London Borough of Enfield, R (on the application of) v Secretary of State for Transport & Ors

The Appellant (“Enfield”) claimed judicial review of the Respondent’s decision to issue an Invitation to Tender (“ITT”) for the East Anglia Rail Franchise (“the EARF”) on 17^th September, 2015 without a minimum requirement that bidders provide a 4 trains per hour (“4tph”) service to Angel Road/Meridian Water from May 2018, throughout the day. By her judgment dated 21^st December, 2015 (“the judgment”) following a “rolled up” hearing, Elisabeth Laing J granted Enfield permission to apply for judicial review but dismissed its claim. From that decision Enfield seeks to appeal.

We too followed a “rolled up” procedure; the matter was listed for permission to appeal, with the appeal to follow if permission was granted. We have now heard full argument and grant permission to appeal.

The background, from the perspective of Enfield, relates to a major regeneration and development of the Meridian Water area in the Borough (“the Regeneration”). The estimated value of the Regeneration is some £2.5 billion; it is intended to provide 8,000 houses, accommodating some 25,000 residents and 3,000 jobs, in a Greater London Authority (“GLA”) designated “Opportunity Area”; Enfield itself has already committed some £70 million. It is said by Enfield that it is the largest development in London of its kind since the 2012 Olympics. Enfield’s case is that it is critical to the success of the Regeneration that a 4tph service is provided to the Angel Road/ Meridian Water station from May 2018 throughout the day (i.e., during normal train running hours). The interested developers (“the Bidders”) are said to regard this 4tph service as crucial and, therefore, the Regeneration is at risk if a 4tph service is not specified as a Train Service Requirement (“TSR”) by the Respondent. Letters from the Mayor of London evince support for the Enfield position.

The perspective of the Respondent is necessarily very different; the Department for Transport’s (“DfT’s”) focus is on the EARF – rather than the Regeneration - and the disparate needs of a segmented market. The scale of the EARF deserves mention. The EARF includes passenger services operating between London Liverpool Street and destinations in Essex, Hertfordshire, Cambridgeshire, Suffolk and Norfolk on two main lines: the Great Eastern Main Line and the West Anglia Main Line (“WAML”). The 131 train stations within the EARF are distributed across thousands of miles of track and cater to many thousands of passenger journeys each day. As set out in the Rail Executive’s September 2015 East Anglia Rail Franchise Stakeholder Briefing Document and Consultation Response (“the Briefing Document”), Delivering Transformation and Growth for Passengers, at para. 2.3:

“ The passenger services can be broken down into five market segments.

•

InterCity services which offer long distance rail services between London and Norwich operating on the Great Eastern Mainline.

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Great Eastern rail services which operate between London and Southend Victoria, Southminster, Clacton-on-Sea, Ipswich, Harwich, Braintree and Sudbury.

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West Anglia services which operate between London and Hertford East, Cambridge and King’s Lynn.

•

Stansted Express which offers a link to Stansted airport with some peak commuting services.

•

Regional services which include interurban rail services between Norwich, Cambridge and Ipswich and rural services to Great Yarmouth, Lowestoft, Cromer and Sheringham that link into InterCity services. These services also provide some connections at Peterborough to the Midlands and the North of England.”

All this said and as will be seen, a major issue on this appeal (Ground III, below) goes to the question of whether the Respondent was rationally entitled to leave out of account the benefits of and risks to the Regeneration flowing from his decision as to the TSR for Angel Road.

As helpfully summarised by Ms Carss-Frisk QC for Enfield, the grounds of appeal are that the Judge erred in:

We were most grateful to both Ms Carss-Frisk and to Mr Sheldon QC (for the Respondent) for the quality of their assistance.

The facts are fully and clearly set out in the Judge’s judgment and need not be extensively repeated here. I highlight those of particular relevance to the appeal.

Angel Road station, which will in due course be replaced by a new station, Meridian Water, is in the Regeneration area. Angel Road is on the railway line from Stratford to Hertfordshire, i.e., the WAML. It is not in dispute that the current service to Angel Road is limited.

A new, third, track is to be built to run parallel to the WAML, for part of the way between Stratford and Angel Road, with construction expected to complete in 2018. That track will provide for a Stratford – Tottenham Hale – Angel Road line (“STAR”); the improvements resulting from the STAR line, once constructed, will enable an additional 2tph to run between Stratford and Angel Road/Meridian Water. To achieve 4tph at Angel Road – as required by Enfield – would involve increasing the current service by 2tph as well as the additional 2tph flowing from the completion of the STAR line.

With a view to the construction of the STAR line, a STAR steering group was set up in about February 2014 (“the steering group”). It included representatives from Enfield, Network Rail, Haringey London Borough Council, Transport for London (“TfL”), the Greater London Authority (“GLA”) and the Respondent. For some time, it would seem until about June 2015, it was anticipated that the TfL Overground Services (“LOROL”) would be responsible for STAR; only thereafter did it become the responsibility of the Respondent to procure the STAR service. As summarised in the judgment (at [12]), the draft terms of reference for the steering group were:

“ ….to provide a decision-making body to oversee the development and delivery of two schemes: the STAR scheme and the scheme to Improve Angel Road station. The steering group was to advise on risks, funding and costs overruns in co-ordination with other projects in the Lea Valley Area, and to report to the London Enterprise Panel (‘the LEP’) and to the GLA’s Investment and Performance Board. ”

Pausing here, it is convenient to introduce two individuals who were members of the steering group and who loom large later in these events. The first is Ms Margaret Kalaugher, a principal transport policy officer at the GLA, who acted as secretary of the steering group. A Mr Ben Stafford of the DfT also attended; his job title was Principal Programme Sponsor in the Rail Networks Upgrades team at the DfT (though he is elsewhere described as the Principal Project Sponsor). As shown by the steering group minutes, he acted as liaison between the steering group and the franchise part of the DfT.

