SHERIFFDOM OF GRAMPIAN, HIGHLAND and ISLANDS at STORNOWAY

Act: Mr Buchanan, Advocate

Alt: Mr Langley, Solicitor, Stornoway

STORNOWAY, June 2012

The Sheriff, having heard agents for the parties, Grants summary decree in favour of the pursuers against the defenders; Grants sanction for the employment of junior counsel; Allows the pursuers' solicitors a 20% increase of fees authorised by the table of fees contained in Schedule 1 to the Act of Sederunt on a party party basis; Refuses the defenders' motion and Finds the defenders liable to the pursuers in the expenses of the cause.

Sheriff

NOTE

[1] This case called before me at Stornoway Sheriff Court to rule on two motions, namely a motion by the pursuers for summary decree and expenses and a motion by the defenders to grant an interim order to bring to an end the prohibition imposed under Regulation 47(10) of the Public Contracts (Scotland) Regulations 2006, as amended.

[2] Mr Buchanan, Advocate, appeared for the pursuers and Mr Langley, Solicitor, Stornoway, appeared for the defenders.

[3] Mr Buchanan advised me that the pursuers' crave, and therefore the action, related to a letter dated 9 November 2011 sent by the defenders to the pursuers advising them that they had been unsuccessful with their tender dated 6 October 2011 for the provision of winter maintenance services, Lot 6 (South Lewis). Said letter advised the defenders that the successful tenderer was Alistair MacDonald.

[4] Pre-action notification was made by the pursuers in their agents' letter dated 16 November 2011. The defenders replied to the pursuers by letter dated 18 November 2011 providing information regarding the evaluation process in which they stated, inter alia,

"Tenderers were required to submit two years audited accounts (or the equivalent) to demonstrate that they met minimum standards of economic standing."

and that:

"Tenderers who did not submit two years audited accounts would fail to meet the criteria."

[5] An action was then raised by the pursuers on 17 November 2011 to Find and Declare that the appointment of Alistair MacDonald as successful tenderer was in breach of the Public Contracts (Scotland) Regulations 2006, as amended.

[6] On 13 December 2011, the defenders wrote stating that it was their intention to award the contract to MacDonald Coaches Limited and not to Alistair MacDonald, as previously stated in their letter of 9 November 2011. This was as a result of Alistair MacDonald stating in a letter of 6 December 2011 that he had bid for the contract as a director of MacDonald Coaches Limited.

[7] Mr Buchanan explained how the defences had been lodged by the defenders on 30 November 2011. They explained how they had reviewed the tendering process in response to concerns raised by the pursuers. It was not until 4 January 2012 that the defenders intimated adjustments stating that Alistair MacDonald had submitted the tender as director of MacDonald Coaches Limited (Answer 5).

[8] Mr Buchan said that the defenders had stated in Answer 8:

"In response to the adjustments dated 30 November 2011 made by the pursuers which for the first time raised a complaint by the pursuers about the identity of the successful bidder, the defenders wrote on 6 December 2011 to Alistair MacDonald seeking clarification as to the identity of the bidder."

[9] Mr Buchanan maintained that there was no defence to their crave. The defenders' position was that the letter of 9 November 2011 was issued in error. When the pursuers sent their letter of grievance dated 16 November 2011, they did not know the content of the other tenderers' bid documents. It was only when the defenders wrote on 18 November 2011, giving information about the evaluation process of consideration of tenders, that the pursuers realised that Alistair MacDonald could not qualify as he could not have had two years audited accounts to lodge evidencing his trading history.

[10] It was not competent to award the contract to Alistair MacDonald since he was not an economic operator in that he was not a contractor, supplier or service provider, all as defined in Regulation 4 of the Public Contracts (Scotland) Regulations 2006. Indeed, the defenders were not arguing against that, instead maintaining that their letter of 9 November 2011 intimating their award of the contract was issued in error and that they should have intimated their intention to award the contract to MacDonald Coaches Limited.

[11] The pursuers' crave was to Find and Declare that the proposed appointment of Alistair MacDonald as successful tenderer was in breach of European Council Directive 2004/18/EC and the Public Contracts (Scotland) Regulation 2006 and was unanswerable and therefore summary decree should be granted.

