NextGen Energy Watervliet TWP, LLC v. Bremner

2025 BCSC 2660 NextGen Energy Watervliet TWP, LLC v. Bremner

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: NextGen Energy Watervliet TWP, LLC v. Bremner, 2024 BCSC 2660 Date: 20241211 Docket: S169686 Registry: Vancouver Between: NextGen Energy Watervliet TWP, LLC, Ted Gatzaros (deceased), Maria E. Gatzaros, personal representative of the Estate of Ted Gatzaros and trustee of the Ted Gatzaros Living Trust Plaintiffs And Charles William John Bremner and Wendy Junko Matsubuchi Defendants Before: The Honourable Justice Matthews Oral Reasons for Judgment (Re: Admissibility of Evidence from Examination for Discovery of Charles Bremner and from Examination in aid of Execution of Charles Bremner) Counsel for the Plaintiffs: J. Van Netten Q. Rochon Counsel for the Defendants: J.D. Whyte A. Miller, Articled Student Place and Date of Trial/Hearing: Vancouver, B.C. December 11, 2024 Place and Date of Judgment: Vancouver, B.C. December 11, 2024 [1] I delivered these reasons orally. I have amended them without changing the substance. Overview [2] The plaintiffs in this case, NextGen Energy Watervliet TWP LLC, Ted Gatzaros (deceased), Maria E. Gatzaros, personal representative of the Estate of Ted Gatzaros and trustee of the Ted Gatzaros Living Trust, to whom I will refer collectively as "NextGen," have read-in excerpts of the examination for discovery transcript of the defendant Charles William John Bremner and excerpts from an examination in aid

of execution of Mr. Bremner in another action, British Columbia Supreme Court Vancouver Registry action S131615. They seek to have this evidence admitted not only against Mr. Bremner, but also against his co-defendant, Wendy Matsubuchi. Mr. Bremner died in August 2022, before this case came to trial, and that is why NextGen has proceeded in this manner. [3] NextGen asserts that, despite that Rule 12‑5(46)(a) of the BC Supreme Court Civil Rules generally only permits read‑ins against the party who was examined, there is an exception where defendants share a commonality of interest. NextGen asserts that that exception applies here because NextGen's claim pertains to assets that it says Ms. Matsubuchi has legal title to and Mr. Bremner has a beneficial interest in, as well as assets that Mr. Bremner fraudulently conveyed to Ms. Matsubuchi to avoid NextGen executing on them. [4] NextGen also asserts that Rule 12‑5(54) allows the transcripts of a person who has died to be used in a civil action, and the evidence can be read-in under that subrule without any limitations as to against whom it is admissible. [5] Finally, NextGen asserts that the evidence is admissible under the principled exception to the hearsay rule. [6] Ms. Matsubuchi takes the position that Rule 12‑5(46) precludes this evidence being admissible against her, and the common interest exception does not apply because

Mr. Bremner cannot be said to be her representative. Ms. Matsubuchi asserts that Rule 12-5(54) does not apply because NextGen has not given the required notice and has been dilatory in bringing in action to trial. Ms. Matsubuchi asserts that the necessity and reliability requirements of the principled exception to the hearsay rule are not met in this case and, therefore, the evidence is not admissible through that route. Background [7] On August 9, 2012, NextGen obtained judgment against Mr. Bremner in the state of Michigan in the amount of $2,012,879US. NextGen commenced an action in British Columbia Supreme Court, Vancouver Registry S131615, for recognition and enforcement of the Michigan judgment. On April 7, 2016, NextGen obtained an order in S131615 for judgment in the amount of the Canadian equivalent of the amount of the Michigan judgment, post judgment interest, and costs. Mr. Bremner appealed that order and then abandoned the appeal. [8] Mr. Bremner and Ms. Matsubuchi have been married since around 1999 or 2000. Since 2010, they have been living in a home on 10th Street East in North Vancouver. Ms. Matsubuchi is the sole person on title to the East 10th Street home. Ms. Matsubuchi is also the sole person on title to a residence on 17th Street East in North Vancouver. That residence is a rental property. [9] In 2015, Mr. Bremner commenced a family law proceeding in

