Canada: Hydro-Québec c. Bell Canada: Spoliation Of Evidence Results In The Dismissal Of A Claim For The First Time In Québec
Product Liability Bulletin

Introduction

The legal maxim omnia praesumenutur contra spoliatorem (all things are presumed against the individual who destroys evidence) has been applied sparingly in Québec. To date, the only consequence of spoliation of evidence has been an adverse inference which, until recently, never led to the dismissal of a claim or to a full defence on the merits of a claim.[1] However, on January 29, 2019, Justice Luc Huppé of the Court of Québec rendered a decision in Hydro-Québec c. Bell Canada[2] that is of interest for all product liability lawyers. This is the first decision in Québec where a claim has been dismissed as a result of a party's breach of its duty to preserve relevant evidence.

Facts

The facts giving rise to this claim stem from a simple utility pole, belonging to Bell Canada, to which transmission lines were attached. During a very windy evening on July 8, 2014, the utility pole in question fell over and damaged a nearby building as well as the Hydro-Québec equipment that was attached to it. In 2012, the parties to the action entered into an agreement that allowed them to jointly use the same set of utility poles, instead of installing separate poles.

According to a Hydro-Québec crew member sent to the scene to examine the fallen pole, the inside of the base of the pole was rotten. Three photographs of the pole were taken before the pole was collected and destroyed by a Hydro-Québec subcontractor responsible for cleaning the scene. This testimony, along with a few blurry photos of the incident was the only direct evidence regarding the rotten utility pole. Bell was not aware of the incident until three months later, when Hydro-Québec sent its letter of demand. As such, Bell was unable to inspect the utility pole.

Reasons

Liability of Bell

It its analysis, the Court addressed the liability of Bell Canada as the custodian of a thing. Citing that under article 1465 of the Civil Code of Québec ("CCQ") liability (1) is incurred when the person is a custodian of a thing, (2) arises from the autonomous act of the thing and (3) may be relieved if the custodian shows it did not commit a fault, the Judge found Bell, a priori, liable for the damages. Bell was clearly the owner of the utility pole, the incident apparently occurred as a result of the autonomous act of the pole, and it was shown that the pole had been installed some thirty-four (34) years earlier, without proof of any inspections or maintenance that may have been carried out by Bell since the pole was installed.

Consequences of Hydro-Québec's Breach of its Duty to Preserve Evidence Relevant to its Claim

After finding that it was impossible for Bell to demonstrate its absence of liability, but before rendering a decision, the judge examined Bell's arguments concerning the fact that it was denied any opportunity to examine the evidence central to the claim, namely, the utility pole.

From the outset, Justice Huppé stated that the evidence in no way established that Hydro-Québec had intentionally destroyed the utility pole after it fell, since it was its subcontractor who disposed of the pole. As such, both parties were faced with an irreversible situation.

However, the consequences of the missing evidence was far more serious for Bell who, as custodian of a thing, was presumed liable for damages caused by the fallen utility pole under article 1465 CCQ. As such, Justice Huppé stated that the "legal position faced by Bell under article 1465 CCQ is all the more significant considering the duty to preserve evidence that may apply to Hydro-Québec."

The Judge emphasized that the missing utility pole prevented Bell from exercising the right provided under article 253 of the Code of Civil Procedure, CQLR, c. C-25.01 ("CCP") that entitles a person who expects to become a party to a lawsuit "to inspect a thing or property which may affect the outcome of the dispute."

The Court then stated the general principle that "any potential litigant, who by their own conduct or that of persons under their control, impairs or makes it impossible for any potential opposing party in a litigation to have access to evidence that is crucial to the latter's claim, must accept the consequences may be brought against them."[3] To illustrate this principle, the judge refers to article 1739 CCQ, under which a buyer is required to give the seller written notice after discovering a defect so that the seller may examine the seriousness and extent of the defect.

Relying on the reasoning of the Superior Court in Jacques c. Ultramar ltée,[4] the judge provided that even before legal proceedings have been commenced, a party facing a potential legal dispute must preserve all evidence under the general duty of good faith provided under articles 6 and 1375 CCQ. Moreover, since the coming into force of the new CCP in 2016, the duty to preserve evidence is expressly stipulated under articles 20 and 251 CPP.

As for the pre-trial duty to preserve evidence, Justice Huppé states as follows:

[TRANSLATION]

Although the agreement between Hydro-Québec and Bell was silent with regard to the existence of a duty to preserve evidence incumbent upon Hydro-Québec when replacing a utility pole. the Court concluded that such a duty was implicit in the agreement, given the obligation to collaborate owed by the parties under any agreement. Emphasizing the potential risks that Bell would face were it possible for Hydro-Québec to replace a pole without advising Bell, the judge found that recognizing such an implicit obligation was necessary to restore the contractual balance between the parties.

Despite the coming into force of articles 20 and 251 of the CCP, the Court notes that the case law has nonetheless found that the consequences arising from the destruction of evidence are limited to an adverse inference. That said, the Court notes that this case law does not easily apply to a situation where a party is presumed liable under article 1465 CCQ and who, as a result of the destruction of evidence that is central to the claim, is denied the opportunity to defend itself.

For these reasons, the Court held that the mere fact that Hydro-Québec had disposed of the utility pole before Bell had a chance to inspect it was sufficient to dismiss the claim.

Conclusion

This decision is of particular interest given that it is the first time that a Québec court has found that spoliation of evidence can justify the dismissal of an action.

It is clear from Justice Huppé's reasons that the particularly vulnerable position in which Bell found itself as a result of the presumption of liability was a determining factor in the dismissing Hydro-Québec's claim.

It will be interesting to see how, and if, the courts will rely on or develop the reasoning in this case and if they will apply this reasoning in other cases where presumptions of liability may apply to the defendant.

Will it now be possible for manufacturers, distributors and professional sellers to claim that the destruction of any evidence central to an action, namely the property sold, is sufficient to justify dismissing a claim based on a latent defect? The answer to this question and the application of this case will certainly be followed closely given the presumptions of liability that apply.

Footnotes 

[1] Jacques c. Ultramar ltée, 2011 QCCS 6020, para. 26
[2] Hydro-Québec c. Bell Canada, 2019 QCCQ 263 [Hydro-Québec]
[3] Hydro-Québec, supra note 1, para. 95
[4] 2011 QCCS 6020 (CanLII)
[5] Hydro-Québec, supra note 1, para. 99

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