Simon's Megalomaniacal Legal Resources

Judicial Review - Public v Private (6)

. Thales DIS Canada Inc. v. Ontario (Transportation) [Air Canada]

In Thales DIS Canada Inc. v. Ontario (Transportation) (Ont CA, 2023) the Court of Appeal considered the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), here in the course of a successful Crown appeal of a JR finding that the bidding requirements were in violation of CETA. In these quotes the court considered the JR 'justiciability' of the case, which was particularly influenced by the availability of an administrative internal review process:

E. THE REVIEWABILITY OF THE REQUESTS FOR BIDS

[119] Ontario argues that the Divisional Court erred in holding that the request for bids was unreasonable. In making this argument, Ontario submits that the issuance of a request for bids is not generally subject to judicial review.

[120] I agree with Ontario that the Divisional Court erred in this case in finding that the request for bids was subject to judicial review on its own apart from the Decision. However, I arrive at this conclusion through a different route than proposed by Ontario.

[121] I deal first with Ontario’s argument, followed by a discussion of how I would address the issue of the reviewability of the request for bids in this case.

(1) There is no general authority that a request for bids should not be subject to judicial review

[122] Ontario relies on the decision in Wauzhushk Onigum Nation v. Minister of Finance (Ontario), 2019 ONSC 3491 (Div. Ct.), to argue that the terms of the request for bids is not subject to judicial review. However, Wauzhushk does not stand for that proposition. In Wauzhushk, the applicant sought to challenge a Cabinet decision directing the Ontario Minister of Finance to seek to increase revenues from land-based gaming. As part of this decision, Cabinet directed the Minister of Finance to shift operations of its gaming sites to private operators through a competitive procurement process. The Divisional Court held that the directive was not justiciable because it was a policy decision of Cabinet. The Divisional Court further held that the manner in which the Ontario Lottery and Gaming Corporation, a Crown corporation, chose to seek bids was not subject to judicial review because it was a commercial matter and not a matter of public law. It was in that context that the Divisional Court stated that “[t]o date, a public tender process has not been subject to public law remedies in Ontario”: at para. 108.

[123] In making this statement, the Divisional Court relied on this court’s decision in Bot Construction Limited v. Ontario (Minister of Transportation), 2009 ONCA 879, 85 C.L.R. (3d) 25. There, the court considered an appeal from a decision of the Divisional Court that had found the rejection of a bid as non-compliant to be unreasonable. This court reversed that conclusion, finding that MTO’s decision in that context was reasonable. However, in the course of the reasons, the court specified that it came to that conclusion “without expressing any view as to the availability of judicial review as a remedy with respect to the tendering process for government procurement contracts”: at para. 19. In other words, there is no definitive authority from this court on the issue of whether a tendering process can or cannot be subject to judicial review.

[124] However, as discussed below, this is not an appropriate case in which to decide the general issue of whether a request for bids can be subject to judicial review. The issue in this case should be decided based on its specific circumstances.

(2) The request for bids is not subject to judicial review because it first went through the Ontario Government’s bid dispute process

[125] In this case, the issue of whether the request for bids is subject to judicial review must be considered in the context of Ontario’s obligations to establish a dispute resolution process under the CETA. Given that the CETA foresees that the participant countries and their sub-governments must establish a review process, the ability to judicially review the request for bids must be considered in the context of that process.

[126] The majority of the Divisional Court reasoned that the request for bids was subject to judicial review because it raised matters of public law. In arriving at this conclusion, the court relied on the decision in Air Canada v. Toronto Port Authority, 2011 FCA 347, [2013] 3 F.C.R. 605. The court based its decision on the various factors to which Air Canada referred at para. 60 to conclude that the request for bids had a sufficiently public character to warrant subjecting it to judicial review.

[127] However, in approaching the issue from this perspective, the majority failed to consider the impact of the review process on the issue of whether the Divisional Court should exercise its discretion to review the request for bids on its own, and separate from the review of the Decision.

