Schrager, Moore, Kalichman

Appeal from a judgment of the Superior Court dismissing an action for damages. Dismissed.

On March 1, 2017, the respondent city launched a call for tenders to purchase asphalt. The tender stated that the contract would be awarded to the lowest bidder taking into account the cost of transportation established, for purposes of comparison, according to the bulk trucking tariff reports of the Ministère des Transports du Québec (MTQ).  This had to be taken into account because, under the collective agreement, the city’s employees would transport the asphalt. On March 16, 2017, the city amended its call for tenders to add a price-adjustment factor for the lost productivity of the teams (clause 9.2). On September 21, the appellant filed an action for damages alleging that the city imposed double compensation for distance, one by applying the MTQ tariff and the other by applying the adjustment factor. It claims that the double compensation prevented it from being awarded the contract and that the city is liable for the resulting loss of profit. On May 2, 2018, it asked the Court to split the proceeding so that the issue of liability would be determined first. After the proceeding was split, the appellant amended its originating application to add a conclusion to have clause 9.2 declared unlawful and invalid. The trial judge rejected that request. The judgment granting leave to appeal raised the issue of the nature of the proceeding and the jurisdiction of the Court of Québec.

An application to review the legality of a decision differs from an action to compensate damage, and one does not hinder the other. They do not have the same objective or the same source. Whereas in the first case, a decision’s legality is challenged to neutralize its effects, it is up to the applicant in the second case to establish that the decision constitutes a fault against it, even more so when the State enjoys immunity. The decision’s illegality or invalidity is not the test of fault and should not be the test of liability.

In this case, the appellant merely claims damages, i.e., a purely private claim arising from the addition by city employees of the adjustment factor, without the city’s approval or intervention, except once the contract was awarded. While a municipal call for tenders involves, at least to a very large extent, the rules of public law, the fact remains that the alleged act essentially falls within the realm of contracts or, more broadly, civil obligations. The true nature of the proceeding is thus an action in civil liability. It would therefore be contrary to the teachings of the Supreme Court in Canada (Attorney General) v. TeleZone Inc. (S.C. Can., 2010-12-23), 2010 SCC 62, SOQUIJ AZ-50703926, 2011EXP-42, J.E. 2011-18, [2010] 3 S.C.R. 585, to require the appellant to first bring an action to quash the city’s decision. The Court of Québec therefore had jurisdiction to determine the issue before it.

As for the merits of the dispute, while it was admitted that the city’s method to determine the adjustment factor was not perfect, the judge concluded that its purpose was to take the actual cost into account when comparing tenders. The addition of the adjustment factor to the MTQ tariff, rather than its substitution, does not in itself violate public order or the principles governing the call for tenders.  It would have been concluded that there was a real double penalty only if it had been established that the adjustment factor took into account the same elements as those included in the MTQ tariff. On this point, the judge found that, even though the adjustment factor did not necessarily exclude every point of contact, the city’s explanation to justify its relevance was convincing. In the absence of a palpable and overriding by the judge, the appeal must fail.

Text of the decision: http://citoyens.soquij.qc.ca