Sere Holding Ltd v HSE

• Jurisdiction: Ireland
• Judge: Mr. Justice Twomey
• Judgment Date: 10 February 2023
• Neutral Citation: [2023] IEHC 63
• Court: High Court
• Docket Number: Record No. 2021/408JR

Between

Sere Holding Limtited

Applicant

and

Health Service Executive

Respondent

and

IAS Medical Limited

Notice Party

[2023] IEHC 63

Record No. 2021/408JR

THE HIGH COURT

COMMERCIAL

Judicial review – Award of contract – Selection criteria – Applicant challenging the award of a contract – Whether the notice party satisfied the selection criteria for entry into the tender competition

Facts: The applicant, Sere Holding Ltd (Sere), was placed in eighth place in a tender process conducted by the respondent, the Health Service Executive (the HSE), for emergency air ambulance services. The tender process was won by the notice party, IAS Medical Ltd (IAS), and the HSE awarded IAS the contract for emergency air ambulance services on the 26th April, 2021. The HES estimated the contract was worth €9.5 million over four years, which it said was a considerable saving to the taxpayer on the previous contract. Sere challenged the award of the contract on the grounds that IAS did not satisfy the selection criteria for entry into the tender competition, i.e. the requirement that each tenderer must have a turnover of €4 million, for the previous three years, in respect of the services for which it was tendering. The key issue in dispute between the parties was what was included in the ‘tender services’ under the terms of the Request for Tender and supporting documentation. The High Court also considered: whether, having decided the main issue in the case (i.e. whether IAS satisfied the selection criteria), it was a good use of court resources to deliver a reserved judgment on a second issue (i.e. whether the HSE verified that IAS satisfied the selection criteria), in circumstances where the HSE suggested that this would be an academic exercise and therefore a waste of court time; and whether there is an onus on State agencies to, at least, consider mediation, bearing in mind that a State agency does not have the financial incentive of most other litigants to avoid the very considerable cost of High Court litigation, since no individual in a State agency is ever out of pocket if it wins or loses in the High Court.

Held by Twomey J that the meaning of tender services in this case included the transport of organs and the transport of organ retrieval teams; this meant that Sere accepted, as a result of this judgment, that IAS satisfied the selection criteria in order to be admitted to the tender. For that reason, Twomey J held that this was not a basis for invalidating the contract entered into between the HSE and the winning tenderer, IAS. The Court proposed asking Sere, after considering this judgment, whether in light of the Court’s decision on the ‘selection criteria issue’, it still needed the ‘verification issue’ to be decided by the Court; if Sere concluded that it did not need a determination of that issue, then there would be a saving of court resources, which could be utilised for the benefit of other litigants. If Sere decided that it still wished to have a determination on the ‘verification issue’, Twomey J held that the Court would consider that issue, having also heard from the HSE and IAS; if after hearing from all parties the Court were to conclude that it should give a judgment on the ‘verification issue’, then adopting that course would not put any additional strain on court resources since that was the position of Sere at the conclusion of the hearing.

Twomey J ordered the parties to engage with each other to see if agreement could be reached regarding all outstanding matters without the need for further court time, with the terms of any draft court order to be provided to the Registrar. In case it was necessary for the Court to deal with final orders and outstanding issues, Twomey J held that the case would be provisionally put in for mention a week from the date of delivery of the judgment at 10.30am, with liberty to the parties to notify the Registrar in the event of such listing being unnecessary.

Application refused.

JUDGMENT OF Mr. Justice Twomey delivered on the 10 ^th day of February, 2023

INTRODUCTION

1 . The applicant in this judicial review (“Sere”) was placed in eighth (and last) place in a tender process conducted by the respondent (the “HSE”) for emergency air ambulance services. The tender process was won by the notice party (“IAS”) and the HSE awarded IAS the contract for emergency air ambulance services on the 26 ^th April, 2021. The HES estimates the contract is worth €9.5 million over four years, which it says is a considerable saving to the taxpayer on the previous contract.

2 . Sere is challenging the award of the contract on the grounds that IAS did not satisfy the selection criteria for entry into the tender competition, i.e. the requirement that each tenderer must have a turnover of €4 million, for the previous three years, in respect of the services for which it was tendering.

