Limits to judicial intervention in the trial process: a cautionary tale for lawyers

20 June 2023

Author: Nicholas Daudelin

Our adversarial justice system is based on the idea that it is up to the parties to the proceedings to formulate the issues to be decided, to submit their evidence and present their arguments, while the court is assigned the role of neutral arbitrator, generally intervening little in the course of the proceedings and not substituting itself to the parties.

The Quebec Court of Appeal recently considered the scope of this principle of “presentation by the parties” in the context of an appeal from a trial decision in which the judge had on his own initiative raised the issue of a possible breach of the causal link and had concluded on this basis that the defendant was not liable (MRT Médical inc. v. 8083851 Canada inc. (Pama Manufacturing), 2023 QCCA 470). The facts are as follows.

The facts and the trial judgment

MRT Médical inc (“MRT”), a distributor of medical equipment, was interested in bidding on a major call for tenders issued by a consortium of some twenty health care institutions called Groupe d’approvisionnement en commun de l’ouest du Québec (“GACOUEST”). In order to prepare its bid, MRT contacted Pama Manufacturing (“Pama”), a medical equipment manufacturer, to obtain a price list on which it would base its bid to GACOUEST.

The tender documents provide that tenders were to be valid for 120 days after the opening of tenders, but that this period could be extended for a further 90 days by notice from GACOUEST.

MRT submits its bid in September 2014. In mid-January 2015, before the opening of the tenders, MRT is however informed by Pama that the latter will not be able to honour the price list it had submitted. MRT therefore contacts GACOUEST and is apparently advised that it should wait and see whether the contract will be awarded. MRT decides not to pursue the matter.

On 27 February 2015, MRT wins the tender and is awarded the contract. As Pama refuses to honour the prices on which MRT’s bid was based, MRT is forced to source the equipment elsewhere at a higher price. It then institutes proceedings against Pama, claiming the losses it suffered as a result.

While this had not been specifically raised as a defence by Pama, the trial judge concluded that MRT could have revoked its bid before the contract was awarded. The trial judge found that pursuant to the tender documents, the MRT’s irrevocability had expired on January 28, 2015, so that MRT could have revoked it bid at that time, before the contract was awarded. The trial judge found that MRT’s failure to withdraw its bid constituted a breach of the causal link between Pama’s alleged misconduct and the harm MRT allegedly suffered.

The Court of Appeal’s Decision

For the majority of the Court of Appeal (Bachand J.A., with whom Sansfaçons J.A. concurred, Hamilton J.A. dissenting), the fact that the trial judge had on his own motion raised the issue of the breakdown of the causal link constituted a reviewable error:

[Translation] “[31] It is true that, generally speaking, the issue of causation was already in play at that time because, as in any civil liability action, the onus was on the appellant to prove fault, injury and a causal link between the two. However, the more specific question of whether appellant’s failure to withdraw its bid in January 2015 had broken the causal link was not in issue. This is because this issue amounted to a question of whether the appellant had itself committed a fault amounting to a novus actus interveniens by failing to withdraw its tender, with the result that it was up to the respondent to raise it. In the absence of exceptional circumstances not present in this case, a judge may not raise a defence to the action before him or her on his or her own initiative, nor may he or she raise causes of action other than those put forward by the plaintiff.

Justice Bachand also emphasized that a party cannot simply allude to a legal or factual question and then claim that it was part of the issues that the judge had to (or could) decide:

[Translation] “[33] At the appeal hearing, the respondent insisted that, during the trial on the merits, the appellant had itself addressed the issue of irrevocability of the bids. While this is correct, it does not follow that the judge could raise the issue of breach of causation on his own initiative. The fact that an issue that could be relevant to an unraised defence was addressed during the trial does not mean that the judge can raise it on his own initiative. To give another example, one can think of a plaintiff who has testified about the time when his or her damage began to manifest itself: this would not in itself allow the judge to raise a plea of extinctive prescription on his or her own initiative in the absence of argument to that effect by the defendant.”

It is interesting to note that the trial judgment in this case was based on the notion that GACOUEST would not have sent a notice of extension of the bid validity period, as permitted by the tender documents. MRT had not raised the existence of such a notice, although the issue had specifically been raised before the trial judge. In its Declaration of appeal, however, MRT claimed that such a notice had indeed been sent by GACOUEST, so that its bid could not have been revoked, as concluded by the trial judge. MRT therefore sought leave to file the notice in question as indispensable new evidence before the Court of Appeal. This application was denied by all three appeal judges, who concluded that MRT should have filed the notice at trial, and that it could not correct its error at the appeal stage. As Hamilton J.A. points out, speaking on this point for his two colleagues:

[Translation] “[20] It is clear that this judgment results in an injustice to the appellant: if it had produced this evidence at first instance, or if the Court had allowed it to do so on appeal, it would have succeeded. However, it is more important to reiterate the principles that parties are masters of their case and that the judge’s role is limited to pointing out deficiencies in the evidence than it is important to intervene. We should not seek to place a more onerous burden on judges to point out errors in the administration of evidence as this could undermine their duty of impartiality. In this case, the judge could not have known about the error. Moreover, parties who have incorrectly adduced their evidence should not be allowed to reargue their case on appeal by way of a motion for indispensable new evidence. This type of motion should only be granted if the evidence is truly “new”, i.e. it was not available at trial. Otherwise, the door will be open for the parties to redo their evidence on appeal.  In short, we must avoid creating a breach in these principles in order to do justice in a particular case.”

 

This decision is a powerful illustration of the importance for parties to clearly formulate the issues in dispute, to raise all the arguments on which their claims are based, and to produce all the relevant documentary evidence. It also underlines that while trial judges can intervene in the debate before them, there are limits on them doing so, in particular when this would result in them modifying what the parties had agreed to submit as issues to be decided by the Court.