Court File and Parties
Court: COURT OF APPEAL FOR ONTARIO Date: 2021-03-08 Docket: C66545
Before: Strathy C.J.O., Brown and Miller JJ.A.
Between: Inzola Group Limited, Plaintiff (Appellant)
And: The Corporation of the City of Brampton, Defendant (Respondent)
Counsel: David Chernos, Stuart Svonkin and Alexandra Allison, for the appellant Adam Stephens, Daniel Rabinowitz and Kate Genest, for the respondent
Heard: February 9, 2021 by video conference
On appeal from the judgment of Justice John R. Sproat of the Superior Court of Justice, dated January 11, 2019, with reasons reported at 2019 ONSC 7632 and from the costs order dated August 26, 2019, with reasons reported at 2019 ONSC 3480.
Strathy C.J.O.:
A. Introduction
[1] This appeal concerns issues of contract interpretation and fair dealing in the context of a multi-million-dollar construction project for an extension to the City Hall in Brampton, Ontario. The appellant, Inzola Group Limited (“Inzola”), which was disqualified as a result of alleged breaches of the Request for Proposals (“RFP”), denied the breaches, claimed it had been disqualified as a result of bias, and sought damages for breach of contract.
[2] The trial judge dismissed Inzola’s claims, but assessed the damages to which Inzola would have been entitled, had its claim succeeded.
[3] Inzola submits that the trial judge erred in the interpretation of the contract, failed to recognize that the City breached a duty of fair and equal treatment, and erred in the quantification of damages.
[4] For the reasons that follow, I would dismiss the appeal on liability. As a result, I find it unnecessary to address damages.
B. Background
[5] On October 30, 2009 the respondent, the City of Brampton (“the City”), issued an RFP for an addition to its City Hall. The RFP process, which the trial judge described as “well-defined and detailed”, was designed to keep elected municipal officials out of the competitive bidding process by limiting the City Council’s role to approving or rejecting a proposal that had been recommended by an independent Evaluation Committee. The process contemplated that qualified "Respondents” who had submitted proposals would engage with City staff in a “Competitive Dialogue”. Their proposals would then be assessed by the Evaluation Committee, which would select a “Preferred Respondent”, whose proposal would be recommended to City Council for approval. The City engaged an outside expert as a Process and Fairness Advisor, to monitor the process, to ensure its fairness and to report directly to City Council.
[6] Inzola was one of three qualified Respondents to the RFP. Inzola was based in Brampton and had extensive experience in land development and construction. An Inzola-related company had built the Brampton City Hall in the late 1980s. The principals of Inzola, John Cutruzzola and Bill Kanellopoulos, had deep roots in Brampton, having been residents since 1972. They owned a number of properties in downtown Brampton and leased space to the City. They had a familiar relationship with City Staff and with members of City Council, many of whom had served for more than 15 years. Between 2003 and 2010, the Mayor and all but one member of Council received donations from companies related to Inzola or its principals. The Mayor, in her first speech to the Brampton Board of Trade, had referred to Mr. Cutruzzola as “Mr. Brampton”. The Mayor and her husband had attended the weddings of Mr. Cutruzzola’s two sons.
[7] As the trial judge observed, there was nothing untoward about these relationships. But, he found that “Inzola perceived itself as having something of a ‘home field’ advantage” in relation to decisions made by City Council. He found that “Inzola perceived that the greater the involvement of Council [in the RFP process], the greater the advantage to Inzola.”
[8] From an early stage in the RFP process, Inzola, either directly or through its lawyers, sought to have the process changed so that qualified Respondents would have the opportunity to present their proposals and prices at a meeting of City Council. Ultimately, Inzola wanted Council to have input into the selection of the successful Respondent. As the trial judge observed, this proved to be a recurring theme in the events leading up to Inzola’s disqualification.
