Excluding persons from a potential contract or opportunity is a practice referred to as “blacklisting”. FORCOMP Forestry Consulting Ltd. v. British Columbia, 2021 BCCA 465 confirms there is no tort of “blacklisting” in Canada. In FORCOMP, the B.C. Court of Appeal affirmed the dismissal of a claim for “blacklisting” – concluding that the law in Canada does not recognize such a tort.
FORCOMP is of interest to municipalities as well as universities, colleges, and all other owners and developers in respect to the use of “blacklist” clauses in tender documents. The decision is also of interest to contractors as it signals the ability of owners to continue to use “blacklist” clauses to exclude contractors with whom they end up in a litigated dispute.
Background
FORCOMP Forestry Consulting Ltd. (“FORCOMP”) is a professional forester whose work requires access to data maintained by the Ministry of Forests of B.C. (the “Ministry”).
Between 1993 and 2002, FORCOMP contracted with the Ministry to provide forestry data analysis. After 2002 this work stopped. FORCOMP alleged this work stopped because it had identified certain errors in the Ministry’s growth models which resulted in errors in the Ministry’s resource planning. FORCOMP alleged as a reprisal, the Ministry blacklisted FORCOMP from securing further government contracts.
FORCOMP sued the Province and individual employees of the Ministry, advancing 4 claims:
- misfeasance in public office;
- conspiracy;
- breach of s. 2(b) of the Charter (freedom of expression); and
- blacklisting.
On an application by the Defendants, the chambers judge struck FORCOMP’s claims in their entirety. The chambers judge held that the claims as pleaded did not disclose any reasonable claim, were frivolous, and were an abuse of process of the court. With respect to the tort of blacklisting, the chambers judge acknowledged that while novel causes of action do not automatically render an action as being doomed to fail, FORCOMP failed to properly plead the necessary facts to ground the claim based on its own proposed framework for the novel tort.
The Court of Appeal Decision
On appeal by FORCOMP, the B.C. Court of Appeal reversed the chambers judge’s decision in part. The Court of Appeal found at the early stage of litigation, FORCOMP’s pleading did disclose a reasonable claim for misfeasance in public office, conspiracy, and breach of s. 2(b) of the Charter.
However, the Court of Appeal affirmed the chambers judge’s dismissal of the tort of blacklisting. The Court of Appeal agreed with the chambers judge that, per the Supreme Court of Canada’s statements in R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, novel claims may be advanced so long as they reflect an incremental development to an existing body of law.
In this case, the Court of Appeal found that no such body of law existed. The Court of Appeal rejected authority relied on by FORCOMP from the U.S. and India – noting that American authority did not support such a novel claim and that the authority in India related to the enforcement of a recognized civil cause of action and accordingly the authority served only to confirm the necessity of upholding procedural fairness rights for parties put on a “blacklist”. In short, the Court of Appeal found no tort of blacklisting exists in the common law world, nor has it been proposed in any common law academic text or other commentaries. Allowing the tort of blacklisting would not reflect a mere incremental development – it would be creating new law which is the mandate of the legislature, not the courts.
The Court of Appeal concluded that in any event, even on FORCOMP’s own proposed framework for blacklisting, it failed to plead the necessary facts to ground all of the elements of the tort.
Implications for Owners and Contractors
The practice of blacklisting in the construction industry began some 20 years ago in response to mass suits brought by contractors against municipalities. See, for example a related article “Discrimination Policies: Do You Have to do Business With Someone Who is Suing You?” published in the July 2001 edition of our Construction Law Bulletin newsletter (available on our website). FORCOMP indicates blacklisting will remain a business practice in the construction industry. FORCOMP’s appeal to the Supreme Court of Canada was denied as of June 30, 2022. Thus, this decision steers the tort of blacklisting further and further away from Canadian law.
Notably, in FORCOMP the B.C. Court of Appeal appears to have gone out of its way to confirm on the record that blacklisting is not, and has never been, a legal basis on which to sue. The Court of Appeal’s reasoning went one step further than the chambers judge who simply found that the pleadings failed to properly allege the facts necessary to ground the tort (i.e. “blacklisting” could be a tort if it was pleaded properly). In other words, FORCOMP may have succeeded before the chambers judge had it pleaded the necessary facts – but on appeal, FORCOMP was seemingly doomed to fail for the fact that the Court was not ready to recognize the claim as a novel tort (as no cause of action exists, no pleadings test could apply to save the claim).
FORCOMP does not mean owners can blacklist with total impunity. FORCOMP was permitted to continue its claims for misfeasance in public office, conspiracy, and breach of s. 2(b) of the Charter. History also tells us an owner can still be exposed to liability without the tort of blacklisting. Indeed, the government has been successfully sued for blacklisting in a manner that the courts have regarded as indicating an improper motive and misuse of a public position.[1] Owners and contractors should remain cognizant of the implications of blacklisting and what rights or recourses a contractor may have should it be blacklisted.
[1] See for example Soo Logging Co. Ltd. v. Province of B.C. [2004], B.C.J. No. 506: in this case, the B.C. Court of Appeal upheld a judgment against the Ministry of Forests for improperly terminating a road construction contract, which included special costs. The Court of Appeal considered, among other things, that the government had blacklisted the contractor with an improper motive to punish them for suing the Ministry.
