The Legal Battle That Built Lansdowne: Friends of Lansdowne Inc. v. Ottawa and Ottawa Sports

and Entertainment Group

INTRODUCTION

The following covers the legal battle that took place in order for Lansdowne (TD Place

Stadium) to be developed and constructed in Ottawa, Ontario. Part One goes through four

different issues that Friends of Lansdowne could have argued had they taken their matter to the

Supreme Court of Canada (SCC). As their ‘Legal Counsel’ I offer my ‘legal advice’ on the issues

by providing legal reasoning via caselaw and principles, as they relate to municipal and

provincial procurement laws. Part Two discusses the Canadian International Trade Tribunal

(CITT), a judiciary branch for matters related to procurement here in Canada. In this section, I

offer my opinion on whether Friends of Lansdowne could have had their matter heard by the

CITT at the time that it filed its complaint with the ONSC.

I) CAN FRIENDS OF LANSDOWNE JUSTIFY A LEAVE TO APPEAL TO THE SCC?

With regards to identifying any and all weaknesses in the Ontario Court of Appeal’s (ONCA)

analysis of the claim made by Friends of Lansdowne (FOL), and whether I think that these

weaknesses are significant enough to justify an appeal to the SCC, it is my opinion that that they

do not justify an application for leave to appeal to the SCC. While there may be minor

deficiencies in the ONCA’s judgement of FOL’s claim that the City of Ottawa (City) breached

the City’s Procurement Requirement, those deficiencies do not surpass the burden required for an

Appellant review, nor do they pass the burden required for leave. This matter contains questions

of mixed law and fact, and therefore, the facts must satisfy the correct legal tests for each issue,

which they do not. Furthermore, the Appellant court must apply the “Palpable and Overriding

Error” standard to the lower court’s decision of mixed law and fact. On that ground, and that 1

ground alone, it is of my opinion that FOL would not have a successful SCC appeal because the

Housen v. Nikolaisen, 2002, SCC, 2 S.C.R. 235.1

ONCA was not incorrect and did not commit a palpable error. Any further legal action taken by 2

FOL to reach a decision in favour of its ‘litigable issues’ is ill-advised and is bordering on an

abuse of process. Regardless of anything said in this brief, the date for filing FOL’s leave to

appeal with the SCC has passed. As counsel for the Appellant, I advise FOL to abandon any and 3

all plans to file an application for leave to appeal to the SCC given that the following weaknesses

do not surpass the burden for appeal.

i. Ottawa Option Policy (2009) Applies to this Procurement and the City Acting in Bad

Faith: It is argued by the Appellant that s. 25(2), regarding an unsolicited bid, shall comply with

Ottawa Option Policy (OOP). The OOP does not apply to this procurement because the LPP is a 4

land development project and OOP (2009) had no effect on the By-Law in 2010. The 5

amendments made to the OOP (2008) were, contrary to our previous position, in good faith as

the City conducted extensive outside consultation, and any technical failure to invoke the OOP

was addressed in the consultation process. When reviewing the ONCA’s judgement, it is 6

apparent that one of the short comings of the Appellant’s position was its failure to establish bad

faith on the part of the City. Establishing that City acted in bad faith is the crux of the Appellant’s

argument in allowing for an appeal. The failure to demonstrate bad faith had a detrimental effect

on all of the Appellant’s case. Given that an appeal (absent a fresh evidence application) is not

an opportunity to introduce new evidence (of bad faith) this significantly diminishes the

likelihood of a successful of appeal. Moreover, given the comments from the ONCA saying that

the actions of the City essentially demonstrated good faith, this would be a very tough hurdle to

FOL v City, [2012] (Factum of the Respondent at para 41).2

Supreme Court Act , RSC, 1985, c. S-26, 58 (1)(a).3

FOL v City, [2012] (Factum of the Respondent at para 66).4

Ibid5

Friends of Lansdowne Inc. (Appellant) v. Ottawa (City) (Respondent) and Ottawa Sports and 6

Entertainment Group (Intervenor), 2012, ONCA, 110 O.R. (3d) 1, 349 D.L.R. (4th) 41 at para 62-65.

surpass as it would require the Appellant on an appeal to establish the judges made a palpable

error in concluding there was no bad faith. 7 8

ii. The Lack of a Competitive Process Making the City’s Purchasing By-Law Illegal: The

Appellant argues that s.270 of the Municipal Act requires the City to adopt and maintain its

procurement policies. These policies are important in ensuring integrity and honesty in the 9

City’s procurement system. The Appellant argues that the City offended the requirement to 10

maintain its procurement policies by parting from the competitive process and it therefore,

violated s. 2(1) and s. 2(2) of its Purchasing By-Law. The ONCA was correct in their analysis 11

of this issue because at the time of the City’s departure from the competitive process, s. 22(1)(d)

was also in place. It provides that where there is an absence of competition for technical reasons,

the City has the right to waive the competitive bids and directly negotiate with a supplier who

meets the specified requirements. OSEG met these specific requirements because after 12

suspending the procurement process, the City decided that it would accept a bid where the bidder

could bring sports teams to the table. Therefore, s. 22(1)(d) allowed the City to accept OSEG’s

unsolicited bid and waive FOL’s bid. The ONCA reached a sound decision in ruling that the

