Executive Summary: Key Legal and Evidentiary Issues

• Pacific Reach Capital Ltd. applied for further and better disclosure of documents under Rules 7-1(10) and (11) of the Supreme Court Civil Rules, BC Reg 168/2009, arising from a dispute over a $250,000 investment entrusted to the defendants.
   
• Central to the underlying action are allegations that defendants Conor Donald Power, Luka Petkovic, and Parnitha Capital Corp. breached fiduciary duties, made misrepresentations, and concealed material facts regarding investment opportunities in Cannalife Capital Corp. and LEEF Holdings Inc.
   
• Disclosure obligations under subrule (10) cover documents that ought to have been produced at first instance, while subrule (11) is broader and extends to documents within a party's power that relate to any matter in question in the action.
   
• Applicants must describe the documents sought with reasonable precision; courts will not pare down overbroad requests on the applicant's behalf.
   
• Discovery evidence from both Mr. Power and Mr. Petkovic confirmed the existence of undisclosed communications, banking records, due diligence materials, and compensation arrangements central to the plaintiff's claims.
   
• The plaintiff's application for a verifying affidavit under R. 7-1(18) was dismissed, as the court found the dispute over production to be genuine rather than indicative of a dilatory or casual attitude toward disclosure.

Facts of the case

Pacific Reach Capital Ltd. (the "plaintiff") commenced proceedings against Conor Donald Power, Luka Petkovic, and Parnitha Capital Corp. (collectively, the "defendants") in relation to a $250,000 investment. The plaintiff alleges that in 2018, the defendants presented it with an investment opportunity, holding themselves out as experienced investors with a history of generating positive returns. The defendants allegedly represented that Cannalife Capital Corp. ("Cannalife") was on the precipice of going public, at which time the plaintiff would realize a substantial return. Relying on those representations, the plaintiff provided $250,000 to the defendants, on the understanding that the monies would be held by Parnitha Capital Corp. in trust and invested exclusively in Cannalife.

When Cannalife did not go public, the defendants allegedly recommended redirecting the plaintiff's investment to LEEF Holdings Inc. ("LEEF"), advising that a merger between LEEF and Cannalife was imminent and that LEEF would go public in early 2020. That did not occur. In April 2022, LEEF was acquired by a company known as Icanic Brands Company, Inc. and began trading at a value far below the plaintiff's expectations and allegedly far below what the defendants had promised. In its notice of civil claim, the plaintiff asserts that the defendants breached their fiduciary obligations by, among other things, acting in their own interests and to the detriment of the plaintiff's interests, and by failing to disclose material facts. The plaintiff further contends that the defendants breached their shared contractual duty of honest performance, deceived the plaintiff, and made misrepresentations on which the plaintiff relied.

The disclosure application

This matter came before the court on the plaintiff's interlocutory application for further and better disclosure of documents pursuant to Rules 7-1(10) and (11) of the Supreme Court Civil Rules, BC Reg 168/2009. The documents sought — collectively referred to as the "Requested Documents" — fell into five categories: (a) all correspondence between Mr. Power and Mr. Petkovic from January 2018 to the present discussing the plaintiff, its investment, Cannalife, LEEF, and the formation of Parnitha; (b) all correspondence between the defendants and Cannalife and/or LEEF relating to the plaintiff, its investment, go-public timelines, valuations, and compensation to be received by the defendants; (c) all corporate, financial and accounting records for Parnitha from June 1, 2017 to December 31, 2021; (d) all due diligence records prepared or reviewed by the defendants regarding Cannalife and LEEF from September 1, 2018 to August 13, 2021; and (e) copies of any agreements, whether formal, written or records of verbal agreements, between the defendants and Cannalife and/or LEEF. The plaintiff also sought an order under R. 7-1(18) requiring the defendants to provide an affidavit verifying their List of Documents. The defendants had resisted these demands, consistently asserting that the scope of the requests was too broad and that the Requested Documents were irrelevant based on the pleadings. Demands for further and better production had been made and reiterated in correspondence dated October 11, 2024, December 27, 2024, and January 16, 2026.

Reasoning and analysis

Associate Judge Robinson outlined the governing legal framework. Under R. 7-1(1), a party must serve a List of Documents setting out all documents in that party's possession or control that could be used to prove or disprove a material fact at trial. Subrule (10) addresses documents that ought to have been disclosed at first instance. Subrule (11) is broader and extends to documents within a party's power that relate to any or all matters in question in the action — a standard analogous to that described in Compagnie Financiere du Pacifique v. Peruvian Guano Co. (1882), 11 Q.B.D. 55. The applicant bears the onus of satisfying the court that the documents exist in the possession, control, or power of the party from whom they are sought, and that they are relevant, with relevancy determined by reference to the pleadings: Parise v. Adelson, 2021 BCSC 891 at para. 11. The court also emphasized that documents must be described with reasonable precision — it is not appropriate to cast a wide net and entrust the court to pare down the request, a principle discussed in Montaigne Group Ltd. v. St. Alcuin College for the Liberal Arts Society, 2026 BCSC 588 at para. 17.

Regarding the existence of the documents, the court was satisfied, based primarily on the defendants' own discovery evidence, that the Requested Documents existed or could be inferred to exist. Mr. Power confirmed that communications between him and Mr. Petkovic related to the litigation occurred and that he did not believe emails and text messages had been disclosed. Both Mr. Power and Mr. Petkovic confirmed the existence of email communications with Cannalife and LEEF representatives, including periodic updates on those companies' status. Mr. Power confirmed banking records related to the withdrawal of Parnitha's investment in Cannalife existed, Mr. Petkovic testified that Parnitha maintained records tracking each investor's shares in LEEF, and Mr. Petkovic further confirmed arrangements with each of Cannalife and LEEF to compensate the defendants for success in generating investment. On relevance, the court found communications among the defendants and between the defendants and Cannalife and LEEF to be relevant to the defendants' state of knowledge regarding the investment opportunities presented to the plaintiff — a central issue in the litigation. Due diligence records were similarly found to be undeniably relevant. Agreements or written arrangements between the defendants and Cannalife and/or LEEF were found relevant to assessing whether the defendants were in a conflict of interest and potentially in breach of their alleged fiduciary obligations to the plaintiff. As for the corporate, financial, and accounting records of Parnitha (category (c)), the court noted that while those records were relevant, the proposed order was overbroad on its face. Rather than pare down the order, the court addressed the concern by reading the scope as limited to documents demonstrating "the initial investment to Cannalife, the return of those funds, and the subsequent transfer to LEEF."

Ruling and outcome

Associate Judge Robinson granted all orders sought in paragraph 1 of Part 1 of the notice of application — categories (a), (b), (c), (d), and (e) of the Requested Documents. The defendants are required to prepare and serve an Amended List of Documents listing each of the Requested Documents and to provide the plaintiff with copies of those documents, all within 30 days of the release of the reasons for judgment. The application for an order compelling the defendants to swear an affidavit verifying their List of Documents under R. 7-1(18) was dismissed, as the court was satisfied that the dispute over production was genuine and did not reflect a dilatory or casual attitude toward disclosure. Pacific Reach Capital Ltd. was the successful party on this application and was awarded costs of the application in the cause. No specific monetary quantum of costs was stated in the judgment.