REDWOOD CONSTRUCTION LIMITED Plaintiff And: MEMORIAL UNIVERSITY OF NEWFOUNDLAND Defendant, 2023 NLSC 4

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Redwood Construction Limited v. Memorial University of Newfoundland , 2023 NLSC 4 Date : January 11, 202 3 Docket : 202101G1733 Between: REDWOOD CONSTRUCTION LIMITED Plaintiff And: MEMORIAL UNIVERSITY OF NEWFOUNDLAND Defendant Before: Justice Peter A. O'Flaherty Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: October 26, 2022 Date of Judgment: January 11, 2023

Summary: A contractor submitted the lowest bid to Memorial University for the construction of a new building. Memorial concluded that the bid was non-compliant, and awarded the contract to the next lowest bidder. The contractor sued in breach of contract and applied for a

summary trial under Rule 17A. Held: The application for a

summary trial was granted. The court determined that the contractor’s bid was non-compliant. Memorial was therefore entitled to a judgment dismissing the contractor’s action for breach of contract.

Appearances: Kevin F. Stamp, K.C. Appearing on behalf of the Plaintiff Stephen F. Penney and Matthew N. Craig Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: Hyrniak v. Mauldin, 2014 SCC 7 , [2014] 1 S.C.R. 87; Young v. Noble, 2016 NLCA 58; BrookConstruction

(2007) Inc. v. North Atlantic Cement and Construction Ltd., 2020 NLCA 42;R. v. Ron Engineering & Construction (Eastern) Ltd., (SCC), [1981] 1 S.C.R. 111; MJB Enterprises Ltd. v. DefenceConstruction

(1951) Limited, (SCC), [1999] 1 S.C.R. 619; Martel Building Ltd. v. R., 2000 SCC 60; G.J. Cahill & Co.(1979) v. Newfoundland & Labrador (Minister of Municipal & Provincial Affairs), 2005 NLTD 129; Double N Earthmovers Ltd. v.Edmonton (City), 2007 SCC 3; Eastern Regional Health Authority v. Kannegiesser Canada Inc., 2015 NLTD(G) 28; W.H. Parsons Ltd.v. Mother Hubbard’s Kitchen Cabinets Ltd. (1988), (NL SC), 75 Nfld. & P.E.I.R. 105, 234 A.P.R. 105 (Nfld.S.C.T.D.); Surespan Construction Ltd. v. Canada (Attorney General), 2008 CAF 57; Steelmac Ltd. v.

Nova Scotia (Attorney General),2007 NSSC 156 STATUTES CONSIDERED: Public Procurement Act, S.N.L. 2016, c. P-41.001; Electronic Commerce Act, S.N.L. 2001, c E-5.2 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT O'Flaherty, J.: INTRODUCTION [1] This is an application by the Plaintiff, Redwood Construction Limited, for a

summary trial under Rule 17A of the Rules of theSupreme Court, 1986, S.N.L. 1986, c. 42, Sch. D, and, if granted, for judgment on its action for breach of contract. [2] On June 27, 2020, the Defendant, Memorial University of Newfoundland, issued an open call for bids to construct a newbuilding at the Fisheries and Marine Institute Holyrood Marine Base in Holyrood, NL. Memorial was required to issue an open call forbids to construct the new building under the Public Procurement Act, S.N.L. 2016, c. P-41.001. [3] Redwood is a general contractor.

On the closing date of the open call for bids, August 27, 2020, Redwood submitted a bid fora stipulated price of $18,222,305.00, including HST. The bid was received by email at 3:00 p.m., which was the deadline for thesubmission of bids. It was the lowest of the seven bids Memorial received. [4] The bid submitted by Redwood did not contain three pages of the bid submission form, including the Bidder Contact pagesigned by an authorized signing official of the bidder.

When Redwood discovered this omission it submitted a second bid submissionform, for the same stipulated price, which contained all the pages of the form with a completed and signed Bidder Contact page. Thesecond bid was received at 3:10 p.m., but by then the deadline for the submission of bids had passed. [5] The 3:10 p.m. bid was rejected because it was submitted too late. Memorial rejected the 3:00 p.m. bid submitted by Redwood(the “Redwood Bid”) because it was unsigned and therefore non-compliant with the terms and conditions of the open call for bids.

OnNovember 2, 2020, Memorial awarded the contract to the next lowest bidder, Olympic Construction Limited, for $18,811,992.89,including HST. [6] Redwood sued in breach of contract, claiming that the Redwood Bid was a compliant bid, and as the low bidder it was entitledto the award of the contract. [7] Memorial’s primary defence is that the Redwood Bid was not compliant with the terms and conditions of the open call forbids because it was unsigned.

Memorial also claims that Redwood’s action was barred under s. 26 of the Public Procurement Act, andthat Redwood’s action in breach of contract is expressly excluded by the limitation of liability clause in the terms and conditions of theopen call for bids.

[ 8 ] The issue in dispute between the parties is whether the Redwood Bid is compliant with the terms and conditions of the open call for bids. The parties submit the issue is an appropriate one for determination using the

summary trial procedure. [ 9 ] On the threshold question under Rule 17A, Redwood has put forward an evidentiary basis for its position that, despite being unsigned, the Redwood Bid was compliant with the open call for bids. I am satisfied that there is no apparent reason not to use the

summary trial procedure to decide the issue in dispute. [ 10 ] Through its filings, Memorial has demonstrated that the issue in dispute is a genuine issue for trial. I am satisfied that I can decide the issue fairly based on the existing record because all the relevant facts and documents are before the court, the issue is not novel or particularly complex, and the law regarding the compliance of a bid with the terms and conditions of a tender call is well established. [ 11 ] For the reasons that follow, my conclusion on the

summary trial is that the Redwood Bid was not compliant with the terms and conditions of the open call for bids. Memorial was therefore legally required to reject the Redwood Bid and it did not breach any contractual obligation to Redwood by making the award to Olympic. [ 12 ] Memorial is therefore entitled to a final judgment dismissing the Redwood action for breach of contract. In the circumstances it is not necessary to address the two alternative defences raised by Memorial. FACTUAL BACKGROUND The Memorial Open Call for Bids [ 13 ] The Defendant, Memorial University of Newfoundland, is a “public body” under s. 2 (

q) of the Public Procurement Act . Memorial is therefore obliged to invite suppliers to submit bids for the supply of goods and services over a certain value. The invitation that a public body such as Memorial issues to potential suppliers is now called an “open call for bids”. Under the previous legislation, the equivalent process was known as a call for public tenders. [ 14 ] On June 29, 2020, Memorial issued an open call for bids identified as MI-001-16 Holyrood Marine Base Phase IIB.

