PUBLIC WORKS |
Monit International Inc. v. Canada
T-878-93
2004 FC 75, Beaudry J.
20/1/04
110 pp.
Public Works--Monit International Inc. claiming $106 million in damages from defendant--From 1974 to 1996, International Civil Aviation Organization (ICAO) tenant in plaintiff's building in Montréal--Monit alleging that in 1992, in course of negotiations to extend rental through short-term lease, two calls for tender made with view to signing long-term lease, representatives of Public Works Canada (PWC) breached duties to it of collaboration, information, equity, good faith, diligence, commercial fair play--In May 1992, PWC published call for tenders to execute long-term lease with lessor--Monit submitted offer-- PWC subsequently decided to cancel call for tenders, made second one in September 1992--Monit made second submission, which was rejected--Westcliff ultimately retained to construct building at 999 Université Street in Montréal-- ICAO's head office now located at that address-- On April 26, 2001, upon consent of parties, order made damages to be determined once liability established-- Defendant submitted awarding of contracts by Crown through calls for tenders pertains to public, administrative law, common law, case law applies--Plaintiff cited Madam Justice Thérèse Rousseau-Houle, Les contrats de construction en droit public et privé, Montréal, Wilson & Lafleur, 1982: "The provinces have exclusive jurisdiction over property and civil rights, and are thereby alone empowered to regulate contracts. Accordingly, any civil or administrative contract must be governed in Quebec by provincial private law. This provincial private law is undeniably indigenous to us: it is therefore law that must fundamentally govern contracts of Government."-- Courts have expressed reservations about importing common law principles where civil law provides rules--Defendant acknowledged principle of bona fide negotiation, thought it complied with principle in all transactions with Monit-- Analysis addressing three critical periods: (1) period preceding first call for tenders (period 1); (2) first call for tenders (period 2); and (3) second call for tenders (period 3)--Concerning period 1, Monit alleged defendant concealed documents from it--Therefore had to use Access to Information Act to obtain information needed to present evidence--Even at end of trial, still had not received all of requested documents to which entitled--Defendant cited privileges under Canada Evidence Act, ss. 37, 38 and 39--Plaintiff made no request to challenge Crown's privileges, immunity cited in regard to witness Paradis-- Defendant irreproachable on this point--Plaintiff then claiming not informed of Société du centre de conférences internationales de Montréal (SCCIM) activities, Cité internationale project until fall of 1991--Court found it curious company did not get wind of this before that time since, from 1989 on, there had been ample discussion of it in newspapers--Furthermore, recession raging in Montréal, vacancy rate in commercial buildings very high, SCCIM sizable project, probably biggest in Montréal in many years--ICAO Monit's largest tenant--Regarding Monit's intention to negotiate long-term lease, Court subscribed to argument negotiations must be conducted in good faith, informed by principles of loyalty and disclosure, not be broken off without cause--It must therefore determine whether PWC negotiated with plaintiff from May 1991 to issuing of first call for tenders--If not, principles of loyalty, disclosure, no interruption without cause do not apply--Court found PWC did not negotiate with Monit--Concerning request for 18-month renewal option at end of lease, Monit alleged swindle, conspiracy, dice loaded in advance, federal government had decided to house ICAO in Cité internationale --Court reached following conclusions: Monit not victim of swindling, conspiracy; not misled, adequately informed of situation by PWC; latter had no hidden agenda when it requested 18-month extension of lease; no promise made to Monit ICAO would remain in its building; renovations performed by Monit in normal course of landlord-tenant relations--Concerning first call for tenders, whether decision to reject Monit proposal consistent with specifications-- Decision erroneous--By choosing to exercise short-term extension and deciding to eliminate Monit proposal, PWC unilaterally changed rules of game, which conflicts with terms and conditions set out in specifications--Monit complied with call for tenders documents by submitting proposal for lease commencing in 1994--Regarding duty to negotiate with Monit, cases on calls for tenders prohibit negotiation with only one of bidders after opening of bids--Negotiating would have violated principle of equality among bidders--Even if PWC had authority to negotiate, it had no obligation to do so--Reserve clause gives it wide latitude--In May 1992, in memo to Mr. Noble (former director general, Department of Foreign