Winbridge Construction Ltd. v. Halifax Regional Water Commission, (2015) 365 N.S.R.(2d) 217 (SC)

• Judge: Warner, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: September 30, 2015
• Jurisdiction: Nova Scotia
• Citations: (2015), 365 N.S.R.(2d) 217 (SC);2015 NSSC 275

Winbridge Constr. v. Water Comm. (2015), 365 N.S.R.(2d) 217 (SC);

    1151 A.P.R. 217

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. OC.006

Winbridge Construction Ltd. (plaintiff) v. Halifax Regional Water Commission (defendant)

(Ken. No. 333366; 2015 NSSC 275)

Indexed As: Winbridge Construction Ltd. v. Halifax Regional Water Commission

Nova Scotia Supreme Court

Warner, J.

September 30, 2015.

Summary:

In March 2010, the Halifax Regional Water Commission (HWC) issued a call for tenders to upgrade secondary clarifiers at a waste water treatment facility. Three contractors submitted bids: L&R Construction Ltd. (L&R), $1,787,150; Winbridge Construction Ltd. (Winbridge), $2,235,708.85; and, Amber Contracting Ltd., $2,690,850. HWC accepted the low bid from L&R. L&R completed the work in accordance with its bid. Winbridge sued HWC for accepting a non-compliant bid and for breaching its duty of fairness to Winbridge. Winbridge claimed that, but for accepting the non-compliant bid, its bid would have been accepted. It claimed damages of $884,000, calculated as the sum of L&R's gross profit ($415,921) plus the amount that the tender exceeded L&R's ($468,000). Alternately, it claimed damages equal to its calculation of L&R's profit (23.5%) on its bid ($524,000).

The Nova Scotia Supreme Court dismissed the action. The court held that: L&R's failure to attend the March 25th, 2010, mandatory site meeting made its bid non-compliant; there was no breach of the duty of fairness; and, the breach of Contract A by HWC did not cause Winbridge to lose a reasonable expectation of receiving Contract B.

Building Contracts - Topic 1301

Tender calls - General - The Nova Scotia Supreme Court provided an overview of tender law - See paragraphs 18 to 25.

Building Contracts - Topic 1302

Tender calls - Duty of care (incl. fairness) - HWC issued a call for tenders - Three contractors submitted bids, including L&R and Winbridge - HWC accepted the low bid from L&R - L&R completed the work in accordance with its bid - L&R had not attended the mandatory site meeting on March 25th, 2010, but was permitted to attend at a site meeting on March 30th - Winbridge sued HWC for accepting a non-compliant bid and for breaching its duty of fairness to Winbridge - Winbridge claimed that, but for accepting the non-compliant bid, its bid would have been accepted - The Nova Scotia Supreme Court stated that of the six ways in which a breach of the duty of fairness might arise, the one relevant here was the duty to ensure the integrity of the competition by avoiding conflicts of interest, unfair advantage or bias - The court did not find that the extension of the closing date was related in any way to L&R or for the purpose of giving it an unfair advantage, or as a sign of bias, partiality or favoritism towards L&R or against any of the other potential bidders - While granting L&R a site visit without an addendum did not make the process unfair, it was a breach of HWC's Contract A with Winbridge, and it did not make the L&R bid compliant - Finally, giving the list to those who had taken out bid documents was not unfair - It was a practice and not an unusual or special dispensation or favor to L&R or any other bidder - Winbridge's President was aware that he could have asked for the list, but decided not to do so because he assumed that only those who attended the mandatory March 25th site meeting could bid - Providing the list to L&R did not cause mischief or detract from the integrity of the tendering process - See paragraphs 63 to 86.

Building Contracts - Topic 1302.2

Tender calls - Privilege clause - The Nova Scotia Supreme Court stated that "The test of whether privilege or exclusion clauses in the Tender Documents are enforceable depends on the answers to three questions: 1. Do the exclusion clauses apply to the circumstances established in the evidence? 2. If yes, was the exclusion clause unconscionable at the time the contract was made (not when breached)? 3. If no, whether the court should refuse to enforce the exclusion clause because of an overriding public policy concern which outweighs the strong public interest in the enforcement of contracts?" - See paragraph 92.

Building Contracts - Topic 1302.2

Tender calls - Privilege clause - HWC issued a call for tenders - Three contractors submitted bids, including L&R and Winbridge - HWC accepted the low bid from L&R - L&R completed the work in accordance with its bid - L&R had not attended the mandatory site meeting on March 25th, 2010, but was permitted to attend at a site meeting on March 30th - Winbridge sued HWC for accepting a non-compliant bid and for breaching its duty of fairness to Winbridge - The Nova Scotia Supreme Court dismissed Winbridge's claim because the breach of Contract A by HWC (the defendant) did not cause Winbridge (the plaintiff) to lose a reasonable expectation of receiving Contract B, "because its bid so significantly exceeded the budget and approved funding for the Project, and the privilege or exclusion clauses with broad discretion reserved to the defendant clearly entitled it to not award contract B to the lowest compliant bidder. ... [I]f a review of the business case for the Project had been conducted, the defendant would not have awarded the contract to the plaintiff or negotiated with the plaintiff. ... [T]he defendant would have deferred or retendered the project." - See paragraphs 87 to 133.

