What Is Meant By Adverse Inference?
An Adverse Inference, Also Sometimes Called a Negative Inference, May Arise Where a Party Fails to Produce Evidence or Testimony and a Court Interprets Such a Failure As Indicative That the Evidence Would Therefore Be Unfavourable to Such a Party.
Understanding the Principle of Adverse Inference As An Evidentiary Rule Arising From Failure to Produce Evidence
An adverse inference may arise where a party fails to testify, or where a party fails to lead evidence that is in control of the evidence, and from such a failure the court may thereby presume that the reason for the absence of the evidence or the absence of testimony is that such would negatively affect the party who fails to provide the testimony or the evidence.
The adverse inference presumption is based upon the expectation that if a party has control over evidence, the party would present the evidence unless the evidence was unfavourable to the party. The principle was well explained within the case of Tiwari v. Chevalier, 2022 ONSC 3071, as well as the case of Lane v. Kock, 2015 ONSC 1972, wherein each it was respectively said:
 The effect of the failure of a party to testify or to call a material witness or other evidence, is summarized as follows in Sydney N. Lederman, Alan W. Bryant & Michelle K. Fuerst, The Law of Evidence in Canada, 4th ed. (Markham: LexisNexis Canada, 2014) at p. 386:
In civil cases, an unfavourable inference can be drawn when, in the absence of an explanation, a party litigant does not testify, or fails to provide affidavit evidence on an application, or fails to call a witness who would have knowledge of the facts and would be assumed to be willing to assist that party. In the same vein, an adverse inference may be drawn against a party who does not call a material witness over whom he or she has exclusive control and does not explain it away. Such failure amounts to an implied admission that the evidence of the absent witness would be contrary to the party's case, or at least would not support it.
The choice to apply an adverse inference is discretion as was explained within the Court of Appeal case of Parris v. Laidley, 2012 ONCA 755, wherein it was said:
 Drawing adverse inferences from failure to produce evidence is discretionary. The inference should not be drawn unless it is warranted in all the circumstances. What is required is a case-specific inquiry into the circumstances including, but not only, whether there was a legitimate explanation for failing to call the witness, whether the witness was within the exclusive control of the party against whom the adverse inference is sought to be drawn, or equally available to both parties, and whether the witness has key evidence to provide or is the best person to provide the evidence in issue.
The adverse inference principle is akin to the common saying of, if you got it, then flaunt it; and is based on the expectation that if a litigant fails to flaunt evidence, the reason for failing to do so is, presumedly, because the evidence is unhelpful, and more likely harmful, to the case of the litigant.