Port Hawkesbury (Town) v. Borchedt Concrete Products Ltd.

Port Hawkesbury (Town) v. Borchedt Concrete Products Ltd. Court Court of Appeal Date 2008-02-20 Citation 2008 NSCA 17 Docket CA 274427 Judge/Registrar/Adjudicator MacDonald, J. Michael (Honourable Chief Justice) (CA); Hamilton, M. Jill (Honourable Justice); Oland, Linda L. (Honourable Justice) Document Type Decision Relations Library Sheet - Port Hawkesbury (Town) v. Borchedt Concrete Products Ltd. - 2008 NSCA 17 - 2008-02-20 - Library Sheet Decision Content NOVA SCOTIA COURT OF APPEAL Citation: Port Hawkesbury (Town) v. Borcherdt Concrete Products Ltd., 2008 NSCA 17 Date: 20080220 Docket: CA 274427 Registry: Halifax Between: The Town of Port Hawkesbury Appellant v. Borcherdt Concrete Products Limited Respondent Judge(s): MacDonald, C.J.N.S.; Oland and Hamilton, JJ.A. Appeal Heard: September 25, 2007, in Halifax, Nova Scotia Held: Appeal allowed in part per reasons of Oland, J.A.; MacDonald, C.J.N.S. and Hamilton, J.A. concurring. Counsel: Douglas A. Caldwell, Q.C. and Adriana L. Meloni, for the appellant David P. S. Farrar, Q.C. and Mark S. Freeman, for the respondent Reasons for judgment: [1] The litigation giving rise to this appeal concerns an invitation to tender issued by the appellant, the Town of Port Hawkesbury (“Town”). The respondent, Borcherdt Concrete Products Limited (“Borcherdt Concrete”), alleged that the Town failed to comply with a proper tendering process. In a decision dated October 26, 2006, Justice J.E. Scanlan held that the Town had breached its duty to ensure fair and equal treatment, its process amounted to bid shopping, and the Town itself had been a non-compliant bidder. He awarded Borcherdt $68,536.00, not including pre-judgment interest and costs. His decision is reported at 2006 NSSC 321, [2006] N.S.J. 426 (Q.L.). The Town appeals his decision and Order dated April 12, 2007. [2] For the reasons which follow, I would dismiss the appeal against the finding of liability. However, I would allow the appeal against damages, and reduce the amount awarded. Background [3] The facts are not contentious. The Town decided to build a $15,000,000 civic centre which included an arena with seating for approximately one thousand spectators. The Town issued invitations to tender for the manufacture, delivery, and installation of pre-cast concrete bleachers to two companies which specialized in pre-cast concrete products. One of those was Borcherdt Concrete. [4] The Town’s tendering documents included “Instructions to Bidders” which contained a privilege clause reading: The Owner reserves the right to reject any and all Tenders that, in its sole discretion, are not in the interests of the Town of Port Hawkesbury. [5] Before the original closing date and time on August 20, 2003, Borcherdt Concrete submitted a bid with in-floor heating of $259,000 plus HST. On that day, the Town extended the closing to August 27, 2003. During the intervening week Thomas Fiander, the project manager for the new civic centre, telephoned Donald Borcherdt, president of Borcherdt Concrete. He indicated that cost was going to be a problem. Also during that week, the Town issued an addendum to its invitation to tender seeking bids both with and without in-floor heating. [6] When the invitation to tender closed on the extended date, only Borcherdt Concrete had bid. Having realized that its bids both with and without in-floor heating would have to be higher because of increased production costs resulting from the Town’s tender stipulation that time was of the essence and its own likely commitment to another arena project, Borcherdt Concrete had increased each of its bids by $10,000. Its final tenders for the manufacture, delivery and installation of the concrete bleachers were $269,000 and HST with in-floor heating and $239,000 and HST without in-floor heating. [7] Borcherdt Concrete’s response complied with the terms of the Town’s tender call. Its ability to perform work of the requisite quality has not been questioned. However, its bids were well in excess of the Town’s budgetary estimate. In May 2003, the Town had had a budget prepared by Hanscomb (“Hanscomb Budget”). It was a Class “C” estimate, one much less detailed and accurate than a Class “A” estimate. The budgetary estimate for the manufacture, delivery and installation of the arena bleachers was $169,092. [8] On August 27, 2003, the day the extended tender closed, Mr. Fiander called Mr. Borcherdt, asking why his company’s bids had increased by $10,000 and if there was any way to come down. According to the project manager, he was left with the impression that, outside of heating, the most that might be saved was $20,000. [9] The Town did not reject the Borcherdt Concrete bids then nor during the next few weeks. Its building committee initially considered three options for the Town: accept the only bid, cast the bleachers in place, or precast the bleachers itself. On September 2, 2003 it instructed the project manager and architect to explore alternative methods to obtain and install the bleachers at a price within its budget. The Town’s architect contacted another concrete company. Without notifying Borcherdt Concrete, the Town entered into negotiations with that third party for a supply only contract for precast bleachers. In addition, some of the specifications for the work changed from those in its earlier invitation to tender. [10] Not until September 29, 2003 did the Town advise Borcherdt Concrete that its tender for the manufacture, delivery and installation of the bleachers had not been accepted. On October 6, 2003 the Town’s building committee authorized acceptance of the third party’s quote of $96,390 for the manufacture and delivery only of precast bleacher sections. The Town acted as general contractor, and used its employees to perform part of the installation work included in its original tender package. [11] Borcherdt Concrete brought an action against the Town for alleged breach of contractual obligations and breach of an implied term of good faith and fairness in the tendering process regarding the supply and installation of concrete bleachers for the arena. The Town’s defence relied inter alia on the privilege clause in the tender documents. The judge found that the Town had breached its duty to ensure fair and equal treatment, and awarded Borcherdt Concrete damages in the amount of $68,536 plus costs and pre-judgment interest. Issues [12] The Town appeals the decision both as to liability and as to damages. Its grounds of appeal pertaining to liability allege that: 1. The trial judge erred in law by failing to give proper consideration to the excessive amount over budget that the Borcherdt Concrete bid was. 2. He made an overriding and palpable error in fact by asserting that the Town did not go back to Borcherdt Concrete and attempt to negotiate. 3. He erred in law in determining that the Town had a duty to reject Borcherdt Concrete’s bid prior to entering into "negotiations" with other suppliers. 4. He erred in law and fact by determining that the Town’s actions amounted to bid shopping. 