D&G Cars Ltd v Essex Police Authority

This case concerns the arrangements made for the recovery of vehicles in the defendant’s police area. There are two actions before me. The first action relates to the termination of a contract between the claimant and the defendant for the recovery of vehicles on the defendant’s behalf. The second action is concerned with the removal of the claimant from a tender competition, related to placing further contracts for the recovery of vehicles, by the defendant. The factual justification for both the termination of the contract by the defendant and also the defendant’s decision to remove the claimant from the tender process were the same. The decisions related to the discovery, at the claimant’s premises, of a Land Rover Discovery vehicle (“the S-LR”) which had been recovered by the claimant and reported to the defendant as having been sent to be crushed, bearing the number plates and one of the Vehicle Identification Number (“VIN”) plates belonging to an older Land Rover Discovery which had been part of the defendant’s fleet of recovery vehicles (“the L-LR”). The full details of how that came about are one of the important issues in the case.

I am not required in the course of this judgment to deal with all of the issues in relation to quantum at stake in this case. I am in effect dealing with the issues in relation to liability, and most of the factual issues associated with the question of quantum.

Prior to embarking upon the main subject matter of this judgment I wish to place on record my gratitude to the lawyers on both sides involved in this case. As might be imagined in a trial of this kind, there were several twists and turns during the course of the hearing. These issues affected both sides in the presentation of their cases. Over the course of the trial a spirit of cooperation evolved between the parties which enabled it to proceed in an effective and timely manner and assisted me in my task of seeking to reach conclusions in relation to the questions raised in the case. I am very grateful for all of the lawyers’ various contributions to assisting me in my task.

The structure of this judgment reflects a number of factual themes which were pursued during the course of the trial. I appreciate that in structuring the judgment in this way, there are overlapping strands of the narrative which appear to be explored separately. I would, however, wish to confirm that in reaching the factual conclusions which I have had to reach, I have had regard, holistically, to the whole of the narrative skein made up of the various strands in the judgment set out below, in order to come to my conclusions.

In my approach to the factual findings in this case I have, of course, started from the proposition that it is for the claimant to prove its case and that it needs to be proved upon the balance of probabilities. So much is obvious and well known. I have sought to explain below the reasons why I have reached the factual conclusions, weighing up both the evidence from the witnesses from whom I heard, and the extensive documentation which is available in the case. There is, however, a further legal issue bearing on the fact-finding exercise, which I need to record that I have also borne carefully in mind. This issue is that there are, in this case, serious allegations of dishonesty being made and also allegations of corruption and conspiracy. In considering these issues I have applied the approach to be derived from In Re B [2009] 1 ACC 11 in which Lord Hoffmann set out the approach as follows:

“13.

… I think that the time has come to say, once and for all, that there is only one civil standard of proof and that is proof that the facts in issue more probably occurred than not. I do not intend to disapprove any of the cases in what I have called the first category, but I agree with the observation of Lord Steyn in McCann’s case, at p 812, that clarity would be greatly enhanced if the courts said simply that although the proceedings were civil, the nature of the particular issue involved made it appropriate to apply the criminal standard.

14.

Finally, I should say something about the notion of inherent probabilities. Lord Nicholls said, in the passage I have already quoted, that – ‘the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability.’

15.

I wish to lay some stress upon the words I have italicised. Lord Nicholls was not laying down any rule of law. There is only one rule of law, namely that the occurrence of the fact in issue must be proved to have been more probable than not. Common sense, not law, requires that in deciding this question, regard should be had, to whatever extent appropriate, to inherent probabilities. If a child alleges sexual abuse by a parent, it is common sense to start with the assumption that most parents do not abuse their children. But this assumption may be swiftly dispelled by other compelling evidence of the relationship between parent and child or parent and other children. It would be absurd to suggest that the tribunal must in all cases assume that serious conduct is unlikely to have occurred. In many cases, the other evidence will show that it was all too likely. If, for example, it is clear that a child was assaulted by one or other of two people, it would make no sense to start one’s reasoning by saying that assaulting children is a serious matter and therefore neither of them is likely to have done so. The fact is that one of them did and the question for the tribunal is simply whether it is more probable that one rather than the other was the perpetrator.”

Returning to the structure of the judgment, having examined the factual issues in the case, I shall then set out the legal issues, both agreed and in dispute, and make the conclusions necessary in that respect. Finally, I propose to set out the conclusions which I have reached in relation to the question of liability in both of the actions.

The defendants, in common with other police authorities, have to take responsibility for vehicles which have been recovered in a number of circumstances. They may be vehicles which have been abandoned. They may be vehicles which have been stopped and it has been discovered are not insured. They may be vehicles which have been involved in serious road accidents involving death, in which case the vehicles themselves may become pieces of evidence in a criminal investigation. The vehicles may be ones which have been directly involved in criminal activity and which need to be recovered and secured so as to enable detailed forensic examination of them as part of a criminal investigation.

It appears that for some time prior to 2006, the activity of recovering vehicles, when it was the responsibility of the defendant, had been outsourced to other contractors. In or about the summer of 2005, Mrs Angela Kemp was appointed to be the defendant’s Vehicle Recovery Manager. Part of her instruction in that new post was to undertake a reassessment and restructuring of the way in which the Vehicle Recovery Unit was operating. In her new role she set about reordering its internal administration. A part of this exercise was to re-examine the contractual arrangements that were in place in relation to the recovery of vehicles. The defendant concluded that it would be appropriate to reform the contractual arrangements so that, instead of them being undertaken at a cost to the police, arrangements should be put in place so that they would be undertaken at no cost to them. This involved reordering the way in which the charging for the service occurred so that instead of looking to the police for payment, the appointed contractors would seek to recover their costs, including the costs of storage of vehicles, from the vehicle’s insurers in some, but by no means all, of the cases I have set out above. The details of those charging arrangements are not central to the issues before me. I shall however, in due course, turn to the way in which other parts of the contract were operated and documented.

In order to place this new contract, it was necessary for Mrs Kemp to investigate with the various elements of the defendant (such as the Scenes of Crime Officers and Traffic Investigations Unit) how they wished to specify the requirements of the contract. She also examined how other police forces administered their vehicle recovery service so as to see whether there were any lessons which could be learnt from practice elsewhere.

All of this material was used by Mrs Kemp, in effect as the representative of the client in a procurement exercise, which was managed and supervised by Mrs Karen King, who was employed as a procurement manager by the defendant. In her role as the client representative Mrs Kemp was involved in the composition of the contract specification, the evaluation of the Pre-Qualification Questionnaires (“the PQQ”) and also the Invitation To Tender (“the ITT”) returns as well as coordinating site visits to the tenderers as necessary. It seems that the PQQs had been sent out prior to Mrs Kemp’s appointment in May 2005. It was not until 9^th December 2005 that the successful and unsuccessful bidders were advised, and those who had been successful at the PQQ stage were invited to submit tenders by 26^th January 2006. Those tenders were then evaluated and, in the case of the claimant, the award of a contract was notified on 3^rd March 2006.

Prior to turning to the detail of the contract award, it is perhaps logical at this stage to allude to an investigation which occurred into the 2006 procurement process. It seems that after the procurement process had been completed, there were a number of complaints raised in relation to it. These are set out in a report which was prepared by DS Angie Garrard. Her report is undated. Within the report she records the nature of the complaints which had been received as being as follows. It was alleged that the process had not been conducted fairly and had not been resourced by properly qualified staff. It was contended that, in relation to one of the competitors (Boyton Cross) they had been unfairly let back into the process after having apparently failed at the PQQ stage, and had then been successful in the tender process, notwithstanding that they did not have either the correct facilities or the necessary trained staff. In relation to a contractor called OnTime, a complaint was raised that they had previously been struck off an earlier contract on several occasions, but that had not been taken into account in the tender process. There were complaints that the process had been predetermined and that certain companies who were successful had in fact already been selected prior to any process being put in place. Allegations of corrupt practice were suggested and overall the process was considered to have been flawed.

In the report of her independent investigation, DS Garrard concluded that the documentary record keeping in relation to the process certainly left a great deal to be desired. There were gaps in the documentation and inconsistencies which rendered it difficult to explain clearly how the decision making process had been reasoned and conclusions had been reached. In particular, in relation to matters which will become germane in the present case, she was concerned as to the approach taken to the inclusion of parties in the process and the scoring of parties who at the point of tender completion did not have the necessary equipment, facilities or staff but who were intending to provide them in the event that their bid was successful. Having investigated the allegations made, she was able to conclude, and was satisfied, that there had been no corruption involved in the procurement process. However, she recorded in her report what Mrs King referred to during the course of her evidence as “learning points”. These related to the need for rigorous documentation to enable auditing of the process and clarity about the evaluation criteria, in particular in relation to elements which were promised for the future, rather than being evidenced at the time of the tender process.

Returning to the participation by the claimant in the procurement exercise, as set out above, they were a successful bidder and won a contract to provide services in the areas of Basildon, Brentwood, Chelmsford and the M25 West from Junction 28. The contract was awarded for five years from 1^st April 2006, with an option to extend for one year. The way in which the contract was structured required the provision of services set out in a specification annexed to the contract. I shall turn to that specification shortly. Condition F5.2 of the contract was under the heading “Remedies in the Event of Inadequate Performance” and provided as follows:

“F5.2 – in the event that the Authority is of the opinion that there has been a material breach of this Contract by the Contractor, or the Contractor’s performance of its duties under the Contract has failed to meet the requirements, then the Authority may, without prejudice to its rights under Condition H2 of the Contract do any of the following:

a)

make such deduction from the payment to be made to the Contractor as the Authority shall reasonably determine to reflect sums paid or sums which would otherwise be payable in respect of such of the Services as the Contractor shall have failed to provide;

b)

without terminating the Contract, itself provide or procure the provision of part of the Services until such time that the Contractor shall have demonstrated to the reasonable satisfaction of the Authority that the Contractor will once more be able to perform such part of the Services in accordance with the Contract;

c)

without terminating the whole of the Contract, terminate the Contract in respect of part of the Services only (whereupon a corresponding reduction in the Contract Price shall be made) and thereafter itself provide or procure a third party to provide such part of the Services; and / or

d)

terminate in accordance with Condition H2, the whole of the Contract”

The contract also addressed issues in relation to liabilities. Under condition G1.4 the following was provided:

“G1.4 subject always to Clause G1.1, in no event shall either Party be liable to the other for:

a)

loss of profits, business, revenue, goodwill or anticipated savings; and / or

b)

indirect or consequential loss or damage.”

In relation to termination, and as foreshadowed by the quotation from condition F5.2 above, condition H2.1 addressed the entitlement of the defendant to terminate the contract. That element of the contract provided as follows:

“H2.1 The Authority may terminate the Contract, or terminate the provision of any part of the Contract by written notice to the Contractor or the Contractor’s Representative with immediate effect if the Contractor commits a Default and if:

a)

the Contractor has not remedied the Default to the satisfaction of the Authority within 30 days, or such other period as may be specified by the Authority, after issue of a written notice specifying the Default and requesting it to be remedied; or

b)

the Default is not capable of remedy; or

c)

the Default is a fundamental breach of the Contract.”

Turning to the specification of the services to be provided, the specification made it necessary for the contractor to have attained and sustained PAS43 accreditation. This is a quality assurance award which is relevant to operating a vehicle recovery contract. Under the specification, the defendant retained the rights to vet those staff who were going to be engaged in the work under the contract through a security clearance process, in particular where they were involved in the handling, recording and storage of property. There was a requirement for rolling notification of new employees. The specification covered the quality and quantity of the storage space and forensic vehicle examination facilities together with prescribing security requirements for the premises, the requirements in relation to light / medium recovery vehicles and heavy recovery vehicles. Specific details were provided governing the procedure to be adopted for examining and recording recovered vehicles and any property within them, together with the storage and release of recovered vehicles and any property they might contain. In particular, the contract as originally configured contained the following in the specification at paragraph 5.8 in relation to disposal:

“5.8

Disposal

5.8.1

No recovered property may be disposed of to a Recovery Operator, their employees or relatives of employees, or agent or servant acting on their behalf, or any member or employee of the Police.”

Section 21 of the specification dealt with “Disposal of Vehicles by Crushing”. The section applied specifically to vehicles where an order under the Police (Property) Act 1897, or any other relevant legislation, had been made directing the vehicle to be crushed. It also applied to vehicles that were in a condition which the officer in the case concluded constituted a public or environmental hazard such that their immediate removal was appropriate. The specification required the crushing of such vehicles so as to ensure that no identifiable part could ever be used on another motor vehicle. The crushing had to be undertaken by an approved and suitably accredited salvage operator.

In the course of the proceedings, the defendant sought to raise a large number of alleged breaches of performance to augment their case in relation to the fundamental breach of contract upon which they relied. Attached to this judgment, at Annex 1, is the schedule of the breaches which was compiled and upon which the defendant initially relied. The production of that schedule gave rise to a great deal of investigatory work on the part of the claimant and the submission of substantial tracts of evidence to refute and contextualise those matters. As a result of the claimant’s endeavours, a very small number of the matters ultimately amounted to events which they admitted were breaches of terms of the contract and its included specification. The purpose of annexing the schedule to this judgment is to avoid the need to rehearse each of those matters in detail, in particular, in the light of matters to which I am about to turn. As is made clear in Annex 1, it is only those limited number of items which are in bold text that were accepted as being breaches by the claimant. Suffice to say that whatever the detailed aspects of these individual disputes in relation to performance might have been, none of them were treated at the time, or subsequently, as being major issues which, so far as the defendant was concerned, justified bringing the contract to an end.

Shortly prior to the trial of this matter commencing, the defendant abandoned its case in relation to all of the matters on the schedule which were not the subject of admission. By that I take them to concede that whatever their complaint may have been, either at the time of the breach or at the time of producing the schedule, those complaints are not in the light of the evidence produced by the claimant regarded now as being well-founded. In relation to the very limited number of complaints which were admitted to be a breach of contract by the claimant, they were relied upon by the defendant solely as potentially additional or cumulative justification for terminating the contract in circumstances to which I shall turn.

The consideration of Annex 1 does not however end at this point. That is because the claimant relies upon the schedule and its production as illustrative of the defendant’s bad faith in dealing with them. It is, the claimant says, symptomatic of the vindictive way in which the defendant has treated them (including in due course terminating the contract and removing them from the tender process) that they sought to raise a constellation of largely bogus allegations of breach of contract in the course of the litigation which were misconceived in the first place and then abandoned after the claimant has spent considerable time and energy refuting them. The force of that contention falls to be considered later in this judgment. However, the nature and extent of the schedule remains before me for that purpose, namely to show that even raising these matters is further evidence from the claimant’s perspective of the defendant’s bad faith.

It is sufficient to observe at this stage that at the very least it appears to me that the production of the schedule of breaches, and reliance upon them, generated far more heat than light in the conduct of this litigation. In my view, so far as the defendant’s case is concerned, they add little or nothing to the merit of the defendant’s case. For reasons which will become apparent when I turn to the facts leading up to the termination, it is clear to me that whatever may have been the position in relation to all of the complaints raised in the schedule, and even if all of them had been admitted, it did not form any significant or material role in the decision making by the defendant to terminate the contract. In my view, their inclusion within the litigation was as unwelcome as it was disproportionate.

Returning to the nature of the contract, and in particular the contract documentation, various forms and procedures were devised in order to facilitate the provision of instructions from the defendant to the claimant in respect of recovered vehicles and also to enable a documentary record to be created of the transactions occurring as the contract was worked upon. For the purposes of my decision, a very limited range of that documentation is pertinent. Firstly, upon the recovery of a vehicle, after the claimant had been instructed by the defendant to attend, a VR1 form was created by the claimant and sent to the defendant recording the identity of the vehicle and the defendant’s reference number, together with other information about the nature of the recovery. Secondly, at the foot of the VR1 form was a form VR2. The purpose of the VR2 form was for the claimant (and other recovery contractors) to record what had happened to the vehicle after it had been recovered. It would document whether the vehicle had been sent to be crushed or had been returned to the owner. A further form, VR3, was also created which contained within it basic details about the vehicle and the circumstances in which the call out to that vehicle had occurred.

Once the vehicle had been recovered there were various options as to the instructions which the defendant might give in relation to it. The key point is that any vehicle was held to the instructions of the defendant and that the claimant was not authorised to deal with the vehicle without those instructions. The various alternatives which might arise included the following. It may have been that it was appropriate to return the vehicle to its owner. Alternatively, the contract provided that if a vehicle was likely to be worth more than £2,000 it could be sent for auction. Finally, if the vehicle was uninsured or of little value, the instruction which the defendant would give would be for it to be crushed.

There were a variety of reasons for issuing a crush instruction from the defendant’s perspective. Amongst them was the concern that if the vehicle was not crushed but for instance broken up for parts then parts which were subject to patent defect might find their way onto the market and be traceable back to the defendant. There was also a concern that vehicles recovered from uninsured drivers were being returned, sometimes via circuitous routes, to the same uninsured drivers and being recovered again. Thus for issues of safety and law enforcement, crushing was often the appropriate outcome for a recovered vehicle.

During 2007 two events occurred concerning the recovery of vehicles which featured significantly in the conduct of the trial. The first related to a vehicle belonging to a Mr Coffey. It appears that on 26^th January 2006 a Y registration Vauxhall Astra was seized by the defendant on the basis that it was uninsured and it transpired that it was alleged to have been involved in a burglary. It further appears that Mr Coffey was informed on 19^th January 2007 that his vehicle had been crushed. Through solicitors, he claimed recovery of the value of the vehicle and stated that the documents in relation to its title were contained within the glove box, and therefore that they had been seized along with the vehicle. On 2^nd March 2007, solicitors acting on behalf of Mr Coffey wrote to the defendant, with his authority, raising his claim for damages in relation to the loss of the vehicle.

On 28^th September 2007, Mrs Kemp raised inquiries with the officer in the case in relation to issues such as the power used to recover the vehicle and the source of the authorisation that it should be disposed of. In his response, the officer was unable to assist as no further action had been taken in relation to the investigation and he was no longer able to recall what power had been used to recover the vehicle, or who may have authorised the disposal of the vehicle, although he accepted that as he was the officer in charge it might have been him. From the documentation the dispute appears to have grumbled on for some time after this exchange, with Mrs Kemp trying to obtain access to the interview record in relation to the investigation without success whilst seeking advice from one of the defendant’s civil claims handlers as to how to take the matter forward. It appears that, in the end, some compensation payment may well have been paid to Mr Coffey.

The reason why this incident had a higher profile in the case than other matters was that in her witness statement Mrs Kemp had stated that the defendant had been advised by the claimant that the vehicle had been returned to its owner, but had then discovered that it had in fact subsequently been registered in the claimant’s name and sold by them. In a witness statement responding to Mrs Kemp, Mr Harding the managing director of the claimant throughout the time with which these proceedings are concerned, stated that they had been authorised to sell the vehicle by the defendant and that the vehicle had never been registered in the claimant’s name. The issue thus emerged as a means of testing both witnesses’ credibility as to what they stated in their witness statements.

In relation to Mrs Kemp, she was pressed by Mr Platford, counsel for the claimant, to justify her contention that the claimant had told the defendant that they had returned the vehicle to the owner and to explain why this assertion was not the subject of any documentation. Mr Platford also pressed Mrs Kemp in relation to her contention that the vehicle had been registered in the claimant’s name and put to her, positively, that it never had. This induced the defendant to produce late evidence from the records of the DVLA that in fact the vehicle had been registered to the claimant, no doubt for the purpose of facilitating its sale, as described by Mr Harding in his witness statement.

On the evidence before me, I am unable to say conclusively whether or not the claimant had authority to sell this vehicle, but I am satisfied that they did do so, and that they registered the vehicle in their name. I am, furthermore, satisfied that Mr Harding was at the very least mistaken in his firm contention that the vehicle had never been registered to the claimant. Equally, however, I am not satisfied that Mrs Kemp is correct when she suggests that the claimant had told the defendant that the vehicle had been returned to its owner. That seems to me to be a contention contrary to the overwhelming preponderance of the evidence. I am also unpersuaded, as suggested in Mrs Kemp’s evidence, that this incident was a prime mover in the variation to the contract which I am about to describe. Similarly, for reasons which I shall explain below, I am equally unpersuaded that the second incident related to the exportation of commercial vehicles principally precipitated the variation in the contract. It seems to me far more plausible that the wide-ranging variations which I am about to describe were part of the overall ironing out of contractual issues in relation to the operation of the contract on a variety of fronts. In any event, little turns in my view on what actually caused the variation to occur. The fact is that it happened and in the following circumstances.

