Profac Facilities Management Services v. Fm One Alliance Corp.

Profac Facilities Management Services v. Fm One Alliance Corp. Court (s) Database Federal Court of Appeal Decisions Date 2001-10-12 Neutral citation 2001 FCA 303 File numbers A-436-01 Notes Digest Decision Content Date: 20011012 Docket: A-436-01 Neutral citation: 2001 FCA 303 BETWEEN: PROFAC FACILITIES MANAGEMENT SERVICES INC. Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent Docket: A-440-01 BETWEEN: BROOKFIELD LEPAGE JOHNSON CONTROLS FACILITY MANAGEMENT SERVICES Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent Heard at Toronto, Ontario, on Wednesday, October 10, 2001 Delivered at Toronto, Ontario on Friday, October 12, 2001 REASONS FOR ORDER BY: LINDEN J.A. Date: 20011012 Docket: A-436-01 Neutral citation: 2001 FCA 303 BETWEEN: PROFAC FACILITIES MANAGEMENT SERVICES INC. Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent Docket: A-440-01 BETWEEN: BROOKFIELD LEPAGE JOHNSON CONTROLS FACILITY MANAGEMENT SERVICES Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent REASONS FOR ORDER LINDEN J.A. The two applicants, Profac Facilities Management Services Inc. ("Profac") and Brookfield Lepage Johnson Controls Facility Management Services ("Brookfield") are both seeking an interim stay of a Determination and Recommendation of the Canadian International Trade Tribunal ("CITT") dated June 27, 2001 until a decision of this Court is delivered in these two judicial review applications of that decision. In that determination the CITT recommended that the proposed service agreements with these applicants, which cover the property management services for 1100 or so properties of Canada Post Corporation, not be renewed but that , within six months, a new solicitation be conducted for those services in accordance with the North American Free Trade Association provisions. FM One Alliance Corporation ("FM One"), one of the respondents in these applications, wishes to tender in the proposed new procurement process. Canada Post Corporation, the other respondent, is also interested in the outcome of this motion. (I have added it as a respondent in Court File No. A-436-01.) In order to succeed in these motions heard together the applicants must satisfy this Court that (1) there is a serious question to be tried, (2) that the applicants will suffer irreparable harm if the stay is not granted and (3) that the balance of convenience between the parties favours the granting of the stay. (See RJR-MacDonald Inc. v. Canada, [1994] 1 S.C.R. 311.) As for whether there is a serious question to be tried, it is necessary to explain the basis of the decision of the CITT. The Tribunal stated in its reasons: Taking for granted, for the purpose of this analysis, that the renewal clause was a proper option clause, the Tribunal must determine whether the renewal clause would be properly exercised if CPC went forward with the proposed renewals. Having regard to the wording of the clause and the circumstances surrounding the proposed renewals, the Tribunal comes to the conclusion that the renewals, as contemplated, would not constitute a proper exercise of the renewal clause. Section 3.4 of the Service Agreements constitutes the renewal clause, which reads as follows: On at least 6 months notice given prior to March 31, 2000, Canada Post shall have the right to renew [these] Agreement[s] for a further term of 5 years on terms and conditions to be mutually agreed upon, in advance, by Canada Post and [BLJC or Profac]. It is clear from the wording of section 3.4 that, in order to renew the Services Agreements, CPC had an obligation to give notice of its intention to do so six months prior to March 31, 2000. It is clear from the record that CPC did not do so. This is not contested by CPC. Therefore, in the Tribunal's view, the proposed renewals would not constitute a proper exercise of the renewal clause. It is contended by the respondent, FM One Alliance Corp., which is seeking to submit a tender for the work currently being done by the applicants in the new procurement process, if it takes place, that there is no serious issue to be tried here. It is suggested that the standard of review is patent unreasonableness and that the decision is amply supported by the record. The clause in the agreement, they say, was properly interpreted and, in any event, it was only a contract to enter into a contract, which cannot be binding. (See Mannpar Enterprises Ltd. v. Canada (1999), 67 B.C.L.R. (3d) 64, at 68 (C.A.). The applicants, on the other hand, stress that the threshold to meet in determining whether there is a serious question to be tried is a low one, that is, that the issue not be a frivolous or vexatious one. They indicate that the standard of review on the legal question in issue is not necessarily patent unreasonableness but, basing themselves on Canada v.Mattel Canada Inc., [2001] S.C.J. No. 37. may well be that of correctness, if the particular legal issue involved here is outside of the expertise of the Tribunal and if the courts may be equally or better equipped to resolve it. They also contend that the issue to be decided is not whether there has been an improper renewal of a contract contrary to NAFTA, for, they say, that question was not decided by the Tribunal. The legal issue is whether the notice period in the pre-existing contract period was not followed, as was actually decided by the Tribunal, or whether the time period in which to deliver the notice was extended by the discussions that had been undertaken and by the interim renewal of the agreement, pending the proposed new procurement which was later abandoned. They suggest that there are many common law decisions that are relevant to this issue which a Court is well placed to unravel. In my view, there is a sufficiently respectable