R (Veolia ES Nottinghamshire Ltd) v Nottinghamshire County Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cranston |
| Judgment Date | 01 October 2009 |
| Neutral Citation | [2009] EWHC 2382 (Admin) |
| Docket Number | Case No: CO/7514/2009 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 01 October 2009 |
[2009] EWHC 2382 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Before: MR JUSTICE CRANSTON
Case No: CO/7514/2009
Philip Coppel QC (instructed by Reynolds Porter Chamberlain) for the Claimant
Michael Supperstone QC and Ian Rogers (instructed by Nottinghamshire County Council) for the Defendant
Timothy Pitt-Payne (instructed by Friends of the Earth Rights and Justice Centre) for the First Interested Party
Peter Oldham (instructed by Audit Commission In-house solicitors) for the Second Interested Party
Hearing date: 25 August 2009
Mr Justice Cranston:
INTRODUCTION
Mr Dowen, the First Interested Party, has applied to inspect and make copies of certain documents which relate to a waste management contract between the claimant, Veolia ES Nottinghamshire Ltd (“Veolia”), and Nottinghamshire County Council (“the Council”). Having taken legal advice, the Council considers that it must allow him access to the documents. Veolia have instituted these proceedings to compel the Council to keep the documents confidential. The issue before me is whether these documents, in their entirety, fall within the statutory right of inspection and copying under section 15(1) of the Audit Commission Act 1998 (“the 1998 Act”). In particular do they fall within the category of “books, deeds, contracts, bills, vouchers and receipts”“relating to”“the accounts to be audited” of the Council for the purposes of that section? The issue which arises in this case has not been the subject of previous case-law.
BACKGROUND
The parties
Veolia is a waste management company. It holds a contract with the Council for waste management (“the Contract”). The Contract was made on 26 June 2006. Veolia submits monthly invoices to the Council for work done under the Contract. The First Interested Party, Mr Dowen, is a local elector in the area of the Council. The Second Interested Party, the Audit Commission for Local Authorities and the National Health Service in England (“the Audit Commission”), is constituted under the 1998 Act. Its functions include regulating the proper control of the public finances of local authorities through audit.
Mr Dowen's application and Veolia's challenge
The Council prepared a statement of accounts for the year ended 31 March 2009. By notice in various local newspapers, the Council notified the public that the accounts “together with all books, deeds, contracts, bills, vouchers and receipts relating to them” were to be open for public inspection at the County Hall from 29 June to 24 July 2009. The notification also advised that from 27 July 2009, until the auditor completed auditing the accounts, a local elector could ask the auditor questions about the accounts and could make objections to anything about which the auditor could take action or make a report under the relevant legislation. On 29 June 2009 Mr Dowen applied to the Council to inspect and take copies of documents open to inspection, including all books, deeds, contracts, bills, vouchers and receipts relating to waste management in the area of the Council.
On 2 nd July 2009 Veolia wrote to the Council, asking the Council to take detailed legal advice and to liaise closely with it before disclosing any documents relating to the Contract, other than documents already disclosed with Veolia's consent in response to freedom of information requests. On 3 rd July 2009 the Council wrote to Veolia informing it that it proposed to make the disputed documents available for inspection. It is the decision in the 3 July 2009 letter which Veolia challenges by these proceedings. It seeks to prevent the Council from disclosing the disputed documents, save in heavily redacted form.
The disputed documents comprise schedules 6A, 6B, 6C and 7 to the Contract; monthly invoices submitted by the claimant to the Council in respect of work carried out under the Contract; and schedules to the invoices which particularise the sums payable. Schedule 6A sets out the various formulae, some with many variables, according to which payments under the Contract are made. Schedule 6B provides for deductions in amounts payable in the event of default by Veolia. Schedule 6C is, in effect, a performance scorecard. As for Schedule 7, it is integral to the calculation of those deductions in setting out the key performance indicators by reference to which some deductions are made. The invoices include schedules which set out the individual items under the Contract for which payment is to be made, the rate for each such item, the quantity of that item claimed for that month and the resultant total for that item.
Veolia contends that these documents constitute valuable information which it supplied to the Council on a confidential basis. It does not want information disclosed to Mr Dowen or otherwise to enter the public domain. It contends that the information is valuable to commercial competitors and to its sub-contractors under the Contract. Were any of that information to enter the public domain it would damage its ability to compete on bids with other local authorities and it would impair its ability to hold down sub-contract prices on the Contract.
The Contract
The Contract between Veolia and the Council is entitled “Waste Management PFI. Project Agreement. Contract A”. Part of it has been disclosed on the Council's website as a result of freedom of information requests. The decision to publish was taken by the public interest panel of the Council, following input from Veolia.
The recitals to the Contract record that local authorities have targets for recycling and landfill obligations; that the Council wishes to procure the services of a private sector contractor to provide waste management functions to enable it to meet its targets and fulfil its obligations; that the Council tendered the contract in accordance with the Public Services Contracts Regulations 1993 and selected Veolia “as the most economically advantageous tenderer to provide the services”; and that the parties consent to the contract being certified under the Local Government (Contracts) Act 1997.
The Public Services Contracts Regulations 1993, SI 1993 No 3228, to which the recitals refer, implement Council Directive 92/50/EEC (OJ NO L209, 24.7.92, p.1) relating to the coordination of procedures for the award of public services contracts. In essence, for what are called Part A services contracts, the regulations require that the process be open and the intention to seek offers be published in the Official Journal of the European Union. Part A services contracts must be awarded on the basis either of the offer which delivers the lowest price or the one which is the most economically advantageous. Among the purposes of the Local Government (Contracts) Act 1997 is to enable councils to certify long-term service contracts, giving a safe harbour from legal challenge except by judicial review or audit review.
Part One of the Contract, Preliminary, includes a definition of indexation, which is in accordance with the mechanism set out in schedule 6A to the Contract. Clause 7 is the substantive clause for certification of the contract under the Local Government (Contracts) Act 1997. Part Two of the Contract, Design and Works, covers Veolia's responsibilities regarding the construction of works under the Contract. Part Three addresses the services which Veolia is to provide in terms of recycling and waste management. Its performance is to be monitored by the Council (clause 61).
“Payment Provisions” is Part Four of the Contract. In brief the Council pays the unitary charge in respect of each payment period calculated in accordance with schedule 6. Subject to the provisions of schedule 6A the Council must pay the amount of any invoice submitted within 28 days of receipt. By clause 78 Veolia acknowledges that the Council is subject to a best value duty and that the clause is designed to assist the Council fulfil that duty. Thus under clauses 78.2 and 78.3, Veolia must make arrangements to secure continuous improvement in the way in which the services are provided, having regard to a combination of economy, efficiency and effectiveness. Veolia undertakes, or will refrain from undertaking, actions which the Council might reasonably request to enable it to comply with that best value duty. Veolia also agrees to permit a best value inspector to have access to sites and facilities, to documents and data, and to subcontractors, agents or employees (clause 78.3.4). At its own cost Veolia must provide an annual services report to address best value and must promptly prepare such written evidence and other supporting information as the Council may reasonably require to verify and audit the material in the Annual Services Report.
Under Part Six of the Contract, Performance and Change, the parties undertake to use their reasonable endeavours to operate on an “open book” basis and to provide access to information as is required to fulfil their respective obligations. Part Eight contains an obligation on Veolia's part to cooperate fully and in a timely manner with any reasonable request of any internal or external auditor of the Council (clause 114). The confidentiality obligation is contained in clause 123, coupled with Schedule 45. It provides that certain...
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