Supreme Court allows adding capacity ground but refuses damages claim in public procurement judicial review.

An Chúirt Uachtarach

The Supreme Court

Record number 2013/211JR

Appeal number 314/2014

Murray J

Laffoy J

Charleton J

Between

Copymoore Limited, Cork Office Machines and Supplies Limited, Cusken Limited, EMS Copier Services Limited, Eurotech

Office Equipment Limited, Inest Limited, Mormac Limited, MBE Mallow Limited, O’Rourke Office Supplies Limited, Sharptext

Cork Limited and TOS Ireland Limited

Applicants/Appellants

and

Commissioners of Public Works of Ireland

Respondent

Judgment of Mr Justice Charleton delivered on the 7th day of November 2014

1. This is an appeal from the judgment and order of Ó Néill J refusing a motion to extend grounds in a judicial review application in a

public procurement challenge; [2014] IEHC 234 (Unreported, Ó Néill J, High Court, 9th May, 2014). At issue in this appeal is whether

the applicants/appellants should be permitted to add two new grounds to their pleading; one relating to capacity and the other to

damages. The failure to plead the capacity ground arose through a simple error made by the lawyers in drafting the notice of

application. That ground was, however, clearly notified to the respondent in the initial letter of 15th March 2013, prior to the

commencement of proceedings. The damages claim was not mentioned there, nor in statement to ground the application for judicial

review but did appear in the originating notice of motion. Since at issue is the validity of a decision to limit the available range of

suppliers in public procurement for State bodies, any amendment to proceedings must take into account the public interest in the

swift disposal of this kind of litigation and will only allow exceptions to the strict time limits involved where good reasons are

advanced.

2. These proceedings commenced by originating notice of motion on 19th March, 2013. One issue which arises in the proceedings

before the High Court is whether that motion commencing the proceedings was issued in time, which is the first plea in the notice of

opposition. No comment will be made on this. Since that is a decision that needs to be resolved by the High Court, this decision is

solely concerned with an amendment application and assumes, without deciding, that the proceedings started in time. Commencing

the proceedings had the effect of freezing a decision by the respondents to limit public procurement to a number of providers in a

multi-supplier framework agreement for the purchase of monochrome and colour printers and other multifunction devices. The trial

date for the substantive review in the High Court is set for 10th December, 2014. Pending the resolution of the proceedings, these

devices are being purchased by the respondents on behalf of a multitude of State agencies without implementing the limiting

measures as to suppliers with which the applicants/appellants take issue. The resolution of the proceedings will depend on whether a

breach has occurred of the European Communities (Award of Public Authorities’ Contracts) Regulations 2006 (S.I. No. 329 of 2006),

known as the Public Procurement Regulations, in respect of which applications must be made swiftly under the European Communities

(Public Authorities’ Contracts) (Review Procedures) Regulations 2010 (S.I. No. 130 of 2010), known as the Remedies Regulations.

Order 84A of the Rules of Superior Courts reflect the time limits in the originating legislation. Under the Remedies Regulations at

Regulation 7(2) an application to suspend the process of awarding contracts must be made “within 30 calendar days”. This runs from

when “the applicant was notified of the decision, or knew or ought to have known of the infringement alleged in the application.”

Regulation 10(2) of the Remedies Regulations enables rules of court to extend the statutory time period for the commencement of

such an application. This requires “good reason to do so.” Order 84A rule 8 on amending a statement of application whether by

specifying different or additional grounds is silent on the standard to be met before such an amendment will be permitted. There is no

doubt, however, that for an amendment to be permitted, good reason is also required. In Keegan v GSOC [2012] 2 IR 570 at issue

before the Supreme Court was an amendment under Order 84. Having reviewed the various authorities on leave to amend judicial

review proceedings, Fennelly J stated that a fair balance needed to be struck between the certainty and security of administrative

decisions and the rights of those affected to contest them. Of necessity, various strict time limits are set by the Rules of the Superior

