Canada (Attorney General) v. Navantia S.A.

Canada (Attorney General) v. Navantia S.A.
Court (s) Database
Federal Court Decisions
Date
2024-06-18
Neutral citation
2024 FC 929
File numbers
DES-1-21
Decision Content
Date: 20240618
Docket: DES-1-21
Citation: 2024 FC 929
Ottawa, Ontario, June 18, 2024
PRESENT: The Honourable Madam Justice Kane
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
NAVANTIA S.A., S.M.E. AND LOCKHEED MARTIN CANADA INC. AND IRVING
SHIPBUILDING INC.
Respondents
ORDER AND REASONS
[1] The Attorney General of Canada [AGC] filed a Notice of Application (as amended) on January 22, 2021 pursuant to subsection 38.04(1) of the Canada Evidence Act, RSC 1985, c C-5 [CEA] seeking an order confirming the statutory prohibition on the disclosure of certain sensitive information or potentially injurious information, as those terms are defined in the CEA, contained in 48 documents [the Section 38 Application]. The AGC submits that the documents at issue include information that, if disclosed, would be injurious to Canada’s international relations and/or national defence.
[2] The information at issue is contained in the documents that were provided to Navantia S.A., S.M.E. [Navantia] in redacted form as part of the Certified Tribunal Record [CTR] in two consolidated Applications for Judicial Review (Court Files T-443-19 and T-585-19). These Applications challenge two related decisions regarding the Canadian Surface Combatant project’s [CSC Project] request for proposals bearing solicitation number CSC-0001 and the selection of the preferred bidder. (Twenty-two documents relate to T-443-19 and 26 documents relate to T- 585-19).
[3] The AGC now seeks to have the prohibition on the disclosure of the redacted information confirmed by the Court, with the exception of certain documents for which the originator has provided their consent to disclosure on strict and specific terms and conditions.
[4] Navantia seeks disclosure of all the information the AGC seeks to protect. Navantia has suggested several terms and conditions to safeguard the information, including that: the documents be provided on a “counsel’s eyes only” basis and only to those counsel with a secret security clearance and to a secret security cleared expert; the documents be maintained in a secure facility; and, the judicial review of the two decisions be conducted in the absence of the public. Counsel for Navantia states that it will comply with any conditions required to safeguard the information.
[5] The Court has carefully considered the submissions of Navantia, the AGC and the Court appointed amicus curiae [amicus], the affidavits and testimony of the affiants, the additional information provided to the Court at the Court’s request, the documents at issue, and the relevant jurisprudence.
[6] These reasons set out the background and context and describe the proceedings to date, the key submissions of the parties and the amicus, and the legal principles that have guided the Court in determining the Section 38 Application.
[7] The Court’s determination of the Section 38 Application and the terms and conditions upon which additional disclosure of the information in 21 of the 48 documents at issue can be provided, along with directions about how the Applications for Judicial Review can be conducted, is set out in the attached Classified Order.
I. Background /The Underlying Applications [8] The determination of the Section 38 Application requires the Court to consider the nature of the underlying proceedings in order to assess the relevance of the redacted information and its probative value to those proceedings.
[9] The underlying proceedings challenge decisions made regarding the CSC Project; Canada’s procurement process to replace the Royal Canadian Navy’s aging fleet with modern warships. The CSC Project has proceeded in several phases. The CSC Project issued a Request for Proposals [RFP] to identify a preferred bidder and to select a bidder for two contracts: to design the ships and their systems (CSC Definition Subcontract); and, to provide/ design the onboard software to ensure the ships’ operational readiness (Combat Management System Software Support Contract).
[10] Navantia is a Spanish state-owned ship building company that specializes in the design and construction of high technology military and civilian vessels. Navantia met the requirements to submit a bid (proposal) and did so. However, Navantia’s bid was found to be non-compliant with certain criteria. Lockheed Martin Canada Inc. [Lockheed] was chosen as the selected bidder.
