Date: 20050509
Docket: T-1605-04
Citation: 2005 FC 655
Vancouver, British Columbia, Monday, the 9th day of May, 2005
Present: THE HONOURABLE MR. JUSTICE KELEN
BETWEEN:
AGUSTAWESTLAND INTERNATIONAL LIMITED
Applicant
- and -
MINISTER OF PUBLIC WORKS AND
GOVERNMENT SERVICES CANADA, and
SIKORSKY INTERNATIONAL OPERATIONS INC.
Respondents
REASONS FOR ORDER AND ORDER
(With respect to two experts for the applicant
being permitted access to confidential information)
[1] This is a motion on behalf of the applicant for an Order that two independent experts, Messrs. Harvey Nielsen and James B. Astley, be permitted access to confidential information produced by the respondent Minister of Public Works and Government Services (the "Minister"), to counsel for the applicant in accordance with the Confidentiality Order of the Court.
[2] The confidential information identified in the motion is as follows:
(a) The Sikorsky Proposal Project Management Plan (P-PMP);
(b) The Sikorsky Proposal System Engineering Plan (P-SEMP);
(c) The Sikorsky Proposal Software Management Plan (P-SPMP);
(d) The Sikorsky Proposal Test and Evaluation Plan (P-TEP);
(e) The detailed evaluations of each of the foregoing plans; and
(f) Any other confidential information, designated in accordance with the Protective Order.
[3] The grounds for the motion are that the confidential information involves highly technical and scientific evidence which counsel for the applicant is not able to comprehend and appropriately analyze without the assistance of engineers with aeronautics expertise.
[4] The Court heard this motion by teleconference, with motion records filed by the applicant, the respondent Sikorsky, and the intervener General Dynamics Canada Ltd. At the teleconference, the Court heard representations from these three parties. The respondent Minister did not oppose the motion.
Affidavit of Sikorsky Witness
[5] The motion was originally heard before the Court at a sitting on Friday, April 15, 2005. While the motion was argued, Sikorsky requested an adjournment so that it could file an affidavit in response. The Court granted the adjournment because the motion was being heard on short notice, and ordered that the motion be heard at a sitting of the Court on Monday, April 25, 2005. Sikorsky filed an affidavit from Mr. Daniel Francis Hunter on April 22, 2005. When the Court sat on April 25, 2005, the applicant stated that Mr. Hunter was not available for cross-examination so the motion could not proceed. I then set the motion down for Thursday, April 28, 2005. At that point, Mr. Hunter was still not available, and had not been available for cross-examination either in person, or by telephone as proposed by the applicant.
[6] The Court has no alternative but to disregard the affidavit of Mr. Hunter. Sikorsky asked that the motion be adjourned on April 15th so that Sikorsky could file this affidavit. Sikorsky cannot file an affidavit and then not make the affiant immediately available for cross-examination. An affidavit cannot swear to the truth of any statement unless that statement can be tested for cross-examination by the opposing party within a reasonable time frame. In the case at bar, a reasonable time frame would be sometime between the original hearing of the motion on April 15th and the hearing date for the motion, April 28th.
[7] As it turns out, the affidavit of Mr. Hunter only speaks to the confidentiality of the information. The confidentiality of that information is not in issue. For this reason, counsel for Sikorsky advised the Court that it could disregard the affidavit for the purposes of deciding the motion. The Court will disregard the affidavit for this reason and because Mr. Hunter was not available for cross-examination.
Background
[8] The evidence is that the Minister advised all potential prime contractors with respect to the Canadian Maritime Helicopter Project that the government will need to contract with experts to assist the government in evaluating bids. Accordingly, the government provided in a letter dated October 25, 2001:
Therefore, by submission and receipt of data, potential contractors and (the government) implicitly agree that such data will be made to these contracted persons subject to proper confidentiality undertakings.
The Minister then specified a short "non-disclosure" agreement and a "conflict of interest" agreement which the Minister will require all sub-contractors to execute.
