Executive Summary: Key Legal and Evidentiary Issues

• Scope and standard of civil liability for allegedly negligent anti-corruption investigations by UPAC / Escouade Marteau and the Competition Bureau under art. 1457 C.c.Q.
• Application and breadth of the statutory “good faith” immunity in art. 20 of the Loi concernant la lutte contre la corruption, including to federal Competition Bureau investigators seconded to UPAC.
• Weight and reliability of key cooperating witnesses (Philippe Rosso and Denis Bonin), and the extent to which their motives, contradictions and corroborating documents affected “reasonable and probable grounds” to accuse.
• Treatment of Paradis’s statements (July 2011 and June 2012), including absence or presence of Charter-type cautions, accuracy of written summaries, lack of video recording, and whether any omissions or errors tainted the prosecution.
• Handling of documentary evidence seized at Construction GCP (seizure, sealing orders, non-disclosure until later, and alleged breaks in chain of custody) and whether these amounted to serious procedural faults.
• Effect of the prosecutorial stay after Jordan-type delay, the subsequent criminal convictions of other actors in the collusion scheme, and the role of prescription on the viability of the civil claim, all weighed against the high threshold for overcoming public-law immunities.

Background and parties

Gaétan Paradis is a long-time construction entrepreneur in the Haut-Richelieu region of Québec and president of Construction G.C.P. Inc. (Construction GCP). The company had a solid regional reputation and had completed numerous major public and private projects in and around Saint-Jean-sur-Richelieu. In 2012, Paradis and Construction GCP were charged criminally with bid-rigging in relation to two municipal infrastructure tenders: the PP-13 pumping station project (Projet PP13) and the Rive Est water filtration plant modernization (Projet Rive Est). The charges alleged infractions of section 47 of the federal Competition Act connected to collusion in municipal calls for tenders. Several years later, after lengthy criminal proceedings and following the Supreme Court of Canada’s decision in R. v. Jordan on unreasonable delay, the federal Director of Public Prosecutions (acting through the Service des poursuites pénales du Canada, SPPC) entered a stay of proceedings in the Competition Act file. Paradis and Construction GCP then sued the Attorney General of Canada and the Attorney General of Québec in civil liability, claiming more than $3.18 million in financial, reputational and moral damages, alleging a botched investigation and wrongful prosecution.

Anti-corruption framework and the Grattoir investigation

In 2009, Québec launched a broad anti-corruption initiative in response to mounting allegations of collusion and corruption in public construction contracts, particularly in the municipal sector. This led to the creation of the Escouade Marteau, a mixed investigative team pooling resources from the Sûreté du Québec (SQ), the RCMP, municipal and other police forces, and the federal Competition Bureau. In 2011, the Unité permanente anticorruption (UPAC) was created by decree and the Escouade Marteau was folded into this permanent structure. UPAC operated within the framework of the Loi concernant la lutte contre la corruption, which created the office of the anti-corruption commissioner and established mechanisms to receive and investigate reports of corruption, collusion, fraud, abuse of trust and similar misconduct in public contracting. The Commissioner was tasked with directing and coordinating investigative teams designated by government, including UPAC. Within this institutional structure, the “Grattoir” investigation was launched in 2010 following a tip from Philippe Rosso, a former estimator at Civ-Bec Inc., a civil-engineering contractor. Rosso alleged the existence of a collusive arrangement among five contractors (the “Groupe des Cinq”) in the Saint-Jean-sur-Richelieu area and described systematic bid-rigging on municipal infrastructure projects. He also linked Construction GCP, though not part of the core group, to regular participation in bid-rigging schemes, including for Projet PP13 and Projet Rive Est. The lead investigator on Grattoir was Marie-Claude Touchette, an experienced Competition Bureau officer seconded to the Escouade Marteau and then UPAC, assisted closely by SQ investigator Stéphane Champagne.