The steering group minutes of the 26 February 2014 meeting indicate that an objective was to “…improve frequency and reliability of local services between Stratford and Angel Road and enable a 4tph service throughout the day”. In the minutes of the 29 May 2014 meeting, this was referred to as a “strategic priority”. Those minutes record Mr Stafford as the “lead” in respect of an action to ensure “…infrastructure facilitated and procured for a 4tph service is factored into the next franchise period, especially for the STAR extension, and establish whether any financial benefit …could be captured to contribute to the cost”. The minutes of the 28May 2015 meeting record Mr Stafford as the lead in respect of an action “Speak to colleagues regarding the East Anglia Rail Passenger Franchise and desire for 4tph service up to Angel Road.” As the Judge noted, it can also be seen that Mr. Jonathan Roberts, Enfield’s consultant, regularly attended the steering group meetings after the 28 November 2014 on its behalf; in the course of doing so, he became acquainted with Mr Stafford.

As it seems to me, the steering group minutes are helpful in three respects:

In December 2014, the Rail Executive (a part of the DfT) launched the East Anglia Rail Franchise Consultation (“the Consultation”), seeking the views of all “stakeholders” on the future of rail services in East Anglia. Those views would “inform the specification” being developed for the EARF that would be issued to bidders in the summer of 2015.

Para. 3.4 of the Consultation document set out the “Franchise objectives”. These included the following:

“ When potential operators bid for the franchise they will be asked to consider delivering the following objectives for the franchise.

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Help the economy of East Anglia thrive by offering higher quality rail services for passengers to and from the region and across the region with service levels that reflect the specific requirements of the different markets served, while working within the affordability constraints on public funding.

…..

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Support local communities to help deliver local transport integration, local regeneration and investment in and around stations…..”

Later in the Consultation document there was this reference to “Social Value”, at para. 6.18:

“ In line with the Public Contracts (Social Value) Act 2012, we will be considering:

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how the East Anglia franchise might improve the economic, social and environmental wellbeing of the area it serves; and

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how, in conducting the process of procurement, Rail Executive will act with a view to securing that improvement.”

I return, later, to the importance which came to be attached both to the objective of “local regeneration” and to the EARF improving the local economy.

Enfield responded to the Consultation in March 2015 – its response (“the Response”) was drafted by its consultant, Mr Roberts, to whom reference has already been made. In the discussion below Box B, the Response acknowledged that local Lea Valley services were “…severely constrained in frequency because of the compromise timetable forced on all users by the limitations of a two-track main line with no passing loops….”. The broad level of train services at local Enfield stations was “…a basic 2 trains per hour in each direction, rather than the TfL norm of 4tph…” This was “totally unacceptable for an urban railway”. Box C stated as Enfield’s objective “Outer London 4 trains per hour frequency”; it continued:

“ ..Enfield…requires that the output specification for the new franchise raises planned local service levels at the borough’s stations to 4tph on weekdays as soon as possible within the franchise lifetime…. ”

Again, the Response acknowledged the constraints, here relating to the minimum intervals between trains. Shorter intervals and new track might be required to address the problem.

In the text below Objective (or Box) G, headed “TfL involvement with Lea Valley services”, detailed reference is made to the Regeneration and Enfield’s wish for a 4tph service at Angel Road:

“ At Angel Road/Meridian Water, there is not yet certainty that a 2tph Stratford-Herts service will call at all times at Angel Road or its replacement station, Meridian Water. This is an essential priority, for the first new timetable recast with the new franchise in December 2016 or in 2017.

A large new community, initially with 3,000 jobs and 5,000 homes, is being created at Meridian Water. Enfield …is to contribute £12m of the £19m for a new station there, to replace Angel Road station with a new, conveniently located and accessible station. By 2019, this will also be the initial terminus of the STAR Line service…. A 4tph service frequency is essential at Meridian Water, to stimulate developer engagements and sufficiently high housing densities. The STAR Line service will be 2tph, so there is an urgent requirement for the new franchise operator to revise the West Anglia route timetable to schedule a consistent 2tph service there throughout the week…”

The Response prompts the following observations:

I turn from Enfield’s aspirations to the work done by the DfT. With regard to the specification for the franchise, the DfT was assisted by the firm LeighFisher Inc (“LF”) as technical advisers. The methodology adopted by the DfT was demand driven. As helpfully summarised by the Judge (at [27] of the judgment), it involves a complex process by which the different priorities were identified and a long list of options developed for detailed assessment. The Judge continued as follows:

“ The key factors which produce demand for rail services are GDP per capita, population and employment. Demand by station and train call for each route and business segment was established, using demand growth forecasts. Those are based on economic projections provided by the Defendant’s Demand Driver Growth (‘DDG’) forecasts (except that the GLA’s employment projections are used for employment in Central London).”

