Vegas marriage could cost Chinese businessman $17 million

They say what happens in Vegas stays in Vegas. But not — apparently — when it comes to B.C. Supreme Court cases.

A judge has ruled against a Chinese businessman who failed to mention in court documents that he was actually married to a woman he went on to sue for more than $17 million.

Lu Hua Rao has now been ordered to hold off from taking any further steps to force his sort-of spouse and business partner Peipei Li to appear before a Chinese arbitration commission he was hoping might give him back his money.

First came love, then came Vegas

Justice Gordon Funt's ruling is the latest twist in a saga that has been unravelling ever since Rao and Li tied the knot in April 2016.

Rao is in his 50s, described by Li as an "experienced, successful and sophisticated businessman, owning several companies and investing in hundreds more — thereby acquiring a great deal of wealth — in the People's Republic of China."  

Li, also known as Zoe, is in her early 30s and works as an office administrator.

"Ms Li says she fell in love with Mr. Rao and that they discussed having children. She says that Mr. Rao told her he was divorced," Funt's ruling said.

"On April 8, 2016, Ms. Li says that Mr. Rao came to Vancouver and asked her to marry him as soon as possible. Ms Li says she agreed. They went to Las Vegas to get married."

But just seven months later Funt says their relationship became one of "animosity" as new facts about Rao's domestic situation came to light.

"Ms. Li says she had become suspicious as to whether Mr. Rao was, in fact, divorced," Funt wrote. "She says that she then learned from a lawyer in China that Mr. Rao was not divorced."

A friend of a friend

Li filed for divorce in family court last January.

That might have been the end of it, but for a business arrangement the two hatched during happier days.

The pair started a corporation together to invest in real estate. They struck a deal whereby Rao agreed to contribute $20 million and Li agreed to invest $1,000, but the two would be considered equal shareholders.

Rao put $17.6 million into the company before the relationship soured. About $7 million was used to purchase a home on Vancouver's west side.

In his initial notice of civil claim against Li, Rao asked to get all his money back. He referred to her as a friend of a friend who "encouraged" him to invest in commercial real estate.

But, as Funt points out, he didn't mention their Sin City marriage.

'An unfair tactical advantage'

Rao never denied the Vegas nuptials. But he described the relationship as "brief and intermittent."

"Mr. Rao says that Ms. Li 'talked about getting married in Vegas,'" Funt writes. "He swears: 'I specifically told her that I was already married in China. However, she told me that a Las Vegas marriage had hardly any effect.'"

Li wants to keep 100 per cent of whatever a court decides is family property in B.C.

Rao went on to withdraw his original civil claim, hoping to try the case before the Beijing-based China International Economic and Trade Arbitration Commission instead.

Funt's ruling concerns Li's request that Rao be forced to withdraw from the overseas process.

In his ruling, Funt wouldn't go that far. But he ordered him not to take further steps or to require Li to take steps in the arbitration.

He pointed out that Li lives in Vancouver, the corporation she and Rao started was formed in the province and the disputed funds and related property are all in B.C. as well.

"I am also satisfied that Mr. Rao is attempting to achieve an unfair tactical advantage," Funt wrote. "His petition for arbitration does not refer to the parties' romantic relationship or the current action."

Rao and Li do agree on one point: they both want the marriage declared void.