5. He erred in law and fact in concluding that the Town was a non‑compliant bidder on the project. As to damages, the Town submits that the trial judge erred in law by failing to take into account any negative contingencies in the assessment of the damage award. [13] I will begin with a consideration of the law of tendering. Afterwards, I will address the Town’s appeal against the finding that it had breached its duty of fair and equal treatment, and then its appeal against the award of damages. In each instance, I will set out the applicable standard of review before commencing my analysis of the merits of the grounds of appeal. The Tendering Process [14] The courts have long recognized the importance of the tendering process in the commercial sphere. In R. v. Ron Engineering and Construction (Eastern) Limited, [1981] 1 S.C.R. 111 at p. 121, Estey, J. emphasized that the “integrity of the bidding system must be protected where under the law of contracts it is possible so to do.” [15] Ron Engineering, supra established that an invitation to tender may become a binding contract upon the submission of a bid in response to that invitation. In Rhyno Demolition Inc. v. Nova Scotia (Attorney General), 2006 NSCA 16, Freeman, J.A. summarized the concept of Contract A and Contract B within the tendering process as set out in that decision. He wrote: [17] Tendering disputes are customarily considered in light of The Queen in Right of Ontario v. Ron Engineering & Construction (Eastern) Ltd., [1981] 1 S.C.R. 111 in which Estey J. developed the Contract A /Contract B framework in circumstances relevant to those in the present matter. Contract A arises when the offer contained in a tender call is accepted by a tenderer by submitting a compliant bid. Each tender submitted in response to the call creates a separate Contract A between each tenderer and the tender caller. There is only one Contract B, which is the contract awarded when a successful tender is accepted, terminating all the Contract A's. Many of the terms of Contract A are implied obligations of fairness imposed upon the party calling for tenders. Tenders must comply with the terms of the tender call. The contract awarded as Contract B must be consistent with the terms required by the tender. . . . [16] Whether or not the tendering process creates a Contract A depends on whether the parties intend to initiate contractual relations by submission of a bid and by the terms and conditions of the tender call: M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619 at ¶ 19. While the express terms set out in the tender documents govern Contract A, in certain circumstances Contract A may also contain certain implied terms: Double N Earthmovers Ltd. v. Edmonton (City), 2007 SCC 3 at ¶ 30. [17] It is also well-established that the owner is under an obligation to treat all bidders fairly and equally. In Martel Building Ltd. v. Canada, 2000 SCC 60 at ¶ 88, Iacobucci and Major, JJ. explained: . . . Implying an obligation to treat all bidders fairly and equally is consistent with the goal of protecting and promoting the integrity of the bidding process, and benefits all participants involved. Without this implied term, tenderers, whose fate could be predetermined by some undisclosed standards, would either incur significant expenses in futile bids or ultimately avoid participating in the tender process. They noted at ¶ 92 that the implied duty to treat all bidders equally and fairly is necessary to give business efficacy to the tendering process. See also Double N Earthmovers, supra where both the majority and the dissent acknowledged that there is an obligation on the part of owners to treat all bidders fairly and equally. [18] Having briefly summarized certain aspects of the law of tendering, I turn to an examination of the trial judge’s decision and an analysis of the grounds of appeal. The Trial Judge’s Decision on Liability [19] The trial judge identified the issue as whether the Town had dealt fairly with Borcherdt Concrete in the context of the tender process. After referring to Martel Building, supra he determined that the Town had breached implied terms, including the implied duty to treat all bidders fairly and equally. He stated: [15] In the case before the Court I am satisfied there was a duty owed to the plaintiff to ensure fair and equal treatment. In the context of the implied terms associated with Contract A in this case, I ask what does fair and equal treatment include? In Chinook Aggregates Ltd. v. Abbotsford (Municipal District) (1989), 35 C.L.R. 241 (B.C.C.A.), the Court concluded that an owner had breached the implied contractual obligation under Contract A by adopting a policy of preferring local contractors whose tenders were within ten percent of the lowest tender in awarding the contract, when that preference was not revealed by, nor stated in the tender documents. [16] In the circumstances of this case an implied term of the contract was that the defendant undertook not to entertain non‑compliant tenders nor to use information obtained from the tender and shop that bid around to other contractors so as to obtain the lower price. When the defendant decided it would perform part of the work which was included in the tender they in effect became a competitor. They were non‑compliant bidders in the process that saw the plaintiff continue to be exposed to risk and liability on Contract A. In addition they breached the implied terms of fairness when they negotiated with the third party without disclosing the negotiations to the plaintiff. Standard of Review [20] In Ulnooweg Development Group Inc. v. Wilmot, 2007 NSCA 49, Saunders, J.A. provided a succinct summary on the standard of review: [24] Deciding the appropriate standard of review depends on how one characterizes the particular question that is under scrutiny. [25] An appeal is not a second trial. Our powers at the appellate level are constrained. On questions of law the judge must be right. Such questions are tested on a standard of correctness. Matters of fact, or inferences drawn from facts are owed a high degree of deference and will not be disturbed unless they resulted from palpable and overriding error. Matters said to be mixed questions of fact and law are also tested using the palpable and overriding error standard, unless the mistake can be easily linked to a particular and extricable legal principle, which will then attract a correctness standard. Where, however, the legal principle is not readily extricable, the question of mixed law and fact will be reviewable on the standard of palpable and overriding error. See for example Housen v. Nikolaisen et al, [2002] 2 S.C.R. 235; H.L. v. Canada (Attorney General), [2005] 1 S.C.R. 401, [2005] S.C.J. No. 24; Campbell‑MacIsaac v. Deveaux and Lombard, [2004] N.S.J. No. 250, 2004 NSCA 87; McPhee v. Gwynne‑Timothy [2005] N.S.J. No. 170, 2005 NSCA 80; Flynn v. Halifax (Regional Municipality) [2005] N.S.J. No. 175, 2005 NSCA 81; and Secunda Marine Services Ltd. v. Liberty Mutual Insurance Company, [2006] N.S.J. No. 266, 2006 NSCA 82. Analysis The Duty of Fair and Equal Treatment [21] The parties to this appeal agree that the Town was obliged to treat all bidders fairly and equally. The Town maintains that it fulfilled that obligation. It argues that in concluding that the Town breached its duty of good faith and fairness during the tendering process, the trial judge made errors of fact, gave inappropriate weight and consideration to certain factors, and made inferences not supported by the facts or the law. [22] I will first address the grounds of appeal relating to the amount the bids exceeded the Town’s budgetary estimate, and to the judge’s assertions that the Town did not go back and attempt to negotiate and that it had a duty to reject Borcherdt Concrete’s bids before dealing with other suppliers. [23] According to the Town, the trial judge failed to properly consider how much over budget the Borcherdt Concrete bids were, and did not appear to appreciate the financial constraints and consequences to the Town. It emphasizes that the Borcherdt Concrete bids were approximately 59% higher than its budget for the work with in-floor heating and approximately 41% higher than that without in-floor