases that cultural differences can give rise to misunderstandings and confusion, even when an interpreter is used.

[171] However, I concluded in the end that the problem with P2’s evidence was not due to the fact the questions and answers had to be translated. Rather, P2 stood out in the way she seemed to have difficulty answering questions directly as compared to other witnesses who were in the same situation of requiring Mandarin interpreters.

[172] There were many material inconsistencies in P2’s evidence, from one moment of her testimony to the next, from evidence one day in direct to the next day, to her evidence in cross-examination, to evidence given on examination for discovery and as between her testimony, her other family members’ testimony, and more compelling evidence at trial.

[173] It takes a lot of energy to lie: energy to try to remember what the lie is; and energy to try to remember if the truth conflicts with the lie and so has to be denied or twisted. I have concluded from her demeanour and the substance of her evidence that P2 was stressed by the burden of having to support the many lies which her case depended upon, and this caused her to have to think and re-think about the questions she was asked so as to try to come up with answers she thought would support her claim. Her evidence unfolded as though she had tried to memorize a story but was not sure of it, and was carefully thinking of all angles so that she could not get caught out in lies.

[174] I have concluded, after noting the many inconsistencies in her evidence, that the great degree of thought and time P2 seemed to require before she could answer many of the questions put to her was a mark of her untruthfulness. I was left without any confidence that she was telling the truth about anything, unless it was against her interests and consistent with an independent source of evidence.

[175] What P2 purported to remember, and to forget, was quite self-serving. Despite purportedly now remembering details of her investments with D1 (despite a changing story about these investments), she claimed to not recall how much money she had to put up as part of an immigration program to invest in the provincial nominee investor program in PEI, or how the money was transferred to Canada for this investment.

[176] Coming back to the quite different version of events in the NOCC and P3’s affidavit, if P2 was emotionally upset this would not explain making facts up: some details might be left out or forgotten but emotional upset would not cause an entirely different story to be fabricated.

[177] I conclude that the facts asserted in the NOCC and P3’s affidavit that formed the basis of the plaintiffs’ claim regarding Mayfair were made up.

[178] P2 was undoubtedly the person who had the dealings on the Canadian properties and dealings with D1. I have no doubt she was the source of the incorrect assertions in the NOCC and in P3’s affidavit. These incorrect assertions of how the defendants allegedly defrauded the plaintiffs cannot be explained away as simple mistake.

[179] Further, even if P2 did sincerely believe her evidence (and I conclude she did not), I would find her evidence to be unreliable. Too much time has passed from the dates of the many money transfers between the parties over the years. There were too many transactions and there was a complete lack of documents concurrently exchanged between the parties to describe their purpose and intentions in relation to the money transfers at issue. This situation provides too much fertile ground for the human memory to be self-serving. That the plaintiffs have tried to piece together stories about what happened working backwards from the limited records of the transactions and have no accurate memory is clear from the changing stories they have advanced.

[180] The defendants’ theory is that the plaintiffs have changed their story about what happened between them regarding Mayfair, as documents and information is produced by the defendants which refutes the plaintiffs’ many versions of events. I agree with the defendants that this is the most likely conclusion and that the plaintiffs cannot be believed in respect of their present version of events regarding Mayfair.

[181] P1 had his own credibility problems, including asserting to Canadian authorities on his Canadian income tax return a miniscule worldwide income of $97.11. This was an incredible assertion given the fact he owns one of the top ten textile manufacturing and distribution companies based in one of the biggest textile manufacturing centres of China.

[182] P1’s evidence did not offer a reasonable, credible explanation for the changes in the plaintiffs’ claim regarding Mayfair, from the allegations in the NOCC, to P3’s affidavit, to the evidence at trial.

[183] I also found P1 to not be a credible witness generally.

[184] P1 sat through P2’s evidence at trial and testified after her. He basically repeated much of her evidence as though she had told him these events at the time (and therefore to rebut allegations that her evidence was the product of recent fabrication). Yet P1 was an interested party and much of his evidence was too simplistic and lacking in detail to give it an air of truth.

[185] There were many contradictions between P1’s evidence on examination for discovery and his evidence at trial. Often these contradictions appeared as though he was trying to shape his evidence at trial to more closely match his wife’s evidence. For example:

· P1 testified at trial that he first had the idea of buying property in Canada soon after the plaintiffs went through an immigration interview in Hong Kong, in May or June 2010; the plaintiffs then made the decision to buy property in Canada one or two months before coming to Canada in late November 2010.

