Executive Summary: Key Legal and Evidentiary Issues

• Whether Bombardier’s omissions regarding the L85 program constituted dol (fraudulent misrepresentation) under article 1401 C.c.Q.

• Assessment of whether Bombardier violated its duty of good faith in contractual negotiations.

• Determination of the causal link between Bombardier’s conduct and the financial damages claimed by Cormer.

• Evaluation of whether the trial judge misapplied the burden of proof or overlooked relevant evidence.

• Consideration of whether the losses claimed by Cormer were a direct and immediate consequence of Bombardier’s actions.

• Clarification of the legal threshold for awarding damages for misrepresentation and breach of good faith in a commercial context.

Background and contractual dispute

Cormer Group Industries Inc. and Bombardier Inc. entered into negotiations in 2011 related to the manufacture of structural parts for Bombardier’s new aircraft, the L85. Cormer committed significant resources to establish a production facility in Mexico in reliance on this opportunity. After signing a Letter of Intent in September 2011 and a Long-Term Agreement (LTA) in February 2012, Cormer began investing in tooling, hiring, and plant setup.

Unbeknownst to Cormer, Bombardier had begun internal deliberations in mid-2011 and early 2012 about possibly suspending or modifying the L85 program. Ultimately, the program was suspended in July 2012. Cormer argued that Bombardier knowingly concealed this strategic shift, inducing it to commit substantial investments. It filed a lawsuit in Superior Court, claiming over $11 million in damages based on dol (fraudulent silence), breach of the duty of good faith in contractual formation, and general contractual fault under article 1458 C.c.Q.

The Superior Court dismissed the action, finding that although Bombardier had been opaque in its communications, its conduct did not meet the threshold for dol or actionable breach of good faith. The judge found no sufficient causal link between Bombardier’s internal discussions and Cormer’s financial losses, which were partly attributable to its own business decisions.

Court of Appeal decision

Cormer appealed, arguing that the trial judge erred in law and in the assessment of the evidence. The Quebec Court of Appeal, however, unanimously dismissed the appeal.

Justice Bich, writing for the Court, found that:

• The elements of dol under article 1401 C.c.Q. were not made out. There was no active concealment, nor proof that Bombardier knew Cormer would not have contracted had it known about the internal discussions.

• Good faith, while requiring honesty and openness, does not impose an obligation to disclose all internal corporate uncertainties or pending strategic decisions. In the context of this commercial relationship, Bombardier’s silence was not contrary to law or contractual standards.

• The causal link under article 1607 C.c.Q. was lacking. Cormer’s losses stemmed from its own commercial judgment, including the speed and scale of its investment decisions, not from any precise act or omission of Bombardier.

• The damages were not the immediate and direct consequences required by article 1611 C.c.Q., nor were they reasonably foreseeable within the meaning of article 1613.

The Court emphasized that commercial parties bear responsibility for securing their own contractual protections and performing due diligence, especially when investing heavily in anticipation of future performance.

Outcome

The Quebec Court of Appeal dismissed the appeal in its entirety. It upheld the Superior Court’s ruling that Bombardier inc. was not liable for the damages claimed. The Court did not disturb the trial judge’s findings on credibility, causation, or legal interpretation. As a result: