Nfc Canada Limited v. North American Van Lines (Canada) Ltd., docket T-288-99

Date: 19990408

Docket: T-288-99

BETWEEN:

     NFC CANADA LIMITED

     Applicant

     - and -

     THE ATTORNEY GENERAL OF CANADA

     Respondent

     - and -

     NORTH AMERICAN VAN LINES (CANADA) LTD.,

     UNITED VAN LINES (CANADA) LTD. and

     ATLAS VAN LINES (CANADA) LTD.

     Intervenors

     REASONS FOR ORDER

LUTFY J.:

[1]      This is one of two applications for judicial review commenced by the applicant. The other proceeding¹ is within the jurisdiction of the Court of Appeal. The applications challenge two different but related decisions. The respondent seeks to strike out or, in the alternative, stay this proceeding pending the outcome of the second one.

[2]      In this proceeding, judicial review is sought with respect to the decision of Public Works and Government Services Canada ("the Department") which determined that the applicant"s bid for household goods removal services "failed to meet the financial mandatory requirement and is therefore non-responsive". This application for judicial review is made pursuant to subsection 18.1 of the Federal Court Act .²

[3]      In the second proceeding, judicial review is sought with respect to the decision of the Canadian International Trade Tribunal to dismiss the applicant"s complaint concerning the procurement process. The C.I.T.T. decided not to conduct an inquiry because, in its view, the complaint did not raise a reasonable indication that the procurement had not been carried out in accordance with Chapter Ten of the North American Free Trade Agreement , Chapter Five of the Agreement on Internal Trade or the Agreement on Government Procurement ("the International Agreements").³ Applications for judicial review of the C.I.T.T."s decisions are brought before the Court of Appeal, pursuant to paragraph 28(1)(e ) of the Federal Court Act.

[4]      The respondent seeks an order striking out this application for judicial review of the Department"s decision as an abuse of process and duplication of proceedings, in view of the applicant"s challenge of the C.I.T.T. decision. In the alternative, the respondent seeks an order staying this application for judicial review, pending the final disposition of the proceeding before the Court of Appeal.

[5]      The parties acknowledge the jurisdiction of this Court to dismiss summarily this application,⁴ pursuant to section 3 of the Federal Court Act, or to stay the proceeding, pursuant to section 50 of the Act.

Factual background

[6]      On November 6, 1998, the Department issued a request for proposal for household goods removal services. The applicant"s proposal was tendered under its registered business name, Allied Van Lines, on or before the bid deadline of December 10, 1998.

[7]      On January 20, 1999, the Department requested in writing that the applicant clarify whether Allied Van Lines was a legal entity within the meaning of the request for proposal. Later that day, after a telephone meeting with the author of the Department"s letter, a solicitor for the applicant responded in writing that Allied Van Lines is not a legal entity but, instead a separate operating division of NFC Canada Limited. The response also noted "... that Allied Van Lines, as a division of NFC Canada Limited, prepares its own separate financial statements. However, it is NFC Canada Limited that, as a legal entity of which Allied Van Lines is a division, files tax returns with Revenue Canada".

[8]      On January 26, 1999, the Department rejected the applicant"s proposal as non-responsive, supra paragraph 2.

[9]      On January 29, 1999, the applicant"s solicitors protested the Department"s disqualification of its proposal. The solicitors reiterated that the bid was made by a legal entity and that the disqualification was contrary to case law and to internal government policies and procedures, including the Treasury Board Contracting Policy concerning "minor aberrations"⁵ and the Department"s Supply Manual concerning modifications after bid closing⁶ ("the Government Procedures").

[10]      On February 5, 1999, the Department responded to the applicant"s objections. The response referred to the clarification that the legal entity was NFC Canada Limited and not Allied Van Lines. The applicant was informed that the contents of this clarification prompted a reassessment of certain financial provisions in the proposal. The Department concluded that the financial statements that had been provided "included those of NFC International Logistics and Moving Services and those of Allied Van Lines Division, but not those of NFC Canada Limited. Accordingly, as stated in our letter of January 26, 1999, "the proposal failed to meet the financial mandatory requirement and is therefore considered non-responsive"."