In the documentation, Memorial invited potential suppliers to submit stipulated price bids to construct a new four storey building and site works at the Fisheries and Marine Institute Holyrood Marine Base in Holyrood, NL. The deadline for the submission of bids was initially 3:00 p.m. NST on August 6, 2020, but it was later changed to 3:00 p.m.

NST on August 27, 2020 (the “Submission Deadline”). [ 15 ] The documentation published with the open call for bids identified as MI-001-16 ran to hundreds of pages of drawings, specifications and contractual terms and conditions pertaining to the ultimate building contract to be entered into (the “Open Call Documents”). [ 16 ] The Open Call Documents included terms and conditions governing the relations of the parties arising from the call for bids and the submission of a bid.

Of particular relevance are the terms and conditions in the Open Call and Acceptance Form for Stipulated Price Contract (the “Open Call and Acceptance Form”). [ 17 ] The Open Call and Acceptance Form contained

Part 1 – Instructions to Bidders which set out requirements for the validity of the bid submissions. Bidders were required to use the Open Call and Acceptance Form to submit their bids. The Redwood Bid Submissions [ 18 ] The Plaintiff, Redwood Construction Limited, is a general contracting company with its head office in Mount Pearl, NL. [ 19 ] On August 27, 2020, Redwood’s employee, Mr. Dale Peddle, responded to the open call for bids by emailing the contractor’s bid submission (the “Redwood Bid”) in a .pdf file to opencalls@mun.ca.

According to the inbox time stamp on opencalls@mun.ca, the Redwood Bid was received at 3:00 p.m. on August 27, 2020, on the Submission Deadline. [ 20 ] The Redwood Bid did not include three pages of the Open Call and Acceptance Form. One of the pages missing was the Bidder Contact Page. That page included a space for inserting the name, address, and signature of the bidder, a confirmation of the signatory’s authority to bind the bidder, and the bidder’s acknowledgement and acceptance of the terms and conditions contained in the document.

It also contained a space for Memorial to sign and thereby accept the bid. [ 21 ] The Redwood Bid included the completed Appendix “A” and a copy of the bid bond required under the open call for bids which was dated August 26, 2020 (the “Aviva Bid Bond”). A recital in the Aviva Bid Bond stated as follows: “WHEREAS, the Principal has submitted a written bid to the Obligee, dated 27th day of August in the year 2020.” [ 22 ] Redwood attributed the submission of the incomplete and unsigned Redwood Bid to an “electronic glitch, through no fault of its own.” When Redwood discovered the electronic glitch, Mr.

Peddle proceeded to email a different .pdf file to opencalls@mun.ca containing all the pages of the Open Call and Acceptance Form, including a completed and signed Bidder Contact Page. Unfortunately, by the time that the second Redwood bid submission was received at opencalls@mun.ca it was 3:10 p.m. on August 27, 2020, and the Submission Deadline had passed. [ 23 ] In the Affidavit of the President of Redwood, Gordon Howell, dated January 31, 2022, at paragraphs 5 and 22, Dale Peddle is described as the Chief Estimator of Redwood, and the “official contact person” for Redwood throughout the tender process. Mr.

Howell’s Affidavit confirmed that it was Mr. Peddle who forwarded both Redwood bid submissions to Memorial on August 27, 2020. The Rejection of the Redwood Bid Submissions [ 24 ] At the public opening of the bids on August 27, 2020, at 3:30 p.m. Memorial released the names of the bidders and the

amounts of the bids. According to the information released, seven bidders had submitted bids to construct the new building. [25] The stipulated prices submitted by the bidders ranged from a low of $18,222,305.00, which was the price in the Redwood Bid,to a high of $19,482,338.00. All prices included HST. [26] Memorial determined that the second Redwood bid submission was late and could not be considered.

This determination isaccepted by Redwood and was not challenged in its action for breach of contract. [27] Upon evaluation of the Redwood Bid, Memorial determined that the Redwood Bid did not include the Bidder Contact Pagesigned by an authorized signatory. Memorial concluded that the absence of the signed Bidder Contact Page rendered the Redwood Bidnon-compliant with the terms of the open call for bids and incapable of acceptance.

Memorial therefore rejected the Redwood Bid. [28] On November 2, 2020, Memorial awarded the construction contract to Olympic Construction Limited, the bidder that it haddetermined submitted the lowest compliant bid in the amount of $18,811,992.89, including HST. ISSUES [29] The issues for determination on this application are as follows: 1. Is this an appropriate case for

summary trial under Rule 17A? 2. Is there a genuine issue for trial on the question of whether the Redwood Bid was compliant with the terms and conditions of theopen call for bids? 3. Is it possible and appropriate to decide the question on the existing record? 4. Was the Redwood Bid a compliant bid? ANALYSIS Is this an Appropriate Case for a

