Amaryllis Ltd v HM Treasury

INTRODUCTION

By proceedings commenced on 16^th June 2008, the claimant seeks substantial damages against the defendant arising out of alleged breaches of the Public Contracts Regulations 2006 (“the Regulations”). The breaches are said to have occurred in connection with the evaluation of tenders from framework contractors for the supply, delivery and installation of all types of furniture for use by and on behalf of UK Public Sector Bodies. The damages claim is currently estimated at in excess of £11 million.

By an application notice dated 13^th March 2009, the defendant sought to strike out the claim and/or summary judgment in its favour. There are two strands to this application. First, the defendant maintains that, contrary to Regulation 47(7)(a), the claimant failed to provide written notice of the breach and its intention to bring proceedings under the Regulations. Secondly, the defendant submits that the proceedings were not brought within three months from the date when grounds for the bringing of proceedings first arose (and that, even if they were, they were not brought “promptly”), in breach of Regulation 47(7)(b). In connection with this second basis for the application, the defendant maintains, should it be necessary, that there is no good reason for extending the period within which proceedings may be brought.

I propose to deal with the application in the following way. At Section 2, I set out, in some detail, the factual background. At Section 3, I then identify the relevant parts of the Regulations. At Section 4 I address the first strand of the application, namely whether or not there was a notice pursuant to Regulation 47(7)(a). Thereafter I deal with the second strand of the application by addressing, in Section 5, the issue as to when the grounds for bringing these proceedings first arose, before going on at Section 6 to analyse whether the proceedings were brought promptly and in any event within three months. At Section 7, I consider whether, if the proceedings were not brought promptly, the claimant has a real prospect of successfully demonstrating an entitlement to an extension of time.

Before embarking on the detailed parts of this Judgment, I should express my thanks to leading counsel for both parties for the economy and the efficiency of their written and oral submissions. In less capable hands, this application would have taken considerably longer than half a day.

THE FACTUAL BACKGROUND

On 30^th November 2007, the defendant advertised the establishment of a framework agreement for use by or on behalf of UK Public Sector Bodies for the supply, delivery and installation of all types of furniture and associated services on a national basis. The notice was placed in the Official Journal of the European Union. The notice made plain that the letting of the Framework Agreement was governed by the Regulations; that the Framework Agreement would be divided into six Lots (with Lot 1 being the largest and most valuable); and that all interested participants had to submit a completed Pre-Qualification Questionnaire (“PQQ”) by 10^th January 2008. The notice made clear that the PQQ would be used in the assessment of the candidates’ economic, financial and technical capacity.

The PQQ was available to be downloaded from 30^th November 2007. The claimant downloaded the PQQ on 4^th December.

It is unnecessary to set out all of the relevant sections of the PQQ in this Judgment. There were a total of six sections. Section A dealt with Commercial and Business Activity; Section B dealt with Quality Assurance; Section C dealt with Health and Safety; Section D dealt with Environmental Management; Section E dealt with Miscellaneous; and Section F dealt with Previous Experience and Comparable Contracts.

The claimant submitted its completed PQQ on 9^th January 2008.

It is the defendant’s case in these proceedings that it completed the first-stage evaluation process on 5^th March 2008. However, not only is there no documentary record of that, but those involved in the process on behalf of the defendant, namely Mr Quinn and Mr Threlfall, include no such evidence in their respective statements. The point is made only by the Treasury Solicitor, Ms Cheyne, who had no involvement in the process at the relevant time.

On 12^th March 2008 the defendant prepared a report on the PQQs that they had received. The document was entitled ‘Report and Recommendations’. Paragraph 1 said that the report was making recommendations on providers who would be “invited to the invitation tender stage of the process”. The report states that the claimant was being recommended for Lots 2, 3, 4 and 5, but not Lots 1 or 6. The report itself was not provided to the claimant until July 2008, and even then it was significantly redacted.

The claimant was informed about the outcome of the first stage tender process in a letter dated 17^th March 2008. The letter was fairly brief. It informed the claimant that it had been successful on Lots 2, 3, 4 and 5 and unsuccessful on Lots 1 and 6. The only information that was provided to the claimant was its score for each Lot, the scoring range of all competing providers, and the scoring range of the successful providers. On Lot 1, the claimant scored 372 against the scoring range of successful providers of between 388 and 439.

By the time of the first-stage tender process, the claimant had had considerable experience of providing furniture to a range of UK public bodies, including a number of Ministries of State. As a result, the claimant was very disappointed not to have been successful on the first stage of the process for Lot 1.

On 9^th April 2008 there was a meeting at the claimant’s premises between Messrs Threlfall and Quinn of the defendant, and Ms Knight of the claimant. Mr King, the claimant’s CEO, joined the meeting part way through. The principal purpose of this meeting appears to have been a discussion of Lots 2-5. However, during the course of the meeting, the question of the claimant’s unsuccessful tender on Lot 1 was raised. There is a considerable dispute as to the way in which the topic was raised and what was said in consequence. It is impossible for me to make any findings of fact on those disputes at this stage. It does, however, appear beyond argument that the claimant’s representatives were interested to know why their bid on Lot 1 had been unsuccessful, and that the defendant’s representatives did not give them very much information in response. It seems that the defendant did indicate that the claimant had failed on environmental issues, and there was a reference to the lack of FSC accreditation.

On 15^th April 2008, the claimant wrote to the defendant to say:

“Secondly, I am writing to confirm our concerns as to why Amaryllis was not selected to tender for Lot 1-Office Furniture and request a de-brief following the PQQ process. As the incumbent supplier to one of your major customers, the MOD, we find it difficult to appreciate how we cannot be considered appropriately qualified. Equally, we are one of the leading suppliers to arguably the largest sector of the Civil Service estate- Department Of Work and Pensions, Ministry of Defence and DVLA. In addition we are a NHS- Pasa appointed supplier.

