Contract To Build A Building Contrary To A Building Bylaw Held To Be Illegal

In Nzeadibe v. Khan, 2017 CarswellBC 2251, 2017 BCSC 1456, the British Columbia Supreme Court recently held that a building contract was illegal and unenforceable because it provided for the construction of a building which would have been contrary to the municipal building bylaw. The decision raises, once again, the contentious role of the doctrine of illegality in contract law.

The defendant agreed to manage the construction of a residence for the plaintiff. The plaintiff said that he bought the property after entering into that agreement with the defendant. The plaintiff alleged that the management agreement called for the construction of a house of 3,638 square-foot and containing a self-contained suite. The written agreement between the parties did not refer to those features, but the plaintiff alleged that they had been agreed to orally. The defendant denied agreeing or representing that the building would have those features. The plaintiff sued for breach of the contract and fraud.

The building as built was substantially smaller than 3,638 square feet and it did not contain a self-contained unit. The construction of a residence in that location with that square footage and incorporating a self-contained suite would have been contrary to the municipal bylaw.

The Trial Judge’s Findings  

The trial judge found that the plaintiff obtained a draft copy of the plan for the building prior to purchasing the property and that the defendant orally committed to building the house according to that plan and informed the plaintiff that he could build a 3600 square-foot house with a secondary suite before the plaintiff purchased the property. However, the judge found that “the plaintiff’s experience would have shown him that this rough plan would not be the final or last plan necessary to obtain a building permit” and that the plaintiff “did not reasonably expect the defendant to build a house contrary to Surrey’s bylaws limiting the size of the structure and prohibiting a secondary suite” and was aware that a self-contained suite would be unlawful. The trial judge also found that the defendant forged the plaintiff’s signature on the alleged written agreement.

The Trial Judge’s Conclusions

The trial judge concluded that: the plaintiff agreed to purchase the property “based on the defendant’s statement that he could build a house with an area of 3500 ft.”; that the defendant’s statement was not a promise but was a representation; and that the defendant “knew that the house could not be built to the size or anywhere close to the size shown on the roof plan.”

The trial judge first found, in one short paragraph, that he could not arrive at a conclusion as to what exactly the contract between the parties was. He then considered, in forty-three paragraphs, whether the contract asserted by the plaintiff would have been illegal and thereby unenforceable, and concluded that it would have been:

“….in the context of personal contracts the inflexible application of the law of illegality is sometimes mitigated so that justice may be done. This principle does not, in my view, extend to the specific context and particular public policy considerations that pertain to the imposition on neighbourhoods of houses built at 30 percent above the allowable limit and encompassing illegal secondary suites that affect each neighbours’ enjoyment of their neighbourhood. Taking into consideration the context of the contract between the parties and the fact that the plaintiff has suffered little if any damage due to the alleged breach of the contract I find that the principles outlined in Top Line supports a conclusion that the contract alleged by the plaintiff is unenforceable….I conclude this case falls squarely within the parameters of an illegal contract that is unenforceable and against public policy. Municipalities have responsibilities to enforce the building protocols set out in their bylaws because of the aesthetic impact on neighbours and additional strains on public services. All neighbouring properties have an interest in enforcement of secondary suite bylaws because the densification created by unlawful suites affects neighbours….The contract to build a structure with an area of 3638 square feet with a secondary suite was contrary to a City bylaw permitting only 2765 square feet and precluding a secondary suite was an illegal contract and should not be enforced.”

In arriving at this conclusion, the trial judge relied principally upon the decision of Justice Newbury in Top Line Industries Ltd. v. International Paper Industries, 2000 BCCA 23. In that case, a lease of a portion of unsubdivided parcel of land was entered into, contrary to the restrictions established under s. 73 of the Land Title Act, and the court found that the lease was illegal.

The trial judge in the Nzeadibe case also concluded that the defendant misrepresented to the plaintiff that a house on the property could comprise more than 3000 square feet, that this representation induced the plaintiff to buy the property, that the defendant knew of the size limitation and suite prohibition affecting the property and made the representation to the plaintiff knowing that it was not true or being reckless as to its truth.


This decision raises important questions about the role or purpose of the doctrine of illegality in construction law.

Is that role or purpose to prohibit contracts that have as their object or purpose the doing of something that is illegal or immoral? Or is its role or purpose to prohibit any contract the actual performance of which is contrary to a bylaw or other public law? And in either case, should the court delete the illegal portion of the contract and enforce the rest of it? None of these questions were satisfactorily addressed by the court in this case.