· On examination for discovery, P1 said that they had the idea of buying property in Canada about ten days before landing in Canada.

· When these contradictions were put to him, P1 said he had no clear recollection other than he remembered his wife told him that D1 told her to transfer money, and that was when he was aware that the property was about to be purchased.

· Asked further questions, P1 said that the day his wife advanced 2 million RMB was the day they decided to purchase property, i.e. November 18, 2010, the date of the 1st and 2nd Transfers.

[186] As another small example, P1 testified that when he and P2 were in PEI on their November 2010 trip to Canada, P2 received a telephone call from D1 and learned that D1 had found them a house, and P2 told him about this. Yet on examination for discovery, P1 testified that he did not learn about this until he and his wife returned from PEI. A small detail, to be sure, but it was in the lack of details or inconsistent details that P1’s evidence left me with the impression that he was untruthful.

[187] It appeared to me that P1 well understood that his wife’s evidence as to the purpose of the eight Transfers in China was essentially uncorroborated, and so he was doing his best as a witness to try to give evidence that she discussed the purpose of these Transfers or Canadian property purchases with him at the time. I did not believe him.

[188] At times P1 ended up contradicting P2’s evidence and I came to conclude he did this not because his evidence was true but either because he believed his version had a greater likelihood of being believed and supporting their claims, or because he had forgotten a detail in P2’s false story and so made a mistake.

[189] P1 became loud and aggressive in demeanour when he was challenged in cross-examination, taking great umbrage when inconsistencies in his evidence were pointed out. He certainly did not come across as a meek member of the Fu Family and I find it unlikely he was ever under the direction of D1. I find that he made his own decisions, one of which was to largely stay out of his wife’s dealings with D1.

[190] In summary, the plaintiffs in the NOCC and P3’s affidavit advanced a claim that D2 had defrauded them with respect to Mayfair. They now agree she did not do so. The changes in their version of events cannot be explained away as a simple mistake. It points to the plaintiffs being prepared to say anything in pursuit of a claim against the defendants, regardless of it being based on fact or fiction, and this undermines the credibility of the plaintiffs on all of their assertions in the present lawsuit.

[191] The whole of the evidence led me to conclude that the Fu Family will assert false facts in this legal proceeding when they believe it suits their interests. I did not find any one of the plaintiffs to be generally credible or reliable.

[192] There are other reasons in addition to the changing claims that cause me to disbelieve the plaintiffs’ assertions regarding Mayfair.

[193] The plaintiffs’ present story that they are the true owners of Mayfair has to explain D1’s payments to them at the time of the purchase of Mayfair. The present explanation they offer is that:

· P2 caused to be transferred to the defendants in China on November 18, 2010, two amounts of 1 million RMB each, that is, the 1st and 2nd Transfers, which was the equivalent roughly of $306,000 if measured in Canadian currency. The plaintiffs did so anticipating that D1 would help them buy property in Vancouver.

· When D1 transferred $200,000 in Canada to P1 and P2’s bank account on November 29, 2010, after signing the offer to purchase Mayfair, she must have been using that roughly $306,000 they had transferred to her in China.

· When D1 transferred $600,000 to the plaintiffs’ Canadian bank account on January 26, 2011, from which the closing balance was paid on the closing of the purchase of Mayfair, this was a loan to the plaintiffs.

· The plaintiffs repaid the $600,000 loan by way of the 3rd to 5th Transfers made in China on February 14, March 2, and March 3, 2011, totalling the equivalent of close to $590,000.

[194] I did not believe the plaintiffs’ story which fails on a simple accounting basis. If the plaintiffs’ story was true, they would not owe D1 $600,000 on the purchase of Mayfair, but instead only just under $500,000. This is because on P2’s story, D1 would still have approximately $106,000 left over from the $306,000 she received in China in advance of the purchase of Mayfair.

[195] P2’s evidence in response to this rather obvious accounting flaw was varied. She essentially tried to toss off the $106,000 as a minor amount of money, that is, “not such a big deal”. She also suggested she knew the money remained in D1’s account so P2 could use it whenever she wanted. This last detail was necessary for P2’s story regarding W. 19th, which comes later. I did not find P2 credible regarding either the alleged advance or the alleged loan.

[196] P2 also suggested that the figures they chose to repay the $600,000 loan were based on D1’s suggestion they use a January 26, 2011 exchange rate. I also find this not believable. There was no suggestion they talked about exchange rates on any other occasion and the evidence of their usual conduct was that they usually just estimated amounts due to each other.

