COURT OF APPEAL FOR ONTARIO
RE:
CITY OF OTTAWA NON-PROFIT HOUSING CORPORATION
(Plaintiff/Respondent) –and– CANVAR CONSTRUCTION (1991)
INC. and WELLINGTON GUARANTEE (Defendants/Appellants)
BEFORE: CATZMAN, BORINS and FELDMAN JJ.A.
COUNSEL: Audrey A. Fennell, for the appellants
Carey B. Thomson and Stuart J. Huxley, for the respondent
HEARD: April 4, 2000
On appeal from the judgment of Chilcott J. dated June 1, 1999.
E N D O R S E M E N T
1Chilcott J. gave judgment in favour of the respondent on the
basis, set out on page 3 of his reasons for judgment, that this
case was governed on the question of liability by Her Majesty the
Queen in right of Ontario and the Water Resources Commission v.
Ron Engineering & Construction (Eastern) Ltd., [1981] 1 S.C.R.
2In delivering the reasons of the court in Ron Engineering,
Estey J. said, at p. 117:
We are not here concerned with a case where
the mistake committed by the tendering
contractor is apparent on the face of the
tender.
3The appeal before us was argued on the basis, unlike Ron
Engineering, that this was a case where the mistake committed by
the tendering contractor – the appellant in this court – was
apparent on the face of the tender. In our view, this is such a
case.
4The tender was made up of two documents: the document headed
“Tender”, appearing at tab 4 of the Exhibit Book, and the
document headed “Bid Bond”, appearing at tab 1 of the Exhibit
Book. Each of these documents made reference to the other, and
we agree with Ms. Fennell, counsel for the appellant, that they
must be read together in assessing whether an error appeared on
the face of the tender. While Mr. Thomson, on behalf of the
respondent, described the Tender as the “primary document” and
the Bid Bond as the “secondary document”, that distinction does
not appear in the agreed statement of facts on which the trial of
this action proceeded before Chilcott J., nor does that
characterization detract from the necessity to read both
documents together in considering the question of error on the
face of the tender.
5Paragraph 1 on page 1 of the document headed “Tender”
stipulated the sum of $2,289,000 as the tender price. Paragraph
2 on page 2 of that document indicated that the appellant was
“enclos[ing] , as a Bid Security Deposit, a surety bid bond or
bonds drawn or written in favour of the [respondent], in the
amount of $149,450”. The document headed “Bid Bond” that was
enclosed provided that the appellant, as principal, and
Wellington Insurance Company, as surety, were held and firmly
bound unto [the respondent] as obligee “in the amount of five
percent of the tender price”.
6Read together, these documents revealed, on their face, a
clear error. The document headed “Bid Bond” purported to bind the
appellant and the surety in the amount of 5% of the tender price.
But $149,450 – the figure appearing on the document headed
“Tender” – is not 5% of $2,289,000. $149,450 is 5% of
$2,989,000, the figure at which (as Chilcott J. found on page 2
of his reasons) the appellant intended to bid. Five percent of
$2,289,000, the figure that appeared on the document headed
“Tender”, is $114,450, a figure that appeared nowhere.
7Mr. Thomson submitted, rightly, that it might not have been
immediately clear to the respondent where the error lay: whether
in the amount of the tender price or in the amount of the bid
bond. That may be so. However, whichever error there was, there
was clearly an error on the face of the tender, with the result
that the disposition of this case was not, as Chilcott J.
concluded, governed by Ron Engineering.
8On the day the tenders were opened, the appellant sent a
letter to the respondent pointing out the error in the tender and
asking that the tender price be adjusted to $2,989,000 or, if
that could not be done, that the bid be withdrawn. The
respondent refused each alternative. The appellant thereupon
refused to execute the construction contract. In our view,
having regard to the error on the face of the tender that we have
identified, the appellant was within its legal right to do so.
9The appeal is allowed, the judgment of Chilcott J. is set
aside, and in its place judgment will go dismissing this action
with costs. The appellant is also entitled to its costs of the
appeal.
Signed: “M.A. Catzman J.A.”
“S. Borins J.A.”
“K. Feldman J.A.”