Sustainable Development Capital Llp, R (On the Application Of) v Secretary of State for Business, Energy and Industrial Strategy & Anor [2017] EWHC 771 (Admin)

[2017] EWHC 771 (Admin)Case No CO/94/2017
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 07/04/2017
Before
THE HONOURABLE MR JUSTICE LEWIS
Between
R on the application of SUSTAINABLE DEVELOPMENT CAPITAL LLPClaimant(1) SECRETARY OF STATE FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGYDefendants(2) UK GOVERNMENT INVESTMENTS LIMITEDDefendant(1) MACQUARIE CORPORATE HOLDINGS PTY LIMITEDInterested Parties(2) MACQUARIE INFRASTRUCTURE AND REAL ASSETS (EUROPE) LIMITEDInterested Party(3) UNIVERSITIES SUPERANNUATION SCHEME LIMITEDInterested Party
Miss Catherine Newman Q.C. and Mr Mathew Smith (instructed by Withers LLP) for ClaimantMr Steven Kovats Q.C. and Mr Simon Colton Q.C.(instructed by the Government Legal Department) for DefendantsMs Sarah Hannaford Q.C. and Mr Ewan West instructed by Allen & Overy LLP for Interested PartiesHearing Hearing dates: 30 and 31 March 2017
Judgment Approved

INTRODUCTION

[1]This claim concerns the proposed sale of a publicly-owned asset, the UK Green Investment Bank plc (“the Bank”). Following an extended process whereby the Defendants invited final offers for the Bank, the First Defendant, the Secretary of State for Business, Energy and Industrial Strategy, decided to appoint the Interested Parties as the preferred bidder on 27 September 2016. The other bidder was a consortium led by the Claimant which seeks to challenge that decision. The Claimant advances essentially two arguments. First it says that its offer was compliant with the terms upon which offers were sought, the Interested Parties’ offer was not compliant, and therefore, it contends, the First Defendant was obliged to accept its bid. Secondly, the Claimant contends that the Defendants have acted unlawfully, or unfairly, in the way they dealt with certain aspects of its offer. The First Defendant contends that he acted lawfully and fairly and decided that the Interested Parties’ offer was better and more likely to satisfy the Government’s objectives and therefore decided to award preferred bidder status to the Interested Parties. In addition, the First Defendant contends that the Claimant delayed in bringing the claim and, in any event, a remedy should be refused as a matter of discretion. The Interested Parties also contend that the dispute is not justiciable in that it does not raise issues of public law amenable to judicial review.[2]By order of 16 February 2017, William Davis J. ordered that there be a rolled-up hearing, that is consideration of the application for permission to apply for judicial review with the substantive hearing to follow immediately afterwards if permission were granted. That hearing took place over 2 days on 30 and 31 March 2017. In the event, full argument was heard on all issues at the hearing.[3]The parties raised a number of points in their oral submissions and in their helpful detailed skeleton arguments and in other documents. This judgment focusses on the principal arguments and the principal documents necessary to deal with the claim. That was particularly necessary given the need to hand down judgment as quickly as possible as agreement on the terms of the sale of the Bank has now been reached. The parties can be assured, however, that all the points raised, and all the documents relied upon or referred to have been considered. The fact that they are not mentioned in this judgment is a reflection simply of the need to focus on what appear to me to be the principal issues. THE FACTS The Bank

THE FACTS

[4]The Bank is a public limited company incorporated on 15 May 2012. The First Defendant is the sole shareholder. The Bank’s activities are carried on within the framework established by sections 1 to 6 of the Enterprise and Regulatory Reform Act 2013 (“the 2013 Act”). The Bank has been designated for the purposes of sections 3 to 6 of the 2013 Act as the Secretary of State is satisfied, amongst other things, that the Bank, acting consistently with the objectives in its articles of association, will only act in pursuance of certain purposes, referred to in the 2013 Act as green purposes. Those are essentially the reduction of greenhouse gas emissions, the advancement of efficiency in the use of natural resources, the protection or enhancement of the natural environment and biodiversity, and the promotion of environmental sustainability (see section 1 of the 2013 Act). The Secretary of State is permitted to give financial assistance to the Bank pursuant to section 4 of the 2013 Act. He must lay a copy of the Bank’s accounts before Parliament (see section 6 of the 2013 Act).[5]In June 2015, the Secretary of State announced that the Government intended to sell its shareholding in the Bank. The intention was to ensure that the Bank became a private sector body. Amendments to the 2013 Act made by the Enterprise Act 2016 to achieve that result will in due course be brought into force. Provision for a report on the sale to be laid before Parliament was also made.