[11] In T-443-19, Navantia challenges the decision made jointly by Irving Shipbuilding Inc. [Irving] and the Minister of Public Works and Government Services [PWGSC] that selected Lockheed as the “selected bidder”. The decision at issue was communicated to Navantia on February 8, 2019.
[12] Navantia argues that the decision is unreasonable and was made in breach of the duty of procedural fairness owed to Navantia. Navantia alleges that Irving and PWGSC engaged in a course of conduct of bias and favouritism toward Lockheed and BAE Systems, Irving’s business partners. Among other allegations, Navantia alleges that PWGSC and Irving amended the criteria after the bidding process was launched and in progress to unjustifiably remove certain requirements that permitted Lockheed to comply, despite Lockheed’s otherwise non-compliance. Navantia alleges that even with these relaxed requirements, Lockheed’s bid remains non-compliant, as it fails to meet mandatory requirements with respect to mature design, personnel accommodation and speed.
[13] Navantia seeks, among other relief, an Order to prohibit the responsible Government Ministers or Departments (PWGSC, Treasury Board, National Defence) from issuing any approvals to Irving to enter into or perform any work under the subcontract with Lockheed pending the disposition of the Application for Judicial Review; an interlocutory stay of the decision pending the final disposition of the Application for Judicial Review; an Order declaring the decision unlawful or quashing the decision and remitting it for redetermination; and, an Order setting aside any decisions that have issued approvals to Irving to enter into or perform any work pursuant to the subcontract with Lockheed.
[14] In T-585-19, Navantia challenges the decision made jointly by Irving and the Minister of PWGSC that the bid submitted by Navantia did not comply with certain criteria. This decision was communicated to Navantia on March 6, 2019.
[15] Navantia argues, as in the related application, that Lockheed’s bid did not meet the stated criteria, despite amendments made to the criteria, which Navantia alleges were made to favour Lockheed. Navantia also argues that the grounds for which Navantia’s bid was found to be non-compliant were new grounds, not previously disclosed to them, and that the information that Navantia should have been able to provide to respond to the issues raised in the “cure period” could not be provided because Navantia and other bid partners were prohibited from doing so due to the classification of the information as “controlled goods”.
[16] Navantia submits that its own bid was fully compliant with the stated criteria and that every aspect of Navantia’s purported non-compliance, which is denied, was due to the Government of Canada’s failure (or that of its representative agencies) to request information from relevant third-party states (foreign governments) in the required and timely manner. Navantia argues that it was denied fair treatment in the procurement process.
[17] Navantia seeks similar relief as in T-443-19.
[18] In the context of the Applications for Judicial Review, Navantia sought all the documents and information relied on by the decision-makers; in other words, the CTR and other specified documents. Navantia notes that this information is related to the procurement process for the CSC and consists of technical details regarding similar naval vessels or components designed or constructed by bidders for foreign countries.
II. The Issue and Process to Date [19] Sections 38 to 38.15 (collectively section 38) of the CEA set out the procedure whereby sensitive or potentially injurious information relating to international relations, national defence or national security may be protected from disclosure before a court, person or body with the jurisdiction to compel the production of information.
[20] The issue for the Court is whether the prohibition to disclose the information identified and redacted by the AGC in the documents at issue should be confirmed by the Court pursuant to subsection 38.06(3), in full or in part, or whether the disclosure should be authorized, in full or in part and/or subject to certain conditions, pursuant to subsections 38.06(1) or (2).
[21] Following the filing of the Section 38 Application on January 22, 2021, the Court convened several Case Management Conferences [CMC] which, among other things, canvassed the volume of information at issue and the possible timetable for filing affidavits, the public hearing and the in camera, ex parte hearing. By Order dated June 25, 2021, the Court appointed Mr. Anil Kapoor as amicus.
