Alan Hu/pacificevergreenrealty.com

The Supreme Court of British Columbia has ordered Alan Hu, a Surrey-based Realtor, to surrender his profits from the sale of a $3.35-million property after breaching his fiduciary duty to a client.

According to a court decision published on Jan. 10, Pei Hua Zhong, a Chinese immigrant of “modest means,” hired Hu to sell his South Surrey, B.C. home and purchase a new property in Surrey in 2017. Zhong signed a contract to buy a property listed for $2.1-million, conditional on securing the down payment by selling his current home.

When his home failed to sell by the subject removal deadline, Zhong decided to pursue bridge financing, planning to use the equity in his existing property to secure the down payment.

While Zhong prepared a second offer of $2.05-million, Hu referred his friend Lingxia Tao, who was vacationing with him in Las Vegas, to another real estate agent to compete for the same property. Zhong was not made aware of the referral. Tao’s offer, submitted with Hu’s assistance, included a clause allowing her to assign the contract to a third party.

In January 2018, the seller accepted Tao’s bid of nearly $2.1-million, cutting Zhong out of the deal. According to court findings, Hu later acquired the property through an assignment from Tao and in 2021, sold the property for $3.35-million— a profit of more than $1.2-million. 

2038 174 St., Surrey B.C., Image source: homesbyalan.ca 2017

In her decision, Judge Amy Francis wrote that Hu “intentionally undermined Mr. Zhong’s bid to purchase the 2038 (174 Street) Property so that he could take an interest in the 2038 Property for himself,” describing his actions as a “marked departure from ordinary standards of decent behaviour,” and “deceptive and underhanded.”

Hu’s failure to act in client’s best interests

She emphasized that a Realtor’s core responsibility is to act loyally and transparently in the client’s best interests. Hu violated this duty when he shared Zhong’s bid with Tao, facilitated her competing offer and ultimately acquired the property through a contract assignment.

Justice Francis found that Tao relied on Hu for instructions and she was not held legally liable.

While litigation regarding the profit split from the sale between Hu and Tao is ongoing, the court has ordered Hu to disgorge all “ill-gotten gains” from the sale​.

Insurance and regulatory implications

In February 2022, Hu submitted statements to the Real Estate Errors and Omissions Insurance Corporation, though intentional misconduct like fraud typically falls outside the scope of coverage. The B.C. Financial Services Authority, which oversees real estate agents in the province, is reviewing the judgment and considering regulatory action.

In addition to surrendering profits, Mr. Hu must also repay the $19,000 referral feed he took for the original purchase of the Surrey property. 

QUICK HITS

• Property owner (Kranenburg) overburdened shared laneway by increasing traffic; ruling limits use of laneway to reduce disruption to neighbours (Grices).
• Court sided with Grices, stating laneway’s use must revert to original purpose of serving a summer camp, limiting further development.
• Case highlights importance of proactive communication — judge suggested conflict could have been avoided if both parties had discussed changes before acting.

A shared laneway between two neighbours in Ontario became the focus of a legal dispute over its use. In the case Kranenburg v. Grice, the owners of two properties on Ontario’s Saugeen River disagreed on how the laneway should be used after one owner, Kranenburg, expanded his property’s operations from a summer camp to a busy trailer park and event space.

Neighbour’s response to increased use of access route

The laneway in question runs through the Grices’ property and provides the only access to Kranenburg’s land, which is otherwise landlocked. Historically, Kranenburg’s property had been used as a youth summer camp, with buses, service trucks, and a small number of seasonal trailers using the laneway. However, after purchasing the property in 2009 and running it as a camp for years, Kranenburg shifted its use in 2020, turning it into a busy trailer park and event space. This change significantly increased traffic on the laneway, with more vehicles coming and going, particularly on weekends.

The Grices, who have owned their agricultural property for generations, raised concerns over the increased traffic, which they claimed interfered with their farm operations and created safety risks. In response, they installed two gates along the laneway — one at the entrance and another near Kranenburg’s property — to control access. They also planted trees along the side of the laneway, which Kranenburg argued further restricted access to his land.

Lawsuit filed for damages from nuisance caused by gates and trees

In light of this, Kranenburg filed a lawsuit, claiming that the gates and trees were a nuisance and asking for damages.

The Grices defended their actions, arguing that the gates were necessary to manage the increased traffic and protect their farming operations. They pointed out that the gates were not locked, and access to the laneway was not fully blocked. They also claimed that Kranenburg had overburdened the laneway by using it for purposes beyond what had originally been intended, specifically citing the heavy traffic from the trailer park and event space.

In response, the Grices sought an injunction to restrict the use change and receive damages for trees Kranenburg had cut down for firewood.

Right-of-way use can evolve within reason, road deemed appropriate for historical low-impact use

In cases involving rights-of-way, courts must determine whether the land has been “overburdened,” meaning that the use of the easement has exceeded what was originally granted. In this case, the parties could not locate the original legal document establishing the laneway’s right-of-way, but they agreed that it had existed before 1994.

The court noted that when no specific restrictions are outlined in the original agreement, it’s generally assumed that the right-of-way use can evolve over time, provided the changes remain within reasonable limits.

After reviewing the evidence, the court found that the laneway’s historical use had been relatively low-impact. It had been used primarily for buses transporting campers, food delivery and garbage trucks, up to 20 seasonal trailers and occasional passenger vehicles. This level of traffic was in line with the laneway’s design as a narrow, single-lane gravel road.

Laneway overburdened, safety concerns deemed legitimate — injunction issued for Kranenburg’s use

However, the court agreed with the Grices that Kranenburg’s recent changes had overburdened the laneway. The increased number of vehicles, particularly on weekends, with trailers and passenger cars coming and going for events, significantly exceeded the historical usage of the road.

The narrow and winding nature of the laneway meant that two large vehicles could not pass each other easily, creating safety concerns. The increased traffic also disrupted the Grices’ enjoyment of their property, as the laneway was visible and the noise from frequent traffic was audible from their home.

As a result, the judge ruled in favour of the Grices and issued an injunction limiting Kranenburg’s use of the laneway. Going forward, the laneway could only be used for buses carrying campers and conference attendees, up to 20 seasonal trailers and service vehicles such as food and garbage trucks. The court also allowed for passenger vehicles used by Kranenburg, his staff and residents.

Kranenburg’s nuisance claim dismissed

Kranenburg’s claim that the gates were a nuisance was dismissed. The court found that the gates did not constitute a “substantial interference” with his property rights, as they did not prevent access to the laneway.

The judge acknowledged that the gates may have been an inconvenience but stated that this was an expected reality (not a “substantial interference”) when sharing a roadway between properties with different uses. The installation of the gates was deemed reasonable, given the increased traffic and the Grices’ concerns for safety.

As for the trees, the court found no evidence that they had significantly impeded access to the laneway or created a nuisance. The judge did, however, advise Kranenburg to communicate with the Grices before cutting down any trees in the future and recommended that a survey and advice from an arborist be obtained if further maintenance was required.

This case highlights the importance of clear communication between neighbours when it comes to shared property access. The judge noted that many of the issues could have been avoided if the two parties had discussed their concerns and plans in advance. Kranenburg’s decision to change the use of his property without consulting the Grices, and the Grices’ installation of gates without discussing them with Kranenburg, ultimately escalated the conflict.

In closing, the judge encouraged both parties to reset their relationship and find a way to peacefully coexist as neighbours moving forward.