Montpellier Estates Ltd v Leeds City Council [2010] EWHC 1543 (QB)

Thursday June 24th, 2010
Neutral Citation Number: [2010] EWHC 1543 (QB)
    Case No: HQ09X00427

IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION

    Royal Courts of Justice
Strand, London, WC2A 2LL
    24 June 2010

B e f o r e :

THE HONOURABLE MR JUSTICE EADY
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Between:

  MONTPELLIER ESTATES LIMITED 

Claimant
  - and -

 
LEEDS CITY COUNCIL

Defendant

____________________

Jonathan Hirst QC and Robert O’Donoghue (instructed by Walker Morris) for the Claimant
Rhodri Williams QC (instructed by Cobbetts LLP) for the Defendant
Hearing dates: 10-11 June 2010

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HTML VERSION OF JUDGMENT
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Crown Copyright ©

    Mr Justice Eady :

  1. There is before the court an application made by Mr Rhodri Williams QC on behalf of the Defendant, Leeds City Council (“the Council”), to strike out narrowly targeted parts of the amended particulars of claim, which were served on 20 November 2009, under CPR 3.4 or, in the alternative, to obtain summary judgment under CPR Part 24 in respect of those specific claims. The Claimant is Montpellier Estates Ltd (“MEL”) which claims to have been treated “appallingly” by the Council in relation to a procurement process initiated in 2007 and carried out, purportedly, in accordance with the Public Contracts Regulations 2006 (which were introduced to implement Directive 2004/18 EC).
  2. The claim was launched on 4 February 2009 and is currently based upon alleged breaches of the Regulations and/or of contractual provisions. I am told that, after careful reflection, MEL is “on the cusp” of serving additional claims founded in the tort of deceit, largely arising out of the same factual matrix. The intention would be to seek an order for consolidation. A detailed letter before action in relation to these new complaints was sent on 7 May 2010. That, however, is all for the future and I must focus on the statements of case as they now stand.
  3. The background to the claim lies in the Council’s plan to choose a site and a developer in relation to a proposed arena and linked facilities.
  4. From the evidence, it emerges that consultants were engaged in September 2004 to provide a feasibility study addressed to “The Future Provision of Concert, Arena and Other Music Related Facilities in Leeds”. This was published the following December. It recognised that the City One site, owned by MEL, was one of four in Leeds that was suitable for the potential development. One of the others was a site under the ownership of the Council at Elland Road. At that time, so the Claimant suggests, a site known as Claypit Lane, which was owned by the Council and Leeds Metropolitan University, was believed to be unsuitable for the planned development.
  5. In early 2006 the Council set up a Project Board to take charge of the proposed development of the arena. Some were concerned from the outset that Elland Road would be viewed favourably by the Council and that, accordingly, there would be a built-in disadvantage for privately owned sites during any procurement process. Those concerns were not by any means confined to MEL, but were also expressed by, for example, the Leeds Chamber Property Forum Steering Group and the Leeds Chambers of Commerce. As is now customary, proposals were invited by way of notice in the Official Journal in May 2007. There was also issued a Prior Information Notice in respect of the Arena Development Competition.
  6. Shortly thereafter, on 19 July 2007, a Contract Notice appeared in the Official Journal, whereby tenders were invited for the procurement of the Arena in the Arena Development Competition. There was also an option in relation to the provision of associated facilities. The procurement would be conducted in accordance with the competitive dialogue procedure provided for in Regulation 18 of the 2006 Regulations (see also Article 29 of the Directive). Mr Williams and Mr Jonathan Hirst QC, who appeared on behalf of MEL, both recognise that the Regulations relevant for present purposes are those that were in operation at the time and that one has to ignore subsequent amendments. The scheme adopted was that bidders could make proposals based on sites in their ownership and/or address the Elland Road site.
  7. As I have said, MEL had concerns, identified in detail in the letter before action of 7 May 2010, as to whether the Council would ever be committed to any proposals put forward by a private developer and feared that, if it became a bidder itself, it would be used as a “stalking horse” for an option involving public ownership. It is said that many assurances were received to the contrary and the Council represented that any competition would be fair and open – including one between private and public options. In the light of such assurances, MEL decided to enter the procurement process, putting forward a proposal for the arena to be developed on the City One site. This was communicated on 22 August 2007 and MEL thereafter submitted to the pre-qualification questionnaire exercise (“PQQ”) carried out by the Council.
  8. This phase was completed successfully, it seems, and MEL was invited on 1 October 2007 to participate in the second stage, which is called the “Invitation to Participate in Dialogue” (“ITPD”). Nevertheless, its concerns had not evaporated and assurances were given on a number of occasions as to fairness and transparency and, in particular, to the effect that the Council had no intention at that time of developing the Arena itself.
  9. Initial proposals were forwarded to the Council by MEL and it was thereafter invited, by email dated 15 February 2008, to take in part in the third stage of the competition, which is referred to as the “Invitation to Continue in Dialogue” (“ITCD”). At a meeting on 20 February 2008, assurances were sought by Ms Janis Fletcher on MEL’s behalf that it would not be used as a “stalking horse” and that the competition would be fair and transparent. Such assurances were indeed forthcoming and were repeated at subsequent meetings on 14 March and 23 April the same year.
  10. An addendum to the ITCD was issued on 29 May 2008, which required the bidders to revisit their proposals because, it was said, they had exceeded the assumed level of public funding. Three weeks later, on 20 June, MEL received a clarification note dated 18 June. This is important for the purposes of the present litigation because it is said that this document contained the first reference to the introduction of a public sector comparator (“PSC”) – a development in respect of which MEL makes a number of significant criticisms. The note contained the following claims:

    “The second stage of the ITCD commenced with the issue of the Developer addendum document (dated 29 May 2008). The purpose at this stage of the Competitive Dialogue process is to continue discussions with those Bidders short listed in the Leeds Arena developer competition, and to provide the detailed information on the Bid Requirements and arrangements for the submissions of Bids.

    Following receipt of initial ITCD submissions it was highlighted in feedback that the requirement for public sector funding was higher than the target outlined.

    It was proposed that it would be in the interests of the parties to focus on re-appraising proposals to form an early view on anticipated public sector funding requirements based on submission feedback and further details contained in ITCD Addendum. The focus of the programme has been to address this during June in order to be able to review the position at the end of June/early July.

    It is expected that through the competition private sector developers will be able to demonstrate optimal value for the delivery of an arena within a wider scheme context. The Council has indicated a target level of up to c £20m for public sector funding for the delivery of an arena.

    The Council will compare the estimated shortfall with a public sector comparator (‘PSC’) to establish that the funding achieves value for money for the public sector investment.”

  11. One of the main criticisms levelled by MEL at the Council’s conduct of the process is that the note gave no details as to the nature of the PSC. On 20 June 2008, the Council and its agent alleged that the PSC was only being used as a test to ensure that bidders were providing value for money.
  12. Mr Hirst submits that the use of a PSC by the Council was unorthodox. He says that a public sector comparator is a well established concept as an evaluation tool and referred to HM Treasury’s Green Book, which provides guidance on the economic assessment of spending and investment. This refers to a PSC as “a hypothetical risk-adjusted costing, by the public sector as supplier, to an output specification produced as part of a PFI procurement exercise. It is expressed in net present value terms; is based on the recent actual public sector method of providing that defined output (including any reasonably foreseeable efficiencies the public sector could make) and takes full account of the risks which would be encountered by that style of procurement”.
  13. It is said on MEL’s behalf that the reference on 20 June 2008 to the proposed use of the PSC was misleading, because it was not truly being used merely as a test or benchmark, to ensure that bidders were providing value for money, but in this instance it was in effect a competitor. Although on 1 July 2008 the Council accepted that the PSC did indeed relate to an actual site, albeit undisclosed, it was still maintaining that it was only a hypothetical comparator.
  14. A further clarification note was issued or “reissued” on 25 August 2008, although it had been dated 24 July. The purpose of this note was to inform the bidders that they should reappraise their proposals and submit what was described as a “best commercial offer”. It was said that this would be evaluated against the “evolving public sector comparator”.
  15. Against this somewhat unpromising background, MEL submitted its tender on 10 September 2008. Following a meeting on 2 October 2008, MEL was notified by the Council on 5 November that the decision had been taken to “terminate” the competition. On the same day, however, it was announced that the Council was to develop the arena at the Claypit Lane site.
  16. It is MEL’s case that the Council had in fact embarked at least a year earlier on a parallel track of providing an alternative public development option, while not only withholding that information from bidders but taking positive steps to conceal it. In particular, when MEL through Ms Fletcher persisted in asking for reassurances, it was given a false picture.
  17. One of the documents Mr Hirst drew to my attention was an email of 28 July 2008 from a Mr Nick Russell with reference to possible amendments to a draft document being considered at that time. The proposed amendments were described in these terms:

    “All this for the audit trail if don’t progress. I have warned advised that we could frighten at least one of the bidders off through this route. Martin understands this.

    Lets try to redraft clearly but soft enough to keep the parties in. This is a draft on which they can comment, but on the issue of PSC selection when we have made clear don’t think we can go backwards, so care to be taken.”

    The language is by no means entirely clear, but Mr Hirst suggests that this provides some evidence that the intention was to lead the bidders “up the garden path”.

  18. It is necessary to identify the limited parts of the amended particulars of claim that are now under attack, but I need to put them in context. I shall therefore set out paragraphs 74 to 77 in full:

    Breaches of the Regulations

    74. Pursuant to obligations arising under Regulation 47(1) of the Regulations and/or general principles of Community law, the Defendant owed the Claimant a duty to comply with the terms of the Regulations in respect of the Procurement.

    75. Further or alternatively, in carrying out the Procurement the Defendant owed the Claimant duties arising under Regulation 4 of the Regulations and/or general principles of Community law to assess its bid in accordance with the principles of transparency, equal treatment and non-discrimination and not to make any manifest error of assessment.

    76. In the premises, by reason of the matters described above, the Defendant acted unlawfully and in breach of the duties it owed to the Claimant pursuant to Regulation 4(3) and 47(1) of the Regulations and/or in breach of obligations arising in Community law.

    Particulars

    i. In the Contract Notice and in the tender documents provided by the Defendant to the Claimant, the Defendant indicated that the Claimant’s bid would be assessed solely on the basis of the evaluation methodology set out therein and in accordance with the competitive dialogue procedure. By way of introducing a PSC against which bids would be evaluated, the Defendant applied a criterion that was not indicated in the contract notice or tender documents contrary to Regulation 30(3) of the Regulations;

    ii. Further or alternatively, by informing the Claimant that a PSC had been established in respect of this Procurement but in doing so misrepresenting the true nature and purpose of the PSC that had been established; indeed, contrary to the Defendant’s representations, this PSC involved development of a specific alternative site or sites, and by making representations to the contrary, the Defendant did not act transparently;

    iii. Further or alternatively, by requiring the Claimant’s bid to compare favourably to the PSC, the Defendant applied a weighting to that criterion that was not indicated in the contract notice or tender documents contrary to Regulation 30(3) of the Regulations, and was not otherwise communicated to the Claimant. The PSC was in fact a pass/fail test in relation to value for money assessment that rendered the Claimant’s performance under the disclosed evaluation methodology irrelevant, since regardless of how well the Claimant performed under that methodology, its bid could not be successful unless it was better than the undisclosed PSC;

    iv. Further or alternatively, by adjusting the Claimant’s bid for “normalisation” and “risk adjustment” without at any time explaining the basis upon which such adjustments were made and/or making equivalent adjustments to the PSC, the Defendant made a manifest error of assessment and/or failed to act transparently and/or failed to treat the Claimant equally and/or in a non-discriminatory manner;

