TPG Technology Consulting Ltd. v. Canada (Public Works and Government Services)

TPG Technology Consulting Ltd. v. Canada (Public Works and Government Services) Court (s) Database Federal Court of Appeal Decisions Date 2007-06-07 Neutral citation 2007 FCA 219 File numbers A-193-07 Decision Content Date: 20070607 Docket: A-193-07 Citation: 2007 FCA 219 Present: RYER J.A. BETWEEN: TPG TECHNOLOGY CONSULTING LTD. Applicant and THE MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES and CGI GROUP INC. Respondents Heard at Ottawa, Ontario, on June 4, 2007. Order delivered at Ottawa, Ontario, on June 7, 2007. REASONS FOR ORDER BY: RYER J.A. Date: 20070607 Docket: A-193-07 Citation: 2007 FCA 219 Present: RYER J.A. BETWEEN: TPG TECHNOLOGY CONSULTING LTD. Applicant and THE MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES and CGI GROUP INC. Respondents REASONS FOR ORDER RYER J.A. [1] TPG Technology Consulting Ltd. (“TPG”) has applied to this Court for judicial review of a decision of the Canadian International Trade Tribunal (the “CITT”), dated April 3, 2007, refusing to undertake an inquiry into two complaints made by TPG. These complaints alleged irregularities and improprieties in respect of the evaluation of TPG’s bid for a contract (the “Pending ETS Contract”) to provide engineering and technical services to the Information Technology Services Board (“ITSB”) of Public Works and Government Services Canada (“PWGSC”). The Pending ETS Contract is to be awarded in response to a request for proposals (the “RFP”) that was issued by PWGSC under solicitation no. EN 869-040407/A. [2] The basis of the CITT’s refusal to conduct an inquiry into the two complaints was that both of them were time-barred pursuant to subsections 6(1) and (2) of the Canadian International Trade Tribunal Regulations S.O.R./93-602 (the “CITT Regulations”). In its judicial review application, TPG alleges that the CITT made jurisdictional and legal errors in arriving at its decision. [3] This application is for an interim order, pursuant to section 18.2 of the Federal Courts Act R.S.C. 1985, c. F-7, prohibiting the Minister of Public Works and Government Services (the “Minister”) from awarding the Pending ETS Contract until this Court renders its decision in the application for judicial review. TPG has also applied for an order expediting the hearing of the judicial review application by this Court. BACKGROUND [4] TPG is presently providing engineering and technical support services to PWGSC under a contract that is to expire on June 15, 2007. That expiry date has been extended to July 15, 2007, by virtue of an order of Malone J.A. dated May 10, 2007. [5] The RFP in respect of the Pending ETS Contract was issued on May 30, 2006. Three corporations submitted bids in response to the RFP: TPG, CGI Group Inc. (“CGI”), one of the respondents, and IBM Canada Ltd. ANALYSIS The section 18.2 order [6] It is common ground that the test to be applied with respect to the granting of the interim order that has been requested by TPG is the test that was set forth by the Supreme Court of Canada in RJR−MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311. Accordingly, to succeed on this motion, TPG must satisfy the Court that there is a serious question to be tried, that it will suffer irreparable harm if the interim order is not granted and that the balance of convenience favours the granting of the order. 1. Serious Question [7] In RJR-MacDonald, the Supreme Court of Canada specified that there is a low threshold with respect to the determination of whether there is a serious issue to be tried and that if a preliminary assessment, and not a prolonged examination, of the merits of the issue reveals that it is neither frivolous nor vexatious, then the motions judge should proceed to consider the other two elements of the test. [8] In this element of the test, the question is whether TPG has raised a serious issue for this Court to determine in the judicial review application. Accordingly, it is necessary to consider the circumstances surrounding the decision of the CITT that is the subject of that application. [9] TPG filed its complaint with the CITT on March 23, 2007. In that complaint, TPG alleged that PWGSC did not evaluate the bids fairly, impartially and in accordance with its published criteria because of the occurrence of a re-confirmation process performed by a single evaluation team member, which was not contemplated in the RFP (the “First Complaint”). TPG also alleged that a reasonable apprehension of bias and/or an appearance of conflict of interest was present in the bid evaluation process arising out of the appointment of Mr. Jirka Danek as Director General of Products and Services of ITSB on June 5, 2006, his prior involvement with TPG and CGI and his proximity to, and potential involvement in, the bid evaluation process (the “Second Complaint”). Both of TPG’s complaints were rejected by the CITT. [10] Under subsection 6(1) of the CITT Regulations, a complaint must be filed with the CITT “… not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier.” Subsection 6(2) of the CITT Regulations states that a potential supplier who has made an objection to the relevant government institution, and is denied relief by that government institution, may file a complaint with the CITT “… within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief, if the