Superior Court of Justice
COURT FILE NO.: CV-21-006643904-000
DATE: 20210929
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Sanscon Construction Ltd.
Applicant
– and –
City of Toronto
Respondent
COUNSEL:
Jonathan Frustaglio, for the Applicant
Michele A. Wright and Molly Lowson, for the Respondent
HEARD: June 28, 2021
REASONS FOR DECISION
VELLA J.
[1] This Application is brought by Sanscon Construction Ltd. (“Sanscon”) seeking various orders relating to its failed bid to obtain a construction contract from the City of Toronto (the “City”).
[2] At the hearing of this matter, consistent with its factum, Sanscon argued this matter by way of a judicial review application. In its first paragraph of its factum, Sanscon states that it “has commenced this Application for the judicial review of an administrative decision made by the Respondent, the City of Toronto”.
[3] By way of brief background, this matter arises out of the City’s decision to award a construction contract arising out of Ariba Doc. No. 2877856257, Tender 71-2021 (“RFT”) for the Bridge Rehabilitation, Road Reconstruction, Water Service Replacement, Cycle Tract Construction and Intersection Improvements on Cummer Avenue from Bayview Avenue to Leslie Street, Contract No. 21ECS-TI-02BE ((the “Project”, “Bid” and/or “Contract”).
[4] Sanscon was the lowest bidder.
[5] The City awarded the Contract to the second lowest bidder, Grascan Construction Ltd. and Torbridge Construction Ltd. (“Grascan”).
[6] Sanscon states that Grascan’s bid was non-compliant with the mandatory Bid requirements and was also mathematically and/or materially unbalanced. Furthermore, the City failed in its duty of procedural fairness and good faith when it assessed Sanscon’s Bid as compared with Grascan’s competing bid.
[7] The City submits that the RFT expressly permits the City to reject the lowest bidder. Furthermore, the City submits that it had an express contractual right to reject Sanscon’s Bid on the basis that it had mathematically and/or materially unbalanced terms.
[8] The City submits that this court lacks jurisdiction to hear this matter by way of judicial review, as I am not sitting as a judge of the Divisional Court, but urges that the Application be dismissed on its merits based on purely contractual principles.
Jurisdiction
[9] Sanscon’s factum does not seek leave of the court to hear this Application for judicial review under s. 6(2) of the Judicial Review Procedure Act, R.S.O. 1990, c.J.1 (“JRPA”), nor does it address the test for leave. In its factum, Sanscon relies on the standard of review of a decision of an administrative body that is set out by the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 reinforcing its premise that this Application is brought as a judicial review.
[10] This court declines to hear this matter by way of an application for judicial review, consistent with the Practice Direction for Divisional Court Proceedings for the Toronto Region. More specifically, and as noted in the endorsement of by Myers J. who presided over the scheduling of this Application at Civil Practice Court:
A proceeding to quash a governmental decision based on an unfair process or as unreasonable in fact or law is properly an application for judicial review. That would proceed on [sic] the Divisional Court. In Toronto, urgent applications for judicial review under s. 6(2) of the Judicial Review Procedure Act are heard by a single judge sitting on the Divisional Court as well. See s. 4 of the Consolidated Practice Direction for Divisional Court Proceedings, effective May 17, 2019.
[11] Myers J. scheduled the Application for June 28, 2021 on the basis that a damages claim for breach of contract lies with this court. In so doing, Myers J. declined to make an interim order to preserve the status quo. Myers J. was not satisfied that Sanscon would suffer irreparable harm if the subject project went ahead.
[12] However, inexplicably, Sanscon formulated its argument at the hearing before me entirely based in judicial review principles, and not breach of contract principles. The relief sought under its factum consists of an order in the nature of certiorari (declaring the City’s decision to be of no force and effect) or in the alternative an order of mandamus (quashing the City’s decision) or in the further alternative an order for prohibition (preventing the City from awarding the Contract to Sanscon’s competitor).
[13] Under s. 7 of the JRPA, an application for an order in the nature of mandamus, prohibition or certiorari “shall be deemed to be an Application for judicial review and shall be made, treated and disposed of as if it were an Application for judicial review”.
[14] Under s. 6(1) of the JRPA, an application for judicial review shall be made to the Divisional Court, subject to s. 6(2).
[15] Section 6(2) of the JRPA, in turn, provides that an application for judicial review may be made to the Superior Court of Justice with leave of a judge thereof, and may be granted at the hearing of the application, where it is made to appear to the judge that the case is one of urgency and that the delay required for an application to the Divisional Court is likely to involve a failure of justice. However, s. 4 of the Consolidated Practice Direction for Divisional Court Proceedings, effective May 17, 2019 (the “Consolidated Practice Direction”) directs that, in the Toronto Region, applications for urgent judicial review are to be brought in the Divisional Court for a hearing before a single judge of the Divisional Court, sitting as a judge of the Superior Court of Justice. Furthermore, the Notice of Application is to be filed with the Divisional Court.
[16] Sanscon’s Application was not brought before the Divisional Court, contrary to the Consolidated Practice Direction.
[17] Sanscon’s factum does not seek leave under s. 6(2) of the JRPA to have this matter heard, nor is it in the Notice of Application. It does not reference this court’s jurisdiction, or address why the Application was not brought before a single judge of the Divisional Court, sitting as a judge of the Superior Court of Justice.
