Court File and Parties

CITATION: K-Bro Linen Systems Inc. v. Ontario (Information and Privacy Commissioner), 2022 ONSC 3572

DIVISIONAL COURT FILE NO.: DC-077/21 and DC-079/21

DATE: 20220615

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: K-Bro Linen Systems Inc.

Applicant

AND

Ontario (Information and Privacy Commissioner) and William Osler Health System – Brampton Campus and Jane Doe (Requestor)

Respondents

BEFORE: Pomerance, Kurke, and Davies JJ.

COUNSEL: M. Huberman, for the Applicant

L. Chen, for the Respondent Information and Privacy Commissioner of Ontario

M. Reynolds and C. Hunter, for the Requestor Jane Doe

HEARD virtually at Toronto: June 8, 2022

Endorsement

[1] At the commencement of the hearing, the parties jointly requested that judicial review application DC-079/21 be dismissed without costs. These reasons, therefore, deal only with judicial review application DC-077/21. At the conclusion of the hearing, we dismissed the application with reasons to follow. These are our reasons.

[2] William Osler Health System (“the Hospital”) contracted K-Bro Linen Systems Inc. to provide linen and laundry services at its various facilities. Jane Doe made a request under the Freedom of Information and Protection of Privacy Act, R.S.O. 1990 (“FIPPA”) for a copy of the Hospital’s linen services contracts since 2016. The Hospital granted partial access to the records requested.

[3] Jane Doe and K-Bro both appealed the Hospital’s decision to the Information and Privacy Commissioner (“IPC”). K-Bro argued that the records or portions of the records contain third party information that is exempt from disclosure. Section 17(1) of FIPPA limits the general right to access records in the possession of a public institution, including hospitals, if the record contains certain types of sensitive information:

17 (1) A head shall refuse to disclose a record that reveals a trade secret or scientific, technical, commercial, financial or labour relations information, supplied in confidence implicitly or explicitly, where the disclosure could reasonably be expected to,

(a) prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization;

(b) result in similar information no longer being supplied to the institution where it is in the public interest that similar information continue to be so supplied;

(c) result in undue loss or gain to any person, group, committee or financial institution or agency; or

(d) reveal information supplied to or the report of a conciliation officer, mediator, labour relations officer or other person appointed to resolve a labour relations dispute.

[4] On its appeal to the IPC, K-Bro argued that the records in question contained financial and commercial information that it had supplied to the Hospital in confidence during the bid process. K-Bro also argued that the disclosure of that information would significantly prejudice its competitive position.

[5] The IPC Adjudicator ordered the Hospital to disclose a copy of a linen services contract and a memorandum summarizing the terms of the contract. The Adjudicator agreed with K-Bro that the contract and memorandum contain financial information about the cost of providing linen services to the Hospital. However, the Adjudicator found that the financial information was not supplied to the Hospital by K-Bro in confidence. The Adjudicator, therefore, found that the contract and the memorandum were not exempt from disclosure under s. 17(1)(a) of FIPPA.

[6] K-Bro now seeks judicial review of the Adjudicator’s decision.

[7] The parties agree that the standard of review is reasonableness. In other words, we must decide whether the Adjudicator’s decision is internally coherent, rationally reasoned, and consistent with the applicable facts and law: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at para. 85.

[8] K-Bro argues that the Adjudicator’s conclusion that it did not supply financial information in confidence to the Hospital is unreasonable. K-Bro argues the Adjudicator erred in her interpretation of the phrase “supplied in confidence” in s. 17(1) of FIPPA. K-Bro also argues that the Adjudicator failed to consider relevant evidence. Finally, K-Bro argues that the Adjudicator made inconsistent or inaccurate factual findings on the issue of whether K-Bro supplied information in confidence to the Hospital.

[9] We do not accept these arguments and dismiss the review for the following reasons.

[10] K-Bro acknowledged that the Adjudicator correctly stated the three-part test for exempting records from disclosure under s. 17(1)(a) of FIPPA. She correctly held that for the exemption in s. 17(1)(a) to apply, K-Bro had the onus of proving the following:

a. the record contains information that is a trade secret or scientific, technical, commercial, financial or labour relations information; and

b. the information was supplied to the institution in confidence, either implicitly or explicitly; and

c. the disclosure of the information could reasonably be expected to significantly prejudice K-Bro’s competitive position.

