Court of Appeal for Ontario

Date: 2018-01-30 Docket: C63678

Judges: Pepall, Hourigan and Brown JJ.A.

Between

Kaymar Rehabilitation Inc. Plaintiff (Appellant)

and

Champlain Community Care Access Centre, Cota Comprehensive Rehabilitation and Mental Health Services and Carefor Health & Community Services Defendant (Respondent in Appeal)

Counsel

Monica Song and Scott McLean, for the appellant

Joel Richler, Robin Linley and Brittiny Rabinovitch, for the respondent

Heard: January 23, 2018

On Appeal

On appeal from the judgment of Justice Julianne A. Parfett of the Superior Court of Justice, dated March 22, 2017, with reasons reported at 2017 ONSC 1843, and the cost judgment dated June 6, 2017, with reasons reported at 2017 ONSC 3504.

Reasons for Decision

A. Overview

[1] In late 2003, the respondent, Champlain Community Care Access Centre ("Champlain"), issued a request for proposals ("RFP") for the provision of physiotherapy, occupational therapy, and social work services (the "Therapy Services"). Champlain intended to split the work between two service providers.

[2] The RFP attracted four bidders, including the appellant, Kaymar Rehabilitation Inc. ("Kaymar"). In the result, Kaymar was not one of the two successful bidders.

[3] In 2005, Kaymar commenced this action against Champlain and the two successful bidders, Cota Comprehensive Rehabilitation and Mental Health Services ("COTA") and Carefor Health and Community Services ("Carefor"), formerly the Victorian Order of Nurses, Ottawa-Carleton Branch.

[4] In December 2010, Polowin J. dismissed Kaymar's action as against COTA and Carefor, following an eight-day summary judgment motion.

[5] Kaymar's action against Champlain proceeded to trial, which lasted 34 days, spread over 18 months (March, 2015 to September, 2016). By judgment dated March 22, 2017, Parfett J. dismissed Kaymar's action. By further judgment dated June 6, 2017, the trial judge awarded Champlain costs of $1,864,000.00, some of which were calculated on a substantial indemnity basis.

[6] Kaymar appeals the dismissal of its action against Champlain and seeks leave to appeal the cost award.

B. Appeal of the Dismissal of the Action

The Issue Stated

[7] At trial, Kaymar put in issue the entire 2003 RFP process: the validity of the RFP documents; their interpretation; the manner in which Champlain conducted the process; and the qualifications of Carefor to submit a bid. The essence of Kaymar's claim was that Champlain designed and administered the RFP process to unfairly favour Carefor.

[8] The scope of Kaymar's appeal is much narrower. Kaymar submits the trial judge made two reversible errors, which require setting aside her judgment: (i) the trial judge erred in interpreting the RFP documents in a way that entitled Champlain to expand the scope of a bidder's qualifying experience to include those who lacked experience in providing Therapy Services; and (ii) she erred in holding that Carefor submitted a compliant bid.

The RFP Documents

[9] Assessing Kaymar's grounds of appeal requires a brief description of the RFP documents and their terms.

[10] The RFP tender package consisted of the main RFP document, together with a set of schedules. Schedule A was called the "Data Sheet". The RFP documents used by Champlain were taken from templates prepared by the Ministry of Health ("MOH"), which were then modified by Champlain.

[11] The RFP called for bids to provide Therapy Services. There was no dispute that at the time Carefor had no previous experience in providing Therapy Services.

[12] The RFP required a bidder to submit its "financial and experience information in accordance with the RFP Data Sheet and Schedule C of this RFP to demonstrate that it has the required experience and financial position." Section 1.3 of Schedule C described the "General Experience" requirements for bidders:

1.3(1) On the applicable form set out in this Schedule, the Respondent shall provide evidence that the Respondent itself has been actively engaged in the services as described in the Data Sheet [in] a community setting or, if set out in the Data Sheet the required equivalent experience , for not less than the amount of time and during the period set out in the RFP Data Sheet.

(2) For the purpose of assessing experience for this RFP Process only, "services in a community setting" means services provided in such locations as homes, schools, the workplace and CCAC clinics but excludes services provided in an institutional setting such as hospitals and long-term care facilities.

(3) If the CCAC intends, for the purpose of this RFP Process, to consider services provided in hospitals, long-term care facilities or similar institutional settings as equivalent experience to "services in a community setting", this will be set out in the RFP Data Sheet. [Emphasis added]

[13] Champlain customized the "General Experience" portion of the Data Sheet to describe "experience equivalents" as follows:

4. Experience Equivalents

Three years delivering professional services in a community setting within the five years immediately prior to the Deadline for Submissions of Proposals. [Emphasis added]

[14] The RFP and its Schedules did not define "professional services." However, during the RFP process Champlain was asked by a bidder to define the term. Champlain responded:

Under the general experience requirement in the RFP Data Sheet, professional experience refers to experience providing health care services, in a community setting, through any of the recognized regulated health professionals in Ontario, other than physiotherapists, occupational therapists and social workers. For example, professional experience includes the provision of nursing or speech language pathology services in a community setting.

[15] There was no dispute that at the time it submitted its bid, Carefor was providing "professional services."

