Breaking news: Supreme Court rules in” Tercon Contractors Ltd. vs British Columbia(Ministry of Transportation)
” The appeal from the judgment of the Court of Appeal for British Columbia (Vancouver), Number CA033983, 2007 BCCA 592, dated December 3, 2007, heard on March 23, 2009, is allowed, the order of the Court of Appeal is set aside and the judgment of the trial judge is restored, McLachlin C.J. and Binnie, Abella and Rothstein JJ. dissenting. ” http://scc.lexum.umontreal.ca/en/news_release/2010/10-02-12.3/10-02-12.3.html
From the Reason for Judgement :
” V. Disposition
 I conclude that the judge did not err in finding that the Province breached the tendering contract or in finding that Tercon’s remedy in damages for that breach was not precluded by the exclusion clause in the contract. I would therefore allow the appeal, set aside the order of the Court of Appeal and restore the judgment of the trial judge. The parties advise that the question of costs has been resolved between them and that therefore no order in relation to costs is required.
Reasons for Judgement : http://scc.lexum.umontreal.ca/en/2010/2010scc4/2010scc4.html
See this earlier post of mine, for history on this case: https://lailayuile.wordpress.com/2010/01/08/tercon-contractors-ltd-vs-british-columbia-ministry-of-transportation-and-highways/
Let me give you a lay-persons summary of this judgement, if you will, in one sentence.
In essence, the Supreme court is upholding the original judgement in favor of Tercon Contracters Ltd. ,with no damages ordered.
I spoke with one of the key players in this case today, former chairman of Tercon Contractors Ltd., Glenn Walsh, and asked him what his reaction was to the judgement of the court.
Walsh had this to say:
Although I am no longer associated with this particular Tercon company, I am obviously pleased and feel vindicated with the judgement–after 9 years.
It supports the whole principle of integrity, honesty, fairness and transparency being requirements in government tendering processes. The court has agreed that the Ministry acted ‘agregiously’ and purposely ‘obfuscated’ the role of Emil Anderson such that the real relationship—-was ‘smothered’.
Ministry staff got caught cooking the books.I think it is unfortunate though, that the court accepted the validity of ‘exclusion clauses’, which effectively prohibit contractors from any claim against a public agency that doesn’t abide by its own tendering rules.It called such a clause to be a ‘negotiat[ion] between savvy participants in the construction business’, saying that bidders are ‘free to decline to participate’ in any tender.I cannot accept that a contractor whose primary business is highway construction can ‘choose’ to not tender highway projects because of an overly onerous clause that allows the agency to bend the rules. That effectively takes away his right to carry on his business.Unlike a negotiated contract between a contractor and a private owner, where any terms of the contract can be negotiated, in a public tender the contractor must accept all of the terms, including the tendering rules, with absolutely no qualifications.To accept the court’s finding that ‘there was no relevant imbalance in bargaining power’ is difficult for me, in that there is no ‘bargaining’ in the public tendering process.The industry has been waiting for years for some clarity on this issue, but this seems to perpetuate heavy-handed procurement practices.
The construction industry in British Columbia is run by knowledgeable and sophisticated people who bid upon and enter government contracts with eyes wide open.No statute in British Columbia and no principle of the common law override their ability in this case to agree on a tendering process including a limitation or exclusion of remedies for breach of its rules.A contractor who does not think it is in its business interest to bid on the terms offered is free to decline to participate. As Donald J.A. pointed out, if enough contractors refuse to participate, the Ministry would be forced to change its approach.So long as contractors are willing to bid on such terms, I do not think it is the court’s job to rescue them from the consequences of their decision to do so.
- Who, within the Ministry of Transportation, called the shots on this bid? Who really orchestrated this entire debacle? And more importantly, where are they now?
- Why did the job change from from the ‘design-build’ concept to the ‘alliance’ arrangement shortly after Tercon was rated the top proponent (and Brentwood 5th) under the former scheme, which would have seen the bidders list shortened to the top 3?
- Who’s original idea was the EAC/Brentwood association?
- What effect did Tercon’s success with its Parksville suit in the 90’s have on how this project was handled?
And most importantly… what does the government plan to do about it ?
Or are the elected folks happy to allow these kind of business practices continue?