[197] In order to support the notion that the plaintiffs needed to send money to the defendants in China and to borrow money from the defendants to purchase Mayfair, P2 came up with what I have concluded were a number of embellishments:

· that D1 came to Canada with the plaintiffs in November 2010 and stayed behind in Vancouver just to voluntarily assist the plaintiffs in choosing a residential property and they relied on her entirely because she is an expert at buying residential property and knew how to get money into Canada;

· that P2 just happened to be cash-strapped at the time because she was interested in buying a property in Shanghai;

· that the plaintiffs could not access money they had recently received from another investment, an investment in Hefei Diyuan, because it was paid into P1’s company account.

[198] P2 claimed that D1 was assisting them in their immigration landing in Canada in November 2010 and in purchasing a residential property. She claimed that D1 told her that Vancouver would be a good place to purchase property, including for the reason that P3 could attend UBC which was a prestigious university.

[199] I find this evidence not credible.

[200] D1 had not become a landed immigrant herself yet, and the plaintiffs’ application to immigrate was more advanced than her own. She had no better knowledge than the plaintiffs on the process. There was no step she could take or did take to assist the plaintiffs in the immigration process of “landing” in Canada.

[201] As for recommending Vancouver as a place to purchase property, the notion that it was recommended in part because it would benefit P3 who could potentially attend UBC is not credible. By the time they came to Canada in November 2010, P3 had two degrees from universities in the UK. There was no evidence that he was planning to seek out yet another degree.

[202] It seems more likely that P2 was borrowing a fact from D1’s life when she made this assertion about P3 and UBC. The youngest child of D1 and D2, a boy, was born in 2002. D1’s evidence was that she thought it would be good for her son’s education if they, as a family, moved to Canada. Given the age of D1 and D2’s son, and their conduct in actually moving together to Canada, this was credible. P2’s evidence was not.

[203] I find that P2’s story about D1 assisting her in landing was a fabrication, meant to provide a reason for D1 travelling to Vancouver that was different than it being for D1’s own purposes, including to purchase a property for the defendants.

[204] P1 also asserted that D1 was assisting them in purchasing a property in Canada, when D1 remained in Vancouver and the plaintiffs flew to PEI in November 2010.

[205] Also, both P2 and P1 claimed as part of the reason that D1 was assisting them in buying a property, and to support the notion that they transferred money to D1 in advance in China, that D1 knew how to get money to Canada and they did not know how to get money out of China due to Chinese currency controls. This was also relied on by P2 to say she repaid D1 in cash for all the expenses that D1 paid for in Canada in relation to Mayfair.

[206] This evidence was not credible for a number of reasons including:

· The plaintiffs needed to deposit money in Canada as part of their immigration process in PEI, as security for their promise to live in PEI. P2 was quite willing to forfeit this money by abandoning any pretense of staying in PEI, and on my view of her evidence, did so as the price to get her immigration status. Despite the significance of this payment to obtaining immigration status in Canada, and despite P2’s evidence recounting her purported memories of the details of money transferred to D1, P2 claimed not to remember how much money it was or how she got the money into the country. This shows that what P2 purported to remember, and to forget, was quite self-serving.

· Likewise P1 claimed in cross-examination he did not recall how much of a deposit they paid to immigrate or how much of a deposit they paid as security for a promise to take a Canadian language course. He claimed they paid the money to an immigration company and did not inquire how they were getting the money out of the country.

· P2 and P1 were more successful financially than D1 and she was not their banker. P1 did not say he did not know how to get money out of China, he just testified in his direct evidence that D1 told his wife it would be “very convenient” to have D1 get the money out of China.

· P2 and P1 immediately opened bank accounts at BMO when they arrived in Canada in November 2010. D1 banked with HSBC. It seems odd and unlikely that D1 would be recommending the plaintiffs bank at a different bank than her own if she was the one directing them on how to do things about their money.

· P2 and P1’s son had spent years studying in university in the UK and it was not suggested he was self-financing or on a scholarship. P1 admitted they knew how to wire money to the UK but he claimed they only wired small amounts.

· There are many examples in the evidence of the plaintiffs transferring money to bank accounts in Canada. As but three examples: in July 2012, $150,000; over $900,000 in September and October 2012; and another approximate $387,000 in October 2012. The plaintiffs had little difficulty using nominees to transfer money from China, such as their employees, to transfer lump sums just under the personal restriction on transferring more than $50,000 out of China.