[11] K-Bro argues that the Adjudicator’s conclusion that the information was not supplied to the Hospital in confidence is inconsistent with the existing jurisprudence and is internally inconsistent. We disagree.

[12] There are several decisions from the IPC and this Court dealing with what it means for information to be “supplied in confidence” during contract negotiations. This Court has found that the content of a negotiated contract will not ordinarily be considered information “supplied” in confidence by a party to the contract: Boeing Co. v. Ontario (Ministry of Economic Development and Trade), Miller Transit Limited v. Information and Privacy Commissioner of Ontario, 2013 ONSC 7139. This is true even if there was little negotiation over the contract or where the contract substantially reflects a proposal made by a party to the final contract. For example, in Boeing Co. v. Ontario (Ministry of Economic Development and Trade) at para. 18, the Court wrote:

The Commissioner has consistently found that information in a contract is typically the product of a negotiation process between the parties and that the content of a negotiated contract involving a governmental institution and another party will not normally qualify as having been “supplied”. Even where the contract is preceded by limited negotiation, or where the final agreement substantially reflects information that originated from a single party, the Commissioner has concluded that the information was not supplied (for example, IPC Order MO-1706, pp. 9-10; IPC Order P-1545 at pp. 9-10).

[13] In Miller Transit, the Court held (at para. 27) that absent evidence to the contrary, the content of a negotiated contract involving a government institution and a third party is presumed to have been generated in the give and take of negotiations, not "supplied" by the third party. The onus was on K-Bro to rebut the presumption that the information in its service contract is not covered by the exemption in s. 17(1): Miller Transit, at para. 31.

[14] K-Bro argues there was evidence to rebut the presumption that the content of its contract with the Hospital was generated through negotiations, which the Adjudicator ignored. K-Bro points to the affidavit from the President of K-Bro in which she states as follows:

All of the Information at issue as it is defined in the submissions of [K-Bro] in the agreements that constitute the Records in all of the appeals was supplied in confidence by K-Bro to the other party (the institution) to the agreement. [emphasis in original]

[15] K-Bro also points to the fact that there were no back-and-forth negotiations with the Hospital about the terms of the contract. The Hospital simply accepted the proposal submitted by K-Bro in response to the request for proposals. In her affidavit, K-Bro’s President states as follows:

K-Bro submitted a response to the RFP. K-Bro’s response was accepted by the institution – at no time did K-Bro enter into any negotiations with the respective hospitals. K-Bro’s RFP responses were accepted “as is”; that is, as they were provided by K-Bro to the hospitals in conformance with the tendering process.

[16] K-Bro argued that these facts distinguish its case from the Boeing Co. and Miller Transit. K-Bro noted that in Boeing Co., the record in issue was a complex, multi-party purchase agreement that the Adjudicator concluded was arrived at through the “typical back-and-forth, give-and-take process of negotiation.” In Miller Transit, the record in question was a contract for the provision of bus services in York Region. The Court found that the information in the record was “mutually generated” information created through the process of negotiation. The Court upheld the Adjudicator’s decision that the information in the contract was not exempt from disclosure because it was generated through the negotiation process and was, therefore, not supplied in confidence:

The IPC adjudicator’s approach in this case was consistent with the approach taken in other cases interpreting the same provision of FIPPA. Those cases have held that, absent evidence to the contrary, the content of a negotiated contract involving a government institution and a third party is presumed to have been generated in the give and take of negotiations and not “supplied” by the third party.

[17] K-Bro argues the Arbitrator ignored the evidence that the content of the contract was not the result of negotiations and, therefore, was supplied by K-Bro in confidence to the Hospital. We disagree. The Adjudicator set out in detail the facts that K-Bro says set this case apart from Boeing and Miller. The Adjudicator also considered K-Bro’s argument that because there was no public procurement process and because their response to the RFP was accepted the terms of its contract were not the product of negotiations.

[18] In the end, the Adjudicator made a factual finding that the contract was the product of negotiations between K-Bro and the Hospital even though there was no procurement process and little back-and-forth between the parties. The decision about whether a contract was the product of negotiations is a fact-specific inquiry. Contrary to K-Bro’s submissions, lengthy discussions between multiple parties over complex issues are not necessary to find that a contract was the product of negotiations. It was open to the Adjudicator to find that the RPF process constitutes a form of negotiation, albeit a limited one.

