Date: 20020816
Docket: T-1234-02
Neutral citation: 2002 FCT 882
Ottawa, Ontario, this 16th day of August, 2002
Present: THE HONOURABLE MR. JUSTICE BEAUDRY
BETWEEN:
COGNOS INCORPORATED
Applicant
and
MINISTER OF PUBLIC WORKS AND
GOVERNMENT SERVICES
Respondent
REASONS FOR ORDER AND ORDER
[1] This is a motion by Cognos Incorporated ("Applicant") for an immediate interim order staying the operation of a certificate issued by a delegate of the Minister of Public Works and Government Services ("Respondent") under s. 30.13(4) of the Canadian International Trade Tribunal Act, R.S. 1985, c. 47, as amended (the "Act") and enjoining the Respondent from proceeding to award a contract pursuant to an Advance Contract Award Notice ("ACAN") for such period of time as the Court directs.
[2] The issue before me was whether I should grant the injunction that the Applicant was seeking. I conclude that the injunction should not be granted. My reasons for this decision are provided below.
[3] Correctional Services Canada ("CSC") is the federal government agency for whom products and services would be provided in accordance with the contract that the Respondent seeks to award. The CSC uses a system known as the Offender Management System ("OMS") to gather, store, retrieve and share information on federal offenders.
[4] Two elements are necessary for the functioning of the OMS. One of these is the OMS database itself. The other is a method of accessing the database. The current method of accessing the database is through the use of the PowerHouse system developed by the Applicant.
[5] Since 1999, CSC has considered making changes with respect to the OMS. The determination to migrate the database; that is, to move it to a different system of storage and retrieval, was made in December 2001, following several months during which CSC elaborated and reviewed project plans. At that time, they determined that only Core Software Corporation ("Core") could provide products and services which fit their needs in this regard.
[6] The ACAN with respect to the migration system was issued on April 19, 2002. In the ACAN, the Respondent stated that an award of the contract to a single supplier, or sole source, instead of an open tender competition, was appropriate because Core had what the Respondent understands to be proprietary rights to software that was uniquely qualified for the task at hand.
[7] On May 2, 2002, the Applicant challenged the decision and submitted that it was the most highly qualified supplier, and that the contract should be awarded on a competitive basis. Following a subsequent exchange of correspondence between the Applicant and the Respondent, representatives of the two parties and the CSC met on June 17, 2002.
[8] The Respondent did not communicate a decision to the Applicant regarding whether or not it would open the contract to competitive bidding. On July 16, 2002, the Applicant filed a complaint with the Canadian International Trade Tribunal ("CITT"), believing that the Respondent and the CSC would proceed imminently with the sole source contract. The complaint was a formal protest requesting that the CITT issue a "Stop Award Order".
[9] On July 18, 2002, the CITT issued the requested order pursuant to s. 30.13(3) of the Canadian International Trade Tribunal Act, R.S. 1985, c. 47 (the "Act"). On July 29, 2002, the Respondent filed a certificate pursuant to s. 30.14(4) of the Act, in which it stated that the awarding of the contract to Core was urgent and that a delay would be contrary to the public interest. Notwithstanding the objections of the Applicant that the letter of certification was inadequate, the CITT issued a rescission of the Stop Award Order on August 1, 2002. This Court was then asked to enjoin the Respondent from awarding the contract pending the determination either of the complaint before the CITT or the judicial review of the decision to issue the certificate.
[10] In order to obtain an injunction of this nature, the Applicant must satisfy the criteria set out by the Supreme Court of Canada in Manitoba (A.G.) v. Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R. 110 and in RJR MacDonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311. The Applicant must demonstrate that there is a serious issue to be tried, that irreparable harm will occur if the injunction is not granted and that the balance of convenience favours the Applicant.
[11] I have no problem in finding that the Applicant has raised serious issues for trial. I need only be satisfied that the Applicant's claims are neither frivolous nor vexatious. This is not a case in which the determination of this application has the effect of a final disposition of the matter. I therefore need not consider the merits of the claims in order to determine if there is a serious issue to be tried.