[128] In this respect, I agree with the concurring judge who stated that, if Ontario established a CETA compliant process for addressing complaints about a request for bids, the request for bids itself should not separately be subject to judicial review:

I disagree with my colleague’s approach because of what it could signal for future cases. If Ontario establishes a CETA-compliant dispute resolution process – as it is obliged to do under CETA – then this court should, in future [cases], respect the process established by Ontario. This would ordinarily foreclose this court from taking original jurisdiction to review an RFB, and instead, this court would leave it to the decisionmaker assigned this task by Ontario in a CETA-compliant process. Or, in other words, faced with an unreasonable decision from a lawful decisionmaker, we would send the issue back.

[129] Indeed, as a general principle, if an administrative process is set up for dealing with an issue, what is typically referred to as an adequate alternative remedy, the parties should first participate in that process before seeking judicial review: Canada (Border Services Agency) v. C.B. Powell Limited, 2010 FCA 61, [2011] 2 F.C.R. 332, at paras. 31-32; Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, 111 O.R. (3d) 561, at paras. 68-69. The reviewing court then has the benefit of the administrative decision makers’ reasons and expertise. If the parties have participated in the administrative process, there is no basis for ignoring the administrative decision and separately reviewing the request for bids afresh. That is not the role of the court on an application for judicial review.[130] Of course, if the original decision maker did not have jurisdiction to review the request for bids, this may be a different issue. However, in this case, with respect, I disagree with the concurring judge’s conclusion that Ontario failed to establish a CETA compliant review process.

. A-1 Credit Recovery v. Ministry of Finance [Air Canada]

In A-1 Credit Recovery v. Ministry of Finance (Div Court, 2023) the Divisional Court considered (and dismissed) a JR against a decision by two Ontario Ministries to disqualify the applicant from an 'RFB' (request for bid) process.

These quotes set out the court's reasoning on the key JR public-private distinction (citing the leading Air Canada case) that it eventually dismissed the application on:

Is the Decision by the Ministries Reviewable?

[21] The Ministries take the position that the Decision is not subject to judicial review because it is a contractual decision and therefore private in nature, as opposed to the exercise by a public body of “a power central to the administrative mandate given to it by Parliament”: Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall, 2018 SCC 26, [2018] 1 S.C.R. 750, at para. 14; Khorsand v. Toronto Police Services Board, 2023 ONSC 1270 (Div. Ct.), at para. 37.

[22] Courts have traditionally considered the process of awarding government contracts for goods and services to be a commercial matter governed by private law: 2169205 Ontario Inc. o/a Lefroy Freshmart v. Liquor Control Board of Ontario, 2011 ONSC 1878, 278 O.A.C. 207 (Div. Ct.), at para. 24. See also: Grascan Construction Ltd. v. Metrolinx, 2017 ONSC 6424 (Div. Ct.), at paras. 91, 104; Wauzhushk Onigum Nation v. Ontario (Minister of Finance), 2019 ONSC 3491 (Div. Ct.) at para. 108. Where there are no statutory provisions or regulations which prescribe how the government agency is to go about entering into the contract in question, the decision to award a contract is not properly a subject for judicial review: St. Lawrence Cement Inc. v. Ontario (Minister of Transportation) (1991), 1991 CanLII 7108 (ON SC), 3 O.R. (3d) 30 (Div. Ct.).

[23] However, in Bot Construction v. Ontario (Minister of Transportation) (2009), 2009 CanLII 92110 (ON SCDC), 99 O.R. (3d) 104 (Div. Ct.) at para. 21, this Court found that “where government procurement decisions are authorized or constrained by statues, rules or regulations” a contract may sufficiently engage the public interest such that judicial review is appropriate. In that case, judicial review was found to be warranted because of the following factors: the contract award had public interest implications beyond the interests of the contracting parties, such as the construction of public roads and the fairness and integrity of the process; the implications on the Canadian steel industry and the road construction industry in Ontario; the expenditure of substantial public funds; and the limitation of the bidder’s private law remedies. On appeal, the Court of Appeal reversed this Court’s decision on other grounds but specifically left open the issue of the availability of judicial review as a remedy with respect to the tendering process for government procurement contracts.

