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Evidence - Spoliation (3). SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp. [remedies]
In SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp. (SCC, 2026) the Supreme Court of Canada allowed an appeal, here where 'spoliation' and damages were central issues.
The court considers extensively remedies for evidentiary 'spoliation', here where the trial court "must draw an adverse inference against the spoliating party that is capable of filling the gap left by spoliation, though this does not foreclose the possibility that other remedies are available" [see para 124 especially re discretionary versus mandatory elements]:(3) The Content of the Remedies Associated With a Finding of Spoliation Are Discretionary
[84] The nature and scope of the remedies associated with a finding of spoliation is the second issue at the heart of this appeal. This section will explain that, once the court makes a finding of spoliation, a rebuttable presumption arises that the destroyed evidence would be unfavourable to the case of the party that destroyed it. The mandatory presumption does not dictate how or to what extent the destroyed evidence would have been unfavourable to the spoliator’s case. This is a discretionary and context-specific determination, usually in the form of an adverse inference, that is “best left to the trial judge who can consider all of the surrounding facts” (McDougall, at para. 4).
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[88] Spoliation, as it relates to the civil process, intersects with the rules of court and the court’s inherent power to control its processes, including preventing abuses of process. While the “principal remedy for spoliation is the imposition of a rebuttable presumption of fact that the lost or destroyed evidence would not assist the spoliator” (McDougall, at para. 29), this is usually not the end of the story.
(a) The Practical Operation of the Mandatory Presumption
[89] How the mandatory presumption practically applies depends on the facts of the case and the trial judge’s determination of how best to ensure fairness in the proceedings. After all, “it cannot be admitted that such a presumption should stand instead of all other evidence, and supply the total deficiency of proof” (St. Louis, at p. 685, citing W. D. Evans, A Treatise on the Law of Obligations, or Contracts, vol. II, Appendix (1806), at p. 169). On the contrary, in determining how best to give effect to the presumption that the destroyed evidence would be unfavourable to the spoliator’s case, trial judges should consider the context, scope, and impact of the destroyed evidence (see generally Endean v. Canadian Red Cross Society (1998), 1998 CanLII 6489 (BC CA), 157 D.L.R. (4th) 465 (B.C.C.A.), at para. 32).
[90] In so doing, the trial judge must draw an adverse inference against the spoliating party that is capable of filling the gap left by spoliation, though this does not foreclose the possibility that other remedies are available. In most cases, such an adverse inference works to correct the imbalance created by spoliation, to undo some of the prejudice caused, to ensure the proper functioning of the court’s fact-finding role, and to remedy the abuse of the court’s process that spoliation represents (see BMW Canada, at para. 48; Trillium Power Wind, at para. 22; Casbohm v. Winacott Spring Western Star Trucks, 2021 SKCA 21, [2021] 4 W.W.R. 506, at para. 36; Doust, at para. 29).
(b) Remedies Outside of the Evidentiary Presumption
[91] Some authors have characterized the remedies or sanctions flowing from a finding of spoliation as “almost unlimited” given the court’s broad discretion (see Underwood and Penner, at § 8:3). In addition to the mandatory presumption arising from a finding of spoliation, courts across Canada, exercising their inherent power to remedy abuses of process, have levied a variety of other sanctions to address the distinct prejudice created by spoliation.
[92] For instance, the “sanctions or remedies available to litigants who suffer due to spoliation include procedural remedies, evidentiary presumptions, contempt proceedings and costs orders. Preventive measures may also be taken through preservation orders” (Holland (Guardian ad Litem of) v. Marshall, 2008 BCCA 468, 301 D.L.R. (4th) 371, at para. 59). At the court’s disposal depending on the case before it is the ability to strike a claim or defence, make an adverse credibility finding against a party’s testimony, order substantial indemnity costs or punitive damages, exclude expert reports, issue an interlocutory injunction, or make a finding of contempt (see, e.g., Brandon Heating and Plumbing (1972) Ltd. v. Max Systems Inc., 2006 MBQB 90, 202 Man. R. (2d) 278; iTrade Finance Inc. v. Webworx Inc. (2005), 255 D.L.R. (4th) 748 (Ont. S.C.J.) (striking a pleading); Doust (adverse credibility finding); Chura v. Batten Industries Inc., 2023 BCSC 1708, 91 C.C.E.L. (4th) 38 (order for special costs); Cheung (Litigation Guardian of) v. Toyota Canada Inc. (2003), 29 C.P.C. (5th) 267 (Ont. S.C.J.) (excluding reliance on reports and other evidence); Western Tank & Lining Ltd. v. Skrobutan, 2006 MBQB 205, 207 Man. R. (2d) 176 (spoliation supporting remedy of interlocutory injunction); Fuller Western Rubber Linings Ltd. v. Spence Corrosion Services Ltd., 2012 ABQB 163, rev’d in part, but not on the finding of contempt, 2012 ABCA 137, 524 A.R. 246 (finding of contempt)).
