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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Lancashire County Council v Brookhouse Group Ltd [2024] EWCA Civ 717 (28 June 2024) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2024/717.html Cite as: [2024] WLR(D) 308, 215 Con LR 98, [2024] PTSR 1513, [2024] EWCA Civ 717 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
TECHNOLOGY AND CONSTRUCTION COURT (KB)
Mr Martin Bowdery KC (Sitting as a High Court Judge)
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE COULSON
and
LADY JUSTICE NICOLA DAVIES
____________________
Lancashire County Council |
Appellant |
|
- and - |
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Brookhouse Group Limited |
Respondent |
____________________
Tim Buley KC and James Neill (instructed by DLA Piper UK LLP) for the Respondent
Hearing date: 12 June 2024
____________________
Crown Copyright ©
LORD JUSTICE COULSON:
1. Introduction
2. The Background Facts
"3. Framework Agreement with Eric Wright
3.1. Our client entered into the SPA with EWG on 20 December 2012 pursuant to its powers contained in section 1 of the Localism Act 2011 having conducted a procurement exercise in accordance with the Public Contracts Regulations 2006 ("Regulations") initiated by the issuing of a contract notice in the Official Journal of the European Union on 6 March 2012. This appears to be the same procurement that you refer to in paragraph 3.2 of your latest letter. Crucially, however, the SPA is not a framework for the purposes of the Regulations and it was not procured as one. It is a long-term strategic partnering arrangement for the structured development of public sector assets in Lancashire – one of two such strategic partnering agreements procured by our client at that time.
3.2. The SPA was procured properly and lawfully pursuant to the Regulations, and neither your client nor any other person has challenged the validity of the SPA at or since the date that it was awarded to EWG."
"On 29 July 2022 the Council entered into the Development Agreement ("DA") with Maple Grove, a wholly owned subsidiary of EWG, pursuant to the SPA. No Contract Award Notice was issued. Prior to the DA, Brookhouse had repeatedly challenged the legality of the SPA in correspondence with the Council. As such, the Council was concerned that a Contract Award Notice would simply prompt Brookhouse to issue a claim in respect of the DA. As set out below, there instead followed a further period of correspondence between the parties pertaining to the DA."
3. The PCR15
"Any person, public entity or group of such persons or entities, including any temporary associations of undertakings, which offers the execution of works or a work, the supply of products or the provision of services on the market."
That definition was the subject of detailed consideration in IGT. Other definitions that may matter for the purposes of this appeal include a "candidate", defined as "an economic operator that has sought an invitation or has been invited to take part in a restricted procedure, a competitive procedure with negotiation, a negotiated procedure without prior publication, a competitive dialogue or an innovation partnership"; and a "tenderer", defined as "an economic operator that has submitted a tender".
"55. — Informing candidates and tenderers
(1) Contracting authorities shall as soon as possible inform each candidate and tenderer of decisions reached concerning the conclusion of a framework agreement, the award of a contract or admittance to a dynamic purchasing system, including the grounds for any decision—
(a) not to conclude a framework agreement,
(b) not to award a contract for which there has been a call for competition,
(c) to recommence the procedure, or
(d) not to implement a dynamic purchasing system.
(2) On request from the candidate or tenderer concerned, the contracting authority shall as quickly as possible, and in any event within 15 days from receipt of a written request, inform—
(a) any unsuccessful candidate of the reasons for the rejection of its request to participate;
(b) any unsuccessful tenderer of the reasons for the rejection of its tender, including, for the cases referred to in regulation 42(14) and (15), the reasons for its decision of non-equivalence or its decision that the works, supplies or services do not meet the performance or functional requirements;
(c) any tenderer that has made an admissible tender of the characteristics and relative advantages of the tender selected as well as the name of the successful tenderer or the parties to the framework agreement;
(d) any tenderer that has made an admissible tender of the conduct and progress of negotiations and dialogue with tenderers."
(a) Regulation 92 sets out general time limits for starting proceedings under the PCR15 which, subject to certain exceptions, provides at Regulation 92(2) those proceedings "must be started within 30 days beginning with the date when the economic operator first knew or ought to have known that grounds for starting the proceedings had arisen".
(b) If, as here, the economic operator is seeking a declaration of ineffectiveness in respect of the underlying contract (in this case, the DA), there are two potential time limits, as set out in Regulation 93:
"93. — Special time limits for seeking a declaration of ineffectiveness
(1) This regulation limits the time within which proceedings may be started where the proceedings seek a declaration of ineffectiveness.
(2) Such proceedings must be started—
(a) where paragraph (3) or (5) applies, within 30 days beginning with the relevant date mentioned in that paragraph;
(b) in any event, within 6 months beginning with the day after the date on which the contract was entered into.
(3) This paragraph applies where a relevant contract award notice has been published [on the UK e-notification service], in which case the relevant date is the day after the date on which the notice was published.
(4) For that purpose, a contract award notice is relevant if, and only if—
(a) the contract was awarded without prior publication of a contract notice; and
(b) the contract award notice includes justification of the decision of the contracting authority to award the contract without prior publication of a contract notice.
