The Secretary of State for Transport v Arriva Rail East Midlands Ltd (“Arriva”)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Sir Rupert Jackson,Lord Justice Newey |
| Judgment Date | 18 December 2019 |
| Neutral Citation | [2019] EWCA Civ 2259 |
| Date | 18 December 2019 |
| Docket Number | Case No: A1/2019/2091, A1/2019/2092, A1/2019/2093, A1/2019/2095 |
| Court | Court of Appeal (Civil Division) |
[2019] EWCA Civ 2259
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
MR JUSTICE STUART-SMITH SITTING AS A JUDGE OF THE ADMINISTRATIVE
COURT AND THE TCC
HT-2019-000158; HT-2019-000160; HT-2019-000173; HT-2019-000187
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Newey
Lord Justice Coulson
and
Sir Rupert Jackson
Case No: A1/2019/2091, A1/2019/2092, A1/2019/2093, A1/2019/2095
and
and
and
and
Rhodri Thompson QC, Fionnuala McCredie QC, Anneli Howard, Fiona Banks & Alfred Artley (instructed by DLA Piper UK LLP) for the Appellant
Philip Moser QC, Joseph Barrett & Jack Williams (instructed by Stephenson Harwood LLP) for Arriva
Tim Ward QC & Daisy Mackersie (instructed by Herbert Smith Freehills LLP) for SEMTL and SSETL
Jason Coppel QC & Patrick Halliday (instructed by Ashurst LLP) for WCTP
The Interested Parties did not appear and were not represented
Hearing dates: 20 th & 21 st November 2019
Approved Judgment
INTRODUCTION
The issue in this appeal is the applicable time limit for the bringing of claims arising out of a public procurement process which is not governed by the Public Contracts (and similar) Regulations. It raises the stark contrast between the 3-month time limit required for an application for judicial review, and the 6-year limit for a claim for breach of statutory duty provided by the Limitation Act 1980. It also raises an issue as to the correct approach to the 3-month limit where the public law issues arise not from a one-off decision, but an ongoing process.
The appellant is responsible for running competitions for rail franchises, including recent competitions for the East Midlands, South Eastern and West Coast rail franchises. The respondents are experienced train operating companies: where it is necessary to refer to them individually, I shall call them Arriva, SEMTL, SSETL and WCTP.
On 9 April 2019 the appellant notified Arriva and SEMTL that they had been disqualified from the competition for the East Midlands franchise; he notified SSETL that they had been disqualified from the competition for the South Eastern franchise; and he notified WCTP that they had been disqualified from the competition for the West Coast franchise. Subsequently, the respondents commenced both judicial review and proceedings under CPR Part 7 against the appellant, seeking to challenge their disqualification and make other claims – including claims for damages — consequential upon this public procurement exercise.
Following a contested case management conference 1, the judicial review proceedings were stayed and Stuart-Smith J (“the judge”) used the Part 7 proceedings as a convenient vehicle to address the various procedural issues that had arisen between the parties. On 1 st and 4 th July 2019, the appellant made applications to strike out various elements of the respondents' Part 7 claims. Those elements arise from what might neutrally be called the appellant's pension requirements. The appellant said that, despite the fact that these are Part 7 proceedings, those elements of the claims should have been brought within the 3-month time limit referable to judicial review proceedings, and that this time limit was triggered earlier than the disqualification letters of 9 April 2019.
In a judgment dated 31 July 2019, the judge refused to strike out those elements of the claims. Permission to appeal was granted on 5 September 2019. There is an underlying need for urgency because the trial of the issues arising out of the appellant's pension requirements is due to be heard by the judge in January 2020.
Accordingly, the principal issue which arises on this appeal is the applicable time limit in which these Part 7 claims should have been brought. The appellant maintains that the judge should have imposed a 3-month time limit by analogy with the procedure for judicial review in CPR Part 54, notwithstanding the fact that these are
Part 7 proceedings seeking private law remedies such as damages, declarations and injunctions. The respondents argue, and the judge found, that the applicable time period for these Part 7 claims (subject to potential exceptions, as explained below) was 6 yearsTHE BACKGROUND FACTS
The original invitations to tender (the “ITT”) were issued for the respective franchises as follows:
a) 29 November 2017 (South Eastern);
b) 27 March 2018 (West Coast);
c) 7 June 2018 (East Midlands).