[22] The 48 documents at issue were provided to the Court and to the amicus in unredacted form for the purpose of the Section 38 Application. The redacted parts of the documents are marked in a see-through readable format. The see-through versions were filed with the Court’s Designated Proceedings Registry and remain under seal (not public). The amicus has had the opportunity to review these documents. Counsel for Navantia have not had any access to the unredacted documents, but have received the redacted CTR, which is extensive.
[23] Public affidavits from representatives of the Department of National Defence [DND] and Global Affairs Canada and Public Services Procurement Canada [PSPC] identified the type of information that is required to be protected from disclosure and the rationale for this protection. Confidential affidavits were also filed in support of the AGC’s position and explain why the redactions to the 48 documents have been made and why the disclosure of this information would be injurious to international relations and/or national defence.
[24] The Section 38 Application was heard in several parts. A public hearing was held on October 25, 2022. Both the AGC and Navantia provided written submissions and affidavits and made oral submissions at the hearing.
[25] An in camera, ex parte hearing was held on November 21 and 22, 2022. The AGC filed classified ex parte affidavits. The affiants were examined by the AGC and cross-examined by the amicus.
[26] The AGC subsequently filed a supplementary classified ex parte affidavit, enclosing additional documents, to provide further information in response to questions raised by the amicus and the Court.
[27] Following the in camera, ex parte hearing, the Court issued Public Communication #1 to provide an update to Counsel for Navantia, noting that on November 21 and 22, 2022, the Court held an in camera, ex parte hearing. The Communication also noted that the AGC called two witnesses, one from DND and one from PSPC, who provided classified affidavits and viva voce evidence on the issue of injury to national defence and international relations; the witnesses were examined by the AGC and cross-examined by the amicus; the AGC undertook to file an additional classified ex parte affidavit in order to file additional documents and did so; and, the amicus undertook to review the affidavit and documents and advise whether additional cross-examination would be required.
[28] In accordance with the timetable agreed upon by the parties and the Court, the amicus filed a classified ex parte Memorandum of Fact and Law on February 24, 2023. The AGC filed a classified ex parte Memorandum of Fact and Law on February 27, 2023. The amicus and AGC filed classified ex parte reply submissions on March 22, 2023.
[29] The Court held an in camera, ex parte hearing on March 23, 2023.
[30] Based on information provided to the Court at the March 23, 2023 hearing, the Court requested that the AGC and PSPC consider recontacting their foreign partners that had previously advised that they did not consent to the disclosure of any information originating from them to better explain the section 38 regime and the type of terms and conditions that the Court could impose to protect the disclosure of the information in the event that the Court determined that some or all of the information should be disclosed.
[31] In response to an inquiry from Navantia about the status of the Section 38 Application, following the hearing on March 23, 2023, the Court issued Public Communication #2, noting, among other things, that the March 23, 2023 hearing was in camera, ex parte, which is not uncommon in the determination of section 38 applications, and that the Court had requested the AGC to consider certain issues that could result in the provision of additional information that could assist in the Court’s determination of the Application. The Court explained that this would delay the time for the Court to reach a decision, but that it was not an opportunity for the AGC to bolster their arguments.
[32] PSPC made additional efforts to contact their foreign partners, provided more detailed information about the section 38 process, and again asked for their positions with respect to the disclosure of the information. PPSC received responses in August 2023. The AGC provided a further affidavit summarizing the responses and attaching the original correspondence.
[33] The Court convened a hearing on October 31, 2023 to receive the submissions of the amicus and AGC regarding the determination of the Section 38 Application in light of the responses from the foreign partners.
[34] On December 1, 2023, the Court issued Public Communication #3 summarizing the current positions of the AGC and amicus. The Communication noted the amicus’ position that the injurious information could be disclosed to counsel for Navantia if strict terms and conditions are imposed to mitigate the injury of disclosure.
[35] The Communication also noted the AGC’s position that the information for which foreign partners have not consented to disclose should not be disclosed because such disclosure would harm important international relationships to the detriment of Canadian interests.
