Forum Connemara Limited v Galway County Local Community Development Committee, judgment of Ryan J. of 21 December 2016
The High Court has refused an application made by Forum Connemara Limited ("Forum Connemara") for a stay on the implementation of the decision made by Galway County Local Community Development Committee (the "Committee") to award Galway Rural Development Company Limited ("GRDCL") a contract for the implementation of the Social Inclusion and Community Activation Programme (“SIPAC”) in County Galway.
On 23rd March 2015, Forum Connemara obtained leave to seek judicial review of the decision by the Committee of 30 September 2014 to appoint only one SIPAC service provider for the county of Galway (the "First Decision"), and the decision by the Committee of 2nd March 2015 to award the contract to GRDCL (the "Second Decision"). The proceedings concerning the First Decision were struck out by the Court of Appeal.
The challenge to the Second Decision was rejected by the High Court on 10 August 2016 and a perfected order was made on 15 September 2016. The High Court granted a stay on the implementation of that decision during the currency of the High Court proceedings and a further stay until 3 October 2016, stating that any further postponement of the decision would be a matter for the Court of Appeal. That deadline passed without an application. On 12 October 2016, Forum issued a notice of motion seeking a further stay until the determination of the appeal from the judgment of the High Court in relation to the Second Decision.
Ryan J. noted that although the motion sought an extension of the stay originally granted when leave was obtained, there was actually no stay in place. As the Committee had not proceeded to enter the contract, the question for the Court was whether to impose a stay.
Submissions by Forum
Forum Connemara submitted that the procedural provisions in the European Communities (Public Authorities’ Contracts) (Review Procedures) Regulations 2010 – S.I. 130 of 2010 (the "2010 Regulations") required that the original stay that came into effect with the grant of leave for judicial review should continue until the determination of the appeal. Alternatively, Forum submitted that justice requires that there be no appointment until its proceedings on appeal have been concluded.
Regulation 8(2) of the 2010 Regulations provides that if a person applies to the Court under paragraph (1), the contracting authority shall not conclude the contract until—
(a) the Court has determined the matter, or
(b) the Court gives leave to lift any suspension of a procedure, or
(c) the proceedings are discontinued or otherwise disposed of.
Ryan J. found that the provision in Regulation 8 (as amended) which provides that the contracting party shall not conclude the contract in question until the "court" has determined the matter must be considered to apply to the High Court and only to the High Court. The Court applied the normal rules of analysis of statutory provisions and based the decision on the fact that Regulation 2 of the 2010 Regulations defined "court" as the High Court. Ryan J. noted that the provision in question sought to balance the interests of the complaining party against the interests of the successful contender who is entitled to respect for its position. It is also difficult to define when the last stage of litigation in respect of an appeal has been reached.
This left the Court in the position of "endeavouring to do justice between the parties". Ryan J. stated that the relevant test was the balance of convenience and the Court considered whether it was more oppressive or onerous to impose a stay or to permit the execution of the contract.
The Court found that the balance of convenience was strongly in favour of resisting the stay. In reaching this conclusion, the Court noted that the contract was intended to operate for a 36 month period, of which 20 months had now elapsed. The successful tenderer had been excluded from providing this service during this period and instead Forum Connemara remained in situ in effective occupation of the position that its rival has won. In the Court's view, imposing a further stay would be seriously unfair to GRDCL. The Court stated that it was more than unsatisfactory that a process designed to ensure fairness should in practice operate to frustrate the implementation of the result.
The decision provides welcome certainty in relation to procurement litigation under the Remedies Regulations. Once the High Court has determined the matter there is no automatic bar on the contracting authority entering the contract with the successful bidder, even where an appeal is lodged. It is up to the appealing party to seek a stay and the High Court will consider the balance of convenience.
For further information, contact Anna-Marie Curran or any member of the EU, Competition & Procurement Group at A&L Goodbody.
Date Published: 27 January 2017