Brookhouse Group Limited v Lancashire County Council

For a declaration of ineffectiveness under the Public Contract Regulations 2015, the six-month period is the longstop unless one of the specific routes to a 30-day period applies.

Regulation 93(5) requires both notification of the contract’s conclusion and a summary of the relevant reasons. Those reasons are defined by reference to regulation 55(2), which concerns information owed to a candidate or tenderer following a competitive procurement procedure. A contracting authority cannot trigger the shorter period merely by explaining, in response to a letter before claim, why it considered that no competition was required. Where the limitation issue is a short and sufficiently clear point of law, it may be determined summarily. The limitation defence was struck out.

Brookhouse Group Limited and Lancashire County Council were co-owners of land forming the Cuerden Strategic Regional Investment Site. The Council entered into a development agreement with Maple Grove Developments Limited, a wholly owned subsidiary of Eric Wright Group Limited, under a 2012 strategic partnering agreement.

Brookhouse sought a declaration of ineffectiveness under regulation 98(2) of the Public Contract Regulations 2015, alleging that the development agreement had been awarded without the required procurement procedure or contract notice. The Council pleaded that the claim was out of time because its response to Brookhouse’s letter before claim had supplied the relevant reasons under regulation 93(5). It also sought strike out or summary judgment.

The central issue was whether regulation 93(5) could apply where no competitive tendering procedure had been conducted before the contract was awarded.

1. The Council’s limitation defence was struck out. The Council’s application to strike out the claim or obtain summary judgment was dismissed.

2. On a strike-out or summary-judgment application concerning limitation, the court should not conduct a mini-trial or resolve disputed facts requiring oral evidence. However, it should determine a short point of law or construction where the evidence is sufficient and the claim is bound to fail on that issue. Any genuine doubt is resolved in favour of the claimant. The approach stated in Sita UK Ltd v Greater Manchester Waste Disposal Authority was adopted.

3. Regulation 93 establishes a six-month longstop for claims seeking a declaration of ineffectiveness. The 30-day period in regulation 93(2)(a) applies only where regulation 93(3) or regulation 93(5) is engaged.

4. Regulation 93(5) requires notification of both the conclusion of the contract and a summary of the relevant reasons. Regulation 93(6) defines those reasons by reference to the reasons which an economic operator would have been entitled to receive under regulation 55(2).

5. Regulation 55 operates in the context of a competitive tendering procedure. Its relevant information is owed to a candidate or tenderer, as those terms are defined in regulation 2, and concerns specified matters such as rejection of participation or tenders, the characteristics and advantages of the successful tender, or the conduct of negotiations or dialogue. It does not extend to a person who was neither a candidate nor a tenderer and who seeks reasons why no competition was conducted.

6. The Council’s letter of 22 September 2022 was a response to a letter before claim. It was not a summary of relevant reasons within regulation 93(5). The letter did not relate to any of the matters specified in regulation 55(2), and the absence of a candidate or tenderer was independently fatal to the limitation defence.

7. The language of the regulations was clear and unambiguous. The legislative purpose did not justify extending regulation 93(5) beyond its terms. Orthodox principles of statutory interpretation require the court to identify the meaning borne by the words used in their statutory context.

The parties were directed to draw up and agree a suitable order.

Not an appeal. The judgment determined the claimant’s strike-out application and the defendant’s cross-application at first instance.