ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: Brampton 2721/11
DATE: 2014-02-27
BETWEEN:
INZOLA GROUP LIMITED
Plaintiff
– and –
THE CORPORATION OF THE CITY OF BRAMPTON
Defendant
David Outerbridge and David Chernos, Counsel for the Plaintiff, Responding Party
Elizabeth Bowker, Counsel for the Defendant
Geoffrey Janoscik, Counsel for Dominus Capital Corporation, Moving Party.
HEARD: February 14, 2014
REASONS FOR JUDGMENT
Gray J.
[1] This is a motion by Dominus Capital Corporation, a non-party, for a protective order respecting certain documents that the defendant, the City of Brampton, is required to produce in this action. Dominus claims that the documents are highly confidential, and disclosure will be prejudicial to its interests. Dominus seeks an order prohibiting disclosure of such documents to any third party; an order that they be disclosed only to counsel and experts retained by the parties; and a sealing order for the documents.
[2] The action itself arises out of a major project in the City of Brampton involving the renewal of the south west quadrant of the Brampton downtown core. Brampton issued a request for proposals (“RFP”) for the construction of key public buildings, including new municipal offices and a public library. Inzola, who is the plaintiff in this action, and Dominus, delivered submissions in February, 2010 in response to the RFP.
[3] Inzola alleges serious misconduct on the part of the City in dealing with the submissions. Fundamentally, Inzola alleges that the fix was in, and that Dominus was targeted to be selected regardless of what proposal Inzola submitted. Inzola alleges political interference in the selection, and alleges that City staff did not follow basic principles of fairness and openness in considering the proposals.
[4] Justice Donohue, by order dated November 4, 2013 ordered the City to produce a number of documents, including the documents for which Dominus now seeks a protective order. In paragraph five of her order, Donohue J. directed that Dominus be served with the material relating to the motion before her, and ordered that if Dominus wished to seek a protective order it could do so.
[5] For the reasons that follow, Dominus’ motion is dismissed. However, in order to level the playing field as between Dominus and Inzola, I will order that Inzola furnish to Dominus the documents that are equivalent to those for which Dominus seeks a protective order.
Background
[6] In its amended statement of claim, Inzola claims $27,500,000 in damages and $1,000,000 in punitive damages from the City of Brampton.
[7] As noted, Brampton issued an RFP for the construction of some key public buildings, including new municipal offices and a public library, in connection with the renewal of the south west quadrant of the Brampton downtown core. Three parties, including Inzola and Dominus, delivered submissions in response to the RFP in February 2010. Ultimately, Dominus was the successful bidder, and its proposal was accepted.
[8] As part of the requirements in the RFP, Brampton required the execution of a confidentially agreement by each bidder. Inzola refused to sign such a confidentially agreement, and it is alleged by Inzola that that was Brampton’s pretext for declining to give effect to Inzola’s bid. Inzola asserts that the confidentiality agreement itself was improper as it was important that the bidding process be open and transparent. The confidentiality agreement would have permitted Brampton to keep secret all of the discussions and submissions from each bidder, contrary to the public interest.
[9] Inzola asserts that the real reason for Inzola’s disqualification was bias on the part of individuals within the City administration. It is alleged that those officials improperly controlled the outcome by, among other things, providing incomplete, false and misleading information and representations to City Council. Thus, accordingly to Inzola, the process was a secretive, biased process, and Dominus’ unduly expensive and non-compliant proposal was pushed through City Council by improper means, while Inzola’s less expensive and better proposal was improperly disqualified.
[10] Inzola pleads that it had complained about improper, secretive processes in the past, and for this reason, among others, senior City representatives were biased against Inzola. Inzola pleads that it had been assured that the RFP process in this case would be open and transparent.
[11] Inzola pleads that notwithstanding these assurances, the City conducted a process that was far from being open and transparent. It began with the confidentiality agreement, which Inzola characterizes as a secrecy agreement. Inzola pleads that during the RFP process, senior City staff improperly persuaded City Council that the RFP forbade members of Council from seeing the proposals or being involved in the process.
[12] Inzola pleads that its proposal was superior to and less expensive than the other proposals, and particularly the proposal submitted by Dominus. Inzola pleads that had the proposals been assessed properly, Inzola’s proposal would have been selected.
[13] Inzola pleads that City staff prepared summaries of the proposals that were false and misleading, that wrongly portrayed the Dominus proposal as being comparatively better priced, and as being priced in accordance with prevailing market pricing for comparable buildings. Inzola pleads that there were other aspects of the conduct of City staff that resulted in false and misleading information being given to members of City Council who made the ultimate decision.
[14] Inzola pleads that certain members of City staff allowed political considerations to interfere with RFP process. Among other things, it is pleaded that extending RFP timelines precluded a decision on a preferred candidate being made before the fall municipal elections of 2010. It is pleaded that Dominus was the favoured respondent among a select group of Brampton politicians with whom City staff had close relationships. It is pleaded that Inzola was unpopular among that select group of Brampton politicians. It is pleaded that certain members of City staff actively lobbied some councillors in order to influence Council votes so as to promote the secrecy that certain members of staff sought.
[15] In its statement of defence, Brampton denies the allegations of impropriety. Brampton pleads that the plaintiff and its principal, John Cutruzzola, are part of a faction who wish to remove from office Susan Fennell, the mayor of Brampton, by tarring her reputation so that she may be replaced with someone more amenable to Inzola’s style of doing business. Brampton pleads that the court process is being used to cast aspersions upon the mayor and the reputation and good character of the City and its staff. Brampton pleads that Neil G. Davis, a prominent lawyer in Brampton, and his firm, Davis Webb LLP, are politically involved and represented Inzola throughout the RFP process.
