ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-446070
DATE: 20121012
BETWEEN:
TRIBUTE RESOURCES INC.
Plaintiff
– and –
PARKS CANADA AGENCY, COASTAL HYDROPOWER CORPORATION, AND BAWITIK POWER CORPORATION
Defendants
Anna Husa , and Ian A. Blue, Q.C., for the Plaintiff
Joel Robichaud , Laura Tausky , for the Defendant, Parks Canada Agency
Ewa Krajewska , for the Defendant, Coastal Hydropower Corporation
Tom Barlow , for the Defendant, Bawitik Power Corporation
HEARD: September 27, 2012
J. WILSON J.
REASONS FOR JUDGMENT
Justice J. wilson
The motion
[ 1 ] The defendants, Parks Canada Agency (Parks Canada) and Coastal Hydropower Corporation (Coastal), bring this motion pursuant to rules 21.01(1) (b) and 21.01(3) (a) of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, for an order striking out the claim of Tribute Resources Inc. (Tribute) on two grounds. First, they contend that the this court has no jurisdiction over this action, as the Federal Court has the exclusive jurisdiction to grant the relief sought in an application for judicial review, pursuant to section 18.1 of the Federal Courts Act , R.S.C., 1985, c. F-7. Second, the defendants contend that the pleading does not disclose a reasonable cause of action.
Brief summary of the facts
[ 2 ] Tribute participated in a tender process initiated by Parks Canada pursuant to a Request for Proposals for work to be performed at Locks 24 and 25 of the Trent-Severn Waterway National Historic Site of Canada. Parks Canada seeks to develop hydroelectric power facilities at these two sites (the Project). Parks Canada has the role of overseeing the management of the design, the development, occupation, and operation of the Project.
[ 3 ] In the initial Request for Proposals, none of the bids from the four entities that made submissions qualified for acceptance. Parks Canada reinitiated the tender process in a second Request for Proposals, but limited participation to the four entities that originally submitted tenders for the Project. Ultimately, Coastal was the successful bidder and in time was awarded a Priority Permit.
[ 4 ] Tribute seeks damages from Parks Canada for costs thrown away associated with their participation in this tender process. Tribute contends that Parks Canada was negligent in conducting the tender process because an ultra vires term was included as a mandatory condition in all proposals made.
[ 5 ] The term in question was the “Return to the Crown Requirement” in paragraph 5.9 of the Request for Proposals. This term required any entity submitting a bid to make a proposal for the sharing of profits between the successful bidder, (which by the terms of the Request for Proposals is entitled to retain the revenues derived from the hydroelectric sites), and Parks Canada. The Return to the Crown Requirement mandated that each entity submitting a bid propose a formula for additional rental payments to the Crown over and above the amounts stipulated by section 30 of the Dominion Water Power Regulation, C.R.C., c. 1603 , (the DWPR).
[ 6 ] Tribute asserts that the Return to the Crown Requirement term was ultra vires of any powers conferred by the Dominion Water Power Act , R.S.C., 1985, c. W-4, the DWPR , or any legislation. Tribute alleges that the inclusion of this ultra vires term has rendered the entire tender process null and void. According to the statement of claim, “[t]his error of law unravelled and invalidated all subsequent steps taken by Parks Canada and Coastal after January 25, 2011”.
[ 7 ] The allegedly invalid subsequent steps are taken to include both the recommendation by the hearing officer in his report dated July 18, 2011, that the bid by Coastal should be accepted, and the decision of the Minister of Parks Canada, on October 20, 2011, to grant the Priority Permit to Coastal.
[ 8 ] Tribute seeks a declaration that the Return to Crown Requirement is ultra vires , a declaration that Coastal is not eligible for a Priority Permit, interim and permanent injunctions preventing Coastal from proceeding with the Project, as well as $400,000 in damages.
Section 18 of the Federal Courts Act
[ 9 ] Section 18(1) (a) of the Federal Courts Act stipulates that the Federal Court has exclusive original jurisdiction “to issue an injunction … or to grant declaratory relief, against any federal board commission or other tribunal” and section 18(3) states that these remedies “may be obtained only on an application for judicial review made under section 18.1 .”
Position of the parties
[ 10 ] Tribute asserts that Parks Canada was not acting as a “board, commission, or other tribunal” when the tender process was invoked, and therefore section 18(1) of the Federal Courts Act does not engage.
