Rumpel Construction Ltd. Plaintiff And: Western Canadian Construction Company Ltd., WCPG Orono Lot 1 Ltd., v. WCPG Orono Lot 2 Ltd., 2022 BCSC 980

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Rumpel Construction Ltd. v. Western Canadian Construction Company Ltd., 2022 BCSC 980 Date: 20220610 Docket: S201310 Registry: Victoria Between: Rumpel Construction Ltd. Plaintiff And: Western Canadian Construction Company Ltd., WCPG Orono Lot 1 Ltd., and WCPG Orono Lot 2 Ltd. Defendants Before: The Honourable Justice B. D. MacKenzie Reasons for Judgment Counsel for the Plaintiff: J. M. Aiyadurai Counsel for the Defendants: D. M. Kamachi Place and Dates of Trial: Victoria, B.C. March 7 - 11, 2022 Place and Date of Judgment: Victoria, B.C.

June 10, 2022 Introduction [ 1 ] The plaintiff, Rumpel Construction Ltd. (Rumpel) is a framing contractor in Victoria, British Columbia, owned and operated by Brad Rumpel. [ 2 ] In 2018, Mr. Rumpel was approached by a representative of the defendant, Western Canadian Construction Company Ltd. (Western), about framing two towers as part of a condominium development in Langford, B.C. called “Orono Towers” (Orono).

The parties had a positive and productive working relationship until a few days before the framing was set to begin, at which time Western informed Rumpel its services would no longer be required. [ 3 ] The other named defendants, WCPG Orono Lot 1 Ltd., and WCPG Orono Lot 2 Ltd. are numbered subsidiaries of Western that legally own the Orono project. [ 4 ] There is no significant dispute about the salient facts in this case. Instead, the parties disagree about the legal nature of their relationship.

Rumpel says that it had a contract to frame the towers; that Western breached it; and that Rumpel should be entitled to damages as a result. Western says that no legally-binding agreement was ever reached, and that it was therefore free to choose another framing contractor whom they believed, at the time, would better suit their needs to frame the towers more quickly. [ 5 ] The end of the relationship came on the heels of many delays. What was initially slated as a project for 2018 ultimately began in the summer of 2019, and was completed, by a different framer, in mid-2020.

Rumpel says that throughout these various delays it negotiated and re-negotiated its contract with Western in good faith in the face of the ever-lengthening timeframe, believing the two had a contract, and at the expense of Rumpel’s other business opportunities. Conversely, Western says the two were in a protracted, and ultimately failed negotiation, and points to the delays as proof that a consensus was never reached. [ 6 ] Ultimately, the only question is whether the two had a contract and if so, how damages should be assessed.

Facts [ 7 ] The parties agree that sometime in March 2018, Blair Echlin, employed at that time by Western as the project manager of the Orono project, reached out to Mr. Rumpel about the possibility of Rumpel framing both towers, the two having worked together on prior projects. They had a brief discussion, and Mr. Rumpel said he would look at the proposed project.

[ 8 ] On March 20, 2018, Mr. Echlin provided a “tender package” to Mr. Rumpel by email which contained detailed designs for the towers. [ 9 ] Following Mr. Rumpel’s feedback on the building design, an updated tender package was provided to Mr. Rumpel on April 13, 2018. [ 10 ] The updated tender package listed Mr.

Echlin as the “tender authority” and contained “Bid Instructions” which stipulated the “format of tender”, along with a “closing date” and time of 4:30 pm on April 27, 2018. [ 11 ] The final page of the tender package contained the following under the heading “Awarding of Contracts & Contractor Qualification”: ◦ Award of trade and/or supplier contract will not be based on price alone.

Awards will be based on all of the following: ▪ A pre-contract meeting will be held, initially with the lowest price bidder, to determine the contractor’s proven ability to perform the work, administrative sophistication, availability and quality of resources, ability to maintain schedule, and general understanding of the project. ▪ Supply and review of industry references, and review of similar project history. ◦ Owner’s Right of Refusal ▪ The Owner reserves the right to refuse any and all bids that it determines will not benefit the success of the project.

Bids may be rejected, should the project be cancelled, sold or suspended for any reason. ◦ Insurance ▪ Insurance must be carried, and valid, per terms of the “CCA 1 - 2008: Stipulated Price Subcontract.” ◦ WorkSafeBC Standing ▪ The successful bidder must be found registered, and in good standing, with WorkSafeBC. ◦ Award Period ▪ All submitted bids, for this contract, must remain valid for a period of 60 days after the Closing Date. [ 12 ] The tender package also provided that a “CCA 1 - 2008: Stipulated Price Subcontract will be used for this agreement”, under the heading “Form of Contract”. A

schedule was included which provided that “Rough Framing” for Building B would commence December 14, 2018, and finish February 12, 2019; with Building A also beginning December 14, 2018 and finishing March 20, 2019. [ 13 ] That same day, on April 13, 2018, Mr. Rumpel emailed a “quote” with a price of $1,150,000 plus GST for “framing labour”, along with a list of what items the quote did and did not cover.

The final lines stated that “All work would be completed in a timely manner, acting reasonably” and “Prior to acceptance of this quote, Rumpel Construction and the Contractor will discuss schedule.” The quote did not provide a deadline for acceptance. The quote was accompanied by an email which stated Rumpel could offer a $16,000 discount off this price if Western adopted a cost-savings measure which Rumpel had previously recommended. [ 14 ] On April 27, 2018, Mr. Echlin confirmed his receipt of the quote and instructed Mr. Rumpel to call him Monday or Tuesday “for results.” Mr. Rumpel testified that Mr.

