Cambrian Offshore South West Limited, R (on the application of) v Norfolk County Council

A reasons challenge requires the claimant to show genuine substantial prejudice caused by inadequate reasoning. Where the disputed issue is one of law, a public authority’s later explanation may be relevant if the claimant can still identify and challenge the legal basis of the decision. Matters alleged to be irrelevant considerations remain relevant where they bear on conflicts of interest and procurement integrity, even if the claimant disputes their factual accuracy. An expectation arising from initial reimbursement cannot override express audit and clawback provisions. A claim to further funding does not automatically constitute a possession for the purposes of Article 1 of Protocol 1.

The claimant sought judicial review of the defendant’s decision not to reimburse £1,372,405 claimed under a grant agreement for a tidal-energy project. The decision relied on alleged procurement failures, conflicts of interest and unlawful contractual variations involving a related contractor.

The court considered seven pleaded grounds, including inadequate reasons, the applicability of ESIF procurement requirements, the classification of the contract as works or services, irrelevant considerations, legitimate expectation and Article 1 of Protocol 1. Permission had previously been directed for specified grounds, and the court determined which grounds were reasonably arguable.

1. Ground 1. The reasons challenge was not reasonably arguable. The decision letter clearly explained the decision, and the claimant was aware of the defendant’s position on the ESIF requirements. The claimant therefore suffered no genuine substantial prejudice. The principle in South Buckinghamshire District Council v Porter [2004] 1 WLR 1953 was applied. The concern against ex post facto rationalisation did not apply to a question of law, on which the defendant was simply right or wrong.
2. Grounds 2 and 5. It was arguable that the relevant provisions of the Interreg Programme Manual and ESIF requirements did not apply. The issue depended on the construction of the contractual and programme documents, potentially informed by the factual matrix. Ground 5 stood or fell with Ground 2 and remained partly relevant to the correction applied to the original contract value.
3. Ground 3. It was arguable that the contract was a public works contract rather than a public services contract. The issue required construction and application of regulation 2 of the Public Contracts Regulations 2015, read with Schedule 2 and regulation 4. The court was reluctant to decide the issue without fuller argument.
4. Ground 4. The challenge based on irrelevant considerations was not reasonably arguable. The matters relied upon by the defendant concerned the procurement and conflicts of interest and were plainly relevant. The claimant’s real complaint was factual inaccuracy, not irrelevance. The defendant had made reasonable inquiries, and the contemporaneous involvement of the procurement consultant with both companies gave rise to an inescapable perception of conflict.
5. Ground 6. No enforceable substantive legitimate expectation arose from reimbursement of the first invoices. The express grant arrangements permitted later audit, financial correction and recovery of expenditure. An implied promise that future payments would continue regardless of later auditing or legal concerns would be inconsistent with those terms. The factual foundation for unfairness or abuse of power was also absent.
6. Ground 7. Permission was refused. The claimant had not shown how its claim to further sums constituted a possession protected by Article 1 of Protocol 1, and the ground was premature in any event.

Permission was granted on Grounds 2, 3 and 5, and refused on the remaining grounds.