Court File and Parties

COURT FILE NO.: FS-18-03038 DATE: 20231117 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Nancy Wu Applicant – and – Anthony Di Iorio. 8821488 Canada Ltd & Decentral Inc. Respondents

Counsel: Aaron Franks, Ilana Zylberman Dembo and Adam Prewer, lawyers for the Applicant Harold Niman, Meysa Maleki and Jorge Cartaya, lawyers for the Respondent Anthony Di Iorio Duncan Boswell, lawyer for 8821448 Canada Ltd. & Decentral Inc.

HEARD: October 17, 2023

Endorsement

DIAMOND J.:

Overview

[1] As per the contents of my Endorsement dated October 17, 2023, on that day long motions were scheduled to proceed before me that entire day. There was insufficient time for the parties to address all of the issues sought on the long motions, and as such it was agreed that the time available would be best served by having the parties make submissions with respect to the applicant’s request for production of a copy of the Decentral Server (a Google drive server housing the electronic documents of the corporate respondents).

[2] Argument on the balance of the issues on the long motions will proceed before me on a second, full-day attendance scheduled for December 19, 2023.

[3] At the conclusion of the October 17, 2023 hearing, I took my decision under reserve.

Procedural History

[4] This application was commenced over five years ago, and the parties are still arguing over disclosure issues.

[5] In late 2020, Justice Kiteley heard motions brought by the applicant for interim spousal support and disclosure. Argument of that motion proceeded both orally, and subsequently in writing. Justice Kiteley released two separate endorsements dealing with the applicant’s motions. The first endorsement was released on December 10, 2020 (Wu v. Di Iorio 2020 ONSC 7646), and the second endorsement was released on March 26, 2021 (Wu v. Di Iorio 2021 ONSC 2332).

[6] I shall refer respectively to Justice Kiteley’s two endorsements as “the December 2020 endorsement” and the “March 2021 endorsement”. Of note, the applicant unsuccessfully moved for leave to appeal from the December 2020 endorsement.

[7] The background to the parties’ separation, and their respective versions of those events, is set out in paragraphs 2 through 18 of the December 2020 endorsement, and need not be repeated here. Those findings were made on an interim basis, and obviously do not bind me or the trial judge.

The Decentral Server

[8] The applicant’s request for the production of the Decentral Server is not a new one, and was previously addressed by Justice Kiteley in the December 2020 endorsement. As part of the applicant’s disclosure motion, she had requested that the respondents produce an electronic copy of the Decentral Server “containing any and all electronic files and documents from October 1, 2017 to August 27, 2020”.

[9] At that time, the applicant took the position that the respondents had not properly and thoroughly searched the entirety of the Decentral Server as evidenced by the respondents’ allegedly deficient affidavits of documents. The parties had previously argued over which search terms could and/or should be used by the respondents in searching the Decentral Server, which contains hundreds and thousands of documents.

[10] The applicant claims that the “unproduced documents” on the Decentral Server are relevant to her claims to unjust enrichment, joint family venture and spousal support. Decentral Inc. is a party to this family proceeding, and the applicant has never been an officer or director. As the applicant is currently an 8.7% shareholder of the corporate respondent 8821488 Canada Ltd. (“882”, the holding company while Decentral Ltd. is the operating company), she submits that the documents are still relevant for equalization purposes as well.

[11] The applicant submits that as the respondent produces documents that only he deems to be relevant, production of the Decentral Server is the only way to remedy the breaches of his disclosure obligations.

[12] In response to the applicant’s request in late 2020 that the respondent produce a copy of the Decentral Server, Justice Kiteley made the following findings (my emphasis in bold):

“I accept the assertion that the server contains gigabytes of data, consisting of more than 460,000 documents. To facilitate disclosure and in accordance with the Sedona Canada Principles, the Corporate Respondents created a list of search terms that has been provided to the Applicant. The Applicant takes the position that the search was inadequate because she had in her possession documents that she says fall within the search terms that were not produced. She does not trust any of the Respondents and does not want to rely on the Respondents and for that reason that she has asked for an electronic copy of the server so that she can conduct her own searches.

The Respondent has to comply with disclosure obligations with respect to documents and information in his possession, power and control. As controlling shareholder of 882 that owns all the shares of Decentral, the owner of the server, the Respondent can be ordered to produce the server but only if relevant and proportional. I agree with the Respondent that a request for an electronic copy of the server is not proportional to the issues in the case and the fact that the search conducted by the Corporate Respondents did not include documents she has in her possession does not make the request proportional.

At a motion for disclosure where the facts are contested, the court must exercise restraint and not make findings of fact or of fact and law that are not supported by the evidence. On this record, I am not persuaded that the request for an order that the Respondent produce an electronic copy of the server is relevant or proportional.

As counsel pointed out, the Corporate Respondents asked the Applicant to identify broader search terms but she has not done so, insisting upon having a copy of the server. The Corporate Respondents remain willing to have the Applicant provide additional search terms and, subject to their decision on relevance, they will comply.”

[13] After the release of both of Justice Kiteley’s endorsements, in early June 2021 the applicant provided search terms for the respondents to use for the new searches of the Decentral Server. It took the respondents nearly eight months to carry out the search using the terms provided by the applicant, and according to the applicant no additional documents were produced as the respondent advised that the search terms “generated too many results”.