The Sale Process

[6]The sale process was carried out by the Second Defendant, UK Government Investments Ltd. That is a company which is solely owned by HM Treasury. The process and the Government’s objectives were set out in a final phase letter dated 9 August 2016. That letter followed on from, and was materially similar to, two earlier letters indicating the process that the Government intended to follow.[7]The objectives and process are set out in section 1 of the final phase letter of 9 August 2016 in the following terms:
“The overall objective of the Proposed Transaction is to deliver value for money for the UK taxpayer, which will be achieved through a combination of value maximisation and transaction certainty. “SoS intends to conduct the sale process as expeditiously as possible and in a manner that will minimise disruption to GIB and its management, employees, clients, investee entities and suppliers. “SoS intends that, post-completion of the Proposed Transaction, GIB is classified as in the private sector. To achieve this objective, the UK Government has undertaken to repeal the legislation which relates to GIB (sections 1 to 6 of Enterprise and Regulatory Reform Act 2013). The powers to enact this are contained in the Enterprise Act 2016; they will be brought into force at the point of completion of the transaction. Notwithstanding this legislative change, it is the intention of SoS that GIB should continue to focus on green sectors and to play a role in accelerating the UK’s transition to a more sustainable low-carbon economy. As such, the Proposed Transaction includes arrangements for the Company to issue a special share as was described in the information memorandum provided in Round 1. SoS also intends that, at completion of the Proposed Transaction, all state-aided funds will have been repaid by GIB to SoS. “The purpose of the Final Phase is to enable you to submit a Definitive Offer for the Company. In addition to your Definitive Offer, you will be required to have finalised the terms of the Transaction Agreement (see section 4). Further details of the requirements for your Definitive Offer are set out below.”
[8]The following emerges from that section of the final phase process letter. First, the aim was to deliver value for money through a combination of maximisation of value and transaction certainty. Secondly, the intention was that the Bank be classified as being within the private sector following the transaction. Thirdly, the intention was that all funds representing state aid provided to the Bank were to be repaid to the Secretary of State. Fourthly, the purpose of the final phase was to enable the bidder to submit a definitive offer.[9]There were further provisions of the letter dealing with the definitive offer. It had to be “final and binding, and must be capable of acceptance by the Seller at any time up to 6 weeks after the Offer Deadline”. The definitive offer had to include certain matters as a minimum. These included the amount in pounds sterling that the bidder proposed to pay in cash for the Bank as at 31 March 2016 (referred to as the “Transaction Value”). Other minimum requirements included the following:
“Financing: Financing of the Transaction Value (as adjusted after the Locked Box Date) should be secured on a certain funds basis and should not be a condition of your Definitive Offer nor a condition to the Proposed Transaction and should be capable of immediate draw-down on completion. Therefore, in your Definitive Offer, please confirm your sources of funds available for financing the Transaction Value, whether through cash on deposit, credit lines and/or investment commitments, as applicable. Where financing (both debt and equity) is being provided by outside sources, copies of term sheets and commitment letters from such sources must be attached to your Definitive Offer”
[10]Offers were to be submitted by 12 noon on Monday 12 September 2016. The letter expressly stated that the Secretary of State: “reserves the right at its sole discretion to adjust the date of the Offer Deadline and/or to accept or ignore bids if they are received after the deadline”.[11]A final section of the final phase letter provided further information part of which is in the following terms (and similar provisions had appeared in earlier letters): “SoS shall be free at its sole discretion to establish the process for the Proposed Transaction, and to supplement or change this process from time to time. Without limiting the foregoing, SoS and BofAML (acting on SoS’s behalf) expressly reserve the right, at their sole discretion, at any time and without specifying any reason, without any liability or obligation of any kind, to accept or reject any or all of the Definitive Offers; to limit or terminate any party's (or parties') access to information; to alter this process in any manner (including any requirement for a Definitive Offer as set out in this letter) or terminate this process entirely and decide not to proceed with a transaction; and to negotiate or enter into an agreement with any party (or parties) with respect to any transaction involving the GIB Group. You acknowledge that neither you nor any of your representatives are relying on any express or implied representation of any kind concerning the manner in which such process will proceed. SoS also reserves the right to allow interested parties to join the process at a later stage subject to their fulfilling the conditions set out in this letter and the BIF, and signing a Confidentiality Agreement.“[12]It was also known that the Secretary of State preferred a bid for 100% of the Bank although the final phase letter did not require that any bid must be for 100% and a bid for a lesser proportion could be made.

The Bids

[13]The Claimant had intended to bid for 100% of the Bank. It assembled a consortium of investors who would provide equity financing for part of the bid and it began arranging loan facilities to finance that part of the sale that would not be provided by equity financing.[14]The Government wished the Bank to be classified as being in the private not the public sector after sale. One of the members of the consortium was a public sector body. One issue was to ensure that any legal structure, by means of the size of the public body’s share and the rights that it would have in relation to the Bank after sale, did not result in the Bank continuing to be classified as a public sector body. The body responsible for taking the final decision would be the Office for National Statistics (“the ONS”) which is a body independent of Government. The Claimant and its advisers, began work on a mechanism whereby the Bank could be classified as a private sector body. That involved preparing a limited partnership agreement (“the partnership agreement”) which limited the rights of a public sector body over the company that would, through subsidiaries, ultimately, own the Bank. A draft was prepared by the Claimant’s legal advisers, Freshfields. A summary of the proposed partnership agreement and the view of Freshfields on the classification issue was sent to the Second Defendant in mid-August 2016 with an e-mail in which the Claimant’s legal adviser expressed his view that he understood that the Second Defendant broadly agreed with the analysis. No reply to that e-mail was sent to Freshfields.[15]On 31 August 2016, one of the members of the consortium withdrew after encountering a regulatory problem in relation to its investment. Following a discussion between representatives of the Claimant and the Second Defendant, the Claimant then decided to bid on the basis that its consortium members would acquire 75% of the equity in the partnership that would, ultimately, own the Bank and the Secretary of State would have the option of taking a 25% share in the equity of the partnership. There would be a need to ensure that the combination of the interest retained by the Government and that to be taken by the other public sector body, and the rights which they would have under the partnership agreement, would not result in the Bank being classified after sale as still being in the public sector. There was an initial meeting in early September between representatives of the Second Defendant and staff at the Treasury (not ONS) but the Treasury indicated that further details on the partnership structure would be needed before they could take a view and that was conveyed to the Claimant’s legal adviser.[16]Mr Maxwell, the Chief Executive Officer of the Claimant, said in his first witness statement that he met with a representative of the First Defendant’s financial advisers on 9 September 2016 and they agreed that the Claimant would put in its bid on 14 September 2016 with an addendum to be provided on 19 September 2016.[17]The Claimant did submit a definitive offer and addendum on those dates. The accompanying documentation demonstrating commitment in relation to the equity financing element of the transaction was said to be provided by the draft partnership agreement under which the investors would become liable to provide the necessary funding on signing the partnership agreement and the fact that investor approvals had been obtained. The commitment in relation to the debt financing element was said to be substantially agreed and letters of commitment were provided. Mr Maxwell, in his third witness statement, accepts that in relation to one tranche of financing, for a particular amount, the documentation did not, as at 19 September 2016, evidence a binding commitment but confirmed that “it is our expectation that long-form documentation can be agreed over the course of the next week and, subject to final outstanding questions being resolved to our satisfaction, our commitment will become binding”. The Claimant, in its offer, sought an exclusive negotiation period in order to complete and executive all definitive documentation relation to the proposed transaction. The Claimant’s offer was labelled, and referred to in the process as the “Maroon” bid.[18]The Interested Parties also formed a consortium and made a definitive offer for 100% of the Bank. That offer was received shortly after the deadline for submitting offers had passed. That bid was labelled, and referred to in the process as the “Gold” bid. The Interested Parties also sought a period of exclusive negotiation in order to finalise the arrangements for the sale.

