D&g Cars Ltd (Appellant/Claimant) v Essex Police Authority (Respondent Defendant)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Leveson,Lord Justice Patten,Lord Justice Briggs |
| Judgment Date | 16 May 2013 |
| Neutral Citation | [2013] EWCA Civ 514 |
| Docket Number | Case No: A2/2012/2513 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 May 2013 |
[2013] EWCA Civ 514
Lord Justice Leveson
Lord Justice Patten
and
Lord Justice Briggs
Case No: A2/2012/2513
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Nicholas Braslavsky Q.C. sitting as a Judge of the High Court
HQ8X04669/HQ8X04637
Royal Courts of Justice
Strand, London, WC2A 2LL
Graham Platford (instructed by Kenneth Elliott & Rowe, Romford) for the Appellant
Patrick Lawrence Q.C. (instructed by Clyde & Co, London) for the Respondent
Hearing date: 18 April 2013
Approved Judgment
This is an appeal from a decision of Nicholas Braslavsky Q.C., sitting as a Deputy Judge of the High Court, Queen's Bench Division, dismissing an appeal brought by D&G Cars Ltd ('D&G') from the refusal of Deputy Master Rose to permit specific substantial amendments to the Particulars of Claim in proceedings brought against Essex Police Authority ('the police authority'). A second appeal, it is brought by leave of Rafferty LJ.
The background to the litigation concerns the commercial relationship between D&G, a vehicle recovery business, and the police authority in connection with the collection and disposal of motor vehicles some of which having been damaged in road traffic accidents, others used unlawfully. The police force area was divided: separate commercial relationships, involving different operators, existed for each.
Having worked for the police authority since 1998, on 3 March 2006, D&G entered into a new contract for five years relating to vehicle recovery from Basildon, Brentwood, Chelmsford, Maldon and the M25 west from junction 28. This followed a tender competition when the number of contractors was reduced from about twenty to five, giving rise to complaints from a number of those who had been unsuccessful; those complaints led to a report (to which I return below) being commissioned.
In 2008, another contractor withdrew from its contract relating to vehicle recovery in three other parts of Essex and, in order to find a replacement, acting as a 'contracting authority' within regulation 3(m) of the Public Contracts Regulations 2006 ('the Regulations'), the police authority placed this contract out to tender. On 10 June 2008, D&G was one of seven companies invited to tender for the new contract: in the event, five companies (including D&G and two relevant competitors, Boyton Cross and BJG) did. One tenderer was disqualified for using the incorrect label.
On about 28 July 2008, before the contract was awarded, the police authority received an anonymous letter alleging that D&G had acted contrary to its general obligations under the existing contract. In short, it was alleged that a Land Rover which had been recovered for the police authority and should have been crushed had, instead, been effectively exchanged for an existing vehicle owned by D&G: it was said that the D&G vehicle had been scrapped in place of the seized vehicle, a process known as 'ringing'.
It is clear that the police authority took this allegation seriously and immediately sent an officer to investigate, giving notice of suspension of the earlier vehicle recovery contract of March 200On the following day, by e mail, D&G's directors explained that, as an exercise, apprentices had exchanged the bodies of the two Land Rovers, repaired, refurbished and repainted their own vehicle and sent the condemned vehicle to be crushed. This account was later found not to be accurate.
Investigation subsequently revealed (and it does not appear to be disputed) that between October 2007 and January 2008, a recovered Land Rover S731 SLS which should have been crushed, had been refurbished with parts from another Land Rover L89 THP owned by D&G, repainted and marked with the livery of a D&G vehicle. The vehicle identification plate from L89 THP had been transferred to S731 SLS and the vehicle registration number plates exchanged, so that to all appearances, what was S731 SLS had become L89 THP and vice versa. What had been L89 THP (but badged as S731 SLS) was then crushed and its destruction under that description certified and proved to the police authority as demonstrating performance of its obligations. In the meantime, what had become L89 THP was taxed as usual.
