Glenman Corporation Ltd v Galway City Council

• Jurisdiction: Ireland
• Judge: Mr. Justice Twomey
• Judgment Date: 20 June 2023
• Neutral Citation: [2023] IEHC 336
• Court: High Court
• Docket Number: Record No. 2023/296 JR

Between

Glenman Corporation Limited

Applicant

and

Galway City Council

Respondent

[2023] IEHC 336

Record No. 2023/296 JR

THE HIGH COURT

COMMERCIAL

JUDGMENT OF Mr. Justice Twomey delivered on the 20th day of June, 2023

INTRODUCTION

1 . This case involves a legal challenge that could lead to a potential delay, of up to two years, in the building of 58 homes in Galway on behalf of Galway City Council (“ Council”). The Council say that this delay will occur if this Court permits a building company (“ Glenman”) to bring a judicial review, after the deadline has expired, to challenge its exclusion from the tender for this public contract.

2 . The contract is worth €10 million and is for the completion of social housing units, which are intended to house 245 people in Ballybaan More, Galway (the “ Project”), where there is a 10-year waiting period for social housing.

3 . The contract in this case is for the ‘completion’ of the housing units, as the Council terminated the previous contract (“ Previous Contract”) that it had with Glenman for the works. This Council therefore sought tenders for the current contract (“ Current Contract”) for the completion of the works, which Glenman had started. However Glenman, in seeking to challenge its exclusion from this tender, failed to issue proceedings within the 30-day time-limit, imposed under Regulation 7(2) of S.I. No. 130 of 2012 European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (“ 2010 Regulations”).

4 . The Council claims that if Glenman is permitted by this Court to issue these proceedings some two months after the expiry of the 30-day time-limit, the Council will not be able to award the contract to the winning tenderer in June/July of 2023, as anticipated. Instead, the contract will be suspended, until Glenman's challenge is finally dealt with by courts. This could be for a period of up to two years if the High Court decision is appealed. Therefore, if Glenman is permitted to bring its legal challenge after the expiry of the deadline, the Council says that it will not have these 58 housing units completed by the anticipated completion date of October 2024. The Council points out that these 58 units make up a very substantial proportion of the Council's target of 224 housing units for completion in 2024.

5 . The Council says it will be prejudiced if this Court were to permit the challenge to proceed after the deadline and in particular, it says that:

“In this case, there is a heightened public interest in the Project proceeding as quickly as possible, given that it concerns the provision of housing.” (Emphasis added)

While there is undoubtedly a pressing public interest in the provision of housing, it is important to observe that the law does not permit this Court to refuse Glenman's application on the grounds that there is a public interest in houses being built as soon as possible.

6 . However, there is another public interest which is relevant to this case, i.e. the public interest in ensuring certainty regarding the validity of all public contracts (for housing, schools, hospitals, critical infrastructure, etc). This requires that the time-limit for any challenge to a public contract is strictly enforced and that the reasons for any applications for derogations from the time-limit are very carefully scrutinised – in order to ensure that public contracts are not subject to endless challenges in the courts.

7 . In considering what Glenman says was the reason for its delay, this Court relies in particular on the statements of Murray J. in the Court of Appeal decision in Arthropharm (Europe) Ltd. v. The Health Products Regulatory Authority [2022] IECA 109 at paras. 99 and 100 regarding time limits in judicial review cases. He noted that ‘adverse consequences’ would follow if ‘ time limits were set aside lightly’ and that there are ‘strong public policy’ reasons that ‘ lean towards the refusal of extensions of time’. He also stated that courts ‘should scrutinise with particular care explanations advanced for the failure to comply’ with time limits.

8 . Having ‘ scrutinised with particular care’ the reasons provided by Glenman for missing the deadline, this Court concludes that the retrospective characterisation by Glenman of the reasons for its failure to comply with the deadline was affected by confirmation bias — a concept which was considered in the recent unsuccessful medical negligence claim in Crumlish v. HSE [2023] IEHC 194.

9 . For this and the other reasons set out below, this Court has decided to allow the Council to award the contract for the social housing as early as June/July of this year (according to the Council), rather than months or years into the future.

