Stewart's Foundation Ltd v Minister for Tourism, Sport and Recreation

• Jurisdiction: Ireland
• Judge: Justice Geoghegan
• Judgment Date: 16 June 1999
• Neutral Citation: 1999 WJSC-HC 7539
• Court: High Court
• Date: 16 June 1999

1999 WJSC-HC 7539

THE HIGH COURT

No.21 J.R./1999

STEWART'S FOUNDATION LTD. v. MINISTER FOR TOURISM, SPORT AND RECREATION

JUDICIAL REVIEW

BETWEEN

STEWART'S FOUNDATION LIMITED

APPLICANT

AND

THE MINISTER FOR TOURISM, SPORT AND RECREATION

RESPONDENT

Citations:

EEC DIR 93/37 ART 30

EUROPEAN COMMUNITIES (AWARD OF PUBLIC WORKS CONTRACTS) REGS 1992 SI 36/1992

EUROPEAN COMMUNITIES (AWARD OF PUBLIC WORKS CONTRACTS) (AMDT) REGS 1994 SI 293/1994

FREEDOM OF INFORMATION ACT 1997

COMMISSION V DENMARK (STOREBAELT CASE) 1993 ECR 1-3353

Abstract:

Judicial review - Certiorari - Prohibition - Tender - Public procurement - Swimming pool - Draft contractual document - State funding limit for project - Whether stipulation by respondent introduced new criteria - Whether respondent in breach of EEC public works directive - Correspondence between parties - Equality in treatment of tenderers - Most economically advantageous tender - Meaning of "contract documents" - Whether applicant's tender validly disqualified - Financial expenditure incurred by applicant in preparing tender - Council Directive 93/37/EEC (SI 36 of 1992 and SI 293 of 1994), art.30

While it may be arguable as to whether the decision of the Government to limit its grant to a maximum of £6 million towards the construction of a 50 metre swimming pool was itself a "criterion" or merely a piece of fundamental contextual information in the light of which the tenders for the construction of the pool would have to be framed, the expression "contract documents" in article 30 of Council Directive 93/37/EEC should not be given too narrow or technical a meaning. If the applicant had expended considerable sums of money before it discovered the amount of funding which the State was prepared to provide, the applicant incurred that expenditure at its own risk. The financial limit of £6 million was communicated to the applicant in the "contract documents" giving that expression a broad meaning and there was therefore compliance with article 30. It would be wrong to entertain the applicant's tender (which envisaged a capital grant from the State of £23.6 million) which on its face fundamentally departed from an essential background fact against which the tenders were to be made, that was to say, that the Government grant would be subject to certain specified limits. The High Court so held in refusing the application for judicial review.

1 Justice Geoghegan delivered the 16th day of June, 1999.

2 This is an application for Judicial Review pursuant to leave granted by Mr. Justice McCracken and arising from a refusal on the part of the Respondent to entertain a tender submitted by the Applicant for the construction of a 50 metre swimming pool. An Order of Certiorari is sought quashing that decision and an Order of Prohibition prohibiting further consideration of any other tender submitted. Other reliefs are also sought but they are all to a similar end. Before I go into the facts of this case in any detail, I think it useful to summarise what the dispute is. The Respondent by a public advertisement sought applicants to be included in a list of companies invited to tender for the construction of a 50 metre swimming pool. The Applicant asked to be included and its request was accepted. The Respondent accordingly forwarded to the Applicant some"invitation to tender" documentation. The letter enclosing that documentation made it clear that the draft contractual document would be sent later. The Applicant went ahead and incurred expenditure in preparing tender. When the contract documents ultimately arrived the letter enclosing them made clear that the amount of State funding which would be available to the successful tenderer would consist of a capital grant up to £6 million and an operational subsidy up to £250,000 per annum for a 20 year period. These were intended as maxima. The Applicant complains that is laying down this stipulation the Minister was at a late stage introducing new criteria and that that was a breach, of the express terms of Council directive No. 93/37/EEC (" Public Works Directive") as implemented in Ireland by S.L.No.36 of 1992 and S.L.No.293 of 1994. The whole case rests therefore on whether the Respondent is in breach of this Directive or not.

