A mother wins a court order requiring her son to return a $1.2-million Coquitlam property

A B.C. Supreme Court judge has ordered a Coquitlam man to transfer a $1.2-million property back to his mother, resolving the latest stage of a years-long dispute over whether she intended to give him the home. In a Sept. 24 decision, Justice Matthew Kirchner found Jeong Sook Han is the property’s sole beneficial owner, although she registered it in her son Jae Kyu Han’s name when she bought it in 2018. Kirchner found Han paid the entire purchase price and did not intend to give the home to her son immediately.

Han signed an agreement to buy the Adiron Avenue property in January 2018, while her son was serving an 18-month prison sentence in South Korea. According to the judgment, Jae Kyu had been convicted of stealing money from his employer to support a gambling addiction. His mother hoped he could start a new life in the Vancouver area after his release and have a place to live without paying rent. She was also concerned he might sell or mortgage the property to get money for gambling. The judge considered those concerns in deciding whether the home was a gift.

Although Han registered the house in her son’s name, she took steps to retain control, including withdrawing the duplicate certificate of title and later registering a purported $3.5-million mortgage against the property. Kirchner found those actions inconsistent with an intention to give her son complete ownership. He accepted that Han may have intended to give her son the property later if he proved his gambling addiction was under control and that he would not sell or mortgage it to support his gambling. But the judge found she never fully trusted him, so the gift was never completed.

A handwritten document known in the litigation as the “IOU,” signed by Jae Kyu while he was imprisoned in Korea, also figured in the case. It purported to record an $811,000 loan from Han’s holding company to her son at 2.2 per cent interest. The amount corresponded to money withdrawn from the company and used to buy the Coquitlam home. Whether the IOU was legally enforceable was the central question at the second trial. If valid, Jae Kyu could argue that the transfer was not a gift because he had agreed to pay $811,000 for the property.

Kirchner concluded neither side intended or agreed to create an enforceable contract at the time. He said there had been no meeting of the minds necessary to give effect to the IOU’s contractual obligation. The judge also noted the parties’ positions changed substantially during the litigation. Jae Kyu first denied there was a loan agreement and said the property had been given to him. After losing that argument at the first trial, he argued the IOU was valid, a position that could have allowed him to keep roughly $400,000 in equity after accounting for the purported $811,000 debt. Kirchner rejected that position and declared the IOU legally ineffective.

The dispute dates to 2022, when Han began trying to regain possession after her relationship with her son deteriorated. She initially started foreclosure proceedings based on the $3.5-million mortgage. At the first trial, a judge found the mortgage invalid because no money had been advanced under it, but ruled that Jae Kyu held the property in trust for his mother. The B.C. Court of Appeal later ordered a new trial, finding the resulting-trust claim had not been properly pleaded and the first trial judge had not adequately considered the IOU’s possible legal effect.

At the second trial, Kirchner found the IOU invalid, Han had paid the entire purchase price and Jae Kyu had made no financial contribution to the acquisition. Under Canadian law, when a parent transfers property to an adult child without payment, there is generally a presumption that the child holds it in a resulting trust for the parent unless the child establishes that a gift was intended. Kirchner found Jae Kyu had not done so and declared Han the sole beneficial owner, ordering her son to convey the property to her.

The judge also declared both the $3.5-million mortgage and the $811,000 IOU void from the outset. Jae Kyu was ordered to pay his mother’s ordinary court costs. Kirchner declined her request for special costs, finding nothing to suggest Jae Kyu had engaged in reprehensible conduct during the litigation.