heating. The Town submits that the privilege clause in the tender documents authorized the Town to reject any and all bids not in its best interests. [24] It is evident from the trial judge’s decision that he understood that the bids by Borcherdt Concrete were considerably higher than the amount the Town had estimated in the Hanscomb Budget. The judge accepted Mr. Fiander’s evidence in this regard, and expressly stated that Borcherdt Concrete’s bid “was substantially over budget.” (Reasons, ¶ 4). Moreover, his discussion addressed Borcherdt Concrete’s concerns regarding the Town’s reliance on the Class “C” estimate in the Hanscomb Budget. The judge determined that, in the circumstances of this case, it made no material difference whether the Hanscomb Budget was in any way deficient. He was satisfied that it was not necessary that the Town get a Class “A” estimate before being entitled to assume the budgetary amount in the Class “C” estimate was appropriate. Clearly, he understood the financial aspects involved in this litigation. I am not persuaded that he made any palpable and overriding error of fact. [25] Having recognized that Borcherdt Concrete’s bids were beyond the estimate, the judge then proceeded to consider whether the Town had breached its implied duty to Borcherdt Concrete while that bidder remained at risk under Contract A. As will be explained further in my analysis relating to the privilege clause, it is my view that in doing so, the judge made no reversible error. [26] I am unable to agree with the Town’s submission that the trial judge made an overriding error in fact in concluding that the Town did not go back and negotiate with Borcherdt Concrete. [27] The Town’s argument is premised on that portion of the judge’s decision underlined in the following extract: [9] Shortly after the closing date of August 27th the town began negotiating with a third party, one of the plaintiff’s competitors, regarding the supply and installation of concrete bleachers and stairs for the arena. The plaintiff was not informed of these third party negotiations and the town was not negotiating with the plaintiff. Not only was the defendant negotiating with a third party, in the end the defendant performed a portion of the work which was included in the original tender package. In that sense they were negotiating “with themselves”. It is worth noting in that regard that the town was the general contractor on this project. Because as the town came to perform part of the work which was tendered by the plaintiff the town was in essence shopping the tender to themselves as much as they were shopping it to the third party. The town knew what the plaintiff (sic) tender amount was. The plaintiff was at a distinct disadvantage in not having the town go back to the plaintiff to renegotiate the contract or to allow them to take part in the discussion as between the town and third party. [Emphasis added] [28] The trial judge does not say that the Town did not go back to Borcherdt Concrete to discuss its bids, but rather that it did not go back to renegotiate. He heard evidence from Mr. Fiander and Mr. Borcherdt regarding their telephone conversations. Both, the first after Borcherdt Concrete’s initial bid when Mr. Fiander indicated that the cost was going to be a problem, and the second after the closing of the extended tender, were brief. The second lasted some six minutes. According to Mr. Fiander, it simply consisted of his inquiry whether costs could be cut somewhere, and Mr. Borcherdt’s indication that, other than removal of the in-floor heating, it might be possible to cut a further $10,000 to $20,000 from his company’s tender if changes were made to the specifications. The Town then contacted a third party and entered into negotiations for a supply only contract, which included changes to the specifications. It did not contact Borcherdt Concrete again before sending its letter rejecting its bid, or before awarding the revised project to the third party. According to Mr. Borcherdt’s testimony, it was not unusual not to find out anything for a period after closing. He thought that meetings were probably going on, and had no idea what else was transpiring during that interim. [29] I see no overriding error of fact in the judge’s statement that the Town had not gone back to Borcherdt Concrete to renegotiate. That the Town’s involvement with this bidder did not amount to negotiations was a conclusion that could reasonably be drawn from these events. [30] The Town also argues that the scope of the tender documents and, in particular, the privilege clause, authorized it, in its discretion, to reject any and all bids that were not in its best interest. For convenience, I again set out the privilege clause in the Town’s tender documents: The Owner reserves the right to reject any and all Tenders that, in its sole discretion, are not in the interests of the Town of Port Hawkesbury. [31] The trial judge in considering this clause stated: [11] The privilege clause in the tender package affords substantial discretion to the town. It does not give an unfettered discretion to simply disregard the rights and interests of the plaintiff in the tendering process. I again refer to the fact that after the extended closing date expired the town did not advise the plaintiff that its tender was not accepted. Mr. Fiander, on behalf of the town, indicated that he felt there would be no purpose served in going back to the plaintiff because after discussing the issue with Mr. Borcherdt he could not anticipate the plaintiff would have been able to reduce his price so as to come within budget. I ask rhetorically, how could the town act fairly as regards the plaintiff without rejecting his bid or going back to the plaintiff to indicate they were negotiating with a third party and considering the option of having town workers perform part of the contract. This was all done during a time when Contract A still was valid and the plaintiff (sic) tender had not been rejected. [Emphasis added] [32] The inclusion of a privilege clause in tender documents is not a rare occurrence and such provisions have been examined in several decisions. In George Wimpey Canada Ltd. v. Hamilton-Wentworth (Regional Municipality), [1997] O.J. No. 3644 aff’d. Ontario Court of Appeal [1999] O.J. No. 3273, the privilege clause provided that the Regional Municipality reserved the right to reject any and all bids and that the lowest bid will not necessarily be accepted. The contract was awarded not to the plaintiff, which had submitted the lowest bid, but to the second lowest tender, with no reasons given. After determining that, in the circumstances, the plaintiff had established that the Regional Municipality did not act fairly or in good faith, Cameron, J. commented at ¶ 30: 30 This finding does not strip the privilege clause of all meaning when used in a contract such as this. The clause, or one like it, is very common in construction contracts including contracts for road grading, blasting, gravelling or paving. It permits the owner to reject the low bid in the case of some “force majeure”, or if it decides not to proceed with the project because the bids are above budget, or changed circumstances negate the viability of the project or adversely affect the low bidder’s qualifications assumed in the pre-qualification standards. It would also permit rejection based on a pre-published policy. There was no such publication here. [33] The privilege clause contained in the call for tenders in Martel Building, supra, stated that the Department of Public Works was not obligated to accept the lowest or any bid. When the project was not awarded to Martel, which