A recent decision of the Ontario Divisional Court highlights the scope of judicial review and touches on a number of other issues that arose in the context of an allegation that the province did not live up to its obligations under certain international agreements concerning decisions made in the course of a bid process.
The applicant, Thales DIS Canada Inc. (Thales), sought judicial review of two decisions. The first was a decision of the Ontario Ministry of Transport (MTO) to issue Requests for Bids for a Card Production and Photo Comparison Technology provider (the RFB). The second was a decision of MTO to dismiss Thales’s complaint about various aspects of the RFB that was submitted through the government bid dispute mechanism (the Decision). The Decision accepted and attached a briefing note of the Director, Program and Policy Enablement (the Director), Supply Chain Ontario (SCO) of the Ministry of Government and Consumer Services, which found the complaint unsubstantiated.
Thales is a security technology company that produces identification cards and passports at its facilities in Poland. It has provided these documents to governments in the European Union and the United Kingdom, as well as certain American states and Canadian provinces. The principal basis for its application for judicial review was that the domestic production requirement in the RFB violated the non-discrimination provisions of the Canadian-European Comprehensive Economic Trade Agreement (CETA) and the Canadian Free Trade Agreement (CFTA). It further submitted that the Decision was biased and the process was procedurally unfair.
The Court granted judicial review and quashed both the Decision and the RFB. The three-judge panel issued two separate sets of reasons. Writing for the majority, Justice Nishikawa (with whom Justice Wilton-Siegel concurred) held that the application was not moot, notwithstanding the evaluation process had been completed and Thales had not ranked first out of the four bidders. This was because the domestic production requirement could not be disentangled from and it could not be shown that it did not interfere with the evaluation process. In any event, the underlying dispute raised a matter of public importance, namely, Ontario’s compliance with international trade obligations, the resolution of which was in the public interest.
Further, judicial review was available even though the SCO process was not created by statute and was not governed by a statutory regime, so the Decision did not constitute the exercise of a statutory power or a statutory power of decision as defined in the Judicial Review Procedure Act. Relief was nonetheless available by means of a prerogative remedy (i.e., certiorari, prohibition or mandamus) because what was in issue was the action of a state decision-making authority of a sufficiently public character.
As for the substance of the application, the majority held that the principal issue was the allegation of discrimination under CETA. The specific question was whether the Director’s position that there was no contravention because the domestic production requirement was saved by the “public safety exception” on the basis that the measure was necessary to limit the material risk of loss, theft and fraud of identity documents, was justified. Justice Nishikawa held that the standard of review of that determination was reasonableness, and after conducting an extensive analysis of the various factors that must be considered with respect to the matter, concluded that the exception did not apply. The Decision was, therefore, unreasonable.
Justice Nishikawa went on to find that, in light of the conclusion above, it was not necessary to consider whether the NFB violated the terms of CFTA. She also held that there was no basis for a finding that the SCO process was procedurally unfair on the record before the Court.
On the other hand, Justice Nishikawa held that while it was not strictly necessary to review the RFB, it was appropriate to do so “for the purposes of clarity and to resolve any outstanding questions as to the status of the RFB.” She held that the RFB was subject to judicial review and, again applying a reasonableness standard, concluded that the decision to issue the RFB, including the domestic production requirement in its terms and conditions, was unreasonable, as it likewise contravened the non-discrimination provisions of CETA and was not justified by the public safety exception. Indeed, there was no evidence that MTO ever considered the application of CETA to the RFB at any stage.
In separate concurring reasons, Justice Corbett agreed with the result but held that the Court should not have undertaken a substantive review of the Decision since Ontario had failed to implement a CETA-compliant dispute resolution process and its choice to resort to an internal bid dispute resolution mechanism to decide a claim under CETA was, therefore, a breach of CETA. Judicial review of the Decision would be a further breach of CETA. The Decision should therefore be quashed on jurisdictional grounds, that is, on the basis that the Director had no jurisdiction to issue the Decision.
The case is significant not only for what it says about compliance with international agreements but it also confirms that judicial review is not necessarily restricted to decisions made within the scope of a statutorily created regime and can encompass decisions that are otherwise the exercise of state authority of a public character. The case is also of interest in dealing with issues of mootness, the standard of review and jurisdiction.
For more information, please reach out to the author, Robert Kligman.