TPG Technology Consulting Ltd. v. Canada, (2014) 471 F.T.R. 1 (FC)

• Judge: Zinn, J.
• Court: Federal Court (Canada)
• Case Date: June 26, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 471 F.T.R. 1 (FC);2014 FC 933

TPG Tech. Consulting Ltd. v. Can. (2014), 471 F.T.R. 1 (FC)

MLB headnote and full text

Temp. Cite: [2014] F.T.R. TBEd. OC.020

TPG Technology Consulting Ltd. (plaintiff) v. Her Majesty The Queen (defendant)

(T-494-08; 2014 FC 933)

Indexed As: TPG Technology Consulting Ltd. v. Canada

Federal Court

Zinn, J.

October 2, 2014.

Summary:

The plaintiff provided specialized information technology services to the federal government from 1999 until December 2007, when its latest contract expired. One of the plaintiff's competitors successfully bid on the most recent contract to provide such services. The plaintiff filed four complaints with the Canadian International Trade Tribunal (CITT). Two were rejected, one was not worthy of investigation and the fourth was time-barred. The plaintiff sued the federal Crown for $251,000,000 in damages, alleging breach of contract, negligence, inducing breach of contract by the plaintiff's subcontractors, and intentional interference with economic interests by unlawful means. The federal Crown moved for summary judgment dismissing the action on the grounds that there was no genuine issue for trial and the action constituted an abuse of process. At issue was (1) whether the court had jurisdiction to hear actions involving procurement disputes (i.e., whether the CITT had exclusive jurisdiction over such disputes), (2) whether the action was res judicata as a result of the unsuccessful CITT complaints (i.e., abuse of process) and (3) whether the plaintiff's pleadings disclosed a genuine issue for trial.

The Federal Court, in a judgment reported (2011), 396 F.T.R. 276, first held that the court had jurisdiction to hear the action. However, the court granted summary judgment dismissing the entire action on the ground that the plaintiff's speculative pleadings raised no genuine issue for trial. It was unnecessary to resolve whether the action also constituted an abuse of process. The plaintiff appealed.

The Federal Court of Appeal, in a judgment reported (2013), 446 N.R. 374, allowed the appeal and set aside the summary judgment dismissing the action. The trial judge misapplied the summary judgment rule. The matter proceeded to trial. The issues were framed as follows: "1. Does the CITT have exclusive jurisdiction to hear and determine [the plaintiff's] complaint and, if so, is this a complete defence to this action? 2. Was [the plaintiff's] proposal evaluated fairly? 3. Was [the competitor's] bid non-compliant, and if so, did the Crown have an obligation to disqualify it or terminate the contract it had been awarded? 4. If [the plaintiff] is entitled to damages, what is the appropriate quantum?".

The Federal Court dismissed the action, declining to exercise the concurrent jurisdiction it had with the CITT. The plaintiff's failure to utilize the avenues of redress in the CITT Act constituted a full defence to the action. In the event that it erred in declining jurisdiction, the court opined that although the evaluation of the plaintiff's bid was not done fairly and equitably, there was no evidence that this resulted in any loss to the plaintiff. The court rejected the argument that the competitor's successful bid was non-compliant. There was no requirement that the competitor's bid be disqualified and the plaintiff's bid accepted.

Contracts - Topic 1261

Formation of contract - Tender calls - General - The Federal Court summarized the legal principles respecting procurement in the bidding process as follows: "1. Where a RFP is issued and a party responds with a proposal, a contract forms between the party issuing the RFP and the party responding to it. This contract (Contract A) is said to 'come into being forthwith and without further formality.' 2. The principal term of Contract A is that the proposal of a responding party is irrevocable and the parties have a mutual obligation to enter into a contract (Contract B) upon acceptance of the proposal. 3. The RPF document(s) provide the other express terms of Contract A. 4. Contract A may also contain implied terms. 5. One implied term of Contract A is that only a proposal that is compliant with the terms of the RFP will be accepted. It is no defence to a claim that a non-compliant bid was accepted to say that the acceptance was made in good faith or was based upon what was believed to be the correct interpretation of the contract. 6. Contract A contains an implied obligation to treat all those who respond 'fairly and equally.' 7. Contract A contains an implied obligation to assess competing proposals on the same terms and conditions and not to rely on a criterion that has not been disclosed to those who have responded. 8. Other terms may be implied in Contract A based upon the presumed intention of the parties where necessary 'to give business efficacy to a contract or as otherwise meeting the 'officious bystander' test as a term which the parties would say, if questioned, that they had obviously assumed.'"- See paragraph 7.

Contracts - Topic 1263

Formation of contract - Tender calls - Duties - [See Contracts - Topic 1261 ].

Contracts - Topic 1276

Formation of contract - Tender calls - Breach of tender - General - The plaintiff and a competitor each bid on a government contract - The competitor's bid was successful - The plaintiff sued the federal Crown, arguing a breach of Contract A (unfairness in the bid evaluation process) and a breach of Contract B (competitor's bid noncompliant) - The Federal Court stated that "once Contract B is awarded, a losing bidder has no ability to insist that the contracting authority terminate the contract; once contract B is formed, all rights and remedies exist only between the contracting authority and the winning bidder. However, evidence of events occurring after Contract B is awarded can be used as proof of a breach of Contract A." - See paragraph 161.