You mentioned the fact that we do not retain FSC Certification in our name. Being an ISO 14001 accredited organisation, Amaryllis places great importance on sustainability and timber traceability. Our Environment Manager has sought expert opinion on this matter and it would seem highly debatable as to whether Amaryllis is required to hold FSC certification in its own right. As we outlined in our tender response, we do require timber traceability from our supply chain together with details of availability of components for repairs and maintenance. This is a formal policy and part of our overall Environment Management Policy.

We appreciate your comments regarding your scoring system and that we were ranked 14, however you only short listed 12 suppliers. We strongly contest this decision-we are aware that one of the short listed companies is one of our suppliers and we believe that we are its largest customer!

We would urge you to reconsider your evaluation.”

The defendant replied on 21^st April 2008. I accept Ms Hannaford’s description of the document as containing ‘quite a lot of words but very little content’. The material part of the letter read as follows:

“In relation to your specific questions I would like to point out the following:

•

Paragraph 3. In line with the government policy to increase collaboration within public sector procurement, OGCbuying.solutions has developed a strategy which meets the requirements of a wide range of customers from Civil Central Government (CCG) and the wider Public Sector (PS), taking into account EU and PS legislation and procurement best practice. The MOD are one of a wide range of collaborative partners within the development of this framework, including the pre-qualification evaluation criteria. The result of the pre-qualification evaluation exercise should not be taken as an indication that Amaryllis Limited could not provide the required support; other suppliers received more marks within the fully compliant competitive evaluation.

•

Paragraph 4. Within the scoring criteria those suppliers who had or were working towards FSC and could provide evidence did receive a score towards the overall total. The 12 short listed suppliers provided evidence at the time of submitting the PQQ, stating that they had FSC certification or PEFC certification which is considered acceptable.

•

OGCbuying.solutions is guided by the central Point of Expertise and Timber Procurement (CPET)… there are two categories. Category A is where the supplier holds certification and the chain of custody is unbroken i.e. from the forest source to the end user. Category B is the chain is broken and the supplier is likely to provide check list evidence that can be downloaded from the website.

•

With regard ISO 4001 in Timber Traceability Policy, Amaryllis Limited were given marks accordingly.

•

Paragraph 5. It clearly states in the PQQ documentation under Background to General Instructions Item 3 that ‘following the sifting of PQQ responses, the successful bidders would be required to submit detailed tenders… following receipt and evaluation of those tenders, it is anticipated that Framework Agreements will be awarded up to 22 providers’.

Whilst we fully appreciate your disappointment at not progressing to the next stage, we regret that we are unable to invite you on this occasion. We nevertheless wish to take this opportunity to thank you for taking part in this exercise.”

In my judgment, this letter did not provide a clear or cogent explanation as to how and why the claimant had been unsuccessful on Lot 1. For reasons which will become apparent below, I consider that this was a significant omission on the part of the defendant.

On the evidence, over the next few weeks, the claimant was principally doing two things: making enquires of other tenderers, so as to work out from their success or failure what it was that the claimant might have failed to include in its tender for Lot 1 and, secondly, considering whether or not, in the circumstances of their failure on Lot 1, to go ahead with the second stage process for Lots 2-5.

On 23^rd May 2008, the claimant notified the defendant in writing that it would not be submitting a tender for Lots 2-5. The letter went on to point out that the claimant had been excluded from tendering for Lot 1 but had not been provided with any justifiable reason for its exclusion. The letter concluded:

“Amaryllis believes that the PQQ submission was not assessed fairly and no consideration was given to its established history as the incumbent supplier. Amaryllis has no confidence that any tender submissions would be given a fair and valid assessment. Amaryllis would be required to commit time, resources and expenditure when the outcome of the PQQ for Lot 1 suggests that there is no reasonable prospect of any tender being successful.”

On 4^th June 2008, the claimant wrote again to the defendant. The third paragraph of the letter made clear that its purpose was two-fold, as follows:

“Firstly, we hereby notify you under Regulation 47 of breaches of the Public Contracts Regulations 2006 and general Treaty principles (as well as breaches of the implied tender contract between our company and OGCbuying.solutions) and our intention to bring proceedings. Secondly, however, you request further information in relation to the non-selection of our company. We expand on these matters below.

Our company has an established history as a supplier of furniture to government bodies including the Department of Work and Pensions, DVLA and Ministry of Defence, and provided a clear and detailed response to the Pre-Qualification Questionnaire. We have not been provided with any proper explanation of the reasons for our non-selection and consider that our response to the Pre-Qualification Questionnaire was not considered fairly or equally. We also consider that the process was not transparent. In particular, we were not aware (and remain unaware) at the relative importance and weightings of the questions in the Pre-Qualification Questionnaire.”

The letter then went on to identify all of the information which the defendant had not provided to the claimant. The repeated request for that information was introduced with these words:

“You have provided insufficient information to enable us to identify with precision all the breaches of the Regulations and general Treaty principles. We therefore request, as a matter of urgency, the following information in relation to Lot 1:

1.

The weighted scoring system originally devised for evaluating the Pre-Qualification Questionnaires and any and all amendments made to it during the course of the evaluation process.

2.

The criteria and sub-criteria originally devised for evaluating the Pre-Qualification Questionnaires and any and all amendments made to them during the course of the evaluation process.

3.

A breakdown of our score against (a) the questions in the Pre-Qualification Questionnaire and (b) the criteria and sub-criteria used for the evaluation of the Pre-Qualification Questionnaire.

4.

The reasons why we were not selected to be invited to tender.

5.

The weighting attributed to the need for FSC Category A certification in the original scoring system and any and all amendments made to this during the course of the evaluation process…

8.

