OPINION

ROSEMARY M. COLLYER, District Judge.

                                  TABLE OF CONTENTS

I.    FACTS ....................................................................121

      A.  The Parties ..........................................................121
          1.  Plaintiffs .......................................................121
          2.  Defendants .......................................................122
      B.  April 2008: The RFP ..................................................122
      C.  April and May: Exchanges with Cruise Lines Prior to Bid ..............126
      D.  Late May: CCCM Prepares for Bid ......................................127
      E.  May 23: The CCCM Bid .................................................130
      F.  May 30 through June 26: CCCM Awarded Contract; Discussions
           About Payment and Taxes Begin; June 3 Meeting .......................132
      G.  June 29 through July 14: Negotiations Continue; Bank Involved ........136
      H.  July 15 and 16: Agreement on Project Services Agreement #1 ...........140
      I.  July 16 through 18: Discussions Shift to Articles of Agreement;
           First Draft of Articles of Agreement and Feedback ...................142
      J.  July 24 through 27: Internal CCCM Discussions Prior to RCMP
           Meeting .............................................................144
      K.  July 28, 2008 Meeting and Second Draft of Articles of Agreement ......145
      L.  July 30 and 31: Negotiations Over Second Draft of Articles of
           Agreement ...........................................................147
      M.  July 31: Executed Version of Articles of Agreement ...................151
      N.  July 31 through August 19: CCCM Refocuses on Cruise Lines ............154
          1.  Negotiations with Holland America Start Well .....................155
          2.  Negotiations with Carnival Stall; CCCM Considers Royal
               Caribbean .......................................................155
          3.  Holland America and Royal Caribbean Raise More Tax Concerns ......156
      O.  August 20 through 27: Bank Financing Talks Stall; RCMP Ship
           Tour; Tax Issues Escalate ...........................................159
      P.  August 25 through September 5: Tax Issues Continue to Escalate .......162
      Q.  September 5 through 8: Discussions with Canadian Revenue
          Agency; Financing Approved ...........................................167
      R.  September 9 through 12: Parties' Discussions on Canadian Taxes .......170
      S.  September 10 through 13: Charter Agreements and Tax Terms
            Negotiations With Cruise Lines; RCMP Asks to Raise Contract
            Amount; Holland America Proposal ...................................173
      T.  September 15 through 23: CCCM Proposes Contract Clarification;
           Further Involvement with CRA; CCCM's Lawyers Involved;
           Negotiations with Royal Caribbean ...................................177
      U.  September 26 through 30: Normande Morin Replaces Kelly
          Meikle as RCMP Contracting Authority; Contractual
          Relationship Begins to Break Down ....................................180
      V.  Evening of September 30: CCCM Prepares Nomination
           Documents ...........................................................183
          1.  Discussion of Nomination of Ships by Class .......................183
          2.  September 30 E-mails Preparing Nomination Documents ..............185
      W.  October 1: CCCM Responds to September 30 Letter & Nominates
           Ships ...............................................................189
      X.  October 2 through 6: RCMP Response to Nomination; Renewed
           Discussions with Cruise Lines; RBC Sends Formal Conditional
           Credit Offer ........................................................192
      Y.  October 9 through 15: Increased Urgency Leads to Frayed
           Relationships .......................................................195
      Z.  October 16 through 23: Despite Resolution on Some Issues,
           Disputes Over Taxes and CPA Review Continue .........................196
     AA.  October 24 Meeting; RCMP States that 90% Letter of Credit
          Requirement Is Reimposed, Then Re-waived .............................199
     BB.  October 28: Threatening to "Walk Away," CCCM Demands
          Assurance on Three Issues ............................................204
     CC.  October 29 through November 7: RCMP's Response; Final Royal
           Caribbean Charter Party Agreement; Attorneys Involved; the

           Bank Withdraws Financing; Final Holland America Charter
           Party Agreement .....................................................206
     DD.  November 10 through 17: Contract Termination .........................212
     EE.  Late November: CCCM's Actions Post-Termination .......................215
     FF.  November 28 through April 2009: RCMP Issues New RFP and
           Contracts Directly with Cruise Lines ................................215
          1.  Revised RFP ......................................................216
          2.  RCMP-Holland America Charter Party Agreement .....................216
     GG.  Post Facto Issues ....................................................217
          1.  The Sessions Letter of Credit ....................................217
          2.  The Health Scores ................................................217
     HH.  Procedural History ...................................................218
II.   LEGAL STANDARD ...........................................................219
      A.  Summary Judgment .....................................................219
      B.  Application of Foreign Law ...........................................220
III.  ANALYSIS .................................................................220
      A.  British Columbia Law .................................................221
          1.  Contract Interpretation ..........................................221
          2.  The "Factual Matrix" .............................................222
          3.  Promissory Estoppel ..............................................223
          4.  Repudiation, Fundamental Breach and Effect of Breach .............223
      B.  Summary of Parties' Arguments ........................................225
      C.  Status of the Agreements at the Time of Breach .......................225
      D.  Responsibility for Taxes .............................................225
          1.  Whether the Taxes Include CCCM's Taxes ...........................226
          2.  Parties' Arguments ...............................................227
          3.  The Articles of Agreement Bound RCMP to Pay Canadian Taxes
               Imposed on the Cruise Lines .....................................227
          4.  The Documents Incorporated in the Final Articles of Agreement
               Required RCMP to Pay the Cruise Lines' Canadian Taxes ...........231
          5.  Promissory Estoppel ..............................................233
          6.  Anticipatory Repudiation by Normande Morin .......................236
          7.  Fundamental Breach ...............................................238
      E.  RCMP's First Breach Argument: Provision of Charter Party
           Agreements ..........................................................239
      F.  RCMP's Second Breach Argument: CCCM's Inability to Obtain
           Financing ...........................................................241
      G.  RCMP's Third Breach Argument: Health Scores ..........................244
      H.  RCMP's Fourth Breach Argument: Canada versus United States
           Law in Charter Party Agreements .....................................245
IV.   CONCLUSION ...............................................................246

Vancouver, Canada hosted the 2010 Winter Olympic Games. To ensure available hotel rooms for athletes, spectators, and staff, the Canadian government sought alternative housing for the Integrated Security Unit, a multi-agency task force headed by the Royal Canadian Mounted Police ("RCMP"). The Integrated Security Unit was responsible for ensuring the safety of visitors, athletes, and venues during the Olympic Games. RCMP found a creative low-cost solution to the lodging scarcity: it would house members of the Integrated Security Unit on cruise ships docked at Vancouver's Ballentyne Pier, using the ships as floating hotels for approximately six weeks. Through a competitive bidding process in 2008, Plaintiff Cruise Connections Charter Management 1, LP was selected as the broker to negotiate charters for ships that met RCMP requirements.

Well before the 2010 Olympics, the relationship between RCMP and Cruise Connections broke down completely. In this suit, each party blames the other for their failed agreement. Cruise Connections contends that RCMP reneged on its promise to pay certain taxes that Canada might impose on the cruise lines. Cruise Connections argues that RCMP's refusal to cover these costs made it impossible for Cruise Connections to finalize charter agreements and bank financing. RCMP insists that it never agreed to pay the taxes in dispute and that Cruise Connections breached its own contract obligations and missed key deadlines. Both parties now move for summary judgment, relying on an extensive written record consisting of the parties' written agreements, correspondence, depositions, and other (almost entirely) uncontested materials.

For the reasons set forth below, the Court finds that RCMP agreed to pay all Canadian taxes imposed on the cruise lines. When RCMP refused to acknowledge its commitment and then repudiated it, it breached the agreement between the parties in a distinctly fundamental way. In contrast, the claims of RCMP against Cruise Connections relate to duties that were not fundamental to the contract, were waived, or were provoked by RCMP's breach on tax payments. Summary judgment will be granted to Cruise Connections and denied to RCMP. The Court will set a bench trial to determine damages.

I. FACTS

A. The Parties

1. Plaintiffs

Plaintiffs are Cruise Connections Charter Management 1, LP (a North Carolina limited partnership) and Cruise Connections Charter Management GP, Inc. (a North Carolina corporation). Cruise Connections Charter Management GP, Inc., is the general partner of the limited partnership, of which the limited partners are Michael Sloane; New West Group, LLC (an LLC organized by Mr. Tracey Kelly); and Issumavik Management Limited (an entity organized by Susan Edwards). See CCCM Organizational Documents, RCMP Motion for Summary Judgment [Dkt. 62] ("RCMP MSJ"), Ex. 7 [Dkt. 62-11].1 Plaintiffs are referred to collectively as Cruise Connections or CCCM,2 and references to the "CCCM partners" mean Ms. Edwards, Mr. Kelly, and Michael Sloane. Michael Sloane is also the president of Cruise Connections Charter Management GP, Inc., of which Mr. Kelly and Ms. Edwards are officers. Phillip "Bud" Sloane is the Chief Financial Officer of Cruise Connections Charter Management 1, LP, but not a partner. Decl. of Phillip Sloane ("P. Sloane Decl."), January 15, 2013, CCCM Br. Opp'n RCMP MSJ ("CCCM Opp.") [Dkt. 67], Ex. 3 [Dkt. 67-3] ¶ 2.

The legal entities comprising CCCM were established on May 23, 2008, immediately before CCCM submitted its bid to RCMP. See CCCM Organizational Documents at CCCM9535 (North Carolina Secretary of State certificate dated May 23, 2008); see also Deposition of Tracey Kelly ("Kelly Dep."),3 RCMP MSJ, Ex. 2 [Dkt. 62-6]; Pls. Mot. Summ. J ("CCCM MSJ") [Dkt. 60], Ex. 5 [Dkt. 60-5]; Defs. Opp. Pls. MSJ ("RCMP Opp.") [Dkt. 66] Ex. 3 [Dkt. 66-5]; CCCM Opp., Ex. 9 [Dkt. 67-9]; RCMP Reply [Dkt. 69], Ex. 1 [Dkt. 69-2]; at 122-23 (stating that the CCCM partners agreed to form CCCM on May 17, 2008 and incorporated on May 23).

The CCCM partners' roles for the 2010 Olympics bid were: "Susan Edwards, VP Operations, Project Manager;" "Tracey Kelly, VP Sales and Marketing, Port and Ship Negotiations;" and "Michael Sloane, VP Administration." See E-mail from Sue Edwards to CCCM Partners titled "Final ISU Bid," with copy of CCCM Bid ("Bid"), RCMP MSJ, Ex. 17 [Dkt. 62-21], CCCM8248-8320 at CCCM8254; see also CCCM MSJ, Ex. 9 [Dkt. 65-4] (duplicate of Bid). None of the CCCM Partners is an attorney. The Bid listed Sue Edwards's profession as a "Project Manager, Team Leader, Event Specialist and [ ] Administrative Law Tribunal Member and Member Chair," with previous experience chartering ships. Id. at CCCM8270. Ms. Edwards was a resident of Victoria, British Columbia, Canada. Id. at CCCM8271. A resident of Seattle, Washington, Mr. Tracey Kelly had worked in the cruise line industry for more than 20 years, including as Vice President of Sales at Holland America Line and Regional Vice President of Sales at Carnival Cruise Lines. Id. at CCCM8276. Michael Sloane owned Cruise Connections, Inc., a travel agency in Winston-Salem, N.C., id. at CCCM8279, that had focused "primarily on full ship charters" for the five years preceding CCCM's 2008 Olympic bid. Id. at CCCM8278.

2. Defendants

Defendants are Her Majesty the Queen in Right of Canada, the Attorney General of Canada, and RCMP (collectively, "RCMP"). The three RCMP personnel most important to the case are Kelly Meikle, Michael Day, and Normande Morin. Ms. Meikle was the Contracting Authority and CCCM's primary contact throughout contract formation; her job title was Manager of Contracting, RCMP "E" Division, Vancouver 2010 Integrated Security Unit ("ISU"). See E-mail from Kelly Meikle titled "Use of the Port at Ballentyne Pier & Request for Proposal," Solicitation No. 2008-00147-ISU, RCMP MSJ, Ex. 9 [Dkt. 62-13]; see also CCCM MSJ, Ex. 3 [Dkt. 65-1] (duplicate of RFP). Michael Day was the Director of Procurement and Contracting for the ISU and Ms. Meikle's supervisor. See Deposition of Michael Day ("Day Dep."), CCCM MSJ, Ex. 10 [Dkt. 60-10]; RCMP Opp., Ex. 1 [Dkt. 66-3]; CCCM Opp., Ex. 6 [Dkt. 67-6]; CCCM Reply, Ex. 2 [Dkt. 70-2] at 16-17. Ms. Meikle and Mr. Day were both stationed in Vancouver. The contract in dispute was the largest on which Mr. Day had ever worked and was among the largest he handled in connection with the 2010 Olympics. Day Dep. at 95-96. Normande Morin was the Director of Strategic Procurement for RCMP at RCMP's headquarters in Ottawa, Ontario. Letter from Normande Morin to CCCM, CCCM MSJ, Ex. 32 [Dkt. 65-22]. Ms. Morin became involved only in late September 2008.

B. April 2008: The RFP

RCMP issued a formal Request For Proposal ("RFP") in April 2008, for a broker to negotiate shipboard accommodations for the Integrated Security Unit ("ISU") during the Vancouver Olympics. See RFP, RCMP MSJ, Ex. 9; see also CCCM MSJ, Ex. 3 (duplicate). The RFP contained several annexes in addition to its main text and is the first of several documents that formed the parties' overall agreement. Its details are described here only as needed to understand the dispute and the contentions of the parties.

Prefatory Section: The RFP contained a prefatory section titled "Statement of Work:"

RFP § 1.2; see also id., Annex A § 1.2 ("All components contained in this statement of work are considered mandatory unless otherwise indicated.").

RCMP Contracting Authority: Ms. Meikle was identified as RCMP's Contracting Authority, with responsibility for "management of the Contract" and authorizing changes to the contract. Id. § 5.1.

Incorporation of Standard Contracting Terms and RFP Terms into Contract: The RFP incorporated its own terms into any resulting contract. Id. § 2.1. It also incorporated by reference various standard Canadian government contracting clauses. See id. §§ 4.3, 4.3.1 ("All clauses and conditions identified in the title, number and date are set out in the Standard Acquisition Clauses and Conditions Manual issued by Public Works and Government Services Canada (`PWGSC').... 9676 (2007/11/30) General Conditions-Services apply to and form part of the contract."). The interpretation and applicability of one of the standard clauses from the "9676 General Conditions" are a focal point of the instant dispute.

Choice of Law: As pertinent to CCCM, the RFP required that the law of British Columbia apply. Id. § 2.4; see also id. § 4.8 ("The Contract must be interpreted and governed, and the relations between the parties determined, by the laws in force in British Columbia.").

General Requirements for Submitted Bids: The RFP set forth extensive requirements for bids. See RFP § 3.1.I. Annex A detailed services requirements and Annex B detailed financial requirements. As particularly relevant to the matters in dispute, the text of the RFP stated:

Id. §§ 3.1.II-.III, 3.2.3 (all emphases in original).

Basis of Payment: Bidders were instructed to provide a per-person, per-day ("PPPD") rate that would cover the bidder's costs for ship charters that would satisfy all requirements. The RFP noted that certain costs would be passed through to RCMP for payment and should not be included in the daily passenger rate.

Specifically, Section 4.6.1 of the RFP provided:

Id. § 4.6.1. Two sections later, the RFP stated:

Id. § 4.6.3.

Financial Security & Payment: Bidders were required to "provide security in the form of [an] irrevocable Letter of Credit from a registered financial institution drawn in favour of the Receiver General for Canada in the amount of ten (10%) percent of the bid value [with its bid], and a second security deposit of ninety (90%) percent of the bid value, on or before April 1, 2009 if a the [sic] bid is successful and contract is awarded." Id., Annex B § 1. The successful bidder would be paid as follows:

Id. § 4.6.2.

Contractor's Obligation to Nominate and Secure Vessels: The RFP allowed only ten days from contract award for a successful bidder to identify and "secure" the ship(s) to house the ISU, and it allowed just twenty days to submit proof to RCMP that the bidder had paid the relevant cruise line(s) 75% of the cost of the charter(s) to guarantee the ship(s)' presence in Vancouver. Id., Annex A § 4.1. Those deadlines provided little occasion for a bidder to involve RCMP in the selection of ships, but other portions of the RFP show that RCMP clearly intended to have such a role. A few subsections later, Annex A required the successful bidder to:

Id., Annex A § 4.7 (emphasis added).4 The text of the RFP also required the successful bidder to "provide the RCMP with a Standard Cruise Ship Charter party agreement for review and comments." Id. § 4.18.1.5 Nothing in the RFP reconciled the differing requirements in Annex A §§ 4.1, 4.5 and 4.18.1; defined the terms "secure" or "nominate;" or explained its short timeline, a full two years before the Vancouver Olympics. It bears emphasis that the RFP appeared to require the successful bidder to negotiate terms (or execute a contract) for one or more acceptable ships within 10 days of contract award and to pay 75% of the charter cost to the cruise line(s) within twenty days of contract award, without allowance for the mandated review and input from RCMP on charter contracts and specific ships. Moreover, the RFP was silent as to how the parties would proceed if RCMP, during its review of "nominated" ships, were to reject them or ask for additional information.

Notwithstanding this set of conflicting provisions, the RFP specified that any: "[f]ailure by the Contractor to nominate and secure the ships within the time required will constitute a breach under the agreement and the ISU will take whatever measure at its disposition to resolve the issue." Id., Annex A § 4.6. Annex B contained similar language that covered a broader scope of requirements. See id., Annex B § 2.

The difficulties posed by these various provisions explain, at least in part, the post-award discussions between RCMP and CCCM.

Requirements for Vessels: The main text of the RFP and Annex A contained both mandatory and optional specifications for the ships. The instant dispute only involves these specifications in respect to the ships' health scores. In relevant part, the RFP stated:

Id., Annex A §§ 5.1, 5.4.

The RFP allowed the cruise lines to substitute one ship for another as long as "the Contractor and the ISU [are] afforded the opportunity to inspect the proposed substituted vessel at the cruise lines [sic] expense" and approve the substitution. Id. § 4.11. Notwithstanding this allowance, the RFP specified that it would be "imperative [that] the Contractor make[ ] every attempt to provide the vessels as stated in the contract nomination ...." Id.

Priority of Documents: Forecasting conflict among the provisions of a resulting agreement, the RFP established a priority list of documents:

Id. § 4.9.

C. April and May: Exchanges with Cruise Lines Prior to Bid

As noted above, the RFP was issued in April 2008, and CCCM was not formed as a legal entity until May 23, 2008. Sometime during late April or early May, the CCCM partners began working together to collect cost quotes from cruise lines. Holland America Line (occasionally "HAL") submitted a quote of $145 PPPD for the ms Statendam on May 21, 2008, specifying that "[a]ll passenger-based taxes" and "[a]ll additional taxes" were not included and would be the responsibility of the charterer, CCCM. HAL Quote, CCCM MSJ, Ex. 6 [Dkt. 65-2] at CCCM8491. Holland America also stipulated:

Id. at CCCM8491-92. A May 22, 2008 quote from Carnival Cruise Lines contained similar language, stating that it did not include "[a]ny government taxes and fees including docking charges in ports for the duration of the charter" and omitting any kind of taxes from the list of costs included in the cost estimate. Carnival Quote, CCCM MSJ, Ex. 7 [Dkt. 65-3] at CCCM53-57.

Cherie Weinstein of Carnival warned Tracey Kelly by email dated May 23, 2008, that a lengthy duration in port in Vancouver might raise tax issues for the cruise lines and/or CCCM. Ms. Weinstein wrote:

E-mail Among Tracey Kelly & Cherie Weinstein, et al., RCMP Opp., Ex. 97 [Dkt. 66-99] at CCCM8-9 (emphasis added). After submitting CCCM's bid to RCMP, Mr. Kelly forwarded Ms. Weinstein's e-mail to the CCCM partners, advising, "Just an FYI ... Noted that we already addressed these concerns in our Reply to RFP, and they would be vetted out during negotiations." Id. at CCCM8.

D. Late May: CCCM Prepares for Bid

CCCM made final preparations for submitting its bid to RCMP in late May 2008. However, a problem arose at the eleventh hour. CCCM's private financial arrangements for a letter of credit for 10% of the bid value, as required by the RFP, fell apart when its financier abruptly withdrew on May 6, 2008.6 See P. Sloane Decl. ¶ 5; Kelly Dep. at 122-23. At that point, CCCM was, in Phillip Sloane's words, "out of time and out of options" and "had no other viable alternatives for getting the letter of credit before [the] bid was due." P. Sloane Decl. ¶ 5. CCCM was not yet a formal business entity, Kelly Dep. at 122-23, and had no cash collateral to secure a letter of credit, Deposition of Phillip Sloane ("P. Sloane Dep."), RCMP MSJ, Ex. 4 [Dkt. 62-8]; CCCM Opp., Ex. 39 [Dkt. 67-39]; CCCM Reply, Ex. 5 [Dkt. 70-5]; RCMP Reply, Ex. 6 [Dkt. 69-7] at 112.

At almost the last minute, CCCM approached John Sessions, a North Carolina businessman, for help. Although none of the CCCM partners knew Mr. Sessions personally, he had been suggested "[b]y someone else who was interested in being a backer." Kelly Dep. at 128. With very limited time — Michael Sloane "had to be in Charlotte in an hour and 45 minutes to be on an airplane" to meet the bid deadline in Seattle7 — CCCM signed a Letter of Intent with Mr. Sessions and received a document purporting to be a Standby Letter of Credit. According to Phillip Sloane, Mr. Sessions "took advantage of the situation, repeatedly raising the price for providing the letter of credit until he eventually demanded a price equal to the amount of the letter of credit ($5,057,500.00)," to which CCCM agreed only because it had no options. P. Sloane Decl. ¶ 5; see also M. Sloane Dep. at 144 ("At the last minute, he went to that dollar for dollar."), P. Sloane Dep. at 66-67 ("[Mr. Sessions] was to get a dollar for dollar for every dollar he put up, including the letter of credit.").

The Letter of Intent was a four-page document executed by Mr. Sessions and each of the CCCM partners. See E-mail & Letter of Credit ("LOC"), RCMP MSJ, Ex. 67 [Dkt. 62-71]; CCCM Opp., Ex. 36 [Dkt. 67-36] (duplicate); Sessions Letter of Intent, RCMP Opp., Ex. 75 [Dkt. 66-77]. Because the Sessions Letter of Intent figures prominently in RCMP's defense to this suit, its relevant provisions are quoted in full:

Sessions Letter of Intent at CCCM15132-33.

Dated May 22, 2008, the Sessions Letter of Credit was titled "Irrevocable Standby Letter of Credit." LOC at CCCM12394. It listed the Southern Community Bank and Trust "We" Credit Administration Department, Winston Salem, NC as the "advising" bank; Canada as the Beneficiary; CCCM as the "Applicant;" and Carolina Shores Leasing, LLC, as the "co-applicant."8 Id. The face amount of the Sessions Letter of Credit was $5,057,500.00 and its "Expiry date" was July 1, 2008. Id. It further stated:

Id.

The legal effect of the Sessions Letter of Intent is put at issue by RCMP, which argues that the Sessions Letter of Intent created a definitive debt obligation that CCCM wrongly did not disclose when it sought financing from the Royal Bank of Canada and, had it done so, CCCM would have received no financing to meet contract requirements. See infra § III.F.

E. May 23: The CCCM Bid

The CCCM Bid ("Bid"), submitted on May 23, 2008, is reproduced in the record as Exhibit 17 to RCMP's Motion for Summary Judgment, Dkt. 62-21, and as Exhibit 9 to CCCM's Motion for Summary Judgment, Dkt. 65-4.9 The Bid identified Victoria, British Columbia, as CCCM's location. Bid at CCCM8249. In its "Acceptance of Statement of Work," CCCM responded to each clause of the RFP — i.e., either agreement or a request for a change. As an "Overview," CCCM indicated:

CCCM8260. CCCM proposed that "during Contract Negotiations, it would be our responsibility to negotiate in turn with the Cruise Line to add in any specific Clauses that the ISU may wish to have included in the [Charter Party Agreement] on this issue." Id. at CCCM8265.

The Bid offered RCMP two price options, each giving a fee of "Per person Charter Hire per bed per day" plus "Per person per day (estimate) Firm Price pass through Service Provider Costs, Taxes (GST.50 per person per day) — invoices will be given directly to RCMP for payment." Id. at CCCM8252. Option 2 proposed to use one Holland America ship with a capacity of 1,258 passengers and two Carnival ships with a capacity of 2,052 passengers each, for a total of 5,362 passengers. Id. at CCCM8262-63, CCCM8298-300.

Basis of Payment: The Bid responded to the RFP's payment clauses, RFP § 4.6, in a section of the Bid labeled "Part 6" and "Part 6.3" at CCCM8302. CCCM proposed that: (1) Port Fees would be "a direct pass through cost" paid by RCMP; (2) Government Fees, Taxes and docking fees would also be a direct pass through cost, id.; (3) the two taxes identified by the ISU, Goods and Services Tax (GST) and Harmonized Sales Tax (HST), would be paid by RCMP and no Provincial Sales Tax (PST) would be paid because RCMP is exempt; (4) "Any additional taxes identified by the Cruise Lines are questionable, and a tax lawyer will be consulted on these issues after the Bid Award;" and, finally, (5) "In any case, all taxes are not the responsibility of the Charterer, they are additional and a pass through cost to the Government of Canada." Bid at CCCM8302 (emphasis added). The final clause was "specific language" CCCM put into its Bid as a response to the "consistent feedback and concerns voiced by the cruise lines" about "the potential that Canadian government taxes would be assessed against the cruise lines, due to the fact that the ships would be docked in a Canadian port for an extended period of time." Kelly Dep. at 213-15; Declaration of Tracey Kelly, November 29, 2012 ("I Kelly Decl."), CCCM MSJ, Ex. 8 [Dkt. 60-8] ¶¶ 4, 6. The cruise lines "informed [CCCM] that whatever Canadian government taxes were imposed against them as a result of the charter, in whatever amount, would be additional to the charter fare." I Kelly Decl. ¶ 7. "[T]he cruise lines did not know which specific taxes would ultimately be assessed, and did not know how much those taxes would be," so CCCM "could not include a specific amount in its bid price to cover the amount of the taxes" and instead "included a provision in its bid stating that the RCMP would be responsible for paying any such taxes as a pass-through cost to the RCMP." Id. ¶¶ 6, 8. Mr. Kelly explained the cruise lines' concerns as follows:

Id. ¶ 5.

CCCM Bid § 4.6.3, in response to RFP § 4.6.3, is one of the centerpieces of the parties' dispute about allocation of tax responsibilities.

Payment and Security: CCCM proposed an alternative to the RFP requirement that "proof of payment to the vessel provider (minimum 75%)" had to be received by RCMP twenty days after contract award. RFP Annex A § 4.1. CCCM first noted that a successful bidder would need approximately $CDN100M of available funds, on which interest alone would raise the daily passenger rate charged to RCMP by more than $150.00. It then proposed a resolution:

Bid at CCCM8307-08 (emphasis added). CCCM also indicated that it accepted RFP Annex A § 4.5 (RCMP would "confirm acceptance of the vessels within forty-eight (48) hours of receipt of the vessel nomination") and Annex A § 4.7 (contractor would provide detailed "information at the time of vessel nomination"). Id. at CCCM8308.

Provision of Charter Party Agreement: In response to the RFP obligation to provide "a Standard Cruise Ship Charter party agreement for review and comments," RFP § 4.18.1, the Bid proposed: "Our interpretation of this Clause is that the RCMP will be provided with the Terms and Conditions of the Charter Party Agreement between the contractor and the cruise lines." Bid at CCCM8304.

Requirements for Vessels: CCCM agreed to RFP Annex A § 5.4, which required the contractor to "provide a Health Canada Cruise ship Inspection score of no less than 95% for the year [sic] 2006 and 2007," and added that it had provided "Health Inspection Scores ... for all cruise ships currently under consideration" in an appendix to the Bid. Bid at CCCM8309.

Priority of Documents: CCCM proposed a materially different priority order for documents than the RFP. The Bid placed the Bid first, listing controlling documents as follows: "a) The Contractor's bid, dated, May 23, 2008; b) The Cruise Lines Charter Party Agreement; c) The Articles of Agreement; d) All annexes in alphabetical order; e) 2003 (200711/30) Standard Conditions; f) 9676 (200711130) General Conditions-Services[;] g) Services for Charterer to provide Vessel Accommodation for RCMP 2010 Integrated Security Unit, Solicitation No 2008-00147-ISU, and all Annexes." Bid at CCCM8303.

F. May 30 through June 26: CCCM Awarded Contract; Discussions About Payment and Taxes Begin; June 3 Meeting

CCCM was awarded the contract on May 30, 2008, by e-mail from Ms. Meikle to Ms. Edwards. E-mail from Kelly Meikle to Susan Edwards, RCMP Opp., Ex. 41 [Dkt. 66-43] at CAN3188 ("Hi Susan, Congratulations, you are the successful bidder! I am happy to award you the contract for Charterer services for cruise ships to be provided for security personnel for the 2010 Vancouver Integrated Security Unit. The Ships (Carnival) will be required from January 31, 2010 to March 2, 2010, with an option to extend on or before June 15, 2008."). Ms. Meikle had read the Bid "from cover to cover" before accepting it. Deposition of Kelly Meikle, May 16, 2012 ("Meikle Dep."), CCCM MSJ Ex. 4 [Dkt. 60-4]; RCMP Opp., Ex. 4 [Dkt. 66-6]; CCCM Opp., Ex. 4 [Dkt. 67-4]; CCCM Reply, Ex. 1 [Dkt. 70-1]; at 124.

CCCM (in the persons of Ms. Edwards and Mr. Kelly) and RCMP (in the persons of Ms. Meikle, Mr. Day and RCMP Inspector Donna Kaluza10) met on June 3, 2008, to discuss unresolved issues. CCCM was most interested in how it could provide adequate financial security to RCMP and receive payment from RCMP. Representatives for RCMP provide very limited information about the meeting. Mr. Day could not recall any details and remembered only that he was there for "less than half an hour," Day Dep. at 96; the record contains no statements from Ms. Meikle concerning the meeting; and Inspector Kaluza's handwritten notes provide only sketchy information about topics, not the content of the discussion. See Notes of CCCM/RCMP Meeting by Donna Kaluza, RCMP Opp., Ex. 13 [Dkt. 66-15]. Mr. Kelly and Ms. Edwards provide similar detail in declarations that are not contested by RCMP. See Second Declaration of Tracey Kelly ("II Kelly Decl."), January 15, 2013, CCCM Opp., Ex. 1 [Dkt. 67-1] & Second Declaration of Susan Edwards, January 14, 2013 ("II Edwards Decl."), CCCM Opp., Ex. 2 [Dkt. 67-2] ¶ 4. For simplicity's sake, Mr. Kelly is cited.