[19] The Hospital’s RFP was the first step in the negotiation process. The provision of a bid in response was the next step. K-Bro provided the Hospital with several options to choose from. When K-Bro provided its bid to the Hospital, it was hoping the Hospital would pick one of the options presented. K-Bro provided the information to the Hospital knowing some of it might find its way into a negotiated contract, which would not be protected from public disclosure. It was open to the Adjudicator to find that the information in the final contract was mutually generated through the RFP process and, therefore, not supplied to the Hospital in confidence. The Adjudicator only ordered the disclosure of the terms of the contract and the memorandum that summarized the contract. The Adjudicator found that information about the three options presented by K-Bro that were not incorporated into the contract was exempt from disclosure. This ruling is rational, internally coherent and consistent with existing jurisprudence.

[20] The Adjudicator also found that even if the contract was not the product of negotiations, it would still not be protected under s. 17(1)(a):

In any event, I agree with the requester’s submission that many previous orders of the IPC have determined that contracts resulting from a bidder’s proposal in an RFP process are considered negotiated and not “supplied”, even if the information in the contract was “simply directly copied from the proposal.”

[21] This finding is also reasonable. It is consistent with this Court’s decisions dealing with the interpretation of s. 17(1) of FIPPA. It is also consistent with other IPC decisions which have found that the acceptance or rejection of a bid in response to an RFP is a form of negotiations and that information supplied in a bid, once accepted and part of a contract, does not meet the definition of having been “supplied in confidence” to the institution: see, for example, IPC Order PO-2435.

[22] Finally, K-Bro argues that the adjudicator’s decision is unreasonable because it is internally inconsistent. K-Bro argues that the adjudicator made inconsistent findings about the pricing information and one other specific term in the service contract. The Adjudicator found those two pieces of information were not “supplied in confidence” in the context of the service contract and memo. The Adjudicator found that the same information was supplied in confidence in the context of another record. K-Bro argued that the same information cannot be “supplied in confidence” when it appears in one document and but not been “supplied in confidence” when it appears in a different document. We disagree.

[23] The decision about whether a piece of information was “supplied in confidence” is necessary context specific. A piece of information could be provided to a government institution in circumstances where it was expected to be held in confidence. The same piece of information can be provided to a government institution in an entirely different context, including contract negotiations, where its confidentiality could not reasonably be expected. For example, this Court has distinguished between information given to a government institution as part of a regulatory process, which has been found to have been “supplied in confidence” and therefore exempt from disclosure, and information that finds its way into a government contract, which is not exempt: Miller Transit at para. 30.

[24] K-Bro argues that the Adjudicator’s decision creates an absurd result because it interprets the word “supplied” in a manner that is inconsistent with its ordinary meaning. The issue under s. 17(1) is not merely whether the information was supplied or given to the institution by the third party. The question is whether the information is supplied in confidence. In all contract negotiations, the parties will give information to each other to inform the terms of the contract. For the purpose of s. 17(1) the question is whether the information was supplied in confidence. And this Court has repeatedly found that when information is included in the final terms of a contract, it is not going to be considered to have been supplied in confidence to the institution. This interpretation is not absurd. It is consistent with the purpose of the FIPPA, which is to provide a right of access to information under the control of institutions to the extent possible while also protecting individual privacy: FIPPA, s. 1.

[25] The Adjudicator articulated a rational basis for finding that the information in the service contract and memorandum are not protected by s. 17(1)(b) of FIPPA. Her decision is internally consistent. The fact that K-Bro’s President states that the information in the contract was supplied to the Hospital in confidence is not determinative. Nor is her statement that there were no negotiations between K-Bro and the Hospital. It may be that K-Bro’s President believed its response to the RFP was being provided in confidence. That belief does not, however, decide the legal issue. It may also be that K-Bro did not consider the process by which the contract was agreed to as a negotiation. Even if the Adjudicator accepted the President’s evidence on these points, it was open to the Adjudicator to find, as she did, that the contract was negotiated and the information in the contract was not “supplied in confidence” to the Hospital as that phrase has been interpreted by the IPC and by this Court. The Arbitrator applied the relevant law and concluded that the facts in this case do not support K-Bro’s argument that its contract with the Hospital was not negotiated.

[26] The Arbitrator’s decision was reasonable and the application is dismissed.

[27] On prior agreement of counsel, the applicant shall pay costs to the respondent, Jane Doe, in the amount of $7,500 all inclusive.

R.M. Pomerance J.

A.D. Kurke J.

B. Davies J.

Date: June 15, 2022