Brookhouse Group Ltd v Lancashire County Council
| Jurisdiction | England & Wales |
| Judge | Mr Martin Bowdery |
| Judgment Date | 17 November 2023 |
| Neutral Citation | [2023] EWHC 2921 (TCC) |
| Court | King's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2023-000018 |
[2023] EWHC 2921 (TCC)
Mr Martin Bowdery KC
Case No: HT-2023-000018
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Rolls Building, Royal Courts of Justice
Strand, London, EC4A 1NL
Tim Buley KC and James Neill (instructed by DLA Piper UK LLP) for the Claimant
Rhodri Williams KC and Tom Walker (instructed by Lancashire County Council) for the Defendant
Hearing dates: 17 th October 2023
This Judgment is set out in 7 parts:
Introduction
The Application
The Chronology of events
Paragraphs 21 to 25 of the Defendant's Defence
The Regulations
The Relevant Legal Principles
Conclusions
INTRODUCTION
The parties dispute concerns the Cuerden Strategic Regional Investment Site (“CSRIS”). This comprises 65 hectares of land. The Defendant owns some 71% of the CSRIS whilst the Claimant owns some 29%.
The Claimant's claim arises out of the award of a contract by the Defendant to a developer, Maple Grove Developments Limited (“MGD”) and entry into that contract by MGD and the Defendant on the 29 July 2022 (“the DA”).
The Defendant contends that the DA contains enforceable obligations on the part of MGD to carry out development works at CSRIS falling within the scope of a procurement contract competitively tendered and awarded to Eric Wright Group Limited (“EWG”) – which owns MGD – on the 6 December 2012 and within the Strategic Partnership Agreement (“SPA”) subsequently entered into with EWG on the 20 December 2012.
The Defendant further contends that the SPA constituted a framework contract which expressly and lawfully envisaged and provided for the Defendant entering into further project specific development agreements either with the chosen developer (EWG) or with its nominated Partnering or Project Services Provider (MGD) without any further competitive tendering requirements. The Defendant claims that the entering into the DA with MGD constituted the lawful execution of the specific provisions of the SPA for the relevant project, namely the development of the Defendant's land within the CSRIS.
The DA is a public works contract and/or a mixed public works and services contract for the purposes of the Public Contract Regulations 2015 (“PCRs”)
The Claimant claims in their proceedings a declaration of ineffectiveness pursuant to regulation 98(2) of the PCRs declaring void the provisions of the DA.
It appears common ground:
i) that the DA contains enforceable obligations on the part of MGD to carry out development works on the Defendant's land at the CSRIS.
ii) that prior to the award of the DA there was no separate contract award notice issued in relation to the contract.
The Defendant in their Defence set out a defence based upon limitation. The Defendant contends that the Claimant was provided with a “summary of the relevant reasons” for the purposes of Regulation 93(5) of the PCRs at the latest by the 22 September 2023 and therefore any claim had to be filed within 30 days of that date (“the Limitation Defence”) and the thirty day time limit for starting proceedings ran from that date and expired on the 24 October 2022.
The Claim Form in the present proceedings was issued on the 20 January 2023 nearly four months after the relevant date and well outside the thirty-day time limit. Accordingly, the Defendant contends that the claim is statute barred in its entirety pursuant to regulation 93(2)(a) of the PCRs. It is also alleged by the Defendant that the Court has no discretion to extend the applicable time limit under regulation 93.
The Claimant contends that the success or failure of the Limitation Defence turns on a short question of law whether in circumstances in which no competitive tendering exercise under the PCRs has been held by a contracting authority can the contracting authority still rely upon regulation 93(5) by providing reasons to any economic operator as to why no competitive award procedure has been carried out.
THE APPLICATION
The Claimant's application dated 12 April 2023 seeks the following order:
That paragraphs 21 – 25 (inclusive) of the Defendant's Defence be struck out pursuant to Civil Procedure Rules (“CPR”) 3.4.(2)(a) on the basis that they disclose no reasonable grounds for defending the claims against the Defendant.
The Defendant's application dated the 27 April 2023 seeks an order:
To strike out the Claimant's claim in its entirely pursuant to CPR r. 3.4(2)(a) on the basis that it discloses no reasonable grounds for bringing the claim against the Defendant.
Alternatively for summary judgment pursuant to CPR r. 24.2(a)(2) on the basis that the Claimant has no real prospect of succeeding on the Claim.
