The Nature and Scope of an
Owner’s Duty of Fairness:
Hub Excavating Ltd. v. Orca Estates Ltd.
In 2007, the British Columbia Supreme Court in handing
down its decision in Hub Excavating Ltd. v. Orca
Estates Ltd. [supplementary reasons for judgment -
2008 BCSC 21 (CanLII)] arguably expanded the nature
and scope of the duty of fairness owed by an owner to
bidders in the tender process. That decision, however,
was appealed by the owner and on April 17, 2009, the
British Columbia Court of Appeal allowed the appeal and
overturned the trial judge’s decision. In its decision,
the Court of Appeal clarified the nature and scope of an
owner’s duty of fairness in the tender process.
The Facts
In this case, the owner had, over a period of years,
developed several phases of a residential development
project. In 2002, the owner had considered proceeding
with “Phase 12” of the project but decided to defer it
in favour of proceeding with a different phase that was
considered more profitable after the owner had received
a written estimate from its engineer estimating
construction costs for Phase 12 at $825,000.00. One of
the issues with Phase 12 was uncertainty about the
amount of rock that needed to be removed and the cost of
doing so.
In 2004, the owner again considered options for
proceeding with Phase 12. The owner’s engineer provided
an oral estimate of construction costs for Phase 12 of
$600,000 or $650,000.
...
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