Courts or by legislation for challenging such decisions. As Fennelly J points out at paragraph 32, however, such limits are mitigated by

the power of the courts to permit an application outside the permitted time “provided the court is persuaded that there is good

reason for the delay and that no other party is adversely or unfairly prejudiced.” Where an amendment is sought, as Fennelly J points

out at paragraph 35, there is no reason to impose a more exacting standard than would be the case for a late application:

On the other hand, it is difficult to see why an applicant for an amendment of grounds should have to satisfy a more

exacting standard in explaining delay than is imposed on an ordinary late application. He may say that the additional

ground is based on material of which he was unaware when he was making his original application. On occasion, the

respondent reveals a new ground of argument in its answer to the application, as appears to have occurred in McCormack

and Dooner. The applicant may offer a different explanation. There is no reason, in logic, to impose on an applicant a

criterion of newly discovered fact to justify an an application to amend, when an application for an extension of time is

not subject to any equivalent condition. This is not to say that the applicant’s knowledge of the facts is irrelevant. In

some cases, as in McCormack, discovery of new facts may be an explanation for the omission to include a ground. In

other cases, the applicant may have been aware at all relevant times of the facts relevant to the new ground and this

will weigh in the balance against him, without being necessarily conclusive.

3. An amendment should not be permitted, however, without an explanation that is sufficient to tilt the balance of rights in litigation

in favour of considering the proposed new ground for seeking judicial review or for opposing it. Fennelly J sets out useful principles at

paragraph 35 as follows:

None of this is to take away from the fact that an application for an amendment of his grounds for judicial review must

explain his failure to include the proposed new ground in his original application. The cases show that the courts are

reluctant to admit new grounds which amount to advancing an entirely new cause of action, as in Ní Eilí v Environmental

Protection Agency, or a challenge to a different decision as in Muresan. The nature of the decision under attack may also

be relevant. If it is one which benefits the public at large or a large section of the public, a challenge may have

corresponding disadvantages for a large number of people. This may explain why special and stricter statutory rules have

been introduced in cases of public procurement, planning and development and asylum and immigration. The courts will

have regard to the public policy considerations which have prompted the adoption of such rules.

4. On the other hand, as Fennelly J states at paragraph 37, an amendment may be more favourably considered where it does not

involve “a significant enlargement of the applicant’s case.” That is because the decision in issue is already under question. Where a

pure question of law is sought to be added to proceedings, an additional ground “may not make any significant difference” whereas,

on the other hand, a different view might be taken where a new ground is factual and “likely to give rise to further exchange of

affidavits relating to the facts.”

5. These are the second set of proceedings that arise out of a decision of this kind. The first were entitled Copymoore Limited and

Others v Commissioners of Public Works in Ireland and the resulting judgment is under appeal to this Court; see [2013] IEHC 230

(Unreported, High Court, Hogan J, 29th May, 2013). In the instant proceedings, the applicants/appellants have submitted that the

capacity ground which is sought to be added to the statement of grounds was also argued therein. In the result, however, the case

was decided in favour of the applicant under another ground. The capacity ground was not ultimately determined by Hogan J in that

written judgment. The applicant/appellants now seek to raise that capacity ground by way of amendment to these proceedings.

Briefly, the capacity issue that is sought to be added to the proceedings is that the respondents did not have the capacity to set up

or enter into a multi-supplier framework agreement. Part of this ground may concern whether consent was given to the respondents

by the relevant Minister. However, when the issue is looked at, it is clear from the submissions on both sides that the point is one of

legal argument in respect of which very little, if anything, in terms of factual matrix needs to be added to the proceedings as they are

now constituted. The motion to amend to add a claim in damages is a straightforward contention that the applicants/appellants have

suffered a monetary loss. What that may be, or how it might arise, is not in any way particularised in the existing statement

grounding the application for judicial review.

