Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co., 2011 MBQB 320

• Judge: McKelvey, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: December 21, 2011
• Jurisdiction: Manitoba
• Citations: 2011 MBQB 320;(2011), 273 Man.R.(2d) 157 (QB)

Eastern Star v. Dominion Constr. (2011), 273 Man.R.(2d) 157 (QB)

MLB headnote and full text

Temp. Cite: [2012] Man.R.(2d) TBEd. JA.027

Manitoba Eastern Star Chalet Incorporated (plaintiff) v. Dominion Construction Company Inc. (defendant)

(CI 09-01-62386; 2011 MBQB 320)

Indexed As: Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co.

Manitoba Court of Queen's Bench

Winnipeg Centre

McKelvey, J.

December 21, 2011.

Summary:

Dominion Construction Company Inc. (Dominion) was one of three bidders on a building project. At issue was whether Dominion was the successful bidder and, hence, liable for its failure to enter into a construction contract in accordance with its bid, or whether its bid was non-compliant thus rendering it not liable.

The Manitoba Court of Queen's Bench held that Dominion was liable. The court awarded the plaintiff owner $518,059.85 plus interest and costs.

Building Contracts - Topic 1302.3

Tender calls - General - Discretion clause - Dominion Construction was one of three bidders on a building project - At issue was whether Dominion was the successful bidder and, hence, liable for its failure to enter into a construction contract in accordance with its bid - In order to avoid liability, Dominion argued that its bid was non-compliant based on: (1) its failure to provide a copy of a bylaw resolution of its board of directors authorizing its chief estimator, who was not a stipulated officer of the company, to sign the bid document; and (2) its failure to include structural addendum #4 in its bid - The Instructions to Bidders contained discretion clauses - The Manitoba Court of Queen's Bench held that Dominion was liable - The court found that Dominion submitted what it believed was a valid and correct bid and that it fully intended its bid to be binding on it - The failure in Dominion's bid to refer to the four structural addenda by their correct numbers was, at worst, an understandable error and, at best, a typographical error - All four structural addenda were taken into account by Dominion in preparing its bid and were intended by Dominion to be referred to in its bid; if this was an incident of non-compliance, Dominion's bid was substantially compliant in this respect - Dominion's failure to include a copy of a bylaw resolution with its bid, was consistent with its practice with other bids it had submitted and the conduct of the other two bidders - Dominion did not dispute that its bid was properly authorized by it, or that it intended its submission to be fully binding on it - The omission was not material and the bid was substantially compliant - Dominion's bid was compliant with the contract bid documents and a valid contract A had been entered into by the owner and Dominion - Thus, Dominion's bid was open for acceptance and was accepted by the owner - Alternatively, if the court had erred in its analysis or findings, such an error would be sufficiently small that it was incumbent on the court to protect the integrity of the tendering process by not allowing Dominion to point to these alleged incidents of non-compliance to resile itself from a bid which it fully intended when submitted to be compliant, to be binding and to be accepted - See paragraphs 1 to 69.

Building Contracts - Topic 1306

Tender calls - General - Amendment or revocation of tender by builder - [See Building Contracts - Topic 1302.3 ].

Building Contracts - Topic 1310

Tender calls - General - Invitation to tender - Effect of conditions of - [See Building Contracts - Topic 1302.3 ].

Building Contracts - Topic 1315

Tender calls - General - Mistake - [See Building Contracts - Topic 1302.3 ].

Building Contracts - Topic 1342

Tender calls - The tender contract - Validity of - [See Building Contracts - Topic 1302.3 ].

Building Contracts - Topic 1389

Tender calls - Breach of tender - Damages - Dominion Construction Company Inc. was one of three bidders on a building project - At issue was whether Dominion was the successful bidder and, hence, liable for its failure to enter into a construction contract in accordance with its bid, or whether its bid was non-compliant thus rendering it not liable - The Manitoba Court of Queen's Bench held that Dominion was liable - The court awarded the plaintiff owner $518,059.85 plus interest and costs - $518,059.85 represented the difference between the Dominion bid and what the owner ultimately paid to construct and complete the construction project - See paragraphs 70 to 74.

Cases Noticed:

Ron Engineering & Construction (Eastern) Ltd. v. Ontario and Water Resources Commission, [1981] 1 S.C.R. 111; 35 N.R. 40, refd to. [para. 28].