Our score(s) in relation to Previous Experience and Comparable Contracts…”

There was a total of 12 identified questions or categories of documentation sought by the claimant.

The letter of 4^th June concluded by saying that it was, in the alternative, a request under the Freedom of Information Act 2000. The deadline for the provision of information under that Act was 20 working days (in this case, therefore, by 2^nd July). It is interesting to note that the defendant did not reply to the letter at all until 2^nd July, when it sought an extension to respond to the request until 24^th July. Of course, by this stage, the claimant had commenced these proceedings. The claimant did not agree to such an extension and sought answers by no later than 10am on 8^th July.

The evidence relating to the defendant’s response to the request of the 4^th June is, to say the least, unsatisfactory. A detailed response was provided by the new deadline imposed by the claimant, namely 8^th July 2009, which was 5 weeks after the request had been made, and outside the period prescribed by the Freedom of Information Act. However, from the documents included in the bundle provided to the court, it appears that the answer was in fact prepared by the defendant no later than 20^th June 2008. There is a draft answer, in precisely the same form as the answer actually sent out on 8^th July, but dated 20^th June. No explanation has been forthcoming as to how and why the defendant apparently waited 19 days before sending out this response.

The defendant’s belated answers explained (for the first time) why the claimant was unsuccessful in its first stage tender for Lot 1. In the 8^th July response, the defendant gave details of the weighted scoring system that had been used, including the information that no marks at all were ascribed to Section F (Previous Experience). The letter also explained that considerable emphasis had been placed on the environmental management part of the PQQ and informed the claimant that it was awarded zero for Section A, on the sole basis that the furniture that it supplied was bought in rather than manufactured by the claimant. All of this information was new to the claimant.

As noted above, in view of the time constraints, the claimant had had no option but to commence these proceedings (on 16^th June) in advance of obtaining this information from the defendant. However, it is plain that it was this information, as to how the tender was evaluated (or ‘marked’) by the defendant, which lies at the heart of the proceedings. Accordingly, for the purposes of the application to strike out, it is important to identify the precise basis of the claims now made. Miss Hannaford puts those under four headings as follows:

Previous Experience and Comparable Contracts

Criteria and Weightings

Environmental Management

Business Activities

THE PUBLIC CONTRACTS REGULATIONS 2006

This case is concerned with a framework agreement. That is defined in Section 2 of the Regulations as:

“…an agreement or other arrangement between one or more contracting authorities or one or more economic operators which establishes the terms (in particular the terms as to price and, where appropriate, quantity) under which the economic operator will enter into one or more contracts with a contracting authority in the period during which the framework applies.”

In other words, the framework agreement was dealing with the first stage of the process. The successful bidders on, say, Lot 1 under the first stage of the agreement would then be invited to tender for specific supply contracts as and when they arose.

Regulation 4 dealt with economic operators. For the purposes of this case, the claimant was an economic operator. Regulation 4(3) required the defendant to deal with the claimant “equally and in a non-discriminatory way …and to act in a transparent way”.

Regulation 16 dealt with what was called “the restricted procedure”. That was the procedure used by the defendant in this case. Regulation 16(8) required the defendant to make the selection of the economic operators to be invited to tender in accordance with Regulations 23, 24, 25 and 26, and to award the contract in accordance with Regulation 30.

Regulation 19 dealt with framework agreements. Regulations 23, 24 and 25 dealt with various criteria for the selection of economic operators.

Regulation 32 was concerned with information about contract procedures. Whilst I accept Ms Hannaford’s submission that this is principally concerned with the second stage of the process, I ought to set out some parts of Regulation 32 verbatim:

“(1)

Subject to paragraph (13), a contracting authority shall as soon as possible after the decision has been made, inform any economic operator which submitted an offer, applied to be included amongst the economic operators to be selected to tender for or to negotiate contract, or applied to be a party to a framework agreement, of its decision in relation to-

a)

the award of the contract; or

b)

the conclusion of the framework agreement;

and shall do so by notice in writing by the most rapid means of communication practicable.

(2)

The notice referred to in paragraph (1) shall include-

a)

the criteria for the award of the contract;

b)

where practicable, the score obtained by-

i)

the economic operator which is to receive the notice; and

ii)

the economic operator –

aa) to be awarded the contract; or

bb) to become a party to the framework agreement; and

c)

the name of the economic operator-

i)

to be awarded the contract; or

ii)

to become a party to the framework agreements.

(3)

A contracting authority should allow a period of at least 10 days to elapse between the days of dispatch of the notice referred to in paragraph (1) and the date on which that contracting authority proposes to enter into the contract or to conclude the framework agreement.

…..

(9)

Except for a request made in accordance with paragraph (4), which shall be dealt with in accordance with paragraphs (4) and (5) and subject to paragraph (13), a contracting authority shall within 15 days of the date in which it receives a request in writing from any economic operator which was unsuccessful…

a)

inform that economic operator of the reasons why it was unsuccessful…

(10)

The reasons referred to in paragraph (9)(a) shall include any reasons why the contracting authority’s decision that the economic operator did not meet the technical specifications-

a)

as specified in regulation 9 (6) by an equivalent means; or

b)

in terms of the performance or functional requirements in regulation 9 (7) by an equivalent means….”

Regulation 47 is critical to the present application. Regulation 47(1) makes plain that the defendant was obliged to comply with the provisions of the Regulations and that this is a duty owed to the claimant. Regulation 47(6) provides that any breach of duty is actionable by the claimant, such proceedings to be brought by the claimant in the High Court.

