It might seem obvious that destroying evidence related to an ongoing dispute is a bad idea. In legal terms, it’s called “spoliation.”
As defined by the court, “Spoliation in law does not occur merely because evidence has been destroyed. Rather, it occurs where a party has intentionally destroyed evidence relevant to ongoing or contemplated litigation in circumstances where a reasonable inference can be drawn that the evidence was destroyed to affect the litigation.”
A 2021 case that brings this matter into focus involves Trillium Power Wind Corporation and the Province of Ontario.
Trillium had made substantial progress towards obtaining authorization to operate an offshore wind farm in Prince Edward County. However, without prior notice given to it, in 2011 Ontario announced a halt to its consideration of any offshore wind farm projects, thereby effectively terminating Trillium’s approval application.
Trillium commenced an action against Ontario. This was pared down to a claim of “misfeasance in public office,” alleging the moratorium announcement was timed to forestall the closing of Trillium’s project financing.
Trillium later learned Ontario had destroyed thousands of documents and other evidence related to the cancellation, including the destruction of phones of departed employees. As a result, Trillium amended its pleadings to include a claim of spoliation.
The Superior Court of Justice found the moratorium on further wind farm development was coincidental and not intended to target Trillium.
“The claim is based almost entirely on unsupported speculation and unproven assertions,” wrote Justice Edward Morgan.
The court dismissed Trillium’s two claims and awarded Ontario $750,000 in costs to be paid by Trillium.
Trillium turned to the Court of Appeal for Ontario.
The Court of Appeal saw no error in the Superior Court’s dismissal of Trillium’s claim for misfeasance in public office. However, it did find an error in the dismissal of Trillium’s spoliation claim.
“In Ontario, there is a rebuttable presumption that destroyed evidence would have been disfavourable to the party who destroyed it,” write Anthony Burden, partner with Field Law LLP and lawyer Grant Szelewicki. That contention can be reversed if the party that destroyed the evidence can prove their actions were not intended to hinder litigation.
In this case, the timing of the destroyed evidence was suspicious, Burden and Szelewicki continue. Not only were the documents in the possession of individuals intimately involved in Trillium’s claim, they were destroyed only after they learned of the claim.
The gaps in evidence therefore made it abundantly clear Ontario purposely destroyed relevant evidence.
Unfortunately for Trillium, the Court of Appeal declined to order a new trial, as the spoliation claim was too intertwined with Trillium’s failed claim of misfeasance.
However, not all was lost for Trillium.
The Court of Appeal determined Ontario’s spoliation amounted to an abuse of process. The motion judge had, “applied a very narrow construction to the meaning and effect of Ontario’s intentional destruction of evidence that Ontario knew it had to preserve and produce.”
Therefore, the appropriate remedy was to deprive Ontario of its earlier $750,000 cost awards and instead award Trillium $30,000 for its costs of the appeal.
What can be learned from this?
“If you are thinking about getting rid of evidence, don’t do it,” write Burden and Szelewicki.
And should you find yourself being accused of destroying evidence in the course of a pending or anticipated litigation, they suggest reviewing current documentation policies to ensure they are “clear, consistent and conservative,” while erring on the side of retention.
Retention means never erasing the emails or work phones of any employees who leave your organization, they continue.
Conversely, if evidence related to your dispute has been destroyed by the other party, Burden and Szelewicki write one can rely on the presumption the evidence was to their disfavour.
“Depending on how clear the evidence, or lack thereof, is supporting spoliation, you may also have a chance of claiming litigation costs from the spoliating party.”
John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.
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