COURT OF APPEAL FOR ONTARIO

DATE: 20000407

DOCKET: C32459

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

[1] Chilcott 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.

[2] In 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.

[3] The 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.

[4] The 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.

[5] Paragraph 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”.

[6] Read 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.

[7] Mr. 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.

[8] On 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.

[9] The 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.”