R Faraday Development Ltd v West Berkshire Council St Modwen Developments Ltd (Interested Party)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holgate |
| Judgment Date | 26 August 2016 |
| Neutral Citation | [2016] EWHC 2166 (Admin) |
| Docket Number | Case No: CO/5673/2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 26 August 2016 |
and
[2016] EWHC 2166 (Admin)
The Honourable Mr Justice Holgate
Case No: CO/5673/2015
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Charles Banner and Ms Heather Sargent (instructed by DAC Beachcroft) for the Claimant
Mr David Elvin QC and Luke Wilcox (instructed by Bond Dickinson) for the Defendant
Hearing dates: 5–7 July 2016
Approved Judgment
Introduction
Faraday Development Limited ("Faraday") challenges the decision of West Berkshire District Council ("WBDC") on 4 September 2015 to enter into a Development Agreement ("DA") with the Interested Party, St Modwen Developments Limited ("SMDL") "to facilitate the comprehensive regeneration" of an area of land at the London Road Industrial Estate, Newbury, Berkshire ("LRIE") of which WBDC is the freehold owner.
The challenge has been made in two sets of proceedings. First, a claim for judicial review was issued on 20 November 2015. Initially, Faraday pursued two grounds:-
(1) WBDC failed to have regard to and/or to comply with its duty under section 123 of the Local Government Act 1972 ("LGA 1972"), to obtain the best consideration reasonably obtainable for the disposal of interests in its land and for the same reason WBDC made an impermissible grant of state aid to SMDL contrary to Article 107 of the Treaty on the Functioning of the European Union ("TFEU");
(2) The DA is a "public works contract" and/or a "public service contract" within the meaning of the Directive 2014/24/EU (which is transposed into English law by the Public Contracts Regulations 2015 ("the 2015 Regulations") and therefore WBDC's decision not to comply with the public procurement regime in that legislation was unlawful.
As regards ground (1) Mr Banner, who together with Ms Sargent appeared on behalf of the Claimant, stated that if the challenge relating to section 123 fails, the "state aid" challenge falls away. Because in the circumstances of this case the Claimant did not consider the "state aid" point to add anything of significance to its challenge, neither party made any submissions on that aspect and I am not asked to deal with it.
On 24 March 2016 Mr Justice Gilbart granted permission to apply for judicial review.
On 13 May 2016 Faraday applied for permission to rely upon an additional ground of challenge. On 17 May 2016 Mr Justice Cranston granted that permission. In its final form the additional ground of challenge is:-
(3) The Council in entering into the DA deliberately sought to avoid imposing any directly or indirectly enforceable obligation on SMDL to carry out or procure works on the LRIE, so as to avoid the public procurement regime, on the basis that this would increase market interest in the DA. That was irrational because it was founded on (i) a misunderstanding of the advice given to WBDC by its experts Strutt & Parker, and/or (ii) a fundamental misconception of the public procurement regime.
Pleadings have been amended on both sides. The parties have since consolidated their respective arguments in skeletons filed for the substantive hearing. In its skeleton argument the Claimant has also updated the factual account upon which it relies from the Amended Statement of Facts and Grounds.
On 22 January 2016 Faraday issued a second claim in the Technology and Construction Court. This claim challenged WBDC's decision to enter into the DA under Part 6 of the 2015 Regulations. It raised the same issue as ground 2 of the judicial review, but was brought in order to avoid any dispute as to whether Faraday's proper remedy in relation to that ground was by way of judicial review or a statutory claim made under Part 6 of the 2015 Regulations. A Part 6 claim could only have been made in this case by an "economic operator" (as defined in regulation 2(1)) to whom the "contracting authority" owed a duty. But where that remedy is not available, a breach of the 2015 Regulations may form a legitimate ground for judicial review ( R (Chandler) v Camden LBC [2010] PTSR 749 at paragraph 77). Thus, it was common ground that it is unnecessary for the Court to determine whether Faraday qualifies in this case as an "economic operator" in order to bring a claim under Part 6 of the 2015 Regulations. On 9 February 2016 Mr Justice Edward-Stuart ordered the Part 6 claim to be transferred to the Administrative Court to be heard together with the judicial review. At the hearing before me neither party raised any issue needing to be dealt with specifically under the Part 6 claim and it was common ground that nothing more need be said about it in this judgment.