Echlin followed up as promised, but advised him that he was still presenting Rumpel’s bid to Western’s owners. Mr. Rumpel stated that a few days later, Mr. Echlin called him and stated that Western was “moving forward” with Rumpel as the framing contractor. Mr. Rumpel stated he took this to mean he had the contract, but the two discussed meeting at the site to “iron out a few things”, including the schedule, the scope of the job and the $16,000 discount. Mr. Echlin testified that he could not remember whether or not this discussion took place. [ 15 ] To that end, Mr. Rumpel testified he and Mr.

Echlin met on site at the beginning of July 2018 and discussed how the project was progressing, the framing schedule, the use of framing subcontractors and how long the framing would take to complete, i.e. “the framing rate”. Mr. Rumpel testified that “Blair was really happy” with this “pace of work.” Mr. Rumpel stated the two men came up with a plan together, and Mr. Echlin “seemed happy” and “it was all really positive.” [ 16 ] Mr. Echlin also testified that the two men had a number of discussions on-site and by telephone about the progress and

schedule but could not recall when these meetings took place or their precise content. However, the two never agreed on a “final”

schedule as the project was in flux. [ 17 ] On August 15, 2018, Mr. Echlin emailed Mr. Rumpel and other trades personnel further construction documents addressed to the “Langford Towers Team.” An attachment to the email listed Rumpel Construction under the heading “Trade Contractor/Supplier.” [ 18 ] On October 12, 2018, Mr. Echlin emailed Mr.

Rumpel a “Letter of Intent.” The subject line of the letter was: Re: Rumpel Construction quote dated April 13, 2018 for Wood Framing at Langford Towers, 868 Orono Ave. (appended), and subsequent discussion… [ 19 ] The letter stated that: This letter is to advise you that it is the intent of Western Canadian Construction Company Ltd., to award the contract of “Wood Framing” at Langford Towers to your firm.

This contract is conditional on the following; • A CCA 1 - 2008 Stipulated Price Subcontract is executed prior to payment of the first progress claim. • The contract value will be a lump sum amount of $1,150,000.00 + GST, less $16,000.00 + GST based on design team responses to WCCC RFI 003. • The scope of work will be outlined in the Wood Framing tender package and Addendum #1 date April 13, 2018. • A pre-contract meeting, between yourself and our project staff, is held to review and/or confirm the following; ◦

Schedule and resources, ◦ Scope of work and site logistics, ◦ Your firms [sic] good standing with WorkSafeBC and safety requirements, insurance, contract administration, ◦ Bid amount and potential additional or deleted work, and costs, ◦

Schedule of Values; and, project document revisions. • No major design changes are issued by the project design team, prior to start of work. [ 20 ] The letter also requested a number of documents be submitted to Mr. Echlin, and included the Rumpel quote as an attachment, along with the previously provided construction

schedule showing a start date for framing of December 14, 2018. Mr. Rumpel said he regarded this “letter of intent” as “formally saying” he had the job, “even though I knew I had the job”, prior to Western’s formal acceptance of his quote. [ 21 ] On the other hand, Mr. Echlin testified that from his perspective the letter of intent did not necessarily mean a bid was accepted, instead stating “we [Western] normally approach the most likely candidate” and send them this letter. [ 22 ] Nevertheless, a few days later, on October 19, 2018, Western’s administrative assistant sent Mr.

Rumpel a CCA 1 Wood Framing Contract and requested he review and sign the contract “as soon as possible”, along with a request for other documents mentioned in the letter of intent. Mr. Rumpel simply responded “Looks good” a few hours later. The administrative assistant followed up again on November 5 and 20, 2018, again requesting Mr. Rumpel return the signed CCA 1 contract. [ 23 ] Mr. Rumpel testified that shortly after he received the letter of intent he met with Mr. Echlin and the site superintendent.

At this meeting the three men discussed various construction details, including that framing subcontractors were no longer required because delays in the project meant that Western would not be prepared to start framing Building A until after Building B was finished. The plan was still to start framing in December 2018. Mr. Rumpel was agreeable to this change of plans, noting he was pleased because he would now be able to “do the whole project myself.” [ 24 ] However, between October 2018 and July 2019, the Orono project was beset with numerous delays. During this time Mr. Echlin and Mr.

Rumpel continued to communicate regarding “updated” schedules, and worked together on pre-construction planning details. Mr. Rumpel testified that it was Mr. Echlin who provided the new proposed start dates during this time, and each time he agreed to the new schedule. This was not seriously challenged by Western, and is supported by contemporaneous emails between the two men. [ 25 ] The initial change in plans was discussed in early December 2018. In a December 21, 2018 email, Mr. Echlin advised Rumpel that the new start date would be in January 2019.

The January date was postponed, then inclement weather precluded a February start. The next proposed date was April 2019. The April date was eventually postponed. [ 26 ] By May 13, 2019, Mr. Echlin estimated that framing would begin in July 2019, another two-month delay, and in an email asked Mr. Rumpel to “Let me know how your

schedule is keeping.” Mr. Rumpel testified he was “getting worried” but told Mr. Echlin “he would make it work”. [ 27 ] Mr. Rumpel testified that the constant delays with the Orono project caused him difficulty. He had to turn down work during the fall of 2018 and into the summer of 2019 in order to remain available for the Orono project, but the constant delays left his employees without work. In the documentary evidence, and according to witness testimony, Mr. Echlin and Mr. Rumpel had a friendly and cooperative approach during these delays and the two worked together to try and keep Mr.

Rumpel’s employees working, with Mr. Rumpel “grabbing any small job I could pick up.” [ 28 ] As the revised July start date approached, Mr. Rumpel and his employees began more pre-construction duties within the scope of Rumpel’s quote, including attending site meetings; generating a “hold down” or “tie down” plan, along with related installations; specifying what lumber was to be ordered and calculating quantities; and attending the site to complete some of these hands-on tasks. On June 12, 2019, Mr. Rumpel and his framers attended a site meeting to discuss scheduling with “all the trades”, at which time Mr.

