David Wylde and Others v Waverley Borough Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Dove |
| Judgment Date | 09 March 2017 |
| Neutral Citation | [2017] EWHC 466 (Admin) |
| Docket Number | Case No: CO/3263/2016 |
| Court | Queen's Bench Division (Administrative Court) |
[2017] EWHC 466 (Admin)
Mr Justice Dove
Case No: CO/3263/2016
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
David Smith & Matthew Dale-Harris (instructed by Burkill Govier) for the Claimant
Jason Coppel QC & Patrick Halliday (instructed by Sharpe Pritchard LLP) for the Defendant
Charles Banner (instructed by CMS Cameron McKenna LLP) for the Interested Party
Hearing date: 31 st January 2017
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This judicial review challenges the decision of the defendant made on 24 th May 2016 to amend an agreement with the interested party which had been entered into for the purpose of achievement of a redevelopment known as the "Brightwells" or "East Street" Scheme ("The Scheme") in Farnham. The challenge is brought on the basis of an alleged failure to comply with the legal requirements required by public procurement law.
Permission to apply for judicial review was granted by Andrews J on 12 th August 2016. On 9 th September 2016 Mr Robin Purchas QC sitting as a Deputy Judge of the High Court ordered that there be a trial of the preliminary issue in relation to the claimants' standing to bring this claim. It is in relation to that discrete issue that this judgment relates. The structure of this judgment is firstly, to set out, so far as necessary, the facts pertinent to the case; secondly, set out the nature of the interest of the claimants in this case; thirdly, to examine the content and structure of the law relating to procurement engaged in this case; fourthly, to consider the law relating to standing and in particular that which pertains to procurement cases; and then finally the judgment considers whether or not the claimants are able to demonstrate standing measured against the legal principles identified.
The defendant and the interested party sought to contend that the claimants were unable to demonstrate standing under the established case law but also, in the alternative, contended that judicial review is not an available remedy to a person who cannot bring themselves within the scope of the remedies provided by the Public Contracts Regulations 2006. Clearly that alternative argument does not arise if I am not satisfied that the claimants can bring themselves within the scope of standing as understood from the present case law. I therefore set out my conclusions in relation to whether or not the claimants are able to bring themselves within the existing case law in terms of standing prior to any consideration of this broader, alternative, submission.
The Facts
The review of the facts of this case is limited to those that are strictly relevant to the determination of the question of standing. They are as follows.
The East Street area of Farnham town centre is an area which the defendant has long wished to see redeveloped and regenerated. In 2002 the defendant undertook a competitive tendering process in relation to the potential redevelopment opportunity at East Street and in October 2002 selected the interested party as their preferred development partner. On 24 th April 2003 they entered into a development agreement ("The Agreement"). Amongst the clauses in the Agreement was a "viability condition", which calls for a financial appraisal of the development so as to arrive at a land value for the site. This viability condition is one of the conditions precedent which have to be satisfied before the Agreement becomes unconditional. There are two key elements to the viability condition. Firstly, there needs to be the achievement of a minimum level of profit for the interested party and, secondly, there is a requirement that as a consequence of the financial appraisal the land value generated to be received by the Council exceeds a minimum value of £8.76m. For various reasons the Agreement has over the course of time previously been varied. Variations have occurred, for instance, in 2006, 2008 and 2009.
A preferred proposal for the Scheme was worked up in 2007 and planning permission was granted for the Scheme on 6 th August 2009. It appears that that planning permission was replaced and renewed on 6 th June 2012, and thereafter implemented in August 2015. Other permissions exist which are relevant to enabling the Scheme to be developed. The defendant promoted a compulsory purchase order for land assembly purposes (on the basis that they did not have all of the necessary land interests to deliver the Scheme) in the form of the Waverly Borough Council (East Street, Farnham) Compulsory Purchase Order 2012. Following a public inquiry into the Order it was confirmed by the Secretary of State in August 2013. At the hearing I was informed that the Order has now been executed and put into effect. There was also a further public inquiry in July 2013 in relation to proposals for the extinguishment of rights of way to enable the Scheme to proceed.
On 24 th May 2016 the defendant's Executive received a report in relation to the need to vary the Agreement. In particular, based on the advice received from its property consultants GVA, it appeared that unless the viability condition was varied such that the minimum land value was reduced to a figure of £3.19m, and further varied in terms of the interested party's profit element, the requirements of the Agreement which had to be satisfied in order for the development to proceed would not be met. In other words, without variations to the minimum land value and the interested party's profit element, the financial appraisal of the development would not generate an outcome which enabled the agreement to become unconditional. GVA advised that the variations which were proposed to the Agreement would still achieve compliance with the requirement to obtain best consideration set by section 123 of the Local Government Act 1972. In the event the Executive adopted the recommendation of the officers to endorse the variations to the Agreement.
On 18 th November 2016 (obviously after these proceedings had been commenced) the defendant published a Voluntary Ex Ante Transparency Notice (the "VEAT Notice"). The purpose of such a Notice is to advertise an intention to enter into a contract without holding a procurement competition. The VEAT Notice advertises the intention to enter the contract to other economic operators thereby giving them the chance to challenge the process. Provided the public authority waits for a period of 10 days after the VEAT Notice has been published prior to entering into the contract, the contract cannot thereafter be declared "ineffective" under the remedies provided by the 2006 Regulations. Having published the VEAT Notice the defendant did not receive any response from any economic operator in relation to it.
The Claimants
There are five claimants in this case. Two of the claimants are members of both the defendant and also Farnham Town Council. Other claimants are members of local civic societies. Those societies are the Farnham Society, the Farnham Building Preservation Trust and the East Street Action Association. All of the claimants are council tax payers and all are opposed to the Scheme which is the subject of the Agreement. The Farnham Society and the Farnham Building Preservation Trust are members of another local organisation, the Farnham Interest Group. One of the claimants is a committee member of the Farnham Interest Group. The Farnham Interest Group appeared at the public inquiries in relation to the orders proposed to facilitate the scheme.
The objectives of the claimants in these proceedings have been distilled in a witness statement lodged on their behalf in the following terms:
"8. The objective of the Claimants is, as stated, to have the decision on 24 th May 2016 by WBC quashed, in so far as it authorises the variation of the Development Agreement, on the grounds that WBC has not thereby acted in accordance with European directives, regulations and case law, as set out in the Statement of Facts and Grounds. This would enable Farnham ratepayers to have an opportunity to recover the loss which WBC acknowledges will inevitably arise from the decision to reduce the condition as to Minimum Land Value to £3.19 million. It would also potentially realise an opportunity for a re-consideration of the current development plan more in keeping with Farnham, restoration of amenity areas given to WBC's predecessor: the Farnham Urban Council, for the benefit and amenity of Farnham townsfolk. It would also give potential more likely to create a thriving residential and commercial centre, (sic) thereby meeting the objectives of the Society, the Trust and the Group, which opportunity cannot be expected if there is no re-tendering, enabling other potential developers to take over the project. In this respect the Claimants are concerned that over the years the project has not even got to an unconditional contract, despite being originally proposed by a brief as long ago as 2002. What has happened is that there have been progressive encroachments into the list of "Required Elements" which the Scheme (as defined in clause 1, Bp A239) was required to deliver; all of which reflect the way in which the Scheme has moved from being "planning-led" to "commercial-led". These include encroachments into the grounds of Brightwells House (listed), removal of the bowling green, and demolition of the bowling clubhouse, as well as several others. Due to the refusal of the WBC to provide the 'exempt' parts of the Report it is not currently known whether or not any of these changes have been...
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