Summary Trial? [30] The Supreme Court of Canada has directed trial courts to use the

summary trial procedure in appropriate cases to providelitigants with more timely and less expensive access to justice (see: Hyrniak v. Mauldin, 2014 SCC 7 , [2014] 1 S.C.R. 87). [31] A

summary trial is no less a trial than a conventional trial. Both provide the parties with a final decision after trial on an issuein dispute. Where a

summary trial differs from a conventional trial is in the procedure used to find the facts. [32] On a conventional trial the judge typically relies upon the testimony of witnesses in court and the admissible documentsentered through the witnesses, or by consent, to find the facts necessary to decide the legal issues. On a

summary trial the judge typicallyfinds the necessary facts in the affidavits of witnesses, with cross-examination where leave is given, or in the answers to interrogatoriesor the evidence at discovery, which are filed as part of the record. [33] The threshold question on an application under Rule 17A is whether the case is an appropriate one for determination bysummary trial. The decision on the threshold question focuses on whether the

summary trial procedure described above will likely allowthe judge to find the facts needed to decide the issues in dispute. [34] The threshold question was described by our Court of Appeal as a preliminary determination of “whether the applicant hasprovided some evidentiary basis for the assertions made and whether the nature of the case is such that it is potentially capable of beingdealt with in the attenuated manner contemplated by a

summary trial” (see: Young v. Noble, 2016 NLCA 58). I will examine these twofactors. [35] In its Statement of Claim, Redwood asserts that Memorial issued the open call for bids identified as MI-001-16 HolyroodMarine Base Phase IIB on June 29, 2020, and that it submitted a compliant bid on August 27, 2020. The evidentiary basis for theseassertions is contained in the January 31, 2022, Affidavit of its President, Gordon Howell, in which Mr.

Howell deposed to the issuanceof the open call for bids by Memorial, and its material terms and conditions, and the filing of the Redwood Bid on August 27, 2020. [36] The Affidavit of Mr. Howell deposed that Dale Peddle, Chief Estimator of Redwood, was recognized throughout the tenderprocess as the “official contact person” for Redwood and that, on August 27, 2020, Mr.

Peddle on behalf of Redwood submitted theRedwood Bid which included the signed Aviva Bid Bond. [37] Redwood has therefore provided some evidentiary basis for its assertions that it submitted a compliant bid in response to theopen call for bids. [38] In terms of the nature of the case, this is a tendering case in which the ultimate question is whether Contract A was formed.The factual matrix in such cases is largely a documentary one, and the open call for bids, the Redwood Bid, and all other relateddocuments have been placed before the court.

In my view, a Contract A case is not only potentially capable of being dealt with in theattenuated manner contemplated by a

summary trial, it is often ideally suited for

summary trial. [39] The parties both agree that the sole issue I have to decide is whether the Redwood Bid complied with the terms and conditionsof the open call for bids. I also note they both submit that the issue in dispute is an appropriate one for determination by

summary trial. [40] I therefore find that the preliminary threshold in favor of proceeding by

summary trial has been crossed by Redwood. Is the Compliance of the Redwood Bid a Genuine Issue for Trial?

[41] The next issue I must consider is whether the compliance of the Redwood Bid with the terms and conditions of the open callfor bids constitutes a genuine issue for trial. [42] In Brook Construction

(2007) Inc. v. North Atlantic Cement and Construction Ltd., 2020 NLCA 42, the Court of Appeal saidthat a genuine issue for trial is one that is “not spurious” and “relates to a material fact or point of law that is necessary to be decided toresolve the ultimate controversy between the parties.” [43] The onus is on Memorial to file evidence to raise the existence of a genuine issue for trial. In its statement of defence Memorialasserts that the Redwood Bid did not include parts of the Open Call and Acceptance Form, notably the Bidder Contact Page, and was notsigned by a representative of Redwood.

Memorial further asserts that the Redwood Bid is not compliant with a mandatory requirementset out in subsection 1.21 of

Part 1- Instructions to Bidders, which provides that in order for a bid to be valid for acceptance by Memorialit must be signed by the duly authorized officials of the bidder. [44] Memorial filed the Affidavit of its Associate Director- Strategic Procurement, Ms. Deanne Piercey, dated March 17, 2022. Ms.Piercey’s Affidavit attaches all the relevant tender documents, including the Redwood Bid, the emails, and all related documents. [45] In her Affidavit, Ms.

Piercey deposes that, having consulting with counsel, she concluded that the Redwood Bid was notcapable of acceptance based on the terms of the open call for bid, in particular the wording of subsection 1.21 of the Instructions toBidders which states: “In order for a Bid to be valid for acceptance, duly authorized officials as indicated in the Instructions to Biddersmust sign it.” [46] The affidavit and the documentary evidence filed by Memorial satisfies me that the compliance of the Redwood Bid constitutesa genuine issue for trial.

Is it Possible and Appropriate to Decide the Question on the Existing Record? [47] The parties submit that the issue of the compliance of the Redwood Bid can and should be decided based on the existingrecord. The position of the parties is an important factor, however I must still decide whether I have a sufficient comfort level with therecord to make the necessary findings of fact. [48] I find that I do.

I am satisfied that all of the relevant tender documents and documentation are in the record before the court.This is not a case in which any material witness has not provided evidence necessary to determine the issue in dispute, or one where thereis a difficult question of credibility to resolve which might make adjudicating the issue on the existing record potentially inappropriate. [49] I also agree with the parties that using the

summary trial procedure to decide the issue in dispute would not be unfair in thiscase. The issue is not complex, and the applicable law regarding the compliance of a bid with the terms and conditions of an open callfor bids is well established. A

summary trial will also serve the goals of timeliness, affordability and proportionality referenced inHyrniak. [50] It is therefore both possible and appropriate to decide the issue of the compliance of the Redwood Bid using the

summary trialprocedure. I will allow the Plaintiff’s application for

summary trial under Rule 17A. Was the Redwood Bid a Compliant Bid? [51] The sole issue to be decided on this

summary trial is whether the Redwood Bid was a compliant bid. The Applicable Legal Principles [52] The parties agree on the basic principles applicable in this case. [53] The principles applied in tendering cases, including the rules applied to determine bid compliance, are derived from thecontractual analysis known as the “Contract A/Contract B” analysis which was first set out by the Supreme Court of Canada in the 1981decision in R. v. Ron Engineering & Construction (Eastern) Ltd., (SCC), [1981] 1 S.C.R. 111.

It is helpful to brieflydiscuss that contractual analysis. [54] Generally, under the “Contract A/Contract B” analysis, an open call for bids by a public body will constitute an “offer” toconsider bids that are submitted by bidders in accordance with the terms and conditions of the offer, and the submission of such a bidwill constitute an “acceptance” of the offer by a bidder.