[207] As for their evidence that D1 was helping them look for a home, neither P2 nor P1 gave any parameters to D1 in terms of cost or what kind of property they wanted in Vancouver, other than it was to be a single family residence. P1 could remember knowing nothing about the price or the mortgage or any details.

[208] I did not find the plaintiffs’ evidence in this regard credible, especially when associated with the plaintiffs’ story that they intended the house to be their residence because they intended to immigrate to Canada.

[209] It is conceivable that the plaintiffs are so wealthy that they were prepared to invest in a rental property in Vancouver based merely on someone else’s recommendation, if they could afford to lose on that investment and it was seen by them as a small amount relative to their overall wealth. However, this was not the plaintiffs’ story.

[210] P2 claimed that they planned to use the house for their residence on their eventual move to Canada. She understood that to keep permanent residency status, the plaintiffs would be required to spend a certain amount of time in Canada. She described the house as her “immigration jail”, a place for the family members to stay when fulfilling their residency requirements.

[211] Yet when it came to purchasing property in China for herself and her family to use personally, even when the property was recommended by D1, P2 had inspected it for herself first and been involved in the decision regarding how much to pay. The only exception was with respect to properties purchased in partnership with others in China that was purely for investment and was not intended for a personal residence.

[212] I find that it is not credible that the plaintiffs would let D1 make a decision about purchasing Mayfair as a personal residence for them without even seeing it first or discussing the cost, style, or even the neighbourhood.

[213] P2 was also not believable in her testimony that she and P1 planned to move to Canada as early as the beginning of 2010 when the 1st and 2nd Transfers were made in China. P1 had a large and successful business in China. When pushed for details about what they did to ready themselves to move, P2 could think of no steps that they took towards arranging their business affairs so that they could move to Canada.

[214] P2’s evidence was that she needed to borrow $600,000 from D1 because she was cash-strapped, as she became interested in buying a property in Shanghai around the same time.

[215] P1 testified that P2 told him about her interest in the Shanghai property and that because of this D1 had agreed to loan money to them for the down payment for the Canadian property. I found P1’s evidence in this regard to be so self-interested and lacking in detail to not be credible.

[216] There are two key problems with this evidence: P2’s evidence regarding the fact she intended to purchase a Shanghai property was not credible; and the plaintiffs were wealthy enough and had other sources of money they could draw upon to invest in Canada, without needing to borrow from D1.

[217] First, the story regarding P2 seeing a property in Shanghai she might buy and then changing her mind about it was vague and unsubstantiated and did not have sufficient detail to appear as true.

[218] Second, the parties implied and then submitted in closing argument that the plaintiffs are much wealthier than the defendants. It does seem from the way they conducted themselves that the plaintiffs are so wealthy that P2 did not feel a need to keep a close track of funds she was transferring here and there. It is hard to believe that the plaintiffs needed to borrow money from the defendants.

[219] Indeed, around the same time as P2 claims to have needed a loan, the plaintiffs received substantial cash return on their investment in Hefei Diyuan.

[220] P1’s evidence was that because the money paid to them from Hefei Diyuan was paid to his company, they could not access the money or it would be illegal. He varied this somewhat in cross-examination, stating they could borrow money from his company for up to three months.

[221] I find it hard to believe that P1 could not pay money to his family from his company including funds received from Hefei Diyuan. To be sure there might be tax consequences, but the inference at trial was that the plaintiffs were extremely wealthy because of P1’s successful business, which means they were able to receive funds from the business, whether as salary, dividends, loans or some other form.

[222] There are other embellishments in P2’s evidence but it is not necessary to review them all.

[223] I find the entire story that Mayfair was intended to be the plaintiffs’ personal residence in Canada, and that the reason D1 was involved in its purchase was because the plaintiffs relied on her for assistance, to be not credible. I find the plaintiffs’ evidence in this regard to be false, intended to support the plaintiffs’ false story that they were always intended to be the true beneficial owners of Mayfair.

[224] The evidence of D1 was not without some problems but it suffered from fewer material inconsistencies than the evidence of P2. D1’s version of events was also more in line with the parties’ actual conduct.

[225] D1 testified that she and D2 – presumably with their children – had applied to immigrate to Canada in 2005 or 2006, first to PEI through a provincial nominee investor program. That application was abandoned, because their daughter was against the move.