    v. Further or alternatively, by applying a so-called “positive sensitivity analysis” to the PSC while failing to apply any such analysis to the Claimant’s bid, the Defendant made a manifest error of assessment and/or failed to act transparently and/or failed to treat the Claimant equally and/or in a non-discriminatory manner;

    vi. Further or alternatively, in considering the variant of Plan B using the Claypit Lane site and in failing in its assessment to take sufficient account of the conditionality of that proposal and the risks associated with it, especially in relation to negotiations with third parties and the acquisition of third party land interests and in particular as compared to the definitive nature of the Claimant’s bid, the Defendant made a manifest error of assessment and/or failed to treat the Claimant equally;

    vii. Further or alternatively, in considering the variant of Plan B using the Claypit Lane site and in taking into account the possibility of developing the detailed design within the constraints of the available public sector funding without permitting the Claimant similar opportunity to refine its proposals in like fashion, the Defendant failed to treat the Claimant equally and in a non-discriminatory manner;

    viii. Further or alternatively, in placing such weight upon the comparison of bids received under the Procurement, which had been under development for nearly a year, with the PSC that the Defendant itself acknowledged to be still “evolving”, the Defendant made a manifest error of assessment as the PSC was not sufficiently developed and/or developed to the same standard as the bids received under the Procurement, to support such a comparison;

    ix. Further or alternatively, in rejecting the Claimant’s bid and in terminating the Procurement on the grounds that the Claimant’s bid and other bids were unaffordable within the constraints of the available public sector funding, the Defendant acted contrary to its previous representations as to the availability and likely level of public sector funding contrary to the principles of transparency and equal treatment;

    x. Further or alternatively, in rejecting the Claimant’s bid and in terminating the Procurement without providing the Claimant with any opportunity to bring its bid within the scope of the affordability constraints that the Defendant had now identified, the Defendant prematurely terminated the competitive dialogue;

    xi. Further or alternatively, in rejecting the Claimant’s bid, in terminating the Procurement and in deciding instead to pursue Plan B, the Defendant failed to follow the process it had set out in the contract notice and tender documents and/or the competitive dialogue procedure as provided for in Article 29 of the Directive and Regulation 18 of the Regulations. Plan B was not part of, and should not be part of that process and could not replace a bid validly made and evaluated under the Procurement;

    xii. Further or alternatively, in rejecting the Claimant’s bid, in terminating the Procurement and in deciding instead to pursue Plan B, the Defendant failed to act transparently in that it had never indicated to the Claimant or other tenderers that the outcome of the Procurement would be determined by a comparison between the outcome of the Procurement and an alternative procurement route the existence of which had not been disclosed to the Claimant and other tenderers and/or had been misrepresented to the Claimant, despite the Claimant’s specific requests for confirmation as to the Defendant’s intentions in this regard.

    Breach of implied contract

    77. In the premises, by reason of the matters described above, the Defendant has acted in breach of the implied contract which existed between it and the Claimant.

    Particulars

    i. Paragraph [76] is repeated.

    ii. By virtue of the breaches of statutory duty particularised at paragraph 74 above, the Defendant was also in breach of the terms of the implied contract arising between it and the Claimant in that (1) the Defendant failed to consider the bids submitted, including the Claimant’s bid, fairly, honestly and in good faith and in accordance with the evaluation methodology set out in the Contract Notice and tender documents and (2) the Defendant’s decision to exclude the Claimant from the procurement of Leeds Arena was not objectively justified, reasonable or consistent with previous representations it had given the Claimant that any such exclusion would be only in accordance with the terms of the procedure laid down in the Contract Notice and tender documents.”

