The background of this case involves a lengthy divorce dispute between the applicant, Nancy Wu, and the respondent, Anthony Di Iorio. The respondent is a successful entrepreneur in the cryptocurrency space and is the founder of Decentral Inc. Decentral Inc. as well as 8821488 Canada Ltd. were named as additional corporate respondents in the litigation.
The applicant had previously sought disclosure of the Decentral Server in late 2020. The applicant sought an order for the production of a copy of the respondent’s online server, the “Decentral Server”, on the basis that the server had unproduced documents that were relevant to her claims of unjust enrichment, joint family venture, and spousal support. The Decentral Server contained hundreds of thousands of documents.
The applicant argued that the respondents had not properly and thoroughly searched the entirety of the Decentral Server, and thus provided a deficient affidavit of documents. Part of the dispute was the search terms that could and/or should have been used by the respondents in searching the Decentral Server.
In an interim decision in December 2020, the Court found that the request for an electronic copy of the server was not proportional to the issues in dispute. 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. The fact that the search conducted by the Corporate Respondents did not include documents that the applicant had in her possession did not make the request proportional. The corporate respondents were willing to run searches using additional search terms and were willing to provide any further documents that were relevant upon the additional search.
The applicant provided further search terms in June 2021. The respondents took eight months to carry out the search and did not provide additional documents as the search terms generated too many results. The respondent performed further review on documents on the Decentral Server June 2023 and provided 204 additional relevant documents and claimed privilege over an additional 279 documents.
Should the Decentral Server be produced? Or is the applicant’s request for the production of the Decentral Server barred by issue estoppel (or res judicata)?
The December 2020 decision refusing the production of the Decentral Server was interim. Hence, issue estoppel and res judicata would not preclude the applicant from bringing a motion for the production of the Decentral Server. However, a motion for the same relief can only be considered, and potentially granted by the Court, if the applicant can demonstrate the presence of new material facts or material facts that were not previously discoverable by the applicant through an exercise of reasonable diligence.
The applicant submitted two new material facts.
First, she argued that the respondent’s failure to comply with his offer to conduct a thorough search of the Decentral Server using the applicant’s search terms was a new material fact. The Court found that the fact the applicant considered the respondent to be untrustworthy in his disclosure obligations was not new. This was not a fundamental factual difference from the factual record before the Court in 2020. Moreover, the Court in 2020 never ordered the respondent to conduct additional searches. The offer to conduct additional searches was made by the respondent.
Second, the applicant brought expert evidence of Susan Wortzman, an expert in the field of e-discovery. Ms. Wortzman opined that there were “far more practical, sensible, and less rudimentary methods” to find relevant documents on the Decentral Server than using search terms. The Court found that the parties chose and were satisfied to use this methodology of search terms in 2020. The applicant failed to produce evidence to explain why this evidence of an e-discovery expert could not have been put before the Court in 2020. Thus, the expert evidence, was not a new fact that was previously undiscoverable through the exercise of reasonable diligence.
The Court held that the applicant failed to discharge her legal onus and dismissed the motion.
If a party suspects deficient disclosure of electronic documents, the party should consider as early as possible whether the opinion of an e-discovery expert could be beneficial. If the party waits too long, the party should be prepared to explain why the expert evidence was previously undiscoverable through the exercise of reasonable diligence.