The Supreme Court of Canada has delivered a unanimous decision clarifying how courts must respond when a party destroys or conceals evidence relevant to litigation. In SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., released July 31, 2026, the Court confirmed that spoliation — the intentional destruction, alteration, or concealment of evidence to subvert the truth-finding process — triggers a mandatory presumption that the destroyed evidence would have been unfavourable to the party that destroyed it.
The case arose from a contract dispute between SS&C Technologies, a data provider that licenses specialized pricing information to financial institutions, and the Bank of New York Mellon. Under their 1999 licensing agreement, the bank was prohibited from sharing SS&C's proprietary data with subsidiaries or affiliates. When SS&C discovered in 2016 that the bank had been sharing its data with up to 65 affiliated entities for years without authorization, it demanded that the bank preserve records showing how the data had been redistributed and to which entities. The bank refused to comply, despite knowing litigation was imminent.
The Supreme Court found that the bank engaged in spoliation. It established a four-part test that must be satisfied on a balance of probabilities to prove spoliation: the evidence was intentionally destroyed, altered, mutilated, or concealed; at the time of destruction, litigation was ongoing or reasonably contemplated; the evidence was relevant to that litigation; and it is reasonable to infer the evidence was destroyed to affect the litigation. Once these elements are established, a rebuttable presumption arises that the destroyed evidence would be unfavourable to the spoliator's case. If the spoliator cannot rebut this presumption, it becomes mandatory and adverse inferences must be drawn.
The Court emphasized that spoliation strikes at two central tenets of the justice system: the establishment and maintenance of a fair trial process, and the quest for truth. Parties are duty-bound through statute and common law to preserve, disclose, and produce documents relevant to litigation. The Court characterized spoliation as a form of abuse of process amounting to egregious conduct that flies in the face of respect for the courts and the rule of law.
While the Court confirmed that adverse inferences are mandatory once spoliation is proven, it rejected the argument that courts must always impose the maximum possible penalty. Instead, trial judges retain discretion over the content and scope of the remedy, which should reflect the context, scope, and impact of the destroyed evidence. The Court noted that available sanctions include striking a claim or defence, adverse credibility findings, substantial indemnity costs, punitive damages, exclusion of evidence, and findings of contempt. In crafting appropriate remedies, courts may consider the spoliator's level of culpability, the intention behind the destruction, the prejudice to the other party, and the impact on the court's ability to fairly dispose of the issues.
The Court found that the trial judge erred by drawing weak and incomplete inferences that failed to level the evidentiary playing field. The inferences drawn — that unauthorized entities used the data and that their use was not minimal — simply restated what the evidence already showed and what the bank itself had argued. Proper adverse inferences should have resulted in concrete findings of fact about how many entities accessed the data and how often, rather than vague ranges of potential use. The Court ordered a new hearing on damages, directing that inferences be drawn that account for the context, scope, and impact of the destroyed evidence.
For business operators, this decision carries important practical implications regarding document retention practices when disputes arise or appear likely. Once litigation is reasonably contemplated — which can occur well before any formal claim is filed — there is an obligation to preserve relevant documents. The bank's refusal to preserve records after receiving a formal preservation notice, based on its own view that the allegations against it were unfounded, was explicitly rejected by the Court. It is not open to parties to ignore their preservation obligations based on their opinion of the merits of a potential claim.
The ruling also underscores that document destruction in the digital age is more inconspicuous but no less serious than physical destruction of records. The Court noted that electronic document management is now the primary mechanism for record-keeping, and spoliation can occur instantaneously at the click of a button. Businesses that fail to implement adequate document retention policies, or that deliberately circumvent them when disputes arise, risk having courts presume the worst about what the missing evidence would have shown.
The decision applies across Canada and will govern spoliation analysis in commercial disputes in all provinces and territories. While the Court left open whether negligent destruction of evidence may qualify as spoliation and whether spoliation should be recognized as an independent tort, it made clear that intentional destruction or concealment of evidence in contemplation of litigation will not be tolerated. The evidentiary gap created by such conduct will be filled with presumptions adverse to the party responsible for creating it.