A lifetime of watching Disney movies has taught adult child me that the familial bond is something truly sui generis.
The bonds we share with our family, by birth or otherwise, run deeper than blood. It’s a kind of relationship that’s been tempered by the raging fires of sibling rivalries and parental pressure, quenched in the waters of unconditional familial love, and ultimately forged by the daily vicissitudes of life.
Even when we are separated from our family, we are never apart. Princess Anna and Princess Elsa taught me that.
When Lilo and Nani worked together to save Stich from the Grand Councilwoman, I discovered that I too could summon the courage already within me to face an inter-dimensional, technologically superior galactic alien empire to save a loveable, blue-furred, extra-terrestrial dog creature for the simple reason that he is my ‘ohana.[1]
You see, there is nothing that can break the bond we share with family.
But $1,664,886.24 in misappropriated trust funds sure can.
The Facts
In Chung v. Chung, 2025 BCCA 136, brothers J and W agreed to purchase two apartment buildings in Vancouver as a joint investment. Both buildings were beneficially owned by J and W but legally owned by corporations holding the properties as bare trustees. W, who resided in Vancouver, managed the properties while J, who resided out of the country, was the passive investor.
In exchange for this arrangement, W received an annual 5% management fee and was prohibited from withdrawing the funds from the corporate trustees without J’s consent and it was agreed that any income generated by the properties would be disbursed to J and W in proportion to their interests. At different points in time, W withdrew $1,168,131.04 and then a further $496,755.20 from one of the corporate trustees and deposited the money into his personal bank account without J’s consent.
Two issues were presented on appeal, namely that the trial judge erred in (1) rendering the constructive trust subject to the potential for reduction from the accounting process under the parties’ settlement agreement and (2) dismissing J’s punitive damages claim.
For present purposes, this article will discuss the latter of the two issues.
The Appellate Decision on the Punitive Damages Issue
Disagreeing with the lower Court’s conclusion not to award punitive damages, the BC Court of Appeal determined that punitive damages were “rationally” required given the misconduct attributed to W by the lower Court.
W’s misconduct “involved more than one breach, concerted efforts to conceal the wrongdoing over a protracted period, deception and deliberate falsehoods.”
Importantly, while the lower Court considered the family context to be “attenuating,” the BC Court of Appeal disagreed. It expressly found that the familial relationship between J and W was an aggravating factor:
“…it [the family context] has the opposite effect, heightening the seriousness of the breach of trust [Emphasis added.]. The judge found there was an explanatory context for Won’s breach of duties, namely, that some of his own money was intermingled with corporate funds and he “felt comfortable withdrawing money from the corporate accounts, without consulting Jae”: at para. 123. Won’s subjective belief in justification does not negate the fact of the breaches or their palpable wrongfulness [Emphasis added.]. Whatever the perceived justification for withdrawal may have been, the fact is that Won was prohibited from the kind of withdrawals made here without Jae’s consent. Not only did he fail to obtain that consent, he knowingly and actively concealed the withdrawals for a long time, and lied about them.”
In the circumstances, the BC Court of Appeal overturned the lower court’s decision in part and awarded J $100,000.00 in punitive damages.
Thanks for reading!
[1] ‘Ohana means family. Family means nobody gets left behind or forgotten.