Jun 1, 2017

Summary of Surespan Construction Ltd. v Saskatchewan

Surespan Construction Ltd. v Saskatchewan, 2017 SKQB 55 (CanLII)
Civil Procedure – Queen’s Bench Rule 7-5
Civil Procedure – Summary Judgment
Contracts – Tender Call

The defendant published an invitation to tender the supply, fabrication, delivery, and erection of a steel bridge. The plaintiff and company S. were the only two bidders. Both bids were rejected because they were substantially higher than estimated and the defendant concluded they were non-compliant with the terms of the tender. The work was re-tendered as two separate projects: one for supply of the steel and one for the erection of the steel. The tender required contractors to hold a prescribed Canadian Welding Bureau (CWB) certification. The plaintiff did not have Division 1 certification because it did not have a registered professional engineer employed full-time. The issues were as follows: 1) was the plaintiff’s evidence admissible and sufficient to support its application for summary judgment; 2) whether Special Provision 2.1 (SP 2.1) applied to the plaintiff: a) as a requirement for submitting a compliant bid, and/or b) as a requirement for receiving the contract; 3) whether the plaintiff’s bid was compliant with the tender; 4) whether any non-compliance was material; 5) whether the plaintiff’s bid was substantially compliant, and whether the irregularity was waived by the defendant; 6) whether the defendant acted honestly and in good faith in rejecting the bids, cancelling the competition and re-tendering the work as two separate contracts; and 7) if the defendant breached its obligations to the plaintiff, what damages should be awarded. The parties both applied for summary judgment.
HELD: The court was satisfied that the summary judgment process would provide a proportionate, expeditious, and less expensive means to properly adjudicate the dispute. The issues were determined as follows: 1) the plaintiff’s witness often demonstrated selective memory and a tendency to avoid answering reasonable, straightforward questions. He said that he believed the SP 2.1 required the plaintiff to obtain the welding certification upon the award of the contract, but other evidence contradicted that belief. The court inferred that the plaintiff submitted its bid knowing that it did not and could not comply with the certification requirement in the hope that it would be waived or revised by the defendant; 2) the court concluded that SP 2.1 was entitled “Contractor Qualifications” for a reason: unless the plaintiff held the welding certification prescribed by SP 2.1, it was not qualified to receive an award of Contract B (the actual contract for performance); 3) the plaintiff’s bid was not compliant with the invitation to tender because the plaintiff did not hold the required certification when it submitted its bid or at any time thereafter. When the plaintiff was asked for clarification of its certification, it replied with what the court found amounted to three conditional or qualified bids; 4) the invitation to tender contained sections for irregular and non-compliant bids. The defendant had discretion to waive or correct non-compliant bids that would not give an unfair advantage over other compliant bids. Non-compliant bids that were non-compliant in a material way were incapable of being accepted. The section also indicated that a bid would be rejected if it was unqualified in any way. The court interpreted that portion to be intended to apply to a “material” condition or qualification. The court concluded that the responsibilities of a full-time engineer that were required for Division 1 certification would have been significant. The welding certification requirement of SP 2.1 was found to be material. Therefore, the plaintiff’s bid was materially non-compliant so that it was not capable of forming Contract A (a contract that comes into existence between the owner inviting tenders and every bidder that submits a bid that is compliant with the owner’s offer). The bid also contained a material condition or qualification, which obligated the defendant to reject it; 5) the court said that even if the non-compliance was not material, the defendant was under no obligation to waive it and in fact did not do so; 6) the defendant could rely on the Privilege Clause to reject the bids. The defendant’s reasons for cancelling the bid competition were found to be reasonable. The court concluded that the defendant acted reasonably, honestly, and in good faith in rejecting both bids; and 7) it was not necessary to determine damages.