had submitted the lowest compliant bid, Martel sued. Iacobucci and Major, JJ. concluded that in the circumstances of that case, it was appropriate to imply a term to treat all bidders fairly. They continued: 89 A privilege clause reserving the right not to accept the lowest or any bids does not exclude the obligation to treat all bidders fairly. Nevertheless, the tender documents must be examined closely to determine the full extent of the obligation of fair and equal treatment. In order to respect the parties' intentions and reasonable expectations, such a duty must be defined with due consideration to the express contractual terms of the tender. A tendering authority has "the right to include stipulations and restrictions and to reserve privileges to itself in the tender documents" (Colautti Brothers, supra, at para. 6). (Emphasis added) [34] For an illustrative decision involving a privilege clause and the intention of the parties, see Wind Power Inc. v. Saskatchewan Power Corp., [2002] S.J. No. 287 (C.A.). [35] The statements in ¶ 89 from Martel, supra set out above were reiterated in Stanco Projects Ltd. v. British Columbia (Ministry of Water, Land and Air Protection), 2006 BCCA 246 (C.A.). Stanco responded to the Province of British Columbia's request for proposals relating to water reservoirs or tanks. The instruction to bidders contained a privilege clause reserving to the Province the right to reject any or all bids and to not necessarily award the contract to the lowest bidder. Stanco was the low bidder for four tanks, two each of two different types. Shortly after the bids were opened, the Province decided to proceed with only one of one of those types. It asked Stanco for the price for a single tank and, without advising that company, also solicited prices from others of the bidders. After the contract for that tank was awarded to another bidder, Stanco successfully sued the Province for damages for breach of contract. [36] On appeal, the Province argued that any implied duty of fairness must be defined with due consideration to the express terms of the tender, particularly any privilege clause. In rejecting this argument, Ryan and Newbury, JJ.A., for the court stated: [51] The Province says that this "privilege clause" was a clear and unequivocal warning that the Province was under no obligation to award the contract to any bidder, and that it cannot be held liable because it did not. [52] The privilege clause in question here has been referred to in other cases as a "bare bones" privilege clause. In Martel, supra, Justices Iacobucci and Major noted, at para. 89 that, "[a] privilege clause reserving the right not to accept the lowest or any bids does not exclude the obligation to treat all bidders fairly". The tender documents must be examined closely to determine the full extent of the obligation of fair and equal treatment. [53] The trial judge did not find that the Province had breached its duty by failing to award the contract to the lowest bidder. She found that the Province had breached its duty to treat all bidders fairly when Westport, having learned of Stanco's bid prices, was permitted to undercut Stanco and re‑bid the contract. There was nothing in the tendering document which would permit the Province to engage in post‑closing negotiations or to treat bidders unequally or unfairly. [37] In Health Care Developers Inc. v. Newfoundland (1996), 141 Nfld. & PEIR 34, the Newfoundland Court of Appeal adopted the summary of the principles enunciated in the jurisprudence since Ron Engineering, supra, as set out in Murphy v. Alberton (Town) (1993), 114 Nfld. & P.E.I.R. 34. After noting that the courts have struggled with reconciling freedom of contract and fairness, Cameron, J.A. continued: [33] It is, however, possible to discern certain generally accepted principles from the cases decided since Ron Engineering. The trial judge adopted those enumerated by Jenkins J., of the Prince Edward Island Supreme Court, in Murphy v. Alberton (Town) (1993), 114 Nfld. & P.E.I.R. 34, 356 A.P.R. 34 (P.E.I.T.D.), at p. 43. Jenkins J., stated: ... upon contract A coming into being: a. there arises at law rights and obligations of the parties that are consistent with the protection and promotion of the integrity of the bidding system where under the law of contracts it is possible to do so. b. the owner owes a general duty to treat all bidders fairly. c. an owner has the right to include in the tender documents stipulations and restrictions on the rights of bidders and to reserve privileges to the owner. d. an owner does not have the right on consideration of competing bids to rely upon undisclosed terms and conditions. e. ‘Lowest or any tender not necessarily accepted’ reserves conditionally to the owner the privilege to decide not to proceed with the work at all, but does not allow the owner to: (i) choose comparatively among the bidders based on criteria that has not been disclosed to the bidders; or (ii) to award to another bidder or another person something other than contract B. f. general custom in bidding, and particular local customs, can result in implied contractual rights. g. an owner does not have the right to pass over properly filed bids and enter into contract B with a bidder whose bid is informal, or invalid. h. where there is a breach of contract A, the measure of damages can include (i) the cost of preparation of the bid; and (ii) upon the low bidder proving he would have obtained the contract, the estimated loss of profit on the work. I, too, would adopt the summary of Jenkins J., of principles enunciated by the cases since Ron Engineering. [Emphasis added] [38] The case law pertaining to privilege clauses establishes that a tendering authority may include in its tender documents clauses reserving privileges to it. A clause reserving the right to reject any and all bids permits the authority not to proceed in certain circumstances. These include economic unfeasibility, such as when the bids are above budget or the project is no longer viable, and reliance on pre-published policy: George Wimpey Canada Ltd., supra. The express terms of the tender determine the extent of the obligation of fair and equal treatment, and a privilege clause reserving the right not to accept the lowest or any bids does not exclude that obligation: Martel, supra. Such a clause does not authorize awarding a contract based on undisclosed criteria or awarding something other than Contract B to another person or bidder: Murphy, supra. [39] In arguing that the privilege clause in its tender documents gave it the right to reject any bid not in its best interests, and that the judge erred by failing to give “proper consideration” to how much Borcherdt Concrete’s bids were above budget, the Town relies on Colautti Brothers Marble Tile and Carpet (1985) Inc. v. Windsor (City), [1996] O.J. No. 4527 (Gen. Div.). The privilege clause in the City’s tender documents for a flooring contract reserved to it the right “to accept or reject any and all tenders.” The plaintiff’s was the only bid submitted. When the City opened it, the unit prices used by the plaintiff became public. The bid was approximately 40% over the City’s budget. Through negotiations, the bid was lowered, but remained 20% above that budget. The City did not accept or reject the bid. It re-tendered by breaking the flooring package into three and inviting the plaintiff and others to bid. The plaintiff did not do so because of other project commitments at the time. The City obtained bids that came within its budget. It never advised the plaintiff that its bid was being rejected. The plaintiff sought a declaration that the City was