[9] The RFP provided that the process would be managed by the City. During the process, Respondents were to contact the City only through the City’s Purchasing Supervisor, who was designated as the “sole point of contact”: RFP, ss. A1 and I1. [1] All Respondents were required to sign a confidentiality agreement in form and substance prescribed by the City: RFP, s. J7. [2] Respondents were prohibited from issuing any media release, public announcement or public disclosure relating to the RFP process without the prior written consent of the City: RFP, s. K4. [3]
[10] Respondents agreed to conduct themselves in good faith and in accordance with the RFP: RFP, s. K8. [4] An addendum to the RFP provided that the Evaluation Committee could, in its sole discretion, disqualify a Respondent for a failure to comply with any of the terms and conditions of the RFP.
[11] Inzola and two other contractors were selected to participate in the Competitive Dialogue. On April 7, 2010, the City sent them a confidentiality agreement (the “Confidentiality Agreement”) to be signed prior to the Competitive Dialogue.
[12] The other two Respondents signed the Confidentiality Agreement and began the Competitive Dialogue process. Inzola objected to signing on the basis that the Confidentiality Agreement was overly broad. Inzola maintained that the Respondents should be able to present their final offers directly to Council.
[13] Over the next two months, Inzola and its lawyers attempted to persuade the City that they should not have to sign the Confidentiality Agreement and that City Council should have an opportunity to see and hear presentations from all three Respondents concerning their proposals and pricing. Acting on the advice of the Process and Fairness Advisor, the City explained that the Confidentiality Agreement was mandatory, and that the RFP process did not contemplate Respondents making direct presentations to Council. Both the Process and Fairness Advisor and the Evaluation Committee concluded that allowing Inzola to make submissions to Council would be a “fatal breach” of the RFP and would contravene “principles of fairness and equity”.
[14] Notwithstanding the City’s response, Inzola’s lawyer asked the City Clerk to permit a deputation on behalf of Inzola to address Council concerning “the scope and duration of the Confidentiality Agreement … and the opportunity for each [Respondent] to present Final Submissions with pricing to Council.”
[15] On May 28, 2010, less than a week before a scheduled Council meeting on June 2, Mr. Cutruzzola left a telephone message for the City Clerk indicating that Inzola wanted to appear before Council, stating, “[e]ither we do it in Council or do it through the press.”
[16] On June 1, 2010, Inzola’s lawyer sent a letter to the Mayor and members of the Council, attaching Inzola’s correspondence with the City, maintaining the position that the Confidentiality Agreement was too broad and that each Respondent should be entitled to present their final submission with pricing to Council, so that Council could hear an “unfiltered presentation”.
[17] Mr. Cutruzzola was not permitted to address the Council at its meeting on June 2, 2010. He immediately gave an interview to the Brampton Guardian newspaper, outlining the concerns he had raised through his lawyer and stated that Inzola would never be part of a “secret process”. That interview was published the same day under the headline, “Developer accuses city of secrecy”. Mr. Cutruzzola was quoted as saying, “[w]hat is behind the secrecy? Why the secrecy?” and “[w]e do not participate in a secret process.”
[18] The Process and Fairness Advisor advised the Evaluation Committee that Inzola was in breach of several provisions of the RFP and that it was necessary for the City to determine Inzola’s status immediately. By letter dated June 11, 2010, the City advised Inzola that it was disqualified from further participation in the RFP process.
[19] Ultimately, one of the other two Respondents, Dominus Construction, was awarded the contract for Phase 1 of the project, the construction of the addition to City Hall. Phase 2, the construction of a library, has never proceeded.
[20] Inzola commenced this action on July 4, 2011.
C. Trial Judge’s Reasons
[21] The trial lasted 38 days. Closing submissions of the parties ran to some 450 pages. The trial judgment was lengthy and thorough.
[22] In view of the focused nature of Inzola’s appeal, I set out the trial judge’s findings only in relation to those matters that are the subject of this appeal.
(1) Breach of contract
[23] The trial judge found that Inzola breached the RFP in several respects.