which he asserted that both residences are family property and filed certificates of pending litigation against them. In 2016, a few months after the order in the recognition and enforcement action, Mr. Bremner signed a release of any claims to those properties. Mr. Bremner was examined in aid of execution in the recognition and enforcement action, and during that examination, he testified that he had no income other than CPP, so his wife was carrying him. He testified that he should be paying rent for living in the home and rent for office space to Ms. Matsubuchi for the home that they had lived in for 13 years but could not afford to do so. He also testified that he paid half of the purchase price of $725,000 for the 10th Street East home. He testified that he did not own a vehicle but had use of one that his wife owned. He testified that his only assets were a painting, a framed medal, and a watch, and that everything else his wife financed. He testified that Ms. Matsubuchi had loaned him over $400,000 and that he released his claims brought in the family action against the properties to offset that loan. [10] In 2016, NextGen commenced this action against Mr. Bremner and Ms. Matsubuchi. NextGen asserts that Mr. Bremner provided money towards the purchase of the 10th Street East home and made financial contributions to the 17th Street East residence, giving rise to a

resulting trust or a constructive trust. NextGen also asserts that Mr. Bremner has transferred funds to Ms. Matsubuchi with the intent to defeat, hinder, or delay his creditors, including NextGen, or, alternatively, if the transfers were made to repay indebtedness, they had the effect of giving Ms. Matsubuchi preference over other creditors. [11] NextGen seeks an accounting, a tracing, a remedial constructive trust over the properties, an accounting of funds received by Ms. Matsubuchi, declarations of fraudulent preference, an order setting aside the transfers, and judgment against Ms. Matsubuchi. Rule 12‑5 (46)(a) [12] Ms. Matsubuchi submits that the read‑ins of the transcripts of the examination for discovery of Mr. Bremner and the examination in aid of execution of Mr. Bremner are only admissible against Mr. Bremner. The rule pertaining to the use of examination for discovery evidence includes Rule 12-5 (46), which reads as follows: (46) If otherwise admissible, the evidence given on an examination for discovery by a party or by a person examined under Rule 7‑2(5) to (10) may be tendered in evidence at trial by any party adverse in interest, unless the court otherwise orders, but the evidence is admissible against the following persons only: (a) the adverse party who was examined; (b) the adverse party whose status as a party entitled the examining party to conduct the

examination under Rule 7‑2(5) to (10); (c) if the person was examined under section 17 of the Class Proceedings Act as a member of a class, the members of that class. [13] It is common ground that the applicable subrule in this case is Rule 12‑5(46)(a), under which the read-ins are admissible against Mr. Bremner. [14] I pause to note that this rule does not pertain to examinations in aid of execution, evidence taken in another proceeding. Accordingly, if that evidence is admissible in this proceeding, its use is not restricted by the subrule. By the same token, this subrule does not make it admissible. It is clearly hearsay and so presumptively inadmissible. I will return to this issue. [15] With regard to the examination for discovery evidence, Ms. Matsubuchi relies on MacEachern v. Rennie, 2009 BCSC 795 at para. 11, in which Justice Ehrcke held that Rule 12‑5(46)(a) stands for the plain meaning of the words. The evidence is only admissible against the person who gave the discovery evidence. [16] NextGen relies on recent cases in which the subrule has been held to give way to an exception where the defendants have a common or identical position. That exception has been explained and used in Waheed v. JM Food Services Ltd., 2023 BCSC 2113, appeal allowed on other issues, 2024 BCCA 381; Nazerali v. Mitchell, 2015 BCSC 2560; and Le Soleil Hotel & Suites Ltd. v. Le Soleil

Management Inc., 2009 BCSC 1303. [17] In Le Soleil, Justice Dickson, then of this court, stated as follows at paras. 47 through 48: [47] The viva voce testimony of Dato Chee, Deborah Chang and Michael Tham and the Documents are plainly admissible evidence against all of the defendants. As a general rule, however, admissions made in the course of examinations for discovery are admissible against only the party who made them: Bower v. Cominco (1998), 1998 CanLII 3857 (BC SC), 53 B.C.L.R. (3d) 322 (S.C.). Accordingly, the discovery evidence read‑in by the plaintiffs would typically be admissible against only the individual defendant involved. [48] An exception to the general rule may arise where the admitting party has a common or identical interest with other defendants. In particular, where parties have a community of joint interest in the conduct of their business affairs and associated litigation to the extent one may fairly be characterised as representing the others that party's admissions on discovery may be used as evidence against the others: Tri‑Con Concrete Finishing Co. v. Caravaggio, [2002] O.J. No. 2771 (Q.L.) (Ont. Sup.Ct.). Such circumstances are unusual, however, and, in the absence of express agreement, should only be found where the independent evidence of commonality is abundantly clear. [18] Ms. Matsubuchi argues that in order to trigger the common interest