The Assessment of Bids

[19]It was considered that neither bid fully satisfied the requirements set out in the final phase letter but that both bids were well-developed with substantial supporting information and they could be evaluated. An assessment panel was therefore established to assess the bids. The panel comprised staff of the Second Defendant responsible for the sale. The panel met on 15 September to review the two offers and reviewed the offers again on 19 and 20 September 2016 in the light of the additional information provided by the Claimant. The panel had a note of a review of the two bids made by the Second Defendant’s financial advisers and were provided with an initial review by its legal advisers. That legal advice was confirmed in a note, said to be a draft, dated 23 September 2016.[20]The 23 September 2016 document noted the view of the legal advisers that both offers required further action to be undertaken in respect of certain matters. The document noted that both bidders were seeking a period of exclusivity during which the Government and the Bank would engage with the bidder as a “preferred bidder” in order to progress the necessary actions. The document noted the possible consequences if those matters could not be satisfactorily resolved. The document also considered the draft partnership agreement provided by the Claimant on 19 September 2016. The advisers considered that they could not determine definitively whether the Bank would be classified by the ONS as being within the public or private sector on the basis of the proposed partnership agreement, given that it had, in their view, unusual characteristics which had not previously been disclosed during the course of the process. They noted that further changes to the draft partnership agreement were envisaged (and those were not envisaged as being concerned solely, in their view, to respond to any requests for amendments made by the Secretary of State). They referred, amongst other matters, to the fact that one element of the debt financing (referred to above) was a non-binding commitment.[21]The panel considered that the Gold bid (that is, the one made by the Interested Parties) was preferable to the Maroon bid (that is, the one made by the Claimant). They recommended that the Interested Parties be given a period of exclusivity to finalise their bid and meet certain conditions. Their views are set out in a document which formed the advice submitted to ministers.[22]In essence, the panel considered that the Gold bid was financially preferable to the Maroon bid, and considered that a still higher price could still be obtained from Gold through further negotiation and that other issues, including a requirement that the Bank be restructured before completion, could also be addressed through negotiation. The Maroon bid was considered to be financially less advantageous than the Gold bid. It would also involve lower receipts as the Maroon bid was, effectively, for 75% not 100% of the Bank (as explained in more detail above). The panel considered that the element of public sector participation (the combination of the interest retained by the Government and the interest to be acquired by other public sector bodies) under the partnership agreement had classification risks (as the ONS might classify the Bank as still in the public sector after sale). The panel considered that its funding position was less secure noting that their intended offer had changed from 100% to 75% (on one of the consortium withdrawing on 31 August 2016 as explained above).[23]The panel’s assessment was reported to a Steering Group meeting on 22 September 2016. The board of the Bank also met and expressed views consistent with the assessment of the panel.[24]On 23 September 2016, a submission was made to government ministers recommending that the Interested Parties be offered a period of exclusivity for further negotiation with a view to finalising the terms of its bid and meeting certain other conditions. The ministers approved that recommendation as appears from an e-mail timed at 18.18 on 26 September 2016. The evidence, and the parties’ submissions, proceeded on the basis that the decision was taken on 27 September 2016, presumably as the e-mail indicating acceptance of the recommendations came in the evening of 26 September 2016 outside of normal working hours. I shall treat the decision as having been reached on 27 September 2016.

Subsequent Events

[25]On 30 September 2016, Mr Maxwell was told by telephone of the decision to offer preferred bidder status to the Interested Parties. Mr Maxwell summarises the conversation in his first witness statement. He said he was told by telephone at 9.30 a.m. that the Maroon offer was considered to be lower than the Gold offer, that there remained question marks over the Gold offer but that the Government were working towards a preferred bidder agreement with Gold and that would take around a week and the Claimant was asked not to stand down their consortium yet.[26]Later on 30 September 2016, the Claimant sent a letter to the Second Defendant increasing the price it was prepared to pay for 75% of the Bank. The letter said that the Claimant was highly confident that the higher offer could be financed but, it seems, documents evidencing binding commitments were not provided.[27]On 10 October 2016, the Claimant was told that the Defendants had entered into an exclusive period of negotiation with the Interested Parties. On 11 October 2016, Mr Maxwell wrote to the Second Defendant setting out his concerns over the process. That letter said, amongst other things, that the Claimant had significant concerns about the process and did not believe that it had met legitimate expectations and registered its concerns about the potential effects of deficiencies in the process. At some stage thereafter, the Claimant instructed solicitors to consider the possibility of judicial review of the decision. On 2 November 2016, solicitors for the Claimant sent a pre-action protocol letter to the Defendants. In that letter, the solicitors stated that the Claimant was concerned in particular about the decision to award the Interested Parties preferred bidder status. The letter identified the grounds of challenge. They included the claim that the Claimant had prepared a bid which was compliant with the terms of the final phase letter, and the Interested Parties had not, and in so doing the Defendants had acted in a way that was said to be inconsistent with the Claimant’s legitimate expectation. The solicitors identified factors that may, in their view, have been taken into account in a legally impermissible manner. The Second Defendant replied to that letter on the evening of 16 November 2016. On 19 December 2016, the Claimant filed a claim for judicial review challenging the decision of 27 September 2016.[28]On 2 February 2017, Ouseley J. granted permission for documents to be served in redacted form on the Interested Parties. On 16 February 2017, William Davies J. ordered that there be a rolled-up hearing on 30 and 31 March 2017 and put in place arrangements so that confidential material would only be seen by certain individuals (referred to as the “confidentiality ring”). A further directions hearing was held on the 20 March 2017.[29]In the event, the Defendants and the Interested Parties were not able to reach final agreement during the initial period of exclusivity and the period for negotiations has been extended. At the hearing on 31 March 2017, I was told that the Defendants and the Interested Parties have now reached agreement in principle on the terms of the sale and are now in a position to sign a binding, contractual agreement providing for the sale of the Bank but wished the Administrative Court to have the opportunity to give judgment in these proceedings before the parties signed the agreement.

