With today's financial climate, BC residents are often looking for a get rich quick idea. One of the trending moves in the real estate market has been to purchase pre-sale properties and sell them before completion for a profit.
In the recent case of Rahil v. Chand 2025 BCSC 106, an unsuspecting duo were led astray by this motivation, when a rogue real estate agent took advantage of their trust. After the deceit came to light, the plaintiffs sued their former realtor for breach of fiduciary duty, breach of contract and fraudulent misrepresentation (although only the former two causes of action were pursued at trial)
Conflicting Facts
As the case unfolded, the plaintiffs described how the defendant realtor was their neighbour and they advanced him monies shortly after they met in 2018. They claimed that they did so with the agreement that the defendant would invest in two properties in which he was the listing realtor - a Surrey Condominium and a Kelowna Condominium. The defendant realtor would then assign the purchase and provide the plaintiffs with the profit. At trial, there was no dispute that he was the listing real estate agent for the properties above. There was no evidence that any investment into the Condominiums was ever made.
The real estate agent's version of events differed considerably from that of the plaintiffs. He argued that the plaintiffs had agreed to allow him to use the funds as a down payment for property in Abbotsford, B.C. The property was purchased in the realtor's name personally. He claimed that the plaintiffs agreed that he would hold the mortgage and make the mortgage payments, with each party having a half interest in the property and that the plaintiffs would be added to title on the Abbotsford property at a later date. It is unclear why the plaintiffs would make this arrangement given they struggled to obtain the funds and did so through a line of credit. There was no written contract to corroborate the realtor's version.
In the absence of a clear agreement between the parties, the documentary evidence began a valuable witness where the parties' versions collided. It was clear that the defendant realtor had accepted the funds, deposited them into his personal account, asked the plaintiffs to sign standard form real forms including:
- An Assignment of Interest in Offer and to Purchase and Agreement of Purchase and Sale;
- A Consent to Assignment; and
- A Receipt of Funds Record.
Further, there documents were clear that the Kelowna Condominium was purchased by a third party as pre-sale and assigned by the defendant to an affiliated party prior to receiving the majority of the funds (although the assignment does not appear to have completed).
The defendant realtor purchased the Abbotsford property in his name almost immediately after receiving funds from the plaintiffs. He did not advise them of this until nearly six months. Between this time, the realtor advised the plaintiffs of several non-existent offers on the Kelowna Condominium. The plaintiffs deny that they ever instructed him to purchase the Abbotsford property on their behalf.
The Issues
The primary issue before the BC Supreme Court was whether a fiduciary duty existed between the plaintiffs and the defendant and whether the defendant breached his obligations.
A related issue was whether the defendant entered into contracts with the plaintiffs which he then breached, and whether he was unjust enriched.
The Decision
As common sense would dictate, the Court found the realtor's story improbable and determined that the realtor had failed to advise the plaintiffs that he would use their funds to purchase the Abbotsford property. The Court also found that the defendant "lied" about purchasing the Kelowna Condominium for the assignment and continued to lie about various offers on the Kelowna Condominium for several months.
On the claim of breach of fiduciary duty, while no realtor agreement was entered into between the parties, the Court concluded that the defendant did in fact act as their realtor, owed them a fiduciary duty and breached that duty.
Siding with the plaintiffs, the Court also found that the realtor breached his contracts with the plaintiffs by failing to invest their funds in the Condominium, as agreed. Further, the Court determined that in the absence of a contract authorizing the realtor to use the plaintiffs' funds to purchase the Abbotsford property, he was substantially enriched to the detriment of the plaintiffs, without juristic reason.
The plaintiffs were awarded damages for the entirety of their investment as well as the interest they had accumulated carrying the debt for the investment. Because the realtor's misconduct was particularly repugnant, punitive damages were also awarded against him.
Takeaways
The case underscores the importance of having the terms of your agreement in writing whenever possible and especially when making investments. While the plaintiffs were fortunate in obtaining an award for their complete investment due to the corroborating documentary evidence, there is substantial risk when there are competing versions.
With respect to a realtor relationship, the case also serves as a reminder that in the absence of a written agreement, implied agencies can be established based on the actions of the parties. In this case, the realtor did all things on their behalf as an agent, except sign an agreement. That will most always be sufficient to establish a fiduciary relationship.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