exception, there must be a finding that the evidence tendered is that of a party who can be "fairly be characterized as representing" the other defendant, such as in Waheed, where the evidence of the sole shareholder and director of three corporate defendants was tendered as against all three defendants. [19] I do not agree that the capability of being characterized as a representative of a co-defendant is a requirement which, if not met, renders the common interest exception inapplicable. It is an example, and a compelling one in Waheed, of how the common interest exception works, but it does not rise to the level of a requirement. Otherwise, the rule would have to be interpreted to preclude the use of the exception where there is abundantly clear commonality of interest and compelling reasons to use the evidence, but no finding of a relationship of representation. [20] In my view, the requirement is apparently and accurately described in the last sentence of Le Soleil at para. 48 where Justice Dickson held that the exception should be rarely applicable and "in the absence of express agreement, should only be found where the independent evidence of commonality is abundantly clear." [21] In my view, the independent evidence of commonality is abundantly clear in this case based on the defendants' common positions vis‑a‑vis NextGen's claims for an accounting, constructive trust,

and fraudulent conveyance. To succeed on either, NextGen must prove conduct by Mr. Bremner that has legal consequences for Ms. Matsubuchi. Mr. Bremner and Ms. Matsubuchi's interests in both these claims is identical. They both stand to gain by contravening evidence that proves Mr. Bremner made contributions to the properties in North Vancouver that gives rise to a beneficial interest to Mr. Bremner, and contravening evidence that Mr. Bremner transferred assets to Ms. Matsubuchi where such transfers meet the definition of a fraudulent conveyance. There is no daylight between their interests on the substantive matters in this case. [22] This complete or identical commonality is reflected by the manner in which they have defended the claims. While Mr. Bremner was alive, they had the same counsel; they filed a joint response to civil claim; they filed a joint amended response to civil claim; and they produced joint lists of documents. While Mr. Bremner is not represented at this trial because he is dead and his estate has not been probated, there is no one to give instructions, Ms. Matsubuchi's counsel is the same person that represented both of them while he was alive. In addition, I have had the benefit of hearing the evidence read-in, as it was clearly admissible as against Mr. Bremner. I have also heard the evidence that NextGen read-in as against Ms. Matsubuchi from her

examinations for discovery. [23] The evidence read-in demonstrates their commonality in interest and how intertwined the two defendants are in relation to NextGen's claims. For example, at Mr. Bremner's examination in aid of execution, he was asked about the purchase of the East 10th Street residence, and he testified that he had contributed to the purchase price. He subsequently sent an email to counsel for NextGen in which he addressed the evidence he gave and stated as follows: 1) 13 years ago my wife, Wendy, bought the house for around 750,000, financed from the net sale proceeds of her Boulevard Crescent home, a $140,000 loan from her father, and the balance from an HSBC loan. I had no part in the financing and was not registered on title.

2) Approximately three months later, I had generated some consulting income by then and gifted $550,000 to Wendy, which she used to repay her father and HSBC leaving title free and clear. They should have used the gifted funds any way she wished and decided to retire her debt.

3) I will make this distinction clear on the record for clarification when we next meet to finish up. Since items 1 and 2 are separated by three months and item 2 appears to me that I cannot claim an original 50 percent equity position in 748 as I declared yesterday. [24] When Ms. Matsubuchi was discovered, she testified that she did not recall Mr. Bremner transferring her money for the purchase of the East 10th Street home or transferring her that sum of money for a gift. She was taken to the email. She testified that she could not recall borrowing money from her father or the $550,000 referred to in that email. Ms. Matsubuchi testified that a half million-dollar gift is not necessarily something she would remember. [25] It is not possible to make sense of Ms. Matsubuchi's evidence without Mr. Bremner's evidence. This is one example. There are many. There are many financial transactions that were in the amounts of tens of thousands of dollars between the two of them over the years, and they were both asked about them. Their evidence is, therefore, factually intertwined, and, as I have already said, their interests in how that evidence is interpreted are legally identical. [26] I pause to note that the commonality of interests that I have found does not arise out of the fact that they were married. The type of commonality I am referring to could be where business parties invest

