Think Twice Before Destroying Business Records Related to Ongoing Litigation
Author: Grazia Hanea
May 31, 2021
An Ontario court recently rendered a decision in a complex construction dispute.
The plaintiff hired a construction management company to oversee the construction of a retirement residence. The plaintiff sued the company after it failed to explain a hefty overcharge and provide a proper accounting. The plaintiff later discovered accounting inconsistencies and a second set of invoices between the company and two subcontractors.
As a result, the plaintiff brought a motion to (1) amend its statement of claim to include allegations of fraud and a request for punitive damages, and (2) force the company to produce relevant business records.
The company opposed the motion on various grounds. It claimed to have purged its business records “in the usual course of business”.
The court ultimately granted the plaintiff’s motion to amend its statement of claim, and ordered the company to produce relevant invoicing, accounting, and payment documentation.
Most importantly, the court found that the company will have to bear the brunt of defending itself against new fraud allegations – after all, it should not have destroyed business records related ongoing litigation. That’s a problem of its own making.
If you have any questions regarding construction litigation, we encourage you to contact Daria Strachan or any of the lawyers at Shields Hunt Duff Strachan.