Background:
The Royal Bank of Canada (RBC) initiated foreclosure proceedings against Sui Sheng Liu after he defaulted on his mortgage for a condominium on Richards Street, Vancouver. An order nisi was granted in June 2019, and the property was later sold for $751,000 in May 2021. After settling tax arrears, strata charges, and RBC’s mortgage, $394,912.53 remained in court pending further orders.

Legal Issues & Arguments:
Hua Zhang, a non-party, claimed a beneficial ownership interest in half of the property based on a 2013 declaration of trust signed by Liu. She argued she purchased a 50% interest in the property for $180,000 plus tax and was entitled to half of the net proceeds ($347,382.58).

Liu initially disputed Zhang’s ownership, stating it was a secured loan, but later admitted she co-owned the property. The Crown in Right of Canada and The Crown in Right of British Columbia opposed Zhang’s claim, arguing her interest should only apply after mortgage repayment.

Court Decision & Award:
Justice Warren ruled in favor of Zhang, applying the doctrine of equitable exoneration, which required Liu’s share to cover the mortgage first. Zhang was awarded $347,382.58 plus accrued interest from the sale proceeds.

Costs:
If no cost hearing was requested within 30 days, Zhang was entitled to costs at Scale B per court rules.