What Fair Is Fair? The Duty Of Fairness Owed To RFP Proponents

If a government institution does not follow a written policy when conducting its RFP procedure, proponents may want to turn to the courts. But what fairness is owed to these proponents and why?

In Jono Developments Ltd v North End Community Health Association, the Nova Scotia Court of Appeal addressed the fairness of an RFP process used to sell a property.1 The Court held that the RFP process was fair, despite the fact that the RFP process differed from a written procedure.

In June 2015, the Supreme Court of Canada denied leave to hear an appeal of the decision, suggesting that the Court's holdings are now persuasive across Canada.

Overview of the Facts

In 2011, the Halifax Regional Municipality ("Halifax") invited proposals for the purchase of a closed school. The evaluation criteria that the RFP set out included

the intent for use of the property; the development experience of the bidder; the bidder's financial capability; and the amount of the financial offer in relation to market value. A set of Community Group2 respondents submitted proposals for the purchase of the property, as did Jono Developments Ltd. ("Jono"), a private developer. Jono was successful.

Around the time Jono won the RFP, the Community Groups became aware of a procedure for the disposal of closed schools that had been passed by Halifax in 2000 (the "Procedure"). The Procedure had never been followed, despite the closing of 18 schools since 2000. The Community Groups sought judicial review of Halifax's decision to sell the property to Jono, alleging that failure on the part of Halifax to observe the Procedure constituted a denial of procedural fairness.

In 2012, the reviewing judge quashed Halifax's decision to approve the sale to Jono and awarded costs to the Community Groups. Jono appealed. At issue at the Court of Appeal was the content of the duty of fairness owed by Halifax to the Community Groups, and whether Halifax breached that duty.

The Court's Reasons

The Court considered the degree of procedural fairness applicable under the circumstances. It referred to five non-exhaustive factors that can affect the content of the duty of fairness from the Supreme Court's 1999 decision in Baker:

The nature of the decision; The statutory scheme under which the decision is made; The importance of the interest at stake in the decision relative to other interests; The legitimate expectations of the parties; and The procedural choices available to the decision-maker.3 The...