argument to be made here to meet the low threshold for deciding that there is a serious issue to be tried in this case. As for irreparable harm, it is contended that, if a new party took over the existing contracts pending the outcome of the appeal, the disruption of the relationship between the current parties to the contract would be irreparable, in the event that the applicants are ultimately successful on the judicial review. No damages could be recoverable for the enormous losses that would be incurred by the applicants, they say. It is one of their core contracts critical to their business. Many of their valuable employees may leave and may not return later. Such a consequence would undoubtedly be disastrous for the current employees of the applicants as well, who will be added to the lists of unemployed persons. The respondent urges that the applicants are continuing to supply the service on an interim basis pending the outcome of the new procurement in any event, so that the extent of their potential loss is more imagined than real. Much of their loss, it is suggested, has been caused by the delay in launching this motion for a stay and that the motion could have been heard and decided already if they had proceeded with expedition. I am not impressed by this argument. When the judicial review of the decision was launched by the applicants, the CPC decided by itself to await the outcome of the case before commencing the new procurement, apparently wishing to avoid a potentially abortive exercise. This eventually precipitated an action in the Trial Division by FM One to force CPC to proceed with the procurement. It was only then that the applicants sought a stay, for it was only then that it seemed to be necessary to do so. I cannot fault any of the parties for dealing with the situation in this way, for there is no need to waste resources on unnecessary litigation. In my view, there is sufficient proof of irreparable harm to meet the second requirement. As for balance of convenience, the applicants clearly have the advantage. Their continuing relationship with CPC, a major part of their business, is threatened by the new procurement. There is a temporary agreement in place but it is a precarious one. To be required to withdraw from that relationship as a result of a procurement that goes to another entity, only to have that new procurement later declared unnecessary by the Court, leading to a reversal of the situation, makes no sense at all. In the meantime there would be dislocation to the operation, wasted startup and closing costs and loss of employees' jobs. Moreover, the cost to these and other potential applicants who enter the procurement process only to learn later that it has been an abortive one cannot be ignored. On the other side, the cost to FM One is merely to wait for the Court decision, before they are given the chance to take over the operation, if they are successful in the procurement, if it takes place. There is also the loss of potential profit. Of course, they may not even succeed in the procurement process. In addition, there would be the benefit of some savings to the public purse that would be foregone as well as fostering the more efficient operation of the procurement system. In my view, these latter potential costs of FM One are far outweighed by those of the applicants, who have clearly shown that the balance of convenience is in their favour. Thus, a stay of the decision should be granted, but with conditions, for the matter should be clarified as soon as possible. The two applications for judicial review will be heard during the week of November 19, 2001, the exact date, time and place to be decided by the Judicial Administrator in consultation with the parties. Thus, the decision of this Court should be released well before the end of the six month period in which the new procurement is to be done, if the application fails. For the hearing to take place at that time, the applicants' records must be filed by October 26, 2001, and the respondent's records on November 2, 2001. The costs of this motion will be in the cause. "A. M. Linden" J.A. FEDERAL COURT OF CANADA Names of Counsel and Solicitors of Record DOCKET: A-436-01 STYLE OF CAUSE: PROFAC FACILITIES MANAGEMENT SERVICES INC. Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent DOCKET: A-440-01 STYLE OF CAUSE: BROOKFIELD LEPAGE JOHNSON CONTROLS FACILITY MANAGEMENT SERVICES Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent DATE OF HEARING: WEDNESDAY, OCTOBER 10, 2001 PLACE OF HEARING: TORONTO, ONTARIO REASONS FOR ORDER BY: LINDEN J.A. DATED: FRIDAY, OCTOBER 12, 2001 APPEARANCES BY: Joel Richler, and Bradley E. Berg For the Appellant, Profac Facilities Management Services Inc. Gordon Cameron For the Appellant, Brookfield LePage Johnson Controls Facility Management Services Milos Bartutciski, and Brian Radnoff For the Respondent, FM One Alliance Corp. SOLICITORS OF RECORD: Blake, Cassels, & Graydon LLP Barristers & Solicitors Box 25, Commerce Court West Toronto, Ontario M5L 1A9 For the Appellant, Profac Facilities Management Services Inc. Blake, Cassels & Graydon LLP Barristers & Solicitors 45 O'Connor Street, 20th Floor Ottawa, Ontario K1P 1A4 For the Appellant, Brookfield LePage Johnson Controls Facility Management Services Davies Ward Phillips & Vineberg LLP Barristers & Solicitors 44th Floor, 1 First Canadian Place Toronto, Ontario M5X 1B1 For the Respondent, FM One Alliance Corp. FEDERAL COURT OF APPEAL Date: 20011012 Docket: A-436-01 BETWEEN: PROFAC FACILITIES MANAGEMENT SERVICES INC. Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent Docket: A-440-01 BETWEEN: BROOKFIELD LEPAGE JOHNSON CONTROLS FACILITY MANAGEMENT SERVICES Applicant - and - FM ONE ALLIANCE CORP. and CANADA POST CORPORATION Respondent REASONS FOR ORDER