[11]      In the meantime, on February 2, 1999, the applicant filed a complaint with the C.I.T.T., pursuant to section 30.11 of the Canadian International Trade Tribunal Act,⁷ claiming that the Department, when it declared the applicant"s bid non-responsive, breached its obligations under various provisions of the International Agreements. The complaint also referred to the case law and the Government Procedures that had been raised by its solicitors in their letter of January 20, 1999. In supplementary submissions of February 10, 1999, the applicant"s solicitors drew to the C.I.T.T."s attention the Department"s letter of February 5, 1999, in response to their original protest. These supplementary submissions focussed on the issue of the financial statements.

[12]      On February 18, 1999, the C.I.T.T. decided that it would not conduct an inquiry into the applicant"s complaint because it did not raise a reasonable indication of a breach of any of the relevant International Agreements, supra paragraph 3.

[13]      On February 24, 1999 and March 19, 1999, the applicant filed its applications for judicial review of the decisions of the Department and the C.I.T.T. respectively.

Analysis

[14]      The applicant made a complaint before the C.I.T.T. concerning the Department"s decision to disqualify its bid.

[15]      A court may exercise its discretion to dismiss an application for judicial review where an adequate alternative remedy exists.⁸ The respondent argues that the applicant, in exercising its right to bring a complaint to the C.I.T.T., pursued an adequate alternative remedy.⁹ In the respondent"s view, the C.I.T.T. process is the sole recourse envisaged by Parliament for complaints by potential suppliers and this challenge of the Department"s decision of January 26, 1999, by way of judicial review before the Trial Division, is inappropriate. Counsel for the respondent referred to the similarity between many of the grounds raised by the applicant in both proceedings and she noted that, in both applications, the substantive issue was the fairness of the Department"s decision. In the application for judicial review in the Court of Appeal, an assessment could be made of the C.I.T.T."s refusal to conduct an inquiry, in the context of whether the Department"s decision breached either the International Agreements or the Government Procedures. Counsel concluded her argument by stating that, apart from the application for judicial review before the Trial Division being wrong in principle, moving forward with both applications simultaneously was not consistent with a common sense approach to the resolution of this dispute.

[16]      The applicant relied on the uncertainty of the C.I.T.T."s jurisdiction to consider possible breaches of Government Procedures, to justify the continuation of both proceedings. For the applicant, the principal issue before the C.I.T.T. was whether the Department had violated any of the provisions of the International Agreements in its decision-making process. The C.I.T.T."s refusal to conduct an inquiry is properly the subject of judicial review before the Court of Appeal. The issue raised in this proceeding, however, is whether the Department breached the Government Procedures in determining that the applicant"s bid was non-responsive. Implicit in this approach is the assumption that certain breaches of the Government Procedures may not be within the scope of review of a complaint before the C.I.T.T.

[17]      The applicant acknowledges that it has yet to obtain the complete factual basis concerning its allegations of the Department"s breach of the Government Procedures. This will require a review of any affidavits the respondent may file and possible cross-examination of the affiants.

[18]      In response to concerns expressed by the Court, counsel for both parties were unwilling, at least at this stage of this proceeding, to point to any provision in the International Agreements or related legislation, which might clarify whether the C.I.T.T. has the jurisdiction to consider alleged breaches of Government Procedures.

[19]      The applicant also argued that the complaint process before the C.I.T.T. was not an adequate alternative remedy. After an inquiry, the C.I.T.T. is called upon to make findings and recommendations, if any.¹⁰ Counsel for the applicant referred to two recent decisions which, in her view, suggest that the C.I.T.T."s recommendations may not be necessarily binding on a government institution.

