Spoiler Alert!: The Supreme Court of Canada revisits spoliation of evidence in SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., 2026 SCC 29
By Joe Thorne and Danielle Harris
For the first time in over a century, the Supreme Court of Canada has considered the impact and consequences where a litigant intentionally destroys or hides evidence – known as spoliation.
Since it last took up that issue in 1895, there have been many advances in data storage, not the least of which is digital record-keeping. The SCC flagged the obvious issue: historically, the law of spoliation developed around the destruction or hiding of paper. Today, spoliation can happen “instantaneously at the click of a button,” through auto-deletion policies, unpreserved email systems, or a simple failure to hit pause on a document destruction schedule.
In SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., the SCC reviewed and restated the law of spoliation, and the takeaway for anyone involved in litigation, or simply managing a document retention policy, is unambiguous: destroy or fail to preserve relevant evidence once litigation is on the horizon, and the consequences can be severe, unpredictable, and largely out of your hands.
The background
SS&C, a Canadian data provider, licensed pricing data to the Bank of New York Mellon (“BNY“) under an agreement that barred BNY from sharing the data with its subsidiaries. SS&C discovered that BNY had in fact shared SS&C’s proprietary data without authorization. The unauthorized arrangement came to light almost by accident, through a system glitch in SS&C’s data delivery. The glitch prompted a related joint venture of BNY, CIBC Mellon, to write to SS&C complaining about it, inadvertently revealing that it had itself been receiving unauthorized data from BNY. When SS&C discovered this, it asked BNY to preserve records showing how SS&C’s proprietary data had been redistributed and to which affiliates. BNY refused. Litigation ensued.
At trial, the judge found BNY in breach of its agreement with SS&C. He also uncovered troubling gaps in BNY’s record-keeping. BNY could not account for more than half of the data SS&C had delivered. The internal analysis BNY offered to explain the discrepancy was, in the trial judge’s words, “so replete with flaws as to be entirely unreliable” and “a bald assertion masquerading as an inquiry.” BNY had searched only a single user bank reserved for CIBC Mellon accounts, then used that narrow search to claim that CIBC Mellon was the overwhelming user of the data. While the trial judge stopped short of formally finding spoliation, he drew two adverse inferences against BNY for its failure to preserve and produce relevant documents: first, that the unaccounted-for data was used by unauthorized entities within the BNY group beyond CIBC Mellon, and second, that those unauthorized entities made more than trivial use of it. He then awarded SS&C its trial damages using what he called a “rateable approach.”
On appeal, the Court of Appeal for Ontario went further. It made an express finding of spoliation against BNY, calling its conduct something that “smacked of contempt for the justice system.” The Court of Appeal accepted the trial judge’s adverse inferences and his overall approach to calculating damages.
Both parties appealed to the SCC.
The modern law of spoliation
The SCC defined spoliation as the intentional destruction, alteration, mutilation, or concealment of evidence intended to subvert the truth-finding process in litigation. It is treated as a form of abuse of process, conduct that undermines both the fairness of trials and the court’s ability to find the truth.
To prove spoliation, a party must establish four things, on a balance of probabilities:
- The evidence was intentionally destroyed, altered, mutilated, or concealed;
- Litigation was ongoing or reasonably contemplated at the time;
- The evidence was relevant to that litigation; and
- It is reasonable to infer the evidence was destroyed to affect the litigation.
If those elements are established, a rebuttable presumption arises that the destroyed evidence was unfavourable to the spoliator. If the spoliator cannot rebut that presumption, the court must draw an adverse inference against the spoliator. There is no discretion to simply disregard spoliation in that case. As the SCC put it, spoliators are “the authors of their own misfortune” and should not be permitted to profit from the evidentiary gaps they create.
Importantly, the SCC clarified that an adverse inference is not automatically the harshest possible inference – a position advanced by SS&C at the appeal. Trial judges retain discretion over how the presumption is applied. However, that discretion goes to the shape of the remedy, not to whether a remedy is available at all. And the remedial toolkit is broad: beyond adverse inferences, courts can strike a claim or defence, draw adverse credibility findings, award substantial indemnity or punitive costs, exclude expert evidence, grant injunctions, or hold a party in contempt. In fashioning any of these remedies, courts will weigh the spoliator’s culpability, its motive, the prejudice caused, and the impact on the court’s ability to get at the truth.
The SCC’s decision
The unanimous SCC upheld the Court of Appeal’s finding that BNY committed spoliation, but found serious problems with how that finding translated into the damages award. In the SCC’s view, the trial judge’s two adverse inferences were “weak and incomplete.” Rather than filling the evidentiary gap left by BNY’s destruction of records, the inferences simply restated what was already apparent from the evidence and from BNY’s own admissions. Inferring that some unspecified number of entities beyond CIBC Mellon used the data to some unspecified degree did not level the playing field. The SCC said the inferences should have resulted in concrete findings of fact: how many entities accessed the data, and how often.
The SCC also found serious problems with the damages award. The SCC found that the trial judge’s “rateable approach” was fundamentally disconnected from BNY’s breaches of its contract and the proper adverse inferences to be drawn from BNY’s spoliation. The approach gave no consideration to the number of entities that may have accessed the data or how many times it was shared. It treated the unaccounted-for data as though it had been shared only once with a single unauthorized entity, despite up to 65 unauthorized entities having had access for years. The SCC found that the award bore no relationship to the underlying breach.
As the SCC put it, the trial judge’s award was “untethered from the facts,” “unconnected to the incomplete inferences” he drew, and “inconsistent with his own rationale for the award.” The matter was sent back to the trial court for a fresh assessment of damages, grounded in proper adverse inferences that produce concrete findings about how many entities used the data, how often, and what it was worth.
What this means
Notably, the SCC declined to resolve two significant questions. First, whether negligent (as opposed to intentional) destruction of evidence can qualify as spoliation remains unsettled. Second, whether spoliation should be recognized as a standalone tort in Canada (and not simply an evidentiary rule), giving rise to an independent cause of action, was also left for another day.
This SCC decision should change how data custodians think about preservation obligations when litigation becomes foreseeable. A few practical points stand out. Once litigation is reasonably contemplated, the duty to preserve relevant evidence is not optional and cannot be discharged simply because a party believes the claim against it lacks merit. BNY’s refusal to preserve data because it “categorically denied” any breach had occurred was no defence at all. Ignoring a preservation request is a gamble with asymmetric downside. If spoliation is found, the burden of the resulting uncertainty shifts entirely onto the spoliator. Remedies remain fact-specific, and are not automatically pegged to the non-spoliating party’s best-case damages theory. Automated or routine deletion schedules do not excuse a failure to override those schedules once a preservation obligation arises.
The bottom line
The SCC has modernized a 130-year-old doctrine for the digital age, and the message to litigants and their advisors is clear: preserve first, argue later.
The consequences of failing to preserve evidence can be severe. They can include adverse inferences that fill entire evidentiary gaps in your opponent’s favour, punitive costs, exclusion of your own evidence, or even having your client or defence struck.
The safest course is simple: when a dispute is on the horizon, preserve documents that might be relevant, and be prepared to explain in detail why you didn’t if you don’t.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact the authors or a member of our Litigation & Alternative Dispute Resolution group.
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