[36] With respect to a particular document for which a foreign partner does not consent to disclose, although that foreign partner consents to the disclosure of other documents on strict terms and conditions, the Court requested the amicus and AGC to consider whether a non-injurious summary of that information could be provided and, if so, to share this with the Court.
[37] On January 22, 2024, the AGC advised the Court that it did not agree with the summary proposed by the amicus. The AGC proposed a more general summary, which is described later in the Court’s reasons.
III. The AGC’s Evidence [38] The AGC filed two public affidavits.
[39] The Affidavit of Daniel Pilon, Director of the International Industrial Security Directorate at PSPC, describes how disclosure of the redacted information would be injurious to international relations. He notes that disclosure would breach four bilateral industrial security agreements between Canada and the United States [US], Australia, the United Kingdom [UK] and the Netherlands respectively.
[40] Mr. Pilon explains the responsibilities of the International Industrial Security Directorate [IISD], which includes negotiating, implementing and monitoring compliance with international bilateral security instruments regarding reciprocal safeguarding requirements for sensitive governmental information exchanged throughout the lifecycle of a contract. Mr. Pilon notes that IISD had negotiated 25 bilateral industrial security agreements to date, including with the UK, the US, Australia, Spain and the European Union. He explains that the content of these instruments cannot be disclosed publicly unless authorization is obtained from the Director of IISD (i.e., Mr. Pilon) and from the respective foreign security authority of the bilateral instrument. Mr. Pilon also notes that IISD ensures that all information exchanged with Canada or private companies in Canada that falls under one of the bilateral agreements is treated according to the terms of the bilateral agreement, including regarding the protection of information.
[41] Mr. Pilon attests that he reviewed the documents that are the subject to the Section 38 Application. He believes that disclosure of the redacted information would be injurious to international relations.
[42] Mr. Pilon describes the information at issue as information that Canada received regarding the bids for the CSC project and references to that information in other documents prepared for the procurement process, including notes of the evaluators. He states that the information is mainly about technical details and plans of similar war vessels or components created for and by the US, Australia, the Netherlands and the UK. Mr. Pilon explains that the documents at issue contain sensitive information that originated from these four countries and the information is likely subject to the terms of the applicable industrial security instruments.
[43] Mr. Pilon also explains that the industrial security instruments include provisions that prohibit the disclosure of information received in accordance with the instrument without obtaining the consent of the country that provided the information.
[44] With respect to the injury to international relations from disclosure of this information, Mr. Pilon notes that, in the context of a procurement process, it is common practice for governments to share information with their allies under an expectation of confidentiality. The reciprocal exchange of sensitive information throughout the procurement process depends on cooperation between countries, which is only possible where the countries take all the steps to protect sensitive information from disclosure. He notes that any breach of confidentiality could have negative consequences including cessation of future exchanges, or a restriction of the disclosure to information of very little value or significance. In his view, a reduction of mutual trust and cooperation between Canada and its allies “would deprive Canada of the benefit of accessing key information required to maintain and improve our national defence technologies and assets via procurement processes”.
[45] Mr. Pilon attests that, to his knowledge, there have been no breaches of the four instruments since their signature. He adds that a breach of any one instrument would have a negative impact on the other instruments because foreign countries would likely be reluctant to provide sensitive information if Canada were not able to protect it.
[46] The Affidavit of Stephen Ellington, Section Head of the Release and Disclosure Coordination Office, within the Director General Intelligence Policy and Partnerships and Chief of Defence Intelligence at Canadian Forces Intelligence Command of DND, describes how disclosure of the redacted information would be injurious to national defence.
[47] Mr. Ellington explains that his Directorate manages defence intelligence partnerships and provides defence intelligence policy, oversight, communications and security advice and support.
[48] Mr. Ellington explains that the mandate of DND/Canadian Armed Forces [CAF] is, in broad terms, to protect Canada and Canadians, defend North America and contribute to international peace and security. He also explains that DND and CAF have distinct roles, although both are responsible to the Minister of National Defence.
