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Evidence - Spoliation

. Jacobi v. Winners Merchants International LP

In Jacobi v. Winners Merchants International LP (Div Ct, 2022) the Divisional Court considered the law of spoliation of evidence:
[28] ... Of the four aspects of the test for spoilation of evidence, at least two are missing here. The evidence must have been “destroyed intentionally” and it must be reasonable to infer that the evidence was destroyed to affect the outcome of the litigation: Yang v. Co-operators General Insurance Company, 2021 ONSC 1540; McDougall v. Black & Decker Canada Inc., 2008 ABCA 353, para. 29. ....
. BMW Canada Inc. v. Autoport Limited

In BMW Canada Inc. v. Autoport Limited (Ont CA, 2021) the Court of Appeal considered an issue of interim possession of chattel property (as an evidence spoliation issue) under R45:
[18] In determining whether to grant an interim preservation order under r. 45.01, the Master referred to and purported to apply the three-part test set out in Taribo Holdings Ltd. v. Storage Access Technologies Inc., [2002] O.J. No. 3886 (S.C.), at para. 5: (1) the asset sought to be preserved constitutes the very subject matter of the dispute; (2) there is a serious issue to be tried regarding the plaintiff’s claim to that asset; and (3) the balance of convenience favours granting the relief sought by the applicant or moving party.


(1) The Relevant Principles

[38] The parties invited the court on this appeal to address the test for r. 45.01 motions, clarifying the role of balance of convenience and whether there is a presumption in favour of the preservation of evidence in a proceeding. As I will explain, it is inappropriate to prescribe a single test for r. 45.01 motions, including a Taribo-type test that focusses on “balance of convenience”, having regard to the variety of circumstances in which such motions can be brought. In a case such as the present, where the condition of property is at issue in the action and its preservation is sought for the purpose of inspection, the goal is to best ensure fairness in the litigation process. I will also explain why it is unnecessary to determine whether there is a presumption in all cases in favour of preserving evidence for litigation, but that r. 45.01 permits the court to address trial fairness concerns that would arise before evidence is destroyed.

(a) What is the Appropriate Test for Interim Preservation of Property in this Case?

[39] Rule 45.01 is available to parties as an interim measure during litigation. Rule 45.01(1) provides that the court may make an interim order for the custody or preservation of “any property in question in a proceeding or relevant to an issue in a proceeding”. The order is discretionary. Although the rule provides that the court “may authorize entry on or into any property in the possession of a party or of a person not a party”, and r. 45.01(2) permits the court to order the property to be sold in such manner and on such terms as are just, there are no criteria prescribed by the rule for the exercise of the court’s discretion under r. 45.01 and there is no limitation on the terms and conditions that can be imposed.

[40] Rule 45.01 is available in a wide variety of circumstances in which interim preservation of property may be sought. The court, in considering whether to make such an order and on what terms, will take into consideration the evidence on the motion and make the order that best responds to the circumstances. The only precondition for preservation or custody is that the property is “in question in a proceeding or relevant to an issue in a proceeding”. As I will explain, it is inappropriate to attempt to prescribe and apply a single test (such as that set out in Taribo or a derivation of such test) to all r. 45.01 motions.

[41] In some cases a r. 45.01 motion will seek to preserve the very property the plaintiff or applicant is pursuing in its litigation. In Taribo, for example, the litigation involved a dispute about shares that former employees of the respondent corporation had tendered in consideration for a reduction of their obligations under promissory notes. The shares were pledged and deposited with a third party. The moving parties’ motion for an interim preservation order sought what was essentially a form of injunctive relief – to prevent the corporate respondent from having the shares released from deposit to it and then converting or cancelling the shares.

[42] The motion judge in Taribo articulated and applied a three-part test requiring that: (1) the assets sought to be preserved constitute the very subject matter of the dispute; (2) there is a serious issue to be tried regarding the plaintiff’s claim to that asset; and (3) the balance of convenience favours granting the relief sought by the applicant or moving party. She relied on two cases involving r. 45.02, which provides that where the right of a party to a specific fund is in question, the court may order the fund to be paid into court or otherwise secured on such terms as are just: News Canada Marketing Inc. v. TD Evergreen, [2000] O.J. No. 3705 (S.C.); Sun v. Ho (1998), 18 C.P.C. (4th) 363 (Ont. Gen. Div.). The Taribo test has been applied in other cases involving r. 45.01 where the moving party is seeking to preserve property that it seeks to recover in the litigation: see e.g., Progressive Moulded Products Ltd. v. Great American Group, 2007 CanLII 12205 (Ont. S.C.); Meade v. Nelson Resources Limited (2005), 2005 CanLII 44818 (ON SC), 14 B.L.R. (4th) 244 (Ont. S.C.).

[43] I accept that the Taribo three-part test is appropriate where a r. 45.01 motion is brought to preserve property that the moving party is claiming in its litigation. In such cases, the moving party seeks to limit or constrain what the responding party may do with property that is in its possession, and to preserve the property for the benefit of its claim. Factors such as whether the property is unique and whether damages claimed in the alternative would be an adequate remedy are also relevant and can fit within the “balance of convenience” analysis: see Auto Enterprise Ltd. v. Oakville Motors Sales & Leasing Inc., [1995] O.J. No. 716 (Gen. Div.), at paras. 10-14. And, where an interim preservation order would “tilt the scales in favour of a plaintiff on the basis of unproven allegations” the court must exercise caution before making such an order: see Stearns v. Scocchia (2002), 27 C.P.C. (5th) 339 (Ont. S.C.) involving a motion under r. 45.02.