objection was made within 10 working days after the day on which its basis became known or reasonably should have become known to the potential supplier.” [11] With respect to the First Complaint, the CITT determined that since TPG first learned of the re-confirmation process in November of 2006, and later learned of its completion on or about February 26, 2007, the complaint that was brought on March 23, 2007, was time-barred by subsection 6(1) of the CITT Regulations. [12] With respect to the Second Complaint, the CITT referred to a letter from TPG to ITSB, dated May 29, 2006, in which TPG expressed concerns regarding the status of Mr. Danek and the conflict of interest it might create if he were to accept an executive position with ITSB. On June 2, 2006, the Chief Executive Officer of ITSB responded, indicating that TPG should have no concerns about conflict of interest on Mr. Danek’s part because he would not be involved in procurement and contracting activities. As a result, the CITT determined that the reply of June 2, 2006, constituted a denial of relief with regard to TPG’s objection to Mr. Danek’s appointment and that TPG’s complaint on March 23, 2007, which they found to be related to that denial, was filed beyond the time limit established by subsection 6(2) of the CITT Regulations. [13] In its application for judicial review, TPG alleges that the CITT erred in law and jurisdiction by refusing to inquire into those complaints on the basis that they were time-barred. [14] With respect to the First Complaint, TPG alleges that the 10 day time period should not have commenced on the date in November of 2006 upon which it learned of the re-confirmation process. Instead, it alleges that the time period should have commenced on March 13, 2007, the date upon which it established that the re-confirmation process actually had an adverse impact upon its bid. In effect, TPG alleges that the bid re-confirmation actually became a bid re-evaluation that was impermissible under the RFP. [15] With respect to the Second Complaint, TPG noted that subsection 30.11(1) of the Canadian International Trade Tribunal Act R.S.C. 1985, c. 47 (4th Supp.) (the “CITT Act”) provides that complaints may be made if they relate to “any aspect of the procurement process”. TPG then alleged that because its May 29, 2006 letter to ITSB, in which the conflict of interest matter was raised, was sent before the commencement of the procurement process, that letter could not have constituted a complaint under the CITT Act. It follows, according to TPG, that the CITT was in error in concluding that the June 2, 2006 response from ITSB was a denial of relief under the CITT Act. In addition, TPG alleged that because the June 2, 2006 response provided a positive assurance to TPG, it could not be construed as a “denial of relief”. Finally, TPG alleges that it was only on March 13, 2006, when it established that it had ceased to be the winning bidder and had become a losing bidder, that the alleged concerns in relation to an apprehension of bias or conflict of interest could be said to have had an adverse impact on its bid. On that basis, it alleges that the 10 day period must be computed from March 13, 2007. [16] In my view, the issues raised by TPG in its application for judicial review are neither frivolous nor vexatious and they meet the low threshold of the “serious issue to be tried” element of RJR-MacDonald test. [17] Counsel for the respondents argued that there was no evidence that there had been any re-evaluation of the bids or the bid scores and further, that there was no evidence that Mr. Danek had any involvement in the bid process. In my view, it is not appropriate for me to consider these matters since the CITT did not deal with them. Instead, the CITT declined to inquire into the complaints on the basis that they were time-barred. It is that determination that will be before this Court on the judicial review application and, in accordance with the first element of the RJR-MacDonald test, it is only the seriousness of the issues that are to be tried in that application that require consideration in the application that is before me. [18] Counsel for CGI argued that the decision of this Court in IBM Canada Ltd. v. Hewlett-Packard (Canada) Ltd., [2002] F.C.J. No. 1008, 2002 FCA 284, makes it clear that the question of the timeliness of a complaint before the CITT is a factual matter that will be subject to judicial review on a standard of patent unreasonableness. He then urged me to conclude that the decision of the CITT to reject TPG’s complaints was not patently unreasonable and based upon that conclusion, to determine that the low threshold in relation to the serious issue element of the test had not been met. [19] In the application before me, it is not my function to determine the appropriate standard of review that is to be applied by this Court in the judicial review application, much less to determine whether that standard has been met. Rather, I am only obliged to consider whether the grounds contained in TPG’s application for judicial review raise serious issues, that is to say, issues that are neither frivolous or vexatious. [20] In concluding that the issues that have been raised by TPG for consideration in the judicial review application have met the serious issue element of the test, I would emphasize that I am expressing no opinion as to the ultimate resolution of those issues. 