On 18^th July 2007, the defendant wrote to the claimant expressing their desire to vary the contract, in particular by their varying a number of aspects of the specification which I have described above. The variations touched upon issues such as storage space and the quality of the forensic and vehicle examination facilities, storage of stolen vehicles and undertaking roadside repairs to vehicles. In addition to these matters, of particular pertinence to the matters before me was the variation to Section 21 of the specification which as set out above related to the “Disposal of Vehicles by Crushing”. In Section 21 additional inserts were proposed. Firstly the categories of vehicle that were to be the subject of the requirements of disposal by crushing were enlarged to include those which would be uneconomical to auction. Of particular relevance to this case the following was added into this part of the specification:

“21.5

No recovered vehicle or property may be disposed of directly to a Recovery Operator, their employees or relatives of employees or agents or servants acting on their behalf, or any member or employee of Essex Police or their immediate family.”

This variation was accepted by Mr Jennings, a director of the claimant, on behalf of the claimant on 25th July 2007.

The second incident which achieved prominence in the course of the trial related to the exportation of lorries and the authorisation of that form of disposal in the following particular circumstances. On 9^th May 2007, Mr Jennings wrote to Mr James Cook, one of the defendant’s employees, who was Mrs Kemp’s manager. Mr Jennings requested authority to export four commercial vehicles which had been recovered because they were uninsured. The sale of these vehicles for export would have enabled the claimant to recover some revenue for the expense and time involved in recovering the commercial vehicles. In his response to this request, Mr Cook supported the suggestion in principle and asked Mrs Kemp to look into it. She in her turn said she would consider authorising the export of the four identified commercial vehicles, subject to full documentation and full details being provided.

A little while later, on 7^th June 2007, Mrs Kemp chased a response in relation to the request that had been made from Mr Cook, and the following day he confirmed that he was happy, in principle, for the export to proceed. He stated that he had already approved this idea more than once. It is important to note at this stage that the list of registration numbers of the commercial vehicles concerned did not include an Iveco lorry registration number A724 WEV (“The A Reg”).

It appears from the documentation that the A Reg had been recovered on 2^nd May 2007. Shortly thereafter, on 8^th May 2007, it seems that personnel in the defendant’s Vehicle Recovery Unit were fielding enquiries from a Mr Cooper, who was acting as an agent in relation to seeking the return of the vehicle. Mr Cooper had a seizure notice and was concerned to secure possession of the A Reg. Mr Cooper persisted with his enquiries and on 21^st May 2007 Mrs Kemp raised the issues as to why or by whom the release of the vehicle was being prevented, no doubt in order to provide him with a coherent response to his enquiries. It had become clear by this stage, if it was not before, that Mr Cooper was a trader assisting the owner of the vehicle to obtain its release. Having received no response in relation to that enquiry from within the defendant’s personnel, Mrs Kemp emailed her colleague Mrs Lynne Harvey identifying concerns about what documents might exist in relation to this recovery, and reinforcing that the defendant should only be dealing with the vehicle’s owner.

On 14^th June 2007 Mr Jennings forwarded an email with a list of four vehicles seeking authority for them to be exported. The email had originated with one of the claimant’s staff responsible for handling the contract with the defendant Mrs Louise Carley. The four vehicles which were identified were not the original four referred to above but were three of those original four together with addition of the A Reg. Mrs Carley’s email went on to identify an additional vehicle. That additional vehicle was in fact one of the ones originally identified in Mr Jennings’s email of 9^th May 2007. In truth the additional vehicle was the A Reg. On 15^th June 2007 Mrs Harvey replied to this email agreeing to the export of the original four that had been identified in the email of 9^th May 2007 but stating in relation to the A Reg (albeit with a typo as to the first letter calling it an “X”) that the vehicle “must be kept as it is in dispute, review date is 20/06/07”.

On 9^th July 2007 the claimants were sent the defendant’s instruction in relation to the A Reg. The instruction appeared at the top of a long list of vehicles and the instruction was for it to be crushed. However, unlike the other references within the instruction sheet referring to crushing, the instruction in the case of the A Reg was expressed as: “this must be crushed”. In fact that instruction was never actioned. The papers show that a sales invoice was generated by the claimant documenting the sale of the A Reg for export to a Mr Olanrewaju on 4^th August 2007.

This documentation seems to have come to the defendant’s attention in the following way. Mr Cooper persisted in chasing the issue on a very regular basis with the defendant seeking the return of this vehicle. On 7^th August 2007 Mrs Harvey was pursuing the documentation with the claimant. It is not altogether clear but I suspect the likelihood is that this was in order to address Mr Cooper’s complaints. On 8^th August 2007 documents relating to the sale of the A Reg came to light when they were faxed across in response to requests by Mrs Kemp and were thereby brought to her attention. That evening Mrs Kemp emailed Mrs King expressing her concern about what had occurred and the potential embarrassment that this could cause to the defendant, on the basis that her email discloses that Mr Cooper had purchased the vehicle from Mr Olanrewaju and therefore, the defendant would have some explaining to do as to how it could be that Mr Cooper’s client’s vehicle had not been returned to him, the instruction to crush it had not been carried out and indeed it had apparently been sold for reward by one of the defendant’s contractors to a third party. Such was Mrs Kemp’s concern about the situation that she canvassed with Mrs King in the email the prospect of suspending the claimant for failure to carry out the defendant’s instructions.

On 9^th August 2007 Mrs Kemp raised her complaint in relation to the failure to carry out the defendant’s instructions with Mr Jennings and asked for an explanation of what had occurred and answers to specific questions about what had taken place. On 10^th August 2007 Mr Jennings replied contending that he thought it had been agreed that uninsured commercial vehicles could be exported. On 11^th August 2007 Mrs Kemp replied drawing attention to the correspondence and the specific instruction in relation to the A Reg. On 13^th August 2007 Mr Jennings replied saying that he had taken it, from his conversation with Mrs Kemp and Mr Cook and subsequent emails, that all commercial vehicles could now be exported and that the crush instruction allowed for an export option.

This did not allay Mrs Kemp’s concern and she called a meeting with the claimant on 20^th September 2007 in order to seek an explanation as to why the instructions in relation to the A Reg had not been carried out and whether or not there were any other vehicles that had been incorrectly disposed of in a similar way. The notes of that meeting record the claimant confirming that the failure to crush the A Reg was an error on their behalf, they having understood that commercial vehicles could be exported irrespective of the instruction in relation to the A Reg vehicle and they advised that they were going to review their internal procedures.

The matter did not end there because on 3^rd October 2007 at the Quarterly Contract Review Meeting, amongst a wider variety of other matters, the matter of crushing was raised. The purpose of this meeting was to bring together all of the contractors working for the defendant in recovering vehicles and for issues pertaining to the contract to be aired. The contractors themselves were entitled to raise matters of concern to them as to how the contract was operating. One of the matters raised by Mrs Kemp at the meeting related to crushing. The minutes of the meeting record as follows:

“Crushing

AK [Mrs Kemp] advised that all garages used for crushing vehicles must be registered with the Environment Agency as approved ‘end of life’ disposal agents. VROs to provide evidence from each of their end of life disposal agents. All VRO to action. AK advised instructions from Essex Police to crush a vehicle must be complied with and Crushing means the vehicle must be crushed in totality.”

In her witness statement, and indeed in her evidence before me, Mrs Kemp relied upon this incident to emphasise the importance placed by the defendant upon following instructions and in particular the instruction to crush. Initially, she maintained in her earlier witness statement that Mr Cook had not given permission for the four vehicles to be exported. That was clearly incorrect and having reread the emails in preparation for the hearing she retracted that suggestion in a witness statement made after the trial had commenced. She nonetheless maintained the main thrust of her concern in relation to this episode, in that the export of the A Reg had not been authorised. In fact the claimant had been told to crush that vehicle.

Mr Harding, in a witness statement, maintained that Mr Cook had authorised the export of all of the vehicles. In his oral evidence he accepted that at the meeting of 20^th September 2007 the claimant had conceded that the sale of the A Reg was a mistake but he continued to assert that they had been entitled to sell it. He contended that this was a commercial decision and that in their discussions with the defendant, Mr Cook had told them to ignore what Mrs Kemp said.

Having considered this evidence I am unable to accept that the claimant had authority to do what they did with the A Reg vehicle. It is important to remember that the defendant does not allege that this incident reflects dishonest behaviour by the claimant but rather, as set out above, that it is context for their emphasis on the importance of following instructions particularly where they pertained to the crushing of vehicles. In my view the contemporaneous documentation is absolutely clear. The emails, to which I have referred, and also the instruction sheet relating to this vehicle make clear that the vehicle was to be crushed. Any reasonable reading of that documentation leads in my view, inevitably, to the conclusion that there was no authority to sell the vehicle. Whilst Mr Harding has made assertions about what Mr Cook may have said, I find it surprising that he would suggest that Mrs Kemp’s day to day instructions should be ignored in this or any other respect. I can see no sensible basis for him wishing to undermine her authority in running the contract from day-to-day in that respect, nor why it would be a responsible action of her manager to do so. Furthermore, and in any event, the note of the meeting of 20^th September 2007 is in my view perfectly clear and includes the acceptance that it was the claimant’s error that led to the vehicle being sold rather than any countermanding of Mrs Kemp’s instruction.

In my view this incident provides very important context for the significance to the defendant of the claimant following the instructions they were given and sheds some light on the potential embarrassment which could be caused to the defendant by instructions not being followed. Mr Cooper and the owner of the vehicle would have had justifiable cause for complaint, and indeed the ability to cause a considerable degree of bad publicity for the defendant by exposing the fact that a vehicle, which had been recovered and taken into the custody of the police, had been irresponsibly sold on to a third party without proper attention being given to the need to dispose of the vehicle correctly. The proper handling of the public’s property, notwithstanding the fact it was properly recovered using appropriate powers, is a matter which obviously required accurate and accountable systems to be in place.

A further, somewhat peripheral issue also emerged in the course of the litigation between the parties in relation to the position of Ontime, another of the defendant’s recovery contractors, at the end of 2007. There is no dispute but that they were suspended from the contract in relation to their operation based at Childerditch on 5^th October 2007. This was as a result of an incident involving a vehicle which they had recovered. The vehicle had contained controlled drugs at the time it was recovered. At some point after that the drugs went missing. The loss of the drugs after the vehicle had been recovered was regarded, understandably, as a serious matter by the defendant and they suspended Ontime. The claimant’s case was that they remained suspended, and the claimant was required to take part in covering for them, up until Ontime decided to withdraw from the contract (a matter dealt with below). The defendant’s case was that Ontime were reinstated after the investigation into the incident was unable to conclude that they had been involved in any wrong-doing and it could not be ruled out that some unknown third party had been responsible for the removal of the drugs.

In support of the claimant’s contention, Mr Platford points to the fact that there is no documentation at all to directly support the reinstatement of Ontime to the contract. He contrasts this with the extensive documentation produced by the defendant in relation to other matters, such as the contingency plans put in place at the time that the claimant was to be suspended. Mr Lawrence QC, who appears on behalf of the defendant, accepted this but drew attention to the correspondence between the defendant and Ontime in January 2008 when Ontime were confirming their intention to withdraw from the contract which he submitted was clearly predicated on the basis that they were at that time operating the contracts which they had with the defendant (they had as a result of the 2006 tender exercise more than one).

This question is, in my view, far from being one of the central issues in the case. Nonetheless, it played a role in the claimant’s attack on the credibility of the defendant’s witnesses. In my view, whilst the observations about the absence of contemporaneous documentation supporting the reinstatement of Ontime is fair, I am not satisfied that the claimant has proved that they were still suspended at the time when they indicated they wished to bring the contract to an end. My reasons are as follows.

The correspondence which is contemporaneous with Ontime’s decision to end the contract does not contain any suggestion that they remained suspended. In addition it is clear from an email dated 24^th October 2007 from one of the defendant’s officers, DI Prophet, that he was not able to prove who had removed the drugs from the vehicle and that from his perspective there was no reason to continue the suspension. There is some support in evidence from Mrs Kemp’s records about the number of recoveries that Ontime were undertaking month by month to show that they were suspended only in October. The schedule which she produced from her records shows that the Ontime recoveries slumped in October 2007 to 29 from previous months when they had recovered well over 100. By November 2007 the figures show that they were recovering over 100 vehicles per month and that this continued into 2008. On this basis I am satisfied that probably before the end of 2007 Ontime had been reinstated to work on the contract which they operated from their Childerditch premises.

It is important at this stage, and prior to dealing with the incident with the S-LR, to deal with the contention raised by Mr Harding and Mrs Carley in relation to the attitude of Mrs Kemp. Their contention was that by around October 2007 her attitude towards them had changed to being one of wishing to engineer their removal from the contract, by exploiting her position with the defendant, in order to manipulate matters and secure their dismissal from the contract. This contention obviously evolves into allegations of bad faith and manipulation of the process after the end of July 2008 in the run up to the termination of the contract and the dismissal of the claimant from the procurement exercise. I shall have to deal with that separately in submissions made about events occurring after the discovery of the S-LR at the claimant’s premises, but I should state at this stage of my consideration of the facts, that I am not at all satisfied that the claimant has established, on the evidence available, prior to the discovery of the S-LR at the claimant’s premises that there was evidence of Mrs Kemp displaying a hostile animus towards them redolent of her wishing to “stitch them up” and have them removed from the contract.

My reasons for reaching that conclusion are as follows. Firstly, it is a serious allegation which contains a significant ingredient of bad faith alleged against Mrs Kemp. In my view there is no clear or cogent evidence to support that allegation and indeed there is, in my view, significant evidence to the contrary. My conclusion is not simply based upon the impression which I formed of Mrs Kemp as a witness in the course of her oral evidence, which was that she was a straightforward witness and an extremely conscientious employee who took her role with the defendant extremely seriously. I accept that, as set out above, there were many complaints pursued by Mrs Kemp which are particularised in the schedule and which have not been pursued any further by the defendant. Mr Harding and Mrs Carley are entitled to draw attention to those many complaints which have not been pursued to a conclusion in these proceedings, and indeed conceded by the defendant, as potential evidence of an antagonistic attitude towards the claimant. Nonetheless, my analysis of them does not support that conclusion. I do not consider that the extent of these unsubstantiated complaint allegations translates into a finding of bad faith against Mrs Kemp. It is clear from the documentation that many complaints were raised, not by her, but by other employees of the defendant who were dissatisfied with the claimant’s performance or premises. Mrs Kemp would have been failing in her duty if these had not been put to the defendant or explored; she was, in raising them and pursuing them, simply doing her job. If her zeal in doing so was misinterpreted by Mr Harding and Mrs Carley, that is insufficient to amount to a basis for a finding of bad faith against her. In my view, these complaints which were raised and answered were part and parcel of the rough and tumble of the continuing contractual relationship between the claimant and defendant and nothing more nor less than that.

There are further reasons on which to base my conclusion in this respect. It is clear that, even as late as 9^th June 2008, in an email in which Mrs Kemp was dealing with a complaint by one of the defendant’s officers about the tardy attendance of the defendant, that she sought to defend them by pointing out to the officer concerned that even if his complaint was correct, that was only one matter in an area where they were undertaking over 100 recoveries a month and therefore “not too bad”. This defence of the claimant is obviously inconsistent with the allegation.

Finally, when I put this matter specifically to Mr Jennings, he said that he had never had any reasons to suspect Mrs Kemp of doing anything untoward. He accepted that they had had disagreements but he described them as “good disagreements” and that whilst she would point out where the claimant was going wrong, if he indicated to her that she needed to listen to the claimant’s point of view, she would listen to it. All of these matters, taken together with the fact that this contention has arisen late in the course of the litigation, and certainly was not raised in the first witness statements of Mr Harding and Mrs Carley, all lead me to the conclusion that certainly there is no evidence to suggest to me in the period prior to the discovery of the S-LR that Mrs Kemp was engaged in a conspiracy to stitch up the defendants.

At the heart of the dispute between the parties in this case, and indeed the catalyst for the breakdown in relations between them, was what happened to the S-LR between October 2007 and July 2008. As will become apparent from what follows, the events in relation to the S-LR at that time still remain, to some considerable extent, shrouded in mystery. There is a lack of continuity in both the evidence of witnesses and the documentary material which is available. The best that can be done is to seek to piece together what was likely to have occurred in order to reach the conclusions which are necessary to resolve the issues which arise in this part of the case and which bear upon questions related to the liability of the defendant, both under the contract and for their actions in removing the claimant from the tender process in 2008.

On 5^th October 2007 one of the defendant’s officers recovered the S-LR as an uninsured vehicle. It seems, from the evidence which was obtained at the time that the vehicle was in a rather poor state. In particular, its brakes were not functioning correctly. Having been recovered, it was then necessary in light of all of the available information, for the defendant, in accordance with the documentary system which has been set out above, to reach a conclusion as to the future for the vehicle. The outcome was that on 24^th October 2007 the S-LR was included on a list of vehicles provided to the claimant with the instruction that it should be crushed.

In his first witness statement Mr Harding stated that other employees at the claimant identified that the recovery of the S-LR presented an opportunity for training apprentices. The suggestion was that they should be instructed to undertake a body swap between the S-LR which had been recovered and the L-LR which was one of the claimant’s fleet vehicles. The L-LR being L registered was an older vehicle and at some points in the evidence it was described as being, in effect, at the end of its useful life. The idea was that they would obtain experience of undertaking the work of a body swap and that it would therefore provide them with material for their apprenticeship portfolio.

Prior to anything occurring in relation to that idea it appears, from the documentation, that on 15^th October 2007, Mr Bennett who was at that time an apprentice at the claimant, undertook an inspection of the L-LR as part of the routine inspections of the claimant’s fleet of operational vehicles. That it was the L-LR he inspected can be determined by noting the mileage which was noted by him on the relevant documentation. The purpose of the inspection was to check whether or not the L-LR was roadworthy.

Having undertaken the inspection, Mr Bennett identified that there was some work which was required, including repairing the rear lights of the vehicle and replacing its brake pads. He undertook that work. The job sheet which he completed is signed “OK SB”. The evidence which I heard made clear that the SB concerned was Mr Steve Bewerss. At that time Mr Bewerss was the parts manager in the mechanical workshop where Mr Bennett worked along with other apprentices. The person in charge of the mechanical workshop at that time was Mr Gibson.

It is important to observe that in all the many thousands of pages of documentation provided in relation to this case, that there is no documentation generated in either of the claimant’s workshops bearing upon the body swap, whether in relation to the instruction as to when and by whom it was to be carried out or as to when it had been attempted or completed. Mr Bennett gave evidence to me describing how he was instructed, along with another apprentice, to remove the bodies from the chassis of each of the L-LR and the S-LR and to swap them over in the mechanical workshop. In this work he was overseen by Mr Melville who was a supervisor in the mechanical workshop. I also heard from Mr Melville. Both he and Mr Bennett described the removal of the body from the chassis of each vehicle. It seems, from their evidence that this task took some considerable time, since it was undertaken around other more pressing commercial work.

They both described how, when the bodies had been removed from the chassis, it became clear that they could not be swapped. This was because the detail of the model of the vehicle had changed in between the time of manufacture of the L-LR and that of the S-LR, such that each of the bodies would have required significant modification in order to be fitted onto the other chassis. It was concluded that because of the extent of the work that would have been involved, it was a waste of time and resources to complete the task. The project was therefore aborted and they both described how the bodies were replaced on the correct chassis of each vehicle and then put outside the mechanical workshop.

Mr Melville explains in his evidence that ordinarily, when a body swap of this kind is undertaken, the under bonnet VIN would be removed, along with the number plate, and placed in the body of the chassis onto which it was to be swapped. There would, of course, be an existing VIN number stamped onto the chassis of each vehicle, as well as one behind the front windscreen. In their evidence both Mr Melville and Mr Bennett pointed out that when the vehicles were put out in the yard, with the correct body on the correct chassis, the correct under bonnet VIN plate and number plate was placed inside each vehicle.