Where the court concludes there was such an “offer” and such an “acceptance”,and an intention to create contractual relations, a contract referred to as “Contract A” will arise. [55] The contract that may later be entered into by the public body with the successful bidder for the supply of goods or services isreferred to as “Contract B”. [56] What is important to recall in a Contract A case is that only a bid submitted in accordance with the terms and conditions of the“offer” made by the public body will constitute an acceptance of the “offer” by the bidder capable of forming Contract A.

WhereContract A is formed, it imposes contractual obligations on the bidder and on the public body. Where Contract A is not formed, nocontractual obligations binding on the public body or bidder ever come into existence. [57] In an open call for bids, or a call for public tenders, it is the public body that has the right to establish the terms and conditionsof the “offer” it makes to consider bids.

It does so in the tender documentation published with the open call for bids. [58] Failure by a bidder to submit a bid that conforms to those terms and conditions results in the submission of a non-compliant bid(see: MJB Enterprises Ltd. v. Defence Construction

(1951) Limited, (SCC), [1999] 1 S.C.R. 619 at paras. 36-40). [59] It is an implied term of Contract A that the public body will only accept a compliant bid (see: MJB Enterprises, supra, at para.

41). It is also an implied term of Contract A that all bidders will be treated fairly and consistently in the assessment of the bids (see: Martel Building Ltd. v. R. , 2000 SCC 60 , at para. 88 ). [ 60 ] A public body cannot therefore accept a non-compliant bid. To do so will breach the implied obligations owed to compliant bidders ( see: G.J. Cahill & Co. (1979) v.

Newfoundland & Labrador (Minister of Municipal & Provincial Affairs) , 2005 NLTD 129 ). [ 61 ] Unless the terms and conditions otherwise provide, a standard of substantial compliance rather than strict compliance is applied in assessing bid compliance (see: Double N Earthmovers Ltd. v. Edmonton (City) , 2007 SCC 3 at para. 109 ). [ 62 ] Bid compliance is to be determined based upon the state of the bid at the submission deadline (see: Eastern Regional Health Authority v. Kannegiesser Canada Inc. , 2015 NLTD(G) 28, at para. 33). [ 63 ] These are the basic principles I will apply as required in this case.

The Positions of the Parties [ 64 ] Redwood’s position is that, despite the absence of the three missing pages, one of which was the Bidder Contact Page, the Redwood Bid contained “all essential elements necessary” to bind the parties to Contract A and was a compliant bid. [ 65 ] Redwood submits that subsection 1.21 of

Part 1 – Instructions to Bidders, did not require the bid to be signed if an acceptable form of electronic consent was provided by the bidder in satisfaction of the signature requirement. Redwood argues that the email from Dale Peddle with attachments, received at 3:00 p.m. on August 27, 2020, was an acceptable form of electronic consent under subsection 1.21. [ 66 ] Memorial’s position is that subsection 1.21 of

Part 1 – Instructions to Bidders, which required the bid to be signed by the authorized officials of the bidder in order to be valid for acceptance, was a mandatory submission requirement. Memorial argues that the Redwood Bid was not compliant with subsection 1.21 because it was not signed by the authorized signing officials of Redwood.

Memorial further argues that the email from Dale Peddle, with attachments, received at 3:00 p.m. on August 27, 2020, was not an acceptable form of electronic consent under subsection 1.21. [ 67 ] Memorial submits that it was required by the tender documentation and the law to reject the Redwood Bid as non-compliant, even though it was the low bid, and to award the contract to the lowest compliant bidder, in this case Olympic.

The Open Call and Acceptance Form [ 68 ] The arguments regarding the compliance of the Redwood Bid with the terms and conditions of the open call for bids focused almost exclusively on the wording and meaning of the provisions of the Open Call and Acceptance Form. I will first set out the relevant terms of the Open Call and Acceptance Form.

I will also consider the relevance and legal effect of the complete form, as contained in the Open Call Documents, under the Contract A/Contract B analysis discussed above. [ 69 ] The Open Call and Acceptance Form has a title page followed by thirteen (13) additional pages and Appendix “A”. The first page of the Open Call and Acceptance Form required, under “Bid Submission” that responses to the open call for bids must be submitted by email, as a single Adobe Acrobat (.pdf) file, to opencalls@mun.ca. [ 70 ] The Open Call and Acceptance Form is thereafter organized under the following parts: a.

Part 1 – Instructions to Bidders; b.

Part 2 – Evaluation; c.

Part 3 – Terms and Conditions of the Open Call for Bids Process; d. The Bidder Contact Page; and e. Appendix “A” – List of Subcontractors. [ 71 ] The relevant terms of

Part 1 - Instructions to Bidders included the following: 1.1 Owner: Having carefully examined the site and all conditions affecting the proposed work as well as the Bid Documents including the Drawings and Specifications, all Addenda and the Instructions to Tenderers, I/We, the undersigned, hereby offer to furnish all necessary labour, materials, superintendence, plant, tools, equipment, etc., required to complete all work requisite and necessary for the proper execution of this Contract, expeditiously and in the satisfactory manner and accept in full payment therefore a stipulated sum of: [Stipulated Price Matrix A-E Follows] in Lawful money of Canada.

I/We understand that Price D identified above will be the Price used in the evaluation of bids and used to determine which bid is the low bid.

1.2 I/We agree to commence work within two (2) weeks after the acceptance of my/our Bid and complete the work in ____ weeks from the acceptance of the Bid and to coordinate the scheduling of our work with that of all Subcontractors working on the Project.

The time of completion indicated herein is required and will be a significant factor in assessing bids. 1.3 My/Our bid shall remain in force for sixty (60) days after the closing date for bids. 1.4 I/We enclose herewith the following copy of our bid Surety if required by the Instructions to Bidders. 1.7 I/We recognize the right of the Owner to reject any and all bids and that the lowest bid may not necessarily be accepted. 1.8 I/We understand that my/our Bid will be subject to rejection unless it is prepared in strict accordance with all the requirements of the Open Call Documents. 1.10 I/We hereby acknowledge receipt of the following Addenda: (List individually the numbers of each Addendum received in the blank space provided.

