Hastings & Co (insolvency) Limited V. The Accountant In Bankruptcy
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2013] CSOH 55 |
| Court | Court of Session |
| Docket Number | CA114/11 |
| Published date | 11 April 2013 |
| Date | 27 March 2013 |
| Year | 2013 |
| OUTER HOUSE, COURT OF SESSION [2013] CSOH 55 | |
| CA114/11 | OPINION OF LORD HODGE in the cause HASTINGS & CO (INSOLVENCY) LTD Pursuer; against THE ACCOUNTANT IN BANKRUPTCY Defender: ________________ |
Act: Currie QC; bto Solicitors
Alt: O'Neill, Solicitor Advocate; Scottish Government Legal Directorate
Third Party intervener (Wylie & Bissett): Cormack, Solicitor Advocate; Pinsent Masons LLP
27 March 2013
[1] This is an application by the Accountant in Bankruptcy (the "AiB") under regulation 47(9) of the Public Contracts (Scotland) Regulations 2012 (the "2012 Regulations") for an interim order to bring to an end the prohibition from entering into a framework agreement in relation to the provision of insolvency services.
[2] On 10 May 2012 the AiB published a prior information notice and a contract notice in relation to the insolvency services in the Official Journal. It stated that the procedure to be used was the restricted procedure. On 7 December the AiB invited tenders by issuing an invitation to tender ("ITT") for inclusion in a framework agreement for the provision of insolvency services.
[3] The proposed framework agreement, which was scheduled to commence on 1 April 2013, was designed to replace a framework agreement dated 24 March 2009. Under the current framework agreement five organisations have been providing insolvency services to the AiB. They are the pursuer, KPMG, Wylie & Bissett, Armstrong Watson, and MMG.
[4] The pursuer submitted a tender in response to the ITT on 24 January 2013. The tender and competing tenders were analysed by a panel of four scorers whom the AiB established to assess the tenders. On 13 February 2013 the AiB wrote by email to the pursuer to inform it that its tender had not been successful. The AiB informed the pursuer that the winning tenderers were Insolvency Support Services ("ISS"), KPMG and Wylie & Bissett.
[5] On 13 February 2013 the AiB sent the pursuer a document entitled "Debrief of the Hastings & Co (Insolvency) Ltd Tender" (the "debrief document"). Solicitors for the pursuer wrote to the AiB on 20 February 2013. They expressed concerns about the AiB's decision to exclude the pursuer from the framework agreement and drew attention to concerns that the pursuer had with the tendering process and the evaluation of its submission. The AiB responded by letter dated 21 February 2013. The pursuer was not satisfied by that response and commenced this action.
[6] In its summons the pursuer mounted ten challenges to the tender process. When the case came to be heard last week, Mr Heriot Currie QC for the pursuer intimated that the pursuer did not insist in four of those challenges.
[7] Before I consider the merits of the six challenges, I have to address two preliminary issues which Ms O'Neill, solicitor advocate, raised. They were, first that the action was not competent because the pursuer had not given prior notice of the action as regulation 47(6) of the 2012 Regulations required and, secondly and in any event, because certain claims were time-barred under regulation 47(7)(b).
The preliminary defences
(i) Failure to give proper notification
[8] Regulation 47(6) so far as relevant provides:
"Proceedings under this regulation may not be brought unless -
(a) the economic operator bringing the proceedings has informed the contracting authority ... of -
(i) the breach or apprehended breach of the duty owed to it in accordance with paragraph (1) or (2); and
(ii) of its intention to bring proceedings under this Part in respect of that breach or apprehended breach; and
(b) the proceedings are brought in accordance with paragraph (7)."
In this case the relevant allegations of breach of the duty owed to the pursuer as an economic operator are the duties in regulation 4(3), which provides that
"a contracting authority must -
(a) treat economic operators equally and without discrimination; and
(b) act in a transparent and proportionate manner."
[9] Ms O'Neill submitted that the letter of 20 February from the pursuer's solicitors failed to meet the requirements of regulation 47(6) in two respects. First, it did not give notice of all of the specific breaches of duty which the pursuer later asserted in this action. Secondly, the letter did not inform the AiB of its intention to bring proceedings.
[10] Dealing with the second challenge first, I am satisfied that the letter gave notice of an intention to raise proceedings. In its fourth paragraph the solicitors stated:
"However, on behalf of Hastings, we give notice that any breach of the regulations will cause Hastings to suffer loss and Hastings gives notice to you of its intention to raise an action to preserve its legal position and recover all such sums lost. Hastings reserves in full its rights to make a claim, and initiate legal proceedings."
While the letter concluded in a more emollient tone by stating that Hastings was considering its options and calling on the AiB to reconsider its position, I have no doubt that the letter gave sufficient notice of an intention to bring proceedings.
[11] To my mind the regulation contains a notification requirement for a practical reason and not as a matter of form. It is to allow the contracting authority to re-consider its position in response to a focused challenge or challenges to its decision and a notification of an intention to raise proceedings absent that reconsideration. In the letter of 21 February 2013 Mr Charles Keegan, the Executive Director of Corporate Services of the AiB, responded in detail to the solicitors' letter and concluded that the AiB was satisfied that there had been no breach of the 2012 Regulations. When he did so I think he can have had no doubt that he had received a notification of an intention to bring legal proceedings.
