Spoliation of Evidence: Supreme Court of Canada Set to Provide Guidance

In SS&C Technologies Canada Corporation v. Bank of New York Mellon Corporation, the Supreme Court of Canada is expected to provide national guidance on spoliation — the intentional destruction of relevant evidence to affect the outcome of anticipated or ongoing litigation — including what conduct constitutes spoliation and the consequences of engaging in it. The decision will likely affect how organizations respond to preservation notices and how they design, implement, manage and enforce litigation holds in all matters.

Factual Background

In 1999, SS&C Technologies Canada Corp. (SS&C) agreed to provide market pricing data to Bank of New York Mellon Corporation (BNY) under a licence agreement (Agreement) executed by BNY’s corporate predecessor, Mellon Financial Corporation (MFC). In 2016, SS&C discovered that MFC and BNY shared its data with numerous BNY-affiliated entities (Affiliated Entities), which SS&C alleged was contrary to the terms of the Agreement. SS&C immediately served a preservation notice, requesting that BNY preserve all records relevant to anticipated litigation.

In the ensuing litigation, SS&C alleged that BNY destroyed relevant records, including records that were created after BNY received the preservation notice and records that would have identified which Affiliated Entities used the data and how much data they used.

Lower Court Decisions

The trial judge held that BNY breached the Agreement by sharing the data with certain of the Affiliated Entities. At the damages phase, the trial judge declined to consider SS&C’s spoliation claim. However, he drew adverse inferences against BNY due to the lack of evidence regarding the securities that were valued using the data and the Affiliated Entities that used the data.

The Court of Appeal for Ontario partially overturned the trial judge’s liability decision, holding that the Agreement did not authorize any of the Affiliated Entities to access the data from SS&C. The Court condemned BNY’s refusal to preserve and produce its data usage records after receiving the preservation notice, stating there was “no doubt” that SS&C had established spoliation (2024 ONCA 675 at paragraph 163).

The Court of Appeal noted that where spoliation is established, there is a rebuttable presumption that the destroyed evidence would have been unfavourable to the party who destroyed it. However, the decision to draw an adverse inference is “a highly discretionary fact-based assessment”, and harsher sanctions can be imposed where appropriate (such as striking a pleading). Despite finding that the trial judge had erred by rejecting SS&C’s spoliation claim, the Court of Appeal declined to interfere with the limited adverse inferences drawn by the trial judge.

SS&C was granted leave to appeal the decision to the Supreme Court of Canada.

Importance of the Decision

With a hearing set for December 10, 2025, the Supreme Court of Canada is poised to clarify the consequences of engaging in spoliation, including where the destroyed evidence is necessary to determine the quantum of a party’s damages. Clear guidance could harmonize the spoliation framework, clarify when courts may draw adverse inferences and what inferences may be drawn, specify when harsher sanctions should be imposed, and instruct courts on how to address evidentiary gaps caused by spoliation when assessing liability and damages.

Conclusion

We will continue to monitor the appeal and provide further guidance once the Supreme Court of Canada releases its decision.

For more information, please contact the authors or any other member of our Litigation & Dispute Resolution group.