THE ISSUES

[30]Against that background, the following issues arise for consideration:(1) Did the Claimant bring the claim within the time prescribed by CPR 54.5?(2) Is the claim justiciable?(3) Did the Defendants act unlawfully or unfairly: (a) As the Claimant’s bid complied with the requirements of the final phase letter whereas the Interested Parties’ bid did not, and the Defendants were therefore legally obliged to accept the Claimant’s bid (the Claimant’s primary case)? (b) In the way in which it dealt with specific elements of the Claimant’s bid (the Claimant’s secondary case)?(4) Should the Court refuse a remedy as a matter of discretion?

DELAY

[31]A claim for judicial review must be brought promptly and in any event not later than 3 months after the date when the grounds of challenge for first making the claim arose: see CPR 54.5. The test is one of promptness. A claim may not have been brought promptly even if it is brought within 3 months: see Finn-Kelcey v Milton Keynes BC [2009] Env. L.R. 17 at paragraph 21 and the cases cited there. Prompt action is necessary so that the parties, and the public generally, know whether they are able to proceed on the basis that a decision is valid and can be relied on and so that they can plan and make business decisions accordingly. In the context of a challenge to a decision affecting the sale of a significant, publicly-owned asset, the wider public interest, as well as the interest of the bidders, provide a real need to ensure that any challenge which may affect the sale process is resolved quickly. See, generally, R v Independent Television Commissioners ex p. TV NI Ltd. (CA) The Times, December 20 1991.[32]Time begins to run on the date when the grounds of challenge first arose, usually the date on which the decision under challenge was taken. The time does not begin to run from the date when the Claimant knew of the grounds of challenge. The date when the Claimant knew (or ought to have known) sufficient to enable a challenge to be brought is likely to be highly material to the question of whether the claim was brought promptly or whether an extension of time for bringing the claim should be granted. See R v Secretary of State for Transport ex p. Presvac Engineering Ltd. (1991) 4 Admin. L. Rep. 121 at pages 133 to 134.[33]In the present case, the decision was taken, and the grounds of challenge first arose, on 27 September 2016. The Claimant was not informed of the decision until 30 September 2016 and, even then, it was informed that the Defendants were working towards agreeing that the Interested Parties would be the preferred bidder, which would take around a week, and the Claimant was asked not to stand down its consortium. It was only informed on 10 October 2016 that the Interested Parties had been appointed the preferred bidder with an exclusive period for negotiation to finalise the agreement. It would not be right in those circumstances to criticise the Claimant for not taking any action in the period between 27 September 2016 and 10 October 2016.[34]Thereafter, in my judgment, the Claimant failed to act promptly, and did delay unduly, in bringing the claim. Certainly, by 2 November 2016, the Claimant knew sufficient to bring the claim. The principal case in these proceedings, namely the claim that the Claimant’s bid complied with the final phase process letter and the Interested Parties did not and so the Defendants were obliged to accept the Claimant’s bid, was set out in that letter. Complaints about the process were also set out in the pre-action protocol letter.[35]The Claimant received a reply on 16 November 2016. Notwithstanding the time that had already elapsed, the Claimant took a further 4 and ½ weeks before filing the claim for judicial review on 19 December 2016. In my judgment, the Claimant did not act promptly. It knew of the decision certainly no later than 10 October 2016. It had lawyers acting for it and knew all it needed to know to bring the claim by 2 November 2016. The use of the pre-action protocol procedure does not affect the time limits for bringing the claim under CPR 54.5, as the protocol itself makes clear. Thereafter, having had a reply, over four weeks passed, without in my judgment any adequate explanation, before the claim was filed. It should have been clear to the Claimant that it would, at the latest, have to act promptly following receipt of the reply to the pre-action protocol letter given the time that had already elapsed. That point is reinforced by the commercial context in which the claim was brought. I recognise that the Defendants and the Interested Parties had not in fact reached a position where they could sign an agreement by 19 December 2016, and that was not the result of any failure to act on the part of the Claimant. I recognise the need for time to draft the proceedings, and, in this case, the burden of ensuring that confidential material was redacted. Nevertheless, in my judgment, the Claimant did not bring the claim promptly, and delayed unduly, by not filing the claim until 19 December 2016.[36]For that reason alone permission to apply for judicial review of the decision of 27 September 2016 should be refused. Nevertheless, it is appropriate, given that full argument was heard over two days, to deal with the other questions that arise.

JUSTICIABILITY

[37]The Interested Parties contend that the decision under challenge in the present case is not amenable to judicial review as the decision and the nature of the alleged breaches do not involve any element of public law.[38]For present purposes, it is helpful to analyse the matter in two stages. First it is useful to consider whether the decision under challenge has a sufficient public element to it and secondly whether the breaches alleged involve breaches of public law obligations which are applicable to the decision-making process. The matter is expressed in this way by Waller J. in R v Lord Chancellor ex p. Hibbit and Saunders [1993] C.O.D. 326: “… it is critical to identify the decision and the nature of the attack on it. Unless there is a public law element in the decision, and unless the allegation involves suggested breaches of duties or obligations owed as a matter of public law, the decision will not be reviewable”.[39]On the first point, the position here is that the First Defendant is exercising the common law powers of a shareholder to sell shares in a business. There is no statutory framework governing the sale process. The First Defendant is entitled to determine the process by which, and the aims for which, the sale is to be conducted. Nevertheless, the decision involves the sale of a publicly-owned asset. It is to be sold as a matter of government policy. The sale has to be reported to Parliament. Those factors are sufficient to generate the public element necessary to render it amenable to judicial review.[40]The second issue is whether the particular allegations made in this case involve questions of public law. Here, there is no relevant statutory framework governing the exercise of the power of sale, so no question of a breach of a statutory restriction on the power to contract arises. The courts have indicated that complaints about the tendering exercise itself are unlikely to involve allegations of breach of any applicable principle of public law. Attaching a public law label such as “irrationality” or a breach of a “duty to act fairly”, is unlikely to give rise to any enforceable claim in public law if, in truth, the claim does no more than challenge a commercial judgment of the public body to prefer one bidder over another. See generally, Mass Energy Ltd. v Birmingham City Council [1994] Env. L.R. 298, The Queen on the application of Menai Collect Limited, North West Commercial Services Limited v Department for Constitutional Affairs v Swift Credit Services Limited [2006] EWHC 724 (Admin) and R (Gamesa Energy UK Ltd.) v National Assembly for Wales [2006] EWHC 2167 (Admin).[41]In those circumstances, the sensible course of action is to consider first the allegations made by the Claimant to determine if those allegations are made out and then, secondly, to determine whether or not the criticisms do, on a proper analysis, involve a breach of a public law obligation applicable to the process in question. THE GROUNDS OF CHALLENGE The Claimant’s Primary Case

