Winning In The Long Run

Winning In The Long Run NORTHWESTERN ONTARIO MUNICIPAL ASSOCIATION April 22, 2010 Allan D. McKitrickMcKitricksBarristers and Solicitors17A Cumberland Street S.Thunder Bay, ON P7B 2T3 Tel: (807) 345-1251 Fax: (807) 345-0043Email: mckits@tbaytel.net

The Marathon Competitors • Fairness • Freedom • Common Sense • Private Rights • Public Rights

The Start Line – Mile 0 • Cardinal Construction v. Brockville (Municipality) • Ontario S.C.J., February 3, 1984

The No Contract Issue • “Following receipt of tenders, the municipal council passed a by-law to authorize the acceptance of the plaintiff’s tender and to authorize the execution of a contract for the subject work.” • “A copy of the by-law and a draft of the contract for execution were sent to the plaintiff, but the formal contract was never executed either by the plaintiff or the municipality.” • work was completed and there was no complaint by the municipality as to the quality of the work.

The No Contract Issue • Municipality paid (without prejudice) subject to negotiation – plaintiff sued

SO WHAT HAPPENED?

The No Contract Issue • “as a matter of law, in the absence of a formal agreement executed by the municipality under seal pursuant to the authorizing by-law, there was no binding contract.”

The No Contract Issue • “However, notwithstanding the absence of a binding contract the municipality could not have the benefit of work and services performed at its request without responsibility for payment therefor.” • “Having completed the work to the satisfaction of the municipality, the plaintiff was entitled to payment on a quantum meruit basis.”

The No Contract Issue • quantum meruit means: as much as is deserved – an inferred promise to pay a reasonable value for services, even in the absence of an enforceable agreement

The Exempting Clauses In Issue

The Exempting Clause Issue • “The location and depth of underground utilities and services shown on the Contract drawings are based on the investigations made by the Engineer. It is, however, the Contractor’s responsibility to contact the Municipal Authorities or Utility Companies for further information in regard to the exact location of these utilities, to exercise the necessary care in construction operations and to take such other precautions as are necessary to safeguard the utilities from damage.”

The Exempting Clause Issue • “For the contractor’s information only, it is anticipated that special support of structures, as shown on the Contract Drawings, will be required for approximately twenty (20) feet of water-main, twenty (20) feet of gas main and one hundred (100) feet of Bell conduit. The information provided herein is approximate only and the Contractor shall base his bid solely on the findings at the site.”

The Exempting Clause Issue • G.C. “102-2 Contractor’s Investigation” • “The Contractor declares that in tendering for the work and in entering into the contract, he has either investigated for himself the character of the work to be done and all local conditions including the location of any utility which can be determined from the records or other information available at the offices of any person, partnership…(cont. on next page)

The Exempting Clause Issue • …Corporation, including a municipal corporation and any board or commission thereof, having jurisdiction or control over the utility, that might affect his Tender or his acceptance of the work, or that, not having so investigated, and except as hereinafter provided he is willing to assume and does assume, all risk of conditions now existing or arising in the course of the work which might or could make the work, or any items thereof more expensive in character, or more onerous to fulfill, than was contemplated or known when the tender was made or the contract signed.”

The Exempting Clause Issue • “The contractor also declares that in tendering for the work and in entering into the contract he did not and does not rely upon information furnished by the Corporation or any of its servants or agents respecting the nature or conformation of the ground at the site of the work, or the location, character, quality or quantity of the materials to be removed, or to be employed in the construction of the work, or the character of the equipment or facilities needed to perform the work, or the general and local conditions and all other matters which could in any way affect the performance of the work under the contract other than information furnished in writing for or in connection with the tender or the contract by the Engineer, except information specifically excluded from this subsection.”

The Exempting Clause Issue • Bidder did not, either at the site or at the offices of Bell or the City, inquire into the nature of the Bell installation; instead Bidder saw and relied upon the representation “underground Bell tel. cable” in the tender drawings certified by the Engineer

The Exempting Clause Issue • “In short, he saw nothing in the documents or at the site that caused him to question the nature of the “cable” or to inquire further as to its nature. At the time (without the benefit of hindsight) the Bell installation was, in his mind, of no particular significance.” • Court did not find the judicial decision that involved the “exempting clause” referred to it as helpful “as the terms and conditions differ from those at Bar, and in any event each case must be decided on its own facts.”

The Exempting Clause Issue • Court then looked at specific provisions and the tender documents as a whole and determined “this convoluted and confusing provision (s.102-2), like the whole contract, is to be construed contra proferentem.” • “102-2 is to be read with 103-2 which provides for the very situation where the bidder relies on incorrect information provided by the City (including the engineer on its behalf). In other words [the bidder] does not assume the risk that the information so provided is incorrect; that information is assumed to be correct.”

The Exempting Clause Issue • Court then held: “I conclude, therefore, on a fair interpretation of these provisions, that the City is not exempted from liability….” • with respect to City argument that bidder when investigating should have recognized the warning signs that the facility was other than as represented…

The Exempting Clause Issue • The Court rejected this and, among other things, cited the following paragraph from an 1881 case: • “If a man is induced to enter a contract by a false representation, it is not sufficient to say, ‘If you had used due diligence you would have found out that the statement was untrue. You had the means afforded you of discovering its falsity, and did not choose to avail yourself of them’.” • And further, the Court said….

The Exempting Clause Issue • “The city became aware before tenders were submitted that the Bell installation was a concrete duct structure. They had a duty to convey that information to bidders, including Cardinal, not only as a matter of professional accuracy but because the information provided in the tender documents was intended by the city to induce bidders to act upon it. In allowing the designation “cable” to stand the city was in breach of its duty of care to Cardinal and for this must be held accountable.”

