May.2.2016

B.C. Supreme Court clarifies the Rule in respect of the location of examinations for discovery of non-resident parties/party representatives

It is not uncommon for non-resident parties to commence actions or to be dragged into litigation in British Columbia. This raises issues, both legal and practical. One issue that can arise is: where should the examination for discovery of the non-resident party be held? In B.C.? Or where the non-resident party resides? One way or another, someone is going to be inconvenienced, but who? That issue was recently addressed in Huang v. Silvercorp Metals Inc., 2016 BCSC 778. This case brings some clarity on that point.

 

In Huang, the plaintiff delivered an appointment to examine for discovery a Dr. Feng, a representative of the defendant, Silvercorp Metals Inc., in Vancouver for a duration of five days. Silvercorp applied for an order striking the appointment and a direction that any examination of Dr. Feng take place in Beijing, where he resided. The Court was therefore tasked with determining the appropriate location of the examination for discovery of non-resident Dr. Feng.

 

Prior to Huang, there were two separate lines of authority. One holds that there is a presumptive right of a witness who resides outside of British Columbia to be examined where they reside and a strong showing of injustice is required to defeat that right: Bronson v. Hewitt, 2008 BCSC 1269 and Banque Indosuez v. Canadian Overseas Airlines Ltd. et al., [1989] B.C.J. No. 930 (S.C.). The other holds that the starting point for the analysis is that a non‑resident party is to be examined within British Columbia, although if it is just and convenient the Court can order otherwise: Le Soleil Hotel& Suites Ltd. v. Le Soleil Management Inc., 2007 BCSC 2049 and First Majestic Silver Corp. v. Santos, 2014 BCSC 1564.

 

The divergent approaches arose from different readings of the Supreme Court Civil Rules. As the Court in Huang noted at para. 11, the first line of authority flows from the view that the emphasis in the applicable Rule is on where the person to be examined resides. The second line of authority, however, considers the “express direction” in the applicable Rule that the examination is to take place “within 30 kilometres of the registry that is nearest to the place where the person to be examined resides”, and that as far as practicable the Rule applies to a person residing outside British Columbia.

 

The Court in Huang preferred the second line of authority for three primary reasons:

 

  1. First, the first line of authority ignores Rule 7-2(11), which provides: “Unless the court otherwise orders or the parties to the examination for discovery otherwise agree, an examination for discovery must take place at a location within 30 kilometres of the registry that is nearest to the place where the person to be examined resides”: para. 11.

 

  1. Second, related to the first point, the first line of authority is “based on a misreading of the Rule”. The Rule requires, as a starting point, parties to be examined for discovery within 30 kilometres of the “registry” nearest the party’s residence. “Registry” clearly means “a registry of the Supreme Court”, and such an interpretation is congruent with the definition under Supreme Court Act, R.S.B.C. 1996, c. 443 (“an office of the Supreme Court in a judicial district”): paras. 12-13.

 

  1. Thirdly, although there are two conflicting lines of authority, First Majestic from the second line of authority is the most recent decision and it was pronounced following a full consideration of the reasoning in Le Soleil, which in turn fully considered the reasoning in the first line of authorities. First Majestic is also consistent with Court of Appeal authority: para. 14.

 

The Court therefore concluded the applicable law is as follows: “the starting point for the analysis is that a non‑resident witness is to be examined within the province although the court has a wide discretion to order otherwise based on what is just and convenient to both parties”: para. 15.

 

Although it is helpful to have a clearer understanding of what legal test should be applied in these circumstances, this case certainly raises further issues that may need to be addressed through an amendment to the Rule.

 

Firstly, applied strictly, when one considers the registry nearest to where the non-resident resides, this decision can lead to nonsensical results. For example, for Ontario residents, it would be Fernie; for California residents, it would be Victoria; for Alaska residents, it would be Fort Nelson.

 

Secondly, it does not provide a definitive framework, as the Court still has “wide discretion” to order otherwise based on what is “just and convenient to both parties”. This is not always an easy question to answer. For example, what if the defendant lives in Sudan? For that individual to attend a discovery in B.C., it would require a trip to Dubai, a wait of at least two weeks while the embassy processes the visa application, and then onward travel to B.C. if the visa is granted, which is not a given. Alternatively, counsel could travel to Sudan, although that raises its own issues. Where does the balance of convenience lie in such circumstances?

 

While such an outrageous set of facts may arise only once in a blue moon, less severe fact patterns calling into question the balance of convenience are bound to arise. Thus, until the Rule is amended to provide more definitive answers in any given circumstance – which for all its warts, the first line of authority did provide – counsel will simply have to work together to determine what makes the most sense in all the circumstances or, failing agreement, attend chambers and let the Court decide.

Jordan A. Bank