6. The initial letter in this case was sent by the solicitor to the applicants/appellants on 15th March, 2013 and it includes a paragraph

complaining about the capacity of the National Procurement Service, or NPS, to establish the framework at issue in these

proceedings:

The NPS has purported to establish the framework to award the contracts for and on behalf of the stated organisations

and bodies of the State. We can find no basis in law for the NPS being entitled so to do. Please provide details as to the

authority capacity of the NPS so to do, with reference to each and every statutory provision relied upon by the NPS in so

doing.

7. This capacity ground was, on the evidence before the Court, simply forgotten in the rush to bring out proceedings. The error was

discovered in late October 2013 and a letter was formulated dated 4th November of that year seeking to amend the statement of

grounds to include the issue of capacity and to make a claim in damages. This was at a time when the parties were yet to conclude

the exchange of affidavit evidence in the in the proceedings. By letter dated the 8th of that month, the amendment was refused and

the following reasons were given:

Firstly, as you are aware specific and strict time limits are provided for in the relevant statutory regulations and Rules of

the Superior Courts and it is clear that your clients are far out of the allowed time to raise these matters.

Secondly, if applicants were permitted to avoid the effect of the strict time limits laid down in procurement matters by

the statutory regulations, the Rules of the Superior Courts and the case law of the courts on the basis of mere

“oversight”, those time limits – which are in the public interest – would be rendered nugatory.

Thirdly, pleadings are closed and extensive affidavits have already been exchanged in this matter. If your clients were to

be permitted to raise this matter at this juncture it would require an additional verifying affidavit to be delivered by your

clients, as the issues which your clients seek to raise are not ones simply of law.

8. Subsequent to that letter, on 16th and 17th December 2013, affidavits were filed on behalf of the appellants and thereafter on

20th February 2014 and 11th March 2014, affidavits were also filed on behalf of the respondent. Consequently, it is difficult to see

the legal point raised as operating in any way as a delaying factor.

Time limits

9. In various statutory provisions, and through secondary legislation, strict time limits have been laid down for the commencement of

various kinds of cases where the swift determination of these is regarded as involving a particular public interest. Thus, in planning

matters, in cases concerning failed applications from refugee status and in public procurement, to take a few examples, shorter and

strict time limits are involved than those generally applicable for judicial review of administrative and quasi judicial decisions. Where a

case is commenced within time on a particular ground but it is sought to add a new ground outside the terms of the statutory limit for

commencing the proceedings, it is not available to an applicant to argue an amendment simply on the basis that the case began on

time. The approach of a court deciding such an application should look to the original time limit as set in legislation, whether those

time limits are strict or may be extended, whether an amendment is permitted expressly or by necessary statutory implication, and

what level of excuse is needed to justify the addition of a new ground outside time.

10. There is an opportunity to amend proceedings under the statutory scheme in force in this case where there is good reason to do

so, though the Article is silent as to the test. In Dekra Éireann Teoranta v The Minister for the Enviornment [2003] 2 IR 270, public

procurement was directly in issue before this Court. An application had been made out of time by the applicant to challenge a public

procurement decision. The High Court had granted an extension. On appeal, the Supreme Court reversed that decision. Fennelly J

considered that this kind of case, within the statutory framework in which it is case, an especial obligation on an applicant to move

swiftly. At page 304, he stated:

The strictness with which the courts approach the question of an extension of time will vary with the circumstances.

However, public procurement decisions are peculiarly appropriate subject-matter for a comparatively strict approach to

time limits. They relate to decisions in a commercial field, where there should be very little excuse for delay.

11. Denham J, after analysing the legislative context, also emphasised the limitation that uncertainty in the market in procurement by

the State was required to be imposed on judicial review of such decisions. She then turned, at pages 288-289 to an analysis of when

there might be good reason to extend time:

There was an onus on the applicant to explain the delay and to give good reason to extend the time within which the

application may be brought. The applicant did not explain the whole delay. It explained part of the delay. In addition, no

good reason was afforded as to why time should be extended.

