Executive Summary: Key Legal and Evidentiary Issues

• Universal Protection Service of Canada Corporation challenged CATSA's RFP outcome after losing its incumbent position as the Pacific Region airport security screening provider to Paladin Airport Security Service Ltd.

• CATSA brought a motion to strike and for particulars against Universal's amended statement of claim, with two of the original five issues proceeding to adjudication.

• Paragraph 80 of the Claim was struck for containing immaterial facts, including the vague reference to "other financial losses" that was open-ended and not tied to the scaffolding of the prayer for relief.

• Universal's allegations of mathematical errors in CATSA's bid evaluation lacked sufficient material facts, as the Claim failed to define or explain the nature of the errors, the meaning of "rates," or the specifics of consensus scoring inconsistencies.

• Leave to amend was granted on the reputational harm claim, with the Court declining to deny amendment on jurisdictional grounds given recent Federal Court jurisprudence on the issue.

• Particulars were ordered within 15 days regarding the alleged mathematical errors and consensus scoring inconsistencies in paragraphs 45, 48, and 54 of the Claim.

Background and the RFP process

This case arises from a request for proposal process administered by the Canadian Air Transport Security Authority (CATSA) for the delivery of aviation screening services across several Canadian regions. CATSA issued the RFP to establish contracts for airport security screening in defined regions, namely the Pacific and Prairies Regions as well as the Central and Atlantic Regions. Upon evaluation, CATSA determined that Paladin Airport Security Service Ltd had the highest-rated proposal for the Pacific and Prairies Regions, while GardaWorld Security Screening Inc had the highest-rated proposal for the Central and Atlantic Regions. Universal Protection Service of Canada Corporation, which had been the incumbent service provider for the Pacific Region, did not receive the highest rating under the terms of the RFP for any of the regions it bid on.

Universal's legal proceedings

Universal pursued two parallel legal avenues in response. First, it commenced an application for judicial review of CATSA's decision on the RFP, which is ongoing with a certified tribunal record produced and a pending motion relating to the content of that record. The two proceedings are being case managed in common. Second, on November 17, 2025, Universal issued the statement of claim in this action, subsequently filing an amended statement of claim on February 26, 2026. The Claim sought compensatory damages for the loss of profits associated with the Pacific and Prairies Regions, punitive damages, and damages for the costs of preparing its bids in the RFP process. CATSA then brought a motion to strike and for particulars. Of the five issues identified in CATSA's notice of motion, three were resolved before the hearing, leaving two to be adjudicated.

The reputational harm allegation and paragraph 80

The first issue concerned paragraph 80 of the Claim, which stated that as a result of CATSA's conduct, Allied Universal Canada had suffered a loss of reputation in the marketplace and "other financial losses." Associate Judge Trent Horne found that this paragraph must be struck. The reference to "other financial losses" was open-ended and non-limiting. As the Court noted, words like "including without limitation" are magnets for a demand for particulars, and the use of "other financial losses" implied that there may be other kinds of financial losses beyond loss of reputation for which relief was claimed. If other kinds of financial losses were contemplated, the defendants were entitled to know what they are. More fundamentally, paragraph 80 did not provide material facts supporting any of the claimed heads of damages. The compensatory damages in paragraph 1 of the Claim were for lost profits arising from Universal not being awarded a contract after the RFP process, which was unrelated to any reputational harm. Punitive damages were claimed, but the material facts in that respect were set out in paragraphs 37–52, 54–55, and 56–62. There was also a claim for the costs of preparing the bids, but this too was unrelated to reputational harm. Paragraph 80 was therefore not tied to the scaffolding of the prayer for relief and raised immaterial facts.

Leave to amend on the reputational claim

Universal had included in its responding motion materials a draft further amended statement of claim that sought to add a new paragraph to the prayer for relief seeking damages for loss of reputation, estimated to be no less than $5 million. The proposed amendment to paragraph 80 described Allied Universal Canada as a global leader in airport security screening services whose presence in the Canadian marketplace had been diminished after losing the ASSAs, negatively impacting its subsequent tendering and marketing processes for security services contracts. The Court raised the question of whether the Federal Court has jurisdiction to adjudicate a claim for loss of reputation. However, since CATSA did not oppose a further amendment on jurisdictional grounds and given the Court's recent consideration of reputational harm claims in Louis Dreyfus Company Canada ULC v Canadian National Railway Company, 2025 FC 1868, the Court declined to deny the amendment on that basis. While the Court noted that Universal's proposed language — stating that the loss of the bid "negatively impacted Allied Universal Canada's subsequent tendering and marketing processes for security services contracts" — would not be sufficient because it did not set out material facts identifying a monetary loss, the Court was not satisfied that Universal was incapable of pleading material facts in this respect. Taking the generous approach required by the jurisprudence, paragraph 80 was struck with leave to amend.

The mathematical errors issue and the demand for particulars

The second issue involved Universal's allegations that CATSA failed to detect and remedy mathematical errors and inconsistencies in the consensus scoring of the bid evaluation process. These allegations appeared in paragraphs 45, 48, and 54 of the Claim. Paragraph 45 asserted that CATSA failed to detect and remedy mathematical errors and inconsistencies in the consensus scoring, but the Claim did not define or explain what these mathematical errors were or otherwise make any reference to consensus scoring. Paragraph 48 referred to an issue regarding "rates" included in Paladin's bid, with item (iii) also referring to mathematical errors. Paragraph 54 referred to the "rates" in Paladin's bid and asserted that CATSA failed to communicate with Paladin to confirm any corrections of such mathematical errors. There was no explanation in the Claim as to what these "rates" were. Universal argued that the mathematical errors and scoring inconsistencies were within CATSA's knowledge because they were contained in documents in CATSA's possession and were specifically communicated to CATSA in prior correspondence. The Court rejected this position. That correspondence had been in the context of the co-pending application for judicial review, and the Court was not satisfied that a letter sent in another Court file meets the requirement that a pleading contain sufficient material facts. Allowing a party to modify or update its material facts by sending letters in another Court file would undermine the certainty and predictability of proper pleadings, which can only be amended with leave. It was not for CATSA to review its documents and look for what it may consider to be a mathematical error or an inconsistency in consensus scoring, or assume what Universal may mean by such terms. Universal was required to plant a flag and state what those errors are. During argument, Universal stated that there were five mathematical errors, but this was not set out in the written representations and was apparently news to CATSA.

The ruling and outcome

On April 20, 2026, Associate Judge Horne issued the Court's order. CATSA was partially successful on its motion: paragraph 80 of the amended statement of claim was struck with leave to amend, and Universal was ordered to provide particulars of the mathematical errors and inconsistencies in consensus scoring referred to in paragraphs 45, 48, and 54 within 15 days of the date of the order. However, CATSA's argument that leave to further amend should be refused — on the basis that Universal had had multiple opportunities to articulate material facts supporting a claim for reputational harm and had been unable to do so — was not accepted by the Court. The parties were encouraged to reach an agreement on costs, failing which CATSA was given 10 days to file costs submissions not to exceed five pages, and Universal was given 20 days to file any costs submissions in reply, also not to exceed five pages. No exact monetary amount was awarded to either party, as this was an interlocutory procedural ruling on a motion to strike and for particulars rather than a final adjudication on the merits.