(5) This paragraph applies where the contracting authority has informed the economic operator of—
(a) the conclusion of the contract, and
(b) a summary of the relevant reasons, in which case the relevant date is the day after the date on which the economic operator was informed of the conclusion or, if later, was informed of a summary of the relevant reasons.
(6) In paragraph (5), "the relevant reasons" means the reasons which the economic operator would have been entitled to receive in response to a request under regulation 55(2).
(7) For the purposes of this regulation, proceedings are to be regarded as started when the claim form is issued."
"(2)
The first ground
Subject to paragraph (3), the first ground applies where the contract has been awarded without prior publication of a contract notice in any case in which Part 2 required the prior publication of a contract notice.
(3) The first ground does not apply if all the following apply:—
(a) the contracting authority considered the award of the contract without prior publication of a contract notice to be permitted by Part 2;
(b) the contracting authority has had published [on the UK e-notification service] 1 a voluntary transparency notice expressing its intention to enter into the contract; and
(c) the contract has not been entered into before the end of a period of at least 10 days beginning with the day after the date on which the voluntary transparency notice was published [on the UK e-notification service].
(4) In paragraph (3), "voluntary transparency notice" means a notice [...] 2 which contains the following information—
(a) the name and contact details of the contracting authority;
(b) a description of the object of the contract;
(c) a justification of the decision of the contracting authority to award the contract without prior publication of a contract notice;
(d) the name and contact details of the economic operator to be awarded the contract; and
(e) where appropriate, any other information which the contracting authority considers it useful to include.
(5)
The second ground
The second ground applies where all the following apply—
(a) the contract has been entered into in breach of any requirement imposed by—
(i) regulation 87 (the standstill period),
(ii) regulation 95 (contract-making suspended by challenge to award), or
(iii) regulation 96(1)(b) (interim order restoring or modifying a suspension originally imposed by regulation 95);
(b) there has also been a breach of the duty owed to the economic operator in accordance with regulation 89 or 90 in respect of obligations other than those imposed by regulation 87 (the standstill period) and this Chapter;
(c) the breach mentioned in sub-paragraph (a) has deprived the economic operator of the possibility of starting proceedings in respect of the breach mentioned in sub-paragraph (b), or pursuing them to a proper conclusion, before the contract was entered into; and
(d) the breach mentioned in sub-paragraph (b) has affected the chances of the economic operator obtaining the contract."
4. The Pleadings
5. The Application to Strike Out
6. The Judgment Below
"30. The shorter time limit in Regulation 93(2)(a) will apply where:
a) Regulation 93(3) applies where the contracting authority publishes a contract award notice.
b) Regulation 93(5) applies which means that the economic operator has been given reasons not only of the conclusion of a contract but also "the relevant reasons";
c) These can only be by virtue of Regulation 93(6) the reasons to which the economic operator was "entitled" under Regulation 55(2);
d) Regulation 55 only applies where:
i) A contract has been awarded pursuant to a competitive tender procedure in accordance with the PCRs, so as to engage the obligation on the contracting authority under reg 55(1);
(ii) A "candidate" or "tenderer" within the meaning of reg 2 as defined above has requested reasons in accordance with reg 55(2);
(iii) The reasons requested must relate to one of the four matters specified in reg 55(2) which are quite specific;
(iv) Reasons relating to those matters need to have been provided, so as (inter alia) to start time running under reg 93(5)."
"31. The reasons relied upon by the Defendant are the reasons set out in its letter dated 22nd September 2022 as to why no competition at all was conducted for the Contract in question. Those reasons:
a) were not requested by a tenderer or a candidate and were not given to a candidate or a tenderer. This in itself is fatal to the Limitation Defence.
b) do not on any analysis constitute a summary of the relevant reasons for the purpose of reg 55(2) of the PCRs. It is simply a written response to the Claimant's letter before claim. The Defendant's response does not contain any information that relates to any of the matters specified in reg 55 (2)."
7. Common Ground and the Central Issue on Appeal
8. The Proper Operation of Regulations 55, 93 and 99 of the PCR15
9. The Council's Basic Case: Analysis and Conclusions
10. The Council's Other Specific Arguments
10.1 Were Brookhouse a "Candidate"?
10.2 Were Brookhouse a "Would-be Candidate"?
10.3 The Procurement Act 2023
"106 Time limits on claims
(1) A supplier must commence any specified set-aside proceedings before the earlier of—
(a) the end of the period of 30 days beginning with the day on which the supplier first knew, or ought to have known, about the circumstances giving rise to the claim;
(b) the end of the period of six months beginning with the day the contract was entered into or modified.
(2) A supplier must commence any other proceedings under this Part before the end of the period of 30 days beginning with the day on which the supplier first knew, or ought to have known, about the circumstances giving rise to the claim."
10.4 Alstom Transport v Eurostar International Limited & Anr [2011] EWHC 1828 (Ch)
10.5 The Principle of Rapidity
10.6 The 'Merits' Point
11. Conclusions
LADY JUSTICE NICOLA DAVIES
LORD JUSTICE NEWEY