High Court of Ireland Decisions

1. The Applicant commenced these proceedings by way originating Notice of Motion pursuant to Order 84(A) of the Rules of the Superior Courts (S.I. 374/1998) Rule 2 thereof dated the 8th March, 2001 seeking a review of an award of a contract on the grounds that the award of the same was in breach of the provisions of Council Directive 93/36/EC of 14th July, 1993, European Communities (Award of Public Supply Contracts) Regulations 1992 and European Communities (Award of Public Supply Contracts) (Amendment) Regulations 1994 and in breach of the legitimate expectation of the Applicant. In response to the originating Notice of Motion the Respondent on the 26th March, 2001 issued a Motion seeking to have the application struck out under the inherent jurisdiction of the Court on the basis that the Applicant’s claim cannot succeed. It is not, as I understand it, sought to rely on the Rules of the Superior Courts Order 27 which applies where no cause of action is shown or the proceedings constitute an abuse of the process of the Court. It is that motion which is before me.

2. The approach which the Court must take on an application such as the present was considered in Sun Fat Chan -v- Osseous Limited (1992) 1 IR 425. Unlike the situation which appertains in this application the Court in that case acted on admitted facts. However, I am satisfied that the jurisdiction to strike out arises not just when facts are admitted but also where the facts are clear and show that the claim is unsustainable. However, the Court should be slow to make an Order. McCarthy J. at p. 428 said:-

3. It has been agreed before me that if I find in favour of the Applicant upon any of the grounds relied upon by it as the basis of its claim in that I cannot say of that ground that it is bound to fail then I should allow the proceedings to continue in total and that the claim should proceed to the next stage envisaged by Order 84(A) - the Respondent to file a statement of grounds of opposition and the Applicant’s motion to proceed to hearing.

4. The circumstances giving rise to the claim are as follows. On the 25th July, 2000 the Respondent caused a notice to be inserted in the Official Journal of the European Union announcing a tender for hospital beds and accessories including mattresses. The Applicant is a manufacturer of mattresses and submitted a tender in response to and in compliance with the advertisement. The Applicants product was subjected to testing along with the products of other companies which took part in the tender process. Following on testing the Respondent issued a Best Buy Guide to Health Boards, hospitals and other similar institutions. Those institutions in turn placed orders with the successful tenderers including the Applicant some of the orders being placed before testing on the Applicant’s product was completed.

5. The Applicant claims that the Respondent abandoned the tender process in favour of a procedure whereby it issued a Best Buy Guide and further the Best Buy Guide as originally issued contained errors in relation to the Applicant’s product.

6. A major basis upon which the Applicants claim is attacked by the Respondent is that it claims not to be a contracting authority within the definition of Council Directive 93/36. Contracting authority is defined as follows in Article 1 of the Directive:-

7. The Respondent is not incorporated. The board consists of representatives of a number of Health Boards, voluntary hospitals, directly funded homes and a representative of the Department of Health and Children. It describes its function as an umbrella to enable Health Boards, voluntary hospitals and directly funded homes and other bodies to exploit economies of scale in the procurement of goods and services. It claims that it does not itself contract, the contract in each case being with the relevant body availing of its services. Thus in the present case while the tender was sought for mattresses what was envisaged was that on foot of the tender individual bodies would approach one or more of the successful tenderers for its requirements but without any obligation to do so: the tenderer on the other hand would have an obligation to supply. The advertisement inserted in the official journal makes this clear, it is claimed. The advertisement describes the awarding authority as follows:-

8. The contracting authorities therefore it is claimed, are the bodies on whose behalf the advertisement was inserted and they in turn are the appropriate Respondents.

