Supreme Court Of Canada Clarifies Spoliation: Preservation Duties Matter, But Remedies Remain Discretionary

The Supreme Court of Canada has provided long-awaited guidance on spoliation—the destruction, alteration, concealment, or loss of evidence relevant to litigation. In SS&C Technologies Canada Corp v Bank of New York Mellon Corp, 2026 SCC 29, the Court unanimously allowed SS&C’s appeal and ordered a fresh assessment of damages.

For businesses and litigants, the decision carries two key messages. First, document preservation demands must be taken seriously, even where the recipient disputes liability. Second, adverse inferences arising from spoliation do not automatically entitle the non-spoliating party to its maximum damages claim. Trial judges retain discretion to craft a remedy that fits the circumstances.

Background and Procedural History

SS&C supplies specialized market-pricing data to financial institutions to value securities. Predecessors of SS&C and Bank of New York (“BNY”) entered into a data licensing agreement which prohibited redistribution of SS&C’s proprietary data without authorization. SS&C discovered that BNY had redistributed the data to affiliates and received payments for such redistribution.

SS&C demanded that BNY preserve all records relating to the redistribution, including records identifying which affiliates received the data and how much BNY earned from that use. BNY refused, maintaining that it had not breached the agreement. The underlying usage data was later lost.

The trial judge declined to make an express finding of spoliation but drew two adverse inferences against BNY: (1) that unauthorized affiliates had used unaccounted-for data and (2) their use was not de minimis. The trial judge awarded damages for sharing data with unauthorized affiliates using a “rateable approach”, pricing the unaccounted-for data with reference to the price BNY paid for accounted-for data. The award was US$5,696,850, far below the US$889,752,087 sought by SS&C.

The Ontario Court of Appeal expressly found that BNY had committed spoliation and its conduct “smacked of contempt for the justice system.” However, it left the trial judge’s damages methodology largely undisturbed.

What the Supreme Court Decided

Writing for a unanimous Court, Justices Côté and Moreau confirmed that BNY had committed spoliation. The Court held that the trial judge’s adverse inferences did not adequately address the evidentiary gap created by BNY’s failure to preserve records, and that the damages methodology could not stand.

A National Test for Spoliation

Establishing spoliation requires proof of four elements on a balance of probabilities:

• 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 that the evidence was destroyed to affect the litigation.

If those elements are met, a rebuttable presumption arises that the evidence would have been unfavourable to the spoliator. If not rebutted, an adverse inference must be drawn.

No Automatic “Worst-Case” Damages Rule

The Supreme Court rejected the argument that once spoliation is established, the Court should presume the non-spoliating party proved its maximum damages position. The remedy remains discretionary and must be tailored to the circumstances, considering the spoliator’s culpability, the reason for the destruction, the prejudice caused, and the impact on the court’s fact-finding function. Possible Court remedies include adverse inferences, striking pleadings, costs sanctions, evidentiary exclusions, and contempt findings.

The Inference Must Do Real Work

The Court emphasized that an adverse inference is not a symbolic remedy. It must be genuinely adverse to the spoliator and must fill the evidentiary gap caused by the missing records. The trial judge’s inferences failed because they did not fill-in the evidentiary gap, created by BNY’s failure to preserve evidence, but instead largely conformed to BNY’s own position and what the remaining evidence already showed, leaving SS&C to bear any uncertainty created by the missing evidence.

The Damages Award Required a Fresh Look

The Supreme Court also found that the rateable damages methodology was not sufficiently connected to the facts. When the Court of Appeal increased the number of BNY-affiliates who received the data from 44 to 65, the damages award did not correspondingly change. That disconnect between the scope of the breach and the amount awarded was a reviewable error, particularly given the unsupported assumption that the unauthorized users would have negotiated a centralized-pricing arrangement with SS&C.

The Court sent the matter back for a fresh assessment of damages on the existing record, subject to the trial judge’s discretion to permit further evidence. The new assessment must be grounded in adverse inferences that produce concrete findings about both the scope of unauthorized data use and its value.

Key Takeaways for Businesses and Litigants

There is no automatic “maximum penalty” rule for spoliation. Courts retain discretion over the appropriate remedy. However, once spoliation is established and the presumption is not rebutted, the resulting adverse inference must have substantive effect. It cannot merely repeat the spoliator’s position or leave the innocent party disadvantaged.

Organizations should treat preservation demands as a litigation risk management issue, not simply a merits issue. If relevant records may bear on a dispute, take preservation steps promptly and comprehensively, even where liability is denied. For parties affected by missing evidence, the decision provides a stronger framework for seeking meaningful relief, but the strategy in each case must be tailored, depending on the nature of the evidence, the procedural stage, and the business consequences at stake. Importantly, damages must still be grounded in a factual record and connected to the scope, duration, and value of the alleged wrongdoing.

Clients facing preservation issues (or concerned about an adverse party’s missing records) should seek advice early on how this decision may affect their position.

Thank you to Simran Samra for her research assistance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.