CITATION: Transdev Canada Inc. v. York (Municipality), 2023 ONSC 2355
OSHAWA DIVISIONAL COURT FILE NO.: DC-22-1335-00JR
DATE: 20230417
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Transdev Canada Inc.
Applicant
– and –
Regional Municipality of York
Respondent (Moving Party)
Peter Mantas, Gabrielle Cyr and Novera Khan, Counsel for the Applicant
Matthew P. Gottlieb, Rahool P. Agarwal and Philip Underwood, Counsel for the Respondent
Phuong Ngo, Counsel for the Intervenor, Miller Transit Ltd.
HEARD: In-Writing
REASONS FOR DECISION
CHARNEY J.:
Introduction
[1] On this motion, the Regional Municipality of York (York Region) seeks a limited permanent sealing order on consent over a subset of the record of proceedings which contains proprietary information submitted by two bidders during a competitive procurement process.
[2] The parties agree that a limited sealing order is necessary. They take the position that the information in question is commercially sensitive, and its release would cause significant prejudice to York Region and the bidders with respect to future procurement processes.
[3] This motion raises one issue: whether a limited permanent sealing order should be granted as to the specified documents.
Facts
[4] This motion relates to an application that arises out of a procurement process commenced by a request for proposal (the “RFP”) issued by the York Region on February 11, 2022. The RFP sought proposals to provide goods and services in respect of public transportation bus services in York Region’s new South-East Transit Division.
[5] The RFP established a process for the submission of proposals by proponents, and the evaluation of those proposals by York Region staff. Each proponent was required to submit two written proposals, one covering technical issues and operational plans and one covering financial issues and costing. The financial proposal was sealed and was not disclosed to the evaluators until the final stage of the evaluation process, after the evaluation of the technical proposal.
[6] The RFP closed in early May, 2022. Six proponents submitted proposals to York Region.
[7] Following the close of the RFP, York Region appointed five of its employees to serve as evaluators under the RFP. The evaluators were senior employees in the Region’s Transit, Procurement, and Finance departments.
[8] York Region’s evaluators provided scores to each of the proposals on the basis of criteria set out in the RFP. The consensus scores were then aggregated for each of the proposals. The proponents who received a total score of at least 60% on this portion of the evaluation were invited to take part in an interview with York Region’s evaluators. At the interviews, the evaluators scored and made additional comments regarding the proponents’ performance. These scores were again consolidated into a consensus figure for each proponent.
[9] The proponents who received a total of 60% on each of the technical proposal and interview scores progressed to the next stage of the process, which involved an assessment of their financial proposals, and in particular the proposed contract price. At this stage, proponents received points based on how close their proposed contract price was to that of the lowest proponent.
[10] The highest scoring proponent was Miller Transit Limited (“Miller”). Miller was subsequently awarded the contract.
[11] The second-highest scoring bidder, Transdev Canada Inc. (“Transdev”), commenced a judicial review application in late September 2022 seeking to challenge the award of the contract to Miller. Transdev took the position that Miller breached the terms of the solicitation of bids and should have been disqualified. Transdev sought a variety of remedies, among them an order requiring the Region of York to cancel and re-issue the applicable Request for Proposals.
[12] The application was heard on December 8, 2022 and dismissed by the Divisional Court in a decision released on January 11, 2023: Transdev Canada Inc. v. The Regional Municipality of York, 2023 ONSC 135. The Court concluded, at para. 65, that the decision taken by York Region “was reasonable, the process undertaken was fair, and the submission made by Miller compliant with the Request for Proposals”..
[13] The record of the procurement proceeding relevant to the application consists of six categories of documents, in roughly chronological order:
RFP Documents – the RFP itself, its schedules and appendices, and related documents;
Addenda – eleven contractual addenda to the RFP and attached documents;
Submissions – the proposals of Miller and Transdev as submitted to York Region;
Proposal Evaluations – materials relating to the evaluation and scoring process, including instructions to the evaluators and their score sheets;
Interviews – materials relating to the interview process, including interview questions, scoring criteria, scores, and comments; and
Reports and Council Documents – reports prepared by York Region and the external fairness monitor relating to the procurement process and minutes of Council and Committee meetings at which the process was discussed.
[14] The material in categories 1, 2 and 6 are largely matters of public record and have already been filed on a public basis with the Court.