[49] Mr. Ellington states that DND/CAF seeks to protect information about the performance details and capabilities of the CSC vessels and, the data and equations that would enable an informed person to predict the performance of the vessel with relative certainty. He explains that disclosure of this information would enable hostile forces to modify tactics and take countermeasures. This in turn would risk the lives of Canadian personnel deployed internationally and domestically and would compromise military operations in support of Canadian interests.
[50] Counsel for Navantia cross-examined both public affiants.
[51] The Court also held an in camera, ex parte hearing at which time affiants, who submitted classified affidavits explaining how the specific information at issue would cause injury to international relations and /or national defence if disclosed, were examined by the AGC and also cross-examined by the amicus.
IV. The Submissions of Navantia [52] Navantia made extensive submissions at a public hearing regarding the relevance of the redacted information. Navantia argued that the unredacted documents in the CTR provide prima facie evidence to support Navantia’s allegations; however, highly technical information is redacted, which is of crucial importance and would confirm that the decisions were unreasonable and procedurally unfair. Navantia submits that the relevance of the information is not disputed; the issue is whether disclosure of the redacted information would cause injury to international relations or national defence and if so, whether the public interest in disclosure—but only to counsel for Navantia—outweighs the public interest in non-disclosure. Navantia’s position is that no injury will result given that public disclosure is not contemplated. Navantia proposes disclosure only to security cleared counsel and Navantia’s security cleared expert(s) and with many additional safeguards.
[53] Navantia submits that full disclosure of the redacted documents is essential to permit meaningful judicial review, which depends on counsel’s access to all the information that the decision-maker relied on to determine that Navantia’s bid was non-compliant with the requisite criteria and that Lockheed’s bid was compliant. Navantia submits that their arguments to the Court and their interpretation of this technical information are essential to the Court’s understanding of the issues and the determination of the judicial review. Navantia submits that the Court’s access to the redacted information on its own – i.e., without submissions by counsel for Navantia about this information – will not be sufficient. Navantia argues that without the full information, Navantia and the Court will not be able to weigh the facts necessary to determine the Applications for Judicial Review. Navantia further submits that summaries of the redacted information, which in other circumstances could mitigate any injury, are not an option. Navantia notes that the technical information, which the AGC submits would be injurious to national defence or international relations if disclosed, could not be adequately summarised.
[54] Navantia submits that the Applications for Judicial Review are unlike others due to the nature and complexity of the information underlying the decision-making criteria and the public interest in ensuring the integrity of a government procurement project of this magnitude. Navantia characterizes the procurement process for the fleet of warships as the most expensive and among the most important to date. Navantia submits that the public should be assured that the contracts for Canada’s future fleet were properly awarded and that all the essential requirements for the ships will be reflected in the end product.
A. Information related to T-443-19
[55] As noted, in T- 443-19 Navantia argues that the decision to select Lockheed as the successful bidder is unreasonable, including because Lockheed failed to meet key criteria. Navantia also alleges a breach of the duty of procedural fairness.
[56] Navantia notes the distinction between the design concepts in the RFP. The Total Ship Reference Point [TSRP] is a design for a proven (i.e., already designed and built) vessel (or one at an advanced design stage). A Bid Compliant Design [BCD] is a design based on a proposed vessel with modifications to meet the requirements of the Royal Canadian Navy.
[57] Navantia explains that their challenge is to the decision that found that Lockheed’s bid was compliant with the “mature design” requirements (related to TSRP); in other words, that the vessel had been built and tested. Navantia submits that Lockheed’s “Type 26” was only 60% complete at the relevant time. Navantia argues that disclosure of the redacted documents is essential to establish how it was determined that Lockheed’s bid met the mature design criteria.
