Mellco Developments Ltd. et al. v. Portage la Prairie (City) et al.,

• Jurisdiction: Manitoba
• Judge: Clearwater, J.
• Neutral Citation: 2001 MBQB 236
• Citation: 2001 MBQB 236,(2001), 167 Man.R.(2d) 161 (QB),[2001] 11 WWR 282,21 BLR (3d) 25,11 CLR (3d) 227,167 Man R (2d) 161,22 MPLR (3d) 227,167 ManR(2d) 161,(2001), 167 ManR(2d) 161 (QB),167 Man.R.(2d) 161
• Date: 17 September 2001
• Court: Court of Queen's Bench of Manitoba (Canada)

Mellco Dev. v. Portage la Prairie (2001), 167 Man.R.(2d) 161 (QB)

MLB headnote and full text

Temp. Cite: [2002] Man.R.(2d) TBEd. OC.028

Mellco Developments Ltd. and Newton Enterprises (1983) (plaintiffs) v. The City of Portage la Prairie and Lions Park Housing Inc. (defendants)

(CI 99-03-00068)

Mellco Developments Ltd. and Newton Enterprises (1983) (plaintiffs) v. Lions Park Housing Inc. and Lions Club of Portage la Prairie (defendants)

Lions Park Housing Inc. and Lions Club of Portage la Prairie (plaintiffs by counterclaim) v. Mellco Developments Ltd. and Newton Enterprises (1983) (defendants by counterclaim)

(CI 00-03-00027) (2001 MBQB 236)

Indexed As: Mellco Developments Ltd. et al. v. Portage la Prairie (City) et al.

Manitoba Court of Queen's Bench

Portage la Prairie Centre

Clearwater, J.

September 17, 2001.

Summary:

The City of Portage la Prairie issued a request for proposals (RFP) for the sale and development of 31.2 acres of city owned land. Only two proposals were received, one from Lions Park Housing Inc. (Lions) and one from Mellco Developments Ltd. (Mellco). The city decided to accept the Lions' proposal. Mellco filed a caveat against the land and later a pending litigation order. Mellco sued the city and Lions, claiming that the Lions' proposal should not have been considered by the city given the magnitude of the non-compliance in the Lions' proposal, and that the city was legally obliged to accept the Mellco's conforming bid as mandated by the terms of the RFP itself. Alternatively, Mellco argued that the Lions breached fiduciary duties to Mellco and therefore held the lands in a constructive trust for Mellco. Lions counterclaimed for damages.

The Manitoba Court of Queen's Bench held that there were valid reasons for the city's desire to use a RFP rather than a formal tendering document. The judge held that this RFP was explicitly not a simple call for a tender or a bid and that the city was entitled to prefer the proposal of Lions over that of Mellco. The law relating to tenders did not apply. All that Mellco was entitled to was to have the City consider its proposal fairly, and in that regard, the city gave fair consideration to both proposals in coming to its conclusion that the Lions' proposal was most attractive. Since no enforceable contracts were formed by the RFP, it was immaterial as to whether either or both of the proposals were "compliant" or "non-compliant" with the express or implied terms and conditions of the RFP. The city was at best obliged to enter into good faith negotiations. Respecting the constructive trust argument, the court concluded that Lions had not been unjustly enriched to the detriment of Mellco. In the result, the court dismissed Mellco's claim with costs and granted judgment in favour of Lions for $35,000 in compensatory damages and $10,000 in exemplary damages for Mellco's wrongful registration of the caveat and pending litigation order filed against the land.

Building Contracts - Topic 1344

Tender calls - The tender contract - What constitutes - [See Contracts - Topic 1262 ].

Contracts - Topic 1262

Formation of contract - Tender calls - What constitute - Tender call vs. request for proposal - The City of Portage la Prairie issued a request for proposals (RFP) for the sale and development of certain city land - The city received proposals only from Lions and Mellco and accepted the Lions' proposal - Mellco sued the city and Lions - The Manitoba Court of Queen's Bench dismissed Mellco's action - The judge held that there were valid reasons for the city's desire to use a RFP rather than a formal tendering document - This RFP was explicitly not a simple call for a tender or a bid and, therefore since no contracts were formed by the RFP, the city was entitled to prefer the proposal of Lions over that of Mellco without regard to whether the proposals were "compliant" or "non-compliant" with the express or implied terms and conditions of the RFP - The law relating to tenders did not apply - All that Mellco was entitled to was to have the City consider its proposal fairly, and in that regard, the city gave fair consideration to both proposals in coming to its conclusion that the Lions' proposal was most attractive - See paragraphs 1 to 74.