obliged to award it the contract and for damages for breach of contract. [40] Valin, J. found that the City was entitled to rely on the privilege clause and was not required to accept the one bid received. He explained at ¶ 34-35: 34 I find that, once the plaintiff's tender was opened, the City acted properly. The plaintiff's bid was substantially in excess of the City's budget for the work. The project manager attempted to effect cost savings in certain areas of the work and invited the plaintiff to quote on those areas. During his cross‑examination, Dr. Becker agreed that the persons in charge of the project for the City had a responsibility to try to bring the plaintiff's bid closer to budget. At the conclusion of those negotiations, the plaintiff's price was still 20% above the City's budget. While the City owes a duty to bidders to conduct itself in a manner that maintains the integrity of the tender system, it has the additional duty to its rate payers to act in a financially responsible manner. In the circumstances, I believe that the City was entitled to decide that it was not going to accept the plaintiff's tender. The fact that the City did not formally reject the plaintiff's tender is of no consequence. The crucial fact is that the City did not accept the plaintiff's tender. 35 In my view, the fact that the City had a budget for the work on which it invited tenders does not equate to an undisclosed term that is inconsistent with the tendering process. Indeed, the City would have been acting in an irresponsible manner if it had not established a budget for the work before inviting tenders. I also find that, once it became apparent to the City that it could not negotiate a price for the work with the plaintiff that was within or reasonably close to its budget, it was proper for the City to divide the work into three packages and to re‑tender the work on that basis. I therefore conclude that, in the circumstances of this case, the City was not obligated by an implied duty of fairness to accept the Plaintiff's bid, even though it was the only bid received. [Emphasis added] [41] While the City succeeded on its argument based on the privilege clause, Valin, J. ultimately determined that the City had breached its duty of fairness in another way. When it opened the plaintiff’s bid, a Contract A was formed. Contrary to its instructions to bidders, the City failed to advise the plaintiff that only one bid was received, failed to negotiate an agreement under which its bid might be opened, and failed to offer to return its bid unopened. [42] As indicated earlier, the record demonstrates that the trial judge in the matter under appeal appreciated that Borcherdt Concrete’s bids were substantially higher than the Town’s budgetary estimates. That was neither ignored nor overlooked. However, the Town submits that the judge failed to give this aspect “proper consideration.” It argues that had he done so, he would have held that the Town was entitled to rely on the privilege clause. [43] A reading of the judge’s decision shows that in his view, the fact that the bids were considerably over budget was not determinative of the critical issue of whether the Town had breached its implied duty of fairness to the bidder. He was correct in law in stating: [11] The privilege clause in the tender package affords substantial discretion to the town. It does not give an unfettered discretion to simply disregard the rights and interests of the plaintiff in the tendering process. ... It is noteworthy that in Colautti Brothers, supra, where it was held that the tendering authority could rely on the privilege clause, the judge there proceeded to consider other aspects of the case in order to decide whether there had been any breach of duty of fairness. [44] In my view, the trial judge neither erred by failing to give proper consideration to the excessive amount over budget that the Borcherdt Concrete bid was, nor by conducting an analysis beyond the privilege clause. The existence of such a provision, as here, is not a final answer to a claim of breach of the duty of fairness. The full extent of the obligation of fair and equal treatment remained to be determined, and this is what the judge proceeded to do. In that regard, there was no evidence before him that its tendering documents permitted the Town, post-closing, to change the process and to contact a third party and discuss a scope of work different from that in its original tender. Nor am I persuaded that he erred in determining that, in the circumstances of this case, the Town had an obligation to notify Borcherdt Concrete that its bid had been rejected, or at least that it was negotiating with a third party. Bid Shopping and Non-Compliant Bidder [45] I will now consider the Town’s submission that the trial judge erred in law and principle when he determined that its actions amounted to bid shopping and described the Town itself as a non-compliant bidder on the arena project. [46] In his decision, the trial judge stated: [9] . . . Not only was the defendant negotiating with a third party, in the end the defendant performed a portion of the work which was included in the original tender package. In that sense they were negotiating “with themselves”. It is worth noting in that regard that the town was the general contractor on this project. Because as the town came to perform part of the work which was tendered by the plaintiff the town was in essence shopping the tender to themselves as much as they were shopping it to the third party. The town knew what the plaintiff (sic) tender amount was. The plaintiff was at a distinct disadvantage in not having the town go back to the plaintiff to renegotiate the contract or allow them to take part in the discussion as between the town and the third party. . . . [16] In the circumstances of this case an implied term of the contract was that the defendant undertook not to entertain non‑compliant tenders nor to use information obtained from the tender and shop that bid around to other contractors so as to obtain the lower price. When the defendant decided it would perform part of the work which was included in the tender they in effect became a competitor. They were non‑compliant bidders in the process that saw the plaintiff continue to be exposed to risk and liability on Contract A. In addition they breached the implied terms of fairness when they negotiated with the third party without disclosing the negotiations to the plaintiff. . . . [23] In this case, the processes followed by the defendant amounted to bid shopping. There is no evidence the defendant disclosed evidence to the third party as regards the details of the plaintiff's bid. Inevitably they at least had that information to use as a yardstick in measuring the third party bid. [26] . . once the tender was let out and Contract A was formed, the plaintiff in this case was exposed to certain risks. The defendant was then not entitled to disregard the interests of the plaintiff and use that bid package to shop the bid to themselves or other nonbidding parties. In doing so Mr. Fiander simply did not appreciate the extent of the obligation not (sic) to the plaintiff. [Emphasis added] [47] In Double N Earthmovers, supra at ¶ 56, the decision of the majority of the Supreme Court of Canada described bid shopping as follows: 56 In Naylor Group Inc. v. Ellis‑Don Construction Ltd., [2001] 2 S.C.R. 943, 2001 SCC 58, at para. 9, the Court quoted a definition of bid shopping that described the practice as follows: ... "the practice of soliciting a bid from a contractor, with whom one has no intention of dealing, and then disclosing or using that in an attempt to drive