Canadian Courts Tell Those Tempted by Spoliation Claims to “Deal With It”

by Dan Michaluk   December 2, 2009

In late October, Master Ronna Brott of the Ontario Superior Court of Justice issued a highly pointed decision that encapsulates Canadian courts’ unwillingness to entertain spoliation disputes before trial and, to some extent, to tolerate the increasingly common problem of lost records and things.

In Cerkownyk v. Ontario Place, Master Brott denied a request for production of a personal computer that a plaintiff in a personal injury claim said she had thrown out because it had broken down after litigation commenced. In dismissing the motion, Master Brott admonished the defendant for proceeding with its production request despite the plaintiff’s agreement to deal with a spoliation claim at trial and, in particular, plaintiff counsel’s sworn statement that the computer was gone:

The circumstances leading up to this motion are in my view, a clear example of a proceeding going astray – of not being able to see the forest through the trees. Lawyers take oaths which require them to act in a professional manner. Defence counsel urged me to ignore the evidence of solicitor Sacks because of the contradictions obtained from the plaintiff’s boyfriend and the IT specialist. I am not prepared to ignore the solicitor’s Affidavit, nor the correspondence and telephone information from plaintiff’s counsel to defence counsel advising that the computer is no longer available. Whether the computer was in fact given to the IT specialist or is corrupted or is still available cannot be established at this stage. But what is critical is that counsel has sworn that the computer is no longer available. That should be the end of it! The rest is for trial.

Aside from the pointed criticism, the case is remarkable for its facts. In persisting with its quest for production, the defendant generated some damning evidence, including a statement by the IT professional who the plaintiff initially relied upon, who said that he never actually examined the plaintiff’s computer before it was discarded. Though Master Brott did not make a finding of spoliation, the evidence reviewed in her decision certainly supported a strong suspicion of misconduct.

Had the defendant moved for a spoliation sanction instead of production it might have avoided Master Brott’s criticism that its motion was pointless because the computer was gone. Despite the troubling evidence the defendant had secured, however, the defendant still would not likely have advanced a successful claim for a spoliation remedy. This is because the law has been clear at least since the Alberta Court of Appeal’s October 2008 decision in McDougall v. Black & Decker Canada Inc.: pre-trial relief for spoliation will only be available in exceptional cases, where the misconduct is deliberate and the prejudice flowing from it is profound. Though Black & Decker is not binding across Canada, both the PEI and Manitoba appeal courts have subsequently adopted the Alberta Court of Appeal view (in DHL and Commonwealth Marketing). In Ontario, the Court of Appeal said that spoliation (as a potential tort claim) should be dealt with on the basis of a complete record in Spasic Estate, and the Ontario Superior Court of Justice seems also be to be on board with the “defer and deal with it” view (see e.g. Beaverton Hotel and Muskoka Fuels).

The principle from Black & Decker is of critical importance today. The pursuit of deliberate misconduct of the kind alleged in Cerkownyk is one thing, but there is rarely a case today that will not tempt at least one party to divert its attentions towards the pursuit of a negligent spoliation claim. Why? Parties to litigation do lose physical evidence and paper and electronic records, understandably now more than ever. My theory is that our level of sensitivity to this mis-step is being shaped by the way we speak about spoliation (as the darkest of all evils) and the continuous news of devastating spoliation sanctions levied by American courts. The Black & Decker principle is a nice made-for-Canada principle with the potential to reverse an early trend towards Canadian spoliation litigation.

I only conclude there is such a trend based on my own pseudo-scientific study. I started running daily Quicklaw alerts on the term “spoliation” about two years ago. At first, the alert would spit out a single spoliation case a month. Now, there is rarely a week that goes by that I don’t receive a new spoliation judgment. This might show that parties are increasingly taking up the opportunity to make something out of others’ lost records and things, but in my own sample of cases, the party asserting spoliation almost always loses. We should not pooh-pooh the duty to preserve, but Canadian courts have sent a clear signal that we should focus on the merits of a dispute to the best we can and deal with lost records as a matter of course.