A-365-05
LÉTOURNEAU J.A.
SHARLOW J.A.
BETWEEN:
and
PUBLIC WORKS AND GOVERNMENT SERVICES CANADA
AND CALIAN LIMITED
Heard at Ottawa, Ontario, on March 22, 2006.
Judgment delivered at Ottawa, Ontario, on April 25, 2006.
REASONS FOR JUDGMENT BY: SHARLOW J.A.
CONCURRED IN BY: RICHARD C.J.
LÉTOURNEAU J.A.
Docket: A-330-05
A-365-05
Citation: 2006 FCA 147
CORAM: RICHARD C.J.
LÉTOURNEAU J.A.
SHARLOW J.A.
BETWEEN:
MED-EMERG INTERNATIONAL INC.
Applicant
and
PUBLIC WORKS AND GOVERNMENT SERVICES CANADA
AND CALIAN LIMITED
Respondent
REASONS FOR JUDGMENT
[1] The applicant Med-Emerg International Inc. (Med-Emerg) has applied for judicial review of two decisions of the Canadian International Trade Tribunal in relation to its procurement complaint (File No. PR-2004-050). The two applications were consolidated and heard together.
[2] The first decision sought to be reviewed is dated June 15, 2005 and is reported as Re Med-Emerg International Ltd., [2005] C.I.T.T. No. 46 (QL). In that decision, the CITT found the procurement complaint of Med-Emerg to be valid in part but recommended no remedy. In the first application for judicial review (A-330-05), Med-Emerg argues that the CITT erred in declining to recommend a remedy after finding that the respondent Public Works and Government Services Canada (PWGSC) breached certain obligations relating to the procurement process, and also that the CITT erred in failing to find that the procurement process was tainted by events that gave rise to a reasonable apprehension of bias.
[3] The second decision is dated August 3, 2005 and is reported as Re Med-Emerg International Ltd., [2005] C.I.T.T. No. 47 (QL). In that decision the CITT made a final determination that the costs awarded to Med-Emerg would be $4,100. In the second application for judicial review (A-365-05), Med-Emerg argues that in limiting the cost award to $4,100, the CITT fettered its discretion and failed to take into account relevant considerations.
Facts
[4] Med-Emerg and the respondent Calian Ltd. (Calian) were two of the three bidders for a contract for the provision and management of a workforce of health service providers to supplement the resources of the Department of National Defence (DND) in Canada. The third bidder is not a party to these proceedings.
[5] The procurement was required to comply with the Agreement on Government Procurement, the North American Free Trade Agreement, and the Agreement on Internal Trade (collectively, the "trade agreements"). The anticipated term of the contract was for a transition period ending on March 31, 2005, and for the following five years, with an option to extend for a further five years.
[6] The request for proposal that began the procurement process set out the detailed requirements for bids. Each of the specified requirements was given a unique alphanumeric designation. The bids were to be evaluated on the basis of a set number of points for each of the specified requirements. A bidder could get full points, ½ points, or no points for each requirement. The maximum number of points was 800. Once the points were determined, the total bid price was calculated. That amount was divided by the number of points awarded to obtain the "price per point". The bidder with the best price per point would succeed.
[7] A technical evaluation committee was struck to examine the technical elements of the bids. Their mandate was to agree upon consensus scores for each of the specified requirements for each bid, which they did. Once that was done, DND calculated the total evaluated price for each bid, and determined the winning bid. The successful bidder was Calian. On December 13, 2004, Treasury Board approval was obtained to enter into a contract with Calian. On December 15, 2004, PWGSC advised Med-Emerg that it was not the successful bidder.
[8] Med-Emerg sought and obtained from PWGSC certain information about the evaluation process. Med-Emerg raised a number of objections, all of which PWGSC rejected. Med-Emerg submitted its complaint to the CITT on January 31, 2005.
[9] PWGSC raised a preliminary objection relating to jurisdiction, which was dismissed on March 11, 2005. That decision is not challenged.
[10] On February 11, 2005, Med-Emerg filed a motion for the production of documents, requesting in particular that the documents be produced before PWGSC submitted its "Government Institution Report" (GIR). That motion succeeded in part. There is no challenge to the propriety of the CITT's decision on that motion.