In the event, though the DfT was well aware of the calls for a 4tph service at Angel Road/ Meridian Water from Enfield and, for that matter, the Mayor of London, a full business case analysis was not performed prior to the issue of the ITT in September, 2015. Moreover, as only became clear at the hearing before the Judge, though in designing the TSR the Respondent focused on “transport economics” (Mr Sheldon’s expression) and hence on meeting actual and projected travel demand over the franchise period, he did not take into account at all in selecting the TSR, either the benefits flowing from the Regeneration if it went ahead or the risk in the light of the chosen TSR that it might not do so. It is common ground that no such wider cost/ benefit analysis was performed.

The approach adopted by the DfT and LF appears from the evidence before the Judge. As explained by Ms Letten, the project director for the EARF competition, in her witness statement dated 13th November, 2015, the DfT “applies a strict appraisal methodology” so as to “create consistency in the analysis of franchises”. As to Angel Road, Mr Franklin, the Project Manager for LF said this (in his witness statement of 16th November, 2015):

“ Stakeholder aspirations were reviewed against the options and business cases that were being prepared, and if it was considered that the option was either already being considered; was not deliverable; was inconsistent with wider stakeholder objectives; or had been discounted at the optioneering (sic) working group stage, it was not considered for detailed assessment. In the case of Angel Road and Northumberland Park our analysis of current and future passenger demand at all …[WAML]… stations… indicated that the planned TSR service frequency, supplemented by STAR, would be sufficient. I also recall that we and the Department considered that, if we were to accommodate Enfield’s aspiration of 4tph throughout the day, there could be an adverse impact on express and longer distance trains on the route owing to the difficulties in timetabling a mix of fast trains, such as the Stansted Express, and slow trains on shared infrastructure. In addition, there would likely be a general performance risk for the whole line given that additional stops would lead to the margin between adjacent fast and slow trains being narrowed. Accordingly, the supplementing of the STAR 2tph services…..with an additional 2tph throughout the day by requiring more WAML services to stop at Angel Road was deemed to have deliverability risk, and adverse journey time impacts on some of the major passenger flows on the route.”

At all events, it is clear from the contemporaneous e-mails between Mr Bradshaw of LF and Mr Morris the Operational Specification Manager of the DfT, that, by 24th July, 2015, officials in the DfT and LF had formed the view that the TSR for Angel Road/Meridian Water would comprise the existing service plus the additional 2tph when STAR was completed. There would not be a 2tph addition to the service provided by the WAML.

It is next convenient to turn to the e-mails on which Enfield’s Ground I rests. In June and July, Mr Stafford speaks of telephone discussions with the GLA as to the level of services. According to Mr Stafford’s witness statement, after checking with Mr Morris, on 29th July, 2015, he sent the following e-mail (“the 29th July e-mail”) to Ms Kalaugher (of the GLA and also the secretary of the steering group):

“ ….Following the discussion we had the other day about the services to Angel Road and the nature of the next Anglia franchise, I have some good news. As I suspected, the franchise approach is quite open for bidders to propose improvements to service and come up with new ideas etc. However, 4tph from Angel Road has been specified as a minimum requirement once the necessary infrastructure works have been completed. As I understand it the ITT will specify 2tph until the STAR scheme has been completed and 4tph once it has.”

The difficulty of reconciling what is said in the 29th July e-mail with the view already taken in the DfT as to no augmentation of the WAML service (summarised above), is readily apparent. Matters did not, however, end there.

On the 31st July, a Mr Jones of the DfT sent an e-mail to Ms Letten and Mr Morris saying this:

“ …following a direct question from the Mayor of London to the SoS, I understand that we have stated that the EA ITT will require bidders to operate the STAR Stratford to Angel Road service of 2tph up to delivery of the additional infrastructure and 4tph following this. Can you confirm this is the case please.”

To this e-mail, Mr Morris replied on 4 August, saying “That is the case”.

Intriguingly, Mr Morris gave this answer on the 4^th August, despite receiving a further e-mail from Mr Bradshaw on the 31^st July underlining that it was important to recognise that the TSR would not provide for an increase in the WAML service.

On the 5th August, Mr Roberts (the Enfield consultant) e-mailed Mr Stafford, as follows:

“ I’m sure the time is approaching for the East Anglia franchise ITT to be published.

I wonder if you can confirm what the expected position is with the ask about Meridian Water having a basic 2tph/ 4tph STAR specification, as was set out below.

Enfield will be keen to be positive to prospective development interests once the ITT is public. ”

The reference to “below” is explained by the Judge, at [38] and following in the judgment; suffice it here to say that there are further references to the importance attached to the 4tph service and the complexity involved in achieving it.

On the same day, Mr Stafford replied (“the 5^th August e-mail”) in the following terms:

“ Hopefully I am right in thinking that Meridian Water is the new name for Angel Road station? If so I can confirm that we are expecting the ITT to require bidders to operate the STAR (Stratford to Angel Road) service of 2tph up to delivery of the additional infrastructure and 4tph following the completion of the infrastructure. ”

The evidence as to Enfield’s knowledge of the 29^th July and 5^th August e-mails and the reliance which it is said was placed on them is contained in the first and second witness statements of Mr George, Enfield’s Regeneration Programme Director (“George 1” and “George 2” respectively). George 1 states that after the 29^th July and in the expectation that there would be a 4tph service, Enfield “continued with its plans for the Regeneration procurement and has incurred considerable sums in professional fees (principally on planning consultants) as well as taking forward the procurement itself.” The linkage to the 29^th July and 5^th August e-mails is, however, weakened by the next assertion in George 1 that no such actions would have been taken if Mr Stafford had indicated at any point – going back to the 28^th May steering group meeting – that there would not be a 4tph service. It may be noted that George 1 refers to Mr Roberts’ e-mail of 5^th August having been sent out of “an abundance of caution”.