The evidence from these witnesses therefore takes us as far as an attempt at a body swap which ceased, leaving each vehicle with the correct body and chassis and the correct under bonnet VIN plate and number plate with it. The evidence does not therefore explain what Mr Godard was to find later at the claimant’s premises and which is described in greater detail below. Both witnesses, understandably at this remove of time, were prone in their evidence to clear and undoubted errors. By way of example, Mr Melville said when he gave evidence that he had been told about the discovery of the ringed vehicle when it occurred in July 2008 by Mr Gibson. That cannot be correct, because as is set out below, it is beyond doubt that Mr Gibson in fact left the claimant’s employment in January. Mr Bennett in his statement indicated that, hard on the heels of the unsuccessful attempt at the body swap, he undertook wheel bearing work on the S-LR. However, that is almost certain to be incorrect in the light of the fact that there is documentary evidence that the wheel bearing work was undertaken on the S-LR but not until May 2008 as I shall turn to below.

I do not for one moment consider that either Mr Bennett or Mr Melville were lying or telling a story which had been made up or which they had been instructed by others to give as their evidence. They both struck me as witnesses who were trying their best to assist the court, but who were obviously and inevitably hampered by the fact that their memories were necessarily vague and patchy bearing in mind that they were seeking to call to mind events which had occurred many years previously. Indeed it transpired that in both cases they had not been asked for the first time by anyone about the events concerning the S-LR until many months after the events with which we are concerned.

I am content to accept the broad thrust of their evidence albeit that in the light of the discrepancies and inconsistencies between some of their evidence, and other well-established facts I am not able to fully accept all the details of which they told me. In particular, I am satisfied on the basis of their evidence on the balance of probabilities that they were instructed by managerial staff in the workshop (who had in their turn been instructed by Mr Harding or other more senior managerial staff) to swap the bodies of the L-LR and the S-LR. The purpose of the instruction to do so is not clear. The attempt that they undertook was unsuccessful.

However, that does not bring the matter to a close because it is quite plain that, albeit Mr Bennett’s attempt at a body swap was unsuccessful, nevertheless work was undertaken to each of the vehicles leaving them in a condition where, albeit the bodies had not been swapped, the under bonnet VIN plates had certainly been swapped and the S-LR had been equipped with a number plate bearing the registration number of the L-LR. I am unable, on the evidence, to conclude precisely who did that. What I am, however, satisfied of is, firstly, that it was undertaken by staff of the claimant and secondly that those staff did that work as part and parcel of the instruction given by Mr Harding and other senior managerial staff, albeit that it may have been undertaking the work in a manner in which they had, strictly speaking, not been directly instructed.

As will become apparent from what follows, it appears that from Mr Harding’s initial instruction and notwithstanding, or perhaps as a result of his and other managerial staff’s intervention or lack of intervention, the initiative which he commenced (and did not terminate) led to an identity swap between the two vehicles. During the course of the trial what happened to the S-LR became termed, as it is known colloquially, as the “ringing” or the “full ringing” of the S-LR. It is this process of the disguised identity swap to which reference is made below when the term “ringing” or similar is used. The chronology continues as follows.

On 23rd November 2007 the vehicle with the L-LR number plates was, in accordance with the claimant’s documentation, having a winch fitted and its brakes repaired. I am entirely satisfied that this was, in truth, the S-LR by some means in the guise of the L-LR. The L-LR would not have required a winch to be fitted whereas the S-LR did. This is another document countersigned by Mr Bewerss with “OK SB”. By now, the S-LR was bearing the fleet number of the L-LR, namely D57, and it was under this identity that the work was being undertaken. It is clear that by this stage work must have been undertaken to re-fix the S-LR body to its own chassis.

As a result of enquiries made by the defendant, which will be described later, DS Maleary (as he then was) came to take a statement from the paint shop manager at that time, Mr Burt. It seems that in early 2008 Mr Gibson brought the S-LR to the paint shop and instructed that it be sprayed white on Mr Harding’s instructions, including spraying white where the under bonnet or slam-panel VIN plate would be attached. Mr Burt caused work to be undertaken in the paint shop respraying the S-LR white. In his statement to the police, he indicated that this work took from January 2008 to March 2008 because, again, it had to be fitted in and around other jobs which were earning the claimant money. It seems to me, however, that it is doubtful that the work took this long in light of matters to which I shall turn below, showing that mechanical work was being undertaken on the vehicle prior to March 2008. I am however entirely satisfied that the S-LR was taken to the body shop on Mr Harding’s instruction by Mr Gibson for it to be re-sprayed.

This aspect of matters is to some extent reinforced by the evidence of Mr Jennings. He described how he had an office over the paint shop and therefore he was able to keep a close eye on work which being undertaken within it. When he saw the blue S-LR in the paint shop for the purpose of being re-sprayed he took this up with Mr Harding as it seemed to him to be a waste of time and money. When he did so Mr Harding indicated that he had instructed the re-spray of the vehicle to occur as it was part of a training project.

On 18^th January 2008 Mr Gibson left the claimant’s employment. He went, in accordance with an arrangement which had been reached prior to his departure, to go to work for one of the claimant’s rival firms namely BJG. It was a firm which at that time had been relatively recently established as will become evident from matters which are discussed below. I heard evidence from Dr Parry, who is employed by the claimant in a variety of roles on a part time basis. Those roles are managerial in nature and involve overseeing recruitment, training and development. He described how, a couple of days before Mr Gibson left the claimant’s employment, he was assaulted by Mr Gibson. He explained that he went to find Mr Gibson in the mechanical workshop because the keys to the Forensic Bay were not hanging where they should have been. When he asked Mr Gibson where they were, Mr Gibson confessed that they were in his pocket and he reminded him that they should be in the designated place. Mr Gibson threw the keys down to Dr Parry who left the workshop but Mr Gibson pursued him and then confronted him about undermining him in front of his staff and pushed him in the chest. Dr Parry kept him at bay and Mr Gibson walked off. Dr Parry indicated that this incident was very out of character and reflecting upon it afterwards he was drawn to the conclusion that Mr Gibson was seeking to engineer a situation which would provide a justification for him leaving his job. This was reinforced when he in fact left the claimant’s employment to take up a prearranged new position.

Shortly after leaving the claimant’s employment, Mr Gibson returned to the claimant’s premises and sought out Dr Parry and apologised for his behaviour. During the course of that meeting he complained bitterly about Mr Harding and Dr Parry was left under no illusion that Mr Gibson had negative feelings towards Mr Harding. This incident was relied upon by the claimant to seek to demonstrate an animus on the part of Mr Gibson to justify the allegations which they make in relation to the ringing of the vehicle having been orchestrated by Mr Gibson in order to sabotage the claimant and promote the interests of his new employers BJG.

Returning to the project, on 23^rd January 2008, Mrs Thorn (now Mrs Page) sent an email to Benfleet Scrap notifying them that a vehicle was on its way to them. That vehicle was identified as bearing the S-LR number plate. In the email Mrs Thorn also provided the vehicle’s VIN number, although she mistyped it into the email. It is clear from the documentation that, having printed the email, Benfleet Scrap then checked the information when the vehicle arrived with them. On their print of the email they have, in manuscript, corrected the VIN number.

Since in my view the overwhelming likelihood is that this was the L-LR, they probably checked the under bonnet VIN to get the number which they wrote onto the printed email. This suggests two things: firstly, that they did not check the VIN number which had been stamped into the chassis of the vehicle and could not be changed, and secondly, that somebody at the claimant’s premises had fixed the S-LR under bonnet VIN plate to the L-LR vehicle. Furthermore, it is likely that the vehicle would have been bearing the S-LR number plate. In short, the L-LR had been prepared for scrapping, as if it were the S-LR. Having been sent to be scrapped, the form VR2 was then completed in the claimant’s office, confirming that Benfleet Scrap had destroyed the vehicle. The DVLA were also advised of its destruction.

On 26^th January 2008 it appears, from an internal invoice, that some 14 hours’ work were undertaken on the S-LR, albeit bearing the identity of the L-LR in terms of the registration number and claimant’s fleet number.

This is followed by a job sheet, dated 9^th February 2008, completed by a Mr Tolliday, and showing that he had undertaken a full service of the vehicle together with work including the replacement of shock absorbers, bushes and front wheel bearings. The documentation also records him fitting wiring for beacons and LEDs and a radio aerial. In particular the fitting of the wiring for the beacons is pertinent because that work would be relevant for the use of the vehicle as part of the claimant’s fleet.

This work is also reflected in an internal invoice dated 13^th March 2008. That document suggests that the work described, which is essentially identical to that on 9^th February 2008 job sheet, was undertaken on 1^st March 2008. Be that as it may, there is a lengthy list of parts purchased for the purposes of undertaking the work, and those parts included new number plates to be fitted to the vehicle.

By the time that this work was done in February or March 2008, the evidence suggests that it is highly likely that Mr Bewerss had become in charge of the mechanical workshop. For instance, Mr Melville confirmed the evidence of others, that after Mr Gibson’s departure, Mr Bewerss was promoted into his post, albeit that it was indicated that there had been a brief interregnum probably for training purposes. It appears to me, however, that certainly by around the time that this work and the subsequent work was undertaken on the vehicle, Mr Bewerss was the person in charge of the mechanical workshop.

Mr Elvy, from whom I heard, is a sign writer and designer who at that time regularly undertook work for the claimant’s body shop. Within the documentation there is an invoice from him, dated 28^th March 2008, relating to three jobs which he had undertaken for the claimants. One of those jobs was the placing of the claimant’s livery on the S-LR and putting in tinted windows for the rear of the vehicle. Mr Elvy stated that Mr Bewerss had instructed him to undertake this work to the vehicle. Although the invoices are dated late March, there is no date for the work and it seems to me very likely, particularly bearing in mind it was invoiced with other work, that this placing of the livery onto the re-sprayed S-LR must have happened a little while prior to the invoice.

This conclusion would be consistent with a further piece of documentation disclosed by the claimant in relation to an event on 6^th March 2008. It appears that on that date the claimant was called out to an incident involving a substantial load which had fallen from a lorry. The claimant’s computer records of that incident record that the fleet vehicle D57 (the fleet number denoting the L-LR which was by now in fact the S-LR) was called out to the scene in order to inspect the event and advise in respect of the appropriate action that needed to be taken. Mr Harding, in his evidence, accepted that this record of the S-LR being used as part of the claimant’s fleet was accurate, although when he was subsequently interviewed by the police he denied that the vehicle had in fact ever been used on the road by the claimant. Mr Jennings denied that this record was accurate on the basis that the call centre would, not uncommonly, fail to complete the records correctly. He surmised therefore that this had happened on this occasion and the document could not be relied upon as demonstrating that the S-LR was called to that incident.

I am unprepared to accept Mr Jennings’ evidence on this point, in particular since Mr Harding does not share his scepticism. I see no reason to go behind the evidence of the document itself and I am entirely satisfied that the vehicle did indeed attend, as part of the claimant’s fleet, an incident on 6^th March 2008.

The claimant’s documentation, in the form of similar computer records, shows that on 14^th May 2008 the vehicle was used again. On this occasion it was called out as part of a group of five vehicles attending an incident involving a JCB. Indeed, on this occasion the computer records show that vehicle D57 was being driven by Mr Harding. Again, he did not deny the accuracy of the computer record in terms of D57 having been involved in the incident. He did however deny that he was the driver and asserted that this was incorrect. Similar to the incident on 6^th March 2008 Mr Jennings denied, again, that vehicle D57 would have been involved in the incident. He contended that this was another example of the claimant’s call centre inaccurately completing the computer records making them misleading. Once more, I find Mr Jennings’ evidence difficult to accept. I am satisfied that it’s likely that the S-LR did attend on that occasion and indeed that Mr Harding was driving it, as indicated in the records.

By this stage, therefore, it appears that the S-LR, bearing the L-LR’s number plate and its fleet number, had been absorbed into the claimant’s fleet as an operational vehicle.

Further consistent with this is the record of Mr Tolliday completing an MOT for the vehicle on 16^th May 2008. Moreover, on 20^th May 2008, Mr Bennett did further work on the vehicle according to a job sheet produced by the claimant (see above). The work which the job sheet he completed described as being done is work to the offside rear wheel bearing and tracks as well as the offside rear light lens. I consider that it is likely that this was the work which he remembered when he was completing his original witness statement, albeit that he has placed it inaccurately in terms of the chronology. It is clear that the work which he did to the wheel bearing was not hard on the heels of the unsuccessful body swap but was in fact work which he did to a vehicle which was apparently part and parcel of the claimant’s operational fleet some several months later. The job sheet is supported by an internal invoice, albeit that someone has written on in manuscript that this invoice relates to work which was done following a failure of the MOT. In the light of the fact that the vehicle is documented to have passed its MOT on 16^th May, I do not place any reliance on that annotation. Nevertheless the documentation certainly establishes that on 20^th May 2008, further work was done to the S-LR.

The position therefore is reached in relation to this aspect of the case that by the end of May 2008 the S-LR had been transformed from a blue Land Rover Discovery vehicle with significant mechanical defects, into a fully functioning vehicle bearing both the claimant’s livery and the necessary accoutrements of a recovery vehicle in its fleet, including items such a winch and beacon lights. It is clear that by the end of May it was functioning as an operational vehicle within the claimant’s fleet, participating on occasions in their recovery work.

Furthermore, it is clear from the evidence that between its MOT on 16^th May 2008 and the end of July 2008, it was driven for around 90 miles (this figure having been derived from the mileage recorded at the stage of the MOT and that recorded when the vehicle was seized). I am unable to accept the explanation provided by Mr Harding and Mr Jennings that this mileage was accrued as a result of road testing the vehicle. It is far more than would have been occasioned by road testing, following on from mechanical work being done to it. It is further evidence of the absorption of the S-LR into the claimant’s fleet of operational vehicles.

Wider questions from this outcome are raised by the parties, both in relation to Mr Harding’s involvement in this, Mr Gibson’s role within what happened and the wider engagement of other of the defendant’s employees in how this may have come about. It is necessary to examine the subsequent events before reaching fully-formed conclusions in relation to those questions.

On 25^th July 2008 Mr David Godard, who was employed by the defendant as a vehicle examiner, came into possession of an anonymous letter. The letter, so far as relevant, was in the following terms:

“I would like to bring your attention to the following information. A vehicle that was recovered on behalf of Essex Police under the vehicle recovery scheme by your contractor D&G Cars at Warley should have been disposed of under the terms of the contract. The Scrap dealer issued a destruction certificate for the vehicle, however this vehicle was not destroyed.

Instead the vehicle’s identity was stolen, the number plates and VIN plate from the bulkhead were removed and replaced by that of another vehicle. The vehicle in question was a vehicle owned by the recovery operator D&G Cars. The vehicle owned by D&G Cars is an old shape Land Rover Discovery, the seized vehicle, a new shaped discovery was then repainted in D&G Cars own livery. This vehicle is now conspicuous as it is the wrong shape for the year suggested by the Number Plates that are on it. No other attempts to change the identity have been made so the car still bears the original stamped chassis numbers etc. The engine and gearbox will also show the identity of the vehicle that should have been scrapped.

The vehicle is a Land Rover Discovery, Van type 3 door chassis. It is in D&G Car’s livery, I do not have the other vehicles details, however an inspection of the vehicle will clearly show the original identity from the VIN and the engine numbers etc. The vehicle is currently being operated from the Warley depot and is used as an incident response vehicle. The vehicle has the number plate of L89 THP on it at this time, this is not the true identity of the vehicle.

I would suspect it must be illegal to alter the identity of the vehicle, it must also be illegal to falsely claim that vehicle has been destroyed, in addition it is strictly forbidden for any police contractor to keep any property seized by the police.

In addition to this there are at least 3 other discovery chassis in the yard that are awaiting the “ringing process”, they are without the original bodies and just sitting in the yard in plain sight. These vehicles have also been “scrapped” and have the relevant destruction certificates!!

I would think that the above would also indicate that the company dealing with the end of life vehicle process must have some difficult questions to answer. (Benfleet Scrap, Manor Trading Estate, Benfleet).”

The 25^th July 2008 was a Friday and Mr Godard and Mrs Kemp decided that Mr Godard should investigate the matter the following Monday. As a result, on 28^th July 2008, Mr Godard visited the claimant’s premises. He was a regular visitor at those premises in the light of his role with the defendant. On arrival he spoke to Mr Harding and explained that he needed to examine a Land Rover bearing the registration number L89 THP. Mr Godard states that, without prompting, Mr Harding told him that the body of that vehicle had been swapped with one which was due to be scrapped and that that had been undertaken as a training exercise. Prior to attending at the claimant’s premises Mr Godard had taken a print-out from the Police National Computer in relation to the L-LR, so that he was equipped, for instance, with a record of that vehicle’s VIN number.

Having been shown to the vehicle bearing the number plate L89 THP, Mr Godard examined it and recorded all of the VIN numbers that the vehicle was displaying. From this he established that the vehicle which he was examining was in truth the S-LR. The VIN which was stamped into the chassis, and also the windscreen VIN, were those of the S-LR. The slam panel VIN, located under the bonnet and pop riveted to the body of the vehicle, was that of the L-LR.

Mr Godard stated in his evidence that he recorded all of these numbers in his notebook at the time when he undertook the examination. In the written evidence before the court, and in particular in the witness statements of Mr Harding, there was lengthy speculation based on the assertion that Mr Godard did not and could not have examined the chassis VIN number on the occasion of his visit to the claimant’s premises but rather that that was a number which he obtained after the vehicle had been recovered to the defendant’s premises and whilst it was in their custody. It was stated, and put to Mr Godard, that the chassis VIN could not have been read since it would have been obscured by dirt and/or corrosion and therefore illegible without some prior treatment.

I have no hesitation in rejecting that contention and indeed the attack which it represents on the reliability of Mr Godard as a witness in respect of the relatively small part which he played in the narrative of this case. As these matters were being put to Mr Godard, and impromptu, he produced whilst in the witness box his contemporaneous notes which were then introduced as documents into the trial. This documentation proved to me, beyond doubt, that he had indeed examined and noted the chassis VIN at the time when he undertook his examination at the claimant’s premises. This contemporaneous documentation is also consistent with photographs which he took at the time and which showed that the chassis VIN was clearly legible. I am also satisfied therefore that Mr Godard told Mr Harding what he had found in relation to the vehicle following his examination, and whilst still at the claimant’s premises on 28^th July 2008. He informed Mr Harding at that time that the vehicle had been ringed. This evidence is of some significance in the light of what subsequently occurred, and in particular in relation to an email which, as is set out below, was sent to the defendant the following day.

Following his examination, Mr Godard caused the vehicle to be taken into police custody and contacted Mrs Kemp to advise her of what he had found. Mrs Kemp in turn contacted Mrs King and also Chief Superintendent Thwaites who was, at that time, a Divisional Commander on the defendant’s staff, responsible for traffic policing. They all subsequently met that day at the defendant’s headquarters.

Following the discussions at that meeting, a decision was taken to suspend the claimants from the contract and at 14.31 on 28^th July 2008 that decision was communicated to other relevant people in the defendant’s organisation.

This decision to suspend the claimants proved controversial in this litigation in a number of ways. Firstly, it was suggested, on behalf of the claimant, that the suspension was unfair, and indeed that that unfairness and the singling out of the claimant for this treatment was evidence of, in particular, the prejudice of Mrs Kemp and Mrs King against them and was part of the wider plan to secure the removal of the claimant from the contract and their replacement by their competitors. The allegation of unfairness was supported by seeking comparison with how other contractors had been dealt with. The evidence pertaining to those other contractors was as follows.

In October 2006 another of the defendant’s contractors known as Albert Road had recovered a vehicle on the basis that it was being driven without insurance. After checks had been undertaken the crushing of the vehicle was authorised by the defendant, and indeed instructions were given that the vehicle must be crushed. Following this, Albert Road sent to the defendant a VR2 stating that the vehicle had been crushed at a firm called Outens and the fact of the crushing of the vehicle was registered with the DVLA. It subsequently transpired that the vehicle had in fact been sold by Outens after it had come into their possession. Once this all came to light arrangements had to be made to enable the vehicle to be returned to its owner and by this means the matter was brought to a close.

