



COURT OF APPEAL FOR ONTARIO

CITATION: CG Acquisition Inc. v. P1
    Consulting Inc., 2019 ONCA 745

DATE: 20191007

DOCKET: C66131

Doherty, Harvison Young and
    Thorburn JJ.A.

BETWEEN

CG
    Acquisition Inc.

Plaintiff (Appellant)

and

P1 Consulting Inc., Ontario
    Infrastructure and Lands Corporation and Liquor Control Board of Ontario

Defendants (Respondents in Appeal)

Harvin D. Pitch and Adam Brunswick, for
    the appellant

Marc McLaren-Caux and Gerald Stobo, for
    the respondent P1 Consulting Inc.

Robin D. Linley, Erin Hoult and Justin
    Manoryk, for the respondent Liquor Control Board of Ontario

Heard: September 17, 2019

On
    appeal from the order of Justice T. McEwen of the Superior Court of Justice,
    dated October 11, 2018, with reasons reported at 2018 ONSC 4089.

REASONS FOR DECISION

[1]

This is an appeal from an order allowing the
    respondents motion for summary judgment and dismissing the appellants action.
    The appellant accepts that this was a proper case for summary judgment. The
    appellant also accepts the facts as found by the motion judge. The appellant
    argues, however, that on a proper application of the applicable legal
    principles to those facts, it was entitled to judgment on its damages claim.

[2]

Given the narrowly focused argument put forward
    by counsel in oral submissions, it is unnecessary to provide a detailed account
    of the evidence. The narrative and arguments advanced on the motion are fully
    and clearly set out in the reasons of the motion judge.

[3]

The appellant (CG) is a real estate
    development company. The respondent, Ontario Infrastructure and Lands
    Corporation, provides services in support of various government efforts to
    modernize and maximize the value of its real estate and infrastructure
    holdings. The Liquor Control Board of Ontario is a public agency. Together, the
    two respondents (Sponsors) decided to redevelop a large piece of property on
    the Toronto waterfront. The respondent, PI Consulting Inc. (P1), was retained
    by the Sponsors to serve as a fairness monitor during the process that would
    eventually lead to the sale and redevelopment of that property.

[4]

The Sponsors issued a request for proposals
    (RFP) in September 2014. The RFP contained detailed specifications and
    requirements. The Sponsors also met with potential participants in the
    proposals and provided additional information to them.

[5]

The process had two stages. At the first stage,
    proposals would be submitted by interested parties. Three proposals would be
    selected from those submitted. At the second stage, one of the three remaining
    proposals would be accepted.

[6]

CG filed a proposal in response to the RFP. The Sponsors
    ultimately disqualified that proposal from further consideration on the basis
    that it listed an ineligible person as one of CGs advisors on the project.
    CG asked the Sponsors to reconsider the disqualification and offered, in
    affidavits, an explanation for wrongly identifying an ineligible person as an
    advisor on the project. The Sponsors considered the request, but declined to
    set aside the disqualification.

[7]

The appellants oral argument targets only the Sponsors
    decision to not rescind the disqualification of the appellants proposal. The
    appellant accepts that it was open to the Sponsors under the terms of the RFP
    to disqualify the appellants proposal. The appellant does not allege any
    unfairness in the initial disqualification. The appellant also accepts that
    there was no obligation on the Sponsors to reconsider that disqualification.

[8]

The appellant does argue, however, that once the
    Sponsors undertook a reconsideration of the disqualification, they owed a duty
    of fairness to the appellant in the reconsideration of the decision to
    disqualify. The appellant submits that the freestanding duty of fairness arises
    out of the appellants reasonable expectations based on the totality of the circumstances,
    which include the terms of the RFP, representations made by the Sponsors in the
    pre-proposal phase of the process, the involvement of a fairness monitor, and
    various government procurement policies and directives in respect of RFPs
    issued by government agencies. Counsel describes this duty of fairness as
    akin to the procedural duty of fairness recognized in the context of judicial
    review of actions by government agencies. The appellant submits, however, that
    in this context, a breach of the duty of fairness gives rise to a remedy in
    damages.

