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Procurement Perspectives: Distinctions between equitable and legal remedies

Stephen Bauld
Procurement Perspectives: Distinctions between equitable and legal remedies

There are two important distinctions between equitable and legal remedies.

First, legal remedies are available as a matter of right, whereas equitable remedies are discretionary.

Second, not only is the availability of equitable remedies a matter of judicial discretion, so too are the terms of such remedies including the duration of the application.

Stated another way, equitable remedies are flexible and their award and scope are based on what is just in all the circumstances of the case.

The judiciary may shape such remedies in accordance with principles so as to accommodate the changing needs and mores of society, in order to achieve justice. In terms of a specific case that may come before the court, where an equitable remedy has served its purpose, it may be ignored or dissolved as no longer necessary.

While the rule that equitable remedies are discretionary means that the plaintiff cannot obtain them as a right, the discretionary nature of the remedy does not mean that it can be granted or withheld on arbitrary criteria.
In the absence of proof of a bar to equitable relief, a plaintiff can expect to be granted the remedy it seeks in accordance with the principles governing its availability.

The plaintiff is not required to disprove every ground that could possibly disentitle it to that relief. It is not open to a party to argue its opponent has not sufficiently disproved the availability of a given bar. The bars to equitable relief are essentially defences to the plaintiff’s claim for such relief. It follows that the onus is on the defendant to rise the possibility of a bar and to offer evidence that such a bar exists on the facts of the case.

With these basic principles in mind, we come to look at the availability of equitable remedies in the context of claims based in the law of tender.

In some cases, a disgruntled supplier has sought an injunction or similar remedy to prevent the award of a contract contrary to the terms and conditions of the tender. To have any chance of success, such an application must normally be brought before any decision has been made, and if a grant of an application will not result in inordinate delay, there may perhaps be some reason for considering the award of such a remedy.

Even in such cases, a strong argument can be made that no injunction should be granted. Since damages will usually provide a full remedy to the supplier, it is difficult to see why an injunction would be a remedy, at least in the absence of any special circumstances.

This is especially true where the effect of delaying construction (or other supply) will be to delay some important public project.

In many cases the courts have stated that there is a critical need to maintain the “integrity” or “sanctity” of the tendering process. So in one case widely quoted case, Kencor Holdings Ltd. v. Saskatchewan, it was said:

“To maintain the integrity of the tender process it is imperative that the low, qualified bidder succeed. This is especially true in the public sector. If government meddle in the process and deviate from the industry custom of accepting the low bid, competition will wane. The inevitable consequence will be higher costs to the taxpayer.

“Moreover, when governments, for reasons of patronage or otherwise, apply criteria unknown to the bidders, great injustice follows. Bidders, doomed in advance to secret standards, will waste large sums preparing futile bids. The plaintiff here, for example, spent $23,000 on its abortive tender.”

While in another case it was said the courts agree on the need to create and monitor a legal framework which attempts to preserve the reasonable expectations of those in the bidding process.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.

Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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