Court File No. lil/ ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: GEM PROPERTIES INC. Plaintiff and WINDSOR REGIONAL HOSPITAL, MICHAEL and MARY JANE Defendants STATEMENT OF CLAIM TO THE A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the Plaintiff(s). The claim made against you is set out in the following pages. IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for you must prepare a Statement of Defence in Form 18A prescribed by the Rules of Civil Procedure, serve it on the Plaintiff(s) lawyer or, where the Plaintiff(s) do(es) not have a lawyer, serve it on the Plaintiff(s), and ?le it, with proof of service, in this Court of?ce, WITHIN TWENTY DAYS after this Statement of Claim is served on you, if you are served in Ontario. If you are served in another province or territory of Canada or in the United States of America, the period for serving and ?ling your Statement of Defence is forty days. If you are served outside Canada and the United States of America, the period is sixty days. Instead of serving and ?ling a Statement of Defence, you may serve and ?le a Notice of Intent to Defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to ten more days within which to serve and ?le your Statement of Defence. IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. TAKE NOTICE: THIS ACTION WILL AUTOMATICALLY BE DISMISSED if it has not been set down for trial or terminated by any means Within ?ve years after the action was commenced unless otherwise ordered by the court. Date: Issued by (140? Registrar Address of Court Of?ce: 245 Windsor Avenue Windsor, Ontario N9A 1J2 TO: WINDSOR REGIONAL HOSPITAL 1995 Lens Avenue, Windsor, ON MICHAEL MARY JANE 4108 Concession Rd. 9, Tecumseh, ON NOR 1K0 l. CLAIM The Plaintiff claims: Damages for breach of tender in the amount of $10,000,000.00; In the alternative, damages for breach of contract in the amount of $10,000,000.00; In the further alternative, damages for breach of natural justice and the duty of fairness in the amount Prejudgment and post-judgment interest in accordance with the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended; An Order for an interim and interlocutory injunction restraining the Defendants from completing a Contract awarded under a Request for Proposals for the acquisition of certain lands from the Respondents, Michael O?Keefe and Mary Jane O?Keefe ?Keefe?). A declaration that the Hospital?s decision to award the Contract to O?Keefe (the ?Decision?) violates the mandatory requirements of the Tender Documents and the Broader Public Sector Procurement Directive and therefore breaches the common law duties of natural justice and procedural fairness and the duty to act in good faith; A declaration that the tender for the Contract submitted by O?Keefe must be disquali?ed for non?compliance with the mandatory requirements of the Tender Documents issued by the Hospital; In the alternative, an Order that the Decision be remitted back to the Evaluation Committee and the tenders re?evaluated on the basis that the tender submitted by O?Keefe is non?compliant and not to be the subject of further evaluation; In the further alternative, an Order that the Decision be remitted back to the Evaluation Committee and the tenders re-evaluated consistently and in accordance with the terms and conditions set out in Hospital?s Tender Documents, including the mandatory requirements of the Broader Public Sector Procurement Directive; Costs of this action; and Such further and other grounds as counsel may advise and this honourable Court may permit. Parties 1. The Plaintiff, GEM Properties Inc., is a duly constituted provincial corporation and is the registered owner of certain lands located on Tecumseh Road East in the Town of Tecumseh, County of Essex and Province of Ontario. The Defendant, Windsor Regional Hospital, is a designated broader public sector organizations providing medical and emergency care to the Windsor and Essex County community (the ??Hospital?). The Defendants, Michael O?Keefe and Mary Jane O?Keefe reside in the Town of Tecumseh and Province of Ontario and are spouses of one another (the ?O?Keefe?). Michael and Mary Jane O?Keefe are the owners of certain lands located on Concession 9 in the Town of Tecumseh, County of Essex and Province of Ontario (the ?O?Keefe site?). Background 4. Pursuant to section 3(1) of the Management Board of Cabinet Act, R.S.O. 1990, c. (the the Management Board of Cabinet (the ??Board?) has the power and duty to establish, prescribe or regulate such administrative policies and procedures as it considers necessary for the ef?cient and effective operation of the public service, and to initiate and supervise the development of management practices and systems for the ef?cient operation of the public service. Public service means ministries or any part thereof. 5. Pursuant to section 3(3) of the Act, the Board may issue administrative directives as it considers necessary in the performance of its duty. 6. On or about July 1, 2011, the Board issued a Broader Public Sector Procurement Directive (the ?Directive?). The Directive applies to all designated broader public sector organizations, including Hospitals, and is designed to ensure that the procurement of publicly funded goods and services are acquired through a process that is open, fair and transparent. 