Echlin confirmed the concrete slab would be poured July 3, 2019 with Mr. Rumpel starting to frame immediately thereafter. [ 29 ] On June 21, 2019, the same administrative assistant emailed Mr. Rumpel and reminded him to complete and sign the same CCA 1 contract that she had sent him in October of 2018, which included the now-long-past start and end dates for the framing work. On July 3, 2019, the administrative assistant again asked Mr. Rumpel to sign the CCA 1 contract and bring it to a scheduled meeting. Mr.

Rumpel replied by email that he would not be able to bring the contract because “I still have to go through it and make sure it still works. I’ll try and find some time in the next few weeks to review it.” In the meantime, the foundation “pour” did not happen on July 3, as “it didn’t work for the re-bar guys.” The new pour date was July 19, 2019 but this date was also re-scheduled to accommodate the project’s plumber. Mr. Echlin said the pour was now set for August 2019.

[ 30 ] On July 14, 2019, Mr. Rumpel emailed Mr. Echlin a “tentative schedule” which showed framing for Building B commencing August 26, 2019 and finishing December 24, 2019; and Building A commencing January 2, 2020 and concluding July 21, 2020. Mr. Rumpel testified that he and Mr. Echlin had a discussion about the

schedule the following day when he attended at the construction site. [ 31 ] According to Mr. Rumpel, the tentative

schedule had been prepared at the request of Mr. Echlin so that they could co-ordinate with the chosen plumber. Mr. Rumpel testified that the

schedule was not related to Rumpel’s resources, but rather his observations of how other aspects of the project appeared to be progressing, and what would be realistic on that basis. [ 32 ] Mr. Echlin testified at trial but had a very limited recollection of many events, and did not recall much about the tentative

schedule or any meetings. Conversely, Mr. Rumpel recalled that at the July 2019 meeting, Mr. Echlin asked him a few questions about the tentative schedule, and clarified that pouring the Building A foundation was planned for November 2019 rather than January 2020, as Mr. Rumpel had estimated when he prepared the updated tentative schedule. Mr. Echlin and Mr. Rumpel also discussed that framing on Building B would begin immediately after an August 6, 2019 foundation pour, rather than August 26, 2019 as Mr. Rumpel had initially estimated. [ 33 ] Mr.

Rumpel also recalled the two discussing other jobs he was working on concurrently, his intent to work Saturdays to expedite Western’s project, and potential sources of more framing labour with Mr. Echlin, but does not recall Mr. Echlin having any objection, protest or concern regarding any of these points of discussion. Mr. Rumpel testified that the two had previously discussed various schedules and timelines for the project, including the use of other framing subcontractors, and a change of plan from framing both towers concurrently to framing them consecutively. Mr.

Rumpel testified that the two successfully cooperated on these details throughout the delays without conflict, and that timelines were always fluid and changing. Mr. Rumpel added that each time the

schedule was changed he remained available to start framing the day after the foundation was poured. [ 34 ] Mr. Rumpel continued working out construction details with Mr. Echlin following the July 14, 2019 scheduling email, and continued to attend the construction site. As late as July 25, 2019, Mr. Echlin emailed Mr. Rumpel regarding the delivery of the lumber Rumpel would need to frame the project. Mr. Rumpel testified that to this point there was never any suggestion that he would not be framing both buildings. [ 35 ] However, on August 1, 2019, Mr. Echlin emailed Mr.

Rumpel, stating “Please be advised, the October 2018 offer to you for ‘Framing’ for Langford Towers, by Western Canadian Construction Company Ltd., not signed and returned, is hereby retracted and revoked.” [ 36 ] When he received this email Mr. Rumpel was very “surprised” as there was never any prior indication he would not be the project framer. Mr. Rumpel then inquired “what about the work I’ve already done on the site?” Mr. Echlin replied, “send me an invoice and we will pay it.” [ 37 ] Mr.

Rumpel followed up through his solicitor on August 29, 2019, stating that the parties already had a “binding contract evidenced by performance of work on the subject lands at Western’s request and the letter of intent;” and that Rumpel was ready, willing and able to perform its obligations. The letter included a signed copy of the initial CCA 1 contract, and an invoice for work performed to that date, in the amount of $12,731.25. [ 38 ] Western had however already hired another framing contractor to complete the project.

Documents put forth at trial showed Western began communications with the other contractor in July 2019. These communications reveal that Western’s primary motivation for retaining the other framing contractor was its assurance that it could complete the framing in a shorter period of time, which Western believed would save it money, despite the second contractor’s higher bid price of $1,238,432.50, the catalyst for Western’s counterclaim, which has since been withdrawn.

Indeed, in an email, Western confirmed with the new framer that it could complete the same framing in just six weeks, which after all the delays, again through no fault of Mr. Rumpel, was very attractive to Western. This assurance turned out to be ill-founded. The other framer eventually completed the project in May or June 2020, similar to the projected completion date Rumpel contemplated in July of 2019. [ 39 ] Upon termination of the contract, Rumpel sent Western an invoice for $12,731.25 representing the value of work done to date. Western declined to pay this invoice.

Rumpel then filed a builder’s lien against the Orono project for this amount, and Western subsequently paid this amount into trust in order to discharge the lien, pending the outcome of this trial. [ 40 ] Again, none of the facts outlined above are particularly controversial or were seriously contested at trial. Rather, the parties disagree as to their legal significance. Was there a contract between Western and Rumpel?

