Court of Appeal for Ontario

Date: May 16, 2018 Docket: C63244 Judges: Lauwers, Benotto and Nordheimer JJ.A.

Between

Gulf Developments Inc. Plaintiff (Respondent)

and

The Corporation of the Town of Essex Defendant (Appellant)

Counsel

James K. Ball, for the appellant

Rodney M. Godard and Ioana Vacaru, for the respondents

Heard and Released Orally

May 16, 2018

On Appeal

On appeal from the judgment of Justice Scott K. Campbell of the Superior Court of Justice, dated December 16, 2016.

Reasons for Decision

[1] We agree with the trial judge's finding, at paragraph 114 of his reasons, that the appellant used the post-tender addendum process as a form of impermissible "re-tendering process", or what might be described as "bid shopping," after the respondent's bid was accepted.

[2] The trial judge accurately recited the law related to the tender process prescribed by the Supreme Court of Canada in R. (Ont.) v. Ron Engineering, [1981] 1 S.C.R. 111, and later cases. He properly invoked the principle in Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860, that all bidders are to be treated fairly. The trial judge also properly applied the law.

[3] The trial judge said, at paragraphs 127 and 128:

I find the plaintiff's bid was accepted. As previously stated, Town Council resolved to award the contract to Gulf. This is apparent from the wording of the resolution, which stated the amount for which the contract was to be awarded. As such, Contract B came into existence prior to the re-tendering process and the ultimate awarding of the contract to PCR, which amounted to a breach of Essex's contractual obligations to Gulf under Contract B.

If there were material issues that required re-tendering in some form, the municipality ought not to have awarded the contract to the plaintiff for a publicized amount. I conclude that once the municipality issued the resolution they were required to issue a purchase order to the plaintiff. The terms of the purchase order were to incorporate the CCDC 2 contract. That contract contains procedures to deal with changes in work or other disputes. That is the procedure that ought to have been followed.

[4] We agree.

[5] On this basis, we dismiss the appeal.

[6] As agreed by the parties, the costs are fixed in the amount of $12,500 all inclusive, payable by the appellant to the respondent.

P. Lauwers J.A.

M.L. Benotto J.A.

I.V.B. Nordheimer J.A.