[20]      In Canada (Attorney General) v. Symtron Systems Inc.,¹¹ Justice Linden noted that the Canadian International Trade Tribunal Act,¹² "... creates a type of "enforcement" mechanism, directing that government institutions shall implement the Tribunal"s recommendations "to the greatest extent possible" ", under subsection 30.18(1). In the opinion of Justice Linden, "... this seems to give the government institution some discretion over whether and how much to comply with the C.I.T.T."s recommendations". In Wang Canada Ltd. v. Canada (Minister of Public Works and Government Services),¹³ Justice McGillis noted that "... a ministerial decision not to award a contract is discretionary in nature, and subject to review by the Court only on the narrow grounds that the Minister or his delegate acted in bad faith, erred in law or took into account irrelevant considerations". From this, the applicant"s counsel argues that there exists substantial discretion in the Minister not to adopt the C.I.T.T."s recommendation. This limited remedial capacity, in her view, substantially compromises the C.I.T.T."s complaint process as an adequate alternative remedy.

[21]      Counsel chose not to engage in submissions concerning the C.I.T.T."s scope of review with respect to the Government Procedures. This argumentation, which the parties may wish to place before the Court of Appeal in the other proceeding, may well affect whether the C.I.T.T. complaint process is determined to be an adequate alternative remedy. In the absence of representations from counsel on the relevant provisions of the International Agreements and the related legislation, it would be inappropriate for me to make any finding on this issue. Accordingly, it would be wrong to dismiss summarily this application for judicial review, pending a judicial determination of the scope of the C.I.T.T."s jurisdiction and the consequent adequacy of the complaint process as an alternative remedy.

[22]      However, this does not mean that the two applications for judicial review should move forward simultaneously. While the two applications challenge different decisions, in both instances, the applicant is ultimately seeking to have the Department"s disqualification of its bid set aside. There is substantial overlap between the factual issues. This will result in duplication of the evidence in both proceedings. The possibility of conflicting decisions, as the two applications proceed in the first instance in the Trial Division and in the Court of Appeal respectively, is to be avoided.

[23]      In the circumstances, the proper administration of justice requires that the application for judicial review in the Trial Division be stayed, pending the final disposition of the one in the Court of Appeal.

    

     J.F.C.C.

Ottawa, Ontario

April 8, 1999

__________________

¹      Court file no. A-196-99.

²      R.S.C. 1985, c. F-7.

³      The C.I.T.T."s summary dismissal of the complaint was made pursuant to paragraph 7(1)(c ) of the Canadian International Trade Tribunal Procurement Inquiry Regulations, SOR/93-602.

⁴      The Court"s discretion to strike out an application for judicial review is only to be exercised in exceptional cases: David Bull Laboratories (Canada) Inc . v. Pharmacia Inc. (1994), 58 C.P.R. (3d) 207 (F.C.A.).

⁵      Clause 10.8.7 of the Treasury Board of Canada Secretariat Contracting Policy .

⁶      Clause 7.345 (23-06-94) of The Supply Manual of Public Works and Government Services Canada. In its written submissions on this motion, the applicant also relied on clause 2.010 (23-06-94) concerning effective communications and clause 7.389 (15-09-97) concerning clarifications.

⁷      R.S.C. 1985, c. C-47 (4^th Supp.), as amended by S.C. 1993, c. 44 and S.C. 1994, c. 47.

⁸      Anderson v. Canada (Canadian Armed Forces), [1997] 1 F.C. 273 (C.A.).

⁹      See Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3 at 31 and [1979] 2 S.C.R. 561">Harlequin v. University of Regina, [1979] 2 S.C.R. 561 at 587-94.

¹⁰      Subsection 30.15(1) of the Canadian International Trade Tribunal Act , supra note 7.

¹¹      [1999] F.C.J. No. 178 (QL) (C.A.) at paragraphs 12-13.

¹²      Supra note 7.

¹³      [1999] 1 F.C. 3 (T.D.) at 16.