The doctrine of illegality has been addressed by the Supreme Court of Canada several times in the last twenty years or so, most noticeably in KRG Insurance Brokers (Western) Inc. v. Shafron, [2009] 1 S.C.R. 157, Transport North American Express Inc. v. New Solutions Financial Corp., [2004] 1S.C.R. 249 and Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986. These cases were not dealt with by the trial judge in the Nzeadibe decision.

The modern trend has been to not strike down a contract just because a statute is violated, and to apply judicial discretion across a broad spectrum of remedies, particularly if the rights of third parties are affected. The court may allow the contract to stand and apply the “blue pencil test” and excise the objectionable portions, but only if the purpose and policy of the statute is not subverted.

There are older Supreme Court of Canada decisions, in Walker v. McMillan, 1882 CarswellNB 71, 6 S.C.R. 241 and Spears v. Walker, 1884 CarswellNB 64, 11 S.C.R. 113, holding that a contract for the erection of a building which is itself contrary to municipal bylaws is an illegal contract. These decisions were not cited by the court in the present case, and they have hardly been cited by any court in the last 50 years. One wonders if these decisions, from an older era when contracts were routinely struck down if their performance infringed a public law, would still be applied.

Although the judge in this case did not address the “blue pencil test”, it is unlikely that the application of that test would have saved this contract. The court was confused enough about the terms of the contract. It is unlikely that the court could have concluded that the parties would have entered into the contract had it not contained, say, the provision relating to the separate suite.

One might expect that the legal principles would be clear in determining whether a building contract is illegal if it involves the construction of a building which is contrary to building or zoning bylaws. One might have that expectation since the construction of buildings that contravene bylaws is not an exceptional event. Yet, no clear statement of those principles emerges from the present decision.

In the present case, the judge seems most motivated by the degree to which the proposed building violated the bylaw, and the aesthetic impact upon neighbours that the building would have had. These are fairly subjective criteria and leave the court with a large discretion, and the parties with considerable uncertainty as to whether the contract will or will not be struck down.

The mere fact that a building contravenes a bylaw, no matter how incidentally, should not invalidate a building contract. Is it the degree to which the building violates the bylaw that makes it illegal? Is it the knowledge of both parties, or the plaintiff, or the defendant, that the building contravenes the bylaw? Is it the mutual purpose of the parties to contravene the bylaw? Is there any difference between a building bylaw (which this case involved) and zoning bylaws? And when, if ever, will the “blue pencil test” be applied to a building contract involving the breach of a bylaw?

We’ll wait for some appellate court to answer these questions.

See Heintzman & Goldsmith on Canadian Building Contracts (5th ed.), chapter 1, section 3(e)

Nzeadibe v. Khan, 2017 CarswellBC 2251, 2017 BCSC 1456

Building contract – illegality – breach of building bylaws – “blue pencil” test

Thomas G. Heintzman O.C., Q.C., LL.D. (Hon.), FCIArb                      December 10, 2017


Unlicensed Architect Cannot File A Legal Hypothec: Quebec Court of Appeal

In Urbacon Architecture inc. c. Urbacon Buildings Group Corp., the Quebec Court of Appeal has recently held that an architectural firm that was unlicensed in the Province of Quebec is not entitled to file a legal hypothec, the Quebec law equivalent of a construction or builders lien. The court so found notwithstanding the cross-Canada reciprocal arrangements that allow architectural firms from one province to become licenced in another. It so held because the architectural firm, which was registered in Ontario, had not taken the steps to become licensed in Quebec. This decision raises issues about the status of the unlicensed architects and other professions under the construction and lien legislation in other provinces or under building contracts generally.


Urbacon Architecture was an architectural firm that was licensed to practice architecture in Ontario. It did not employ any Quebec architects but its sole shareholder had been licensed in Quebec between 1968 and 1984.

Urbacon Buildings entered into a contract with Bell Canada for the design and construction of a building. The principal of Urbacon Buildings was the son of the principal of Urbacon Architecture. Originally the building was to be built in the Ottawa region, but finally the building was built in Gatineau, Quebec. That building contract stipulated that Urbacon Architecture would be the consultant.

In the preliminary stages of the project, Urbacon Architecture prepared architectural, structural, electrical and mechanical drawings. The drawings were then approved by architectural and engineering firms in the province of Quebec.