[11] The GIR is the document that PWGSC was required to produce in response to the complaint of Med-Emerg. As I understand it, the complaint, the GIR, and the complainant's response to the GIR set out the factual context of the dispute and the submissions of the parties. It is the usual practice of the CITT to treat factual allegations in those documents as evidence without requiring affidavits or sworn testimony. There is no challenge to the propriety of that practice.
[12] There were six grounds of complaint before the CITT:
(1) Med-Emerg alleged that, during the debriefing process after the winning bid was announced, PWGSC did not provide Med-Emerg with pertinent information concerning the reasons for not selecting its proposal, or the relevant characteristics and advantages of the highest rated proposal. The CITT found this ground of complaint to be valid in part. The CITT noted that two of the three trade agreements required PWGSC to provide Med-Emerg, on request, all relevant information pertaining to the complainant's own bid, including the individual scoring sheets, the final contract price as published on the government data base, and Calian's price per point.
(2) Med-Emerg alleged that, for three of the evaluated criteria, RC-3(h), RC-4(g) and RC-4(k), PWGSC introduced unpublished evaluation criteria into the evaluation process. It appears that some factors taken into account for that item were not cross-referenced to the item itself, so bidders could not reasonably have known that those factors would impact the score for that item. The CITT found this complaint to be valid with respect to RC-3(h) and RC-4(g), and to be partly valid with respect to RC-4(k). The CITT noted that, under the trade agreements, guidelines should be obvious from the published point-rated criteria. The CITT also stated that referring to other sections of the request for proposals or the statement of work for the purposes of evaluation, where those other sections are not mentioned in the published point-rated evaluation criteria, is not consistent with the objectives of transparency, efficiency and clarity, as required by the trade agreements.
(3) Med-Emerg alleged that the evaluators failed to properly apply the published evaluation criteria for items RC-4(d), RC-4(i) and RC-4(j). That complaint was found not to be valid. The CITT's determination of that point is not challenged.
(4) Med-Emerg alleged that some of the evaluation criteria were ambiguous. In support of that argument, they cited wide variations in the scoring. The CITT did not expressly find that the evaluation criteria were ambiguous but noted, consistently with its comments under the second ground, that the evaluation should have been done only on the basis of information in the material specifically cross-referenced in the published rating criteria. The CITT did not accept that scoring variations was necessarily evidence of ambiguity in the evaluation criteria. I infer that the CITT did not find that the allegations underlying this ground of complaint resulted in any point disadvantage to Med-Emerg. Counsel for PWGSC suggested that there would be no prejudice, because any such ambiguity would likely have affected all bidders.
(5) Med-Emerg alleged that Calian did not meet the mandatory requirements of the request for proposals. That complaint was found not to be valid. That conclusion is not challenged.
(6) Med-Emerg alleged that PWGSC failed to follow the prescribed evaluation procedures. This complaint had two aspects. The first was the allegation of Med-Emerg that PWGSC had not properly evaluated the financial capability of Calian. The second was the allegation that PWGSC had failed to conduct an independent valuation of the financial proposals. The CITT found both aspects of this ground of complaint not to be valid.
[13] As the CITT concluded that there were several breaches of the trade agreements in conducting this procurement, it was required to consider what remedy, if any, should be recommended. The CITT noted, at paragraph 99 of its reasons, that in the matter of remedy it is required to consider all the circumstances relevant to the procurement in question, including: (1) the seriousness of any deficiency found by the CITT; (2) the degree to which Med-Emerg and other interested parties were prejudiced; (3) the degree to which the integrity and efficiency of the competitive procurement system were prejudiced; (4) whether the parties acted in good faith; and (5) the extent to which the contract was performed.
