Date: 19991216
Docket: T-2424-98
OTTAWA, ONTARIO, THIS 16th DAY OF DECEMBER 1999
PRESENT: MR. JUSTICE J.E. DUBÉ
BETWEEN:
RICHCRAFT CONSTRUCTION LTD.
Plaintiff
- and -
NATIONAL CAPITAL COMMISSION
Defendant
ORDER
The plaintiff's motion for leave to amend its statement of claim and for injunctive relief is dismissed with costs.
Judge
Date: 19991216
Docket: T-2424-98
BETWEEN :
RICHCRAFT CONSTRUCTION LTD.
Plaintiff
- and -
NATIONAL CAPITAL COMMISSION
Defendant
REASONS FOR ORDER
DUBÉ J. :
[1] The plaintiff ("Richcraft"), an Ottawa home building contractor, seeks an order granting leave to amend its amended statement of claim and an injunctive order restraining the defendant ("the NCC") or its agents from offering for tender two parcels of land in Ottawa for which tenders are already scheduled to be opened this Friday, December 17, 1999.
1. The Facts
[2] By notice of sale issued in October, 1998, the NCC offered four parcels of land for sale by way of public tender. Richcraft submitted a tender dated November 12, 1998, in the amount of $4,650,000.00 for all four parcels. Its offer was the highest single bid for all four parcels but the second highest behind the combination of other bids for single parcels. There were ten bidders altogether.
[3] The NCC reviewed all the offers and notified the bidders that it "cannot recommend any of the offers for the necessary approvals since the prices offered were below anticipated levels". The NCC also added that it will be "forwarding you an invitation to Tender within the next few days on Parcels 1 and 2 only and invite you to submit an offer for one or both of these parcels at that time". The tenders for the two parcels in question are the ones to be opened this Friday. These are the two sales which Richcraft seeks to restrain by way of injunctive relief.
2. The NCC Offer to Sell
[4] The NCC call for tenders included schedules which specified the following relevant terms and conditions:
| a) "the parcels may be purchased individually, in combination with one or more or in whole." |
| b) "The National Capital Commission reserves the right to reject any and all offers, including the highest." |
| c) "Sale of the property is subject to the required internal and governmental approvals." |
| d) "If this offering does not produce an offer which the National Capital Commission is prepared to recommend for internal and other government approvals, the National Capital Commission may, at its option put the immovable up for sale by public tender or dispose of the immovable in any other way, including by direct sale to any other party." |
| e) "Should there be a tie in the offers submitted and should such offers be considered adequate by the National Capital Commission, each of the tied offers shall be permitted to submit a new offer. The highest of the new offers considered adequate by the National Capital Commission shall be recommended for internal and government approvals. If none of the tied offers submit a new offer or if there is still a tie then, in any such event, the National Capital Commission may, at its option cancel the call for offers or make a new call for public offers." |
[5] As mentioned earlier, the Richcraft's offer of $4,650,000.00 was not the most financially advantageous to the NCC as the best offer was a combination of four other bids totalling $4,688,302.00. In any event, the NCC determined that none of the offers received were adequate to be recommended for the required internal and governmental approvals.
[6] In answer to questions at the cross-examination of his affidavit, Robert Curry Wood, Vice-President, Capital Planning and Real Assets Management of the NCC said that with reference to the value of the lands, "there was a range of values indicating approximately $7 to $8 million for the densities that we had foreseen". A document prepared by the NCC for the call for tenders shows that it estimated the value based on market demand and on planning projections, as follows:
Estimated Value Based on Market Demand 7,209.780 4,759,780 5,984,780
Indication of Value Based on Planning
Estimated value based on Market Demand 7,209,780 4,759,780 5,984,780
Delete: 125 townhomes in Parcel - 3 1,755,375 1,130,375 1,442,875
Add: 420 Apt. Units @ $8k to $10K per 4,200,000 3,360,000 3,780,000
Delete: 162 townhomes in Parcel - 4 2,274,966 1,464,966 1,869,966
Add: 202 townhomes 2,836,686 1,826,686 2,331,686
Estimated Value Based on Planning Projection 10,216,125 7,351,125 8,733,625
[7] On December 23, 1998, Richcraft filed its statement of claim in this matter and on February 18, 1999, the NCC served its statement of defence. In its statement of claim, Richcraft elected to claim damages only. There was no claim for specific performance nor injunctive relief. Richcraft merely claimed for lost profits and for loss of the investments to build and sell townhomes. The NCC served a motion for summary judgment to dismiss Richcraft's claim on May 12, 1999, but the hearing of that motion, at the request of Richcraft, was adjourned to December 15, 1999, and then to May 2, 2000. The NCC consented to the adjournments provided no further steps be taken by Richcraft. Shortly after the sale of two of the lots was advertised by the NCC, Richcraft moved the instant motion for injunctive relief.