Mr. Kelly declares that "a goal of this meeting was to agree to a schedule for payment to Cruise Connections as well as to address the RCMP's financial security concerns." II Kelly Decl. ¶ 9. Mr. Kelly and Ms. Edwards asked Ms. Meikle to explain why RCMP wanted the contractor to execute letters of credit for 100% of the contract price no later than April 1, 2009, prior to the date CCCM would receive any payment from the RCMP. Id. ¶ 10. Ms. Meikle explained "that the RCMP needed some type of financial security in place to make sure that the RCMP did not pay Cruise Connections tens of millions of dollars, only to have Cruise Connections fail to deliver the ships when it came time for the Olympics," and "letters of credit in favor of the RCMP for 100% of the contract price would allow the RCMP to recoup any payments already made to Cruise Connections if Cruise Connections ultimately failed to deliver the ships." Id. ¶¶ 11-12. CCCM responded that "obtaining letters of credit for 100% of the contract price before receiving any payment from the RCMP was simply not possible, especially when coupled with a requirement that Cruise Connections also pay the cruise lines at least 75% of the cruise fare before receiving any payment from the RCMP." Id. ¶ 13.

Mr. Kelly and Ms. Edwards declare that the parties reached a mutually satisfactory compromise with three points that were significantly different from the RFP and Bid:

II Kelly Decl. ¶¶ 14-17.

Officer Kaluza's contemporaneous notes reflect that taxes were discussed but do not provide any substance of that discussion. Notes of CCCM/RCMP Meeting at CAN20650. Mr. Kelly described the discussion on taxes at his deposition:

Kelly Dep. at 216.

A few days after the June 3 meeting, Mr. Kelly recounted the discussion on Government Taxes in an email to Messrs. Phillip and Michael Sloane and Ms. Edwards:

E-mail from Tracey Kelly to Messrs. Sloane & Susan Edwards, RCMP Opp., Ex. 9 [Dkt. 66-11]. Mr. Kelly proposed drafting an agreement to reflect the June 3 meeting with RCMP. Id. at CCCM171. In response, Ms. Edwards expressed some concern about GST and the Hotel tax. E-mail from Susan Edwards to CCCM Partners, RCMP Opp., Ex. 10 [Dkt. 66-12] at CCCM178 ("It is a fact that hotel accommodation is being supplied — is it by us or by Carnival??"). Mr. Kelly wrote back: "3. The point about GST vs. HTL Tax, CCCM is providing a `service' w/ the charter ships. Specifically, Mike [Day] said that this cannot be viewed as both a service and Htl? It was his quote." E-mail from Tracey Kelly to CCCM Partners, RCMP Opp., Ex. 11 [Dkt. 66-13] at CCCM179.

Ms. Edwards was not entirely convinced and worried in a June 12 email about visas for crewmembers, hotel taxes, Canada Revenue Agency income taxes and other costs. See E-mail from Susan Edwards to CCCM Partners, RCMP Opp., Ex. 14 [Dkt. 66-16] at CCCM206. Mr. Kelly responded: "In our RFP response, did we not write that all Taxes (associated w/ the Vancouver stay) will be a Pass Thru?" E-mail from Tracey Kelly to CCCM Partners, RCMP Opp., Ex. 15 [Dkt. 66-17] at CCCM209.

Ms. Edwards then began an effort to procure a signed acknowledgment from RCMP concerning the parties' agreements at the June 3 meeting. She sent Ms. Meikle an e-mail on June 18, 2008, with an attachment named "Contractor Outline.doc," explaining: "Here is a document from Tracey re: contract details. We would look to have these points agreed to in any Contract." E-mail from Susan Edwards to Kelly Meikle & CCCM Doc., CCCM MSJ, Ex. 12 [Dkt. 65-6] at CAN568; see also CCCM Reply, Ex. 6 [Dkt. 70-6]. The Contractor Outline is referred to in the record as "Minutes" of the June 3 meeting or as an effort to "memorialize" the meeting. In relevant part, the Minutes stated:

Id. at CAN9671-72. The document also noted that "the original bid award of 3 ships (2 Fantasy Class Carnival Ships, 1 S Class Holland America Line Ship) will move forward." Id. Procurement by RCMP was customarily accomplished through only a purchase order, and Ms. Meikle issued a Purchase Order to CCCM on June 20, 2008. E-mail from Susan Edwards to Tracey Kelly, Bud Sloane & Mike Sloane, Confirmation Letter, Purchase Order & General Conditions 9676, RCMP MSJ, Ex. 58 [Dkt. 62-62]; see also CCCM MSJ, Ex. 24 [Dkt. 65-15] (duplicate). Ms. Meikle hesitated to adopt any other process and did not sign the Minutes.

At the same time, restrictions on space for rafted ships11 at the Ballentyne Pier forced CCCM to reconsider its plan to use a combination of Holland America and Carnival ships. See June 19, 2008 E-mail from Susan Edwards to Tracey Kelly, RCMP MSJ, Ex. 89 [Dkt. 62-93] at CCCM354; see also RCMP Opp., Ex. 95 [Dkt. 66-97]. CCCM was also investigating financing options to secure letters of credit. See E-mail Chain Between Susan Edwards & Kelly Meikle, CCCM MSJ, Ex. 14 [Dkt. 65-8].12 While Ms. Edwards was worried that it might be financially infeasible for CCCM to fulfill the contract13 and wanted to convey her worries to Ms. Meikle,14 Mr. Kelly responded, "We are not going to provide the RCMP with `choices.' We will provide them with `solutions.' Please do not provide Kelly the Options. You can only say, how we got here (to this situation) and that we are confident that we will have a solution that will work." Id.

On June 24, 2008, Ms. Edwards sent an updated copy of the Minutes of the June 3 meeting to Ms. Meikle, now described as a Project Services Agreement. E-mail Chain Between Susan Edwards & Kelly Meikle at CAN9671-73. This was CCCM's second effort to obtain more formal sign-off on the topics and agreements from the June 3 meeting and thereafter, in part for CCCM's protection and in part for the cruise lines and banks that wanted to see a "contract," not merely a purchase order. Ms. Edwards wrote:

Id. at CAN7228.

On June 26, 2008, Ms. Meikle and Ms. Edwards both signed the version that had been sent to Ms. Meikle on June 18, 2008, i.e., the so-called Minutes of the June 3 meeting. See Executed Version of June 3, 2008 Meeting Minutes, CCCM MSJ, Ex. 13 [Dkt. 65-7] at CCCM13790. Ms. Edwards signed on behalf of Messrs. Kelly and Sloane. Id. Ms. Meikle testified at her deposition that she "believe[d] this document was a document of minutes of what was discussed.... Whether or not I agreed to everything in it was not my intent. My intent was a — this basically was what they wanted and what we had talked about." Meikle Dep. at 135.

On June 26, Ms. Meikle also reminded Ms. Edwards that RCMP needed signed charter party agreements with the cruise lines. Ms. Edwards promised to ask Mr. Kelly about their delivery date. E-mail from Susan Edwards to CCCM Partners, RCMP Opp., Ex. 81 [Dkt. 66-83] at CCCM556.

G. June 29 through July 14: Negotiations Continue; Bank Involved

At least by June 29, 2008, CCCM was deep in discussions with Cindy Brand of the Royal Bank of Canada (also "the Bank") about financing. Negotiations for financing are relevant because RCMP argues that CCCM would never have been able to get the necessary funding and therefore could never have performed under the contract. RCMP also argues that because CCCM could not get the requisite financing, RCMP is not liable to CCCM even if RCMP itself breached the contract. See infra § III.F. Ms. Brand notified Ms. Edwards on June 29 that the Bank would need various confirmations from Mr. Day concerning the contract and payment schedule "prior to moving forward with [CCCM's] financing request." E-mail Chain Among Susan Edwards, Cindy Brand & Tracey Kelly, et al., CCCM Opp., Ex. 40 [Dkt. 67-40] at CCCM636. Ms. Brand also sought "[c]onfirmation of the financial ability of CCCM to provide some level of financial backup for the financing requested. We could start with Bankers references for each of the limited partners." Id.

The record then reflects silence in the three-way discussions among CCCM, the Bank, and RCMP for approximately two weeks. However, during the lull on financing issues, Mr. Kelly received additional information on the still-burgeoning tax issue, by way of a detailed e-mail from Mark O'Brien, Chief Tax Strategic Officer of Carnival Corporation. See E-mail Chain Between Tracey Kelly & Carnival, RCMP MSJ, Ex. 42 [Dkt. 66-44] at CCCM965-67. Mr. O'Brien's e-mail is repeated here nearly in full, as it is the most complete and contemporaneous exposition of the tax issues in the entire record:

Id. at CCCM966-97.

Id. at CCCM965-66. A few days later, Mr. O'Brien advised: "There are all [sic] outside our normal tax consequences. Again let's get our Canadian tax advisors together to discuss. These are complicated issues." Id. at CCCM965. Mr. Kelly forwarded Mr. O'Brien's e-mail to Ms. Edwards, asking whether she had "an update on getting these Tax concerns in-front of Mike?" — presumably, Mr. Day. Id. The e-mail chain does not show a response from Ms. Edwards.

Beginning on July 14, 2008, CCCM began anew its efforts to obtain a formal written version of the agreements between the parties subsequent to the contract award. Mr. Kelly explained:

Kelly Dep. at 150.

On the morning of July 14, Ms. Edwards asked Ms. Meikle to put the attached agreement on RCMP letterhead, sign it, and return. Email Chain Among Kelly Meikle & Susan Edwards, et al., CCCM MSJ, Ex. 14 at CAN399; see also RCMP Opp., Ex. 16 [Dkt. 66-18] (partial copy of exchanges). With her email, Ms. Edwards forwarded the prior emails between Mses. Edwards and Meikle from June 24, 2008, with the draft Project Services Agreement ("PSA"). Ms. Meikle responded later in the afternoon, stating:

E-mail Chain Among Kelly Meikle & Susan Edwards, et al., at CAN398. Ms. Edwards further wrote that evening that she "absolutely support[ed] the Project Sign Off Document strategy" and "consider[ed] this the first Document of many that will take us through this Project. Through some method, I will need this Document (Contractor Outline) acknowledged and signed off on for my Records...." Id. at CAN398.

The RCMP letter promised by Ms. Meikle was signed by Michael Day, but it proved to be a disappointment to CCCM. It stated that it was written "in response to the request for clarification sent you [sic] by Cindy Brand" of the Royal Bank of Canada." Letter from Michael Day to CCCM, part of RCMP MSJ, Ex. 10 [Dkt. 62-14] at CAN1392.15 It continued:

Id. Enclosed with Mr. Day's letter were copies of the Purchase Order and General Conditions 9676. See supra § I.B. General Conditions 9676 contained a section critical to this dispute. "§ 35: Taxes" stated, in part:

E-mail from Susan Edwards to Tracey Kelly, Bud Sloane & Mike Sloane, Confirmation Letter, Purchase Order & General Conditions 9676, RCMP MSJ, Ex. 58 at CCCM917.

Ms. Edwards forwarded Mr. Day's letter and attachments first to the CCCM partners for review, id. at CCCM890, and then to Ms. Brand, E-mail from Susan Edwards to Cindy Brand, CCCM Opp., Ex. 18 [Dkt. 66-20] at CCCM930. Separately, Ms. Edwards warned the CCCM partners that Kelly Meikle was "starting to dig in her heels" about providing any further documentation to make the cruise lines or banks feel more secure about the contract. E-mail from Susan Edwards to CCCM Partners, CCCM Opp., Ex. 17 [Dkt. 66-19] at CCCM924. Ms. Edwards worried that if CCCM pushed any harder, "she will dig her heels in farther. PO=Contract. Period." Id. Nonetheless, Ms. Edwards planned to forward the draft Project Services Agreement on RCMP letterhead in hopes that Ms. Meikle, who had approved it in the format of Minutes, would sign off. Id.

That evening, Ms. Edwards shared her frustration with Mr. Kelly: "I am losing it with regard to the financing. Phillip [Sloane] calls me again and again stating that he must have his contract or there is no point in going to a Bank. Kelly [Meikle] calls me again and again stating that the PO and the Payment Terms Outline is as good as it [is] going to get and that the financing is our problem don't involve them." E-mail from Susan Edwards to Tracey Kelly, RCMP Opp., Ex. 21 [Dkt. 66-23] at CCCM959.

H. July 15 and 16: Agreement on Project Services Agreement # 1

Ms. Edwards yet again sought a more detailed document from Ms. Meikle on July 15. See E-mail from Susan Edwards to Kelly Meikle, et al., RCMP Opp., Ex. 101 [Dkt. 66-103] at CAN2322 ("As per our conversation yesterday Tracey and the Cruise Lines are looking for the full contract option that you spoke of yesterday.").16 She wrote further to Ms. Meikle later in the day on July 15, copying Mr. Day and suggesting:

E-mail from Susan Edwards to Kelly Meikle & Michael Day, RCMP Opp., Ex. 22 [Dkt. 66-24] CCCM970.

Ms. Meikle answered the second of these e-mails, indicating that they were both "on the same page" and that "[t]his project is going to need this type of record keeping for the purposes of audit, and best practices." E-mail Chain Among Kelly Meikle, Susan Edwards & Tracey Kelly, et al., RCMP Opp., Ex. 23 [Dkt. 66-25] at CCCM983. On the next day, July 16, Ms. Meikle and Ms. Edwards signed "Project Services Agreement 1" on CCCM letterhead with an RCMP watermark ("Project Services Agreement," occasionally referred to as "Project Sign Off # 1").17 See Project Services Agreement, CCCM MSJ, Ex. 17 [Dkt. 65-10] at CCCM1098. As discussed above, the Project Services Agreement was a slightly more developed version of the June 3 meeting minutes. It stated, in part:

Id. at CCCM1092. As in the prior Minutes, the Project Services Agreement stated:

Id. at CCCM1094-95 (emphasis added). Ms. Edwards sent a copy of the Project Services Agreement to Ms. Brand at the Royal Bank of Canada later that same day. E-mail from Susan Edwards to Cindy Brand, RCMP Opp., Ex. 106 [Dkt. 66-108] at CCCM1065.

Ms. Meikle and Mr. Day were questioned about the Project Services Agreement and the status of the parties' agreements as of July 15 and 16 at deposition. Ms. Meikle testified that Ms. Edwards drafted the document, including putting the RCMP watermark on it, and that she believed the Project Services Agreement "doesn't supersede the contract." Meikle Dep. at 141, 143-44. By contrast, Mr. Day had the following exchange with CCCM's counsel:

Day Dep. at 105.

I. July 16 through 18: Discussions Shift to Articles of Agreement; First Draft of Articles of Agreement and Feedback

Despite agreement on the Project Services Agreement, CCCM still wanted a formal contract to share with cruise lines and banks, as Mr. Kelly explained to Mr. Day in a July 16, 2008 e-mail:

E-mail from Tracey Kelly to Michael Day, RCMP Opp., Ex. 27 [Dkt. 66-29] at CCCM1045. When he forwarded a copy of this e-mail to the CCCM partners, Mr. Kelly commented, "I have been asking for a contract for 6 weeks with Kelly's eyes glazing over whenever I do." E-mail Chain Among CCCM Partners, et al., CCCM Reply, Ex. 13 [Dkt. 70-13] at CCCM1046. Ms. Edwards also exchanged emails with Ms. Brand at the Bank, expressing regret that RCMP had not yet given CCCM "a full Service Contract" and asking Ms. Brand to be patient. See E-mail from Susan Edwards to Cindy Brand, RCMP Opp., Ex. 28 [Dkt. 66-30] at CCCM 1051; see also E-mail Chain Between Susan Edwards & Cindy Brand, RCMP Opp., Ex. 105 [Dkt. 66-107] at CCCM1059-60 (response that the Bank had "not given up" on CCCM).

In fact, on July 17, 2008, Ms. Brand offered to have the Bank's own lawyer draft a "legal document" to confirm that CCCM would assign 80% of the contract value directly to the Royal Bank of Canada as collateral for the requested financing. E-mail from Cindy Brand to Susan Edwards, RCMP Opp., Ex. 26 [Dkt. 66-28] at CCCM1138. She added: "It must be clearly noted that the drafting of these legal documents and considering 100% financing of a project is a very unusual step for RBC," but she was willing "to present this deal if it can be confirmed that payment is undoubted, which will assist in mitigating the risk level." Id.

Apparently, CCCM had finally persuaded RCMP that a formal contract was needed because, also on July 17, 2008, Ms. Meikle's assistant sent the first draft of a full-length contract to Ms. Edwards. E-mail Chain & First Draft of Articles of Agreement ("First Draft"), CCCM MSJ, Ex. 18 [Dkt. 65-11] at CCCM1104. The First Draft followed the structure of the RFP and continued many of its terms as if the intervening discussions and Project Services Agreement had never occurred.18 For instance, it incorporated all the standard Canadian procurement terms without change, § 3; its language on tax responsibilities came directly from the RFP and was arguably inconsistent with Project Services Agreement, which had specified that "any and all Canadian Government Taxes imposed as a result of this Charter will be the responsibility of the RCMP;" it incorporated terms from Annex A § 4.1 ("proof of payment to the vessel provider (minimum 75%) must be received by the ISU Contracting Authority within twenty (20) days of contract award") and Annex B § 1 (requiring "a second security deposit of ninety (90%) percent of the bid value, on or before April 1, 2009"), despite subsequent discussions; it retained the RFP's timing for CCCM to nominate and secure ships — notwithstanding, of course, that more than ten days since the initial contract award had already lapsed and CCCM had neither nominated nor secured any ships; and it put the First Draft in first place among the priority of documents, followed by: "(b) 9676 (2007/11/30) General Conditions-Services[;] (c) Annex A, Statement of Work[;] (d) Annex B, Basis of Payment[;] (d) [sic] The Contractor's Bid dated 2008-05-20[;] (e) Project Services Agreements[.]" First Draft § 9. One of the negotiated changes did survive: § 6.2 stated:

CCCM's partners immediately expressed their dismay to each other. Mr. Kelly emphasized the most critical point regarding § 6.3: "This section needs to state specifically that all Tax consequences that arise as a result of this Charter are the responsibility of the RCMP/ISU. IT DOES NOT CURRENTLY." E-mail Chain Among CCCM Partners, et al., RCMP Opp., Ex. 29 [Dkt. 66-31] at CCCM 1146. Ms. Edwards asked to meet with Mr. Day during the week of July 21 "to go over the Contract." E-mail Chain Among Michael Day, Susan Edwards & Kelly Meikle, et al., RCMP Opp., Ex. 30 [Dkt. 66-32] at CAN7214. She told Mr. Day and Ms. Meikle that she would "be sending out, ahead of time, some notes/suggested amendments for clarity and for operational correctness that will assist the project." Id. When Mr. Day stated that he was unavailable and suggested pushing the meeting to the week of July 28, Ms. Edwards responded: "The amendments we are suggesting are almost all cosmetic, or minor due to Operational issues.... I am loathe to wait another minimum 10 days before we can present something to the Cruise Lines, would there be any alternatives as to how we can push this??" Id. Ms. Meikle then sent an email only to Mr. Day, expressing some exasperation:

Id.

J. July 24 through 27: Internal CCCM Discussions Prior to RCMP Meeting

While waiting for its meeting with RCMP, CCCM continued its internal discussions about how to respond to the First Draft. These e-mails demonstrate that the absence of a full-length contract continued to be a sticking point for the Royal Bank of Canada. See E-mail from Phillip Sloane to CCCM Partners, RCMP Opp., Ex. 102 [Dkt. 66-104] at CCCM1346. On July 24, Ms. Edwards assured the Bank that CCCM's discussions with the RCMP were "moving forward and the RCMP have the ball in their court[.]" E-mail Chain Among Susan Edwards & Cindy Brand, et al., RCMP Opp., Ex. 107 [Dkt. 66-109] at CCCM1344.

CCCM responded to the First Draft on July 24 with a document titled "Response to Contract: Clarifications." See E-mail from Susan Edwards to Kelly Meikle & Michael Day, et al., Clarification Doc. & Timeline Doc.("CCCM First Draft Resp."), RCMP Opp., Ex. 8 [Dkt. 66-10]. Most clauses in the Articles of Agreement were identified only by number and CCCM's statement that it "Agreed." CCCM placed comments or responses to others. CCCM also proposed a timeline to complete negotiations between the parties, which envisioned execution of the Articles of Agreement on July 30, 2008, and then a month, until August 30, 2008, for CCCM to deliver to RCMP "[a]ll required certificates [and] [charter party agreements]/Proof of non-cancelable contracts with the Cruise Lines." Id. at CAN627. Whereas Annex A § 4.1 of the First Draft had required CCCM to "identify and secure" vessels within "ten (10) days of contract award" and provide proof of 75% payment and security within twenty days, CCCM proposed: "The contractor shall identify and secure the vessels within 30 days of contract award. Proof of contractual obligations to cruise lines will be provided to ISU contracting authority within 30 days of contract being signed." Id. at CAN622-23. CCCM also proposed to extend to 30 days the deadline for providing charter party agreements to the RCMP following acceptance of the nominated ships. Id. at CAN621.

The Response to Contract included two lengthy sections on taxes. In the first section, under a heading of "Payment," CCCM wrote:

Id. at CAN616. The second section responded to "Goods and Service Tax," at § 6.3 of the First Draft, and began with the following two paragraphs:

Id. at CAN618. The Response to Contract then included a nearly verbatim repetition of the lengthy e-mail on potential taxes sent to Mr. Kelly by Mark O'Brien, Carnival's Chief Tax Strategic Officer, quoted supra at § I.G. See CCCM 1st Draft Resp. at CAN618-20. CCCM also replaced RCMP's Goods and Services Tax paragraph with the statement "GST is included in the RFP as a pass through cost, the Contractor will remit upon receipt to the Government." Id.

K. July 28, 2008 Meeting and Second Draft of Articles of Agreement

Mr. Kelly and Ms. Edwards finally met with Ms. Meikle and Mr. Day on July 28, 2008. For this meeting, as with the June 3, 2008 meeting, the record includes depositions and declarations from Mr. Kelly and Ms. Edwards and limited excerpts from the depositions of Mr. Day and Ms. Meikle to reconstruct the parties' discussions and agreements. There is no pertinent disagreement among these sources. Mr. Kelly avers:

I Kelly Decl. ¶ 12; accord Declaration of Susan Edwards ("I Edwards Decl."), November 27, 2012, CCCM MSJ, Ex. 15 [Dkt. 60-15] ¶ 4. At deposition, Mr. Kelly testified that Ms. Meikle and Mr. Day "confirm[ed] multiple times that 9676 obligated the RCMP to pay any and all Canadian taxes" and that Mr. Kelly relied on that confirmation because "[t]hey were the contracting authority, and that was reinforced to us and we relied on their statements, their commitments." Kelly Dep. at 217-18. Mr. Kelly also testified that Ms. Meikle and Mr. Day told him "that because 9676 obligated RCMP to pay these taxes just discussed in my previous questions, that it was not necessary to include in the articles of agreement more specific language showing that RCMP had bound itself to pay those taxes." Mr. Kelly trusted this advice because "they knew 9676 and... understood the meaning." Id. at 218-19.

The recollections of Ms. Meikle and Mr. Day dovetail with those of Mr. Kelly and Ms. Edwards. Mr. Day testified at deposition:

Day Dep. at 137, 140, 191 (emphases added).

Ms. Meikle testified that "[t]o the extent there was discussion in the July 28 meeting... concerning the tax issue being raised by the Cruise Lines," those discussions "would have been conducted by Mike Day," Meikle Dep. at 186, and also indicated her agreement with Mr. Day:

Meikle Dep. at 245-47.

On July 30, 2008, Ms. Meikle forwarded a Second Draft of the proposed Articles of Agreement ("Second Draft"). Meeting the timeline proposed by CCCM, the Second Draft was signed by Mr. Day and Ms. Meikle. Second Draft Articles of Agreement, CCCM MSJ, Ex. 21 [Dkt. 65-12] at CCCM 13066. As compared to the First Draft, the Second Draft did not change: § 3, incorporating General Conditions 9676; § 6.2, regarding method of payment; § 10 (former Section 9) regarding Priority of Documents; §§ 4 and 19 regarding contract financial security; Annex A § 4.5, requiring ISU to confirm acceptance of nominated vessels within forty-eight hours; Annex A § 5.6, stating that CCCM's failure to "nominate and secure the ships within the time required" constituted a breach of contract; and Annex B, requiring CCCM to, in relevant part, provide "a second security deposit of ninety (90%) percent of the bid value, on or before April 1, 2009." See id. at CCCM13067-96.

Among the provisions RCMP revised were:

Basis of Payment — Tax Clause: The title of the section was changed from "§ 6.3. Goods and Services Tax/Harmonized Sales Tax and Provincial Sales Tax" to "§ 6.3. Goods and Services Tax/Harmonized Sales Tax and Provincial Sales Tax AND HOTEL TAX." Id. at CCCM13072. The text of § 6.3 was augmented with a new paragraph:

Id.

Contractor's Obligation to Nominate Vessels and Timeline: Section 18 was amended to provide 30 days after acceptance of a nominated ship, instead of ten, for CCCM to "confirm all terms and conditions of the Agreement between the parties" in the charter party agreement Id. at CCCM13076. Similarly, while Annex A § 4.1 still required CCCM to "identify and secure the vessel or vessels" within "ten (10) days of contract award," the deadline for providing "[p]roof of security of the vessel, and proof of payment to the vessel provider (minimum 75%)" was extended from 20 to 30 days. Id. at CCCM13078.

L. July 30 and 31: Negotiations Over Second Draft of Articles of Agreement

After CCCM received the Second Draft, the parties engaged in a rapid-fire series of negotiations that led to final Articles of Agreement on July 31, 2008. Much of the critical contract language that was in flux during the final bargaining is at issue in this case.

Late in the day on July 30, 2008, Ms. Edwards e-mailed Ms. Meikle a list of proposed changes to the Second Draft, suggesting that the document was "so close" to being final and only that "[t]here were some agreements that did not make it to the final document." July 30-31 E-mail Chain Among Susan Edwards & Kelly Meikle ("7/30-31 E-mail Chain"), RCMP MSJ, Ex. 71 [Dkt. 62-75] at CCCM1828; see also CCCM MSJ, Ex. 22 [Dkt. 65-13] (duplicates of some e-mails); RCMP Opp., Ex. 86 [Dkt. 66-88] (additional duplicates). CCCM proposed the following changes; all language in the right column is quoted verbatim from Ms. Edwards's e-mail.

           Clause as of Second Draft                                                   Edwards July 30 Proposal

§ 6.2. Method of Payment. An initial payment                           § 6.2. The last phrase ... DELETE ... providing
equal to eighty percent (80%) of the Contract value                    the contract financial security in the amount of

shall be payable on or before April 30, 2009)                          100% of the contract value has been received by
providing the contract financial security, in the                      the ISU.
amount of one-hundred (100%) of the contract
value has been received by the ISU. A second
payment equal to fifteen percent (15%) of the
Contract value shall be payable on or before October
31, 2009; A final payment equal to five percent
(5%) of the Contract value shall be payable on or
before March 31, 2010 providing full and satisfactory
completion of the contract.

                                                                       REPLACE WITH ... providing that proof of the
                                                                       signed non-cancellable Cruise Line Contract is executed
                                                                       and a copy to the ISU (Section 18: Charter
                                                                       Party Agreement).

                                                                       Id. at CCCM1828.

§ 6.3. Goods and Services Tax/Harmonized Sales                         6.3 ADDITION ... Any potential additional taxes
Tax and Provincial Sales Tax AND HOTEL TAX.                            (assessed by the Provincial or Federal Governments)
All prices and amounts of money in the Contract                        on behalf of this project are to be paid by
are exclusive of Goods and Services Tax (GST) as                       the RCMP as per General Condition 9676, Section
applicable, unless otherwise indicated. The GST is                     35.
extra to the price herein and will be paid by the
RCMP. The RCMP is exempt from Provincial
Sales Tax (PST) under exemption number
R005521.

                                                                       Id.

If the City of Vancouver/Province of British Columbia
imposes a Hotel Tax then the RCMP shall
pay the applicable tax to the Charterer for submission
to the appropriate government body. The
RCMP shall seek exemption from the Provincial
Government with respect to this tax under this
contract, if necessary.

The GST shall be extended and incorporated into
all invoices and progress claims and must be
shown as a separate item on invoices and progress
claims. All items that are zero-rated, exempt or to
which the GST does not apply, are to be identified
as such on all invoices. The Contractor agrees to
remit to Canada Customs and Revenue Agency
any amounts of GST paid or due.

§ 10. Priority of Documents.... (a) the Articles                       10. typo (a,b,c,d,d,e). CORRECTION: We have in
of Agreement; (b) 9676 (2007/11/30) General Conditions-Services[;]     notes (e) and (f) as switched with PSA's before
(c) Annex A, Statement of                                              Contractor Bid.
Work[;] (d) Annex B, Basis of Payment[;] (d) [sic]
The Contractor's Bid dated 2008-05-20[;] (e) Project
Services Agreements[.]

                                                                       Id. at CCCM1828.

§ 19. Contract Financial Security. The form of                         19. Contract Financial Security DELETE ...
the required security will be as previously indicated                  The form of the required security will be as previously
in this Request for Proposal....                                       indicated in this request for proposal.
                                                                       REPLACE WITH ... The form of the required
                                                                       security will be a fully signed non-cancellable
                                                                       Charter Party Agreement.

                                                                       Id.

Annex A § 4.1. The Contractor shall identify and                       STATEMENT OF WORK ANNEX A ... 4.1
secure the vessel or vessels within ten (10) days of                   DELETE 10 days[;] REPLACE with: 30 days
contract award. Proof of security of the vessel,
and proof of payment to the vessel provider (minimum
75%) must be received by the ISU Contracting
Authority within thirty (30) days of contract
award. If this requirement is not met, the contract
may be terminated.

                                                                       DELETE: 75%[;] REPLACE with: 70%

                                                                       Id. at CCCM1829.

