England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(MR JUSTICE BENNETT)

		Royal Courts of Justice Strand London, WC2A 2LL
		22 April 2005

1. LORD JUSTICE WALLER: I will ask Sir William Aldous to give the first judgment.
2. SIR WILLIAM ALDOUS: This is a renewed application by Cookson & Clegg Limited for permission to appeal. I say at the outset that in my view this is a case where permission should be granted, and therefore there is no necessity for me to deal at length with the issues that arise. However in outline the facts are these.
3. The applicants have for many years supplied clothing to the British armed forces. On 14 June 2003 the Ministry of Defence advertised its intention to seek tenders for supply of various types of military clothing over a five-year period under a contract known as a "call off" contract. Such a contract does not compel the Ministry to purchase a particular quantity of clothing in any particular period, but enables them to require supplies of two million items per year over a five-year period. The potential value of the contract was in excess of £50 million. It was therefore on important contract for the applicants.
4. The applicants were named with nine other companies on the shortlist of those invited to tender. They tendered, but on 21 June 2004 the Ministry informed them that the contract had been awarded to a company called Cooneen Watts & Stone Limited, who are joined as interested parties to these proceedings. Cooneen had not been on the shortlist as it was not in existence at the time; it was a joint venture company formed by two other companies.
5. On 6 July 2004 representatives of the applicants attended a debriefing meeting at which the Ministry explained why the applicants had not been awarded the contract. On 17 September 2004 the applicants started Part 7 proceedings against the Ministry. In their amended particulars of claim they allege breaches of the Public Supply Contracts Regulations. In summary, they allege first, that the award had been made to a company which was not on the shortlist; second, that past experience of the tenderers had been excluded; third, the contract was entered into without allowing a period for aggrieved tenderers to mount a legal challenge; fourth, that the decision was irrational and perverse. The Ministry has served a defence and the claim is proceeding to trial, which is expected to take place in October 2005.
6. On the same day as the claim was started the applicants applied for judicial review of the decision to award the contract to Cooneen. The application was refused on paper by Sir Michael Harrison on 16 November 2004. The application was renewed on 23 November 2004. It was refused by Bennett J, who give his reasons in writing on 21 January 2005.
7. The decision sought to be reviewed was that of the Ministry to award the contract to Cooneen.
8. The judicial review claim form sought, in essence, the same relief as was sought in the Part 7 proceedings. Because of the conclusion that I have come to I need not refer in any detail to the judge's judgment. However, the applicants sought permission to appeal. Their application was considered on paper by Sedley LJ and refused on paper. He said this:

"I consider that Bennett J was entitled to exercise the court's discretion as he did, and that his decision discloses no error of law. Thus the fact that he might (at least arguably) have granted permission and then consolidated the two proceedings, or have granted permission for [judicial review] and then stayed it pending the Part 7 decision, is of no consequence.

2. The endeavour to erect a public law case outside the Regulations seems to me artificial. The Regulations determine and so are coextensive of the parties' public law powers and rights. The content of procedural fairness is determined directly or by implication by the Regulations. An irrational decision by a public authority is in principle, I would have thought, a nullity in any forum: whether a quashing order can then issue is truly secondary.

3. This is not the kind of case in which damages would be insufficient compared with a public law remedy. It concerns losses on a potential commercial contract, whether these are quantified by pre-estimate or by periodical payments in parallel with calls-offs given to the eventual contractor. (Why HMG would prefer this to nullification or re-tender if it loses, I do not at present understand.)

4. To the extent that there are disputes of fact (see skeleton paragraph 13(1)), JR is actually the less appropriate route.

5. The contrast drawn with contracts worth less than £100,000 is relevant only if public law reaches parts which Part 7 proceedings cannot reach, and this - in the present context - I do not accept.

6. I am sorry that it was left to the MoD to draw the amendment to the Part 7 claim, allowed by the Master on the day judgment was given, to my attention. It reinforces the view reached Bennett J.

7. I would have been prepared to enlarge time had I considered an appeal viable."

9. Mr Bear, on behalf of the applicants, explained to us in outline that the dispute as pleaded was as to the factors taken into account by the Ministry, including whether they took into account past experience and whether time was given to enable the aggrieved tenderers to complain. As I have said, further complaint was made as the choice of the start up company over the applicants, and it is said that the decision was irrational.
10. Mr Bear submitted that the disputes between the parties could not necessarily be decided in the Part 7 proceedings, because the judicial review proceedings contained independent causes of action brought upon general principles of domestic law which would perhaps enable the applicants to obtain relief not available in the Part 7 proceedings. In particular, he drew to our attention Alcatel [1999] ECR I-7671, in which it was held that the remedy of setting aside the contract was one that a court perhaps could or should order. Mr Bear referred us to the amended defence of the Ministry in which they allege that the remedy to which the applicants are entitled, if they are right, is in fact damages, and there is no room in domestic law or community law for interfering with the vested contractual rights of a third party such as Cooneen. He says that in the Part 7 action, a quashing remedy might not be awarded. He submitted that damages may not be an adequate remedy in this particular case because of the difficulty which the applicants may have to establish that they would have obtained the contract if it had not been awarded to Cooneen. He drew attention to the type of contract that was awarded; it was a call off contract, and therefore was one which potentially could be determined if the facts were, as they may be, that Cooneen obtained their garments from China or elsewhere.
11. In those circumstances, he submitted that there may be a gap between relief that could be obtained in the Part 7 proceedings and the relief that he could obtain under the judicial review proceedings applying the decision in Alcatel. In those circumstances, he submits that the correct course is for the two proceedings to proceed. He accepts that they should be consolidated, and was not prepared to dispute the view, that I had formed, that in the Part 7 proceedings Cooneen are an interested party having regard to the relief that is sought, namely relief determining the contract. In those circumstances, the added time of hearing a consolidated action was very small indeed and the increase in costs was not significant. In those circumstances, he submits there is a real prospect of this court reversing the discretionary decision taken by Bennett J and therefore permission to appeal should be granted.
12. There clearly is considerable difficulties in the applicants' way, as was pointed out by Sedley LJ. However, I have come to the conclusion there is just sufficient for this case to be considered by the Full Court. I therefore would grant permission.
13. LORD JUSTICE WALLER: I agree.

(Application granted; time estimate half a day; to be heard by three judges, one of whom could be a High Court Judge; costs to be costs in the appeal).