CourtCanada Ltd.

August 18, 2010 16:23 ET

CourtCanada Ltd.: Ontario's Defence "Replete With False and Misleading Statements"

AG Ministry Filed Statement of Defence in Response to $12 Million Claim by COURTCANADA

TORONTO, ONTARIO--(Marketwire - Aug. 18, 2010) - Canadian software company CourtCanada Ltd. (www.courtcanada.com) has responded to a Statement of Defence filed by the Ontario Ministry of the Attorney General in the company's $12 million lawsuit. 

In July, the Toronto-based company sued the government for breach of contract including $2 million in punitive damages for a "malicious" attempt by the Ministry to harm the company's operations and reputation. Later that month the government filed its Defence, which the company's brief Reply describes as "...replete with false and misleading statements." 

COMPANY SUPPLIES "OSCAR" COURT SCHEDULING SYSTEM TO MINISTRY

CourtCanada has operated the Online System for Court Attendance Reservations (OSCAR) since October 2007. Initially introduced as a "pilot project" in the Estates division of the Superior Court of Justice in Toronto, the web-based court scheduling system provides free public access to court room schedules and other information, and enables lawyers to search for available court time and reserve attendances online, on a "pay-per-use" basis. Ministry staff also use the system for "back office" court room schedule management and administration.

The Ministry deemed the pilot project successful and in July 2008 issued a 'Request For Proposals' for a permanent system. Following the competitive bidding process, the company was selected to deliver the expanded service and in December 2008 entered a contract with the Ministry.

COMPANY CLAIMS MINISTRY BREACHED CONTRACT

The RFP required that the selected service provider finance the cost of development and operation of the system, as well as an operating infrastructure capable of servicing the entire province. The Ministry was not charged for its use of the system. Instead, the service provider was expected to earn a return on its investment through fees collected from lawyers who opt to book attendances online through OSCAR, rather than through traditional no cost channels such as personal attendance at the court office. 

This arrangement provided the government with high performance technology at no cost to taxpayers. However, the service's economic viability was dependent upon OSCAR's expansion to new "divisions" to generate volume and provide lawyers with access to the service. In Toronto, these divisions range in size between Estates, which hears less than 5,000 matters per year, to Civil Motions, which hears more than five times that number. 

After being notified of its selection to provide the service, CourtCanada expanded its infrastructure to satisfy the requirements of the RFP. OSCAR continued to operate in the Estates division, and in the spring of 2009 was expanded to the high-profile Commercial List division. These small divisions together represent about 5 percent of the annual volume of civil matters in the province. 

CourtCanada completed pre-deployment steps for the Civil and Bankruptcy divisions in the summer of 2009. However, after months of unanswered requests for authorization from the government to complete deployment, in March 2010 the company was notified that the Ministry had decided to cease further expansion altogether. 

GOVERNMENT CLAIMS NOT REQUIRED TO ROLL OUT SYSTEM

The Ministry says it was not required to deploy OSCAR beyond the Estates and Commercial List divisions, relying on contract provisions it claims provided no guarantees of minimum revenues or exclusivity. According to the Defence, the RFP included estimated annual volumes for all Toronto civil courts only for the purpose of allowing bidders to assess the size of the work that would be required under the contract.

CourtCanada's Reply does not directly address this claim by the Ministry. However, the company's president, Gregory Azeff, says the company accepted the risk that lawyers might choose the no cost alternative that the Ministry itself was offering, or a competing service offered by another private sector supplier in the future. "But the risk that the Ministry would call for a private sector supplier to finance development of a sophisticated software system, and then decide to shelve it? That risk was never contemplated by the contract." 

MINISTRY DENIES SABOTAGE; CLAIMS ACTIONS PART OF "NEW BOOKING METHOD"

CourtCanada claims the Ministry attempted to create a justification for its decision by sabotaging the system. According to the company, in mid-April the Ministry abruptly ceased entering new Commercial List matters into OSCAR, systematically deleted existing matters from the schedule, and published materially misleading information on the OSCAR website. 

