L0C8 Code Ltd v The Department of Environment Climate and Communications and Others

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Mr. Justice Allen
• Judgment Date: 30 September 2024
• Neutral Citation: [2024] IECA 235
• Docket Number: Appeal Number: 2024/30

Between/

LOC8 Code Limited

Plaintiff/Appellant

and

Department of Environment, Climate Support and Communications, Capita Business Support Services Ireland Limited

and

An Post

Defendants/Respopndents

[2024] IECA 235

Allen J.

Meenan J.

O'Moore J.

Appeal Number: 2024/30

THE COURT OF APPEAL

CIVIL

Public procurement – Strike out – Out of time – Appellant appealing against the judgment and consequent orders striking out the appellant’s proceedings against each of the respondents – Whether the judge was correct in his conclusion that the claim was for breach of public procurement rules

Facts: The plaintiff/appellant, Loc8 Code Ltd, appealed to the Court of Appeal against the judgment of the High Court (Barrett J) delivered on 20th December, 2023 ([2023] IEHC 752) and consequent orders made on 16th January, 2024 striking out the appellant’s proceedings against each of the defendants/respondents, the Department of Environment, Climate Support and Communications, Capita Business Support Services Ireland Ltd and An Post, on the grounds that the claims were in substance claims for breach of public procurement law which had been brought years out of time. The summons was indorsed with a claim for damages for conspiracy and the appellant was – as it was in the High Court – adamant that the action was not founded on any alleged breach of public procurement law but on conspiracy. It was accepted, however, that if the claims were – as the respondents contended – claims for breach of public procurement law, the action was manifestly out of time. The respondents each opposed the appeal on the ground that the High Court judge was correct in his analysis and conclusion. Capita Business Support Services Ireland Ltd and An Post also contended that the judgment should be affirmed on the additional grounds that the proceedings were improperly constituted; frivolous and vexatious; an abuse of process; inadequately particularised; disclosed no reasonable cause of action; and did not comply with the requirements of, and had been brought outside the time limited by, O. 84A of the Rules of the Superior Courts. The core issue on the appeal was whether the judge was correct in his conclusion that the claim was for breach of public procurement rules.

Held by Allen J that it was perfectly clear from the pleadings – and from the replying affidavit of the appellant’s founder and chief executive officer, Mr Delaney – that the foundation of the appellant’s claim was for damages arising out of the public procurement process conducted in 2011 for the award of the contract for the national postcode system, and the award of that contract to Capita Business Support Services Ireland Ltd in 2013. Allen J held that it was quite properly – and necessarily – conceded by the appellant that if the substance of the action was a claim for breach of public procurement rules, it was impermissible and out of time. Allen J was satisfied that the High Court judge’s conclusion as to the substance of the action was not only correct but inescapable. Allen J held that the High Court judge dealt with the respondents’ motions – with the agreement of the appellant – on the basis of the pleadings as they stood. Allen J held that, in circumstances in which the judge concluded that the action was fundamentally flawed and impermissible, it could not have been saved by amendment of the detail.

Allen J dismissed the appeal and affirmed the order of the High Court.

Appeal dismissed.

NO REDACTION NEEDED

JUDGMENT of Mr. Justice Allen delivered on the 30 ^th day of September, 2024

Introduction

1 . This is an appeal against the judgment of the High Court (Barrett J.) delivered on 20 ^th December, 2023 ( [2023] IEHC 752) and consequent orders made on 16 ^th January, 2024 striking out the appellant's proceedings against each of the respondents on the grounds that the claims were in substance claims for breach of public procurement law which had been brought years out of time.

2 . The summons was indorsed with a claim for damages for conspiracy and the appellant is – as it was in the High Court – adamant that the action is not founded on any alleged breach of public procurement law but on conspiracy. It is accepted, however, that if the claims are – as the respondents contend – claims for breach of public procurement law, the action is manifestly out of time.

Background

3 . As I will come to – and as was candidly acknowledged by counsel – the case pleaded by the appellant was not all that it might have been and much of what was alleged by the appellant was hotly contested by the respondents. However, the objective factual background is common case, and it is by reference to that objective factual background that the issues can best be understood and analysed.