[24] In Air Canada v. Toronto Port Authority, 2011 FCA 347, [2013] 3 F.C.R. 605, at para. 60, Stratas J.A. identified a number of factors as relevant to determining “whether a matter is coloured with a public element, flavour or character sufficient to bring it within the purview of public law” for the purposes of judicial review. Those factors include: the character of the matter for which review is sought; the nature of the decision-maker and its responsibilities; the extent to which the decision is founded in and shaped by law as opposed to private discretion; the body’s relationship to other statutory schemes or parts of government; the extent to which a decision-maker is an agent of government or directed/controlled by a public entity; the suitability of public law remedies; and the existence of compulsory power over the public at large or over a defined group.

[25] In Thales DIS Canada Inc. v. Ontario, 2022 ONSC 3166 (Div. Ct.), (leave to appeal granted), this Court applied the Air Canada factors and found that the request for bids in that case was reviewable. By contrast, in Astro Zodiac Enterprises Ltd v. Board of Governors of Exhibition Place, 2022 ONSC 1175 (Div. Ct.), at paras. 29-36, this Court found that an application of the Air Canada factors led to the conclusion that the matter was a private contract dispute.

[26] Applying the Air Canada factors to the circumstances of this case, we find that the matter is a private contract dispute to which public law remedies are not suitable:

(a) The character of the matter for which review is sought. The procurement was for the collection of non-tax related debts owed to Ministries within the Ontario government. The successful bidders are assigned collection accounts and receive a fixed commission when those accounts are collected. While the amounts to be collected could be significant, this is at MOF’s discretion. The successful bidders exercise no discretion as to what accounts are collected, and their actions are effectively invisible to the public, other than those individuals whose debts are assigned to collection.

(b) The nature of the decision-maker and its responsibilities. The MOF is a government Ministry but is not an administrative body like a court or tribunal exercising statutory decision-making powers.

(c) How much a decision is founded in and shaped by law rather than private discretion. While the RFB was issued pursuant to the Procurement Directive, which is mandatory, there are no specific statutes or regulations which direct how the MOF is to contract with collection agencies. Moreover, the Minister of Finance (and not the successful bidders) has the discretion to determine that all or part of a debt owed to it is uncollectible: Financial Administration Act, R.S.O. 1990, c. F.12, s. 5(1).

(d) The Board’s relationship to other statutory schemes, or as an agent of government or directed or significantly influenced by a public entity. The MOF is a public entity. However, the contracted service of debt collection arises in various business settings and is far from unique to the government.

(e) The suitability of public law remedies. A-1 seeks not only to quash the Decision but also the award of contracts to the four successful bidders. This demonstrates that the dispute would be better addressed by civil remedies, which A-1 would be able to pursue without impacting contracts already awarded to third parties.

(f) The existence of compulsory power. A-1 was not compelled to make a bid and did so voluntarily. Its disqualification from the RFB process does not impact its ability to otherwise carry on business.

(g) An “exceptional” category of cases in which the conduct has attained a serious public dimension. No such circumstances exist in this case.

[27] We therefore conclude that this dispute is not subject to judicial review. ...

. Sui v. Ontario

In Sui v. Ontario (Div Court, 2022) the Divisional Court holds that for a matter to be subject to judicial review, it must be 'sufficiently "public"':

[4] If there is jurisdiction in this court, it arises pursuant to s.2(1)1 of the Judicial Review Procedure Act. To establish that basis of jurisdiction, the applicant would have to establish that there was a sufficiently "public" aspect to the issue to ground the exercise of this court's review jurisdiction: Setia v. Appleby College, 2013 ONCA 753; Air Canada v. Toronto Port Authority, 2011 FCA 347, para. 60. ...