[14] The CITT noted that, in the context of the complaints of Med-Emerg, the more potentially serious breaches were those that would have an impact on the scores awarded to the bidders. The CITT focused on the second complaint listed above (the use of unpublished point-related evaluation guidelines that took into account sections of the request for proposal that were not directly referenced in the published point-related criteria), because the seriousness of that complaint was directly proportional to the degree of prejudice to Med-Emerg and to the integrity and efficiency of the competitive process. The CITT concluded that Med-Emerg was not seriously prejudiced by this breach because it would not have been awarded the contract in any event. That is because the number of points in issue in relation to that part of Med-Emerg's complaint was so small, relative to the total points available, that Med-Emerg could not have overcome Calian's price per point advantage even if Med-Emerg had been awarded full points for those items.
[15] The CITT also noted that the integrity and efficiency of the competitive system would be negatively affected by the other breaches. However, the CITT concluded that restarting the evaluation process or re-evaluating the proposals would have a greater negative impact on the system than the prejudice already suffered.
[16] The CITT concluded by recommending no remedy, although it made some pointed and well warranted criticisms of the procedures adopted by PWGSC in this case. The following appears at paragraph 103 of the CITT's reasons:
[103] The Tribunal has consistently tried, through its determinations, to impress upon the government that the lack of attention paid to this fundamental aspect of the procurement process impacts on the bidder, as the Tribunal stated in Brookfield LePage Johnson Controls Facility Management Services [(6 September 2000), PR-2000-008 and PR-2000-021 (CITT) at 17]:
As well, by not being informed of all the "rules of the game", bidders are unable to maximize their efforts in order to be the successful bidder. Not giving the rating and weighting methodology is like a teacher giving students a test comprising different questions, each being worth different point values, but not disclosing those point values. A student would not know where to focus his or her energies in responding. Such an approach is simply unfair.
It also adversely impacts on the government itself. Not only does the government incur costs in defending itself at court or Tribunal proceedings, but it also suffers delays in the acquisition of goods and services affected by these proceedings. In addition, the very real possibility exists that proposals, which might otherwise have prevailed, are unfairly excluded.
[17] In the concluding portion of its June 15, 2005 decision, the CITT determined that although it would not recommend any remedy to Med-Emerg for the complaints that were found to be valid or partly valid, Med-Emerg was entitled to its reasonable costs incurred in preparing and proceeding with the complaint. The CITT fixed the amount of costs, on a preliminary basis, at $4,100. That is the amount of costs set out in the CITT's "Guidelines for Fixing Costs in Procurement Complaint Proceedings" for cases of the highest level of complexity. The parties had the right to make further submissions on costs, either to dispute the amount awarded, or to argue for an award of an amount outside the Guidelines.
[18] Med-Emerg made a submission for reconsideration of the costs determination, arguing that the amount awarded should be substantially more than the maximum amount permitted by the Guidelines. PWGSC made submissions opposing the reconsideration. The CITT, in its August 3, 2005 decision, determined that the costs award would remain unchanged.
[19] As indicated above, Med-Emerg seeks judicial review of both the June 15, 2005 decision (the substantive decision) and the August 3, 2005 decision (the costs decision).
The first application for judicial review (A-330-05): the substantive decision
[20] In its application for judicial review of the June 15, 2005 determination, Med-Emerg alleges that the CITT made five errors that warrant the intervention of this Court. It is convenient to deal with allegations of error in the order in which they appear in the Med-Emerg memorandum of fact and law.
(1) Did the CITT use the wrong test to determine the remedy to be recommended?
[21] This ground for the application for judicial review is framed as an allegation of an error of law, which Med-Emerg argues should be reviewed on the standard of correctness.
[22] The argument of Med-Emerg is that the CITT, having correctly listed the five factors to be taken into account in determining the recommended remedy, applied the wrong legal test when it finally determined to recommend no remedy. Med-Emerg argues that the CITT considered only the degree of prejudice to Med-Emerg, and the efficiency of the competitive procurement system, and failed to consider the seriousness of the breaches and the extent to which the contract was performed.
[23] The consideration of the five statutory factors is not, and is not intended to be, a mechanical process. The weight to be given to each factor, or any particular combination of factors, will vary with each case. In my view, a fair reading of the reasons indicates that the CITT put its mind to all of the relevant factors, to the extent they were raised by the evidence and the submissions of the parties. The CITT gave, and was entitled to give, overwhelming weight to the factor of potential prejudice to Med-Emerg in the technical evaluation scores.