The second incident used by way of comparison to seek to establish the allegation of unfairness was an episode investigated at the start of August 2008 relating to the theft of light clusters from vehicles which had been recovered by Boyton Cross. Complaints had been raised with Mrs Kemp and she sought the assistance of officers in investigating incidents involving vehicles which had been recovered by Boyton Cross, when there was good evidence that when they had been recovered they had been fitted with intact light clusters, but nevertheless at the point of their return to their owners they had been found to have had the light clusters removed. The removal of the light clusters, it was concluded in the investigation of the matter, would have had to have been undertaken with tools. Mrs Kemp was unable to shed any light in her evidence as to what had occurred in response to her raising these thefts from vehicles whilst they had been in the custody of Boyton Cross.

The challenge put to Mrs Kemp was why the claimant had been suspended when neither Albert Road nor Boyton Cross had been when the incidents described above had come to light. Why, it was asked, had the claimant been singled out to be suspended whereas the other contractors had not? Mrs Kemp explained that in so far as Albert Road was concerned, on analysis, they had in fact done nothing wrong. The true culprit in relation to what had occurred were Outens who had sold the vehicle which Albert Road had given to them to be crushed without authority to do so and who had then advised that the vehicle had been crushed, when in reality it had been sold. That did not, in Mrs Kemp’s view, involve any culpability on the part of Albert Road. By contrast, she observed, the claimant had apparently appropriated a vehicle to their own use when they had been instructed to crush it, and had indeed told the defendant that it had been crushed.

So far as Boyton Cross was concerned, again she contended that the issue was at a wholly different scale involving potentially theft by an employee, but not the ringing of an entire vehicle which had purportedly been crushed.

For my part, I entirely accept the explanations provided by Mrs Kemp as to why the knowledge of the defendant as to what had occurred at the claimant’s premises warranted suspension, whereas the incidents relating to Albert Road and Boyton Cross did not. I am unable to detect any unfairness of treatment when the three separate cases are put alongside each other. The allegation which lay at the door of the claimant was far more serious, involving as it did the appropriation of the entire vehicle and its representation both as a matter of its identity and also in terms of its appearance and branding as one of the claimant’s vehicles when in truth it was a vehicle which the claimant had been instructed to crush and which they had led to the defendant to believe (through the documentation) had indeed been crushed. I do not consider, therefore, that there is any substance in the contentions in relation to unfairness relied upon by the claimant.

The second way in which this decision to suspend became controversial was because there was a dispute as to who, on behalf of the defendant, had authorised the suspension. The claimant, consistent with the concern as to the animus of Mrs Kemp against them, contended that it had, in effect, been authorised by her. This was supported by the witness statement of Chief Superintendent Thwaites (as he then was, he having since retired from the defendant’s employment) in which he described receiving an email from Mrs Kemp, advising him that the claimant had already been suspended. Furthermore, in that witness statement he indicated unequivocally that his role in the suspension was one of oversight and not decision making.

When Mr Thwaites came to give his evidence he changed this aspect of his account and became adamant that, notwithstanding that he did not have a strong or positive recollection of the events, he was nonetheless convinced he was the person who took the decision to suspend. He expressed this view on the basis that because of his seniority in the defendant’s organisation it was inevitable that he would have been the person to whom others would have deferred, and that he was the individual who would have made the relevant decision.

I am unable to accept this aspect of Mr Thwaite’s evidence. I am, in particular, impressed by the contemporaneous documentation and in particular a note which was compiled the following day by Mrs Kemp, and recorded in an email to Mr Thwaites as a file note to reflect what had occurred on 28^th July 2008. In that note, she recorded as follows:

“I attended MSD Boreham and met with Dave and Mick Thwaites and we agreed that D&G would be suspended. Dave advised DS Paul Maleary had been given this to investigate.”

Although this file note was relied upon by Mr Thwaites in support of his contention in the witness box that he was the person, and he alone, who took the decision, the note in fact supports what in my view is far more likely to have been the case, namely that there was a collective sharing of views as to what should occur and a consensus from that meeting in which all shared that the claimant should be suspended. Whilst undoubtedly, if the decision had become internally contentious and had required defending, I have no doubt that Mr Thwaites in his capacity at the time would have been the person who would have been called to account for that decision. In my view, the way in which the decision was arrived at is accurately reflected in Mrs Kemp’s contemporaneous note as being one which was reached collectively by those present at the meeting. I am equally satisfied that Mrs Kemp did not make the decision to suspend the claimant alone.

On 29^th July 2008, Mr Jennings wrote on behalf of the claimant to Mrs Kemp to seek to explain the claimant’s view of matters in the light of discovery which had been made by Mr Godard on the previous day. In that email he stated as follows:

“We have an apprentice in workshop and an apprentice in body shop, we supplied them with a Renault Clio ex courtesy car to do a total colour change as project

We also gave them our old L89 THP Land Rover as this has a separate body to chassis, project was to change body / chassis from old to new and repaint, moving parts from old to new and visa [sic] versa

We requested from our compound that when next Land Rover came up for disposal, to send it over for project, which was done as requested, project was started VIN numbers and parts were changed over, donor vehicle was then sent to scrap with donor original VIN and the body chassis from L89 THP

L89 THP with its new parts was then repainted as final part of this apprentice project, refitted and looking new then serviced by same apprentices

The vehicle is of very low value and the oldest vehicle in our colours, the cost of the project in labour alone came to over £6,000 plus paint materials; put this project nearer £9,000 for an L Reg Land Rover

The project was a high profile job, with all members of staff and visitors, including police officers, taking a daily interest in the job, which took about 3 months to complete

Once vehicle was complete, it was then parked up in the corner like our Mack and Chevy show trucks, vehicle has never been used on the road it was our show project

Since car squad have visited and we have been suspended following an anonymous letter from either an ex member of staff or another operator who is also tendering for Essex Police recovery who knows about the vehicle and project in question, but have twisted the story to suit

We called a meeting yesterday amongst the directors, as we were most upset about being suspended immediately

On looking at the evidence from Essex Police point of view, we can totally understand why D&G Cars have been suspended 1. we should have checked where donor vehicle originated from 2. we should have requested permission before proceeding 3. we should have informed yourselves of the extent of changes we were doing

D&G Cars have not done this project for self gain as the project outweighed value of L Reg Land Rover, the vehicle is not used

we have not tried to cover anything as the project was done for 3 months in front of all and sundry. We have not changed chassis number on chassis, we have not covered up chassis number on windscreen / windows to try and hide the identity as suggested by Concerned Motorist

This has caused great embarrassment to our company and yourselves, which we apologise for”

It will be apparent in the light of what has already been set out in this judgment that there are a number of significant errors in this email which was sent by Mr Jennings. What is described in the email does not reflect what in reality happened in respect of the S-LR and what was probably sent to scrap. It was not the L-LR which was repainted as part of the project, but rather the S-LR which was the subject of the re-spray and re-branding as one of the claimant’s fleet. The vehicle was used on the road. The errors in the email cannot be explained in my view by a failure on the part of Mr Godard to explain what he had found on his examination. As I have set out above, I am entirely satisfied that Mr Godard explained that what he had found was, in effect, a ringed vehicle.

The defendant relies upon this email and its contents (and indeed cross examined both Mr Harding and Mr Jennings at length in relation to it) as evidence of dishonesty on the part of Mr Harding and Mr Jennings in relation to what had happened to the S-LR. The resolution of this allegation in relation to dishonesty is set out below but, at the very least, the email demonstrates that the claimant was not remotely on top of the issues in relation to their treatment of the S-LR, nor had they undertaken any competent investigation at this stage of what had happened.

At the time of the claimant’s suspension from the contract, Mr Thwaites had sought the involvement of Mr Adam Hunt who is a solicitor and in-house lawyer with the defendant. A meeting was convened, on 1^st August 2008, in order to review the situation and seek to determine the way forward. In addition to Mr Hunt, the meeting was attended by Mr Thwaites, Mrs Kemp, Mrs King, Mr Godard and DS Maleary. Notes were taken of the meeting. Mr Maleary was in attendance because by then, as will be evident from the file note set out above, he had been appointed to undertake an investigation of the matter.

Various matters relating to the discoveries made by Mr Godard at the claimant’s premises and related issues are recorded in the notes but they acquired an importance in the trial as a result of one particular point which was raised at the meeting in relation to the behaviour of the claimant in performing the contract. It was recorded as follows:

“An incident had occurred previously whereby a vehicle had been found on a forecourt in London, which should have been crushed by D&G. This vehicle was brought to HQ and a decision made to return to the original owner. Justin Smith, who is now the Inspector at Central RPU will have full knowledge of this incident. No proof could be found as to who was specifically responsible and no charges were brought.”

The note of the meeting does not make clear who made this observation. What is absolutely clear is that what the meeting was told was certainly wrong. D&G were not involved in this incident which was in fact the incident involving Albert Road which I have set out above. In my view it is most probable that these observations which have been minuted came from Mrs Kemp since she is the person who is most likely to have been aware of this incident, and indeed she was the person who later reported to Mr Hunt about it. The documentation shows that Mrs Kemp was passed a copy of the minutes and afforded the opportunity to comment upon them. When she did so, she did not correct this misleading information. As a result, and understandably, this issue is relied upon by the claimant as evidence of Mrs Kemp actively spreading prejudice against the claimant in the process which was leading to the termination of their contract with the defendant. It is a matter to which I have had regard in reaching my overall conclusions on this allegation.

At around this time Mr Hunt had, in seeking to form conclusions about the defendant’s position, become concerned as to whether or not there was power in the contract to enable them to suspend it. Because of his concern, Mr Hunt eventually sought external advice because it seems that he was not convinced that the defendant was entitled to suspend their contract with the claimant in the manner in which they have purported to do so.

It is clear that from the point in time when Mrs Kemp became aware that Mr Maleary had been appointed to undertake the investigation of any criminal offence, she began to communicate with him regularly. On 29^th July 2008 she enquired as to whether or not an arrest was imminent in relation to the matter. She subsequently commenced passing to Mr Maleary large quantities of documentation which she had retrieved from her own records relating to the contractual arrangements and events which had transpired between the defendant and the claimant during the operation of the contract. These communications were deployed by the claimant to seek to contend that this was evidence of Mrs Kemp manipulating the process and also demonstrated an unhealthy familiarity between Mrs Kemp and Mr Maleary, further bolstering the allegation that she and Mr Maleary were in league to seek to prejudice the relationship between the claimant and the defendant.

I am unable to accept that there is anything untoward or malign in the communications which the documentation discloses between Mrs Kemp and Mr Maleary. I have no doubt that once Mr Maleary was instructed to conduct the investigation, Mrs Kemp was equally instructed to assist him in any way in which she was able to do so. That would have involved passing to him any pertinent document which she had as part of her records. Furthermore, I see nothing inappropriate in Mrs Kemp enquiring of Mr Maleary as to whether or not any arrest was imminent since, at the time of making her enquiry, she was actively involved in managing the issues associated with the defendant’s contract with the claimant and the impact upon that of the discovery of the ringed vehicle and the investigations that were being undertaken in that respect. I do not, therefore, regard the evidence in respect of the contact between Mrs Kemp and Mr Maleary as being of any weight at all in assessing the claimant’s allegations in relation to the suggestion that the contract was terminated through bad faith, to which I shall turn in due course.

On 5^th August 2008, in the course of his investigations, Mr Maleary requested that Mr Harding attend Brentwood Police Station where he was then interviewed under caution. During the course of the interview Mr Harding made the following statements. Firstly, he contended that the L-LR was, at the time of the project, redundant and did not work. Secondly, he stated that he had authorised the body swap as an apprentice project but accepted that he had been “a fool” and “wrong” not to ask the defendant for permission to undertake it. Thirdly, he said that once the project had been completed (and it had taken a little time to complete) he had not taken any further notice of it and hadn’t looked at the vehicle further. Fourthly, he contended that the result of the project was not intended for use and had not in fact been used on the road. Fifthly, whilst he accepted that as the managing director of the company he was ultimately responsible for what had happened, nevertheless, he was not aware how it had come about that the S-LR had ended up, in effect, posing as the L-LR. Sixthly, he told Mr Maleary that, as far as he was aware, the L-LR body shell had been sent for crushing. Seventhly, he stated that the instructions to undertake the project had been given to Mr Burt who was in charge of the body shop and an apprentice who had subsequently emigrated to South Africa.

After the interview had been completed Mr Maleary reported back to Mr Hunt on what had happened. In an email on the evening of 5^th August 2008 he advised as follows:

“I arrested and interviewed HARDING he has accepted responsibility and has stated he had no dishonesty. I do not agree with this, my view is that the conversion of the vehicle from one identity to another is dishonest behaviour the problem we have is his ultimate knowledge. He says he was fully aware but failed to notify Essex Police. I did point out that he had never undertaken such an action before.”

During the course of cross-examination Mr Maleary was criticised for the terms of this email, which it was suggested misled Mr Thwaites and Mr Hunt as to the truth of the position. It was contended that what Mr Harding had been describing in his interview was the body swap exercise which he had authorised which was far from accepting responsibility for the ringing of the vehicle. I do not consider that the criticisms raised by the claimant of this email are well founded. It needs to be borne in mind that Mr Maleary was providing a necessarily succinct note to brief Mr Thwaites and Mr Hunt as to the state of his investigation. It will be clear from what I have set out above, in relation to the principal points to be gleaned from the interview, that Mr Harding was not in substance disputing the fact that the S-LR had, in reality, been ringed whilst in the custody of the claimants. As the brief email correctly identifies, the real issue between Mr Maleary and Mr Harding was the question of dishonesty. It should also be borne in mind when reading the email, as I have no doubt that Mr Thwaites and Mr Hunt did, that it was being written by an investigating officer necessarily and understandably bringing a degree of scepticism to bear upon the assertions which were being put to him by a suspect who was being investigated. I do not, therefore, consider that there is any substance in the complaint raised by the claimant as to this email.

From 6^th August 2008 to 8^th August 2008 Mr Hunt sought further information from his colleagues, and in particular Mrs Kemp, in relation to the performance of the claimant during the contract. Mrs Kemp reported back to him that there had been day-to-day breaches, but none that had been sufficiently serious as to justify the suspension of the contract. Furthermore, she reported back the incident relating to the A Reg and the sale of vehicles for exports to Nigeria. Again it was suggested by the claimant, in my view unconvincingly, that the comments made by Mrs Kemp in these emails were prejudicial and seeking to poison the mind of Mr Hunt and those who would be making decisions about the contract. I am unable to detect any reality in that allegation. In truth, the responses provided by Mrs Kemp accurately reflected what had gone on in relation to the administration of the contract, albeit from her perspective, and I do not regard her responses as evidencing any animus against the claimant so as to form an ingredient in their allegation of bad faith.

On 12^th August 2008 Mr Hunt wrote to Mr Jennings setting out the defendant’s understanding of the facts pertaining to the discovery of the S-LR and what had happened in respect of that vehicle. He provided the claimant until 15^th August 2008 to make a response in relation to these contentions. In fact the substance of this communication was overtaken by discussions which occurred between Mr Hunt and the claimant’s solicitors which led to the deadlines being extended. In the meantime a further meeting in relation to the contract was convened between those working for the defendant on 19^th August 2008 to discuss the issues.

Before that meeting happened, on 18^th August 2008 as part of the tendering process, Mrs Kemp was engaged at a site visit at one of the claimant’s competitors, BJG, during the course of which she learnt that Mr Gibson had left the claimant’s employment in about January 2008. She made a note of this at the time because, no doubt, it had struck her as of interest. In my view the significance of this is that it is good evidence that she was unaware of his departure from the claimant prior to this site visit. This evidence further undermines, in my view, the overall contentions of the claimant that Mrs Kemp was somehow working with Mr Gibson to secure the removal of the claimant from the contract with the defendant and its award to BJG, the competitor for whom Mr Gibson went to work.

At the meeting of 19^th August 2008 Mr Kenneth Cocksedge was present along with, amongst others, Mrs King, Mrs Kemp and Mr Hunt. Mr Cocksedge was, at that time, the defendant’s director of finance and he was going to be the person taking any decision in relation to the future of the contract between the claimant and the defendant. The purpose of the meeting was to receive advice from Mr Hunt together with the views of the other employees present and for discussion to occur to enable Mr Cocksedge to reach his decision.

The following emerged from the discussion as recorded in the contemporaneous notes of the meeting. Firstly, Mr Cocksedge was satisfied that there had been a breach of the contract as a result of the matters which had come to light, and in particular that there had been a lack of integrity on the part of the claimant demonstrated by what had emerged. Secondly, Mrs Kemp expressed her firm view that there had been a fundamental breach of contract by the claimant. Thirdly, Mr Hunt explained that he had been advised by the claimant’s solicitor that they would be likely to rely on other incidents which had occurred in order to diminish the significance of the incident involving the S-LR so as to undermine any claim that the defendant was entitled to treat that incident as a fundamental breach. This was taken to be a reference to the A Reg incident involving the sale for Nigerian export, the facts of which Mrs Kemp explained in greater detail to the meeting. Fourthly, Mr Cocksedge concluded, having received the advice from Mr Hunt and heard the debate at the meeting, that he was satisfied that there had been a fundamental breach of the contract and, furthermore, that the claimant’s suggestion that there should be a consensual suspension of the contract was one which was not acceptable. He concluded that the claimant should be given until 26^th August 2008 in order to offer a final written explanation as to their side of the question, following which a final decision would be reached on whether or not to terminate the contract. Finally, it was recognised that if the decision which emerged was that the contract was to be terminated for fundamental breach then that would inevitably result in the need to remove the claimant from the ongoing tender process, in which they were participating and which is described below.

On 22^nd August 2008 Mr Hunt asked Mrs Kemp for further information about what became known as the “forecourt incident”. This incident is the one which is set out above and which involved Albert Road recovering a vehicle and passing it to Outens to be crushed, following which Outens sold on the vehicle and it was discovered on a forecourt for sale. It is also the incident described above which was said to found an allegation of unfairness in that Albert Road were not suspended from the contract when this incident came to light and the vehicle had to be returned to its original owner, having not been crushed as instructed.

Mrs Kemp’s email in response to Mr Hunt’s request which set out the factual detail of this incident, was relied upon by the claimant in the cross-examination of her as to the fairness of the claimant’s suspension. Mrs Kemp was also criticised because it emerged (as a result of the late disclosure of documentation by the defendant) that in fact shortly prior to providing the account of this incident to Mr Hunt, she had stated in an informal exchange with a claims handler employed by the defendant with whom she was very friendly, that she was about to “write a little story on a vehicle for Adam”. The claimant made play of this remark suggesting that it betrayed the fact that Mrs Kemp was providing “little stories” for Mr Hunt in order to prejudice him against the claimant and further her campaign of seeking to have the claimant removed from the contract.

I am unable to accept that suggestion. It is clear, from the context of the email that this remark was nothing more than a light-hearted, jocular or off-the-cuff observation to a work colleague, with whom she was close, and does not found any suggestion that she was misleading Mr Hunt or providing him with inaccurate or inappropriate information. What the email exchange with Mr Hunt of 22^nd August 2008 certainly does disclose is that by that time any misleading impression which had been created by the observations at the meeting on 1^st August 2008 and in the notes of it had been dispelled and corrected, at least as far as Mr Hunt was concerned. This email exchange made clear to Mr Hunt that the forecourt incident was not an allegation involving the claimant. This further undermines the claimant’s case that the misleading note of the forecourt incident in the meeting notes of 1^st August 2008 was evidence of Mrs Kemp campaigning against the claimant’s interests.

