Executive Summary: Key Legal and Evidentiary Issues

• Plaintiffs allege a fraudulent scheme resulted in approximately $850,000 being transferred to defendants under the guise of investing in COVID-related medical supplies for West African nations.

• Kelly Barber's liability turns on whether she knowingly received and used monies from the alleged fraud despite claiming separate finances from her common law spouse, Brian Foster.

• The court applied Rule 7-1(11) for party document production, using a relevancy test akin to the Guano test requiring documents to "relate to any or all matters in question."

• Non-party document production from National Bank of Canada Financial Inc. required a higher standard under Rule 7-1(18), necessitating specificity and potential capability of proving or disproving a material fact.

• Financial records predating the alleged 2021 fraud were deemed relevant to establish a benchmark for assessing subsequent changes in Ms. Barber's financial position.

• The plaintiffs' application was granted in full, with costs awarded in the cause.

Background of the dispute

This commercial litigation arose from what the plaintiffs characterize as a fraudulent investment scheme during the COVID-19 pandemic. The plaintiffs—12007231 Canada Inc. (doing business as JJK Supply), AMA Internation Group, Inc., Jason Wouters, and Kirk Aldridge—claimed they transferred approximately $850,000 to Brian Foster and/or Bags Sari Consulting (Canada) Ltd. over a three-month period from March to May of 2021. The plaintiffs believed they were investing in a venture which involved the sale and supply of vaccines and medical equipment to certain West African nations in the midst of the COVID pandemic. After transferring the monies, the plaintiffs allegedly discovered that the purported business venture was a "sham" and that the monies were used by the defendants for their own personal uses and gains.

Kelly Barber's alleged involvement

Kelly Barber, a named defendant, is the common law spouse of Brian Foster, having lived with him in a marriage-like relationship for approximately 30 years. She resides with Mr. Foster at a property registered solely in her name at 3617 West 15th Avenue, Vancouver (the "3617 Property"). The plaintiffs alleged that Ms. Barber knowingly received and used monies arising from the alleged fraudulent scheme to pay her personal expenses. Ms. Barber denied any liability, asserting that notwithstanding her long-term relationship with Mr. Foster, they have maintained separate finances throughout. She further denied that Mr. Foster has any legal or beneficial ownership in real property registered in her name and stated that she has been solely responsible for all costs associated with the acquisition and maintenance of the 3617 Property and another property she also owns at 3625 West 15th Avenue, Vancouver (the "3625 Property"). According to Ms. Barber, Mr. Foster's monetary contributions have been limited to a monthly "rent" payment of $4,000 which he has paid consistently since at least 2007.

The plaintiffs' application for document production

The plaintiffs brought an application seeking production of documents from both Ms. Barber and National Bank of Canada Financial Inc. (the "Bank"), a non-party to the litigation. From Ms. Barber, the plaintiffs sought: investment account statements for the years 2019 to 2022; credit card statements for the years 2019 to 2022; full monthly account statements including cheque images and e-transfers for the years 2019 to 2022; complete income tax returns including all T-slips, Notices of Assessment and schedules for the years 2017 to 2024; and copies of all documents including leases and payment records related to the rental of the 3617 Property and the 3625 Property from 2007 to 2022. From the Bank, the plaintiffs requested mobile deposit slip images for the years 2019 to 2022, copies of all correspondence, mortgage applications, mortgage renewals and promotional materials related to mortgages registered on title to the properties, and all documents related to pre-authorized debit agreements or payment instructions in respect of any mortgage registered on title to either property. Ms. Barber opposed the application, arguing primarily that the documents do not meet the threshold of relevancy. The Bank did not take a position on the application and disclosed a willingness to provide the documents sought upon being ordered to do so.

The applicable legal framework

The court considered document production principles under Rule 7-1. For documents sought from Ms. Barber as a party, the test under Rule 7-1(11) required that documents be within her "possession, power or control" and that they "relate to any or all matters in question in the action"—a standard akin to the Guano test. For non-party production from the Bank under Rule 7-1(18), the court held that a higher standard applies: documents must be described with specificity and must be potentially capable of proving or disproving a material fact, rather than being limited to potentially leading to a further train of inquiry. The court emphasized that the independent interests of non-parties must be safeguarded so that they are not required to embark on what may be an onerous task of finding, collecting and disclosing records where probative value is limited.

The court's analysis and ruling

Associate Judge Robinson found that the plaintiffs satisfied the requirements for both aspects of their application. Regarding Ms. Barber, the court determined that the extent to which Ms. Barber and Mr. Foster comingled their finances is directly at issue in the litigation and has been placed in issue by Ms. Barber through her own pleadings. The documents sought were directly relevant to testing Ms. Barber's assertions and would either demonstrate that Ms. Barber has unexplained income or sources of income, or they may be entirely supportive of her position. The court also found that banking and credit card statements from 2019 will serve to establish a benchmark against which subsequent changes to her financial position may be assessed and measured. Concerning the Bank's records, the court was satisfied that the requests were described with precision such that the Bank will have no difficulty in determining the scope of its disclosure obligations. The court noted that Ms. Barber had previously disclosed a number of her personal banking records containing references to various deposits described as "mobile deposits," and the plaintiffs are entitled to details of those deposits, including who made them and for what purpose.

Orders and outcome

The court granted the plaintiffs' application in its entirety. Ms. Barber was ordered to disclose and provide the requested documents within 21 days of the release of the reasons. The Bank was ordered to provide the enumerated documents within 21 days of being served with a copy of the order arising from the reasons. As conditions of the order, the plaintiffs were made responsible for paying the Bank's reasonable charges incurred in complying with the order, and were required to provide counsel for Ms. Barber with complete, unredacted copies of all documents obtained from the Bank within seven days of receipt. The plaintiffs, having been entirely successful on the application, were awarded costs in the cause. No specific monetary award on the underlying allegations was addressed, as this decision pertained solely to document production.