If none have been received, write the word none.) NOTE: FAILURE TO COMPLETE TABLE 1 SHALL RESULT IN DISQUALIFICATION 1.14 Bidders may amend their bids after they have been submitted if, and only if, the amendment is emailed prior to the Submission Deadline marked BID SUBMISSION AMENDMENT followed by open call number and name. Bidders my revise their bids by email: opencalls@mun.ca The Owner does not accept any responsibility for any bids or amendments submitted by means other than the email listed above. Bidders making submissions near the deadline do so at their own risk due server availability.

The time for the closing will be determined according to the inbox, time stamp on opencalls@mun.ca. Bids received after the closing time based on this time stamp, will NOT be considered. 1.21 In order for a Bid to be valid for acceptance, duly authorized officials as indicated in the Instructions to Bidders must sign it. Memorial University, in consideration of

section 11 of the Electronic Commerce Act , confirms its acceptance of electronic signatures, or other acceptable form of electronic consent, in satisfaction of the signature requirement for bid submissions. The electronic form of signature or consent must be directly related to the relevant bid submission at issue and must be reliable, in a manner as determined by Memorial University, for the purpose of identifying the person submitting the bid response.

By submitting a bid under this process, the bidder confirms that the signatory has the appropriate and proper authority to bind the bidder to its submission, a confirmation upon which Memorial relies in the processing of the bid submission. [Emphasis added] [ 72 ] The relevant terms of

Part 2 - Evaluation included the following: 2.1 Stage I – Mandatory Submission Requirements: Stage I will consist of a review to determine which bids comply with all the mandatory submission requirements. Bids that do not comply with all of the mandatory submission requirements as of the Submission Deadline will, subject to the express and implied rights of the Owner, be disqualified and not evaluated further. Stage II – Pricing: Stage II will consist of a review of the submitted pricing of each compliant bid in accordance with pre-tender estimates (if performed) and in relation to other bids.

The evaluation of price will be undertaken after the evaluation of mandatory requirements has been completed. 2.2 No Amendment to Forms: Other than inserting the information requested on the mandatory submission forms set out in the Open Call, a bidder may not make any changes to any of the forms.

Any bid containing any such changes, whether on the face of the form or elsewhere in the bid, shall be disqualified. 2.3 Selection of Lowest Compliant Bidder as Preferred Supplier: Subject to the Owner’s reserved rights, the compliant bidder with the lowest pricing will be the preferred supplier, and will be selected to enter into the Agreement in accordance with the following section. In the event of a tie, the preferred supplier will be determined by way of a coin toss, in accordance with the Public Procurement Policy. [ 73 ] The relevant terms of

Part 3 – Terms and Conditions of the Open Call for Bids Process included the following:

3.1 Open Call Incorporated into Bid: All of the provisions of this Open call are deemed to be accepted by each bidder and incorporated into each bidder’s bid.

A bidder who submits conditions, options, variations or contingent statements to the terms as set out in this Open call, either as part of its bid or after receiving notice of selection, unless otherwise indicated, shall be disqualified. 3.4 No Incorporation by Reference: The entire content of the bidder’s bid should be submitted in a fixed form, and links to the content of websites or other external documents referred to in the bidder’s bid but not attached will not be considered to form part of its bid. [ 74 ] The Bidder Contact Page received particular attention in this case. [ 75 ] Under the heading are the words “ See Clause 1.21, for Electronic Signature acceptance. ” The Bidder Contact Page then contained spaces marked for the insertion of the following information and a signature of the bidder: a.

A space to identify the call for bids for which the bid is submitted; b. A space for the bidder’s full business name; c. A space for the bidder’s full business mailing address; d. A space for the bidder’s phone number, fax number and email address; e. A space for the date when the bid was signed and delivered by the bidder; f.

Spaces for the signature of the signatory of the bidder, the printed name of the signatory, and the title of the signatory. [ 76 ] Under the space for the printed name of the bidder’s signatory are the words “Accepted on Behalf of Memorial University of Newfoundland:” The Bidder Contact Page then contained the following spaces for completion by Memorial: a.

A space for the signature of the signatory of Memorial, a space for the printed name of the signatory, and a space for the title of the signatory. [ 77 ] At the bottom of the Bidder Contact Page, in bold lettering, the following statement and acknowledgement is made on behalf of the bidder: I have the authority to bind the bidder.

IN COMPLETING THIS PAGE AND SUBMITTING YOUR BID, THE PROPONENT ACKNOWLEDGES HAVING READ, UNDERSTOOD AND AGREED TO THE TERMS AND CONDITIONS OF THIS DOCUMENT. [ 78 ] It is also helpful to consider the relevance and legal effect of the Open Call and Acceptance Form, as it is found in the Open Call Documents, under the Contract A/Contract B analysis discussed above. [ 79 ] The wording of subsection 1.1 refers to the “ undersigned ” bidder making an “ offer ” to the Owner to furnish all work requisite and necessary for the proper execution of a contract for a stipulated sum: 1.1 Owner: Having carefully examined the site and all conditions affecting the proposed work as well as the Bid Documents including the Drawings and Specifications, all Addenda and the Instructions to Tenderers, I/We, the undersigned, hereby offer to furnish all necessary labour, materials, superintendence, plant, tools, equipment, etc., required to complete all work requisite and necessary for the proper execution of this Contract, expeditiously and in the satisfactory manner and accept in full payment therefore a stipulated sum of : [ 80 ] Subsection 1.2 refers to the bidder’s agreement to commence the work within two weeks of “ the acceptance of my/our Bid ”: 1.2 I/We agree to commence work within two (2) weeks after the acceptance of my/our Bid and complete the work in ____ weeks from the acceptance of the Bid and to coordinate the scheduling of our work with that of all Subcontractors working on the Project.

The time of completion indicated herein is required and will be a significant factor in assessing bids. [Emphasis added] [ 81 ] In subsection 1.3 of the Open Call and Acceptance Form the bidder confirms that its bid (or offer) will remain in force for sixty (60) days after the closing date.

