The appellant bank, as assignee of a bankrupt subcontractor's accounts receivable, brought a delictual action against the respondent owner (Hydro-Québec) for failing to disclose geotechnical reports that revealed poor soil conditions and errors in the original design.
The trial judge allowed the action, finding the owner acted fraudulently by hiding the information, which led to the subcontractor's financial ruin.
The Court of Appeal reversed this decision.
The Supreme Court of Canada allowed the appeal in part, holding that the Court of Appeal erred in overturning the trial judge's findings of fact without demonstrating a palpable and overriding error.
The Court affirmed that a contracting party can be delictually liable to a third party (the subcontractor) for failing to act reasonably, which includes a duty to inform in the context of a large construction project where the owner possesses superior expertise and knowledge of design errors.