Alleged collusion and the role of Construction GCP

Rosso told investigators that Civ-Bec promised Construction GCP subcontract work in exchange for Construction GCP filing a non-genuine (“de complaisance”) bid on PP13 so Civ-Bec could win the contract. He produced emails in which he sent a fully priced, itemized spreadsheet to Construction GCP’s estimator, Denis Bonin, indicating what numbers to include in GCP’s general-contractor bid so that its total would be above Civ-Bec’s. Similar evidence was presented for Projet Rive Est. Rosso said Fedele, a Civ-Bec principal, told him that “tout est réglé” and that “tout le monde va se tasser,” while other players refused to prepare their own bids. Rosso later gave a sworn, recorded KGB-type statement broadly confirming his earlier allegations. Investigators also interviewed Bonin, who confirmed much of Rosso’s account, handed over documents (often overlapping with Rosso’s), and, crucially, implicated Paradis personally. According to Bonin, Paradis instructed him to file sham bids on PP13 and Rive Est so that Civ-Bec would be assured of winning, with Construction GCP expecting subcontract work in return. In April 2011, relying largely on Rosso and Bonin’s information, UPAC obtained search warrants for multiple locations, including Civ-Bec and Construction GCP. The police seized numerous documents from GCP, many of which matched those supplied by Rosso and Bonin, reinforcing the investigators’ view that Civ-Bec had effectively prepared GCP’s “losing” bids on the two municipal projects.

Criminal proceedings and their termination

In June 2012, criminal charges under section 47(1)(b) and 47(2) of the Competition Act were laid against several corporations and individuals, including Paradis and Construction GCP. The charges alleged that they had submitted bids which were the product of an undisclosed agreement or arrangement among bidders in response to the PP13 and Rive Est calls for tenders, thus amounting to bid-rigging. Parallel fraud and related charges were filed in the Court of Québec against other players such as Civ-Bec and its principals, though not against Paradis or GCP. Paradis was arrested on 21 June 2012 and interrogated by SQ-UPAC officers Geneviève Leclerc and Gilles Desmarais. He spoke at length but declined to sign a written statement. A joint preliminary inquiry was held in 2014 in the Competition Act file and the provincial offences file. Around 30 witnesses, including Rosso and Bonin, testified. At the end of the preliminary inquiry, the Court of Québec concluded that the evidence against Paradis and Construction GCP was “amply sufficient” to commit them to stand trial on the bid-rigging counts. Meanwhile, the provincial criminal case (which did not include Paradis or GCP) proceeded to a lengthy trial. In 2017, several accused, including Civ-Bec and its principal Pasquale Fedele, were convicted of multiple counts, with the trial judge finding beyond a reasonable doubt that there was collusion at least between Civ-Bec and Construction GCP on the PP13 and Rive Est contracts. In the Competition Act file, Construction GCP brought a Jordan-based motion in September 2016 seeking a stay for unreasonable delay. While that application was being heard in early 2017, and shortly after the Jordan decision was released, the SPPC entered a discretionary stay of proceedings under section 579 of the Criminal Code, effectively ending the criminal case against Paradis and GCP without a trial on the merits.

Civil claim for negligent investigation and wrongful prosecution

Paradis and Construction GCP then pursued a civil action in the Superior Court of Québec. They alleged that the anti-corruption and Competition Bureau investigators had conducted a sloppy and biased investigation, lacked reasonable and probable grounds to accuse them, and had fundamentally misunderstood or ignored exculpatory information. They also suggested that Crown prosecutors with the SPPC had acted negligently or improperly by authorizing and maintaining charges on an inadequate evidentiary basis. The plaintiffs claimed approximately $3,186,115 in damages for alleged financial loss (including loss of public contracts and surety bonding), reputational harm, stress and moral prejudice. By prior order, the civil case was bifurcated: the Court would first rule on liability of the public authorities and, only if liability were found, a second phase would address the quantum of damages. The judgment in 2026 deals only with this first stage and focuses on whether the investigators and Crown prosecutors committed any actionable civil faults, and whether any such faults caused the laying or continuation of unjustified criminal proceedings.