[58] Navantia also challenges the finding that Lockheed’s bid complied with other criteria, specifically speed and personnel accommodation. Among other things, Navantia submits that the only way to verify compliance is to have access to Lockheed’s bid submissions, the supporting documents, and the evaluator’s notes.
[59] With respect to the procedural fairness issues, Navantia submits that Canada and its agent, Irving, favoured Lockheed and the Type 26 design, including by making 88 amendments to the RFP. Among other allegations, Navantia submits that the amendment to the RFP that assigned responsibility for the evaluation of bids against specific criteria resulted in a “siloed” approach rather than evaluating the bid holistically. Navantia submits that this “siloed” approach may have led to an erroneous finding that Lockheed’s bid was compliant. Navantia adds that access to the actual information and documents submitted by Lockheed is the only way for Navantia to demonstrate to the Court that the Lockheed bid was not compliant.
[60] Navantia also submits that the RFP evaluation process may have led to erroneous findings of compliance. Navantia submits that, among other documents, the “General Arrangement” documents must be disclosed in order to assess whether the Lockheed bid was compliant.
B. Information related to T-585-19 [61] In T-585-19, Navantia challenges the decision that Navantia’s own bid was non- compliant. In addition to the relevance and importance of the information needed to determine T‑443-19, Navantia submits that other redacted information relates to government-to-government protocols [G2G], which impeded Navantia’s ability to respond to issues raised in the evaluation. Navantia submits that Canada failed to make the requests for this information from other countries in accordance with the protocol.
[62] Navantia argues that this information will show what was relied on to find that Lockheed’s bid was compliant and Navantia’s bid was non-compliant.
C. Public Disclosure is not requested; terms and conditions will alleviate or mitigate the injury [63] Navantia submits that no injury to international relations or national defence could arise from disclosure to security cleared counsel for Navantia or to its security cleared expert(s) (as necessary); terms and conditions can mitigate or eliminate any injury.
[64] Navantia suggests that the bilateral security agreements between Canada and the four countries would permit a person who holds a security clearance in Canada that is equivalent to the necessary security clearance in the other country to access the classified information addressed in the agreements. Counsel for Navantia note that they possess the required security clearances.
[65] Navantia disputes the AGC’s contention that disclosure of the information sought would lead to cessation or reduction in future information sharing between countries with which Canada has bilateral agreements. Navantia submits that this would mean that procurement decisions that involve information supplied by foreign governments would be immune from meaningful judicial review.
[66] Navantia submits that in assessing the consent of foreign governments, foreign governments should be aware that procurement decisions are subject to judicial review, and in the course of judicial review, information must be disclosed. Navantia argues that Canada’s international relations would not be injured by the application of the rule of law and the terms and conditions to be imposed on any disclosure.
[67] Navantia emphasizes that they are fully aware of the need to ensure the security of the information and safeguard it from any further disclosure. Counsel for Navantia notes, among other things, that they have necessary security clearances, are registered in good standing with Canada’s Controlled Goods Program, are subject to large monetary fines for any breach of the Controlled Goods Program, will build secure facilities for the storage of information or will attend at existing secure facilities to access the information, and are willing to abide by any terms and conditions imposed by the Court on the disclosure of the information sought to be protected by the AGC. In addition, counsel hold a Facility Security Clearance at the NATO SECRET level and have received preliminary approval for Document Safeguarding and Production Capabilities at NATO SECRET level. Navantia notes that this is the same security clearance held by personnel who have already seen the information.
[68] Counsel for Navantia also point to the Confidentiality Order issued in August 2020 that remains in effect. More generally, counsel submit that they do not pose any risk of disclosure and, as a result, there is no risk to international relations or national defence.
D. Public Interest in limited disclosure trumps non-disclosure [69] Navantia submits that the redacted information has significant relevance and probative value; without the full disclosure, it will not be possible for counsel for Navantia to interpret the information in order to make submissions to the Court. Nor will it be possible for the Court to determine if the decision that Navantia’s bid was non compliant reflects a rational chain of analysis or if the decision that Lockheed’s bid was compliant is supported by the evidence, including the evaluator’s notes. Navantia argues that without disclosure of the unredacted information, it will be impossible to determine whether the evaluators missed or misapprehended the facts.