Double N Earthmovers Ltd. v. Edmonton (City) et al., [2007] 1 S.C.R. 116; 356 N.R. 211; 401 A.R. 329; 391 W.A.C. 329; 2007 SCC 3, refd to. [para. 31].

M.J.B. Enterprises Ltd. v. Defence Construction (1951) Co. et al., [1999] 1 S.C.R. 619; 237 N.R. 334; 232 A.R. 360; 195 W.A.C. 360, refd to. [para. 32].

Chandos Construction Ltd. v. Alberta (Minister of Alberta Infrastructure) (2004), 381 A.R. 58; 46 C.L.R.(3d) 275; 2004 ABQB 836 (Q.B.), refd to. [para. 33].

Graham Industrial Services Ltd. v. Greater Vancouver Water District et al. (2004), 194 B.C.A.C. 1; 317 W.A.C. 1; 40 B.L.R.(3d) 168; 2004 BCCA 5, refd to. [para. 34].

Derby Holdings Ltd. v. Wright Construction Western Inc. et al. (2002), 221 Sask.R. 112; 2002 SKQB 247, dist. [para. 35].

Maple Reinders Inc. v. Cerco Developments Ltd. et al., [2011] B.C.T.C. Uned. 924; 2011 BCSC 924, refd to. [para. 37].

Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), [2010] 1 S.C.R. 69; 397 N.R. 331; 281 B.C.A.C. 245; 475 W.A.C. 245; 2010 SCC 4, refd to. [para. 40].

Litz (R.) & Sons Co. v. Manitoba Hydro (2006), 204 Man.R.(2d) 256; 2006 MBQB 164, refd to. [para. 42].

Chandos Construction Ltd. v. Alberta (Minister of Alberta Infrastructure) (2006), 380 A.R. 152; 363 W.A.C. 152; 50 C.L.R.(3d) 1; 2006 ABCA 41, refd to. [para. 44].

H B Lynch Investments Inc. v. Canada (Minister of Public Works) (2004), 252 F.T.R. 301; 2004 FC 747, affd. (2005), 339 N.R. 261; 2005 FCA 237, dist. [paras. 46, 47].

Midwest Management (1987) Ltd./Monad Contractors Ltd. (Joint Venture) et al. v. BC Gas Utility Ltd. (2000), 147 B.C.A.C. 175; 241 W.A.C. 175; 82 B.C.L.R.(3d) 79; 5 C.L.R.(3d) 140; 2000 BCCA 589, reving in part (1999), 16 B.C.T.C. 30; 47 C.L.R.(2d) 101 (S.C.), refd to. [para. 48].

Silex Restorations Ltd. v. Leasehold Strata Plan VR 2096, Owners et al. (2004), 201 B.C.A.C. 244; 328 W.A.C. 244; 36 C.L.R.(3d) 73; 2004 BCCA 376, refd to. [para. 48].

Graham Industrial Services Ltd. v. Greater Vancouver Water District et al., [2003] B.C.T.C. 1735; 40 B.L.R.(3d) 159; 2003 BCSC 1735, affd. (2004), 194 B.C.A.C. 1; 317 W.A.C. 1; 40 B.L.R.(3d) 168; 2004 BCCA 5, leave to appeal denied (2004), 331 N.R. 198; 210 B.C.A.C. 320; 348 W.A.C. 320 (S.C.C.), refd to. [para. 51].

Toronto Transit Commission v. Gottardo Construction Ltd. et al. (2005), 202 O.A.C. 178; 77 O.R.(3d) 269 (C.A.), leave to appeal denied (2006), 355 N.R. 394; 2006 CarswellOnt 2544 (S.C.C.), refd to. [para. 51].

Calgary (City) v. Northern Construction Co. (1982), 67 A.R. 95; 23 Alta. L.R.(2d) 338 (Q.B.), revd. [1986] 2 W.W.R. 426; 67 A.R. 95 (C.A.), affd. [1987] 2 S.C.R. 757; 80 N.R. 394; 82 A.R. 395 (S.C.C.), refd to. [para. 51].

Authors and Works Noticed:

Emanuelli, Paul, Government Procurement (2nd Ed. 2008), p. 499 [para. 50].

Counsel:

Helga D. Van Iderstine and John B. Martens, for the plaintiff;

David M. Skwark and Johanna C. Caithness, for the defendant.

This action was heard by McKelvey, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on December 21, 2011.