[18] In any event, this matter is not urgent. The Contract has already been awarded and the City has authorized Grascan to take certain steps under the Contract by the date of the hearing of this application. There was nothing preventing Sanscon from commencing an Application for judicial review in the proper forum and seeking an urgent hearing.
[19] This is not a matter of mere formality. Judges of the Divisional Court have experience in dealing with Applications under s. 6(1) and 6(2) of the JRPA. This matter should have been started as an application for judicial review and brought before the Divisional Court.
[20] The City submits that while the court does not have jurisdiction to hear this matter by way of judicial review, the court should nonetheless make a finding on the merits of the Application. The City advances as one reason supporting its submission that the subject matter of the Application does not fall within the scope of a judicial review in any event, and relies, in part, on Wauzhushk First Nation v. Minister of Finance, 2019 ONSC 3491 and 2169205 Ontario Inc. o/a Lefroy Freshmart v. Liquor Control Board of Ontario, 2011 ONSC 1878.
[21] In Wauzhushk First Nation, the court held that the matter before it was not appropriate for judicial review because it involved the review of a policy decision of the Cabinet. This is not the situation here.
[22] In Lefroy Freshmart, the Divisional Court dismissed an application for judicial review of a decision of the Liquor Control Board of Ontario (“LCBO”) to award authorization to operate an agency store following a competitive procurement process based on the alleged unfairness of the procurement process and the unreasonableness of the decision. The Divisional Court found that in making the decision to award an agency store authorization, the LCBO had not exercised a statutory power of decision. Rather, it was a purely private commercial arrangement and accordingly to be dealt with in accordance with the principles of contract.
[23] However, in this case, the power to award the contract in question by the City’s Bid Award Panel appears to arise by operation of subsection 195-8.2 of the Toronto Municipal Code, Chapter 195 (the “Municipal Code”). The Municipal Code appears to set out mandatory substantive requirements governing any recommendation made by the Chief Procurement Officer’s recommendation. Accordingly, it is arguable that what is being challenged by Sanscon is the Bid Award Panel’s exercise of a statutory power of decision.
[24] There was limited argument on the characterization of the nature of the Bid Award Panel’s decision. This issue should have the benefit of full argument before the Divisional Court, should this matter proceed before it. Therefore, I am not ruling on it.
[25] The City also urges that as the evidence is before the court, and this court has jurisdiction under r. 14.05(3)(d) to hear this matter since it involves the determination of rights that depends upon contractual interpretation, it ought to rule on the merits of this matter, notwithstanding how the argument was framed at the hearing by Sanscon. The Notice of Application was originally brought under r. 14.05(3).
[26] The City submits that it is clear on the face of the RFT that it had the contractual right to reject the lowest bidder, and to consider the mathematical and/or material imbalance that was clearly present in the Bid in its decision to reject it. The City also states that the Bid was non-compliant with the mandatory Bid requirements. Sanscon admits that the Bid reflected material imbalances.
[27] In the circumstances, I decline to make a ruling on the merits of the Application based in contractual principles. The Application is fundamentally flawed as it was argued as a judicial review but not before the appropriate court and brought without leave. In my view, it would not be appropriate to render a ruling on the merits of the breach of contract matter in these circumstances.
[28] In my view it would not be in the interests of justice to dismiss the Application on the merits
Request for an interim or interlocutory injunction
[29] In light of my finding that this court declines jurisdiction to hear this matter by way of judicial review, this issue is moot.
Conclusion and Disposition
[30] Accordingly, this court declines to hear this matter by way of an urgent judicial review application under s. 6(2) of the JRPA and it should be brought before the Divisional Court in accordance with the Consolidated Practice Direction.
[31] The Application is dismissed on the basis that this Application has been brought in the wrong forum, without prejudice to the Applicant, Sanscon, to commence appropriate proceedings, and without prejudice to the City’s right to plead any defences, including any limitation period defences, subject only to the following paragraph.
[32] Neither party asked me to exercise my discretion under s. 6(3) of the JRPA to transfer this matter to the Divisional Court. Should the parties, or either of them, wish me to consider this, I invite brief written submissions on this discreet issue which must be received within 10 days from the release of these reasons. In the event I do not receive submissions on this issue within that time frame, then this disposition will be final, subject only to costs.
[33] In the event that Sanscon determines to bring this matter by way of a judicial review application in the proper forum, or by any other proceeding, it may be advisable that the parties rely on the same affidavits, and transcripts from cross examination (which can, on consent, be used as examinations for discovery). This would lead to a more efficient, expeditious and less expensive proceeding by minimizing duplication of time caused by the within Application.
[34] The parties should attempt to settle the issue of costs. However, if they cannot, then the City is to provide its Cost Outline within 20 days from the release of this decision, together with a brief written submissions, and Sanscon shall deliver its Costs Outline and brief written submissions within 10 days thereafter. The written submissions shall not exceed 3 pages double spaced in length. The cost outlines and submissions will be provided to my judicial assistant.
Vella, J.
Released: September 29, 2021
COURT FILE NO.: CV-21-006643904-000
DATE: 20210929
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Sanscon Construction Ltd.
Applicant
– and –
City of Toronto
Respondent
REASONS FOR JUDGMENT
Vella J.
Released: September 29, 2021