Annex B § 1. In determining the Contractor financial                   DELETE ANNEX B from this Articles of Agreement.
capability to undertake this requirement, the
Contractor has provided security in the form of an
irrevocable Letter of Credit from a registered
financial institution drawn in favor of the Receiver
General for Canada in the amount of ten (10%)
percent of the bid value, and a second security
deposit of ninety (90%) percent of the bid value, on
or before April 1, 2009 if a the bid is successful and
contract is awarded....

                                                                       Id.

Ms. Edwards has explained that she "ask[ed] [RCMP] to state in the Articles of Agreement that the taxes were to be paid by the RCMP `as per General Condition 9676, Section 35' ... because Michael Day had explained to me that General Conditions 9676, paragraph 35 did, in fact, obligate the RCMP to pay the taxes." I Edwards Decl. ¶ 5.

Ms. Meikle responded early the next morning, writing that she would "look these over .... However, just a heads up, once the RFP is bid on it is understood all clauses are agreed to and I cannot change anything which is in 9676." 7/30-31 E-mail Chain at CCCM1828. Mr. Kelly suggested, to satisfy the cruise lines without making any change to 9676, that § 35, subsection 3, of 967619 be cut and pasted into the agreement. E-mail Chain Among Tracey Kelly & Kelly Meikle at CCCM MSJ, Ex. 22 at CAN729.

Ms. Meikle then wrote a lengthier response on each of Ms. Edwards's points, noting that "it appear[ed] there [were] some significant changes which were not discussed at the meeting." E-mail Chain Among Kelly Meikle & CCCM Partners, RCMP Opp., Ex. 32 [Dkt. 66-34] at CAN2156. Ms. Meikle's responses are quoted verbatim in the right-hand column:

             Edwards July 30 Proposal                                        Meikle July 31 Response

§ 6.2. The last phrase ... DELETE ... providing             No, the Government of Canada cannot pay out any
the contract financial security in the amount of            money in advance of services not provided. What
100% of the contract value has been received by             ever [sic] financial arrangements are in place cannot
the ISU.                                                    be the responsibility of the Government. We
                                                            cannot assume the risk of funding a private company
                                                            and by allowing funding not to be in place is a
                                                            risk. The charter agreement is not a contract
                                                            between the Government and the cruise lines. We
                                                            cannot consider a third party contract meeting our
                                                            risk to the taxpayer dollars. The reason we put in
                                                            an LOC versus a Bid Bond/Security Performance
                                                            Bond is that it does not cost the vendor money. If
                                                            you would like we could change the document
                                                            (Annex B) to read full 100% security bond, or if
                                                            you would like we can also change the payment

                                                            schedules to be paid 80% on first date of occupancy,
                                                            and 20% within 30 days of departure??

REPLACE WITH ... providing that proof of the                Id. at CAN2157.
signed non-cancellable Cruise Line Contract is executed
and a copy to the ISU (Section 18: Charter
Party Agreement).

6.3 ADDITION ... Any potential additional taxes             6.3 cannot be "added" to as this is a clause that has
(assessed by the Provincial or Federal Governments)         been approved by the Department of Justice as
on behalf of this project are to be paid by                 such. If you will please note, the second paragraph
the RCMP as per General Condition 9676, Section             where I did indicate if a hotel tax is assessed
35.                                                         then we would pay, however, this project is
                                                            a fifty/fifty split funding from the Province of
                                                            British Columbia and the Federal Government of
                                                            Canada, and I have spoken to the Regional Director
                                                            of the ISU for the Province of B.C. and he
                                                            felt we could request and receive an exemption for
                                                            this contract.

                                                            Id.

10. typo (a,b,c,d,d,e). CORRECTION: We have in              No, the Contractor's bid must be before the PSA's
notes (e) and (f) as switched with PSA's before             simply because if there was no bid, there would be
Contractor Bid.                                             no PSA's.

                                                            Id.

19. Contract Financial Security                             [No response from Ms. Meikle.]

DELETE ... The form of the required security
will be as previously indicated in this request for
proposal.

REPLACE WITH ... The form of the required
security will be a fully signed non-cancellable
Charter Party Agreement.

STATEMENT OF WORK ANNEX A ...                               Normally, we do not change the SOW, as that was
                                                            what was bid on however, I have also made comments
                                                            and changes to the contract.

                                                            Id.

4.1 DELETE 10 days[;] REPLACE with: 30 days                 Done.

                                                            Id. at CAN2158.

DELETE: 75%[;] REPLACE with: 70%                            No, this was in the RFP and we have not discussed
                                                            this. We are making payment of 80% which currently
                                                            exceeds the monies which must be paid by
                                                            yourselves to the [c]ruise ship lines.

                                                            Id.

DELETE ANNEX B from this Articles of Agreement.             No, we cannot delete this annex, as it relates to the
                                                            LOC, this was put in place and written by the
                                                            Dept of Justice, and I was directed to include....

                                                            Id.

Ms. Meikle, Mr. Kelly, and Ms. Edwards exchanged additional e-mails and held a telephone conference. The two primary points of discussion were (1) the percentage of prepayment to be made to the cruise line within thirty days under Annex A § 4. 1, which RCMP agreed to reduce to 70%, E-mail Chain Among Susan Edwards & Kelly Meikle, et al., RCMP Opp., Ex. 109 [Dkt. 66-111] at CAN373; and (2) modifying § 6.2 to require any agreement between CCCM and the cruise lines to contain a clause specifying that the vessels were chartered "for the express and exclusive use of the Vancouver 2010 ISU" as security for RCMP, see E-mail Chain Among Kelly Meikle & CCCM Partners, RCMP Opp., Ex. 36 [Dkt. 66-38] at CCCM1878. Mr. Kelly recounted that conversation as follows:

I Kelly Decl. ¶¶ 13-14. Ms. Meikle agreed at her deposition that she cut and pasted 9676 General Conditions § 35(3) into the main text of the Articles of Agreement "to try to help satisfy the Cruise Line tax concern." Meikle Dep. at 197; see also id. at 217.

M. July 31: Executed Version of Articles of Agreement

The final version of the Articles of Agreement ("Articles of Agreement") was executed by Susan Edwards, Tracey Kelly, Michael Sloane, Kelly Meikle, and Michael Day on July 31, 2008. Contract No. 7131092, RCMP MSJ, Ex. 18 [Dkt. 62-22] at CAN141; see also CCCM MSJ, Ex. 11 [Dkt. 65-5] (duplicate). In this document, CCCM's address was identified as Winston-Salem, North Carolina, U.S.A. Articles of Agreement at CAN141. The terms of the Articles of Agreement were as follows:

Choice of Law: As in the RFP, the Articles of Agreement provided: "The Contract20 must be interpreted and governed, and the relations between the parties determined, by the laws in force in British Columbia." Id. § 9.

Payment for CCCM: The face sheet of the Articles of Agreement stated:

Id. at CAN141. As the parties had negotiated during the preceding two days, § 6.2 read:

Articles of Agreement § 6.2.

Basis of Payment and Tax Clauses: Section 6.1 of the Articles of Agreement stated, in relevant part:

Articles of Agreement § 6.1. The final version of the taxes clause incorporated verbatim § 35(3) of the 9676 General Conditions document. As relevant here, it read:

Articles of Agreement § 6.3.3-.4.

Contractor's Obligation to Nominate and Secure Vessels: Annex A § 4.1 now reflected RCMP's concessions on the timeline for CCCM to subcontract for ships and on the percentage of prepayment that CCCM was required to make to the subcontractor. It stated:

Id., Annex A §§ 4.1, 4.6. The deadline had also been extended to thirty days in the provision on charter party agreements, which read: "The contractor must provide the RCMP with a Standard Cruise Ship Charter party agreement for review and comments. The Charter Party agreement shall confirm all terms and conditions of the Agreement between the parties within thirty (30) days of the Contractors [sic] confirmation of acceptance of the ship nominated." Id. § 18.

Two new sections appeared in the Articles of Agreement, addressing financial security for RCMP against any failure to perform:

Id. §§ 19, 20.

As in the RFP, at the time of nomination, CCCM was required to provide:

Id., Annex A § 4.7.

The 48-hour-response period remained, requiring CCCM to "ensure the vessel or vessels nominated ... in all respects [met] the specification standards of the RFP document" and the RCMP to, in return, "confirm acceptance of the vessels within forty-eight (48) hours of receipt of the vessel nomination." Id., Annex A § 4.5

Requirements for Vessels: These provisions were unchanged in any meaningful way from the RFP, see supra § I.B, except that the Articles of Agreement anticipated "two Carnival Cruise Line ships and... one `S' Class Holland America Cruise Line ship." Id. § 1. In addition, the same health-score provisions, which had not been an issue in the parties' discussions to that point, appeared unchanged in the Articles of Agreement. Id., Annex A § 5.4.

Vessel Replacement: The Articles of Agreement maintained the clause giving the cruise lines flexibility in substituting ships, with the same caveats. Id. § 4.11.

Priority of Documents: Without explanation in the record, the priority of documents differed from all drafts. The Articles of Agreement provided:

Id. § 10.

The meaning of the Articles of Agreement and the significance of the evolution of the drafts are at issue in the parties' cross-motions for summary judgment. As with other of the contracting documents, CCCM has offered declarations from its partners as to their understandings of the terms of the Articles of Agreement; RCMP has offered no conflicting evidence. As CCCM's declarations are substantively similar, Mr. Kelly is quoted for consistency and clarity:

I Kelly Decl. ¶¶ 15-16; I Edwards Decl. ¶¶ 6-7 (substantively the same); see also Declaration of Michael T. Sloane ("M. Sloane Decl."), November 29, 2012, CCCM MSJ, Ex. 20 [Dkt. 60-20] ¶ 4 (substantively the same).

Almost immediately after receiving the executed Articles of Agreement, Ms. Edwards sent a copy to Ms. Brand at the Royal Bank of Canada via e-mail. E-mail from Susan Edwards to Cindy Brand, et al., RCMP Opp., Ex. 33 [Dkt. 66-35] at CCCM 1907.

N. July 31 through August 19: CCCM Refocuses on Cruise Lines

With the Articles of Agreement in hand, CCCM immediately returned its focus to negotiations with the cruise lines to finalize charter party agreements (often referenced as "CPAs"). See E-mail Chain Between Tracey Kelly & Susan Edwards, RCMP Opp., Ex. 38 [Dkt. 66-40] at CCCM 1980. Mr. Kelly, who owned a travel agency, served as CCCM's primary negotiator with the cruise lines. When the Articles of Agreement was executed on July 31, 2008, CCCM intended to subcontract with Holland America and Carnival and expected to make a profit of $14,415,182. E-mail from Phillip Sloane to Cindy Brand & Profit Projections Doc., RCMP Opp., Ex. 80 [Dkt. 66-82] at CCCM2174-75. During the quick pivot from negotiations with RCMP to negotiations with the cruise lines, CCCM made one strategic choice that would have later ramifications. In order to "hide [CCCM's] `profit' margin," Mr. Kelly decided that he would not provide the cruise lines with the entire Articles of Agreement or provide RCMP with complete copies of the final charter party agreements. E-mail Chain Between Tracey Kelly & Susan Edwards, RCMP Opp., Ex. 38 at CCCM 1980 (he would "share `parts' of the contract w/ the Cruise Lines as issues arise (such as Taxes)" but would not "provide a full copy of the ISU Articles of Agreement to Cherie [Weinstein of Carnival];" E-mail Chain Among CCCM Partners, RCMP Opp., Ex. 110 [Dkt. 66-112] at CCCM 1996 (he would have the cruise lines "blank out" portions of the CPAs that would allow RCMP to determine CCCM's profit).

1. Negotiations with Holland America Start Well

On August 5, 2008, Mr. Kelly forwarded a first draft of a charter party agreement between CCCM and Holland America to the CCCM partners, which Mr. Kelly had negotiated with Alexis Puma of the cruise line. E-mail Chain Among CCCM Partners & Alexis Puma, et al., RCMP Opp., Ex. 111 [Dkt. 66-113] at CCCM2206. Mr. Kelly noted that he had asked Ms. Puma to seek management approval for several revisions on the next draft, including, most importantly: "that the 10% cash deposit be waived in-lieu of 70% [Letter of Credit] and full payment of Charter Hire in May 09. Explained how the payments come from Canadian Gov't to [the Royal Bank of Canada] and [the Bank] to Cruise Lines." Id. On August 11, 2008, Rob Coleman of Holland America notified Mr. Kelly that Holland America would agree to the financial structure Mr. Kelly had requested — i.e., that CCCM would not be required to make any cash deposit and would instead post a 70% letter of credit upon signing the charter party agreement, and would pay the charter fare in full in May 2009. E-mail Chain Among Tracey Kelly & Holland America Personnel, RCMP Opp., Ex. 88 [Dkt. 66-90] at CCCM15118.

2. Negotiations with Carnival Stall; CCCM Considers Royal Caribbean

Mr. Kelly's first documented contact with Carnival ("CCCL" in emails) after the Articles of Agreement was to inform Ms. Weinstein on August 6, 2008 that he "believe[d]" that CCCM had "addressed ... Taxes." E-mail Chain Between Tracey Kelly & Cherie Weinstein, RCMP Opp., Ex. 43 [Dkt. 66-45] at CCCM2258. Ms. Weinstein was not convinced:

Id. at CCCM2258-60. Mr. Kelly wrote back: "Where I do understand this concern, and the past experience that CCCL had with Katrina, this is a much different situation and a different government. There is specific legislation (section 9676 of Canadian government contracts, Terms and Conditions) that addresses taxes and confirms that the RCMP will pay." Id.

Thereafter, Mr. Kelly contacted Vicki Freed and Stacy Shaw of Royal Caribbean International ("RCI" or "RCL" in emails), indicating that CCCM "would like to do business with [Royal Caribbean and Celebrity Cruises]."21 E-mail Chain Among Tracey Kelly, Vicki Freed & Stacy Shaw, RCMP MSJ, Ex. 19 [Dkt. 62-23] at CCCM2465. Mr. Kelly offered the same structure to which Holland America had just agreed, i.e., CCCM "would secure the Vessel(s) with a 70% [Letter of Credit] w/in 14 days of contract signing. [CCCM] would pay 100% of the Charter Cruise Fare on or before the end of May 2009." Id. at CCCM2466. Ms. Shaw responded on August 13, offering to provide at least one ship, Jewel of the Seas, and possibly a second ship, Radiance of the Seas. E-mail Chain Between Stacy Shaw & Tracey Kelly, RCMP MSJ, Ex. 20 [Dkt. 62-24] at CCCM2542. She also told Mr. Kelly that the proposed financial structure would need some work, but Royal Caribbean would be willing to try to accommodate the charter rate proposed by CCCM. Id.

On August 14, 2008, the CCCM partners discussed by e-mail whether it would be financially advantageous for CCCM to switch from Carnival to Royal Caribbean. E-mail Chain Among CCCM Partners, et al., RCMP Opp., Ex. 112 [Dkt. 66-114] at CCCM2576. A change was also driven in part by RCMP's request for an increase in the number of beds. Mr. Kelly and Ms. Shaw then exchanged further electronic communications, by which Mr. Kelly asked Ms. Shaw to "move forward with this Proposal," including both "Radiance Class vessel[s]," and Ms. Shaw replied to confirm: "[D]o I understand your offer as follows if both ships are offered: Jewel of the Seas [and] ... Radiance of the Seas[?]" E-mail Chain Between Tracey Kelly & Stacy Shaw, RCMP MSJ, Ex. 21 [Dkt. 62-25] at CCCM10040-41.

3. Holland America and Royal Caribbean Raise More Tax Concerns

Only a few days apart in mid-August 2008, representatives of both Holland America and Royal Caribbean expressed more concerns about the taxes they might have to pay if their ships were used for the 2010 Vancouver Olympics. Mr. Kelly sought to assure both lines that their concerns had been addressed by the revisions to the Articles of Agreement on which CCCM had insisted.

First, in an August 14, 2008 e-mail, Mr. Coleman of Holland America wrote to Mr. Kelly:

[Estimated charter fee]     $9 440 080
Customs duty                1,925,501
GST                         664,554
Payroll taxes               40,500
income taxes                1,625,360
hotel taxes                 1,000,000
individual income taxes     50,625
[Total duties & taxes]      5,306,53922

E-mail Chain Among Rob Coleman, Tracey Kelly & Susan Edwards, et al., RCMP Opp., Ex. 39 [Dkt. 66-41] at CCCM2872. Interdelineating Mr. Coleman's email, Mr. Kelly responded:

Id. In his e-mail, Mr. Coleman also "provided the details" of the Holland America's corporate tax calculation:

Estimated charter fee:                       9,440,080
estimated profit margin                      36%
Taxable income                               3,368,621
tax rate
Federal and provincial                       31.0% 0.31
total federal and provincial tax             1,044,273
taxable income less fed & provincial tax     2,324,349
branch profits rate                          25.00%
branch profits tax                           581,087
total federal, provincial and BPT            1,625,360

Id. To these points, Mr. Kelly responded:

Id. at CCCM2871. Responding only to Mr. Kelly, Ms. Edwards complained that it did not "seem appropriate" for Holland America to ask CCCM "to be responsible for their Corporate Income tax? ?" Id.

Mr. Kelly sent Mr. Coleman a more lengthy e-mail later on August 18, attaching a copy of General Conditions 9676. See E-mail Chain Among Susan Edwards, Tracey Kelly & Rob Coleman, RCMP Opp., Ex. 44 [Dkt. 66-46]. Writing that he was "highlighting General Conditions 9676, section 35, paragraph 3," Mr. Kelly explained:

Id. at CCCM2828-29. Ms. Edwards complimented Mr. Kelly on his phrasing in an e-mail sent only to him, noting that she "ha[d] a concern that they won't see the Corporate Income tax as being covered" but "hope[d] that 9676 mollifie[d] them." Id. at CCCM2828. Asked at her deposition about this e-mail, Ms. Edwards stated: "I had a great belief in the project that 9676 would cover it, but it didn't matter. We knew right from the very beginning that corporate income tax needed to be covered." I Edwards Dep. at 136.

Second, and much to CCCM's consternation, Royal Caribbean contacted Mr. Kelly on August 19 about their own reservations concerning Canadian tax liability. Ms. Shaw wrote:

E-mail Chain Among Royal Caribbean Personnel & Tracey Kelly, et al., CCCM Reply, Ex. 12 [Dkt. 70-12] at CCCM9876 (emphasis added); see also Kelly Dep. at 220 ("Q. Did you show 9676 to the cruise lines? A. Yes. Q. Did the cruise lines explain to you in so many words that they were unconvinced that 9676 obligated RCMP to pay the taxes about which cruise lines were expressing concerns? A. Yes.").

O. August 20 through 27: Bank Financing Talks Stall; RCMP Ship Tour; Tax Issues Escalate

On August 20, CCCM learned that the risk management department at the Royal Bank of Canada had rejected CCCM's request for financing. P. Sloane Dep. at 125. Tracey Kelly, Phillip Sloane, and Mike Sloane discussed possible sources for alternative funding by e-mail, with the most promising being another Canadian bank. See E-mail from Phillip Sloane to Tracey Kelly & Mike Sloane, RCMP MSJ, Ex. 85 [Dkt. 62-89] at CCCM10017; E-mail from Tracey Kelly to Phillip Sloane & Mike Sloane, RCMP MSJ, Ex. 86 [Dkt. 62-90] at CCCM10018. Mr. Kelly also suggested as a "last option" arranging direct funding with the cruise lines — possibly by proposing "10% cash down and a direct assignment of funds in April [2009]," with one payment to Holland America, one to Royal Caribbean, and the remainder (i.e., CCCM's profit) to CCCM. E-mail from Tracey Kelly, RCMP MSJ, Ex. 86 at CCCM10018.

Notwithstanding the "bad news" from the Bank, id., CCCM pressed on. On August 23, Ms. Edwards took "RCMP personnel, including [Ms.] Meikle and [Inspector] Kaluza," on a tour of Holland America's ms Statendam — i.e., the same ship for which CCCM had received a quote in May, but not the ship listed in the final Bid. II Edwards Decl. ¶ 6. During the tour, Ms. Edwards "explained that the Statendam was part of a class of Holland America ships known as the `S-class,' and that while this inspection was taking place on the Statendam, it [might] not ultimately be the exact ship brought into port in Vancouver for the Olympics." Id. After explaining that ships within the same class are "identical as far as layout, amenities, beam width, length, displacement, and number of rooms" and that "it is not unusual for a cruise line to switch ships within a particular class, even when a charter party agreement names a specific ship[,] RCMP personnel informed [Ms. Edwards] that this arrangement was acceptable, and that the Statendam, in particular, and Holland America's S-class vessels, in general, would be acceptable the RCMP for use during the Olympics."23 Id.

CCCM continued its work on avoidance of Canadian taxes while restarting its efforts to secure financing. Mr. Kelly and Ms. Edwards decided to "ask[] Ms. Meikle and Mr. Day to give [them] written assurance that the RCMP was obligated to pay the taxes, so that [CCCM] could provide that written assurance to the cruise lines." I Kelly Decl. ¶ 18. Although negotiations were ongoing with Royal Caribbean to replace Carnival, Mr. Kelly asked Mr. Border of Carnival to review a "proposed amendment" to the CCCM-RCMP contract and to have Mr. O'Brien, Carnival's Chief Tax Strategic Officer, review it as well. E-mail Chain Among Tracey Kelly & Jim Border, et al., RCMP Opp., Ex. 47 [Dkt. 66-49] at CCCM3551. The document for review provides insight into CCCM's contemporaneous understanding of the tax issues:

Potential Taxes:

E-mail from Tracey Kelly to Jim Border & CCCM Doc., RCMP Opp., Ex. 48 [Dkt. 66-50] at CCCM10118. Mr. Border replied: "[P]lease understand that Mark and I represent Carnival in this matter and I can not [sic] review the agreement nor advise you regarding any aspect of this transaction except to strongly suggest[] that you engage Canadian counsel." E-mail Chain Among Tracey Kelly & Jim Border, et al., RCMP Opp., Ex. 47 at CCCM3550.

CCCM received a draft charter party agreement24 from Royal Caribbean on August 27, 2008. E-mail from Tracey Kelly to CCCM & E-mail from Stacy Shaw to Tracey Kelly with First Draft RCCL CPA, RCMP MSJ, Ex. 22 [Dkt. 62-26]. The draft charter party agreement covered Jewel of the Seas but contained many blanks and was labeled "For Discussion Purposes Only." Ms. Shaw cautioned: "We have yet to address language specific to this project so we should expect certain clauses to change and/or be added ...." Id. at CCCM3371. Three areas of the Royal Caribbean draft charter party agreement are notable: Section 5, titled "Taxes and Fees," would require CCCM to prepay to Royal Caribbean an amount sufficient to cover "unknown" taxes, id. at CCCM3377;25 Sections 8 and 9 proposed (1) installment payments from CCCM to Royal Caribbean on unspecified dates and (2) delivery of an irrevocable standby letter of credit, due upon signing the charter party agreement, for the "Total Guaranteed Amount," id. at CCCM3377-78; and, finally, Section 22 would allow Royal Caribbean, upon notice, to substitute another Radiance-class ship for Jewel of the Seas. Id. at CCCM3383.

Also on August 27, Mr. Kelly spoke with Ms. Meikle to update her. In an e-mail intended to serve as "a formal summary of our discussion and committed actions from our conference call today 8/27/08," Mr. Kelly wrote to Ms. Meikle:

E-mail Chain Among CCCM Partners & Kelly Meikle, RCMP Opp., Ex. 114 [Dkt. 66-116] at CCCM3443-44; see also Kelly Dep. at 220 (stating that he "relay[ed]" the cruise lines' concerns that 9676 did not obligate RCMP to Ms. Meikle and Mr. Day).

P. August 25 through September 5: Tax Issues Continue to Escalate

Mr. Kelly again contacted Jim Border of Carnival on August 29:

Id. at CCCM3549-50. Mr. Kelly also asked for Carnival's "Canadian Attorney contact information." Id. at CCCM3549. Mr. Border declined to answer Mr. Kelly's question, telling Mr. Kelly to let him know when CCCM retained an attorney. Id. at CCCM3548. Mr. Kelly then sent contact information for Will Joyner, an attorney with Womble Carlyle Sandridge & Rice in North Carolina who had drafted CCCM's organizational documents. Id. Mr. Border wrote to Mr. Kelly on September 1, 2008, that he "had a very pleasant chat with your North Carolina counsel concerning the charter. Our impression is that they will be recommending to you that you engage Canadian counsel for this transaction." E-mail Chain Among Jim Border & Tracey Kelly, et al., RCMP Opp., Ex. 49 [Dkt. 66-51] at CCCM3642.

Mr. Kelly wrote again to Mr. Border on the next day, apparently to confirm the subjects discussed during the conference call:

Id.

At this point — September 2 — internal CCCM e-mails show that the CCCM partners considered three strategies to address the cruise lines' tax problem. Ms. Edwards wrote to Mr. Kelly:

E-mails from Susan Edwards to Tracey Kelly, RCMP Opp., Ex. 115 [Dkt. 66-117] at CCCM3674. Ms. Edwards then drafted a document titled "Tax Protocol," "on Letterhead," that she sent to the CCCM partners, proposing that they send it to Ms. Meikle. Although the first draft of this document does not appear in the record, Ms. Edwards told the CCCM partners:

E-mail Chain Among CCCM Partners, RCMP Opp., Ex. 52 [Dkt. 66-54] at CCCM3762-63 (ellipsis in original). Ms. Edwards also wrote that she was trying "to play up the idiocy of this so that we can psychologically team up on the same side" and that she "titled it, TAX PROTOCOL" because she was "trying to use language that creates a policy" and "indicate[] a POSITIVE, TEAM APPROACH." Id.

Although he "like[d] what Sue wrote," Phillip Sloane advised: "We are hiring legal counsul [sic] in Canada today with an emergency status on their assignment. Before we let take [sic] the next step do you think we might want to get comments back from our counsul? [sic] What do you say?" Id. at CCCM3762. Ms. Edwards disagreed:

Id. The approach advocated by Ms. Edwards won out, and e-mails she sent to Mr. Kelly on September 3 show that Mr. Kelly was tasked with sending the proposed letter to Ms. Meikle and then calling her in hopes that she would agree to resolve the tax problem in a way favorable to CCCM, either by pursuing a repeal of any potential taxes or paying additional funds to cover the taxes. In an e-mail titled "Happy Place," Ms. Edwards included the following suggestions for Mr. Kelly's phone call:

E-mail from Susan Edwards to Tracey Kelly, RCMP Opp., Ex. 53 [Dkt. 66-55] at CCCM3732.

Ms. Edwards, who was questioned in depth about this e-mail at her deposition, summarized it as "cheerleader Sue hoping that Tracey can get through to Kelly when I wasn't able to." I Edwards Dep. at 132-33. She explained:

Id. Asked what she meant by the reference in point 7 to "phantom taxes," Ms. Edwards and CCCM's counsel had the following exchange:

Id. at 134, 136.

On September 4, Mr. Kelly wrote Ms. Meikle an e-mail asking for a phone call to discuss "the Cruise Lines concerns on Canadian Taxes." E-mail Chain Among Tracey Kelly & Kelly Meikle et al. & CCCM Letter to Kelly Meikle & Michael Day, CCCM MSJ, Ex. 25 [Dkt. 65-16] at CAN9640-41. Ms. Meikle responded that she was available but, "to be quite honest I don't know much about Canadian Tax Law. I'm not sure I am the person to advise or guide on this issue." Id. In a second email on that day, Ms. Meikle advise that she needed more time because RCMP needed to check with "Canada Revenue Taxation Agency." Id. at CAN9368. As a result, she added: "Please consider the September 8, 2008 deadline [for CCCM to execute and submit charter party agreements] to be suspended until we can resolve this issue...." Id.

At some point on September 4, Messrs. Kelly and Day and Ms. Meikle did talk by phone. See CAN3637-38 (Mr. Kelly's "Minutes from Conf call 9/04/08 and proposed Tax strategy"). In his cover email. Mr. Kelly thanked RCMP for the extension of the September 8 deadline because legal counsel will need to review;" reminded Mr. Day and Ms. Meikle that the charter dates "require significant changes in the Cruise Lines['] printed itineraries [sic] and thus risk to the Lines for waiting;" and provided an attached ISU Tax Protocol for consideration. Id. at CAN9637-38. The attachment, on CCCM letterhead, stated:

Proposed Actions for Discussion:

Id. at CAN9643-45. Mr. Kelly also sent a follow-up e-mail, writing that he wished to clarify that "the Cruise Lines are based in the United States but they [sic] Foreign Flagged Companies (from Countries that do not have Corporate Income Tax, Payroll Taxes, and GST)." E-mail Chain Among Tracey Kelly & Kelly Meikle, et al., RCMP Opp., Ex. 55 [Dkt. 66-57] at CAN7880; see also RCMP Opp., Ex. 65 [Dkt. 66-67] (duplicate).

Ms. Meikle responded the next morning to report that RCMP's solicitor had referred it to "Canadian Revenue Canada Taxation Agency." E-mail Chain Among Tracey Kelly and Kelly Meikle, et al., RCMP Opp., Ex. 55 at CAN7800. Ms. Meikle promised to respond further that same morning. Id.

Mr. Day acknowledged at deposition that, at least no later than September 4, 2008, he "knew that the Cruise Lines had a concern about the potential of Canadian taxes." Day Dep. at 42, 52.

Q. September 5 through 8: Discussions with Canadian Revenue Agency; Financing Approved

Mr. Day notified Mr. Kelly on September 5 that Mr. Day had contacted the Canada Revenue Agency (occasionally "CRA"). See E-mail Chain Among Kelly Meikle, Michael Day & Tracey Kelly, RCMP Opp., Ex. 56 [Dkt. 66-58] at CAN7904; see also CCCM Reply, Ex. 9 [Dkt. 70-9]. Mr. Day summarized the call in the e-mail:

Id. at CAN7904. Mr. Day acknowledged at deposition that he had begun "talking to RCMP finance in September of 2008 about how to handle the potential costs of the taxes imposed against the Cruise Lines... because as of September 5, 2008, [he] believe[d] that RCMP finance would be responsible for paying the taxes assessed against the Cruise Lines ... [i]f those taxes were to become applicable." Day Dep. at 54.

Mr. Kelly responded:

E-mail Chain Among Tracey Kelly & Michael Day, et al., RCMP Opp., Ex. 118 [Dkt. 66-120] at CAN980.