[226] Later, in 2008 or 2009, the defendants applied to immigrate again, this time through a Quebec program and a Manitoba program. The Manitoba program sent a notice to them which was the basis for D1’s trip to Canada in July 2010, and her visit to both Winnipeg and Vancouver. After the trip, D1 became confident about moving to Canada. She discussed it with her daughter who was by then in university in Chicago, and her daughter was now supportive of it.

[227] D1 said that she discussed with an immigration consultant buying property in Winnipeg and Vancouver.

[228] As mentioned, D1’s evidence was that she and her husband wanted to move permanently to Canada, with their young son (born in 2002), once their immigration application was approved. This evidence is credible in part because the defendants’ conduct matched this intention.

[229] D1 said she was shown properties and made the offer to purchase Mayfair on November 25, 2001, closing on January 31, 2011.

[230] Funds were wired into D1’s HSBC account on November 29 and December 2, 2010, in the amounts of: $599,985 and $204,000 respectively. The transferor was shown as “Sealand International Limited” (“Sealand”) on D1’s HSBC statements. D1 testified that these funds were transferred from a friend who deals with foreign trade, and she repaid him in China.

[231] These transfers were made following but in close temporal proximity to the offer to purchase Mayfair.

[232] I have no difficulty in accepting D1’s evidence that she caused the transfers to be made to her account, and from her account so that she could complete the purchase of Mayfair.

[233] The funds wired to D1’s HSBC account from Sealand provided the source of funds in D1’s HSBC account from which D1 paid amounts in respect of Mayfair: she transferred $200,000 on November 29, 2010 and $600,000 on January 26, 2010 to P1 and P2’s BMO account. From these funds the deposit of $150,000 was paid on December 2, 2010 and the closing balance of $613,997.50 was paid on January 31, 2011 for the purchase of Mayfair.

[234] The dates of the transfers to D1’s HSBC account from Sealand are inconsistent with the plaintiffs’ version of events. The alleged need for D1 to make a $600,000 loan to P2 for the purchase had not even arisen yet, on P2’s evidence. P2’s evidence was that she only realized she needed that loan later, in January or February 2011.

[235] There is no evidence as to Sealand’s source of the money transferred to the defendants. However, neither side to the case provided evidence as to their various personal sources and quantum of income. This much is clear: the plaintiffs did not claim to have any connection with Sealand.

[236] The dates of the transfers from Sealand to D1’s HSBC account are more consistent with the defendants’ version of events: that D1 made arrangements to pay the purchase price after she made the offer to purchase Mayfair because she was buying the property for the defendants’ beneficial ownership.

[237] Both P1 and P2 were evasive in their evidence about whether they were still in Canada at the time of taking of possession of Mayfair, which on the purchase contract was in the afternoon of February 1, 2011. P1 suggested in his evidence that the plaintiffs did go to the house on possession, but his evidence was inconsistent in this regard and unbelievable, as he could not remember any details including whether anyone was living in the house.

[238] P2 was insistent in her evidence that the sellers stayed living in Mayfair after the closing of the purchase, renting it. This was indeed an option available on the purchase contract documents which were produced in this litigation. Unfortunately for P2’s credibility, it was not an option the sellers ended up pursuing and so P2 was wrong that they were living there.

[239] The information regarding the plaintiffs’ travel suggests that they arrived back in China on February 2, which also suggests they left Canada on February 1.

[240] Mayfair was rented to a tenant who was not the seller of the property, with the tenancy not commencing until February 10, 2011.

[241] As mentioned, P2 did not know about the rental arrangements for Mayfair.

[242] The rental was arranged by the realtor, Mr. Gu. D1 gave evidence that she had the dealings with Mr. Gu regarding arrangements for the tenant and he gave her the tenancy agreement. D1’s evidence was credible in this regard. In contrast to P2, D1 knew that the sellers of Mayfair moved out and decided not to rent the property.

[243] D1’s evidence was that she, D2, and their son stayed “a few days” in the Mayfair house, sleeping on the floor, to celebrate the purchase of the property and the Chinese New Year, before the new tenant of the home moved in. This evidence is consistent with the documents: possession date was February 1 and the lease commencement date was February 10.

[244] Also of interest is the fact that the plaintiffs gave all of the legal documents regarding the purchase of Mayfair to D1. P2 says she gave the documents to D1 for safe-keeping but that evidence was not credible. P2 was not in a habit of giving property purchase documents to D1 for safe-keeping. D1 had no better opportunity to keep the documents safe than did P2. This fact is more consistent with D1’s evidence that the defendants were the true owners of Mayfair.

