



COURT OF APPEAL
    FOR ONTARIO

CITATION: Reaction Distributing Inc. v. Algonquin Highlands
    (Township), 2019 ONCA 433

DATE: 20190523

DOCKET: C66375

Doherty, Nordheimer and Harvison Young JJ.A.

BETWEEN

Reaction Distributing
    Inc.

Plaintiff (Respondent)

and

The Corporation of the
    Township of Algonquin Highlands

Defendant (Appellant)

John Ewart, for the appellant

John Montgomery, for the respondent

Heard:  May 22, 2019

On appeal from the judgments of Justice Bryan Shaughnessy
    of the Superior Court of Justice, dated December 7, 2018 with reasons reported
    at 2018 ONSC 7324

REASONS FOR DECISION

[1]

The defendant appeals from the trial judgment that awarded the
    respondent damages in the amount of $71,063.60. At the conclusion of the
    hearing, we dismissed the appeal with reasons to follow. We now provide those
    reasons.

[2]

The respondent submitted a tender for work to be done for the appellant.
    The respondent submitted its tender in a three ring binder contained in a box. The
    box did not have the respondents name or address on the outside of the box. It
    was one of the contractual requirements of the tender process that all tenders
    had to be submitted in a sealed envelope that had marked, on the outside, the
    companys name and return address.

[3]

The appellant disqualified the respondents tender as a consequence of
    this omission and awarded the contract for the work to the only other company
    that submitted a tender. The respondent sued the appellant for breach of
    contract. The trial judge found that the respondents tender was in substantial
    compliance with the tender requirements. The trial judge found that the respondents
    failure to include its name and return address was a mere irregularity. He thus
    found that the appellants disqualification of the respondents tender constituted
    a breach of contract. The trial judge found that the respondent had submitted
    the lowest bid for the work and would have been awarded the contract for the
    work if the appellant had evaluated the respondents tender. Consequently, the
    trial judge awarded the respondent its lost profit from its failure to be
    awarded the contract for the work.

[4]

While the terms of the tender process permitted the appellant to waive
    any non-compliance, the appellant says that that term did not require it to
    waive any non-compliance. It says that the respondent clearly did not comply
    with the requirement to have its name and return address on the outside of the
    tender and therefore it was entitled to disqualify the respondents tender.

[5]

The appellant raised three issues: (i) that the trial erred in finding a
    breach of contract in this situation; (ii) erred in finding that the appellant
    had not acted in good faith; and (iii) erred in finding that the respondent
    would have been awarded the contract for the work, if the appellant had
    considered its tender. At the hearing, the appellant chose not to pursue the
    third issue.

[6]

We do not accept either of the other grounds advanced by the appellant.
    On the first issue, the law is that substantial compliance is the test to be
    applied in considering tender requirements:
Double N Earthmovers Ltd. v.
    Edmonton (City),
2007 SCC 3, [2007] 1 S.C.R. 116. Consequently, and
    subject to the second issue, it was open to the trial judge to find that the
    respondent substantially complied with the tender requirements and thus the
    appellants failure to consider the respondents bid constituted a breach of
    contract.

[7]

On the second issue, the trial judge found that the appellant had not
    treated the respondent fairly and equally in reaching its conclusion to
    disqualify the respondents tender. The trial judges finding, in this regard,
    is a factual one that is not to be interfered with absent palpable and
    overriding error, of which there is none here. We would note, on this point,
    that the appellant did not place any evidence before the trial judge as to the
    reasons why the appellant was not prepared to waive the non-compliance.

Conclusion

[8]

The appeal is dismissed with costs to the respondent fixed in the agreed
    amount of $6,500 inclusive of disbursements and HST.

Doherty
    J.A.
I.V.B. Nordheimer J.A.
Harvison Young J.A.