Legal standards for police liability and public-law immunity

The Court began by setting out the Québec civil-law framework. Under art. 1457 C.c.Q., any person (including the State through arts. 1376 and 1463-1464 C.c.Q.) owes a duty to respect rules of conduct to avoid causing injury to others; extra-contractual fault arises where someone departs from what a reasonable, prudent and diligent person would have done in the same circumstances. For police and investigators, that standard is the “normally prudent, diligent and competent” officer. It is an obligation of means, not of result, and does not demand perfection or excellence. Investigations must be carried out in good faith, seriously and objectively. Before recommending charges, investigators must have reasonable and probable grounds to believe in the suspect’s guilt; this is a lower threshold than proof beyond a reasonable doubt and does not require the officer to be convinced the Crown will win at trial. The judge emphasized that an acquittal or a stay of proceedings does not, by itself, prove negligent investigation. Plaintiffs must still show fault, damage and causation on the civil balance of probabilities. Crucially, the Court held that all investigators involved in the Grattoir operation, including those seconded from the federal Competition Bureau, benefitted from the statutory immunity in art. 20 of the Loi concernant la lutte contre la corruption. That provision shields the Commissioner, his staff, and members of designated investigative teams from civil suits for acts or omissions done in good faith in the exercise of their functions. Drawing on Supreme Court jurisprudence in Finney and Hinse, the Court characterised this as a “relative” immunity: to overcome it, plaintiffs must show bad faith in the subjective sense (intent to harm) or a very serious form of gross negligence (faute lourde), amounting to reckless disregard of legal duties. The burden is heavy. The Court also rejected a constitutional argument that this provincial immunity could not apply to federal Competition Bureau agents. It held there was no conflict with federal powers or federal paramountcy, and that the federal State can benefit from provincial immunities where compatible with its own liability regime.

Evaluation of key witnesses and evidentiary foundation

A central plank of the plaintiffs’ case was that the investigation rested on the unreliable word of two compromised witnesses: Rosso and Bonin. They argued Rosso had a vendetta against Civ-Bec and its principal Fedele and was embroiled in civil litigation with them; Bonin allegedly harboured resentment towards his former employer, Construction GCP, and hoped to curry favour with Civ-Bec. The Court accepted that both men had personal motives and that these issues should be factored into credibility analysis. It also acknowledged that the précis of facts prepared for the SPPC did not explicitly highlight these motives, even though they were documented elsewhere in the investigative file. However, the Court found that the investigators were well aware of these concerns, documented them in their internal records, and cross-checked Rosso and Bonin’s accounts by extensive corroborative work. Over about two years, the team interviewed more than 130 witnesses, conducted surveillance, reviewed tender documents via SEAO, executed 18 searches, and analysed numerous seized records. The judge stressed that Rosso, as Civ-Bec’s estimator, and Bonin, as GCP’s estimator responsible for the actual bids on PP13 and Rive Est, were both in “privileged positions” to know how the tenders were actually prepared. Their statements were supported by documentary evidence: matching email exchanges, virtually identical pricing spreadsheets sent from Rosso to Bonin, overlapping documents from different sources, and seizure of the same materials at GCP’s offices. The pattern of GCP’s bids—non-compliant with mandatory bonding requirements and therefore effectively doomed—further supported the theory of sham participation. Additional notes written by Paradis to Bonin about working on the tenders aligned with Bonin’s account that Paradis was actively engaged in the bidding process. The Court also placed significant weight on earlier judicial findings: (1) after a full preliminary inquiry, the Court of Québec had already held that the evidence against Paradis and GCP was “amply sufficient” to justify committing them to trial; and (2) in the related provincial fraud trial, the Court of Québec convicted Civ-Bec and others, having made a careful Vetrovec-type assessment and still finding Rosso and Bonin credible, and concluding that there was collusion “without any doubt” between Civ-Bec and Construction GCP for the PP13 and Rive Est projects. Against that backdrop, the Superior Court held that it would be incoherent to retrospectively say that investigators lacked reasonable and probable grounds to recommend charges when multiple courts, on much fuller evidence, had found the same record strong enough for committal and for convictions of related actors. The plaintiffs, the judge noted, had not identified any specific additional investigative steps that a reasonable officer should have taken, nor any new exculpatory evidence that such steps would have uncovered.