[245] In addition, the defendants paid all of the ongoing expenses for Mayfair, including property taxes and insurance. P2’s answer to this was to suggest in her evidence that every time the plaintiffs visited Canada, they and any friends travelling with them brought large amounts of cash – $10,000 each, which was the maximum permissible for import to Canada – and gave it to D1 so that she could pay ongoing expenses. However, I find this to be another unbelievable embellishment inconsistent with other conduct and evidence.

[246] If the plaintiffs wished to pay back D1 for ongoing expenses, they could have done so with money they had already wired to their bank accounts in Canada; they did not need to bring cash.

[247] The plaintiffs also did not point to any document or occasion when the expenses paid on Mayfair by the defendants were apparently reviewed with the plaintiffs or agreed to as necessary and proper expenses as a first step prior to the plaintiffs allegedly handing over cash to D1.

[248] I find the fact that D1 knew the details about the rental of Mayfair, and was given all of the purchase documents, and paid all ongoing expenses, to be consistent with D1’s evidence that the defendants were the true owners of Mayfair and inconsistent with the plaintiffs’ version of events.

[249] D1’s evidence is to the effect that she asked P2 if she could put the purchase of a Vancouver property in P2’s name because P2 and P1 had attained immigration status in Canada (or were on a path to be assured of same) and P2 confirmed that the Fu Family did not at that time intend to live in Canada, they just wanted their immigration status. In contrast, D1 had not, as of late 2010, had her immigration application approved but she did want to move to Canada and buy a property.

[250] Only a few months later, D1 also purchased property in Winnipeg and purchased W. 19th in her own name. She explained that she had learned through the process of buying Mayfair that she was able to purchase property as a visitor to Canada, but the procedure for the mortgage would be more complicated and the percentage of the down payment would have to be higher.

[251] D2’s evidence was that when D1 told him about purchasing Mayfair, she told him it would be put in the plaintiffs’ names because it would be more convenient for them to get a mortgage. I suspect the word “convenient” is the best translation of a word that might have a slightly different nuance.

[252] In cross-examination, D1 added the explanation that she was concerned that if she was not successful in immigrating, then Mayfair would have to be sold and she had heard that there would be a lot of taxes that would have to be paid i.e. as opposed to the taxes that would have to be paid if it was owned by someone who had residency status. This was another reason for D1 wanting to have Mayfair in the plaintiffs’ names.

[253] It is quite credible that the parties might put properties they own in the other’s name, as this was done in China. Both P2 and D1 were used to buying properties in China that were registered in someone else’s name, and they trusted each other.

[254] While there are some inconsistencies in D1’s and D2’s evidence, I find it credible based on their past practices that at the time of the purchase of Mayfair D1 felt she would have some advantage to registering the title in P1 and P2’s names while at the same time she had an understanding with the plaintiffs that the defendants were the true beneficial owners.

[255] D2 gave evidence that in August 2014 he approached P1 and asked him to put something in writing confirming the Canadian properties that the plaintiffs held in trust for D1 and D2, including Mayfair. He testified that P1 confirmed that the Fu Family held Mayfair in trust for the defendants.

[256] However, D2 was asked expressly on examination for discovery less than a year before this trial, in November of 2016, if P1 or P2 ever acknowledged that they were holding Mayfair in trust, and his evidence was that he could not recall.

[257] I do not accept D2’s evidence that in August 2014, when he met with P1, P1 acknowledged to him that the plaintiffs held Mayfair in trust for the defendants. By August 2014 the plaintiffs were unlikely to have made that concession as the relationship between the two families was unravelling and they were having disputes about the Chinese Partnership Properties. The plaintiffs started this action in September 2014.

[258] Also, D2 testified that two documents which appear to be accounting notes, tendered as exhibits at trial, Exs. 25 and 26, were in his handwriting but that he could not recall what was the purpose or what were the circumstances of the notes. The lack of recollection seemed incredible and so undermined the credibility of D2’s evidence generally.

[259] The amounts and timings of the Transfers in China for the most part did not match the funds required to pay for the Canadian properties. The plaintiffs have put forward multiple equations breaking down numbers from multiple transfers or within a single transfer to try to show that the numbers “add up” to whatever supports their argument. They also have produced handwritten notes and notebooks to try to support their version of facts. But to paraphrase a famous remark, there are three kinds of lies: lies, damn lies, and math.

