News & Insights

Rajit Mittal, Aivrey McKinley, Clifton Cheng

Overview

In SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., 2026 SCC 29, the Supreme Court of Canada considered the issue of spoliation, which occurs when a party intentionally destroys, alters, mutilates, or conceals evidence with a view to undermining the truth-finding process in litigation. 

The decision marks the Supreme Court of Canada’s first substantive consideration of spoliation since St. Louis v. The Queen (1896), 25 S.C.R. 649. Since St. Louis was decided over a century ago, record-keeping practices have changed significantly, and spoliation can now occur far more inconspicuously through the destruction or concealment of electronic records. 

The Court articulated a four-part test to find spoliation and held that parties should not benefit from evidentiary gaps resulting from their spoliation. This decision provides important guidance for Canadian courts and litigants in evaluating whether spoliation has occurred and in determining appropriate remedies for spoliation. 

Background

SS&C Technologies Canada Corporation (“SS&C”) is a provider of specialized market pricing data used by financial institutions to value securities. In 1999, SVC (SS&C’s predecessor) entered into two separate data service agreements with Bank of New York Mellon Corporation (“BNY”) and CIBC Mellon (the “CIBC Mellon”). The agreements prohibited the sharing, redistribution, or sale of data, including to subsidiaries and affiliates.

In 2011 CIBC Mellon ended its agreement with SS&C, stating that SS&C’s services were no longer required.  In 2016, SS&C discovered CIBC Mellon was still receiving data through BNY. SS&C sued for breach of contract.

The trial judge found that BNY had breached its agreement for the unauthorized sharing of data and awarded $5,696,850 USD in damages. A key issue in the trial for damages was BNY’s failure to retain and preserve relevant data in the face of reasonably contemplated litigation, for which it provided no explanation. 

The trial judge held that the court may draw adverse inferences from the failure to produce documents absent spoliation and drew the following two inferences: (1) the data BNY could not account for was used by unauthorized entities within the BNY family other than CIBC Mellon; and (2) non-CIBC Mellon unauthorized entities made more than minimal use of the data.

The Ontario Court of Appeal did not interfere with trial judge’s adverse inferences, and noted there is no doubt that BNY engaged in spoliation by intentionally failing to preserve and produce relevant data. The Court of Appeal found, however, that the trial judge erred in law in holding that remedies granted by a court for spoliation are limited to awards in damages and that adverse inference are not available remedies where spoliation is proved. Nonetheless, the Court of Appeal largely affirmed the trial judge’s damages award, except for adjustments for double recovery.

SS&C then appealed the award for damages to the Supreme Court of Canada, arguing that the trial judge erred in drawing inferences that did not properly remedy BNY’s spoliation and therefore tainted the damages awarded to SS&C. 

Analysis

The Supreme Court of Canada agreed that BNY engaged in spoliation and articulated the test for a court to evaluate whether spoliation has occurred. The party alleging spoliation bears the burden of proving, on a balance of probabilities, the following four elements: (1) the evidence was intentionally destroyed, altered, mutilated, or concealed; (2) at the time of destruction, litigation was ongoing or reasonably contemplated; (3) the evidence was relevant to the litigation; and (4) it is reasonable to infer that the evidence was destroyed to affect the litigation. The spoliator may challenge any of the four elements as all four elements are required to make out a finding of spoliation. 

Once spoliation is found under the four-part test, the court presumes that the destroyed evidence would be unfavourable to the spoliator’s case. The burden then shifts to the spoliator to rebut the presumption by showing, for example, that the destroyed evidence was not harmful to its case.  If the spoliator cannot rebut the presumption, then the court must draw adverse inferences. At this stage, the spoliator can introduce evidence to potentially narrow the scope of any adverse inferences. 

The Supreme Court of Canada noted that spoliation is a creature of abuse of process that comes in various degrees and forms. Accordingly, once spoliation is proven, it is within the trial judge’s discretion 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.

Key Takeaways

• The four-part test for spoliation is: (1) the evidence was intentionally destroyed, altered, mutilated, or concealed; (2) at the time of destruction, litigation was ongoing or reasonably contemplated; (3) the evidence was relevant to the litigation; and (4) it is reasonable to infer that the evidence was destroyed to affect the litigation. 
• If spoliation is established, there is a rebuttable presumption that the destroyed evidence would be unfavourable. If the presumption is not rebutted, the court must draw adverse inferences.  
• Courts have flexibility when deciding on the remedy for spoliation, so long as the remedy is responsive to the prejudice caused by the missing evidence. 
• The Court left open for another day the important questions of whether negligent destruction of evidence may qualify as spoliation and whether spoliation should be recognized as an independent tort in Canada. 

If you have any questions about this case or generally, please contact one of the authors or another member of the VML team.