THE GROUNDS OF CHALLENGE

[42]The primary case of the Claimant, as set out in its skeleton argument, is that it submitted a compliant offer and the Interested Parties did not and therefore the First Defendant was obliged to accept the Claimant’s offer. In the amended statement of facts and grounds, the issues are described differently but the same essential case is advanced. The Claimant contends that the issue is whether procedural fairness and rationality require the First Defendant to agree to sell to the only bidder whose bid complied with the requirements of the sale process and not to confer a period of exclusivity on the alternative bidder whose bid did not comply.[43]First, the underlying concept of the Claimant’s case is that the final phase letter set out a series of requirements so that, if only one bid met those requirements, the First Defendant was obliged as a matter of public law to contract with that bidder (see, e.g., paragraph 2(i)(a) of the amended grounds of claim and paragraph 56 of the Claimant’s skeleton). That premise is, however, incorrect. There was no statutory framework governing the sale process in the present case. The First Defendant could determine by what process it would decide to sell its stake in the Bank. The final phase letter expressly retained a discretion for the First Defendant to refuse to accept any or all offers, and to change the process by which the sale was conducted. That appears from the terms of the final phase process letter itself which stated in terms that the Secretary of State: “shall be free at its sole discretion to establish the process for the Proposed Transaction, and to supplement or change this process from time to time” and further that the Secretary of State and his advisers “expressly reserve the right at their sole discretion, at any time and without specifying any reason, without any liability or obligation of any kind, to accept or reject any or all of the Definitive Offers”.

and further that the Secretary of State and his advisers

[44]In the absence of any statutory or other applicable legal regime, the Secretary of State was entitled to fix the terms of the sale process. The Secretary of State was selling a valuable public asset and he was entitled to determine how he wished to structure the sale and what the objectives were. Whether or not persons might consider the process to be a desirable one, or in colloquial language “fair” or unduly weighted in favour of the Government, those were the terms set and if any bidder wished to take part in the sale process it did so on those terms. There is no basis for asserting that there was a legitimate expectation that the First Defendant would operate according to different terms or that the First Defendant was in some way not adhering to the process that he had fixed. He was. The process he fixed ensured the maximum discretion for the Secretary of State in terms of the process, the decision on whether or not to accept any offer and what objectives and aims the sale should seek to achieve.[45]Secondly, the factual premise underlying the Claimant’s primary case is also, in my judgment, misconceived. The language of a “compliant” bid is suggestive that a series of requirements were fixed, and that a bid could be said to have satisfied or “complied” with those requirements. Further, it is said that the Claimant’s bid did, or did sufficiently, satisfy those requirements (presumably viewed objectively) and so was compliant. That is not, in my judgment, an appropriate description of the process. Furthermore, and as a matter of fact, the First Defendant did not consider that the Claimant’s bid had satisfied his requirements. He was entitled to take that view on the material before him. Even if it were appropriate to view the matter objectively, and for the court, rather than the Secretary of State, to consider the matter, the Claimant’s bid did not satisfy the requirements of the final phase letter. I give the following as examples of matters where the Claimant’s bid was not seen to satisfy (or in the Claimant’s language “comply” with) the requirements of the Secretary of State.[46]The sale process set objectives. The overall objective was to deliver value for money to be achieved through a combination of value maximisation and transaction certainty. Assessment of those matters was, ultimately, a matter for evaluation by the Secretary of State. He considered that the Claimant’s offer did not satisfy those objectives. Furthermore, and additionally, it was clear that the intention of the sale was that funds representing state aid would have to be repaid. The value put on the bid by the Claimant as at 31 March 2016 would not ensure that state aid funds would be repaid. The Claimant sought to address that point by stating that its headline valuation was at a figure that exceeded the state aid provided to the Bank and it was only the figure reached after deduction of certain figures that brought it below the state aid figure. Alternatively, they suggest that the value of the bid as at 31 December 2016 (when the amount of the bid would have been increased by a figure calculated by an accrual rate, that is a rate designed to reflect the assumptions as to the amount of monies received by the Bank from its investments between 31 March 2016 and the anticipated completion date of 31 December 2016) exceeded the state aid figure. It is, in my judgment, a matter for the Secretary of State to determine if a bid would meet one of the objectives, or intentions, underlying the sale. Even viewed objectively, however, the Claimant’s case is not made out in this regard. The “consideration or Transaction Value” is defined in the final phase letter as the amount in pounds sterling that the bidder proposed to pay in cash for the Bank as at 31 March 2016. That points to the figure being the figure after deductions (the cash sum which the bidder proposed to pay) and, furthermore, that it was the figure as calculated as at 31 March 2016 (not some later date) that was relevant.[47]To take another example, the final phase letter made it clear that the financing arrangements through equity and debt commitments had to be certain. Debt commitments letters had to be provided with the definitive offer. In the case of the Claimant, one element of debt financing was not committed at the time it made its offer. There was one tranche of funding, described in paragraph 17 above, which was not committed and was based on an expectation that it would be finalised in due course. That matter alone, in my judgment, would entitle the First Defendant to take the view that the requirements relating to certainty of funding were not satisfied by the Claimant’s offer.[48]In addition, the First Defendant took the view that the Claimant’s offer was not final and binding and capable of acceptance as required by the final phase letter. A number of matters were outstanding and needed to be resolved. These included, for example, the final terms of the partnership agreement and the final commitment in relation to one particular tranche of funding. In the circumstances, the bid could not be accepted as it stood and further work would be needed. Indeed in one sense that was recognised by the Claimant as it sought a period of exclusivity for it to finalise the necessary documentation and commitment. In those circumstances, the First Defendant was entitled to take the view that the bids (of both the Claimant and the Interested Parties) did not amount to the final and binding offer that he was seeking. Indeed, even if it were a matter to be viewed or ascertained objectively then, on the information available, the Claimant’s bid was not a final and binding offer within the meaning of the final phase letter.[49]There was considerable discussion in oral argument as to whether other requirements of a procedural nature had been complied with. There was discussion about whether the fact that the Claimant had not supplied term sheets but had provided information which was the same or better than that contained in a term sheet, or whether the fact that due diligence would necessarily have had to have been carried out in respect of the period following the bid and completion, or whether the fact that the bid was not received by 12 noon on 12 September 2016 (in circumstances where the Secretary of State wished to and did evaluate the bid, even though received later, as was the Interested Parties’ bid) meant that the Claimant’s bid was not “compliant”. It is not necessary to resolve those issues although, in fairness, having regard to the contemporaneous material, none of those matters were ones that appear to have led the First Defendant to conclude that the Claimant’s bid did not satisfy the First Defendant’s requirements. The important fact is that the First Defendant considered that the bid did not satisfy his requirements. In my judgment, he was entitled to take that view on the material before him for the reasons given above. Indeed, even if the bid could have been said to satisfy the requirements, the Secretary of State, was in any event, entitled to amend the process and require further steps to be taken. To that end, he was not obliged to accept any bid. He was entitled, instead, to grant a period of time, exclusively, to one bidder to enable that bidder to try to reach a situation where its bid was acceptable to the Secretary of State.[50]The primary case of the Claimant is therefore unarguable on the facts and on the law.