in a property, one as the owner on title and the other as a silent partner who contributes funds. If a judgment creditor of the silent party is asserting that those funds were contributed in contrary to the judgment creditor's rights, the interests of the silent partner and the person on title are identical, as in this case. [27] I conclude that the examination for discovery transcript read‑ins are admissible against Ms. Matsubuchi under the common interest exception. However, that does not address the examination in aid of execution evidence. In addition, in case I am wrong on common interest exception, I will consider the other routes by which the examination for discovery evidence might be admissible against Ms. Matsubuchi. Examination in aid of Execution [28] The use of transcript of examination in aid of execution is not restricted by Rule 12‑5 (46)(a), but it is not permitted by that rule either. And, given that it is hearsay, it is inadmissible unless there is an exception that permits its admissibility. [29] In this case there was an order made by Justice Loo on February 8, 2023, pertaining to the examination in aid of execution evidence. That order reads as follows: The plaintiffs may rely in the within action on the examination in aid of execution transcript of Mr. Charles Bremner from Supreme Court of British Columbia action registry number S131615 dated April 24th,

2017. [30] That application was not opposed by Ms. Matsubuchi, but her counsel states that was because the order was necessary to overcome the implied undertaking rule. Her lack of opposition did relate to the admissibility of the evidence or the extent of its admissibility. [31] I will not deal with the latter point because I do not need to, but I am not necessarily satisfied that Justice Loo's order is simply a release from the implied undertaking. It does not say that. Nevertheless, the evidence is hearsay and, therefore, needs a determination of its substantive admissibility. [32] The parties both agree that the potential applicable routes are Rule 12-5(54) or the principled exception to the hearsay rule. The parties agree that those two routes also apply to the consideration of whether the examination for discovery evidence is admissible, if it is not admissible under the common interest exception. [33] I turn to Rule 12-5(54) for both categories of read-ins. It provides for the use of sworn testimony of a deceased person in a trial as follows: (54) If a witness is dead, or is unable to attend and testify because of age, infirmity, sickness or imprisonment or is out of the jurisdiction or the witness's attendance cannot be secured by subpoena, the court may permit a transcript of any evidence of that witness taken in any proceeding, hearing or inquiry at which the evidence

was taken under oath, whether or not involving the same parties, to be put in as evidence, but reasonable notice must be given of the intention to give that evidence. [34] Ms. Matsubuchi says this rule is not applicable because reasonable notice has not been given. She asserts that the first time she had notice that the read‑ins were sought to be admitted under this rule was when counsel for NextGen made that submission at trial after reading in the evidence. [35] It is clear that no formal notice specifying Rule 12-5(54) was given, or at least none that has been brought to my attention. I also accept that the notice, which has been given through trial management conferences, of reading in discovery evidence would naturally give raise to the assumption that Rule 12-5(46) applies, and so for the examination for discovery evidence, notice that it would be tendered would not be notice that NextGen was seeking that it be tendered against Ms. Matsubuchi. [36] However, Ms. Matsubuchi has known, since Justice Loo made his order in February 2023, about the examination in aid of execution evidence that was going to be tendered and no Rule 12-5(46) assumption could be made about that evidence. As I have said, Ms. Matsubuchi did not object to Justice Loo's order. While NextGen does not say that she agreed to the evidence being admissible against her, it is clear that she had notice it was

being tendered. [37] Rule 12-5(54) was considered by Justice Gomery, then of this court, in Carnival Corporation v. Vancouver Fraser Port Authority, 2021 BCSC 643. In that case, a cruise ship hit a floating concession in Vancouver Harbour. The captain of the plaintiff's cruise ship was examined for discovery but died before trial. The plaintiff sought to tender examination for discovery evidence of the captain, in other words, to tender the evidence given by their own examination for discovery representative. The defendant argued that was not permitted by Rule 12‑5(46), and Rule 12-5(54) could not be used to get around Rule 12‑5(46). [38] Justice Gomery applied an earlier decision of this court in Malik (Admissibility of evidence of the Deceased Mr. Malik), 2007 BCSC 934, which held that a party could use Rule 12-5(54) to tender the evidence of its own deceased person or itself, despite Rule 12‑5(46). [39] Neither Carnival nor Malik are directly on point because, in this case, it is the party conducting the examination who seeks to use the evidence at trial under Rule 12-5(54), but both cases stand for the proposition that Rule 12-5(46) does not stand in the way of receiving the transcript of evidence given by a deceased person under Rule 12-5(54). [40] Justice Gomery also considered the relationship between Rule 12-5(54) and the principled exception to the hearsay rule at

