Metropolitan Resources North West Ltd v Secretary of State for Home Department (on behalf of the UK Border Agency)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE NEWEY |
| Judgment Date | 01 April 2011 |
| Neutral Citation | [2011] EWHC 1186 (Ch) |
| Court | Chancery Division |
| Date | 01 April 2011 |
[2011] EWHC 1186 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Newey
Mr Philip Moser appeared on behalf of the Claimant
Miss Elisa Holmes appeared on behalf of the Defendant
Approved Judgment
This case concerns the provision of accommodation for asylum-seekers. For present purposes, such accommodation can be divided into two main categories. First, there is accommodation made available under section 98 of the Immigration and Asylum Act 1999, referred to as "Initial Accommodation", or " IA". This type of accommodation is provided on a short-term basis, usually for more than two weeks, essentially while asylum-seekers apply for support. Secondly, there is longer-term, or "Dispersal", accommodation pursuant to section 95 of the 1999 Act.
The defendant (which I shall refer to as "the UK Border Agency") does not itself provide asylum-seekers with accommodation. It enters into "Target Contracts" for others to do so. Two such contracts were entered into in 2006 with, respectively, Liverpool City Council and Happy Homes UK Limited ("Happy Homes"). Both contracts were for the provision of accommodation and related services in the northwest region.
Initially, Liverpool City Council and Happy Homes each provided only Dispersal Accommodation. However, Liverpool City Council has also been providing IA services since mid-2007. To achieve that, the Council entered into a sub-contract with the claimant, Metropolitan Resources North West Limited.
The contract with Liverpool City Council was for a five-year period. The UK Border Agency had contractual rights to extend the contract by up to a year, but it had to give at least three months' notice of its exercise of those rights. No such notice has been given. As things stand, therefore, the contract will come to an end on 28 April of this year.
The UK Border Agency is on the point of launching a procurement exercise with a view to replacing the existing Target Contracts from 2012. In the short term, however, it has approached Happy Homes to provide IA services when the contract with Liverpool City Council expires at the end of April. The UK Border Agency has exercised its rights to extend the Target Contracts of Happy Homes and other providers in the northwest region, bar Liverpool City Council, by 12 months.
The claimant, which stands to lose the IA work when Liverpool City Council's contract expires, challenges the UK Border Agency's decision to award IA services to Happy Homes. It alleges that by asking Happy Homes to take on IA services without having conducted any kind of competition or allowed the claimant to submit a proposal, the UK Border Agency has breached the Public Contracts Regulations 2006 ("the Regulations").
The claimant instituted the present proceedings on 24 February of this year. The claim form includes a notice to the effect that the issue of the claim operates as "an automatic injunction pursuant to Regulation 47G of the Public Contracts Regulations 2006 (as amended by the Public Contracts (Amendment) Regulations 2009) requiring the Defendant to refrain from entering into the disputed contract." The regulation in question provides as follows:
"(1) Where–
(a) proceedings are started in respect of a contracting authority's decision to award the contract; and
(b) the contract has not been entered into,
the starting of the proceedings requires the contracting authority to refrain from entering into the contract.
(2) The requirement continues until any of the following occurs–
(a) the Court brings the requirement to an end by interim order under regulation 47H(1)(a);
(b) the proceedings at first instance are determined, discontinued or otherwise disposed of and no order has been made continuing the requirement (for example in connection with an appeal or the possibility of an appeal)."
By the application which is now before me, the UK Border Agency seeks to have the requirement imposed by regulation 47G lifted. It invokes regulation 47H, which, among other things, empowers the court to make an interim order bringing such a requirement to an end, or to require the claimant to give an undertaking as to damages.
It is common ground between the parties that the principles established in American Cyanamid v Ethicon Limited [1975] AC 396 apply in cases such as this one. The following issues, therefore, arise. (a) Is there a serious issue to be tried? (b) If so, would damages provide the claimant with an adequate remedy? (c) If not, would the UK Border Agency be adequately protected by requiring the claimant to provide an undertaking as to damages? (d) If not, where does the balance of convenience lie?
