After a call for tenders, it is not unusual for an unsuccessful bidder to contest the outcome by taking legal action against the client. It is, however, more unusual to see the plaintiff take legal action against the successful bidder.
The recent decision of the Quebec Superior Court in Fermes A. Collin inc.1 shows that such an action can be successfully challenged by means of a motion to dismiss.
Summary of facts
In this case, the Municipality of Saint-Esprit initiated a tendering process for the removal and the supply and dispersal of abrasives on its territory. The plaintiff, Les Fermes A. Collin Inc. ("Collin"), and the defendant, Au Sentier de l'érable, s.e.n.c. ("Sentier"), both submitted bids. The Municipality awarded the contract to Sentier.
Collin argued that Sentier's bid was non-compliant, as it failed to demonstrate that Sentier owned or rented the necessary equipment on a long-term basis, as required by the specifications of the call for tenders.
Collin therefore sued the Municipality and Sentier, alleging that they were jointly and severally liable to pay it the sum of $336,431.86, i.e., the profits it would have earned had it won the contract.
Sentier asked for dismissal of the action on the grounds that there was no real allegation of fault against it that would justify an award for damages.
Principles of law
The Court recognized that, in the case of a motion to dismiss under article 165(4) of the formerCode of Civil Procedure, the facts alleged are assumed to be true. However, the Court pointed out that while the facts are assumed to be true, the legal characterization of those facts is not. In this case, the action was extra-contractual and required an allegation of fault.
In addition, the Court distinguished the facts of the case with those of L'Immobilière Société d'évaluation conseil inc.2 In that case, the Court of Appeal allowed the action brought by an unsuccessful bidder, Les Évaluations BTF, against a successful bidder, L'Immobilière. Contrary to the present case, the bid submitted by L'Immobilière was inaccurate in several respects, and the bidder had wilfully misled the selection committee.
The Superior Court ruled in favour of Sentier, granted the motion to dismiss, and dismissed Collin's action.
According to the Court, the action contained no allegations of collusion or corrupt practice between the Municipality and Sentier. Nor did it contain any allegations of misrepresentation on the part of Sentier.
Consequently, the Court declared the action inadmissible in the absence of any concrete allegation of fault.