Date: 20060615
Docket: T-1605-04
Citation: 2006 FC 767
Ottawa, Ontario, June 15, 2006
PRESENT: The Honourable Mr. Justice Kelen
BETWEEN:
AGUSTAWESTLAND INTERNATIONAL LIMITED
Plaintiff
and
THE MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES CANADAand
HER MAJESTY THE QUEEN
Defendants
REASONS FOR ORDER AND ORDER
[1] The defendants bring two summary judgment motions:
(i) seeking judgment dismissing the allegations and claims in the Statement of Claim (Claim) founded upon the design and structure of the Request for Proposals issued December 17, 2003 (RFP) (RFP Structure Challenge); and
(ii) seeking judgment dismissing the Claim, including allegations founded upon the evaluation of the bids submitted in response to the RFP and which culminated in the Minister's decision of July 23, 2004 awarding the contract to Sikorsky International Operations Inc. (Sikorsky) (Evaluation Challenge).
[2] The defendants state that the plaintiff seeks judicial review remedies in respect of two decisions of the Minister:
(a) the plaintiff claims the Minister designed the structure of the RFP in a manner that was discriminatory and biased against the plaintiff and contrary to the Minister's duties; and
(b) the plaintiff claims the Minister unfairly discriminated against the plaintiff in evaluating its bid of May 14, 2004, which led to the Minister's announced decision of July 23, 2004 to award the contract to Sikorsky.
[3] The position of the defendants is well-summarized in their memorandum of fact and law at paragraphs 3 and 4 which read:
¶ 3. The bases upon which the Minister seeks summary judgment dismissing the RFP Structure Challenge are:
(a) the complaint should have been brought before the Canadian International Trade Tribunal ("CITT"), an expert tribunal created specifically to address claims such as those being advanced by the plaintiff. The CITT would have provided the plaintiff with an adequate alternative remedy;
(b) in the alternative, the plaintiff was obliged to bring its RFP Structure Challenge to the Federal Court of Canada within 30 days of December 17, 2003, pursuant to section 18.1 of the Federal Courts Act; and
(c) by submitting a bid on May 14, 2004 in response to the RFP, without objection, the plaintiff has waived its remedies and is estopped by its own conduct from bringing the RFP Structure Challenge.
¶ 4. The basis upon which the Minister seeks summary judgment dismissing the Claim, including the Evaluation Challenge, is that all of the plaintiff's complaints with respect to the procurement should have been brought before the CITT, which would have afforded the plaintiff an adequate alternative remedy.
Facts
Letter of interest
[4] By letter of interest dated August 22, 2000, the Minister of Public Works and Government Services Canada invited contractors to submit bids to contract for the split procurement of new helicopters to replace Canada's CH-124 Sea King helicopter fleet:
1. helicopter airframes, related ship alterations and long-term service support; and/or
2. equipment and armaments, their integration into the airframes and long-term service support.
The letter stated that the successful bid would be chosen based on the selection criterion "lowest price compliant".
Complaint to CITT
[5] On October 11, 2000 Agusta filed a complaint to the CITT relating to the process of procurement established by the Minister's letter of interest. The plaintiff argued that the procurement was structured to discriminate against Agusta, contrary to article 504(2) of the Agreement on Internal Trade, Canada Gazette, Part I, Vol. 129, No. 17 (April 29, 1995) by using a "lowest price compliant" selection criterion and failing to consider the cost benefit of operating a single common helicopter fleet.
[6] By decision dated October 31, 2000 the CITT refused to hear Agusta's complaint because, inter alia, the complaint was premature at the letter of interest stage. The Federal Court of Appeal upheld the CITT's decision on judicial review (see E.H. Industries Ltd. v. Canada(Minister of Public Works and Government Services) (2001), 267 N.R. 173 (F.C.A.)).
Request for Proposals
[7] On December 17, 2003 the Minister posted a Request for Proposals for the purchase and servicing of 28 Maritime helicopters. Following a pre-qualification screening process in which only Agusta and Sikorsky were found to have compliant technical proposals, both contractors submitted bids on May 14, 2004 in response to the Minister's final RFP. The Minister determined that Sikorsky's bid was the lowest cost compliant bid. On July 23, 2004 the Minister announced the contract would be awarded to Sikorsky.
Judicial review
[8] Agusta applied for judicial review of the procurement decision on September 1, 2004, claiming that Public Works and Government Services Canada was biased against it. On motions which I heard October 26, 2004:
(i) Public Works and Sikorsky moved to strike Agusta's application for judicial review on the grounds that it was out of time and was barred because Parliament established an adequate alternative statutory remedy before the CITT; and
(ii) Agusta moved for an extension of time in which to file its application for judicial review.
By my Order dated November 3, 2004 the Court granted Agusta an extension of time to apply for judicial review and adjourned Public Works' motion to strike sine die so that the CITT might decide whether the tribunal's procurement review process was available to Agusta. Upon the CITT refusing to decide this issue, I dismissed Public Works' motion to strike out the application for judicial review.
Conversion to an Action
[9] On December 2, 2005, this Court ordered that the plaintiff's application for judicial review be converted to an action (see Agustawestland International Ltd. v. Canada(Minister of Public Works and Government Services)(2005), 144 A.C.W.S. (3d) 410 (F.C.).) In addition to the prerogative relief previously sought on judicial review, on conversion the plaintiff further claimed damages for breach of contract and tort.
Motion for Summary Judgment
[10] Public Works now brings two motions under subsection 213(2) of the Federal Courts Rules, for orders granting summary judgment:
i. dismissing Agusta's action claimed in its entirety; or
ii. dismissing Agusta's claims other than those pertaining to evaluation of bids submitted in response to the RFP.