Confidentiality agreement
[24] First, he found that Inzola failed to sign a confidentiality agreement. He rejected Inzola’s submission that the Confidentiality Agreement was overly broad because it was not restricted to protecting “commercial confidentiality”. In this regard, he referred to the evidence of Paul Emanuelli, an expert witness on public procurement, who testified that the definition of confidential information in the agreement was a standard one. The trial judge observed that the agreement had been drafted by external counsel and the other two Respondents had signed the agreement.
[25] The trial judge found that, in any event, Inzola’s real concern about the Confidentiality Agreement was that it would preclude Inzola from presenting its proposal directly to Council. He observed, “[i]n my opinion, this was not a legitimate concern. I agree with [the Process and Fairness Advisor] and interpret the RFP as not allowing Respondents to present their Final Offers directly to Council.”
Sole point of contact
[26] The trial judge also found that Inzola had breached the sole point of contact provision of the RFP. He rejected as “highly technical” Inzola’s argument that the provision was concerned only with “questions” about the RFP and did not prohibit a Respondent from raising “concerns or complaints about the City’s conduct of the RFP process”. Pointing to section I1 of the RFP, the Communication Protocol, he noted that the RFP provided that any Respondent that communicated with the City other than through the Purchasing Supervisor could be disqualified. He found that Inzola clearly breached the RFP by having its lawyer write to the Mayor and Council on June 1, 2010, effectively asking them to intervene in the process.
[27] As a preamble to these conclusions, the trial judge observed that all City witnesses had agreed that the 2005 “Bellamy Report” [5] was “highly persuasive, if not authoritative”, as to procurement best practices in public contracting. He made reference to observations in that report that elected municipal officials should remain outside the competitive process and should not be involved in reviewing bid documents, meeting with bidders and making their own evaluation. He noted that a direct appeal to Council would have been contrary to the recommendations of the Bellamy Report.
[28] The trial judge thus accepted the City’s submission that Inzola’s interpretation of the “sole point of contact” provision would be unworkable, would wreak havoc on the procurement process, would undermine the integrity and proper functioning of the procurement process, and would “defeat the policy objective outlined in the Bellamy Report of keeping the politicians separated from specific procurements.”
Media releases and public disclosure
[29] The trial judge also found that Inzola had breached the RFP’s prohibition of public announcements or disclosure to the media. He found, again, that Inzola’s arguments concerning this issue were highly technical. There was no relevant distinction between making an announcement or press release and a response to a media inquiry. Mr. Cutruzzola had threatened to “do it through the press” if he were not allowed to speak to Council and that is exactly what he did.
(2) Uneven Treatment
[30] A significant part of Inzola’s case at trial was that the Mayor and City staff were biased against Inzola and that City staff had acted unethically to tilt the RFP process against Inzola and in favour of Dominus, the successful Respondent. The trial judge found that the City did not breach its obligations to Inzola and the disqualification of Inzola was not the result of bias. At para. 172, he found that “Dominus was selected as the Preferred Respondent based on the merits of its Final Offer and not by reason of any political inference or partiality.”
[31] Inzola does not challenge this conclusion, except in one respect.
[32] Dominus submitted a final offer dated December 9, 2010. This was some six months after Inzola had been disqualified. Dominus’s offer included “Phase 1”, the expansion of City Hall, and Phase 2, which included a library to be constructed at 20 George Street in Brampton. The offer stated that Dominus had an option to purchase 20 George Street. That statement was untrue, at least at the time that Council met on March 28, 2011 to consider whether to approve Dominus as the Preferred Respondent to construct the Phase 1 City Hall expansion.
[33] On that date, Dominus advised City staff that as the City had deferred consideration of Phase 2, Dominus had not extended its option on 20 George Street. It said that it had a business relationship with the owner of the property and was confident that it could acquire the property. There was evidence to support the conclusion that at the Council meeting on March 28, 2011, and in a subsequent report to Council in July, City staff misled Council about the existence of an option. In fact, Dominus had told City staff that it was not prepared to pay for an option on 20 George Street, given that Phase 2 might not proceed.
[34] However, on August 10, 2011, the day Council approved the contract with Dominus, Dominus acquired an option to purchase 20 George Street for $480,000. Ultimately, the City acquired the option from Dominus and purchased the property, in spite of the fact that Phase 2 was not proceeding.