George 2 was dated 24 November 2015; by then Enfield knew that reliance was in issue, so Mr George dealt with the topic at greater length. George 2 states that had Enfield been advised of the position now adopted by the Respondent it would have done a number of things differently, including putting the procurement process on hold and not incurring significant sums on professional and other fees. However, a number of the examples which then follow plainly pre-date the 29^th July and 5^th August e-mails; indeed, it is difficult throughout this statement to be confident as to that which relates to those two e-mails and that which pre-dates them. George 2 does go on to suggest that it would not have issued an invitation on 31^st July to participate in dialogue and submit outline solutions (“ISOS”) for the master developer contract, a key stage in the procurement process; however, even in this regard: (1) it is clear that anything done on 31^st July could not have been done in reliance on the 5^th August e-mail; (2) it is far from clear that what was done on the 31^st July was done in reliance on the 29^th July e-mail. It is, however, plain that the 29^th July e-mail did come to Enfield’s knowledge (a point to which I shall return). George 2 also includes some specific references to actions taken after the 5^th August; these involve briefings, meetings and evaluations of the outline solution submissions. At para. 45, George 2 says this:

“ ….Enfield has taken the view that it would not stop the master developer procurement for the Regeneration following publication of the EARF ITT. It is Enfield’s view that there is far too much at stake to risk putting everything on hold because the Defendant has failed to ensure… a 4tph service…. There is also a risk that were it to do so, Enfield would suffer around £3m in abortive fees to the master developer bidders because the Bidders have now each spent circa £1 million in preparing their bids. If the procurement was halted or becomes abortive Enfield could get challenged by all 3 Bidders asking for compensation of fees. The Bidders would not have incurred a large proportion of those fees had the master developer procurement been stopped prior to the ISOS on vision and key outline principles made on 31 July 2015. ”

On the 17^th September, 2015, the DfT published both the ITT and the Briefing Document. Disconcertingly - it certainly does nothing to boost confidence - the two documents were contradictory with regard to the service level for Angel Road/Meridian Water.

It is common ground that the ITT does not impose a minimum requirement on bidders to provide a 4tph service to Angel Road/Meridian Water throughout the day; instead, the minimum requirement does not extend beyond 4tph only during 2-3 hours of evening peak traffic and in one direction only.

By contrast and, as it turns out erroneously, the Briefing Document when dealing with the Franchise Specification and under the heading “Providing Extra Train Services” speaks of “…2tph Angel Road – Stratford calling at all stations to become 4tph once new infrastructure is built.” Moreover and when dealing with “Our Vision for the Franchise”, the Briefing Document, mutatis mutandis, uses the same language as the Consultation:

“ Bidders for the franchise are being asked how they will deliver the following objectives for the franchise:

……

•

Support local communities to help deliver local transport integration, local regeneration and investment in and around stations.”

Still further, the Respondent’s Foreword underlined the “clear objectives” for the EARF, recognising the “vital role the railway will play in securing the economic growth” in the region. That same point as to economic benefits for the region features later in the Document under the heading “Summary of Benefits”.

After the commencement of these proceedings, Ms Letten of the DfT sent a letter dated 3^rd December, 2015 to Enfield setting out the Respondent’s “reconsideration” of the TSR for Angel Road (“the reconsideration”) and attaching the 25 page LF analysis which had been conducted. The matter is concisely summarised in the judgment:

“ 65. …The letter [of 3^rd December] said that Angel Road was one of the least used stations on the WAML. It summarised why the Defendant had not thought it necessary to analyse a full business case for increasing the service for Angel Road.

66.

The letter said that the Defendant had since instructed …[LF]…to do such an analysis with the same method which had been used for analysing other proposals for increases in services…. LF also did an analysis using Network Rail’s latest demand growth figures for Angel Road, as a comparator. Those figures directly took account of the figures for homes (5000) and jobs (3000) forecast for Meridian Water. To test the analysis, it was repeated with those figures trebled. Even then there was no positive business case for the increased train service. The Defendant had taken into account the Claimant’s representations and the aspirations of ‘key stakeholders’ and ‘key government objectives’. The Defendant must act fairly between stakeholders, and take into account what is ‘deliverable’ and ‘value for money’. It was therefore important for the Defendant to use ‘a consistent and tested’ method for deciding where the limited improvements which were possible should be focused. Having considered these factors, the Defendant had decided that the service level in the published TSR was still appropriate. ”

It is only necessary to add that the LF analysis indicated that, consistently with “..recommendations in WebTag A5-3 ‘Rail appraisal’, and the approach undertaken on the appraisal of train service options for inclusion in the specification”, they had not assessed “Wider Economic Impacts (agglomeration effects)”. The reason given was that these were very difficult to assess for rail schemes alone – there would be a need to calculate the change in accessibility of zones by all modes of transport, not just by rail. As to the business case in respect of the options for reaching a 4tph service level, these all had negative Net Present Values (“NPVs”) of between £0.4m and £6.6m.

I turn to the three grounds of appeal.

The legal framework: It is convenient to begin with a brief (and essentially undisputed) outline of the legal framework for present purposes.