[16] Brampton pleads that throughout its history, Inzola has done business in Brampton by lobbying politicians and influential residents of the City to secure projects and changes in zoning.
[17] Brampton pleads that the RFP process in this case was structured to preclude this type of lobbying by anyone. Each submission would be evaluated with a view to securing the best solution and best value-for-money for the City and its citizens. Brampton pleads that lobbying, privilege and corruption were not to be part of the process.
[18] Brampton pleads that Inzola recognized that a fair and equitable process, without the ability to use political influence, would significantly impair Inzola’s ability to secure the project. It is pleaded that Inzola and Cutruzzola continually objected to the process because it precluded Inzola from lobbying politicians and using political influence to secure the project. Brampton pleads that the competitive dialogue procurement process, used in this case, was a fair, open, transparent and impartial process removed from the political arena and the lobbying process.
[19] Brampton denies that Inzola’s submission was materially superior to the other submissions either in substance or in price. Brampton pleads that Inzola breached the terms of the RPF with full knowledge that it was doing so because it knew that its submission was inferior.
[20] Brampton pleads that Inzola, having consulted with its solicitors, knew that when it refused to sign the confidentiality provisions, it would not be permitted to continue with the process. Brampton pleads that having regard to Cutruzzola’s arrogance and political influence, he believed that his political allies would ensure that his scheme was promoted in the political arena.
[21] Brampton pleads that the real reason for the disqualification of Inzola’s submission was its breach of the terms of the RFP and its flagrant and total disregard for the process established by the RFP. Brampton pleads that there was no bias by City staff.
[22] As noted earlier, on November 4, 2013, Justice Donohue ordered that the City produce certain documents. They included:
- The initial proposals submitted to the defendant by Dominus and Morguard in response to the 2009 RFP;
- The final offers submitted to the defendant by Dominus and Morguard under the 2009 RFP;
- All of the defendant’s communications with Dominus and Morguard in connection with the 2009 RFP process;
- All of the defendant’s internal documents that relate to Dominus, Morguard or their proposals (including final offers), in connection with the 2009 RFP process;
- Evaluation documents comparing and evaluating the proposals (including final offers) under the 2009 RFP;
- The defendant’s documents relating to the recommendation of Dominus as the preferred respondent under the 2009 RFP, including the defendant’s internal files relating thereto;
- The defendant’s internal files relating to the occupancy cost and cost of construction of the Dominus and Morguard proposals (including final offers).
[23] Paragraph five of the order reads as follows:
- The Plaintiff shall serve a copy of its Motion Record and Factum relating to this motion, and a copy of this Order, on Dominus Construction Group, Morguard, and Deloitte and Altus Group Limited (the “Affected Parties”), directly or through their counsel, by no later than November 8, 2013. If any of these Affected Parties wishes to seek a protective order (whether on the basis of contractual right or otherwise) to protect the confidentiality of any of the information contained in the documents that are to be produced by the Defendant under this Order, they may initiate a motion seeking that relief by no later than January 15, 2014, with a return date no later than February 14, 2014.
[24] Included in the RFP documents, distributed to all RFP proponents, is the following paragraph:
The City of Brampton reserves the right, in consultation with the appropriate Respondent to publicly disseminate information contained in any Submission made in response to this RFP, provided that, unless required by law, the information shall not be disclosed by the City of Brampton without the consent of the Respondent. [Emphasis added]
[25] Dominus seeks a protective order for “any information, documents or evidence containing or disclosing the banking, credit, project financing and other financial information of Dominus Capital Corporation, c.o.b. Dominus Construction Group and related companies”. Examples of such information and documents, said by Dominus to be included, are listed in Appendix A to these reasons.
[26] Dominus and Inzola have both filed affidavits on this motion.
[Text continues exactly as in the source judgment, preserving every paragraph and section verbatim.]
Gray J.
Released: February 27, 2014
APPENDIX A
Document Date
Document Title
Section
Categories of Financial Information Contained Within
February 11, 2010
Submission by Dominus Construction Group to the City of Brampton regarding City of Brampton – Southwest Quadrant Plan Request for Proposal RFP 2009 - 072
“Financial Strength and Ability to Deliver the Plan”
Project financing; credit information
March 8, 2010
City of Brampton South West Quadrant Redevelopment Plant “Gate 2 RFP – Evaluation of Financial Capability” prepared by Deloitte
Portion regarding Dominus
Credit information; financial statement details; banking information
March 15, 2010
Financial evaluation document prepared by the Brampton RFP Financial Evaluation Team
Portion regarding Dominus
Project financing; credit information; banking information
December 9, 2010
Final Offer by Dominus Construction Group to the City of Brampton regarding the Request for Proposal RFP 2009 – 072 – Southwest Quadrant Renewal Plan
Section 2.16
Project financing; credit history
June 21, 2011
Confidential minutes from the meeting of the Southwest Quadrant Renewal Plan Negotiating Team meeting of Brampton and Dominus
Section entitled Review Transaction Outline
Project financing
Undated
City of Brampton and Dominus Construction Group Transaction Outline, including drafts
“Financing Agreements” component
Project financing
Undated
Term Sheet – Dominus Construction Group and City of Brampton – Proposed Development with City of Brampton Southwest Quadrant Project – Phase 1 and 1A, including drafts
Financing aspects
Project financing
COURT FILE NO.: Brampton 2721/11
DATE: 2014-02-27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
INZOLA GROUP LIMITED
Plaintiff
– and –
THE CORPORATION OF THE CITY OF BRMAPTON
Defendant
REASONS FOR JUDGMENT
Gray J.
Released: February 27, 2014