prices down amongst contractors with whom one does intend to deal" . . . . Other courts have described bid shopping somewhat more broadly, as "conduct where a tendering authority uses the bids submitted to it as a negotiating tool, whether expressly or in a more clandestine way, before the construction contract has been awarded": see Stanco Projects Ltd. v. British Columbia (Ministry of Water, Land and Air Protection) (2004), 242 D.L.R. (4th) 720, 2004 BCSC 1038, at para. 100, aff'd. (2006), 266 D.L.R. (4th) 20, 2006 BCCA 246. [48] As the Town points out and the judge stated in his reasons, there was no evidence that the Town ever disclosed the particulars of the Borcherdt Concrete bid to the third party during their negotiations. The circumstances here are not captured by the narrow definition of bid shopping set out in Naylor Group Inc. v. Ellis‑Don Construction Ltd., [2001] 2 S.C.R. 943. [49] However, Double N Earthmovers, supra, also referred to a broader definition. As noted in the British Columbia Court of Appeal’s decision in Stanco, supra, at ¶ 57, the judge of the British Columbia Supreme Court concurred with the view of Gruchy, J. in Western Plumbing and Heating Ltd. v. Industrial Boiler -Tech Inc. (2000) 180 N.S.R. (2d) 41 (S.C.) that the term bid shopping should be given an expansive interpretation, so as to include: . . . conduct where a tendering authority uses the bids submitted to it as a negotiating tool, whether expressly or in a more clandestine way, before the construction contract has been awarded, with a view to obtain a better price or other contractual advantage from that particular tenderer or any of the others. What I am speaking of here is bid manipulation which can potentially encompass as vast a spectrum of objectional practices as particular circumstances may make available to a motivated and inventive owner, intent on advancing its own financial or contractual betterment outside the boundaries of the established tendering protocol. [Para. 100.] In Western Plumbing, supra, Gruchy, J. spoke of the value of the integrity of the bidding system, described the process of bid shopping as destructive to the tendering system, and set out this broader definition of bid shopping. [50] As is evident from the decision excerpts set out earlier, the trial judge made extensive factual findings on this issue. There were no express or implied terms on the Town’s tender documents that would permit the Town to renegotiate the scope of the work with a third party, and to award it a contract. [51] In my view, the trial judge correctly identified the legal test on the issue of bid shopping and did not err in his application of that test. Moreover, in characterizing the Town, which acted as the general contractor and whose employees completed some 50% of the installation work, as a non-compliant bidder, he made no overriding and palpable error of fact. Construction Contract Guidelines [52] In assessing the issue of fairness, the trial judge referred to the Construction Contract Guidelines as prepared by the Province of Nova Scotia Office of Economic Development, Procurement Branch (the “Guidelines”). While the Town agrees that the Guidelines are of assistance in assessing its actions, it submits that the judge did not adequately apply them to the particular circumstances before him. [53] The Guidelines include the following. CCG 38 EFFECT OF BIDS HIGHER THAN THE ESTIMATED CONTRACT VALUE .1 Where all Bids submitted in response to an invitation to bid are higher than the estimated contract value, bids shall not necessarily be invalidated for this reason. .2 If the lowest competent Bid is within 15% of the estimated contract value, the Contracting Authority may choose to: .1 Award the contract for the bid amount. .2 Negotiate changes in the scope of the work with the lowest competent bidder to achieve an acceptable contract price. .3 Failing negotiation, or if the lowest Competent Bid is greater than 15% over the estimated contract value: .1 The Contracting Authority may make changes in the scope of work and invite the three lowest competent original Bidders to rebid. .2 If these invited Bids fail to bring a Bid to within 15% of the estimated contract value and subject to confirmation of the Contracting Authorities budget, the Contracting Authority may take whatever action which in its opinion will result in an acceptable contract price. [54] In referring to the Guidelines, the trial judge stated: [19] As I noted above, I accept that however imprecise a Class C budget might be it was the budget relied upon by Mr. Fiander and the town. I find no fault in their reliance and using that as a parameter to establish a budgetary amount for the work for the purpose of assessing bids. Obviously the plaintiff’s tender was not within fifteen percent of assessing bids. Obviously the plaintiff’s tender was not within fifteen percent of the estimated contract value as referenced in CCG 38. The guidelines would suggest CCG 38.3(1) and (2) would apply and the defendant could make changes in the scope of the work and invite, in this case, the only bidder to rebid. If this process failed to bring the tender within fifteen percent of the estimated contract value, then the budget should have then been confirmed by the contracting authority. It was at that state [sic] the Class C budget may have been subjected to closer scrutiny. The defendant then could take whatever action, which in its opinion, would result in an acceptable contract price. That is not to suggest the duty of fairness would not continue and for example require the town to formally reject the plaintiff’s bid at that stage. [20] In the circumstances of this case, what I suggest as a bare minimum for the defendant was to advise the plaintiff there was to be a change in the scope of the work. The scope of the work was altered by the defendant as it negotiated with the third party. For example, there was a requirement in the initial bid for pressure testing of the in floor heating tubing in the pre-caste concrete. That requirement for a twenty-four hour pressure testing was deleted for the third party. In addition, the defendant did portions of the installations. In this regard it is of some importance to note they used town employees. In doing so they could do that at cost, without any requirement for a profit component or contribution to overheads in relation to town employees. [21] The plaintiff was never given an opportunity to engage in any process similar to the process as set out in CCG 38. In saying this I emphasize that the Construction Contract Guidelines are guidelines and nothing more. Even though they are only guidelines they are a measure in assessing what may be appropriate in terms of fair treatment of the plaintiff. [Emphasis added] [55] The Town submits that Guideline 38.2 uses a benchmark of 15% when dealing with bids higher than budget amount. It points out that here the Borcherdt Concrete bid was much higher over budget, and that the Town only received a single bid. [56] It is clear from ¶ 20 of his decision that the judge recognized that the situation before him did not fit squarely within Guideline 38.2. Moreover, he himself emphasized that the Guidelines were only guidelines. They were included only to illustrate what he considered to be the bare minimum, post-closing obligation of the Town, namely to advise Borcherdt Concrete that there was to be a change in the scope of the work. (Reasons, ¶ 20) Failure to follow them was not described as in any way decisive in his analysis. I am not persuaded that he relied on the Guidelines in such a manner or to such an extent that appellate intervention is warranted. [57] In