Handling of Paradis’s arrests, interrogations and statements

The plaintiffs next attacked the way the investigators obtained and recorded Paradis’s own statements. Two key episodes were at issue: a July 2011 visit by investigators to serve a motion to extend the retention of seized items, during which Paradis spontaneously spoke about the projects; and the formal arrest and interrogation in June 2012. For July 2011, Paradis received no formal caution about his right to silence. The lead investigator, Touchette, took notes on a scratch pad and later wrote a summary that described Paradis’s explanation: Civ-Bec supposedly sent GCP only its subcontract price for a mechanical portion, GCP added its own building work and margin, and filed a genuine bid as general contractor, not a sham one. Paradis also acknowledged that on other occasions he had agreed to “put in a price” at a competitor’s request when he did not want a job, though he denied seeing that as collusion. Touchette reproduced this account in the précis of facts sent to the SPPC, expressly noting that no caution had been given. At trial, SPPC counsel testified they had assumed this statement would likely be inadmissible at a criminal trial and had never relied on it to justify the charges. They viewed it as cumulative and ambiguous at best; it did not generate further leads or “fruits of the poisonous tree.” The Court accepted that conclusion and held that, even if the absence of a caution had been technically questionable, it caused no prejudice and did not contribute to the decision to prosecute. For the June 2012 arrest, Paradis claimed he had not been advised of his right to silence. Officer Leclerc testified in detail that she and her partner read him standard Charter rights twice—at his home and again in the police car—and then facilitated a private telephone consultation with counsel before questioning. Her account was supported by contemporaneous notebook entries by her partner, Desmarais, which the Court found credible. Paradis’s recollection was vague and internally inconsistent, including an incorrect assertion that he had never previously been arrested. The judge preferred Leclerc’s version and concluded that Paradis had been properly advised and had spoken voluntarily. The plaintiffs also complained that the ECR (UPAC’s running investigation log) inaccurately stated that Paradis had given a written statement and contained an overly compressed summary suggesting he had made admissions to using Civ-Bec’s numbers because he already had subcontract work. The Court agreed that the ECR contained some imprecise wording, partly due to the use of pre-formatted templates and later transcription. However, it stressed that the ECR was an internal management tool, not the primary evidentiary record. Investigators and prosecutors were expected to consult original notes and underlying documents. Those notes showed that Paradis largely denied being part of a “system,” denied knowingly stepping aside for Civ-Bec, and repeatedly claimed he did not think what he had done was “collusion.” The Court found no deliberate falsification and, again, no causal link between any ECR inaccuracies and the decision to prosecute or maintain charges.

Evidence seizure, confidentiality and chain of custody

A further line of attack focused on the April 2011 search at Construction GCP’s offices and the handling of seized evidence. The plaintiffs argued they had been kept in the dark for over a year about the grounds for the search and the items seized, and claimed an unexplained break in the chain of custody. The Court reviewed the record and held that confidentiality flowed from a sealing order granted under s. 487.3 of the Criminal Code by the Court of Québec. The order was based on an affidavit from investigator Champagne explaining that the investigation was ongoing, that additional searches were anticipated, that surprise was critical, that media attention risked compromising the work, and that there were concerns about witness safety and document destruction. In that context, non-disclosure of the supporting materials and seized-items list until the sealing order was later lifted was lawful and not a fault of the investigators. Paradis was informed on the day of the search that the investigation related to PP13 and Rive Est, and he himself directed officers to the relevant filing cabinets. The Court found no evidence of prejudice from the temporary sealing. On chain of custody, the plaintiffs relied on a single SQ “Disposition des pièces à conviction” form, suggesting that some items’ movement was not properly recorded. The Court heard evidence that multiple officers took part in the search, that investigator Guylène Leclerc was in charge of triaging and formally seizing documents, and that all seized paper documents (Lot 2011-1158) and digital media (Lot 2011-1159) were logged and transferred to the SQ’s exhibits vault. The form showed that all items were initially lodged and then removed and returned for copying and analysis, with signatures from vault staff confirming re-deposit. The plaintiffs called no witness involved in the physical handling of the exhibits and offered no concrete evidence of tampering or loss. The Court held there was no proven break in the chain and no serious procedural fault in the management of the seized material.

Disciplinary history of the lead investigator

The plaintiffs attempted to undermine investigator Touchette’s credibility by introducing a 2016 “McNeil letter” from the SPPC in the criminal file, disclosing that she had been dismissed from the Competition Bureau for alleged misconduct in a later, unrelated investigation (2014) involving search warrants. They contended this showed a pattern of falsifying affidavits, hiding evidence and disregarding chain-of-custody safeguards—behaviour said to mirror what happened in Grattoir. The Court admitted the McNeil letter for limited purposes, primarily as potential impeachment of Touchette’s credibility, but noted that the underlying dismissal letter from the Bureau was not in evidence and that Touchette’s detailed testimony refuted the allegations. She explained her version of the later case, denied knowingly misleading the court or her superiors, and stated she had contested her dismissal before eventually resigning when she found new employment. The Court found that the plaintiffs had not proven, even on a balance of probabilities, that the 2014 disciplinary allegations were well-founded. It therefore gave the McNeil letter only minimal weight. Combined with the fact that Touchette’s evidence on Grattoir was well-supported by documents and independent witnesses, the Court concluded that her subsequent employment dispute did not undermine the reliability of her account in this civil action.