Although the object of the skeleton argument for Faraday was to consolidate the Claimant's arguments it was nevertheless 64 pages long and accompanied by a summary. Ground 1 itself was subdivided into eight sub-grounds 1A to 1H. The Claimant also produced a prodigious amount of evidence, notably four witness statements and an affidavit by Mr Duncan Crook (a director of and major shareholder in Faraday) taking up some 52 pages or so of closely typed text. Much of this material was unnecessary or inappropriate. Mr Crook's statements went way beyond setting out the essential facts of the claim and producing relevant documents. For example, he offered an extensive commentary on the documents (see also his exhibit DC1, document 43). As was pointed out by the Chancellor Sir Terence Etherton in JD Wetherspoon plc v Harris [2013] 1 WLR 3296 (paragraph 39), it is generally not the function of a witness statement to provide a commentary on the documents in a trial bundle, especially where the points made are essentially matters for legal argument or submission. Much of Mr Crook's commentary on documents overlapped with points taken in the Claimant's skeleton argument, but it also raised additional observations not relied upon in the skeleton. That approach created unnecessary uncertainty for WBDC and for the Court as to the scope of Faraday's case. For that reason I asked Mr Banner to identify whether there were any additional points in Mr Crook's material upon which the Claimant would wish to rely, failing which they would not be dealt with in this judgment. He told me that there were none.
Unfortunately, important sections of Faraday's skeleton argument did not indicate which particular documents or passages are relied upon to support the legal criticisms being made of WBDC. However, I am grateful to Faraday's counsel for producing during the hearing two succinct documents, "Claimant's key references" and "Reply", which not only identified the specific materials relied upon but also refined the legal criticisms of WBDC very considerably. For example, it became clear that Grounds 1A to H now largely turn upon Grounds 1D and 1E. It would have been of even more assistance to the Court if this process of refinement had been carried out at an earlier stage, especially when the skeleton argument was being prepared.
I am bound to add that despite the prolixity of Faraday's material, the references it made to certain parts of the documentation (for example in the skeleton argument) were somewhat selective. There was a failure to deal with other passages which tended to undermine certain of the criticisms being made against WBDC. This unfortunate lack of objectivity meant that Faraday pursued some sub-grounds unnecessarily before they were sieved out, or reduced, in its written submissions produced during the hearing.
On the first day of the hearing I drew Mr Banner's attention to the inclusion of opinion evidence in parts of the witness statements relied upon by the Claimant, notably those of Mr Crook. Generally evidence of this kind can only be given by an expert acting within the scope of his expertise. Furthermore, it is generally a pre-requisite for the giving of expert opinion evidence that the expert in question is independent and impartial. ( The Ikarian Reefer [1993] 2 Lloyd's Rep 68; Kennedy v Cordia (Services) LLP [2016] 1 WLR 597 paragraphs 51–52). It was not suggested on behalf of the Claimant that Mr Crook had the necessary degree of independence to be able to proffer expert opinion evidence, for example, on the satisfaction of the duty under section 123 (see his first witness statement and paragraph 36 of his fourth witness statement), or on whether, in the absence of regeneration, WBDC's rental income was at risk in the longer term (see paragraphs 6 to 8 of his fourth witness statement). I also note that the Claimant's Solicitor, Mr Kelly, gave his opinion on non-legal matters to do with valuation practice (see paragraphs 34 to 37 of his second witness statement). The rejection by Mr Justice Cranston on 17 May 2016 of a late attempt by the Claimant to adduce expert evidence (see the Application Notice dated 13 May 2016) may perhaps explain this attempt to include such material in the witness statements for the Claimant dated 10 June 2016. Fortunately, I need say no more about this inappropriate material, as it did not form any part of the more refined contentions which Mr Banner put forward during the hearing both orally and in writing. However, it is unfortunate that these arguments were not refined or focused at an earlier stage so as to make it unnecessary for such material to be prepared or read.
The remainder of this judgment deals with matters under the following headings:
(i) Factual background (paragraphs 12 to 21);
(ii) Local planning...
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