[9]

Counsel for the appellant identifies the
    fundamental unfairness in the reconsideration process as the failure to adequately
    involve the fairness monitor, P1. He submits that the record shows that P1 wanted
    to be involved in the reconsideration process, but was virtually excluded from that
    process by the Sponsors.
[1]


[10]

The motion judge rejected the appellants
    submission, both as a matter of law and on the evidence. He concluded that
    neither the Sponsors, nor P1 owed a duty of fairness to the appellant, either
    by way of a freestanding obligation, or as an aspect of the duty of care owed
    under the law of negligence. The motion judge went on to find that the Sponsors
    had acted reasonably in refusing to rescind the disqualification of the
    appellants proposal, especially having regard to the need to ensure that the
    process was fair to all of the proponents who had submitted proposals.

[11]

Without meaning to cast any doubt on the motion
    judges legal analysis, we choose to dispose of the appeal on the factual
    basis. Assuming without deciding that the appellant was owed a duty of
    fairness, there was no unfairness to the appellant in the reconsideration process.

[12]

The Sponsors advised CG on April 30, 2015 that
    their proposal had been disqualified. The Sponsors provided a detailed
    explanation for the disqualification.

[13]

On May 6, 2015, appellant, through counsel,
    replied to the disqualification letter with a request that the Sponsors
    reconsider the disqualification. The letter included two affidavits explaining
    how the appellant had erroneously identified an ineligible person as a member
    of their proposal team.

[14]

The Sponsors chose to reconsider the
    disqualification based on the material provided by the appellant. The material
    was circulated to senior management and to P1. The Sponsors met to discuss the
    request for reconsideration and sought legal advice from outside counsel. No
    one from P1 attended those meetings.

[15]

On May 12, 2015, the Sponsors advised P1 that,
    based on their assessment and the legal opinion they had received, the Sponsors
    had decided they would not change the disqualification decision.

[16]

P1 subsequently reviewed the Sponsors decision
    to uphold the disqualification of the appellant. P1 indicated to the Sponsors
    that from a fairness perspective it concurred in the decision to maintain the
    disqualification. P1 did so only after receiving assurances that the Sponsors
    would take a consistent position moving forward in relation to other RFPs if
    the same issue arose again.

[17]

In considering the appellants submission that
    P1 was not sufficiently involved in the request for reconsideration, it is important
    to bear in mind that there was no relationship of any kind between P1 and the
    appellant. P1 contracted to provide fairness monitoring services to the
    Sponsors in accordance with the terms of an agreement. Under that agreement, P1
    was to provide observations on fairness issues and an impartial opinion on the
    fairness of the procurement process. P1 had no decision-making power, no
    authority to provide legal or
quasi
legal advice, and no authority to
    evaluate in any way the merits of the various bids.

[18]

We agree with the motion judge (para. 95) that
    the reconsideration process was neither inadequate nor unfair. The appellant
    got exactly what it asked for  a reconsideration of the disqualification of
    its proposal based on the information provided in the affidavits forwarded to
    the Sponsors by counsel for the appellant. On the advice of external legal
    counsel, and no doubt out of concern to maintain the overall integrity of the
    procurement process, the Sponsors determined that the explanation offered by
    the appellant did not warrant a rescinding of the disqualification.

[19]

In our view, the fact that P1 did not opine on
    the fairness of the process in respect of the reconsideration of the
    disqualification before the Sponsors made their decision did not adversely affect
    the fairness of the process. The basis for the Sponsors decision had nothing
    to do with the process, but rather turned on the Sponsors assessment of the
    merits of the request for a reconsideration. In any event, P1 did agree with
    the Sponsors decision after receiving assurances that should the same
    situation arise in the future, the Sponsors would deal with it in the same way.

[20]

The appellant has failed to make out any
    unfairness in the reconsideration process. It follows that any claims based on
    that alleged unfairness must fail, regardless of the merits of the legal
    principles advanced by the appellant. As indicated above, we need not address those
    principles. We also need not address the motion judges finding that the
    exclusion clause in the RFP also excludes any liability on behalf of the
    Sponsors or P1.

[21]

The appeal is dismissed. The parties agree that
    the Sponsors should have their costs in the amount of $45,000, inclusive of
    disbursements and relevant taxes, and that P1 should have its costs in the
    amount of $30,000, inclusive of disbursements and relevant taxes.

Doherty
    J.A.

A.
    Harvison Young J.A.

J.A.
    Thorburn J.A.





[1]

It is difficult to understand how P1 could be said to have
    breached a duty of fairness when, on the appellants own theory, P1 sought
    involvement in the reconsideration process, but was denied that opportunity by
    its client, the Sponsors.