[93] This list is not exhaustive.
[94] In crafting additional remedies, the court may find the following non-exhaustive list of considerations relevant: the level of culpability of the spoliator, the intention or reason behind the destruction of the evidence, the prejudice to the non-spoliating party, and the impact of the destruction of evidence on the court’s ability to fairly dispose of the issues (see generally The Sedona Conference, “The Sedona Canada Principles Addressing Electronic Discovery, Third Edition” (2022), 23 Sedona Conf. J. 161, at p. 313).
(c) The Remedy for a Finding of Spoliation Is Not Necessarily the Highest Possible Inference
[95] It is beyond doubt that spoliation is a flagrant attack on the civil justice system that flies in the face of its truth-seeking function and the fairness its processes aim to achieve. The penalty for this conduct should be severe, but it should not be blind. In the modern world, spoliation can occur in any number of ways and to varying degrees. To enforce a one-size-fits-all mandatory remedy that imposes the “maximum penalty” may create disproportionate consequences. Trial judges are well placed to determine the extent of the prejudice to a party harmed by spoliation, analyze the magnitude of the spoliating conduct, and fashion a proportionate remedy. Remedial discretion aligns with the jurisprudence, doctrine, provincial legislation, and other common law approaches. We discuss each of these areas below.
(i) Jurisprudence Addressing a Trial Judge’s Remedial Discretion
[96] The Latin maxim omnia praesumuntur contra spoliatorem (“all things are presumed against the spoliator”) is an organizing principle underpinning the doctrine of spoliation. While SS&C places significant stock in this maxim in arguing for maximum penalties, this Court in St. Louis tempered reliance on the maxim.
[97] Justice Taschereau, concurring, found that the Exchequer Court had carried the maxim too far (St. Louis, at p. 652). Justice Girouard, writing for the majority, agreed, and noted that most modern nations, including Canada, did not take the maxim as far as the Romans (pp. 666-67 and 682-83). Instead, Girouard J. endorsed the language of Campbell J. in Bott v. Wood, 56 Miss. 136 (1878), at pp. 140-41:There is great danger that the maxim may be carried too far. It cannot properly be pushed to the extent of dispensing with the necessity of other evidence, and should be regarded as mere matter of inference in weighing the effect of evidence in its own nature applicable to the subject in dispute. [p. 679] [98] SS&C cites Armory to buttress its claim that the maxim, when properly applied, ensures that the highest possible remedial value be awarded to the prejudiced party. In Armory, a chimney-sweep found a piece of jewellery and took it to a goldsmith. The goldsmith’s apprentice removed the stones and the goldsmith offered the chimney-sweep money, but the chimney-sweep declined and requested the return of the stones. The goldsmith’s apprentice returned only the empty socket for the stones. The chimney-sweep brought a claim against the goldsmith. Chief Justice Pratt directed the jury that unless the stones were produced, they should “presume the strongest against” the goldsmith and “make the value of the best jewels the measure of their damages” (p. 664; see also Cassels and Jones, at p. 262).
[99] In reviewing Armory, Girouard J. recognized that it was not directly on point, as the goldsmith was in the position of a thief. Justice Girouard went further in stating, at pp. 683-84, “[t]he appellant is his own master; he has taken nothing from the respondent; and I cannot understand how the maxim contra spoliatorem can generally be applied to a party who withholds or destroys his own papers.”
[100] In Lamb v. Kincaid (1907), 1907 CanLII 38 (SCC), 38 S.C.R. 516, a boundary dispute arose between the owners of placer claims in the Yukon. The appellants trespassed onto the disputed area and removed large amounts of auriferous material and mixed it with material taken from its own portion of the land (p. 526). From this mixture, the appellants extracted gold, prompting the respondents to bring a claim for invasion of their placer claim and damages equal to the value of the extracted gold. The appellants argued that they were entitled to deduct from the damages the expenses incurred in removing and washing the extractions, but did not maintain any account of this information. The Court declined to speculate for the benefit of the appellants, citing Armory in support of its position that “if a man by his deliberately tortious act destroys the evidence necessary to ascertain the extent of the injury he has inflicted, he must suffer all the inconvenience which is the result of his own wrong” (p. 540).