Affairs), Mr. Miller (former project manager at PWC) described steps to follow in selecting best bid--After determining which one was best, negotiations were to be held --Miller was planning to negotiate after opening of bids-- However, four days before opening of bids, PWC received opinion from Department of Justice that this call for tenders was not call for proposals and there could be no negotiation-- In conclusion, PWC should have considered Monit proposal and entered into negotiations with it following its June 1992 bid--Defendant did not have to award contract to Monit, but latter lost opportunity to obtain contract--To conclude on period 2, whether Monit waived its rights resulting from first call for tenders by agreeing to participate in second call for tenders--No evidence showing clearly that Monit waived or wanted to waive rights--No express or implied indication of such waiver--Also, Monit, prior to filing bid on November 15, 1992, unaware of all relevant facts that might have enabled it to waive rights pursuant to first call for tenders --Concerning second call for tenders, Monit learned on March 24, 1993 proposal disqualified as failed to obtain 70% passing mark on technical level--PWC representatives met with Monit's representatives on September 29, 1992-- Purpose of meeting to ensure Monit clearly understood second set of specifications, to discuss first proposal and inform company of strong and weak points, finally to enable it to successfully complete technical phase--Monit not misled, PWC did not hold out prospect to it of free ride from first phase to second--On contrary, it was given serious warnings, particularly concerning criteria as to schedule, security-- Concerning questions and answers, requests for clarifications, plaintiff alleged criteria in each of categories unknown-- Furthermore, cancellation by Miller of requests for clarification discriminated against it--Requests for clarifica-tion crossed out by Miller had no significant impact on evaluation of Monit proposal--Although true criteria unknown, unknown to all bidders, not only to Monit--Monit, like other bidders, obtained from PWC information needed for adequate preparation of proposal--Public authority need not disclose evaluation criteria, weighting factors--Authority may add criteria unknown to bidders, so long as all bidders treated in same way--Plaintiff cited inexperience of evaluators --Work done without bias, prejudice, to best of ability, knowledge--Evaluators exercised judgment in comparing various proposals--At meeting of January 12, 1993, evaluators filed marks awarded to each of criteria in own sphere of activity--Main objective to determine final marks for each of proposals--Monit argued that because of obvious contradictions in testimony, PWC should not have added it to list of those who failed in categories of architecture, engineering, functionality--However, plaintiff's experts confirmed lack of discrimination, favouritism on part of evaluators--Concerning final aspect of period 3, proposal finally adopted, accepted, authorized by all decision- making bodies that of Westcliff on site on Université Street in Montréal--Plaintiff submitted that there was "arm-twisting" to persuade ICAO to move into Cité internationale where new building stands, Monit consequently treated unfairly-- Preponderance of evidence established Pierre Martin (former consultant with ICAO) had no bias against Monit --Conclusions: During periods preceding first call for tenders, first call for tenders, second call for tenders, government, representatives had duty of fairness, good faith or diligence to plaintiff--Government, representatives did not breach duty of fairness, good faith, diligence to plaintiff for first and third periods, but breached duty for second period-- In doing so, government incurred liability to plaintiff for second period--Neither defendant nor any of departments, representatives conspired to ensure ICAO would not remain in Monit building--During period preceding first call for tenders, defendant did not make misrepresentations to Monit concerning intentions in relation to long-term renewal of leases nor did she breach duty to act in good faith--Monit knew PWC would consider more than one option, consequently long-term renewal of leases not guaranteed in any way--During period of first call for tenders, Monit's proposal evaluated carefully, equitably, impartially by defendant, but latter should have considered Monit's proposal and initiated negotiations with it after finding proposal alone technically qualified--During period of second call for tenders, Monit's proposal evaluated carefully, equitably, impartially by defendant--During that period, defendant acted in accordance with duty of good faith toward everyone-- Access to Information Act, R.S.C., 1985, c. A-1--Canada Evidence Act, R.S.C., 1985, c. C-5, ss. 37 (as am. by S.C. 2001, c. 41, ss. 43, 140; 2002, c. 8, s. 183), 38 (as am. by S.C. 2001, c. 41, ss. 43, 141), 39.