Subsection 3.1 incorporate all the terms and conditions of the Open Call Documents into each bidder’s bid, without any variations to those terms and conditions. [ 82 ] As noted above, the Bidder Contact Page contained a space for the bid to be signed by the bidder, an express confirmation of the signatory’s authority to bind the bidder, and the bidder’s express acknowledgement of its understanding and acceptance of the terms and conditions contained in the document. [ 83 ] Immediately under the signature spaces for the bidder, the words “Accepted on Behalf of Memorial University of Newfoundland:” are found, followed by a space for an authorized signatory of Memorial to sign. [ 84 ] The significance of the Open Call and Acceptance Form becomes clear from its wording.

Under this open call for bids, a bidder is submitting its bid in the form of an offer to Memorial to perform the specific work outlined in the Open Call Documents for a particular price, which Memorial is entitled to accept in writing.

[85] The Open Call and Acceptance Form also contains the terms and conditions which establish the circumstances in which a bidis valid for acceptance by Memorial or will be disqualified by Memorial. Those terms and conditions govern when the submission of abid results in the creation of Contract A. Under this open call for bids, an invalid or disqualified bid would include a bid that wassubmitted without a bid bond, did not list the Addenda received, was submitted after the Submission Deadline, was unsigned and did notprovide an electronic consent, or a bid that altered the bid submission form (see: ss. 1.4, 1.10, 1.14, 1.21, and 2.2). [86] In

summary, in addition to being a response to the open call for bids, the submission of a bid by Redwood was intended to bean offer to perform the work outlined in the Open Call Documents for a stipulated price. The open call for bids is therefore a call foroffers by suppliers to enter into Contract B with Memorial on the specific terms and conditions set out by Memorial in the Open CallDocuments, for the stipulated price provided by the bidder.

The Application of the Law to the Facts [87] The argument proceeded on the basis that the parties intended to initiate contractual relations by the call for bids andsubmission of a bid, and that submission of a compliant bid by Redwood would result in the formation of Contract A. I am content toproceed on that basis based on my review of the open call for bids. [88] I will turn first to Redwood’s argument that, notwithstanding the missing three pages, including the signed Bidder ContactPage, the Redwood Bid was a compliant bid based on the application of the principle in W.H. Parsons Ltd. v.

Mother Hubbard’s KitchenCabinets Ltd. (1988), (NL SC), 75 Nfld. & P.E.I.R. 105, 234 A.P.R. 105 (Nfld. S.C.T.D.). [89] In its brief, Redwood argues that “everything necessary to bind (Memorial) in a contract in respect of the tender was providedthrough the Redwood Bid as submitted at 3:00 p.m. on August 27, 2020” and that “…all essential elements necessary to bind theDefendant and Plaintiff were included in the Redwood Bid as submitted at 3:00 p.m. on August 27, 2020, similar to the decision of thisHonourable Court in W.H. Parsons Ltd. v.

Mother Hubbard’s. [90] Redwood argues that the Aviva Bid Bond, signed on August 26, 2020, by Trevor Howell, verified by its express wording thatan “acceptable” bid was submitted to Memorial on August 27, 2020, and it therefore “contractually confirmed” the bid.

The Aviva BidBond contains the following recital referring to the submission of a bid to Memorial on August 27, 2020: “WHEREAS, the Principal has submitted a written bid to the Obligee, dated 27th day of August in the year 2020.” [91] Redwood argues that the Redwood Bid was submitted by the “official contact person”, Dale Peddle, and included the projectname, the Aviva Bid Bond, the pricing under subsection 1.1, the completion of the work within 78 weeks under subsection 1.2, thecompleted Addenda list, the completed Appendix “A”, and the correct heading on the email.

Redwood also claims that it “clearly andexpressly” acknowledged it had carefully examined all the Open Call Documents. [92] Redwood cites W.H. Parsons Ltd. v. Mother Hubbard’s, a landlord tenant case, as authority for the proposition that if a leasemissing certain details contained all the essential terms it therefore could be deemed to be a valid lease agreement, sufficient to bind thelandlord and tenant (see: Redwood Brief, para. 30).

By implication, I understand the Redwood argument to be that if a bid missingcertain details contained all the essential elements it could nonetheless be deemed a valid bid, sufficient to bind Memorial and Redwoodto Contract A. [93] Redwood did not directly address the question of whether the Open Call and Acceptance Form included a mandatoryrequirement that in order to be valid for acceptance a bid must be signed by the authorized signing officials of the bidder. [94] In response, Memorial submits that the terms and conditions of this open call for bids created a mandatory requirement thatbids must include a complete bid submission form including a signed Bidder Contact Page.

Memorial submits that the analysis whichmust be applied when the court considers whether the Redwood Bid was a compliant bid does not change to whether the bid includes “allessential elements necessary” to bind the parties to Contract A when the bidder inadvertently fails to include a complete bid submissionform with a signed Bidder Contact Page. [95] Memorial further argues that the Aviva Bid Bond is not equivalent to, or an acceptable substitution for, a completed and signedOpen Call and Acceptance Form. [96] With respect, for the following reasons I find that I must reject Redwood’s submission that, despite the absence of the missingthree pages including the signed Bidder Contact Page, the Redwood Bid was nonetheless a compliant bid because it contained “allessential elements necessary” to bind the parties to Contract A. [97] First, I am not persuaded that either the facts or the legal reasoning of the court in W.H.

Parsons Ltd. v. Mother Hubbard’s haveany application in determining the compliance of the Redwood Bid. [98] In W.H. Parsons Ltd. v. Mother Hubbard’s, the facts were that a landlord agreed to lease a commercial premises and a tenantagreed to accept the premises for a term of five years. The signed agreement to lease contained a description of the premises, thecommencement and duration of the term, and the rent.

The tenant later refused to sign a formal lease agreement, and argued that becausethere was no lease signed, only a signed agreement to lease, that the landlord was not entitled to succeed on an action for repudiation ofthe lease. [99] The legal reasoning of the court was that the signed offer to lease contained “all the essential terms of the lease” and that whilethere “may have been some details still outstanding, there was no outstanding term of substance” (see: W.H. Parsons Ltd. v. MotherHubbard’s, at para. 34). As such, a valid and binding lease was found to exist. [100] Unlike W.H. Parsons Ltd. v.