summary, it is my view that the trial judge did not make any reversible errors in finding that the Town had breached its implied duty of fair and equal treatment. I would dismiss the Town’s appeal against liability. Damages [58] After finding that the Town had breached its obligations under Contract A, the trial judge awarded Borcherdt Concrete the total loss of profit without any discount. The Town submits that he erred in law in his assessment of damages. Specifically, it argues that he failed to consider that the reversal of any unfairness would not have resulted in the parties following through with Contract B. Before examining its submissions, I will address the standard of review and how damages are to be assessed in a tendering case. Standard of Review [59] On the issue of the standard of review to be applied to a trial judge’s damages assessment, Saunders, J.A. (dissenting only on the extent to which general damages ought to be reduced) wrote for the Court in 2703203 Manitoba Inc. v. Parks, 2007 NSCA 36: [76] We will not disturb a Trial Judge’s award of damages unless it can be demonstrated that the judge applied a wrong principle of law or has set an amount so inordinately high or low as to be a wholly erroneous estimate. See, for example, Toneguzzo‑Norvell et al v. Savein et al 1994 CanLII 106 (S.C.C.), (1994), 110 D.L.R. (4th) 289 (S.C.C.); Campbell‑ MacIsaac v. Deveaux & Lombard, 2004 NSCA 87 (CanLII), 2004 NSCA 87; McPhee v. Gwynne‑Timothy, 2005 NSCA 80 (CanLII), 2005 NSCA 80; and Ken Murphy Enterprises Ltd. v. Commercial Union Assurance Company of Canada, 2005 NSCA 53 (CanLII), 2005 NSCA 53. Analysis [60] The general measure of damages for breach of contract is expectation damages: M.J.B. Enterprises v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619 at ¶ 55. In Naylor Group Inc., supra, Binnie, J. for the Court stated: 73 The well‑accepted principle is that the respondent should be put in as good a position, financially speaking, as it would have been in had the appellant performed its obligations under the tender contract. The normal measure of damages in the case of a wrongful refusal to contract in the building context is the contract price less the cost to the respondent of executing or completing the work, i.e., the loss of profit: M.J.B. Enterprises Ltd., supra, at p. 650; Twin City Mechanical v. Bradsil (1967) Ltd. (1996), 31 C.L.R. (2d) 210 (Ont. Ct. (Gen. Div.)), at pp. 225‑26; S. M. Waddams, The Law of Damages (3rd ed. 1997), at para. 5.890; McGregor on Damages (16th ed. 1997), at para. 1154. [61] However, a breach of Contract A, as here, does not automatically lead to damages equivalent to the loss of profit. Damage awards in the tendering context can fall along a spectrum ranging from nominal damages, through the cost of bid preparation, to an award of lost profit. [62] The summary of the principles found in case law since Ron Engineering, supra, as set out in Murphy, supra which was adopted by the Newfoundland Court of Appeal in Health Care Developers Inc., supra, reads in part: . . . upon contract A coming into being: . . . h. where there is a breach of contract A, the measure of damages can include: (i) the cost of preparation of the bid; and (ii) upon the low bidder proving he would have obtained the contract, the estimated loss of profit on the work. [Emphasis added] [63] The plaintiff bears the onus of proving that it suffered damages on a balance of probabilities. It is also the plaintiff that must substantiate the connection between the breach of Contract A and the loss of Contract B. In M.J.B. Enterprises, supra at ¶ 57, Iacobucci, J. for the Court stated: Even if the evidence supports that, on a balance of probabilities, Contract B would have been awarded to the appellant, it still must be determined whether the loss of Contract B, although caused by the breach of Contract A, is nonetheless too remote. The classical test regarding the remoteness of damages is that provided in Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145, at p. 151, per Alderson B.: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it. [64] Where it was satisfied that there had been a breach of the duty of fairness but also determined that the bidder would not have been awarded Contract B in any event, a court may decline to award any damages for the breach. See, for example, Martel, supra. [65] Where satisfied that, but for the owner’s breach of contract, the plaintiff would have been awarded Contract B, the courts have awarded the full profit that the plaintiff would have earned, had it been awarded Contract B. See, for example, M.J.B. Enterprises, supra at ¶ 55-56; Thompson Bros. (Const.) Ltd. v. Wetaskiwin (City), [1997] A.J. No. 822 (Q.B.). [66] Where the plaintiff was unable to establish a link between the breach of Contract A and the loss of anticipated profit on Contract B, it may, in certain circumstances, still be entitled to the cost of its bid preparation. See, for example, Colautti Brothers, supra at ¶ 41. [67] Where there is uncertainty as to whether the plaintiff has established a causal connection between the breach of Contract A and the loss of profit of Contract B, a discount may be imposed on the plaintiff’s profit figure. See, for example, Starco Enterprises Ltd. v. Stephenville Airport Corporation, [2005] N.J. No. 266 (S.C.). In Maritime Excavators (1993) Ltd. v. Nova Scotia (Attorney General) (2000), 183 N.S.R. (2d) 236 (S.C.), Tidman, J. addressed this in assessing damages for breach of a Contract A: [100] After considering all the circumstances, I am of the view that the plaintiff is entitled to 100% of its assessed damages. First of all, if I am correct in finding that the plaintiff should have been awarded the contract as the lowest compliant bidder, there is no reason to discount based on the loss of a chance because the plaintiff in those circumstances would have been awarded the contract. If I am incorrect in that finding, I am satisfied on the evidence that even if the invocation of the privilege clause was open to the defendant it would not have done so and would have accepted the plaintiff's bid. Having so decided I see no reason to engage in the speculative process of arriving at a discount percentage to apply to the plaintiff's assessed damages. [68] P. Sandori and W. M. Piggott in Bidding and Tendering What is the Law? 3rd Ed. (Markham, Ontario, 2004) Butterworths, explain at p. 276: Where the breach of Contract A is judged to have resulted in the loss of Contract B, the contractor is usually awarded the profit it would have earned on the lost project. Because bidding and contracting is more art than science, the court takes the contractor's anticipated profit figure with a grain of salt. Typically, three discounts may be considered by the court: · The first is to give effect to the possibility/probability that Contract B would not have been awarded to the contractor (maybe the chances were good but not absolutely certain). · The second is to allow for other circumstances, such as unanticipated negative project conditions. · The third addresses whether the contractor took steps to reduce (mitigate) its losses by seeking replacement work. [69] I turn then to the trial judge’s assessment of damages. In awarding Borcherdt Concrete the total loss of profit without any discount, he set out his reasons as follows: [27] The defendant's position in relation to the damages claim is that the plaintiff must prove damages on a balance of probabilities. The defendant suggests that the plaintiff would not have been a successful bidder in any event because the bid was substantially over budget and the contract would not have been awarded