Due to its dis-satisfaction with the work that had been done, Urbacon Buildings terminated its dealings with Urbacon Architecture. Urbacon Architecture demanded payment for its work from Bell Canada, and when it was not paid it filed a legal hypothec in the province of Quebec. Urbacon Buildings applied to the Quebec Superior Court for an order setting aside the legal hypothec and that order was granted. The Court of Appeal upheld that decision.

Articles 2724 (2) and 2726 of the Quebec Civil Code

Articles 2724(2) and 2726 of the Quebec Civil Code read as follows:

  1. 2724. Only the following claims may give rise to a legal hypothec:

(2) claims of persons having taken part in the construction or renovation of an immovable;

  1. 2726. A legal hypothec in favour of the persons having taken part in the construction or renovation of an immovable may not charge any other immovable. It exists only in favour of the architect, engineer, supplier of materials, workman and contractor or subcontractor in proportion to the work requested by the owner of the immovable, or to the materials or services supplied or prepared by them for the work. It is not necessary to publish a legal hypothec for it to exist.

In the application of these articles, Urbacon Architecture argued that the court should have regard to the reciprocity agreement between the architectural profession in Quebec and those in other provinces of Canada, known as the l’Accord sur le commerce intérieur and the l’Accord de commerce et de coopération entre le Québec et l’Ontario.

Decision of the Quebec Court of Appeal

The Court of Appeal held that the statutory regulation of the architectural profession in Quebec is for the protection of the public and a matter of public order. Articles 2724 and 2726 contain extraordinary protections for architects and others to recover their fees and other amounts due to them in respect of a building project. Accordingly, those articles should be strictly interpreted. If unregistered firms could use those provisions to recover their fees, then the protection of the public would be undermined. For these reasons, the word “architect” in Article 2726 should be interpreted to refer only to a firm that is registered as an architectural firm in Quebec.

The court did not accept the argument of Urbacon Architecture based upon the interprovincial accords between the architectural professions in Canada. The court did not agree that the licensing of a non-Quebec firm under those accords was simply an “administrative” formality.” Rather, having failed to register as an architectural firm in Quebec, Urbacon Architecture, and any other non-Quebec firm that did not become licenced in the province of Quebec, was simply not entitled to the benefits accorded to the architectural profession in Quebec, including Articles 2724 and 2726.


Two aspect of this decision are notable.

First, in its decision the Court of Appeal did not refer to two more recent decisions of the Supreme Court of Canada dealing with the issue of illegality of contracts. The most recent Supreme Court decision that the Court of Appeal considered was the 2001 decision in Fortin v. Chretien. Since then, the Supreme Court has decided KRG Insurance Brokers (Western) Inc. v. Shafron, [2009] 1 S.C.R. 157 and Transport North American Express Inc. v. New Solutions Financial Corp., [2004] 1S.C.R. 249. In those decisions, the Supreme Court has tended to alleviate against the harshness of the traditional doctrine of illegality of contracts. Presumably, the Quebec Court of Appeal considered that those cases from common law provinces did not affect its interpretation of articles of the Quebec Civil Code or the particular amendments to the statutes relating to building contracts and legal hypothecs in Quebec.

Perhaps, also, the Court of Appeal was of the view that the present case did not deal with the alleged illegality of a contract –but rather the alleged unenforceability of a statutory right or privilege. But the Court of Appeal did refer to and rely upon Fortin v. Chretien, which was concerned with the alleged illegality of a contract made by a non-licensed person (a former lawyer). The Court of Appeal did not analyze the exact inter-relationship, if any, between the doctrine of illegality of contracts, and the unenforceability of statutory rights and privileges.

Second, one wonders about the limits and application of this decision. Will it be applied to construction and builders lien statutes outside Quebec, so as to invalidate liens filed by professionals, or indeed any firm, that are not properly licensed in the applicable province? Could it have an effect upon building contracts, so that if a professional firm is not registered in the applicable province, then its functions as “architect” or “engineer” under a contract will be invalidated if the firm is not properly registered?

See Heintzman and Goldsmith on Canadian Building Contracts, 5th ed., chapter 1, part 3(c) and chapter 16, part 4(a)(i()II.