Mother Hubbard’s, in this case there was no signed agreement containing “all the essential terms” ofa bid. Here, Redwood submitted an unsigned bid form, with three pages missing, in response to an open call for bids in the form of offers

by suppliers to enter into Contract B with Memorial. [ 101 ] In such circumstances, the legal reasoning of the court in W.H. Parsons Ltd. v. Mother Hubbard’s has no application. I accept that the reasoning could have potential application if Redwood had refused to sign Contract B, after it had submitted a signed offer to perform the work outlined in the Open Call Documents and the offer had been accepted by Memorial. But those are not the facts and the issue is not the enforceability of Contract B, it is whether Contract A was formed. [ 102 ] Secondly, it appears to me that applying the legal reasoning in W.H.

Parsons Ltd. v.

Mother Hubbard’s in the manner argued by Redwood would be unworkable in a Contract A case, in light of the established Contract A/Contract B analysis. [ 103 ] Under that contractual analysis, only a bid that complies with all of the mandatory terms and conditions of the “offer” made by the public body can constitute an acceptance of the “offer” by the bidder capable of forming Contract A. [ 104 ] The “essential terms” of a compliant bid are therefore all the mandatory terms and conditions which the public body dictates that the bidder must meet, and the question of whether a term is an “essential term” as opposed to a term that is not a “term of substance” does not arise.

In a Contract A case the law is concerned with whether or not the term in question is a mandatory submission requirement. [ 105 ] I will turn next to Redwood’s argument that the Redwood Bid was a compliant bid because it was submitted with an acceptable form of electronic consent. [ 106 ] As Redwood acknowledged, the signature requirement for bids submitted in response to an open call for bids issued by Memorial is not a new requirement (see: Instructions to Tenderers, ss. 1.5.1 – 1.5.3).

What is new is the confirmation in subsection 1.21 of the Open Call and Acceptance Form that in consideration of the Electronic Commerce Act , S.N.L. 2001, c E-5.2 , Memorial will accept electronic signatures, or other acceptable forms of electronic consent, in satisfaction of the signature requirement for bid submissions. [ 107 ] Redwood submits that the open call for bids therefore did not require the bid to be signed if an acceptable form of electronic consent under subsection 1.21 was provided by the bidder in satisfaction of the signature requirement.

Redwood argues that the email sent by Dale Peddle at 3:00 p.m. on August 27, 2020, with attachments, was an acceptable form of electronic consent under subsection 1.21. [ 108 ] Memorial argues there was no signature provided, electronic or otherwise, and the email received from Dale Peddle at 3:00 p.m. on August 27, 2020, with attachments, was not an acceptable form of electronic consent under subsection 1.21.

Memorial’s position therefore is that the Redwood Bid was not compliant with subsection 1.21 which expressly required the bid to be signed by the authorized officials of the bidder in order to be valid for acceptance, or to have an acceptable form of electronic consent in satisfaction of the signature requirement. [ 109 ] I accept Redwood’s position that under subsection 1.21 of the Instructions to Bidders the Redwood Bid did not need to be signed by the authorized officials of the bidder if the bidder provided an acceptable form of electronic consent. [ 110 ] The email sent by Dale Peddle attached both the Aviva Bid Bond and the unsigned and incomplete bid form.

Was the email with attachments an acceptable form of electronic consent provided in satisfaction of the signature requirement? [ 111 ] For the following reasons, I conclude that the email sent by Dale Peddle, with attachments, was not an acceptable form of electronic consent in satisfaction of the signature requirement for bid submissions in subsection 1.21 of the Instructions to Bidders. [ 112 ] First, I find that the email sent by Dale Peddle, with attachments, does not “satisfy” the signature requirement for bid submissions. [ 113 ] The reason for the requirement for the signature by duly authorized officials of the bidder is outlined in subsection 1.21.

The bid is required to be signed by a person with appropriate and proper authority “ to bind the bidder to its submission, a confirmation upon which Memorial relies in the processing of the bid submission. ” [ 114 ] I have already found that the bid submission was also an offer to enter into Contract B with Memorial on the specific terms and conditions set out by Memorial in the Open Call Documents, for the stipulated price provided by the bidder.

Subsection 1.21 clearly provides that Memorial required the bid (offer) to be signed by duly authorized officials so that it could rely upon the bid (offer) as “binding the bidder to its submission.” The reason for the signature requirement is clearly to ensure that, upon acceptance of the lowest compliant bid by Memorial, a binding obligation on the bidder would arise to enter into the terms of Contract B. [ 115 ] Subsection 1.21 provides that an acceptable form of electronic consent may “satisfy” the signature requirement for bid submissions where a signature or electronic signature is not provided.

In order to “satisfy” the signature requirement in subsection 1.21 however, the electronic consent must itself be responsive to the reason for the signature requirement, which is to bind the bidder to its submission. [ 116 ] The email sent by Dale Peddle was electronic but it did not contain any words, and in particular it did not contain any words of consent or confirmation responsive to the purpose of the signature requirement.

It was therefore not in my view a form of electronic consent contemplated by subsection 1.21. [ 117 ] The email did not consent to the submission of the bid, on behalf of Redwood, or confirm that the Redwood Bid was binding upon and enforceable against the bidder. It did not confirm that Mr. Peddle had authority to bind the bidder to the terms and conditions of the open call for bids, or verify that Mr. Peddle, on behalf of Redwood, had read, understood and agreed to the terms and conditions of the Open Call and Acceptance Form.

The attachments, the Aviva Bid Bond and the incomplete Open Call and Acceptance Form, also contain no such statements. [ 118 ] Furthermore, there was no evidence provided by Redwood to show that Dale Peddle was an authorized signatory of the Redwood Bid on August 27, 2020, at 3:00 p.m. The only evidence on the point stated that he was the “official contact.”