9. I am not satisfied that the matter can be so simply disposed of. It is quite clear from the documents exhibited on the application that the decision as to whose tender should be accepted rested with the Respondent although those parties on whose behalf it is claimed the advertisement was placed have no obligation to purchase supplies from a successful tenderer. This arrangement could in my view arguably amount to a contract - the benefit obtained by the Applicant being placed on a list of successful tenderers from whom the bodies represented by the Respondent might purchase their supplies and the consideration moving from the Applicant being the expense incurred in submitting a tender and having its product tested. If some such contract should be found to exist at the hearing of the Applicant’s motion it would then be necessary to proceed and determine whether the contract so found comes within the definition of Public Supply Contract as defined in Council Directive 93/36/EEC:-

10. The contract which I have suggested might be found in the relationship between the Applicant and the Respondent is arguably within the definition of Public Supply Contracts. The contract is for pecuniary interest: the Respondent tells me that its function is to achieve economy of scale in purchases by Health Boards, voluntary hospitals and so forth. The contract involves the purchase of products: the definition arguably does not require that the purchase should be between the tenderer and the contracting authority. The expression “with or without option to buy” arguably refers to a situation such as that envisaged by the Respondents advertisement - the bodies which the Respondent represented were to have an option to buy from the successful tenderer but no obligation to do so.

11. Another possibility is that a tripartite agreement could be found the parties to the same being the Applicant, the Respondent and the bodies represented by the Respondent. In such a contract the Respondent again would arguably come within the definition of contracting authorities the contract being for pecuniary interest involving the purchase of products the bodies represented by the Respondent having an option but no obligation to buy from the Applicant.

12. The second objection raised by the Respondent is that no contract for the supply of beds was in fact awarded the procedure having at some point transformed into one whereby a Best Buy Guide was issued by the Respondent to the bodies which it represented from which they could select but without any obligation to do so. This objection presupposes that the only contract that could come into existence on foot of the advertisement was one between the Applicant and the bodies represented by the Respondent and not as I have postulated a separate contract between the Applicant and the Respondent and individual contracts to purchase between the bodies represented by the Respondent and the Applicant each time an order for the Applicant’s product should be placed. It is arguable that placing the Applicant’s list name and product on the Best Buy List.

13. In the Affidavit grounding this Motion the Respondents General Manager deposes that the Respondent has no corporate identity or legal personality and that accordingly it is not capable of suing or being sued. This proposition is not axiomatic. (See Superior Court Rules Order 14 Rules 1, 5, 10 and 11.) The Applicant may well be able to satisfy the Court on the hearing of the substantive motion that the Respondent is a partnership the partners being those individuals nominated by the bodies habitually represented by the board, to constitute the Respondent. Alternatively, the Respondent may be a trade name under which the various bodies which it represents carry on business so that those bodies are in fact liable for its defaults. In any event there is no bar to proceedings being instituted against the Respondent in the Respondent’s name.

14. I bear in mind the caveat of McCarthy J. quoted above: the full circumstances surrounding the Respondents involvement in the events given rise to this claim may not yet be before the Court. It is possible that discovery might bring further circumstances to light relevant to the determination of the issues which arise. Documents disclosed on this application are capable of persuading the Court that the Respondent acted as something more than a mere agent. The tender was based on a document - Instructions to Tenderers - which is informative in this regard. The Respondent is described as the awarding authority. The Respondent appropriates to itself many functions appropriate to a contracting party rather than an agent in the following paragraphs thereof:-

15. As against the foregoing paragraph 3.4 of the document corresponds closely in its description of the functions and relationships of the party with that deposed to on behalf of the Respondent. However, it is not inconceivable that on construing the document a Court might find the Respondent to be something more than a mere agent with no contractual liability.

16. Having regard to the agreement between the parties that if any part of the Applicants case survives examination on this motion the entire of the same should go to the next stage of the procedure laid down in Article 84(A) the foregoing, it seems to me, is sufficient to enable me to dispose of this motion. I am not satisfied that the Applicants case whether on agreed facts or on clear facts as established on the Affidavits must fail. Accordingly, I refuse to make an Order striking out the Applicant’s claim that being the relief which the Respondent seeks on this Notice of Motion.