The Claimant’s Secondary Case

[51]The Claimant’s secondary case contends that the Defendants acted unlawfully or unfairly in the way that they considered certain specific matters. There are eight matters which are helpfully listed in paragraph 63 of the Claimant’s skeleton argument. I consider those in turn to determine first if any of the criticisms are established. If so, it may be necessary to consider whether the criticisms really do establish that a public law error has occurred. I will deal with two of the eight matters listed first, as those were the matters which, from the oral argument, appeared of particular importance to the Claimant’s case. In considering the eight matters, the important documents for assessing the validity of the claims is the advice given to the First Defendant on 23 September 2016, and the explanation given by Mr Norris in his witness statements although I have considered all the relevant material.

The Assessment of Project G

[52]Project G was a particular investment project which was not yet finalised when the sale process was underway. The Interested Parties included Project G in their bid. Their proposed purchase price therefore included an element attributable to Project G. The Claimant did not include Project G in its bid and therefore there was no element in its proposed purchase price attributable to that Project. The Claimant’s concern was that any difference between the price offered by the Interested Parties and it, the Claimant, might be attributable to the difference in the assets the two bidders were proposing to acquire rather than a situation where, like-for-like, the Claimant’s bid was lower than the Interested Parties. The Claimant had been told that they would not be penalised if their bid did not include Project G.[53]That matter is fully explained in paragraph 137 of Mr Norris’ first witness statement. The assessment was conducted in a way which avoided the Claimant being penalised because its bid did not include Project G. The assessment involved rolling forward the two bids to the expected completion date of 31 December 2016 using their assumptions about the Bank’s future investments and the amounts payable by them in respect of anticipated income. More significantly, for present purposes, the valuation of each bidder was then compared against the Second Defendant’s own valuation of the Bank – using different benchmarks. In the case of the Claimant, the value placed on the Bank excluding Project G was used. In the case of the Interested Parties, the value placed on the Bank including Project G was used. That way, the assessment could ascertain the difference between the value placed by the Second Defendant on the Bank and the different bids (using the appropriate benchmark) to see how much above or below the Second Defendant’s valuation the bid was. The Claimant was not therefore disadvantaged by the way that Project G was assessed.

The Restructuring Costs

[54]The Claimant’s bid deducted from its headline purchase price certain proposed costs connected with an anticipated restructuring of the Bank’s operations. Thus, the price that the Claimant was prepared to pay was an amount less those restructuring costs. It contended that the Defendants had not made a quantification of the amount of restructuring costs that formed part of the Interested Parties’ bid and so, had not acted fairly or lawfully as between the parties in the way they dealt with this matter. This point was not part of the amended grounds of claim but I permitted a further amendment at the hearing to allow the Claimant to raise this point. I also permitted the Defendants to adduce evidence on this point as, understandably, they had not dealt with it in their evidence as this point was not then part of the claim.[55]The position is explained in Mr Norris’ third witness statement. The costs (referred to as restructuring costs) contemplated by the Claimant related to changes in the operations of the Bank. The costs related, largely, to staffing costs and the disposal of assets. Those costs would be deducted from the amount the Claimant would pay to the First Defendant for the Bank.[56]The matters concerning the Interested Parties’ bid have also been described as restructuring costs but in fact refer to a different exercise. They refer to the costs of establishing a new corporate body to hold certain of the Bank’s assets. That work involved work by the Bank’s own staff and legal advisers. These costs were essentially administrative and minimal. The Interested Parties did not propose to deduct any sums from their bid to reflect the costs. Rather, if they succeeded in their bid, the costs would have been borne by the Bank (and, to that extent, would be reflected in the value of the asset purchased by the Interested Parties). If the sale did not proceed, and if the costs had been incurred, they would have been borne by the Bank. The panel evaluating the bids analysed the terms of this aspect of the Interested Parties’ bid in terms of what is referred to as transaction certainty, that is the certainty of the transaction being finalised, as the restructuring was a condition of the Interested Parties’ bid.[57]The Defendants were entitled to approach the question of these aspects of the bids by the Claimant and the Interested Parties in the way they did. There was no error of law or any breach of any principle of public law in the way that these matters were dealt with. In truth, the costs reflected different matters and, in one case (the Claimant’s) would result in a significant reduction in the money paid by the Claimant for the Bank if its bid succeeded and, in one case (if the Interested Parties’ bid succeeded), a minimal reduction in the value of the assets being purchased or (if the Interested Parties’ bid failed) leave the Bank bearing these costs. There was no illegality or unfairness in the way this aspect of the bids was dealt with.