[35] At trial, Inzola cited the City’s dealings with Dominus and 20 George Street as evidence of a continuing bias against Inzola. Inzola submitted that the City provided assistance to Dominus, which it never would have provided to Inzola, to ensure that Dominus would succeed.
[36] The trial judge rejected this argument:
I do not agree. By August, 2011, City staff had been working hard for approximately 14 months to gain approval for a much needed City Hall expansion. Testimony and emails show City staff working at all hours of the day and night and on weekends. [The Process and Fairness Advisor] testified that a failed RFP can stigmatize a City and deter future respondents. So too could a second failed RFP stigmatize the senior staff members who were driving the process. I am satisfied that the assistance offered to Dominus had nothing to do with Inzola and everything to do with staff wanting to complete the project successfully to meet the needs of the City and to be recognized for that accomplishment. The dealings with 20 George St. do not, therefore, support Inzola's contention that bias against Inzola was a factor in its disqualification.
[37] In contrast to Dominus’s alleged breach, the trial judge found that “the breaches by Inzola could not have been more fundamental. Inzola wanted Council to intervene and effectively sanction a new process whereby Inzola would get to make an unfiltered presentation of its proposal to Council.”
(3) Damages
[38] For the “sake of completeness”, the trial judge considered the damages that would have been awarded to Inzola, had he found the City liable to Inzola. Inzola argued that expectation damages should be awarded because it would have been awarded the contract had it not been disqualified. The trial judge rejected this argument. He found that the RFP was essentially an unenforceable agreement to negotiate, which would not create a contract until the successful Respondent had negotiated a contract with the City. The minimal performance principle found in Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303 was applicable. If Inzola had established liability, it could only recover its reliance damages in the amount of $200,000, its estimated cost in responding to the RFP.
[39] In the further alternative, the trial judge quantified Inzola’s damages in the event it was entitled to expectation damages. He held that Inzola was “fighting an uphill battle” to become the successful Respondent and that it had a 20% chance of doing so. Based on his calculation, Inzola would have made a profit of $13,818,260 had it been successful in securing the contract. As a result, he estimated Inzola’s damages at 20% of that amount, namely $2,763,652.
D. Discussion
[40] Inzola raises five issues on appeal, which I shall discuss in order.
(1) Was Inzola permitted to raise process concerns outside the sole point of contact?
(a) The Parties’ Submissions
[41] Inzola claims that the trial judge made two errors in the interpretation of the RFP. This section considers the first of the alleged errors. Inzola submits that the trial judge conflated the substance of its concerns about the RFP with the manner in which they were communicated. Specifically, Inzola submits that the trial judge erred by focusing on the merits of Inzola’s complaints rather than whether it was entitled to raise them directly with City Council and outside the “sole point of contact” provision of the RFP.
[42] Inzola submits that the “sole point of contact” provision pertained only to operational communications in the course of the RFP process. It was not intended to apply to concerns about the process itself. Inzola says that the issue was not whether its objection to the Confidentiality Agreement was legitimate, it was whether it was entitled to raise the issue outside the sole point of contact. Inzola submits that the purpose of the relevant provisions of the RFP were to prevent Respondents from lobbying with City Council in favour of their proposals, not to prevent them from raising concerns about the process.
[43] The City points out that by submitting its proposal, Inzola accepted the terms of the RFP. [6] The trial judge found that Inzola had committed three independent breaches of the RFP: it had failed to sign the Confidentiality Agreement; it had breached the duty to communicate only through the “sole point of contact”; and it had made a statement to the media. The City submits that any one of those breaches would have justified its disqualification.
[44] The City submits that City officials wanted to keep Inzola in the process, because they believed it was desirable to have three Respondents competing for the contract. However, Inzola attempted to change the process to its own advantage, and persisted in that conduct in spite of the City’s warning that it would be disqualified. Ultimately, the Evaluation Committee disqualified Inzola, based on the advice of the Process and Fairness Advisor.