Relevant Legislation
[11] The legislation and authorities relevant to this motion are:
1. Canadian International Trade Tribunal Act, R.S.C. 1985, c. 47 (4th Supp.);
2. Canadian International Trade Tribunal Procurement Inquiry Regulations, SOR/93-602;
3. Agreement on Internal Trade, Canada Gazette, Part I, Vol. 129, No. 17 (April 29, 1995); and
4. Federal Courts Rules, SOR/98-106.
The relevant excerpts of these authorities follow these Reasons at Appendix "A".
Issues
[12] The issues raised on this motion are as follows:
1. Are these motions for summary judgment res judicata?;
2. In the alternative, is the CITT procurement review process an adequate alternative statutory remedy with respect to the plaintiff's complaints with respect to this procurement?;
3. In the alternative that the CITT is not an adequate alternative remedy, should the first motion for summary judgment (with respect to the RFP dated December 17, 2003) have been the subject of a separate application for judicial review to the Federal Court under section 18.1 of the Federal Courts Act within 30 days?; and
4. In any event, has the Plaintiff waived its right to object to the structure of the RFP when the Plaintiff submitted a bid in response to the RFP?
Analysis
Defendants' position
[13] Public Works submits that summary judgment be granted dismissing Agusta's action in its entirety, because there is no genuine issue for trial. The defendant pleads that the plaintiff could have availed itself of a complaint to the CITT as an adequate alternative statutory remedy, for which reason the Federal Court should not exercise its jurisdiction to judicially review these decisions so that there is no genuine issue for trial in this action. Alternatively, if the adequacy of an alternate remedy to this action is a genuine issue for trial that requires findings of fact, the Court should decide the question on summary judgment on the affidavit evidence. In the further alternative that the CITT procurement review process was not an adequate alternative statutory remedy, the plaintiff was obliged to bring its RFP Structure Challenge to the Federal Court within 30 days of December 17, 2003, pursuant to section 18.1 of the Federal Courts Act. In any event, the plaintiff waived its remedies and is estopped by its own conduct from bringing this RFP structure challenge when it submitted a bid on May 14, 2004 in response to the RFP.
Plaintiff's position
[14] Agusta submits that summary judgment should be dismissed because the motion is grounded on a question of adequate alternative remedy that has been previously decided by the Court and is res judicata. In the alternative, if the question of an adequate alternative remedy is not res judicata, the motion should be dismissed in whole or in part because:
(i) the question of an adequate alternative remedy should be decided by the trial judge;
(ii) in respect of the evaluation of its procurement bid, the plaintiff had no adequate alternative remedy before the CITT because it was not a "Canadian supplier";
(iii) in respect of the structure of the procurement, the plaintiff had no adequate alternative remedy before the CITT because it was not a "Canadian supplier"; and
(iv) in respect of its prayer for relief for the private law remedies in contract and tort, the question of adequate alternative remedy do not apply.
Test for Summary Judgment
[15] Under subsection 216(1) of the Federal Courts Rules, the Court shall grant summary judgment where it is satisfied that there is no genuine issue for trial with respect to a claim or defence. The Court may also grant summary judgment under paragraph 216(2)(b) where a genuine issue exists solely as a question of law, or under subsection 216(3) where the Court is able on the whole of the evidence to find the facts necessary to decide questions of fact and law:
| Where no genuine issue for trial
216. (1) Where on a motion for summary judgment the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly.
Genuine issue of amount or question of law
(2) Where on a motion for summary judgment the Court is satisfied that the only genuine issue is [...]
(b) a question of law, the Court may determine the question and grant summary judgment accordingly. [...]
Summary judgment
(3) Where on a motion for summary judgment the Court decides that there is a genuine issue with respect to a claim or defence, the Court may nevertheless grant summary judgment in favour of any party, either on an issue or generally, if the Court is able on the whole of the evidence to find the facts necessary to decide the questions of fact and law.
|
Absence de véritable question litigieuse
216. (1) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue qu'il n'existe pas de véritable question litigieuse quant à une déclaration ou à une défense, elle rend un jugement sommaire en conséquence.
Somme d'argent ou point de droit
(2) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue que la seule véritable question litigieuse est : [...]
b) un point de droit, elle peut statuer sur celui-ci et rendre un jugement sommaire en conséquence. [...]
Jugement de la Cour
(3) Lorsque, par suite d'une requête en jugement sommaire, la Cour conclut qu'il existe une véritable question litigieuse à l'égard d'une déclaration ou d'une défense, elle peut néanmoins rendre un jugement sommaire en faveur d'une partie, soit sur une question particulière, soit de façon générale, si elle parvient à partir de l'ensemble de la preuve à dégager les faits nécessaires pour trancher les questions de fait et de droit.
|
To succeed on its motion for summary judgment, Public Works must demonstrate that there is no genuine issue for trial disclosed in Agusta's statement of claim, or alternatively that genuine issues for trial may be decided by the Court by reason of being sole questions of law or questions of fact and law able to be resolved by the Court on the evidence before it.
Issue No. 1: Are these motions for summary judgment res judicata?
(a) Doctrine of res judicata
[16] Res judicata, a well-established doctrine of law, encompasses two forms of estoppel: "cause of action estoppel"; and "issue estoppel". The doctrine is based on two policies:
1. there should be an end to litigation; and
2. an individual should not be sued twice for the same cause of action or issue.
[17] Cause of action estoppel prevents a person from bringing an action against another where the cause of action was the subject of a final decision of a Court of competent jurisdiction. Issue estoppel has a wider application since it can apply to separate causes of action. It arises when the same question or issue has been decided by a Court of competent jurisdiction. The parties to that decision are prevented or estopped from raising the same issue. See Apotex Inc. v. Merrek and Co., 2002 F.C.A. 210 at paragraphs 24 and 25.