. Certified General Accountants Association of Canada v. Canadian Public Accountability Board

In Certified General Accountants Association of Canada v. Canadian Public Accountability Board (Div Court, 2008) the Divisional Court considered a public versus private JR issue, broadly:

DOES THIS COURT HAVE JURISDICTION TO HEAR THE APPLICATION FOR JUDICIAL REVIEW?

[41] Section 2 of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 as amended (the “JRPA”) outlines the scope of applications for judicial review. Section 2(1)2 indicates that he Court may grant relief in,

....

Proceedings by way of an action for a declaration or for an injunction, or both, in relation to the exercise, refusal to exercise or proposed or purported exercise of a statutory power.

[42] In Keewatin v. Ontario (Minister of Natural Resources), 2003 CanLII 43991, [2003] O.J. No. 2937, 66 O.R. (3d) 370 (Div. Ct.) Mr. Justice Then quashed an application for judicial review with leave to bring an action where the issues raised could only be properly and adequately adjudicated on the basis of evidence tendered at trial. More importantly, Mr. Justice Then found that essentially the ministerial decision questioned by the applicants could not be characterized as a statutory power of decision but rather was a question of constitutional validity of the legislation in question.

[43] The exercise of a statutory power was also found lacking in the case of Re Tomen and Ontario Public School Teachers’ Federation et al., [1986] O.J. No. 727 at p. 2 despite the “public aspect” of the Ontario Teachers’ Federation. Its By-Law 1 did not have the force of subordinate legislation but of private law.

[44] In Re Ainsworth Electric Co. Ltd. v. Board of Governors of Exhibition Place et al., (1987), 1987 CanLII 4317 (ON SC), 58 O.R. (2d) 432 (Div. Ct.) where a Board of governors of Exhibition Place, created under provincial legislation and given a public mandate to operate, manage and maintain Exhibition Place made a decision relating to the number of electrical contractors on the premises of Exhibition Place, the Divisional Court unanimously found that it lacked jurisdiction in the matter. The decision in question was a commercial decision and the “courts have no authority in the exercise of their prerogative jurisdiction, to review a commercial business decision”.

[45] In Ripley v. Investment Dealers Association (1990), 1990 CanLII 4150 (NS SC), 99 N.S.R. (2d) 338 at 346, 347 (S.C. T.D.), aff’d (1991), 108 N.S.R. (2d) 38 (C.A.), Mr. Ripley was a member of the Investment Dealers’ Association of Canada (I.D.A.) who came under the investigation of the I.D.A. as a result of a complaint against him. One question before the Court was whether the decision of the discipline panel of the I.D.A. should be quashed on an application for certiorari. The Court found that the decision of the disciplinary committee was not subject to certiorari. The Court came to that conclusion in finding that the I.D.A. was not performing a public function or acting as an agent of the government. This was so despite the fact that the provincial Securities Act of Nova Scotia provided for a potential delegation of certain authority to the I.D.A. (in fact, no such delegating regulation had been passed), made reference to membership with the I.D.A. as a condition of being registered under certain categories of investment dealers as defined under the Act and provided certain exemptions from bonding and participation in a compensation fund to members of the I.D.A. In essence, the Court found that the Nova Scotia Securities legislation and Regulations merely recognized that the I.D.A. has rules and procedures that were acceptable to the Registrar of Securities for the province. Significantly, the Court found that if the I.D.A. disciplinary panel were to revoke the approval of the applicant, it would not result in the automatic revocation of his registration under the provincial Securities Act.

[46] Nonetheless, the Nova Scotia Court of Appeal did find that as an unincorporated association, not specifically empowered under any statute and whose members bind themselves by contract to comply with the requirements of the I.D.A. constitution by-laws and regulations and where the right to practice one’s profession is in issue, the I.D.A. must comply with the rules of natural justice which includes such things as a fair hearing and reaching a decision untainted by bias.

