This article is an excerpt from Government Procurement, which is available for purchase.
In its March 2012 decision in All Tech Sealants & Waterproofing Ltd. v. Halifax (Regional Municipality), the Nova Scotia Supreme Court rejected Halifax Regional Municipality’s application for summary judgment. The case dealt with a dispute over the performance of a pavement marking repainting contract. After the award of the tendered contract, the parties discovered significant deficiencies in the inventory information provided by the Region to bidders. Performance issues ensued, with the contractor claiming that the lack of accurate information provided during the bidding process led to increasing performance costs, including multiple trips to certain locations to confirm the nature of the required work. The Region responded by scaling down the scope of work and terminating the remainder of the contract. The contractor sued. The Region brought a motion for summary judgment based on the terms of the contract. The court rejected the motion, finding that the outstanding issues could not be readily resolved by reference to the contract terms alone and that a trial would be necessary to hear evidence and resolve outstanding factual questions:
I have reviewed the affidavits and considered the submissions of counsel and I am not satisfied that HRM has established a lack of material facts requiring trial. In order to assess the contractual arguments raised by HRM, the Court would need to determine a number of points which appear to be in dispute. These include the nature and extent of the errors in the HRM inventories and how these impacted the work of All Tech. The Court will need evidence as to what instructions were given by HRM to deal with the problems and when these were provided.
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It is clear from the evidence and submissions of both parties that this contract did not proceed as initially anticipated due to errors in the data maintained and provided by HRM. There was disorganization and confusion with respect to how to deal with the issue. All Tech took longer and incurred greater expenses than either party would have initially anticipated. The result was significant discussions between the parties to try and resolve the dilemma. Each party was blaming the other for exacerbating the problem.In the circumstances, there is simply not a sufficient evidentiary framework to allow the Court to apply the contractual terms. In fact, there is some question as to whether the contract itself was amended by the discussions between the parties. For this reason, I am dismissing the HRM motion for summary judgment. (paras. 14, 18-19)
As this case illustrates, the failure to make accurate material disclosures about contract performance conditions during a bidding process can give rise to serious post-award performance disputes. Such disputes often involve complex factual issues that are difficult to resolve, particularly by way of summary application, and that can result in protracted and complex litigation.
