Executive Summary: Key Legal and Evidentiary Issues

• Ms. Xu appealed the dismissal of her negligence claim against Ndax Canada after losing cryptocurrency to a third-party scam.
   
• Fresh evidence regarding the scammers' identities, cell phone records, and post-traumatic stress documentation was proposed for admission on appeal.
   
• Trial fairness was challenged on the basis of self-representation and language barriers, including an alleged denial of interpreter access.
   
• Palpable and overriding factual errors were alleged concerning an audio recording of a key phone conversation with an Ndax employee.
   
• Reviewable legal errors were claimed in the trial judge's negligence analysis, including her treatment of the applicable standard of care.
   
• Deference to the trial judge's findings ultimately led the Court of Appeal to dismiss both the fresh evidence application and the appeal.
   

Facts of the case

Yan Li Xu opened an account on the cryptocurrency trading platform operated by Ndax Canada on 14 April 2023. She deposited funds, purchased cryptocurrency, and over the following four weeks instructed Ndax to transfer the cryptocurrency in three separate transactions to a digital wallet. Unbeknownst to Ndax, the wallet was controlled by a third party who had convinced Ms. Xu she could profit by following his instructions; she later learned this individual was connected to a group of scammers operating under the name Encrypt. Before processing the transactions, Ndax required Ms. Xu to acknowledge automated risk warnings, spoke with her by phone on multiple occasions, and evaluated the transactions using an independent risk assessment tool called BitRank. Ms. Xu, however, disregarded Ndax's warnings, misrepresented that the destination wallet was her own, and pressed Ndax to complete the transfers. The police notified Ndax of a scam complaint involving Encrypt on 23 May 2023, after all three transactions had already been processed. Ms. Xu subsequently sued Ndax in negligence, and the Supreme Court of British Columbia dismissed her claim, prompting this appeal.

Policy and legislative provisions at issue

The appeal centered on Ndax's internal risk-management documents rather than statutory provisions. The court examined Ndax's User Agreement and Risk Disclosure, both of which clients must confirm having reviewed during account opening, and which contain warnings about cryptocurrency risks and the irreversibility of completed transactions. Ms. Xu argued the trial judge erred in relying on these documents because the versions entered into evidence were dated after her transactions. The Court of Appeal found this argument unpersuasive, noting the trial judge declined to rely on the User Agreement at all, and that the Risk Disclosure was only one of several warnings Ndax provided, alongside personal phone conversations cautioning Ms. Xu about third-party manipulation and the finality of cryptocurrency transfers.

Reasoning and analysis

Justice Riley, writing for the court, addressed four categories of argument. On trial fairness, the court found no merit to the claim that Ms. Xu was denied an interpreter, since she had not requested an adjournment or other relief and had simply asked for the court's patience; the record showed she was able to testify, cross-examine witnesses, and argue her case effectively despite self-representing. On fresh evidence, applying the criteria from Palmer v. The Queen, the court declined to admit evidence about the scammers' identities, cell phone records, and post-traumatic stress documentation, finding much of it failed the due diligence threshold and none of it material to the trial's outcome. Regarding alleged factual errors, the court deferred to the trial judge's acceptance of testimony from Ndax employee Mr. Khangsar over Ms. Xu's competing recollection of a key phone call, finding no palpable and overriding error. On the negligence analysis itself, the court applied the standard of review from Housen v. Nikolaisen and Leung v. Shamtanis, concluding the trial judge's finding that Ndax met its standard of care — based on automated warnings, phone conversations, and BitRank risk assessments across all three transactions — was fully supported by the evidence and free of extricable legal error.

Ruling and overall outcome

The Court of Appeal dismissed both the application to adduce fresh evidence and the appeal itself, with Justices Griffin and Winteringham concurring with Justice Riley's reasons. Ndax Canada was the successful party, and the decision does not specify any monetary award, costs, or damages ordered in connection with the appeal.