Legal Blog

Naylor

There are some cases that are so interesting that we get to write about them three times: at trial, on appeal, and in the Supreme Court of Canada. However, by the third time the writing passion wanes. It is fortunate that further appeals to the English Privy Council were abolished in the 1930s. Naylor Group v. Ellis-Don Construction has now been decided in the Supreme Court of Canada. Our views of the trial and appeal decisions can be found in the January 1997 and September 1999 newsletters.

Result 

Naylor was victorious. Ellis-Don is still liable. Under the Bid Depository Rules, Ellis-Don could not choose a sub other than the low bidder without reasonable reasons for the change. The Court held that the decision of the Ontario Labour Relations Board was not a reasonable reason to drop Naylor because Ellis-Don had taken on that risk before Naylor tendered the project.

Further, Naylor’s damages for loss of profit were increased on appeal. The Court of Appeal had reduced the damage award by 50% for contingencies and site conditions and a further 50% for the possibility that Naylor might have had to subcontract its work to a unionised contractor. The Supreme Court agreed with the first reduction but not the second. The OLRB decision meant that Ellis-Don could not contract with Naylor without major problems for Ellis-Don with its unions and the OLRB. This, however, would not affect Naylor’s profitability on the job.

Naylor was awarded $365,000 plus interest and costs.