Naylor Group Inc. v. Ellis-Don Construction Ltd.

Naylor Group Inc. v. Ellis-Don Construction Ltd.

The Toronto Bid Depository rules and standard form contract created a Contract A obliging Ellis-Don to subcontract the electrical work to Naylor absent a reasonable objection; the OLRB decision did not frustrate that obligation because it affirmed a pre-existing bargaining commitment; Ellis-Don’s belated objection was unreasonable given its prior assurances and conduct, and Naylor is entitled to damages for lost profit measured at CAD 365143 plus prejudgment interest and costs.

Citation
2001 SCC 58
Parties
Appellant/respondent on Cross Appeal: Ellis-Don Construction Ltd.; Respondent/appellant on Cross Appeal: Naylor Group Inc.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
27 September 2001
Procedural Posture
Appeal to Supreme Court of Canada / Final Judgment on Appeal From Ontario Court of Appeal
Outcome
Appeal dismissed; cross-appeal allowed
Legal Topics
Bid Depository, Contract A/contract B, Frustration, Damages, Unjust Enrichment, Union Affiliation, Bid Shopping
Source Language
English
Contract Law Labour Law Remedies Bid Depository Contract A/contract B Frustration Damages Unjust Enrichment +2 more

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Parties

Ellis-Don Construction Ltd.

Appellant/respondent on Cross Appeal

Naylor Group Inc.

Respondent/appellant on Cross Appeal

Procedural Posture

Appeal to Supreme Court of Canada / Final Judgment on Appeal From Ontario Court of Appeal

Legal Issues

  1. 1 Whether a Contract A arose between prime contractor and prospective subcontractor under the Bid Depository rules and, if so, its terms
  2. 2 Whether the Ontario Labour Relations Board decision frustrated Contract A
  3. 3 Whether the prime contractor breached Contract A by refusing to subcontract to the bidder it carried

Ratio Decidendi

The Toronto Bid Depository rules and standard form contract created a Contract A obliging Ellis-Don to subcontract the electrical work to Naylor absent a reasonable objection; the OLRB decision did not frustrate that obligation because it affirmed a pre-existing bargaining commitment; Ellis-Don’s belated objection was unreasonable given its prior assurances and conduct, and Naylor is entitled to damages for lost profit measured at CAD 365143 plus prejudgment interest and costs.

Court Disposition

Appeal dismissed; cross-appeal allowed

Orders

  • Judgment for Naylor Group Inc. in the sum of CAD 365143 plus pre-judgment interest and costs
  • Appeal dismissed with costs; cross-appeal allowed with costs