THE CHRONOLOGY OF EVENTS
| DATE | DETAIL |
| The Strategic Partnering Agreement | |
| 2011 | The Council acquired an interest in the CSRIS |
| November 2011 | A Prior Information Notice in the OJEU was published (ref. 2011/S 217-353851) in respect of the regeneration of the CSRIS |
| 8 March 2012 | The Council commenced a competitive tender procedure in respect of the development of the CSRIS by publishing a Contract Notice in the OJEU (ref. 201S 47-077170). This competition was also advertised on the Council's website. |
| 30 April 2012 | Brookhouse wrote to the Council to express its interest in the competition. |
| 21 May 2012 | The Council responded to Brookhouse's expression of interest. As the deadline for receipt of requests to participate was 10:00am on 12 April 2012, the Council stated that it was unable to consider Brookhouse as part of the tender process. |
| 6 December 2012 | Following the conduct of the competitive dialogue procedure by the Council, two contracts were awarded. The second of these, the SPA, was awarded to EWG. |
| 20 December 2012 | The Council entered into the SPA with EWG. |
| 7 January 2013 | A Contract Award Notice in respect of the SPA was published in the OJEU (ref2013/S-02633). |
| The Development Agreement | |
| 2019 | Brookhouse and the Council attempted to agree on heads of terms for an agreement relating to the development of the CSRIS, |
| 15 January 2020 | Shoosmiths, on behalf of the Council, explained that the Council's preference was to use the SPA to enter into a development agreement with EWG. |
| 15 February 2021 | In response to a freedom of information request by Brookhouse for details of each development contract awarded using the SPA with EWG, the Council provided Brookhouse with the details of 11 such projects. This included one in relation to the CSRIS. |
| 29 July 2022 | The Council entered into the DA with MGD, a wholly owned subsidiary of EWG, pursuant to the SPA. |
| 3 August 2022 | The Council notified Brookhouse that it had entered into the DA with MGD. |
| 2 September 2022 | A press release was issued announcing that the Council had submitted an application for planning permission for the development of the CSRIS. |
| 2 September 2022 | The Council sent a letter to Brookhouse confirming that planning permission for the development of the CSRIS had been submitted. |
| Procedural History | |
| 8 September 2022 | Brookhouse sent a detailed letter before claim to the Council. This confirmed that it was aware of the Council's press release concerning the development of the CSRIS. |
| 22 September 2022 | The Council provided its response to the letter before claim. This confirmed the conclusion of the DA and provided Brookhouse with a detailed summary of the reasons why the Council was entitled to enter into the DA by the execution of the provisions of the SPA without conducting any further competitive tender processes. |
| 21 December 2022 | A draft Particulars of Claim was provided to the Council by Brookhouse. |
| 22 December 2022 | The parties agreed a confidentiality agreement under which redacted versions of the SPA and the DA were provided to Brookhouse. |
| 20 January 2023 | Brookhouse's Claim was issued. |
| 16 February 2023 | The Council served its Defence. |
| 8 March 2023 | Brookhouse served its Reply to the Defence. |
| The Strike Out Application | |
| 8 March 2023 | Brookhouse invited the Council to withdraw the limitation argument set out in paragraphs 21–25 (inclusive) of the Defence. |
| 14 March 2023 | The Council declined Brookhouse's invitation to withdraw its limitation argument. |
| 12 April 2023 | Brookhouse issued its Strike Out Application. |
| The Cross Application | |
| 27 April 2023 | The Council issued its Cross-Application to strike out Brookhouse's claim in its entirety. |
PARAGRAPHS 21 TO 25
The paragraphs of the Defence which are at the core of both the Claimant's and the Defendant's applications are:
“Limitation
[21] The claim is brought under the Public Contracts Regulations 2015 (“the 2015 Regulations”). The allegation at paragraph 43(1) – (4) is that on 29th July 2022 the Defendant entered into a public works contract with MGD without: (i) applying the procedure set out in Part 2 of the 2015 Regulations contrary to regulation 26(1); (ii) publishing a call for competition in accordance with Part 2 contrary to regulation 26(2); (iii) publishing a contract notice containing the information set out at regulation 49; and (iv) submitting such a notice in accordance with regulation 51. The Claimant therefore alleges that the first ground of ineffectiveness under regulation 99(1) applies and claims a declaration to this effect.
[22] Regulation 93 of the 2015 Regulations provides:
“[93] Special time limits for seeking a declaration of ineffectiveness
(1) This regulation limits the time within which proceedings may be started where the proceedings seek a declaration of ineffectiveness.
(2) Such proceedings must be started—
(a) where paragraph ( 3) or (5) applies, within 30 days beginning with the...
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