In Catalyst Capital Group Inc v Moyse, 2016 ONSC 5271the Ontario Superior Court considered whether the defendant, Brandon Moyse, who deleted his Internet browsing history from his personal computer in the face of a preservation order, had intentionally destroyed relevant evidence, giving rise to spoliation. Spoliation is an evidentiary rule that gives rise to a rebuttable presumption that destroyed evidence would be unfavourable to the party that destroyed it.

Background

The underlying action arose after Moyse, who had been employed by Catalyst, left the company to take a position with a competing investment management firm. Catalyst brought an action for breach of confidence for the alleged misuse of confidential information regarding a target company in which Catalyst had unsuccessfully attempted to acquire an interest. Subsequently, the target company was successfully acquire by Catalyst’s competitor, and Catalyst claimed Moyse had delivered Catalyst’s confidential information to its competitor and its competitor had used it in the successful acquisition.

After Moyse had joined the competitor company and before this action was commenced, Catalyst obtained a consent order requiring Moyse and the competitor company to preserve and maintain all records in their possession, power or control “relating to Catalyst and/or related to their activities since March 27, 2014 and/or related to or was relevant to any of the matters raised in the Catalyst action.” The order required specifically that Moyse turn over his computer to counsel for forensic imaging of the data stored on it.

However, before turning his personal computer over to his lawyer, Moyse deleted his personal browsing history and purchased software entitled “RegCleanPro” to further delete registry information. In addition, Moyse wiped clean his Catalyst-issued mobile device before returning it.

Spoliation

After determining that the elements of an action for breach of confidence could not be made out on the facts of the case, the Court turned to the question of spoliation. A finding of spoliation requires four elements to be established:

  • the missing evidence must be relevant;
  • the missing evidence must have been destroyed intentionally;
  • at the time of destruction, litigation must have been ongoing or contemplated; and
  • it must be reasonable to infer that the evidence was destroyed in order to affect the outcome of the litigation.

In explaining why he had erased his browsing history, Moyse said he was worried that Catalyst would be able to access his personal internet browsing history and that, in light of the anticipated court proceedings, this history might become part of the public record. In particular, Moyse was concerned that his having accessed adult entertainment websites would become public.

Moyse stated that he did not believe it was improper to delete his internet browsing history as the order did not require him to maintain his computer in “as is” condition. Because the focus of the preservation order was to maintain and preserve documents, he felt that by deleting his browsing history, he was deleting personal information not relevant to the litigation. Moyse was aware that simply deleting his browsing history through the browser would not fully erase the record so he searched online for a more permanent solution. He purchased the first program he found, RegCleanPro. He ran the RegCleanPro software to clean his computer registry the day before he delivered his computer to his lawyers.

The Court accepted Moyse’s evidence as to why he had deleted his internet browsing history. This was partially based on the fact that Moyse had a girlfriend and that it was understandable that he would not want his browsing of adult entertainment websites included in the record. It was concluded that Moyse had not intended to destroy relevant evidence and that this precluded any finding of spoliation. Catalyst contended that Moyse could have looked at Catalyst documents related to the target company in his dropbox before erasing his browsing history. This argument was dismissed as there was no evidence that Catalyst documents had ever been transferred into Moyse’s dropbox and because the forensic image of his computer showed that the last time Moyse accessed his dropbox pre-dated his working on the target company file.

Regarding the mobile device, the Court accepted that Moyse wiped it to delete pictures and texts of a personal nature. Because Catalyst maintained access to all of the emails on the device, no spoliation was found.

Justice Newbould found that Catalyst had not established that Moyse had intentionally destroyed evidence in order to affect the outcome of the litigation. As such, there was no basis to find or infer a presumption that Moyse destroyed evidence that would be unfavourable to him.

Catalyst had also argued that spoliation should be recognized as an independent tort. While Canadian courts have allowed the pleading of a tort of spoliation to proceed to trial, there were no cases referred to in Catalyst’s submissions that actually recognized spoliation as a tort. Due to the finding that there was no spoliation, the Court did not consider whether such a tort exists in Canada.

Takeaways for Business

This decision exposes reasons why a carefully drafted preservation order is essential. If the order had stated that Moyse turn over his computer in “as is” condition and he had still deleted his browsing history, Moyse’s credibility as a witness would likely have been called in to question. If the order had stated that Moyse turn over his computer in “as is” condition and he had left it in the same condition, forensic experts could have definitively known if he had confidential information to share.

In short, a preservation order should state everything that is to be preserved, and the manner in which it is to be preserved.