Executive Summary – Key Legal & Evidentiary Issues

• Allegations of shareholder oppression tied to the forced redemption of shares at undervalued prices.

• Dispute over wrongful dismissal following the plaintiffs’ removal from the hay export business.

• Claims of civil conspiracy to exclude plaintiffs from future business growth and valuation benefits.

• Contested relevance and production of valuation documents from 2019 and 2021 used for internal and external purposes.

• Confidentiality concerns surrounding emails and business projections provided to valuators.

• Disagreement on whether loan applications and business transaction documents involving valuations are relevant to the claim.

Facts of the Case

The dispute centers around a collapsed business relationship in a hay export operation based in British Columbia and Idaho. The plaintiffs—Judd Ying Yu Wu, Jessica Ju Ying Wu, and their company Alfalfa Holdings Ltd.—co-founded and managed a hay farming and export business with several other parties, including TopHay Leo Farms Ltd. and its affiliates (collectively referred to as "TopHay").

Judd Wu was a director and manager of day-to-day operations, while Jessica Wu handled administrative and bookkeeping roles. The business expanded significantly, including a joint venture in Idaho, and various corporate reorganizations followed. Tensions escalated when, in 2018 and 2019, the plaintiffs were allegedly ousted from management roles and stripped of their shares in the business.

The plaintiffs initiated legal proceedings alleging:

• Wrongful dismissal

• Shareholder oppression through forced redemption of Alfalfa Holdings’ shares at an undervalued price of $0.42

• Civil conspiracy to remove the plaintiffs from the company and benefit from its projected growth without them

The defendants responded with their own claims, accusing Judd Wu of financial misconduct, overbilling, and unauthorized transactions. Over the course of the litigation, disputes over document disclosure became a central focus.

Arguments and Court’s Analysis

The plaintiffs sought production of:

1. Four emails and attachments sent to MNP LLP for the preparation of a 2021 valuation report

2. All documents where TopHay used valuations or appraisals in business or loan contexts

3. Special costs and sanctions under Rule 22-7 of the Supreme Court Civil Rules for alleged non-disclosure by the defendants

1. Disclosure of Emails and Attachments

The court found that the associate judge had erred in refusing to order disclosure of the emails and attachments. These were directly used in the 2021 valuation report (valuing TopHay Leo at $68 million), a figure relevant to determining whether the plaintiffs were treated unfairly in the share redemption. Despite defendants’ concerns about confidentiality and competitive harm, the court ruled that disclosure should be made to plaintiffs’ counsel and expert only, under controlled conditions.

2. Disclosure of Valuations Used in Loans and Deals

The associate judge had rejected this request, reasoning that proposed but unrealized business arrangements or loan applications were not relevant. Justice Chan disagreed, stating such documents could reflect the defendants’ own views on the company’s value, which was central to both the oppression and conspiracy claims. Disclosure was ordered.

3. Rule 22-7 Sanctions

The plaintiffs argued that repeated failure to disclose documents warranted court sanctions and costs. While acknowledging delays and inconsistencies in disclosure, the court did not find the associate judge “clearly wrong” in declining to impose sanctions. The defendants had produced significant documents, and the judge found no pattern of willful non-compliance.

Outcome

The court partially allowed the plaintiffs’ appeal:

• Ordered disclosure of the four emails and attachments provided to MNP

• Ordered production of documents where valuations/appraisals were used in financing or business transactions

• Declined to issue sanctions or special costs under Rule 22-7

The plaintiffs were awarded costs in the cause, reflecting their substantial success on appeal.