paras. 21-29 of Carnival. He reviewed the decision of the Supreme Court of Canada in R. v. Bradshaw, 2017 SCC 35. Justice Gomery held that it was appropriate to consider the principled approach to hearsay and its consistent elements, necessity and reliability, in applying Rule 12-5(54). [41] With regard to necessity, Justice Gomery held that Rule 12-5(54) essentially codifies common law necessity because it only applies in the case of death or other condition rendering the witness unable to testify. Justice Gomery notes that necessity may not be established if the evidence is otherwise available. [42] In this case, Ms. Matsubuchi argues that the necessity requirement is not made because some of the evidence has either no relevance or only passing relevance to the claims against Ms. Matsubuchi and her actions. I will return to that issue, but I am of the view that the necessity requirement is generally met where a person is dead, unless the evidence is otherwise available. Mr. Bremner is dead. His evidence is not otherwise available. As I have said, I consider that sufficient to satisfy necessity, as explained in Bradshaw and Carnival. [43] I would not consider Ms. Matsubuchi's evidence to be "evidence that is evidence that could stand as a proxy for Mr. Bremner's evidence and therefore be otherwise available evidence". That is not a conceptually cogent position. In addition,

Ms. Matsubuchi's evidence reinforces the need for Mr. Bremner's evidence. Ms. Matsubuchi frequently testified that she could not remember or was not sure about financial transactions between herself and Mr. Bremner and did so to the extent that Mr. Bremner's evidence on those topics becomes more important and, as far as the evidence I have heard to date, the most cogent evidence on those topics. [44] Ms. Matsubuchi asserts that some, but not all, of the evidence is not necessary, because some of it does not relate to her. In general, I disagree. Some of the evidence, for example Mr. Bremner's date of birth, Mr. Bremner's ability to work post judgment, and the issue that prevented him being able to work are not directly relevant to the claims against Ms. Matsubuchi, but they do provide some context that is relevant to those claims and to the assertions that NextGen is making about the transactions between the two of them. [45] It is always difficult to understand how context evidence will play a role until all of the evidence has been heard. At this stage, I would simply say that some of the evidence that seems to relate mostly to Mr. Bremner, which is context evidence, is not entirely disconnected from the claims against Ms. Matsubuchi. I do not accept the argument that vast portions of the evidence tendered are irrelevant to the claims against Ms. Matsubuchi and, therefore,

not necessary. [46] There are some examples of context evidence that demonstrates the intertwining and interrelationship I have described already in these reasons. For example, I believe at his examination in aid of execution, Mr. Bremner testified that communication between him and Ms. Matsubuchi on financial matters was - I am not sure whether he used the term "was lacking" or "not very good," but he gave evidence that, essentially, they did not have good communication on financial matters. Ms. Matsubuchi testified about loans she asserts she made to Mr. Bremner, and when asked what the purpose for the loans was, testified that he would ask her for money and she would not question him because he was an adult and she did not consider it to be appropriate to question him about that. That could be an example of a lack of communication on financial matters, especially when the sums, which were, as I say, often in the tens of thousands of dollars, is considered. This is a couple who, according to Ms. Matsubuchi's evidence, she was loaning him money, and he was paying her interest on those loans, and she expected to be repaid, yet she did not consider it necessary for her to understand what the loans were for. In this way, Mr. Bremner's evidence about their communication is actually corroborative of Ms. Matsubuchi's evidence and is of assistance in assessing her evidence. [47] In

addition, Mr. Bremner, when testifying on things that are not immediately apparent to be directly relevant to the claims against Ms. Matsubuchi, often wove references to Ms. Matsubuchi into his evidence by saying that things such as his lawyer/estate planner had asked him how he was going to survive, and he said it was all down to his wife. Because of his lack of assets, he frequently referred to the fact that his wife was carrying him and he had no other fallback. In addition, large swaths of the evidence relate to funds flowing between the two of them, and that is certainly relevant to the claims against both of them. [48] Finally, as I have already stated, until all of the evidence is in, the full relevance of what may appear to be marginally relevant context evidence cannot be understood. The case law on the principled exception to the hearsay rule that Justice Gomery applied to Rule 12-5(54) makes the point that the finding of necessity and reliability does not determine what weight should be given to the evidence. [49] With regard to reliability, and returning to Carnival, Justice Gomery addressed the issue at paras. 27-30 of his judgment, explaining that the evidence must be sufficiently reliable to overcome the dangers arising from the difficulty of testing it, citing R. v. Khelawon, 2006 SCC 57 at para. 49; and Bradshaw at para. 26. [50] Justice Gomery addressed both