[18] As I held in Al Yamani v. Canada (Minister of Citizenship and Immigration), [2003] 3 F.C. 345 (T.D.), aff'd (2003) 60 W.C.B. (2d) 313 (F.C.A.), a key tenant of estoppelis that a party must bring forward the subject matter of the whole case relating to the issue at one time, once and for all, and bring forward every remedy flowing from that issue based on the subject matter. A party cannot make half the argument on one occasion, then bring the same issue to the Court and argue the other half. In this case, the earlier motion to strike by the defendants was a different form of relief than this motion for summary judgment. Therefore, cause of action estoppel is not applicable. However, both the motion to strike and the motions for summary judgment are based on the same issue, namely that the CITT procurement review process was an adequate statutory alternative remedy. As the Court of Appeal held in Apotex, at paragraph 25:
Issue estoppel is wider, and applies to separate causes of action. It is said to arise when the same question has been decided, the judicial question which is said to create the estoppel is final, and the parties to the judicial decision or their privies are the same persons as the parties to the proceedings to which the estoppelis raised ...
(b) Previous decisions
[19] In analyzing this issue, it is necessary to consider my previous decisions with respect to the defendants' motion to strike the application for judicial review in this matter. The previous decisions are:
1. the Order of the Court dated November 3, 2004, Agustawestland International Ltd. v. Canada(Minister of Public Works and Government Services) (2004), 263 F.T.R. 54 (F.C.) ("first Order");
2. the Reasons for Order dated November 3, 2004, as above ("Reasons"); and
3. the Order dated November 29, 2004, unreported T-1605-04 ("second Order").
[20] The first Order adjourned the motion to strike sine die.
[21] The Reasons stated in part:
The basis for motion to strike this application for judicial review
¶ 15 Public Works and Sikorsky submit that this application for judicial review ought be struck out on two bases:
...
2. that the application is barred because Parliament has established an adequate alternative statutory remedy, namely the applicant can file a complaint with respect to any aspect of the procurement process with the Canadian International Trade Tribunal, which has the authority and expertise to conduct an inquiry into a complaint about any aspect of the procurement process.
...
¶ 34 Sikorsky submits that Agusta seeks to have two separate decisions of the Minister reviewed, and that both are out of time. The first decision is the structuring of the procurement and evaluation process, as released in the form of the RFP to the pre-qualified bidders on December 17, 2003. The second decision is the decision on July 23, 2004 to award the contract to Sikorsky.
...
¶ 36 ... Sikorsky submits that there is no reasonable explanation provided for why Agusta did not challenge the structuring of the procurement process as announced on December 17, 2003, the stage at which the Federal Court of Appeal suggested it do so in E.H. Industries, supra. It cites Au v. Canada (Minister of Citizenship and Immigration), (2001) 202 F.T.R. 57, 2001 FCT 243, and Zundel v. Canada(Human Rights Commission), (1999) 164 F.T.R. 250, [1993] 3 F.C. 58 to support that argument that any allegation of bias must be raised at the first opportunity. ...
...
¶ 52 The Court does not at this time have sufficient facts on which to decide whether Agusta meets the definition of a "Canadian supplier" for the purpose of the AIT. Agusta should present the relevant factual underpinning to the Tribunal as part of a complaint.
...
¶ 55 I am also satisfied that the Tribunal has broad powers including:
1. the power to conduct an inquiry into the complaint, which inquiry may include a hearing, per section 30.12(1) of the CITT Act;
2. the power to recommend remedies including that the bids be re-evaluated or that the designated contract be terminated, per section 30.15 of the CITT Act; and
3. the power to order the government institution to postpone the awarding of the contract until the Tribunal determines the validity of the complaint, per section 30.13(3) of the CITT Act.
Accordingly, Parliament has provided an adequate alternative remedy for Agusta's complaint with respect to this procurement process if the Tribunal finds that Agusta meets the definition of a "Canadian supplier" for the purposes of the AIT. Under section 7(1) of the CITT Procurement Inquiry Regulations the Tribunal shall within five working days after the complaint is filed, make this determination.
¶ 56 As indicated at the hearing, the issue of whether the procurement process constitutes a course of conduct for the purpose of judicial review is a matter properly left to the Judge hearing the application for judicial review. ...
...
REASONABLE BASIS FOR AGUSTA CONCLUDING THAT THE TRIBUNAL PROCUREMENT REVIEW PROCESS WAS NOT AN ADEQUATE ALTERNATIVE REMEDY
¶ 66 Public Works told Agusta that it would object to the Tribunal's jurisdiction to review this procurement on the basis that Agusta was not a "Canadian supplier". In 2000, the Tribunal had questioned its jurisdiction to review a complaint filed by Agusta because it was a foreign supplier.
¶ 67 Since 2000, Agusta says that it decided not to register with Public Works as a "Canadian supplier" under the Public Works Controlled Goods Regulations, and it stopped operating in Canada as a Canadian subsidiary corporation.
¶ 68 At this hearing before the Court, Public Works submitted that the Tribunal procurement review process was an adequate alternative remedy, yet would not make a commitment not to object to the jurisdiction of the Tribunal in this regard. For all of these reasons, the Court is satisfied that Agusta had a reasonable basis for not filing the complaint with the Tribunal until this time.