Mr. Kelly and Ms. Edwards talked with Mr. Keane and Lana Sharpe of the Canada Revenue Agency on September 5, 2008. According to Ms. Edwards's minutes, which she sent to Mr. Kelly and Canada Revenue, the parties discussed "possible taxes and the process/procedures required to reach a decision as to what, if any, taxes would be assessed for the RCMP 2010 Charters." E-mail Chain Among Tracey Kelly, Susan Edwards & CRA Staff, RCMP Opp., Ex. 87 [Dkt. 66-89] at CCCM4133-44. The minutes demonstrate that the tax implications of chartering vessels to use as accommodations for the ISU at the Olympics were far more complicated than anyone at CCCM or RCMP had believed and that it would be a major undertaking for Canada Revenue to determine what taxes might apply to each ship, dependent on, inter alia, possible tax treaties between Canada and the ship's country of registration. The conversation also clearly distinguished CCCM's potential tax liability, if it were found to be a Permanent Establishment under Canadian tax law, from the matter of cruise-line taxes. Even in a "best case" scenario for CCCM, in which CCCM was determined not to be a "Permanent Establishment" in Canada, the extent of tax liability for it and the cruise lines might remain unknown until a tax waiver application had been resolved, which could not occur until very close to start of the 2010 Olympics.26

On September 8, 2008, Ms. Shaw of Royal Caribbean sought clarification on the charter party agreement and the entire project. E-mail Chain Among Stacy Shaw & Tracey Kelly, RCMP MSJ, Ex. 24 [Dkt. 62-28] at CCCM10716. The issues presented by Ms. Shaw and Mr. Kelly's answers (in italics) were as follows:

Id. at CCCM10716-17.

While tax issues were percolating, Ms. Brand at Royal Bank of Canada sent a "Conditional Approval" to CCCM on September 8:

E-mail from Cindy Brand to Phillip Sloane & Susan Edwards, CCCM Opp., Ex. 18 at CCCM4145. The grant of "conditional approval" meant that the Royal Bank of Canada would follow up with CCCM by providing "a detailed letter ... outlining all of the approved credit facilities and all the terms and conditions relating thereto." Deposition of Thomas Siemens, October 3, 2012 ("Siemens Dep."), RMCP MSJ, Ex. 6 [Dkt. 62-10]; CCCM MSJ, Ex. 46 [Dkt. 60-46]; CCCM Opp., Ex. 7 [Dkt. 67-7] at 10. The Royal Bank of Canada intended to provide CCCM with a "$1.5 million line of credit ... for operating expenses," and "letters of guarantee in favour of the cruise lines for $19.724 million," in return for which CCCM would assign to the Bank its first payment from RCMP in the amount of for $44.278 million. Id. at 13-14. That money would be transferred to the Bank "before the cruise lines ... were allowed to draw under the letters of credit." Id. at 14-15. Some of that money would remain available to CCCM after the $1.5 million line of credit and $19.724 million letters of credit were drawn upon. Id.

Phillip Sloane then forwarded Ms. Brand's e-mail to "Skip Brown[,] the president of Tristone Bank in Winston-Salem,"28 P. Sloane Dep. at 127, writing:

E-mail from Phillip Sloane to "sbrown@tristonebank.com," CCCM Opp., Ex. 19 [Dkt. 67-19] at CCCM4147.

Continuing the trend of positive developments for CCCM, Mr. Kelly reported that he had just had a "good long conversation that was very positive" with Mr. Day on taxes. Mr. Kelly wrote:

E-mail from Tracey Kelly to CCCM Partners, RCMP Opp., Ex. 66 [Dkt. 66-68] at CCCM4149.

R. September 9 through 12: Parties' Discussions on Canadian Taxes

The positive tone of the conversation between Mr. Day and Mr. Kelly was the final highwater mark of the relationship between CCCM and the RCMP. The following day, September 9, Mr. Day suggested a different course for addressing the tax problem to Ms. Meikle: tell CCCM that (1) its Bid, which specified that RCMP would pay the taxes, was part of the contract between CCCM and RCMP, which should be enough to assuage the cruise lines' concerns, and (2) RCMP would not sign any contract amendments. His email clearly states his understanding of RCMP's commitments to CCCM:

E-mail from Michael Day to Kelly Meikle, CCCM MSJ, Ex. 26 [Dkt. 65-17] at CAN20627 (emphasis added).

Questioned about this email during his deposition, Mr. Day was similarly clear that he believed that § 35(3) of the General Conditions 9676 document and § 4.6.3 of the RFP and Bid bound RCMP to pay the taxes about which the cruise lines were concerned:

Day Dep. at 65-66, 68-69.

On September 10, Ms. Meikle carried out Mr. Day's instruction, writing to Mr. Kelly:

E-mail Chain Among Tracey Kelly & Kelly Meikle, et al., CCCM MSJ, Ex. 27 [Dkt. 65-18] at CAN4009 (emphasis added). Mr. Day emphasized Ms. Meikle's email in a later message to Mr. Kelly on September 12:

E-mail Chain Among Kelly Meikle, Michael Day & Tracey Kelly, et al., CCCM MSJ, Ex. 28 [Dkt. 65-19] at CAN7869 (emphasis added). That evening, Ms. Meikle added: "Further to Mike's email below, the priority of documents includes the Federal Government shall be responsible for any additional taxes which may be assessed to the contractor with respect to the cruise ships lines. Please consider this email acknowledgment and acceptance of this clause." Id. (emphasis added). Ms. Meikle testified that she wrote this e-mail "[b]ecause the [Canada Revenue Agency] might ultimately decide to charge the taxes, might ultimately decide not to charge the taxes" and she "didn't know as of September 12, 2008, whether or not they were ultimately going to be assessed." Meikle Dep. at 123. Mr. Day testified that he concurred with Ms. Meikle's e-mail "based upon [his] understanding and participation in the contract negotiations with CCCM and [his] reading of the contract." Day Dep. at 71. These exchanges ended Mr. Day's direct involvement with CCCM, as he left for vacation with no e-mail access and did not return until October 8. See id. at 77-78, 154.

Knowing that the cruise lines would not be satisfied, CCCM decided to press forward to obtain more formal written confirmation that Bid § 4.6.3 should provide "the level of comfort" needed. Mr. Kelly thanked Mr. Day and Ms. Meikle and then added:

E-mail from Tracey Kelly to Kelly Meikle & Michael Day, et al., RCMP Opp., Ex. 68 [Dkt. 66-70] at CCCM10914.

Also on September 10, as part of its evaluation of the tax questions, the Canada Revenue Agency asked Ms. Edwards for "information on the country in which the cruise lines file their tax returns" and "a copy of the proposed agreement between your company and the cruise lines." E-mail from Lana Sharpe to Susan Edwards, et al., RCMP Opp., Ex. 57 [Dkt. 66-59] at CCCM4214. Ms. Sharpe stated: "Until we get this additional information we will not be able to proceed with the balance of our submission." Id. It is unclear whether or when CCCM answered this request.

S. September 10 through 13: Charter Agreements and Tax Terms Negotiations With Cruise Lines; RCMP Asks to Raise Contract Amount; Holland America Proposal

During the evening of September 10, Mr. Kelly updated Royal Caribbean on the tax discussions between CCCM and RCMP. Mr. Kelly wrote:

E-mail Chain Among Stacy Shaw & Tracey Kelly, RCMP MSJ, Ex. 59 [Dkt. 62-63] at CCCM10760. Ms. Shaw answered that Royal Caribbean was studying the tax issue and working on its response, although it assumed "that taxes will be due [and understood] that a pursuit of a remission will take place in the coming year." Id. at CCCM10759. Ms. Shaw forecast that Royal Caribbean would require approximately $2.8 million per ship to be prepaid by CCCM if no tax remission were in place. Id. Answering Ms. Shaw on September 11, Mr. Kelly suggested that "CCCM and ISU will pursue a TAX Remission for the Cruise Lines, that Process takes up to 12 months, if by September 2009 the TAX Remission is not complete (or successful), then CCCM will receive additional Funds from the ISU to establish an [Letter of Credit] for the stated amount of Taxes. This TAX LOC will remain in place until TAXES are assessed. The Canadian Taxes will be paid from this LOC." E-mail Chain Between Stacy Shaw & Tracey Kelly, RCMP MSJ, Ex. 59 at CCCM10758. Mr. Kelly and Ms. Shaw also spoke by phone later that day and Mr. Kelly told Ms. Shaw that Royal Caribbean's tax projection was "250% higher than the other Lines."29 Id. at CCCM10757.

Royal Caribbean sent a second draft charter party agreement to Mr. Kelly on September 12. E-mail from Tracey Kelly to CCCM Partners & E-mail from Stacy Shaw to Tracey Kelly, RCMP MSJ, Ex. 26 [Dkt. 62-30]. Still labeled "For Discussion Purposes Only," it was far more complete than its predecessor. Id. at CCCM4246. However, Royal Caribbean's offer was only valid if a charter party agreement were executed no later than September 17, 2008, and a letter of credit provided no later than September 30, 2008. Id. at CCCM4259. Royal Caribbean named Jewel of the Seas and Radiance of the Seas for charter, and both ships were mentioned in the replacement clause. Id. at CCCM4246, CCCM4256. The proposal would require CCCM to pay Royal Caribbean $18,736,800.00USD by May 31, 2009 and $1,240,830.00USD by December 31, 2009. Id. at CCCM4250. Royal Caribbean solved its tax problem by making CCCM responsible for "any and all TAXES." Id. at CCCM4249-50. In addition, Royal Caribbean wanted two letters of credit, one to "secure CRUISE LINE for the Purchaser's obligations under this Agreement" for $13,115,760.00USD, and a second to "secure CRUISE LINE for the Purchaser's obligations under this Agreement relating to estimated TAXES," in the amount of $5,700,000.00USD. Id. at CCCM4251.

As CCCM was grappling with Royal Caribbean to negotiate charter party agreements, Mr. Day of RCMP was grappling with the need to increase the contract price to cover taxes on the cruise lines. It appears that his request was not warmly received, as he first spoke to Deirdre Dare, a senior RCMP staffer, and then sent her an email on September 12 to warn that considerable money damages would be due to CCCM if RCMP repudiated the contract instead of increasing its value:

E-mail from Michael Day to Deirdre Dare, et al., CCCM Reply, Ex. 10 [Dkt. 70-10] at CAN20596. Later on the same day, Mr. Day wrote again to Ms. Dare, setting out the history of the CCCM-RCMP contract and requesting authorization for an additional $10 million "in the event that CRA rules that the contractor is to pay corporate taxes." E-mail Chain Among Deirdre Dare & Michael Day, et al., Excel Spreadsheet & Background Doc., CCCM MSJ, Ex. 23 [Dkt. 65-14] at CAN20556-57. Mr. Day attached a spreadsheet and a lengthy narrative to his email; the narrative explained "the history and background of the contract for accommodation vessels, the background on the corporate tax issue and the possible impact of that." Id. at CAN20554. The spreadsheet illustrated the sequence of negotiations as the number of beds increased. Id. at CAN20555. As Mr. Day's narrative stated, he and Ms. Meikle considered corporate taxes "extraordinary" and unforeseen until they were "identified by the contractor providing the accommodation vessels." Id. at CAN20556-57. Mr. Day testified at deposition that by the time he wrote to Ms. Dare, "the RCMP had agreed to pay those very taxes that the Cruise Lines were expressing concern about." Day Dep. at 88.

The narrative document confirms Mr. Day's contemporaneous intentional agreement to bind RCMP to pay Canadian taxes assessed against the cruise lines and confirms many details of the parties' contracting history. Mr. Day wrote to Ms. Dare:

Conclusion:

E-mail Chain Among Deirdre Dare & Michael Day, et al., Excel Spreadsheet & Background Doc., CCCM MSJ, Ex. 23 at CAN20556-57. Asked about this email and its attachments at deposition, Ms. Dare testified that Mr. Day sent her this information in preparation for Ms. Dare to make a submission to the Treasury Board for additional spending authority. Deposition of Deirdre Dare ("Dare Dep."), June 26, 2012, CCCM Reply, Ex. 3 [Dkt. 70-3] at 78-80.

On September 13, 2008, Mr. Kelly received the first draft of a charter party agreement from Ms. Puma of Holland America. E-mail from Alexis Puma to Tracey Kelly & First Draft HAL CPA, RCMP MSJ, Ex. 25 [Dkt. 62-29]. The proposed charter agreement was for ms Statendam, the ship RCMP had toured in August, and it carried an option date of September 12, 2008 — i.e., the day before CCCM received it. Holland America proposed three payments from CCCM: security of $6,608,056 due 30 days after a final charter party agreement was signed; a final payment of $9,440,080 due May 31, 2009; and "$2,929,680" in "additional tax" due on July 15, 2009. Id. at CCCM4356-57. Holland America proposed to reserve the right to substitute "any vessel of adequate size and similar standards as the VESSEL," with prior consent of CCCM, id. at CCCM4369; and proposed that U.S. maritime law would govern its charter, with disputes resolved in Washington State, id. at CCCM4375. The proposed charter party agreement from Holland America also contained lengthy provisions on taxes, with the repeated effect of requiring CCCM to reimburse Holland America for any and all assessed taxes. Id. at CCCM4362, CCCM4365-66.

On that same day, September 13, RCMP delegates inspected Radiance of the Seas, a Royal Caribbean ship. During the tour, Ms. Edwards "explained ... that the Radiance of the Seas was part of Royal Caribbean's Radiance class of ships, identical in all material respects with the other ships in that class" and "that it was common in the industry for ships within a class to be switched for various reasons, but that in any case the ship which would be brought into port for the Olympics would be a Radiance class vessel that satisfied the requirements of Cruise Connections' contract with the RCMP." II Edwards Decl. ¶ 15. Ms. Edwards avers that "the RCMP officials informed [her] that this arrangement was acceptable, and that the Radiance of the Seas in particular, and the Radiance class in general, would be acceptable for use during the Olympics." Id.

T. September 15 through 23: CCCM Proposes Contract Clarification; Further Involvement with CRA; CCCM's Lawyers Involved; Negotiations with Royal Caribbean

As he had forecast on September 10, Mr. Kelly sent a "Proposed Clarification to Contract" to Ms. Meikle on September 15. E-mail from Tracey Kelly to Kelly Meikle & Proposed Clarification to Contract, CCCM MSJ, Ex. 29 [Dkt. 65-20] at CAN7859. In his cover email, Mr. Kelly wrote: "As promised, attached is our ISU Contract Clarification on Taxes. For your review and if approved, please sign, scan, and then email back to me. This document is requested by the cruise lines prior to finalizing CPA.... We expect to finalize CPAs this week. The Financing is approved...." Id.

The Proposed Clarification would have adopted the course of action that CCCM had discussed internally in the prior days: RCMP would apply for tax relief for the cruise lines and, if unsuccessful, would pay the cruise lines' taxes. The Proposed Clarification emphasized RCMP's tax-payment obligation from the Bid, to which Mr. Day and Ms. Meikle had directed CCCM; it was designed to obtain explicit confirmation from RCMP that "the term `all taxes' shall be interpreted to include, without limitation, all taxes of any kind imposed by Canada ..., including without limitation, income, capital, sales, goods and services or excise taxes, and levies, duties, deductions and withholdings, incurred by: (i) [Holland America] and Royal Caribbean... in connection with the respective charter party agreements ... (the "Pass Through Tax Costs"); and (ii) the Contractor or the partners thereof (the "CCCM Tax Costs") in connection with the Contract." Id. at CAN7860-61.

CCCM's lawyer in North Carolina, William Joyner, called Ms. Meikle on September 18 and then sent a follow-on email to advance a slightly different "Tax Proposal." CCCM recognized that RCMP had a "$60 million per vendor cap[, which] preclude[d] ISU from confirming additional monies to cover these taxes in total." E-mail from G. William Joyner, III to Kelly Meikle, et al., RCMP Opp., Ex. 69 [Dkt. 66-71] at CAN19717-18. To address this limitation, CCCM proposed that RCMP pay directly $1,777,000 for Garbage Disposal, Recycling, Pilotage and other third-party costs, while leaving the contract value payable to CCCM at $CDN57,308,116; that RCMP would pay all taxes assessed against the cruise lines and CCCM up to its contract limit of $60 million, unless it obtained greater expenditure authority; that RCMP would immediately apply for and use its good efforts to obtain greater expenditure authority; and that RCMP would apply for and use its good efforts to obtain a tax remission from the Canada Revenue Agency. Id.

Mr. Joyner's email is notable for appearing to confirm Ms. Meikle's assurances that RCMP had "agreed that the Canadian taxes are the responsibility of the ISU" although it was unable to provide further written assurance because of "the $60 million per vendor cap" (also part of the emails between Mr. Day and Ms. Dare). Id. There was no immediate response.

Canada Revenue again asked Ms. Edwards on September 17 for the cruise lines' tax "filing information" and a copy of "the most complete contract between CCCM and the Cruise Line." E-mail from Lana Sharpe to Susan Edwards, et al., RCMP Opp., Ex. 61 [Dkt. 66-63] at CCCM4641. This time, Mr. Kelly answered the next day and forwarded an e-mail from Royal Caribbean that stated in relevant part: "We do file and pay income taxes in the US[,] but only on a small portion of our worldwide income. Liberia does not impose income taxes on [Royal Caribbean]. In general [Royal Caribbean] does not pay income taxes anywhere else in the world with the exception of a few cruises in certain countries." E-mail Chain Among Tracey Kelly & Lana Sharpe, et al., RCMP Opp., Ex. 63 [Dkt. 66-65] at CCCM4767. Because the Royal Caribbean email also referenced an "email of September 9th regarding Permanent Entity status," Canada Revenue asked for a copy of that e-mail too, id.; Mr. Kelly declined, writing: "We had sent an email to [Royal Caribbean] explaining what [Permanent Entity] status meant and requesting the information of where they file taxes. This is a long way to say that the referenced email did not contain any usable information." Id. at CCCM4766. Mr. Kelly then directed Ms. Sharpe to "to [CCCM's] Canadian Legal Counsel for this project," "TJ Kang of McCarthy Tétrault LLP in Calgary." Id. Finally, Mr. Kelly noted that: "As for Holland America Line, they have not sent a formal notification, but they file ship[-]based revenue income tax in Netherlands/Antilles. They also file income taxes in the states for their USA operations." Id. This was the last interaction between CCCM and the Canada Revenue Agency before CCCM's relationship with RCMP broke down completely.

Despite uncertainty about RCMP's acceptance of its most recent Tax Proposal, CCCM continued its negotiations with Royal Caribbean. CCCM received a third draft of a charter agreement from Royal Caribbean on September 19. Royal Caribbean's management urged a speedy resolution of the negotiations because of "the impact of this project to open deployment and pending announcements." E-mail Chain Between Stacy Shaw & Tracey Kelly, RCMP MSJ, Ex. 27 [Dkt. 62-31] at CCCM11220.

Royal Caribbean's third proposed charter agreement was not much different from its second. It continued to require CCCM to pay all Canadian taxes, although the taxes were to be paid directly to the Canadian taxing authorities (national, provincial, municipal) and not to Royal Caribbean. Id. at CCCM11226. The payment provisions were unchanged, and the security provision was modified only slightly to reduce the amount of the first letter of credit from $13,115,760 to $12,716,970. Id. at CCCM11227-28. Royal Caribbean also inserted a more expansive right to substitute ships "with a capacity of 2,110 or greater and with comparable amenities" but not necessarily within the Radiance class of ships. Id. at CCCM11234. Mr. Kelly sent back proposed revisions on September 23, 2008. E-mail from Tracey Kelly to Stacy Shaw with Revised RCCL CPA, RCMP MSJ, Ex. 29 [Dkt. 62-33]. This fourth draft contained only two substantive areas of change, the more important being a complete revision to Section 5 on Taxes and Fees, called Rider 5A. CCCM's Rider 5A provided that CCCM would be responsible for "any applicable Canadian federal, state, municipal, provincial or other governmental or quasi-governmental sales, use, value-added, excise, or other taxes, duties, fees or charges (whether now in existence or hereafter imposed or changed)" and was required to "reimburse CRUISE LINE for any and all Canadian federal, state, municipal or provincial income taxes actually imposed against CRUISE LINE." Id. at CCCM4933-35. Mr. Kelly wrote that these changes were "aimed at ensuring that the Cruise Line: (i) [would] comply with all Canadian filing and other requirements on a timely basis; (ii) [would] take commercially reasonable efforts to minimize Canadian taxes; and (iii) [would] deliver to CCCM any refund of Canadian taxes that they receive for which CCCM has made a prior payment." Id. at CCCM4928. Mr. Kelly added that CCCM's proposal was "aimed at making clear that CCCM pay Canadian tax only to the extent that it does not minimize other foreign taxes payable by the Cruise Line and confirm that carriage of any dispute in respect of tax with a Canadian governmental authority is controlled by CCCM." Id. Mr. Kelly also inserted three sentences to the Security section of the draft charter party agreement to clarify that CCCM would provide a Tax Letter of Credit to Royal Caribbean only 12 months after execution of the charter agreement and only if a tax remission were not obtained by that time. Id. at CCCM4936-37.

While Royal Caribbean and CCCM were thus negotiating final terms for a charter party agreement, Normande Morin, RCMP Director of Strategic Procurement in Ottawa, became involved in the ISU's vessel chartering project. The first indication in the record of Ms. Morin's involvement comes from an internal e-mail written on September 19, 2008, in which Ms. Morin reacted to Mr. Joyner's e-mail to Ms. Meikle:

E-mail Chain Among Normande Morin & Kelly Meikle, et al., CCCM MSJ, Ex. 31 [Dkt. 65-21] at CAN7791. Ms. Meikle wrote back:

Id.

U. September 26 through 30: Normande Morin Replaces Kelly Meikle as RCMP Contracting Authority; Contractual Relationship Begins to Break Down

Ms. Morin reviewed the Articles of Agreement sometime between September 22 and September 26, 2008. Deposition of Normande Morin ("Morin Dep."), June 27, 2012, CCCM MSJ, Ex. 30 [Dkt. 60-30], RCMP Opp., Ex 6 [Dkt. 66-8], CCCM Opp., Ex. 42 [Dkt. 67-42] at 90. In a letter titled "Nomination of Cruise Ships and Security Requirement" and faxed to CCCM on Friday, September 26, 2008, Ms. Morin demanded that CCCM "nominate the vessels and provide the security documents" within a week:

Letter from Normande Morin to CCCM, CCCM MSJ, Ex. 32 [Dkt. 65-22] at CAN19480.

Ms. Morin's letter caused immediate concern. See II Edwards Decl. ¶ 17 ("Ms. Morin's letter confirmed the concerns previously expressed by Ms. Meikle regarding the negative impact of Ottawa's involvement, and specifically gave us concern that Ms. Morin was eager to find any excuse to terminate the contract with Cruise Connections.").30 Mr. Kelly answered Ms. Morin by email on Sunday, September 28, writing:

E-mail Chain Among Tracey Kelly, Kelly Meikle & Normande Morin, et al., & CCCM Doc., RCMP Opp., Ex. 28 [Dkt. 67-28] at CAN2076. The attachment was titled "Nomination of Cruise Ships and Security Requirement" and contained a lengthy rebuttal of the negative assertions made in Ms. Morin's September 26 letter:

Id. at CAN2080-81 (formatting as in original).

Ms. Morin and Mr. Kelly spoke by telephone on Monday, September 29, and Mr. Kelly then sent another email to Ms. Morin, which she printed and on which she wrote comments. E-mail from Tracey Kelly to Normande Morin, et al., with Ms. Morin's Notes, CCCM MSJ, Ex. 34 [Dkt. 65-24]; see Morin Dep. at 150 (acknowledging handwritten notes). That document, with Ms. Morin's notes in italics, reads as follows:

Id. at CAN2049. At her deposition, Ms. Morin testified that the "no further clari" line meant that "no further clarification" would be provided on the tax issue because she believed she had made RCMP's position with respect to Canadian taxes clear by September 29, 2008. Morin Dep. at 151-52.

Ms. Morin sent a September 30 letter to CCCM reiterating her position on payment of Canadian taxes:

Letter from Normande Morin to CCCM, CCCM MSJ, Ex. 35 [Dkt. 65-25] at CAN1984; see also CCCM Opp., Ex. 32 [Dkt. 67-32].

V. Evening of September 30: CCCM Prepares Nomination Documents

On the evening of September 30, with only four days remaining before the deadline imposed by Ms. Morin, the CCCM partners scrambled to finalize their nominations. As stated above, three ships had been the subject of the ongoing negotiations between CCCM and the cruise lines: Royal Caribbean's Jewel of the Seas and Radiance of the Seas, and Holland America's ms Statendam. CCCM was required to provide, inter alia, "Name of the Vessel; Official number, Class, year built, Flag, length, beam, displacement, [and] passenger capacity, proof of Health Canada inspection of no less than 95% in the last two years." Articles of Agreement, Annex A § 4.7. The Articles of Agreement also required "a Health Canada Cruise ship Inspection score of no less than 95% for the year 2006 and 2007" and "within ten (10) days of the vessel receiving, the Inspection scores for the years 2008 and 2009." Id., Annex A § 5.4.

1. Discussion of Nomination of Ships by Class

In their September 30 emails, the CCCM partners discussed for the first time nominating a ship by class of ship instead of by a specific ship name — for example, "two ships from the Royal Caribbean Radiance Class" instead of Radiance of the Seas and Jewel of the Seas. RCMP contends that the contract required CCCM to nominate specific ships by name and CCCM argues that cruise contracting industry practice is to refer to classes of ships.

Cruise ships within a given class are called "sister ships" and are structurally identical. I Edwards Dep. at 50 (sister ships are "completely identical except for probably interior design and carpet colour"); Kelly Dep. at 31 ("Ships are designed, for lack of a better term, in a cookie-cutter format. So once you understand the class of the vessel, they're all the same. You know, it would be like you driving a Mercedes E350, and Corinne has a Mercedes E350. Well, they are built exactly the same; right?"); Shaw Dep. at 160 (stating that "all Radiance-class ships are "basically identical" "[f]rom a physical standpoint"). Noteworthy is the language of the signed Minutes of the June 3, 2008, meeting — to wit, "the original bid award of 3 ships (2 Fantasy Class Carnival Ships, 1 S Class Holland America Line Ship) will move forward." Minutes at CAN9671-72. Cruise industry practice was also clear, according to the CCCM partners. Ms. Edwards testified:

I Edwards Dep. at 49-50; see also id. at 54, 74. Mr. Kelly's testimony was in accord:

Kelly Dep. at 31-32; see also id. at 67. RCMP's counsel had the following exchange with Mike Sloane during Mr. Sloane's deposition:

M. Sloane Dep. at 53-54. For his part, Phillip Sloane stated: "And so if you're in the business, if you're in the ship business, if you're in the charter business, you know that any ship can be replaced with an equal ship of equal quality, size and space." P. Sloane Dep. at 43.

When asked whether the contract required CCCM to "nominate classes of ships or ... nominate specific vessels," Ms. Edwards answered: "We were asked to nominate vessels, and we knew when everybody agreed that the substitution of vessels — it is not a point of anything for us." I Edwards Dep. at 54. Mr. Kelly testified that RCMP "requested that we nominate specific vessels." Kelly Dep. at 32. Mike Sloane, however, testified: "Q. Mr. Sloane, CCCM's contract with the RCMP required CCCM to nominate vessels?... THE WITNESS: Class of vessels." M. Sloane Dep. at 39; see also id. at 45 ("Q. Where in the document does it refer to `class of vessels'? A. Doesn't."). And Phillip Sloane testified that "the Royal Caribbean Cruise Lines ships were [R]adiance class ships which is what the contract called for, a class of ship." P. Sloane Dep. at 26.

The industry flexibility is reflected in the vessel replacement clauses that are apparently standard in charter party agreements. The CCCM partners' deposition testimony about classes versus specific ships referenced such clauses. See Kelly Dep. at 50 ("Cruise lines have the ability to interchange classes."); M. Sloane Dep. at 53-54 ("Because in the contract, it says that the cruise lines can substitute ships at any time if the ships aren't safe or if there's a problem with the ships.... It says that they can change the ship at any time."); P. Sloane Dep. at 43 ("And so at any point in time, that ship could have been replaced by another ship of equal class."). Notably, § 4.11 of Annex A of the RFP agreed that "[t]he cruise ship line shall have the option to substitute the vessels of similar size and quality that fully meets [sic] the requirement of the ISU and the Contractor," with limited conditions of prior approval and inspection. RFP Annex A, § 4.11.

2. September 30 E-mails Preparing Nomination Documents

The flurry of e-mails and documents exchanged among the CCCM partners on September 30 has become the evidence behind one of RCMP's primary arguments in its motion for summary judgment. RCMP argues that CCCM purposefully misled it by phrasing its nomination to mask CCCM's intent to use a ship with noncompliant health scores for the 2010 Olympics. Health scores for the four relevant ships — Radiance of the Seas, Jewel of the Seas, Serenade of the Seas, and the Statendam — presented contract problems. With a 2008 score of 88 for Radiance of the Seas, 93 in 2007 for Jewel of the Seas, and 94 for the Statendam in 2006 and 2007, the ships failed to meet the range of 95 or better required by the contract.

Michael Sloane acknowledged at deposition that Radiance of the Seas was not in compliance in 2008. M. Sloane Dep. at 58. Mr. Kelly testified that "[t]he health scores of the cruise industry are exceptional" and "better than any hotels," describing the single score of 88 for Radiance of the Seas as an "anomaly." Kelly Dep. at 66.

Ms. Edwards circulated a draft of "Ship Nominations" to the CCCM partners on September 30. See 8:01 p.m. E-mail from Susan Edwards to CCCM Partners, RCMP MSJ, Ex. 38 [Dkt. 62-42] at CCCM5276-78. In the text of her cover e-mail, Ms. Edwards sought their advice:

Id. at CCCM5276. The draft nominating document, intended for Ms. Morin, stated:

Id. at CCCM5277-78.

Counsel for RCMP questioned Ms. Edwards at length during her deposition about this e-mail. Ms. Edwards testified:

Edwards Dep. at 62-64.

At 8:34 p.m. — approximately 30 minutes after sending her first e-mail — Ms. Edwards e-mailed the CCCM partners again, attaching a revised version of the Ship Nominations to add the Maasdam as a Holland America sister ship, with a resulting improvement of that cruise line's health scores from "94-97" to "94-98." 8:34 PM E-mail from Susan Edwards to CCCM Partners, RCMP MSJ, Ex. 39 [Dkt. 62-43] at CCCM5279-81. Ms. Edwards wrote: "I added in the Maasdam as it had good scores. I printed off all the Health Canada and CDC scores and they are ready to go when this next pakg [sic] is completed." Id. at CCCM5279; see also I Edwards Dep. at 66 (acknowledging that the reference to "good scores" was to health scores).