[101] SS&C also relies on Ponce v. Société d’investissements Rhéaume ltée, 2023 SCC 25, for the principle that evidentiary difficulties should be resolved against the wrongdoer where their actions prevent the other party from proving its damages. In Ponce, two presidents of a group of companies learned that another company was interested in acquiring the group of companies they ran. Instead of disclosing this information to their shareholders, they purchased the group of companies themselves and resold them at a substantial profit (para. 1). Though they sought compensation for the lost gain, the shareholders in Ponce contended that any difficulties in proving their damages was attributable to the presidents’ wrongdoing (para. 108). Ponce cited Kincaid for the principle that “where a fact cannot be proved because of a party’s dishonesty, that fact will be assumed to be true in the absence of evidence to the contrary” (Ponce, at para. 114; see also Kincaid, at paras. 539-40; Rainbow Industrial Caterers Ltd. v. Canadian National Railway Co., 1991 CanLII 27 (SCC), [1991] 3 S.C.R. 3, at pp. 14-16; Biotech Electronics Ltd. v. Baxter, 1998 CanLII 13186 (QC CA), [1998] R.J.Q. 430 (C.A.)).
[102] While Kincaid draws on Armory, and Ponce draws on Kincaid, these decisions do not squarely deal with spoliation. As BNY points out, Armory, Kincaid, and Ponce were not necessarily concerned with the intentional destruction of relevant documents in the face of reasonably contemplated litigation. Instead, these cases were primarily concerned with a party’s wrongs that preceded the litigation process and affected the party’s ability to prove their damages. As explained below, proving damages, while usually tied to the issue of spoliation, is conceptually distinct from proving spoliation generally.
[103] In sum, courts have moved away from a draconian approach to remedies for spoliation to more proportional remedies, as will be discussed below.
(ii) Broader Doctrinal Framework
[104] Spoliation poses a risk to the justice system because it “can mislead courts and can encourage parties to settle on unjust terms”, it “can result in people being denied the opportunity to obtain a legal remedy even when they have suffered egregious harm”, it can even cause judges to “render decisions that are based on inaccurate findings of fact, and as a result may be rendered wrong in law, based on flawed evidentiary records”, and it “can also frustrate litigants’ prosecution and defence of their actions” (Cudmore, at § C:1, § 1).
[105] Like with the doctrine of abuse of process, remedies for spoliation are inherently discretionary. In Saskatchewan (Environment) v. Métis Nation – Saskatchewan, 2025 SCC 4, Rowe J., writing for a unanimous Court, stated that “[w]here an abuse of process has been established, a subsequent question arises: What remedy is to be granted? That decision is discretionary” (para. 32 (emphasis added); see also Trillium Power Wind, at para. 22; Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, [2022] 2 S.C.R. 220, at paras. 35-36; Behn v. Moulton Contracting Ltd., 2013 SCC 26, [2013] 2 S.C.R. 227, at para. 40; Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at paras. 37-38). Fixing a remedy for abuse of process is discretionary in order to allow judges to do justice in the array of circumstances in which abuses may arise. Spoliation requires similar flexibility.
[106] Given the jurisprudential developments in this area, it would be inconsistent for this Court to hold that a finding of spoliation attracts a bright-line, mandatory remedy, while emphasising that the related doctrine of abuse of process attracts contextual, flexible remedies. At paras 107-111 the court considers provincial legislation [includes Ontario's R30.08(1) 'Failure to Disclose or Produce Document'] related to spoliation.
Then the court considers common law remedies to spoliation:(iv) Common Law Approaches to Remedies for Spoliation
[112] The consensus among other common law jurisdictions follows the flexible remedial approach. SS&C did not point to any other common law jurisdictions that have adopted a non-discretionary approach to assessing remedies for spoliation. This is likely because there is minimal support for the “maximum penalty” approach. Remedial discretion remains prevalent.
[113] For example, in England, where a court has found that a party suppressed documents, there are a number of remedies available:In some cases a judge might draw adverse inferences as to what missing documents might have contained; in some he might hold that the burden of proof on a particular issue was not discharged; in some he might go so far as to hold that the whole trial process was so corrupted that a fair trial was indeed impossible and the action should be dismissed . . . . But I do not think there can be any hard and fast rules. The impact of document suppression in any particular case must depend on what the issues are, and what the other evidence is.
(Gangat v. Jassat, [2022] EWCA Civ 604, at para. 44) [114] The starting point for the analysis is usually to determine whether a fair trial is possible given the destruction of evidence. If so, the court may determine whether the remedy of striking out a pleading would be proportionate and fair in all the circumstances, “or whether some other remedy will safeguard the position of the innocent party” (Active Media Services Inc. v. Burmester, Duncker & Joly GmbH & Co. Kg, [2021] EWHC 232 (Comm.), at para. 307).