[12] The Applicant raised two main issues in its submissions. One of these is whether the Respondent properly applied s. 30.13(4) when it issued the certificate to the CITT requesting a rescission of the Stop Award Order on urgency and public interest grounds. The other issue is the requirement or absence of a requirement that the Respondent provide reasons for issuing the certificate. The written and oral submissions of both parties indicate that there is much room for valid debate on both sides of each of these issues. These issues are worth raising.
[13] The main submission of the Applicant regarding irreparable harm was that if the injunction were not granted, the Applicant would suffer damages that could not fully be remedied as the range of remedies that the CITT would be able to recommend would be limited. A premise on which this argument was based was that if the injunction were not granted, it would be impractical for the CITT to recommend such actions as the rescission of a contract which will already have been partially or substantially performed by the date of its decision.
[14] The Applicant urges that if the injunction is not issued, its procedural remedies would be unavailable to it and that it therefore would not be able to enjoy what it refers to as the "fruits of its remedy". The loss of the procedural remedy is, in the Appellant's view, irreparable. This assumes that even if the CITT were to recommend that the contract be undone and offered again on a competitive basis, such a recommendation would be impractical to carry out in full.
[15] Another submission is that monetary damages for lost opportunity may be recommended, but that money could not adequately compensate for the nature of the harm, which is the loss of the opportunity to compete for the contract. Counsel for the Applicant referred to the statement originally made in RJR MacDonald, supra, that the nature of the harm, rather than its magnitude, is what must be considered.
[16] Two other arguments were among those raised by the Applicant in seeking a finding of irreparable harm. One was the absurdity of going ahead with proceedings if the object of those proceedings is no longer there, and the other made reference to statements in previous CITT decisions indicating that only exceptional circumstances would lead that tribunal to recommend rescission of a contract.
[17] I am of the opinion that the harm that would be caused to the Applicant is not irreparable. S. 30.15(2) provides that the CITT may recommend remedies upon determining that a complaint is valid. These remedies may include monetary compensation, as provided for in paragraph (e) of the subsection. I do not accept the submission of the Respondent that these recommendations are not binding on the government. S. 30.18 of the Act provides the following:
(1) Where the Tribunal makes recommendations to a government institution under section 30.15, the government institution shall, subject to the regulations, implement the recommendations to the greatest extent possible.
(2) Within the prescribed period, the government institution shall advise the Tribunal in writing of the extent to which it intends to implement the recommendations and, if it does not intend to implement them fully, the reasons for not doing so.
(1) Lorsque le Tribunal lui fait des recommandations en vertu de l'article 30.15, l'institution fédérale doit, sous réserve des règlements, les mettre en oeuvre dans toute la mesure du possible.
(2) Elle doit en outre, par écrit et dans le délai réglementaire, lui faire savoir dans quelle mesure elle compte mettre en oeuvre les recommandations et, dans tous les cas où elle n'entend pas les appliquer en totalité, lui motiver sa décision.
The wording of the statute indicates that a CITT ruling imposes obligations on the affected government institution. The government institution would be required to provide reasons for a failure to meet those obligations.
[18] The effect of this provision of the Act, when applied to the case at bar, is that the Respondent would be required to deliver any remedy that the CITT may wish to award, including monetary damages or rescission of the contract, to the greatest extent possible, or justify a failure to do so. This Court may intervene in the event of a failure by the Respondent to comply with the recommendations.
[19] With respect to the range of remedies available to the CITT, it should be noted that the contract between the Respondent and Core is still being negotiated. Meanwhile, although the Respondent has requested, and been granted, additional time to complete procedures with respect to the hearing of the complaint before the CITT, a decision from that body is still expected by early December at the latest. The estimate of CSC representative Phil Higo in his affidavit is that the migration process would take 14 to 16 months to complete. It is therefore unlikely, given that the contract has not yet been negotiated, that performance of the contract will be to such an extent that its cancellation would be impractical for the CITT to recommend. As a result, it can be concluded that the range of remedies available to the Applicant would not be reduced if an injunction were not granted.
[20] The CITT has ordered the cancellation of contracts in previous cases. The matter of Novell Canada Ltd., [1999] C.I.T.T. No. 54 (File no. PR-99-001), and the matter of IBM Canada Ltd., [1999] C.I.T.T. No. 87 (File no. PR-99-020), are examples of complaints where cancellation of the impugned contract was recommended as a remedy. The awarding and performance of a contract by no means constitute a bar to its cancellation.