Ms. Edwards then turned her attention to the other topics referenced in Ms. Morin's most recent letter, writing at 8:43 p.m.:

E-mail Chain Among CCCM Partners, RCMP MSJ, Ex. 41 [Dkt. 62-45] at CCCM5286; see also RCMP MSJ, Ex. 87 [Dkt. 62-91] (duplicate). At 9:01 p.m., Ms. Edwards sent another e-mail to bring her partners up to date:

E-mail Chain Among CCCM Partners, RCMP MSJ, Ex. 40 [Dkt. 62-44] at CCCM5290-91; see also RCMP Opp., Ex. 72 [Dkt. 66-74] (duplicate). Phillip Sloane responded at 9:14 p.m.:

E-mail Chain Among CCCM Partners, RCMP MSJ, Ex. 41 at CCCM5286 (emphasis added).

At her deposition, Ms. Edwards disclaimed any knowledge of what Phillip Sloane's reference to "this health issue" meant. I Edwards Dep. at 68. Mr. Sloane testified that with this e-mail he was "basically saying" that Ms. Morin was a "stick of dynamite" who was "not being cooperative," making "threats," and "looking for trouble" instead of "coming up with solutions." P. Sloane Dep. at 41-43. Mr. Sloane acknowledged that the "health issue" was that: "One of the ships ... and I'm not sure even which one because I didn't — I wasn't involved in the names of the ships, appears not to have met the criteria for health score." Id. at 43.

At 9:26 p.m., Phillip Sloane sent an additional e-mail to the CCCM partners, suggesting: "What about having multiple ships [sic] names on the contract knowing full well the ones the cruiselines [sic] want to use and then put the onus on them to get these ships up to Canadian health standards by 12/31/09? ? Is this possible?" E-mail Chain Among CCCM Partners, RCMP MSJ, Ex. 40 at CCCM5290. At his deposition, Mr. Sloane stated that he could not "remember why" he wrote this e-mail and "really [did]n't know why [he] did it." P. Sloane Dep. at 45. Ms. Edwards also disclaimed any understanding of what Mr. Sloane meant. I Edwards Dep. at 73.

Ms. Edwards e-mailed Mr. Kelly at 9:27 p.m., including nothing in the body of the e-mail and attaching a document with the filename "Cruise Connections Charter Management (Clean) 09.19.08.doc." E-mail from Susan Edwards to Tracey Kelly, RCMP MSJ, Ex. 36 [Dkt. 62-40] at CCCM5292. The document is an unsigned charter party agreement with Royal Caribbean with Microsoft Word's Track Changes feature enabled. The tracked changes for the first page show that "Radiance of the Seas" was replaced with "Serenade of the Seas" in one place but not another. Id. at CCCM5293. Separately, at 9:56 p.m., Ms. Edwards responded to Phillip Sloane's 9:26 p.m. e-mail about having "multiple ship names" on the document. 9:56 PM E-mail from Susan Edwards to CCCM Partners, RCMP MSJ, Ex. 42 [Dkt. 62-46] at CCCM5321. She sent the CCCM partners a link to http://www.hc-sc.gc.ca/hl-vs/travel-voyage/general/ship-navire-eng.php, writing that she was "including this Health Canada explanation page in our package tomorrow so that she might `forgive us' a few points." Id.

At 10:07 p.m., Ms. Edwards sent the CCCM partners a document titled "Amended Nomination Document," writing: "Check this one out. I have printed off all the supporting documents from Health Canada and CDC and they are ready to go." 10:07 PM E-mail from Susan Edwards to CCCM Partners, RCMP MSJ, Ex. 43 [Dkt. 62-47] at CCCM5323. Compared to the 8:01 p.m. draft, the 10:07 p.m. version was shorter and contained the names of fewer vessels; it stated:

Id. at CCCM5324.

This draft is notable because it lacked any mention of Radiance of the Seas, one of the ships for which CCCM had been negotiating with Royal Caribbean but which had a noncompliant health score of 88 in 2008. Instead, Ms. Edwards had named Serenade of the Seas, which had never incurred a noncompliant health score during the reported period. Phillip Sloane responded to Ms. Edwards, asking: "The only change I see is you left off one of the RCCL ships?" E-mail Chain Among CCCM Partners, RCMP MSJ, Ex. 44 [Dkt. 62-48] at CCCM5331. She responded: "Yes, I only put down the exact # of ships that we are contracting for." Id.

W. October 1: CCCM Responds to September 30 Letter & Nominates Ships

CCCM sent Ms. Morin three groups of documents on October 1 — two days in advance of her deadline. The first group included: (i) a "Response to Faxed Letter from Contracting Authority on September 30, 2008, Subject: Nomination of Cruise Ships and Security Requirements" and (ii) "Nominated Vessels and Information related to specifics of the vessels." Oct. 1, 2008, Fax from Susan Edwards to Normande Morin & Attachs., part of RCMP MSJ, Ex. 10 [Dkt. 62-14] at CAN1378; see also CCCM MSJ, Ex. 38 [Dkt. 65-28] (duplicate with "Received" stamps). The "Response" from CCCM was a lengthy document that stated, in relevant part:

Nominated Vessels Doc., RCMP MSJ, Ex. 10 at CAN 1380-81 (formatting as in original).

Among the "Nominated Vessels" were Royal Caribbean's Jewel of the Seas and Serenade of the Seas, and Holland America's ms Statendam, with no reference to Radiance of the Seas. See id. at CAN1383. Asked about this change at her deposition, Ms. Edwards engaged in the following exchange with the RCMP's counsel:

I Edwards Dep. at 58-59; see also id. at 53 ("Well, we nominated the class of ships called the Radiance class of ships and also Holland America class of ships; two different classes of ships were nominated."). Ms. Edwards acknowledged that she did not provide the health scores for Radiance of the Seas, explaining that she did not because "[t]he context [was] ... that [CCCM was] nominating ships within a class of ships" and CCCM "just chose these ones at this time, knowing that it was a non-issue due to the vessel replacement clause that all had agreed to." Id. at 60-61.

Mr. Kelly denied knowing who changed the name of the ship in the draft sent to the RCMP. Kelly Dep. at 70. Pressed to explain, he testified:

Kelly Dep. at 67. Stacy Shaw confirmed that she did not approve replacing Radiance of the Seas with Serenade of the Seas, and she did not recall ever being informed by CCCM that they had nominated Serenade of the Seas instead of Radiance of the Seas. Shaw Dep. at 125, 130.

The second group of documents sent by CCCM to Ms. Morin included (1) "Charter Party Agreement (CPA) between RCCL and CCCM" and (2) an "Acknowledgment Form" that, according to Mr. Kelly, was "a Bank requirement to insure that the CPA has been reviewed and acknowledged by the Contracting Authority." E-mail from Tracey Kelly to Normande Morin titled "Response #2 CPA for RCCL and CCCM" & Attachments, RCMP MSJ, Ex. 32 [Dkt. 62-36] at CCCM5433; see also CCCM MSJ, Ex. 52 [Dkt. 65-41]. In the e-mail body, Mr. Kelly wrote:

E-mail from Tracey Kelly to Normande Morin, RCMP MSJ, Ex. 32 at CCCM5433.

Mr. Kelly forwarded to Ms. Morin an unsigned charter party agreement with Royal Caribbean that did not match perfectly any of the four drafts CCCM had exchanged with that cruise line. Id. at CCCM5435-62. It stated "Issue Date: September 2, 2008" and was not valid unless executed "on or before Monday, September 22, 2008 with a valid irrevocable letter of credit to follow on or before September 30, 2008." Id. at CCCM5450. The cost of the charter was deleted. Id. at CCCM5437. The draft referred to Jewel of the Seas and Serenade of the Seas on the first page and Jewel of the Seas and Radiance of the Seas on the third page. Id. at CCCM5435, CCCM5437.

Mr. Kelly also forwarded a document from the Royal Bank of Canada titled, "Acknowledgement of Satisfaction of Condition Precedent." Id. at CCCM5434. The subject line read: "Re: Contract titled `Charter Services to Provide Vessel Accommodation for Royal Canadian Mounted Police and Canadian Armed Forces, Vancouver 2010 Integrated Security Unit, Contract Number 7131902' dated July 28, 2008, as amended by a Contract Amendment dated August 25, 2008 (the `Amendment') and by a Clarification to Contract dated September 15, 2008 (the `Clarification') (together the `Contract')..." Id. The final referenced document — "Clarification to Contract dated September 15, 2008" — was significant because, as discussed supra at § I.T, RCMP did not sign any such document on September 15, 2008; that date was when Mr. Kelly sent a proposed "Clarification" to RCMP for review and signature. Above the place for Ms. Morin's signature, the Bank explained its purpose:

Id.

Mr. Kelly's final e-mail to Ms. Morin attached an unsigned charter party agreement with Holland America and a second "Acknowledgement of Satisfaction of Condition Precedent" form from the Royal Bank of Canada. E-mail from Tracey Kelly to Normande Morin titled "Email # 3 CPA for HAL and CCCM" & Attachments, RCMP MSJ, Ex. 33 [Dkt. 62-38]; see also CCCM MSJ, Ex. 53 [Dkt. 65-42]. The charter party agreement was for ms Statendam; it had an option date of September 26, 2008, and a redacted charter price. HAL CPA, RCMP MSJ, Ex. 33 at CCCM5464-84.

X. October 2 through 6: RCMP Response to Nomination; Renewed Discussions with Cruise Lines; RBC Sends Formal Conditional Credit Offer

In her October 2 response to the CCCM nominating documents, Ms. Morin indicated that RCMP would review them and emphasized that RCMP would not agree to any tax clarification. Since her position is critical to the dispute, it is quoted at length:

Letter from Normande Morin to CCCM, RCMP Opp., Ex. 70 [Dkt. 66-72] at CAN1375-76.

Also on October 2, Royal Caribbean assured CCCM that "[t]he taxes and fees language was considered significant by our Legal and Tax teams but they are diligently working on it with counsel and Canada." E-mail Chain Between Tracey Kelly & Stacy Shaw, RCMP MSJ, Ex. 45 [Dkt. 62-49] at CCCM5583. Mr. Kelly responded: "We are literally at the Bank, waiting for the revised CPA from [Royal Caribbean]. We sent the very same language to [Holland America] and they incorporated it within 24 hours. I do understand that [Royal Caribbean] is conservative, and we hope that the CPA is returned asap. Looking to close this week!" Id.

On October 3, Ms. Morin sent the CCCM nomination documents to Mr. Day, Ms. Meikle, Inspector Kaluza, and Kevin DeBruyckere32 and asked for their review and comments. E-mail from Normande Morin to RCMP Staff, RCMP MSJ, Ex. 30 [Dkt. 62-34] at CAN161. Ms. Morin instructed:

Id. (paragraph breaks removed). The responses are not included in the record, but Ms. Morin must have been satisfied because, at 4:08 p.m., she wrote to Mr. Kelly:

E-mail from Normande Morin to Tracey Kelly, RCMP MSJ, Ex. 31 [Dkt. 62-35] at CCCM 13414 (errors and formatting as in original).

While RCMP was reviewing the nomination documents, CCCM continued its negotiations with the cruise lines over language concerning tax liabilities. On October 3, Holland America informed Mr. Kelly that its "outside tax counsel [would] review provision 4H, Taxes, as a point of due diligence" and that it was awaiting a response. E-mail Chain Among Tracey Kelly, Rob Coleman, Alexis Puma & Other HAL Representatives, RCMP MSJ, Ex. 49 [Dkt. 62-53] at CCCM11668. Royal Caribbean was engaged in a similar review process. See E-mail Chain Among Katie Turner & Tracey Kelly, et al., RCMP MSJ, Ex. 52 [Dkt. 62-66] at CCCM5622. A revised draft charter party agreement for Royal Caribbean, referring to Jewel of the Seas and Radiance of the Seas, provided that Royal Caribbean would invoice CCCM for "CONSUMPTION TAXES" and "CDN TAXES" after the charter. Id. at CCCM5661-62. Both forms of taxes were to be CCCM's responsibility. Id. at CCCM5661-62.

CCCM executed a formal Credit Facilities Offer Letter with the Royal Bank of Canada on October 6, 2008. See RBC Credit Facilities Offer Letter ("Credit Offer Letter"), RCMP MSJ, Ex. 84 [Dkt. 62-88]; see also CCCM MSJ, Ex. 47 [Dkt. 65-36]. The Credit Offer Letter offered a revolving credit facility of $1,500,000; a non-revolving demand facility of $19,724,000 in the form of letters of guarantee ("LGs," another term for letters of credit); and a $100,000 "VISA Business" facility. Id. at CCCM15008-09. If CCCM fulfilled its terms, the Credit Offer Letter ensured that CCCM could finance the RCMP project. However, it attached a Terms and Conditions document that required CCCM to "covenant and agree" to various stipulations, among them that: CCCM had not "granted, created, assumed or suffered to exist any charge, lien, pledge, security interest, or other encumbrance affecting any of its assets or other rights ...;" and CCCM had not "incurred any indebtedness other than under the agreements described in the preceding paragraph." Id. at CCCM15013-15.

RCMP argues that the Sessions Letter of Intent violated these terms so that, had CCCM been truthful with the Royal Bank of Canada, the Bank would never have extended credit, with the ultimate result that CCCM could not have performed and, therefore, breached the contract.

Y. October 9 through 15: Increased Urgency Leads to Frayed Relationships

As of October 9, RCMP had neither returned executed Acknowledgment Forms required by the Royal Bank of Canada nor advised CCCM that the charter party agreements were acceptable. The cruise lines wanted action and certainty. E-mail Chain Among Tracey Kelly & Stacy Shaw, RCMP MSJ, Ex. 47 [Dkt. 62-51] at CCCM5756 (Royal Caribbean writing that its "natives [were] getting restless"). Mr. Kelly promptly requested an update from Ms. Morin, reminding her that the cruise lines had postponed announcing their 2010 sailing schedule in September to accommodate the ship charter in Vancouver but needed to sign the charter party agreements. E-mail Chain Among CCCM Partners and Normande Morin, RCMP MSJ, Ex. 34 [Dkt. 62-38] at CCCM6237. Ms. Morin answered that RCMP was "completing its last review" of the charter agreements and would provide its comments "as soon as possible before the end of the week." Id. at CCCM6236. (October 9 was a Thursday.) Ms. Morin also commented that the Credit Offer Letter had referenced a "Clarification to the Contract dated September 15, 2008," to which RCMP had never agreed. Id. at CCCM6237. She concluded that the Clarification "cannot be included in the letter as being part of the Contract." Id.

Mr. Kelly sent "an updated Acknowledgment of Conditions Precedent document" on Friday, the next day, and asked Ms. Morin to sign it "before noon" Pacific time because CCCM's contact person at the Royal Bank of Canada was leaving for a week-long vacation at 3:00 p.m. Id. at CCCM6236 (without attachment). Ms. Morin did not meet Mr. Kelly's requested deadline and failed to provide any comments on the charter agreements.

Stacey Shaw of Royal Caribbean contacted Mr. Kelly on Monday, October 13 with increasing frustration at the delay and noting that "[t]he deployment announcement for Radiance is scheduled for tomorrow." E-mail Chain Among Stacy Shaw & CCCM Partners, RCMP MSJ, Ex. 48 [Dkt. 62-52] at CCCM5834. Mr. Kelly replied that he had not heard from RCMP on the preceding Friday, as expected, and that October 13 was a Canadian holiday, but he promised immediate action thereafter. Id. Mr. Kelly renewed his efforts to contact Ms. Morin on October 14 and 15, with increasing urgency. See E-mail Chain Among CCCM Partners & Normande Morin, RCMP MSJ, Ex. 34 at CCCM6235-36 ("As of today (10/14/08) there has been no email, fax, or phone call from the Contracting Authority.... Because of this continuing delay, the cruise lines have noted that these CPAs are endanger [sic] of being cancelled and the vessels put into general sales. The Bank (RBC) is also awaiting the requested documents."); id. at CCCM6235 ("In addition to this email, I have placed calls (and left a message) to your office today. CCCM is in urgent need of an update from the ISU.").

Notwithstanding the tie-up at RCMP, Mr. Kelly continued negotiations with Holland America on October 15 to address several issues regarding its charter party agreement. Mr. Kelly wrote that the several documents he sent "represent[ed] the concerns and revisions from both our Legal Counsel, and the ISU." E-mail from Tracey Kelly to Alexis Puma & Rob Coleman, RCMP MSJ, Ex. 50 [Dkt. 62-55] at CCCM11849. Noting that CCCM continued to work to obtain final approval of the charter agreements from RCMP, Mr. Kelly proposed that CCCM supply Tax Letters of Credit in Canadian dollars to Holland America, delivered after CCCM received its second payment from the Canadian Government, on or before November 30, 2009. Id. at CCCM11862. Mr. Kelly also proposed a very broad definition of the Taxes for which CCCM would assume responsibility, taking up three single-spaced pages. The details of the proposal are not relevant to the outcome here, but the fact of the ongoing negotiations over Canadian taxes and CCCM's continued efforts to salvage the contract with RCMP are noteworthy. See id. at CCCM11858-60.

Z. October 16 through 23: Despite Resolution on Some Issues, Disputes Over Taxes and CPA Review Continue

Ms. Morin finally responded to Mr. Kelly on Thursday, October 16, writing:

E-mail Chain Among CCCM Partners and Normande Morin, RCMP MSJ, Ex. 34 at CCCM6234.

Mr. Kelly's immediate answer thanked Ms. Morin for her email but warned that RCMP's delay had "put [the] CPAs in jeopardy." Id. at CCCM6234. After assuring Ms. Morin that the pier could accommodate the vessels, and that CCCM understood its responsibilities, he added, "as acknowledged in the July 14th, 2008 correspondence with the ISU, CCCM must fund tens of millions of dollars at time of closing the CPAs, and the ISU has already confirmed the process in which the Bank (RBC) must insure that the CPAs include all the conditions of the ISU/CCCM contract. That is why we have requested both your review of the CPA and the Conditions Precedent document. Once we have these documents, CCCM can move to a simultaneous closing of both the CPAs and the Financing." Id.

Later on October 16, Ms. Morin forwarded a signed version of the Bank's Acknowledgment Form to Mr. Kelly. See E-mail from Tracey Kelly to CCCM Partners & Signed RCMP Acknowledgment Form, RCMP MSJ, Ex. 64 [Dkt. 62-68] at CCCM6283-85. Without explanation, she had modified the Bank's document yet again, defining the Contract without the Articles of Agreement and acknowledging only that RCMP had agreed to certain payment terms but not that it was satisfied with the charter party agreements. More precisely, the changes were:

Mr. Kelly warned his CCCM partners that Ms. Morin's revised version of the Bank document did "not accomplish what the original RBC [document] requested," and that it did "not address the fact the contract has been amended" to assign a first payment of $44 million to the Royal Bank of Canada "`if' the CPAs meet the contract precedent." Id. at CCCM6283.

Mr. Kelly expressed his reservations to Ms. Morin on October 17 but said that he would ask the Royal Bank of Canada if it would accept the revised document. E-mail from Tracey Kelly to Normande Morin, RCMP MSJ, Ex. 35 [Dkt. 62-39] at CCCM6289; see also RCMP MSJ, Ex. 65 [Dkt. 62-69] (duplicate). As he reported to her later, the Bank was:

E-mail from Tracey Kelly to Normande Morin, Mike Sloane & Sue Edwards, RCMP MSJ, Ex. 61 [Dkt. 62-65] at CCCM6306. Mr. Siemens's deposition testimony confirmed that the Bank needed "acknowledgment of the assignment of that first $44 million payment to RBC" and "that CCCM was entitled to that payment on or before April 30, 2009." Siemens Dep. at 25. With that acknowledgment, the Royal Bank of Canada would have had "the protection it needed to fund the credit facility if everything was done in a timely manner." Id.

A telephone call between Ms. Morin and Mr. Kelly on October 17 did not prompt Ms. Morin to take favorable action. While Mr. Kelly wanted to talk about the changes to the Bank document and CCCM's need for RCMP to approve the charter party agreements, Ms. Morin used the call to raise different problems with the contract, particularly liability waivers that would be required from ISU staff. See E-mail from Tracey Kelly to Normande Morin, Mike Sloane & Sue Edwards, RCMP MSJ, Ex. 61 at CCCM6305-06. Ms. Morin told Mr. Kelly that she was "not authorized to provide" approval of the charter party agreements "now" because someone had "been out everyday this week" who needed to "provide a response to a specific section of the CPAs." Id. In fact, she saw "no big problem" with eventually approving the charter party agreements, but liability waivers from ISU members were "[t]he area of concern." Id. Mr. Kelly tried to explain that such waivers "are standard clauses to all charter contracts," and, more critically, the cruise lines were "at a point where they may very well pull their vessels and then CCCM would have to start over. If that were to happen, and CCCM began to re-negotiate all the vessels at this point, it would be very difficult to find vessels that could accommodate the RCMP (ISU) needs as currently outlined." Id. Ms. Morin said that she understood and did not "want [CCCM] to lose these ships," but could only provide an update when her "Superior" returned on the following Monday. Id.

As a closing to his follow-up email, Mr. Kelly stressed:

Id.

Ms. Morin finally sent Mr. Kelly a lengthy e-mail with RCMP's responses to the charter party agreements and another revision to the Bank's Acknowledgement Form on September 20. E-mail from Normande Morin to Tracey Kelly, RCMP MSJ, Ex. 53 [Dkt. 62-57]. She stated that "[o]nce above comments for the CPAs have been addressed and the RCMP has your confirmation of the acceptance of the content of the letter [for the Royal Bank of Canada] we will finalize the letter." Id. at CCCM13647-48.

In part, Ms. Morin objected to the requirement that ISU officers sign waivers of liability and insisted that the charter party agreements (between CCCM and the cruise lines) be governed by Canadian law as was the contract between RCMP and CCCM. See id. at CCCM13647-48. On the Acknowledgement Form for the Royal Bank of Canada, Ms. Morin's definition of the Contract remained just as limited and failed to mention the Articles of Agreement; her assurance on payments to CCCM was equally vague. She only added the sentence: "The Crown has reviewed the charter party agreements and they reflect the requirement found at section 6.2 of the Contract between the RCMP and Cruise Connections Charter Management 1, LP." Id.

Mr. Kelly responded to Ms. Morin later on October 20, with brief replies to each of her questions on the charter agreements. E-mail Chain Among Normande Morin & CCCM Partners, RCMP MSJ, Ex. 54 [Dkt. 62-58] at CCCM12021-23. For present purposes, the only noteworthy part of his response was the statement that the Royal Bank of Canada required an acknowledgment that "the CPA's [sic] satisfy (fulfill/reflect) the contract requirements that are listed between the RCMP and CCCM." Id. at CCCM12022-23. Mr. Kelly asked to schedule a conference call at 10 AM on October 21 so that CCCM could "meet the cruise line time-line of 12 noon." Id. at CCCM12023.

Ms. Morin's comments on its charter party agreement were not satisfactory to Royal Caribbean. On October 22, Ms. Shaw sent "discussion points" to Mr. Kelly stating, inter alia, that Royal Caribbean would not agree to be governed by Canadian law. E-mail Chain Between Tracey Kelly & Stacy Shaw, RCMP MSJ, Ex. 57 [Dkt. 62-61] at CCCM6403-05. The cruise line's tax department was "conducting a review of the proposed [tax] language/revisions." Id.

AA. October 24 Meeting; RCMP States that 90% Letter of Credit Requirement Is Reimposed, Then Re-waived

It is unclear whether the telephone conference ever occurred, but on October 24, the contract negotiators (Mr. Kelly, Ms. Edwards, Ms. Meikle and Mr. Day) attended a face-to-face meeting with Ms. Morin at RCMP's Vancouver office. Summaries of the events of this meeting are set forth both in Mr. Kelly's sworn declaration and in RCMP's typed minutes.33 RCMP's minutes are titled "CCCM Negotiation on Charter Bargaining" and state that the purpose of the meeting was "Negotiations regarding Accommodation Vessels between CCCM and ISU/RCMP-Re: Charter Party Agreements." Meeting Minutes, RCMP Opp., Ex. 74 [Dkt. 66-76] at CAN4134. According to the minutes, the relevant parts of the meeting were as follows, with certain comments highlighted to show the rationale for each party's position:

Id. at CAN4134.

Mr. Kelly's account of the meeting is consistent with the RCMP minutes. CCCM's objectives were "to discuss any remaining issues with the draft charter party agreements" and "to demand that the RCMP honor its contractual commitment to pay the taxes." I Kelly Decl. ¶ 21. The parties never reached the subject of taxes because "Ms. Morin declared that Cruise Connections was required to secure a letter of credit for 90% of the value of the contract between Cruise Connections and the RCMP — which was approximately $50 million." Id. ¶ 23. According to Mr. Kelly, he and Ms. Edwards:

Id. CCCM decided not to press the tax issue during the meeting and to reraise it in writing afterward "[a]fter seeing how Ms. Morin dismissed Ms. Meikle's confirmation that the RCMP had waived the 90% letter of credit requirement, and given Mr. Day's inexplicable lack of participation in the meeting."34 Id. Ms. Morin has admitted that Ms. Meikle stated during the meeting that "she [Ms. Meikle] and Mike Day had waived the 90 percent letter of credit requirement." Morin Dep. at 94.

On October 24, Ms. Morin signed a version of the Bank's Acknowledgment Form that was markedly different from the original but apparently satisfied the Bank and CCCM. Revised Executed Conditions Precedent Doc., RCMP MSJ, Ex. 66 [Dkt. 62-79] at CAN1898. While the Contract was still narrowly defined, Ms. Morin agreed that RCMP would pay $44 million to CCCM, assigned to the Royal Bank of Canada, before April 30, 2009, "with provisions that the conditions of the Contract have been satisfied." Id. She also agreed that "[t]he Crown has reviewed the charter party agreements and they satisfy the service requirements of the Contract between the RCMP and Cruise Connections Charter Management 1, LP." Id.

When reporting on the meeting to the CCCM partners, their North Carolina attorney Mr. Joyner, and their Canadian attorney, Mr. Kang, Mr. Kelly opined that CCCM had achieved something by securing the signed Acknowledgment Form for the Royal Bank of Canada, but stressed that three other issues worth about $20 million dollars to CCCM still needed resolution. E-mail Chain Among CCCM Partners, G. William Joyner, III & TJ Kang, RCMP Opp., Ex. 96 [Dkt. 66-98] at CCCM15024. One new problem was the change in the exchange rate between Canada and the U.S., which was "so low that we will not have enough money coming in to cover our costs." Id. Mr. Kelly suggested that CCCM needed three amendments to the Contract: to cover taxes explicitly; to cover changes in the exchange rate; and to cover the intervening increase in charter costs of about $6 million due to delay. Id.

Even more critical, however, was Ms. Morin's insistence that CCCM provide a Letter of Credit to RCMP for 90% of the value of the Contract, as required by RFP Annex B § 1. Mr. Kelly wrote to Ms. Morin:

E-mail from Tracey Kelly to Normande Morin, et al., CCCM MSJ, Ex. 41 [Dkt. 65-31].

Ms. Morin asked Mr. Day to review the RFP and CCCM contract documents, and Mr. Day responded on October 27, explaining that the 90% letter of credit requirement had been waived:

E-mail from Michael Day to Normande Morin, CCCM MSJ, Ex. 39 [Dkt. 65-29] at CAN1067-68 (emphases added); see also CCCM Opp., Ex. 16 [Dkt. 67-16]. Despite Mr. Day's confirmation, Ms. Morin was dissatisfied and "still had to verify this matter" further. Morin Dep. at 101. So she wrote back to Mr. Kelly on October 27:

E-mail Chain Among Tracey Kelly and Normande Morin, et al., CCCM Opp., Ex. 22 [Dkt. 67-22] at CAN15429-30. Mr. Kelly replied on the very same day, reiterating that RCMP had already waived the 90% letter of credit requirement and warning that "without the confirmation that there is no requirement for 90% LOC, the Bank will not Fund." Id. at CAN15429.

Mr. Day sent additional e-mails to Ms. Morin on October 28, 2008. In his first email of the day, he asked whether she would be able "to advise CCCM that the provision to provide an LOC for 90% of the contract value has been determined to not apply to the contract so they can finalize the CPA and secure the vessels." E-mail from Michael Day to Normande Morin, CCCM MSJ, Ex. 40 [Dkt. 65-30] at CAN1069. He added: "Please understand that I am getting tremendous pressure from Operations regarding the status of this contract. I am trying to assure them this is moving forward but I need to be able to show them something to keep them from pushing the panic button." Id. In his second email that day, Mr. Day explained to Ms. Morin that because "Article 6.2 of the contract" required CCCM to provide "the non-cancellable charter party agreement" with an exclusive-use clause no later than April 1, 2009, CCCM's right to payment under the contract in May 2009 was contingent on RCMP receiving the charter party agreements, not on CCCM paying the cruise lines the full charter fare. See E-mail Chain Among Michael Day, Normande Morin & Kevin DeBruyckere, CCCM Opp., Ex. 15 [Dkt. 67-15] at CAN1889.

Ms. Morin testified at deposition that she did not ask Mr. Day about any agreement on RCMP responsibility for taxes because: "In some [cases], the contract spoke to the issues; in some other cases we had to understand how the contract spoke to the issues." Morin Dep. at 107. Since "there was no — no belief in what we had in terms of information, at a certain point, that the tax issue had been decided, for sure." Id. at 108.

BB. October 28: Threatening to "Walk Away," CCCM Demands Assurance on Three Issues

Late in the afternoon on October 28, 2008, CCCM escalated the saber-rattling. Mr. Kelly sent an e-mail with a two-page letter attachment to RCMP Superintendent Kevin DeBruyckere and Assistant Commissioner Bud Mercer, who was also Chief Operating Officer of the ISU. In the e-mail, Mr. Kelly stated that he was attaching "a letter outlining a series of critical issues that place the ISU charter vessels in jeopardy. [CCCM] has worked diligently and in good-faith with the RCMP to resolve all issues, but the continuing delays and lack of actions by the Contracting Authority have brought this project to a complete stop. CCCM has made every effort to work with the Contracting Authority, but believes that without your intervention, the project will fail this week." E-mail Chain Among RCMP Personnel & CCCM October 28 Letter, RCMP MSJ, Ex. 70 [Dkt. 62-74] at CAN1070. Because the frayed relationship was reaching its tearing point, the text of the letter is included:

Id. at CAN1072-73. The inclusion of direct reference to CCCM's own Canadian taxes and to the exchange rate problem were new matters.

