Court Dismisses Bid Bond Claim


The owners of a leaky condominium complex in White Rock issued a tender call for envelope repair work. Bid security was required as part of the tender, and the lowest priced contractor submitted a bid bond to the owners. Although notified that it had been selected to perform the work, that ontractor did not enter into the construction contract. The building owners then commenced a lawsuit against the contractor itself and against the contractor’s surety under the provisions of the bid bond.

The Issue

The Homeowner Protection Act mandates that third party warranty coverage be in place for building envelope repair work. In this case, the tender call went further and required the bidders to attach to their bid forms “confirmation of 2 years and 5 years Third Party Warranty Coverage for this specific project…”. The evidence established that while the contractor included in its bid form both a warranty provider’s name and a building envelope renovator license number, it did not have warranty coverage in place for the specific project and it did not attach any document to its bid form to confirm coverage.

The surety brought a summary trial application before the Supreme Court of British Columbia, seeking a dismissal of the owners’ claim. The grounds for the application were that the contractor’s failure to have warranty coverage in place and its failure to attach confirmation of warranty coverage to its bid form made that form materially non-compliant with the tender call.

The Decision

In Reasons for Judgment given March 11, 2005, the Honourable Mr. Justice Williams allowed the surety’s application. Williams J. stated:

On a review of the relevant documentation which is in evidence, I am impelled to conclude that the insurance coverage was nothing less than mandatory…he tender document clearly and unequivocally called for the bidder to provide confirmation of the coverage. [The contractor] did not provide the confirmation…To my mind, that deficiency is manifestly material…

Williams J. dismissed the lawsuit against the surety.

Prepared by former Associate, Graham R. MacLennan