{"id":53574,"date":"2026-08-04T12:08:57","date_gmt":"2026-08-04T16:08:57","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=53574"},"modified":"2026-08-04T12:09:00","modified_gmt":"2026-08-04T16:09:00","slug":"spoliation-after-ssc-technologies-the-supreme-court-of-canada-reshapes-the-law-of-destroyed-evidence","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/commercial-litigation\/spoliation-after-ssc-technologies-the-supreme-court-of-canada-reshapes-the-law-of-destroyed-evidence\/","title":{"rendered":"Spoliation after SS&C Technologies<\/i>: The Supreme Court of Canada reshapes the law of destroyed evidence"},"content":{"rendered":"\n

Evidence is the foundation of every civil lawsuit. When relevant evidence disappears, courts face a fundamental challenge: how can they fairly determine the truth when one party has destroyed the information necessary to do so?<\/p>\n\n\n\n

In a previous article discussing what happens when a party destroys evidence<\/em><\/a>, we reported on the state of spoliation law in Canada and identified the Supreme Court of Canada\u2019s then-pending decision in SS&C Technologies Canada Corp. v. Bank of New York Mellon Corporation<\/em> as a pivotal opportunity for clarification. That decision has now arrived.<\/p>\n\n\n\n

On July 31, 2026, the Supreme Court of Canada (the \u201cCourt<\/strong>\u201d) released its reasons in SS&C Technologies Canada Corp. v. Bank of New York Mellon Corporation<\/em>, 2026 SCC 29<\/a>, its first spoliation decision in over a century, since St. Louis v The Queen<\/em>, 1896 CanLII 65 (SCC)<\/a>.<\/p>\n\n\n\n

This decision provides authoritative guidance the legal community has long awaited. In unanimous reasons, the Court articulated a clear four-part test for establishing spoliation, confirmed that adverse inferences are mandatory once spoliation is proven, expanded the menu of available remedies, and set out guiding principles for crafting proportionate relief. At the same time, the Court expressly declined to resolve two significant questions; whether negligent destruction can constitute spoliation and whether spoliation should be recognized as an independent tort, leaving those issues for another day.<\/p>\n\n\n\n

The established principles of spoliation<\/h2>\n\n\n\n

As we described in our earlier article, spoliation has long been understood as the intentional destruction of relevant evidence in ongoing or contemplated litigation (McDougall v Black & Decker Canada Inc<\/em>, 2008 ABCA 353<\/a>). When intentional destruction is proven, a rebuttable presumption arises that the evidence would have been unfavourable to the party who destroyed it. The burden then shifts to the alleged spoliator to show that, while the destruction was intentional, it was not intended to influence the litigation (St. Louis v The Queen)<\/em>.<\/p>\n\n\n\n

Despite this general framework, significant uncertainty persisted. Courts disagreed on whether adverse inferences were mandatory or permissive once spoliation was established. The scope of available remedies remained unclear. Further, lower courts had queried, without resolving, whether negligence or recklessness could trigger the doctrine, and whether spoliation could ground an independent cause of action.<\/p>\n\n\n\n

The Supreme Court\u2019s decision in SS&C<\/em> has now resolved several of these questions.<\/p>\n\n\n\n

The facts<\/h2>\n\n\n\n

The dispute arose from a data licensing agreement under which the Appellant supplied proprietary securities pricing information to the Respondent. The agreement prohibited redistribution of that data to affiliates or other entities.<\/p>\n\n\n\n

The Appellant later discovered that the Respondent had allegedly shared the data throughout its corporate group for years and demanded preservation of records showing how the data was used and redistributed. Despite the preservation demand and impending litigation, the Respondent failed to preserve and produce key usage information.<\/p>\n\n\n\n

The trial judge found that the Respondent breached the agreement but declined to expressly find spoliation or rule on whether spoliation is an independent tort. He drew two adverse inferences based on the Respondent\u2019s failure to preserve records: (1) unaccounted-for data was used by unauthorized entities other than CIBC Mellon; and (2) that use was not de minimis<\/em>. He then applied a \u201crateable approach\u201d to damages, awarding SS&C US$5,696,850.<\/p>\n\n\n\n

The Ontario Court of Appeal made an express finding of spoliation against the Respondent, holding its conduct \u201csmack[ed] of contempt for the justice system.\u201d The Court of Appeal increased the number of unauthorized entities that used the data from 44 to 65 but upheld the trial judge\u2019s damages figure.<\/p>\n\n\n\n

The Appellant argued this outcome created a windfall for the Respondent of as much as US$145,000,000 relative to its claimed damages, effectively signaling that spoliation could be a strategically advantageous litigation tactic.<\/p>\n\n\n\n

The Supreme Court\u2019s decision<\/h2>\n\n\n\n

The Court unanimously allowed the Appellant\u2019s appeal. The Court did not disturb the Court of Appeal\u2019s finding that the Respondent committed spoliation, rather, the Court found errors of law and palpable and overriding errors in the trial judge\u2019s assessment of damages and remitted the matter to the Superior Court solely for reassessment of the quantification of damages.<\/p>\n\n\n\n

The Court\u2019s key holdings include:<\/p>\n\n\n\n

A clear four-part test for spoliation<\/h3>\n\n\n\n

The Court articulated a definitive four-part test that a party must establish, on a balance of probabilities, to prove spoliation:<\/p>\n\n\n\n

    \n
  1. evidence is intentionally destroyed, altered, concealed, or mutilated;<\/li>\n\n\n\n
  2. at the time of destruction, litigation is ongoing or reasonably anticipated;<\/li>\n\n\n\n
  3. the evidence is relevant; and<\/li>\n\n\n\n
  4. it is reasonable to infer that the destruction is aimed at affecting the litigation process.<\/li>\n<\/ol>\n\n\n\n

    Mandatory adverse inferences<\/h3>\n\n\n\n

    Perhaps the decision\u2019s most consequential holding is that once spoliation is proven and the presumption remains unrebutted, courts must draw adverse inferences against the spoliator.<\/p>\n\n\n\n

    Critically, however, the Court distinguished between the obligation to draw an adverse inference (which is mandatory) and the content or scope of that inference (which remains discretionary and context-specific). The trial judge retains discretion to determine how<\/em> and to what extent<\/em> the destroyed evidence would have been unfavourable, but does not have discretion over whether<\/em> to draw an inference at all.<\/p>\n\n\n\n

    Rejection of a \u201cmaximum penalty\u201d approach<\/h3>\n\n\n\n

    The Court expressly rejected the Appellant\u2019s argument that courts should impose the highest possible adverse inference as a mandatory response to spoliation. Remedies must be proportionate to the prejudice suffered and the culpability involved. The Court noted that this proportionate approach is consistent with Canadian jurisprudence on abuse of process, provincial rules of civil procedure, and the approach taken in other common law jurisdictions including England, Australia, and in the United States.<\/p>\n\n\n\n

    A broader remedial toolbox<\/h3>\n\n\n\n

    The Court also confirmed that adverse inferences are not the sole remedy for spoliation. Depending on the circumstances, courts may draw upon a broad, non-exhaustive menu of remedial tools, including:<\/p>\n\n\n\n