  19. In fact, from this passage in the pleading, the only parts which Mr Williams seeks to attack are sub-paragraphs 76(i), (iii), (x) and (xi) and paragraph 77. One of Mr Hirst’s points is that it seems curious to attack those particular paragraphs in view of those which remain unchallenged, and will require investigation, both on disclosure and at trial, come what may.
  20. There is also an attempt to strike out, perhaps unusually, the first paragraph of the prayer, which seeks an order preventing the Council from entering into any contract for the development of the Leeds Arena, whether at the Claypit Lane site or otherwise.
  21. Mr Hirst has reminded me that relief of the kind now sought should be reserved for plain and obvious cases and that I should not be drawn into conducting a mini-trial. He argues that this case is far from plain and obvious – not least because much of the factual background in relation to the Council’s conduct of the procurement process is either a matter of dispute or not as yet revealed. Mr Hirst, however, submits that it is at least clear already that there is a strong prima facie case that the Council conducted a seriously flawed procurement process. That may be so, but it would not necessarily preclude summary relief in a case where a particular plea can be shown, on facts which are either undisputed or assumed against the applicant, to be bad in law or otherwise bound to fail.
  22. Mr Hirst also points to the recognised judicial policy that a court should be slow to grant summary relief in a case which turns to a significant extent upon issues of law that are uncertain or developing. It is true, for example, that the 2006 Regulations are giving rise to a good deal of litigation at the moment and that their practical application is a matter that is having to be addressed on a case by case basis as new scenarios emerge.
  23. A central plank of Mr Hirst’s submissions is that the present application, narrowly focused as it is, merely nibbles around the edge of the claim and, even if successful, would not have the effect of undermining it in substance. He characterises the application as a time-wasting exercise.
  24. In order to understand the basis of Mr Williams’ argument it is necessary to explain more fully the nature of the Council’s case. It contends that the criteria for the award of the contract were fully set out in the tender documentation, together with their weightings, in accordance with Regulation 30(3), which provides:

    “Where a contracting authority intends to award a public contract on the basis of the offer which is the most economically advantageous it shall state the weighting which it gives to each of the criteria chosen in the contract notice or in the contract documents or, in the case of a competitive dialogue procedure, in the descriptive document.”

  25. In November 2008 the tender process was terminated before the final stages of the competitive dialogue procedure were reached and before there was a full evaluation of the tenderers’ bids. Accordingly, Mr Williams submits that the decision to abandon the procedure was not taken through any application of the award criteria (that stage not having been reached), but simply on the basis that the commercial proposals place on the table by the two bidders were not affordable. Thus, the Council concluded, as he submits it was entitled to do, that value for money would not be achieved by continuing.
  26. Mr Williams emphasises that neither the Directive itself nor the 2006 Regulations would require the award criteria to be applied to a decision not to award a contract, but instead to abandon the tender procedure.
  27. There are certain obligations which do arise when such an abandonment takes place, but Mr Williams submits that they were fully complied with in this instance. In particular, the Council conveyed its reasons for abandonment to the bidders; furthermore, MEL had been informed of the situation by no later than 25 August 2008, when it received the clarification note to which I have already referred.
  28. Mr Williams also submits that the Council’s procedure was consistent with the requirements of Regulation 18 and, specifically, with the requirements contained in sub-regulations (20)-(24), which are in these terms:

    “(20) The contracting authority shall open with the participants selected, in accordance with Regulations 23, 24, 25 and 26, a dialogue the aim of which shall be to identify and define the means best suited to satisfying its needs.

    (21) During the competitive dialogue procedure, a contracting authority –

    (a) may discuss all aspects of the contract with the participants selected;

    (b) shall ensure equality of treatment among all participants and in particular, shall not provide information in a discriminatory manner which may give some participants an advantage over others; and

    (c) shall not reveal to the other participants solutions proposed or any confidential information communicated by a participant without that participant’s agreement.

    (22) The contracting authority may provide for the competitive dialogue procedure to take place in successive stages in order to reduce the number of solutions to be discussed during the dialogue stage by applying the award criteria in the contract notice or in the descriptive document.

    (23) Where the contracting authority provides for the competitive dialogue procedure to take place in successive stages in accordance with paragraph (22), it shall ensure that the number of economic operators to be invited to participate at the final stage is sufficient to ensure genuine competition to the extent that there is a sufficient number of economic operators to do so.