THE TRIBUNAL IS THE APPROPRIATE FORUM
¶ 69 The Tribunal is the expert body mandated by Parliament to conduct an inquiry into a complaint with respect to a procurement process. Agusta originally filed its complaint with respect to this procurement process before the Tribunal, presumably for this reason. Public Works and Sikorsky have submitted to the Court that the Tribunal is the appropriate body to review this procurement (subject to the puzzling position of Public Works that it cannot advise the Court whether it would, or would not object, to the Tribunal jurisdiction). Accordingly, all three parties, and the Court, agree that the Tribunal is the appropriate forum to review this procurement if the Tribunal has jurisdiction of Agusta.
...
¶ 72 Under section 7 of the CITT Procurement inquiry Regulations, the Tribunal determines within 5 days of the complaint being filed, whether the applicant fulfills the conditions for an inquiry. If the Tribunal procurement review process is available to the applicant, the court will stay this application for judicial review. Until this is known, the Court will adjourn this motion to strike sine die. At this point, the parties should assume that the motion for an interlocutory injunction will proceed on November 23, 2004.
[22] The second Order reads in part:
UPON the Court adjourning the respondents' motion to strike to provide time for the Canadian International Trade Tribunal to decide whether the applicant is a "Canadian supplier" (see paragraphs 70 to 72 of the Court's Reasons for Order dated November 3, 2004);
AND UPON the Tribunal having decided on November 24, 2004 that it will not decide this issue (notwithstanding the finding of this Court at paragraph 71 of the Reasons);
AND UPON the Court having already found that the applicant had a reasonable basis for not filing a complaint with the Tribunal until directed by the Court (see paragraph 68 of the Reasons);
AND UPON the Court having already found that it cannot determine whether the adequate alternative remedy doctrine so clearly applies that it should strike this application (see paragraph 53 of the Reasons);
...
AND for the other reasons set out by the Court in its Reasons dated November 3, 2004;
THIS COURT ORDERS THAT:
1. This motion to strike out the application for judicial review is dismissed;
...
(c) The two summary judgment motions
[23] I will now consider whether the Court's previous two Orders and Reasons for Order make the defendants' two summary judgment motions res judicata. I will deal first with the motion for summary judgment regarding the Minister's decision of July 23, 2004 that the contract be awarded to Sikorsky.
[24] The Court's first Order adjourned the application for judicial review of this decision until the CITT could determine whether it had jurisdiction. The Court found that the CITT procurement review process was an adequate alternative remedy for the plaintiff's complaint if the plaintiff meets the definition of a "Canadian supplier" for the purposes of the Agreement on Internal Trade (AIT). The Reasons also found that the plaintiff had a "reasonable basis" for concluding that the Tribunal procurement review process was not an adequate alternative remedy, until the Court directed the plaintiff to file a complaint with the Tribunal and stated that the Tribunal "can receive the complaint on the basis that the applicant only had a reasonable basis to know that it may be eligible as a "Canadian supplier" to file a complaint as of the date of this Order (November 3, 2004)". The second Order came after the Tribunal would not decide the issue, notwithstanding the finding of the Court. The second Order was that the motion to strike the application for judicial review be dismissed.
[25] While the motion for summary judgment is different than a motion to strike the application for judicial review, the underlying issue in both motions is the same. I dismissed the motion to strike on the basis of this issue. The two Orders with Reasons were appealed and upheld on appeal by the Federal Court of Appeal on April 5, 2005, see [2005] F.C.J. No. 567 (QL) per Rothstein, J.A. This issue cannot be re-litigated.
[26] While I held that the Tribunal is the appropriate forum to review this procurement if the Tribunal has jurisdiction over the plaintiff, I also held that the plaintiff had a reasonable basis for concluding that the Tribunal procurement review process was not an adequate alternative remedy because the plaintiff was not a "Canadian supplier". This decision is final because the defendants appealed and the appeal was dismissed. The defendants did not seek leave to appeal to the Supreme Court of Canada.
[27] It is trite law that the Court will not exercise its discretion to judicially review a decision if the applicant has not exhausted its alternative statutory remedies. However, if the applicant has a reasonable explanation for not doing so, then the Court will exercise its discretion. In this case, the applicant satisfied the Court in this regard. Moreover, the defendants cannot ask the Court to apply this equitable doctrine if they do not come to Court with "clean hands".
[28] As I held in Constable Darrel Bruno v. The Attorney General of Canada, et al., 2006 FC 462 at paragraph 26, a party must come to Court with "clean hands" when it takes the position that the Court should decline its judicial review jurisdiction.
¶ 26 It is clear to the Court that Staff Sergeant Asp's position that the grievance procedure was not available or appropriate was in error. It is also clear that the respondents cannot on one hand advise Constable Bruno that the grievance procedure with respect to the implementation decision is not available to him, and on the other hand take the position before this Court that Constable Bruno should have pursued the internal grievance procedure. The respondents must come to Court with clean hands when they take the position that the Court should decline its judicial review jurisdiction on this basis.
[29] In the case at bar, a senior Public Works official responsible for this procurement advised the plaintiff on two occasions that the plaintiff was not a "Canadian supplier, and could not file a complaint with the CITT with respect to this procurement". Moreover, the senior Public Works official advised that Public Works would object to the jurisdiction of the Tribunal if the plaintiff did file a complaint. This evidence is uncontradicted. To compound this position, the former counsel for the defendants, arguing the motion to strike before this Court on October 26, 2004, would not confirm to the Court that Public Works would not object to the jurisdiction of the Tribunal if Agusta were to file a complaint. The defendants were not coming to Court with "clean hands" when they submitted that the Court should decline its judicial review jurisdiction on the basis that the Tribunal is an adequate alternative remedy.
