Calgary (City) v. Northern Construction Co., (1985) 67 A.R. 95 (CA)

• Judge: McDermid, Harradence and Kerans, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: December 11, 1985
• Citations: (1985), 67 A.R. 95 (CA);1985 ABCA 285;[1986] 2 WWR 426;42 Alta LR (2d) 1;67 AR 95;32 BLR 81;19 CLR 287

Calgary v. Northern Constr. Co. (1985), 67 A.R. 95 (CA)

MLB headnote and full text

City of Calgary v. Northern Construction Company Division of Morrison-Knudsen Company Inc., Northern Construction Company Ltd., Morrison-Knudsen Company Inc. and the Canadian Indemnity Company

Appeal No. 15090

Indexed As: Calgary (City) v. Northern Construction Co.

Alberta Court of Appeal

McDermid, Harradence and Kerans, JJ.A.

December 11, 1985.

Summary:

The City of Calgary brought an action for liquidated damages of $395,000 against Northern Construction Company for its failure to complete a construction project which Northern tendered for and was awarded by the city. The Alberta Court of Queen's Bench, in a decision reported at paragraphs 60 to 115 below, dismissed the action. The city appealed.

The Alberta Court of Appeal, in the decision reported at paragraphs 1 to 59 below, allowed the appeal and ordered Northern to pay the damages claimed.

Building Contracts - Topic 1301

Tender calls - General - The Alberta Court of Appeal stated that the case of Ron Engineering and Construction (Eastern) Ltd. v. Ontario, Province of and Water Resources Commission, [1981] 1 S.C.R. 111; 35 N.R. 40 (S.C.C.), was authority for the proposition that an owner makes an offer when it advertises for tenders and each tenderer accepts that offer when its tender is deposited - See paragraph 27.

Building Contracts - Topic 1304

Tender calls - Effect of tender by builder - A city advertised for tenders for a construction project - When the tenders were opened, the lowest bidder, Northern Construction, realized it made a clerical error in its bid and requested the city to allow it to increase its bid - The city refused the request and awarded the contract to Northern - Northern refused to undertake the project - The city sued Northern for liquidated damages - The Alberta Court of Appeal allowed the city's action, because when Northern deposited its tender, a contract arose between the city and Northern, which Northern breached by failing to complete the project - See paragraphs 1 to 33.

Building Contracts - Topic 1315

Tender calls - Mistake - A judge of the Alberta Court of Appeal discussed the issue of mistake as it relates to tenders - See paragraphs 34 to 59.

Cases Noticed:

Ron Engineering and Construction (Eastern) Ltd. v. Ontario, Province of and Water Resources Commission, [1981] 1 S.C.R. 111; 35 N.R. 40; 119 D.L.R.(3d) 267, folld. [paras. 11 et seq.].

Belle River Community Arena Inc. v. W.J.C. Kaufmann Co. Ltd. et al. (1978), 20 O.R.(2d) 477; 87 D.L.R.(3d) 761 (Ont. C.A.), refd to. [paras. 27, 43, 112].

McMaster University v. Wilchar Construction Ltd. et al. [1971] 3 O.R. 801; 22 D.L.R.(3d) 9, refd to. [paras. 27, 114].

J.G. Collins Insurance Agencies Limited v. Elsley's Estate [1978] 2 S.C.R. 916; 20 N.R. 1, refd to. [para. 29].

Smith v. Hughes (1871), L.R. 6 Q.B. 597, refd to. [para. 40].

Imperial Glass Ltd. v. Consolidated Supplies Ltd. (1960), 22 D.L.R.(2d) 759 (B.C.C.A.), refd to. [paras. 40, 114].

Ron Engineering and Construction (Eastern) Ltd. v. Ontario (1979), 98 D.L.R.(3d) 548 (Ont. C.A.), refd to. [para. 51].

Earl of Aylesford v. Morris (1873), L.R. 8 Ch. App. 484, refd to. [para. 53].

McKenzie v. Bank of Montreal (1976), 70 D.L.R.(3d) 113 (Ont. C.A.), refd to. [para. 54].

Harry v. Kreutziger (1978), 95 D.L.R.(3d) 231 (B.C.C.A.), refd to. [para. 54].

Berney v. Pitt (1686), 2 Ch. Rep. 396, refd to. [para. 56].

Nott v. Johnson and Graham (1687), 23 E.R. 627, refd to. [para. 56].

Leepo Machine Products Limited v. Western Assurance Company et al. [1973] S.C.R. 171, refd to. [para. 114].

Authors and Works Noticed:

Anson's Law of Contract (1979), p. 302 [para. 40].

Blom, Joost, Article, 6 Can. Bus. Law J., pp. 80-97 [para. 114].

Halsbury's Laws of England (4th Ed.), vol. 9, para. 230 [para. 27].

Hudson's Building and Engineering Contracts (20th Ed. 1970), p. 216 [para. 27].

Nozick, R.S., Article, 60 Can. Bar Rev., pp. 345-357 [para. 114].

Peden, The Law of Unjust Contracts (1980), p. 25 [para. 57].

Reiter, B.J., and J. Swan, Article, (1982), 3 Sup. Ct. L. Rev., pp. 128-132 [para. 114].

Swan, John, Article, 5 U.B.C. Law Review, pp. 447-473 [para. 114].

Counsel:

A.A. Abougoush, and K.L. Meyer, for the appellant;

G.C. Hawco, for the respondents.

This appeal was heard before McDermid, Harradence and Kerans, JJ.A., of the Alberta Court of Appeal. The decision of the Court of Appeal was delivered on December 11, 1985, and the following opinions were filed:

McDermid, J.A. (Harradence, J.A., concurring) - See paragraphs 1 to 33;

Kerans, J.A. (Concurring in separate reasons) - See paragraphs 34 to 59.