Case Report – Court says duty to preserve doesn’t spring from gravity of potential dispute

On March 30th, the British Columbia Supreme Court held that a gaming company had no duty to preserve betting slips redeemed by an individual to whom it denied a prize claim for over $6.5 million.

The plaintiff claimed he submitted 20 to 25 betting slips into the gaming company’s redemption machine, and that the machine retained five to 10 tickets as winning slips. The machine then produced a voucher for $6.5 million, which the gaming company would not pay based on a claim that the voucher was produced in error. It based this conclusion on an examination of a winning slip that was stamped by the machine as associated with a $6.5 million win but that did not reveal a winning wager at all. At the time it denied a payout, the gaming company also denied the plaintiff’s request to see his other slips that were retained by the machine. The gaming company destroyed these slips in the ordinary course of its business a week or two later, well before the plaintiff threatened or commenced an action.

The Court held that the gaming company had no duty to preserve when it destroyed the records. It said:

While perhaps it may have been prudent for the defendants to have contacted Mr. Patzer before the betting slips were destroyed, I cannot accede to Mr. Laxton’s submission that they had a positive duty to do so. I appreciate that the error of issuing a cash voucher for such a large amount of money is significant. I accept that Mr. Patzer asked to see his betting slips on November 6, 2004 but he did not follow up this request further. More importantly, if Mr. Patzer was not satisfied with the explanation he had been given, he should have advised the defendants. They would then have been at least put on notice that the matter had not been put to rest.

Here, the slips were destroyed in the ordinary course of business before the defendants were aware that Mr. Patzer was considering litigation or even challenging their explanation for the error. While it is unfortunate that they were destroyed so soon after the event, the defendants did not intentionally destroy the winning betting slips in an effort to suppress the truth. Accordingly, there is no basis to apply the doctrine of spoliation.

As there is no common law duty to preserve property which may possibly be required for evidentiary purposes and given these findings, the plaintiff’s claim based on the defendants’ destruction of the betting slips must fail.

Patzer v. Hastings Entertainment Inc., 2010 BCSC 236 (CanLII).