First, a public authority may create a legitimate expectation (substantive or procedural) by making a clear and unambiguous representation upon which it is reasonable for a member of the public to rely: R v Devon CC, ex p Baker [1995] 1 All ER 73, at 88, per Simon Brown LJ (as he then was). The starting point is to ask “…what in the circumstances the member of the public could legitimately expect”: R v North and East Devon HA, ex p Coughlan [2001] QB 213, at [56] (italics added). The question of whether a representation is clear and unambiguous is objective rather than subjective: Paponette v A-G of Trinidad and Tobago: [2010] UKPC 32; [2012] 1 AC 1, at [30], per Lord Dyson JSC (as he then was). An important reason for the protection of legitimate expectations lies in the trust between citizens and officials, upon which good government depends: Wade and Forsyth, Administrative Law (11^th ed.), at p.451.

Secondly, the consequences of legitimate expectations fall into different categories. As neatly summarised by the Judge (at [73]), drawing on Coughlan (supra), esp. at [57]:

“ Where a public authority has created a legitimate expectation, and wants to change its mind, that expectation can have one of three main consequences: (1) the authority may be bound to take the promise into account if it is minded to resile from it and gives it the weight it thinks fit; (2) it may be bound to give an opportunity to the promisee to make representations before it changes its mind; or (3) if it has promised a substantive benefit, the court ‘in an appropriate case’ will decide whether a change of tack is so unfair as to amount to an abuse of power…. ”

The second category involves the procedural protection ofexpectations whether substantive or procedural, whereas the third is concerned with substantive benefits: see: Coughlan (passim); Wade and Forsyth (supra), at pp. 458 – 459.

Thirdly, the issues to which legitimate expectations give rise may come to be considered in a wide variety of contexts, as, with respect, illuminated by Laws LJ in R v Education Sec., ex p Begbie [2000] 1 WLR 1115, at pp. 1130 – 1131:

“ ….In some cases a change of tack by a public authority, though unfair from the applicant’s stance, may involve questions of general policy affecting the public at large or a significant section of it (including interests not represented before the court); here the judges may well be in no position to adjudicate save at most on a bare Wednesbury basis, without themselves donning the garb of policy-maker which they cannot wear…

In other cases the act or omission complained of may take place on a much smaller stage, with far fewer players. ….The case’s facts may be discrete and limited, having no implications for an innominate class of persons. There may be no wide-ranging issues of general policy, or none with multi-layered effects, upon whose merits the court is asked to embark. The court may be asked to envisage clearly and with sufficient certainty what the full consequences will be of any order it makes. In such a case the court’s condemnation of what is done as an abuse of power, justifiable ….only if an overriding public interest is shown of which the court is the judge, offers no offence to the claims of democratic power.

There will of course be a multitude of cases falling within these extremes, or sharing the characteristics of one or other. The more the decision challenged lies in what may inelegantly be called the macro-political field, the less intrusive will be the court’s supervision. More than this: in that field, true abuse of power is less likely to be found, since within it changes of policy, fuelled by broad conceptions of the public interest, may more readily be accepted as taking precedence over the interest of groups which enjoyed expectations generated by an earlier policy.”

Fourthly, while, as a matter of law, reliance on the promise in question is not a pre-requisite to a successful claim based on legitimate expectations, as observed by Peter Gibson LJ in Begbie (at p.1124):

“…it would be wrong to understate the significance of reliance in this area of the law. It is very much the exception, rather than the rule, that detrimental reliance will not be present when the court finds unfairness in the defeating of a legitimate expectation.”

Fifthly, in terms of the burden of proof, it is unnecessary to go beyond the summary furnished by Lord Dyson JSC, in Paponette (supra), at [37]:

“ The initial burden lies on an applicant to prove the legitimacy of his expectation. This means that in a claim based on a promise, the applicant must prove the promise and that it was clear and unambiguous and devoid of relevant qualification. If he wishes to reinforce his case by saying that he relied on the promise to his detriment, then obviously he must prove that too. Once these elements have been proved by the applicant, however, the onus shifts to the authority to justify the frustration of the legitimate expectation. It is for the authority to identify any overriding interest on which it relies to justify the frustration of the expectation. It will then be a matter for the court to weigh the requirements of fairness against that interest.”

The judgment: The Judge’s conclusions on this Issue can be shortly summarised:

The rival cases: For Enfield, Ms Carss-Frisk did not pursue the claim that the Respondent had unfairly breached Enfield’s “substantive legitimate expectations”, namely, that the ITT would include a minimum requirement of a 4tph service to Angel Road/Meridian Water. Instead, the Enfield case was that the assurances given by the Respondent in the 29^th July and 5^th August e-mails at least entitled Enfield to an opportunity to make further representations on an “informed basis” as to the essential need for a 4tph service against the background of the Respondent not taking into account the benefits of and the risks to the Regeneration; this case was thus confined to the “procedural protection of substantive expectations”. The Judge had correctly construed the e-mails of the 29^th July and 5^th August; that apart, Ms Carss-Frisk challenged the Judge’s conclusions root and branch. Ms Carss-Frisk underlined the importance of maintaining confidence and trust in the communications of officials.