[260] It would be one thing if the plaintiffs could show, by way of example, that they transferred to the defendants a certain sum, such as $1,000,000, and the defendants then, in close temporal proximity, spent the same sum, $1,000,000, on a property. But that is not what the plaintiffs can show. Instead the plaintiffs seem to have worked backwards to try to group together a number of payments made in China, or parse from one payment separate amounts, and then to relate these payments to the property purchases at issue in Vancouver.

[261] I also find that P2 attempted to buttress the lack of corroboration of her recollection as to the purpose of the Transfers by falsely asserting that she had made notes in a notebook, and other notes in her husband’s notebook, prior to any falling out and the contemplation of litigation. When she was questioned about these notes in cross-examination, her evidence was confused and inconsistent.

[262] P2 had no organized method for keeping notes in her notebook. Her evidence as to when she wrote notes in the book, and on what page order, was variable and uncertain but this much was clear: she wrote notes out of order from the dates on which events occurred.

[263] P2’s oral evidence as to when these self-serving internal records was created was not persuasive. Record-keeping was not part of her regular practice and no reason was given for creating these exceptional records. The way the notes are collected looks very much like P2 was going through her bank records of transfers and grouping some together by date and amounts. This book does not appear as though she was writing notes in chronological fashion when events occurred.

[264] Further, P2’s oral evidence attributing the purpose for some of these Transfers was not matched by notes on the page. For example, at what was p. 315 of Ex. 6, her notebook, there was a reference to transfers on dates that match the 1st through 6th Transfers. P2 stated in her evidence that the 3rd through 6th Transfers were in relation to Mayfair and W. 19th, but she did not point to any note on the page stating this.

[265] Indeed the premise of P2’s evidence was that she completely trusted D1 and so could give her very general instructions such as “buy a nice house”, without more. If so, her attitude would suggest there was no need for notes.

[266] Also, on some pages of P2’s notebook there were different pens used, suggestive that some notes on some pages were supplemented by additional notes at a later time. When it was suggested to P2 in cross-examination that she did not know the order of her notes, an assertion that seemed clear from how she paused in going through the notebook and the variability of her evidence, she answered “I know the approximate order” [emphasis added]. There was no evidence to support how she could objectively “approximate” when a particular note was written, other than to be self-serving.

[267] P2 also claimed to have instructed Ms. Mo, the accountant or bookkeeper working with P1’s company, to keep “real time” records of each transfer and the purpose of each transfer and that she did so. As mentioned, the plaintiffs produced a spreadsheet at trial to support this evidence. There was a considerable amount of leading of P2’s evidence in her examination in chief, including walking her through Ms. Mo’s alleged spreadsheet.

[268] In an earlier judgment, I denied the plaintiffs’ application to call Ms. Mo as a witness, in the face of inadequate notice: see Fu v. Zhu, 2017 BCSC 754. Besides inadequate notice to the defendants, I further held that Ms. Mo’s anticipated evidence and the newly-produced spreadsheet (and any other records) did not prove anything of substance in relation to the pleadings and, moreover, was intended only to bolster P2’s credibility (at para. 98). Ms. Mo’s anticipated evidence would seem to be nothing more than oath-helping.

[269] I do not find credible P2’s evidence that there was a contemporaneous accounting record relating to the Transfers. Had there been it would not have taken until the eve of trial for the plaintiffs to produce it and there would not have been so many different versions of the plaintiffs’ stories regarding the Transfers to the defendants.

[270] As for P1, he claimed to have had important accounting meetings with D1 and D2 to reconcile accounts in April and May 2013, and to have made contemporaneous notes of the latter meeting which he brought back to China towards the end of May 2013.

[271] I did not find P1’s evidence regarding what occurred during the accounting meetings and his note-taking to be credible. I do not accept that these notes were contemporaneous but rather, find them also to be a self-serving attempt to buttress the Fu Family oral evidence.

[272] Indeed, this conclusion is supported by the fact that P2 made her own notes in the same notebook as P1.

[273] P2 was questioned about notes she made in P1’s notebook about the 7th Transfer of 1.28 million RMB on February 29, 2012. P2 made two notes in the notebook to suggest the transfer was about the Elm purchase; then she crossed her notes out and attributed the transfer to Mayfair and W. 19th. The problem is that the transfer of funds was not close in time to any of the purchases: Mayfair and W. 19th were purchased in 2011; and Elm was purchased in September 2012. P2 was unable to say why or when she crossed out her notes.