[30] It is conceivable that the defendants' new counsel would have made other arguments on the motion to strike with respect to this issue. However, a key tenant of issue estoppel, which is part of res judicata, is that a defendant must bring forward his whole case relating to the issue at one time, once and for all. The Minister is barred from seeking to reopen the finding of the Court with respect to that issue on the ground that there were some arguments not advanced in the earlier proceedings. The reason for res judicata is that there should be an end to litigation with respect to an issue, and that an individual should not be before the Court twice for the same issue.
[31] In any event, the Court will decide in the alternative, on the basis of the new evidence on this motion for summary judgment, whether the plaintiff is a "Canadian supplier" and whether the Tribunal would have had jurisdiction.
[32] The motion for summary judgment regarding the RFP Structure deals with a claim based upon the allegedly biased structure of the RFP dated December 17, 2003. The defendants submit that the CITT is an adequate alternative remedy to review this RFP so that the Court should decline its jurisdiction.
[33] Before the hearing of this motion for summary judgment, I did not remember that this issue was also before the Court on the application by the defendants to strike the application for judicial review. However, the Reasons make clear that the application for judicial review seeks to have two separate decisions of the Minister reviewed, the first decision being the structuring of the RFP dated December 17, 2003, and that the application is barred because the Tribunal is an adequate alternative remedy. See paragraphs 15, 34 and 36 of the Reasons for Order dated November 3, 2004.
[34] Sikorsky also submitted that there was no reasonable explanation why the plaintiff did not challenge the structuring of the procurement process at that time. In the Reasons for Order, the Court stated at paragraph 56:
¶ 56 As indicated at the hearing, the issue of whether the procurement process constitutes a course of conduct for the purpose of judicial review is a matter properly left to the Judge hearing the application for judicial review. ...
[35] It is now clear to me that this issue was also before the Court. However, it was not argued with the same arguments as new counsel for the defendants have argued the issue on this motion for summary judgment. Nevertheless, the second Order of the Court dismissed the motion to strike out the application for judicial review, which included the RFP Structure decision dated December 17, 2003. For this reason, the motion for summary judgment with respect to the RFP decision is res judicata. Having said that, I will consider in the alternative, whether the decision regarding the structure of the RFP is a separate decision or a "continuing course of conduct", and whether the plaintiff is a "Canadian supplier" so that the Tribunal would have had jurisdiction.
Issue No. 2: In the alternative, is the CITT procurement review process an adequate alternative statutory remedy with respect to the plaintiff's complaints with respect to this procurement
[36] This is a mixed question of fact and law. As a question of law, I have already held that the power of the CITT to conduct an inquiry into a procurement review complaint pursuant to subsection 30.13(1) of the CITT Act is an adequate alternative remedy for the plaintiff's complaint if the CITT had found that the plaintiff meets the definition of a "Canadian supplier" for the purposes of the AIT. Accordingly, the mixed question of fact and law, for the purpose of this alternative issue, is whether the plaintiff is a "Canadian supplier".
[37] In the Court's Reasons for Order dated November 3, 2004, I considered the jurisdiction of the Tribunal at paragraphs 47 to 51. At paragraph 52 I concluded that the Court did not at that time have sufficient facts to decide whether the plaintiff meets the definition of a "Canadian supplier" for the purpose of the AIT, and that the plaintiff should present the relevant factual underpinnings to the Tribunal as part of a complaint. The plaintiff has now done so and these facts are now before the Court.
[38] In the Reasons for Order dated November 3, 2004 I found that Article 501 of the AIT explains that the purpose of the AIT is to ensure "equal access to procurement for all Canadian suppliers", and that Article 506 defines a "Canadian supplier" as:
... a supplier that has a place of business in Canada.
and defines a "place of business" as:
... an establishment where a supplier conducts activities on a permanent basis that is clearly identified by name accessible during normal business hours.
[39] Based on the uncontradicted evidence before the Court on this motion for summary judgment (the Affidavit of Mr. Art Silverman), it is clear that:
1. the plaintiff had at all material times an Ottawa office, with two employees, for the purpose of liaising with the defendants on the Maritime Helicopter procurement;
2. the plaintiff does not conduct its regular business from this office or from any other place of business in Canada;
3. the plaintiff does not earn any income in Canada, and has no income tax liability in Canada;
4. the plaintiff does not enter into contracts in Canada, either for the delivery of helicopters or for the purchase of supplies. The plaintiff has never purchased or sold anything in Canada. The plaintiff does not import any products into Canada. It does not deliver products in Canada. It conducts all its commercial activity outside of Canada;
5. the plaintiff intentionally avoids having any residency status in Canada for legal reasons, including income tax; and
6. the plaintiff's Ottawa office, which is an office in an office building, is not an establishment where the plaintiff conducts its normal business activities on a permanent basis.
[40] On this evidence, the Court concludes that the plaintiff was not at the material times a "Canadian supplier" so that the Tribunal would not have had jurisdiction to review a complaint filed by the plaintiff with respect to this procurement. The Court agrees with the Tribunal in the Re Winchester Division-Olin Corp., [2004] C.I.T.T. No. 44 that the AIT is a domestic agreement and a foreign supplier cannot be extended any rights under the AIT. It would make no sense if a foreign supplier could acquire "Canadian supplier" status by simply leasing an office in Canada with two employees for a very limited purpose. The AIT is a domestic agreement between Canada's federal government and its provincial and territorial governments. A foreign supplier cannot take a benefit under that Agreement.
[41] Accordingly the Court finds that the CITT was not an adequate alternative remedy for the plaintiff in this case because the plaintiff was not a "Canadian supplier", and the Tribunal has no jurisdiction to review procurement complaints by non-Canadian suppliers.