Building Contracts - Topic 1302.2

Tender calls - Privilege clause - [See Building Contracts - Topic 1310 ].

Building Contracts - Topic 1310

Tender calls - General - Invitation to tender - Effect of conditions of - HWC issued a call for tenders - Three contractors submitted bids, including L&R and Winbridge - HWC accepted the low bid from L&R - L&R completed the work in accordance with its bid - L&R had not attended the mandatory site meeting on March 25th, 2010, but was permitted to attend at a site meeting on March 30th - Winbridge sued HWC for accepting a non-compliant bid and for breaching its duty of fairness to Winbridge - Winbridge claimed that, but for accepting the non-compliant bid, its bid would have been accepted - The Nova Scotia Supreme Court held that L&R's failure to attend the March 25th mandatory site meeting made its bid procedurally non-compliant - The tender package described the March 25th site meeting as mandatory - The privilege or exclusion clauses in the Tender Documents (s. 18) did not contain an express waiver by bidders of the right of an owner to accept a non-compliant bid - The closest that s. 18 came to constituting an express waiver by bidders of a non-compliant bid was with respect to bids that were "incomplete, obscure or irregular" - They did not provide a defence to the defendant's claim that it was entitled to accept L&R's non-complaint bid - Equally clearly, when read on its own, s. 18.1 provided that the owner might accept any tender "notwithstanding any custom of the trade nor anything contained in the Contract Document or herein" - To allow a procedurally non-compliant bid to be considered, especially when the owner had the ability to correct its error in the public notice of the tender, such as in this case by the issuance of an addendum, negated the integrity and business efficacy of the tender process - This constituted an overriding public policy to enforcement of the privilege/exclusion clauses, whose provisions did not clearly apply at the Contract A stage - See paragraphs 26 to 62.

Contracts - Topic 1261

Formation of contract - Tender calls - General - [See Building Contracts - Topic 1301 ].

Contracts - Topic 1263

Formation of contract - Tender calls - Duties - [See Building Contracts - Topic 1302 ].

Contracts - Topic 1264

Formation of contract - Tender calls - Privilege clause - [See first and second Building Contracts - Topic 1302.2 ].

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. 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, refd to. [para. 18].

Martel Building Ltd. v. Canada, [2000] 2 S.C.R. 860; 262 N.R. 285; 2000 SCC 60, refd to. [para. 18].

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. 18].

Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways) (2010), 397 N.R. 331; 281 B.C.A.C. 245; 457 W.A.C. 245; 2010 SCC 4, appld. [para. 18].

Olympic Construction Ltd. v. Eastern Regional Integrated Health Authority (2014), 348 Nfld. & P.E.I.R. 141; 1082 A.P.R. 141; 2014 NLCA 20, dist. [para. 32].

Admiral Roofing Ltd. v. Board of Education of School District No. 57, [2010] B.C.T.C. Uned. 1394; 2010 BCSC 1394, refd to. [para. 33].

North End Community Health Association et al. v. Halifax (Regional Municipality) (2014), 351 N.S.R.(2d) 252; 1111 A.P.R. 252; 2014 NSCA 92, refd to. [para. 33].

Jono Developments Ltd. v. North End Community Health Association - see North End Community Health Association et al. v. Halifax (Regional Municipality).

British Columbia v. SCI Engineers & Constructors Inc., [1992] B.C.J. No. 248 (S.C.), refd to. [para. 37].

Maritime Excavators (1994) Ltd. v. Nova Scotia (Attorney General) (2000), 183 N.S.R.(2d) 236; 568 A.P.R. 236 (S.C.), refd to. [para. 38].

Kinetic Construction Ltd. v. Comox-Strathcona (Regional District), [2004] B.C.A.C. Uned. 198; 2004 BCCA 485, refd to. [para. 39].

Halifax (Regional Municipality) v. England Paving & Contracting Ltd. (2009), 281 N.S.R.(2d) 154; 893 A.P.R. 154; 2009 NSSC 224, refd to. [para. 42].

Steelmac Ltd. v. Nova Scotia (Attorney General) (2007), 255 N.S.R.(2d) 363; 814 A.P.R. 363; 2007 NSSC 156, refd to. [para. 45].

Amber Contracting Ltd. v. Halifax (Regional Municipality) (2009), 283 N.S.R.(2d) 168; 900 A.P.R. 168; 2009 NSCA 103, refd to. [para. 129].

Counsel:

Doug Lutz, for the plaintiff;

Randolph Kinghorne, for the defendant.

This action was heard in Kentville, N.S., on May 19-22, 2015, by Warner, J., of the Nova Scotia Supreme Court, who delivered the following decision on September 30, 2015.