Court File and Parties

Citation: Bois A. Lachance Lumber Limited v. Conseil Scolaire Catholique de District des Grandes Rivières, 2010 ONCA 694

Date: 2010-10-21

Docket: C50676

Court of Appeal for Ontario

Before: Sharpe, Blair and Rouleau JJ.A.

Between:

Bois A. Lachance Lumber Limited Plaintiff/Respondent

and

Conseil Scolaire Catholique de District des Grandes Rivières Defendant/Appellant

Counsel: Pierre Lambert-Bélanger, for the defendant/appellant Guy A. Wainwright, for the plaintiff/respondent

Heard & released orally: October 18, 2010

On appeal from the judgment of Justice David J. Nadeau of the Superior Court of Justice dated May 22, 2009.

Endorsement

[1] The appellant school board appeals a judgment for damages arising from the respondent’s claim that the appellant breached its obligation to treat all bidders equally and fairly following a call for tenders on a site development project.

[2] Two bids were submitted. The bid accepted by the appellant was lower than that of the respondent. The respondent alleges that the successful bid was noncompliant with the terms set out in the tender documents as the successful bidder did not furnish a Performance Bond and a Labour and Material Payment Bond, each for 50% of the value of the contract, as specified by the tender documents. After being notified that its bid had been accepted, the successful bidder provided the appellant with a letter of credit in place of the performance bonds.

[3] The trial judge found that the appellant had breached its obligation to treat all bidders equally and fairly. He found that the successful bidder failed to supply the performance bonds required by “Contract A” and that the letter notifying the successful bidder that its bid had been accepted was insufficient to form “Contract B”.

[4] In our view, the trial judge erred in coming to these conclusions. The tender documents only required that the successful bidder obtain the performance bonds “[u]pon acceptance” of its bid and did not require that proof of the ability to obtain those bonds be included in the package. Accordingly, the successful bid was compliant when it was submitted and evaluated by the appellant.

[5] That bid constituted an offer to enter into “Contract B” and the appellant’s letter of July 17, 2007, notifying the successful bidder that its bid had been accepted, amounted to a binding acceptance of the offer, i.e. “Contract B”: see Ontario v. Ron Engineering, 1981 CanLII 17 (SCC), [1981] 1 S.C.R. 111; Double N Earthmovers Ltd. v. Edmonton (City), 2007 SCC 3, [2007] 1 S.C.R. 116 at para. 3. At that point, any obligations owed by the appellant pursuant to “Contract A” to the respondent, an unsuccessful bidder, were discharged. The respondent was not required to investigate the successful bidder’s capacity to provide performance bonds before accepting the compliant bid. The trial judge did not find that before the bid was submitted the respondent had colluded with the successful bidder to ignore the bonding requirement. There was nothing in the tender documents to preclude the appellant from waving or modifying a term after a bidder had been retained, and “Contract B” was a distinct contract to which the respondent was not privy: Double N Earthmovers at paras. 71-72. Accordingly, having accepted the bid, it was open to the appellant to accept an alternate type of security for the successful bidder’s performance in the form of a letter of credit.

[6] We conclude that as the successful bidder submitted a compliant bid that was accepted by the appellant, the modification to the contract agreed to by those parties following the formation of “Contract B” did not amount to a breach of any contractual right of the respondent.

[7] For these reasons, we allow the appeal, set aside the judgment, and in its place substitute a judgment dismissing the respondent’s claim.

[8] The appeal is allowed, judgment set aside and judgment dismissing the claim substituted. The appellant is entitled to costs of the appeal, fixed at $9,539.92 and of the trial, fixed at $14,200, both amounts inclusive of taxes and disbursement.

“Robert J. Sharpe J.A.”

“R.A. Blair J.A.”

“Paul Rouleau J.A.”