procedural and substantive reliability as explained in Bradshaw. He sated that "procedural reliability is established where there are adequate substitutes for testing the truth and accuracy of the statement"; whereas substantive reliability is a matter of whether there is "sufficient circumstantial or evidentiary guarantees that the statement is inherently trustworthy": Carnival at para. 28, citing Bradshaw at para. 27. [51] At para. 29, Gomery J. stressed the point I just made, that "threshold reliability" is the question on the admission of the evidence. The question of what weight should be given to the evidence by the trier of fact is not at issue at this stage. [52] At para. 30 of Carnival, Justice Gomery observed that "Rule 12‑5(54) requires that the evidence in question have been taken under oath or affirmation, providing some indication of procedural reliability", but that is not necessarily sufficient to establish procedural reliability. [53] In Carnival, Justice Gomery assessed procedural reliability and held that it was sufficient, despite that it was the party who had tendered the witness for discovery that wanted the evidence admitted. Justice Gomery noted that in those circumstances, there was a concern that the party who had conducted the examination for discovery may not have fully cross‑examined on that opportunity but may have been more focused on the

discovery element of examination for discovery as opposed to the search for admissions against interest element of an examination for discovery. [54] Justice Gomery also noted that the captain could not be considered a neutral witness because he would naturally be inclined to testify in a manner that defended his conduct during the collision. Nevertheless, given the fact that the discovery was under oath, there was an opportunity for cross‑examination, and that there was five hours of examination that was probing, Justice Gomery held that, overall, there was sufficient procedural reliability to hold the evidence reliable. [55] In this case, there was an examination in aid of execution and three examinations for discovery of Mr. Bremner. In between the examinations for discovery, Mr. Bremner had provided answers to outstanding requests; documents, including banking records, had been obtained by the plaintiffs; and the following discovery focused on answers to the outstanding requests and the more recently produced records that related to the evidence given before. Large portions were read in. I have no hesitation in saying that it was a probing examination, but at the same time it was not a cross‑examination. Open-ended questions were asked, questions that allowed Mr. Bremner to explain his evidence and his answers were a frequent feature of the examinations for discovery as

well as the examination in aid of execution. [56] In addition, in this case there are some substantive checks on reliability. As I have noted, Mr. Bremner testified about a lack of communication between himself and Ms. Matsubuchi on financial matters, and Ms. Matsubuchi's evidence corroborated that in other words, and vice versa. And, again, as Carnival makes clear, the weight to be given is still entirely at large. I may not accept some of what was read in from Mr. Bremner because of general assessment of veracity and reliability, as takes place in every case. I may find that his evidence does not accord with the preponderance of probabilities, or I may find that, where it conflicts with Ms. Matsubuchi's evidence, I could find that, after reflection on all of the evidence, to accept her evidence. [57] In addition to necessity and reliability, Justice Gomery discussed the following factors to be considered under Rule 12‑5(54). The first factor is unfairness to the examining party. This, as a feature, is more specific to that case than this case because of Justice Gomery's concern that the examining party did not conduct the examination in a manner that it might have if it knew that the evidence was going to be tendered as a substitute for the witness's viva voce evidence in the event of the witness's death. In this case, that unfairness would land with the party who is

tendering the evidence and, therefore, is not a factor that weighs against receiving it. [58] The second factor is whether the evidence can be said to be a fair portrait of the evidence of the deceased person. This concern can arise because a party who is cross‑examined may not be given an opportunity to give their evidence fully if they are simply answering questions put to them by a party opposed in interest. While this certainly was questions posed by a party opposed in interest, and some of them in the nature of cross‑examination, there were also, as I have observed, open-ended questions and chances for Mr. Bremner to explain his evidence. I consider it to be as fair a portrait of his evidence as can be expected in the circumstances. Like Carnival, there was extensive discovery evidence over many hours, all of which supports a finding of procedural fairness. [59] Another factor considered by Justice Gomery was where the responsibility for the inability of the witness to testify lies. In this case, Mr. Bremner has died, and so neither party is responsible in the sense of there being a deliberate attempt to make him unavailable. [60] The next question is an overarching question of fairness and where fairness lies. On this point, and related to the point of responsibility for the unavailability of the witness, Ms. Matsubuchi submits that fairness is served by excluding the

