By Development Ltd and Others v Covent Garden Market Authority
| Jurisdiction | England & Wales |
| Judge | Mr Justice Coulson |
| Judgment Date | 28 September 2012 |
| Neutral Citation | [2012] EWHC 2546 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case Nos: HT-12121 |
| Date | 28 September 2012 |
[2012] EWHC 2546 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Coulson
Case Nos: HT-12121
HT-12-229
Ms Sarah Hannaford QC (instructed by Hogan Lovells) for the Claimants
Mr Nigel Giffin QC and Mr Jason Coppel (instructed By Eversheds) for the Defendant
Hearing date: 6 th September 2012
By an application originally made before Ramsey J at the CMC on 12th July 2012, the claimants seek an order permitting them to adduce expert evidence in relation to both planning and finance issues at the trial of this action, currently fixed for January 2013. The application raises an important issue as to the extent, if at all, to which expert evidence can be admissible or relevant in a procurement dispute under the Public Contracts Regulations 2006 (as amended).
The defendant is a statutory corporation which owns a large site next to Vauxhall Cross in South London where, for almost 40 years, the New Covent Garden Market has operated. The defendant wishes to redevelop the site. It began a tender process in March 2010. The procedure utilised was known as the competitive dialogue procedure which, following pre-qualification, involves three stages: stage 1, being initial dialogue and submission of outline solutions; stage 2, being the detailed dialogue; and stage 3, being the submission of final tenders.
The claimants reached stage 3 of the process. However, on 27 March 2012, the defendant issued a notice under Regulation 32, notifying the claimants that their tender had not been successful and that the defendant intended to award the development contract to a rival bidder, VSM.
In these proceedings, the claimants seek to challenge that decision. They contend that the defendant's evaluation of the respective bids contained a number of manifest errors, particularly in relation to planning matters. In the alternative, they contend that the decision was unfair and/or arose as a result of the unequal treatment of their bid. Until these claims have been resolved, this large London development cannot proceed.
The Claimant's Application
At the CMC in July, the claimants applied for permission to rely on expert evidence in the fields of both planning and finance (another area of the evaluation in respect of which the claimants say that the defendant made manifest errors and/or acted unfairly). Although Ramsey J expressed a general doubt as to whether such evidence was admissible in a case of this sort, he reached no concluded view. Instead, he required the claimants to identify those issues on which they said expert evidence was required. He allowed the defendant time in which to respond and fixed a hearing for 6 September 2012 for the matter to be argued out if the parties were unable to agree.
On 15 August 2012, the claimants identified their proposed questions for the experts. The planning questions were as follows:
"(1) Whether the claimant's tender was not compliant with planning policies, emerging policies and/or published planning guidance and, if so, in which respects (pleaded in particular at paragraph 90 and 91 (b), (c) and (d) of the CPoC, paragraph 97(1) and 99(1) of the AD, paragraph 60 of R).
(2) Whether the Claimant's tender provided a comprehensive and substantiated planning scheme (pleaded in particular at paragraph 91(1)(a) of the CPoC and paragraph 97(2) of the Defence and paragraph 60 of R).
(3) Whether the Claimant's planning strategy involved a much higher planning risk than VSM's and/or whether VSM had adopted a lower risk planning strategy (pleaded in particular at paragraph 83(1) and 91(1)(b) of the CPoC, paragraphs 98(1), 99(2), 103(2), 103(4) and 111(1) of the AD, and paragraphs 61–63, 64, 77, 81 of R).
(4) Whether VSM's bid included significant planning risks and/or weaknesses (pleaded in particular at paragraphs 84(2)(f)(v) and 91(1)(b) of the CPoC, paragraph 99(2) of the AD, and paragraphs 64 of the R), and if so which risks and/or weaknesses.
(5) Whether the Claimant's assumptions relating to tariff and/or CIL payments were inconsistent with the Claimant's planning strategy statements and/or the draft CIL policy position and/or too low and/or a much greater underestimate than those of VSM (pleaded in particular at paragraph 83(3) of the CPoC and 112(7)(c) of the AD).