[ 119 ] Secondly, I find that, to be effective, the submission of an electronic consent must have been made known by Redwood so that Memorial could determine its suitability and reliability.

Subsection 1.21 provides that an acceptable consent, in substitution for the signature requirement “…must be directly related to the relevant bid submission at issue and must be reliable, in a manner as determined by Memorial University , for the purpose of identifying the person submitting the bid response.” [ 120 ] There was nothing in the email sent by Dale Peddle, or in the attachment, to signify that Redwood was providing an electronic consent in satisfaction of the signature requirement for bid submissions.

There is no evidence that such intention was ever evinced by Redwood in either of its bid submissions, or at any time prior to the award to Olympic, such that Memorial could determine its suitability and reliability as an acceptable form of electronic consent in satisfaction of the signature requirement. [ 121 ] The evidence that does exist satisfies me that Redwood did not in fact intend to submit the Redwood Bid unsigned, with an acceptable form of electronic consent. The evidence is that at 3:10 p.m. on August 27, 2020, after Redwood discovered the “electronic glitch” with the Redwood Bid, Mr.

Peddle emailed a different .pdf file to opencalls@mun.ca containing all the pages of the Open Call and Acceptance Form, including the completed and signed Bidder Contact Page. [ 122 ] Finally, no authority was provided to the court in support of the submission that an email containing no words of consent could, in and of itself, amount to an “electronic consent” within the meaning of the Electronic Commerce Act . [ 123 ] I therefore find that Redwood did not provide an acceptable form of electronic consent in satisfaction of the signature requirement in this open call for bids.

Redwood’s argument on this issue is, with respect, dismissed. [ 124 ] I will now consider whether the absence of the signed Bidder Contact Page rendered the Redwood Bid non-compliant with the terms of the open call for bids and incapable of acceptance under subsection 1.21 of the Instructions to Bidders. [ 125 ] The process by which Memorial was required to evaluate the bids submitted and determine bid compliance is set out in the Open Call and Acceptance Form.

Subsection 2.1 outlined a two-stage process as follows: 2.1 Stage I – Mandatory Submission Requirements: Stage I will consist of a review to determine which bids comply with all the mandatory submission requirements.

Bids that do not comply with all of the mandatory submission requirements as of the Submission Deadline will, subject to the express and implied rights of the Owner, be disqualified and not evaluated further . [Emphasis added] Stage II – Pricing: Stage II will consist of a review of the submitted pricing of each compliant bid in accordance with pre-tender estimates (if performed) and in relation to other bids.

The evaluation of price will be undertaken after the evaluation of mandatory requirements has been completed. [ 126 ] In submitting a bid in response to this open call for bids Redwood must be taken to have known that the bid it submitted must conform to all the mandatory submission requirements established by Memorial, and that the failure to do so would result in the submission of a non-compliant bid and the disqualification of the Redwood Bid from further evaluation of price.

The language of subsection 2.1 is not capable of being read in any other way. [ 127 ] Furthermore, a requirement for a strict standard of bid compliance was established by Memorial in subsection 1.8: 1.8 I/We understand that my/our Bid will be subject to rejection unless it is prepared in strict accordance with all the requirements of the Open Call Documents. [ 128 ] I must look at the relevant terms and conditions of the Open Call and Acceptance Form to determine whether the requirement to submit a signed bid was a mandatory submission requirement under this open call for bids. [ 129 ] Subsection 1.21 of

Part 1 – Instructions to Bidders, provides in material part: 1.21 In order for a Bid to be valid for acceptance, duly authorized officials as indicated in the Instructions to Bidders must sign it . [Emphasis added] [ 130 ] Memorial cited authorities which considered the failure of a bidder to submit a signed bid ( Surespan Construction Ltd. v. Canada (Attorney General) , 2008 CAF 57 ) and the failure of a bidder to submit the bid on the form required by the call for bids ( Steelmac Ltd. v. Nova Scotia (Attorney General) , 2007 NSSC 156 ).

In both cases, the courts ruled that the bids were non-compliant with the tender documents. [ 131 ] In Surespan , the Federal Court of Appeal reviewed a decision of the Canadian International Trade Tribunal summarily dismissing a complaint by a bidder that its bid for the construction of a bridge was improperly rejected by Public Works and Government Services Canada because the face of the bid was not signed by an authorized official of the bidder as required by the tender documents. [ 132 ] The tribunal had concluded that Public Works and Government Services Canada properly found that the bid was non-compliant, based on the mandatory requirement in the tender documents that the bid had to include a signed tender form, and the bidder’s failure to provide such a form.

The Court of Appeal agreed that the requirement was mandatory and dismissed the bidder’s appeal. [ 133 ] Based on the clear wording of subsection 1.21 of the Instructions to Bidders I find that a signed bid was a mandatory submission requirement of this open call for bids. Redwood failed to submit a bid signed by the duly authorized officials of the bidder.

The failure by the bidder to submit a bid that conforms to all the mandatory terms of the open call for bids resulted in the submission of a non- compliant bid. [ 134 ] As a result of this finding it follows that Contract A was not formed between Redwood and Memorial by the submission of the

Redwood Bid, and no contractual obligations binding on the public body or bidder ever came into existence. It further follows that Memorial was required to reject the Redwood Bid, and Memorial did not breach any contractual obligation to Redwood by making the award to Olympic. [ 135 ] In the circumstances it is not necessary to address the two alternative defences raised by Memorial.

SUMMARY AND DISPOSITION [ 136 ] I find that I can determine this case on a

summary trial. The Plaintiff’s application for

summary trial under Rule 17A is therefore allowed. [ 137 ] The sole issue for

summary trial is whether the Redwood Bid was a compliant bid. [ 138 ] My conclusion is that the Redwood Bid was not compliant with the terms and conditions of the open call for bids. [ 139 ] The Plaintiff’s action is therefore dismissed in its entirety, with costs. [ 140 ] As the successful party, Memorial shall have its costs of the proceeding taxed pursuant to Rule 55, Appendix 1, Scale of Costs, Column 3, for one counsel. _____________________________ PETER A. O’FLAHERTY Justice