On 26^th August 2008, in response to the defendant’s invitation, the claimant’s solicitors wrote a letter setting out their position in relation to the incident involving the S-LR and its implications for the future of the contract. In the course of that letter it was accepted that an instruction was given for the body swap following which, it was stated, the resultant vehicle was instructed to be put “into good repair”. It was asserted in the letter that Mr Harding’s instruction had not been properly carried out, leading to the S-LR bearing the identity of the L-LR. It was further suggested that the vehicle which was the result of the project had not been used on the road. The letter culminated with the following statement of the claimant’s position:

“In the circumstances, transference of an identification plate and the number plates is irrelevant, and in any event not something for which the company is responsible. What is relevant is simply an omission by the company to seek the consent of Essex Police to the use of the vehicle for the purpose to which it was eventually put. That does not constitute a fundamental breach of the Contract so as to give Essex Police the right to terminate it before the fifth anniversary in 2011. If Essex Police should purport to terminate the Contract before its natural end, they will have to pay the company damages for lost revenue less savings in expenditure. The company estimates that at £12,000 per week, i.e. around £1.5 million to the end of the Contract.

Furthermore, the Contract does not provide for suspension. Essex Police could accept fundamental breach and determine the Contract or continue as before. Essex Police are in breach of Contract by not providing the company with work as before the suspension.

The company requires Essex Police to end the suspension forthwith. If that is done immediately then the company is prepared to waive its claim for damages. If not, the company requires the payment of damages for the whole period from the start of the suspension to the term date of 31^st March 2011 in a sum presently estimated at £1 million (i.e. the total loss of revenue less saved expenses), but discounted to £900,000 to take account of early payment and the avoidance of court proceedings.”

Having considered the contents of this letter, on 28^th August 2008 the defendant advised the claimant that it had reached the decision that there had been a fundamental breach of contract and that the contract was being terminated. On 2^nd September 2008 the claimant was advised that they had been removed from the tender process which was then on foot. In fact a formal notice terminating the contract was not sent until December 2008 bringing the contract to an end in March 2009.

Whilst the letter of 2^nd September 2008 advertised the end of the contractual relations between the claimant and the defendant, and also ceased their involvement in the tender process, Mr Maleary’s criminal investigation continued. On 21^st August 2008 the CPS provided him with advice in relation to charging. The advice suggested that, in particular, evidence was needed in relation to the use of the vehicle and also in respect of proof as to whether or not a vehicle had indeed been crushed. It was also advised, in particular, that any witnesses who had been involved in working on the project would be crucial in seeking to establish that Mr Harding and Mr Jennings had behaved dishonestly.

Following receipt of this advice, on 17^th October 2008, Mr Maleary interviewed Mr Jennings and he then re-interviewed Mr Harding on 23^rd October 2008. Issues pertaining to the use of the vehicle on the road were put to both of them in their interviews. This is an issue which I have dealt with above, and in my view nothing further turns on the answers which they gave at this stage.

On 11^th December 2008 a statement was obtained from Mr Burt. It had taken Mr Maleary some time to locate Mr Burt for the purposes of obtaining a statement from him since the body shop at the claimant’s premises had been closed in the spring of 2008 and prior to the discovery of the S-LR. Mr Burt had therefore left the claimant’s employment and indeed the disbandment of the body shop it seems led to certain documentation about the jobs which had been done in the body shop probably being destroyed. During the course of his statement Mr Burt mentioned Mr Gibson. This was the first reference to Mr Gibson in the investigation of the case. On 28^th January 2009 Mr Maleary reported the fruits of his investigation to the CPS.

Following this on 4^th February 2009, Mr Harding and Mr Jennings were both charged. It transpired that whilst the advice which had been received by the CPS, and which had led to Mr Harding’s and Mr Jennings’s being charged, was initially favourable in respect of there being a reasonable prospect of securing their conviction, ultimately it was concluded by other CPS lawyers that they would not be able to prove that either of them had been dishonest to the criminal standard in what had occurred to the S-LR. As a result of this, in a decision which Mr Maleary still profoundly disagrees with, charges were discontinued against both Mr Harding and Mr Jennings in May 2009 and the criminal proceedings against them were brought to a close.

During the course of his evidence, and in particular in cross-examination, Mr Maleary was heavily criticised and his credibility was attacked as a consequence of his inclusion within his first witness statement of reference to the forecourt incident as being a matter which was the responsibility of the claimant. Mr Maleary was criticised, in particular as someone who was experienced in giving evidence, for having included within his statement a matter which was intended to be highly prejudicial and which was, on the evidence, clearly wrong. When challenged about this material as a result of an interlocutory order in the case, and when a further witness statement was produced, Mr Maleary could, at best, only point to the misleading reference in the meeting of 1^st August 2008 as being the source for the information which he had provided. This led to the further criticism that, therefore, the material on which he had relied was at best hearsay.

In my view these were all cogent criticisms of Mr Maleary’s written evidence and his decision to include the allegation in relation to the forecourt incident without properly sourcing or validating it in a statement which carried with it an affirmation as to its truth and reliability is a matter which I have incorporated into my assessment of his evidence and the ultimate conclusions which I reach below. It was, at best, careless and clearly impacts adversely upon my assessment of the reliability of his evidence.

He was also criticised for not having pursued and obtained evidence from Mr Gibson. This aspect was particularly emphasised by the claimant, bearing in mind the nature of the claimant’s case that Mr Gibson was at the heart of orchestrating the ringing of the S-LR. In his oral evidence Mr Maleary suggested that he had a belief that he may well have attempted to locate Mr Gibson after he was referred to by Mr Burt in the witness statement which he obtained from him. Whether or not that is the case (and it is appropriate to point out that there is no documentary material at all to substantiate any suggestion that Mr Maleary did indeed seek to locate Mr Gibson) in my view the criticism of Mr Maleary in this respect is very overstated. It needs to be borne in mind that it was not until December 2008 in Mr Burt’s statement that Mr Gibson was identified. Certainly neither Mr Harding nor Mr Jennings had mentioned Mr Gibson in their description of the work that was undertaken to the S-LR, let alone blamed him for the ringing of that vehicle. In those circumstances it does not appear to me to be a particularly fair criticism of Mr Maleary that he failed to identify Mr Gibson as the culprit for the ringing of the S-LR and pursue him to obtain further evidence.

As set out above these are all matters which I have borne in mind in reaching my ultimate conclusions in relation to the factual issues which arise in this part of the case.

On 8^th January 2008 Ontime, who, it would be recalled, were one of the contractors who had successfully bid for the defendant’s vehicle recovery contracts in the 2006 tender process, wrote to the defendant following a meeting with Mrs Kemp indicating that they had taken a commercial decision to terminate their contract with the defendant with effect from 31^st March 2008. They reconfirmed that this was their intention on 30^th January 2008 in a further letter. I have referred to this correspondence above in relation to my conclusions about the length of their suspension from one of the contracts.

As a result of the 2006 tender process they operated contracts for three of the defendant’s areas and therefore there were three lots which needed to be re-let. Those lots were as follows. Lot 1 was Epping Forest District; lot 2 was Castle Point / Rochford and South End and lot 3 was related to the M11 North and Southbound from Junction 8 to the Metropolitan border. As an interim measure these areas were covered by the defendant’s existing contractors until they were re-let, including work being undertaken by the claimant. The contracts were to be re-let for the remaining time of the contract period, namely up until the end of 2011, with an option for a one year renewal at the election of the defendant thereafter.

In March 2008 the contracts were advertised. The adverts were placed in several publications including the Official Journal of the European Union. The overall scope of the contract was described as follows:

“The Vehicle Recovery Operators will have the necessary expertise, be accredited to PAS 43 standard and be able to

(a)

Carry out both light vehicle and heavy vehicle recovery to specified requirements

(b)

Provide appropriate, secure storage facilities

(c)

Recover, store and preserve vehicles in a suitable undercover environment to enable forensic examination

(d)

Recover vehicles where Essex Police exercise statutory powers of removal and collect any charges arising from this activity

(e)

Provide a dedicated single contact number to provide a 24- hour service, for every day of every year.

The Contract for each Lot shall be for the remaining period of approximately two years which it is anticipated will commence in January 2009 plus an option for Essex Police to extend the duration for a further one year.”

The information provided about each of the lots made clear that the contract was for a similar specification in relation to the requirements which have been set out above. Each of the lots was described geographically in the advertisement.

Before embarking on an examination of what in fact occurred during the tender process it is, in my view, important to set out and understand the points that are raised in this part of the case. It will be recalled that the issues in relation to the tender process form a separate action which is being tried at the same time as the action in relation to the termination of the contract. The first issue in relation to that action based on the tender process relates to whether or not the claimant should have been removed from the tender process. That issue in itself depends upon an examination of matters which have already been set out above relating to the discovery of the S-LR at the claimant’s premises and the outcome of the subsequent investigations. I will return to these issues in my conclusions.

The principal purpose of this section of the judgment is to examine the secondary questions which arise if it is to be concluded that the claimant ought to have remained within the tender process. If the claimant ought not to have been disqualified for the reasons relied upon by the defendant then it is necessary to examine what their prospects would have been in the subsequent tender competition.

The key issues which are raised by the claimant in respect of the 2008 tender competition are as follows. Firstly, other competitors in that competition, and in particular, Boyton Cross and BJG, ought to have been disqualified from the competition. Secondly, the claimant contends that the tender evaluation process was unsatisfactory and flawed. Thirdly, it is contended that had the tender competition been run correctly then all three lots would have been awarded to the claimant. It is with those key issues in mind that I turn to examine the history of the tender process and the issues which emerge from it.

The need to undertake a re-tender process as a result of Ontime terminating their contracts had not been planned for by the defendant. It was therefore thought appropriate for them to obtain some assistance with the conduct of the procurement exercise. To that end in May 2008 Mr Guilhem Lavabre was recruited in order to assist the defendant. Ten operators expressed an interest in participating in the tender process and they were each sent PQQ documentation.

The PQQ forms required information from the potential tenderers on a variety of matters and with respect to a number of capabilities. Some of these requirements were characterised as mandatory. In particular at Section D4 it was a mandatory requirement for the respondents to “confirm that you are currently accredited to PAS43:2002”; at Section D5 it was also a mandatory requirement for the respondents to “confirm that from 1^st January 2009 you will have the capability to recover both light and heavy vehicles”. Finally, for these purposes at Section D6 the respondents needed to indicate “how many vehicles in total you will be able to store.”

One of the contractors, Redcorn, was rejected at the PQQ stage on 16^th May 2008. This was because they did not have a current PAS43 certificate. They responded to this decision on 17^th May 2008 advising that they would be in possession of a PAS43 accreditation in a month’s time (and thus in good time to commence work on the contract) and therefore asked for their interest to be accepted. That suggestion was rejected by Mr Lavabre on behalf of the defendant in the following terms:

“the reason is that the process cannot be dependant on the awarding at a point in the future of a qualification which is absolutely needed for the provision of the services. On that matter, the parallel you are drawing with the level of insurance cover is not totally appropriate. Also, this principle is a basic consideration of the Procurement procedure.”

Applying what it suggests is a similar logic, the claimant contends that both BJG and Boyton Cross should also have been disqualified at this stage. BJG were a relatively new company which had been set up and commenced trading not long prior to the procurement process and which employed some of the people who had previously been employed by Ontime prior to them withdrawing from the defendant’s area. One of the examples of the former employees who they had engaged was Mr Darren Donoghue who was responsible for compiling the tender documentation on behalf of BJG. BJG were bidding solely for lot 2. Boyton Cross were already operating a contract with the defendant and they were bidding in the 2008 tender process for lots 1 and 3.

In relation to BJG, the claimant draws attention to the fact that the address provided by that company on the PQQ documentation is one at Bentalls Business Park in Basildon. By contrast, in the Experian report undertaken in relation to their financial circumstances, the registered office of the company is identified as being at Abacus House, Romford. The address which is provided on the PAS43 certificate, furnished with the PQQ documentation, was at 14 Dolphin Point, Purfleet. The claimant’s point in the light of this variety of addresses attributed to BJG is that they should have been disqualified on the basis of failing the requirement in relation to having current PAS43 accreditation. The proof of PAS43 accreditation was a mandatory requirement and further the premises from and within which the accredited operations occur is contended to be an integral part of the process which is being accredited. The claimant contends that it should have been clear to the defendant from the proliferation of addresses that BJG simply did not have a PAS43 certificate for the premises which they were proposing to deploy in order to service the contract for lot 2. As such they failed a mandatory requirement and should have been disqualified at this stage.

So far as Boyton Cross were concerned, they produced with their PQQ documentation PAS43 certificates for premises in Braintree, Bishop Stortford and Chelmsford. They did not, however, produce a PAS43 certificate for their premises at Waltham Cross which were the premises which they proposed to use for the operations in order to service the contracts for lots 1 and 3 for which they were bidding. Thus, again, it is contended by the claimant that at this stage the Boyton Cross interest should have been disqualified on the basis that they failed a mandatory requirement in respect of possession of a current PAS43 certificate.

The defendant’s answer to this through the evidence of Mrs King and Mr Lavabre is that the mandatory requirement contained in the PQQ documentation was to have PAS43 accreditation for a vehicle recovery operation undertaken by the economic entity bidding so as to show that they were capable of achieving the necessary standard of performance required to secure the award of that accreditation. It was not necessary, or a mandatory requirement, to have a PAS43 certificate for the actual premises which were offered for the contract. This contention is, to some extent, at odds with what I shall allude to below in relation to Mr Lavabre’s continuing investigation with Boyton Cross as to the existence of PAS43 accreditation for the Waltham Cross premises. On balance, however, it is an explanation which in my view is coherent.

Firstly, it is not inconsistent with the PQQ documentation itself which does not require PAS43 certification for particular premises. Furthermore, it is not inconsistent with the promotion of competition, which is one of the purposes of the exercise. If any person not holding a PAS certificate for premises which they propose to use to service the contract were to be disqualified, notwithstanding that they operated a PAS43 certificated process from other premises, then that could have excluded from the process a significant number of potential tenderers. It would, for example, have excluded an operator from a different region who wished to open new premises in the defendant’s area and who already had a successful and PAS43 accredited operation in another region, from bidding and using the defendant’s contract as a means of expanding their business within the defendant’s area. Thus I am satisfied that the decision not to disqualify BJG and Boyton Cross at this stage was legitimate.

It was also contended by the claimant that both BJG and Boyton Cross should have been excluded at the PQQ stage because they were not suitable companies. In relation to Boyton Cross, I do not consider that that is a tenable proposition on the basis that Boyton Cross were already undertaking a contract for the defendants in any event.

So far as BJG were concerned it is right to observe, as I have set out above, that it was a young business which had been recently established and which did not have extensive premises or operations at the time when the tender process was being undertaken. It is also correct to observe, and indeed the PQQ made no secret of the fact, that BJG was employing personnel who had been employed by Ontime at the time when they had been suspended from the defendant’s contract. Furthermore, it is true that BJG had a limited financial track record and this was plain from the Experian report to which I have referred above. Nevertheless in my view, the fact that it was a smaller and younger company than other potential other tenders, was not of itself a legitimate and sustainable reason to exclude them from bidding and further participating in the tender process at this stage. In my view disqualification from even tendering would have been a decision which it would have been exceedingly difficult for the defendant to justify had they taken it.

Having completed the PQQ stage of the process, it was necessary to proceed to the ITT stage. A deadline for the provision of ITT documentation was set for 16^th July 2008. One of the companies tendering, Midway, was disqualified at this stage. They had submitted a tender but had not complied with the necessary procedure in that they had failed to apply a blue label to the envelope containing the tender documentation. Whilst this may seem a small matter, and indeed the claimant sought to make something of the disqualification of Midway for this apparently inconsequential and bureaucratic failing, as Mrs King explained it is a necessary, albeit apparently trivial, step for tenderers to apply the appropriate blue label to the envelope containing their bid so that all bids are opened simultaneously and as part of a transparent process. In fact what had happened as a result of the failure to provide the blue label was that the Midway tender envelope had been opened as being a part of the defendant’s ordinary post. The fact that this happened sheds some light on why the provision of a label to ensure that the tender envelope is set to one side to be opened alongside all of the others is a mandatory part of the process.

Following the elimination of Midway the other tenders were opened at the same time on 18^th July 2008. There were four tenderers who had submitted completed documentation for consideration. Those tenders proceeded to evaluation. Prior to the tender opening session there had been thought given, by Mr Lavabre, to an evaluation tool to enable a consistent procedure to be applied to each of the tenderers. An email exchange occurred between him and Mrs Higgins following which it was clarified that, in relation to compliance with the specification and the proposed terms and conditions of the contract, a pass / fail approach should be taken. Whilst passing would only lead to a proportionate contribution towards the final overall score, plainly it was intended that failing mandatory criteria would lead to the consequence of the tender being disqualified. This approach makes obvious sense since compliance with the specification and the defendant’s terms and conditions had to be regarded as a non negotiable, and to that extent inflexible, requirement of winning the contract. It is against this background that the claimant complains that in the light of the available evidence, both BJG and Boyton Cross should have been disqualified from the tender process. I now set out the detail of the matters which give rise to these contentions.

After he had had an opportunity to peruse the tender documentation, Mr Lavabre wrote to all of the tenderers seeking further information. In particular, he wrote to Boyton Cross seeking clarification of a number of matters on 22^nd July 2008. Boyton Cross responded on 24^th July 2008 and the issues which were raised and responded to were as follows.

As set out above, Mr Lavabre continued to seek a PAS certificate for Boyton Cross’s premises at Waltham Cross. It was explained to him in Boyton Cross’s response that the certificate for the Waltham Cross premises would be available in November 2008 when, at the regular PAS43 accreditation review of all of their operations, these premises would be brought into consideration. It was emphasised by Boyton Cross, in particular as the exchange evolved, that they had no reason to believe that the premises would not be included within their PAS43 accreditation and that accreditation could only be withheld if there had been a diminution in the quality of the operation which they ran, which they did not believe was conceivable.

Secondly, on 22^nd July 2008 Mr Lavabre sought training certificates for the staff who Boyton Cross had identified in their tender documentation. In the response of 24^th July 2008, a further schedule was promised to him. When this further schedule was sent through on 31^st July 2008 it in fact showed materially different information from that which had been in the tender document. Fewer employees were identified in the revised schedule and fewer training accomplishments were recorded against the names of those who were identified.

The claimant contrasted this situation, which did not lead to Boyton Cross being disqualified, to the way in which the claimant had been treated in respect of training requirements. They had also been asked, on 22^nd July 2008, for documentation to prove the staff training which was described in the tender documents. Unbeknown to Mr Lavabre these had been hand delivered to Mrs King on 29^th July 2008. As he was unaware of this Mr Lavabre had strongly recommended to the defendant that the claimant should be disqualified as they had not provided a compliant tender owing to the absence of the staff training documentation.

In fact, as will be obvious, this issue was overtaken by the discovery of the S-LR at the claimant’s premises at around this time. Mrs King’s clear view was that the claimant would not have been disqualified on this basis and that Mr Lavabre was erroneously recommending their disqualification because he was not aware that in fact the gap in the documentation had been plugged. Nonetheless his approach is relied upon by the claimant in support of their contention that Boyton Cross should have been disqualified because the original tender documentation they had produced was, by their own admission, inaccurate and unreliable. Furthermore, the claimant complains that in effect what Boyton Cross were doing at this stage of the tender process was, after the tenders had been closed, providing a whole raft of new information tantamount to a new tender in the form of the provision of this further information.

Turning to the tender provided by BJG, a number of issues are raised by the claimant as fundamental defects in the BJG tender. Again, on 22^nd July 2008, further information was sought by Mr Lavabre to clarify BJG’s tender. They also replied on 24^th July 2008 dealing in particular with the questions which were raised by Mr Lavabre about premises and training.

In relation to staff training again documentation was requested and in response BJG placed reliance upon the provision of future training for staff which they had booked and paid for. They provided evidence of the schedule for this future training and also of the payment that they had made for it. The claimant complains, again, that this is the defendant placing illegitimate reliance upon requirements which are not currently evidenced in the tenderer’s documentation, but which are to be provided at some point in the future. The claimant contends that that approach is not legitimate on the basis that the tender requires demonstration and proof of these issues at the point at which the tender is furnished.

Turning to premises, the claimant again contends in relation to BJG’s tender that this was a further example of illegitimate reliance being placed by the defendant on plans and proposals for future provision, rather than evaluating the tender upon the basis of what the tenderer actually had at the time of submitting the tender documentation.

