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The issue before the court
was whether SFCRA breached
the contract by, among other
things, assessing the bids
on the basis of undisclosed
criteria and negotiating with
another bidder during the bid
evaluation process.
In finding for Elan, the court found that SFCRA had an
obligation to evaluate all of the bids fairly and consistently.
It also determined that the tender scoring method used by
SFCRA, which deviated from the evaluation matrix set out
in the bid documents, was contrary to the reasonable expectations
created by those documents. The court further held
that deciding how the bids were to be scored only after they
had been submitted was contrary to the principle of fairness.
The court acknowledged there was nothing to indicate
that SFCRA had acted dishonestly or with malice. Citing the
principles articulated in Bhasin, however, it concluded that
an obligation of good faith may require more than honesty
and that conducting a bid evaluation in an arbitrary manner
or on the basis of undisclosed criteria is enough to constitute
a breach of Contract A.
It follows that parties to the tendering and procurement
process, be they owners or bidders, are advised to consider
what the principles of good faith and honest dealing require
of them. It isn’t enough to act without malice or in an honest
fashion. To avoid liability, parties must make certain they act
fairly and consistently.
Dean G. Giles is a partner with Fillmore Riley LLP who practises
primarily in the areas of commercial, intellectual
property and insurance litigation, covering such areas as
general insurance defence matters, commercial liability insurance,
professional errors and omissions, subrogation and
policy interpretation. You may reach him at 204-957-8337 or
deangiles@fillmoreriley.com.
LEGAL
PILING CANADA 75
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