In its Defence, the Ministry denies its actions were intended to harm the company, and claims they were part of a "new method of booking" through OSCAR. This explanation does not ring true to Azeff, who believes the government concocted it only after it learned that the company's server logs had recorded details of the incident. "The first time we heard this explanation was in the government's Defence," says Azeff. "Terminating use of the system and deleting existing matters from the schedule – without notifying anyone – is not a 'new method of booking'. Knowingly publishing false information on the site is not a 'new method of booking'." 

CourtCanada claims it only learned of the Ministry's actions through complaints regarding inaccurate information in OSCAR. The company immediately contacted Ministry representatives, but did not receive a response until four days later, when it was told the incident had been inadvertent and staff had been "reminded and instructed" to use the system properly. 

GOVERNMENT'S DEFENCE MISLEADING

The Ministry relies on a section of the RFP which it claims limited expansion to two court houses in downtown Toronto. The Statement of Defence includes a quote from the RFP that refers to expansion of OSCAR to the courthouses at 330 and 393 University Avenue.

Azeff claims the Ministry truncated the quote in order to change its meaning and mislead the reader. "When including that quote, the Ministry deliberately excluded the rest of the same section of the RFP, which explicitly refers to '...the possibility of province-wide expansion'," says Azeff. CourtCanada's Reply includes the language omitted by the Ministry in the Defence.

MINISTRY STAFF PREVENTED LAWYERS FROM USING OSCAR

Azeff considers the Ministry's statements regarding a low rate of booking by Commercial List lawyers to be particularly disingenuous. "The Ministry adopted a practice of making dates unavailable through OSCAR while offering those dates to parties who contacted the Commercial List office directly," says Azeff. "The Ministry typically closed dates from online booking almost two weeks ahead of the hearing date." This was particularly problematic in the fast-paced Commercial List division, in which most court hearings are booked less than ten days in advance. "Users were unable to secure the dates they wanted through OSCAR, and were thus forced to book through the court office. And once that happens, they don't come back to OSCAR."

In addition to undermining the credibility of the system, the company claims the practice prevented it from accessing up to three-quarters of Commercial List matters. "In comparison, in the Estates division, where the court staff manage the system properly, almost two-thirds of eligible matters are now booked online," says Azeff, who says the Ministry has acknowledged the problem. "We advised the Ministry of the issue, and were assured that it would be rectified. It wasn't." 

NET EFFICIENCY GAINS FROM OSCAR

Azeff dismisses the Ministry's claim that OSCAR created more work for court staff, whom the Ministry claims had to enter data into two different systems. "Unfortunately the Ministry's practices in the Commercial List court office unfairly limited online booking, which would have further streamlined their operations," says Azeff. "But OSCAR does much more than just enable online booking. Other efficiency gains, including the elimination of legacy processes which themselves involved double and even triple data entry by court staff, more than offset any time spent ensuring both systems are accurate and up to date." 

The company claims that the Ministry's claims are not only inaccurate, but also irrelevant, as OSCAR was developed to operate in accordance with the Ministry's instructions. "The Ministry used and assessed OSCAR for almost a year prior to issuing the RFP, which required that the selected system operate independently of its other systems. The Ministry is now criticizing OSCAR for meeting its own requirements."

GOVERNMENT SHOWS LITTLE INTEREST IN IMPROVING PROCESS

According to Azeff, the company repeatedly offered to assist the Ministry in improving process efficiency by, among other things, exporting OSCAR data directly to the Ministry's existing FRANK case management system, at no charge to the Ministry. Surprisingly, these offers were rebuffed. "It made me question whether the Ministry was really interested in improving the efficiency of the court process," says Azeff.

Ontario lags behind other major North American jurisdictions in delivering online justice services. Numerous reports, including the exhaustive 2007 Report on Civil Justice Reform by the Hon. Coulter Osborne, a retired judge of the Superior Court of Justice, have identified the need for technology improvement to help address the high cost and slow pace of litigation in the province. 

Yet despite such recommendations, the government has taken little concrete action since the 2002 failure of its Integrated Justice project, which wasted almost $400 million of taxpayer funds. While provinces like British Columbia have introduced efficient online services such as electronic document filing, in Ontario litigants must physically deliver documents to the court office, often via professional process server.

A former litigator, Azeff is looking forward to watching the case progress. "One of the nice things about computers is that they can produce very clear data. That evidence will be revealed through the litigation process. It will speak for itself."

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