Mr. Day forwarded CCCM's letter to Ms. Morin and advised her that he had already spoken to Mr. DeBruyckere and told him "of the contract issues at play and some of the discrepancies in the letter. The short version was that we can not agree to this latest demand...." Id. at CAN 1070. Mr. Day also noted "several contradictions to the information you related to me." Id. Notably, Mr. DeBruyckere had called Mr. Kelly before he heard from Mr. Day and had promised CCCM to discuss the letter internally. Id.

On October 28, CCCM also received unpromising news from the Royal Bank of Canada. That morning, Mr. Kelly had sent electronic copies of the "final version[s]" of (unsigned) charter party agreements with Royal Caribbean and Holland America to Cindy Brand at the Royal Bank of Canada, asking whether they would "suffice to move the Financing forward." E-mail Chain Among Tracey Kelly & Cindy Brand, et al., RCMP Opp., Ex. 76 [Dkt. 66-78] at CCCM6662. Ms. Brand noted "concerns" because the drop in the exchange rate meant CCCM might not have sufficient funds to secure letters of credit to cover on-board revenue, as required by the charter party agreements.35 Id.

CC. October 29 through November 7: RCMP's Response; Final Royal Caribbean Charter Party Agreement; Attorneys Involved; the Bank Withdraws Financing; Final Holland America Charter Party Agreement

Responding to CCCM's letter to Mr. Mercer on October 29, 2008, Ms. Morin took a stern tone:

Letter from Normande Morin to CCCM, RCMP MSJ, Ex. 81 at CAN115-16 (emphases added); see also CCCM MSJ, Ex. 36 [Dkt. 65-26].

The consequence of Ms. Morin's October 29 letter was that CCCM faced a November 5 deadline to decide (1) to reaffirm the contract, (2) to provide proof that the ships were secured, and (3) to provide proof that the charter party agreements were satisfactory. In addition, RCMP maintained its insistence on a 90% letter of credit and would agree to no further clarifications or agreements on taxes or the exchange rate.

When asked at deposition why she did not acknowledge that the 90% letter of credit requirement had been waived, Ms. Morin testified:

Morin Dep. at 120; see also id. at 123 (agreeing that she "needed to satisfy [her]self that the interests of the RCMP had been adequately protected"). Ms. Morin also testified that she had concerns about the validity of the Sessions Letter of Credit, which CCCM had submitted to meet the 10% security requirement when it submitted the Bid. Ms. Morin believed that the Sessions Letter of Credit was "not negotiable" and "wasn't a valid letter of credit as the 10 percent piece," which was "another element added to concerns .... There was so many unclarified details on the file, as such, that it was a lot to pick up and look at and move easily forward with this ...." Id. at 124. Notably, however, the Sessions Letter of Credit had expired, by its own terms, on July 1, 2008, see supra § I.D — long before Ms. Morin became involved. RCMP had never before questioned its validity, strongly suggesting that it had waived any concerns about the letter of credit.

Royal Caribbean formally executed a final charter party agreement with CCCM on October 31, 2008. Final RCCL CPA, RCMP MSJ, Ex. 55 [Dkt. 62-59] at RCCL1-30. The agreement covered Jewel of the Seas and Radiance of the Seas but not Serenade of the Seas, officially nominated to RCMP. Id. at RCCL1. The final price was $18,167,100.00USD, and CCCM was required to provide a $12,716,970USD letter of credit no later than November 24, 2008. Id. at RCCL3, 8-9. The provisions on Canadian taxes required CCCM to reimburse Royal Canadian for "any and all Canadian federal, state, municipal or provincial income taxes imposed against CRUISE LINE." Id. at RCCL5. In all, CCCM was required to provide three separate letters of credit: (1) "an irrevocable Standby Letter of Credit [`Purchase LOC']" worth $12,716,970.00USD, which Royal Caribbean would draw down no later than May 31, 2009; (2) "a second irrevocable Standby Letter of Credit," worth $6,330,000.00USD, to cover on-board purchases by passengers; and (3) a "third irrevocable Standby Letter of Credit," the "Taxes LOC", "in Canadian Dollars equal to $5,700,00.00USD at the exchange rate in effect on November 30, 2009." Id. at RCCL8-9.

On October 31, Mr. Joyner, CCCM's U.S. attorney, answered Ms. Morin's October 29 letter:

Letter from G. William Joyner, III to Normande Morin, RCMP MSJ, Ex. 77 [Dkt. 62-81] at CAN1108.

Ms. Morin answered on November 3, with distinct clarity as to RCMP's position on cruise line taxes:

November 3, 2008 Letter from Normande Morin to G. William Joyner, III, CCCM Reply, Ex. 7 [Dkt. 70-7]. The exchange continued on November 4, as Mr. Joyner replied in a letter that disagreed with RCMP on taxes, reasserting that CCCM was not responsible for these amounts. He stated that CCCM would investigate other options for proceeding but demanded that RCMP confirm that the 90% letter of credit requirement was waived:

November 4, 2008 Letter from G. William Joyner, III to Normande Morin, RCMP MSJ, Ex. 78 [Dkt. 62-82] at CAN1106; see also CCCM MSJ, Ex. 42 [Dkt. 65-32].

The next day brought a response from RCMP, which asserted for the first time that CCCM was in breach of contract for failing to provide proof that the ships had been secured. Totally ignoring what had already been agreed to, Ms. Morin suggested that RMCP "was prepared to consider negotiating alternative arrangements instead of the 90% Letter of Credit." Letter from Normande Morin to G. William Joyner, III, CCCM MSJ, Ex. 37 [Dkt. 65-27] at CAN1852.

The letter stated:

Id.

CCCM responded with a two-page letter on November 6, attaching letters from Holland America and Royal Caribbean confirming that CCCM had signed charter party agreements with them. Mr. Joyner's letter stated:

E-mail and Letter from G. William Joyner, III to Normande Morin et al., RCMP MSJ, Ex. 73 [Dkt. 62-77] at CCCM12585-86; see also CCCM MSJ, Ex. 43 [Dkt. 65-33].

Ms. Morin wrote to Mr. Joyner on November 7, finally agreeing that RCMP would "waive the requirement for a 90% Letter of Credit" but on the understanding that "CCCM will have paid the cruise lines for 100% of the CPAs at the time of the initial payment of 80% by the RCMP to CCCM." Letter from Normande Morin to G. William Joyner, III, RCMP MSJ, Ex. 68 [Dkt. 62-72] at CAN11354-55; see also CCCM MSJ, Ex. 44 [Dkt. 65-34]. She also asserted: "RCMP is not in breach of contract." Letter from Normande Morin to G. William Joyner, III, RCMP MSJ, Ex. 68 at CAN11354. This November 7 letter extended the deadline for CCCM to provide "fully executed non-cancellable Charter Party Agreements naming the Vancouver 2010 Integrated Security Unit as having exclusive use of the vessels" and "proof of payment (minimum 70%) to the vessel provider" to 5:00 p.m. Eastern time on November 10, 2008. Id.

On the day Ms. Morin sent her letter electronically to Mr. Joyner, CCCM wrote to the Royal Bank of Canada in an effort to preserve its relationship. As then forwarded by Mr. Joyner to Ms. Morin, the Bank responded:

Letter from G. William Joyner, III to Normande Morin & Attached Siemens E-mail, RCMP MSJ, Ex. 72 [Dkt. 62-76] at CCCM13976, CCCM13974.

Despite the chaotic situation between CCCM and Ms. Morin, Holland America and CCCM reached a final charter party agreement for the ms Standendam on November 7, 2008. See Final HAL CPA, RCMP MSJ, Ex. 56 [Dkt. 62-60] at 6.36 That agreement required CCCM to post three letters of credit: charter security of USD$6,608,056 due 30 days from signing; additional tax security of CDN$1,000,000 due November 30, 2009; and on-board revenue security of USD$2,408,840 due May 31, 2009. Id. at 2. CCCM accepted responsibility for paying both "Taxes" and "Additional Tax Amounts," as broadly defined. Id. at 11-15.

DD. November 10 through 17: Contract Termination

On Ms. Morin's deadline of November 10 for CCCM to deliver copies of executed charter party agreements and proof of 75% payment to the cruise lines, Mr. Joyner sent a letter stating that those items would not be forthcoming that day. See Letter from G. William Joyner, III to Normande Morin & Attached E-mail, RCMP MSJ, Ex. 72 [Dkt. 62-76] at CCCM 13974-76; see also RCMP MSJ, Ex. 80 [Dkt. 62-84]; CCCM MSJ, Ex. 45 [Dkt. 65-35]. To the contrary, he told Ms. Morin that, unless RCMP notified CCCM by November 13, 2008, that RCMP would be responsible for Canadian taxes and did not require a 90% letter of credit, CCCM would terminate the contract. In relevant part, Mr. Joyner stated:

Letter from G. William Joyner, III to Normande Morin and Attached E-mail, RCMP MSJ, Ex. 72 at CCCM13975.

Mr. Kelly was asked at deposition about the decision not to provide the final versions of charter party agreements to RCMP. He testified that he believed that "[a]ll [he] needed to do was provide confirmation that the ships were under charter" and that Ms. Morin improperly "expanded" the scope of what was required concerning charter party agreements because she wanted "to understand how much money [CCCM was] making." Kelly Dep. at 76. Mr. Kelly also testified that the charter party agreements "were proprietary documents between CCCM and the cruise lines.... [P]roviding that information was — would give away how much money we were making with these charters." Id. at 75; id. at 97 ("[I]t was not my intention to share with [the RCMP] what our final pricing was, and that's what I was referring to when I said we would not be sending the executed CPAs.").

Ms. Morin responded by letter on November 12, 2008. In a somewhat more conciliatory tone, she finally admitted that the 90% letter of credit requirement was waived but refused to agree to CCCM's demands on payment of Canadian taxes, adjustments for the exchange rate, and RCMP's need for signed charter party agreements and proof of payment, for which she extended the deadline to November 14 at noon eastern time. November 12, 2008 Letter from Normande Morin to G. William Joyner, III, RCMP MSJ, Ex. 75 [Dkt. 62-79] at CAN1832-34; see also CCCM MSJ, Ex. 48 [Dkt. 65-37]. Ms. Morin's letter stated:

November 12, 2008 Letter from Normande Morin to G. William Joyner, III, RCMP MSJ, Ex. 75 at CAN1833-34. At deposition, Ms. Morin testified that RCMP was comfortable stating that the 90% letter of credit requirement was waived, by November 12, because it had "been satisfied and explained." Morin Dep. at 125.

Although RCMP gave CCCM until November 14 to reply, Ms. Morin received an internal draft of a revised RFP on November 13 for cruise ship accommodations at the 2010 Vancouver Olympics. E-mail from Kaleigh Ferguson to Normande Morin & Draft Revised RFP, CCCM Opp., Ex. 24 [Dkt. 67-24] at CAN11852-84. RCMP also suspended the contracting authority of Ms. Meikle, Mr. Day, and Mike McAuley pending "a review to be undertaken by HQ Internal Audit, of the contracting processes with regards [sic] to the Cruise Ship contract." E-mail from Robert Jorssen to Michael Day, CCCM MSJ, Ex. 33 [Dkt. 65-23] at CAN20637; see also Meikle Dep. at 24-25 (acknowledging that her contracting authority was suspended in November 2008).

CCCM did not comply with RCMP's November 14 deadline and sent a letter from Mr. Joyner instead, stating that CCCM's "positions ... ha[d] not changed." November 14, 2008 Letter from G. William Joyner, III to Normande Morin, RCMP MSJ, Ex. 76 [Dkt. 62-80] at CAN1825-26; see also RCMP MSJ, Ex. 80 [Dkt. 62-84]; CCCM MSJ, Ex. 49 [Dkt. 65-38]. Mr. Joyner also sought a meeting "[a]s a final good faith effort to salvage this project," failing which "CCCM will terminate the contract, notify the cruise lines, and pursue its legal rights and remedies" after the close of business on Monday, November 17, 2008. November 14, 2008 Letter from G. William Joyner, III to Normande Morin, RCMP MSJ, Ex. 76 at CAN1825.

No meeting occurred. RCMP sent a November 17, 2008, letter to CCCM declaring CCCM in default and the contract therefore terminated:

E-mail & Letter from Normande Morin to G. William Joyner, III, RCMP MSJ, Ex. 83 at CAN1174-76; see also CCCM MSJ, Ex. 50 [Dkt. 65-39].

EE. Late November: CCCM's Actions Post-Termination

On November 18, Mr. Kelly notified Holland America that RCMP had "reversed their position on paying the (potential) Canadian taxes" but that CCCM intended to honor the charter contracts and "enforce the non-cancelable contract with the RCMP." E-mail from Tracey Kelly to Rob Coleman, et al. & CCCM Doc., RCMP Opp., Ex. 83 [Dkt. 66-85] at CCCM6988-70. When contacted by attorneys for Holland America, who had read news accounts of the cancellation of RCMP charter contracts, Mr. Kelly said that CCCM believed RCMP was trying "to force the cruise lines to accept responsibility for any taxes and to renegotiate the entire deal for a lower price." E-mail Chain Among HAL Personnel, RCMP Opp., Ex. 84 [Dkt. 66-86] at CCCM15080-81. These e-mails are the final documents in the record from either Holland America or Royal Caribbean.

FF. November 28 through April 2009: RCMP Issues New RFP and Contracts Directly with Cruise Lines

On November 28, 2008 — eleven days after terminating its contract with CCCM — RCMP issued a renewed and modified RFP for ISU security accommodations for the 2010 Vancouver Olympics ("Revised RFP"). It later issued several amendments and clarifications for the Revised RFP. See Revised RCMP RFP & Amendments, RCMP Opp., Ex. 37 [Dkt. 67-37] at CAN20189 et seq. The Revised RFP stated that it would not explain why the contract with CCCM was terminated. Id. at CAN7363 (Amendment # 1, Q7 & Q8). However, acting as its own broker, RCMP discovered the complexities with which CCCM had been dealing and agreed to significant concessions on the contested issues.

1. Revised RFP

The Revised RFP is notable in several respects for the changes that RCMP made following its experience with the CCCM contract. See E-mail from Kevin DeBruyckere to Alain Seguin, CCCM Opp., Ex. 23 [Dkt. 67-23] at CAN16857 ("Many of the points in the SOR [Statement of Requirements in the Revised RFP] were developed based on our experience with the first RFP and were specifically included to avoid confusion and/or post contract award negotiations. The ISU learned a great deal by going through the process with the last contractor, and our learning was incorporated into very specific language in the current RFP SOR."). Among these initial modifications, a new contact person was identified in place of Ms. Meikle; the Revised RFP specified that there would be no protection for exchange rate fluctuation, id. at CAN20194; the Revised RFP prohibited brokers from bidding because RCMP would contract only with an "official Cruise Line Company," id. at CAN20220 ("No Cruise Line Broker shall appear on the final contract."), id. at CAN20197, CAN20207; and the Revised RFP allowed a possible advance payment upon receipt of an irrevocable standby letter of credit for 100% of the value of the advance payment. Id.

As to the critical issue of Canadian taxes, the Revised RFP retained the language on GST and HST from the earlier RFP and added: "All other taxes are included in the firm price except as provided in Article 13 of the General Conditions 2035 (12/05/08)." Id. at CAN20201. This clause did not clarify matters, and RCMP was required to issue a series of clarifications and amendments before it finally offered to cover:

Id. (emphasis added). In addition, RCMP eventually allowed bidders to contact Ms. Sharpe of the Canada Revenue Agency "for tax information." Id. at CAN6269.

2. RCMP-Holland America Charter Party Agreement

RCMP and Holland America executed a charter party agreement for the ms Statendam on April 9, 2009. RCMP-HAL Charter Party Agreement ("RCMP-HAL CPA"), CCCM Opp., Ex 33 [Dkt. 67-33] at CAN2538-66. RCMP was its own Charterer. Id. at CAN2538. It agreed to pay Holland America $14,500,000 USD "net," with 50% payable upon execution of the charter agreement and smaller percentages as various contract milestones, such as arrangements for berthing, occurred. Id. at CAN2538-40. The agreed-upon price to Holland America was exclusive of, inter alia, "(i) any Canadian Taxes (defined below) payable by CHARTERER in respect of this Agreement or the property or services provided hereunder, [and] (ii) any Canadian Taxes payable by, remittable by, assessed against, or levied against OWNER or its personnel or crew in respect of or arising out of or in connection with or as a consequence of this Agreement or the property or services provided hereunder." Id. at CAN2540. The definition of Canadian taxes substantially mirrored that proposed by Holland America in negotiations with CCCM in the fall of 2008. See supra § I.CC. The aggregate amount of reimbursable Canadian taxes was not to exceed USD$8,000,000. Id. at CAN2541.

RCMP also took a new approach to ships' health scores. It agreed with Holland America on applicable scores above 90 after 2006 — perhaps unsurprising, in that the ms Statendam had scored 94 and 94 in 2006 and 2007, respectively. Id. at CAN2546.

In addition to Statendam, RCMP also signed two other charter party agreements for the 2010 Vancouver Olympics that are not in the record. According to news reports, RCMP contracted for Holland America ships ms Statendam and ms Oosterdam, and one Carnival ship, Elation, with a total value of $76 million Canadian dollars for all three final contracts. Stephanie Levitz, "Three ships to house 2010 Olympics security staff in new $76 million deal," The Canadian Press (Apr. 21, 2009); Damian Inwood, "Three cruise ships rented for Olympic security," Canwest News Service (Apr. 21, 2009).

GG. Post Facto Issues

The parties have submitted post facto evidence on two of the issues in their cross-motions for summary judgment that does not fit neatly into the above history of the case. That evidence is discussed by issue here — first, the Sessions Letter of Credit, and second, health scores.

1. The Sessions Letter of Credit

Shown the $5 million "letter of credit" that Mr. Sessions provided as part of the Bid, see supra § I.D. Mr. Siemens of the Royal Bank of Canada testified at deposition that he had not seen it before and did not believe CCCM had provided it to the Bank when applying for financing. Siemens Dep. at 56-57. He testified that he did not know that the Sessions Letter of Credit had expired in July, that it could not be drawn upon, or that CCCM was "$5 million in debt as a result of obtaining th[e] letter of credit." Id. Had the Bank known about the Sessions Letter of Credit, it would have affected the "risk analysis... unfavorably." Id. Mr. Siemens also testified that the clause in the Sessions Letter of Credit to the effect that it could not be drawn upon meant that it was "not a definitive debt obligation and could never be." Id. at 57.

2. The Health Scores

Ms. Edwards's second declaration, submitted as an exhibit to CCCM's opposition on January 14, 2013, provided a more detailed, if self-serving, explanation of the replacement of Radiance of the Seas (with a subpar health score) with Jewel of the Seas (with compliant health scores) in the final nomination on September 30 and October 1. She stated:

II Edwards Decl. ¶¶ 3, 18, 20-22.

HH. Procedural History

CCCM filed its Complaint on November 26, 2008, less than ten days after receiving RCMP's November 17 letter of contract termination. Compl. [Dkt. 1]. CCCM claimed breach of contract, Compl. ¶¶ 28-36, and violation of the North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen.Stat. § 75-1 et seq. (id. ¶¶ 37-43). The case was randomly assigned to the Honorable James Robertson.

RCMP moved to dismiss, arguing that the Court lacked subject matter jurisdiction because Defendants were immune from suit under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602-11. See [Dkt. 9]. CCCM opposed, see Dkt. 12, and Judge Robertson held oral argument on June 9, 2009. Concluding that FSIA applied and CCCM's allegations did not fit within any exception in 28 U.S.C. § 1605(a)(2), Judge Robertson granted the motion to dismiss at the conclusion of the hearing. In an opinion expanding on his reasoning, Judge Robertson concluded that the CCCM-RCMP contract did not involve a "direct effect" in the United States as required by § 1605(a)(2) because "there was an `intervening element' — [CCCM's] inability to perform its contractual obligations to the [cruise lines and the travel agency that had booked a relocation cruise] — between the defendants' actions and [CCCM's] financial loss." Cruise Connections Charter Mgmt. 1, LP v. Attorney Gen. of Can., 634 F.Supp.2d 86, 90 (D.D.C.2009), rev'd, 600 F.3d 661 (D.C.Cir.2010), reh'g denied, 609 F.3d 450. On appeal, the D.C. Circuit concluded that there was a direct effect in the United States because:

600 F.3d at 664-65.

Shortly following remand, the case was reassigned to the undersigned when Judge Robertson retired. RCMP answered the Complaint and filed a Counterclaim for breach of contract. See Ans., Aff. Defenses & Countercl. [Dkt. 22]. RCMP then again moved to dismiss, Dkt. 23, and CCCM again opposed, Dkt. 25. This time, the RCMP argued (1) forum non conveniens and (2) failure to state a claim for violation of the North Carolina Unfair and Deceptive Trade Practices Act. Applying the four-step inquiry set forth in Pain v. United Technologies Corp., 637 F.2d 775, 779 (D.C.Cir.1980), this Court concluded that dismissal for forum non conveniens was not appropriate because CCCM was "entitled to litigate [its] claim in U.S. Courts, even if the law of British Columbia, Canada" applied. Cruise Connections Charter Mgmt. 1, LP v. Attorney Gen. of Can., 764 F.Supp.2d 155, 157, 159-64 (D.D.C.2011). Count II was dismissed because "Canada is not a `person, firm or corporation' subject to suit under the N.C. Trade Practices Act." Id. at 164-65.

Discovery on the cross claims of breach of contract began in March 2011 and lasted approximately eighteen months. Following a status conference on October 26, 2012, the Court entered a briefing schedule for cross-motions for summary judgment on the sole remaining count37 and scheduled a bench trial to begin on October 15, 2013. After the parties' cross-motions were fully briefed, the Court continued the trial due to the complexity of the case "so that the need, scope, and purpose of a trial [could] be determined once the pending cross-motions for summary judgment are resolved." See Minute Order dated July 1, 2013.

II. LEGAL STANDARD

A. Summary Judgment

Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Moreover, summary judgment is properly granted against a party who "after adequate time for discovery and upon motion ... fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In ruling on a motion for summary judgment, the court must draw all justifiable inferences in the nonmoving party's favor and accept the nonmoving party's evidence as true. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. A nonmoving party, however, must establish more than "the mere existence of a scintilla of evidence" in support of its position. Id. at 252, 106 S.Ct. 2505. In addition, the nonmoving party may not rely solely on allegations or conclusory statements. Greene v. Dalton, 164 F.3d 671, 675 (D.C.Cir.1999). Rather, the nonmoving party must present specific facts that would enable a reasonable jury to find in its favor. Id. at 675. If the evidence "is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). Further, "[w]hen opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007); see Reetz v. Jackson, 176 F.R.D. 412, 414-15 (D.D.C.1997) (a plaintiff cannot create a genuine issue of material fact by contradicting her own deposition testimony).

B. Application of Foreign Law

The parties agree that the law of British Columbia, Canada governs their dispute. Federal Rule of Civil Procedure 44.1 provides that "[i]n determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence." A court may "consider any material the parties wish to present," and it "may do its own research on foreign law, just as ... on issues of domestic law." 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure ("FPP") § 2444 (3d ed.); see also Ganem v. Heckler, 746 F.2d 844, 854 (D.C.Cir.1984) (noting that "written or oral expert testimony accompanied by extracts from foreign legal sources" are common sources of foreign law accepted under Rule 44.1). The Court need not accept the law proffered by the parties and is free to "reexamine and amplify material that has been presented by counsel in partisan fashion." Estate of Botvin ex rel. Ellis v. Islamic Repub. of Iran, 772 F.Supp.2d 218, 228 (D.D.C.2011) (quoting Fed.R.Civ.P. 44.1 advisory committee note).

The Court's determination of foreign law is "treated as a ruling on a question of law." Fed.R.Civ.P. 44.1; see also Ry. Labor Execs.' Ass'n v. U.S. R.R. Retirement Bd., 749 F.2d 856, 860 (D.C.Cir.1984). Therefore, "[o]nce foreign law is ascertained to the judge's satisfaction," a court is free to decide summary judgment motions "as it would in any other context." FPP § 2444.

In this case, both parties have provided the Court with statements of the British Columbia law they believe to be applicable, complete with citations to authority. See, e.g., RCMP Opp. at 37, CCCM Reply at 11 (parties' statements of promissory estoppel). The Court has verified the law cited by the parties and has also conducted its own research to provide a full discussion of the principles relevant to the case.

III. ANALYSIS

At the outset, the Court reviews the British Columbia law that governs the parties' breach of contract claims. The Court will then briefly discuss the status of the parties' various agreements, identifying the contractual provisions that were in effect at the time of the alleged breaches.

Next, the Court will address CCCM's argument that RCMP anticipatorily repudiated its duty to pay taxes that the cruise lines (and possibly CCCM) would incur due to their vessels being in Vancouver for the 2010 Olympics. For the reasons stated below, the Court finds that: (i) RCMP anticipatorily repudiated its contractual duty to pay the cruise lines' taxes; (ii) RCMP is liable for that repudiation on a promissory-estoppel theory; and (iii) the repudiation was a fundamental breach because it frustrated the commercial purpose of the entire contract.

The Court will then address RCMP's claims that CCCM breached the contract with respect to financing and financial security. The Court concludes that CCCM's noncompliance was excused by RCMP's repudiation of its agreements as to taxes, which made it impossible for CCCM to finalize its financing.

Finally, the Court will discuss the issue of ship health scores, concluding that a charter party agreement for a ship with a noncompliant health score was not a fundamental breach of the contract.

A. British Columbia Law

It is undisputed that the law of British Columbia, Canada, governs this contract dispute. In British Columbia, as in the rest of Canada, contractual relationships are governed by the common law. See Hodgkinson v. Simms, [1994] 3 S.C.R. 377, ¶ 144 (Can.). For the most part, owing to our shared British ancestry, British Columbia contract law and prevailing United States contract law are similar. As appropriate, the Court draws analogies or contrasts to American law.

A brief word on the Canadian court system will also be helpful. Canada has a dual federal-provincial court structure similar to the dual federal-state structure of the United States' court system. The first level court in British Columbia is the Provincial Court, which hears some first-instance cases, and the Supreme Court, which hears most first-instance cases as well as some appeals from the Provincial Courts. The British Columbia Court of Appeals, which ordinarily decides cases in three judge panels, is the final arbiter of provincial British Columbia law in most cases; its decisions are cited as "Can. B.C.C.A." and are printed in multiple reporting services, such as the British Columbia Law Reports ("B.C.L.R."). The Supreme Court of Canada is the final court of appeal; like the United States Supreme Court, its docket is mostly discretionary, subject to limited exceptions. Its decisions are generally reported in the Supreme Court Reports, cited as "S.C.R." See generally "Legal System of Canada," 40 St. Louis U. L.J. 1343 (1996); Canadian Department of Justice, "How the Courts Are Organized" (Apr. 30, 2013) http://www.justice.gc.ca/eng/csj-sjc/ccs-ajc/page3.html (last accessed Sept. 9, 2013).

1. Contract Interpretation

"In the absence of ambiguity, words in a contract are to be given their literal meaning[.] Words of ordinary use in a contract must be construed in their ordinary and natural sense[.] The paramount test of the meaning of words in a contract is the intention of the parties[.]" Rickards Estate v. Diebold Election Sys. Inc. (2007), 69 B.C.L.R. 4th 75, ¶ 20 (Can. B.C.C.A.) (quoting MacMillan Bloedel Ltd. v. B.C. Hydro & Power Auth. (1992), 72 B.C.L.R.2d 273, ¶ 30 (Can.B.C.C.A.); other citations omitted). A court should determine the intention of the parties "in the objective sense by reference to the surrounding circumstances at the time of signing the contract" because "the meaning of words varies according to the circumstances with respect to which they were used" due to "the imperfection of language." Id. ¶¶ 20-21 (citation omitted); see also Compagnie francaise du Phénix v. Travelers Fire Ins. Co., [1952] 2 S.C.R. 190, ¶ 116 (suggesting best interpretation of term would be one "consistent with the intention of the parties as disclosed in relation to the contract as a whole").

"When the parties are in agreement as to the meaning of a provision, a court, in the absence of compelling reasons to the contrary, should construe the document in accord therewith." Phénix, [1952] 2 S.C.R. ¶ 98. "[W]ords must be given their primary meaning where that meaning `is unambiguous, ... is not excluded by the context, and is sensible with reference to the extrinsic circumstances in which the writer was placed at the time of writing.'" Rickards, 69 B.C.L.R. 4th ¶ 22 (quoting Shore v. Wilson, [1842] 8 Eng. Rep. 450, 518 (U.K.H.L.)). For example, when the parties write a contract clause that is "as wide as possible and there is no reason for attributing to [them] any intention of restricting [the clause's] natural meaning," the clause should be read as broadly as written. Victoria-Vancouver Stevedoring Co. v. Grand Trunk Pac. Coast S.S. Co., [1918] 3 W.W.R. 450, ¶ 7 (Can.S.C.C.) (upholding broad reading of clause limiting common carrier's liability). Still, "the parties to a contract must be presumed to have attributed a meaning and purpose to its several parts which, when read together, constitute a complete consistent contract and, therefore, repugnancy should be, if reasonably possible, avoided." Phénix, [1952] 2 S.C.R. ¶ 117.

2. The "Factual Matrix"

In interpreting a contract, British Columbia courts permit consideration of certain contextual facts called the "factual matrix," relying on a United Kingdom case from the House of Lords titled Prenn v. Simmonds, [1971] 1 W.L.R. 1381. See Black Swan Gold Mines Ltd. v. Goldbelt Res. Ltd. (1996), 25 B.C.L.R.3d 285, ¶ 12 (Can.B.C.C.A.). The factual matrix may be considered without finding an ambiguity in the contract because it is "always helpful." ACLI Ltd. v. Cominco Ltd. (1985), 61 B.C.L.R. 177, ¶¶ 4, 16 (Can. B.C.C.A.).

