Executive Summary: Key Legal and Evidentiary Issues

• Scope and enforceability of a registrar’s production order over a successful party’s counsel files in a special costs assessment.
• Adequacy of the defendants’ privilege and relevance claims over 13,824 records, including whether generic descriptions (“presumed privileged” / “not relevant”) meet the evidentiary burden.
• Impact of concurrent litigation in Ontario, Michigan, Switzerland, and in the Court of Appeal on what can properly be included in a Supreme Court of British Columbia special costs assessment.
• Use and limits of solicitor-client and litigation privilege when a party seeks substantial special costs and relies on former counsel’s accounts without full disclosure.
• Serious credibility and evidentiary concerns arising from Dr. Pourtaghi’s affidavits falsely attributing “compliance” findings to the registrar, despite transcripts showing no such findings.
• Propriety of relying on large-scale, unspecific privilege/relevance notation lists as proof of compliance with disclosure obligations in complex costs proceedings.

Facts of the case

This decision arises from a long-running family and commercial dispute between Massimo Aki Nouhi (the original plaintiff and now defendant by way of counterclaim in the costs phase) and his niece, Nahid Pourtaghi, together with her company Naki Enterprises Inc. The underlying litigation went to trial before Justice Harvey. At the outset of the trial, Mr. Nouhi discontinued his claim, and the proceeding went forward solely on the defendants’ counterclaim. Harvey J. ultimately awarded costs to Dr. Pourtaghi and Naki, including special costs for a substantial portion of the litigation, increased party-and-party costs for the counterclaim, and party-and-party costs for certain applications.
The defendants then initiated a costs assessment before the registrar. They claimed about $500,000 in costs, of which approximately $310,000 were claimed as special costs based on accounts rendered by their former counsel. These counsel had acted not only in the British Columbia action but also in related or parallel proceedings in Ontario, Michigan, Switzerland, and in an appeal to the British Columbia Court of Appeal. Critically, the law firm had not maintained separate files for each jurisdiction or proceeding, and the defendants acknowledged that the special costs claim swept in work done in those other matters, as well as potentially for the Court of Appeal. Because the Supreme Court registrar has no jurisdiction to assess costs of Court of Appeal proceedings, and because costs incurred in foreign or out-of-province matters are not ordinarily recoverable in a British Columbia Supreme Court costs assessment, this significantly complicated the task of isolating what items were properly within the Costs Order.

Procedural history and the production order

Anticipating that the assessment of special costs would be complex, Registrar Gaily exercised the registrar’s powers under Rule 23-6(5) of the Supreme Court Civil Rules to make a comprehensive document production order on October 31, 2023, later reiterated on January 11, 2024. The order followed the principles in Gichuru v. Smith, which emphasize that proper scrutiny of special costs generally cannot occur without meaningful disclosure of the recipient’s counsel’s file. Under Gichuru, a party who wishes to preserve privilege over its counsel’s file while still seeking special costs faces a choice: waive privilege, delay the assessment until all appeals are exhausted, or abandon the claim to special costs.
In January 2024, one of the defendants’ former counsel produced to Mr. Nouhi’s counsel a USB device (the “2024 USB”) containing nearly 900 documents. This production, while significant, did not encompass the entire contents of counsel’s files. The defendants took the position that additional records within their former counsel’s files were privileged or irrelevant and therefore non-producible. In April 2024, Mr. Nouhi’s counsel delivered only a partial list of objections to the special costs, expressly noting that full objections could not be given until the defendants complied fully with the production order and produced their counsel’s files.
Throughout 2024, several pre-hearing conferences took place, and the registrar ordered that former counsel for the defendants (notably Mr. Lysak and Mr. Sorochan, K.C.) swear affidavits describing whether additional materials remained in their files, the nature of those materials, and any privilege claims. Those affidavits were eventually filed in mid-2024, but they did not address the detailed list of records later produced in 2025 and did not establish full compliance with the original Production Order.