[ 11 ] Further, Tribute argues that the decision in Canada (Attorney General) v. TeleZone Inc. , 2010 SCC 62 , 3 S.C.R. 585 ( TeleZone) , creates a new regime to deal with public tenders, and allows a claim for damages to be advanced in the Superior Court.
[ 12 ] Counsel for Parks Canada and Coastal argue that Parks Canada clearly fell within the ambit of section 18(1) of the Federal Courts Act . Further, TeleZone can easily be distinguished from the present case. The defendants contend that Tribute is in substance improperly seeking judicial review of the tender process in this court. Adding a claim for monetary damages cannot override the exclusive jurisdiction of the Federal Court to determine the issues raised.
Was Parks Canada Acting as a Federal Board, Commission, or other Tribunal?
[ 13 ] Tribute’s argues that Parks Canada’s actions were of a private not a public character, and that issuing a Request for Proposals is a purely commercial activity not specifically authorized by any particular statute or order. For these reasons, Tribute argues that Parks Canada was not acting as a federal board, commission, or tribunal in this tender process and therefore, section 18(1) was not engaged.
[ 14 ] I disagree with these arguments.
[ 15 ] As TeleZone confirmed, at paragraph 3, the section 2 definition of a federal board, commission, or other tribunal is “sweeping”:
The definition of "federal board, commission or other tribunal" in the Act is sweeping. It means "any body, person or persons having, exercising or purporting to exercise jurisdiction or powers conferred by or under an Act of Parliament or by or under an order made pursuant to a prerogative of the Crown" (s. 2), with certain exceptions, not relevant here, e.g., decisions of Tax Court judges. The federal decision makers that are included run the gamut from the Prime Minister and major boards and agencies to the local border guard and customs official and everybody in between.
[ 16 ] A review of the scope and breath of the Request for Proposals document makes it clear that Parks Canada is acting as a board, commission, or tribunal in its role in the development and supervision of the Project, as well as in its role overseeing the tender process.
[ 17 ] In addition to compensation, Tribute seeks injunctive and declaratory relief.
[ 18 ] I note that the recent decision of Irving Shipbuilding Inc. v. Canada (Attorney General) , 2009 FCA 116 , [2010] 2 F.C.R. 488, at paragraphs 21 and 22 , confirms that the process of awarding contracts by tender process may be subject to judicial review:
The fact that the power of the Minister, a public official, to award the contract is statutory, and that this large contract for the maintenance and servicing of the Canadian Navy's submarines is a matter of public interest, indicate that it can be the subject of an application for judicial review under section 18.1 , a public law proceeding to challenge the exercise of public power.
[ 19 ] As Parks Canada was acting as a board, commission, or tribunal in this tender process and as the relief sought is listed in section 18(1) (a), I conclude that section 18(1) of the Federal Courts Act is engaged and that the Federal Court has exclusive jurisdiction over the subject matter in this action.
Impact of the TeleZone Decision
[ 20 ] Tribute argues that its claim discloses a reasonable private cause of action for damages that is similar to the claim in TeleZone. Parks Canada and Coastal argue that TeleZone can be easily distinguished from the facts of this case as Tribute seeks injunctive and declaratory relief and attacks the administrative decision made.
[ 21 ] I conclude that Tribute has misinterpreted the intended scope of TeleZone .
[ 22 ] TeleZone confirms, at paragraph 81, that a claim of damages, standing alone, arising from a government decision to award telecommunication licenses may be brought in the Superior Court. It states, at paragraph 46, that when a claim for damages is advanced, the Superior Court and the Federal Court have concurrent jurisdiction. It also states, at paragraph 23, that proceeding by way of judicial review is not a necessary preliminary step to recover damages from the Crown in every case if the administrative decision in question was not being challenged.
[ 23 ] However, the Court confirms, in paragraph 80, that TeleZone ’s claim was “dominated by private law considerations”. In this case, the private law claim for damages appears as a tag on to the injunctive and declaratory relief claimed. Counsel concedes that without a declaration that the Return to Crown Requirement in the Request for Proposals was ultra vires , Tribute cannot successfully advance its claim for damages. The core preliminary question is one of judicial review.