[9] There was no evidence adduced before the Court that the applicant's two experts are untrustworthy when it comes to abiding by the terms of the Confidentiality Order. Moreover, there was no evidence that the confidential information is of a higher order of confidentiality than is usual in complex and important commercial matters.
Right to a Fair Hearing
[10] The disclosure of confidential information to experts on a confidential basis does not breach a confidentiality agreement. Part of the litigation process includes the right of civil litigants, including the applicant and Sikorsky, to a fair hearing, which would include access to documents on a confidential basis. The litigant has the right to retain experts independent from the parties to assist in the evaluation of documents on a confidential basis. That is part of a fair hearing and part of the ordinary practice before the Courts.
[11] Sikorsky and General Dynamics recognize this principle and have indicated to the Court that they accept that the applicant's experts, Messrs. Astley and Nielsen, will have access to the confidential documents, but propose certain terms and conditions.
[12] Before considering the terms and conditions, it is important to recognize that when the respondent Sikorsky submitted its proposal to the Minister for the Maritime Helicopter Procurement, it accepted that the proposal would be assessed and evaluated in confidence by a number of unidentified, independent experts who were on contract with the Minister for this purpose. The applicant and Sikorsky also implicitly understood that the procurement might be the subject of litigation, and that their respective confidential documents may be reviewed by a Court while protecting the confidentiality of these documents. As referred to above, the interests of justice require that confidential materials be disclosed to independent experts obtained by a litigant. Otherwise, the litigant could not have a fair hearing. Such confidential materials are disclosed to experts upon the condition that the experts restrict their use of that confidential material to the purposes of the litigation.
ITAR
[13] The first objection made by the respondent Sikorsky and the intervener General Dynamics is that certain confidential documents are subject to U.S. International Trade in Arms Regulations ("ITAR") restrictions and, because of obligations to the U.S. government by Sikorsky and General Dynamics, these companies cannot agree to allow these experts access to this information. The Court cannot accept this submission for three reasons:
· Sikorsky and General Dynamics have provided this information to the Minister for the purposes of this procurement with the necessary licenses and permissions under ITAR.
· It is the Minister, not Sikorsky or General Dynamics, which produced the confidential information for the purpose of this litigation to counsel for the applicant under the protection of the Court's Confidentiality Order. Accordingly, it is not Sikorsky or General Dynamics which is agreeing to the release of this information to the applicant's expert witnesses.
· When the confidential information was provided to the Minister, the Minister had the right to retain independent expert witnesses to analyze and evaluate the information. It was implicit that a court, while protecting the confidentiality of the information, could judicially review the Minister's evaluation of the information in accordance with Canadian law. Part of the right to evaluate the confidential information by way of judicial review includes the right of a litigant to obtain access to the confidential information in a meaningful way while protecting the confidentiality of the information.
Accordingly, the Court concludes that allowing the independent expert witnesses for the applicant access to the confidential information on a confidential basis could not contravene ITAR. If it did, then the Government could not accept such confidential information from Sikorsky because it could not properly evaluate it, and its evaluation could not be subject to judicial review under Canadian law.
Experts Enter into Undertaking Directly with Sikorsky
[14] Sikorsky and General Dynamics submit that the experts enter into a permanent non-disclosure agreement with Sikorsky and an undertaking to the Court agreeing to be permanently bound to not disclose any of the information contained in the confidential documents. The Court agrees with the latter, but not the former. The experts will be bound by an undertaking to the Court that the confidential information will not be used for a purpose outside the scope of the litigation for which disclosure was made. Any breach of that undertaking will put the experts in contempt of Court which is punishable by fine and/or imprisonment. Moreover, Sikorsky may have a cause of action in tort against the experts for breaching their obligations to not use the information for any purpose outside the scope of the litigation. Accordingly, no direct agreement with Sikorsky is necessary or appropriate.
Experts Only Discuss Confidential Information with Counsel and Keep the Documents in Counsel's Offices
[15] Sikorsky submits that the Order permitting the experts access should provide that the experts will only be permitted to discuss the confidential information with counsel for the applicant. This condition is self-evident since the experts are not permitted to disclose or discuss the information with anyone not entitled to access the confidential information.