The PQQ documentation from BJG had indicated that further premises were required by them in order to provide the necessary storage capacity required by the contract. In their response to Mr Lavabre’s request on 24^th July 2008, Mr Donoghue drew attention to the fact that their current landlord was prepared to make a 14,000 square foot building available to them which was opposite their current premises and which had planning permission and adequate space to provide the necessary storage for the contract. It was indicated that the building was available and that the necessary legal procedures to make it available to BJG could be completed within 4-6 weeks of the confirmation of success in the tender process. Mr Lavabre responded to Mr Donoghue on 25^th July 2008 as in response to this information as follows:

“I am forwarding it to Essex Police for their perusal, as far as I am concerned, this is satisfactory. I think that if you have a plan of sorts (e.g. top level project plan) to show how you could be up and running in due course (i.e. 1^st January 2009) with all the equipment fitted in this quite impressive building, it would do no harm. My experience with the force, no different than from any Public Sector organisation, is that they are quite risk averse, and the more documentation can be used to evidence that a due diligence has been undertaken, the better they feel. There is no doubt as to neither your experience, abilities nor your motivation, it’s just the usual public sector normal search for reassurances. If you are ok to provide such a high level plan, please assume a formal contract awarding on September 30^th.”

It is necessary to pause to observe that the last sentence quoted above was relied upon by Mr Platford on behalf of the claimant in suggesting to Mr Lavabre that he had in fact been instructed that BJG were to be awarded the contract and that this was an indication that in effect the tender process was a charade given that the award of lot 2 to BJG was a fait accompli. Mr Lavabre vigorously denied that suggestion, and indeed made clear that the disqualification of the claimant came completely out of the blue to him. I also reject that suggestion. It is plain that the sense of what Mr Lavabre was telling Mr Donoghue was that in producing a project plan, which no doubt would have needed to set out each of the steps necessary to procure and then fit out the building, he should assume that he would have from 30^th September until 1^st January in order to accomplish all of those steps.

In response to this email on 29^th July 2008 Mr Donoghue sent through what was described by him as an “Action Plan”. It did not contain a chronology as to how, step by step, within the time available the premises were to be secured and fitted out. It provided photographs of the proposed building together with a letter from the owner of the building indicating a willingness to let it to BJG and to complete the legal arrangements within 6 to 8 weeks of instruction.

On 30^th July 2008 Mr Lavabre passed this documentation onto Mrs Kemp who was at that time due to be involved in a site visit to evaluate BJG’s premises. In doing so, he expressed his dissatisfaction that the documentation did not truthfully amount to a robust plan of action for securing operational premises. Apart from these shortcomings of this document it is apparent that it led to issues in relation to how the site visit was to be conducted. Mrs Kemp wrote to Mr Lavabre on 18^th August 2008 expressing her concern as to how the site visit evaluation was to proceed on the basis that BJG were, as she put it, a “blank canvas”. Mr Lavabre provided some advice as to how the site visit evaluation should be conducted indicating that the proposed premises should be marked as if they were under the control and being operated by BJG and that the panel should proceed to ask only open rather than closed questions about the new premises so that the questions posed did not suggest answers which, presumably, they would then not be able to verify for themselves since the premises had yet to be fitted out and appointed for the purposes of the contract.

The extent to which this advice was acted upon or absorbed by the evaluation panel is unclear. Certainly one of the site visit evaluators was led to score the BJG premises on the proforma against which all of the tenderers’ sites were evaluated as in respect of most categories “TBC” (“to be confirmed”). This was presumably on the basis that he was not able physically to visit or evaluate operational premises being proposed by BJG. Thus this element of the BJG tender gives rise to complaints from the claimant, that the defendant was reliant not only on premises which were not under BJG’s control or operational at the time but were rather the future promise of potential premises. In addition it is complained that they were allowed, through the Action Plan, to furnish new information which was not contained within the tender documentation itself. Furthermore, the claimant pursued through cross-examination the incoherence of the evaluation process when it sought to address itself to the qualities of premises which had yet to be under the tenderer’s control or to be operated as a vehicle recovery facility. The point pursued was that the evaluation process did not contain any means to evaluate contingent proposals of this kind or account for the inherent uncertainty in their delivery.

In addition to the future provision of premises, the BJG tender also proceeded upon the need for the future provision of vehicles. One of the matters required to be specified within the ITT documentation, and in particular in Schedule 12, was the identification of the vehicles which would be deployed in order to service the contract. In their tender documentation, BJG relied upon the proposed acquisition of a significant number of vehicles, which they did not presently own, in order to provide the specified service under the contract. Again, the criticism raised by the claimant is that the defendant was relying upon the future provision of necessary vehicles, rather than the demonstration of the capability to provide the vehicles at the time of the submission of the tender.

Finally, in this respect, reliance is placed upon the requirement under paragraph 3.5.3 of the tender specification “for heavy goods vehicles a rolling road for brake testing and a 20 metre level concrete track for tachograph calibration purposes.” BJG did not have a rolling road either at their current premises or as part of their proposed premises. In September 2008, shortly prior to the awarding of the contract and after the only other competitor for lot 2, the claimant, had been disqualified, there was an internal exchange of email correspondence between Mrs King and others working for the defendant in relation to this rolling road requirement. On behalf of the Traffic Investigation Unit it was indicated that from their perspective only access to a rolling road was really required because it was not frequently necessary to test vehicles on a rolling road. In the light of this indication and the suggestion that in any future redrafting of the contract specification only access to a rolling road, rather than possession of a rolling road, would be required, it was agreed that the contract could be awarded to BJG notwithstanding the fact that they did not have their own rolling road.

Having set out the issues raised by the claimant in relation to the tender information provided by BJG and Boyton Cross, I turn to the evaluation tool itself. In the claimant’s written evidence there were a number of detailed criticisms raised of the evaluation tool devised by Mr Lavabre and the way in which it had scored and evaluated the information received from the various tenderers. This was in the light of the contention raised by the defendant that they had instructed Mr Lavabre to re-score the tender process after the claimant had been removed but including the information from them, and that his evaluation tool had nevertheless reached the conclusion that even if the claimant had not been disqualified they would not have scored higher marks than BJG who were awarded the contract for lot 2 or Boyton Cross who were awarded the contracts for lots 1 and 3. This argument, supported by material in Mr Lavabre’s written evidence, was strongly opposed by the claimant.

In fact, as matters turned out, shortly before Mr Lavabre was called to give evidence this element of the defendant’s case was completely abandoned. It was explained, by Mr Lawrence, that upon a re-examination of this element of the defendant’s evidence the conclusions in Mr Lavabre’s witness statement that the claimant would have scored less than those awarded the contract could no longer be sustained. Indeed it was stated that the scores which he set out in his material could not be explained. Furthermore it was said on behalf of the defendant that no alternative calculation was to be proffered and the defendant retreated to a position of simply putting the claimant to proof in relation to its prospects of succeeding in the tender process.

In my view this late concession completely curtails any necessity to examine the detailed criticisms of the evaluation tool raised by the claimant since it is not a scoring process which, in substance, the defendant has been able to sustain and defend. It is an obvious requirement of any evaluation tool or matrix that whilst it will inevitably involve judgement and pragmatic or arithmetical weighting it must, to be fit for purpose, be transparent and readily capable of replication. These qualities are obviously a necessary part of a procedure which needs to be consistently applied to each tender and then, potentially, explained to any disappointed competitor or, if necessary, made subject to sensitivity analysis. An evaluation tool which is opaque and incapable of subsequent replication fails the requirement to have these qualities. This has implications for my approach to the evaluation of the claimant’s chance of securing the tender had they not been disqualified.

I shall turn in due course to the implications of these points for my conclusions in relation to this aspect of the case having set out the relevant legal principles to guide my judgment on the criticisms of the process raised by the claimant.

Not every breach of a contract will give rise to an entitlement on behalf of the injured party to treat the breach as one which is fundamental and bringing the contract to an end. The position was definitively explained by Lord Denning MR in his judgment in Cehave NV v Bremer Handels GmbH (The Hansa Nord) [1976] 1 QB 44 at page 60 D to G as follows:

“In 1962 in the Hong Kong Fir Shipping Co ltd v Kawasaki Kisen Kaisha ltd [1962] 2 QB 26 the Court of Appeal drew attention to this vast body of case law. They showed that, besides conditions and warranties, strictly so called, there are many stipulations of which the effect depends on this: if the breach goes to the root of the contract, the other party is entitled to treat himself as discharged: but if it does not go to the root, he is not. In my opinion, the principle embodied in these cases applies to contracts for the sale of goods just as to all other contracts.

The task of the court can be stated simply in the way in which Upjohn LJ stated it at p64. First, see whether the stipulation, on its true construction, is a condition strictly so called, that is, a stipulation such that, for any breach of it, the other party is entitled to treat himself as discharged. Second, if it is not such a condition, then look to the extent of the actual breach which has taken place. If it is such as to go to the root of the contract, the other party is entitled to treat himself as discharged: but, otherwise, not. To this may be added an anticipatory breach. If the one party, before the day on which he is due to perform his part, shows by his words or conduct that he will not perform it in a vital respect when the day comes, the other party is entitled to treat himself as discharged.”

In this case there are, in essence, two key terms of the contract and breaches of those terms relied upon in the contractual action. The first condition is the express condition in the contract relating to the disposal of vehicles both requiring the defendant’s instructions to be actioned and also precluding the disposal of a vehicle into the hands of the claimant. The second condition relied upon is an implied condition that both parties to the contract would conduct themselves acting in good faith, or as frequently and properly expressed in the course of the proceedings, with honesty and integrity in undertaking the duties and observing the requirements of the contract.

The question of whether or not a breach of a term of a contract in the second category identified by Lord Denning is such as a to amount to a repudiatorary breach is to be judged objectively in relation to all of the circumstances as viewed from the perspective of a reasonable person in the position of the party aggrieved by the breach. The assessment is one which is highly fact sensitive. In the case of Eminence Property Developments ltd v Heaney [2010] EWCA Civ 1168 Etherton LJ (as he then was) in giving a judgment with which all of the court agreed observed as follows:

“61.

I would make the following general observations on all those cases. First, in this area of the law, as in many others, there is a danger in attempts to clarify the application of a legal principle by a series of propositions derived from cases decided on their own particular facts. Instead of concentrating on the application of the principle to the facts of the case in hand, argument tends to revolve around the application of those propositions, which, if stated by the Court in an attempt to assist in future cases, often become regarded as prescriptive. So far as concerns repudiatory conduct, the legal test is simply stated, or, as Lord Wilberforce put it, ‘perspicuous’. It is whether, looking at all the circumstances objectively, that is from the perspective of a reasonable person in the position of the innocent party, the contract breaker has clearly shown an intention to abandon and altogether refuse to perform the contract.

62.

Secondly, whether or not there has been a repudiatorary breach is highly fact sensitive. That is why comparison with other cases is of limited value. The innocent and obvious mistake of Mr Jones in the present case has no comparison whatever with, for example, the cynical and manipulative conduct of the ship owners in The Nanfri.

63.

Thirdly, all the circumstances must be taken into account insofar as they bear on an objective assessment of the intention of the contract breaker. This means that motive, while irrelevant if relied upon solely to show the subjective intention of the contract breaker, may be relevant if it is something or it reflects something of which the innocent party was, or a reasonable person in his or her position would have been, aware and throws light on the way the alleged repudiatory act would be viewed by such a reasonable person. So, Lord Wilberforce in Woodar (at page 281 D) expressed himself in qualified terms on motive, not by saying it will always be irrelevant, but that it is not, of itself, decisive.

64.

Fourthly, although the test is simply stated, its application to the facts of a particular case may not always be easy to apply, as is well illustrated by the division of view among the members of the Appellate Committee in Woodar itself.”

The existence in this case of an implied term to act with honesty and integrity as set out above is accepted by both parties. It seems to me however that it would be appropriate to set out for the avoidance of doubt what in my view is the proper legal basis for the implication of that term into this contract.

The approach to the potential implication into a contract of a term of this type was recently considered in the case of Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111. Leggatt J analysed the position as follows:

“131.

Under English law a duty of good faith is implied by law as an incident of certain categories of contract, for example contracts of employment and contracts between partners or others whose relationship is characterised as a fiduciary one. I doubt that English law has reached the stage, however where it is ready to recognise a requirement of good faith as a duty implied by law, even as a default rule, into all commercial contracts. Nevertheless, there seems to me to be no difficulty, following the established methodology of English law for the implication of terms in fact, in implying such a duty in any ordinary commercial contract based on the presumed intention of the parties.

132.

Traditionally, the two principle criteria used to identify terms implied in fact are that the term is so obvious that it goes without saying and that term is necessary to give business efficacy to the Contract. More recently, in Attorney General for Belize v Belize Telecom Ltd [2009] 1 WLR 1988 at 1993-5, the process of implication has been analysed as an exercise in the construction of the contract as a whole. In giving the judgment of the Privy Council in that case, Lord Hoffmann characterised the traditional criteria, not as a series of independent tests, but rather as different ways of approaching what is ultimately always a question of construction: what would the contract, read as a whole against the relevant background, reasonably be understood to mean?

133.

The modern case law on the construction of contracts has emphasised that contracts, like all human communications, are made against a background of unstated shared understandings which inform their meaning. The breadth of the relevant background and the fact that it has no conceptual limits have also been stressed, particularly in the famous speech of Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at pp. 912 – 3, as further explained in BCCI v ALI [2002] 1 AC 251 at p. 269.

134.

Importantly for present purposes, the relevant background against which contracts are made includes not only matters of fact known to the parties but also shared values and norms of behaviour. Some of these are norms that command general social acceptance; others may be specific to a particular trade or commercial activity; others may be specific still, arising from features of the particular contractual relationship. Many such norms are naturally taken for granted by the parties when making any contract without being spelt out in the document recording their agreement.

135.

A paradigm example of a general norm which underlies almost all contractual relationships is an expectation of honesty. That expectation is essential to commerce, which depends critically on trust. Yet it is seldom, if ever, made the subject of an express contractual obligation. Indeed if a party in negotiating the terms of a contract were to seek to include a provision which expressly required the other party to act honestly, the very fact of doing so might well damage the parties’ relationship by the lack of trust which this would signify.

136.

The fact that commerce takes place against a background expectation of honesty has been recognised by the House of Lords in HIH Casualty v Chase Manhattan Bank [2003] 1 CLC 358. In that case a contract of insurance contained a clause which stated that the insured should have ‘no liability of any nature to the insurers for any information provided’. A question arose as to whether these words meant that the insured had no liability even for deceit where the insured’s agent had dishonestly provided information known to be false. The House of Lords affirmed the decision of the courts below that, even though the clause read literally would cover liability for deceit, it was not reasonably to be understood as having that meaning. As Lord Bingham put it at [15] : ‘Parties entering into a commercial Contract…will assume the honesty and good faith of the other; absence such an assumption they would not deal.’ To similar effect Lord Hoffmann observed at [68] that parties ‘contract with one another in the expectation of honest dealing,’ and that: ‘…in the absence of words which expressly refer to dishonesty, it goes without saying that underlying the contractual arrangements of the parties there will be a common assumption that the persons involved will behave honestly.’

137.

As a matter of construction, it is hard to envisage any contract which would not reasonably be understood as requiring honesty in its performance. The same conclusion is reached if the traditional tests for the implication of a term are used. In particular the requirement that parties will behave honestly is so obvious that it goes without saying. Such a requirement is also necessary to give business efficacy to commercial transactions.

138.

In addition to honesty, there are other standards of commercial dealing which are so generally accepted that the contracting parties would reasonably be understood to take them as read without explicitly stating them in their contractual document. A key aspect of good faith, as I see it, is the observance of such standards. Put the other way round, not all bad faith conduct would necessarily be described as dishonest. Other epithets which might be used to describe such conduct include ‘improper’, ‘commercially unacceptable’ or ‘unconscionable’.

139.

Another aspect of good faith which overlaps with the first is what may be described as fidelity to the parties’ bargain. The central idea here is that contracts can never be complete in the sense of expressly providing for every event that may happen. To apply a contract to circumstances not specifically provided for, the language must accordingly be given a reasonable construction which promotes the values and purposes expressed or implicit in the contract…

141.

What good faith requires is sensitive to context. That includes the core value of honesty. In any situation it is dishonest to deceive another person by making a statement of fact intending that other person to rely on it while knowing the statement to be untrue. Frequently, however, the requirements of honesty go further. For example, if A gives information to B knowing that B is likely to rely on the information and A believes the information to be true at the time it is given but afterwards discovers that the information was, or has since become, false, it may be dishonest for A to keep silent and not to disclose the true position to B. Another example of conduct falling short of a lie which may, depending on the context, be dishonest is deliberately avoiding giving an answer, or giving an answer which is evasive, in response to a request for information.

142.

In some contractual contexts the relevant background expectations may extend further to an expectation that the parties will share information relevant to the performance of the contract such that a deliberate omission to disclose such information may amount to bad faith. English law has traditionally drawn a sharp distinction between certain relationships – such as partnership, trusteeship and other fiduciary relationships – on the one hand, in which the parties owe onerous obligations of disclosure to each other, and other contractual relationships in which no duty of disclosure is supposed to operate. Arguably at least, that dichotomy is too simplistic. While it seems unlikely that any duty to disclose information in performance of the contract would be implied where the contract requires a simple exchange, many contracts do not fit this model and involve a longer term relationship between the parties which they make a substantial commitment. Such ‘relational’ contracts, as they are sometimes called, may require a high degree of communication, cooperation and predictable performance based on mutual trust and confidence and involve expectations of loyalty which are not legislated for in the express terms of the contract but are implicit in the parties understanding and necessary to give business efficiency to the arrangements. Examples of such relational contracts might include some joint venture agreements, franchise agreements and long term distributorship agreements.”

It will be clear from what has been set out above that both the existence and the content of an implied condition in relation to honesty and integrity is highly sensitive to the context of the contract itself. By the use of the term ‘integrity’, rather as Leggatt J uses the term ‘good faith’, the intention is to capture the requirements of fair dealing and transparency which are no doubt required (and would, to the parties, go without saying) in a contract which creates a long-standing relationship between the parties lasting some years and which has the qualities and features to which I shall turn shortly. There may well be acts which breach the requirement of undertaking the contract with integrity which it would be difficult to characterise definitively as dishonest. Such acts would compromise the mutual trust and confidence between the parties in this long-term relationship without necessarily amounting to the telling of lies, stealing or other definitive examples of dishonest behaviour. They would amount to behaviour which the parties would, had they been asked, have identified as obvious acts which were inconsistent with the maintenance of their intended long-term relationship of fair and open dealing and therefore would amount to a breach of their contract.

As noted above, there are particular features of this contract which warrant the inclusion of this implied term. Firstly, as already noted, the contract created a relatively lengthy period of contractual relationship between the parties, during which there were going to be a very large number of individual transactions undertaken under the auspices of the contract. It was, in my view, a ‘relational’ contract par excellence. Secondly, the substance of the contract involved dealing with the recovered property of members of the public acting on behalf of a law enforcement agency. This required that the recovered property was itself treated with both honesty and integrity whilst it was being dealt with by the claimant and they were exercising the requirements of the contract. Thirdly, and related to the second point, the property which was recovered and being handled by the claimant might, in some instances, require return to the public and therefore its treatment whilst in the hands of the claimant was of the upmost importance. Fourthly, some of the vehicles which were recovered under the specification of the contract would themselves form part of the evidence for criminal investigations and potential prosecutions in which they might become exhibits. This aspect is reinforced by the specification within the contract, not simply for storage space but also for the facilities for forensic examination and investigation of the vehicles whilst being held on the claimant’s premises. All of these features of this particular contract make it clear in my view that there was an implied term that, as set out above, the parties would act with honesty and integrity in operating the contract.

A further legal issue arises because the claimant contends that it cannot be held liable unless the controlling mind and will of the company, namely Mr Harding or Mr Jennings, were responsible for the dishonesty or lack of integrity which might be found in respect of the treatment of the S-LR. This is associated with the contention that if there was any dishonesty or lack of integrity involved in the treatment of the S-LR that was the responsibility of Mr Gibson.