    (24) The contracting authority may continue the competitive dialogue procedure until it can identify one or more solutions, if necessary after comparing them, capable of meeting its needs.”

  29. Mr Williams adds that it is the Council’s case that MEL could not have been awarded the development contract. Its commercial proposal was not, he submits, affordable within the competition’s affordability parameters. It would have been unlawful to alter those parameters for the purpose of accommodating MEL’s commercial proposal without having abandoned the original procedure and launched a fresh competitive tender process.
  30. Reliance is placed by the Council on its conclusion that value for money would not be achieved by continuing with the tender procedure. Moreover, in accordance with its duty as a best value authority, it was obliged to consider such other options as were open to it.
  31. In the light of that brief summary of his client’s case, Mr Williams submits that the challenged sub-paragraphs in paragraph 76 of the amended particulars of claim fall into a trap. That is to say, they fail to distinguish the duties which exist in respect of the disclosure and application of award criteria, and their weightings, from the (less onerous) duty which arises in respect of a decision to terminate a procedure without making an award.
  32. He summarised, as follows, those complaints that he submits should be struck out.
  33. In relation to paragraph 76(i), the claim is that the Council, in introducing a PSC against which to evaluate the bids, had applied a criterion which had not been indicated in the relevant documents. It is MEL’s contention that this would infringe the requirements of Regulation 30(3), set out above.
  34. That is obviously closely linked to the allegation in paragraph 76(iii), to the effect that the Council applied an undisclosed weighting. Indeed, it is said that it simply introduced a pass/fail test inconsistent with the weightings announced earlier.
  35. Paragraph 76(x) contains the allegation that the Council wrongly terminated the procedure without providing MEL with an opportunity to bring its bid within the scope of the affordability constraints.
  36. As to paragraph 76(xi), it is alleged that the Council failed to follow the process set out in the contract documents by terminating the procurement and deciding to pursue what is described as “Plan B” (not being in itself part of the tender process).
  37. Mr Williams submits that none of these contentions is sustainable because, by one means or another, they all seek to impose obligations in respect of termination that cannot be justified under the Regulations.
  38. Mr Hirst says that this is beside the point. While he is not prepared to accept that the Council had an unchallengeable right to terminate in November 2008, that is not the basis of MEL’s complaint in paragraph 76. It is criticising the introduction of a PSC, secretly and in parallel with the procurement process, from a much earlier point (which he puts, on the basis of disclosed documents, at no later than January 2008). Further, as Mr Williams appears to accept, the introduction of the PSC entailed a pass/fail test. The complaint about this is that it replaced the weighting which had originally been given and constituted a new, and undisclosed, “hurdle”.
  39. Moreover, paragraph 76(x) should not be characterised as seeking to obtain a “second bite at the cherry”, since MEL’s true complaint is that it had never been given any proper opportunity to match up to the undisclosed new criterion of affordability. That is a criticism of the way the procedure was conducted – not of the later termination. The Council never explained the PSC to the bidders and, therefore, MEL could not have known what it was truly competing against. Nor, for that matter, could the Council have explained the situation since the PSC was recognised internally to be “evolving” in any event. Although Plan B and the PSC were, in a real sense, outside the procurement process and separate from it, nevertheless what MEL is complaining about in this part of the pleading is that it was playing a role in parallel during the procurement process itself. It was not merely an alternative option to which the Council turned following abandonment.
  40. While recognising that paragraph 76(xi) goes further, and criticises the decision to pursue Plan B rather than the mere fact of termination, Mr Hirst submits that this is a case that MEL is fully entitled to run. He submits, in the light of the history I have briefly described, that the true analysis here is that the Council decided to go with what had in effect been for some time a (secret) competitor. That argument may or may not succeed at trial but, in the light of the developing law in this area, MEL should not be deprived of the opportunity of arguing the point. Once again, the complaint is that there had been a lack of transparency during the process and prior to termination. Mr Hirst submits that these are most unusual circumstances and are not covered by any existing authority, whether European or domestic.
