Spoliation of evidence occurs where a party has intentionally destroyed evidence relevant to ongoing or contemplated litigation where a reasonable inference can be drawn that the evidence was destroyed to affect the litigation. But how does a court make a determination when the evidence itself has been erased? What recourse does a party have against another party who has destroyed relevant evidence? The Ontario Court of Appeal dealt with these issues in a recent decision.

Background

Trillium took substantial steps towards the authorization of their proposed wind farm when the Ontario government announced a moratorium on further wind projects, putting an end to Trillium’s permit application.

Although the lower court dismissed Trillium’s lawsuit against Ontario in 2013, Trillium amended its pleadings in 2015 to include a claim for spoliation of evidence. Before amending, Trillium learned that Ontario had destroyed thousands of records that Trillium claimed to include internal government communications made in advance of the moratorium. The parties brought competing summary judgment applications. Unfortunately for Trillium, the motions judge dismissed its spoliation claim and ordered over $750,000 in costs payable to Ontario. Trillium appealed.

What the Court Said

The Ontario Court of Appeal considered whether the motions judge should have dismissed Trillium’s spoilation claim. In short, the Court found that the motions judge made a mistake.  

In Ontario, there is a rebuttable presumption that destroyed evidence would have been disfavourable to the party who destroyed it. The adverse inference is rebutted if the party proves that they destroyed evidence not to hinder litigation, if the party proves their case, or if they disprove the opposing party’s case. Remedies typically include the Court’s application of the adverse inference and ordering that the spoliator pay costs to the other party.

The Court here found that there was sufficient evidence to prove that Ontario had engaged in spoliation of evidence for three reasons:

1. The Information and Privacy Commission had conducted a report that found that Ontario had deliberately destroyed devices, deleted emails and disposed of documents in contravention of government policy, which was a “notorious violation of record-keeping obligations and raised serious issues of political accountability”.

2. The timing of the destroyed evidence was highly suspect. Ontario disposed of documents held by individuals who were intimately involved in Trillium’s claim (including those who were involved in the moratorium) and only did so after they learned of Trillium’s claim. These individuals had even prepared affidavits for Ontario’s summary judgment motion. The gaps in evidence made it abundantly clear that Ontario destroyed relevant evidence on purpose.

3. Evidence from criminal proceedings against the former chief of staff proved that Ontario’s policy was to fully erase all email records from departed personnel and reset or even physically destroy their phones.

In short, the motions judge construed the doctrine of spoliation too narrowly, failing to account for the “broader context of Ontario's obligations to preserve and produce relevant documents.” Although the Court set aside the motion judge’s decision on the spoliation issue, it declined to order a new trial because Trillium’s spoliation claim was too closely connected to its failed misfeasance claim.

Further, even if the Court drew an adverse inference against Ontario, it could not have been used to force Ontario to reverse its moratorium and avoid its damages altogether. In other words, Trillium would not be able to prove that it suffered damages at Ontario’s hand. Furthermore, the early announcement of the moratorium saved Trillium from wasting money funding the wind farm project.

However, the Court did not leave Trillium high and dry, ordering that Ontario pay back Trillium’s costs from trial in addition to $30,000 for the costs of its appeal.

Takeaways

Finding yourself in a situation where you believe another party has destroyed evidence is not ideal, but there are ways of managing the situation. First, you can rely on the presumption that the evidence was disfavourable to the other party. Depending on how clear the evidence (or lack thereof) is to support spoliation, you may also have a chance of claiming litigation costs from the spoliating party.

If you are thinking about getting rid of evidence, don’t do it. To avoid the risk of being accused of destroying evidence, review your organization’s record-keeping policies and ensure they are clear, consistent and conservative. Always err on the side of retention. If members of your team leave your organization, do not immediately erase their emails or wipe their work phones. Above all, when in the course of pending or anticipated litigation, never delete or destroy any records.

If another party in your litigation matter points the finger at you, gather evidence to support that the alleged loss of evidence was not intended to affect litigation.

Disputes can become complex very quickly, so it is advisable to consult a lawyer without delay. Contact Anthony Burden in Calgary, Jeremy Taylor in Edmonton, or any member of Field Law's Construction Group for advice.

Link to Decision: Trillium Power Wind Corporation v. Ontario, 2023 ONCA 412