Regulation 47(7) is in the following terms:

“(7)

Proceedings under this regulation must not be brought unless-

a)

the economic operator bringing the proceedings has informed the contracting authority or concessionaire, as the case may be, of the breach or apprehended breach of the duty owed to it in accordance with paragraph (1) or (2) by that contracting authority or concessionaire and its intention to bring proceedings under this regulation in respect of it; and

b)

those proceedings are brought promptly and in any event within 3 months from the date when grounds for the bringing of the proceedings first arose unless the Court considers that there is good reason for extending the period within which the proceedings may be brought.”

I now turn to deal with the issues between the parties arising out of the Regulations, particularly Regulation 47(7).

WAS THE CLAIMANT’S LETTER OF 4^TH JUNE 2008 A NOTICE UNDER REGULATION 47(7)a) ?

The Authorities

There have been a number of reported cases dealing with Regulation 47(7)(a) (or its predecessor) and what is required in order to give adequate notice. Whilst cases in this area of the law are likely to turn on their own facts, there is some useful guidance to be gleaned from these authorities.

In R v Portsmouth City Council Ex Parte (1) Bonaco Builders Limited and Others [1997] EuLR 665, the notice in question asserted a breach of the Public Works Regulations 1991 without giving any indication at all of what the alleged breach might be. Keene J (as he was then) considered that the language of the Regulation, which referred to the breach of duty rather than a breach of duty, suggested that the actual breach complained of must be identified in the notice. He said that this conclusion was supported by a consideration of the purpose of the notice, which was to address the possibility of the breach being remedied. He said:

“If that is so, then it reinforces the natural meaning which one would attach to the language of the paragraph, because a breach can only be remedied if it is first identified with some specificity. The fact that in the present case no precise remedy of the breaches could have been achieved cannot affect the interpretation of this provision. I conclude that it is a requirement of the 1991 Regulations that before proceedings may be brought under Regulation 31, the contractor must have informed the authority of the breach of duty which is alleged and not merely of a breach of duty.”

On the facts of that case, Keene J had no difficulty in concluding that the letter relied on as constituting the notice did not comply with the Regulations. Although the matter went to the Court of Appeal, where the result was overturned, that was on an entirely different point.

In Keymed Limited v Forest Healthcare NHS Trust [1998] EuLR 71, the complaint in the notice concerned the advertisement of a proposed contract. The part of the notice that was said to allege the breach complained of read as follows:

“…Had that contract been advertised on the basis of the documents now disclosed our clients would have had the opportunity to tender. They have the expertise to fulfil the technical requirements and if that would have been means by which they could supply the medical equipment they would have been prepared to undertake responsibility for the other aspects which could have been met by them as easily as any other contractor.”

Langley J concluded that this letter was sufficient to comply with the Regulation, because it brought to the Trust’s attention the allegation that it had wholly failed to comply with the Regulation relating to advertisement of contracts; it enabled the Trust to investigate the allegation; and it notified the Trust of the intention to bring proceedings. He concluded that the letter adequately fulfilled the purpose and letter of the notice provision in the relevant Regulation.

In Luck v LB Tower Hamlets [2003] EuLR 143, the alleged notice was in remarkably brief terms. It merely said that the Council’s decision to exclude the claimant from the tender process was unlawful, without giving any details as to how and why it was said to be unlawful. When those details were sought by the Council, the claimant’s solicitors merely said that they had been instructed to issue proceedings.

In those circumstances, the Court of Appeal had little difficulty in concluding that the alleged notices did not refer to the Regulations either expressly or implicitly, and did not refer to the breach or apprehended breach of the duty owed. They therefore concluded that any claim under the Regulations was barred by reason of the lack of notice.

In my judgement, these authorities are clear. A general reference to an alleged breach of the Regulations is not enough; the notice must identify the actual breach complained of. That did not happen in either Portsmouth or Luck. However in Keymed, where the notice was found to be sufficient, detailed or lengthy particulars were not required. What mattered was a clear statement of the alleged breach by reference to the Regulations, and a stated intention to commence proceedings.

The Letter of 4^th June

With those principles in mind, I turn back to the claimant’s letter of 4^th June 2008 (paragraphs 18-20 above). Was that sufficient notice in accordance with Regulation 47(7)(a)? In my judgment, it was.

First, there can be no doubt that the Regulations themselves were plainly and obviously identified; see the first paragraph of the quotation from the letter set out at paragraph 18 above. So too was the statement of the intention to commence proceedings, included in the same paragraph.

Secondly, in my judgment, the actual breach complained of was clearly identified. The second paragraph of the quotation in paragraph 18 above identified the claimant’s case that its previous experience was wrongly ignored; it alleged that the response to the PQQ was not considered fairly or equally; and in particular it made the complaint that no information was provided as to the relative importance and weightings of the questions in the PQQ. All of those alleged breaches mirror the claims now made in these proceedings, as summarised in paragraph 23 above. They are set out in the notice in considerably greater detail than, for example, the alleged breach in Keymed.

Thirdly, I accept Ms Hannaford’s submissions that the adequacy of the notice has to be considered against the backdrop of the information made available to the claimant by the defendant. As set out in Section 2 above, the claimant had sought in writing the reasons for its failure on Lot 1 as early as 15^th April 2008. That request should have been the subject of a comprehensive response, but it was not. There was no reason why the information that was eventually sent on 8^th July 2008 could not have been sent under cover of the defendant’s letter of 21^st April 2008. No explanation for this delay has been provided by the defendant.

Accordingly, I have to consider the adequacy of the notice of 4^th June 2008 in the knowledge that, if the defendant had properly and promptly answered the request, much more information would have been available to the claimant at the relevant time. Instead, the claimant was forced to rely upon its suspicions, together with the information provided to it by other tenderers. For the reasons which I have given, that led to what I consider to be the entirely adequate notice of the 4^th June but, to the extent that there is any legitimate complaint that the notice lacked specificity, then in my judgment that stems from the defendant’s default. It cannot, therefore, avail the defendant in mounting a challenge under Regulation 47(7)(a).

