Siemens Mobility Ltd v High Speed Two (HS2) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Eyre |
| Judgment Date | 14 October 2022 |
| Neutral Citation | [2022] EWHC 2451 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2022-000281 |
and
[2022] EWHC 2451 (TCC)
Mr Justice Eyre
Case No: HT-2022-000281
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Royal Courts of Justice
7 Rolls Building, Fetter Lane,
London, EC4A 1NL
Fionnuala McCredie KC, Ewan West, Fiona Banks and John Steel (instructed by Osborne Clarke LLP) for the Claimant
Sarah Hannaford KC, Simon Taylor and Ben Graff (instructed by Herbert Smith Freehills LLP) for the Defendant
Hearing date: 21 st September 2022
Approved Judgment
Introduction.
The Claimant is engaged, inter alia, in the manufacture and maintenance of railway rolling stock. The Defendant is a non-departmental public body responsible for developing, building, and operating the HS2 railway. From April 2017 the Defendant conducted a procurement exercise leading to the award of a contract for the supply and maintenance of very high speed railway rolling stock for that project. The Claimant was an unsuccessful tenderer in that exercise which resulted in the contract being awarded to a joint venture formed by the Interested Parties.
It is common ground that the procurement exercise was governed by the Utilities Contracts Regulations 2016 (“the Regulations”) and that the Claimant was an economic operator and the Defendant a utility for the purposes of the Regulations. When it was issued this claim was the latest in a series of claims in which the Claimant alleges breaches of the Regulations by the Defendant in the conduct of the procurement exercise. The first claim was issued on 18 th June 2021 and five further claims were issued before the current claim. Associated judicial review claims were issued alongside each of those claims. Those earlier claims have been consolidated and are set down for a sixteen-day trial beginning on 14 th November 2022.
The current claim was issued on 15 th August 2022. It will be necessary to analyse in some detail the nature of the claim being made but it suffices at this stage to say that the claim relates to alleged conflicts of interest arising from the involvement of Tim Sterry, Tom Williamson, and Bernard Rowell in the procurement process and to an alleged breach of the Tender Opening Evaluation Procedure (“the TOEP”) drawn up to govern assessment of the rolling stock tenders. The claim in relation to Mr Rowell has been abandoned and I will not refer to it save to the extent that it forms part of the Defendant's argument about the nature of the claim which was originally made.
Messrs Sterry and Williamson were formerly employed by the First Interested Party (“Bombardier”). They are members of and hold defined benefits under the Bombardier Transportation UK Pension Plan (“the Scheme”). There is dispute as to the proper analysis of how the claim was originally advanced but the Claimant's contention now is that membership of the Scheme gave rise to a conflict of interest which was not properly addressed.
A judicial review claim associated with this claim was issued on 16 th August 2022. However, at the time of the hearing before me that claim had not been transferred to the Technology and Construction Court and, for the reasons I explained briefly at the hearing, I accepted that it was not appropriate for me to consider the grant or refusal of permission in respect of that claim.
On 16 th September 2022 the Claimant issued a further claim also alleging a breach based on failure to address a conflict of interest. That is not before me though I note that the Defendant says that a finding that the current claim is out of time will inevitably mean that the further claim is also out of time.
The Defendant says that the Claimant knew or ought to have known that it had grounds for starting the current claim at the latest by the end of October 2021 or shortly thereafter and in any event more than 30 days before 16 th August 2022 with the consequence that the claim was not commenced within the 30 day period provided for in regulation 107. Accordingly, it applies for the claim to be struck out and/or for summary judgment.
The Claimant says that in relation to the conflict of interest element of the claim the knowledge which is relevant is the knowledge of Mr Sterry and Mr Williamson's membership of the Scheme and that it had neither actual nor constructive knowledge of that membership until receipt of the Defendant's solicitors' letter of 2 nd August 2022. In addition it says that the Defendant's actions in October 2021 gave rise to an estoppel by representation which precludes the current application. The arguments before me focused on the role of Mr Sterry and the provision of information about him. The parties proceeded on the footing that in terms of limitation the claim relating to Mr Williamson's involvement stood or fell with that in relation to Mr Sterry.