Referral from the Supreme Court and tailored disclosure approach

In early 2025, after continuing disputes over disclosure, Mr. Nouhi applied to a Supreme Court judge, Justice Veenstra, for a stay of the costs assessment until the defendants complied with the registrar’s production order. In reasons indexed as 2025 BCSC 327, Veenstra J. declined at that stage to order a stay but emphasized the complexity of the assessment and the need for a clear determination by the registrar as to whether the Production Order had in fact been obeyed. He adjourned the stay application generally and referred the question of compliance back to Registrar Gaily for a substantive hearing (the present “Compliance Hearing”), directing that the registrar be provided with the full record of affidavits and transcripts of the relevant pre-hearing conferences.
Before this Compliance Hearing, a related decision, De Angelis v. Siermy, 2025 BCSC 1031, was released by Associate Judge Robertson. That case also dealt with the disclosure of a successful party’s solicitor’s file in a special costs assessment. There, the registrar adopted a “tailored disclosure” model: requiring production of a list of counsel’s file contents, specifying documents over which litigation privilege, solicitor-client privilege, or relevance objections were made, and giving the basis for each claim. This approach balanced the strong protection afforded to solicitor-client privilege with the need for transparency and fairness in testing special costs claims.
Taking guidance from De Angelis and similar authorities, Registrar Gaily adopted a similar tailored-disclosure approach in this case. At an August 2025 pre-hearing conference, the registrar ordered the defendants to serve, by a specified date, a list of documents from their counsel’s files identifying for each document whether solicitor-client privilege, litigation privilege, or a relevance objection was being asserted, and setting out the basis for each such claim.

The August 2025 list and its deficiencies

In response, on August 22, 2025, Dr. Pourtaghi delivered a Form 22 list of documents with two schedules. Schedule A enumerated the documents already produced on the 2024 USB. Schedule B, later re-sent in Excel form, set out what became known as the “August 2025 List,” comprising 13,824 additional records from counsel’s files. Within that list, thousands of documents were designated as subject to solicitor-client privilege, a small number as subject to litigation privilege, and the great majority of the remaining items as irrelevant to the British Columbia special costs assessment.
However, the descriptions in the August 2025 List were extremely generic and, in the registrar’s view, substantively inadequate to discharge the evidentiary burden associated with asserting privilege or irrelevance. For solicitor-client privilege, the explanation was often only “email correspondence presumed privileged unless otherwise shown,” or the equally broad “confidential communication with legal counsel for purpose of advice,” with no further context. Many relevance objections were justified merely by the notation “non-email document, not relevant to BC special costs.” Some entries combined a bare document description (for example, an affidavit or corrected reasons for judgment) with nothing more than the assertion that the document was a non-email and therefore “not relevant to BC special costs.”
The registrar highlighted specific examples to illustrate the pattern. Documents such as an affidavit filed in the litigation or a corrected judgment of a Supreme Court judge were simply marked as irrelevant with the same boilerplate phrase, without any explanation of why such clearly case-related materials would not be relevant to evaluating the reasonableness of fees or the scope of work claimed. Similarly, certain personal or family emails were designated as irrelevant on the basis that they related to other jurisdictions or corporate matters, again with purely conclusory language and without linkage to particular claims, issues, or time periods.
The litigation privilege designations were few in number but suffered a similar defect: they asserted privilege on the basis that the documents were created for the dominant purpose of litigation or settlement, but did not address whether that litigation had concluded (which it had, by 2023) or whether the privilege had otherwise been lost or waived. No further affidavit evidence was filed to support or particularize these claims in light of the registrar’s explicit directions.