For all these reasons, therefore, I consider that the letter of 4^th June 2008 was an adequate notice under Regulation 47(7)(a). Thus, the first ground of the defendant’s application to strike out must fail.

WHEN DID THE GROUNDS FOR BRINGING PROCEEDINGS FIRST ARISE?

The Authorities

It is common ground that Regulation 47(7)(b) operates in precisely the same way as a limitation provision. Thus, no claim can be brought unless its requirements have been met: see Matra v Home Office [1999] 1 WLR 1646.

In many ways, the starting point for a consideration of the question as to when the grounds first arose is Jobsin Co UK Plc v Department of Health [2001] EuLR 685, although that case is principally concerned with the reasons for the short limitation period enshrined in Regulation 47(7)(b), and the principles relevant to extensions of time. On the facts of that case, the Court of Appeal held that Jobsin’s right of action first arose in August 2000, which was the time that the Electronic Briefing Recruitment Document (the rough equivalent to the PQQ in the present case) was first issued. The court concluded that, because the complaints in that case were about the failures within the Briefing Document itself, Jobsin were aware at the time that the flawed document was sent out “of all the facts that it needed to know in order to start proceedings”: see paragraph 33 of Dyson LJ’s judgment. Jobsin did not need to wait until the end of the tender process to acquire knowledge of the facts relevant to the alleged breach.

I treat with a certain amount of caution Mr Bowsher’s submission that Jobsin is authority for the unqualified proposition that knowledge of the alleged breach is irrelevant for the purposes of Regulation 47(7)(b). In Jobsin, the claimant was aware of the facts giving rise to the breach in August, which was why the Court of Appeal held that the grounds to bring proceedings arose at that time. What Dyson LJ was making clear was that a claimant’s ignorance of the law (that the known facts gave or might give rise to a legal claim) was not a good reason for delay. He also explained why actual loss was not required for the grounds for starting proceedings to arise.

Since Jobsin, there have been a number of other cases which have focused on the issue as to when, in circumstances such as these, the grounds for bringing proceedings first arose. R (Burkett) v Hammersmith and Fulham LBC [2002] 1WLR 1593 was a dispute arising out of the judicial review of a planning application. It is, however, relevant because the provisions of Regulation 47(7) are (and are plainly designed to be) akin to the provisions relating to judicial review. One of the points debated in the House of Lords was whether the grounds for bringing proceedings arose when the planning authority accepted a deficient environmental statement and placed it on the register, or when the disputed planning permission was actually granted. Lord Steyn concluded, at paragraph 51 of his speech, that the relevant date was the date when the planning permission in issue was actually granted. Thus time did not run from the resolution to adopt the impugned planning policy, which was made in September 1999, but on the grant of the actual planning permission on 12^th May 2000.

This approach was subsequently adopted in a case involving Regulation 47(7), namely Risk Management Partners Limited v The Council of the London Borough of Brent and others [2008] EWHC 1094 (Admin); [2008] EuLR 660. This was a decision of Stanley Burnton LJ. He referred to both Jobsin and Burkett. Ultimately, he followed the approach in the latter case. The relevant part of his judgment is as follows:

“91.

Translating these references from the planning context to the present context, in a case in which there is a claim that there has been an actual breach of the Regulations, the grounds for the bringing of proceedings arise when the first breach takes place. Jobsin is authority that those grounds arise even if at that date the claimant has not suffered loss, but only risks suffering loss. The context of Burkett differs from the present. In particular, the liability of a contracting authority for damages under the Regulations is a reason to require the claimant to bring proceedings as soon as the breach is apprehended, and in this connection I refer to paragraph 33 and 38 of Dyson LJ’s judgment in Jobsin. However, given the identity of wording between regulation 47 (7) and the former RSC order 53 r. 4 (1) and the present CPR Part 54.5, that difference does not justify departure from the principles laid down in Burkett. If Parliament or the draftsman of the Regulations had intended a different result from that applicable in judicial review proceedings, a different form of words would have been used. In my judgment, therefore, for the purposes of Regulations in the present case ‘grounds of the bringing of the proceedings’ first arose when the breach that first formed the subject of the claim occurred. It would have been different if the claim were for an injunction to restrain a breach of the Regulation; but it is not.

92.

It is therefore necessary to determine when the breach of the Regulations first occurred. It seems to me it was when Brent abandoned the tender process and awarded the contracts to LAML. That occurred in March 2007. Until then, it could have lawfully awarded the insurance contracts to a company participating in the tender process. It is not in contended on that basis RMP failed to satisfy the requirements of regulation 47(7).”

The approach in Burkett and Risk was also followed in a construction case concerned with Regulation 47 in Northern Ireland, namely Henry Brothers Limited v Department of Education for Northern Ireland [2008] NIQB 105; [2009] BLR 118. In that case, the judge held that the breach did not occur when ITT documents were distributed to the tenderers, because such distribution did not, of itself, amount to a breach of the Regulations. This was despite the fact that the document referred to a tendering procedure which was unlawful. The judge adopted the analysis of Stanley Burnton LJ in Risk, and concluded that the relevant date was when the claimants were wrongly excluded from the tender process. Having referred to and adopted the approach in Risk, he said:

“In the circumstances of this case it does not seem to me that the relevant unlawful act took place until the impugned procedure was implemented by the Department and its consultants with the result that Henry Brothers were excluded. It was open to the Department to amend or otherwise modify the criteria and the manner in which they were to be applied at any stage prior to the impugned decision, a right that was specifically reserved at paragraph 8 of the Memorandum of Information and Instructions to Tenderers.”