First Ground of Appeal

[16] The trial judge found that it was appropriate for Champlain to use, as "experience equivalents", experience in providing "professional services." As a result, she found that organizations, such as Carefor, with no prior experience providing Therapy Services were qualified under the terms of the RFP to submit bids. To the extent there were internal inconsistencies amongst some of the RFP's schedules because they referred only to Therapy Services and not to "professional services", the trial judge interpreted s. 2.2 of the RFP – which established the priority amongst the RFP documents – to give priority to information contained on the Data Sheet over that in the RFP and its other schedules. Consequently, any conflicting language in the other schedules was to be read in light of, and modified to conform to, the Data Sheet's stipulation that experience in "professional services" constituted "experience equivalents" qualifying a bidder to apply.

[17] Kaymar submits the trial judge's interpretation was unreasonable. It contends that s. 1.3(3) of Schedule C operated in priority to the Data Sheet, thereby restricting Champlain to only considering bids from applicants with experience in providing Therapy Services.

[18] We see no merit in this submission. The trial judge's interpretation was reasonable. Indeed, we agree with it. Section 2.2 of the RFP clearly gave priority to information contained in the Data Sheet over that in any other schedule. By its terms, s. 1.3(1) of Schedule C recognized that priority. It stated an applicant shall provide evidence that it had been "actively engaged in the services as described in the Data Sheet [in] a community setting or, if set out in the Data Sheet the required equivalent experience…" The "experience equivalents" section of the Data Sheet opened the door to bids from applicants that had experience in providing "professional services", even though they did not have experience in providing Therapy Services.

[19] Moreover, the tendering relationship is one defined by contract, what the Supreme Court of Canada described as "Contract A" in Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 806, at para. 76. As the trial judge properly concluded, at para. 109 of her reasons:

[T]he provision for experience equivalents was an express term of the 2003 therapies' RFP. Kaymar – and other bidders – could have chosen not to bid if they were not prepared to accept the terms of the RFP. By bidding, Kaymar effectively accepted that experience equivalents were a term of the RFP.

[20] Accordingly, the trial judge reasonably interpreted the RFP, the Data Sheet, and the other Schedules when she concluded they permitted bids by applicants who had experience in providing "professional services", but not Therapy Services. We therefore see no basis for appellate interference with her interpretation: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 50 to 52.

Second Ground of Appeal

[21] Kaymar submits the trial judge erred in failing to find that Carefor's bid was non-compliant because it did not provide actual data on its experience providing Therapy Services. Kaymar argues that it was a fundamental requirement of the RFP documents that bidders be experienced providers of Therapy Services.

[22] Champlain responds that Kaymar's submission must stand or fall with its position on the RFP's use of "professional services" as permissible "experience equivalents". If such use was permissible, then bidders were not limited to those with Therapy Services experience.

[23] We accept Champlain's submission. It follows logically from our earlier conclusion that the trial judge did not err in finding Champlain could broaden the "experience equivalents" in the RFP to encompass "professional services". Accordingly, we see no error in the trial judge's conclusion that organizations with no specific experience providing Therapy Services could apply.

Summary

[24] For the reasons set out above, we dismiss Kaymar's appeal from the trial judge's judgment dismissing its action against Champlain.

C. Costs Appeal

The Issue Stated

[25] Kaymar commenced this action in April 2005. The trial started in March 2015, following a decade of pre-trial litigation. The trial continued for 34 days over a period of 18 months, ending in September 2016.

[26] Champlain sought costs of $2,834,880.91 on a substantial indemnity basis. Kaymar argued that nothing in its litigation conduct merited an award of substantial indemnity costs. It contended that the partial indemnity costs of $1,547,313.00 shown on Champlain's bill of costs should be reduced for several reasons. The trial judge agreed with certain of the deductions proposed by Kaymar, but awarded Champlain "all-in" costs of $1,864,000.00, calculated on a partial indemnity basis up until the date of a May 2014 offer to settle by Champlain, and thereafter on a substantial indemnity basis.

[27] Kaymar seeks leave to appeal the cost award and, if leave is granted, a reduction of the award to $1,461,077.58.

Analysis

[28] At the hearing, Champlain's counsel candidly conceded that the trial judge's award of substantial indemnity costs was not supportable by the reasons she gave. In light of that concession, it is open to us to approach afresh what would constitute a fair and reasonable award of costs.

[29] Determining a fair and reasonable amount for the costs of an action following a trial requires a holistic consideration of the factors set out in rule 57.01(1), together with the history of the action. Kaymar's action spanned almost a decade. The trial lasted 34 days. It was hard-fought litigation, with Kaymar challenging the fairness of numerous aspects of the RFP process. In its Amended Statement of Claim, Kaymar levelled a very serious allegation that Champlain had "rigged" the process for evaluation of responses to the 2003 RFP to ensure Kaymar would be wholly unsuccessful. The trial judge rejected all of Kaymar's allegations that the RFP process was unfair.

[30] Given the length of the proceeding, the serious nature of the allegations, the complexity of the issues, the length of the trial, and Champlain's unqualified success at trial, we conclude that a fair and reasonable award of partial indemnity costs of the action to Champlain is $1,675,000.00, inclusive of disbursements and all applicable taxes.

D. Disposition

[31] For the reasons set out above, we dismiss Kaymar's appeal from the judgment dismissing its action. We grant Kaymar leave to appeal costs, set aside para. 1 of the costs judgment dated June 6, 2017, and substitute an order that Kaymar pay Champlain its costs of the action fixed at $1,675,000.00, inclusive of disbursements and all applicable taxes.

[32] Kaymar shall pay Champlain its costs of this appeal fixed at $35,000.00, inclusive of disbursements and all applicable taxes.

"S.E. Pepall J.A." "C.W. Hourigan J.A." "David Brown J.A."