Calgary-based Sovereign General Insurance Co. is alleging that the City of Cranbrook has “unlawfully interfered in economic relations” by including an exclusion clause in tender documents for a wastewater treatment facility.
In a statement of claim filed April 30 in BC Supreme Court, Sovereign alleged that Cranbrook has “intentionally interfered” with business relationships between the plaintiff and 14 contractors for whom the plaintiff provides various bonds and insurance-related products.
At the heart of the allegations is a clause that Cranbrook included in a recent tender document for the construction of a wastewater treatment and disposal systems irrigation disinfection facility.
The clause stipulates that nobody who tenders can obtain performance, labour or material bonds from any company with which Cranbrook is involved in litigation as of April 1, 2012, “and for certainty [tenderers] shall not use as a surety the Sovereign General Insurance Company.”
Sovereign claims that the issuance of the tender documents was unlawful in that:
- it coerced contractors to terminate specific bonding facilities with the plaintiff in order to bid on the project;
- it required any contractor operating in and around the city to obtain bonding facilities from providers other than the plaintiff;
- it effectively terminated the business relationships between Sovereign and the contractors;
- the exclusion clause created “irreparable damage to the name and reputation of the plaintiff”; and
- the exclusion “explicitly restrains trade.”
Sovereign claims that it has suffered and continues to suffer loss and damages arising from the tender documents. It is seeking:
- damages;
- a declaration that the exclusion constitutes unlawful interference with contractual relations;
- a declaration enjoining the defendant from relying on the exclusion; and
- a prohibitive injunction stopping the defendant from expressly excluding the plaintiff’s involvement as surety in forthcoming projects.
None of these allegations has been proven.
As of press deadline, no response to the civil claim had been filed. [??JW to check??]