  41. Mr Hirst also wishes to be able to argue at trial that there is no authority, so far, which demonstrates that an authority in the position of the Council has an untrammelled right to terminate; that is to say, a right to terminate without due regard to transparency and non-discrimination.
  42. Mr Williams cited to me a number of European authorities, which are becoming very well known, in support of the proposition that there is indeed a right to terminate a procurement process that is only fettered by the obligations (a) to notify the Official Journal and (b) to supply in writing, if so requested by any tenderer, the reasons for its decision: see e.g. case T-203/96 Embassy Limousines & Services v European Parliament [1998] ECR II-4239; case C-27/98 Metalmeccanica Fracasso Spa v Amt der Salzburger Landeregierung fur den Bundesminister fur wirtschaftliche Angelegenheiten [1999] ECR I-5697; case C-92/00 Hospital Ingenieure Krankenhaustechnik Planungs GmbH (HI) v Stadt Wien [2002] ECR I-5553; Kauppatalo Hansel Oy v Imatran Kaupumki [2003] ECR I-12139; case T-69/05 Evropaiki Dynamiki v European Food Safety Authority, Order of the Court of First Instance of 19 October 2007, OJ [2007] C 315/39.
  43. I see the force of Mr Williams’ submission, in relation to the wide scope of a public authority’s discretion to terminate a procurement process, in general terms. Yet I do not think it would be right to strike out any of the passages in paragraph 76 (or otherwise grant summary relief) in the light of the particular facts of this case. The case pleaded, which Mr Hirst wishes to leave open for trial, is not directed solely to the circumstances of termination but, as I have already attempted to make clear, to the parallel process leading to the formulation of Plan B. It was continuing, albeit undisclosed, during the procurement process itself. What, if any, damage flowed from this will be for later consideration.
  44. I turn then to paragraph 77, which is concerned to identify the facts alleged to give rise to breaches of an implied contract. Mr Hirst objected to some of Mr Williams’ submissions on this part of the case on the ground that he appeared to be making a wider point; namely, to the effect that MEL should not be allowed to plead an implied contract at all. On the other hand, as Mr Hirst emphasised more than once, no challenge was raised on the application to paragraph 7 of the amended particulars of claim where the existence of such a contract is asserted. I agree that this extension would not be legitimate, in view of the limited nature of the application. In any event, there is authority that an implied contract can arise in a procurement context even in circumstances where the 2006 Regulations have application: see e.g. Harmon CFEM Facades (UK) Ltd v House of Commons Corporate Officer (1999) 67 Con LR 1. Thus, the pleading in paragraph 7 is not inherently objectionable.
  45. The purpose of paragraph 77, as I understand it, is simply to identify conduct which is said to give rise to breaches of the implied contract pleaded at paragraph 7. It is raising, in effect, an alternative legal basis for relying upon the averments set out earlier in the pleading. It may well be that at trial this way of putting the case will add nothing, as Mr Williams submits, but I do not think it appropriate to strike the passages out and thus preclude the argument.
  46. Finally, it is necessary to consider the claim for an injunction, contained in the prayer, which Mr Williams also seeks to strike out. His position was not entirely easy to understand, since on the one hand he submitted that the claim is absolutely hopeless but, on the other, contended that the survival of the plea on the record would cause major inconvenience to the Council by inhibiting its future conduct.
  47. I find it very difficult to imagine circumstances in which the court would be in a position at trial to grant this form of relief. Mr Hirst accepts that no such order could bite in respect of contracts already entered into and the evidence suggests that, by that time, all relevant contracts would indeed have been finalised. Even if this proves to be incorrect, there would be powerful arguments why the court should not put a spoke in the Council’s freedom of action in the context of procurement: see e.g. the observations of Aikenhead J (with reference to interim relief) in the recent case of European Dynamics v HM Treasury [2009] EWHC 3419 (TCC) at [24]. But that is not a reason to strike out the claim for an injunction at this stage. The matter should properly be assessed when the time comes.
  48. In the result, I shall reject the Council’s application in its entirety.

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