Date:
20120411
Docket: A-69-11
Citation: 2012 FCA 110
CORAM: EVANS
J.A.
SHARLOW
J.A.
DAWSON J.A.
BETWEEN:
TREVOR NICHOLAS
CONSTRUCTION CO. LIMITED
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR
JUDGMENT
DAWSON J.A.
[1]
In
1995, Trevor Nicholas Construction Co. Limited (plaintiff or appellant) sued
the federal Crown (defendant) in respect of four tenders advertised by Public
Works Canada. Three of the tenders were for dredging services at three
locations: on the St. Clair River, at Amherstburg and at Collingwood. The
fourth tender was for installation of rock and armor stone at Cobourg. Two
causes of action were pled. The plaintiff alleged that the defendant had
treated the plaintiff unfairly and also that it had breached an implied term of
the contracts which were created when the plaintiff delivered four fully
qualified low tenders.
[2]
By
order dated May 16, 2001, the Federal Court granted summary judgment dismissing
the plaintiff’s claim to damages under the implied contractual terms. The
Federal Court ordered that:
2.
This
matter shall proceed to trial on the following issues:
(i)
In light
of the claim of the Plaintiff that it was treated unfairly, was there an
implied obligation on the part of the Defendant that the Plaintiff be treated
fairly?
(ii)
If there
was such an obligation, was that obligation breached?
(iii)
If that
obligation was breached, what if any damages are recoverable as a result of the
breach?
[3]
Subsequently,
by order dated January 20, 2011, a judge of the Federal Court granted summary
judgment dismissing the balance of the plaintiff’s claim (2011 FC 70, 328 D.L.R.
(4th) 665). The Judge found there was no genuine issue for trial with respect
to the plaintiff’s claim that the defendant breached its obligation to treat
the plaintiff fairly in respect of the four tenders.
[4]
This
is an appeal from the January 20, 2011 order of the Federal Court dismissing
the plaintiff’s action.
The Issues
[5]
The
plaintiff raised ten grounds of appeal in its memorandum of fact and law. I
would frame the issues to be decided on this appeal as follows:
1.
Was
the order of the Federal Court vitiated by some procedural defect?
2.
Could
the motion for summary judgment succeed in view of the Judge’s finding that the
issue of whether the plaintiff was treated fairly was not res judicata?
3.
Did
the Judge improperly receive hearsay evidence?
4.
Did
the evidence before the Federal Court raise one or more issues of credibility
which could only be determined after a trial?
5.
Did
the evidence raise a genuine issue for trial?
Consideration
of the Issues
1. Was
the order of the Federal Court vitiated by some procedural defect?
[6]
The
appellant asserts that:
a.
The
defendant lacked status to bring the second motion for summary judgment in view
of the wording of the Federal Court order of May 16, 2001 which directed that
the “matter shall proceed to trial”. In the circumstances, the Judge lacked
jurisdiction to hear the motion for summary judgment.
b.
The
Judge also lacked jurisdiction to hear the motion for summary judgment because
the defendant neither sought nor obtained leave to bring a second motion for
summary judgment.
c.
Declaratory
relief is not available on a motion for summary judgment.
d.
The
summary judgment motion materials were defective because not all of the
relevant pleadings were before the Court. Specifically, the defendant failed to
include the plaintiff’s reply pleading as part of the motion materials.
[7]
For
the following reasons, I find there was no procedural defect that vitiated the
summary judgment proceeding. Each alleged procedural defect is responded to
below in the order advanced by the appellant:
a. When
the May 16, 2001 order is read fairly, in the context of the supporting
reasons, it is apparent that the Federal Court was not adjudicating upon the
mechanism by which the issue of unfair treatment was to be decided. Rather, the
Court was dismissing the claim relating to alleged breaches of contracts, while
allowing the allegation of unfair treatment to proceed. The Federal Court at
all times retained discretion to decide how the issue of unfair treatment would
be adjudicated.
b. The
plaintiff relies upon Rule 213(2) of the Federal Courts Rules,
SOR/98-106 which currently provides:
|
213. (2) If a party brings a
motion for summary judgment or summary trial, the party may not bring a
further motion for either summary judgment or summary trial except with leave
of the Court.