to the plaintiff under any circumstances. I again refer to the fact that had the budget been subjected to closer scrutiny the budgetary error in the square footage may have been noted. Had that occurred the plaintiff's tender may have appeared more reasonable. Although the work did come within $2,000 of the town budget some of the specs were changed for the third party. For example, they were not required to pressure test the in‑floor heating in the pre‑caste [sic] sections. In addition, the contract was split so the town employees performed part of the installation work. Even though there was an allocation made for labour costs for town employees there was no contribution to other overheads or profit for those employees. In the end it is difficult to determine whether in fact the town came within $2,000 on the Hanscomb budget. Even if that was accurate it is not an answer to the claim that the defendant breached its duty of fairness owed to the plaintiff in the tender process. [28] I am not convinced the plaintiff would not have been awarded a contract. I point again to the fact that the square footage estimated by the defendant was in error and the plaintiff was one of only two companies initially deemed able to do the work. Had the defendant continued to work with the plaintiff in eliminating or reducing testing of in floor heat tubes and eliminating caulking warranties in addition to alteration of delivery schedules as eventually occurred, it may well be that the plaintiff could have been successful in winning the contract. In addition a complete analysis of the cost of using town employees may have disclosed that the eventual cost was closer to the plaintiff's bid costs than the defendant now suggests. [Emphasis added] [70] The judge correctly observed that the plaintiff has the burden of proving damages. He was satisfied that, at a minimum, Borcherdt Concrete should be compensated for the cost of preparing its tenders. He then stated that the proper measure exceeded that cost, and was to be based on loss of profit. In awarding damages of $68,536.00, he reviewed the evidence pertaining to the gross profits as claimed, the direct costs of production, and the mark-up on the total costs of production (Reasons, ¶ 40). [71] However, nowhere did the judge determine that Borcherdt Concrete had proved that, but for the Town’s breach of Contract A, it would have been awarded Contract B. His decision does not include a finding that the plaintiff would have succeeded. In my view, his statement that “I am not convinced the plaintiff would not have been awarded a contract” does not signal that Borcherdt Concrete had established the requisite link between the Town’s breach and its loss of anticipated profit. I do not accept that the judge’s use of double negatives amounts to a positive statement, one sufficiently unequivocal as to ground a finding of a causal connection between the breach of Contract A and the loss of profit of Contract B. Where that connection had not been established, the judge erred in principle by awarding the total loss of profits. [72] In Naylor, supra at ¶ 80, the Supreme Court of Canada stated that appellate courts are obliged to interfere and to substitute their views of a proper award in certain circumstances, including where the trial judge had made an error in legal principle. As shown in ¶ 76-86 of that decision, both the Ontario Court of Appeal and the Supreme Court of Canada themselves conducted damage assessments. [73] I reject the Town’s submission that the proper measure of damages in this case is limited to $1,000, the cost of preparing the tenders. The Town has not persuaded me that there are reasons to restrict the damages in this way in the circumstances of this case. [74] In oral submissions, the Town argued that alternatively, the trial judge ought to have considered that had negotiations ensued between it and Borcherdt Concrete, they would have been for a supply only contract such as that the Town ultimately entered into with the third party, rather than for the original proposal for the manufacture, delivery and installation. It also suggests that the Town would only have proceeded with the supply only contract if it came to around $96,000, the same price as presented by the third party. It points out that, according to Mr. Borcherdt’s testimony, his company charged a 35% markup. The Town takes the position that a proper award of damages would be calculated by taking 35% of $96,000, which would come less than $34,000. [75] I have two difficulties with the Town’s oral argument. First, there was no evidence as to how the Town would have proceeded in further negotiations with Borcherdt Concrete, much less how or how much that company would have bid on the same supply only contract. The approach suggested is too speculative to be of value. Second, the Town cites no legal authority for assessing damages in this manner. Consequently, I reject this submission. [76] As explained earlier, discounts may be considered by the court to give effect to the possibility or probability that Contract B would not have been awarded to the bidder. In order to decide the extent of the discount, it is necessary to determine the likelihood that the Town would have accepted the bid presented by Borcherdt Concrete for the manufacture, delivery and installation of the bleachers with in-floor heat, which is what the Town obtained in the final result. It is undisputed that the bid by Borcherdt Concrete far exceeded the Town’s budgetary estimates. Again, that bid was $269,000 and HST with in-floor heating. That figure was approximately 59% higher than the one the Town had in the Hanscomb Budget, which was $169,092. The Borcherdt Concrete bid was virtually $100,000 over budget. [77] Mr. Fiander testified that, as early as the original closing, he knew that he couldn’t recommend acceptance of a single price bid of $269,000. Very quickly after Wednesday, August 27, 2003, the day the Town’s extended tender closed, he changed the process. By Tuesday, September 2, the Town’s architect had already contacted the third party. The following day, it asked it to provide a proposal for the meeting of the Town’s building committee scheduled for the following Monday. Under cross-examination, Mr. Fiander stated that if the Town could not accomplish the work at close to the Town’s budget, there was a possibility that it would be awarded to Borcherdt Concrete. However, the speed with which the Town searched for other ways to get the work fabricated and installed at a price closer to its budgetary estimate is telling of its need and determination not to award the contract for what the sole bidder had tendered. [78] As stated in Maritime Excavators, supra the process of arriving at a discount percentage to apply to assessed damages includes a speculative aspect. Here the evidence as a whole indicates that there was a possibility that Borcherdt Concrete would not have been awarded Contract B because of budgetary constraints and because, on its face, its bid was 59% higher than the Town’s figure. I would apply a discount of 35% to the damages representing the loss of profit of Borcherdt Concrete. That would reduce the damages from $68,536 to $44,548, not including pre-judgment interest and costs. Disposition [79] I would dismiss the Town’s appeal against the judge’s finding that the Town had breached its implied duty of fair and equal treatment during the tendering process. I would allow its appeal against damages by reducing the award to $44,548. I would order that Borcherdt Concrete pay the Town costs of $2,500 plus taxable disbursements. Oland, J.A. Concurred in: MacDonald, C.J.N.S. Hamilton, J.A.