Although by letter from its solicitors, D&G acknowledged that the way in which the vehicle had been misappropriated had "some of the hall marks of ringing" and, indeed, their initial explanation was not wholly accurate, the directors of D&G emphatically deny any knowledge of this activity. They ascribe the refurbishment to a training exercise involving the workshop manager and two apprentices (none of whom any longer worked for D&G); those involved in the re-painting would not have been in a position to appreciate what had been done.
In any event, on 28 August 2008, the police authority gave notice of termination of the 3 March 2006 contract and, on 11 September 2008, notified D&G that it had been excluded from the tender competition. D&G responded by arguing that this exclusion was in breach of the relevant Regulations and invited the police authority to delay the award of contracts pending the determination of the lawfulness of that exclusion. The police authority refused to do so and awarded the contracts to two of the other tenderers.
D&G then commenced two sets of proceedings. The first was for damages for breach of contract in terminating the 2006 contract; the second arose from the termination of the consideration of the tender for the new contracts. The Particulars of Claim in both proceedings deal with the vehicle exchange incident at some length. It was asserted that D&G (by its managing director) had initiated a legitimate bodywork project for apprentice training confined to the exchange of bodies between an existing and recovered vehicle and, importantly, for the disposal of the correct, recovered, vehicle in accordance with its obligations: it was conceded that, in error, the consent of the police authority was not sought. Further, it was further asserted that the inherent identities of the two vehicles were exchanged without authority but, in any event, without financial advantage to D&G. In both sets of proceedings, it is also made clear that
"[D&G] will invite the court to infer that disaffected ex-employees set out to injure [D&G] and jeopardise its prospect of successfully tendering for the balance of the contract for the Epping Forest, Castlepoint and M11 areas to the advantage of a competitor of [D&G]."
In the proceedings in relation to the 2006 contract, it is pleaded that the notice of suspension was in breach of contract and that further breaches of contract have been the purported termination of the contract and the removal of all vehicles then being stored by D&G. The defence relies upon the incident concerning the Land Rovers as giving rise to a fundamental breach of contract within H2(1) of the contract alternatively a repudiatory breach. In the alternative, that incident, together with other specified complaints amounts to such a breach of contract.
As for the proceedings relating to the exclusion from the tender, it is baldly alleged that the refusal to consider the tender, despite requests, is in breach of the Public Contracts Regulations 2006 which govern the tender process ("the Regulations"). In particular, it is said that D&G were not treated "equally and in a non-discriminatory way" as required by Reg. 4(2(a). By way of defence, the police authority rely on Reg. 23(4)(e) as justifying their treatment of D&G as ineligible on the grounds that it had committed an act of grave misconduct in the course of its business. The misconduct alleged was knowingly to exchange number plates, disguising the condemned Land Rover as its own and lying about what it had done or instructing apprentices to remove the body work from the condemned Land Rover to use on its vehicle without obtaining the consent of the police authority "knowing that it would not get such consent or that it was most unlikely to do so". Alternatively, the police authority reasonably believed that to be the case and D&G failed to obey instructions to crush the vehicle, did not have reliable systems in place and gave an account which was not true such as to give reasonable grounds to doubt its integrity. In the circumstances, it was not to the economic advantage of the police authority to contract with D&G.
Not surprisingly, the proceedings were consolidated. By application dated 5 October 2010, D&G sought specific disclosure of the documents relating to the 2008 tender process. Master Eyre took the view that on the pleadings, nothing amounted to a wholesale re-run of the tender process would be permitted and he refused to make the order. On 15 July 2011, Timothy Straker Q.C. sitting as a deputy judge of the High Court, allowed the appeal on the basis that it was necessary to examine the rival bids within the process in order to assess (a) the prospects of D&G in that process and (b) the potential loss to them of exclusion. In other words, this disclosure related to issues of quantum.
Having seen those documents (and, in particular, the report), D&G sought to make comprehensive amendments to the Particulars of Claim, making wide allegations against the police authority (covering some 41 as opposed to 9 pages). In short, the case which is sought to be advanced is that 'relevant servants or agents' of the police authority were consciously biased in favour of other tenderers and against D&G, in...
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