Urbacon Architecture inc. c. Urbacon Buildings Group Corp., 2016 CarswellQue 2972, 2016 QCCA 620

Building contracts –legal hypothecs, and construction and builders liens –illegality

Thomas G. Heintzman O.C., Q.C., FCIArb                                     May 29, 2016

This article contains Mr. Heintzman’s personal views and does not constitute legal advice. For legal advice, legal counsel should be consulted.


Can An Arbitrator Decide An Issue Falling Within A Statutory Regime?

The recent decision in Advanced Explorations Inc. v. Storm Capital Corp. dealt with the question of whether an arbitral tribunal has the authority to decide an issue arising out of a statutory regime over which a regulatory tribunal has specific authority. That question is a thorny jurisdiction issue in the law of arbitration. The decision was rendered by Justice Graeme Mew of the Ontario Superior Court who was, until his recent appointment to the bench, a well-known litigation counsel and arbitrator. His decision that the arbitral tribunal had authority to decide the issue is of additional interest due to his experience in the field of arbitration.


Storm Capital (“Storm”) entered into a Finder’s Fee Agreement with Advanced Explorations Inc. (“AEI”) under which Storm was to seek investors for AEI. In the Finder’s Fee Agreement, the parties agreed to resolve “any dispute, difference of opinion or question … touching on this Agreement or any part thereof” by arbitration. The arbitrator’s decision “shall be binding and conclusive on all parties in interest and no appeal shall lie there from.”

One of the investors introduced by Storm to AEI made investments in the company. AEI refused to pay Storm a finder’s fee for the investments. The parties went to arbitration and the arbitrator held that Storm was entitled to compensation. The arbitrator found that there was a nexus between Storm’s introduction and the investments and that the transactions resulted from the introduction and that therefore Storm was entitled to the finder’s fee.

The arbitrator rejected AEI’s argument that Storm was required to be registered as an LMD/EMD under the Securities Actso as to ensure that it would be compliant with the applicable securities laws (the “securities issue”).

AEI then applied to court to set aside the arbitration award and Storm filed a cross-application to enforce it. Justice Mew dismissed the application and granted the cross-application to enforce the arbitration award.

The Decision

There are three important aspects of Justice Mew’s decision.

First, Justice Mew considered AEI’s submission that the award should be set aside as unreasonable. Justice Mew reviewed several conflicting decisions dealing with the question of whether the court has authority to set aside an arbitral award based upon unreasonableness, and in particular the decision of the Ontario Court of Appeal in Smyth v. Perth & Smiths Falls District Hospital (2008), 92 O.R. (3d) 656. In Smythe, the Court of Appeal considered whether the result was “reasonable” as that term has been defined in Dunsmuir v. New Brunswick, even though the parties had agreed that the arbitration would be the final determination of the issue and that there would be no appeal. Justice Mew noted that the Court of Appeal did not identify the source of its authority to review an arbitral award for reasonableness and he agreed with the view, stated by some commentators, that Smyth is “at best ambiguous” as authority for such a proposition. However, he concluded that even if Smyth was authority for an arbitrator’s award to be reviewed for reasonableness, the arbitrator’s award was reasonable for the reasons referred to by him in the balance of his decision.

Second, Justice Mew dealt with AEI’s submission that the arbitrator’s decision was wrong because the arbitrator had relied upon conduct and agreements other than the Finder’s Fee Agreement itself in interpreting that agreement and the arbitration clause in it, even though the arbitrator had found that the Finder’s Fee Agreement was “clear and unambiguous”.
Justice Mew held that the arbitrator had concluded that“ “the context and factual matrix into which the [Finder’s Fee Agreement] was born” was important to understanding the terms of the contract” and looked to a prior agreement for that reason. However, the arbitrator had “anchored AEI’s liability to Storm in the language of the Finder’s Fee Agreement, and at no point did he incorporate a term or condition from a prior contract.” Justice Mew held that “when ascribing meaning to the various terms of the contract, the arbitrator was entitled to take note of the parties’ sophistication and prior dealings with each other.”

Third, Justice Mew addressed AEI’s submission that the arbitrator usurped the role of the Ontario Securities Commission (OSC) and Toronto Stock Exchange-Ventures (TSX-V) by deciding whether Storm was required under law to be registered as a LMD/EMD. This “securities issue” pertained to whether Storm was eligible to receive compensation under the Finder’s Fee Agreement. AEI submitted this issue was “not capable of being the subject of arbitration under Ontario law.”