THE FACTS

3 I now turn to the sequence of events in more detail. On the 21st January, 1998 a notice was published in the Offical Journal pursuant to the Council Directive to which I have already referred. It was headed "Department of Tourism, Sport and Recreation, Tender Procedure Notice, Council Directive 93/37/EEC 50 Metre Swimming Pool". This notice contained particulars of the contracting authority, the intended project, the date for receipt of candidature, the address to which the candidature had to be sent, a stipulation that the candidated had to demonstrate that they had the necessary financial status, technical knowledge and experience to undertake the development, the "criteria for award for contract" and certain other information. The stated criteria for award of contract was "the most economically advantageous tender". This particular wording has a significance to which I will be referring later on in this judgment. Under the heading "Other Information" the notice explained that the first stage of the process involved a written application for inclusion in the list of participants and for a copy of the invitation to tender documentation. The second stage was to involve the submission by the selected candidates of design, construction, financing and operating proposals for the procurement of the project in accordance with the invitation to tender documentation. It was further stated that the latest date for acceptance of applications for invitation to tender documentation would be 5.00 p.m. on 5th March, 1998 and that the invitation to tender documentation would issue to qualified candidates on 26th March, 1998. The Applicant applied to be included in the list by a letter of 5th February, 1998. The Respondent wrote to the Applicant on 26th March, 1998. This letter is in the following terms:-

"National 50 Metre Swimming Pool project - Invitation to Tender Documentation

Dear Mr. Devine,

The Department of Tourism, Sport and Recreation are pleased to provide you with the invitation to ender documentation for the national 50 metre swimming pool project.

You will find enclosed a copy of the project brief and a "financial and general information" document, supplementary to paragraph 3.4 of the brief. A draft of the contract/legal agreement between the promoter and successful consortium is under preparation and will be issued in the coming weeks.

Yours sincerely."

4 It will be noted that full documentation was not provided with that letter but it is part of the Applicant's argument that the expression "a draft of the contract/legal agreement between the promoter and successful consortium" referred exclusively to the draft of the actual document intended to be signed. Apart from that draft contract it is argued that the documentation was complete. In the introduction to the project brief it states that the proposals to be submitted "should supply a financial plan for the project showing capital and operational funding needs and indicating the levels of financial contributions envisaged from various sources". Presumably one of these "various sources" might for the purpose of a tender be the State. In paragraph 2.11 of the project brief it is stated that the award will be made "to the most economically advantageous proposal which meets the criteria set out in this brief in relation to financial, functional, life cycle, operational and technical requirements". On one view that sub-paragraph does seem to suggest that whatever criteria are to be applied are set out in the project brief, I will return to this matter in due course.

5 In the project brief a deadline of 23rd April, 1998 had been set for queries but by letter of 8th May 1998 the Department stated that "because of the need to resolve certain by issues and also to obtain legal and other advice on certain elements of the draft contract/legal agreement" it was not going to be possible to issue further documentation to candidates for a number of weeks and that it was therefore necessary to suspend the process. By letter of 24th June, 1998 the Department explained that certain key issues had been resolved and that work was being recommenced on the draft contract/legal agreement which would issue shortly. In the meantime the deadline for submission of tenders which had been 26th June was admitted to be redundant and the Department indicated that it would be drawing up a new timetable. The next letter coming from the Department was dated 24th August, 1998. This letter enclosed the draft contract/legal agreement for the project and it set new dated for the submission of queries to the Department, for the submission of completed tenders and for assessment but it also stated the following:-

"The amount of State funding which will be available to the successful tenderer, if one should emerge at the conclusion of the present tender procedure, is as follows:-"

(i) Capital grant up to £6m.

(ii) Operational subsidy up to £250,00 p.a., for a 20 year period.

6 The precise levels of assistance will not be determined until a successful tender is identified. As you know, the contract will be awarded to the economically most advantageous tender."

7 The draft contract/legal agreement which was enclosed with that letter was the typical form of contract which might have been anticipated. The terms of Clause 12 of the draft contract clearly envisaged a Government grant though the amounts were left blank.

8 At this stage the Applicant started to complain. The Chief Executive of the Applicant, Mr. David Devine, wrote to Mr. Oliver power, Principal Officer in the Department, by letter of 9th...