(b) Analysis
[45] Inzola’s submission about the trial judge’s reasoning must be considered in the context of its breaches of the requirements of the RFP. Absent a credible basis for refusing to sign the Confidentiality Agreement, Inzola was obligated to sign it. In this case, Inzola had no credible basis for not signing the agreement. Its real reason for not wanting to sign was, as the trial judge found, that Inzola wanted to advocate for its proposal before City Council.
[46] Nor can there be any dispute that Inzola breached the prohibition against “media release, public announcement or public disclosure”. I agree with the trial judge that Inzola’s interpretation of the media provision was highly technical and contrary to its plain meaning. More fundamentally, by mischaracterizing the RFP to the press as a “secret process”, Inzola was attempting to undermine the process to its advantage.
[47] Last, I agree with the trial judge that Inzola’s interpretation of the “Communication Protocol” was also highly technical and ignored the broad meaning of clause A1. The “sole point of contact” feature of the RFP was designed to ensure consistency and fairness in RFP communications. If Inzola had a complaint about the process, it was required, pursuant to the RFP, to communicate that complaint through the sole point of contact. Again, on a more fundamental level, Inzola’s communication with the Mayor and City Council was contrary to a principal objective of the RFP process – preserving the integrity of the process by keeping politics out of it.
[48] Inzola was not disqualified because it misinterpreted the RFP. It was disqualified because its conduct not only breached the terms of the RFP, but because it threatened the credibility and integrity of the RFP process. It was disqualified by the Evaluation Committee, on the advice of the Process and Fairness Advisor, who were understandably concerned that politicizing the process at the insistence of one Respondent would cause a loss of confidence in the fairness and integrity of the process on the part of the other two Respondents and could cause the RFP process to fail.
[49] In my view, the trial judge’s interpretation of the contract in this respect was reasonable and is entitled to deference: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 52.
(2) Did the trial judge err by treating the “Bellamy Report” as part of the factual matrix?
(a) The Parties’ Submissions
[50] The second alleged interpretation error advanced by Inzola is that the trial judge erred in concluding that the Bellamy Report was part of the factual matrix of the contract, effectively treating Inzola’s conduct as a breach of the Bellamy Report’s recommendations as opposed to a breach of the RFP.
[51] Inzola observes that the RFP was a contract and that the relevant contractual interpretation principles should apply. Contractual interpretation involves analyzing the words of the written contract, in light of its factual matrix. The factual matrix of a contract includes facts that are objectively within the knowledge of both parties at the time the contract was executed: Sattva, at paras. 47, 58. Inzola submits there was no evidence that it regarded the Bellamy Report as part of the contract’s matrix or underpinnings.
[52] Inzola submits the trial judge erred by focusing his findings on the City’s subjective and uncommunicated intentions with regard to the Bellamy Report: Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129. Inzola says it had no reason to know that its actions would be measured against the Bellamy Report. Nor would Inzola have considered the Bellamy Report part of the factual matrix of the contract because the Report had no statutory effect and the Report concerns events that took place in a different city. Further, Inzola says it did not address in its closing submissions at trial whether the Bellamy Report could be used as an interpretive aid, because no one, including the City, suggested it could be.
[53] Ultimately, says Inzola, the trial judge found a breach of the Bellamy Report, not the RFP. Specifically, the trial judge erred when he accepted the City’s submission, at para. 210, that bringing City Council into disputes about the procurement process would undermine the integrity and proper functioning of that process and “would defeat the policy objectives outlined in the Bellamy Report of keeping the politicians separated from specific procurements.”
[54] The City counters that the trial judge’s interpretation of the RFP was based on the plain meaning of its provisions, which supported his conclusion that Inzola had clearly breached the RFP. The City submits that it was appropriate for the trial judge to consider the Bellamy Report in response to Inzola’s assertion that it was entitled to complain about the process, whether it was ultimately right or wrong. The Bellamy Report was relevant to how City staff developed and ran the RFP process and it was also relevant to the standard of commercial reasonableness. In addition to relying on the Bellamy Report as evidence of best practices, the City submits that the trial judge also relied on the expert evidence of Mr. Emanuelli, who testified on the subject of best practices in RFP processes, including the “single point of contact” approach.