Position of the Parties [ 41 ] In resisting Rumpel’s claim for damages, Western says the evidence shows that the parties “intended to contract”, but several of Western’s “pre-conditions” were never fulfilled. Further, Western says that the parties never reached consensus ad idem because the

schedule was an essential term of the contract, and the parties never came to agreement on this term, as Western “pushed back” the start date on several occasions. Finally, Western says that even if there was a valid offer made to Rumpel, Rumpel did not accept the offer with sufficient formality before it was “revoked” on August 1, 2019. [ 42 ] Conversely, Rumpel says the parties formed a contract when Western accepted Rumpel’s formal bid, submitted on April 13, 2018. Rumpel says that this acceptance was communicated orally to Mr. Rumpel, and was also confirmed through Mr.

Echlin’s conduct, including the letter of intent. Rumpel says the terms of the contract can be derived from a combination of terms set out in the tender package and Mr. Rumpel’s bid. Importantly, Rumpel contends that the signing of the CCA 1 was not a condition precedent but merely a

term of the contract, the performance of which was only required after work was commenced and prior to the first progress invoice, asclearly stated in the purported contract. Law [43] The Supreme Court of Canada summarized the legal principles which apply to the formal bid and tender process in Double NEarthmovers Ltd. v. Edmonton (City), 2007 SCC 3, finding that: [2] A call for tenders involves a party’s (often referred to as the “owner”) requesting the submission of bids to complete a particularproject.

Where the parties intend to initiate contractual relations, a submission in response to a call for tenders can lead to the formationof Contract A. The call for tenders is the offer by the owner to consider the bids it receives and to enter into the contract to complete theproject where a bid is accepted. A bidder accepts that offer by submitting a bid that complies with the requirements set out in the tenderdocuments. The contractual rights and obligations of the parties to Contract A are governed by the express or implied terms of the tenderdocuments. [3] A bid also constitutes an offer to enter into Contract B.

This is the contract to complete the project for which bids were sought.Where a bid is accepted, the terms of the tender and bid documents become the terms and conditions of Contract B. [Emphasis added.] [44] Our Court of Appeal has found that a formal “notice of award” is not required to indicate acceptance of a bid.

In examiningwhether a bid is accepted, giving rise to contractual relations, the surrounding circumstances must be examined, including: whetheracceptance of a bid was conditional; the conduct of the parties; and the existence or absence of a “letter of intent” -- which may indicateacceptance of a bid. (Silex Restorations Ltd. v.

Strata Plan VR 2096, 2004 BCCA 376 at para. 36.) [45] In Grand Sierra Construction Ltd. v Karras, 2001 BCSC 768, Vickers J. found that in the context of the construction industry,the term “award” generally indicates the creation of contractual relations between parties, rather than merely being synonymous with“offer.” At para. 29 the court found that “a contract is said to be awarded when:

a) an owner or general contractor accepts, by some formof notice, a contractor’s bid for a contract; or

b) as a result of a negotiation process, the parties reach agreement on the terms of a contractand enter into that contract.” Findings Tender Package, Bid and Acceptance [46] As a preliminary matter, it is necessary to determine if the tendering process had sufficient formality such that a bid made byRumpel, once accepted, would give rise to a contract. Put another way, was there a Contract A? I find that there was: the tender packagecontemplated making an “award” of a contract upon certain conditions; the agreed statement of facts characterized Rumpel’s quote as a“bid;” the tender package referred to Mr.

Echlin as the “tender authority;” there was a formal deadline for the submission of bids; andmost importantly, the tender package and addenda included sufficient terms and details such that a bidding party could make a true‘offer’ (rather than mere estimate), which, once accepted, could form a complete contract, i.e. the essential terms were stipulated. [47] The wording of the tender package clearly contemplates a formal bid/tender process, but also a “pre-contract meeting” whichwould precede any contract award. [48] I find that such a meeting took place. Mr.

Rumpel testified that a few days following the “Closing Date” Mr. Echlin told him thatWestern was “moving forward” with Rumpel, but the two needed to meet on site to formalize a few details. Mr. Rumpel testified that thismeeting eventually occurred on site in early July 2018, and the two men discussed precisely the subjects contemplated in the tenderdocuments: the availability of quantity of Rumpel’s framers to complete the job -- with or without subcontractors -- and the schedule.

Mr.Rumpel testified that the conclusion of the meeting was “all positive” and that he believed he had the contract for framing. [49] Counsel for Rumpel also argues that Western communicated its acceptance of Rumpel’s bid through Mr. Echlin’s conduct. Iagree. In Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp. 2020 SCC 29 the Supreme Court of Canada confirmed that thecommon law’s long adherence to the objective theory of contract formation continued, citing Smith v. Hughes (1871), L.R. 6 Q.B. 597(Eng. Q.B.) at 607, per Blackburn J; and Saint John Tug Boat Co. Ltd. v.

Irving Refinery Ltd., (SCC), [1964] S.C.R. 614(SCC). At para. 33 the Court explained that in examining whether a party’s conduct constituted acceptance of an offer, the court shouldconsider what a reasonable person in the position of one party would conclude. [50] In the present case, Mr. Echlin’s conduct closely followed the process for awarding contracts set out in the tender package. I amsatisfied a reasonable person in Mr. Rumpel’s position would conclude that following Mr.

Echlin’s statement that Western was “movingforward” with Rumpel, combined with the successful pre-contract meeting in July 2018, that Western had accepted Mr. Rumpel’s bid,and that the parties therefore had a contract at that time. [51] All of Western’s subsequent conduct, up to the point of purporting to “revoke” the contract, including the letter of intent, theparties’ subsequent meetings and Rumpel’s part performance of the contract, would only have strengthened a reasonable person’s beliefthat Western had accepted Rumpel’s bid and the two had entered into a binding contract. [52] Mr.

