



COURT OF APPEAL FOR ONTARIO

CITATION: Inzola Group Limited v. Brampton
    (City), 2021 ONCA 143

DATE: 20210308

DOCKET: C66545

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)

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 Inzolas 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 Councils 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. Cutruzzolas 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
    Inzolas 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 Citys 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 Citys response, Inzolas
    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, Inzolas lawyer sent a letter
    to the Mayor and members of the Council, attaching Inzolas 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 Inzolas 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 JUDGES 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 Inzolas
    appeal, I set out the trial judges 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 Inzolas 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,
    Inzolas 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 Inzolas 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 Citys 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 Citys
    submission that Inzolas 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 RFPs prohibition of public announcements or disclosure to the
    media. He found, again, that Inzolas 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 Inzolas 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. Dominuss
    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 Citys 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 Dominuss 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 Inzolas 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 Inzolas 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 Inzolas 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 Citys 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]

Inzolas submission about the trial judges
    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 Inzolas 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 Inzolas
    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, Inzolas 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 judges 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 Inzolas
    conduct as a breach of the Bellamy Reports 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 contracts matrix
    or underpinnings.

[52]

Inzola submits the trial judge erred by focusing
    his findings on the Citys 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 Citys 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 judges
    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 Inzolas 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 Inzolas 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 judges 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 Citys response to Inzolas conduct, he was entitled to consider,
    as he did, the underlying principles that informed the Citys 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 Dominuss breach
    differently from Inzolas and applied an uneven standard to Dominuss
    non-compliant bid. Inzola submits that, had Dominuss 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 Dominuss 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 Inzolas conduct on
    the one hand and to Dominuss on the other. Inzola submits that by failing to
    sanction Dominuss 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 Dominuss breach. In considering Inzolas 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 Inzolas and Dominuss 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 Inzolas and
    Dominuss 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 Inzolas argument. The trial judge concluded that the
    breaches were not similar  Inzolas breach was fundamental to the process. The
    City submits that Dominuss 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 Dominuss promised option could not be delivered. In fact, the City
    now owns the property in question.

(b)

Analysis

[63]

I agree with the Citys submissions. Dominuss
    breaches were not of the same order of magnitude as Inzolas breaches. As the
    trial judge found, Inzolas breach was fundamental. It threatened the integrity
    of the RFP process itself. In contrast, Dominuss 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 Dominuss 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 Respondents 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
    Respondents 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
    respondents unqualified agreement and acceptance of the foregoing.