[24] As to the other factors, the matter of the integrity and efficiency of the procurement process was expressly addressed in paragraph 102 of the reasons. The matter of good faith was addressed in paragraph 104, where the CITT noted that there was no allegation of bad faith.
[25] The extent to which the contract was performed was not expressly considered in relation to remedy, but there was no evidence before the CITT on that point except the information about the expected term of the contract, which would have commenced before the June 15, 2005 decision. It is difficult to see how that factor could have assisted the position of Med-Emerg, given the conclusion of the CITT that Med-Emerg could not have overcome Calian's price per point advantage in any event.
[26] In my view, the record does not support the allegation of Med-Emerg that the CITT applied the wrong test, or failed to consider a relevant factor, when it determined that it would not recommend a remedy.
(2) Did the CITT decide the issue of remedy on the basis of facts not in evidence?
[27] Med-Emerg alleges that the CITT did not have an evidentiary foundation for its conclusion that Med-Emerg could not have overcome Calian's price per point advantage. The confidential portion of the record establishes that, even if Med-Emerg had been awarded full marks for the specific items in its complaint, it could not have succeeded. Med-Emerg does not dispute that point, but argues that, without studying the technical proposal of Calian (which was not part of the record), the CITT could not possibly know that the scores awarded to Calian were not overstated as a result of the errors complained of. I am unable to find any merit in this argument. Having reviewed the record, it seems to me that it was reasonably open to the CITT to conclude, even without Calian's technical proposal, that Med-Emerg could not have overcome Calian's price per point advantage.
[28] I would add that Med-Emerg did not allege in its complaint that Calian's score was overstated. Indeed, Med-Emerg would have had no basis for such an allegation, because it did not have Calian's technical proposal. I understand that Med-Emerg made a strategic decision early in the process not to request access to Calian's technical proposal, because such a request might have required disclosure of some of its own confidential information.
(3) Did the CITT fail to consider the range of remedies sought?
[29] In its complaint, Med-Emerg submitted that an appropriate remedy would be to terminate Calian's contract and either award the contract to Med-Emerg, or start a new procurement process. In the alternative, Med-Emerg asked for compensation for lost profit and the costs associated with the bid preparation. The CITT expressly rejected the principal remedies sought, for the reasons stated above, but did not mention the alternative remedies. In my view, given the CITT's determination that Med-Emerg was not prejudiced by any of the errors in the procurement process, there would have been no foundation for any of the alternative remedies sought by Med-Emerg. In the circumstances of this case, the fact that the CITT did not mention those alternatives is not an error that warrants the intervention of this Court.
(4) Did the CITT err in law in rejecting Med-Emerg's claim of reasonable apprehension of bias on the basis that there was no direct evidence of prejudice?
[30] An important feature of the evaluation process was that the technical evaluation of each bid was to be conducted independently of the financial evaluation. All parties agree that the separation of the two evaluation functions is important to the fairness of the process. The concern is that if a technical evaluator has knowledge of the ultimate bid price, that knowledge could cause the technical evaluators, consciously or unconsciously, to favour the lowest bid.
[31] A reasonable apprehension of bias exists if an informed person, viewing the matter realistically and practically, and having thought the matter through, is more likely than not to conclude that the decision would not be made fairly (The Committee for Justice and Liberty et al v. The National Energy Board et al, [1978] 1 S.C.R. 369, per de Grandpré J. at page 394). I infer that the purpose of the separation of technical evaluation from the financial evaluation is to avoid a situation that could give rise to a reasonable apprehension of bias. Therefore, it is theoretically possible that if the evaluation process fails to respect that separation, a reasonable apprehension of bias could arise. In its complaint, Med-Emerg alleged that PWGSC failed to maintain the necessary separation between the technical evaluation and the financial evaluation.