Rumpel testified that the scope of work included in the initial quote included attending pre-construction meetings andworking on a tie-down layout prior to the framing crew beginning their work in earnest. [53] Turning to the reliability of the evidence of Mr. Rumpel and Mr. Echlin, I found Mr. Rumpel to be a forthright and open witnesswith a good memory for key events. This was in contrast to Mr. Echlin who had very limited memory of the events and presented as a

reluctant and somewhat defensive witness. As mentioned, Mr. Echlin stated he is no longer employed by Western, which may explain his reticence and lack of recall. [ 54 ] Mr. Rumpel’s unchallenged testimony is that he did, in fact, attend many pre-construction meetings, including in July 2018, a few months following his bid, and eventually began the tie-down work in the early summer of 2019. I was provided pictures of Mr. Rumpel and his crew members on-site performing this work. I accept that Mr. Rumpel had begun performance of the contract by this time.

If nothing else, it would be eminently reasonable for Rumpel to conclude Western had accepted its bid and the two had a contract after Rumpel began performing the contract without any objection from Western. [ 55 ] Nonetheless, Western submits that the parties never reached a consensus on the

schedule of the project, which it says was an essential term, and therefore no contract was ever created. To that end, Western says that while the initial tender package included a schedule, and Mr. Rumpel made his bid on this basis, Rumpel’s bid was never formally accepted by Western. Western suggests that the subsequent letter of intent constitutes a counter-offer to, rather than acceptance of, Rumpel’s bid. Western says this counter-offer was also never accepted by Rumpel, and was in fact rejected when Rumpel made a further counter-offer by way of the July 14, 2019 email enclosing a “tentative schedule”.

Finally, Western submits that Rumpel’s part-performance does not give rise to a contract per se citing Rafal (c.o.b. RJG Contracting and Management) v. Legaspi, 2007 BCSC 1944 and Fame Construction Ltd. v. 430863 B.C. Ltd. , [1998] B.C.J. No. 2300 . [ 56 ] The thrust of Western’s submission was that when its conduct is examined on the whole, its conduct was more consistent with, and more reasonably interpreted as, a (failed) attempt to continue negotiations with Rumpel rather than acceptance of Rumpel’s bid.

Western’s submissions were general in nature, but at times counsel for Western seemed to suggest that both the tender package and the letter of intent contained conditions precedent which were never fulfilled, including the pre-contract meeting, signing of a CCA 1, and receipt of confirmation of Rumpel’s good standing with WorkSafeBC and other insurance. [ 57 ] As stated above, I find that the pre-contract meeting occurred in July. I will address the CCA 1 in more detail below.

However at this point I will note that I do not find that Rumpel’s good-standing with WorkSafeBC and proof of insurance were true conditions precedent. Counsel for Western also emphasized the fact that Rumpel did not follow up to emailed requests from Mr.

Echlin’s administrative assistant with regard to these documents. [ 58 ] The placement of the terms under the heading “Award of Contract & Contractor Qualifications” together with an outline of the procedure for awarding contracts such as the “award period” of 60 days and the owner’s ability to reject bids does not, in my view, suggest these are true conditions precedent to the construction contract. Instead, given the reference to “Contractor Qualifications” and the wording suggests the requirement for insurance and good standing with WorkSafeBC were restrictions on who was invited to bid on the contract.

The wording of these provisions is more akin to a representation or warranty, and simply state the bidder must carry insurance and be in good standing. This is different than a term requiring Western’s receipt of proof of Rumpel’s insurance or WorkSafeBC standing as a condition precedent to the contract. At the same time, there was no evidence to suggest that Rumpel was not in good standing with WorkSafeBC or did not have the necessary insurance. [ 59 ] Finally, in my view, the fact that Mr.

Echlin’s administrative assistant followed up on these requests would indicate to a reasonable person that these requirements were of low priority to Western as they were delegated to a non-management employee. Had these truly been essential terms or true conditions precedent, one would expect Mr. Echlin to at least mention them to Rumpel at one of their many meetings.

Letter of Intent [ 60 ] Western points to the letter of intent as evidence that it would have been unreasonable for Rumpel to conclude there was a contract as opposed to merely continuing to negotiate, such that the letter of intent was a counter-offer, with conditions precedent, in response to Rumpel’s bid. [ 61 ] I do not agree that the letter of intent is a counter-offer as it merely repeats terms already set out in the tender package.

While some of these terms could be construed as conditions, by this point the only term which could be construed as a true condition precedent, the pre-contract meeting, had already been fulfilled. I conclude that the letter of intent was simply a re-statement of the tender package, bid, and already-agreed contract; the letter of intent appears to be created as an attempt by Mr. Echlin to “firm things up” before the anticipated December 2018 start date, and tie-up Rumpel’s services in face of mounting delays. The letter of intent supports Mr. Rumpel’s testimony that Mr.

Echlin advised him his bid was accepted, and that Rumpel had been awarded the contract. [ 62 ] It is therefore hard to conceive how the letter of intent could be a “counter-offer” as Western proposes. Rather, Mr. Rumpel’s testimony that he understood the letter of intent as merely confirming the parties’ agreement, is a reasonable

interpretation of this document in light of the circumstances. The timing of the letter is also significant, it was sent on October 12, 2018, about two months before the framing work was scheduled to start. Mr. Rumpel testified, and I accept, that the parties had another pre-construction meeting to discuss

schedule and logistics a few days following the letter. [ 63 ] As I have noted, the letter of intent also requested that Rumpel supply various documents including a certificate of insurance and a WorkSafeBC registration number, however these requests were not listed under the purported “conditions” section.