In essence, it seems to me that what matters in each case is when the specific breach of the Regulations (of which complaint is made) actually occurred. Depending on the facts of the case, that will often be when the actual decision is made to exclude the claimant tenderer from the process or wrongly reject his tender. It seems to me that the Burkett/Risk/Henry line of authority is clear and gives rise, if I may say so, to a simple and common sense result. It is therefore the approach which I propose to adopt in the present case.

The Present Proceedings

On behalf of the defendant, Mr Bowsher’s primary submission in his skeleton argument was that the grounds for bringing the proceedings first arose when the PQQ was available for downloading. As it seems to me, this was precisely the same argument which failed in Henry. I reject it for two reasons.

First, it is contrary to the approach set out in the Burkett,Risk and Henry cases. Those decisions stress that the grounds for bringing proceedings such as these first arise when a specific and irrevocable act occurs. It seems to me clear that that was not when the PQQ was available to download; it was when the claimant’s answers to the PQQ were, on its case, improperly and unfairly evaluated.

Secondly, it seems to me that, on a proper analysis of the claimant’s complaints of breach, none of them arise out of any inherent deficiency in the PQQ itself. I have summarised at paragraph 23 above the nature of the four principal complaints raised by the claimant in these proceedings. Those are all concerned, not with the content of the PQQ, but with how the information provided by the claimant in response to the PQQ was dealt with (in many instances allegedly ignored) by the defendant. That, therefore, is another reason why the grounds for bringing these proceedings cannot be said to have arisen before the claimant’s responses to the PQQ were evaluated and the decision taken, on the basis of those responses, to exclude the claimant from the list of successful tenderers on Lot 1.

For these reasons, I hold that the grounds for bringing these proceedings first arose when an irrevocable decision was taken by the defendant to exclude the claimant from the list of successful tenderers on Lot 1. When was that?

As I have already indicated, there were some suggestions by the defendant’s solicitors that this occurred on the 5^th March 2008 but there was no proper evidence of that (see paragraph 9 above). Given that the report on the tender process was not prepared for another week, I am bound to reject that case as erroneous. Thus, the first possible date was 12th March 2008, because that was the date of the evaluation report which indicated that the claimant was not going to be included on the list of tenderers for Lot 1 (see paragraph 10 above). However, there are two reasons why I also reject that as the relevant date.

First, so it seems to me, applying Dyson LJ’s test in Jobsin, it cannot be said that on 12^th March, the claimant “was aware of all the facts that it needed to know in order to start proceedings”. On the contrary, the claimant did not know at that stage that it had been excluded from the relevant list, let alone why not: the claimant could not have worked that out from anything in the PQQ or any other document or communication received from the defendant.

Secondly, I note that the report of the 12^th March was said to contain only “recommendations”. It is clear that the report was presented to an individual or a committee, who then decided whether or not to accept the recommendations in the report. There is no evidence at all from the defendants as to the identity of those decision-makers or when that decision was taken. The relevant parts of the report which appear to contain that information have been redacted, even in the version supplied to the court. However, since on the face of the report itself, it only contained a series of recommendations, it cannot be said that the completion of the report itself constituted an irrevocable decision to exclude the claimant from the list of successful first-stage tenderers for Lot 1.

For those reasons, therefore, I do not accept the defendant’s alternative argument that the date for the purposes of Regulation 47(7)(b) was 12^th March 2008. In the light of that conclusion, it seems to me both clear and logical to find in favour of the claimant’s case: that the date on which the grounds for bringing these proceedings first arose was 17^th March 2008, when the defendant wrote to inform the claimant that its bid in relation to Lot 1 had been unsuccessful. It seems to me that that was when the irrevocable decision was taken which gave rise to these proceedings. I also consider that this conclusion is entirely consistent with the line of authority in Burkett, Risk and Henry, set out above.

WERE THE PROCEEDINGS BROUGHT PROMPTLY AND IN ANY EVENT WITHIN THREE MONTHS?

The Authorities

The authorities establish that the period of three months identified in Regulation 47(7)(b) is to be regarded as a maximum period, and that the requirement to bring proceedings promptly can mean, depending on the facts, that proceedings initiated before the expiry of that period may still be found not to have been commenced ‘promptly’: see Langley J in Severn Trent Plc v Dwr Cymru Cyfyngedig [2001] CLC 107 at 112 and M Holleran Limited v Seven Trent Water limited [2005] EuLR 364, a decision of Cooke J.

The requirement for promptness was emphasised and explained in both Jobsin and Holleran. In the former case, at paragraph 33 of his judgment, Dyson LJ observed that the limitation period was short and went on:

“That is no doubt for the good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible. It is not merely because the interests of all those who participated in the tender process have to be taken into account. It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible. A balance has to be struck between two competing interests: the need to allow challenges to be made to an unlawful tender process, and the need to ensure that any such challenges are made expeditiously. Regulation 32(4)(b) [the previous version of Regulation 47(7)(b)] is the result of that balancing exercise. It may often be the case that a service provider is not aware of the intricacies of regulations such as the 1993 Regulations and has little or no understanding of how they should be interpreted. If ignorance of such matters were routinely to be regarded as a good reason for extending the time for starting proceedings, the clear intent of Regulation 32(4)(b), that proceedings should normally be started promptly and in any event not later than three months after the right of action first arose, would be frustrated.”

Accordingly, it seems to me that the court has first to ascertain whether or not the proceedings have been commenced within the three month period. If they have not, then the only remaining question is whether there is a good reason for extending time. If the proceedings have been commenced within that period, it is then necessary for the court to consider whether or not, even though they have been commenced within the maximum period of three months, it can also be said that they had been commenced promptly.

The Present Proceedings

Within Three Months?

In the present case, I have found that the grounds for bringing proceedings first arose on 17^th March 2008. The proceedings in the present case were commenced on 16^th June 2008. It therefore seems to me clear that the claim was commenced within the three month period identified in the Regulations Accordingly, the only relevant issue becomes whether or not the proceedings were commenced promptly.