This argument engages the question of the attribution of acts to a corporate entity. This issue was addressed by the Privy Council in the case of Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 in particular in the judgment of the Judicial Committee given by Lord Hoffmann which provides at page 511 as follows:

“Once it is appreciated that the question is one of construction rather than metaphysics, the answer in this case seems to their Lordships to be as straight forward as it did to Heron J. The policy of section 20 of The Securities Amendment Act 1988 is to compel in fast moving markets, the immediate disclosure of the identity of persons who become substantial security holders in public issuers. Notice must be given as soon as that person knows that he has become a substantial security holder. In the case of Corporate Security Holder, what rule should be applied as the person whose knowledge for this purpose is to count as the knowledge of the company? Surely the person who, with the authority of the company, acquired the relevant interest. Otherwise the policy of the act would be defeated. Companies would be able to allow employees to acquire interests on their behalf which made them substantial security holders but would not have to report them until the board or someone else in senior management got to know about it. This would put a premium on the board paying as little attention as possible to what its investment managers were doing. Their Lordships would therefore hold that upon the true construction of s20(4)(e), the company knows that it has become a substantial security holder when it is known to the person who had the authority to do the deal. It is then obliged to give notice under s20(3). The fact that Koo did the deal for a corrupt purpose and did not give such notice because he did not want his employers to find out cannot in their Lordship’s view affect the attribution of knowledge and the consequent duty to notify.

It was therefore not necessary in this case to inquire into whether Koo could have been described in some more general sense as the ‘directing mind and will’ of the company. But their Lordships would wish to guard themselves against being understood to mean that whenever a servant of a company has authority to do an act on its behalf, knowledge of that act will for all purposes be attributed to the company. It is a question of construction in each case as to whether the particular rule requires that the knowledge that an act has been done, or the state of mind with which it was done, should be attributed to the company. Sometimes, as in re supply of Ready Mixed Concrete (No 2) [1995] 1 A.C. 456 and this case, it will be appropriate. Likewise in a case in which a company was required to make a return for revenue purposes and the stature made it an offence to make a false return with intent to deceive, the Divisional Court held that the mens rea of the servant authorised to discharge the duty to make the return should be attributed to the company: see Moore v I. Bresler Ltd [1994] 2 All ER 515. On the other hand, the fact that a company’s employee is authorised to drive a lorry does not in itself lead to the conclusion that if he kills someone by reckless driving, the company will be guilty of manslaughter. There is no inconsistency. Each is an example of an attribution rule for a particular purpose, tailored as it always must be to the terms and policies of the substantive rule.”

It follows from the principles which are set out in the Meridian Global Funds case that the question of attribution, and whether it properly extends beyond the two directors of the claimant Mr Harding and Mr Jennings, is one which has to be assessed against the context of the implied term of the contract set out above, being the instrument giving rise to the liability. As Lord Hoffmann explains, the question will not simply be resolved on the basis of whether or not an employee of the company had authority to undertake the act giving rise to the breach of contract. The issue is whether, on analysis, the purpose of the provision of the contract properly required the restriction of attribution to the directors only or to a wider category of the claimant’s employees.

In my view the pertinent factual context for the conclusions in relation to this issue are similar to those which I have set out above justifying the inclusion of the implied terms in the first place. Looking at the purposes of the contract and its specification, they included the safe, secure, and accountable recovery of vehicles so as to enable either their undamaged retention to enable either their return intact to their owners, or their safe disposal so as to ensure amongst other things that elements of the vehicles did not appear in the market either in whole or in part, or the safeguarding of the vehicles as evidence in criminal investigations.

Measured against the importance of these issues to, in particular, the defendant and the reliance which the defendant had to place in the light of these matters on the trust and integrity of the claimant, I am satisfied that it is not sensible and does not properly give effect to the purpose of the term within the factual context of the contract to limit the question of attribution solely to Mr Harding and Mr Jennings. In my view, bearing in mind the purpose of including the implied term and the factual basis for doing so, the actions of other of the claimant’s employees, in particular their managerial and supervisory staff, should properly be regarded as capable of giving rise to a breach of the implied term.

In the course of argument the requirement under the contract for the defendant to vet the claimant’s staff who were working on the contract was relied upon as bolstering the argument that attribution should be restricted solely to the two directors. That vetting was not, however, in my view designed as a proxy for compliance with the implied term, nor is it properly to be regarded as appropriate to restrict attribution so as to meet the purposes of the contract.

On a day-to-day basis the actions of the claimant’s staff in discharging the requirements of the specification of the contract rested with the instruction and supervision provided by their managerial and supervisory staff. Compliance with the implied term clearly, in my view, depended upon the actions of the managerial and supervisory staff so as to ensure that the conduct of the contract respected the requirements of, for example, having the custodianship of property which might ultimately feature as controversial evidence in a criminal trial.

It follows that in my view the question of attribution of the claimant’s actions in relation to the implied term are not restricted simply to the acts or defaults of Mr Harding or Mr Jennings but properly understood ranged wider to the acts and omissions of the claimant’s managerial and supervisory staff. That wider definition would certainly embrace the staff managing and issuing instructions in the mechanical workshop (Mr Gibson and Mr Bewerss) and in the body shop (Mr Burt).

It is now necessary to turn to the legal propositions involved in the action relating to the tender process. The defendant contends that it was entitled to remove the claimant from that process based on the provisions of the Public Contracts Regulations 2006 which governed the tender process. The claimant was an economic operator for the purposes of the 2006 regulations. The process which was being deployed under the 2006 regulations was the ‘restricted procedure’.

Regulation 23 of the 2006 regulations provides criteria for the rejection of economic operators. In particular regulation 23 provides as follows:

“23(4) A contracting authority may treat an economic operator as ineligible or decide not to select an economic operator in accordance with these Regulations on one or more of the following grounds, namely that the economic operator - … (e) has committed an act of grave misconduct in the course of his business or profession;”

There is no further definition within the Regulations of the term “grave misconduct”. There is, further, no assistance to be derived from any case law. That said, in my view there is little difficulty in accepting that if there has been a breach of an implied term related to honesty and integrity which is sufficiently serious as to be properly regarded as a repudiatory breach of a pre-existing contract with the public body conducting the tender process then that would fall within the definition of “grave misconduct” for the purposes of the Regulations. Repudiatory breaches of other terms would fall to be considered on their own facts but it would not be correct to assume that every repudiatory breach would amount to “grave misconduct”. It is the fact that it is repudiatory breach of a term related to honesty and integrity which founds its characterisation as “grave misconduct”.

The legal principles governing a tendering exercise of this kind were set out by Morgan J in Lion Apparel Systems Limited v Firebuy Limited [2007] EWHC 2179 as follows:

“27.

The principally relevant enforceable Community obligations are obligations on the part of the Authority to treat bidders equally and in a non-discriminatory way and to act in a transparent way.

28.

The purpose of the Directive and the Regulations is to ensure that the Authority is guided only by economic considerations.

29.

The criteria used by the Authority must be transparent, objective and related to the proposed contract.

30.

When the Authority publishes its criteria, which conform to the above requirements, it must then apply those criteria. The published criteria may contain express provision for their amendment. If those provisions are complied with, then the criteria may be amended and the Authority may, and must, then comply with the amended criteria.

31.

If relation to equality of treatment, speaking generally, this involves treating equal cases equally and different cases differently.

32.

Council Directive 89/655/EEC (the remedies directive) requires Member States to take measures necessary to ensure that decisions taken by an Authority in this context may be reviewed effectively and as rapidly as possible on the grounds that such a decision may have infringed Community law in the field of public procurement or national rules implementing that law.

33.

Regulation 32 of the 1993 Regulations (which I consider below) gives effect to the remedies directive.

34.

When the court is asked to review a decision taken, or a step taken, in a procurement process, it will apply the above principles.

35.

The court must carry out its review with the appropriate degree of scrutiny to ensure that the above principles for public procurement have been complied with, that the facts relied upon by the Authority are correct and that there is no manifest error of assessment or misuse of power.

36.

If the Authority has not complied with its obligations as to equality, transparency or objectivity, then there is no scope for the Authority to have a ‘margin of appreciation’ as to the extent to which it will, or will not, comply with its obligations.

37.

In relation to matters of judgment, or assessment, the Authority does have a margin of appreciation so that the court should only disturb the Authority’s decision where it has committed a ‘manifest error’

38.

When referring to ‘manifest’ error, the word ‘manifest’ does not require any exaggerated description of obviousness. A case of ‘manifest error’ is a case where an error has clearly been made.”

Embedded within these principles, and further explained in the cases of SIAC Construction Limited v Council of the County of Mayo C-19/00 and EVN AG, Wienstrom GmbH v Austria and ors Case C-448/01, is the requirement that the documentation (namely the notice, the PQQ, ITT and contractual documentation) must clearly formulate the requirements which are to be tendered to and those requirements must be consistently applied. This principle is of particular application to the claimant’s contentions in relation to the inclusion of future requirements within the tender evaluation process. Once the tenders have been received, they cannot thereafter be altered, but it is permissible for them to be clarified if appropriate: see R (Harrow Solicitors and Advocates) v LSC [2011] EWHC 1087. The fact that the defined criteria sent out in the tender process could only be met by a limited number of economic operators does not in itself constitute a breach of the requirement for equal treatment: see Concordia Bus Finland v Helsingin kaupunki, HKL-Bussiliikenne Case C-513/99.

During the course of the trial, and at my invitation, a list of the key factual and legal questions which needed to be answered as an outcome of the trial process was agreed between the parties. That agreed list is annexed to this judgment as Annex 2. As will be noted, it covers legal and factual issues as well as the key questions determining liability. It assisted in structuring the presentation of final submissions by both parties. It has also guided my deliberations and these conclusions.

What will be clear, in particular to the parties, is that the list of questions does not range across the very many factual issues which were raised in the case although some of these more peripheral issues are part of the context of answering the factual questions or relate to the reasons given for answering some of the questions in a particular way. In fashioning both my examination of the facts and also these conclusions I have, albeit not question by question, answered all of the questions identified in the agreed document. I have also addressed many, but by no means all, of the additional facts and issues which were raised during the course of the evidence. Those which I have addressed are those that were in my opinion directly relevant to the central questions which needed to be answered.

Turning to the main factual questions raised I am satisfied that Mr Harding did give instructions for a body swap between the L-LR and the S-LR as a training exercise for the claimant’s apprentices. He probably gave the instructions to those who were in charge of the mechanical workshop, Mr Gibson in the first instance and via Mr Gibson to both Mr Bewerss and, in terms of the body shop, Mr Burt. It is clear from the evidence in my view that when the S-LR found its way to the body shop to be re-sprayed the instruction which had been given by Mr Harding was questioned by Mr Jennings who was concerned as to the waste of expenditure in re-spraying an older vehicle. When it was questioned I am satisfied that Mr Harding reconfirmed the instruction. It may well be that the way in which that instruction was ultimately carried out bore little relation to the instruction which had been originally given. However, the original instruction came from Mr Harding and was acted upon by the staff managing the mechanical workshop and the body shop (Mr Gibson followed by Mr Bewers and Mr Burt) and it was as a result of the combination of these instructions that the vehicle found by Mr Godard on 28^th July 2008 came to present to him as it did.

I am not at all convinced that anyone on behalf of the claimant ever intended to get permission from the defendant for either the body swap training exercise or indeed for any work to be undertaken to the S-LR. Even were I wrong about that it is clear from the evidence that any thought that permission might be asked of Mrs Kemp was no more than half hearted and, most importantly, never in fact acted upon. It is, in my view, beyond argument that consent should have been sought for anything other than disposal by crushing of the S-LR.

I am, equally, not convinced that Mrs Kemp would have given permission for any work on the S-LR even if she had been asked for it. The basis for my conclusion is firstly that she said in evidence herself, and I regarded her as a straightforward, honest and truthful witness, that she probably would not have given permission even for the training project body swap originally envisaged by Mr Harding. In relation to this issue, the claimant relies upon other occasions when they were permitted by Mrs Kemp to retain vehicles for other purposes. Examples of this included where the vehicles were provided in order to facilitate mechanical training in local schools or where they were given over to the defendant for covert police operations or target practice for their armed officers.

It is accepted on all sides that these occasions happened but they were in my view very different from that which was proposed in this case, namely a body swap with the potential confusion as to the identities of the vehicles which would result. Certainly, they did not provide any precedent for the activity originally envisaged, nor any excuse for not seeking permission even for the project envisaged by Mr Harding’s original instruction. Even if Mrs Kemp had been persuaded to give permission, it is clear to me that it would have been conditional upon both the vehicles being crushed immediately after the project had been completed. However, I am unconvinced that any permission would in fact have been forthcoming. In any event, even if Mr Harding had asked for permission for the apprentice training exercise of the body swap as is set out above, that is not in fact what happened or what this case is actually about.

I have set out above detailed conclusions in relation to what works were done to the L-LR and S-LR between the time when the S-LR was recovered as an uninsured vehicle and the time when it was discovered by Mr Godard having been ringed and posing as the L-LR. To summarise what in fact happened whilst the vehicle was in the claimant’s custody, I am satisfied that after an abortive attempt at the body swap training exercise further work was done on the S-LR in order to create the vehicle which was found by Mr Godard on 28^th July 2008. In short, that work amounted to not simply the re-joining of the S-LR’s body to its chassis, but its equipping as a recovery vehicle (including for instance fitting a winch and beacon lights), its re-spraying and works to seek to identify it as the L-LR (fixing the L-LR’s VIN plate onto its slam panel and giving it new number plates) followed by it being covered in the claimant’s livery and then its absorption into, and use as part of, the claimant’s fleet in recovery work.

The key question which this gives rise to is as to whether, in the light of these findings, the claimant breached the implied term of honesty and integrity. An alternative analysis would be to ask whether this was such a grave and serious breach of the express terms in relation to following instructions to dispose by crushing, and not disposing of vehicles to the claimant or those associated with it as to amount to a repudiatory breach. It truth whichever route is taken the question amounts to the same one. Did the facts which emerged on 28^th July 2008, and in the investigation thereafter, amount to such a serious breach of either term of the contract so as to justify its repudiation?

I have no doubt that what amounted in effect to the appropriation of the S-LR and its ringing, leading to it becoming in effect part of the claimant’s fleet without taking any steps to ask permission was a combination of acts which clearly breached the implied term in relation to integrity, the content which I have set out above. Furthermore, I have no doubt that the overall combination of those actions was known to the managerial and supervisory staff of the claimant. I am satisfied that both Mr Harding and Mr Jennings, after about the beginning of March 2008, would have been aware of the S-LR being present at the claimant’s premises and presenting superficially as the L-LR, a vehicle which was part of their fleet. A moment’s reflection on their part would have made clear to them that what had occurred was quite plainly wrong and involved a betrayal of the defendant’s trust and confidence in them and amounted to action which entirely lacked the integrity necessary in the conduct of a contract of the kind which they had with the defendant.

It is to be observed that Mr Harding knew very quickly at Mr Godard’s visit on 28^th July 2008 the vehicle which was the focus of his inquiries and that it had been involved in a body swap exercise. He also knew, immediately, that he ought to have asked for permission. In my view what occurred and what was known or ought to have been known by Mr Harding is more than adequate to demonstrate a lack of integrity on the part of the claimant, even if attribution were to be limited to him alone. However, for the reasons which I have set out above, the question of attribution needs to go wider in this case. On the correct approach to attribution which incorporates the actions and omissions of Mr Gibson, Mr Bewers and Mr Burt (as those managing and supervising the day to day work on the S-LR) the position is, again, that the implied condition was clearly breached and what occurred clearly demonstrated the lack of the integrity required by the contract.

The breach of the condition which I have identified is further reinforced, or at least not alleviated, by an examination of events which occurred after the discovery on 28^th July 2008. Firstly, it is apparent in my view that no adequate investigation seems to have been undertaken by either Mr Harding or Mr Jennings into how it could be that a vehicle they had recovered on behalf of the defendant had been ringed and transformed into a vehicle posing as one of their own fleet. It was clear during the course of the evidence that some employees who had been obviously involved in working on the vehicles, for example Mr Bennett, were not asked until many months afterwards (or, it seems, at all in the case of Mr Bewers) what in fact had gone on to lead the state of affairs discovered by Mr Godard. Documents, some of which emerged during the course of the trial, were not sought out in order to thoroughly investigate how the situation discovered by Mr Godard had come about. The lackadaisical nature of the investigation into what was a very serious allegation is heavily suggestive of Mr Harding and Mr Jennings either knowing, or strongly suspecting, that something had gone badly wrong in relation to the treatment of the S-LR which further reinforces my conclusion in relation to the lack of integrity in what had occurred.

Secondly, the email which was sent by Mr Jennings on 29^th July 2008 was, as examined above, riddled with errors and potentially misleading information. In reality there is no sensible explanation for the problems with the contents of the email and it only serves to reinforce the concerns in relation to the claimant’s lack of integrity in dealing with the defendants on this occasion.

Thirdly, when Mr Harding came to be interviewed by Mr Maleary, he did not assist his cause. Far from providing Mr Maleary with a clear documentary history or a document trail explaining what had happened to the S-LR after it had been recovered, Mr Harding produced nothing to assist Mr Malerary’s investigation. In fact in the answers which he provided he gave erroneous information to him, for example in relation to whether or not the vehicle had been used on the road. He gave unhelpful answers for instance in relation to who had in fact worked on the project. As set out above, it was Mr Harding’s answers in his first interview with Mr Maleary that suggested that Mr Burt was the person who had been engaged in directing the work on the vehicle and that an apprentice who had emigrated to South Africa had been involved in it. Again, none of this alleviates the concerns in relation to the lack of integrity shown by the claimant in dealing with the S-LR.

Having said this, I am not satisfied that either Mr Harding or Mr Jennings were dishonest in the sense that they set out to ring or dishonestly appropriate a recovered vehicle for their own use. The seriousness of such an allegation would require clear and conclusive evidence and I am unconvinced that such evidence exists in this case. I have no doubt that this was an extremely difficult time for Mr Harding as he sought to support his wife who was at the time terminally ill. That, as explained by himself and other witnesses, meant that he was not at the claimant’s premises frequently, nor was he concentrating on the claimant’s business with the focus and attention to detail that he would otherwise have brought to bear. I have little difficulty in accepting that he would have been distracted at the time with far more important and immediate concerns in his private life than the day-to-day detail of the claimant’s business.

Nevertheless, whilst not dishonest, for the reasons I have set out above, had he been fully focused on the claimant’s day-to-day business what happened would, I have no doubt, immediately have struck him as wanting integrity and wholly unacceptable. There was a chance to review, examine or investigate what was in fact happening as a consequence of his instruction at the time when Mr Jennings raised the query with him when the vehicle was admitted to the body shop, but Mr Harding did not seize it. He, and certainly Mr Jennings may complain that the initial instruction was taken far further and to an ultimate outcome which was never intended by Mr Harding, but the reality is that no one in a managerial or supervisory capacity stopped the ringing of the S-LR or enquired as to what had happened when the vehicle was assimilated into the claimant’s fleet. They could and should have done so. Indeed as I have set out above, individuals who were part of the managerial and supervisory staff (Mr Gibson, Mr Bewers and Mr Burt) were in my view most likely to have been involved in issuing the instructions which escalated the apprentice project into the ringing of the vehicle. Those instructions were not adequately themselves supervised, overseen or investigated by the company’s directors bearing in mind the S-LR was at all times on the claimant’s premises during the course of its transformation and then operation as part of their fleet.

Having concluded in summary that there was a clear and serious breach of both the implied term of honesty and integrity (in particular the requirement to deal with integrity), and the express terms in relation to disposing on the instructions of the defendant and not taking possession of recovered vehicles, I turn to the question raised by the claimant as to whether or not firstly, what occurred was as a result of the malign actions of Mr Gibson seeking to discredit the claimant and secondly, orchestrated by Mrs Kemp, Mr Maleary and Mrs King so as to disadvantage the claimant and lead to them losing the contract and being removed from the tender process.

I have no difficulty in accepting that, in relation to works on the L-LR and S-LR prior to him leaving the claimant’s employment, Mr Gibson would have been involved in giving instructions. Any instructions which he gave to those working under him in the mechanical workshop would have been the fruit of the instructions originally given by Mr Harding as set out above. The issue of the detail of Mr Gibson’s instructions is not absolutely clear from the evidence but in my view it is likely that he instructed the re-assembly of the S-LR and also its transfer to the body shop for re-spraying after the abortive body swap described by Mr Bennett and Mr Melville. However, it needs to be recalled when assessing the claimant’s allegation that Mr Gibson had left the claimant’s employment before the re-spray was finished and also prior to further mechanical work being undertaken in order to fit out the S-LR and identify it (in particular by the provision of the number plates) as the L-LR.