Like the tender package, the letter of intent instead contemplated a meeting whereby various aspects of the project, including the schedule, logistics, and the WorkSafeBC and insurance documents would be “review(ed) and/or confirm(ed).” This does not have the effect of making Western’s receipt of Rumpel’s WorkSafeBC and insurance information a condition precedent to the contract, even if the letter of intent were to be construed as a “counter-offer.” CCA 1 [ 64 ] Western also submitted that the only “true” contract was the CCA 1 and that its communications with Western, including the letter of intent, were merely negotiations aimed at the eventual signing of the CCA 1, which never occurred, or only occurred after

Western had withdrawn its “offer”. [ 65 ] I do not accept that a reasonable person would view Western’s conduct as part of the negotiation process aimed at the eventual signing of a CCA 1. For reasons already stated above, a reasonable person would have viewed Western’s conduct as consistent with the acceptance of Rumpel’s initial bid. [ 66 ] Further, both the tender package and letter of intent contemplate the CCA 1 as a condition which must be fulfilled only “prior to the first progress invoice”, which would occur after performance of the contract had already begun.

The only way to interpret the reference to the CCA 1 in both the tender package and the letter of intent is as a non-essential term of the contract. [ 67 ] As an alternative argument Western appeared to suggest the signing of the CCA 1 was a condition precedent to either their acceptance of Rumpel’s bid or Rumpel’s acceptance of their counter-offer.

I reject these submissions because a true condition precedent would not have a “deadline” for satisfaction at some point after performance of the contract had already begun. [ 68 ] Rumpel’s conduct was consistent with the statements in the tender package and letter of intent. When Rumpel was prompted to sign the CCA 1 in July 2019 by the administrative assistant, Mr. Rumpel indicated he did not intend to sign the CCA 1 immediately, even though the performance of the contract had already begun.

His statement that he had to go through the contract to “see if it still works” was not a repudiation of the parties’ contract, and in fact very reasonable, given that the CCA 1 contained dates for performance which had long since passed. [ 69 ] Further, there is no evidence that Mr. Echlin, listed as the “tender authority” in the tender package, ever mentioned the CCA 1 to Mr. Rumpel until he purported to “revoke the contract” on August 1, 2019. If the execution of the CCA 1 was required to form the contract, or a true condition precedent, I am satisfied Mr. Echlin waived this requirement when he allowed Mr.

Rumpel to begin performing work on site without requiring him to sign this document, or even mentioning it. [ 70 ] The fact that the procuring of Mr. Rumpel’s signature appeared to be the exclusive purview of Western’s administrative assistant demonstrates that Western’s operating mind or agents did not consider the execution of the CCA 1 to be essential in any way. Instead, Mr.

Echlin’s reliance on the CCA 1 to “revoke the contract” on August 1 2019 appears to be an unsupportable technical excuse, with no basis in law, to relieve Western of its contractual obligations when Western believed it could obtain the services of another framer who could do the job much faster than Rumpel -- a promise which failed to materialize. Effect of Delays and July 14, 2019 Email [ 71 ] Finally, Western points to the many delays in the project as evidence that the parties could not have reached consensus ad idem.

Western says that the start date and timeline for performance would have been essential terms of any contract, and the parties never reached an agreement on these terms. Western submits that the letter of intent could have been an offer to Rumpel to frame the towers, but that Mr. Rumpel’s July 2019 email with a proposed framing

schedule was a counter-offer which “killed” any offer contained in the letter of intent. [ 72 ] I do not accept Western’s submissions. As stated above, I find that Rumpel and Western entered into a contract in July 2018 after the successful pre-construction meeting was held, as was contemplated in the tender package. At this time, the terms of the contract were those set out in the bid and tender package: the price was $1,150,000 plus GST, less a $16,000 discount; the scope of work was as stipulated in the tender package; and the start date and

schedule were those set out in the tender package, i.e. commencing December 2018, with completion in March 2019. Western affirmed these terms in the October 2018 letter of intent. [ 73 ] Mr. Rumpel testified that as it became clear the December 2018 start date was not realistic, Mr. Echlin proposed various revised start dates and schedules, each of which he accepted. I accept Mr. Rumpel’s testimony, and find that Western proposed these contractual modifications which were accepted by Mr. Rumpel on each occasion. [ 74 ] To repeat, I find that it was Western, not Mr. Rumpel, who proposed various modifications to the start date and

schedule terms, and Mr. Rumpel accepted these contractual modifications. This includes the July 2019 start date. Mr. Rumpel testified that Mr. Echlin proposed the July 2019 start date in the spring of 2019. This was also evident in a May 2019 email sent by Mr. Echlin to Mr. Rumpel setting out a July 2019 start date and asking Mr. Rumpel to “Let me know how your

schedule is keeping.” I take this statement to indicate Western’s flexibility and willingness to work with Rumpel on a new

schedule in the face of delays, none of which were occasioned by Rumpel. [ 75 ] In submissions, Western referred to Rafal and Fame and the issue of part-performance and a timeline for completion. However, the statements in Rafal and Fame regarding timelines for completion were specific to the facts of those cases. What will be an essential term in one contract, may not be essential in another.

While I find that Rumpel and Western had a contract which included a start date and timeline which was modified from time to time by the agreement of both parties, I do not consider it an essential term of the contract. [ 76 ] I say this for a few reasons. Firstly, Mr. Echlin’s conduct, and the terms of the tender package itself, which contemplated a pre- contract meeting to “confirm” the schedule, would leave a reasonable person to conclude that the

schedule term was subject to modification upon agreement by the parties. Mr. Echlin’s conduct in repeatedly altering the start date and proposed schedule, along with his willingness to work collaboratively with Rumpel on a new schedule, demonstrates a good-faith attempt to re-negotiate a non-essential term of the contract, rather than repudiate the contract or “reject” a “counter-offer” by Rumpel. Therefore Mr.