The appellant calls the sending out of the ITTs collectively “Decision 1”.
The ITTs were sent out against a background of correspondence and dialogue between the appellant and the respondents (as existing train operating companies) about the need for an industry-wide solution to various pension issues, and in particular the possibility of a minimum 25% increase in technical provisions identified by the Pensions Regulator. The Regulator was carrying out a detailed investigation into these matters which was still ongoing as at June 2018. It is the respondents' case that, as a result of this, the ITTs did not provide sufficient clarity or certainty and that “the full scope of the pensions liabilities of a successful bidder arising as a result of the Pensions Regulator's investigation were unknown and unascertainable” (see paragraph 42 of SEMTL's Particulars of Claim).
The respondents submitted their tender bids during the period of the investigation by the Pensions Regulator. Some of the respondents suggest that they were asked to rebid on more than one occasion. However, for present purposes, the appellant's Re-Bid Instructions were:
a) 19 September 2018 (South Eastern);
b) 7 November 2018 (West Coast);
c) 9 November 2018 (East Midlands).
The Re-Bid Instructions were primarily concerned with changes to the appellant's pension requirements. The appellant calls these Re-Bid Instructions collectively “Decision 2”. It is the Respondents' case that the Pensions Regulator's investigation was still pending at the time of Decision 2 and that, in consequence, they “did not contain any firm indication of the total likely exposure of the winning bidder” (see paragraph 50 of SEMTL's Particulars of Claim).
In late 2018 the respondents considered the Re-Bid Instructions, and submitted updates to their tender responses, addressing (insofar as they felt able) the appellant's updated pension requirements. The precise nature of these responses was different in each case, but it appears clear that it was the nature of those responses to the pension requirements which led to the disqualification of each of the respondents on 9 April 2019. The appellant calls the disqualification decisions collectively “Decision 3”.
Proceedings were commenced as follows:
a) On 8 May 2019, Arriva issued its Part 7 proceedings in respect of the East Midlands franchise. On 22 May 2019, Arriva issued judicial review proceedings in materially identical terms.
b) On 8 May 2019, SEMTL issued its Part 7 proceedings in respect of the East Midlands franchise. On 31 May 2019, SEMTL issued judicial review proceedings in materially identical terms.
c) On 6 June 2019, SSETL issued its Part 7 proceedings in respect of the South Eastern franchise. On 7 June 2019, SSETL issued judicial review proceedings in materially identical terms.
d) On 23 May 2019 WCTP issued its Part 7 proceedings. On 3 June 2019, WCTP issued judicial review proceedings in materially identical terms.
It will therefore be noted that each of the eight sets of proceedings with which this litigation is concerned was commenced within three months of the disqualification letters of 9 April 2019 (Decision 3). However, as explained below, the focus of the appellant's application is the respondents' pleaded complaints about Decisions 1 and 2. No proceedings of any kind were issued within 3 months of either of those earlier decisions (if that is what they were). That is at the focus of the appellant's application to strike out. It is therefore necessary to look in a little more detail at the individual pleadings.
THE PLEADED CLAIMS
Arriva's Claims
Arriva's claim is in respect of the East Midlands franchise. Arriva plead that the appellant was in breach of his various obligations in respect of the procurement, and expressly state at paragraph 103 of their Particulars of Claim that the appellant's conduct of the procurement was unlawful. The pleaded breaches run from paragraphs 104 – 121. Within those breaches are various allegations in relation to the ITT and the Re-Bid Instructions, primarily in respect of the pension requirements.
As to the relief claimed, Mr Moser QC made plain that Arriva's basic claim was for damages. He said he was “relaxed” about Arriva's other claims for discretionary relief, such as the claim for a declaration that the competition was unlawful and a declaration that, if he had acted lawfully, the appellant would have determined that Arriva should have been awarded the East Midlands franchise....
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