[44] While the Taribo test is appropriate for r. 45.01 motions where the moving party claims an interest in property, or for r. 45.02 motions where the claim is to a specific fund, it is not required to be applied or adapted for all motions for interim preservation of property. This is apparent from the wording of the rule itself. Rule 45.01(1) authorizes the court to make an order for entry into any property, including the property of third parties, for the purpose of an interim order under the rule. Likewise, r. 45.01(2) permits the court to order the sale of property. The test articulated in Taribo, even as modified by the Divisional Court, would be insufficient and would not account for the range of factors that would need to be considered where entry into property, third party interests, or sale of property arises in a r. 45.01 motion.

[45] Similarly, a Taribo-type test focussing on “serious issue to be tried” and “balance of convenience” is neither necessary nor appropriate in a case like the present, where the r. 45.01 motion sought to preserve evidence to permit inspection. In my view, the overall consideration in such motions is to make an order that is consistent with a fair litigation process. In making or refusing the order, and in establishing terms, the court should have regard to the issues in dispute in the litigation, the relevance and materiality of the property as evidence, the purpose for which interim preservation is sought and its proposed duration (whether for the entirety of the proceeding or for an interim period to permit the evidence to be documented, inspected, tested, and the like), and the benefits and harm or prejudice to the interests of each party in the litigation.

(b) Is There a Prima Facie Obligation to Preserve Evidence?

[46] The parties joined issue in the courts below and in this appeal on whether there is a prima facie obligation in all cases to preserve property that is the subject matter of litigation, or more narrowly, to preserve evidence for trial. It is unnecessary to determine that issue in this appeal. First, any attempt to delineate the scope of such a rule would be met by a range of factors, which could be characterized as exceptions to or limitations on such a rule, such as considerations of the importance of the evidence to the proceeding, the perishability of the property, the feasibility of its preservation, and the like. Second, the determination of the relatively narrow issue on the r. 45.01 motion in this case and accordingly on appeal would not turn on any such obligation or presumption. Autoport seeks interim preservation of the vehicles for a limited time and purpose, and BMW characterizes the question as simply one of cost.

[47] While it is unnecessary to determine whether there is a prima facie obligation to preserve evidence, and its scope, I do not agree with the Divisional Court’s unqualified rejection of the duty of litigants to preserve evidence, and BMW’s assertion in this court that parties must be free to deal with their property as they see fit. The principle advanced by BMW, articulated so broadly, would apply whether or not the property is evidence and whether or not its temporary preservation or pre-trial destruction would affect trial fairness.

[48] The courts have long recognized the doctrine of spoliation of evidence: see McDougall v. Black & Decker Canada Inc., 2008 ABCA 353, 302 D.L.R. (4th) 661 for a useful summary of the case law and principles. Underlying the doctrine is the trial fairness principle that parties to litigation are expected not to destroy important evidence, at least until the opposing party has had a fair opportunity to examine that evidence. The remedies are informed by considerations of trial fairness: the imposition at trial of a rebuttable presumption of fact that the missing evidence, had it been preserved, would have been unfavourable to the party who destroyed it, and other possible remedies to “level the playing field”, such as the exclusion of expert reports: see Gutbir v. University Health Network, 2010 ONSC 6752, at para. 13; McDougall, at paras. 18, 29; Stilwell v. World Kitchen Inc., 2013 ONSC 3354, 47 C.P.C. (7th) 345, at para. 55; and Endean v. Canadian Red Cross Society (1998), 1998 CanLII 6489 (BC CA), 157 D.L.R. (4th) 465 (B.C.C.A.), at para. 32, leave to appeal granted but appeal discontinued, [1998] S.C.C.A. No. 260. The debate in the cases about whether there is a standalone tort of spoliation, and whether remedies are available for negligent spoliation (the cases are summarized at paras. 19 to 22 of McDougall), does not undermine the animating principle: that the destruction of evidence can be harmful to trial fairness.

[49] Rule 45.01 permits the court to address trial fairness concerns that would arise if property constituting evidence were to be destroyed prior to its destruction, and so avoid the kind of harm in the litigation process that spoliation remedies address.
. Armstrong v. Moore

In Armstrong v. Moore (Ont CA, 2020) the Court of Appeal held that spoliation of evidence did not justify awarding punitive damages (yet). This is my mind makes it a candidate for tort status soon:
[37] However, we defer to another day whether a court is entitled to rely on spoliation of evidence as providing a basis for awarding punitive damages. Ontario jurisprudence has yet to resolve definitively whether spoliation is a cause action: See Spasic Estate v. Imperial Tobacco Ltd. (2000), 2000 CanLII 17170 (ON CA), 49 O.R. (3d) 699 (C.A.), at paras. 12, 22; leave to appeal refused, [2000] S.C.C.A. No. 547. In our view, that issue need not and should not be resolved in this appeal.
. Kiden Used Furniture v. Pearson

In Kiden Used Furniture v. Pearson (Ont CA, 2015) the Court of Appeal stated with respect to spoilation of evidence that:
The usual remedy for spoliation is a presumption that the destroyed evidence would have been unfavourable to the party who destroyed it. But this adverse evidence inference is not capable of being positive proof of the landlord’s negligence. The appellant had the obligation of establishing that negligence and causation could be proven at trial and failed to do so on the motion.


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