[12] What is more problematic for the pursuer is the first challenge, namely that the pursuer is now barred from the raising in these proceedings of challenges of which it gave no notice in the solicitors' letter.
[13] The principal challenge, which Mr Currie characterised as a root and branch attack on the AiB's approach to the procurement exercise, was that the process had been deliberately "weighted ... against small and medium sized enterprises ("SMEs"). The letter then sought to particularise that charge and focused on questions 4-7 of the ITT. While the letter did not state specifically in its discussion of each of those questions that its criticism amounted to a breach of the 2012 Regulations, a fair reading of the letter leaves no doubt that the charge of discrimination against SMEs underpinned the discussion of each question. The criticism of the approach to question 7 also raised an issue of undisclosed or irrelevant criteria. I therefore do not accept Ms O'Neill's submission that the comments on the individual questions were not allegations of breaches of the 2012 Regulations.
[14] But the pursuer did not criticise the AiB's approach to questions 1 and 3 of the ITT, which concerned "continuous improvements" and "customer services". In my opinion, having failed to raise any issue on the wording of those questions and the assessment of the tenderers' answers to them in the regulation 47(6) letter, the pursuer is barred by that regulation from challenging those matters in this action.
[15] An economic operator may develop its arguments in support of a particular notified challenge in the course of a legal action. But it would defeat the practical purpose of the notification requirements if it were allowed to open up new fronts on raising legal proceedings. That would enable an economic operator to mount challenges to parts of the process, which it had not given the contracting authority the opportunity to reconsider. Without such notice, the possibility of avoiding expensive litigation is lost. In my view, the policy of the legislation is that the economic operator has to particularise its complaints when the effect of any legal action that follows is to bring into operation the regulation 47(9) prohibition. I consider that this approach is consistent with the guidance which the courts have given in Luck v London Borough of Tower Hamlets [2003] 2 CMLR 12, Rix LJ at paras 30-31 and 42, Gillen v Inverclyde Council 2010 SLT 513, Lord Woolman at para 19, and Clinical Solutions International Ltd v NHS 24 and Capgemini UK plc [2012] CSOH 10, at paras 12 and 13.
(ii) Time bar
[16] The relevant time restriction in this case is contained in regulation 47(7)(b) which provides:
"For the purpose of paragraph (6)(b), proceedings must be brought - ...
(b) ... within 30 days beginning with the date when the economic operator first knew or ought to have known that grounds for starting the proceedings had arisen unless the Court considers that there is good reason for extending the period within which proceedings may be brought, in which case the court may extend that period for up to a maximum of 3 months from that date."
[17] Ms O'Neill submitted that in so far as the pursuer criticised the ITT as lacking in transparency, time ran for the date on which it received that document in December 2012, because on reading that document it ought to have known of the grounds on which it now founded. She referred to Uniplex (UK) Ltd v NHS Business Services Authority [2010] 2 CMLR 1225 at para 35; Clinical Solutions (above) at paras 16 and 17; and Traffic Signs and Equipment Ltd v Department for Regional Development [2010] NIQB 138, Weatherup J at paras 21 and 22. She submitted that the pursuer's challenges to questions 1, 3 and 6 were time barred.
[18] Mr Currie submitted that the pursuer was able to discover the lack of transparency of the impugned questions only when it received the debrief document, which showed that the AiB had adopted an interpretation that differed from its understanding.
[19] I am satisfied that the pursuer's criticisms of questions 1 and 3 could not have been formulated before it saw the debrief...
To continue reading
Request your trial
-
Shetland Line (1984) Limited Against The Scottish Ministers
...Housing Executive [2015] NIQB 54, per Horner J at paras 30, 32, 33 and 37; and Hastings & Co (Insolvency) Ltd v Accountant in Bankruptcy [2013] CSOH 55, per Lord Hodge at paras 50-51. The bids were evaluated in accordance with the criteria set out in the Competition Documentation. Even if a......
-
Scott & Co (scotland) Llp Against Aberdeenshire Council
...Healthcare at Home Limited v Common Services Agency 2014 S.C. (UKSC) 247; Hastings & Co (Insolvency) Ltd v The Accountant in Bankruptcy [2013] CSOH 55; Elekta Ltd v The Common Services Agency 2011 SLT 815; and Shetland Line (1984) Limited v The Scottish Ministers [2012] CSOH 99. Decision an......
-
Street Lighting Supplies & Co Ltd Against Scotland Excel And Renfrewshire Council
...City Council and Ypeople Ltd [2012] CSOH 199, Lord Malcolm at paragraph 7; Hastings & Co (Insolvency) Ltd v Accountant in Bankruptcy [2013] CSOH 55. Lord Hodge at paragraphs 53 and 54; Patersons of Greenoakhill Ltd v South Lanarkshire Council [2014] CSOH 21, Lord Tyre at paragraphs 10 and 1......
-
Johnson & Johnson Medical Limited, T/a Depuy Synthes Uk Against Greater Glasgow Health Board
...The Common Services Agency [2012] CSOH 75; 2013 SC 411; and 2104 SC (UKSC) 247 (“Healthcare at Home”); and Hastings & Co (Insolvency) Ltd [2013] CSOH 55 (“Hastings”). Mr Currie said, however, that he did not take issue with the propositions in law which the pursuers set out in their note of......