[115] In Australia, “courts may remedy spoliation of evidence in a number of ways” (Mills & Anor v. Central Sydney Area Health Service & Anor, [2002] NSWSC 728, at para. 97). It is necessary “to weigh the effect of the alleged destruction of documents in respect of the issues in the proceeding, in order that the remedy be not out of proportion to the prejudice occasioned” (British American Tobacco Australia Services Ltd. v. Cowell (Representing the Estate of McCabe (deceased)), [2002] VSCA 197, 7 V.R. 524, at para. 190). A few years after the Supreme Court of Victoria (Court of Appeal) decided McCabe, the Evidence (Document Unavailability) Act 2006 (Vic.), was enacted to create a practical approach to dealing with spoliation by empowering judges to make a range of orders (see C. Kwan Lee, “Document Destruction in Victoria: the Correctness of Eames J’s Decision in McCabe” (2009), 6 Macquarie J.B.L. 37, at p. 47; Evidence (Miscellaneous Provisions) Act 1958 (Vic.)). Sections 89B and 89C of the Evidence (Miscellaneous Provisions) Act 1958 are instructive:89B Court may make ruling or order
(1) If, in a civil proceeding, it appears to the court that —
(a) a document is unavailable; and
(b) no reproduction of the document is available in place of the original document; and
(c) the unavailability of the document is likely to cause unfairness to a party to the proceeding —
the court, on its own motion or on the application of a party, may make any ruling or order that the court considers necessary to ensure fairness to all parties to the proceeding, having regard to the matters set out in section 89C.
(2) Without limiting subsection (1), a ruling or order may be —
(a) that an adverse inference will be drawn from the unavailability of the document;
(b) that a fact in issue between the parties be presumed to be true in the absence of evidence to the contrary;
(c) that certain evidence not be adduced;
(d) that all or part of a defence or statement of claim be struck out;
(e) that the evidential burden of proof be reversed in relation to a fact in issue.
89C Matters the court must consider
Before making an order under section 89B, the court must have regard to —
(a) the circumstances in which the document became unavailable; and
(b) the impact of the unavailability of the document on the proceeding, including whether the unavailability of the document will adversely affect the ability of a party to prove its case or make a full defence; and
(c) any other matter that the court considers relevant. [116] In the United States, the remedial approach to spoliation is principally derived from the Federal Rules of Civil Procedure, 28 U.S.C. app. (2024), or other state procedural rules, and the court’s inherent powers (B. Finlay, M.-A. Vermette and M. Statham, Electronic Documents: Record Management, E-Discovery and Trial (loose-leaf), at § 5:35). In the context of electronically stored evidence, r. 37(e)(2) of the Federal Rules of Civil Procedure provides a uniform standard for U.S. federal courts in the imposition of sanctions after making a finding of spoliation (Christian, at p. 917). Rule 37(e) provides:(e) Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:
(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment. [117] Despite r. 37(e)(2) having standardized the remedial options for U.S. federal courts, a finding of spoliation does not require courts to apply the sanctions listed (as evidenced by the use of the word “may”) (Christian, at p. 917). Relatedly, the court’s “broad discretion in crafting an appropriate sanction for the destruction of evidence” through its inherent powers allows it to focus on restoring the prejudiced party to the same position it would have been in absent the spoliation (Finlay, Vermette and Statham, at § 5:37). Indeed, U.S. courts have imposed a variety of sanctions or remedies, including “fines, shifting costs and awarding attorney’s fees, the exclusion of evidence, adverse inference instructions to juries, the dismissal of claims, default judgments, and, where the spoliator is a lawyer, the recommendation of disciplinary action” (§ 5:35 (footnotes omitted)).
[118] In sum, several other common law jurisdictions retain the discretionary, flexible approach to remedying spoliation that supports rejecting the use of the mandatory “maximum penalty” approach advocated by SS&C. We therefore decline to adopt a change to the common law that would effectively amount to binding trial judges to a presumption that the non-spoliating party has proven their maximum position on damages in every case where spoliation is found.
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[124] When spoliation is found, the precise contours that the resulting adverse inference takes is subject to judicial discretion. This is essential to ensure that justice is done in the particular circumstances of each case. However, the requirements that the inference drawn be adverse to the spoliator and capable of filling the evidentiary gap left by the spoliation is not similarly discretionary. As stated above, once spoliation is found, a mandatory presumption arises that the destroyed evidence would be unfavourable to the spoliator’s case. ....
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