7. The Directive provides, in part, that organizations must be accountable for the results of their procurement decisions and must be transparent to all stakeholders, providing equal access to information on procurement opportunities, processes and results. Moreover, organizations must maximize the value they receive from the use of public funds and must ensure that frontline services, such as patient care, must receive the right product, at the right time, in the right place. 10. Where the estimated value of procurement of goods or services is $100,000 or more, an open competitive process must be employed. This includes providing full disclosure of the evaluation methodology and process to be used in assessing submissions. Procurement documents must clearly outline the mandatory, rated and other criteria that will be used to evaluate submissions, including the weight of each criterion. Submissions that do not meet the mandatory criteria must be disquali?ed. Pursuant to section 72.13 of the Directive, the submission that receives the highest evaluation score and meets all mandatory requirements set out in the procurement documents must be declared the winning bidaround February of 2014, the Ontario government announced approval for the Hospital to construct a new Acute Care Hospital Facility in the Windsor area (the ?Facility?). The Hospital was ?rst required to identify a site for the Facility. Once the site was identi?ed, the Hospital was to enter into a Purchase Agreement for the site with a completion date of July 21, 2017. On July 23, 2014, the Hospital issued a Request for Proposals which invited submissions from property owners interested in offering their properties as a potential site for the Facility (the The RFP described a 2-Phase procurement process. During Phase 1 the sites would be evaluated and up to ?ve sites, with the highest Phase 1 scores, would be short-listed for 15. 16. 17. 18. 19. Phase 2. During Phase 2 only the short-listed sites would be evaluated, leading to the identi?cation of a ?Preferred Site? for the facility. The RFP described the evaluation criteria that would be used to review and assess the submissions for Phase 1 and Phase 2. In part, the evaluation criteria disclosed certain mandatory features for the property with respect to roadway capacity, two road frontage and municipal servicing. The evaluation criteria also provided for the potential to reject a site and the related Phase 2 submission if there were any impediments that would materially delay or prevent construction of the Facility. As part of the evaluation process, the ?Acquisition Cost? was to be assessed. The acquisition cost included: i. Estimate of probable costs to bring each short-listed Site to the condition of an average site in Essex County with no signi?cant geotechnical, environmental, archaeological or other issues, and which can be readily connected to municipal services including water, sanitary and storm sewers, electrical, natural gas and other utilities. ii. The sum of the base price offered and the cost estimates described above were to be the ?Acquisition Cost? for each short-listed site. The Acquisition Cost was integral to the evaluation of Phases 2 submissions. Phase 1 Submissions 20about October 1, 2014, GEM provided a Phase 1 submission in response to the RFP. site was comprised of 75 acres of serviced lands on the north side of Tecumseh Road East. The site has two access points directly from Tecumseh Road, as well as access from the proposed extension of Catherine Street. All municipal services are located at the front of the site along Tecumseh Road. This includes water, storm and sanitary sewer and natural gas. site was short-listed and was ranked number one against all other sites for the Phase I evaluation. Prior to submitting Phase 2, GEM met with certain members involved in the Evaluation Process including the Respondent?s lawyer. During this meeting the representatives advised that if only 50 acres were required for the Facility, GEM could exclude from Phase 2 the more expensive commercial land resulting in a lower per acre price. GEM was advised to include all 75 acres in its Phase 2 Submission. The Decision at Issue 25. 26. Subsequently, GEM submitted a Phase 2 submission with a base price of $136,000/acre. This included the more expensive commercial lands. The Hospital awarded the Contract to the Respondents, Michael and Mary Jane O?Keefe. The O?Keefe site is comprised of 60 acres of un-serviced farm land which fronts on Concession 9. Unlike site, the O?Keefe site requires signi?cant roadway 27. 28. 29. 30. 31. 