3 . The key issue in dispute between the parties is what is included in the ‘tender services’ under the terms of the Request for Tender and supporting documentation. For the reasons set out in this judgment, this Court agrees with the HSE's, rather than Sere's, interpretation of what is included in that term and therefore concludes that IAS did in fact satisfy the selection criteria. This judgment also considers:

• • whether, having decided the main issue in the case (i.e. did IAS satisfy the selection criteria), it is a good use of court resources to deliver a reserved judgment on a second issue (i.e. did the HSE verify that IAS satisfied the selection criteria), in circumstances where the HSE suggests that this would be an academic exercise and therefore a waste of court time.

• • whether there is an onus on State agencies to, at least, consider mediation, bearing in mind that a State agency does not have the financial incentive of most other litigants to avoid the very considerable cost of High Court litigation, since no individual in a State agency is ever out of pocket if it wins or loses in the High Court.

BACKGROUND

4 . Sere claims that IAS was admitted to the tender process even though it did not satisfy the requirement to have a turnover of €4 million relating to the tender services (the ‘tender services’) in each of the previous three years. Based on Sere's definition of those tender services, it says IAS failed to meet this requirement and should not have been awarded the contract for these ‘emergency air ambulance services’. Accordingly, Sere seeks, amongst other things, an order setting aside the award of the contract to IAS (under Regulation 8 and/or 9 of European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (the “Remedies Regulations”) S.I. No. 130 of 2010) and a declaration that the decision to award the contract to IAS is invalid.

5 . The value of the contract awarded to IAS is estimated by the HSE to be €9.5 million over four years (see the Amended Statement of Opposition of the HSE, para. 20). The HSE has submitted that the contract contains ‘ very considerable savings for the State compared to the prior contract’, which savings appear to amount to circa €4.5 million over a four-year period. This is based on Sere's evidence that the value of the previous contract was €7 million over two years — see Exhibit/Tab 16 of the affidavit dated 15 ^th July, 2021 of Mr. Stanley Edgar (“Mr. Edgar”).

6 . The key issue in this case, when considering if this turnover requirement was met, is whether the tender services:

Based on its more restrictive interpretation, Sere claims that any turnover which IAS had in relation to the transfer of organs and the transport of organ retrieval teams, could not be used to enable IAS to satisfy the pre-condition that it have a €4 million turnover.

• • are restricted to a transfer involving a patient (with a medical team in a specially equipped aircraft), as claimed by Sere, or,

• • include the transfer by an airplane of (i) organs and of (ii) organ retrieval teams, in addition to the transfer of patients, as claimed by the HSE.

7 . It is important to bear in mind that the term ‘emergency air ambulance services’ is not defined in the Request for Tender, published by the HSE on 25 ^th October, 2020 (the “RFT”), although this term is used by the parties to refer to the tender services. The key issue therefore is not what the term ‘emergency air ambulance services’ means, but rather what constitutes the tender services under the terms of the RFT and relevant supporting documentation, i.e. the Specification Response Document dated 25 ^th October, 2020 (the “SRD”).

8 . In sworn evidence on behalf of Sere, Mr. Edgar claimed that:

“There are a number of obvious elements to an emergency air ambulance service. These include that there must be a sick or injured patient requiring or just having received medical care or treatment; the journey must form part of the journey from or to a place of medical treatment; and the aircraft must be specially designed or adapted to carry a sick or injured patient.

It is simply common sense that one cannot have an emergency air ambulance service in the absence of a patient, medical personnel and a properly equipped aircraft.” (Emphasis added)

9 . Thus, Sere's case rests on its claim that the tender services were services which had three necessary elements, namely a patient, a medical team and a properly equipped aircraft. The corollary of Sere's interpretation is that any services which did not contain each of these three elements were not included in the tender.

10 . Thus, if Sere had won the tender, the logic of Sere's interpretation is that it would not have been obliged under the resulting contract to transfer organs or transport organ retrieval teams. It follows that if Sere, as the winning tenderer, had nonetheless agreed to transfer organs or transport an organ retrieval team, it would have been entitled to charge market...