For the Respondent, Mr. Sheldon did not seek to challenge the Judge’s reading of the 29^th July and 5^th August e-mails. In his submission, the Judge’s conclusions had been set out with great care; they applied well-trodden principles and disclosed no error of law. No legitimate expectations had been generated here and there was no reason to believe that anything said in the relevant e-mails had been reasonably relied upon by Enfield. As to reliance, “in the real world” some £70 million had been spent and committed before the e-mails; Enfield was not going to stop and had not stopped; there was not the clarity in the evidence that might have been expected. As the Judge had observed, Enfield had taken a calculated risk – the e-mails did not make a significant difference. It was not unfair not to entertain further representations; Enfield had already put its best case in the Response and was not entitled to a further “go”. Further, any amendment to the TSR in Enfield’s favour would have had detrimental consequences for other users of the EARF; it would therefore be unfair to entertain further representations from Enfield unless the same opportunity was afforded to those who would be thus affected. Finally, it was noteworthy that the reconsideration had reached the same conclusion.

Discussion: The 29^th July and 5^th August e-mails contained clear and unambiguous statements by Mr Stafford of his understanding that 4tph throughout the day would be specified in the ITT; the Judge’s reading of those e-mails was correct and Mr Sheldon was realistic not to challenge it.

For my part, I do not think that Mr. Stafford’s role is to be downplayed as the Respondent sought to do. As “Principal Programme (or Project) Sponsor” his role was plainly of some significance, all the more so because he was providing liaison between the steering group and the franchise part of the DfT. Moreover, the statements made in the 29^th July and 5^th August e-mails were not “rogue” statements made by Mr Stafford on some frolic of his own; on the evidence before us, he had checked with Mr Morris before sending the 29^th July e-mail and, as earlier noted, his statement in the 5^th August e-mail accorded with a confirmation given by Mr Morris in an internal e-mail of the 4^th August.

These statements were, however, mistaken. 4tph, as the DfT already well knew, were not going to be specified in the ITT. Regrettably, this was an inept performance on the part of the DfT, serving to undermine public confidence in its competence and the communications of its officials.

Differing from the Judge, I am of the view that the Respondent must be taken to have known that the 29^th July e-mail would be transmitted to Enfield. By sending the e-mail, as Mr Stafford did to Ms Kalaugher, it was plainly to be inferred that she would distribute it to all members of the steering group, including Enfield. I am, with respect, unable to accept that the precise capacity in which Mr Stafford communicated with Ms Kalaugher would have made any difference in this regard. As already remarked, I am also satisfied that the 29^th July e-mail came to Enfield’s knowledge – and there is no reason to suppose that it did not do so more or less contemporaneously.

Thus far but, with respect, no further, I see force in the Enfield case on this Ground. Beyond this point, the Enfield case encounters insuperable hurdles and, in my judgment, the Judge was right in the conclusions to which she came. My reasons follow.

I am not persuaded that either or both the 29^th July and 5^th August e-mails created any legitimate expectations on the part of Enfield.

First, this was a massive project in which Enfield had already spent or committed some £70 million before the e-mails. To my mind, it is simply unreal that the two e-mails in question – even on my approach to their distribution, Mr Stafford’s significance and the DfT’s failings – would have generated expectations, still less expectations upon which it was reasonable for Enfield to rely. The provision of 4tph was plainly not a done deal and Enfield knew that it would give rise to problems for others using the EARF. Against this background, as the Judge put it (at [87 iv)]), “..it was unreasonable for the Council to rely on an ‘informal’ email promising this great prize….”.

Secondly, I am wholly unpersuaded that Enfield placed any or any significant reliance on the 29^th July and 5^th August e-mails or either of them.

Further and if, contrary to my view, the Respondent had created a legitimate expectation, then I agree with the Judge, essentially for the reasons she gave (at [90] – [91]), on the particular facts, the Respondent would have been entitled to depart from it. This is one of those cases, contemplated by Laws LJ in Begbie where broad conceptions of the public interest relating to the EARF need to take precedence over the particular interest of Enfield.

Still further and if, again contrary to my view, the Respondent had created a legitimate expectation, I would not have been attracted to giving Enfield an opportunity to make further representations. In a nutshell and as already observed, the Enfield case could not have been more fully or plainly expressed than it was in the Response; there is nothing whatever to suggest that the Respondent was not well aware of that case. Moreover, further representations from Enfield could not have been entertained without resulting in a further round of representations from others interested in the EARF who might have been affected by the requirement of 4tph at Angel Road/Meridian Water; public administration is not improved by delay thus occasioned. For completeness, I am not dissuaded from this conclusion by Ms Carss-Frisk’s post-hearing submissions. In this regard too, I agree with the Judge (at [101]).

Accordingly, I would dismiss Ground I.

I can deal very briefly indeed with this Ground. Its essence appears from Ms Carss-Frisk’s skeleton argument:

“ ….the learned judge erred in holding that the Defendant did not act in breach of natural justice and unfairly towards Enfield in misinforming Enfield….but then not giving Enfield a chance to make further representations. Enfield relies on all the points set out above. [i.e., under Ground I] In R (USA Tobacco) v Secretary of State for Health [1992] QB 353, the Court of Appeal held that while the applicant could not rely on the doctrine of legitimate expectation, it had been ‘led up the garden path’ and that fairness and natural justice therefore required that the Secretary of State give the applicant an opportunity to make representations before he changed his policy… Similarly in this case, Enfield was misled about the Defendant’s intentions as to the minimum requirements in the ITT, and fairness and natural justice required that Enfield be told of the true position and given an opportunity to make representations. ”

As it seemed to me at the hearing, on the facts of the present case, the success of Ground II depends essentially on the fate of Ground I. In short, if Enfield had succeeded on Ground I, it would not have needed Ground II; conversely, if Enfield failed on Ground I, Ground II would not avail it. The USA Tobacco case, concerning a government volte face on banning oral snuff but not other tobacco products is very far removed from the facts here – certainly in the light of my conclusions on Ground I. Suffice to say that for the reasons already expressed under Ground I, I am not persuaded that the Respondent acted in breach of natural justice or unfairly in not giving Enfield an opportunity to make further submissions. The Judge arrived at the same conclusion (at [101]) and I agree with her; it is unnecessary to express any view on the reasons she there gave for coming to this conclusion and I do not do so.

