The recent Ontario Court of Appeal decision in SS&C Technologies Canada Corp v. Bank of New York Mellon Corp 2024 ONCA 675 is up for appeal before the Supreme Court of Canada [2025 CanLII 35401]. The ONCA decision was an eye-opening, moment in Canadian commercial and evidentiary law, particularly in the areas of contract interpretation and spoliation.
The crux of the dispute was over a data licensing agreement signed by the predecessors of SS&C and BNY. The agreement limited use of SS&C’s proprietary financial data to the “Client.” BNY, over time, shared this data with its affiliates, leading to allegations of unauthorized distribution and breach of contract. The Court upheld the trial judge’s conclusion [2021 ONSC 2657] that “Client” referred narrowly to the contracting party (BNY), not its affiliates. This strict interpretation reinforced the principle that commercial contracts must be read precisely and contextually, particularly in cases involving complex corporate structures. Although helpful to confirm that generalized corporate relationships or subsequent mergers do not broaden contractual rights absent clear language to that effect, the most notable take away was the COA’s consensus on Spoliation.
SS&C asserted a claim of spoliation over missing BNY usage data. Spoliation is a common law doctrine first developed in Canada in 1896, remaining largely unchanged throughout the past 128 years. It is an evidentiary rule that allows the court to remedy abuse of process, but whether it is also a free-standing tort claim remains unresolved. In this case, the COA found that regardless of whether spoliation is only an evidentiary rule, an adverse inference is an available remedy.
BNY attempted to eschew their discovery obligations on the basis of BNY’s views about SS&C’s claim. The COA firmly held It is not open to lawyers or parties to ignore their obligations under the Rules of Civil Procedure based on their opinion of the merits of a potential claim. Rather, Spoliation creates a rebuttable presumption that evidence destroyed would have been unfavourable to the party who destroyed it.
BNY’s failure to preserve relevant documents after receiving a litigation hold request was deemed an intentional act to suppress evidence, irrespective of the ‘smoking gun’ nature, or lack thereof, of the documents in question. This led the Court to draw adverse inferences against BNY to the tune of nearly 5.7 million USD.
While we await review from the Supreme Court of Canada, the COA decision ought to serve as a cautionary tale: creative interpretations of contractual scope will not override plain language, and ‘poorly managed’ discovery hurts both your case, and your wallet.