[70] Navantia also submits that the issues raised in their Applications for Judicial Review are matters of public importance; meaningful judicial review is in the interest of all Canadians to ensure the integrity of the government’s procurement process. Navantia adds that the Canadian public has an interest in ensuring that the replacement warships can meet current and future capabilities and demands to protect Canada’s interest within Canada and abroad. In addition, the Canadian public has an interest in ensuring that its tax dollars are wisely spent and that the government is accountable for its expenditures.
[71] Navantia again submits that summaries of the redacted information are not an option; summaries could not include the technical information without raising the same concerns regarding the injury to international relations or national defence and summaries of charts or drawings are not feasible.
V. The AGC’s Submissions A. Public Submissions [72] The AGC notes that the decisions made by PWGSC, now challenged by Navantia, were based on a wide range of information. The AGC adds that, with respect to procurement decisions, a high level of deference is owed to the decision-maker. (Irving Shipbuilding Inc v Canada (Attorney General), 2009 FCA 116 at paras 21 – 25 [Irving]; Gestion Complexe Cousineau (1989) Inc v Canada (Minister of Public Works and Government Services), 1995 CanLII 3600 (FCA), [1995] 2 FC 694 (CA) at para 23)
(1) Injury to International Relations [73] The AGC acknowledges that all the information considered by the decision-makers included in the CTR is relevant, but submits that the disclosure of the information would be injurious.
[74] The AGC submits that Canada is prohibited under the bilateral industrial security instruments between Canada and its foreign partners (UK, US, Australia, Netherlands) from disclosing the classified documents from these partners without their consent. Disclosing the information would breach the bilateral instruments, which is injurious to international relations.
[75] The AGC disputes the submission of Navantia and the amicus that because “public” disclosure is not requested, there is no need to obtain the consent of the other countries.
[76] The AGC explains that the purpose of these instruments is to facilitate the exchange of classified information between governments and their industries in order to allow cooperation in industrial security matters. Trust is needed to allow Canada to benefit from free and frank exchanges of information between public officials and their foreign counterparts (Canada (Attorney General) v Almalki, 2010 FC 1106, at para 80, [Almalki]; Canada (Attorney General) v Tursunbayev, 2021 FC 719, at para 78, [Tursunbayev]).
[77] The AGC also submits that, contrary to Navantia’s view, these instruments do not explicitly or implicitly allow disclosure to counsel, even with security clearances, for judicial review purposes; the instruments clearly prohibit the disclosure of information received without first obtaining the consent of the originating country that provided the information.
[78] The AGC points to the “third party rule” as analogous. In Canada (Attorney General) v Canada (Commission of Inquiry into the Actions of Canadian Officials), 2007 FC 766 [Arar], the Court explained that the “third party rule” is an understanding among information-sharing partners that information providers will maintain control over its subsequent disclosure and use. A breach of the third-party rule may have a negative impact on the parties’ relations, the most likely of which would be a cessation or reduction of future information sharing. As found in Arar, it is often impossible to know the extent to which the relationship has been harmed by a breach (para 79).
[79] The AGC notes that where a request is made to a foreign country to consent to disclose their information, the foreign country can either consent to disclose with conditions, refuse to disclose, or fail to respond. Where the foreign country refuses, the injury to international relations would be greater if the information were disclosed in the face of the refusal. Injury would also result if information were disclosed where the foreign government failed to respond.
(2) Injury to National Defence [80] The AGC submits that disclosing the information would reveal the performance details of Canada’s vessels, enabling hostile forces to develop countermeasures. This would risk the lives of Canadian troops and impair Canada’s military operations.