3. Injunctive Relief
[8] It is trite law that there are three criteria that an applicant must meet so as to obtain this equitable remedy:
| (i) that there is a serious question to be tried; |
| (ii) that irreparable damage would be caused to the plaintiff it is not granted; and |
| (iii) that the balance of convenient favours the plaintiff. |
3(a) - Serious Question to be Tried
[9] The privilege clause attached to the Schedules of the call for tenders stipulates quite clearly that the NCC has "the right to reject any and all offers, including the highest". As mentioned earlier, there are other privilege clauses such as the one stating that "sale of the property is subject to the required internal and government approval". Those clauses flash a clear signal that there is no obligation on the part of the NCC to accept the highest bidder1.
[10] In M.J.B. Enterprises v. Defence Constr.2, the Supreme Court of Canada dealt with the tendering process and a privilege clause providing that the lowest or any tender would not necessarily be accepted. In that case, the accepted bid was conceded to be non-compliant as the bidder had not fulfiled all the requirements in the call for tender. The major issue in that appeal was whether the inclusion of a privilege clause in the tender document allowed the respondent to disregard the lowest bid in favour of any other tender, including a non-compliant one. Iacobucci J. provided a general analysis of the law of tendering beginning with the Supreme Court decision in Ron Engineering3. As to non-compliant bids, he concluded "that the privilege clause is compatible with the obligation to accept only a compliant bid". It is "incompatible with an obligation to accept only the lowest compliant bid. With respect to this latter proposition, the privilege clause must prevail". He stated that "the additional discretion not to award a contract is presumably important to cover unforeseen circumstances".
[11] In the case at bar, Richcraft's tender was compliant. It was not rejected on the ground of non-compliance. None of the bids were accepted because, as mentioned earlier, on the ground that the prices offered were below anticipated levels. Clearly, the NCC had the discretion to make that decision and, in any event, Richcraft did not submit the best bid.
[12] Consequently, in my view, there is no serious issue to be tried.
3(b) - Irreparable Harm
[13] So as to succeed Richcraft must demonstrate by clear and convincing evidence, not by mere speculation, that it would suffer irreparable harm if the injunctive relief is not granted. Richcraft's statement of claim alleges that "because the Tender was not accepted, the Plaintiff has lost a significant amount of profits on these units in an amount in excess of $9,000,000.00". It is only now that Richcraft claims that "any sale of these lands will cause irreparable harm to the Plaintiff". Where losses can be compensated by the payment of money, there is no irreparable harm: damages afford an adequate remedy in such an instance.
[14] There is no evidence that the piece of land in question is "unique" in the sense that it is irreplaceable. Richcraft is in the business of buying land, building houses and making a profit. As stated by Sopinka J. of the Supreme Court of Canada in Semelhago v. Paramadevan4, land is no longer considered to be "unique". The learned judge said as follows:
| ...While at one time the common law regarded every piece of real estate to be unique, with the progress of modern real estate development this is no longer the case. Residential, business and industrial properties are all mass produced much in the same way as other consumer products. If a deal falls through for one property, another is frequently, though not always, readily available. |
[15] No irreparable harm has been demonstrated.
3(c). Balance of Convenience
[16] Since there is no serious issue to be tried and no irreparable harm, it is not necessary to deal with the balance of convenience. However, it is obvious that if injunctive relief were granted, the reputation of the NCC would be tarnished. If it cannot complete the current invitation of tenders on the two parcels of land in question, the NCC would be unfairly restrained. It has a mandate to look after the affairs of the National Capital and it must be allowed to conduct its business in the public interest.
4. Disposition
[17] Consequently, Richcraft's motion for leave to amend its statement of claim and for injunctive relief is denied with costs.
OTTAWA, Ontario
December 16, 1999
Judge
__________________
1 Bourque (Pierre) & Fils Ltée v. Canada (1999), 162 F.T.R. 98 and Glenview Corp. v. Canada (1990) 34 F.T.R. 292.
2 [1999] 1 S.C.R. 619 at 644.
3 (1981), 119 D.L.R., (3d), 267 (S.C.C.).
4 [1996] 2 S.C.R. 415 at 428.
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