Issue No. 3: In the alternative that the CITT is not an adequate alternative remedy, should the first motion for summary judgment (with respect to the RFP dated December 17, 2003) have been the subject of a separate application for judicial review to the Federal Court under section 18.1 of the Federal Courts Act within 30 days?
[42] In accordance with the reasons above, this issue has already been considered by the Court in its Reasons for Order dated November 3, 2004, and its Order dated November 29, 2004. At paragraph 56, I found that the issue of whether the procurement process constitutes a course of conduct for the purpose of judicial review is a matter properly left to the Judge hearing the application for judicial review. Since making this finding, the parties have filed approximately twelve affidavits, many of which have been cross-examined. This evidence reinforces my conclusion that the RFP Structure may, or may not be, a "continuing course of conduct". This conclusion will require the Trial Judge to make findings of fact and credibility based on the evidence. This evidence should be cross-examined before the Trial Judge. The Trial Judge must make findings of fact which will turn on the drawing of inferences. There are conflicts in the evidence which the Trial Judge must resolve. The plaintiff alleges bias in the procurement, and the facts allegedly supporting this conclusion go back several years, including the RFP Structure. If the structure of the RFP is evidence of a "continuing course of conduct", it may simply be background information with which the Court adjudicates the allegation of bias with respect to the evaluation of the bids which culminated in the Minister's decision on July 23, 2004. This is a genuine issue for trial that cannot be properly resolved on a motion for summary judgment under Rule 216 of the Federal Courts Rules, 1998.
Issue No. 4: In any event, has the plaintiff waived its right to object to the structure of the RFP when the plaintiff submitted a response to the RFP?
[43] The defendants submit that the plaintiff has waived its right to object to the RFP Structure when the plaintiff submitted a bid in response to the RFP. By submitting a bid, the plaintiff accepted an invitation to enter into "contract A" with the defendant. That contract was that the bid be considered in accordance with the RFP. See Ontariov. Ron Engineering & Construction (Eastern) Ltd., [1981] 1 S.C.R. 111. The defendants refer to Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490 where Mr. Justice Major held at paragraphs 18 and 19:
¶ 18... The principle underlying both doctrines (waiver or promissory or equitable estoppel) is that a party should not be allowed to go back on a choice when it would be unfair to the other party to do so.
¶ 19 Waiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some known right or defect in performance of the other party ...
¶ 20 Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since no consideration moves from the party in whose favour a waiver operates. An overly broad interpretation of waiver would undermine the requirement of contractual consideration.
(Emphasis added.)
[44] In the case at bar, the plaintiff did not intend to abandon its legal right to object to the structure of the RFP. The plaintiff wrote five letters to the defendants objecting to the structure of the RFP, and placed full page newspaper advertisements objecting to the RFP structure. The evidence is that the bid was made in response to the RFP because the plaintiff was confident that Sikorsky did not have the ability to deliver the helicopters within the 48 month time period requirement by the RFP so that the Sikorsky bid would be "non-compliant". Since the plaintiff and Sikorsky were the only qualified bidders, the plaintiff thought it would win the RFP regardless of the RFP structure.
[45] The Court is satisfied that the defendants knew the plaintiff objected to the RFP, and was not under any impression that the plaintiff was waiving its legal rights in that regard.
Causes of Action in Contract and Tort
[46] This action, in addition to judicial review, sues the defendants for breach of contract and for tort. These causes of action are not restricted by the doctrine that the Court should not assume jurisdiction if there is an adequate alternate remedy provided by statute.
[47] In Grenier v. Canada, [2005] F.C.J. No. 1778 the Federal Court of Appeal held that a person cannot indirectly challenge the lawfulness of a decision, by way of an action for damages, that is subject to judicial review within 30 days after the decision is made pursuant to subsection 18.1(2) of the Federal Courts Act. I would add that subsection 18(3) of the Federal Courts Act provides that the remedies of judicial review may be obtained only on an application for judicial review under section 18.1. The Grenier case applies to administrative decisions which are generally subject to judicial review, not to acts by the Crown which are normally subject to legal actions for breach of contract or tort. For this reason, the plaintiff's action in this case for breach of contract and for tort would not be barred if the plaintiff had not, as the plaintiff has, also commenced applications for judicial review over the same subject matter.
Costs
[48] The Court has concluded that these two motions for summary judgment are res judicta. The plaintiff seeks costs of this motion on an increased scale, and in its factum, on a solicitor and client basis. At the hearing, counsel for the defendants agreed that the plaintiff is entitled to costs on an increased scale if the Court finds that these motions are res judicata. The Court also agrees.
[49] Because the defendants brought a duplicitous and unnecessary motion, the plaintiff is entitled to its legal costs payable forthwith. The amount of legal costs awarded by the Federal Court of Appeal to the plaintiff when the Court of Appeal dismissed the defendants' appeals from the Orders dismissing the motion to strike out this case was $8,000. The Court will allow costs as a lump sum in the amount of $10,000, which is between the upper end of counsel fees allowed under Tariff B of the Federal Courts Rules for these motions for summary judgment, and the probable solicitor and client costs.
ORDER
THIS COURT ORDERS that:
1. The motion by the defendants seeking summary judgment dismissing the allegations and claims in the Statement of Claim founded upon the design and structure of the Request for Proposals issued December 17, 2003 is dismissed with costs payable forthwith;
2. The motion by the defendants for summary judgment seeking judgment dismissing the Claim, including allegations founded upon the evaluation of the bids submitted in response to the Request for Proposals and which culminated in the Minister's decision of July 23, 2004 awarding the contract to Sikorsky International Operations Inc., is dismissed with costs payable forthwith; and,
3. The total amount of legal costs for both motions will be $10,000 inclusive of disbursements.
"Michael A. Kelen"
Appendix "A"
RELEVANT LEGISLATION
1. Canadian International Trade Tribunal Act, R.S.C. 1985, c. 47 (4th Supp.)
| Filing of complaint
30.11 (1) Subject to the regulations, a potential supplier may file a complaint with the Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint.