evidence as against Ms. Matsubuchi because NextGen was dilatory in prosecuting this action despite Mr. Bremner's ill health, and therefore should not be permitted the indulgence that Rule 12-5(54) provides. [61] Ms. Matsubuchi points to an affidavit that Mr. Bremner swore in this proceeding in 2020 when his attendance at a further examination for discovery was in issue. In that affidavit, he explained that, for over year, he had had significant cardiac health issues, had undergone surgery, had had strokes, and had had consequences due to his surgery that affected his mobility. Ms. Matsubuchi submits that the Michigan judgment was recognized in 2016. This action was commenced in 2016. By 2020, Mr. Bremner's illness was a problem with the case, but Ms. Matsubuchi submits the case ought to have been tried by then and that had happened, she would not be in a position to be subject to having her husband's evidence admitted against her. [62] NextGen points to the case of Kootenay Savings Credit Union v. Brar, 2021 BCSC 2027, where Justice Crerar said as follows: [39] The victim of a fraud almost always suffers from a significant knowledge imbalance. The law seeks to counteract this vulnerability by imposing on the defendant an evidentiary duty to rebut prima facie suspicious circumstances, referred to in the jurisprudence as "badges of fraud." [63] Leaving aside badges of fraud,

NextGen says that that judicially recognized knowledge imbalance means that cases like this takes time to develop. NextGen points to the fact that significant numbers of the banking documents that it relies on and examined for discovery on were not disclosed by Mr. Bremner and Ms. Matsubuchi voluntarily but as a result of court applications, that there were bank accounts that had not been identified by either of them which the plaintiff later became aware of through review of other documents produced and sought orders, and that it has been a time-consuming and painstaking process of putting together the evidence pertaining to multiple transactions and having serial examinations for discovery on those transactions. Having heard the evidence and seen some of the development of that through the read-ins from the serial examinations for discovery, I have a sense of that. Again, I have not heard Ms. Matsubuchi's evidence, so I am not making findings, but at this stage there is sufficient evidence to persuade me that, while it certainly took some time to get to trial, the challenges in putting the case together may have been largely responsible for that. [64] NextGen also asserts that there were issues in having the defendants attend serial examinations for discovery, including Mr. Bremner's ill-health, which caused some of them to be truncated and which caused him to not attend one

and resulted in the application in which he swore the affidavit that I have referred to. [65] In addition, I take into account what would typically happen in a case like this if Mr. Bremner had not died. The plaintiff would certainly be at liberty to read in the discovery evidence against him, but would have readily available other methods to have that evidence admissible as against Ms. Matsubuchi, including calling him as an adverse witness, in which case his evidence on the stand would be evidence at large and not restricted by Rule 12-5(46) or accepting an undertaking that he would be called by the defence and cross‑examining him on that, including putting his discovery evidence to him for him to adopt or to be impeached on it, in which case, again, all of that evidence would be generally admissible and not restricted by Rule 12‑5 (46). The problem preventing that usual course of events in this case is Mr. Bremner's passing away before trial. [66] In addition, Ms. Matsubuchi has had the advantage of many opportunities, since this action was commenced, to understand both her and her husband's evidence in order to defend herself. She has had personal knowledge of the matters that are at issue, which concern transactions in which she was a participant or recipient or alleged to be a recipient. As I have said and explained, her interests are directly aligned with those of Mr.

Bremner. If the evidence is admitted for the limited purposes of the claims commenced against Mr. Bremner, justice will not be done because the claims against him are inextricably intertwined with claims against Ms. Matsubuchi, which she has the apparent advantage in understanding. [67] Accordingly, I hold that the portions of the examination for discovery and examination in aid of execution which have been read in to evidence are admissible under Rule 12-5(54). [68] Regarding the principled exception to hearsay, I have dealt with these principles above in my assessment of Rule 12-5(54), and for the reasons I have given, they are satisfied in this case. Accordingly, if the evidence from the examination for discovery and the examination in aid of execution of Mr. Bremner was not admissible under Rule 12-5(54), I would admit it under the principled exception to hearsay rule. Disposition [69] The evidence tendered from the examination for discovery and the examination in aid of execution are in evidence as against both Mr. Bremner and Ms. Matsubuchi. If Ms. Matsubuchi seeks to have other portions of that evidence admitted, she may apply. The parties should expect that the court will undertake a similar analysis as in these reasons if that application is brought. "Matthews J."