Justice Mew held that AEI had waived its right to raise this argument by placing the issue before the arbitrator, as it had done, and then not asserting any definitive position before the arbitrator during the hearing.

In any event, Justice Mew held that the arbitrator had the jurisdiction to decide this matter. He applied the principle of “competence-competence” which is well known to arbitration law, namely that an arbitral tribunal has jurisdiction to decide in the first instance what matters are within its jurisdiction. Here, the arbitrator had raised the question of his jurisdiction on the securities issue with the parties, and had implicitly found that he had jurisdiction when he made his award, and any review of that award would be undertaken on the standard of correctness.

Justice Mew then found that the arbitrator had the jurisdiction to deal with the securities issue and that nothing in the Ontario Securities Act(OSA) deprived the arbitrator of jurisdiction. His remarks (leaving out the citations to cases) bear repeating at some length:

“Public policy in Ontario favours respect for the parties’ decision to arbitrate. The Arbitration Act, 1991 is designed … to encourage parties to resort to arbitration as a method of resolving their disputes in commercial and other matters, and to require them to hold to that course once they have agreed to do so……If the legislature wishes to preclude an issue from being the subject of arbitration, it must expressly state this intention…It is not enough that the subject matter over which arbitration is sought be subject to regulation or concern the public order……  AEI is correct that Ontario law establishes a comprehensive regime for the regulation of securities within the province, and that the OSC and the TSX-V are given wide-ranging powers of supervision…..However, no provision in the OSA or other statute was referred to that expressly precludes arbitration on matters of securities law. I also do not read the jurisprudence to evince a public policy that an arbitrator is unable to rule on securities matters…. On the contrary, the securities regulators are not given exclusive jurisdiction to decide questions of compliance with Ontario securities law. For example, under s. 128(1), the Superior Court of Justice may issue declarations on whether a person or company has complied with the OSA and the regulations promulgated thereunder. In addition, certain decisions of the OSC may be appealed to the Divisional Court, and the court on appeal has the power to “direct the Commission to make such decision or to do such other act as the Commission is authorized and empowered to do under this Act or the regulations and as the court considers proper”: OSA, ss. 9(1), 9(5). Private parties may also bring actions to redress injuries suffered from improper securities practices (even though the OSC could bring an enforcement action for the same misconduct): see OSA, ss. 130-138.14. 70.” (emphasis added)

Justice Mew also rejected AEI’s submission that AEI should not be placed in the position of contravening the securities laws of Ontario. The evidenced did not support a finding that AEI would violate securities laws if the finder’s fees were paid. In any event:

“the fact that AEI might have to choose between compliance with the arbitration award and compliance with its regulatory obligations goes to the question, not before the court at the present time, of whether AEI would be held in contempt of court if it refuses to pay. That is a separate matter from the question of whether the arbitrator lacked the jurisdiction, as a matter of Ontario law, to rule on the Securities Issue in the first place.”

On the issue of enforcement, Justice Mew held that, under section 50(3) of the Ontario Arbitration Act, 1991, once he had rejected the grounds for setting aside the award he had no discretion to refuse enforcement of a valid and final non-family arbitration award and he ordered that it be enforced.


Each of the three issues addressed in this decision are important, but this comment will focus on the first and third.

The first issue is whether an arbitration award can be reviewed on the grounds of reasonableness. That issue was addressed by me in my blog of November 24, 2012 in which I discussed the Smythdecision. As Justice Mew mused in the present case, one is left to wonder where that authority is to be found. Section 46 of the Ontario Arbitration Act, 1991 sets forth very specifically and at some length the grounds for setting aside an arbitration award. Unreasonableness, or even an error in law, is not found in that section as a ground to set aside such an award. In the case of domestic arbitrations, the reason for that position appears to be clear: in their arbitration agreement, the parties may provide for appeals on matters of law (and fact), and if they do not then they can seek leave to appeal on a matter of law. And under the Ontario Act, they can agree that there shall be no appeals. So issues and mistakes of law are addressed as part of the arbitration process, not for setting aside arbitral awards. If there is an error or law, then the parties can appeal if they have so provided or seek leave to appeal if they have not provided at all, but not if they have specifically agreed that they cannot do so, as in this case.

The concept of review of a tribunal’s decision on the ground of unreasonableness is found in the law relating to the judicial review of the decisions of governmental officers, bodies and tribunals. As Justice Mew noted, there is no apparent source of authority for that sort of review in section 46(1) of the Ontario Arbitration Act, 1991.   Hopefully an appellate court will address this issue again soon.