[15] The materials in categories 3, 4 and 5 were the subject of a pre-application motion for an interim sealing order, which was heard by me on November 16, 2022. The parties did not want to include the documents in these categories as part of the public record because they were concerned that disclosure of these documents would seriously undermine the competitiveness and the fairness of a “re-tender” in the event that Transdev was successful in its application for judicial review. I granted an interim sealing order on November 21, 2022: Transdev Canada Inc. v. York (Municipality), 2022 ONSC 6531. The sealing order was an interim order on the basis that the panel hearing the judicial review would be in a better position to assess whether the sealing order should be made permanent:
[16] In the result, Transdev was unsuccessful in its application, and the RFP did not have to be redone. The panel issued the following order with respect to the sealing order, at para. 68:
The Sealing order is continued for two months following the issuance of these reasons subject to further Order by the Court. Should the parties seek to have the Order continued with respect to any of the documents that have been sealed, the parties are to advise the Court, in writing as to any agreement they have made or outline any area of disagreement. The court is to be so advised within six weeks of the issuance of these reasons. The court will advise counsel as to the need, if any, for further submissions and the forum in which they are to be made.
[17] Pursuant to this direction, the parties advised the Court that they sought a permanent sealing order with respect to certain documents.
[18] Given the difficulty in reconvening the same panel, I was assigned to hear the post-application motion for a sealing order, pursuant to s. 21(3) of the Courts of Justice Act, R.S.O. 1990, chap. C.43.
[19] On March 10, 2023, I temporarily continued the sealing order pending further order of the court, to provide the parties with an opportunity to make written submissions. I also granted Miller leave to participate in the motion as a friend of the court and to make written submissions.
[20] The parties have advised that, following the dismissal of Transdev’s application for judicial review and the period to seek leave to appeal from that decision, the parties are no longer concerned about a possible re-tender process, and York Region does not seek a permanent sealing order with respect to the documents in categories 4 and 5.
[21] This motion relates to a subset of materials from the confidential proposals of Miller and Transdev, described above in category 3 (the “Confidential Documents”). These documents include proprietary commercial information. The parties argue that the release of these documents would harm the interests of Miller and Transdev and could negatively affect future procurement processes.
[22] York Region has maintained the confidentiality of the Confidential Documents and has not disclosed them to any external party, except for Transdev’s external counsel, who agreed to receive them on a “counsel’s eyes only” basis and executed undertakings promising not to disclose those materials to anyone.
[23] A complete, unredacted copy of the record was also provided directly to the panel of the Divisional Court that heard the application. A redacted copy of the record excluding confidential information was also filed with the court.
[24] On March 31, 2023, York Region submitted a Notice of Request for Publication Ban in accordance with the Court’s practice direction. It has not received any inquiries from the press regarding the requested sealing order.
Analysis
[25] Section 137(2) of the Courts of Justice Act permits the Court to order that any document filed in a civil proceeding be treated as confidential, be sealed and that it not form part of the public record.
[26] The test to be applied by a court on a motion for a sealing order was set out by the Supreme Court in Sherman Estate v. Donovan, 2021 SCC 25 at para 38:
In order to succeed, the person asking a court to exercise discretion in a way that limits the open court presumption must establish that:
(1) court openness poses a serious risk to an important public interest;
(2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and
(3) as a matter of proportionality, the benefits of the order outweigh its negative effects.
Only where all three of these prerequisites have been met can a discretionary limit on openness — for example, a sealing order, a publication ban, an order excluding the public from a hearing, or a redaction order — properly be ordered.
[27] I will consider each of these factors in turn.
(i) Court openness poses a serious risk to an important public interest;
[28] The parties argue that this case involves sensitive and confidential commercial information, the disclosure of which could prejudice future procurement processes to the detriment of York Region, Miller, and Transdev.
[29] York Region has an interest in maintaining the confidentiality of its evaluation processes to protect the integrity of future public procurements. This means that the confidential information does have an important public interest component and is not just relevant to private commercial concerns.
[30] The proponents, Transdev and Miller, also have an interest in maintaining the confidentiality of their proposals to protect their proprietary information and to remain competitive in future procurements, both in York Region and elsewhere.
[31] The evidence submitted by York Region, Transdev and Miller clearly demonstrates that the Confidential Documents contain critical competitive information regarding the procurement process, including the complete proposals of the highest and second-highest scoring proponents with full details of their technical and financial plans. This includes commercially sensitive information such as unit price, cost estimates, cost breakdown and hourly rates. The Technical and Financial proposals contain institutional knowledge and trade secrets.
[32] A competitive procurement process can operate properly only if each proponent is motivated to submit its strongest proposal, without knowledge of the other proposals. If other proponents in future procurement processes know the details of the two highest-scoring proposals in this one, they will naturally be incentivized to tailor their own future submissions to that standard. This behaviour would deprive York Region of proponents’ best offers and likely result in worse terms for the Region in future procurements.