Rumpel’s July 14, 2019 email with a “tentative schedule” cannot be interpreted as a counter-offer but instead was part of the on-going collaboration between the parties to come up with a workable plan. [ 77 ] This is supported by Mr. Rumpel’s testimony that the “tentative schedule” was for the reference of a third-party plumber and for planning purposes, and was based on his observations of the state of the project on that date, rather than the availability of his employees. By this time Western had proposed many unrealistic schedules which had long since passed. I take Mr.

Rumpel’s testimony to mean that he was relying on his extensive knowledge of the construction industry to provide a realistic timeline to aid both the plumber and Mr.

Echlin, since Mr. Echlin’s previous estimates had proved unreliable. [ 78 ] Moreover, there is no evidence that Mr. Rumpel rejected a

schedule proposed by Mr. Echlin based on his inability to complete the job in a timely manner, as Western suggests. To the contrary, Mr. Rumpel testified that in response to Rumpel’s tentative schedule, with an August 26, 2019 start date, Mr. Echlin suggested an earlier start date of August 6, 2019 which Rumpel readily agreed to. [ 79 ] Further, counsel for Rumpel drew my attention to an “alternative”

schedule prepared by Western at the time of the tender package, with a later start date, which was not provided by Western until the discovery stage of this proceeding. Counsel for Rumpel suggested that this “secret schedule” demonstrated the tentative nature of Western’s initial December 2018 start date and schedule, and thus undermined the essentiality of this term to the contract. I accept this submission. [ 80 ] Mr. Rumpel further testified that very shortly after he received the letter of intent which confirmed the December 2018 start date, he had a meeting where Mr.

Echlin proposed a later start date and longer timeline for completion. This, along with the “secret schedule”, suggest that the letter of intent was an attempt by Western to “firm up” or “lock in” Rumpel as the framing contractor in the face of mounting delays. Mr. Rumpel had already showed his willingness to work with Western on a flexible basis. All of which leads me to conclude that it was advantageous for Western to lead Mr.

Rumpel to believe the two had a contract so that Rumpel would turn down other work in order to remain available to frame the Orono project when it eventually began. [ 81 ] This is indeed what Mr. Rumpel testified transpired. Mr. Rumpel turned down other work to remain available to fulfill his obligations to Western. [ 82 ] The clear advantage Western derived from having the start date and

schedule remain a flexible or tentative term of the contract, up for re-negotiation, strongly undermines Western’s contention that the start date and

schedule were essential terms upon which the parties never reached an agreement. Conclusion [ 83 ] In my view, the wording of the tender package clearly indicates Western’s intent to conduct a formal tender and bid process. Mr. Rumpel’s “quote” in response to the tender package therefore constituted an offer to enter into a contract for the wood framing. I accept Mr. Rumpel’s testimony that Mr. Echlin, as agent for Western, indicated Western’s acceptance of Rumpel’s bid orally and through his subsequent conduct, and a contract was entered into at that time.

The terms of the contract were substantially those contained in the tender package and Mr. Rumpel’s quote, including the scope of work and price contained therein. The initial

schedule with a start date of December 14, 2018 was a non-essential term of the contract, and one which was re-negotiated between the parties as Rumpel’s performance became impossible due to Western’s delays. It was therefore not open to Western to “revoke the contract” on August 1, 2019. I am satisfied Rumpel has established that this was a breach of the parties’ agreement. Damages [ 84 ] Given Western’s breach of its contractual obligation, Rumpel is entitled to damages to put itself in the same position as if the contract had been performed.

The onus is on Rumpel to prove its loss on a balance of probabilities standard. In the case of contractual breach, a party is expected to attempt to mitigate its losses to a reasonably possible extent, but the onus is on the party advancing the argument to show a failure of mitigation. [ 85 ] However, Western argued that Rumpel did not prove its loss, and therefore did not advance the argument that Rumpel failed to mitigate. In any event, there was no evidence that Rumpel failed to mitigate.

To the contrary, evidence showed Rumpel had a good reputation in the construction business, and its services were therefore in high demand both before and after the Orono contract was breached. Rumpel turned down many projects while waiting for Orono to begin. Once Rumpel was told its services were no longer required, Mr. Rumpel immediately looked for new work, which he successfully obtained. [ 86 ] Instead of arguing a failure to mitigate, Western suggested that Rumpel’s failure to lead expert evidence from accountants or other financial experts is fatal to its claim for damages.

I do not accept this proposition, as no legal authorities were cited in support of this suggestion. Requiring expert authorities to prove financial losses would impede access to justice for individuals and small businesses in civil cases. Further, I am unsure what additional information an expert would have been able to provide in this case. I am satisfied Mr.

Rumpel knows his business better than anyone else and is acutely aware of the usual profit he can expect from any given project, given the many projects he has framed in the past. [ 87 ] I do not accept Western’s submission that Rumpel has failed to produce sufficient evidence to prove its lost profit and substantiate its claim for damages, in the absence of “financial documents to show profit and loss.” On this point, as Rumpel was prevented from completing the project it was contracted to perform, there are obviously no specific documents pertaining to the Orono project.

As a result, the only alternative was for Mr. Rumpel to rely on past projects to estimate Rumpel’s loss on the Orono project. [ 88 ] In this regard, Rumpel’s primary evidence of loss was the testimony of Mr. Rumpel. As I noted above, I found Mr. Rumpel to be a forthright and credible witness with a good memory of the events in question. He told the court that his profit was typically 40% of the total quoted price for a job. In support of this figure, Rumpel provided documentary evidence showing the financial breakdown of other projects. Mrs. Rumpel, Mr. Rumpel’s wife, also testified.