The Change in Assessment

[58]The Claimant complains that there were two assessment templates completed by the panel evaluating the bids, one prepared on 19 September 2016 and one on 20 September 2016. The Claimant complains that the rating placed on transaction certainty in respect of the agreement (that is, the certainty that the transaction would be completed) for the Claimant’s bid was lower in the 20 September 2016 template as compared with that shown on the 19 September 2016 template and no reasons or explanations have been given.[59]This criticism shows no public law error. The panel carried out evaluations on 19 and 20 September 2016, reviewing all the information provided prior to and on 19 September 2016. The final advice that they gave to the minister is recorded in the submission of 23 September 2016. Their final conclusion was that the two bids carried a similar level of transaction completion risk. The fact that, at one stage during the assessment process, the evaluation panel considered that the transaction certainty in respect of the agreement being completed might be higher for the Claimant (and that would have made its bid slightly better than, not level with, the Interested Parties’ bid in this respect) does not reveal any error of law. This is simply an example of the evaluation panel working through its assessment and adjusting its views before reaching a final conclusion. It is not required to give reasons for a change or alteration in assessment as it works through that internal process. The ultimate conclusion that it reached is clear and is recorded in the advice given to ministers.

The Steering Group

[60]The outcome of the evaluation was reported to the Steering Group overseeing the project on 22 September 2016. The Claimant complains that that meeting was not informed of the legal advice of Freshfields that, in Freshfields’ view, a proposed draft partnership agreement governing the rights of public sector bodies in respect of the Bank would not result in the Bank being classified as being in the public sector rather than the private sector after sale. In oral argument, Miss Newman for the Claimant further criticised the fact that one member of the Steering Group was recorded in the minutes of the meeting as having expressed the view that there could be a significant risk that the ONS might classify the Bank as still being in the public sector after sale if the Claimant’s bid was accepted and in her submission there was no basis for such a view and it should not have been allowed to influence the decision-making process.[61]The decision was based on the advice given to ministers following the assessment by the evaluation panel. The panel had the definitive offer of the Claimant which refers to the advice of their advisers to the effect that their view was that the Bank would not be classified as being in the public sector after sale if the partnership mechanism proposed by the Claimant was utilised. The panel had advice from the legal advisers for the Defendants on the documentation (including the draft partnership agreement submitted by the Claimant on 19 September 2016) and that advice is confirmed in a written document dated 23 September 2016. That advice dealt with the Claimant’s contention that the rights attributed to the public sector bodies (the interest retained by the Government and the interest to be acquired by another public sector body) would not lead to the Bank being classified as still being in the public sector. The Defendants’ legal advisers were not so confident and considered that the issue would not be as straightforward as the Claimant believed, noting that recent decisions of the ONS indicated a trend of treating any such rights as being sufficient to lead to classification as a body in the public sector.[62]In short, therefore, the evaluation panel which provided the advice to ministers knew what the Claimant’s contention was in relation to the possible consequences of continued public sector interest in the Bank after sale pursuant to the draft partnership agreement and had its own legal advice. It reached a conclusion, which was that the Claimant’s bid presented a degree of risk that the Bank would not be declassified. There was no failure to have regard to any material consideration. The panel reached a view it was entitled to reach on all the material before them. The fact that the Steering Group (which was not giving the advice to the ministers but was overseeing the process) did not have the Claimant’s legal advice, or that one member expressed comments on the risk to declassification, does not amount to any error of public law or any breach of any duty to act fairly.

The View of ONS on Declassification

[63]The Claimant’s complain that the Defendants failed properly to assess whether declassification would be achieved under the Claimant’s proposed bid because it came to a view on that question themselves rather than seeking the view of the ONS. First, the fact is that the Defendants understood that the ONS, which is a body independent of Government, would only reach a view on classification after the transaction had been completed. That necessarily meant that the Defendants may have to take a view on the risk that declassification would not occur: see paragraph 76 of Mr Norris’ first witness statement. Secondly, and in any event, there was no enforceable public law obligation on the Defendants to obtain such a view and it made no error of public law by choosing to make an assessment of the risk itself. The Defendant Wrongly Attributed Weight to Suggestions that the Claimant’s Consortium was Fragile or Unable to Increase the Level of it Offer.[64]The Claimant contends that the Defendants wrongly attributed weight to suggestions that the Claimant’s consortium was fragile or would be unable to increase its offer. The position appears from the advice given to ministers. The Interested Parties’ bid was considered better in financial terms than the Claimant’s and the assessment was that the Interested Parties had the financial capacity to bid more. There were other issues with the Interested Parties’ bid but it was judged that those could be addressed through negotiation. Against that the Claimant’s bid was considered financially less advantageous and its funding position appeared less secure. That latter view was based on the fact that the Claimant had changed the scope of its intended offer, effectively offering to buy 75% of the Bank rather than 100% in the way described in more detail in paragraph 15 above, shortly before the final deadline offer (which is correct, as, on the 31 August 2016 one of the members of the consortium assembled by the Claimant withdrew). That was a view that the Defendant were entitled to reach on the material before them. There were additional reasons, supporting the financial assessment, to support the conclusion not to proceed with the Claimant’s bid but rather appoint the Interested Parties as the preferred bidder. The Claimant’s bid would, for example, lead to lower receipts (as the Government would retain a 25% share), and there was a risk relating to declassification.

The Lack of an Opportunity to Answer Concerns about Declassification Risk or Increased Price

[65]The Claimant contends that the Defendants acted unlawfully by failing to give the Claimant an opportunity to answer what it regards as the misplaced concerns held by the Defendant as regards declassification or its ability to increase its price. The short answer is that there was no obligation on the Defendants to do so. They had invited definitive offers. It was clear that they wished the purchase price to result in a situation which resulted in obtaining maximum value and transaction certainty, and where state aid funds would be repaid and the Bank after sale would no longer be classified as a being part of the public sector. The Claimant made its bid and put in its information. It did not provide the best price. Its proposed arrangements left a degree of risk in the view of the Defendants as to declassification. The Defendants decided that neither bid was acceptable as it stood and decided to appoint the Interested Parties rather than the Claimant as the preferred bidder and to give them a period of exclusivity (both bidders having sought such a period). The Defendants were not obliged to give the Claimant further opportunities to comment on declassification or whether it could increase its price. The Defendants were entitled to form a judgment, and decide how next to proceed, in the light of the information provided and to do so was consistent with the terms of the final phase letter.