Glaswegian Enters. Inc. v. BC Tel Mobility Cellular, Inc. (1997), 49 B.C.L.R.3d 317, at *7 (Can.B.C.C.A.).38

In evaluating the factual matrix, a court must "ke[ep] the contextual facts in the background and the text of the agreement in the foreground," because "[t]he words of the contract must not be overwhelmed by a contextual analysis." Black Swan, 25 B.C.L.R.3d ¶ 19. Thus, "the Court cannot make a new agreement," Glaswegian, 49 B.C.L.R.3d 317 at *7; "where the language used in the deed in its primary meaning is unambiguous, and that meaning is not excluded by the context, and is sensible with reference to the extrinsic circumstances, then such primary meaning must be taken conclusively as that in which the words are used." Black Swan, 25 B.C.L.R.3d ¶ 23 (quoting Canadian Delhi Oil Ltd. v. Alminex Ltd. (1967), 62 W.W.R. 513, ¶ 15 (Can.Alta.C.A.); internal quotations omitted).

In a lengthy passage quoted from Prenn, the Black Swan court gave particular instructions about how the factual matrix should be considered in a case involving a lengthy course of negotiations:

Id. ¶ 17 (quoting Prenn, [1971] 1 W.L.R. at 1384-85); see also Glaswegian, 49 B.C.L.R.3d at *7 (emphasizing that courts should always search "for the meaning intended by the parties as expressed in the agreement" in concluding that trial judge assigned the meaning "most consistent with commercial reality and most consistent with the other clauses of the whole agreement").

3. Promissory Estoppel

The Supreme Court of Canada has adopted the doctrine of promissory estoppel as set forth in Engineered Homes Ltd. v. Mason:

[1983] 1 S.C.R. 641, ¶ 7 (citation omitted); see also John Burrows Ltd. v. Subsurface Surveys Ltd., [1968] S.C.R. 607, ¶ 17 (requiring "some evidence that one of the parties entered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced"). For example, in Hansen v. British Columbia (Minister of Transportation & Highways), the British Columbia Court of Appeals upheld a finding of promissory estoppel because: "The representation was unambiguous. It was a representation of fact. It was intended to be relied upon, and was relied upon. [And, i]n the circumstances as found by the Board, the reliance was reasonable." (2000) 76 B.C.L.R.3d 241, ¶¶ 10-15 (Can.B.C.C.A.).

4. Repudiation, Fundamental Breach, and Effect of Breach

There are three general circumstances in which a contract is discharged: "(i) renunciation by a party of his liabilities under it; (ii) impossibility created by [a party's] own act; [or] (iii) total or partial failure of performance." Celgar Ltd. v. Star Bulk Shipping Co. (1979), 12 B.C.L.R. 62, ¶ 9 (Can.B.C.C.A.) (quoting Heyman v. Darwins Ltd., [1942] A.C. 356, 378-79 (U.K.H.L.)). A partial failure only relieves the nonbreaching party's obligations under the contract when the partial failure is a fundamental breach — i.e., it "occur[s] in a matter which goes to the root of the contract," a concept akin to materiality under U.S. contract law that is defined further below. See id. When a breaching party "has done something which puts it out of his power to perform his part of the contract[,] has intimated that he does not intend to perform his part," or has otherwise prevented the performance of a condition precedent, the nonbreaching party's duty to perform any conditions precedent is relieved. Whitehall Estates Ltd. v. McCallum (1975), 63 D.L.R.3d 320, ¶ 49 (Can.B.C.C.A.) (internal citation and quotation marks omitted). To evaluate whether a party's repudiation was wrongful, courts apply an "objective reasonable person" standard to determine whether the party has, "by words or conduct, evince[d] an intention to refuse the performance of the contract and not to be bound by it." Vancouver Canucks Ltd. P'ship v. Canon Can. Inc., 2013 BCSC 866, ¶ 157 (Can.B.C.Sup.Ct.) (quoting, inter alia, Business Depot Ltd. v. Lenhdorff Mgmt. Ltd. (1996), 24 B.C.L.R.3d 322, ¶¶ 66-67 (Can.B.C.C.A.)).

A "fundamental breach" occurs when "a particular breach or breaches of contract by one party is or are such as to go to the root of the contract which entitles the other party to treat such breach or breaches as a repudiation of the whole contract. Whether such breach or breaches do constitute a fundamental breach depends on the construction of the contract and on all the facts and circumstances of the case." Celgar, 12 B.C.L.R. ¶ 8 (quoting Suisse Atlantique Société D'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale, [1967] 1 A.C. 361, 363 (U.K.H.L.)); see also id. ¶ 11 (referring to a breach that "has the effect of substantially depriving the injured party of what he bargained for"). Put another way, a fundamental breach is one that is "tantamount to the frustration of the contract either as a result of the unequivocal refusal of one party to perform his contractual obligation or as a result of conduct which has destroyed the commercial purpose of the contract, thereby entitling the innocent party to be relieved from future performance." Poole v. Tomenson Saunders Whitehead Ltd. (1987), 16 B.C.L.R.2d 349, ¶¶ 26-28 (Can.B.C.C.A.) (collecting cases).

When a fundamental breach occurs:

Id. ¶ 10 (quoting Morrison-Knudsen Co. v. B.C. Hydro & Power Auth. (1978), 85 D.L.R.3d 186, ¶ 116 (Can.B.C.C.A.)); see also Elderfield v. Aetna Life Ins. Co. of Can. (1996), 27 B.C.L.R.3d 1, ¶ 15 (Can. B.C.C.A.) ("[A] repudiation of a contract does not automatically terminate that contract. Instead, an act of repudiation confronts the innocent party with two choices — to affirm the contract and treat it as continuing or to accept the wrongful repudiation and treat the contract as at an end.").

Once the non-breaching party accepts the repudiation, the non-breaching party is freed "from further performance and [may] sue for damages immediately, even if the breach that constitutes the repudiation is anticipatory." Elderfield, 27 B.C.L.R.3d ¶ 15. "Failure to unequivocally accept the repudiation means that the repudiation has no effect unless there is a continued refusal to perform. The contract continues to exist for the benefit of both parties and an action cannot be brought until one of the parties fails to perform." Id.; see also Homestar Indus. Props. Ltd. v. Philps (1992), 72 B.C.L.R.2d 69, ¶ 29 (Can.B.C.C.A.) ("If the innocent party wishes to crystallize his rights before the time for performance and elects to accept an anticipatory repudiation as putting an end to the contract, he must so notify the other party and thereupon his rights to damages arise."). The non-breaching party may also defer acceptance of the repudiation. Homestar, 72 B.C.L.R.2d ¶ 21; see also Bogusinski v. Rashidagich, [1974] 5 W.W.R. 53, ¶ 42 (Can.B.C.Sup.Ct.) (in insurance case, holding that the nonbreaching party could "defer[] action until properly and reasonably convinced by investigation that proper grounds for repudiation had arisen").

B. Summary of Parties' Arguments

The parties have filed cross-motions for summary judgment, each arguing that the other breached the contract. CCCM alleges that RCMP materially breached its obligations under the contract when, in September 2008, it declared that it would not pay approximately $6 million in Canadian government taxes that might be assessed against the cruise lines. CCCM MSJ Mem. at 1-2. In the alternative, CCCM contends that the deadline for nominating and securing the ships had not yet arrived and RCMP's wrongful equivocation regarding taxes impaired CCCM's ability to perform. CCCM Opp. at 2.

RCMP argues that "CCCM has attempted to stitch a quilt out of shreds of testimony, distorted timelines, and partial threads of emails to hide CCCM's failure to accurately account for basic costs, or determine how it would finance the project before it submitted its response to the RCMP's Request for Proposal and before it signed a contract with the RCMP." RCMP Opp. at 1. RCMP puts the entire blame on CCCM, asserting that:

RCMP MSJ Mem. at 43.

C. Status of the Agreements at the Time of Breach

A brief word on the status of the parties' agreements is necessary to any discussion of their respective contractual duties. The Court refers to the parties' "contract," but, to be clear, there was no single, final, integrated agreement between CCCM and RCMP. The last agreed-to document between the parties was the Articles of Agreement, signed on July 31, 2008. See supra § I.M. Section 10 of the Articles of Agreement listed various documents in descending order of priority in the event of a "discrepancy between the wordings of any documents:" (1) the Articles of Agreement; (2) 9676 General Conditions, see supra § I.G; (3) "Annex A Statement of Work;" (4) the Bid, see supra § I.E; and (5) Project Services Agreement, signed on July 16, see supra § I.H.

D. Responsibility for Taxes

CCCM contends that RCMP anticipatorily repudiated the contract by reneging on its agreement to pay all Canadian government taxes imposed on the cruise lines due to the ships' prolonged stay in Vancouver. These taxes, including income taxes for the foreign-flagged ships, came to an estimated $6 million. RCMP's position is that it never entered into any such agreement and agreed only to be accountable for Goods and Services Taxes ("GST") and Harmonized Sales Tax ("HST"). RCMP argues that CCCM did not recognize the cost of Canadian taxes on the cruise lines when formulating its bid and only when CCCM learned such taxes could increase its costs and decrease its profits did CCCM try to get RCMP to amend the contract.

1. Whether the Taxes Include CCCM's Taxes

As a threshold matter, RCMP contends that CCCM has slyly expanded the breadth of taxes at issue. It argues that there are two sets of taxes at issue — those that would be imposed by Canada on (a) the cruise lines and (b) CCCM. RCMP Opp. at 28. RCMP insists that neither party ever "contemplated that the RCMP should or would be responsible for carving out a tax haven to shield only CCCM...." Id. at 28-29. According to RCMP, only in early September 2008 did CCCM realize "that it had never accounted for taxes that it could owe the [Canada Revenue Agency]," and, "unwilling to change its profit estimates to account for the cost of paying standard taxes on its activities, CCCM tried to force the RCMP to take responsibility for paying any and all taxes that CCCM and its partners would incur." Id. at 29-30 (citations omitted). RCMP argues that CCCM demanded that RCMP agree "to pay for any tax assessed, for any amount, for any activity, incurred by CCCM and its partners," referring to § "b.ii" of the September 15 Proposed Clarification, see supra § I.T, which, indeed, would have required RCMP to pay "all taxes" (very broadly defined) assessed against Holland America, Royal Caribbean and CCCM.

CCCM characterizes this issue as a "diversion" because "the contract language, [Mr.] Day's unequivocal testimony, and [Ms.] Meikle's approval of the clear agreement as stated in [the Project Services Agreement] [demonstrate] that, like the cruise line taxes, any Canadian government taxes imposed against CCCM would also be treated as a pass through cost to RCMP." CCCM Reply at 12. It concedes possible confusion in the record but attributes that confusion to the fact that the dispute "clearly narrowed to a back and forth exchange on the cruise lines' taxes," not CCCM taxes. Id. at 13-14.

As explained below, RCMP has much the better side of this argument. While the Court concludes that RCMP agreed to pay Canadian taxes that would be imposed on the cruise lines due to their unusually extended stay in Vancouver, it did not agree to pay ordinary business taxes assessed against CCCM, a business located in Victoria, British Columbia, Canada, according to its Bid. See supra § I.E (discussing scope of Bid); Bid at CCCM8302 ("Any additional taxes identified by the Cruise Lines are questionable, and a tax lawyer will be consulted on these issues after the Bid Award." (emphasis added)); see also supra § I.F (June 3 meeting's focus on taxes that might be imposed on the cruise lines). CCCM persuaded Ms. Meikle and Mr. Day that Canadian taxes would scare away any cruise line because of the financial structure of the cruise lines, but no such discussion or reasoning applied to CCCM. After RCMP told CCCM that Canadian taxes on the cruise lines were CCCM's responsibility, both parties at times referred to them as CCCM taxes. That imprecision does not mean, however, that RCMP ever agreed to pay customary doing-business taxes assessed against CCCM, and nothing in the parties' contract documents or representations made to CCCM by Ms. Meikle and Mr. Day during their voluminous negotiations on Canadian taxes conveyed that meaning. The references to "the taxes" throughout this Opinion refers to taxes that Canadian taxing authorities might have assessed against the cruise lines — at that time, an indeterminate fact and an indeterminate amount.

2. Parties' Arguments

CCCM argues that, from early in the parties' contractual relationship, their mutual intent was for RCMP to pay "any and all" Canadian government taxes imposed, as its Bid proposed. Id. at 25-28. It urges the Court to find all of the written agreements between the parties unambiguous in reflecting agreement that RCMP would pay all Canadian taxes. Id. at 30-34. CCCM cites Mr. Day and Ms. Meikle, RCMP's two contracting authorities, for making it "clear that when they entered the contract with Cruise Connections, they intended to bind the RCMP to pay any and all Canadian government taxes, including income tax imposed upon the cruise lines as a result of the charter." Id. at 27.

RCMP also reads the contract as clear and unambiguous, but leading to a different conclusion: CCCM bore full responsibility for all taxes except for the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). RCMP Opp. at 32-36. Its argument hinges on the premise that § 6.3 of the Articles of Agreement "explicitly described the specific taxes that for which [sic] the RCMP would pay," i.e. GST and HST. Id. at 32-33. Because § 6.3 is clear and did not impose liability on RCMP for cruise-line taxes, and because the terms of the Articles of Agreement take priority, RCMP argues that any earlier contract documents (the Bid or Project Services Agreement) cannot alter or amend its clear language. Id. at 33-34.39

3. The Articles of Agreement Bound RCMP to Pay Canadian Taxes Imposed on the Cruise Lines

The Court finds that § 6.3 of the Articles of Agreement required RCMP to pay any Canadian taxes imposed on the cruise lines because that was the parties' intent when RCMP and CCCM agreed to the Articles of Agreement on July 31 and the factual matrix in which agreement was achieved supports that conclusion. The Court also finds that, if there were any ambiguity in the Articles of Agreement, other contract documents incorporated into the Articles of Agreement by § 10, Priority of Documents, indisputably bound RCMP.

Section 6.3 of the Articles of Agreement is discussed at length supra at § I.M. Subsection 3 provided in relevant part:

(Emphasis added.) This language repeated a portion of § 35 of General Conditions 9676 verbatim. RCMP's current argument rests on the contention that, because § 6.3 of the Articles of Agreement did not expressly cover Canadian corporate taxes unrelated to excise or customs taxes, the taxes at issue naturally fell on CCCM, its contractor. The flaw in the argument is that the contracting representatives of both RCMP and CCCM viewed Canadian taxes on the cruise lines as potential, unquantified (and unquantifiable) taxes that might be imposed, and the parties' joint intent is the pole star of contract interpretation. See Rickards, 69 B.C.L.R. 4th ¶ 20. Docking cruise ships in port for approximately six weeks as accommodations for the 2010 Vancouver Olympics was an unprecedented scenario with which neither RCMP nor CCCM had experience. No person engaged in the negotiations from RCMP or CCCM (or even experienced tax counsel at the cruise lines, who were preparing estimates throughout the summer of 2008) knew exactly whether or what or in what amount Canadian taxes might be imposed. The immediate negotiating parties on both sides of the table viewed potential Canadian taxes on the cruise lines as "change[s] in any tax imposed," "after the bid submission date," that would "affect[ ] the costs of the Work to the Contractor," which were, therefore, covered by § 35(3) of General Conditions 9676 and § 6.3 of the Articles of Agreement. See, e.g., Bid § 4.6.3 ("Any additional taxes identified by the Cruise Lines are questionable, and a tax lawyer will be consulted on these issues after the Bid Award."); Kelly Dep. at 216 (stating that, during the June 3 meeting, RCMP representatives took the position that the taxes were "potential and questionable" and the RCMP representatives "didn't even know if [the taxes] would be applied"); E-mail Chain Among Kelly Meikle and CCCM Partners, RCMP Opp., Ex. 32 at CAN2157 (Ms. Meikle's statement that "I did indicate if a hotel tax is assessed then we would pay ... I have spoken to the Regional Director of the ISU for the Province of B.C. and he felt we could request and receive an exemption for this contract."); E-mail Chain Among Tracey Kelly and Carnival Representatives, RCMP MSJ, Ex. 42 at CCCM965-66 (e-mail from Carnival that the potential taxes were "outside [Carnival's] normal tax consequences" and "complicated" and that they should discuss with "Canadian tax advisors"). CCCM's interactions with the Canada Revenue Agency in September 2008 — through a contact provided by RCMP — yielded the information that determining any taxes would be complex and require at least "several weeks minimum." See supra § I.Q. After it began acting as its own broker under the Revised RFP, RCMP discovered the tax issues to be very complex, leading bidders to submit multiple series of questions and leading RCMP to the same inescapable conclusion — RCMP had to bear the tax costs itself. See supra § I.FF.

If the language of § 35(3) of General Conditions 9676 appears clear to a lawyer used to reading statutes closely, it was not so clear to Messsrs. Day or Kelly or Mses. Edwards or Meikle. Clarity in hindsight does not bring a victory home to RCMP on these facts; what is "paramount" in contract interpretation "is the intention of the parties." Rickards, 69 B.C.L.R. 4th ¶ 20. British Columbia courts — and courts in Canada generally — rely on the factual matrix surrounding a contract to inform their interpretations of the parties' intentions in adopting contract terms. See Black Swan, 25 B.C.L.R.3d ¶ 12. In this case, the facts that comprise that "matrix" are clear: authorized representatives of RCMP repeatedly read § 35(3) of General Conditions 9676 to impose an obligation on Canada to pay cruise-line taxes that were uncertain and incalculable at the time of the Bid, making such taxes incapable of inclusion in the contract cost and, therefore, "extraordinary." See, e.g., E-mail Chain Among Deirdre Dare & Michael Day, et al., Excel Spreadsheet & Background Doc., CCCM MSJ, Ex. 23 at CAN20556 (Michael Day's reference to "potential increased cost solely due to extraordinary taxes that may be imposed by Canada").

The details of events demonstrate the problem. The exchanges between CCCM and RCMP leading to the Articles of Agreement demonstrate RCMP's commitment: since the taxes were unknown and indefineable, if ever assessed, they came within § 6.3 of that Agreement, which merely quoted General Conditions 9676. When Ms. Edwards asked Ms. Meikle to insert the phrase "[a]ny potential additional taxes (assessed by the Provincial or Federal Governments) on behalf of this project are to be paid by the RCMP as per General Condition 9676, Section 35," July 30-31 E-mail Chain Among Susan Edwards & Kelly Meikle, RCMP MSJ, Ex. 71 at CCCM 1828, Ms. Meikle declined because she lacked authority to change the regulatory text, not because she disagreed with the substance of the change, E-mail Chain Among Kelly Meikle and CCCM Partners, RCMP Opp., Ex. 32 at CAN2157.40 Ms. Meikle testified at deposition that she agreed to paste the text of General Conditions 9676 § 35(3) into the Articles of Agreement "to try to help satisfy the Cruise Line tax concern." Meikle Dep. at 197; see also Meikle Dep. at 217. In light of RCMP's own documentary evidence showing that Ms. Meikle and Mr. Day repeatedly assured CCCM that the parties need not include any stronger language regarding RCMP's responsibility for taxes because § 6.3 of the Articles of Agreement covered the point and should be cited to the cruise lines, RCMP cannot now fault CCCM for failing to insist on the inclusion of different language.41

There is much more evidence demonstrating that negotiators for both parties intended § 6.3, Articles of Agreement, to reflect their agreement that RCMP was responsible for the cruise lines' Canadian taxes. Mr. Day testified at deposition:

Day Dep. at 137, 140, 191. Mr. Day also testified:

Id. at 65-69; see also E-mail Chain Among Deirdre Dare & Michael Day, et al., Excel Spreadsheet & Background Doc., CCCM MSJ, Ex. 23 (Mr. Day's request for an increase to the contract limit "in the event that [Canada Revenue Agency] rules that the contractor is to pay corporate taxes," referring to the taxes as "extraordinary" and writing that "the extended berthing periods of the vessels in Canada presents the possibility that the unique nature of this charter may attract these taxes"). Mr. Day's correspondence with Ms. Dare clearly demonstrates that he believed preexisting Canadian procurement regulations bound or permitted RCMP to pay the cruise lines' taxes and that he had so agreed, writing that "the terms of the contract stipulate that any changes to existing taxes or the imposition of new taxes are considered to be extra to the contract." Mr. Day thus requested an increase to RCMP's budget of "[a]n additional $4.7 million...." E-mail Chain Among Deirdre Dare & Michael Day, et al., Excel Spreadsheet & Background Doc., CCCM MSJ, Ex. 23 at CAN20556-57.

Ms. Meikle's testimony was similar to Mr. Day's:

Meikle Dep. at 245-47.

Having evaluated "the background of relevant facts that the parties must clearly have been taken to have known and to have had in mind when they composed the written text of their agreement," Glaswegian, 49 B.C.L.R.3d at *7, the Court finds that the parties were "in agreement as to the meaning" of § 6.3 of the Articles of Agreement when it was signed: RCMP had agreed to pay any Canadian taxes imposed on the cruise lines because of the ships' lengthy stay at the Vancouver 2010 Olympics. See Phénix, [1952] 2 S.C.R. ¶ 98.

4. The Documents Incorporated in the Final Articles of Agreement Required RCMP to Pay the Cruise Lines' Canadian Taxes

If a lawyer's limiting interpretation of § 35, General Conditions 9676 were to prevail over the intentions and understanding of all negotiators, other contract documents incorporated into the Articles of Agreement by its Priority of Documents made RCMP's obligation to pay the taxes at issue clear. The incorporated contract documents under which RCMP agreed to pay the contested taxes are § 6.3 of the Bid, discussed in detail supra at § I.E, and the Project Services Agreement, discussed in detail supra at § I.H. The Bid stated:

(Emphasis added). The Project Services Agreement emphasized the point:

(Emphasis added).

Despite these terms, RCMP argues that § 6.3 of the Articles of Agreement was exhaustive in identifying taxes for which RCMP was responsible, and because the disputed taxes were not listed, the Court cannot look to any other contract document. RCMP Opp. at 33-34. RCMP's argument misses the mark. Nowhere in the parties' voluminous correspondence or agreements is there support for the assertion that the Articles of Agreement were intended to supersede or invalidate prior contract documents that were expressly incorporated. The Articles of Agreement did not include a merger clause, which might have extinguished the legal effect of prior agreements. To the contrary, the interpretation urged by RCMP, whereby the Articles of Agreement replaced and preempted all prior contract documents, would be contrary to its express terms by which they were explicitly incorporated. Only if there were a "discrepancy" between contract documents would the Articles of Agreement prevail. If one read § 6.3 of that Agreement so as not to require RCMP to pay the cruise-line taxes (contrary to the negotiators' understanding and intentions), there would still be no discrepancy between it and the Bid or Project Services Agreement. As RCMP posits § 6.3, it is silent on the subject of cruise-line taxes, but the Bid and Project Services Agreement are specific. RCMP does not argue that its contract representatives could not have bound RCMP to pay costs that were not mandated by its standard procurement clause, as is demonstrated by RCMP's later agreement to do just that because the unusual circumstances of retaining cruise ships in port for weeks required it. Having agreed to incorporate the Bid and the Project Services Agreement into the Articles of Agreement, RCMP representatives are bound to them, even under RCMP's interpretations.

It is noteworthy that CCCM and RCMP negotiated the Articles of Agreement because necessary outside parties (the cruise lines and Royal Bank of Canada) would not accept RCMP's Purchase Order as representing a bilateral contract. See supra, § I.I (CCCM would "need a full contract created to work in conjunction with the [Purchase Order]" because "the Cruise Lines and [ ] other Key Partners [were] not accepting the contractual value of the PO"). Viewing the Articles of Agreement as the parties' intended sole and exclusive agreement would contravene § 3 of the Articles of Agreement, which defined the parties' "Contract" as "the Articles of Agreement, these general conditions [i.e., 9676 (2007/11/30) General Conditions], any supplemental general conditions, annexes and any other document specified or referred to as forming part of the Contract, all as amended by agreement of the Parties from time to time[.]" It would also directly contradict Mr. Day's understanding of the parties' contractual relationship. E-mail from Michael Day to Kelly Meikle, CCCM MSJ, Ex. 26 at CAN20627 ("When we issued the contract, we incorporated their proposal in the priority of documents which makes it a part of the contract."). On this record and with these accords, it is clear that the contract documents agreed to by RCMP remained in force and effect.

RCMP's further argument that there was, in fact, a "discrepancy" between the Articles of Agreement and the tax provisions in other incorporated contract documents is without merit. RCMP would have the Court accept the fanciful notion that Messrs. Day and Kelly and Mses. Meikle and Edwards intended the Articles of Agreement to reverse the terms of the Bid and Project Services Agreement binding RCMP to pay the cruise lines' Canadian taxes, if any. Since one of the prime purposes of the Articles of Agreement was to cement that requirement in language acceptable to necessary third parties — a goal as to which Mr. Kelly and Ms. Edwards finally accepted the assurances of Mr. Day and Ms. Meikle that § 35, General Conditions 9676 was sufficient — RCMP has offered no reason why CCCM would agree to such an irrational step or evidence that Mr. Day and Ms. Meikle intended to accomplish such a sleight of hand. To be blunt, the evidence of the parties' discussions leading to the Articles of Agreement disproves RCMP's after-the-fact claim.

Because there was no "discrepancy" on paying the cruise lines' Canadian taxes between the terms of (i) the Articles of Agreement and either (ii) the Bid or the Project Services Agreement, the language of the latter two contract documents independently required RCMP to pay any Canadian taxes imposed on the cruise lines.

5. Promissory Estoppel

Finally, if there were not an express or valid agreement that RCMP would pay for the cruise lines' Canadian taxes, the doctrine of promissory estoppel would bar RCMP from now denying that obligation.

CCCM argues that the official contracting authorities for RCMP made repeated statements accepting RCMP's responsibility for cruise-line taxes on which CCCM detrimentally relied. CCCM MSJ Mem. at 28-30. Specifically, CCCM contends that it "relied upon [Mr.] Day and [Ms.] Meikle's assurances that General Conditions 9676 properly gave effect to their agreement that the RCMP was required to pay the taxes, as is specifically set forth within [the Bid] and [the Project Services Agreement]." Id. at 29. CCCM contends that it "would not have executed the final contract in the absence of [Mr.] Day's assurances," so "the RCMP is estopped from enforcing any provision or construction of the contract that leads to any conclusion that it was not responsible for the taxes." Id. at 28-29. RCMP responds that the doctrine of promissory estoppel does not apply because a written contract governed the CCCM/RCMP relationship and that contract was clear. RCMP Opp. at 36-38. It further argues that promissory estoppel is a legal principle developed by courts of equity to protect a party that has been harmed in the absence of a contract and CCCM is misusing the principle in an effort to bind RCMP to CCCM's own interpretation of their written contract. From this vantage point, RCMP emphasizes that CCCM cannot indicate any post-contract statement by RCMP designed to change the terms of their written contract and upon which CCCM detrimentally relied.

The elements of promissory estoppel under British Columbia law, discussed supra at § III.A.3, are familiar: to recover, an aggrieved party must show that its counterpart made an unambiguous promise or assertion that was intended to induce reliance and upon which, in fact, the aggrieved party reasonably relied. Engineered Homes, [1983] 1 S.C.R. ¶ 7. If, as RCMP contends, there is doubt about the binding nature of the contract documents, RCMP remains liable to CCCM under the doctrine of promissory estoppel. There is no genuine dispute of material fact (almost all facts are demonstrated by RCMP documents and witnesses); the evidence and testimony of RCMP representatives demonstrate that RCMP repeatedly made such assertions; and CCCM reasonably acted in reliance upon them.42

There are two roughly-defined instances of promissory estoppel in the record: (1) the events of late July leading to execution of the Articles of Agreement on July 31, discussed supra in §§ I.H through L, and (2) the events of early August through September, when Ms. Morin replaced Ms. Meikle as Contracting Authority, discussed supra in §§ I.N through I.T.

First, CCCM agreed to the wording of § 6.3 of the Articles of Agreement — using the text of § 35(3), General Conditions 9676; to wit: RCMP would cover "any change in any tax" — based entirely on the good-faith representations and assurances of Mr. Day and Ms. Meikle. These two RCMP contracting authorities acknowledged as much under oath when testifying at deposition. See Meikle Dep. at 197, 245-47; Day Dep. at 137, 140, 191. Mr. Day was "trying to come up with contract language that confirmed what the RCMP and CCCM had already agreed to" in the Project Services Agreement. Day Dep. at 139-40. The testimony of Mr. Day and Ms. Meikle is confirmed by the deposition testimony and declarations of Ms. Edwards and Mr. Kelly. See Kelly Dep. at 217-18 (Mr. Kelly testifying Ms. Meikle and Mr. Day "confirm[ed] multiple times that 9676 obligated the RCMP to pay any and all Canadian taxes."); see also I Kelly Decl. ¶ 12; I Edwards Decl. ¶ 4. Ms. Meikle and Mr. Day told Mr. Kelly "that because 9676 obligated RCMP to pay these taxes just discussed ... that it was not necessary to include in the articles of agreement more specific language showing that RCMP had bound itself to pay those taxes." Kelly Dep. at 218-19. While counsel for RCMP argues that the CCCM partners' assertions are self-serving, RCMP has not offered any contradictory evidence and its own, authorized, representatives agree. These representatives' agreement on the development and purposes of the contract documents is entirely consistent because, as stated supra at §§ III.D.3-.4, Ms. Meikle, Mr. Day, and the CCCM partners shared the belief that the taxes in question were "unknown" (and unknowable) and thus covered by § 35 of General Conditions 9676. See, e.g., Day Dep. at 105 ("Q. RCMP had accepted by July 15, 2008, that RCMP would be responsible for any and all Canadian government taxes imposed as a result of the charter; correct? A. Yes."). Only when Ms. Morin became involved in late September did RCMP's position change. The record is undisputed, except for the argument of counsel, that RCMP made repeated representations that it was liable for cruise-line taxes with the purpose and intention of persuading CCCM to agree to the language of § 6.3 in the Articles of Agreement.