‘ Promptly?’

In order to consider this question, it is necessary to identify the various component parts of the actual 3 month period between 17^th March 2008 and 16^th June 2008. In my judgment, there was no culpable delay whatsoever during the first part of this period, which ran from between 17^th March 2008 and about 22^nd April (when the defendant’s response to the first request for information was received). The claimant was notified of its exclusion from the list for Lot 1 by a letter dated 17^th March 2008, which was the start of Easter week. A meeting was arranged for the first full working week after Easter, on 9^th April, at which the Lot 1 position was raised expressly, but when no clear answers were given. Thereafter, on 15^th April, the claimant sought in writing an explanation of the reasons why their Lot 1 bid had failed. They received the first (inadequate) answer to that on about 22^nd April. It cannot seriously be suggested that the claimant did not act promptly throughout that first part of the 3 month period.

Following receipt of the first answer on about 22^nd April, until the second request for information on 4^th June, Mr Bowsher submitted that very little, if anything, happened to progress this matter. It was this (second) part of the 3 month period that formed the focus of his criticism of the claimant’s performance. However, I do not accept that, on the evidence, nothing relevant happened during these 6 weeks. The evidence is clear that, during this time, Mr King and Ms Knight were involved in making enquiries from other potential tenderers, so as to try and piece together the possible reasons for their exclusion from the Lot 1 list. Given the commercial sensitivity of the matter, and the business rivalries that may have been involved, this would inevitably have taken a certain amount of time.

In addition, during this period, the claimant was deciding, in the light of the information that it was gleaning as to how and why its bid on Lot 1 might have failed, whether or not it was worthwhile continuing its involvement on Lots 2-5. In the end, by letter of 23^rd May, the claimant decided that it would not participate further (see paragraph 17 above). That was obviously an important decision and therefore took some time to arrive at.

It was Mr Bowsher’s submission that, on the basis of the evidence of Mr King and Ms Knight, the claimant was deliberately refraining from commencing proceedings because of concern about its commercial position: did the claimant wish to run the risk of alienating such an important client? In this connection, he relied on paragraph 38 of the judgment of Dyson LJ in Jobsin where he rejected the argument that commercial considerations meant that it was reasonable for Jobsin to decide not to start proceedings until the tender process had been completed, and said:

“It seems to me that a tenderer who finds himself in such a situation faces a stark choice. He must either make his challenge or accept the validity of the process and take his chance on being successful, knowing that the other tenderers are in the same boat. In my view, it is unreasonable that he should sit on his rights and wait to see the results of the bidding process on the basis that, if he was successful he would remain quiet, but otherwise he will start proceedings.”

It seems to me that this passage is not directly applicable to the present case for two reasons. First, taking the evidence in the round, I reject the contention that the evidence of Mr King or Ms Knight indicated that they were deliberately delaying commencing proceedings because of their concern about their commercial situation. There is no evidence that they “sat on their rights”. Secondly, the observations of Dyson LJ in Jobsin were directly applicable to a situation in which the breach was known about at the outset of the bidding process, but the claimant waited to see what would happen at the end of that same process before taking action. This case is different. Here, the problem was not known until the bidding process was completed and the tenders had been evaluated. Moreover, the claimant in the present case was not hedging its bets, waiting to see the outcome of a procedure it knew was flawed; here, the claimant knew that it had been unsuccessful on Lot 1 and was waiting only to gather sufficient information in order to make a decision as to whether or not to bring proceedings. In those circumstances, I do not believe that the observations at paragraph 38 of the judgment of Dyson LJ in Jobsin have any direct applicability to the present case.

For all those reasons, therefore, I reject the criticism that the claimant let this second part of the 3 month period pass because it was concerned about its commercial position. The claimant knew that it had been excluded and knew that the defendant was not going to include it in the list of successful Lot 1 bidders. The claimant was entitled to gather what information it could about the reasons for its exclusion from that list and then balance the result of those researches against the risks of commencing proceedings against the defendant, with whom it had an ongoing commercial relationship, not least in relation to Lots 2-5. That is the explanation for Ms Knight’s concern about “creating a stir”. For those reasons, I do not believe that the claimant unreasonably delayed during the second part of the 3 month period between 22^nd April 2008 and 4^th June 2008.

The third and final component of the 3 month period ran between 4^th June and 16^th June. On 4^th June a request for further information was made by the claimant as part of the notice under Regulation 47(7)(a). From then until 16^th June, the claimant was waiting to receive a response. In the absence of any such response, the claimant was entitled to wait until 16^th June when, in order to comply with the 3 month time limit, it was obliged to commence proceedings. No criticism can be made of the claimant in relation to that final component part of the 3 month period between 17^th March and 16^th June 2008.

For those reasons, therefore, it seems to me that it cannot be said that the claimant did not commence proceedings promptly. This is not a case in which the claimant waited to see the outcome of a tender process it always knew to be flawed before deciding whether or not to bring proceedings. On the contrary, once the claimant was aware of the outcome, it simply wanted to know the reasons for its failure on Lot 1. The actual 3 month period was characterised by two separate requests for those reasons from the claimant, neither of which were answered during that period by the defendant.

That brings me onto an important related point. It is fair to compare the claimant’s speed of reaction during the relevant period (which I have concluded was prompt) with the defendant’s conduct during that period, which, for the reasons set out below, I have concluded was anything but prompt. It seems to me that it is not unreasonable for a court, which is being asked by the defendant to say that the claimant’s conduct in this situation was not prompt, so as to bar the claimant from bringing a claim said to be worth £11 million, to compare it with the conduct of the defendant and, more importantly, to see whether or not the claimant’s speed of reaction was in any way dictated by the defendant’s failure to provide information which was available only to the defendant.

