ROYAL BANK OF CANADA v KADDOURA, 2013 ABQB 630
5.2: When something is relevant and material
5.5: When affidavit of records must be served
5.6: Form and contents of affidavit of records
The primary issue in this Application was whether, in a dispute between a 'straw buyer' and the lawyer who represented the straw buyer, files the lawyer handled for other straw buyers were producible in the litigation. Master Prowse first defined 'straw buyers' and how they drive the fraudulent schemes they are involved in before considering the Affidavit of Records. The Court stated that the Pleadings first had to be examined to determine whether documents were material and relevant for the purpose of production.
After examining the contents of the Parties' Pleadings in detail, Master Prowse considered the relevance and materiality of the previous transactions conducted by the lawyer involved in the transactions with the straw buyers. The key issue in this case was "who knew what", as between the lawyer and the straw buyer. Master Prowse held that documents regarding previous transactions, if they existed, were relevant and producible under Part 5. The Court stated that whether those records ultimately persuaded a Trial Judge was something a Trial Judge would ascertain after hearing the evidence in full; however, at this stage, the documents should be produced so the Trial Judge would have access to the complete “story” at Trial. Master Prowse held the view that the lawyers in question should be required to disclose the existence of previous purchase and mortgage transactions which involved either the same mastermind or agent of the mastermind or loans officer, subject to solicitor and client privilege.
Master Prowse declined to consider the solicitor and client privilege arguments presented by counsel, because if there were no files, the issue did not have to be engaged. The Court directed counsel for the lawyers to include those files in a Supplementary Affidavit of Records, indicating what portions were being claimed as non-producible pursuant to solicitor and client privilege, and the issue could then be addressed based on specific files.
Master Prowse concluded that, subject to solicitor and client privilege, the prior files were relevant and material and producible because they could establish a pattern which distinguished the transaction in question from a bona fide transaction.View CanLII Details