[12] For the defenders, Mr Langley said that in the view of the defenders the tender had come from the economic operator and that it had always been their intention to award the contract to MacDonald Coaches Limited.

[13] Clarification re identification had been sought on 6 December 2011 and the defenders had written to the pursuers on 13 December 2011 amending the terms of their letter of 9 November 2011 and stating that it was their intention to award the contract to MacDonald Coaches Limited.

[14] Mr Langley asked me to refuse the pursuers' motion and to grant the defenders' motion to grant an interim order bringing to an end the prohibition preventing the defenders from entering into a contract with Alistair MacDonald.

[15] This was opposed by Mr Buchanan, who indicated that there were no pleadings in support of the motion. Very properly, Mr Langley conceded that he had no pleadings in support of the motion. Further, it was pointed out by Mr Buchanan that the motion, as before the court, was to bring to an end the prohibition from entering into a contract with Alistair MacDonald, which was not what the defenders appeared to be wanting.

[16] Mr Langley conceded that he would have to amend the motion of 28 November 2011 to allow the Council to award the contract to MacDonald Coaches Limited, which was opposed by Mr Buchanan.

[17] Although the legislative framework covering the subject matter is complex and requiring careful legal examination, nonetheless the point at issue is fairly straightforward - Do the defenders have any answer to the pursuers' claim for summary decree in that they accept (after service of the writ and lodging of defences) that they intimated their intention to award the contract to Alistair MacDonald when they should not have done so?

[18] I must say I find it strange that a local authority, well versed in the award of public contracts, would not be able to differentiate between someone who describes his organisation as "a sole trader" and an organisation such as a partnership or a limited company. Further, Mr MacDonald describes himself as "owner" stating that the organisation had been a PSV operator for the last 17 years. This is in contrast to a limited company which had only been in existence since 2007.

[19] But, for the purposes of this action and the pursuers' motion, that is all of little moment. All the pursuers are asking for is for the court to Find and Declare that the proposed appointment of Alistair MacDonald Lochs as successful tenderer in relation to the competition for the award of the tender for the provision of winter maintenance services, Lot 6 (South Lewis) as intimated to the pursuers by letter from the defenders dated 9 November 2011 is an appointment and award made in breach of European Council Directive 2004/18/EC and also of the Public Contracts (Scotland) Regulations 2006, as amended, and for summary decree on the ground that no defence to the action is disclosed.

[20] The head of the Executive Office of the defenders, Lesley MacDonald, stated in a letter to the pursuers, dated 13 December 2011:

"I therefore amend the terms of my letter dated 9 November 2011 to clarify that it is the Comhairle's intention to award this contract to MacDonald Coaches Limited and not to Alistair MacDonald as previously advised."

[21] The defenders now say that there has been no change in identity of the successful bidder, but all that the pursuers are asking for is a ruling in relation to the proposed appointment of Alistair MacDonald and that really is unanswerable.

[22] Turning to the motion by the defenders, I did not consider their motion to be well founded. I was not prepared to allow the motion to be amended at the bar as it struck at the very heart of the case and, in any event, there were no pleadings on record in support of the motion. Accordingly I refused the defenders' motion.

[23] I shall grant the pursuers motion in respect of summary decree together with the expenses of the action.

[24] Mr Buchanan, in moving for the expenses of the motion on the cause, also moved that I grant sanction for the employment of junior counsel and that I allow a percentage increase in fees. He argued that given the complexity of the case and the specialised knowledge required of the solicitor that an uplift was justified, the same grounds applying to the sanction for junior counsel.

[25] The defenders had now advised the court that the Council's solicitors had known by 25 October 2011 that there could be no contract with Alistair MacDonald yet they proceeded, necessitating the pursuers raising an action with all its cost.

[26] For the defenders, Mr Langley argued that there was no reason for an uplift and that the defenders had not behaved unreasonably.

[27] I considered that the cause before me did qualify for an increase in fees and I shall allow a 20% increase on the authorised fees on a party party basis and will certify the case as being suitable for the employment of junior counsel.