A Richmond home builder, who prefers verbal contracts without a paper trail, managed to win $1.4 million for two axed luxury properties in Richmond and West Vancouver.
Yongfeng Enterprises was hired in 2015 by a couple to build a house at No. 2 Road in Richmond, just south of Steveston Highway, and also a house at 1360 Ottaburn Road in West Vancouver.
The builder only made a verbal agreement for the Richmond property, but there was a written one for the West Vancouver house, for Yu Na Song and Bo Wei.
According to the contract, the West Vancouver home will cost $1.2 million to build.
Yongfeng told the court that the house was an investment property, according to Weis, while Weis claimed that the property was originally intended to be the daughter’s house, but they sold it because they were “unhappy” with the construction.
Later that year, Yongfeng – owned by Feifei Ren and Shao Ming Wang – was brought to work in another house in Richmond, 11266 No. 2 Road, without a contract in place.
According to Yongfeng’s owner, Wang, he met with the Weis several times to negotiate a contract for the Richmond project and told them he did not want to start construction without a signed contract. The Richmond home cost about $4.5 million to build.
He still started construction after Wei, who was in China at the time, told him that the contract had been approved and he would sign it when he returned to the country. Wei also sent him a deposit for the project.
Weis, however, has a different version of events.
They told the court they never agreed to have Yongfeng build the house in Richmond and said they wanted to check the performance of the West Vancouver house builder before committing to the contract.
“They testified that their verbal agreement with (Yongfeng’s owner) for the Richmond house was that Yongfeng could begin the initial phases of construction, such as excavation, foundation and framing,” read the decision by Justice Simon Coval of the BC Supreme Court.
“Mr. Wei said he saw it as allowing Yongfeng to ‘temporarily do the job.’ “
Payment disputes
The West Van house was sold in late 2016 and Weis refused to pay Yongfeng’s last invoice.
According to Yongfeng, Weis also “repeatedly violated their payment obligations under the Richmond (contract) by paying too little, too late.”
“In their testimony, the Weis acknowledged paying less than Yongfeng asked for, but Mr. Wei said it was because he felt Yongfeng was overcharging,” Coval’s decision read.
Despite receiving a payment that was less than the outstanding amount, Yongfeng told the court that it continued to work based on Wei’s assurances “that he will pay in full when he has the money available.”
Yongfeng said the parties met in April 2017 to revise the agreement and revise payment obligations to “help mend the relationship.”
Wei denied that this happened, but his wife, Song, said she remembered going to Yongfeng’s office and the revised agreement was made. The parties did not sign the amended agreement.
Around May 2017, Weis decided to hire a quantity surveyor because they were not satisfied with the cost and progress of construction in Richmond. Yongfeng testified that he agreed to do so.
A quantity surveyor was hired without Yongfeng’s input, who valued the current work at about $1.55 million, as opposed to the $1.9 million paid to Weis so far.
When the parties did not agree on the valuation, they stopped talking to each other and Yongfeng stopped working at the Richmond house.
The Weis obtained a lawyer in July 2017, claiming that Yongfeng “abandoned the Richmond building in January and falsely requested payments. They took Yongfeng to court in October.
Conflicting accounts of no paper trail
Both parties gave “fundamentally different” versions of events at trial and their credibility was an important consideration for Judge Coval.
“There were no contemporaneous written communications regarding significant decisions and events in the parties’ business relationship,” Coval wrote.
He added that Wei says he “doesn’t have email and doesn’t write letters.”
Wang, on the other hand, admits that he is “happy to talk only verbally with clients who want it” and finds resolving payment disputes with clients in person or on the phone “more friendly” than written letters.
Judge Coval ultimately sided with the contractor, finding that Weis “knowingly testified to a false version of events designed to avoid the legal effects of the contract they agreed to.”
Coval added that it is unlikely for the parties to agree to an informal and vague arrangement, and for Yongfeng to work on the Richmond house for almost a year while unpaid if it does not believe it will get $4.5 million for the construction of the entire house.
Coval agreed with Weis that it was “very unusual for experienced entrepreneurs” like Yongfeng’s owners to take on a $4.5 million project based on “an unsigned contract and promise over the phone” without a paper trail.
However, he found that this is exactly what happened based on the strength of the evidence.
Weis must pay Yongfeng $1.15 million for unpaid work and lost profits related to the Richmond home, and $240,000 for unpaid work and extras on the West Van home.