Public-law immunity for prosecutors and the SPPC’s role

Though the civil claim focused largely on investigators, the pleadings and argument also touched—albeit obliquely—on the conduct of the SPPC. The Superior Court summarized the Supreme Court of Canada’s framework for civil liability of prosecutors for malicious prosecution: the plaintiff must prove that the criminal proceedings were initiated by the defendant, ended in the plaintiff’s favour, lacked reasonable and probable grounds, and were pursued with malice or for an improper purpose unrelated to the administration of justice. This is an intentionally demanding standard designed to protect prosecutorial independence. During closing argument in the civil case, the plaintiffs effectively abandoned any attempt to meet this test; there were no concrete allegations or evidence of malice, improper motive or abuse of prosecutorial power by the SPPC. SPPC counsel Martine Sirois testified that at all times prosecutors believed the evidentiary record in the Competition Act case met the “reasonable prospect of conviction” standard, and that the stay in January 2017 was motivated solely by concerns about Jordan-type delay jurisprudence and the risk of creating an unfavourable precedent if the Jordan motion were adjudicated. The Court found this evidence credible and saw nothing to suggest bad faith. In light of that and in the absence of any serious malicious-prosecution case, the Court held that the SPPC bore no civil liability.

Prescription and timing of the civil action

The defendants also raised a limitation defence. All parties agreed that the applicable basic prescription was three years under art. 2925 C.c.Q., not the one-year period for defamation-type actions. The question was when the three-year clock began to run. The Attorney General of Canada argued that any cause of action crystallized in June 2012, when Paradis was arrested and fully aware of the material facts underlying his complaint, making the 2018 civil claim out of time. The Attorney General of Québec took a more nuanced view, suggesting that prescription had run on certain discrete alleged faults but not on the overarching claim of wrongful prosecution. The Court applied the approach from Popovic, which holds that for actions effectively premised on the wrongful nature of an ongoing criminal proceeding, prescription is suspended until that proceeding ends because its outcome is integral to the civil cause of action. It concluded that the plaintiffs’ civil claim was in substance about the fact and consequences of being criminally charged, not about stand-alone harms from isolated investigative steps; without the criminal charges, the civil action would never have been brought. Given that the criminal case ended with a stay on 6 January 2017 and the civil action was filed in December 2018, the Court held that the claim was not prescribed. Nonetheless, this finding only meant the case could be decided on the merits of alleged fault and causation; it did not assist the plaintiffs on the substantive issues, where they failed.

Final assessment and outcome

After an exhaustive review of the investigative steps, the evidence available to investigators and prosecutors at each stage, and the legal standards for police and prosecutorial liability, the Superior Court concluded that the plaintiffs had not discharged their burden. The Court found no proof of intentional misconduct or gross negligence on the part of any member of the Escouade Marteau/UPAC or the Competition Bureau, as required to pierce the statutory immunity under the anti-corruption legislation. Nor was there evidence that investigators ignored exculpatory leads, fixated on Paradis to the exclusion of contrary facts, or otherwise engaged in the kind of “tunnel vision” seen in the Manoukian case. At most, the Court identified minor imperfections in record-keeping and drafting of summaries, none of which materially affected the existence of reasonable and probable grounds or caused the criminal proceedings to be launched or continued. Equally, there was no basis to conclude that SPPC prosecutors acted maliciously or for an improper purpose. Because fault, causation and bad faith were not established, the Court held that neither the Attorney General of Canada nor the Attorney General of Québec incurred civil liability. The action brought by Paradis and Construction GCP was therefore dismissed in its entirety, with taxable costs (“frais de justice”) awarded in favour of the two Attorneys General. The judgment does not set out any specific dollar figure for those costs, and the total monetary award in favour of the successful parties cannot be determined from the reasons alone.