[16] Sikorsky seeks a term that all confidential documents be kept at the offices of counsel for the applicant, under the control of counsel for the applicant, so that the experts may only access and work on these documents at the offices of counsel for the applicant. The Court agrees that this is a reasonable condition in the circumstances of this case.
Experts Not Participate in Any Re-procurement of this Contract
[17] Sikorsky seeks a condition that the experts having access to these confidential documents may not participate in any re-procurement of the Maritime Helicopter Project by the Government of Canada that may occur as a result of this litigation. That is a reasonable condition, which was in fact imposed by the Minister on its independent experts who evaluated the confidential information. The Minister required that its independent experts enter into a "conflict of interest" agreement whereby the independent contractor certified that it will not enter into any relationship with any bidder for the Maritime Helicopter Procurement until the contract for the procurement is finalized.
Non-Competition Agreement for Ten Years
[18] Finally, Sikorsky seeks a term and condition that the expert witnesses will not participate in any future procurement anywhere in the world for a period of ten years in which Sikorsky, or its affiliated companies, are a competitor. This is a "non-competition" agreement. In the Court's view, this type of a restriction is not reasonable for the following reasons:
1. There is no evidence that this is an industry practice, i.e. a non-competition restriction on aeronautical engineers when they leave one company to work for another; and
2. The Minister has disclosed part of the confidential information to approximately 21 independent expert witnesses and 80 employees, and has not imposed any such restriction on any of them.
3. No expert helicopter engineer may be willing to be involved in this case if he or she was so restricted in future employment.
Undertaking
[19] The applicant shall draft a non-disclosure and conflict of interest agreement which reflects this decision, have the two experts execute same, and file the undertaking with the Court.
Implied Undertaking Rule
[20] In common law, there is an implied undertaking to the Court by a person receiving confidential information through a Court proceeding that the confidential information so obtained will not be used for a purpose outside the scope of the litigation for which the disclosure was made, unless the producing party consents or the Court grants leave. Any failure to comply with the undertaking shall be a contempt of Court. The undertaking remains in effect as long as the confidential information is not disclosed in open Court or to the public. See The Queen v. Ichi Canada Ltd., (1991) 40 CPR (3d) 119 (F.C.T.D.) per Reed J. at page 126 and Goodman v. Rossi, (1995) 24 OR (3d) 359 (C.A.) per Morden A.C.J.O. at page 371. Accordingly, the undertaking from the expert witnesses in this case only confirms their ordinary legal obligation and implied undertaking.
ORDER
THIS COURT ORDERS that:
1. The applicant's motion is allowed with costs in the cause payable by the respondent Sikorsky.
2. The applicant's two independent experts, Messrs. Harvey Nielsen and James B. Astley, will be permitted access to the confidential information produced by the respondent Minister under the Court's Confidentiality Order, subject to executing a non-disclosure and conflict of interest undertaking to the Court in accordance with the Reasons for Order, and subject to the terms and conditions of the Court's Confidentiality Order.
(Sgd.) "Michael A. Kelen"
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1605-04
STYLE OF CAUSE: AGUSTAWESTLAND INTERNATIONAL LIMITED
- and -
MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES CANADA et al.
PLACE OF HEARING: Ottawa, ON
DATE OF HEARING: April 28, 2005
REASONS FOR ORDER AND ORDER: KELEN J.
DATED: May 9, 2005
APPEARANCES:
GORDON CAMERON FOR APPLICANT
JAN BRONGERS FOR RESPONDENT MINISTER
BARBARA McISAAC FOR RESPONDENT
R. BENJAMIN MILLS Sikorsky International Operations Inc.
GREGORY SOMERS FOR THE INTERVENER
General Dynamics Canada Ltd.
SOLICITORS OF RECORD:
BLAKE CASSELS & GRAYDON, LLP
OTTAWA, ON FOR APPLICANT
JOHN H. SIMS, Q.C FOR RESPONDENT MINISTER
DEPUTY ATTORNEY GENERAL OF CANADA