The third issue is of equal importance: does a regulatory regime imposed by statute preclude arbitration? Here, Justice Mew made two decisions.

First, he held that unless such a statutory regime specifically excludes arbitration or does so by necessary implication, then parties can arbitrate an issue which pertains to their agreement even if it also pertains to the statutory regime of a government regulator. This decision is of considerable importance to persons engaged in businesses which are regulated to some extent or another, which includes just about any business today. For instance, the construction industry is impacted by zoning and building bylaws, and any businesses which hire employees are subject to labour relations statutes. Justice Mew has held that those regulatory regimes do not preclude the parties putting the same issues into their contracts and having them determined by arbitration as between themselves.

The second point is one of illegality. At some point, the dispute issue may involve an alleged illegality under the regulatory regime and the arbitrator may have to decide whether the illegality is so central to the claim being made that no relief should be granted. But that is an issue to be dealt with under the law of contract dealing with illegalities, which is another subject but one which an arbitral tribunal would apparently have no difficulty in determining. And even if the remedy awarded by the arbitrator would enforce an illegality, then the court may not find the respondent to be guilty of a contempt of court if the award is not obeyed. But that does not remove the arbitrator’s jurisdiction to address the issue in the first instance.

See Heintzman and Goldsmith on Canadian Building Contracts, 4th ed. Chapter 10, part 3.

Advanced Explorations Inc. v. Storm Capital Corp.2014 CarswellOnt 8794, 2014 ONSC 3918

Arbitration – Jurisdiction of the Arbitral Tribunal – Enforcing and Setting aside Arbitral Awards – Illegality – Waiver – Regulatory Regime


Thomas G. Heintzman O.C., Q.C., FCIArb                                                                   July 18, 2014


Can A Condition In An Invitation To Tender Be Illegal?

Construction Law – Tenders – Illegality

Can a condition in an invitation to tender a construction contract be illegal?  This is a question upon which construction law is largely silent.  But the Court of Appeal of Quebec has held that a condition of tender may be unlawful. This is not a recent decision, but it is not well known outside Quebec.  The importance of the issue of illegality makes it a suitable subject for this blog.

In Société de developpement de la Baie James v. Compagnie de construction et de developpement Cris Ltée, the contractors contested standing terms which James Bay Development Society inserted into its invitations to tender.  Those terms (sub-sections 3.1 and 3.3) excluded any bid from a contractor who had commenced proceedings against, or was the defendant in proceedings commenced by, James Bay Development Society.  The Court of Appeal held that this condition was illegal as being contrary to public order.

The Court of Appeal held that Section 3.3 was contrary to the principle of the rule of law.  That principle is now incorporated into the Canadian Charter of Rights and Freedoms.  A principle element of the rule of law is access to the courts. While the law of contract is based upon the liberty to enter into any contract that the parties may agree to, there are limits to that liberty, and one limit, in Quebec, is public order. Any contractual provision which contravenes political public order is an absolute nullity.  While the parties can agree in their contract to waive certain rights, they cannot do so with respect to matters which are oppressive to the extent of being contrary to public order.

In addition, the Court of Appeal noted that sub-section 3.1 of the standing terms permitted the Bay James Development Society to accept, in its discretion, a non-compliant bid.  However, the provincial law governing the tenders stipulated that a non-conforming bid was required to be automatically rejected.  Accordingly, the Court of Appeal held that, on this additional ground, sub-section 3.1 of the standing terms was invalid.

This decision is a reminder of the need to review the terms of any invitation to tender from an overall standpoint, including its legality.  In the case of any governmental body, the Charter of Rights and Freedoms, and other statutes, regulations or bylaws applicable to that body, may be relevant.  Those considerations and the James Bay decision, may not be applicable if the owner issuing the invitation to tender is not a public body.  But there may be other conditions of legality which apply to the tender.

See Goldsmith and Heintzman on Canadian Building Contracts (4th ed.), Chapter 1, Section 2(d).

Construction Law – Tenders – Illegality: 

Société de developpement de la Baie James v. Compangnie de construction et de developpement Cris Ltée, (2001), 16 C.L.R. (3d) 26 (Que. C.A.)

Thomas G. Heintzman                                                                                                                                                 June 5, 2011