[32] I summarize as follows the facts relating to this ground of complaint. Each bid was required to contain approximately 400 discrete items of financial information. When the bids were received, a representative of DND checked each bid to ensure that it contained all of the required information. This meant, necessarily, that she saw each of the 400 items of financial information associated with each bid. However, with knowledge of only the 400 items of financial information, she could not have determined the final bid price for any bid, even on the basis of a rough order of magnitude. Only the bids that contained all of the required information were considered in the next step of the evaluation process, which was the technical evaluation. The technical evaluation committee included, as a member, the same DND representative who had seen the 400 items of financial information. However, her function in the committee was limited to that of scribe and observer, and to answer procedural questions. She did not communicate any financial information to the other members of the committee.
[33] The CITT concluded that the test for reasonable apprehension of bias was not met. That conclusion appears at paragraph 98 of the reasons, which read as follows:
[98] Regarding the allegation that PWGSC failed to independently evaluate the financial proposals, the Tribunal is of the view that the contracting authority was a titular member of the Committee only. The contracting authority was an observer at the Committee kick-off meeting and at the two consensus meetings that followed the individual evaluations. The contracting authority's role was to respond to procedural questions and to act as "scribe". There is no evidence that information relating to the financial proposals was passed on to the technical evaluators prior to or during their evaluations. Evidence shows that the contracting authority calculated the total evaluated prices only after the two consensus meetings. Moreover, without such a calculation, the Tribunal is not convinced that the contracting authority could have estimated, even on the basis of a rough order of magnitude, the financial value of each proposal. Therefore, it is unlikely that the contracting authority had the necessary financial information to influence the technical evaluators and to support an allegation of a reasonable apprehension of bias. The Tribunal is of the view that a reasonable and informed person, viewing the matter realistically and practically, and having thought it through, would not conclude that there was sufficient evidence to support an allegation of reasonable apprehension of bias. Therefore, it is not convinced that the requirement that the financial proposals be evaluated independently of the technical proposals was not followed and that this element of the complaint is not valid.
[34] Med-Emerg argues that the CITT misapplied the test for reasonable apprehension of bias, by requiring evidence that financial information was actually passed on to the evaluators. In my view, that argument is based on a misinterpretation of paragraph 98 the CITT's reasons. As I read that paragraph, the CITT was explaining why a reasonable person, knowing the role of the DND representative on the technical evaluation committee, and the state of her knowledge while attending the meetings of that committee, would not conclude that there was, in fact, a failure to separate the financial and technical evaluations. Based on my reading of paragraph 98, I conclude that the CITT correctly applied the test for reasonable apprehension of bias.
[35] I observe, however, that PWGSC could have avoided this aspect of the Med-Emerg complaint by ensuring that the DND representative who was required to attend meetings of the technical evaluation committee was not the same person who screened the bids. There may be cases, perhaps involving bids that are less complex than this one, where even the cursory financial knowledge gained during the screening would comprise an adequate basis for estimating the final bid price, or for drawing an inference about the probable ranking of the bids.
(5) In assessing Med-Emerg's claim of reasonable apprehension of bias, did the CITT fail to take into account the cumulative effect of the errors of PWGSC, all of which favoured Calian and prejudiced the other bidders?
[36] Med-Emerg submits that the CITT should have considered that the cumulative effect of all of the breaches resulted in a systematic award of higher points to Calian and lower points to Med-Emerg. The difficulty with this argument is that it was not part of the complaint before the CITT. It was not argued, and the CITT did not find, that Calian was awarded more points than it should have been awarded.
(6) Conclusion on the review of the substantive decision
[37] My review of the five allegations of error discloses no basis for the intervention of this Court. I would dismiss the first application for judicial review.
[38] I now turn to the second application.
The second application for judicial review (A-365-05): the determination of costs
[39] The statutory authority for an award of costs in relation to a procurement complaint heard by the CITT is found in section 30.16 of the Canadian International Trade Tribunal Act, R.S. 1985, c. 47. That provision reads as follows:
| 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. |
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. |
[40] There are no relevant regulations, and it appears that there is no established procedure for taxing costs.