Introduction: Under this Ground and as earlier foreshadowed, Enfield alleges irrationality on the part of the Respondent in failing to take into account the benefits of, and potential harm to, the Regeneration if the ITT did not require a 4tph service to Angel Road/Meridian Water.

The legal framework: The starting point is The Railways Act 1993 (“the 1993 Act”), helpfully summarised by the Judge (at [69]):

“ Section 23 of the Railways Act 1993…. requires the Defendant to designate such services for the carriage of passengers by rail as he considers ought to be provided under franchise agreements. Section 26(2) requires the Defendant to prepare an ITT and to issue it to such persons as he thinks fit. By virtue of section 29(5) …..a franchise agreement may contain such conditions as the Defendant thinks fit. The discretion conferred by section 29(5) is, in terms, a broad discretion. Parliament has conferred it on the Defendant in a complex, technical, quasi-commercial field.”

Notably, the Respondent enjoys a broad discretion.

The Public Services (Social Value) Act 2012 (“the 2012 Act”) requires public authorities to have regard to economic, social and environmental well-being in connection with public services contracts. S.1(3) provides as follows:

“ The authority must consider –

(a)

how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and

(b)

how, in conducting the process of procurement, it might act with a view to securing that improvement.”

As will be seen, Enfield does not seek a determination from this Court that s.1(3) of the 2012 Act applied to this part of the franchise process; the argument here is, instead, that the Respondent had promised to comply, by analogy, with the obligations imposed by s.1(3) and had breached that analogical duty.

As to “irrationality”, a working definition is to be found in De Smith’s Judicial Review (7^th ed.), at para. 11-036:

“ Although the terms irrationality and unreasonableness are these days often used interchangeably, irrationality is only one facet of unreasonableness. A decision is irrational ….if it is lacking ostensible logic or comprehensible justification. ”

Self-evidently, irrationality is not easily established.

The judgment: The Judge rejected the contention of irrationality. As she put it (at [94]), the question was “…whether, and if so, to what extent, the Defendant must specifically take into account, in drawing up the TSR, the economic value of a future development, which it knows that one entity in its area wants to promote….”. The Judge’s answer to this question was as follows (at [95]):

“ I have already said that the statutory discretion is a wide one, and noted that it is to be exercised in a highly technical and complex field. I do not consider that, as a matter of statutory construction, it is possible to spell out an obligation of the kind for which the Claimant contends. It is for the Defendant, subject to Wednesbury, to decide how it will specify the TSR. I am not persuaded that the general method which the Defendant has decided to use for doing that is irrational, or that its preference for analysing the transport economics of different options for the TSR is unlawful. ”

The Judge next dealt with submissions advanced by Enfield with reference to the 2012 Act, which the Judge had already categorised (at [94]) as another route to the same goal. The principal Enfield submission (at [98]) was that even if, as a matter of law, the 2012 Act did not apply at all or to the relevant stages of procurement, the Respondent had nonetheless promised to comply, by analogy, with the obligations imposed by s.1(3) thereof at those stages. In this regard, the Judge held (at [99]) that the Respondent had complied with s.1(3) by analogy:

“ The duty is a duty to consider how what is proposed to procure might improve the economic etc well-being of the area, and how, in conducting the process of procurement, the Defendant might act with a view to securing that improvement. These are general target duties expressed at a very high level of abstraction. There are multiples of different ways in which different relevant authorities might consider these matters. I am not persuaded that the way in which the Defendant approached the specification of the TSR breached this analogical duty. In particular, I cannot spell out of this analogical duty [an] obligation to take into account the economic value of one entity’s plans for one development in the relevant area.”

The rival cases: It was common ground that the Respondent had not taken into account the benefits of and potential harm to, the Regeneration, when deciding on the minimum TSR for the ITT. In Ms Carss-Frisk’s submission for Enfield, it was irrational on the Respondent’s part not to have done so and the Judge’s conclusion was in error. The gravamen of Ms Carss-Frisk’s complaint focused on the Respondent’s own commitment to comply, by analogy, with the 2012 Act, together with the franchise objectives of “local regeneration” and to the EARF improving the local economy, contained in the Consultation – and later reiterated in the Briefing Document. The Respondent could not rationally comply with his own objectives and commitments if he left the Regeneration out of account. Albeit the Respondent was required to balance competing priorities, he could not do so if the Regeneration was not even considered. While not every local project needed to be taken into account, it was irrational to leave out of account a project on the scale of the Regeneration. As shown, for example, by Crossrail 2 it was possible to factor in wider economic impacts.