BACKGROUND

10 . The background to this dispute is somewhat unusual, since Glenman was the building company engaged under the Previous Contract, dated 20 ^th December, 2019 to build the 58 housing units which are the subject of this new tender. However, the Council terminated that contract on 21 ^st June, 2022. The reason for that termination is that there were considerable delays with the works under the Previous Contract, which the Council claims were attributable to Glenman, but which Glenman disputes. As a result of those delays, only 20% of the works on the social housing was completed between 2020 and 2022. This is why the Current Contract now being offered by the Council is for the completion of the remaining 80% of the works.

11 . Glenman disputes that the Council was entitled to terminate the Previous Contract. The matter was referred to conciliation and on 20 ^th December, 2022 the conciliator (the “ Conciliator”) upheld the decision of the Council to terminate the Previous Contract (the “ Recommendation”). However, Glenman filed a Notice of Dissatisfaction with that Recommendation.

12 . It is important, at this juncture, to point out that there is a clear conflict of evidence on affidavit as to who is responsible for the historic delay on the building works. This Court cannot therefore resolve at this juncture who is responsible for this ‘historic delay’. For this reason, this Court cannot take into account the ‘historic delay’ as a factor in exercising its discretion on Glenman's application to be permitted to issue proceedings after the expiry of the 30-day time-limit..

The Decision which Glenman wants to challenge

13 . The decision which Glenman wants leave to challenge is a decision by the Council to exclude Glenman as a tenderer from the Current Contract, which decision was issued by the Council on the 22 ^nd December, 2022 (“ Decision”). In excluding Glenman from the tender process, the Council relied on Regulation 57(8)(g) of the European Union (Award of Public Authority Contracts) Regulations 2016 (“ 2016 Regulations”). This provides:

“(8) Subject to paragraphs (13) and (20), a contracting authority may exclude from participation in a procurement procedure any economic operator in one or more of the following situations:

[…]

(g) where the economic operator has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, a prior contract with a contracting entity or a prior concession contract, which led to early termination of that prior contract, damages or other comparable sanctions” (Emphasis added)

14 . Prior to its decision to exclude Glenman as a tenderer, the Council had received Glenman's response dated 12 ^th October, 2022 to the Suitability Assessment Questionnaire, which had been sent to all the tenderers for the Project. Part 3 of the questionnaire deals with the various grounds which might exclude a tenderer from the process, e.g. where a tenderer had been found guilty of criminal convictions, fraud, terrorist offences, etc.

15 . Paragraph 3.C.14 reads as follows (with Glenman's answers in bold):

“Early termination, damages or other comparable sanctions

Has the economic operator experienced that a prior public contract, a prior contract with a contracting entity or a prior concession contract was terminated early, or that damages or other comparable sanctions were imposed in connection with that prior contract?

Supplier answered? Yes

Please describe them:

Yes, 3.C.13 the validity of the termination is a matter of an ongoing dispute resolution process.

Have you taken measures to demonstrate your reliability (“Self-Cleaning”) No”

Should Glenman be granted leave to challenge the Decision outside the 30-day time limit?

16 . Glenman is seeking the leave of the Court pursuant to Order 84A, Rule 4(2) of the Rules of the Superior Courts, to challenge the Decision despite its failure to comply with the 30-day deadline. This rule states:

“(2) Notwithstanding sub-rule (1), the Court may grant leave, on the application of the intending applicant for that purpose, to make an application to which Regulation 7(2) of the Public Procurement Remedies Regulations or, as the case may be, Regulation 7(2) of the Utilities Remedies Regulations applies after the expiry of the time mentioned in sub-rule (1), where the Court considers that there is good reason to do so.” (Emphasis added)

Glenman claims that that there is ‘ good reason’ for the deadline to be ignored in this instance.

Letters issued before or immediately after the expiry of the time limit

17 . Of key importance, in considering whether there is a ‘ good reason’ to, in effect, extend the deadline, is the Decision itself and the acts and omissions of the parties after its issue, up to the expiry of the deadline for any challenge to that Decision.

18 . However, before getting into detail on the evidence which has to be considered by this Court in this regard, it is useful at this juncture to consider the correct approach to analysing such evidence.

LAW RELEVANT TO LATE CHALLENGES IN PUBLIC PROCUREMENT CASES

19 . It is...