Eco-Zone Engineering Ltd. v. Grand Falls-Windsor (Town) et al., (1995) 142 Nfld. & P.E.I.R. 12 (NFTD)

• Judge: Schwartz, J.
• Court: Supreme Court of Newfoundland and Labrador (Canada)
• Case Date: August 28, 1995
• Jurisdiction: Newfoundland and Labrador
• Citations: (1995), 142 Nfld. & P.E.I.R. 12 (NFTD)

Eco Zone Eng. v. Gr. Falls (1995), 142 Nfld. & P.E.I.R. 12 (NFTD);

    445 A.P.R. 12

MLB headnote and full text

Eco-Zone Engineering Limited (plaintiff) v. The Town of Grand Falls-Windsor and the Town of Bishop's Falls carrying on business under the name of Exploits Regional Services Board (defendant)

(1994 No. G.F. 102)

Indexed As: Eco-Zone Engineering Ltd. v. Grand Falls-Windsor (Town) et al.

Newfoundland Supreme Court

Trial Division

Schwartz, J.

August 28, 1995.

Summary:

Eco-Zone Engineering Ltd. responded to a tender call regarding the construction of a water treatment plant owned by two munici­palities. Eco-Zone's tender in the amount of $6,667,300 was accepted and Eco-Zone commenced work on the project. Subsequently, Eco-Zone claimed that its tender bid did not include the Goods and Services Tax (GST) as that was an extra to the tender bid. Eco-Zone applied for a declaration that the municipalities were liable to pay the GST on the full contract price, other than GST added to the pre-selected equipment and that included in the Cash Allowances.

The Newfoundland Supreme Court, Trial Division, declined to grant the declaration.

Building Contracts - Topic 1351

Tender calls - The construction contract - General - The Newfoundland Supreme Court, Trial Division, stated that "when an Owner accepts the tendered bid submitted by a Contractor an Agreement comes into existence between the parties. The Agree­ment reached is based on the tendered amount, which is presumably made after receiving all project documentation, in­cluding plans and specifications, and the Owner's acceptance of the offer (or tender bid). The executed agreement, which is prepared subsequently, only formalizes the arrangement previously met between the contracting parties" - See paragraph 25.

Building Contracts - Topic 1351

Tender calls - The construction contract - General - The Newfoundland Supreme Court, Trial Division, stated that "Instruc­tions to Bidders, together with plans and specifications for a project, are available for a Contractor's perusal prior to a tender bid being submitted. The Contractor deter­mines the tendered price it will submit on the basis of these documents. In my opin­ion the Instructions to Bidders, together with plans and specifications, and the completed Tender Form are an integral part of the Contract Documents. The A­greement, which is a document of a later date and 'shall govern over all docu­ments' does not change the submitted tender price and its subsequent acceptance by the Owner" - See paragraphs 28 and 29.

Building Contracts - Topic 2624

Payment - Compensation to builder - Extras - What constitutes an extra - Eco-Zone tendered on a construction project - The tender form stated that it would com­plete the project "for the sum of ... (in­cluding Cash Allowance and 7% G.S.T. .... ($ .....) in lawful money of Canada which includes all prime costs, allowances and Government sales or excise taxes" - The owner accepted Eco-Zone's tender for $6,667,300 - Eco-Zone commenced work - However, the subsequent Agreement did not contain the parenthetical expression "(including Cash Allowance and 7% G.S.T.)" - Later, Eco-Zone claimed that its tender bid did not include the Goods and Services Tax (GST) as that was an extra to the tender bid - Eco-Zone applied for a declaration that the municipalities were liable to pay the GST on the full contract price - The Newfoundland Supreme Court, Trial Division, declined to grant the declaration.

Sales and Service Taxes - Topic 4901

Goods and services tax - General - A dispute arose between an owner and a contractor as to whether the GST was included in the tender bid submitted by the contractor - In determining the issue, the Newfoundland Supreme Court, Trial Divi­sion, held that the GST was both an excise tax and a sales tax - See paragraph 45.

Words and Phrases

All other charges - The Newfoundland Supreme Court, Trial Division, considered the meaning of the phrase "all other charges" as found in a contract relating to the construction of a water treatment plant - See paragraph 53.

Cases Noticed:

Charest (Marcel) & Fils Inc. v. Rivière-du-Loup (Ville), [1993] G.S.T.C. 22 (Que. C.A.), dist. [para. 21].

Ron Engineering & Construction (Eastern) Ltd. v. Ontario and Water Resources Commission, [1981] 1 S.C.R. 111; 35 N.R. 40, consd. [para. 24].

Winnipeg Waste Disposal Limited Part­nership v. Portage la Prairie (City), [1992] G.S.T.C. 11; 80 Man.R.(2d) 316 (Q.B.), consd. [para. 32].

Titan Landco Inc. v. Wis Development Corp. (1981), 28 B.C.L.R. 143 (S.C.), consd. [para. 33].

Reference Re Goods and Services Tax, [1992] 2 S.C.R. 445; 138 N.R. 247; 127 A.R. 161; 20 W.A.C. 161, consd. [para. 39].

Services sanitaires Roy Inc. v. St.- Patrice-de-Rivière-du-Loup (Munici­pal­itié), [1994] G.S.T.C. 57 (Que. S.C.), dist. [para. 54].

Woodlawn Construction Ltd. v. Bedford Waterfront Development Corp., [1994] G.S.T.C. 51; 132 N.S.R.(2d) 208; 376 A.P.R. 208 (C.A.), folld. [para. 55].

Construction G. Di Iorio Inc. v. Pointe-Claire (Ville), [1992] G.S.T.C. 3 (Que. S.C.), folld. [para. 55].

Statutes Noticed:

Excise Tax Act, R.S.C. 1985, c. E-15, sect. 165(1) [para. 42]; sect. 221(1) [para. 43].

Authors and Works Noticed:

Hudson, Building and Engineering Con­tracts (10th Ed. 1970), p. 212 [para. 23].

Counsel:

Ronald Noseworthy, Q.C., and Richard Gosse, for the plaintiff;

Alexander McDonald and Randall Pel­letier, for the defendant.

This application was heard on April 10, 11 and 12, 1995, before Schwartz, J., of the New­found­land Supreme Court, Trial Divi­sion, who delivered the following judgment on August 28, 1995, and was filed on August 30, 1995.