[47] In McDonald v. Anishinabek Police Service, 2006 CanLII 37598 (ON SCDC), [2006] O.J. No. 4210 (Div. Ct.), the Divisional Court had the following to say about the purpose of requiring a “statutory power” as a prerequisite to relief in the form of a declaration or injunction…” at paragraphs 51 to 53 inclusive:

51. On a plain reading of the JRPA, where an injunction or a declaration is sought, judicial review must relate to a statutory power. However, where the order sought is in the nature of mandamus, prohibition or certiorari, the exercise of a statutory power is not required.

52. The purpose of requiring a “statutory power” as a prerequisite to relief in the form of a declaration or injunction is to restrict the JRPA’s application to only the public, and not the private, law uses of these remedies. However, as the prerogative writs are only available as public law remedies, no such limitation is required.

53. While early interpretations of s. 2(1)1 of the JRPA may have read in the requirement of a “statutory power” as a prerequisite to relief in the nature of mandamus, prohibition or certiorari, subsequent cases have rejected this interpretation. Rather, the prerogative writs are available where the public decision-maker owes a duty of fairness.

[48] In that same decision the Court went on to discuss the evolving nature of judicial review applications by way of prerogative writs. It made reference to the need of such evolution in order to meet the ever-changing nature of the administrative state. Hence, in R. v. Criminal Injuries Compensation Board, Ex p. Lain, [1967] 2 Q.B. 864, the Court found the decision of the Criminal Injuries Compensation Board amenable to judicial review even though it was not created by statute but by the prerogative powers of the executive branch of government. It was found that in the exercise of its function and mandate the board had sufficient public or official character to negate the notion that it operated merely in the private domaine.

[49] The Court in McDonald v. Anishinabek Police Service, supra, in coming to its decision also relied on a decision of the British Court of Appeal, R. v. Panel on Take-overs and Mergers, [1987] 1 Q.B. 815 (C.A.). The Applicant strongly relies on this case in its argument that this Court has jurisdiction to hear its judicial review application for declaratory relief. On the facts of that case the Panel of Take-overs and Mergers dismissed a complaint that a company, N. Plc. had acted in concert with other parties in breach of the City Code on Take-overs and Mergers. The applicant sought to quash the panel’s decision on an application for judicial review. The relief sought among other things, included an order of certiorari to quash the panel’s decision and /or a declaration that the decision was wrong in law. In coming to its decision the British Court of Appeal did not appear to make a distinction between the categories of relief sought.

[50] In coming to its conclusion that the British Court of Appeal had the jurisdiction to hear the matter even though the source of the Panel’s power could not be said to be derived from public law such as a statute or a statutory instrument or prerogative, the Court described the Panel of Take-overs and Mergers in the following way,

The Panel on Take-overs and Meragers is a truly remarkable body. Perched on the 20th floor of the Stock Exchange building in the City of London, both literally and metaphorically it oversees and regulates a very important part of the United Kingdom financial market. Yet it performs this function without visible means of legal support.

The panel is an unincorporated association without legal personality and, so far as can be seen, has only about twelve members. But those members are appointed by and represent the Accepting Houses Committee, the Association of Investment Trust Companies, the Association of British Insurers, the Committee of London and Scottish Bankers, the Confederation of British Industry, the Council of the Stock Exchange, the Institute of Chartered Accountants in England and Wales, the Issuing Houses Association, the National Association of Pension Association and the Unit Trust Association; the chairman and deputy chairman being appointed by the Bank of England. Furthermore, the panel is supported by the Foreign Bankers in London, the Foreign Brokers in London and the Consultative Committee of Accountancy Bodies.