Evidentiary concerns regarding affidavits and use of AI

A significant evidentiary and credibility issue arose from the contents of several affidavits sworn by Dr. Pourtaghi in 2025. In those affidavits (notably Affidavits #14, #16, and #20), she repeatedly swore that Registrar Gaily had already found, on the record at earlier pre-hearing conferences in July and September 2024, that she and Naki had “complied with all outstanding production requirements” and that the registrar had “rejected” allegations of non-compliance and confirmed the matter was ready to be set down for taxation, subject only to the plaintiff delivering objections. She even purported to quote the registrar’s exact words, such as “There is compliance.”
By the time these affidavits were sworn, Dr. Pourtaghi had already been provided with official transcripts of the relevant pre-hearing conferences, which showed that no such findings or statements had been made. Justice Veenstra’s earlier reasons also expressly noted that there had never been a judicial determination that the defendants had complied with the Production Order. Despite being alerted by opposing counsel that her characterizations did not match the transcripts, Dr. Pourtaghi persisted in filing further affidavits advancing the same assertions.
At the Compliance Hearing, she conceded that the transcripts did not support her sworn statements and attempted to characterize them as a “misunderstanding” or “good faith” attempt by a self-represented litigant to summarize the registrar’s directions. The registrar rejected this explanation, finding that Dr. Pourtaghi understood the nature of sworn evidence and had knowingly sworn false statements about findings that were never made. This conduct weighed heavily against her credibility and underscored the need for strict adherence to the transcript and actual orders, rather than litigant characterizations, in contested procedural disputes.
The registrar also noted that written submissions filed by Dr. Pourtaghi for the Compliance Hearing appeared to have been generated with the assistance of an AI program, because the documents contained typical AI-system boilerplate such as references to “integrating your new file content” and similar language. While the court did not prohibit her from using such tools, the registrar cautioned that any AI-assisted drafting must not involve unauthorized recording of court proceedings and should in any event be done outside, not during, the live hearing. The key concern remained that submissions, whether human- or AI-assisted, cannot contradict verified transcripts and court records.

No discussion of policy terms

Unlike insurance or coverage disputes, this decision does not involve interpretation of any insurance policy or contractual policy terms. There were no clauses of an insurance or other standardized policy instrument at issue. Instead, the core legal framework concerned the Supreme Court Civil Rules, the law of costs (including special costs), and the doctrines of solicitor-client and litigation privilege. The “terms” under discussion were, in effect, the conditions under which counsel’s files must be produced or described to allow a fair and informed assessment of claimed special costs, rather than the wording of any policy document.

The registrar’s determination on compliance and overall outcome

After reviewing the full record, including the 2024 USB production, the affidavits of former counsel, the August 2025 List of 13,824 additional records, the prior judgments of Harvey J. and Veenstra J., and the parties’ submissions, Registrar Gaily concluded that the defendants had not complied with the Production Order. The registrar found that the bare assertions of privilege and irrelevance contained in the August 2025 List, unsupported by detailed affidavit evidence, did not provide a sufficient basis to withhold those documents from the plaintiff in the context of a special costs assessment. The generic notations “email correspondence presumed privileged unless otherwise shown” and “non-email document, not relevant to BC special costs” were too conclusory to allow the registrar to balance privilege against the payor’s right to test the reasonableness of the claimed fees.
In light of these deficiencies, and given the false sworn statements about prior “compliance” findings, the registrar held that the defendants had not discharged their onus to demonstrate that they had produced what the Production Order required, or justified any withholding with specific, contextualized privilege or relevance claims. Accordingly, the registrar expressly found that the defendants—who are otherwise the successful parties in the underlying action and holders of the Costs Order—had failed to comply with the production obligations governing their special costs assessment.
As to the practical outcome, this decision does not finally determine the quantum of costs payable to any party. The underlying Costs Order in favour of Dr. Pourtaghi and Naki remains in place, but the assessment of the claimed approximately $500,000 in costs, including about $310,000 in special costs, cannot properly proceed until compliance with the Production Order is achieved. In this Compliance Hearing, the successful party is Mr. Nouhi, in the sense that the registrar accepted his position that the defendants have not complied with the Production Order, but no specific dollar amount is awarded or fixed in his favour in this decision, and the total monetary figure ultimately payable on costs (or any adjustments that may arise from this non-compliance) cannot yet be determined.