|
213. (2) Si une partie présente
l’une de ces requêtes en jugement sommaire ou en procès sommaire, elle ne
peut présenter de nouveau l’une ou l’autre de ces requêtes à moins d’obtenir
l’autorisation de la Cour.
|
The present
motion for summary judgment was filed on or about January 4, 2005. However, as
the Judge correctly noted, Rule 213(2) came into force in its present form in
December of 2009. Prior to December 2009, Rule 213(2) did not limit the number
of summary judgment motions that could be brought by a party. The Regulatory
Impact Analysis Statement which accompanied the Rules Amending the Federal
Courts Rules (Summary Judgment and Summary Trial), SOR/2009-331 expressly
noted that “Rule 213(2) is replaced by a provision which limits a party to
bringing one motion for summary judgment or summary trial”. It follows that the
Judge correctly concluded that at the time the motion was brought, the
defendant did not require leave to bring its second summary judgment motion.
Moreover, even if the previous rule contained any implied limit on the number
of summary judgment motions, the Judge possessed the discretion under Rule 55
to vary the rule or dispense with its compliance.
c.
The
Federal Court did not grant declaratory relief. The Judge simply found there
was no genuine issue for trial with respect to the plaintiff’s claim that the
defendant breached its implied obligation to treat it fairly. Moreover, while
declaratory relief cannot be granted on an interlocutory basis, I see no reason
in principle why declaratory relief cannot be granted on summary judgment. See,
for example, Canada (Minister of Citizenship and Immigration)
v. Schneeberger, 2003 FC 970, [2004] 1 F.C.R. 280.
d.
The
Judge found that the defendant was not bound to include the plaintiff’s reply
in its motion materials. Moreover, the Judge concluded that the plaintiff was
not prejudiced by the defendant’s failure to include the reply in its motion
record because there was no information contained in the reply that was of
potential relevance to the motion that was not already before the Court. The
appellant has not shown that the Judge committed any error in his appreciation
of the defendant’s obligation to produce the plaintiff’s pleading or the lack
of materiality of the content of the plaintiff’s reply. In any event, the
appellant advised in oral argument that it put the reply before the Judge on
the summary judgment motion. No complaint can be made when the document was
before the Court on the motion for summary judgment.
2. Could
the motion for summary judgment succeed in view of the Judge’s finding that the
issue of whether the plaintiff was treated fairly was not res judicata?
[8]
On
the summary judgment motion the defendant argued that it was established, as a
matter of res judicata, that the plaintiff was treated fairly by the
defendant. The defendant relied upon the decision of the Federal Court in a
related proceeding cited as 2001 FCT 1282. The Judge accepted the plaintiff’s
argument that there were sufficient differences between the facts and
allegations in the case before him and the facts and allegations addressed in
2001 FCT 1282 so as to preclude the application of the doctrine of res
judicata. On this appeal, the appellant now argues that this finding was
fatal to the defendant’s motion for summary judgment.
[9]
I
respectfully disagree. Even though the principle of res judicata was
found not to be applicable, the Judge was still required to assess the evidence
before him in order to ascertain whether a genuine issue for trial existed (see
the first ground relied upon in the defendant’s motion for summary judgment).
It was open to the Judge to find that no genuine issue existed based upon the
remaining evidence relied upon by the defendant.
3. Did
the Judge improperly receive hearsay evidence?
[10]
The
appellant argues that hearsay evidence is not permitted on a motion for summary
judgment unless the evidence meets one of the exceptions to the hearsay rule.
Specifically, the plaintiff complains that he could not effectively
cross-examine the defendant’s deponent, Mr. Grossi, on the exhibits to his
affidavit and therefore suffered prejudice.
[11]
The
Judge dealt with the plaintiff’s argument concerning hearsay evidence at
paragraphs 33, 34 and 38 of his reasons:
33. The plaintiff submitted that
many of the exhibits included with the affidavit of Joseph Grossi, sworn on
December 23, 2004 (the “Grossi Affidavit”), constitute hearsay evidence that
should be disregarded because Mr. Grossi was not in a position to swear to the
truth of the contents of those documents and he did not in fact swear to the
truth of the contents of those documents.
