Destiny Enterprises Canada Ltd. v. Kim

Destiny Enterprises Canada Ltd. v. Kim

The A‑Mart→E‑Mart asset sale was substantially performed and E‑Mart held beneficial title to the inventory, equipment and the equitable interest in the lease; A‑Mart and R. Kim (as controlling mind) knew or were reckless as to that ownership, failed in fiduciary obligations to obtain lease assignment, and unlawfully transferred and disposed of E‑Mart’s assets to Hi‑Mart, constituting conversion and equitable fraud; defendants are jointly and severally liable for compensatory damages, punitive damages and special costs as ordered.

Citation
2014 BCSC 299
Parties
Plaintiff: Destiny Enterprises Canada Ltd.; Defendant / Defendant by Counterclaim / Third Party: Richard Kim (also known as Hyun Chul Kim); Defendant / Defendant by Counterclaim: 628047 B.C. Ltd. (A-Mart); Defendant / Defendant by Counterclaim: 680868 B.C. Ltd. (Hi-Mart); Defendant / Landlord: Narland Properties (Tri-Cities) Ltd.; Claimant / Counterclaimant: E-Mart Food Centre Ltd.; Defendant / Claimant in Related Action: Sang Gab Kim (also known as Sang Gap Kim); Defendant / Third Party: Kyu-Hak Yon
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
25 February 2014
Procedural Posture
Civil / Judgment (reasons for Judgment)
Outcome
Judgment for E‑Mart and S. Kim; defendants liable for conversion and equitable fraud; awards for compensatory, punitive and special costs as set out
Legal Topics
Conversion, Equitable Fraud, Estoppel, Share Transfer, Lease Assignment, Fiduciary Duty, Damages, Punitive Damages, Special Costs
Source Language
English
Contract Property Tort Equity Corporate Law Conversion Equitable Fraud Estoppel +6 more

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Parties

Destiny Enterprises Canada Ltd.

Plaintiff

Richard Kim (also known as Hyun Chul Kim)

Defendant / Defendant by Counterclaim / Third Party

628047 B.C. Ltd. (A-Mart)

Defendant / Defendant by Counterclaim

680868 B.C. Ltd. (Hi-Mart)

Defendant / Defendant by Counterclaim

Narland Properties (Tri-Cities) Ltd.

Defendant / Landlord

E-Mart Food Centre Ltd.

Claimant / Counterclaimant

Sang Gab Kim (also known as Sang Gap Kim)

Defendant / Claimant in Related Action

Kyu-Hak Yon

Defendant / Third Party

Procedural Posture

Civil / Judgment (reasons for Judgment)

Legal Issues

  1. 1 Whether E-Mart acquired ownership of the Grocery Store assets under the A‑Mart/E‑Mart agreement
  2. 2 Whether A‑Mart and R. Kim were estopped from denying completion of the sale to E‑Mart
  3. 3 Whether transfer of 53 E‑Mart shares to S. Kim was unenforceable for lack of consideration or duress

Ratio Decidendi

The A‑Mart→E‑Mart asset sale was substantially performed and E‑Mart held beneficial title to the inventory, equipment and the equitable interest in the lease; A‑Mart and R. Kim (as controlling mind) knew or were reckless as to that ownership, failed in fiduciary obligations to obtain lease assignment, and unlawfully transferred and disposed of E‑Mart’s assets to Hi‑Mart, constituting conversion and equitable fraud; defendants are jointly and severally liable for compensatory damages, punitive damages and special costs as ordered.

Court Disposition

Judgment for E‑Mart and S. Kim; defendants liable for conversion and equitable fraud; awards for compensatory, punitive and special costs as set out

Orders

  • E‑Mart recovers jointly and severally from the defendants damages for equitable fraud and conversion in the amount of CAD 204600
  • Punitive damages awarded against the defendants in the amount of CAD 35000