(b) Analysis
[55] I do not accept Inzola’s submission. The trial judge was entitled to consider the underlying principles of the RFP and its structure in order to properly interpret the contract.
[56] The trial judge considered a variety of evidence in his interpretation of the underlying principles of the RFP. The Bellamy Report was entered as an exhibit at trial and the trial judge qualified Mr. Emanuelli as an expert witness on “industry norms in Canadian public procurement”. The trial judge also relied on the evidence of City staff, who explained that the Bellamy Report had influenced their design of the RFP process.
[57] For example, Mr. Lewis, Commissioner of Financial Services and Chair of the Evaluation Committee, gave evidence, in the trial judge’s wording, that “the standard in Brampton, and in other places he had worked, was that Council was not involved in evaluating tenders or proposals. That was a key Bellamy Report recommendation. It was also standard that the actual proposals or bids that were received did not go to Council.… It was also standard that Respondents were not allowed to delegate to Council.”
[58] The trial judge did not find that the Bellamy Report was part of the “factual matrix” or that the parties had a meeting of the minds with respect to the report. It was not necessary for him to do so. In assessing the City’s response to Inzola’s conduct, he was entitled to consider, as he did, the underlying principles that informed the City’s choice of the structure for the RFP. These underlying principles made it clear that the RFP was designed to keep City Council separate from the evaluation process. The trial judge did not need to, as Inzola suggests, “fill in” the RFP terms with the Bellamy Report recommendations to come to this conclusion. As discussed above, Mr. Emanuelli and City witnesses stated that best practices in contracts of this nature called for the process to take place outside the political realm.
(3) Did the City breach its duty of fair and equal treatment?
(a) The Parties’ Submissions
[59] Inzola claims that the City owed it a duty of fair and equal treatment in the RFP process, regardless of whether it breached the RFP. It claims the City breached that duty by treating Dominus’s breach differently from Inzola’s and applied an uneven standard to Dominus’s “non-compliant bid”. Inzola submits that, had Dominus’s bid been disqualified, there would have been a new RFP process and Inzola would have been entitled to bid. It claims damages for the loss of opportunity.
[60] Inzola says that while the trial judge recognized a duty of fair and equal treatment, he failed to properly consider whether Dominus’s misrepresentation of the status of its option on 20 George Street should have resulted in its disqualification. Had he done so, he would have recognized that the City applied an uneven standard to Inzola’s conduct on the one hand and to Dominus’s on the other. Inzola submits that by failing to sanction Dominus’s misrepresentation by disqualifying it, the City breached the duty of fair and equal treatment owed to Inzola.
[61] Inzola further submits that the timing of its disqualification is insignificant in the analysis of whether the City breached the duty of fair and equal treatment: CG Acquisition Inc. v. P1 Consulting Inc., 2019 ONCA 745, at paras. 11, 16 and 19. While Inzola accepts that the City had discretion in the process, it submits that there was no exercise of discretion with regard to Dominus’s breach. In considering Inzola’s disqualification, the City raised the issue with the Evaluation Committee and consulted with the Process and Fairness Advisor. Inzola submits that same process was not followed when Dominus submitted a non-compliant bid. City staff knew about the breach and did not convene a meeting, nor did they consult the Process and Fairness Advisor. Instead, Inzola submits that City staff misled City Council about the misrepresentation. Inzola submits that had the City engaged in the same process for Inzola’s and Dominus’s breaches, they likely would not have breached their duty of fair and equal treatment – instead they engaged in two different processes, resulting in unfair and unequal treatment of Inzola.
