Case information

Contracts — Public tendering — Bid — Compliance — Minor irregularity — Awarding of contract — Test to be applied under Contract A by Canadian clients and ultimately by courts to characterize irregularity and conclude that bid is substantially compliant — In absence of bad faith and where client had discretion to accept or reject bid whose non compliance was minor or not material: whether court must show judicial deference to client’s decision wrongly characterizing irregularity as major or material; whether client can be liable if it makes error in characterizing irregularity; and if court finds that client wrongly characterized irregularity as major, whether it can exercise that discretion in favour of rejected bidder and thus recognize its right to contract or to unrealized profits.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant, Defence Construction Canada, is a federal government corporation with the authority to enter into contracts and to act on behalf of the Department of National Defence and the Canadian Armed Forces. Pursuant to its authority and power, the applicant issued a public call for tenders for repair work. The respondent, Atwill Morin Group Inc., submitted a bid under the call for tenders within the specified time. Although it had the lowest bid, it was disqualified from the tendering process for non compliance with a condition related to electronic bonding. The respondent brought an application for damages and interest, claiming $646,156.00 from the applicant, which corresponded to the loss of anticipated profits on the contract. The Quebec Superior Court ordered the applicant to pay that amount to the respondent. The Quebec Court of Appeal unanimously dismissed the applicant’s subsequent appeal.