The outcome of the application in relation to that part of the claim will in very large part depend on my analysis of the nature of the breach being alleged in these proceedings. That will govern the matters of which the Claimant needed to have actual or constructive knowledge to start the 30 day time period running and those matters being identified it will then be necessary to consider when the Claimant first had knowledge of them.
The Claimant also contends that there was a failure to comply with the procedure laid down in the TOEP. That breach is said to have involved a failure to record the concerns which Mr Sterry had expressed in a WhatsApp exchange. Those concerns were as to whether the joint venture's tender met a mandatory requirement laid down by the Defendant. The Claimant says that those concerns should have been recorded in the Evaluation System and that the failure to do so was a breach of the TOEP. The claim in respect of that alleged breach is also said to be out of time with the Defendant contending that the Claimant had the requisite knowledge in April 2022.
In respect of the alleged breach of the TOEP there is no dispute as to the nature of the claim and it is not suggested that the alleged estoppel can assist the Claimant there. The issue will, accordingly, be when the Claimant had actual or constructive knowledge of the relevant matters.
If the Claimant is found to have had knowledge such as to start time running in respect of either claim more than 30 days before the issue of the claim a further question will arise. It will then be necessary to consider whether the claims amount to allegations of breaches of different obligations or to allegations of different breaches of the same duty. If the latter then both claims will be out of time if either of them is (or more precisely the 30 day period for both will start at the date the Claimant had knowledge of either) but if the former then they can survive separately from each other.
The Parties' Cases in Outline .
The Defendant says that the claim as originally advanced was based on a conflict of interest which was alleged to flow from the past employment of Messrs Sterry and Williamson with Bombardier. Although the Claimant has sought to change tack that was, the Defendant says, the breach alleged in the Particulars of Claim. The Claimant was aware of that previous employment and so of the relevant conflict of interest before October 2021 and in any event very substantially more than 30 days before the commencement of the proceedings. Even if the relevant conflict is that alleged to have derived from Messrs Sterry and Williamson's membership of the Scheme the Claimant was aware of that in October 2021 and even if the Claimant did not have actual knowledge of that membership it had constructive knowledge because it could and should have made in October 2021 the enquiries which it did make in July 2022. Those enquiries would have been answered then as they were in July 2022 and would have revealed such membership.
The Claimant says that the basis of the conflict of interest claim has throughout been that of a conflict derived from Messrs Sterry and Williamson's membership of the Scheme. The Claimant had no actual knowledge of that membership until it received the Defendant's solicitors' letter of 2 nd August 2022. It had no constructive knowledge at any earlier stage. That was because it was entitled to take the response it received in October 2021 at face value and to assume that further enquiries would not reveal any further conflict of interest. Alternatively, the Claimant asserts an estoppel. It says the Defendant's actions in October 2021 amounted to a representation that the documentation provided then was the only relevant conflict of interest documentation in respect of Mr Sterry and that Mr Sterry had no financial or other conflict of interest. The Claimant relied on that representation to its detriment by making no further enquiries and by not making any challenge to the procurement exercise based on such a conflict of interest. As a consequence it would be unconscionable for the Defendant now to assert that the Claimant had the relevant knowledge (either actual or constructive) at an earlier stage and the Defendant is estopped from making such a contention.
The Defendant says that by April 2022 at the latest the Claimant knew of the failure to record the concerns which Mr Sterry had expressed in the WhatsApp exchange. The Claimant had such knowledge because the WhatsApp messages were included in the Defendant's disclosure given on 1 st April 2022 in the proceedings then underway. The Claimant accepts that the messages were disclosed at that time but says that it was only after it had received and been able to consider Mr Sterry's witness statement in July...
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Siemens Mobility Ltd v High Speed Two (HS2) Ltd
...The strike out application came before Eyre J on 21 September 2022. On 14 October 2022 the Judge handed down judgment (reported at [2022] EWHC 2451 (TCC)), striking out Siemens' claim that HS2 failed to conduct the Procurement in accordance with the provisions of the TOEP, together with th......