Some, at least, of this further work after Mr Gibson had left must have been undertaken when Mr Bewers was in charge of the mechanical workshop. It is at the very least disturbing, if not in reality sinister as claimed by the defendant, that Mr Bewers has not been called by the claimant to give evidence, albeit documents were produced in which he had initialled his approval in relation to work undertaken and that he was in charge of the mechanical workshop when some of the work on the S-LR was done.

His absence from the trial was explained by Mr Harding and Mr Jennings on the basis that he was not a person in any authority. However, I am unconvinced that that contention is fully borne out by the evidence which, as I have set out, includes the undisputed evidence that he was, following a short hiatus after the departure of Mr Gibson, in charge of the mechanical workshop and had endorsed (by initialling them) documents relating to work on the vehicle. It was said that his endorsement of some of the documentation was to do with his role in relation to ordering and providing parts for work to be undertaken, but that still does not justify him not being called in relation to work carried out on the vehicle after Mr Gibson left and which was directly relevant to its emerging role as part of the claimant’s fleet. The short point is that it renders it impossible in my view to conclude that the entire project leading to what was found by Mr Godard was orchestrated by Mr Gibson in an effort to discredit the claimant, when some of the important work to enable the vehicle to present as part of the claimant’s fleet was undertaken after Mr Gibson had left and upon the instruction of others.

Furthermore, the reality is that there is little if any evidence to implicate Mr Gibson in such a scheme in circumstances where the seriousness of the allegation would call for clear and convincing evidence that he had been guilty of seeking to sabotage the claimant. In substance, the only evidence which can be relied upon is that it is likely he issued some of the instructions associated with ringing the vehicle, that he had a row with Dr Parry shortly before his departure which I have addressed above and that he left the claimant’s employment to go to work for a competitor. This material does not, in my view, come close to substantiating the allegation made against him. I am therefore wholly unconvinced by this element of the claimant’s case. My views are further reinforced by the evidence given by Mr Jennings that he had no reason to suspect that Mr Gibson was involved in any such skulduggery.

I am equally unconvinced by the allegations of, in effect, bad faith against Mrs Kemp, Mr Maleary and Mrs King. It is contended on behalf of the claimant that some or all of these witnesses were in league to discredit the claimant and ensure that the claimant lost the contract and also the tender process to their competitors. In my view there was, in this part of the claimant’s case, a good deal of chasing of shadows and little of any substance. I have earlier set out that, so far as Mrs Kemp was concerned, I am satisfied that she was a reliable witness and have already concluded that there is little evidence to suggest that she was prejudiced against the claimant prior to Mr Godard’s discovery.

Having reviewed the evidence as to what happened after the discovery, I am equally not satisfied that there is any significant evidence which supports the contention that she was seeking to use Mr Godard’s discovery as a means of poisoning the minds of the decision makers in the defendant’s management against the claimant or manipulating matters to ensure that they were removed from the contract and the tender process so that it could be awarded to others. There is no doubt that Mrs Kemp was, following the discovery, a vocal advocate for the removal of the claimant from the contract and the tender process. For the reasons which I have set out above, that was a view that she was entirely entitled to hold. I have examined in the course of my review of the facts the detail of the claimant’s allegations and the limited number of documents to which they have referred in an endeavour to demonstrate Mrs Kemp’s prejudice. I am, for the reasons for which I have given above, unconvinced by these allegations.

I am equally unconvinced by the contentions made against Mr Maleary in his investigation of the alleged criminal offence involved in what Mr Godard discovered. Again, I have dealt in detail with allegations which were made against Mr Maleary in my review of the facts above and provided conclusions as to why I do not consider that the claimant’s complaints demonstrate any bad faith on Mr Maleary’s behalf. In truth, as I have identified above, there are some matters which occurred during the course of his investigation and the preparation of his evidence for this case which can be legitimately criticised. For instance, the error in attribution of the forecourt incident to the claimant when it was in fact the responsibility of Albert Road in the note of the meeting of 1^st August 2008 and, in my view more importantly, the subsequent reliance upon that episode by Mr Maleary in his witness statement. Whilst those matters were properly the subject of censure by Mr Platford in the course of the evidence they are not errors which, in my view, betray a sinister effort on behalf of Mr Maleary to do the claimant down. This evidence was careless and ill-considered, particularly from someone whose stock in trade is the establishment of the truth, but I am not satisfied that it betrays a deliberate attempt to mislead the court nor that it is redolent of his earlier involvement in a conspiracy to cause serious commercial harm to the claimant.

Viewed overall, the evidence and the documents in particular show in my view a fair and proportionate investigation of the incident and a proper and generally accurate response to the enquiries raised, in particular, with Mrs Kemp by other colleagues within the defendant’s organisation. In reality there is no evidence of any bad faith on the part of Mrs King unless reliance is being placed on the flaws in the procurement process. However, that evidence did not come close to establishing bad faith on her behalf, even on the findings which I have made about those procedural flaws.

I have borne in mind that the claimant also relies in this respect upon the multiplicity of allegations which were raised at an earlier stage in the litigation as demonstrating, additionally, bad faith of the part of the defendant. This is on the basis that the overwhelming majority of the allegations were misconceived and can only have been raised in order not simply to put the claimant to expense as to the proof of their falsity, but also in the making of them they showed a wholly unjustifiable prejudice against the claimant.

In my view, whilst it is undoubted that the change of tack by the defendant to seek to rely upon a blizzard of relatively unimportant and ultimately inaccurate suggestions of breach of contract was a serious tactical misstep on their part, taken both individually and also alongside all of the other available material, I am still un-persuaded that the claimant has established that there was bad faith on the part of the defendant relating either to the termination of the contract or the claimant’s removal from the tender process. The inclusion of these allegations in the litigation was misconceived, but it was not malign.

To conclude on the facts which have emerged and which I have found, it is plain that there was a serious breach both of the implied term of honesty and in particular integrity, and also the express terms in relation to following the defendant’s instructions for disposal and not retaining vehicles for the claimant’s own use. That breach arose as a result of the claimant through, in particular, the actions of its supervisory and managerial staff in either directing or failing to prevent the ringing of the S-LR and its assimilation into the claimant’s fleet when they had purported to have disposed of it and crushed it.

Following the discovery of what had occurred, the failure to adequately investigate or indeed explain what had happened reinforced rather than alleviated the legitimate concern of the defendant that what had happened betrayed their trust and confidence in the claimant and demonstrated a course of conduct which was wholly lacking in integrity even if not definitively dishonest. I am entirely satisfied that the reasonable person in the defendant’s position, and in possession of the facts which the defendant had, would have done precisely what the defendant did and treat that which was discovered as a repudiatory breach and also grave misconduct so as to lead to the termination of the contract and the removal of the claimant from the tender process.

The claimant has wholly failed to make out any of its allegations that this state of affairs came about as a result of bad faith, either on the part of Mr Gibson or on the part of employees of the defendant.

It follows from these conclusions that the claimant’s claims in the contract action and the tender process action both fail and that (albeit quantum is not fully agreed) the defendant’s counterclaim must succeed. I have nevertheless and in deference to the extensive evidence heard and the arguments deployed, gone on to consider what the position would have been if the claimant had not been disqualified from the tender process.

It will be recalled that the claimant criticised the failure to disqualify others from the tender competition. I have already set out my conclusions in relation to the questions arising at the PQQ stage above. The balance of my conclusions are set out below. The second complaint related to the allegation that the tender evaluation process was flawed and unsatisfactory. Again, some preliminary points have been already set out in relation, for instance, to the evaluation tool devised by Mr Lavabre. My findings and overall conclusions on this point are set out below. Finally the claimant contends that they would have won the tender competition if it had been conducted properly. I turn below to consider my evaluation of their prospects of success had they remained in the competition.

I propose to deal first with my conclusions in relation to the criticisms raised by the claimant of the details provided in the tender documentation from Boyton Cross and BJG.

Firstly, in my view there was nothing wrong or impermissible in the defendant, through Mr Lavabre, seeking further information about the tender documentation from the tenderers after the ITT documentation had been received. Indeed, it is to be anticipated that some clarification or further detailed information may regularly be required after tender documentation has been received in order to undertake a comprehensive comparative evaluation of the material received from the various parties. Obviously care needs to be taken to ensure that in providing this further information the discipline of having a deadline for the ITT documentation as a complete tender for the contract is not bypassed by the provision of new and significantly different material.

This leads me to the second issue namely the extent to which through the provision of this material that line was crossed and what was in effect a new tender materialised. Having reflected upon the points raised by the claimant, I am not satisfied that this occurred. It is right to observe, as I have set out above, that the material provided by Boyton Cross in relation to staff training was in significant respects different from that which had been provided with the ITT documents. It included different staff and different training achievements. However, it was not in effect a new tender so far as those staff and their qualifications were concerned, and whilst the initial tender documentation can be properly characterised as inaccurate, the correction of that information (in substance to the disadvantage of the tenderer, although that is by no means decisive) leads me to the conclusion that the defendant was correct in not disqualifying the tender at that stage as a result of the provision of that new information. It did not change the content of the tender information to the point where, in effect, it was a new tender. I am satisfied that the material provided was simply more accurate details in relation to the relevant staff and their training.

Again having examined the premises Action Plan which was furnished by BJG that, in truth, offered very little more information to that which had already been provided either as part of the tender documentation or through the provision of the information on 24^th July 2008 indicating that the building was available with planning permission and that the landlord was willing to let it to BJG. Even if the kind of detailed project plan clearly contemplated by Mr Lavabre had been provided by BJG setting out details with the milestones relating to the acquisition and fitting out of the building I would not have been persuaded that that should have led to them being disqualified from the process. In effect the provision of such information would simply have been further detail in respect of the proposal which was already fully before the defendant for the servicing of the contract from newly acquired and appointed premises.

I turn now to consider the complaint raised in relation to the reliance by the defendant upon information in respect of the future provision of requirements of the specification which could not, at the time of submission of the tender, be demonstrated by the tenderer. As a matter of principle in my view there is no difficulty in accepting a tender based upon specification requirements which the tenderer does not currently enjoy but which they have a plan or proposal to acquire.

Dealing with the particular requirements of this tender exercise as specified in the documentation which was provided both at the stage of the advertisement and in the PQQ and ITT I am not satisfied that it precluded reliance on premises, trained staff and equipment which were not under the control or in the employment or possession of the tenderer at the time of the tender but which would be in time to deliver the services required by the contract. There is a distinction to be made in relation to the requirement for PAS43 accreditation which was, as set out above, specified as the need for “current” accreditation. The requirements in relation to premises, trained staff and equipment were not expressly required to be current or presently available to the tenderer. Indeed some of the requirements were expressed in the future tense. For instance, in addition to the overall anticipation that the contract “will commence in January 2009”, tenderers were asked to confirm in relation to training that their personnel “shall be trained” in the relevant services. No doubt in the light of the criticisms set out above related to the 2006 tender process the documentation could have been more crisply and precisely expressed in relation to this aspect of the tender information. I do not, however, consider that the claimant has made out a case that on the basis of the tender documentation it was illegitimate for the defendant to rely upon future planned provision of operational premises, trained staff and necessary equipment.

There is in my view in any event a reason grounded in the purposes of the exercise which reinforces this, even if in and of itself it would not be decisive. Returning to the observation made above about the need to promote competition and not foreclose the opportunity for an existing successful contractor to open a new outlet in a new operational area if such an operator were precluded from doing so on the basis that they did not currently have the necessary premises that would impede rather than promote the interests of competition which are an important purpose of the tendering process.

Whilst therefore I have no difficulty for the reasons set out above in accepting that a bid based upon such future provision should not be disqualified, nevertheless the necessarily contingent nature of such a tender with the accompanying uncertainty of provision needed in my view to be reflected in the evaluation process in order to be fair to those tenderers who were already equipped with the requirements of the specification and could therefore demonstrate with certainty that the specification would be met. The evaluation tool deployed by the defendant failed either to reflect the contingent nature of bids based upon future provision and thereby give consideration to the possibility that matters might not be secured or provide adequate guidance as to how that contingency was to be reflected in the evaluation where there were, for instance, no premises to be in fact evaluated.

How those issues were to be actually reflected in an evaluation process is not a matter about which I need to decide, but I am satisfied that in order to treat all of the tenderers fairly it would have been appropriate to make some adjustment to the evaluation of tenders which were dependant upon the future acquisition of resources to fulfil the requirements of the specification. Whilst therefore I am not satisfied that reliance on future provision was a basis for disqualifying either Boyton Cross or BJG, it was a matter which should have been reflected in the evaluation of their tenders. In this respect in my view the claimant has legitimate grounds for complaint.

Turning to the question of the absence of the rolling road from BJG’s premises, I am unconvinced by the response provided in particular by Mr Lavabre on this issue that because it was an expensive piece of equipment, a pragmatic decision was taken that having access to it would suffice to meet the tender requirements. The specification is in this respect, to my mind, clear and unequivocal. If therefore a bid did not meet this requirement of the specification then the consequence in terms of the evaluation process was that it should fail in accordance with the discussion which had occurred in respect of the evaluation methodology. Thus, unless BJG were proposing to provide, as part of their new premises, a rolling road (in which case as set out above that future provision would itself need to be reflected in the evaluation) then their failure to provide this required element of the specification should have led to their disqualification.

The final element of the analysis is to examine what the consequence of these conclusions are in relation to the claimant’s prospects in the tender process if they had not been disqualified from it.

In the light of what I have set out above, I have little difficulty in concluding that the claimant would have won the tender for lot 2. Even if BJG had not been disqualified for failing to have a rolling road, any comparison between the two bids would have been undertaken between a tenderer who had all of the necessary elements of the specification already as against a tenderer who was going to be required to provide large elements of the necessary specification. In my view it was inevitable that an evaluation process would have led to the award of lot 2 to the claimant.

The position in relation to lots 1 and 3 is more balanced. I accept the submission made by Mr Platford in relation to the third bidder, Boleyn Castle, that Mr Harding’s evidence (which was not in this respect the subject of any significant dispute) demonstrates that they were not likely to be a strong competitor to the claimant in the process. Boyton Cross were, however, a well-established operator with the requirements of the specification in place. For the reasons I have set out above no assistance can be afforded to me from the evaluation tool that was in fact used by the defendant. Doing the best that I can as a broad brush assessment in my view the claimant would have had at least an even chance of securing the contracts for lots 1 and 3 dependant upon factors, such as the commercial rates to be inputted into the evaluation and other matters which have not and could not have been further or more fully explored in the evidence before me. I would rate the prospects of succeeding therefore in the tender processes for lots 1 and 3 as at least 50%.

Two further loose ends remain. The first is that notwithstanding that it was not included in the key issues document agreed by the parties, at the end of the trial the defendant continued to pursue a point pleaded in relation to the provisions of the Unfair Contract Terms Act 1977. Mr Platford on behalf of the claimant resisted the reliance on this point, not simply because it appeared to have been abandoned in the list of issues document, but also that the claimant had clearly pleaded the contention that clause G1.4 (the exclusion clause relied upon) was not a fair and reasonable term and no adequate and pleaded response had been provided to that and that if such a response had been provided, evidence would be likely to have been called on the issue as to whether or not it was a fair and reasonable term.

In my view Mr Platford’s points in this respect are entirely justified. Although there may be cases where it is not necessary for a person relying on an exclusion clause to plead the particulars as to why it was a fair and reasonable term to include in the contract, the circumstances of this case in my view warranted a properly particularised response to the claimant’s contentions. In the light of the main findings which I have reached, this point has become academic but if I had reached the opposite conclusion I would, as a matter of case management, have precluded the defendant from relying on clause G1.4 in the light not simply of the fact that there was no pleaded response but, more pertinently, that the absence of any pleaded response had prejudiced the claimant in that evidence had not been provided or called in relation to that particular issue.

The final loose end relates to the period for which damages might have been awarded to the claimant had I been satisfied that they should succeed in the contract claim. In my view the answer to this question is relatively straightforward. Whilst the contract provided for a three month notice period, the factual position was, as set out by Mr Platford, that although the defendant repudiated the contract, the claimant did not accept that repudiation and thus the contract did not come to an end at that point. In fact, as set out above, the defendant ultimately served a notice terminating the contract in December 2008 which expired in March 2009 and therefore applying the principle in Golden Strait Corp v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2 AC 353 in the events as they turned out the contract was not brought to an end until March 2009 and thus the claimant, if it had been successful in the contract action, would have been entitled to damages up to March 2009.

In the final result the Claimant’s claims in both actions must be dismissed. The defendant’s counterclaim in the contract action succeeds. I invite the parties to submit their proposals for an order giving effect to these principal conclusions and their submissions in relation to any ancillary matters.

Bold text signifies allegation admitted

What instructions did Mr Harding give in connection with the L and S LRs; when and to whom did he give those instructions?

If Mr Harding instructed a body swap of the S and L LR as a training exercise, did he intend to seek D’s permission for that work to be done and did he reasonably believe that such permission would be given?

Did Mr Harding’s instructions involve dishonesty and/or a want of integrity on his, and therefore C’s, part?

What work was done to the L and S LRs between October 2007 and July 2007; when and by whom was that work done?

When and where on C’s premises were the L LR registration plates and slam-panel VIN affixed to the S LR?

Was the S LR used on the public highway, and, if so, when and by whom?

Did C’s actions in connection with the LRs involve dishonesty and/or a want of integrity, and if so on whose part and in what respects?

What did Mr Harding and/or Mr Jennings know about the matters set out in MFQ 4 to 6 before 28 July 2008?

Were any or all of:

If the answer to MFQ 9 is “yes”, did Mr Gibson intend to use information as to the changing of the identity of the S LR to discredit C?

If the answer to MFQ 10 is “yes”, did Ms Kemp and/or Ms King and/or DS Maleary know that?

Were Ms Kemp and/or Ms King and/or DS Maleary improperly motivated by a wish to advantage C’s competitors and/or to disadvantage C?

Following 28 July 2008, what steps (if any) did Mr Harding and/or Mr Jennings take to ascertain what had happened to the LRs, and with what result?

Did C provide D with accurate information concerning the LRs in the period between 28 July and 28 August 2008; if not, in what respects was the information which was provided inaccurate?

Did D treat all tenderers alike in the 2008 procurement process, in particular in relation to potential disqualification?

What were the chances of C succeeding in the 2008 procurement process (in the light of events which have in fact happened) if they had not been disqualified?

Can C breach a contractual obligation owed to D by the actions of its employees, who are not the directing mind and will of C?

What relevance does the knowledge, honesty, and integrity, or otherwise, of the directing mind and will of C have in the question as to whether a breach of contract established in the above circumstances is repudiatory?

If the issue as to whether a breach is repudiatory depends on dishonesty and/or lack of integrity, is it necessary for actual dishonesty or lack of integrity to be established, or is it sufficient for there to be an appearance of dishonesty and/or lack of integrity, viewed from the perspective of the reasonable person in D’s position?

Is any proven bad faith and/or improper motive of D in terminating the contract relevant to the question of whether a breach of contract is repudiatory?

Does “grave misconduct” within the meaning of the 2006 Regulations by an employee but unknown to the directing mind and will of C nonetheless entitle D to disqualify C from the procurement process?

Did C breach the implied term of the contract as to integrity?

Was D entitled to treat the contract as having been repudiated, in the light of the answers to the MFQs and having resolved the MLIs above?

If D was not entitled to treat the contract as terminated, is C entitled to damages for the losses occurring in the 3 months from 28^th August 2008, as D maintains, or losses occurring in the period 28^th July 2008 to 20^th March 2009, as C maintains?

Was D entitled to disqualify C from the procurement process for “grave misconduct” in the light of the answers to the MFQs and MLIs above?

In disqualifying C from the procurement process was D guilty of treating them unequally or in a discriminatory way?

If the answer to 1. is “no”, the answer to 2. is “yes”, what were the chances of C succeeding in the 2008 tender?

If C had a significant chance of success in the 2008 tender, what is the period of loss for which C is entitled to damages?