Date:
20120215
Docket:
A-246-11
Citation: 2012 FCA 51
CORAM: LÉTOURNEAU
J.A.
NOËL
J.A.
PELLETIER
J.A.
BETWEEN:
LES SYSTÈMES
EQUINOX INC.
Applicant
and
PUBLIC WORKS AND GOVERNMENT SERVICES CANADA
and ATTORNEY
GENERAL OF CANADA
Respondents
REASONS FOR
JUDGMENT BY THE COURT
BY THE COURT
[1]
This
is an application for judicial review by Les Systèmes Equinox Inc. (the
applicant) from a decision of the Canadian International Trade Tribunal (the
Tribunal or CITT) wherein the Tribunal recommended pursuant to subsections
30.15(2) and (3) of the Canadian International Trade Tribunal Act,
R.S.C. 1985, c. 47 (4th Supp.) (the Act) that Public Works and
Government Services Canada (PWGSC or the respondent) pay the applicant the
amount of $322,377 as compensation for the lost opportunity resulting from the
improper award of a contract to another bidder.
[2]
This
recommendation was made following a series of decisions from both the Tribunal
and this Court. In particular, an earlier Tribunal decision had recommended
that the applicant be compensated for its lost opportunity “by an amount equal
to one quarter of the profit it would reasonably have earned had it been the
successful bidder …” (Tribunal’s decision of March 12, 2009, at para. 86). At
issue in this application for judicial review is the dollar amount of the
compensation recommended by the Tribunal.
[3]
The
applicant contends that the final recommendation is unreasonable and premised
on a number of errors, and asks that the matter be returned to the Tribunal for
a new determination of the compensation. The respondent for its part takes
issue with the fact that the amount awarded comprises compounded and
pre-judgment interest.
[4]
Decisions
of the Tribunal in the exercise of its remedial discretion to award
compensation and determine the amount thereof are to be reviewed on a standard
of reasonableness as this exercise goes to the core of its jurisdiction (see Canada
(Attorney General) v. Envoy Relocation Services, 2007 FCA 176, at paras. 15
to 18, a decision rendered at a time when “patent unreasonableness” was the
most deferential standard). The application of the standard of reasonableness
extends to the decision to award pre-judgment interest given that this exercise
is inextricably intertwined with the Tribunal’s mandate to determine the amount
of the compensation (compare Canada (Canadian Human Rights Commission) v.
Canada (Attorney General), 2011 SCC 53; [2011] S.C.J. No. 53, at para. 25).
[5]
Applying
this standard, we are of the view that no reviewable error has been
demonstrated by the applicant or the respondent.
[6]
In
particular, we do not agree that the method used to assess the compensation was
unreasonable. The Tribunal was entitled to consider information derived from
actual experience between PWGSC and the successful bidder. In so doing, the
Tribunal was careful not to use this co-bidder as a “surrogate” and sought to
assess the proper compensation for Equinox’ lost opportunity by making the
appropriate adjustments (see for example para. 76 of the decision).
[7]
The
applicant also contends that a different assessment method should have been
followed. It argues that the Tribunal should have applied the percentage
reflecting Equinox’ profit margin to the total expenditures of PWGSC during the
contract period. We agree with the respondent that the existence of an
alternative method of assessment does not render the decision of the Tribunal
unreasonable.
[8]
It
was also reasonable for the Tribunal to limit the compensation period to five
years on the basis that the applicant’s claim for compensation beyond this
period is speculative in nature.
[9]
The
applicant challenges the assessment of particular heads of revenues and costs.
For instance, it challenges the Tribunal’s rejection of the amount provided at
Item No. 001-A of Equinox’ bid. As noted by the respondent, this item had been
found to be non-compliant with the requirements of the procurement process in a
prior CITT decision. In our view, it was reasonable for the Tribunal to choose
not to consider this item in the assessment of the compensation. Similarly, we
do not believe that the Tribunal’s assessment of the labour and overhead costs
was unreasonable.
[10]
The
applicant also contends that the Tribunal erred in not compensating Equinox for
the lost opportunity to sell its source code. In this respect, we note that no
claim for compensation under this head was made by the applicant. It follows
that no error can be said to have been committed by the Tribunal on that
account.
[11]
Finally,
the applicant contends that the pre-judgment interest awarded to it should have
been greater to reflect the fact that a larger proportion of the expenditures
would have occurred earlier on in the performance of its contract. However, the
Tribunal did calculate the interest to reflect the applicant’s concern that
most expenditures would have occurred early in the contract. The applicant may
disagree with the amount that was ultimately recommended by the Tribunal, but
that does not make it unreasonable.
[12]
The
respondent for its part argues that the Tribunal did not have the power to
award pre-judgment interest, and alternatively, that the interest should not
have been compounded. We first note that the respondent did not file an
application for judicial review. In Larsson v. Canada, [1997] F.C.J. No.
1044 [Larsson], this Court held that a respondent that had not filed an
application for judicial review could not seek the judicial review of a portion
of the decision (Larsson, at paras. 27 and 28):
27. Had the taxpayer wished to
dispute the Tax Court Judge's decision on the lump sum payment issue, it was
entirely open to him to have brought his own application for judicial review.
Under Rule 1620 of the Federal Court Rules, a motion could have been
brought to have the two applications for judicial review heard together. I agree
with the submissions of the Minister Representative that this rule at least
implies that there is an obligation on the respondent in an application for
judicial review to bring his own application for judicial review where the
respondent wishes to review the decision on different grounds than those
proposed by the applicant.
28. Consequently, I make no
comment on the merits of the taxpayer's submissions with respect to the
taxation of the lump sum payments. Had the taxpayer wished this to be a subject
of judicial review, it was incumbent upon him to bring his own application for
judicial review.
[13]
We
would add that, in any event, it was reasonable for the Tribunal to recommend
the payment of compounded pre-judgment interest as part of the compensation owed
to Equinox. While the Act does not specifically empower the Tribunal to
recommend the award of pre-judgment interest, the Tribunal is entitled to take
into account the time value of money. In our view, the Tribunal’s remedial
discretion as set out in paragraph 30.15(2)(e) is sufficiently broad to
allow the award that it made.
[14]
The
application for judicial review is accordingly dismissed. Given the rejection
of the application and the respondent’s failed attempt to challenge the
decision of the Tribunal, the parties should assume their respective costs.
“Gilles
Létourneau”
“Marc Noël”
“J.D Denis Pelletier”
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