4 . In October, 2009 the Minister for Communications, Energy and Natural Resources officially announced the Government's intention to proceed with the implementation of a National Postcode System (“NPS”).

5 . Part 3 of the Communications Regulation (Postal Services) Act, 2011 made provision for The National Postcode System. Section 66(2) of the Act of 2011 provided that:-

“(2) The Minister may, with the prior consent of the Minister for Public Expenditure and Reform, enter into a contract with one or more than one person for the development, implementation and maintenance of a system (in this section referred to as the ‘national postcode system’) for the allocation, dissemination and management of postcodes for the purposes of, or relating to, the provision of postal services and the use of the national postcode system by other persons for such other purposes as the Minister considers appropriate.”

6 . In January, 2011 – before the legislation had been enacted – the Department of Communications, Energy and Natural Resources decided to establish a list of candidates (proposed contractors for the NPS contract) with the capability required to successfully design, realise, disseminate and manage an Irish NPS, and to that end issued a Pre-Qualification Questionnaire (“PQQ”) for the appointment of a Postcode Management Licence Holder. The PQQ stated that the procurement process would follow the Negotiated Procedure set out in the European Communities (Award of Contracts by Utility Undertakings) Regulations, 2007 (S.I. No. 50). The declared objective of the 2007 Regulations was to give effect to Directive 2004/17/EC (as amended by Directive 2005/51/EC) on the coordination of procurement procedures of entities operating in the water, energy, transport and postal services sectors.

7 . The appellant was incorporated in 2009 as a company limited by shares. Its founder and chief executive officer, Mr. Gary Delaney, had already developed a digital address code.

8 . By letter dated 23 ^rd February, 2011 the appellant, by its then solicitors, wrote to the Department. The appellant – it was said – wished to participate in the tender process but had been precluded from doing so under the PQQ. The tender process – it was said – contravened Department of Finance guidelines and a number of identified EU directives in a number of specified respects. Among the appellant's objections was that the PQQ required – or was said to require – that each member of any consortium should have an annual turnover of not less than €40 million. The appellant did not participate in the tender process.

9 . One of the participants in the tender process was the third respondent, An Post, the national postal service provider, which was unsuccessful.

10 . Another of the participants in the tender process was the second respondent, Capita Business Support Services Limited (“Capita”) which was successful and which on 21 ^st December, 2013 was awarded a ten year a contract with an option to renew for a further five.

11 . The contract award to Capita was a contract in the terms contemplated by s. 66(2) of the Act of 2011 for the development, implementation and maintenance of a system for the allocation, dissemination and management of postcodes for the purposes of, or relating to, the provision of postal services and the use of the national postcode system by other persons for other purposes.

The proceedings

12 . By plenary summons issued on 2 ^nd September, 2022 the appellant commenced proceedings against the three respondents claiming:-

• 1. Damages for conspiracy, including exemplary and punitive damages;

• 2. Interest pursuant to statute and common law;

• 3. Injunctions:

  • (i) restraining Capita from operating outside its statutory and contractual mandate and restraining the Department from financing such operations;

  • (ii) restraining the Department from the use of State political and administrative resources to unlawfully promote the commercial activities of Capita to the detriment of the appellant's business;

  • (iii) restraining the Department from allowing the operation or use of the National Postcode (Eircode) without effective and independent oversight; and

  • (iv) restraining the Department from renewing or extending the licence holder contract of Capita for the National Postcode (Eircode) on or about 20 ^th December, 2023 or until the conclusion of the action, whichever is later.

• 4. Further or other relief;

• 5. Costs.

13 . Appearances were promptly entered for each of the respondents, who each called for delivery of a statement of claim.

14 . By notice of motion issued on 21 ^st November, 2022 Capita applied to have the proceedings entered in the High Court Commercial List. That motion was returnable for 28 ^th November, 2022. The Commercial List judge did not enter the proceedings in the Commercial List but transferred the application to the Competition List for 30 ^th November, 2022. The order of the Competition List judge of 30 ^th November, 2022 shows that the appellant and the Department and An Post neither consented to nor opposed entry into that list but...