It is also undisputed that CCCM relied on RCMP's assurances when it signed the Articles of Agreement on July 31. E.g., Kelly Dep. at 217-18 (relying on Mr. Day and Ms. Meikle because "[t]hey were the contracting authority, and that was reinforced to us and we relied on their statements, their commitments"); see also, e.g., E-mail Chain Among Susan Edwards, Tracey Kelly & Rob Coleman, RCMP Opp., Ex. 44 at CCCM2828-29 ("Per Michael Day, Director of Procurement for the RCMP, and with 30 years of Canadian Government experience on contracting, this section [9676 section 35, paragraph 3] addresses all Tax implications that `may' be assessed, and insures that the Canadian Government ([i.e.,]: RCMP) will be financially responsible."). The Court also concludes that CCCM's reliance was reasonable. When the Articles of Agreement were signed, CCCM well knew that the RCMP charter could raise complex tax issues for the cruise lines that needed to be resolved in contract negotiations. See supra § I.C (discussing, inter alia, warning e-mail from Carnival on May 23, 2008). CCCM does not dispute that point but insists that it thought it had addressed those issues through § 6.3 of the Bid and the Project Services Agreement that RCMP pay "any and all Canadian Government Taxes imposed as a result of this Charter." Thus, when Mr. Day and Ms. Meikle assured CCCM during drafting of the Articles of Agreement and at their July 28 meeting, that § 6.3 of the Articles of Agreement (reciting § 35(3) of General Conditions 9676) was (i) consistent with all prior agreements and (ii) sufficient to protect CCCM, CCCM acted reasonably in relying on those assurances. The legitimacy of CCCM's reliance is bolstered by the fact that Ms. Meikle and Mr. Day were procurement specialists with RCMP with years of experience concerning the meaning and applicability of standard Canadian government contracting clauses with which RCMP dealt routinely, even if the charter contract presented a unique concept.

The second instance of promissory estoppel involves the events of early August through late September, recounted in detail supra in §§ I.N through I.T. During that time period, the cruise lines notified CCCM that their legal departments were not satisfied that the terms of the Articles of Agreement guaranteed payment by RCMP of Canadian taxes that might be imposed on them. CCCM then asked RCMP for additional written clarification to assuage the cruise lines. Mr. Day and Ms. Meikle continued to press General Conditions 9676 and, in further reliance on their representations, CCCM ultimately offered to the cruise lines that it would arrange to post letters of credit to cover the taxes on the understanding that a remission might be possible. By late September, Ms. Morin had taken over the contract and reversed RCMP's position.

Unfortunately, RCMP's belief in the expansive scope of § 35(3) General Conditions 9676 became critically unsettling to CCCM's dealings with the cruise lines and the Royal Bank of Canada. Holland America and Royal Caribbean were both firm in their rejections of any tax liability to Canada and in their reliance on § 35; they both insisted that RCMP provide more explicit assurances or CCCM provide letters of credit. See supra § I.N.2.43 CCCM made efforts to persuade the cruise lines, citing Mr. Day and Ms. Meikle, that the language of § 35(3) General Conditions 9676, covered their taxes, but these efforts fell on deaf ears. See e.g., E-mail Chain Among Susan Edwards, Tracey Kelly & Rob Coleman, RCMP Opp., Ex. 44 at CCCM2828-29 (responding to Holland America by "highlighting General Conditions 9676, section 35, paragraph 3").

With the charter party agreements in danger because the cruise lines feared Canadian taxes, Mr. Day and Ms. Meikle continued to try to persuade CCCM that CCCM should rely on payment from Canada if the taxes were ever assessed. For instance, on September 10, Ms. Meikle wrote to Mr. Kelly at Mr. Day's direction, advising him:

E-mail Chain Among Tracey Kelly & Kelly Meikle, et al., CCCM MSJ, Ex. 27 at CAN4009 (emphasis added). Mr. Day offered the same comfort in an email dated September 12: "The assurance you are seeking is already stipulated in the contract. What Kelly will provide is a written confirmation of that provision separate from the formal agreement." E-mail Chain Among Kelly Meikle, Michael Day & Tracey Kelly, et al., CCCM MSJ, Ex. 28 at CAN7869 (emphasis added). Ms. Meikle then added:

Id. (emphasis added).

The record is clear that by late August, CCCM very well knew that the cruise lines had identified major tax liabilities that they unequivocally refused to pay and wanted to impose on CCCM. RCMP had told CCCM in late July that RCMP's general contracting clauses covered the taxes and should pacify the cruise lines; in August, it became clear that the cruise lines were not pacified. Before it received Ms. Meikle's and Mr. Day's clear reassurances on September 10-12 that the "Federal Government shall be responsible," id., CCCM feared it would be left to pay any cruise-line taxes owed to Canada and the CCCM partners considered walking away from the contract. E-mails from Susan Edwards to Tracey Kelly, RCMP Opp., Ex. 115 at CCCM3674. Expressing skepticism at first, but then assured by RCMP's representatives, the CCCM partners opted to go forward with finalizing charter party agreements. It must again be said that their reliance on the expertise of RCMP's contracting authorities was reasonable. CCCM and RCMP fully understood the gravity of the cruise lines' position and, without doubt, Ms. Meikle and Mr. Day intended in good faith to induce and persuade CCCM to proceed, as it did. CCCM's reliance on their assurances through August and September is further demonstrated by its negotiation of, and agreement to, complex contract language to address applications for tax remission process and interim letters of credit from CCCM as tax security.

The Court concludes that, even if RCMP were not contractually obligated to pay Canadian taxes assessed against the cruise lines, RCMP is estopped from denying that obligation. At two separate critical points, RCMP made extensive representations to CCCM beyond the contract itself that RCMP would pay such taxes. CCCM reasonably relied to its detriment on those representations.

6. Anticipatory Repudiation by Normande Morin

Having found that the RCMP was contractually obligated to pay any Canadian taxes incurred by the cruise lines, the question remains whether RCMP breached that duty, and, if so, when. The Court concludes that Ms. Morin anticipatorily repudiated RCMP's obligation to pay the taxes at issue by reinstituting previously-suspended contract deadlines on September 26, 2008.

On September 4, Ms. Meikle suspended the September 8 deadline for CCCM to execute and submit charter party agreements "until we can resolve [the tax] issue." E-mail Chain Among Tracey Kelly & Kelly Meikle et al. & CCCM Letter to Kelly Meikle & Michael Day, CCCM MSJ, Ex. 25 at CAN9368. While RCMP's negotiators thought that they had solved the problem, the cruise lines refused to proceed on those terms. It was suggested by RCMP that CCCM should ascertain information from Canada Revenue Agency and, in Mr. Day's words, possibly "have those extraordinary taxes waived." CCCM and the cruise lines began negotiations on a plan that would give CCCM and RCMP 12 months to obtain tax remission from the Canada Revenue Agency but require CCCM to post letters of credit to cover the potential taxes.

Before these negotiations and arrangements could be completed, Ms. Morin unilaterally reinstated the deadline for CCCM to "nominate the vessels and provide the security documents required" on September 26, requiring CCCM to do so no later than October 3. See supra § I.U. Understanding that the cruise lines, RCMP, and CCCM were still working to resolve the tax issue, CCCM responded with disbelief. See id. Ms. Morin responded with stern language on September 30:

Letter from Normande Morin to CCCM, CCCM MSJ, Ex. 35 at CAN1984.

The September 26 and September 30 letters from Ms. Morin constituted an anticipatory repudiation of the contract and represent RCMP's first refusal to pay Canadian taxes imposed on the cruise lines, in breach of contract.44 See Celgar, 12 B.C.L.R. ¶ 9; see also Vancouver Canucks, 2013 BCSC 866 ¶ 157 (a party repudiates a contract when it has, "by words or conduct, evince[d] an intention to refuse the performance of the contract and not to be bound by it"). CCCM did not accept her position. To the contrary, on October 1, CCCM wrote to Ms. Morin:

Nominated Vessels Doc., RCMP MSJ, Ex. 10 at CAN1380. Ms. Morin never acceded to this request. At that point, CCCM turned away from the tax issue to focus on other contentious issues with RCMP and to negotiate with the cruise lines. The Court finds that, upon Ms. Morin's anticipatory repudiation, CCCM chose to preserve its disagreement and continue with performance, thus preserving its right to sue. Poole, 16 B.C.L.R.2d ¶ 10.

7. Fundamental Breach

The final question with respect to Canadian taxes is whether Ms. Morin's anticipatory repudiation amounted to a fundamental breach of contract — a concept akin to materiality under U.S. law. First, of course, the question of taxes was a critical one to the cruise lines. None of them would charter a single ship to ISU for the 2010 Winter Olympics unless it had an ironclad assurance that the unusually-long port stay would not be taxed. The issue was raised just at the time of the Bid and CCCM addressed it in its Bid, later accepted by RCMP. Second, RCMP representatives had been assuring CCCM, at least since July 28, that § 35 of General Conditions 9676 (and the terms of the Bid and Project Services Agreement, explicitly made part of the contract) covered any cruise-line taxes. Third, when the cruise lines rejected the supposed tax assurances in the late-July Articles of Agreement, CCCM asked RCMP for more definite language and Ms. Meikle and Mr. Day provided commitments of payment under § 35 only. Fourth, all parties considered the possibility of a tax remission but realized that it would take months, if successful. Finally, the cruise lines refused to commit to charter party agreements without certainty.

Looking through its own lens, CCCM views the tax issue as fundamental because "RCMP's sudden refusal to abide by its agreement to pay the taxes would have placed an approximately $6 million burden on Cruise Connections. This amount would have been greater than 10% of the total contract price, and approximately 25% of Cruise Connections' anticipated profits." CCCM MSJ Mem. at 37. According to CCCM, "such a large and unanticipated financial burden would have frustrated the commercial purpose of the contract." Id.; see also CCCM Reply at 16. RCMP retorts that "the taxes that the RCMP was refusing to pay would comprise 25 percent of CCCM's expected profits," which "would leave CCCM nearly [CDN]$18,000,000 expected profits from performing, with the ability to sue for the balance." RCMP Opp. at 38-39. RCMP argues that such a decrease was insufficient to deprive CCCM "of `substantially the whole benefit' of the contract, nor would the remaining [CDN]$18,000,000 destroy the commercial purpose of the contract." Id.

The Court concludes that RCMP's breach of the tax obligation it had accepted was plainly fundamental as described by British Columbia law because it went "to the root of the contract" and "destroyed the commercial purpose of the contract." Celgar, 12 B.C.L.R. ¶ 8; Poole, 16 B.C.L.R.2d ¶¶ 26-28. The estimated $6 million in tax assessments was worth more than 10% of the $56 million value of the contract and represented a substantial portion of CCCM's estimated profit, which had been estimated at $14.4 million as of July 31 but had decreased to $5.7 million by October. E-mails Among CCCM Partners & Other Documents, RCMP Opp., Ex. 92 at CCCM 15153; Profit Projections Doc., RCMP Opp., Ex. 80 at CCCM2174-75; CCCM October 28 Letter, RCMP MSJ, Ex. 70 at CAN1072-73. On the facts and circumstances of this case, a breach that might have rendered the contract wholly unprofitable was fundamental to its commercial purpose.

Apart from mere profit concerns, Ms. Morin's breach affected the contract in another fundamental way: CCCM could neither obtain financing if it were required to pay Canadian taxes nor execute charter party agreements with any cruise line. First, as to the financing: CCCM, which had no standing capital, was working with narrow margins of credit and had no means to finance a contingency of approximately $6 million on its own. CCCM was able to obtain financing from the Royal Bank of Canada because the Bank was effectively depending on RCMP's good credit and the Bank's receipt of the initial RCMP payment of $44 million, long before CCCM had to pay the cruise lines. After Ms. Morin's repudiation, CCCM could only proceed if the Bank agreed to extend additional letters of credit to cover cruise-line taxes, in the hopes that General Conditions 9676 and the contract required RCMP to reimburse CCCM or that a tax remission could be obtained. Borrowers have hopes; banks like a sure thing. Among other parts of the financing, RCMP's agreement to cover cruise-line taxes was critical to the Bank's evaluation of CCCM's ability to perform.

Second, the possibility of Canadian taxes was the issue that had prevented finalization of charter party agreements; such taxes had been of critical concern since the Bid. The inability of RCMP's contract representatives to state their admitted contract obligation in plain English in September 2008 placed a major roadblock to expedient conclusion of negotiations on the charter party agreements. RCMP's agreement to cover cruise-line taxes was critical to the cruise lines' willingness to charter any ships, as is proved by the months of discussion and debate about the tax issue by them, by CCCM, and by RCMP representatives. It was no small matter and, in fact, when RCMP negotiated its own charter agreements with these selfsame cruise lines, it was forced to agree to pay any Canadian taxes. When Ms. Morin announced that she would not fulfill RCMP's agreement on taxes, it added insurmountable difficulties to CCCM's negotiations with the Royal Bank of Canada and the cruise lines that caused delays and additional expense. RCMP fundamentally breached the contract when Ms. Morin rejected its prior agreement to cover Canadian taxes imposed on the cruise lines for their participation at the 2010 Vancouver Olympics.

E. RCMP's First Breach Argument: Provision of Charter Party Agreements

RCMP alleges that CCCM breached their contract by refusing to provide the agreed-upon security for the CCCM-RCMP agreement — i.e., CCCM refused to provide RCMP with signed charter party agreements. It is undisputed that CCCM provided unsigned draft charter party agreements to RCMP no later than October 1; that CCCM provided letters from the cruise lines attesting that they had executed charter party agreements; and that CCCM did not send RCMP copies of its final charter agreements with the cruise lines. See supra § I.X.

RCMP contends that it asked CCCM to "fulfill its obligations" on November 7 and 12, 2008, and submit the signed charter party agreements with Holland America and Royal Caribbean, which, by then, had been finalized. RCMP MSJ Mem. at 33. Further, RCMP asserts that the charter party agreements served as its financial security to ensure the ships' presence in Vancouver and that "[t]he contract clearly stated that the RCMP's financial security would be ... `a fully signed non-cancellable [charter party agreement] naming the Vancouver 2010 Integrated Security Unit, having exclusive use of the vessels.'" Id. at 31-32. Admitting that Ms. Meikle extended the deadline for charter party agreements twice, RCMP asserts that Ms. Morin legitimately reinstated the deadline and eventually gave CCCM until November 25, 2008, to submit signed charter agreements to RCMP but CCCM never complied and therefore breached the contract.

CCCM insists that there was no such breach. It argues that the time for performance, i.e., providing signed charter party agreements to RCMP, had not yet arrived. CCCM offers two bases to support its argument that delivery would have been premature: (1) Ms. Meikle had suspended all deadlines and Ms. Morin wrongly revived them; and (2) CCCM was not obligated to provide final, executed charter agreements to RCMP until April 1, 2009 (as CCCM argues was orally agreed at June 3, 2008, meeting). There is no dispute about Ms. Meikle's indefinite suspension of any deadline for submission of charter party agreements, although RCMP challenges the oral agreement from June 3. Beyond these points, however, CCCM also contends that Ms. Morin first cited contract language by which she only needed letters to prove the ships were under contract, not signed charter party agreements, and then, after CCCM's attorney sent her such letters, she abruptly demanded executed charter party agreements. The written record supports this sequence. See supra §§ I.CC — .DD; Letter from Normande Morin to CCCM, RCMP MSJ, Ex. 81 at CAN115-16 ("In accordance with Clause 4, Annex "A" of the contract, the Contractor shall secure the vessels and provide the RCMP with a proof [sic], in the form of a written letter form [sic] the Cruise Line that vessels have been secured ...."); Letter from Normande Morin to G. William Joyner, III, CCCM MSJ, Ex. 37 at CAN1852 ("Should CCCM not provide the letters from the cruise lines as proof that the vessels have been secured ...."). CCCM complied with that demand on November 6, ahead of Ms. Morin's deadline, by providing the requested letters. See supra § I.CC. On the very next day, November 7, RCMP abruptly changed its demand to "fully executed non-cancellable Charter Party Agreements naming the Vancouver 2010 Integrated Security Unit as having exclusive use of the vessels" and "proof of payment (minimum 70%) to the vessel provider," to be submitted no later than November 10, 2008.

The sequence of events makes clear that the contretemps about signed charter party agreements has no relevance to this litigation, and RCMP's position is without merit. RCMP admits that Ms. Meikle acted in early September to suspend the deadline indefinitely, until the parties could resolve the tax issue to the satisfaction of the cruise lines, which would otherwise not agree to charter their ships to the ISU. Soon thereafter Ms. Morin repudiated RCMP's agreement to pay any Canadian taxes imposed on the cruise lines, resulting in an anticipatory breach of the contract. Because the very declaration by which Ms. Morin rejected RCMP's tax obligation also constituted a fundamental breach of contract, it is impossible to accept RCMP's current argument that her unilateral statement "resolved" the tax issues and freed her to reinstate the suspended deadline.45 Therefore, it is unnecessary to sort through the parties' various arguments about differing deadlines. Put another way, RCMP's argument that it had a right to demand performance with a November 10 deadline and declare breach of contract for failure to submit charter agreements requires the Court to accept three untenable premises: (1) RCMP could repeatedly agree to pay cruise-line taxes throughout the summer of 2008 and into September; (2) in early September, RCMP could suspend deadlines for submission of charter agreements until taxes were resolved; and, (3) in September and early November, RCMP could repudiate its agreement to pay cruise-line taxes.

The entire record makes it plain that RCMP's own conduct was the central reason why negotiations for charter party agreements were prolonged and expensive. The cruise lines would not pay Canadian taxes, and they could use their ships elsewhere. While Ms. Meikle and Mr. Day knew very well that the cruise lines sought additional assurances on taxes and tried to provide them to CCCM, Ms. Morin was new to the issues and appears, at best, to have been terribly impatient. Mr. Kelly tried to explain CCCM's situation on September 28:

See, e.g., CCCM Doc., RCMP Opp., Ex. 28 at CAN2080-81. Ms. Morin was not moved. She refused to engage further on taxes and continued to insist on a 90% letter of credit that she knew full well RCMP representatives had waived for other security. In the face of her intransigence, CCCM continued to negotiate on tax language with Holland America and Royal Caribbean until the end of October. However one might sort through the dates, there is no doubt that RCMP's own actions impeded finalization of charter party agreements. Its prior breach of contract also renders its claim about delivery of final charter agreements legally empty.

F. RCMP's Second Breach Argument: CCCM's Inability to Obtain Financing

RCMP's second claim of breach of contract against CCCM doubles as an impossibility defense: "At the time that the RCMP terminated the contract, CCCM could not have performed its obligations... because it had no means to finance the agreements due to a "host of covenants" CCCM made to the Royal Bank of Canada and immediately breached "as of the day that CCCM entered into a preliminary financing agreement with the [Bank]." RCMP MSJ Mem. at 39; see also RCMP Opp. at 25 (arguing that CCCM could never receive letters of credit for taxes because it "had made significant misrepresentations to the Royal Bank of Canada to obtain financing[] and violated covenants in its preliminary financing agreement").

RCMP's argument has two threads. First, it asserts that "[i]f CCCM had paid Mr. Sessions US$5,057,500 pursuant to the terms of the [Sessions Letter of Intent], or if CCCM had disclosed this obligation to the Royal Bank of Canada, CCCM's financing scheme would have crumbled" because "CCCM agreed to assign its first payment from the RCMP to the Royal Bank in order to guarantee these letters of credit, and the RCMP was asked to sign an agreement promising to make the first payment to the Royal Bank."46 RCMP Opp. at 26. Moreover, RCMP asserts that CCCM's agreement to the Sessions Letter of Intent violated several covenants in CCCM's financing agreement with the Bank, "which prohibited entering into any other agreements that would affect its assets or rights, assign any interest in its rights under the contract with the RCMP, incur any debt, provide for any payment to a third party, or from changing its ownership structure." Id. The second thread of the RCMP's argument is that CCCM did not disclose to the Royal Bank of Canada that CCCM had provided to the RCMP charter party agreements that were materially different from the actual charter agreements and which "did not meet the [Bank's] condition precedent requirement." RCMP MSJ Mem. at 41-42 & n. 13. RCMP insists that such a disclosure "would have affected [the Bank's] analysis as to whether the [Royal Bank of Canada] would provide the preliminary financing to CCCM." Id.; see also RCMP Reply at 20 ("What the RCMP and the Royal Bank did not know, however, was that CCCM had provided falsified charter party agreements to the RCMP, chartering a ship that did not meet the material service requirements of the contract, and that CCCM had not included the RCMP's changes that CCCM agreed would be made in the final charter party agreements.").

CCCM responds that the Sessions Letter of Intent is of no significance for four reasons: (1) it was not enforceable; (2) if enforceable, it did not violate CCCM's covenants to the Bank; (3) CCCM could have paid Mr. Sessions if not for RCMP's delay; and, as an investor, (4) Mr. Sessions' fiduciary duties would have prevented him from causing a breach of the financing agreement between CCCM and the Royal Bank of Canada. As to CCCM's ability to finance the deal overall, CCCM argues that RCMP's breach of its obligation to pay Canadian taxes imposed on the cruise lines and RCMP's failure to acknowledge that the RCMP security requirement had changed from a 90% LOC to signed charter party agreements frustrated CCCM's ability to obtain financing. CCCM Opp. at 9-13; see also id. at 28 (asserting that RCMP "wrongfully declared the contract terminated because RCMP's conduct prevented CCCM from obtaining funding of its financing agreement with the [RBC]").

The Court concludes that Ms. Morin's anticipatory breach of contract on September 26 and 30 and her demands for a 90% letter of credit, which had already been waived, fundamentally changed the financial underpinnings of the contract. Moreover, on review of the entire record, the Court cannot find that CCCM would have been unable to secure the requisite financing for the transaction without Ms. Morin's actions. If anyone bore the brunt of responsibility for the financing falling through, it was Ms. Morin, whose repudiation of the taxes, modifications to the Bank's Acknowledgement Form, and insistence on reinstating the 90% letter of credit requirement, discussed supra at §§ I.AA — .DD, directly led to the November 7 decision by the Royal Bank of Canada to decline to proceed with the transaction, as Mr. Siemens advised the parties:

See Siemens E-mail, RCMP MSJ, Ex. 72 at CCCM13976. RCMP's delay in reviewing documents CCCM had submitted on October 1 for an entire month, during which Ms. Morin was essentially incommunicado, see supra § I.Y; unilateral and repeated re-writing of a form presented by the Royal Bank of Canada, without the Bank's input or permission; and insistance on a 90% letter of credit that Ms. Morin already knew had been waived months prior are all unexplained in the record.

The progression makes clear that RCMP was the proximate cause of the failure of bank financing for CCCM's contract with RCMP. RCMP's argument that CCCM must bear the blame can be made with a straight face only if RCMP ignores its own actions. Moreover, accepting RCMP's argument would require too much speculation as to (i) the validity and effect of the Sessions Letter of Intent and (ii) whether CCCM could have satisfied the eight conditions precedent set forth in the Credit Facilities Offer Letter issued by the RBC after granting preliminary approval to CCCM. See supra § I.X (discussion of RBC preliminary approval). While RCMP contends that the Sessions Letter of Intent "would have made CCCM's financing scheme and compliance with the RCMP's contract unworkable" because it violated the Terms and Conditions document CCCM signed for the RBC, RCMP Opp. at 43, the deposition testimony of Mr. Siemens on that point was equivocal.47 See supra § I.GG.1 (discussing Mr. Siemens's testimony that he did not believe CCCM had provided the Sessions document to the RBC and believed that it would have affected the Bank's "risk analysis ... unfavorably," but also that the letter of credit was "not a definitive debt obligation and could never be").

In similar circumstances, a British Columbia court found that plaintiff-homebuyers were excused from a contractual condition requiring them to "arrang[e] satisfactory financing" because "the defendants had, by their repudiation, made it impossible for the plaintiffs to obtain financing because their `rejection of the whole arrangement made compliance with the condition by the [plaintiffs] impossible in any practical sense.'" Cameron v. Albrecht (1981), 121 D.L.R.3d 767, ¶ 6 (Can.B.C.Super.Ct.) (quoting Whitehall Estates Ltd. v. McCallum (1975), 63 D.L.R.3d 320, ¶ 59 (Can.B.C.C.A.)). The same reasoning applies here: by its repudiation of its contract obligations, RCMP made it impossible for CCCM to maintain its financing, and RCMP bears responsibility for that loss.48

G. RCMP's Third Breach Argument: Health Scores

Finally, RCMP argues that CCCM is liable for breach of contract because its charter agreement with Royal Caribbean was for Radiance of the Seas, a ship that did not meet RCMP's contract requirement for certain health scores. RCMP further contends that CCCM contrived to hide its breach by nominating Serenade of the Seas, which had compliant health scores but had not been subject to negotiations with Royal Caribbean.

Without doubt the Articles of Agreement, see supra at § I.M, required CCCM to contract only for ships that met certain health requirements. See Articles of Agreement Annex §§ 4.7, 5.4. Without doubt, Radiance of the Seas did not meet the contract requirements for the years in question, but Serenade of the Seas was compliant in those years.

CCCM acknowledges that it nominated Serenade of the Seas but contracted for Radiance of the Seas, which received a non-compliant health score of 88 on June 20, 2008. CCCM Opp. at 2 ("CCCM's personnel should have reacted differently...."). Despite these concessions, CCCM argues that it did not breach the contract because its deadline for delivering charter party agreements had not arrived; it had more than enough time to contract with Royal Caribbean for Serenade of the Seas, which was an identical sister ship to Radiance of the Seas; and, in any event, any ship's health score in prior years might readily improve or decrease in subsequent years as they were all working vessels and subject to regular inspections.

The Court agrees that the record shows legerdemain by CCCM in its nomination of Serenade of the Seas. Nonetheless, the issue of health scores is not fundamental to the contract because the scores were variable from ship to ship and year to year. ISU needed "healthy" ships for the 2010 Vancouver Winter Olympics, and the RFP measured that health by scores for 2006 and 2007. See supra § I.B. Realistically, however, the various contractual documents also recognized that such scores might change from year to year, e.g., RFP Annex A §§ 5.1, 5.4, and it allowed the cruise lines to substitute ships. Under such contractual and real-life dynamics, the Court cannot find that the specific health score of a nominated ship in 2008 was fundamental to contract performance with healthy ships in 2010. See Celgar, 12 B.C.L.R. ¶¶ 8-9.

That strict compliance with health scores was not fundamental to the contract is further confirmed by RCMP's explicit acceptance of Jewel of the Seas and ms Statendam upon nomination by CCCM. Both ships, included in the nominations, had scores below 95 prior to nomination (93 for Jewel of the Seas in 2007; 91, 92, 94, 94 in 2004, 2005, 2006, and 2007, respectively, for Statendam). Nonetheless, on October 3, Ms. Morin wrote to Mr. Kelly that she was "[c]onfirming receipt of Health Certificates in good order for all three vessels," see E-mail from Normande Morin to Tracey Kelly, RCMP MSJ, Ex. 31 at CCCM13414, and on October 16, she wrote: "The RCMP has confirmed acceptance of the vessels nominated by CCCM." E-mail Chain Among CCCM Partners and Normande Morin, RCMP MSJ, Ex. 34 at CCCM6234. (RCMP modified its health-score requirements when contracting itself for Statendam, see supra § I.FF.2, allowing for "scores of 90 or better for inspections held since October 2006" and only requiring a "commercially reasonable effort" to maintain a 95 score through the 2010 Olympics. RCMP-HAL CPA at CAN2546. This point is made only in concert with the evaluation of whether strict compliance with health scores was a fundamental contract requirement in 2008.)49

For the foregoing reasons, the Court concludes that a noncompliant health score as of September 2008 neither "destroyed the commercial purpose of the contract," Poole, 16 B.C.L.R.2d ¶¶ 26-28, nor went "to the root of the contract," Celgar, 12 B.C.L.R. ¶ 8. Accordingly, even if CCCM breached the contract by nominating Serenade of the Seas but contracting for Radiance of the Seas, that breach was not a fundamental breach as it did not concern a contemporaneous fundamental issue, and Ms. Morin had breached the contract before the charter party agreement for Radiance of the Seas was finalized.

H. RCMP's Fourth Breach Argument: Canada versus United States Law in Charter Party Agreements

Finally, the Court briefly addresses RCMP's argument that CCCM failed to require that the governing law and legal jurisdiction for the charter party agreements would be Canada and not the United States, as Ms. Morin demanded. RCMP MSJ Mem. at 38. RCMP contends that Ms. Morin's October 20 changes to the draft charter agreements, see supra § I.Z, obligated CCCM to impose the law of British Columbia onto Royal Caribbean and Holland America, instead of U.S. law as the cruise lines had proposed. Id. at 38-39.

This argument is without merit. The contract assured RCMP of the right to review charter agreements for compliance with the RCMP/CCCM contract but did nothing to make RCMP a party to the charter party agreements. RCMP's role was only as a party to a contract with CCCM and a beneficiary of CCCM's charter agreements with the cruise lines. Ms. Morin confused her position as government contractor with CCCM's position as broker/contractor for cruise lines. Nothing in the RFP, the Articles of Agreement, or any other contract document addressed venue or jurisdiction for the charter party agreements to be negotiated between RCMP's broker and various cruise lines. In other words, Ms. Morin (and RCMP) had no legal right to insist on the law or venue to control disputes between RCMP's contractor and its subcontractors. Her statement — "U.S.A. Jurisdiction: The RCMP contract with Cruise Connections is a Canadian Contract. Issues arising from that contract are to be resolved by a Canadian Court," E-mail from Normande Morin to Tracey Kelly, RCMP MSJ, Ex. 53 at CCCM13647 — failed to recognize that CCCM's charter agreements with the cruise lines were not the same as "RCMP contract with Cruise Connections."

RCMP relies on CCCM's response to Ms. Morin's point, which was "AGREED," E-mail Chain Among Normande Morin and CCCM Partners, RCMP MSJ, Ex. 54 at CCCM12022. Whether CCCM agreed to the legal point or only to raise the issue with the cruise lines is unclear. The non-lawyers representing CCCM in negotiations, dealing with non-lawyers from RCMP, may not have appreciated the difference between Canadian and U.S. law and venue for any dispute under the charter agreements, but the cruise lines did and flatly refused to agree. Inasmuch as RCMP did not have a contractual or legal right to insist, the refusal of the cruise lines to agree to terms in a contract to which RCMP was not privy, could not possibly violate the contract between RCMP and CCCM. Even if CCCM's "AGREED" response established an obligation breached by CCCM, any such breach dealing with the charter party agreements was not fundamental to the RCMP/CCCM contract, especially in light of the fundamental breach by RCMP of its agreement to pay Canadian taxes assessed against the cruise lines, if any.

IV. CONCLUSION

RCMP breached its contract with CCCM by anticipatorily repudiating its obligation to pay Canadian taxes that might be imposed on the cruise lines as a result of the 2010 Olympics charter. CCCM is not liable to RCMP for any of the contract breaches alleged by RCMP. Accordingly, CCCM's motion for summary judgment will be granted, and RCMP's cross-motion for summary judgment will be denied. A trial date for a bench trial on damages will be set at the status conference on October 15, 2013.

A memorializing Order accompanies this Opinion.