Exempting Clause – Propositions From Cardinal • Generally, the duty owed to bidders in the preparation of tender documents is to exercise reasonable care that the information presented reflects with reasonable accuracy the nature of the work and its factual components so as to enable the contractor to prepare a proper bid;

Exempting Clause – Propositions From Cardinal • For a party issuing a tender in a construction context to rely on a full investigation clause, the party must give practical reality to the requirement of independent investigation and allow the time necessary for bidders to properly complete their investigations,

Exempting Clause – Propositions From Cardinal • if it was otherwise this would mean that a tenderer could not rely on any information furnished by the engineer who prepared the documents for tender so that the tenderer would have to duplicate all the pre-engineering work even though there was usually insufficient time to do so; the Court in Cardinal found this to be unrealistic.

Mile 13.1 Halfway point • Orillia (City) v. Nicol, Ontario Court of Appeal, March 6, 1997

Issue – Charter of Rights, searches s. 8 • whether a search conducted pursuant to a regulatory municipal by-law respecting debris and garbage infringes s. 8 of the Charter and, if so, whether the infringement is justified under s.1 • s.8 – unreasonable search and seizure • s.1 – justified as a reasonable limit

Facts • city served notice on a homeowner to clear property of old unworking cars within 30 days • city official, without owner’s consent, climbed the fence and took pictures showing the cars had not been removed as required • the property was a vacant yard in a residential area surrounded by a fence and a no trespassing sign was posted on the property.

Facts • by-law said city inspector is to be permitted to inspect for its investigation purpose • appellant submitted by-law constituted an infringement of s.8 of the Charter and that this infringement was not justified under s.1

Decision • lower standard applied to a search conducted to enforce regulatory standards than to a search to enforce the criminal law; • why? stigma and penalty differences and: • “people in today’s society are accustomed to regulation and it is generally accepted that it is necessary for the state to ensure that an individual’s activities are compatible with the common good of the community.”

Decision • “The wording of section 8 of the Charter does not prohibit inspections without prior authorization. It simply imposes a requirement of reasonableness. The requirement of reasonableness is a flexible standard to be applied in the context of the particular case.” • “The standard of reasonableness required by the by-law depends largely on identifying the privacy interest which is at stake and the severity of intrusion of that privacy interest.”

Decision • “[Regulatory powers of inspection] are based on the common sense assumption that the threat of unannounced inspection may be the most effective way to induce compliance.” • “The object of the search, garbage and refuse, has a low expectation of privacy” and “once a 30 day notice period to remove has been given, the search in question is one which may be reasonably expected by all members of a residential community as a means of ensuring compliance with the notice and to ensure that the health, safety and property standards are then met.”

Decision • Thus, C.A. found that search was reasonable so no infringement of s.8, making it unnecessary to consider s.1.

Mile 24 – A “Marathon” Case on the “Reasonable Search” Subject

The Case • R v. M.(A.) • S.C.C. heard May 22, 2007, decided April 25, 2008

The Facts • Principal of high school issued standing invitation to police officers to conduct sniffer dog searches at school • School had zero tolerance drug policy

The Facts • Student brought drugs in his backpack • Sniffer dog detected drugs in backpack of youth in gymnasium during random walk through

The Issue • Can the evidence obtained by the police through the use of the sniffer dog be used in court?

S.C.C. • By a 6-3 score • “NO”

Why Not? • Youth’s charter rights to not be subject to unreasonable search and seizure violated • High school students are entitled to privacy, albeit lessened privacy in school environment. • There must exist a reasonable suspicion before using sniffer dog. • “Teenagers expect the contents of their backpacks not to be open to the random speculative scrutiny of the police. This expectation is a reasonable one that society should support”.

Why Not? • The student expected the contents of his backpack to be private, and this expectation was not abandoned when he left his backpack in a public place (gymnasium). • False positives can arise from sniffer dog searches – from the perspective of the general population, false positives raise serious concerns about the invasion of the privacy of innocent people.

Why Not? • “While the sniffer dog search may have been seen by the police as an efficient use of their resources, and by the principal as an efficient way to advance a zero tolerance policy, their objectives were achieved at the expense of the privacy interest of every student at the school.” • Dissenting Judge – “Using sniffer dogs to perform a random search for drugs at a high school can be justified on the basis of a generalized reasonable suspicion about the presence of illicit substances, providing that a reasonably informed student would have been aware of the possibility of random searches involving the use of dogs”.

Why Not? • And further, • “The heightened importance of preventing drug activity in schools, the highly regulated nature of the school environment, the reduced expectation of privacy students have while at school, and the minimally intrusive nature of sniffer dog searches all support a finding that police may use sniffer dogs to search in schools where there is a reasonable suspicion of drug activity”.

Why Not? • “However, police may not enter a school and conduct a search whenever they please on the basis that drugs may be found on any given day. Each random dog-sniff search must be justified on the basis of a suspicion that drugs will be located at that specific location at the specific time the search is being performed.”

What do you thing the result should be?

Mile 26.2 - What Just Happened • Important S.C.C. decision involving exclusion clauses in tendering

When Did It Happen • February 15, 2010

The Facts The Province accepted a bid and awarded the work to a party who was not eligible to bid. Another bidder claimed that doing so breached the term of the tender call to only consider bids from eligible bidders and the duty in tendering law to treat all bidders fairly.

Winning In The Long Run