[41] In 1999, the CITT published guidelines (the 1999 Guidelines) for the award of costs in procurement complaints. The guiding principles for those guidelines were stated in part 2.0, which reads as follows:
| 2.1 These guidelines are intended to implement the following principles:
|
| (a) costs awarded shall not exceed those necessarily and reasonably incurred by the claimant: |
| (b) costs are a means of reimbursement only and are not intended to be a source of profit for the claimant; |
| (c) the assessment and taxation processes should be efficient and fair to all parties; |
| (d) the assessment and taxation processes must be sufficiently flexible to ensure that costs are awarded taking into account the particular circumstances of a procurement proceedings and the nature and value of a party's participation in that proceeding; and |
| (e) the assessment and taxation processes must take into account financial assistance from the government or other sources. |
[42] While the 1999 Guidelines were in force, parties were permitted to claim disbursements, plus an amount for legal fees based on a reasonable number of hours multiplied by standardized hourly rates for counsel, ranging from $200 per hour for counsel with 20 or more years of experience, to $60 per hour for article students. According to Med-Emerg, awards of costs varied on a case by case basis, but were applied to achieve, in the typical case, partial indemnity for the successful party.
[43] Counsel for the applicant provided a number of examples of awards based on the 1999 guidelines. The examples indicated cost awards of approximately $126,000 in File No. PR-99-034, $92,000 in File No. PR-95-001, $41,000 in PR-96-030, $30,000 in PR-98-047, $48,000 in PR-2000-039, $42,000 in PR-2001-051, $30,000 in PR-2001-052. The record does not disclose whether this sample of cost awards is representative of all cost awards made by the CITT under the 1999 Guidelines, or whether it is a selective sample of awards at the high end.
[44] In 2004, the CITT published new guidelines (the 2004 Guidelines) for fixing costs in procurement complaint proceedings. The stated purpose of the 2004 Guidelines is "to simplify and expedite the procedure for awarding costs in relation to procurement complaint proceedings and to bring the level of awards more in line with the costs granted by most courts of justice in Canada". The guiding principles are stated as follows:
2.1 This guideline is intended to implement the following principles:
• The costs awarded normally represent a partial indemnity.
• The costs awarded are not intended to be a source of profit for the claimant.
• The assessment and taxation processes should be efficient and fair to all parties.
[45] The 2004 Guidelines employ what I would call a modified flat rate methodology. Each case is first classified into one of three categories. The classification is based on a number of criteria relating to the complexity of the procurement, the complexity of the complaint, and the complexity of the proceedings. The flat rate for costs is $1,000 for the simplest case (Level 1), $2,400 for cases in the middle range of complexity (Level 2) and $4,100 for the most complex cases (Level 3). A footnote explains how the flat rates were determined:
| The flat rates were determined after a survey of the existing rates in other courts of justice in Canada and were based on the consideration that indemnification was to be partial only. The initial figure was established at a level generally consistent with the Federal Court of Canada tariff for fees and was then increased by 50 per cent to allow for disbursements. |
[46] However, the flat rate is not the final determination of costs. Section 4.2 of the 2004 Guidelines provides a procedure by which a party may argue for a departure from the flat rate, or a complete departure from the guidelines. Section 4.2 reads as follows (my emphasis):
| 4.2.1. When the Tribunal issues its determination, it will award costs, if appropriate, and give a preliminary indication of the level of complexity and the amount of the award. |
| 4.2.2. Parties that believe that the preliminary indication is not appropriate may make submissions on the complexity of the case, the amount of the flat rate or the reason why the guideline should not be followed. |
| 4.2.3. Parties will have 10 working days from the date of the determination to make such submissions and 5 working days to respond to the submissions of the other parties. |
| 4.2.4. If the parties make no submissions on costs, the Tribunal will confirm its preliminary indication by making a cost order. |