34. This submission
confuses the issue of the defendant’s use of the exhibits with the truth of the
contents of those exhibits. Mr. Grossi did not swear to the truth of the
contents of the exhibits in question. He simply swore to the truth of the fact
that the defendant took the contents of the exhibits into account when it made
the By-Pass Decisions.
[…]
38. The cases relied upon by the
plaintiff on this issue are distinguishable. In Expressvu Inc. v. NII Norsat
International Inc., [1997] F.C.J. No. 276, at paras. 5-7 (T.D.), Associate
Chief Justice Jerome struck certain parts of affidavits filed by the plaintiffs
on the basis that they constituted “expressions of opinion on the very
questions of law which the Court is being called upon to decide,” and contained
“conjecture, speculation about hypothetical events or what is in the mind of
other persons, [and] statements which are irrelevant or immaterial to the
issues in this litigation, or which are based on information and belief without
stating the source of the information.” In Inhesion Industrial Co. v. Anglo
Canadian Mercantile Co. (2000), 6 C.P.R. (4th) 362, at paras. 21-24
(F.C.T.D.), Justice O’Keefe declined to accept affidavit evidence regarding the
assignment of a copyright, which was a vital issue in the case, because the
affiant did not speak with the author of the pattern in question and had little
personal knowledge of the transfer of the copyright in the pattern to the
plaintiff. By contrast, as noted above, Mr. Grossi was intimately involved with
the defendant’s review of the Tenders and had personal knowledge that the
exhibits in question were considered by the defendant in making the By-Pass Decisions.
His affidavit therefore complied with Rule 81(1) of the Rules.
[12]
The
appellant has not established any error in the Judge’s analysis of the use to
be made of the exhibits attached to Mr. Grossi’s affidavit or the relevance of
cross-examination directed to events that occurred after the decisions were
made not to accept the plaintiff’s tenders.
[13]
The
Judge was required to assess whether a genuine issue existed that the defendant
breached its obligation to treat the plaintiff fairly. This required the Judge
to first consider what the duty of fair treatment required. The Judge correctly
stated the law concerning the content of the obligation of fair treatment at
paragraph 46 of his reasons:
The defendant’s implied
obligation to treat the plaintiff fairly flows from its “obligation to treat
all bidders fairly in the sense of not giving any of them an unfair advantage
over the others” and not unfairly preferring one bidder over another (Northeast
Marine Services Limited v. Atlantic Pilotage Authority, [1993] 1 F.C. 371,
at 411-412 (T.D.), reversed on other grounds, [1995] 2 F.C. 132 (C.A.)). In
assessing whether this obligation was breached, it must therefore be determined
whether the plaintiff was treated unfairly, relative to other bidders. This
assessment should include a determination as to whether the By-Pass Decisions
were made on the basis of considerations that were extraneous to those set
forth or implied in the tender documentation (M.J.B. Enterprises Ltd. v.
Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619, at paras.
45-48; Best Cleaners and Contractors Ltd. v. The Queen in right of Canada,
[1985] 2 F.C. 293, at 306-307 (C.A.); Direct Underground Inc.
v. Pickering (City) (2000), 6 B.L.R. (4th) 147, at
paras. 17-18 (Ont. S.C.J.)). In my view, the assessment should also include
a determination as to whether the defendant was biased against the plaintiff or
made one or more of the By-Pass Decisions in bad faith, for example, by basing
any of the By-Pass Decisions on facts that the defendant knew or ought to have
known were untrue at the time those decisions were made. [underlining
added]
[14]
Of
significance is that it was necessary to consider whether the defendant knew or
ought to have known when it decided not to accept the plaintiff’s tenders that
it was basing its decision on irrelevant or incorrect factors. The information
the plaintiff sought to cross-examine Mr. Grossi upon was, in the words of the
Judge, “information that came to light many years after the defendant made its
decision to by-pass the plaintiff”. (Reasons paragraph 68. See also paragraphs
69, 79, 80, 94 and 101). Information received after the by-pass decisions were
made was irrelevant to the issue before the Court. No prejudice could arise
from the inability to cross-examine upon irrelevant issues.
4. Did
the evidence before the Federal Court raise one or more issues of credibility
which could only be determined after a trial?
[15]
The
appellant argues that the evidence raised an issue of credibility which “required
a hearing before a trial Judge”.