32. improvements and the provision of municipal services. The O?Keefe lands cannot be readily connected to municipal services as there are none to connect to. The Hospital?s Decision to select the O?Keefe site is contrary to the Directive and the requirements of the Tender. To comply with the Directive, the Hospital was required to fully disclose the evaluation methodology, criteria and process to be used in assessing the Phase 2 submissions and to apply that methodology, criteria and process fairly, impartially and consistently. Without notice to GEM, the Hospital added additional amounts to bid in respect of purported environmental and rezoning costs. In respect of the environmental costs, GEM submitted an Engineering Report which set out the costs of addressing certain adverse environmental conditions. The Hospital, unilaterally and arbitrarily, added $41,650.00 to this cost on the recommendation of its engineer. There is no justi?cation for this additional amount. The Hospital also added $42,000.00 to base price for the cost of rezoning. Pursuant to the RFP, rezoning costs were to be absorbed by the offeree. GEM accounted for rezoning costs in its base price. An undisclosed allowance for incremental site service connection was added to the evaluation criteria during the evaluation process. GEM was assessed $520,000 in this regard. This amount was intended to fund the extension of the existing municipal services from Tecumseh Road and Catherine Street to where the hospital would potentially be located on the lands. This extension was not a criterion under the Tender Documents, nor was it ever disclosed to GEM. 33. 34. 35. 36. 37. 38. The additional costs served only to arti?cially in?ate base price. By comparison, no adjustment was made to the O?Keefe price to account for the work that will be required to widen the roadway and service the lands. The costs of completing the road widening alone are estimated at between $25,000,000 and $50,000,000. The Hospital also failed to take into consideration the cost of bringing services to the O?Keefe lands. The Hospital?s failure to add these additional costs to the O?Keefe submission created an unfair advantage. The Hospital did not employ any adequate mechanism by which it could properly compare serviced lands to un?serviced lands. This lead to a signi?cant bias in favour of un-serviced lands over serviced lands. Furthermore, in selecting a property with an inadequate roadway and no services, the Hospital has imposed on the taxpayers an unnecessary multimillion dollar burden. This is contrary to the Directive which requires organizations to maximize the value they receive from the use of public funds. The Hospital also failed to consider the delay that would result from the need to widen the roadway and complete the municipal services. This is contrary to the Tender Documents which oblige the Hospital to identify any Major Constraints that would materially delay or prevent construction of the Facility. When having regard to the Mandatory Evaluation Criteria prescribed by the Tender Documents and the requirements of the Directive, site is far superior to the O?Keefe site. 39choosing the O?Keefe site, the Hospital has breached its obligations under the Directive and its duty to act fairly and in good faith. Compliance with the Directive is mandatory and not discretionary. In the alternative, if the Decision involved the exercise of any discretion by the Hospital, the Hospital?s exercise of that discretion was unreasonable in the circumstances. Furthermore, the Hospital?s inconsistent application of the evaluation criteria in awarding the contract to O?Keefe violates the principle of fairness that must be employed in any competitive procurement process. GEM had a legitimate expectation that it would be treated fairly. Public concerns such as equal access to government markets, integrity in the conduct of government business, the promotion and maintenance of community value and the costs to the tax payers requires that the Hospital consistently and fairly apply the Directive in awarding contracts. The Hospital?s inconsistent application of the Directive and the evaluation criteria creates industry wide uncertainty and concerns. In the event an interim and interlocutory injunction is not granted, a stay of the Decision is necessary until the Application is determined. GEM will experience incompensable harm if the Contract is awarded and carried out prior to a determination of the Action. There is a serious matter to be tried. The balance of convenience favours granting a stay under the circumstance. The Plaintiff relies upon the provisions of the Management Board of Cabinet Act, R.S.O. 1990, c. 1. and the Ontario Broader Public Sector Procurement Directive (July 1, 2011). 45. The Plaintiff proposes that this action be tried in the City of Windsor, Southwest Region. Dated: December 22, 2015 MARIA MARUSIC MARUSIC LAW Barristers 1 Ouellette Avenue, Suite 902 Windsor, ON N9A 6T3 Tel: 519-969-1817 Fax: 519-969-9655 Lawyers for the Plaintiff Court File No: I 3/ GEM PROPERTIES INC. - and - WINDSOR REGIONAL HOSPITAL et al SUPERIOR COURT OF JUSTICE Proceedings commenced at Windsor STATEMENT OF CLAIM MARUSIC LAW 100 Ouellette Avenue, Suite 902 Windsor, Ontario N9A 6T3 Telephone: 519-969-1817 Facsimile: 519-969-9655 MARIA MARUSIC Lawyers for the Plaintiff