Damage Awards - Topic 2020.1

Exemplary or punitive damages - Wrongful registration of caveat or pending litigation order or certificate - The City of Portage la Prairie issued a request for proposals (RFP) for the sale and development of 31.2 acres of city owned land - Only two proposals were received, one from Lions and one from Mellco - The city decided to accept the Lions' proposal - Mellco filed a caveat against the land and later a pending litigation order and sued the city and Lions, claiming that the Lions' proposal should not have been accepted - The Manitoba Court of Queen's Bench dismissed Mellco's action and awarded Lions $35,000 in compensatory damages and $10,000 in exemplary damages for Mellco's unreasonable registration of the caveat and pending litigation order - See paragraphs 59 to 74.

Municipal Law - Topic 2488

Contracts by a municipality - Contracts requiring public tenders - Tender call vs. request for proposal - [See Contracts - Topic 1262 ].

Real Property - Topic 7859

Title - Registration of instruments, etc. - Lis pendens or certificate of pending litigation - Damages for wrongful filing - [See Damage Awards - Topic 2020.1 ].

Real Property - Topic 7946

Title - Registration of instruments, etc. - Caveats or cautions - Damages for wrongful filing - [See Damage Awards - Topic 2020.1 ].

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. 6].

Nickel Developments Ltd. v. Canada Safeway Ltd. et al. (2001), 156 Man.R.(2d) 170; 246 W.A.C. 170 (C.A.), refd to. [para. 18].

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; 170 D.L.R.(4th) 577, refd to. [para. 22].

Hughes Land Co. v. Manitoba (Minister of Government Services) (1991), 76 Man.R.(2d) 64; 10 W.A.C. 64 (C.A.), refd to. [para. 23].

Martel Building Ltd. v. Canada, [2000] 2 S.C.R. 860; 262 N.R. 285, refd to. [para. 25].

Old St. Boniface Residents Association Inc. v. Winnipeg (City) et al., [1990] 3 S.C.R. 1170; 116 N.R. 46; 69 Man.R.(2d) 134, refd to. [para. 39].

Harker et al. v. Regina (City) et al. (1995), 128 Sask.R. 224; 85 W.A.C. 224 (C.A.), refd to. [para. 39].

Soulos v. Korkontzilas et al., [1997] 2 S.C.R. 217; 212 N.R. 1; 100 O.A.C. 241; 146 D.L.R.(4th) 214, refd to. [para. 42].

Chaplin v. Hicks, [1911] 2 K.B. 786 (C.A.), refd to. [para. 58].

Kohler v. Thorold Natural Gas Co. (1916), 52 S.C.R. 514, refd to. [para. 69].

Authors and Works Noticed:

Chitty on Contracts (26th Ed. 1989), p. 554 [para. 18].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (4th Ed. 1999), c. 12, pp. 40, 42 [para. 21]; 43 [para. 22]; 473 to 499 [para. 18]; 475, 477, 478 [para. 19]; 493, 495 [para. 20]; 794 [para. 69].

McInnes, Mitchell, Reflections on the Canadian Law of Unjust Enrichment: Lessons from Abroad (1999), 78 C.B.R. 416, p. 425 [para. 42].

Waddams, Stephen M., The Law of Contracts (4th Ed. 1999), pp. 28 to 54 [para. 18]; c. 3, pp. 105 [para. 19]; 105 to 126 [para. 18].

Waddams, Stephen M., The Law of Damages (1991 Looseleaf Ed.), para. 11.210 [para. 72].

Waddams, Stephen M., The Valuation of Chances (1998), 30 C.B.L.J. 86, generally [para. 58].

Counsel:

G. Patrick S. Riley, for the plaintiffs/defendants by counterclaim;

Brian J. Meronek, Q.C., and Russ Wookey, for the defendant, City of Portage la Prairie;

Bradley Patzer, for the defendants/plaintiffs by counterclaim, Lions Park Housing Inc. and Lions Club of Portage la Prairie.

This case was heard before Clearwater, J., of the Manitoba Court of Queen's Bench, Portage la Prairie Centre, who delivered the following judgment on September 17, 2001.