[274] I repeat the important point that the plaintiffs failed to explain how it is that they could purport to have accurate contemporaneous notes about the transactions or discussions with the plaintiffs, yet so many “mistakes” were made in their pleadings and P3’s affidavit.

[275] P1’s story regarding meeting with D1 and D2 in April and May 2013 for an accounting with respect to the three properties fell apart under cross-examination and made no sense. He could provide no details about why the defendants needed to account for anything with respect to Mayfair, if the rest of the plaintiffs’ evidence regarding Mayfair was to be believed. In other words, if the plaintiffs were, as they alleged, the true owners of Mayfair who had paid all the expenses, then why would there need to be any accounting?

[276] Because the plaintiffs were so loose with the truth when it suited their interests in other ways, and by intention did not put in writing any intentions regarding money transactions between the Fu Family and the Xia Family, I am left with no confidence that they were truthful when they testified about the creation of their notes and the purpose of the eight Transfers in China.

[277] I reject the plaintiffs’ evidence regarding their notebooks or notes being contemporaneous records of transactions or discussions with the defendants corroborative of the plaintiffs’ version of events. These records are unreliable and I find they are more likely to be after-the-fact attempts at reconstruction or revision.

[278] The plaintiffs’ attempt to group together or parse apart the Transfers made in China to the defendants proves very little as to the purpose of the Transfers, especially given the multiplicity of transactions between the parties and the absence of any written communications exchanged between the parties at the time.

[279] I return to the meetings to discuss accounting. The parties do agree that there were two meetings between some of the plaintiffs and defendants in April 2013 and again in May 2013 to discuss some accounting matters.

[280] The plaintiffs say that, with respect to Mayfair, all of the expenses had been covered, up to close to April 2013, and there were no accounting adjustments to be made for past expenses other than perhaps a few mortgage payments. This seems to be the case: the monthly rental income of $4,000 was being used to pay part of the monthly mortgage payment of $5,647.95; and the shortfall between the rent and mortgage payment, which was a monthly shortfall of $1,647.95, had been mostly covered by cash put in the plaintiffs’ BMO account by the defendants when the property was purchased, an excess of around $36,000.

[281] However, as of April 2013, the surplus cash put in the plaintiffs’ BMO account by the defendants had run out.

[282] The limited notes in evidence regarding the parties’ meetings in the spring of 2013 and the bank records which contain the parties’ notes are more consistent with the defendants’ version of events regarding Mayfair than with the plaintiffs’ version of events. These notes indicate that the parties did indeed discuss the monthly shortfall between the mortgage payments and rent.

[283] Importantly, there are some print-outs from the plaintiffs’ BMO account as of April 10, 2013 and May 9, 2013 containing handwritten notes which are consistent with the parties meeting to discuss Mayfair, and in particular the difference between the monthly mortgage payment and monthly rent. As of April 10, 2013 the plaintiffs’ BMO account had a balance of $73,431; as of May 9, 2013 the account had a balance of $67,715. These cash balances were more than enough to continue funding the shortfall between the mortgage payment and rent if Mayfair belonged to the plaintiffs. There was no need for the parties to be discussing the subject at all if Mayfair belonged to the plaintiffs.

[284] I reject as incredible P1’s evidence which was to the effect that the discussions about Mayfair were because D1 was helping him understand his own banking records regarding his costs and expenses in relation to Mayfair. He was a sophisticated businessman and did not rely on D1 as his accountant.

[285] It is more credible that if Mayfair was beneficially owned by the defendants, going forward there needed to be a plan on how the defendants would address the future monthly shortfall between the mortgage payment and the rent. I accept D1’s evidence that this was one of the purposes of the parties’ discussions in April and May 2013, to address the monthly mortgage shortfall for Mayfair going forward. This is logical and more consistent with the totality of the evidence than the plaintiffs’ version of events which is wholly unbelievable.

[286] As mentioned, the Defendants’ Chinese Payments to the plaintiffs in China were in the amount of 2 million RMB on April 1 and 2.075 million RMB later, on September 10, 2013, roughly the equivalent of $327,869 and $340,164.

[287] I accept the defendants’ position that after the parties’ accounting discussions, an agreement was reached between D1 and P1 in May 2013 that the defendants would make a payment to the plaintiffs tha