City’s By-Law was not made illegal by them having waived the competitive bids and awarding

OSEG with the contract.

iii. The City was precluded from receiving OSEG’s proposal when the earlier proposal for a

design competition was outstanding: The ONCA’s analysis of this claim is correct and does not

Housen v. Nikolaisen, 2002, SCC, 2 S.C.R. 235.7

Friends of Lansdowne Inc. (Appellant) v. Ottawa (City) (Respondent) and Ottawa Sports and 8

Entertainment Group (Intervenor), 2012, ONCA, 110 O.R. (3d) 1, 349 D.L.R. (4th) 41 at para 72.

Municipal Act, SO, 2001, c 25, s. 270.9

Friends of Lansdowne Inc. (Appellant) v. Ottawa (City) (Respondent) and Ottawa Sports and 10

Entertainment Group (Intervenor), 2012, ONCA, 110 O.R. (3d) 1, 349 D.L.R. (4th) 41 at para 59.

Canadian International Trade Tribunal Procurement Inquiry Regulations, 1993, SOR/93-602, s. 2.11

Canadian International Trade Tribunal Procurement Inquiry Regulations, 1993, SOR/93-602, s. 22(1)12

(d).

justify a further leave to appeal to the SCC. This is because our claim was made on the basis that

at the time of OSEG’s unsolicited bid the OOP (2002) was in place which we argued does not

allow for the receipt of an unsolicited bid when the procurement process “has been initiated or is

planned to be initiated.” We claimed that the City could, therefore, not accept OSEG’s bid. Our

claim was incorrect due to the City having been implicit in its subsequent approvals of the

development after having completed two years of consultations and tweaking of its requirements

for development. The City’s decision to depart from its initial procurement process and enter into

private negotiations with OSEG complied with the Purchasing By-Law and the OOP.

iv. The By-Laws are illegal because the Procurement By-Law was not followed: It is my

opinion that this argument has not been met. The City is lawfully allowed to depart from its

policy in a by-law as long as this by-law is not governed by statute. The City acted in good faith

and it did not render a by-law illegal by not following policy laid out in another.

Due to the containing only minor deficiencies and given that the ONCA’s decision was

not one that met the standard for palpable and overriding error in establishing that the City acted

in bad faith, it is my opinion that FOL can not justify a leave for an application to appeal to the

SCC.

II) COULD FRIENDS OF LANSDOWNE HAVE HAD THEIR MATTER HEARD BY THE CITT AT THE TIME THAT THEY FILED WITH THE ONTARIO SUPERIOR COURT? FOL has asked whether or not their matter could have been heard by the CITT at the time

that it filed its complaint with the ONSC. In response to their inquiry, I have outlined the three

requirements that an entity must meet for the CITT to have jurisdiction. I will address each

requirement while providing my opinion on whether or not they have been met given the facts

surrounding the Lansdowne matter.

2a. Contract Value Threshold: Under this category the CITT would have had jurisdiction to

hear FOL’s complaint at the time that it was initially filed with the ONSC. The construction 1314

and development contract for the development of Lansdowne was more than $100, 000,

therefore FOL’s matter falls within the first CITT category.

2b. Excluded Classes of Procurement and Excluded Institutions: FOL’s matter falls under

this category if i) the contract is one that is awarded or proposed to be awarded by a designated

government institution and ii) if it falls within the class of contracts designated under the relevant

trade treaties. The CITT only deals with contracts granted by the Federal or Provincial

government and in our case, the contract was awarded by the City of Ottawa. Chapter 5 of the

AIT does not allow for the Federal or Provincial government to extend to municipalities.

Therefore, the contract awarded to OSEG does not fall under the AIT for this category.

2c. Distinguishing Contract Award Phase and Contract Performance Phase: The CITT does

not hear complaints over post-award contract administrative matters. Therefore, FOL’s complaint

can not be heard because at the time of the ONSC decision the City had already awarded OSEG

the contract. To fall under the CITT’s jurisdiction in this category, FOL would have had to file its

complaint no later than 10 working days after the day on which the basis of the complaint

became known or reasonably should have become known. 15

In conclusion, the CITT would not have had jurisdiction to hear FOL’s complaint given

that only one of the two previously mentioned requirements were met. Also, FOL was already

30+ days past the time limit for a complaint at the time that their matter was in front of the

ONSC; therefore, their complaint would not have been heard on that basis and that basis alone. 16

Agreement on Internal Trade,1995, Article 502(c).13

Canadian International Trade Tribunal Procurement Inquiry Regulations, 1993, SOR/93-602, s. 5(a).14

Canadian International Trade Tribunal Procurement Inquiry Regulations, 1993, SOR/93-602, s. 6(1).15

Canadian International Trade Tribunal Procurement Inquiry Regulations, 1993, SOR/93-602, s. 6(4).16