Contents of complaint
(2) A complaint must
(a) be in writing;
(b) identify the complainant, the designated contract concerned and the government institution that awarded or proposed to award the contract;
(c) contain a clear and detailed statement of the substantive and factual grounds of the complaint;
(d) state the form of relief requested;
(e) set out the address of the complainant to which notices and other communications respecting the complaint may be sent;
(f) include all information and documents relevant to the complaint that are in the complainant's possession;
(g) be accompanied by any additional information and documents required by the rules; and
(h) be accompanied by the fees required by the regulations.
Chairman may assign member
(3) The Chairperson may assign one member of the Tribunal to deal with a complaint and a member so assigned has and may exercise all of the Tribunal's powers, and has and may perform all of the Tribunal's duties and functions, in relation to the complaint.
[...]
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Dépôt des plaintes
30.11 (1) Tout fournisseur potentiel peut, sous réserve des règlements, déposer une plainte auprès du Tribunal concernant la procédure des marchés publics suivie relativement à un contrat spécifique et lui demander d'enquêter sur cette plainte.
Forme et teneur
(2) Pour être conforme, la plainte doit remplir les conditions suivantes:
a) être formulée par écrit;
b) préciser le contrat spécifique visé, le nom du plaignant et celui de l'institution fédérale chargée de l'adjudication du contrat;
c) exposer de façon claire et détaillée ses motifs et les faits à l'appui;
d) préciser la nature de la réparation demandée;
e) préciser l'adresse du plaignant où peuvent être envoyées les notifications et autres communications relatives à la plainte;
f) fournir tous les renseignements et documents pertinents que le plaignant a en sa possession;
g) fournir tous renseignements et documents supplémentaires exigés par les règles;
h) comporter le paiement des droits réglementaires.
Désignation de membre
(3) Le président peut désigner un membre du Tribunal pour l'instruction de la plainte. Celui-ci exerce dès lors les pouvoirs et fonctions du Tribunal.
[...]
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2. CanadianInternational Trade Tribunal Procurement Inquiry Regulations, SOR/93-602
| DESIGNATIONS
3. (1) For the purposes of the definition "designated contract" in section 30.1 of the Act, any contract or class of contract concerning a procurement of goods or services or any combination of goods or services, as described in Article 1001 of NAFTA, in Article 502 of the Agreement on Internal Trade or in Article I of the Agreement on Government Procurement, by a government institution, is a designated contract. [...]
APPLICATION
4. These Regulations apply to complaints by potential suppliers concerning designated contracts. [...]
TIME LIMITS FOR FILING A COMPLAINT
6. (1) Subject to subsections (2) and (3), a potential supplier who files a complaint with the Tribunal in accordance with section 30.11 of the Act shall do so not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier. [...]
CONDITIONS FOR INQUIRY
7. (1) The Tribunal shall, within five working days after the day on which a complaint is filed, determine whether the following conditions are met in respect of the complaint:
(a) the complainant is a potential supplier;
(b) the complaint is in respect of a designated contract; and
(c) the information provided by the complainant, and any other information examined by the Tribunal in respect of the complaint, discloses a reasonable indication that the procurement has not been conducted in accordance with whichever of Chapter Ten of NAFTA, Chapter Five of the Agreement on Internal Trade or the Agreement on Government Procurement applies.
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DÉSIGNATIONS
3. (1) Pour l'application de la définition de contrat spécifique à l'article 30.1 de la Loi, est un contrat spécifique tout contrat relatif à un marché de fournitures ou services ou de toute combinaison de ceux-ci, accordé par une institution fédérale - ou qui pourrait l'être - et visé, individuellement ou au titre de son appartenance à une catérogie, à l'article 1001 de l'ALÉNA, à l'article 502 de l'Accord sur le commerce intérieur ou à l'article premier de l'Accord sur les marchés publics. [...]
CHAMP D'APPLICATION
4. Le présent règlement s'applique aux plaintes déposées par les fournisseurs potentiels relativement aux contrats spécifiques. [...]
DÉLAIS DE DÉPÔT DE LA PLAINTE
6. (1) Sous réserve des paragraphes (2) et (3), le fournisseur potentiel qui dépose une plainte auprès du Tribunal en vertu de l'article 30.11 de la Loi doit le faire dans les 10 jours ouvrables suivant la date où il a découvert ou aurait dû vraisemblablement découvrir les faits à l'origine de la plainte. [...]
CONDITIONS DE L'ENQUÊTE
7. (1) Dans les cinq jours ouvrables suivant la date du dépôt d'une plainte, le Tribunal détermine si les conditions suivantes sont remplies:
a) le plaignant est un fournisseur potentiel;
b) la plainte porte sur un contrat spécifique;
c) les renseignements fournis par le plaignant et les autres renseignements examinés par le Tribunal relativement à la plainte démontrent, dans une mesure raisonnable, que la procédure du marché public n'a pas été suivie conformément au chapitre 10 de l'ALÉNA, au chapitre cinq de l'Accord sur le commerce intérieur ou à l'Accord sur les marchés publics, selon le cas.
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3. Agreement on Internal Trade, CanadaGazette, Part I, Vol. 129, No. 17 (April 29, 1995)
| Article 501: Purpose
Consistent with the principles set out in Article 101(3) (Mutually Agreed Principles) and the statement of their application set out in Article 101(4), the purpose of this Chapter is to establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy in a context of transparency and efficiency. [...]