2. Irreparable harm [21] The second element of the test is that of irreparable harm, which is described in RJR-MacDonald at page 341: At this stage the only issue to be decided is whether a refusal to grant relief could so adversely affect the applicants’ own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application. “Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court’s decision (R.L. Crain Inc. v. Hendry (1988), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, [1985] 3 W.W.R. 577 (B.C.C.A.)). The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration (Hubbard v. Pitt, [1976] Q.B. 142 (C.A.)). [22] The evidence before me shows that the existing service arrangement between TPG and ITSB accounts for approximately 70% of the gross revenues of TPG. In addition, TPG employs a number of subcontractors and employees in the provision of those services. [23] Having regard to the criteria for this element of the test, I am persuaded that the loss of such an important contract prior to the outcome of the judicial review application could cause irreparable harm to TPG, which could manifest itself in a permanent loss of business, a permanent loss of skilled employees and experienced subcontractors, an inability to obtain new large government contracts and damage to its reputation. To that extent, TPG may be said to be in circumstances that are similar to the applicants for similar orders in Profac Facilities Management Services Inc. v. FM One Alliance Corp., [2001] F.C.J. No. 1530, 2001 FCA 303, and Seprotech Systems Inc. v. Peacock Inc., [2002] F.C.J. No. 1764, 2002 FCA 497. Accordingly, I conclude that this element of the test has been met. 3. Balance of Convenience [24] The third element of the test requires a determination of which of the parties would suffer greater harm from the granting or the refusal to grant the interim order, pending the outcome of the decision on the merits. [25] In applying the second element of the test, I concluded that TPG could suffer irreparable harm if the interim order is not granted. [26] Counsel for CGI expressed a strong desire that the Minister should be permitted to award the Pending ETS Contract as soon as possible but tendered no evidence of harm that CGI would suffer if there was a delay in awarding that contract. [27] Counsel for the Minister conceded that it would suffer no harm by virtue of a delay in awarding the Pending ETS Contract provided that there was an assurance that the existing service that TPG is currently providing would continue during the period from July 15, 2007 to and including the end of a 60 day transition period following the date upon which the Pending ETS Contract is awarded, in the event that TPG is not the recipient of the award of that contract. While that latter concern is valid, it is a matter that can be dealt with as a condition of any interim order that is granted. [28] In my view, the balance of convenience weighs in favour of TPG. Without the interim order, there is a definite possibility that the Pending ETS Contract could be awarded to another bidder before this Court hears the judicial review application. Such an action on the part of the Minister could result in the harm to TPG that was described above. That harm, in my view, would be more significant to TPG than any harm that would befall CGI if the interim order were to be issued. Similarly, provided that the Minister’s requirement for service continuity is met, the potential harm to TPG if the interim order is not granted would be greater than the potential harm to the Minister if the interim order were to be issued. [29] For these reasons, I am persuaded that the three part test in RJR-MacDonald has been met and that the interim order should be granted to TPG on the condition that TPG will continue to provide the service that it is currently providing under the existing contract with ITSB during the period from July 15, 2007 to and including the end of a 60 day transition period following the date upon which the Pending ETS Contract is awarded to a bidder other than TPG, or such earlier date as ITSB and TPG may agree upon. Expedited hearing of judicial review application [30] The application for an expedited hearing of the judicial review application was not opposed and I am willing to grant an order to that effect. CONCLUSION [31] In accordance with the terms of the accompanying order, the Minister is prohibited from awarding the Pending ETS Contract and the hearing of the application for judicial review of the decision of the CITT is expedited. [32] Costs should be in the cause. “C. Michael Ryer” J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-193-07 STYLE OF CAUSE: TPG TECHNOLOGY CONSULTING LTD. and THE MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES ET AL. PLACE OF HEARING: OTTAWA DATE OF HEARING: JUNE 4, 2007 REASONS FOR ORDER BY: RYER J.A. DATED: JUNE 7, 2007 Mr. Ronald D. Lunau Mr. Phuong T.V. Ngo FOR THE APPLICANT Mr. I.H. Fraser Mr. Robert B. (Robin) Carter FOR THE RESPONDENT, MINISTER Mr. Simon V. Potter Mr. R. Benjamin Mills FOR THE RESPONDENT, CGI GROUP INC. SOLICITORS OF RECORD: Gowling Lafleur Henderson LLP Ottawa, Ontario FOR THE APPLICANT John H. Sims Q.C. Deputy Attorney General of Canada Ottawa, Ontario FOR THE RESPONDENT, MINISTER McCarthy Tétrault LLP Ottawa, Ontario FOR THE RESPONDENT, CGI GROUP INC.