It has no statutory, prerogative or common law powers and it is not in contractual relationship with the financial market or with those who deal in the market. According to the introduction of the City Code on Take-overs and Mergers, which it promulgates:

The code has not, and does not seek to have, the force of law, but those who wish to take advantage of the facilities of the securities markets in the United Kingdom should conduct themselves in matters relating to take-overs according to the code. Those who do not so conduct themselves cannot expect to enjoy those facilities and may find that they are withheld. The responsibilities described herein apply most directly to those who are actively engaged in all aspects of the securities markets, but they are also regarded by the panel as applying to directors of companies subject to the code, to persons or groups of persons who seek to gain control (as defined) of such companies, and to all professional advisers (insofar as they advise on the transactions in question), even where they are not directly affiliated to the bodies named in section (1) (a). Equally, where persons other than those referred to above issue circulars to shareholders in connection with take-overs the panel expects the highest standards of care to be observed. The provisions of the code fall into two categories. On the one hand, the code enunciates general principles of conduct to be observed in take-over transactions: these general principles are a codification of good standards of commercial behaviour and should have an obvious and universal application. On the other hand, the code lays down a series of rules, some of which are no more than examples of the application of the general principles whilst others are rules of procedure designed to govern specific forms of take-over. Some of the general principles, based as they are upon a concept of equity between one shareholder and another, while readily understandable in the City and by those concerned with the securities markets generally, would not easily lend themselves to legislation. The code is therefore framed in non-technical language and is, primarily as a measure of self-discipline, administered and enforced by the panel, a body representative of those using the securities markets and concerned with the observance of good business standards, rather than the enforcement of the law. As indicated above, the panel executive is always available to be consulted and where there is doubt this should be done in advance of any action. Taking legal or other professional advice on matters of interpretation under the code is not an appropriate alternative to obtaining a view or a ruling from the executive.

[51] The Court concluded as follows at page 826:

The panel is a self-regulating body in the latter sense. Lacking any authority de jure, it exercises immense power de facto by devising, promulgating, amending and interpreting the City Code on Take-overs and Mergers, by waiving or modifying the application on the code in particular circumstance, by investigating and reporting upon alleged breaches of the code and by the application or threat of sanctions. These sanctions are no less effective because they are applied indirectly and lack a legally enforceable base. ...

[52] And at page 838, the Court stated:

But in between these extremes there is an arena in which it is helpful to look not just at the source of the power but at the nature of the power. If the body in question is exercising public law functions, or if the exercise of its functions have public law consequences, then that may … be sufficient to bring the body within the reach of judicial. It may be said that to refer to “public law” in this context is to beg the question. But I do not think it does. The essential distinction, which runs through all the cases to which we were referred, is between a domestic or private tribunal on the one hand and a body of persons who are under some public duty on the other.

[53] As the Divisional Court in McDonald v. Anishinabek Police Service, supra, pointed out, the principles established in R. v. Panel on Take-overs and Mergers, supra, have since been applied by Canadian Courts (see Volker Stevin N.W.T. (’92) Ltd. v. Northwest Territories (Commissioner) (1993), 1994 CanLII 5246 (NWT CA), 113 D.L.R. (4th) 639 (N.W.T.C.A.); Masters v. Ontario (1993), 1993 CanLII 8530 (ON SC), 16 O.R. (3d) 439 (Div. Ct.); and Scheerer v. Waldbillig, 2006 CanLII 6460 (ON SCDC), [2006] O J. No 744 (Div. Ct.)).

[54] The Divisional Court came up with its own list of various factors which can be used to distinguish domestic tribunals from public bodies found at page 18 of McDonald v. Anishinabek Police Service, supra:

. the source of the board’s powers;
. the functions and duties of the body;
. whether government action has created the body, or whether, but for the body, the government would directly occupy the area, such that there is an implied devolution of power;
. the extent of the government’s direct or indirect control over the body;
. whether the body has power over the public at large, or only those persons who consensually submit to its jurisdiction;
. the nature of the body’s members and how they are appointed;
. how the board is funded;
. the nature of the board’s decision –does it seriously affect individual rights and interests;
. whether the body’s constituting documents, or its procedures, indicate that a duty of fairness is owed; and
. the body’s relationship to other statutory schemes or other parts of government, such that the body is woven into the network of government.