[14] In early June 2023, the respondent informed the applicant that he had performed a further review of 56,000 emails on the Decentral Server, and located an additional 204 relevant documents, and a further 279 relevant documents that he claimed to be subject to privilege. These additional efforts on the part of the respondent did not commence until September 2022.

Issue to be Decided

[15] As Justice Kiteley has already dismissed the applicant’s request for production of the Decentral Server, the respondent takes the position that the motion before this Court must be dismissed by reason of issue estoppel, res judicata, abuse of process and/or collateral attack.

[16] As held by the Court of Appeal for Ontario in Kendall v. Sirard 2007 ONCA 468, an interlocutory order is still nevertheless binding on the parties, and “it is not open for the Court, in a case of the same question arising between the same parties, to review a previous decision not open to appeal”.

[17] Notwithstanding, as Justice Kiteley’s decision is not final, the doctrine of issue estoppel and res judicata would not “forever preclude” the applicant from bringing a motion for the same relief. However, as held in M. B.-W. v R.Q. 2015 NLCA 28, such a motion could only be considered, and potentially granted, by the Court if the applicant could demonstrate the presence of new, material facts, or material facts which were previously not discoverable by the applicant through the exercise of reasonable diligence.

[18] Accordingly, before I consider whether the Decentral Server ought to be produced at this time, I must be satisfied that there are new, material facts, or material facts not previously discoverable through the applicant’s exercise of reasonable diligence.

Decision

[19] For the reasons which follow, I am not satisfied that the applicant has discharged her legal onus on the record before this court, and the applicant’s motion must therefore be dismissed.

[20] I agree with the applicant that while Justice Kiteley previously dismissed her motion, her Honour did so on the record that was before the Court at that time. This is consistent with the existing jurisprudence, as I must determine whether a new, factual record containing new, material facts or material facts previously undiscoverable through the applicant’s exercising reasonable diligence, now exists.

[21] The applicant submits that there are two sets of new, material facts which satisfy the legal onus placed upon her. The first set of new facts is based upon the respondent’s failure to comply with his offer to conduct a thorough search of the Decentral Server using the applicant’s search terms. I do not find the record before this Court to show a fundamental factual difference from the record before Justice Kiteley in late 2020.

[22] On this motion, the fact that the applicant considers the respondent to be untrustworthy and delinquent in his disclosure obligations is, simply, not new. The applicant made the same submission before Justice Kiteley as noted in her Honour’s decision. Of note, as Justice Kiteley did not specifically order the respondent to carry out an additional search of the Decentral Server with the applicant’s search terms, but merely referenced the respondent’s offer to do so, Justice Kiteley was apparently content with dismissing the applicant’s motion for production of the Decentral Server without ordering the respondent to carry out any further searches of the Decentral Server.

[23] I find the case law relied upon by the applicant to be distinguishable from the case before me. In Ackerman v. Ackerman 2016 SKQB 353, the moving party adduced additional evidence supporting her concerns that her husband had diverted income to his new spouse. This was sufficient to permit the Court to revisit the moving party’s motion for disclosure.

[24] Whether or not the respondent has been shown to be holding back relevant documents is not relevant to the preliminary task before this Court. The same accusations against the respondent were made by the applicant before Justice Kiteley. Those accusations were that the respondent was not conducting proper searches of the Decentral Server, and was delinquent in his disclosure obligations. While other events may have occurred between December 2020 and now, the fact of the respondent’s alleged non-disclosure remains the same.

[25] The second new, material facts relied upon by the applicant is the expert evidence of Susan Wortzman tendered by the applicant. Ms. Wortzman is proffered as an expert in the field of e-discovery, and opines that there are far more practical, sensible and less rudimentary methods to find relevant documents in a server than a simple “search terms” approach used on the Decentral Server.

[26] At the outset of the hearing of the motion, there were submissions made with respect to the applicant’s objection to the respondent’s attempt to file a responding expert report after the conclusion of cross-examinations (ie. in alleged breach of Rule 39.02 of the Rules of Civil Procedure). This Court does not have to decide that issue, for even considering only the evidence of Ms. Wortzman, I am not satisfied that the applicant has met her legal onus.

[27] The parties chose and were satisfied to use the search terms methodology in 2020 (and beyond). There is no evidence before this Court explaining why expert evidence such as that of Ms. Wortzman could not have been tendered before Justice Kiteley in December 2020.

[28] There is no evidence before this Court supporting a contention that the alternative search methods proposed by Ms. Wortzman were unavailable or unknown as of late 2020.

[29] As such, the evidence of Ms. Wortzman, even if accepted by this Court, is not a new fact previously undiscoverable through the exercise of reasonable diligence. It cannot now lie in the applicant’s mouth to maintain that the opportunity to pursue alternative search methods has arisen or been reasonably discovered since the release of Justice Kiteley’s endorsements.

[30] Accordingly, the applicant’s motion for disclosure of a copy of the Decentral Server is dismissed.

Costs

[31] In light of the fact that the balance of the law in motions are scheduled to be heard before me on December 19, 2023, I am reserving the issue of the costs of this motion until my disposition of the balance of the relief sought by the parties.

Diamond J.

Released: November 17, 2023