[21] It is particularly helpful to refer to Telus Integrated Communications v. Canada (Attorney General), [2000] F.C.J. No. 1429, in which an interlocutory injunction was requested pending the adjudication of a CITT complaint, as is the case here. Heneghan J., in applying the rule that an applicant must provide evidence, not speculation, that irreparable harm would occur, stated:
I am in no better position than counsel for the parties in so far as anticipating how the tribunal may exercise the discretion conferred by section 30.15(2) of the CITT Act in the event that it upholds the complaint [...]. The tribunal has the discretion to recommend a meaningful remedy to the applicant [if the applicant] succeeds upon its complaint before the tribunal. It is inappropriate for me to speculate, either positively or negatively, how that tribunal may exercise its discretion to provide a remedy, and I decline to do so. (emphasis added.)
[22] Likewise, a full range of remedies remains open to the CITT in the case before me. As a result, I cannot hold that any remedy, procedural, pecuniary or otherwise, will be unavailable to the Applicant upon a successful CITT complaint or judicial review proceeding if the injunction is denied.
[23] Counsel for the Applicant noted that the factors of the test for stays should not be a series of mechanical steps to be followed in a drilled progression. This approach to the test was articulated in Turbo Resources Ltd. v. Petro Canada Inc. (1989), 24 C.P.R. (3d) 1 at 20. Although I appreciate this enlightened approach, I must still find that the ability of the Applicant to obtain satisfactory remedies for any harm that it may incur between now and the disposition of its complaint is an overarching factor which precludes the granting of this injunction.
[24] Although I am not required to delve into the balance of convenience inquiry, having decided that the Applicant has not demonstrated the irreparable harm which justifies an injunction, I wish to comment on this element.
[25] Among the submissions of the Applicant was that harm to the integrity and the public perception of the public procurement process would occur if the award of this contract were to proceed. The CITT, in its determination of Novell, supra, expressed concern that the process by which procurement decisions were appealed would be prejudiced if government institutions routinely certified that contracts were urgent and that delay would be contrary to the public interest in order to circumvent the process. I have no proof that the Respondent or the CSC engage in such a practice.
[26] In addition, I cannot assume, based on the record before me, that the Respondent acted in a manner other than one in which good faith was demonstrated. Much correspondence was exchanged between the parties, and the Applicant, Respondent and the CSC made the effort to meet with each other in an effort to settle issues before engaging in adversarial processes. I do not find that this is a case where failure to grant the injunction would bring the public procurement process into disrepute.
[27] I also cannot find evidence to support the Respondent's submissions that the granting of an injunction would have resulted in prejudice in the form of compromised public safety. The project in the context of which this contract was proposed has been in the works since 1999. That said, the decision to proceed with the OMS migration was not made until December 2001. The contract for which the Respondent issued an ACAN and which it seeks to award if this injunction does not prevent them from doing so is still in the negotiation stage. I therefore do not expect that it will be signed and performed immediately. I also do not believe that when the CITT renders its decision, performance of the contract will have progressed to such a degree that its cancellation would be impossible for all practical purposes.
[28] Based on these considerations, I find that the balance of convenience is fairly even. It favours neither the Applicant nor the Respondent. On this basis, I would have had to conclude, were I required to decide it, that the Applicant had not met the burden of demonstrating that the balance of convenience lies in its favour.
ORDER
THIS COURT ORDERS THAT the above application be dismissed with costs to the Respondent.
(signed) Michel Beaudry
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1234-02
STYLE OF CAUSE: COGNOS INCORPORATED and MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: August 15, 2002
REASONS FOR ORDER:THE HONOURABLE MR. JUSTICE BEAUDRY
DATED: August 16, 2002
APPEARANCES:
Mr. Martin Mason
Ms. Phuong Ngo FOR THE APPLICANT
Mr. David Attwater FOR THE RESPONDENT
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP
Ottawa, Ontario FOR THE APPLICANT
Lang Michener
Ottawa, Ontario FOR THE RESPONDENT