The Central Tenders Board and another v White (trading as White Construction Services) (Montserrat)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Toulson |
| Judgment Date | 06 October 2015 |
| Neutral Citation | [2015] UKPC 39 |
| Date | 06 October 2015 |
| Docket Number | Appeal No 0082 of 2014 |
| Court | Privy Council |
[2015] UKPC 39
Lord Kerr
Lord Hughes
Lord Toulson
Appeal No 0082 of 2014
Privy Council
From the Court of Appeal of the Eastern Caribbean Supreme Court (Montserrat)
Appellants Karen Reid Sheree Jemmotte-Rodney
(Instructed by Alan Taylor & Co)
Respondent (Acting Pro Bono) David di Mambro Wendy Mathers
(Instructed by Bankside Commercial Ltd)
Heard on 10 June 2015
The Central Tenders Board ("the CTB") is part of the Ministry of Finance, Economic Development and Trade of Montserrat. The other appellant, the Attorney General, was not a necessary party to the proceedings and appears to have been included as a matter of formality.
The CTB appeals against a decision made by the High Court, and upheld by the East Caribbean Court of Appeal, that it was in breach of a building contract made with the respondent, Mr Vernon White (trading as White Construction Services). The trial judge, Benjamin J (Ag), ordered that Mr White should recover compensation to be assessed in default of agreement.
The CTB's defence to Mr White's claim was that it acted ultra vires in failing to comply with proper procedures for the procurement of goods or services by tender, and therefore that the contract was void.
On behalf of the CTB, Ms Karen Reid informed the Board that the government was pursuing the appeal in order to obtain guidance about how it should proceed when confronted with issues about non-compliance with public law requirements in the area of awarding contracts, in particular, the requirement of equal treatment of tenderers. She referred in this context to the judgment of Lord Reed in Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49, [2014] 4 All ER 210, para 14. That case concerned European law requirements regarding procedures for awarding public works contracts, but there is no dispute as a general principle of public law that tenderers for public contracts should be afforded fair and equal treatment.
The present contract was for the erection of a school hall. Tenderers were supplied with a tender form, drawings, specifications, conditions of contract (based on a standard form), and bills of quantities. The instructions to tenderers required the completed form of tender to be submitted with the tenderer's schedule of labour rates, schedule of material prices, schedule of construction equipment, list of proposed sub-contractors, construction programme and priced bills of quantities. It was stated that failure to comply strictly with such instructions "is liable to cause your tender to be rejected".
The instructions to tenderers also included the following statements:
i) "The time for completion for the complete contract is to be determined by the tenderer in the Form of Tender."
ii) "The Employer, Government of Montserrat, does not bind itself to accept the lowest or any tender."
iii) "Errors discovered in the Contractor's Tender will be dealt with as follows:
The Contractor will be given details of such errors and afforded an opportunity of confirming or withdrawing his offer. If the Contractor withdraws, the tender of the second most advantageous tenderer will be examined, and if necessary this Contractor will be given a similar opportunity."
iv) "The Tenderer to whom the award is made will be required to enter into an agreement with the Employer. This agreement will be of the form that is in the Tender Documents."
v) "The party to whom the Contract is awarded will be required to execute the Contract and (if required) furnish the Performance Bond duly executed within seven days, not including Sunday or Legal Holiday. Failure so to execute the Contract shall be sufficient reason for the Architect to cancel the award without obligation or claim upon the Employer."
Tender documents were issued to six contractors and were to be returned by 28 October 2011. Mr White submitted his tender on that date. It began:
"I/We, the undersigned, having examined the bills of quantities and tender drawings referred to therein do hereby offer to execute and complete in accordance with the conditions of contract the Works – Construction of Lookout School Expansion, Building 6 – New Multi Purpose Hall; the works described for the sum of [offer price in words] (EC$2,227,537.77) and completed in … working weeks from the date of the notice to commence."
The number of working weeks was left blank.
Tenders were received from four other contractors. The five tenders were opened publically and sent to a technical team for evaluation. Mr White was the lowest tenderer. The technical team reported on his tender that no errors were found in the measured works or in the preliminaries and that the form of tender including its appendix was properly prepared and priced. In a comparative summary of the tenders, the duration of Mr White's construction programme was shown as 55 weeks. The team recommended that his tender should be accepted.
The tenders were considered at a meeting of the CTB on 16 November 2011. Concern was raised that Mr White had not shown the time for completion in his letter of tender. The chairman said that he had asked the Permanent Secretary to obtain legal advice from the Attorney General, but the government architect told the meeting that the duration was shown in a different document which formed part of the tender. (In fact, Mr White's construction programme contained a slight ambiguity, because on different lines it showed the overall duration as "275 days?" and "273 days?". On the basis of a five day working week, 275 days equated to 55 weeks.) The CTB then accepted the technical team's recommendation.
On 24 November 2011 the chairman of the CTB wrote to Mr White stating:
"This is to advise you that your tender submission in the amount of [offer price in words] (EC$2,227,537.77) has been successful."
On 25 November 2011 the managing director of the next lowest tenderer wrote a letter of complaint to the CTB that Mr White's tender had been accepted although it failed to state the time for completion. The writer argued that there had been four tenders which complied with the tender request, and that the contract should have been awarded to his company. The chairman of the CTB sought legal advice.
In the meantime there was correspondence between the government architect and Mr White about arranging a meeting for the execution of contract documents, but it was postponed by the CTB from time to time. There was also inconclusive discussion between the parties about Mr White's liability for customs duty on materials used in the construction of the building. Mr White was unhappy with certain parts of the standard form of contract wording, which he saw as being inconsistent with the government's usual practice in relation to customs duties and government contracts.
In a letter dated 22 March 2012 the chairman of the CTB wrote to Mr White:
"Please be advised that the award of the above tender was challenged and the Central Tenders Board is advised that the tender was non-compliant. The Central Tenders Board on reviewing the tender confirmed that the tender failed to comply with instructions to tender and is accordingly non-compliant. In this regard the tender failed to comply strictly with [the requirement that the time for completion was to be determined by the tenderer in the form of tender].
This is to inform you therefore that the award of the contract to your company has been withdrawn."
Mr White promptly issued legal proceedings in the form of a judicial review application against the CTB and the Attorney General. Since the foundation of the claim was that the CTB had acted in breach of contract, it would have been simpler and more appropriate to bring an ordinary claim for breach of contract. But that is of no consequence, apart from perhaps causing a degree of unnecessary complication, because Mr David di Mambro (to whom with his junior, Ms Mathers, the Board is indebted for representing Mr White pro bono) pointed out that under the Eastern Caribbean Supreme Court Civil Procedure Rules 2000, Part 56.1, the court may grant damages on an application for judicial review, in addition to or instead of an...
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