[ 24 ] Further the Court concluded, in paragraph 79, that the absence of an attack in TeleZone on the administrative decision is relevant to determining whether a claim for damages in the Superior Court can be advanced:
TeleZone is not attempting to nullify or set aside the Minister's order. Its case is that the Minister, in deciding not to issue a licence to TeleZone , acted in breach of his contractual and equitable duties or in breach of a duty of care. TeleZone does not say that the Minister's decision should be quashed. On the contrary, TeleZone 's causes of action in contract, tort and equity are predicated on the finality of that decision excluding TeleZone from participation in the telecommunications market, thereby (it says) causing it financial loss. Nor does TeleZone seek to deprive the Minister's decision of any legal effect. It does not challenge the licences issued to its competitors. It does not seek to undo what was done. It complains about what was not done, namely fulfilment by Industry Canada of its alleged contractual and equitable duties and its duty of care towards TeleZone itself.
[ 25 ] By way of contrast, I conclude that Tribute is challenging the administrative decisions made. By arguing that all steps taken after the circulation of the Request for Proposals are a nullity, Tribute is challenging steps taken. Unlike TeleZone , Tribute is seeking to undo what has been done. If successful, the relief sought by Tribute would have the effect of halting the Project and requiring the parties to recommence the tender process. There is no merit to Tribute’s suggestion that it is not attacking the decisions of the hearing officer and Minister per se and that the Court only needs to rule on vires to determine entitlement to damages.
[ 26 ] Tribute seeks injunctive and declaratory relief, which are precisely the forms of relief the court in TeleZone , at paragraph 52, confirmed were within the exclusive jurisdiction of the Federal Court:
All of the remedies listed in s. 18(1) ( a ) are traditional administrative law remedies, including the four prerogative writs - certiorari , prohibition, mandamus and quo warranto - and declaratory and injunctive relief in the administrative law context. Section 18 does not include an award of damages. If a claimant seeks compensation, he or she cannot get it on judicial review. By the same token, the plaintiff in a damages action is not entitled to add a supplementary claim for a declaration or injunction to prevent the government from acting on a decision said to be tainted by illegality. That is the domain of the Federal Court.
[ 27 ] I conclude that the matters raised by Tribute, considered in their entiret y, a re matters that are within the exclusive jurisdiction of the Federal Court.
[ 28 ] Although not specifically argued by counsel, I refer to paragraph 78 of TeleZone, which confirms that the superior court has inherent residual jurisdiction to stay the claim for damages if the essential character of the claim is one of judicial review:
There is always a residual discretion in the inherent jurisdiction of the provincial superior court … to stay the damages claim because in its essential character, it is a claim for judicial review with only a thin pretence to a private wrong. Generally speaking the fundamental issue will always be whether the claimant has pleaded a reasonable private cause of action for damages. If so, he or she should generally be allowed to get on with it.
[ 29 ] In the alternative, if matters raised in this case are not squarely within the exclusive jurisdiction of the Federal Court, I would exercise my inherent jurisdiction to stay this proceeding and defer to the Federal Court.
Conclusions
[ 30 ] The plaintiff’s claim is therefore struck as this court does not have jurisdiction to determine the threshold question of whether the Return to the Crown Requirements was ultra vires . In light of this conclusion, it is not appropriate to deal with the other issue raised by the applicants, as to whether Tribute’s claim fails to disclose a reasonable cause of action.
Costs
[ 31 ] At the conclusion of the argument, counsel made submissions as to costs, and each party submitted a costs outline: Parks Canada sought costs in the total amount of $18,686.16; Coastal sought costs in the amount of $15,195.68; and Tribute sought costs in the amount of $8426.15.
[ 32 ] This was a two hour motion involving narrow issues. I consider the principles outlined in Rule 57 of the Rules of Civil Procedure , and in particular, the reasonable expectation of the award of costs payable by the losing party. I award costs payable by Tribute to each of Parks Canada and Coastal in the amount of $8,400 inclusive of HST, (for a total award of $16,800).
J. Wilson J.
Released: October 12, 2012
COURT FILE NO.: CV-12-446070
DATE: 20121012
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
TRIBUTE RESOURCES INC. Plaintiff – and – PARKS CANADA AGENCY, COASTAL HYDROPOWER CORPORATION, AND BAWITIK POWER CORPORATION Defendants
REASONS FOR JUDGMENT
J. Wilson J.
Released: October 12 , 2012