[62] The City makes three responses: (i) the duty of fair and equal treatment as articulated by Inzola was no longer in existence once Inzola had been disqualified; (ii) the trial judge compared Inzola’s and Dominus’s breaches and concluded they were not similar and therefore did not need to be addressed with similar processes; and (iii) the City had the discretion to deal with the breaches differently because the situations were different. Ultimately, the City submits that these arguments were before the trial judge and he rejected Inzola’s argument. The trial judge concluded that the breaches were not similar – Inzola’s breach was fundamental to the process. The City submits that Dominus’s breach was not only less serious, but also of a different nature. It related to an option in the distant Phase 2. There was no concern that Dominus’s promised option could not be delivered. In fact, the City now owns the property in question.
(b) Analysis
[63] I agree with the City’s submissions. Dominus’s “breaches” were not of the same order of magnitude as Inzola’s breaches. As the trial judge found, Inzola’s breach was fundamental. It threatened the integrity of the RFP process itself. In contrast, Dominus’s breach was inconsequential. It related to a second phase of the project, which never happened. The breach was also technical, in the sense that City officials never had any doubt that Dominus was able to secure an option on the property.
[64] Even assuming, therefore, that Inzola had a right to insist on equal treatment after its disqualification, there was no reasonable comparison between the two “breaches”. Moreover, s. K9 of the RFP gave the City broad discretionary powers over the RFP process. Specifically, s. K9(f) empowered the City to waive deficiencies and excuse non-compliance. The City was therefore entitled to waive Dominus’s breach.
(4) Did the trial judge err in the calculation of damages?
[65] Inzola submits that the trial judge erred in finding that, in the event of success at trial, Inzola was entitled only to reliance damages, rather than expectation damages. In view of the fact that I would dismiss the appeal on liability, I do not find it necessary to address this issue.
(5) Leave to appeal costs
[66] Inzola seeks to appeal the costs order against it. I would not grant leave to appeal costs.
[67] The trial judge awarded the City its costs on a partial indemnity basis of $3.08 million. Inzola has not demonstrated that the trial judge made an error in principle or that the costs award was plainly wrong: Open Window Bakery Ltd., at para. 27.
E. Disposition
[68] For these reasons, I would dismiss the appeal. If the parties are unable to resolve costs, they shall make written submissions. The City shall file its submissions within fifteen days of the release of these reasons and Inzola shall have seven days within which to respond. The submissions shall not exceed five pages in length, excluding costs outlines.
Released: March 8, 2021 “G.R.S.” “George R. Strathy C.J.O.” “I agree. David Brown J.A.” “I agree. B.W. Miller J.A.”
[1] “A1. Background. The City will manage the RFP Process and there will be a single point of contact for Respondents. During the RFP Process, Respondents should contact the City only through the Purchasing Supervisor as set out in RFP, section I. Communication.” “I1. Communication Protocol. Any Respondent who has questions with regard to the RFP Process, requirements, or other aspects of the RFP shall communicate solely through Purchasing Division… Any Respondent found to be in communication with other than the Purchasing Supervisor may result in the City disqualifying the Respondent’s Submission.”
[2] “J7. Confidentiality Agreement. Respondents are required to sign and submit a confidentiality agreement in a form and substance prescribed by the City … prior to the Competitive Dialogue Process.”
[3] “K4. Media releases, public disclosures and public announcement. A Respondent, including any Joint Venture participant, and their Advisors, employees, representatives and Respondent Team members, and their respective Advisors, employees and representatives shall not issue or disseminate any media release, public announcement or public disclosure (whether for publication in the press, on the radio, television, internet or any other medium) that relates to the RFP Process, the RFP documents or the Project or any matters related thereto, without the prior written consent of the City.”
[4] “K8. Good Faith Process. By responding to this request, the Respondent commits to respond to this RFP, and otherwise to conduct itself, in good faith with the City of Brampton and in accordance with the terms of this RFP.”
[5] City of Toronto, Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, The Honourable Denise E. Bellamy, 2005.
[6] “K. Legal Matters. The respondent agrees and confirms that its submission to [the City] pursuant to this RFP indicates and expresses Respondent’s unqualified acceptance, agreement, promise and obligation to the following terms, conditions, provisions, disclaimers and requirements in this RFP. The delivery of a submission by the respondent shall constitute the respondent’s unqualified agreement and acceptance of the foregoing.”