Mother wins legal battle with son over $1.2M Coquitlam home

A BC Supreme Court judge has ordered a Coquitlam man to transfer a $1.2-million property back to his mother, ending the latest chapter of a years-long legal battle over whether she intended the home as a gift.

In a Sept. 24 decision, Justice Matthew Kirchner found Jeong Sook Han is the sole beneficial owner of the Adiron Avenue property, despite having registered it in the name of her son, Jae Kyu Han, when she purchased it in 2018.

Kirchner concluded the mother paid the entire purchase price, never intended to immediately gift the home to her son and had instead tried to retain control over the property.

The ruling followed a second trial after an earlier decision in the mother’s favour was overturned by the B.C. Court of Appeal and sent back for reconsideration.

Han signed an agreement to purchase the Coquitlam home for $1.2 million 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 wanted him to have somewhere to live without having to pay rent.

But she was also concerned he might sell or mortgage the property to obtain money for gambling.

Those concerns became central to the court’s determination of whether the home was truly a gift.

Han registered the house in her son’s name but took steps to retain control of the asset, including withdrawing the duplicate certificate of title and later registering a purported $3.5-million mortgage against the property.

Kirchner found those actions were inconsistent with an intention to give her son complete ownership.

“I accept that Mrs. Han likely intended to give the property to Mr. Han sometime in the future if he proved to her that his gambling addiction was under control and he would not sell or mortgage the property to support it,” Kirchner said..

But the judge found she never reached the point where she fully trusted her son and therefore never completed the gift.

The case was complicated by a handwritten document, referred to throughout the litigation as the “IOU,” which Jae Kyu signed while still imprisoned in Korea.

The document purported to create an $811,000 loan from Han’s holding company to her son at 2.2 percent interest. That amount corresponded to money withdrawn from the company and used toward the purchase of the Coquitlam home.

Whether that IOU was legally enforceable became the central question at the second trial.

If it was valid, Jae Kyu could argue the transfer was not gratuitous because he had agreed to pay $811,000 in exchange for the property. Kirchner instead concluded neither side intended or agreed to create an enforceable contract at the time.

“There was simply no meeting of the minds at the material time that would be necessary to give effect to the contractual obligation of the IOU,” Kirchner said.

The judge also noted the parties’ positions on the IOU had changed dramatically over the course of the litigation.

Jae Kyu initially denied there was any loan agreement and claimed the property had been given to him. After losing that argument at the first trial, he took the position that the IOU was valid — an interpretation 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 back to 2022, when Han began trying to regain possession of the home after her relationship with her son deteriorated. She initially launched 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 Jae Kyu held the property in trust for his mother.

The B.C. Court of Appeal subsequently ordered a new trial, finding the resulting-trust claim had not been properly pleaded and that the first trial judge had not adequately considered the possible legal effect of the IOU.

At the second trial, Kirchner concluded the IOU was invalid, Han paid the entire purchase price and Jae Kyu made no financial contribution toward acquiring the property.

Under Canadian law, when a parent transfers property to an adult child without receiving payment, there is generally a presumption that the child holds the property in a “resulting trust” for the parent unless the child can establish that it was intended as a gift.

Kirchner found Jae Kyu had not done so.

“I would make a declaration that Mrs. Han is the sole beneficial owner of the property and order that Mr. Han convey the property to her,” Kirchner wrote.

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