Sometimes there’s a fine line between information to be disclosed by a project owner and information the contractor must obtain on its own.

In Construction BSL inc. c. Procureur général du Québec (Ministère des Transports du Québec), the Superior Court had to rule on the limits of a public project owner’s duty to inform, in a case where the tender documents provided to bidders did not include a geotechnical survey.

Different conditions: Could they have been anticipated?

In May 2018, the Ministère des Transports du Québec (MTQ) put out a call for tenders for structural reinforcement work on two bridges in the City of Gatineau. Construction BSL inc. (BSL) won the contract.

The work involved excavating nine to ten feet down to the footings to install new concrete piles.

BSL came to inspect the site before winning the contract. However, the MTQ’s tender documents did not include any geotechnical survey.

Since it was known that a stream runs under the bridges, just a few metres from the construction site, standard pumps were installed to deal with water buildup.

During excavation, BSL discovered large rocks, whereas it had expected to find MG-20 as backfill. Large quantities of water flowed in, the pumps proved inadequate, and a cofferdam had to be installed.

Given the unexpected volume of water infiltration, BSL asked the MTQ to produce a geotechnical survey. The MTQ refused, saying it was foreseeable that water would seep in, given the location of the work.

Undue pressure

The problems encountered led BSL to submit several engineering change requests at a cost of $416,000. BSL received $37,500 and sued the MTQ for the remainder.

The MTQ argued that the $82,000 claim for water management had been settled, since BSL had accepted the $37,500. According to the evidence, that amount was accepted under pressure.

Specifically, BSL had to choose between accepting the $37,500 or filing a notice of intent to claim, which would have resulted in late penalties of $80,000. The Court opined that this proposal left BSL unable to make a free and informed choice. The MTQ’s approach was tantamount to undue pressure and went against the principles of fair contract negotiation.

Duty to inform: Where is the line?

In a construction project, the contractor has to bear the risk of any unforeseen circumstances and therefore has a duty to verify the site conditions.

A project owner like the MTQ, which has a wealth of expertise at its disposal, must for its part inform the contractor by providing plans that are representative of reality, so as not to distort the contractor’s risk. 

In this case, the evidence showed that the MTQ distorted BSL’s risk, but also that BSL did not act prudently.

The project designer neglected to inform BSL that pumps of a certain capacity were needed. Moreover, by not conducting a geotechnical survey, the MTQ failed in its duty to inform. Citing decisions handed down in similar cases, the Court determined that the site conditions triggered an obligation to provide a geotechnical survey. The fact that the work involved only rehabilitating existing bridges did not relieve the MTQ of that obligation.

For its part, BSL failed in its duty to verify by not seeking information on the type of backfill used, even though this was its first bridge rehabilitation project. In addition, BSL had to bear the risks inherent to the project, including those arising from the large amounts of water present when a work site is located near a stream.

The Court therefore concluded that the parties should share liability equally.

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For many years, Miller Thomson’s Construction & Infrastructure team has been helping industry manage the legal aspects of both public- and private-sector projects.