Executive Summary: Key Legal and Evidentiary Issues

• Justice Matthews upheld a prejudgment garnishing order of $646,418.86 against Response Biomedical Corp., rejecting the argument that Dr. Kinnaird's severance claim was not a liquidated debt.
   
• Response Biomedical's disclosure objections failed because the undisclosed allegations did not bear on whether the debt was due and owing.
   
• Undue hardship arguments were rejected for lack of evidence tying Response Biomedical's financial difficulties specifically to the garnished funds.
   
• A separate application by Dr. Kinnaird for summary judgment was dismissed by Justice Milman because of unresolved factual disputes.
   
• Conflicting evidence on whether Dr. Kinnaird held a disclosable interest in her own employment contract prevented summary resolution of that issue.
   
• Allegations of just cause for termination, including conflict-of-interest conduct, also required a full trial given contested evidence from both sides.
   

Facts of the case

Dr. Barbara Kinnaird was chief executive officer of Response Biomedical Corp. ("RBC"), a British Columbia diagnostics company, having joined the company in August 2004 and been promoted from chief operating officer to CEO in May 2015. Following her promotion, she renegotiated her employment contract, which was approved by the board of directors through a signed consent resolution in December 2015 and formally executed in January 2016. That contract entitled her to 24 months' base salary and a prorated incentive payment in lieu of notice if RBC terminated her without providing 24 months' written notice.

RBC terminated Dr. Kinnaird's employment around the turn of the year [the record is inconsistent on the precise date: one decision describes termination as occurring "in December 2024," while both decisions' detailed chronologies point to early January 2025 — a text message and phone call on December 22, 2024, a meeting on January 3, 2025, and a formal termination letter on January 6, 2025]. RBC paid her eight weeks' severance, the statutory minimum, on January 9, 2025, rather than the 24 months called for in her contract. Dr. Kinnaird commenced an action against RBC in March 2025, and RBC responded with a counterclaim alleging she had breached her contract and fiduciary duties by engaging in outside business activities, including consulting and coaching ventures and involvement with a company called HyLiDx, and alleging these activities amounted to just cause for termination.

On November 13, 2025, Dr. Kinnaird obtained a prejudgment garnishing order without notice to RBC, resulting in $646,418.86 being paid into court. RBC applied to set that order aside, an application heard by Justice Matthews and decided in reasons released July 7, 2026 (2026 BCSC 1256). Separately, Dr. Kinnaird applied for judgment by way of summary trial on her severance claim and to dismiss RBC's counterclaim; that application was heard by Justice Milman and decided in reasons released September 4, 2026 (2026 BCSC 1702). A five-day trial is already scheduled to begin May 17, 2027.

Policy and legislative provisions at issue

The garnishing order application turned on the Court Order Enforcement Act, R.S.B.C. 1996, c. 78 ("COEA"). Section 3(2)(d) requires an affidavit supporting a prejudgment garnishing order to state that an action is pending, the time of its commencement, the nature of the cause of action, the actual amount of the debt claimed, and that it is justly due and owing. Section 5(2) separately gives the court discretion to release garnished funds where the order is unjust, unnecessary, an abuse of process, or causes undue hardship.

RBC's summary trial defences relied on sections 147, 149, and 151 of the Business Corporations Act, S.B.C. 2002, c. 57 ("BCBCA"). Section 147 defines when a director holds a "disclosable interest" in a contract, while carving out contracts relating merely to the director's own remuneration. Section 149(2) bars a director with a disclosable interest from voting to approve that contract. Section 151, however, provides that a contract is not invalid merely because a director had an undisclosed interest or the board did not approve it. RBC also pointed to a conflict-of-interest clause in Dr. Kinnaird's employment contract, which barred her from engaging in other paid employment or consulting activity without board approval, and from acting where her private interests conflicted or could be perceived to conflict with her obligations to RBC.

Reasoning and analysis

On the garnishing order application, Justice Matthews held that Dr. Kinnaird's claim was for a liquidated debt, not damages, because contractual severance payable in lieu of notice — even when payable in installments over 24 months — gives rise to a debt fixed by the terms of the contract rather than a sum requiring assessment. She found the 24 months of pay in lieu of notice was payable or accruing due as of the date of termination, and that only the timing of payment, not the underlying entitlement, extended over 24 months. On disclosure, the court found that the allegations RBC said were omitted from Dr. Kinnaird's supporting affidavit — including its claims of dismissal for cause and its counterclaim for breach of fiduciary duty — did not bear on whether the debt was liquidated and due and owing, and so were not required to be disclosed. On the question of undue hardship, the court found RBC's evidence of financial harm was underdeveloped, noting RBC's revenue figures suggested its difficulties predated the garnishment, while the uncertain timeline to trial and evidence suggesting RBC's majority shareholder had discussed winding down the company supported maintaining the order against the risk of a "dry judgment."

On the summary trial application, Justice Milman applied the suitability factors summarized in Saran v. Cartonio, Inc., 2020 BCSC 556, considering whether the necessary facts could be found on the record and whether it would be unjust to decide the case summarily. He identified two central disputes: whether the severance covenant was unenforceable because Dr. Kinnaird voted to approve her own contract, and whether RBC had just cause to terminate her. On the first issue, he found it could not be determined on the record whether the severance term was so generous as to constitute a disclosable interest, or whether the approval process — including a rushed December 2015 consent resolution described in an email from RBC's then-CFO — was nonetheless fair and reasonable to RBC. On the second issue, he found extensive conflicting evidence between Dr. Kinnaird and RBC's interim CEO on the causes of RBC's declining financial performance, whether Dr. Kinnaird neglected her CEO duties, whether her outside activities were board-approved or benefited RBC, and whether HyLiDx was a competitor. Because neither party had cross-examined the other's affiants and no discovery had occurred, the court concluded these disputes could not be resolved without a trial.

Ruling and overall outcome

In 2026 BCSC 1256, Justice Matthews dismissed Response Biomedical's application, leaving the prejudgment garnishing order of $646,418.86 in place in favour of Dr. Kinnaird. In 2026 BCSC 1702, Justice Milman dismissed Dr. Kinnaird's application for summary judgment, holding that the matter must proceed to the trial already scheduled for May 17, 2027, and ordered that the costs of that application be payable in the cause. Neither decision resolved the underlying merits of Dr. Kinnaird's severance claim or RBC's just-cause and contract-enforceability defences, and no final monetary award has been made; the garnished funds remain held pending the outcome of the trial.