Crown - Topic 1012

Contracts with Crown - General principles - Tenders - Duty of Crown - The plaintiff's contract for services to the federal government expired - The Crown issued a Request for Proposal (RFP) - The bid of one of the plaintiff's competitors was accepted - The plaintiff's bid was the second choice - The plaintiff claimed that the Crown breached Contract A because the bid evaluation process was unfair - Each bid was evaluated individually by five evaluators, who then agreed on final scores by consensus - There was a change in the evaluation process when the plaintiff's bid was evaluated - The Crown failed to establish on a balance of probabilities that the same was done for all bids - The change involved only two of the RFP requirements - The Federal Court held that the plaintiff was treated unfairly, resulting in a breach of Contract A - However, the action for breach of contract would have been dismissed because the plaintiff failed to prove that it suffered damages as a result - The unfairness in the evaluation process would not have affected the ultimate result - See paragraphs 110 to 151.

Crown - Topic 1012

Contracts with Crown - General principles - Tenders - Duty of Crown - [See Contracts - Topic 1261 ].

Crown - Topic 1013

Contracts with Crown - General principles - Complaints (incl. procedure and remedies) - [See Trade Regulation - Topic 1301 ].

Crown - Topic 1014

Contracts with Crown - General principles - Request for proposal (RFP) - [See Contracts - Topic 1261 ].

Crown - Topic 1069

Contracts with Crown - Service contracts - Tenders - [See Contracts - Topic 1261 ].

Crown - Topic 4087

Actions by and against Crown in right of Canada - Defences - Bars or exclusions - Existence of alternative remedy - [See Trade Regulation - Topic 1301 ].

Trade Regulation - Topic 1301

Commissions - Canadian International Trade Tribunal - Jurisdiction - Remedies for breach in tender evaluation process on Crown contracts - The plaintiff's contract for services to the federal government expired - The government issued a Request for Proposal (RFP) - The bid of one of the plaintiff's competitors was accepted - The plaintiff's bid was the second choice - The plaintiff filed four complaints with the Canadian International Trade Tribunal (CITT), challenging the fairness of the procurement process (particularly that the competitor's bid was noncompliant and should have been rejected in favour of the plaintiff's bid) - Two were dismissed on the merits, one was unworthy of investigation and the fourth was time-barred - The plaintiff sued the federal Crown for $251,000,000 in damages for breach of contract A - The plaintiff argued that its bid was not evaluated fairly, because the competitor's bid should have been rejected as non-compliant, resulting in the contract being awarded to the plaintiff - The Federal Court dismissed the action - The court stated that "where the only claim being raised is a breach of Contract A because of unfairness in the procurement process and the acceptance of a non-compliant proposal, the Federal Court should defer to the CITT which has jurisdiction to deal with both. ...the CITT is a highly specialized tribunal which deals daily with complex issues relating to procurement and the relationship between RFPs, legislation, and domestic and foreign trade agreements. ... fairness of the evaluation of the bids and compliance with the terms of the RFP are all within the specific jurisdiction of the CITT. ... no aspect of [the plaintiff's] claim falls outside of the jurisdiction of the CITT ... [The plaintiff] ought to have brought a complaint before the CITT, as it had done four previous times. Its proper remedy before the Court in this case is applying for judicial review of the CITT's decision. ... [The plaintiff] still had an obligation to exhaust its possible avenues of recourse with the CITT and show that it could not obtain an adequate remedy before proceeding to this Court. ... In the face of a refusal to exercise that avenue of redress, this Court ought not to intervene." - See paragraphs 69 to 109.

Cases Noticed:

Ron Engineering & Construction (Eastern) Ltd. v. Ontario and Water Resources Commission, [1981] 1 S.C.R. 111; 35 N.R. 40, refd to. [para. 6].

M.J.B. Enterprises Ltd. v. Defence Construction (1951) Co. et al., [1999] 1 S.C.R. 619; 237 N.R. 334; 232 A.R. 360; 195 W.A.C. 360, refd to. [para. 6].

Martel Building Ltd. v. Canada, [2000] 2 S.C.R. 860; 262 N.R. 285, refd to. [para. 6].

Double N Earthmovers Ltd. v. Edmonton (City) et al., [2007] 1 S.C.R. 116; 356 N.R. 211; 401 A.R. 329; 391 W.A.C. 329, refd to. [para. 6].

Quebec Telephone Co. et al. v. Canada (Attorney General) et al. (2012), 435 N.R. 239; 2012 FCA 203, refd to. [para. 76].

Vaughan v. Canada, [2005] 1 S.C.R. 146; 331 N.R. 64; 2005 SCC 11, refd to. [para. 79].

Lebrasseur v. Canada (2007), 370 N.R. 193; 2007 FCA 330, refd to. [para. 80].

Envoy Relocation Services Inc. et al. v. Canada (Minister of Public Works and Government Services), [2007] N.R. Uned. 43; 2007 FCA 177, refd to. [para. 82].

Siemens Westinghouse Inc. v. Canada (Minister of Public Works and Government Services) et al. (2001), 274 N.R. 695; 2001 FCA 241, refd to. [para. 83].

Powell (C.B.) Ltd. v. Canada Border Services Agency (President) et al., [2011] 2 F.C.R. 332; 400 N.R. 367; 2010 FCA 61, refd to. [para. 96].

Monit International Inc. v. Canada (2004), 255 F.T.R. 1 (F.C.), refd to. [para. 140].

Counsel:

Peter N. Mantas, Leslie J.F. Milton, Alexandra Logvin, Sean Stephenson and Leslie E. Wilber, for the plaintiff;

Peter J. Osborne, Monique Jilesen and Brian Harvey, for the defendant.

Solicitors of Record:

Fasken Martineau DuMoulin LLP, Ottawa, Ontario, for the plaintiff;

Lenczner Slaght Royce Smith Griffin LLP, Toronto, Ontario, for the defendant.

This action was heard between May 12 and June 26, 2014, at Ottawa, Ontario, before Zinn, J., of the Federal Court, who delivered the following judgment on October 2, 2014.