For the Respondent, Mr Sheldon strongly resisted the charge of irrationality. He submitted that the DfT had used an established, standard, economic modelling methodology, in order to specify a TSR that would provide optimal benefits (within the constraints of the available track and associated infrastructure) across the EARF as a whole. The DfT’s focus was on transport economics and was demand led, so taking into account meeting current and projected travel needs. On the DfT evidence (set out above), this methodology created consistency in the analysis of franchises. The Respondent could not take into account every development within the area of the EARF; the Respondent did not and could not approach the matter from the point of view of advantaging particular development projects - it was not for him to “pick winners”. The standard transport economics methodology was proportionate for franchise specifications. New infrastructure projects (such as Crossrail 2) were different from franchise specifications, where it was necessary to make the best use of a congested infrastructure. In any event, the approach followed here was not in conflict with any of the Respondent’s commitments or objectives whether under the 2012 Act or otherwise. As Mr Sheldon expressed it in his skeleton argument:

“ Specifying a train service requirement by reference to transport economics modelling implicitly takes account of rising demand for rail services resulting from population growth in particular areas, and is consistent with delivering maximum social, as well as economic, value in a consistent manner that is not liable to being skewed by ‘special pleading’ from particular persons or interests. ”

Discussion: There is, with respect, undoubted attraction in Ms Carss-Frisk’s submissions. First and foremost, there is the contention, all the more forceful for its simplicity, that if local regeneration was an objective of the franchise, how could the Respondent rationally not take the Regeneration into account? Secondly, the Respondent’s assertion that its standard transport economics methodology was proportionate for a franchise specification but a wider economic impact assessment was not, is no more than an assertion in Mr Sheldon’s skeleton argument. In my judgment, if the Respondent wished to advance a “proportionality” argument, it required evidence, not simply the submissions of counsel, even if (as Mr Sheldon told us) they were based on his instructions. Thirdly, it is plain that wider economic impact assessments are capable of being conducted, as demonstrated by the Respondent’s approach to Crossrail 2.

On balance, however, I am not persuaded that Enfield has made good its charge of irrationality. My reasons follow.

First, I do have regard to the Respondent’s commitments contained in the Consultation, repeated in the Briefing Document, as to local regeneration, helping the economy and acting in line with s.1(3) of the 2012 Act. As it seems to me, however, these are broad aspirational words, rather than amounting to specific criteria for the franchise specification. While this wording cannot be dismissed as a mere “puff” (cf., Chitty on Contracts, Vol. I, 31^st ed., 2012, at para. 6-007) – and the Respondent does not contend that it should be – the objectives are drafted (very likely by a number of hands after a series of revisions) in generalised terms and should be read accordingly. Put another way, objectives such as local regeneration, helping the economy and the like are plainly worthy and worthwhile; extracting a precise commitment from such language is altogether more difficult. As the Judge observed with specific regard to the 2012 Act (at [99]), “…These are general target duties expressed at a very high level of abstraction.” For my part, I would certainly not wish to elevate these statements of objectives into a hard and fast requirement for the use of any particular methodology in developing the franchise specification, the TSR and the ITT. Put another way, it is a leap altogether too far from these objectives to the conclusion that the methodology utilised by the DfT was irrational.

Secondly, I accept Mr Sheldon’s submission that the adoption of the DfT’s standard transport economics modelling is not inconsistent with any of the objectives stated in the Consultation or the Briefing Document. The reason is that this methodology is demand led, based on current and projected transport needs. A transport system that is responsive to demand – current and projected – is bound, in my view, to assist local regeneration and the local economy, together with the social goals described in the 2012 Act. In any event and though the demand led standard transport economics methodology is clearly different from an approach based on wider economic impacts, I am not persuaded that there is as stark a dichotomy between them as Enfield urged. Additionally, I accept the DfT evidence that the approach it adopted assisted in achieving consistency, both across the EARF and as between different franchises.

Thirdly, the Respondent enjoys a wide discretion under the 1993 Act in what the Judge rightly described (at [69]) as a “…complex, technical, quasi-commercial field”. As already canvassed, the evidence is lacking to permit the conclusion that the DfT could not have conducted a wider economic impact assessment, taking particular account of the Regeneration or that it would have been disproportionate to do so – and the Crossrail 2 example shows that it was capable of conducting such an exercise. It does not at all follow that it was irrationalnot to do so and instead to proceed with the standard transport economics methodology. All the more so when, as appears from the evidence of Ms Letten and Mr Franklin (set out above), it must be taken into account: (1) that the provision of 4tph at Angel Road/ Meridian Water would have had an adverse impact on other users of the EARF and carried with it a performance risk for the whole line; and (2) that there was no positive business case for the increased train service at Angel Road, even on the assumptions deployed in the reconsideration. Even assuming that the Respondent could “pick winners”, I cannot accept that it was irrational for him not to do so, in a context where striking a fair balance between competing priorities could give rise to acute difficulty.

For these reasons, I would dismiss Ground III.

Enfield has applied to adduce evidence that was not before the Judge, principally, a further statement from Mr George, dated 21^st March, 2016 (“George 3”). I have now read George 3, de bene esse and agree with the Respondent that its principal focus is to seek to bolster the Enfield case on: (1) risk to the Regeneration if 4tph is not specified as part of the ITT; and (2) reliance on the 29^th July and 5^th August e-mails. Other parts of George 3, together with some ancillary materials were admitted into evidence, providing the Court with an update on developments following the judgment.

For my part, I would not admit the controversial parts of George 3 into evidence. They manifestly fail the test contained in Ladd v Marshall [1954] 1 WLR 1489, even assuming (without deciding) that test is to be more broadly read in the light of the “overriding objective” of the CPR. Had it wished to do so, Enfield could and should have adduced this evidence before the Judge. It is unfair and wrong to seek to do so now.

It goes without saying that nothing in this judgment should stand in the way of the parties seeking a negotiated solution, if achievable.

I agree.

I also agree.