[33] Having their proposals disclosed would also impose a significant and unjustified disadvantage on Miller and Transdev with respect to future procurement processes. Competitors could use the proposals to replicate the proponents’ technical and financial expertise, details of which would otherwise not be known. This information would directly affect Miller’s and Transdev’s ability to participate on an even footing in future procurement processes.
[34] The plans submitted by each proponent were unique to each proponent. The way each proponent responded to the technical requirements in the RFP is critical to their ultimate performance. It would be impossible for York Region to fairly evaluate the various proposals if this information was known to competitors.
[35] Competitors in the industry could also access the pricing information in Miller and Transdev’s financial proposals, which would allow them to reverse engineer costs and margins, making it easy for them to adjust future proposals to undercut these bidders. This would be unfair to York Region and to Miller and Transdev.
[36] In City of Niagara Falls v. Ontario Lottery and Gaming Corporation, 2018 ONSC 205, Sweeny J. found that it was appropriate to issue a sealing order over a request for proposal issued by the OLGC. In making that order, he found, at para. 9:
[T]hat the need to preserve the confidentiality of the document arising in the context of a procurement process is in the public interest. I am prepared to accept that in the context of seeking appropriate bids, confidential information may be disclosed and that in order to ensure a fair process which results in appropriate bids, the confidential information needs to be protected.
[37] He accepted the OLG’s position that refusing to issue a sealing order would “seriously jeopardize the integrity of OLG’s procurement process”.
[38] I find that, in this case, releasing the Confidential Documents would prejudice future competition, jeopardize the integrity of future procurement processes, and unfairly harm Miller and Transdev. These are important issues which raise a public interest in confidentiality.
(ii) The order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk;
[39] The information contained in the Confidential Documents is highly sensitive and its release to any interested party could compromise the fairness of future procurement processes. The presence of the Confidential Documents in the public case file would allow other proponents to access and copy them.
[40] The parties are seeking a carefully tailored sealing order that is limited to a narrow category of documents. There is, in my view, no reasonable alternative to a sealing order to protect the confidentiality of the RFP materials at issue.
(iii) The benefits of the order outweigh its negative effects.
[41] I agree with the parties in this case that there is little, if any, public interest in publicizing the information in the Confidential Documents. The details of the technical and financial proposals are complex, technical, and of little or no interest to the public in general. The public will have access to all of the documents contained in the other five categories of documents.
[42] In Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, at paras. 78 and 87, the Iacobucci J. stated:
As well, it is important to remember that the confidentiality order would restrict access to a relatively small number of highly technical documents. The nature of these documents is such that the general public would be unlikely to understand their contents, and thus they would contribute little to the public interest in the search for truth in this case.
In my view, it is important that, although there is significant public interest in these proceedings, open access to the judicial review application would be only slightly impeded by the order sought. The narrow scope of the order coupled with the highly technical nature of the Confidential Documents significantly temper the deleterious effects the confidentiality order would have on the public interest in open courts.
[43] The same analysis applies to the present case. It is likely that the only persons who would be interested in the Confidential Documents to be sealed in this case are the competitors of Miller and Transdev, who would use them precisely for the purpose sought to be avoided by the parties to this motion. That could lead to a less-qualified proponent being selected or to York Region paying a higher contract price than it otherwise would have.
[44] Accordingly, I conclude that the benefits of issuing a permanent limited sealing order over the Confidential Documents outweighs its negative effects on court openness.
Conclusion
[45] Based on the foregoing, this Court Orders:
THIS COURT ORDERS THAT the sealing order originally made November 21, 2022 and continued January 11, 2023 and March 8, 2023 will be continued on a permanent basis with respect to the portions of the record designated “Confidential Information” by this Order.
THIS COURT ORDERS that the following information shall be designated “Confidential Information”:
a) The portions of the technical and financial proposals of Miller Transit Limited identified by redactions in the documents attached as Exhibits “A” and “B” to the affidavit of Dan Sguigna, sworn April 4, 2023; and
b) The portions of the technical and financial proposals of Transdev Canada Inc. identified by redactions in the documents attached as Exhibits “A” and “B” to the affidavit of Yusha Pirzada, sworn April 6, 2023.
- THIS COURT ORDERS that a copy of the Record of Proceedings in this matter with redactions covering the portions of the Record designated “Confidential Information” shall be filed with the Court.
Justice R.E. Charney
Released: April 17, 2023
CITATION: Transdev Canada Inc. v. York (Municipality), 2023 ONSC 2355
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Transdev Canada Inc.
Applicant
– and –
Regional Municipality of York
Respondent
REASONS FOR DECISION
Justice R.E. Charney
Released: April 17, 2023