For the reasons set out in paragraph 15 above, I am in no doubt that the defendant simply failed to answer the request provided by the claimant on the 15^th April. That request was made pursuant to Regulation 32(9). The letter of 21^st April was wholly inadequate; it certainly contained none of the information referred to in Regulation 32(9) and (10). Accordingly, the information provided on 8^th July, almost 3 months later, was the first time that the defendant had actually provided the relevant de-brief information, despite the fact that it was sought orally on 9^th April, and in writing on 15^th April. That was far, far outside the 15 days expressly identified in Regulation 32(9) (set out at paragraph 28 above).

For the avoidance of doubt, I find that there was no reason why the defendant should not have provided the 8^th July information on 21^st April, in answer to that first request of 15^th April. Certainly there is no evidence from the defendant which begins to justify their delay between April and July. On the balance of probabilities, I find that, had that information been provided when it should have been, these proceedings would have been commenced earlier.

In addition, it is worth noting that, even when the request for information was renewed on 4^th June, it took the defendant 5 weeks formally to answer that request. That is in circumstances where, on the evidence available to me, it appears that the answers had actually been prepared, and could have been sent out, on 20^th June. In other words, the actual preparation time for answering these requests was 16 days (4^th June-20^th June, just one day longer than the 15 day period stipulated in Regulation 32(9)) but, instead, it took the defendant almost three months (15^th April-8^th July) to provide them. That was a wholly inadequate performance which, as I have indicated, was the principal cause of any delay in the commencement of these proceedings.

Accordingly, for the reasons set out above, I have concluded that these proceedings were brought promptly. They were on any view brought within the three months. On the material before me, I conclude that the principal reason why the proceedings were not commenced sooner was because of the defendant’s failure to answer the original request for information on 15^th April 2008.

DOES THE CLAIMANT HAVE A REASONABLE PROSPECT OF ESTABLISHING A GOOD REASON FOR ANY NECESSARY EXTENSION OF TIME?

Of course, on my primary conclusions, set out above, there is no requirement on the part of the claimant to seek any extension of time. The claim was brought within three months and was bought promptly.

If I am wrong about that then, given the interlocutory nature of these proceedings, the question becomes whether, on the evidence, the claimant has a real prospect of demonstrating that there is a good reason for extending the period within which proceedings must be brought.

In Keymed, Langley J had to consider the principles applicable to an extension of time application in such circumstances. In that case he concluded that the relevant considerations were: the length of and reasons for any delays; the extent for which the claimant is to be blamed for any delay; the extent to which the defendant may have induced or contributed to the delay; and whether the defendant has been or will be prejudiced by the delay or the grant of an extension. He concluded that, on the facts of that case, the delay was not very long and that the claimant had been misled into believing that a particular tender process would be followed. He also considered that it was reasonable for Keymed to seek clarification when they realised that such a process might not have been followed, and that there could be no delay whilst the defendant investigated and notified Keymed of their decision.

In Jobsin, as Dyson LJ demonstrated in his judgment, there was no good reason for any extension of time. Only two reasons had been put forward: the claimant’s lack of knowledge as to the true legal position, and the commercial consideration issue noted above. Dyson LJ rejected both as being good reasons for delay. Similarly, in Holleran, Cooke J was unable to identify any good reasons for the delay. In that case, the claimant knew all the relevant facts in August 2003 but did not even take legal advice until November. No ground for any extension was made out.

In my judgment, the facts and matters are set out in Section 6.2(b) of this Judgment above show that this case is similar to that of Keymed. First, for the reasons there set out, I am in no doubt that the only potentially arguable period of delay was that between 22^nd April and 4^th June 2008. I have explained why, on the evidence before me, it seems to me that this was not, in truth, a period of delay at all, but if I am wrong about that, it seems to me, also for the reasons set out above, that the claimant has a real prospect of being able to demonstrate good reason for an extension equivalent to the delay during that 6 week period. In my judgment, on the balance of probabilities, if the request for information on 15^th April had been properly and promptly answered by the defendant, these proceedings would have been commenced much earlier. The effluxion of time between 22^nd April and 4^th June only occurred at all because of the defendant’s wholesale failure to reply to the request of 15^th April.

Finally on this point, reverting again to Keymed, where Langley J identified the question of prejudice as a potentially relevant factor, I note that the defendant has not identified any prejudice flowing from the alleged delay. This is unsurprising, perhaps, given that the dispute concerns only the framework or first stage element of the eventual contracting arrangements.

Accordingly, it seems to me that if (contrary to my primary findings) an extension is necessary, the claimant has a real prospect of being able to demonstrate that it was the defendant’s conduct during the relevant period that was at least the principal cause of any delay, and that no prejudice has resulted from the delay in any event. In those circumstances, applying the principles set out by Langley J in Keymed, the claimant has a real prospect of demonstrating good reason for any delay, and thus a valid claim for an extension of time.

CONCLUSIONS

For the reasons set out in Section 4 above, I consider that the letter of 4^th June 2008 was a notice pursuant to Regulation 47(7)(a).

For the reasons set out in Section 5 above, I consider that the grounds for bringing these proceedings first arose on 17^th March 2008.

For the reasons set out in Section 6 above, I consider that these proceedings were brought within three months and were brought promptly in all the circumstances, in accordance with Regulation 47(7)(b).

For the reasons set out in Section 7 above, if I am wrong to conclude that the proceedings were commenced promptly, I consider that the claimant has a real prospect of demonstrating good reason for the delay, and thus an entitlement to any necessary extension of time under Regulation 47(7)(b).

Accordingly, in the light of those findings, I dismiss the defendant’s applications for summary judgment and to strike out these proceedings.