| 4.2.5. If one or more parties make submissions, the Tribunal will consider them, request additional information, if necessary, and then make whatever cost order it believes is warranted. |
[47] The applicant provided nineteen examples of the quantum of costs awarded in procurement matters after the publication of the 2004 Guidelines. They may be summarized as follows (note that this list includes the current case as example 12: PR-2004-050):
|
|
Case |
Complexity |
Preliminary determination |
Submissions |
Final determination |
| 1. |
PR-2003-076 |
Level 1 |
$1,500 |
Yes |
$1,500 |
| 2. |
PR-2003-078 |
Level 1 |
$1,000 |
No |
$1,000 |
| 3. |
PR-2003-082 |
Level 1 |
$1,000 |
No |
$1,000 |
| 4. |
PR-2004-001 |
Level 2 |
$2,400 |
Not stated |
$2,400 |
| 5. |
PR-2004-004 |
Level 2 |
$2,400 |
No |
$2,400 |
| 6. |
PR-2004-007 |
Level 3 |
$4,100 |
Not stated |
$4,100 |
| 7. |
PR-2004-009 |
Level 1 |
$1,000 |
Not stated |
$1,000 |
| 8. |
PR-2004-014 |
Level 1 |
$1,000 |
Not stated |
$1,000 |
| 9. |
PR-2004-036 |
Level 2 |
$2,400 |
Yes |
$2,400 |
| 10. |
PR-2004-038 |
Level 1 |
$1,000 |
No |
$1,000 |
| 11. |
PR-2004-046 |
Level 2 |
$2,400 |
Not stated |
$2,400 |
| 12. |
PR-2004-050 |
Level 3 |
$4,100 |
Yes |
$4,100 |
| 13. |
PR-2005-019 |
Level 2 |
$2,400 |
No |
$2,400 |
| 14. |
PR-2005-010 |
Level 2 |
$2,400 |
No |
$2,400 |
| 15. |
PR-2005-004 |
Level 3 |
$4,100 |
No |
$4,100 |
| 16. |
PR-2005-015 |
Level 1 |
$1,000 |
Not stated |
$1,000 |
| 17. |
PR-2005-017 |
Not stated |
|
|
$1,000 |
| 18. |
PR-2005-026 |
Level 1 |
$1,000 |
No |
$1,000 |
| 19. |
PR-2005-032 |
Level 1 |
$1,000 |
Yes |
$1,000 |
[48] Of the nineteen examples, there is one in which the amount of the award was not the flat rate in the 2004 Guidelines (example 1), and one in which it is not possible to determine if and how the 2004 Guidelines were applied (example 17). In the remaining seventeen cases, the final determination was the same as the preliminary determination. Of those seventeen cases, there are only four (including this case - example 12) in which there is an indication that one or more parties made a submission (which I take to mean a submission seeking a departure from the 2004 Guidelines). There is no case in which such a submission was accepted.
[49] I turn now to the cost award in this case. As some of the complaints of Med-Emerg were found to be valid or partly valid while others were found to be invalid, and as no remedy was granted, the CITT could have treated the case as one of mixed success, and awarded no costs at all. Instead, the CITT determined on a preliminary basis that Med-Emerg should be awarded costs of $4,100. The CITT's reasons for granting Med-Emerg costs, despite its limited success, are set out in paragraph 105 of its June 15, 2005 determination. The CITT said that the factors favouring the award of costs to Med-Emerg were the additional burden imposed on it by the two motions filed in the proceedings, and the overall importance of the issues upon which Med-Emerg prevailed. As the case was found to be one of the highest level of complexity (Level 3), the costs were fixed on a preliminary basis at $4,100.
[50] Med-Emerg made a submission to seek a higher award, arguing that the CITT would be fettering its discretion unless it departed from the 2004 Guidelines, and also that this was an appropriate case to depart from the 2004 Guidelines. Med-Emerg sought either an award equal to all of its legal costs, or in the alternative a partial indemnity based on its actual disbursements plus the cost of legal services on the basis of a tariff of $120 per hour. PWGSC also made a submission, essentially supporting the reasons set out in the June 15, 2005 determination and pointing out that Med-Emerg did not succeed in obtaining a remedy.
[51] The CITT considered the submissions and fixed the costs award at $4,100, in accordance with its preliminary determination. While the CITT did not give detailed reasons, I infer from the language of the final determination that the CITT was not persuaded that it had fettered its discretion, or that it had any reason to depart from its preliminary determination.
[52] Med-Emerg does not challenge the validity of the 2004 Guidelines. It does not argue that the flat rate amounts chosen for the three categories of cases are not a reasonable reflection of cost awards in this Court or other Canadian courts. Nor does it argue that the CITT is not empowered to establish guidelines for cost awards in procurement matters. Rather, Med-Emerg repeats in this Court the arguments it made to the CITT, that adherence to the 2004 Guidelines in this case would be an improper fettering of the CITT's discretion and an improper failure to consider all relevant circumstances.
