MSI—Defence Systems Ltd v The Secretary of State for Defence
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 25 June 2020 |
| Neutral Citation | [2020] EWHC 164 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000296 |
| Date | 25 June 2020 |
[2020] EWHC 164 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Heard remotely as if at the Rolls Building, 7 Rolls Building
Fetter Lane, London, EC4A 1NL
The Hon. Mr Justice Stuart-Smith
Case No: HT-2019-000296
Simon Taylor (instructed by Jenner & Block London LLP) for the Claimant
Andrew Kinnier QC and Jonathan Lewis (instructed by Government Legal Department) for the Defendant
Hearing dates: 11 June 2020
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
The Defendant is running a procurement exercise, to which the Defence and Security Public Contracts Regulations 2011 (“the Regulations”) apply. It is for the provision of repair and support services for 30mm naval gun systems (“the Contract”) for five years with an option for the Defendant to extend it for an additional five years. The estimated value of the Contract was said in the OJEU Notice posted by the Defendant to be in the order of £60–120 million. The Claimant is the incumbent contractor and is participating in the procurement. The other relevant bidding participant is Devonport Royal Dockyard Limited, which is commonly referred to as “Babcock”. There was another bidder (“Leonardo”) but they withdrew and no longer participate.
On any view, the procurement has not gone smoothly. This has led the Claimant to issue proceedings alleging various breaches of duty by the Defendant. Proceedings were issued on 21 August 2019. As often happens in procurement disputes, the Claimant says that it has been given inadequate disclosure and information on a piecemeal basis as a result of which its case is still developing. The current iteration of the Claimant's claim is set out in Amended Particulars of Claim dated 11 November 2019, which were settled in the light of disclosure given in October 2019. Since then there has been further disclosure as a result of which the Claimant now wishes to re-amend the Particulars of Claim. In doing so it maintains that it is still not in a position to finalise its claim as it has not yet received information relating to Babcock's bid. The court is told that negotiations are underway to establish a confidentiality ring that will enable that information to be provided to the Claimant as appropriate.
There are two applications before the court. The first to be issued is the Defendant's application of 4 May 2020 which seeks to strike out the Claimant's claim, or parts of it, pursuant to CPR 3.4(2)(a) on the basis that it discloses no reasonable ground for bringing the claim; alternatively, that the Claimant's claim, or parts of it, should be struck out pursuant to CPR 4.3(2)(b) in conjunction with CPR 3.1(2)(k) on the grounds that it would be disproportionate to allow the claim (or parts of it) to proceed to trial; alternatively that summary judgment should be awarded to the Defendant on the whole or parts of the claim pursuant to CPR 24.2 on the basis that the Claimant has no real prospect of succeeding on the claim (or parts of it) and there is no other compelling reason why the case should be disposed of at trial.
The second application is the Claimant's application to re-amend the Particulars of Claim. By the end of the hearing the Defendant's position was that, if and to the extent that the existing claim survived the strike out application, re-amendments relating to the surviving parts would not be opposed.
Principles to be applied
Strikeout and summary judgment
The principles that are applicable to an application for summary judgment under CPR 24.2(a) are similar to those that apply to an application to strike out under CPR 3.4(a). They are conveniently summarised by Lewison J (as he then was) in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]. I bear them in mind throughout; but it is not necessary to set them out again here. For present purposes it is sufficient to note that “no real prospect of succeeding” means that the Court must consider whether the Claimant has a realistic as opposed to a fanciful prospect of success; however, in reaching that conclusion the Court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial.
In addition, the Claimant relies upon the following principles, which are not in doubt:
i) Where the pleadings show significant disputes of fact going to the existence and scope of the legal duties owed, the Court should only strike out a claim if it is certain that the claim is bound to fail: Hughes v Colin Richards & Co [2004] EWCA Civ 266 at [22];
ii) For a strikeout application to succeed it has to be plain and obvious on the face of the Particulars of Claim that the claim is bound to fail, and the strikeout regime should be used sparingly: Liconic AG v UK Biocentre Limited [2014] 8 WLUK 116 at [4].
CPR 3.4(2)(b) taken in conjunction with CPR 3.1(2)(k) is engaged when a statement of case is “an abuse of the court's process or is likely to obstruct the just disposal of the proceedings.” I accept the guidance of Jackson J (as he then was) in Atos Consulting Ltd v Avis Europe PLC [2005] EWHC 982 (TCC) at [18]–[19] that “a court will only strike out a statement of case pursuant to the second limb of rule 3.4.(2)(b) if the statement of case is such as to prevent the just disposal of the proceedings or, alternatively, such as to create a substantial obstruction to the just disposal of the proceedings.” Jackson J continued by saying that, short of that, “it is not appropriate for the court to step down into the arena and to tell either party how to plead its case.” This latter observation is to be taken in the context of the well-established and oft-repeated requirement that a statement of case must include “a concise statement of the facts on which the claimant relies”: see CPR 16.4(1)(a). It should not need repeating that pleadings “need not and should not, contain the evidence by which they are to be proved or the opposing party's pleadings or admissions”: see Hague Plant Ltd v Hague [2014] EWCA Civ 1609 at [76].
It is one of the recurring difficulties in procurement cases that claimants often have partial and inadequate information, a difficulty that is heightened by short and relatively inflexible periods within which to bring a claim in time. While recognising that difficulty, it does not relieve the pleader of the obligation to comply with normal principles of pleading: if anything it emphasises the need for skill and judgment to be exercised so as to achieve compliance. I would therefore add to Jackson J's observation that the court's case management powers when dealing with an inadequate pleading are not limited to striking all or part of it out: there may be circumstances where it is more appropriate to require the party to make good the deficiency rather than taking the draconian step of striking out. That said, I endorse without reservation that, ultimately, it is for the party to decide how it shall try to plead its case, provided it follows the well-known principles I have touched on above.
The Regulations
Pursuant to Regulations 51 and 5(2) a contracting authority such as the Defendant is under a duty to treat economic operators such as the Claimant and Babcock equally and in a non-discriminatory way and to act in a transparent way. The Claimant contends (but the Defendant does not admit) that in accordance with general principles of EU Law and/or Treaty Principles, the Defendant also owed it duties to act rationally, proportionately and in accordance with the principle of good administration. No submissions have been made about these non-admitted duties for the purposes of these applications and the Claimant has concentrated on the duties of equal treatment and transparency. For the purposes of the strikeout I assume that the existence of the other alleged duties is at least arguable.
The discretion to cancel or rewind a procurement
The Regulations recognise the existence of a discretion to abandon a procurement but do not give guidance on how that discretion should be exercised: see regulation 33(9). I summarised the broad principles that govern a contracting authority's discretion to cancel or rewind a procurement in Amey Highways Ltd v West Sussex County Council [2019] EWHC 1291 (TCC) at [12] and [59]. For present purposes it is sufficient to summarise them yet further: a contracting authority has a broad discretion in assessing the factors to be taken into account in deciding not to award a contract or to abandon or rewind a procurement. One circumstance in which it has been held to be lawful to abandon a procurement has been where the contracting authority discovers that the content of the Invitation to Tender (“ITT”) makes it impossible for it to accept the most economically advantageous tender, provided that, when it adopts such a decision, it complies with the fundamental rules of Community law on public procurement such as the principle of equal treatment.
Professor Arrowsmith suggests in her text, The Law of Public and Utilities Procurement at paragraph 7–321, that among the good reasons for deciding to begin again could be “where [the contracting authority] has made a mistake in the first procedure, such as omitting appropriate award criteria.”...
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