She is the bookkeeper for Rumpel. She testified as to the hourly wages of Rumpel’s crew at the time, permitting Mr. Rumpel to “estimate” what his labour costs on Orono would have been if he was permitted to fulfill the contract. [ 89 ] Rumpel therefore says its expected profit from the Orono project would have been $532,959. Rumpel bases this projection on its profits and costs of another, similar-sized project it had recently completed at Cook Street, prior to contracting to frame the Orono project. Mr.

Rumpel provided a detailed break down of the Cook Street project, showing how many square feet an average framer could

complete per day, material costs, labour costs, other employee costs, etc., and applied these numbers to the Orono project to arrive at atotal cost and profit estimate. Mr. Rumpel also provided detailed breakdowns of other similar projects to support this estimate. In histestimony, Mr. Rumpel explained the assumptions he used in these calculations, and how he applied these to the Orono project, all ofwhich I found to be straightforward and reasonable. Mr.

Rumpel was not seriously challenged on his profit estimates based on priorprojects similar in size to the Orono project. [90] However, when pressed in cross-examination about what Rumpel’s “true loss” was, Mr. Rumpel estimated it at $440,000.

Whilethis conclusion was not clarified by either side, this may have been in light of arguments made by Western that only net profit, and notgross profit, should be compensated, and that overhead items which normally come from gross profit including staff CPP premiums,office expenses etc. should not be included as compensable damages. [91] At the same time, Rumpel introduced documents that suggested that it had been awarded a contract to frame a building forAbstract Developments at 1201 Fort Street, which was set to start in the fall of 2019.

Emails between Rumpel and Abstract suggest thatbefore Western breached the Orono contract, Rumpel may have offered, or was “open to” terminating this contract by agreement in orderto allow Abstract to find a framer who could start the job sooner. At that time, Rumpel was not in a position to frame Fort Street giventhe Orono schedule, and would not be able to start the job until mid-2020, even if Abstract delayed the start date. However, because ofWestern’s contractual breach, Mr.

Rumpel was available to frame Fort Street during the Fall of 2019. [92] In considering an appropriate amount of damages, I accept the long-standing legal proposition that, as in this case, where abreach of contract allows an individual to take on new business that they would not have otherwise been able to undertake, this“substitute” business must be accounted for when assessing their losses.

On the other hand, other business which would have beenperformed in any event, regardless of the contractual breach, forms no part of the damages assessment, and will not reduce the amount ofdamages occasioned by the breach: Karas v. Rowlett; (SCC), [1943] S.C.J. No. 46. [93] In this case, the evidence does show that Rumpel had the Fort Street contract prior to the Orono breach, but that Abstract wasintent on moving forward before Rumpel would be available.

However, due to Western’s breach, Rumpel was able to frame Abstract’sFort Street project once Western breached its contract with Rumpel, as well as freeing Rumpel to take on new business in 2020. In fact,Mr. Rumpel testified that his business was growing and did well during 2020. He estimated his 2019 profit to be about $300,000 or$325,000; and in 2020, “I’m guessing around $500,000.” [94] Therefore, Rumpel’s profits at Fort Street have to be taken in account when assessing the appropriate amount of damages. Mr.Rumpel testified that his profit on the Fort Street project was “200 and change.” [95] In light of Mr.

Rumpel’s statement that his “true loss” was $440,000, and because he was available to frame the Fort Streetproject and make a profit of $200,000, I consider an appropriate award of damages to be $240,000, representing Rumpel’s loss as a resultof Western’s breach of contract. [96] There is also the matter of the unpaid invoice of $12,731.25. Rumpel is only entitled to recover its actual costs, since its overallloss of profits has already been accounted for in the damages award. Counsel for Rumpel therefore conceded that Rumpel’s actual costswere $3,516.41, exclusive of Mr. Rumpel’s own time.

While counsel for Western conceded that Mr. Rumpel should be compensated forhis time and the whole amount is payable, I interpret this concession on Western’s part to be contingent on their position that no damagesare otherwise owed for loss of profits. [97] Be that as it may, I see no reason not to follow counsel’s submission that the amount owing for work done prior to Western’sbreach as outlined on the unpaid invoice is $3,516.41. Rumpel is therefore awarded damages totalling $243,516.41.

Punitive Damages and Costs [98] In addition to damages for loss of profit, Rumpel submits that “punitive damages should be awarded based on Western’s badfaith conduct”, including unreasonably withholding payment of the $12,731.25 invoice and the filing of a counterclaim, where Westernsought the difference between what it paid to the framer who finally did the framing and Mr. Rumpel’s quote to frame the project. Inother words, as counsel for Rumpel pointed out, the withdrawn counterclaim, filed by counsel other than trial counsel, in factacknowledged Western had a valid contract with Mr.

Rumpel. [99] Notwithstanding the inconsistent position initially advanced in the ill-conceived counterclaim, given the totality of thecircumstances and the fact that counsel agreed the $12,731.25 invoice should be reduced, I do not consider Western’s conduct to beharsh, vindictive, or demonstrating contempt such that a punitive damages award would be justified. I am also not satisfied there issufficient evidence to establish a breach of any duty of good faith to Rumpel. [100] Turning to the question of costs, counsel for Mr.

Rumpel submitted that Western’s last minute breach of its contractualobligations was reprehensible and flagrant conduct worthy of condemnation by way of special costs. As in the case of punitive damages,I am not persuaded that Western’s conduct was so high-handed or reprehensible that it is deserving of rebuke, thereby justifying a specialcosts award. Rumpel has however been successful and is entitled to its costs on Scale B, as well as appropriate interest. “B. D. MacKenzie J.” The Honourable Justice B. D. MacKenzie