Is there then a serious issue to be tried?
It is common ground that IA services are Part B services for the purposes of the Regulations. That means that regulation 4(3) is applicable. Regulation 4(3) provides as follows:
"A contracting authority shall (in accordance with Article 2 of the Public Sector Directive)–
(a) treat economic operators equally and in a non-discriminatory way; and
(b) act in a transparent way."
Article 2 of the Public Sector Directive, to which there is reference in regulation 4(3), states:
"Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way."
It is the claimant's case that, by deciding to invite only Happy Homes to put forward a proposal for the provision of IA services, the UK Border Agency breached regulation 4(3) of the Regulations and also similar, general principles of European law as to equal treatment and transparency. As regards transparency, Mr Philip Moser, who appears for the claimant, referred me to the decision of the European Court of Justice in Telaustria Verlags Gmbh [2000] ECR I-10745, where the court said (in paragraph 62 of its judgment) that the obligation of transparency which is imposed on a contracting authority:
"consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of procurement procedures to be reviewed."
Mr Moser also relied on the decision of the European Court of Justice in pressetext Nachrichtenagentur Gmbh [2008] ECR I-4401, which he said showed that a material change to a public contract is to be treated as a new award. In this connection, the court said the following:
" 34 In order to ensure transparency of procedures and equal treatment of tenderers, amendments to the provisions of a public contract during the currency of the contract constitute a new award of a contract within the meaning of Directive 92/50 when they are materially different in character from the original contract and, therefore, such as to demonstrate the intention of the parties to renegotiate the essential terms of that contract: see, to that effect, Commission of the European Communities v French Republic ( Case C-337/98) [2000] ECR I-8377, paras 44 and 46.
3. An amendment to a public contract during its currency may be regarded as being material when it introduces conditions which, had they been part of the initial award procedure, would have allowed for the admission of tenderers other than those initially admitted or would have allowed for the acceptance of a tender other than the one initially accepted.
3. Likewise, an amendment to the initial contract may be regarded as being material when it extends the scope of the contract considerably to encompass services not initially covered. This latter interpretation is confirmed in article 11(3)(e) and (f) of Directive 92/50, which imposes, in respect of contracts concerning, either solely or for the most part, services listed in Annex IA thereto, restrictions on the extent to which contracting authorities may use the negotiated procedure for awarding services in addition to those covered by an initial contract.
3. An...
To continue reading
Request your trial
-
Covanta Energy Ltd v Merseyside Waste Disposal Authority
...various reasons for that are set out in the latter part of the judgment. (e) Metropolitan Resources Northwest Ltd v Home Secretary [2011] EWHC 1186 (Ch) where again the difficulty of assessing damages meant that they were not regarded by Newey J as an adequate remedy. On that occasion an i......
-
Bristol Missing Link Ltd v Bristol City Council (Defendant/Applicant)
...( Letting International, Morrisons, Alstom [2010] EWHC 2747 (Ch), Indigo Services [2010] EWHC 3237 (QB), and Metropolitan Resources [2011] EWHC 1186 (Ch)). There are also cases where, on the facts, damages have been held to be an adequate remedy and the injunction therefore refused ( Europe......
-
OCS One Complete Solution Ltd v Dublin Airport Authority and Another
...COVENTRY & WARWICKSHIRE NHS TRUST 2010 EWHC 3332 METROPOLITAN RESOURCES NORTH WEST LTD v SECRETARY OF STATE FOR THE HOME DEPT 2011 EWHC 1186 (CH) EUROPEAN COMMUNITIES (AWARD OF CONTRACTS BY UTILITY UNDERTAKINGS) (REVIEW PROCEDURES) REGS 2010 SI 131/2010 REG 9(4) ALSTOM TRANSPORT v EUROSTAR ......
-
Group M UK Ltd v Cabinet Office
...exercise. In point are at least two authorities: Metropolitan Resources North West Ltd v Secretary of State for Home Department [2011] EWHC 1186 (Ch) and Indigo Services UK Ltd v Colchester Institute [2010] EWHC 3237 (QB). It is certainly arguable that any further extension would be unlaw......