# Augusta v. Canada and Sikorsky: Brief Status Review



## Cloud Cover (29 Nov 2004)

Decisions in the Federal Court, Trial Division

If you happen to be one who believes that Augusta's allegations of bad faith have merit, and that the government's attempts to stop the application for review failed to rebut that presumption, you might have been pleased with this decision, and then disappointed how the story appears to end. I had earlier queried the correctness of CITT reviewing the case on the basis of jurisdiction, and that is exactly what was argued, but for different reasons than I thought. However, that doesn't seem to have changed the outcome and what might [sigh] follow in terms of damage awards.

This following passages are very interesting. This is not the entire judgment, just the most interesting part. I assume Augusta at least filed it's full argument for judicial review of the CITT decision, as well as the entire contract. 

_Augusta Westland International v. Canada (Minister of Public Works and Government Services) and Sikorsky International Operations Inc_. (2004) FC 1545 F.C.(T.D), Kelen, J.

 [58]                  The Court will grant an extension of time in certain circumstances. The Grewal test, as I recently applied it in Saskatchewan Wheat Pool v. Canada (Canadian Grain Commission), 2004 FC 1307, has four criteria or parts, which I repeat for ease of reference: 
1.              is granting an extension necessary to do justice between the parties;
2.               does the applicant have an arguable case for setting aside the impugned decision;
3.               is there a proper justification for the delay, taking into account factors such as the intention to file an application within the allowed time and that the intention was maintained continuously thereafter; and
4.               will an opposing party suffer prejudice from the grant of an extension.

[59]                  With respect to the first part of the test, I am satisfied that the applicant's allegations of bad faith in the award of a major contract warrant a proper hearing. This procurement involves the expenditure of billions of dollars, and a 10 day extension of time is necessary "to do justice" between the parties in this case.

[60]                  With respect to the second part of the test, the applicant has raised an arguable case for setting aside the July 23, 2004 decision to award the contract to Sikorsky. The applicant alleges that the contract was awarded to Sikorsky in bad faith. In particular, the evaluation process was biased so that the applicant's bid was rejected. These serious allegations may prove unfounded, but at this stage they do raise an arguable case.

[61]                  With respect to the third part of the test, I am satisfied that there is justification for the 10 day delay. After the July 23 decision, Agusta requested from Public Works information on which the decision was based. Public Works asked Agusta to submit these questions in writing, and this was done on July 31. Agusta wrote again on August 9 asking that the answers to these questions be forthcoming. The requested information from Public Works was only received on August 23, 31 days after the decision. Following the receipt of this information, Agusta filed this application for judicial review 9 days later. I am satisfied from the evidence that Agusta, at all times, demonstrated a continuing intent to challenge this procurement and the 10 day delay is reasonably explained by the failure of Public Works to provide answers in a timely fashion. The information allegedly provides the grounds upon which the July 23, 2004 decision to cancel the contract can be impugned and set aside. This Court has repeatedly granted extensions of time where a party demonstrates a reason for the delay. In many cases, the delay is much longer than 10 days.

[62]                  The information sought from Public works does not constitute "reasons", as the term is used in the jurisprudence. If Agusta had commenced this application before August 23, it might not have received the information from Public Works.

[63]                  Moreover, the evidence is that Agusta always intended to challenge this procurement. Agusta commenced the legal challenge to this procurement process four years ago and was told by the Court that it was premature. There can be no doubt that all parties knew that Agusta intended to legally challenge this procurement should any grounds to do so arise.

[64]                  With respect to the fourth part of the test, there is no prejudice from the grant of a 10 day extension to any of the parties. This procurement has taken many years, at least as far back as 1992 when the Government originally decided to purchase these helicopters. Adding 10 days to the process will not prejudice any of the parties.

[65]                  For these reasons, and upon considering the extensive jurisprudence of this Court where such extensions of time are normally granted when the parties can provide a reasonable explanation for the delay, the Court will grant the extension requested.

                                                                           

Follow Up
On November 23,a motion for an interlocutory injunction preventing the issuance of the contract was supposed to be heard in Federal Court. I'haven't researched to see if the motion went forward, but if it did, it failed. It is noteworthy that the contract was formally awarded on the 23rd, and that on the 24th, CITT sent a letter to Augusta stating that Augusta had missed the deadline of November 17 to file for review of its case before that tribunal. 
reference:  http://www.citt-tcce.gc.ca/procure/determin/pr2e041_e.asp


This leads me to wonder, has Augusta abandoned the legal bid to overturn the contract, or are they now going to simply sue in damages for bad faith and possibly loss of economic opportunity,and take in a windfall like in 1993. And, will any damages come from DND or the PWGS?

Cheers


----------

