There are a wide variety of ways in which the purchase and sale of a property may go awry, including one party refusing to close the transaction, the seller refusing to vacate the sold property, or the parties being unable to agree on the particular property that is the subject of the sale. Another issue that may arise is with respect to the real estate professionals involved in the transaction. Real estate agents, like many other professionals, including lawyers, accountants, engineers and health care providers, are, by virtue of their role, in a fiduciary position with respect to their clients. This means that the real estate agent owes their client a duty to act in the client’s best interests and provide ethical, legal services to the best of their ability. When something goes wrong with respect to a real estate deal, aside from the buyer and seller suing one another, sometimes one or both of the real estate agents involved are also sued. One such case is that of Qiao v Fu.

Buyer Agrees to Purchase Three Residential Real Estate Properties

In September of 2016, the plaintiff, Man Qiao (“Qiao”), executed three separate contracts of purchase and sale in relation to three pre-sale condominium units: units 211, 411 and 408 in a development located at 4468 Dawson Street in Burnaby, British Columbia. The closing date for all three contracts was July 24, 2017, and the properties’ vendor was Amacon Dawson Development Partnership (“the vendor”). Qiao retained Lawrence Fu (“Fu”) of New World Realty as her real estate agent with respect to each transaction. 

By August 1, 2017, one week after the closing date, Qiao had completed the purchase of only one of the three properties, which led the vendor to cancel the remaining two contracts on the grounds that Qiao had failed to complete the transactions on the closing date. Qiao contended that the fault for the failure to close those deals laid entirely with Fu, whom she alleged had been negligent in failing to forward the contracts in question to Pauline Fong-Leung (“Fong-Leung”), a notary public in a timely manner. Qiao further alleged that Fu had breached the fiduciary duty he owed her.

Court Assesses Credibility of Witnesses in Weighing Testimony

The court began its ruling by noting that when a legal dispute boils down to competing accounts of events, the testimony of each witness is crucial to the ultimate determination of the matter at hand. In such circumstances, the court is tasked with assessing the credibility of the people who provide testimony to the court. In assessing credibility, the court must evaluate the witness’ trustworthiness “based upon the veracity or sincerity of a witness and the accuracy of the evidence that the witness provides.” The court continued to note that “the art of assessment involves the examination of various factors such as the ability and opportunity to observe events, the firmness of his memory, the ability to resist the influence of interest to modify his recollection, whether the witness’ evidence harmonizes with independent evidence that has been accepted, whether the witness changes his testimony during direct and cross-examination, whether the witness’ testimony seems unreasonable, impossible, or unlikely, whether a witness has the motive to lie, and the demeanour of a witness generally.” 

Considering those criteria, the court was satisfied that “Qiao’s evidence was internally inconsistent, self-serving, and generally not credible. At several points, it did not harmonize with the circumstances surrounding the subject transactions and the events that took place”. The court was further satisfied that the testimony provided by Fu and Fong-Leung “was credible, coherent, logical, and consistent with both the documentary evidence and each other.” As a result, the court “preferred” the evidence of Fu and Fong-Leung to that of Qiao, which means that, where there was a discrepancy, the court chose to believe the story told by Fu and Fong-Leung rather than that told by Qiao. 

Did the Real Estate Agent Breach the Duty of Care Owed to the Client?

The court’s assessment of whether Fu had breached the duty of care he owed to Qiao began with a statement about the standard of care expected of real estate agents at the time of the incident in question in 2017. At that time, the court found that the duty of a real estate agent “was to provide contracts of purchase and sale in a timely fashion to a conveyancer retained by the purchaser so that the transaction could be completed on time.” Qiao testified that she had relied upon Fu to send the contracts to Fong-Leung in a timely fashion and that Fu had inexplicably failed to do so, thus falling short of the standard of care expected of him. Fu testified that Qiao had verbally instructed him not to send the contracts in question to Fong-Leung, in addition to which Fong-Leung had not even been formally retained by Qiao until July 24, 2017, which was after the anticipated closing date. 

Given the conclusions of the court with respect to credibility, it is perhaps unsurprising that the court preferred the evidence of Fu and Fong-Leung to that of Qiao and concluded that Qiao had explicitly instructed Fu not to provide Fong-Leung with a copy of the contract. As such, Fu did not breach the duty of care owed to Qiao because he simply followed Qiao’s instructions when he declined to send the paperwork to Fong-Leung.

Did the Real Estate Agent Breach the Fiduciary Duty he Owed to the Client?

“An allegation of breach of fiduciary duty implies dishonesty, deceit, or constructive fraud.” Breach of fiduciary duty is distinguishable from negligence because negligence implies carelessness, while breach of fiduciary duty “carries with it the stench of dishonesty.” The court noted that “there is a presumption in law that real estate agents owe a fiduciary duty to their clients,” pursuant to which the court was prepared to accept that Fu was, in fact, in a fiduciary position with respect to Qiao. However, the court was also satisfied that Fu had not breached that duty. As the court noted, Qiao had not even asserted “any form of wrongdoing tantamount to a breach of fiduciary duty.” Qiao had argued that Fu failed to meet the standard of care he owed her, which was negligent. She had not alleged any dishonesty, deceit or constructive fraud, as would be required for a claim of breach of fiduciary duty to be successfully made out. In the circumstances, Fu was found to have committed no wrongdoing and breached no duty to Qiao.

Contact the Vancouver Real Estate Litigation Lawyers At Meridian Law Group to Discuss Your Property Dispute Needs

If you are involved in a dispute involving the purchase or sale of real estate, you need capable, quality legal representation. Whether your real estate issue involves a breach of contract, a division of property under the Property Partition Act or an allegation of negligence or fraud against a realtor or broker, Meridian Law Group can help. Contact Meridian Law Group today to schedule a consultation with one of our experienced, intelligent, tenacious lawyers. Our team of commercial litigators has the skills and knowledge necessary to guide you through this process with ease while ensuring that your rights are preserved and that you recover every dollar to which you are entitled. 

From our offices in Vancouver, Meridian Law Group is proud to serve clients throughout the province of British Columbia. Contact us online or by telephone at (604) 687-2277 to schedule a confidential consultation.