[81] The AGC points to Mr. Ellington’s evidence that, if disclosed, Canada’s enemies may use the information to create countermeasures that could risk the safety of Canadian personnel and impair military operations.
[82] The AGC submits that in Arar, this Court adopted the broad definitions of national defence: “All measures taken by a nation to protect itself against its enemies”; “A nation’s protection of its collective ideals and values is included in the concept of national defence”; and “A nation’s military establishment” (at para 62).
[83] The AGC argues that it is not required to establish a direct threat to national defence for the purposes of section 38. Distant events with a real possibility of harming Canadian security would constitute a sufficient threat (Suresh v Canada (Minister of Citizenship and Immigration), 2002 SCC 1 at para 88).
[84] The AGC submits that the Court should defer to the AGC’s assessment of injury given the AGC’s access to special information and the AGC’s expertise (Canada (Attorney General) v Ribic, 2003 FCA 246 at paras 18 – 19 [Ribic]; also see Tursunbayev, at para 86 ; and Huang v Canada (Attorney General), 2017 FC 662 at para 45; Canada (Attorney General) v Telbani, 2014 FC 1050 [Telbani] at paras 42 – 43).
[85] The AGC adds that the evidence of injury to national defence and international relations from disclosure greatly surpasses the threshold required under section 38 of the CEA.
B. Classified Ex Parte Submissions of AGC [86] The AGC notes that Navantia and the amicus concede that injury to national defence and international relations would result from public disclosure. The AGC disputes the position of Navantia and the amicus that the injury would be mitigated by limited disclosure. The AGC submits that the extent and nature of the injury arising from even limited disclosure must still be assessed at the third stage of the Ribic test.
[87] The AGC adds that limited disclosure on strict terms and conditions does not avoid the need to obtain the consent of the foreign countries.
(1) Correspondence with the UK, the US, Australia and the Netherlands
[88] The AGC submits that PSPC has made reasonable efforts to obtain consent for limited disclosure to security cleared counsel and to the Court to be used in an in camera hearing of the Applications for Judicial Review. The AGC notes that PSPC redoubled their efforts to seek consent from the four countries at the Court’s suggestion. The AGC points to the extensive correspondence back and forth seeking consent and attempting to explain the section 38 process and the [various responses received ].||| |||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[89] The AGC described the |[various responses received from foreign governments in detail,= |ranging from a clear refusal to a lack of consent. One response]|| | ||||||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| acknowledged that the Court could reach a different decision and, if so, |||||||||| identified the need for extensive terms and conditions on any disclosure of |||||||||||| information.
(2) The documents at issue [90] The AGC notes that there are [several] documents at issue relating to Lockheed’s successful bid to build a ship based on the “Type 26” ship, which BAE (a British company) designed (at issue in T- 443-19). The AGC describes [these]| documents as including sensitive and injurious information about the capabilities of the warships under construction that will be used by the Canadian navy and that hostile actors could use to harm Canada’s national defence.
[91] The AGC agrees that the information |[one country] has consented to disclose can be disclosed to security cleared counsel for Navantia on specific terms and conditions to mitigate the injury to national defence. The AGC further submits that the disclosure of these documents will provide Navantia with sufficient information to meaningfully advance their arguments on judicial review.
[92] [There are] 26 documents originating from [several countries that] relate to Navantia’s bid to build a ship based on the F-105 that Navantia built for the Spanish navy, which was then adapted for the Australian navy. Navantia’s bid included information or elements provided by subcontractors from Australia, the US and the Netherlands. These documents relate to the decision that Navantia’s bid was non- compliant (T-585-19).
[93] The AGC notes that these documents were delivered to the bid evaluation team in accordance with the G2G provisions in the RFP.
[94] The AGC submits that Navantia was fully aware of the G2G protocols and agreed to the RFP process. As such, Navantia was aware of how to seek the documents from other countries via the G2G protocol (i.e., ask the country, then ask Canada to make the request,