Article 504: Reciprocal Non-Discrimination
[...]
2. With respect to the Federal Government, paragraph 1 means that, subject to Article 404 (Legitimate Objectives), it shall not discriminate:
(a) between the goods or services of a particular Province or region, including those goods and services included in construction contracts, and those of any other Province or region; or
(b) between the suppliers of such goods or services of a particular Province or region and those of any other Province or region.
[...]
Article 506: Procedures for Procurement
1. Each Party shall ensure that procurement covered by this Chapter is conducted in accordance with the procedures set out in this Article.
[...]
Article 518: Definitions
In this Chapter: [...]
Canadian supplier means a supplier that has a place of business in Canada; [...]
place of business means an establishment where a supplier conducts activities on a permanent basis that is clearly identified by name and accessible during normal working hours; [...]
supplier means a person who, based on an assessment of that person's financial, technical and commercial capacity, is capable of fulfilling the requirements of a procurement and includes a person who submits a tender for the purpose of obtaining a construction procurement;
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Article 501 : Objet
Conformément aux principes énoncés au paragraphe 101(3) (Principes convenus) et à leurs modalités d'application énoncées au paragraphe 101(4), le présent chapitre vise à établir un cadre qui assurera à tous les fournisseurs canadiens un accès égal aux marchés publics, de manière à réduire les coûts d'achat et à favoriser l'établissement d'une économie vigoureuse, dans un contexte de transparence et d'efficience. [...]
Article 504 : Non-discrimination réciproque
[...]
2. Sous réserve de l'article 404 (Objectifs légitimes), le paragraphe 1 a pour effet d'interdire au gouvernement fédéral d'exercer de la discrimination:
a) entre les produits ou services d'une province ou d'une région, y compris entre ceux inclus dans les marchés de construction, et les produits ou services d'une autre province ou région;.
b) entre les fournisseurs de tels produits ou services d'une province ou d'une région et les fournisseurs d'une autre province ou région. [...]
Article 506 : Procédures de passation des marchés publics
1. Chaque Partie veille à ce que les marchés publics visés par le présent chapitre soient passés conformément aux procédures prévues au présent article.
[...]
Article 518 : Définitions
Les définitions qui suivent s'appliquent au présent chapitre.
« fournisseur » Personne qui, après évaluation de ses capacités financières, techniques et commerciales, est jugée en mesure d'exécuter un marché public donné. Sont également visées par la présente définition les personnes qui soumettent une offre en vue d'obtenir un marché public de construction;
« fournisseur canadien » Fournisseur qui a un établissement au Canada; [...]
« établissement » Endroit où le fournisseur exerce ses activités de façon permanente et qui est clairement désigné par un nom et accessible durant les heures normales de travail.
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4. Federal Courts Rules, SOR/98-106
| SUMMARY JUDGMENT
213. [...]
Where available to defendant
(2) A defendant may, after serving and filing a defence and at any time before the time and place for trial are fixed, bring a motion for summary judgment dismissing all or part of the claim set out in the statement of claim.
[...]
Where no genuine issue for trial
216. (1) Where on a motion for summary judgment the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly.
Genuine issue of amount or question of law
(2) Where on a motion for summary judgment the Court is satisfied that the only genuine issue is
(a) the amount to which the moving party is entitled, the Court may order a trial of that issue or grant summary judgment with a reference under rule 153 to determine the amount; or
(b) a question of law, the Court may determine the question and grant summary judgment accordingly.
Summary judgment
(3) Where on a motion for summary judgment the Court decides that there is a genuine issue with respect to a claim or defence, the Court may nevertheless grant summary judgment in favour of any party, either on an issue or generally, if the Court is able on the whole of the evidence to find the facts necessary to decide the questions of fact and law.
Where motion dismissed
(4) Where a motion for summary judgment is dismissed in whole or in part, the Court may order the action, or the issues in the action not disposed of by summary judgment, to proceed to trial in the usual way or order that the action be conducted as a specially managed proceeding.
|
JUGEMENT SOMMAIRE
213. [...]
Requête du défendeur
(2) Le défendeur peut, après avoir signifié et déposé sa défense et avant que l'heure, la date et le lieu de l'instruction soient fixés, présenter une requête pour obtenir un jugement sommaire rejetant tout ou partie de la réclamation contenue dans la déclaration.
[...]
Absence de véritable question litigieuse
216. (1) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue qu'il n'existe pas de véritable question litigieuse quant à une déclaration ou à une défense, elle rend un jugement sommaire en conséquence.
Somme d'argent ou point de droit
(2) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue que la seule véritable question litigieuse est :
a) le montant auquel le requérant a droit, elle peut ordonner l'instruction de la question ou rendre un jugement sommaire assorti d'un renvoi pour détermination du montant conformément à la règle 153;
b) un point de droit, elle peut statuer sur celui-ci et rendre un jugement sommaire en conséquence.
Jugement de la Cour
(3) Lorsque, par suite d'une requête en jugement sommaire, la Cour conclut qu'il existe une véritable question litigieuse à l'égard d'une déclaration ou d'une défense, elle peut néanmoins rendre un jugement sommaire en faveur d'une partie, soit sur une question particulière, soit de façon générale, si elle parvient à partir de l'ensemble de la preuve à dégager les faits nécessaires pour trancher les questions de fait et de droit.
Rejet de la requête
(4) Lorsque la requête en jugement sommaire est rejetée en tout ou en partie, la Cour peut ordonner que l'action ou les questions litigieuses qui ne sont pas tranchées par le jugement sommaire soient instruites de la manière habituelle ou elle peut ordonner la tenue d'une instance à gestion spéciale.
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