In exercising its discretion in such applications the court retains its duty to protect the right of access to the courts.

However, there are special weightings which must be given. Thus the requirement under European and Irish law that such

applications be brought rapidly is important. So too is the nature of the contract under review. This public contract calls

into play the special importance of time and thus the nature of the prejudice to the parties if they are delayed. The court

may also consider any prejudice to the public, the common good.

On the facts of this case not only is there no explanation for a considerable part of the delay but also there is no reason,

good or otherwise, rendered for part of the delay or for an extension of time. On the facts, there is a gap from the 5th

January, to the 24th February, 1999. Further, the activity in March, 1999 was dilatory and had no place in a situation of

threatened proceedings of this type. The court requires that good reason be furnished in an application such as this by an

applicant.

The term "good reason" in O. 84, r. 21 of the Rules of the Superior Courts 1986, was considered by Costello J. in O'Donnell v. Dun

Laoghaire Corporation [1991] I.L.R.M. 301. He stated at p. 315:-

The phrase 'good reasons' is one of wide import which it would be futile to attempt to define precisely. However, in

considering whether or not there are good reasons for extending the time I think it is clear that the test must be an

objective one and the court should not extend the time merely because an aggrieved plaintiff believed that he or she was

justified in delaying the institution of proceedings. What the plaintiff has to show (and I think the onus under O. 84, r. 21

is on the plaintiff) is that there are reasons which both explain the delay and afford a justifiable excuse for the delay.

There may be cases, for example where third parties had acquired rights under an administrative decision which is later

challenged in a delayed action. Although the aggrieved plaintiff may be able to establish a reasonable explanation for the

delay the court might well conclude that this explanation did not afford a good reason for extending the time because to

do so would interfere unfairly with the acquired rights (The State (Cussen) v. Brennan [1981] I.R. 181).

Or again, the delay may unfairly prejudice the rights and interests of the public authority which had made the ultra vires

decision in which event there would not be a good reason for extending the time, or a plaintiff may acquiesce in the

situation arising from the ultra vires decision he later challenges or the delay may have amounted to a waiver of his right

to challenge it and so the court could not conclude that there were good reasons for excusing the delay in initiating the

proceedings.

I am satisfied that this analysis is applicable to the term "good reason" in O. 84A, r. 4. I apply the test to this case. Thus, the

applicant had to show that there were reasons which both explained the delay and offered a justifiable excuse. The public contract in

issue involved significant liabilities, obligations and expenditure which may raise important factors for a court. The justice of the

situation may raise issues such as prejudice to the notice party arising from the expenditure and other undertakings in the contract.

Also, I am satisfied, concepts of the public good may be relevant as being prejudiced by protracted and delayed judicial review. The

common good could have a heavy weighting in reviews of this type, reflecting the requirement on any applicant to move rapidly.

However, in this case the decision necessary relates only to the reason and explanation for the delay. The discretion in relation to

such an application must be exercised in accordance with law. Whilst O. 84A, r. 4 is relatively new, it is clear and unambiguous. The

concept that the application be "made at the earliest opportunity" is not dissimilar to the term "promptly". The words are informed by

the requirement under European law that the application be made rapidly.

12. These remarks are directly relevant to this appeal.

High Court Decision

13. The decision in Dekra was interpreted by Ó Néill J in the High Court in a restrictive manner. It limits the relief which can be given

where a discretion is given to add a ground or to commence proceedings outside the time limits in a way that is not reflected in the

broad discretion conferred on the High Court under the legislation. Ó Néill J stated his view at the end of his judgement:

23. The problem here is that these judicial review proceedings relate to public procurement matters, and it is well settled,

since the judgements of the Supreme Court in the Dekra case, that in this specialised area of judicial review, a strict or

stringent approach must be adapted to applications for relief outside of the prescribed time limits. Whilst there is,

undoubtedly, a jurisdiction to extend the time limit in question, this can only be done if it is demonstrated that there is

good and sufficient reason for so doing. In other areas of judicial review, mere oversight or error on the part of legal

representatives could, as mentioned in the judgement of Finlay Geoghegan J. in the Muresan case, be a ground for

extending time in an appropriate case. In my opinion, in a procurement case, the stricter approach to compliance with the

prescribed time limits required would exclude mere oversight as a good and sufficient reason for permitting an extension of

the time limit. It would seem to me, that in order to reach the necessarily high threshold which “good and sufficient

reason” requires in these cases, it must be shown that the factor which brings about the application to extend time or to

seek relief outside the time limit, was either not in existence within the time limit or was unknown to the applicant within

that time limit. In effect, an applicant must be able to demonstrate that insofar as the ground sought to be added to the

proceedings is concerned, he was effectively inhibited or prevented from raising that ground within the prescribed time

limit.

24. In this case, all the information necessary to plead the “capacity” ground was amply available to the applicants within

the time limit. That being so, I feel bound to follow the reasoning of the Supreme Court in the Dekra case and applying

the strict approach described in the judgements in that case, inevitably results in a conclusion that the applicants have

not demonstrated a good and sufficient reason for extending the time limit prescribed so as to permit the amendment

sought.

14. This view is over strict. It is not necessary to demonstrate a factor unknown to an applicant or one which was not in existence

for time to be extended. Instead, a late application or a late amendment to include a new ground not previously pleaded requires

“good reason”. That must take into account the factors listed by the learned trial judge, but these are not the only factors. One of

the most important factors is the public interest and another is the conduct of the parties. As to the first, there is a clear public

interest in the disposal of controversies involving multiple suppliers of goods to the State within a prompt time-frame. There is also,

however, an interest in ensuring that such points as can be argued and which are applicable to other similar situations are considered

and ruled on by the High Court. As to the conduct of the parties, there has already been a contest in the first set of proceedings on

the issue of capacity. That point has already been argued in those separate proceedings and an amendment to include it will not

come as a surprise to the respondents. Furthermore, by that argument in the first set of proceedings, it was made clear to the

respondents that the applicants/appellants regarded capacity as point of real substance, whether they were right or wrong. That

point was notified to the respondents in the initial letter in the instant judicial review application. A mere oversight led it to be

dropped but that was in the context of what this Court has been told is a cross-appeal, or notice to vary judgment, in the other case

which seeks to reargue the capacity point before the Supreme Court. Thus, no matter how the question is looked at, it is a point

notified at the earliest opportunity, which is essential to the disposal of the controversy between the parties and which is not raised

unfairly, which otherwise it might be were the respondents to be notified of the point after the time limit had elapsed. Adding the

point to these proceedings will assist in the final disposal and it will not cause any delay and it has not caused any prejudice.

15. In contrast, the applicants/appellants seek also to claim damages on the basis that they have been wrongly shut out of profits

from the contracts under the multi-supplier framework agreement for the purchase of monochrome and colour printers and other

multifunction devices. This is effectively a new point. It was not part of the first set of proceedings. It was not notified to the

respondents in an initial letter. It does not in any way arise naturally or by implication out of the existing pleadings. No reason has

been advanced as to why this point was not included in the statement to ground the application for judicial review, as opposed to the

originating notice of motion, as initially drafted. The award of damages is not essential to the disposal of the aspect of the case

which would be in the public interest. The capacity of bodies such as the respondents to set up tender procedures and to limit the

range of suppliers is, in contrast, a matter that ought to be decided so as to ensure that the law is clarified.

Result

16. In the result, the amendment in respect of capacity will be allowed. An amended statement of grounds should be furnished today

incorporating the alteration. That ground will be taken to be denied if no amended notice of opposition is filed. The respondents have

liberty to file such a notice and if it is required an affidavit within four days of this judgment. The application to add a claim for

damages is refused. The trial should not be delayed.