(6) Whether a full planning application for a 175m tower on the Northern site was necessary and/or whether LB Wandsworth was unlikely to accept an outline planning application (paragraph 97(3) of the AD and paragraph 60(3) of R).
(7) Whether a planning application based on the Claimant's scheme in its tender would have been rejected and/or whether the Claimant's scheme presented at tender posed a much greater risk of not obtaining planning permission than the scheme presented during dialogue (if different) (pleaded in particular at paragraph 28, 126 of the AD and paragraph 95(d) of R)."
In addition, the proposed questions for the financial experts were as follows:
"(1) What were the financial risks in both bids, in particular in relation to IRR proposals, credit ratings of guarantors, and issues relating to debt/the placing of equity at risk.
(2) Was VSM's finance solution more risky than that of the Claimant, in particular in relation to IRR proposals, credit ratings of guarantors, and issues relating to debt/the placing of equity at risk.
(3) What is the difference between credit ratings of AA, Aa3 and A+? Are credit ratings of A+ and Aa3 materially weaker than a credit rating of AA."
The defendant responded on 23 August 2012 setting out why, in its view, expert evidence was neither admissible nor relevant. The matter was then debated before me at the hearing on 6 September 2012 at which, amongst other things, reference was made to a number of authorities. I indicated at the close of that hearing that I would reserve my decision and provide my reasons in writing. Accordingly, I propose to set out some general principles of law before looking at the procurement cases in particular, and then go on to give my answer to the question raised by the application.
General Principles of Law
Under the 2006 Regulations as amended, the principal way in which an unsuccessful bidder, such as the claimants, can challenge the proposed award of a contract to another bidder is to show that the public body's evaluation of the rival bids either involved a manifest error or was in some way unfair or arose out of unequal treatment. Accordingly, in deciding such claims, the court's function is a limited one. It is reviewing the decision solely to see whether or not there was a manifest error and/or whether the process was in some way unfair. The court is not undertaking a comprehensive review of the tender evaluation process; neither is it substituting its own view as to the merits or otherwise of the rival bids for that already reached by the public body.
In Upjohn Limited v Licensing Authority Established Under Medicines Act 1968 and Others [1999] 1 WLR 927, the CJEC stressed this limited function at paragraph 34:
"According to the court's case law, where a Community authority is called on, in the performance of its duties, to make complex assessments, it enjoys a wide measure of discretion, the exercise of which is subject to a limited judicial review in the course of which Community judicature may not substitute its assessment of the facts for the assessment made by the authority concerned. Thus, in such cases, the Community judicature must restrict itself to examining the accuracy of the findings of fact and law made by the authority concerned and to verifying, in particular, that the action taken by that authority is not vitiated by a manifest error or a misuse of powers and that it did not clearly exceed the bounds of its discretion."
At paragraph 37 they went on:
"…Community Law [does] not require the Member States to establish a procedure for judicial review of national decisions revoking authorisations to market proprietary medicinal products, empowering the competent national courts and tribunals to substitute their assessments of the facts and, in particular of the scientific evidence relied on in support of the revocation decision, for the assessment made by the national authorities competent to revoke such authorisations."
The test of 'manifest error' applied in the European cases, which is that required by the 2006 Regulations, is very similar to, if not the same as, the Wednesbury test of irrationality in domestic judicial review proceedings: see Upjohn and paragraph 74 of the judgment of Hidden J in R v The Licensing Authority (Ex Parte Novartis), a judgment dated 30 March 2000.
In domestic judicial review proceedings, it is very rare for expert evidence to be either relevant or admissible. The reasons for that were fully set out by Collins J in R (on the application of Lynch) v General Dental Council [2003] EWHC 2987 (Admin). He concluded that, in most JR cases, expert evidence will not be admissible, particularly where the public body making the decision under review is itself composed of experts or has been advised by an expert assessor. He said of such cases at paragraph 25:
" it will be virtually impossible to justify the submission of expert evidence which goes beyond explanation of technical terms since it will almost inevitably involve an attempt to challenge the factual conclusions and judgment of an expert."
Collins J did, however, draw a distinction between a report from an expert "which seeks to explain what is involved in a particular process and how complicated that...
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