Ron Engineering & Construction (Eastern) Ltd. v. Ontario and Water Resources Commission, (1981) 35 N.R. 40 (SCC)

• Judge: Martland, Dickson, Estey, McIntyre and Lamer, JJ.
• Court: Supreme Court (Canada)
• Case Date: January 27, 1981
• Jurisdiction: Canada (Federal)
• Citations: (1981), 35 N.R. 40 (SCC);13 BLR 72;1981 CanLII 17 (SCC);[1981] CarswellOnt 109;35 NR 40;[1981] 1 SCR 111;119 DLR (3d) 267;[1981] SCJ No 13 (QL)

Ron Eng. & Constr. Ltd. v. Ont. (1981), 35 N.R. 40 (SCC)

MLB headnote and full text

Ron Engineering & Construction (Eastern) Ltd. v. Ontario, Province of and The Water Resources Commission

Indexed As: Ron Engineering & Construction (Eastern) Ltd. v. Ontario and Water Resources Commission

Supreme Court of Canada

Martland, Dickson, Estey, McIntyre and Lamer, JJ.

January 27, 1981.

Summary:

This case arose out of a builder's tender of $2,748,000.00 along with a deposit of $150,000.00. The builder was the low bidder. However, within an hour after the tenders were opened the builder advised the owner that the tender was in error and should have included an additional amount of $750,058. The contract was awarded to the next highest bidder at a price of $3,380,464.00. The builder commenced an action for the return of the $150,000.00 deposit. The trial court dismissed the builder's action. The builder appealed to the Ontario Court of Appeal.

The Ontario Court of Appeal allowed the appeal and granted judgment to the builder for $150,000.00 plus costs. The judgment of the Ontario Court of Appeal is set out below - see paragraphs 30 to 37. The owner appealed to the Supreme Court of Canada.

The Supreme Court of Canada allowed the appeal, set aside the judgment of the Ontario Court of Appeal and restored the judgment of the trial court.

Building Contracts - Topic 1313

Tender calls - Deposit by builder, forfeiture of - The Ontario Water Resources Commission called tenders for a construction project - The builder submitted a tender of $2,748,000.00 along with a deposit of $150,000.00 - The builder was the low bidder - Within an hour after the tenders were opened the builder advised the owner that the tender was in error and should have included an additional $750,058.00 - The contract was awarded to the next highest bidder at a price of $3,380,464 - The builder claimed the return of the $150,000.00 deposit on the ground that the owner was advised of the mistake prior to acceptance by the owner - The Supreme Court of Canada dismissed the builder's action - The Supreme Court of Canada stated that the deposit was validly forfeited under the terms of the "unilateral contract" which arose when the builder submitted its tender.

Building Contracts - Topic 1304

Tender calls - Effect of tender by a builder - The Supreme Court of Canada referred to terms and conditions of a tender call which result in a "unilateral contract" when a builder submits a tender (see paragraphs 11 and 16).

Building Contracts - Topic 1312

Tender calls - Deposit by builder - The Supreme Court of Canada referred to the purpose of a deposit made by a builder with a tender (see paragraph 17).

Cases Noticed:

Belle River Community Arena Inc. v. W.J.C. Kaufmann Co. Ltd. et al. (1978), 20 O.R.(2d) 447, refd to. [paras. 8 and 35].

McMaster University v. Wilchar Construction Ltd. et al., [1971] 3 O.R. 801, dist. [para. 18].

Foster v. Mackinnon (1869), L.R. 4 C.P. 704, refd to. [para. 22].

Authors and Works Noticed:

Fridman, The Law of Contract, page 81 [para. 22].

Cheshire and Fifoot, Law of Contract (9d) (1976), page 239 [para. 22].

Counsel:

B. Johnston, Q.C. and M. Fleishman, for the appellants;

Hyman Soloway, Q.C. and J. Shields, for the respondent.

This appeal was heard by MARTLAND, DICKSON, ESTEY, McINTYRE and LAMER, JJ. of the Supreme Court of Canada at Ottawa, Ontario on November 13, 1980.

The judgment of the Supreme Court of Canada was delivered by ESTEY, J., on January 27, 1981.