What happens when a business is asked to preserve records for a potential claim it considers baseless and decides not to comply?
The Supreme Court of Canada (“SCC”) recently addressed this very question in SS&C Technologies Canada Corp. v Bank of New York Mellon Corp. (“SS&C Technologies”),[1] marking the Court’s first consideration of “spoliation” since 1896.[2] The decision provides important guidance on the consequences of intentionally failing to preserve relevant evidence in contemplation of litigation, regardless of a party’s perception of the merits of the matter.
How Did the SS&C Technologies Spoliation Dispute Arise?
SS&C Technologies Canada Corporation (“SS&C”) licensed proprietary financial pricing data to Bank of New York Mellon Corporation (“BNY”) under an agreement that restricted sharing with affiliates and other third parties.[3] After CIBC Mellon terminated its separate agreement with SS&C, it continued receiving SS&C’s data through BNY without paying for it.[4] SS&C discovered the unauthorized sharing in 2016, terminated its agreement with BNY and commenced a breach of contract claim.[5]
The case took an important turn when SS&C asked BNY to preserve records showing the extent of the data sharing. BNY declined, maintaining that no breach had occurred. As such, the relevant usage data was ultimately not preserved, despite BNY knowing that its production could ultimately be required in litigation.[6] These facts became central to the case, with the Court making clear that a party cannot avoid its obligation to preserve relevant evidence simply because it believes the potential claim has no merit.[7]
At trial, the judge ruled in favour of SS&C, drawing adverse inferences against BNY, and the Court of Appeal went further, expressly finding that BNY had committed “spoliation”.[8] This brought the issue of spoliation before the SCC.
What Is Spoliation and When Does It Apply?
Spoliation occurs when a party intentionally destroys, alters, mutilates, or conceals relevant evidence with a view to affecting the truth-finding process in litigation.[9] The question before the SCC was whether that threshold was met here and, if so, what consequences should follow.
What Are the Requirements for Establishing Spoliation?
To establish spoliation on a balance of probabilities, four elements must be shown:
- the evidence was intentionally destroyed, altered, mutilated or concealed;
- litigation was ongoing or reasonably contemplated at the time, i.e. regardless of the perceived strength of the merits of such potential litigation;[10]
- the evidence was relevant to that litigation; and
- It is reasonable to infer that the evidence was destroyed to affect the litigation.[11]
Once these elements are established, the court presumes that the missing evidence would have been unfavourable to the spoliating party (requiring the spoliator to therefore rebut such presumption).[12] Importantly, the consequences are not uniform; Judges retain discretion in deciding how to address spoliation based on the circumstances of the case.[13]
For example, in SS&C Technologies, while the Supreme Court found that BNY had committed spoliation, it nevertheless determined that the adverse inferences drawn at trial did not adequately address “gaps created by the missing evidence”, including how many unauthorized entities accessed SS&C’s data.[14] It therefore sent the matter back to the Superior Court for a new assessment of damages based on concrete findings about the extent and value of the unauthorized data use.[15]
What Does the SCC’s Spoilation Decision Mean for Businesses?
- A preservation letter is not optional. Disagreeing with the merits of a claim is no basis for declining to preserve. On receipt of a demand letter or preservation request, issue a litigation hold and suspend routine deletion for the affected records.
- Auto-deletion is the new shredder. The Court noted that record-keeping is now overwhelmingly electronic and that evidence can disappear at the click of a button.[16] A retention policy without a documented, tested suspension mechanism is a liability.
- The clock can start before the claim. Preservation obligations can arise before a statement of claim is issued. A demand letter, regulatory inquiry, internal investigation or escalating commercial dispute may signal that litigation is reasonably contemplated.
- Confidentiality covenants reach affiliates. The underlying breach was data shared within a corporate group. Licences and non-disclosure agreements that restrict disclosure to “third parties” should say expressly whether affiliates are included.
Protecting Records When Litigation Is Anticipated
SS&C Technologies highlights the risks of letting records lapse while a dispute is still just a letter on a desk. The takeaway for businesses is simple: when litigation is reasonably contemplated, preservation should be considered early to ensure relevant records are not lost through routine deletion.
For guidance on record-retention or litigation-hold practices in light of this decision, a member of our business law group would be more than happy to discuss at your convenience.
The author would like to thank Alia Samem, Student-at-Law, for her assistance with this article.
[1] SS&C Technologies Canada Corp. v Bank of New York Mellon Corp., 2026 SCC 29 [“SS&C Technologies”]; decision rendered on July 31, 2026.
[2] Ibid.
[3] Ibid at para 18.
[4] Ibid at para 22.
[5] Ibid at para 23.
[6] Ibid at para 33.
[7] Ibid at para 62.
[8] Ibid at para 64.
[9] Ibid at para 79.
[10] Ibid at para 62.
[11] Ibid at para 80.
[12] Ibid at para 81.
[13] Ibid at para 84.
[14] Ibid at paras 126 & 131.
[15] Ibid at para 161
[16]Ibid at para 2.