Date: 20040401
Docket: A-334-03
Citation: 2004 FCA 144
CORAM: STRAYER J.A.
NOËL J.A.
SEXTON J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
POLARIS INFLATABLE BOATS LTD.
Respondent
Heard at Vancouver, British Columbia on March 31, 2004.
Judgment delivered at Vancouver, British Columbia on April 1, 2004.
REASONS FOR JUDGMENT BY: NOËL J.A.
CONCURRED IN BY: STRAYER, SEXTON JJ.A.
Date: 20040401
Docket: A-334-03
Citation: 2004 FCA 144
CORAM: STRAYER J.A.
NOËL J.A.
SEXTON J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
POLARIS INFLATABLE BOATS LTD.
Respondent
REASONS FOR JUDGMENT
NOËL J.A.
[1] This is an application for judicial review of a decision by the Canadian International Trade Tribunal (CITT) which denied costs to the applicant despite its success in resisting the complaint filed by the respondent.
[2] The reasons given by the CITT for denying costs are as follows:
Although the complaint is found not to be valid, the Tribunal is of the view that the very specific circumstances of this case warrant that no costs be awarded to [Public Works and Government Services Canada (PWGSC)]. Indeed, the Tribunal finds that the fact that no reasons were given under Annex C of the evaluation plan to explain Polaris's scoring has certainly been an important factor that contributed to the filing of the complaint. When PWGSC uses a scoring grid such as the one used in this case, which is very broad and allows for considerable discretion in the evaluation, it is reasonable for bidders to expect from PWGSC a rationale explaining their marks. The Tribunal considers that, because of the way in which Annex C was constructed, with a blank column for maximum possible points, it is reasonable to expect that reasons explaining the scoring would be provided. Had Polaris been provided with some reasons that explained its scoring in the first place, it may well have decided not to file a complaint and PWGSC would not have incurred costs in this matter. For the above reasons, each party will bear its own costs (Reasons of the CITT, page 7).
[3] The CITT arrived at this conclusion despite noting at page 2 of its reasons that upon being provided with a copy of the evaluation summary, the respondent was invited but refused to attend a debriefing session offered by PWGSC during which the scores would have been explained.
[4] The applicant alleges that in refusing to award costs, the CITT is merely pursuing its illegal policy of denying costs to the Crown (see Canada (Attorney General) v. Georgian College of Applied Arts and Technology, [2003] 4 F.C. 525, 2003 FCA 199). Alternatively, the applicant submits that the decision denying costs is patently unreasonable.
[5] This is one of several applications directed against the CITT's refusal to award costs to the Crown despite its success. In Attorney General of Canada v. EDS Canada Ltd., 2004 FCA 122, this Court found the CITTs decision not to award costs to the successful Crown to be patently unreasonable. The decision of this Court in Attorney General of Canada v. Educom TS Inc. et al. 2004 F.C.A. 130 which was rendered in the interim is to the same effect. The Court at paragraph 2 of this decision provided some useful background by quoting the following passage from EDS:
[4] The Tribunal's power to award costs in contained in the Canadian International Trade Tribunal Act, R.S. 1985, c. 47 (4th Supp.):
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30.16(1) Subject to the regulations, the Tribunal may award costs of, and incidental to, any proceedings before it in relation to a complaint on a final or interim basis and the costs may be fixed at a sum certain or may be taxed.
(2) Subject to the regulations, the Tribunal may direct by whom and to whom any costs are to be paid and by whom they are to be taxed and allowed.
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30.16(1) Les frais relatifs à l'enquête - même provisionnels - sont, sous réserve des règlements, laissés à l'appréciation du Tribunal et peuvent être fixés ou taxés.
(2) Le Tribunal peut, sous réserve des règlements, désigner les créanciers et le débiteurs des frais ainsi que les responsables de leur taxation ou autorisation.
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[5] This is one of several cases in this Court where the Attorney General argues that the Tribunal has unlawfully denied the Crown its costs on the basis of perceived defects in the procurement process that did not vitiate the procurement, but were trivial in nature and unrelated to either the failure of the complainant's bid or its decision to pursue a complaint before the Tribunal. The decision of this Court in Canada (Attorney General) v. Georgian College of Applied Arts and Technology, [2003] 4 F.C. 525, 2003 FCA 199, is an important part of the background of these cases.