[53] The argument that the CITT has fettered its discretion in this case is not based on anything in the reasons given by the CITT in this case. Rather, it is based on what is said to be a pattern established by all of the awards made by the CITT under the 2004 Guidelines. It is the position of Med-Emerg that the CITT is again adopting an invariable practice on costs, analogous to the practice that was disapproved by this Court in Canada (Attorney General) v. Georgian College of Applied Arts and Technology (C.A.), [2003] 4 F.C. 525 (Georgian College #1).
[54] Prior to 2002, the CITT had adopted a practice of awarding no costs to the Crown when a procurement complaint was dismissed, as long as the complaint was made in good faith. In Georgian College #1, this Court found that adherence to that practice was an improper fetter on the statutory discretion given to the CITT in section 30.16 of the Canadian International Trade Tribunal Act (quoted above). The matter was returned to the CITT for further consideration of the matter of costs. Upon reconsideration, the CITT again declined to award costs to the Crown. That decision was also reviewed by this Court, which found that the decision to decline to award costs was unreasonable: Canada(Attorney General) v. Georgian College of Applied Artsand Technology (F.C.A.), [2005] 2 F.C.R. 209 (Georgian College#2). The CITT was directed to award the Crown costs of $3,327.05.
[55] I am not persuaded that the CITT has fettered its discretion in this case. First, the 2004 Guidelines themselves state that the CITT is prepared to hear argument in any particular case that it should award an amount other than amounts stated in the guidelines, or that it should depart altogether from the guidelines. Med-Emerg made submissions to that effect to the CITT. The fact that its submissions were not adopted does not establish that the CITT has substantially closed its mind to the prospect of departing from the 2004 Guidelines.
[56] Second, from the short history of the use of the 2004 Guidelines, in so far as it can be discerned from the list of cost awards listed above, there is one instance in which the CITT departed from the 2004 Guidelines, and only four additional cases in which it was asked to depart from the guidelines and did not. In my view, it would not be reasonable to conclude, based on this record, that the CITT has adopted a rigid practice like the one that was criticized by this Court in Georgian College #1.
[57] I would also reject the argument that the CITT failed to take into account all relevant considerations in fixing costs in this case at $4,100. The record discloses that the CITT received and considered the submissions of Med-Emerg and PWGSC on costs, and accepted the submissions of PWGSC. Given the factors considered by the CITT in its preliminary award of costs and the subsequent submissions of both parties, it was not unreasonable for the CITT to conclude that Med-Emerg should not be awarded costs of more than $4,100.
[58] Underlying the arguments made by Med-Emerg in this case is the suggestion that the flat rates set out in the 2004 Guidelines are too low, compared to the awards that were made under the 1999 Guidelines. As the record in this case does not permit a fair evaluation of that suggestion, I will say no more about it.
Conclusion
[59] I would dismiss both applications for judicial review, with costs to PWGSC in both applications. Calian is entitled to its costs in the application relating to the merits (A-330-05).
"I agree
J. Richard C.J."
"I agree
Gilles Létourneau J.A."
COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-365-05
A-330-05
STYLE OF CAUSE: Med-Emerg International Inc. v.
Minister of Public Works Services Canada and Calian Ltd.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: March 22, 2006
REASONS FOR JUDGMENT BY: Sharlow J.A.
Létourneau J.A.
APPEARANCES:
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Mr. Paul Conlin
|
FOR THE APPLICANT
|
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Mr. Alan D'Silva Ms. Justine Whitehead |
FOR THE RESPONDENT (PWGS)
FOR THE RESPONDENT (Calian Ltd.)
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SOLICITORS OF RECORD:
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Ottawa, Ontario
|
FOR THE APPLICANT
|
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Ottawa, Ontario
Stikeman Elliott LLP Ottawa, Ontario |
FOR THE RESPONDENT (PWGS)
FOR THE RESPONDENT (Calian Ltd.) |