[16]
The
Judge dealt with this issue at paragraphs 103 and 104 of his reasons:
The plaintiff
submitted that the differences between the evidence that it adduced and the
evidence adduced by Mr. Grossi gave rise to a credibility issue that cannot be
determined in a motion for summary judgment, but must be addressed in a trial (Suntec
Environmental, above).
I disagree. In
reaching my conclusions on this motion, I was not required to choose between
contradictory evidence provided by Mr. Grossi and the plaintiff. For the
reasons I have already stated, I concluded that the plaintiff has not set out
any specific facts or adduced any evidence whatsoever that raises a genuine
issue as to whether the defendant breached its implied obligation to treat the
plaintiff fairly in reviewing the Tenders.
[17]
The
appellant has not shown that the Judge committed any palpable and overriding
error in his appreciation of the evidence that would warrant our intervention.
Specifically, the appellant has not pointed to any instances where the Judge
was required to choose between truly contradictory evidence.
[18]
During
oral argument, the appellant endeavoured to show examples of instances where
the evidence of the defendant’s witness, Mr. Grossi, was impugned. For example,
Mr. Grossi gave clear evidence in his affidavit about the information and
reports relied upon when the decision was made to by-pass tenders from the
appellant. The appellant then pointed to an admission from Mr. Grossi that
he was not in the room when the decision was made. However, that admission by
itself is not determinative of whether Mr. Grossi, who had been intimately
involved in the tender process, knew what the decision-maker relied upon.
Mr. Grossi could well have known what was put before the decision-maker
even though he was not in the room with the decision-maker. The appellant
confirmed in oral argument that Mr. Grossi was never directly challenged as to
how he knew which information was relied upon. There was therefore no true
conflict in the evidence to be resolved.
[19]
In
oral argument the appellant also argued that credibility issues arose because
the Judge did not dismiss the affidavits the plaintiff relied upon, and so was
obliged to give some weight to them. However, the plaintiff had no direct evidence
to show that when making his decision not to accept the plaintiff’s tenders,
the decision-maker knew that the information before him was incorrect or based
upon irrelevant factors. At best, the plaintiff’s evidence took issue with the
accuracy of various opinions placed before the decision-maker. The Judge was
entitled to weigh this evidence against the evidence provided by the defendant
and determine the plaintiff’s evidence was of insufficient weight to create a
genuine issue for trial.
5. Did
the evidence raise a genuine issue for trial?
[20]
The
appellant has not demonstrated any error in the Judge’s articulation of the
legal principles which were applicable to the defendant’s motion for summary
judgment. Nor has the appellant demonstrated any error in the Judge’s
articulation of the legal content of the applicable duty of fairness and what
would be required at law in order to establish a breach of that duty.
[21]
The
Judge considered the plaintiff’s assertions and evidence relating to each of
the four tenders. At paragraph 30 of his reasons, the Judge wrote that there
was nothing in the plaintiff’s motion record:
[…] that would indicate or suggest in any
way that the defendant knew, at the time when it made the By-Pass Decisions,
that any of the facts upon which it relied in making those decisions were
false, erroneous or misleading. Despite my repeated requests during the oral
hearing, the plaintiff was not able to identify any basis for this claim, other
than its mere belief that the defendant knew that some of those facts were
false.
[22]
After
setting out the plaintiff’s general allegations and describing the evidence,
the Judge characterized the plaintiff’s claims as “largely bald assertions or
based on information that came to light many years after the defendant made its
decision to by-pass the plaintiff’s bid on this project” that were “clearly
without any foundation” (see Reasons at paragraphs 67-68. See also paragraphs 79-80,
88-94 and 102). The Judge made a finding of fact that the defendant “went to
great lengths and incurred considerable expense to treat the plaintiff fairly”
(Reasons at paragraph 80).
[23]
The
appellant has failed to demonstrate any palpable and overriding error in the Judge’s
assessment of the evidence that led him to conclude that there was no genuine
issue for trial. There is therefore no basis for our intervention.
Conclusion
[24]
For
these reasons, I would dismiss the appeal with costs fixed in the all-inclusive
amount of $500.00.
“Eleanor R.
Dawson”
“I agree.
John M. Evans J.A.”
“I agree.
K. Sharlow J.A.”
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