[6] In Georgian College, the Court held that the Tribunal's refusal to award costs to the Crown in that case was an unlawful exercise of its statutory discretion. The Court stated (at paras. 25-28) that the Tribunal's power to award costs is exercisable on essentially the same principles as those governing the award of costs by the courts, including the principle that, in the absence of exceptional circumstances, the successful party is normally awarded its costs. Consequently, the Court held (at para. 37), the Tribunal erred when it refused costs to the Crown pursuant to a general policy of encouraging unsuccessful bidders to complain to the Tribunal about alleged defects in the procurement process.
[7] According to counsel for the Attorney General, the Tribunal has awarded the Crown its costs in 4 out of the 13 cases in which the Crown was successful before the Tribunal since this Court decided Georgian College. On the basis of these statistics and of the general principle, applicable to the Tribunal, that costs follow the event, it would seem that, for reasons that the Tribunal has not made explicit in this case, it is reluctant to award the Crown its costs when a complaint is dismissed.
[6] In EDS (as in Educom) the Court did not accept the Crown's invitation to hold that the CITT was willfully defying the decision of this Court in Georgian College. Rather, it held that the decision could not withstand scrutiny despite the very considerable deference owed to the CITT's exercise of discretion:
[14] If the Tribunal is going to rely on apparently trivial and immaterial defects in the procurement documents to depart from the general rule that costs follow the event, it is incumbent upon it to spell out with some particularity the nature of the defect and its relevance to the award of costs. In the absence of a substantiated finding that the defects prejudiced the bidder's response to the RFP or induced it to complain, the fact that "PWGSC and DND are the authors of the RFP" provides no rational basis for denying the Crown its costs on the dismissal of the complaint.
[7] The defect identified in this case is not found in the procurement documents. Rather, the CITT takes issue with the scoring grid used in the evaluation process. Specifically, it held that this grid, "which is very broad and allows for considerable discretion in the evaluation" requires a rationale explaining the marks. It is significant that the CITT refused to accept for inquiry the respondent's ground of complaint alleging that the evaluation plan was ambiguous and subjective (CITT's letter to the respondent dated February 14, 2003, Application Record volume 1, tab 3).
[8] Keeping in mind that the respondent never took the position that it was misled by the scores, that it never argued that costs ought to be denied to the Crown despite its success on account of PWGSC's failure to explain the scores and that it launched its complaint after declining PWGSC's offer to meet and be provided with an explanation as to the scores, it was patently unreasonable for the CITT to hold that PWGSC was responsible for the filing of the complaint by reason of its failure to explain the scores.
[9] As was noted by this Court in EDS and repeated in Educom, it would seem that, for reasons that remain unknown, the CITT is reluctant to award the Crown its costs when a complaint is dismissed. The unfortunate result is that the CITT is in fact forcing complainants to bear the further costs of defending before this Court decisions which are fundamentally flawed.
[10]
I would allow the application for judicial review with costs, set aside the Tribunal's decision to refuse costs to the Crown, and remit the matter to the CITT with the direction that it award the Crown its reasonable costs.
(Sgd.) "Marc Noël"
J.A.
"I agree" (Sgd.) "B.L. Strayer"
J.A.
"I agree" (Sgd.) "J. Edgar Sexton"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-334-03
APPEAL FROM A Decision of the Canadian International Trade Tribunal, dated 23-JUN-2003 FOR FILE NO. PR-2002-060.
STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA and
POLARIS INFLATABLE BOATS LTD.
PLACE OF HEARING: VANCOUVER, B.C.
DATE OF HEARING: 31-MAR-2004
REASONS FOR JUDGMENT: JUSTICE SEXTON
CONCURRED IN BY: JUSTICE STRAYER
JUSTICE NOËL
DATED: 01-APR-2004
APPEARANCES:
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Ms. Susanne Pereira
Department of Justice
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FOR THE
APPLICANT
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Mr. John R. Shewfelt
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Mr. Morris Rosenberg
Deputy Attorney General of Canada
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FOR THE APPLICANT
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Miller Thomson LLP, Vancouver
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FOR THE RESPONDENT
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