The Increased Offer

[66]The Claimant contends that the Defendants acted unlawfully in failing to consider the enhanced price offer made by it on 30 September 2016. There was nothing unlawful in the way the Defendants proceeded in this matter. The Defendants in fact took the decision to appoint the Interested Parties as the preferred bidder on 27 September 2016 before any increased offer was received. There was nothing unlawful in the Defendants doing so on the basis of the information they had at the time (which did not include the increased offer which came three days later). Summary[67]For all those reasons, there is no basis for concluding that any of the Claimant’s criticism evidences any error which could be categorised as a public law error in the way that the Defendants approached the assessment of the bids and the decision of 27 September 2016 to appoint the Interested Parties as the preferred bidder. For completion, I note that the Claimant relies on, amongst others, the decision in R v National Lottery Commission ex p. Camelot Group plc [2001] EMLR 43. In that case there was a tender process for the award of a licence to conduct a national lottery for a period of time. Neither side produced an acceptable bid. The authority decided to terminate the process and gave one bidder only the opportunity of correcting the deficiencies in its bid but did not give the other bidder the opportunity to do so. The factual situation in the present case is very different. Each bidder here had the opportunity to bid and both sought a period of exclusivity in which to negotiate and bring the agreement to a conclusion. In deciding how to proceed, given its judgment that neither bid satisfied its requirements, and bearing in mind the discretion reserved for the Secretary of State over procedure, the decision was to appoint one of the bidders as the preferred bidder and grant that bidder the period of exclusivity sought. That was a lawful working out of the bidding process. There was nothing unfair about the process.[68]For those reasons, even if the claim had been brought in time, permission would have been refused as the grounds of claim do not disclose any arguable error on the part of the Defendants.

DISCRETION

[70]The final issue concerns the question of whether the court would refuse a remedy. Section 31(6) and (7) of the Senior Courts Act 1981 provides that:
“(6) Where the High Court considers that there has been undue delay in making an application for judicial review, the court may refuse to grant - (a) leave for the making of the application, or (b) any relief sought on the application, if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration. “(7) Subsection (6) is without prejudice to any enactment or rule of court which has the effect of limiting the time within which an application for judicial review may be made.”
[71]Section 31(7) recognises that rules may be made governing the time for bringing a claim for judicial review. Those rules are contained in CPR 54 and I have already indicated that the Claimant failed to comply with the requirements of CPR 54.5 and, for that reason, permission to apply for judicial review should be refused. As the Claimant did not bring the claim promptly, there is also undue delay for the purposes of section 31(6): see R v Dairy Quota Tribunal ex p. Caswell [1990] 2 A.C. 738. In those circumstances, the court could refuse to grant a remedy in the circumstances contemplated in section 31(6)(b) of the Senior Courts Act 1981. Furthermore, the grant of a remedy is discretionary and, in appropriate circumstances, a remedy may be refused even if a claim has been brought in time: see, e.g. dicta in R (Burkett) v Hammersmith and Fulham LBC [2002] 1 W.L.R. 1593 at paragraphs 18 to 19 (per Lord Steyn) and see R v Gateshead MBC ex p. Nichol (1988) 87 L.G.R. 435.[72]The position in the present case is this. The Claimant is challenging a decision to appoint the Interested Parties as a preferred bidder and grant them a period of exclusivity within which to finalise an agreement. The Claimant itself had sought a period of exclusivity and recognised that its bid would require further work before it could be agreed. The remedy sought by the Claimant would, therefore, appear to be either that the Interested Parties should not be the preferred bidder and that it should (its primary case) or that the decision to appoint the Interested Parties was not lawfully taken so that that decision should be quashed and the matter reconsidered afresh by the Defendants.[73]The position now is that the Interested Parties and the Defendants have in fact negotiated an agreement in principle. That agreement, I was told, was now ready to be signed and I was shown a letter dated 28 March 2017 confirming that all the elements of the sale had been agreed in principle, that all the relevant documentation was in agreed form, and that final approval would be given on receipt of the judgment in the present case.[74]In my judgment, it would not be appropriate to grant any remedy now to quash the decision of the 27 September 2016. To do so would either not affect the ability of the parties to complete the agreement or would, at best, create uncertainty about the legal status of the agreement that the Interested Parties and the First Defendant have said that they have agreed in principle. That would be likely to prejudice the completion of the sale. That would in turn be detrimental to good administration. The First Defendant wishes to sell a publicly-owned asset and has conducted a process to identify a buyer and is satisfied with the terms agreed with the buyer. It would be contrary to good administration to prejudice the completion of that sale and thereby prevent the taxpayer and the public purse from obtaining the benefit of that sale.[75]Furthermore, considerable time and resources have been spent by the Interested Parties on finalising that agreement. Mr Purcaro, the senior managing director of one of the members of the consortium put together by the Interested Parties, sets out the financial outlay in his witness statement. These are the costs of fees for external advisers and also internal costs of working on completing the agreement (see paragraph 13(b) of Mr Purcaro’s witness statement). That expenditure is not attributable to the fact that the Claimant delayed in bringing these proceedings: the agreement was not finalised and the work would have needed to be done in any event. The outlay would, however, be wasted if the decision to appoint the Interested Parties as the preferred bidder was quashed and that was seen, in some way, as casting doubt upon the ability of the First Defendant and the Interested Parties to enter into the final agreement. All of this occurs in a context where the final phase letter made it clear that the First Defendant reserved the right, at his discretion, to accept or reject any or all of the offers. The Claimant would have known, therefore, that there could be no guarantee that its offer would be preferred or accepted. In all those circumstances, granting a remedy now in relation to the 27 September 2016 decision would be detrimental to good administration and additionally would prejudice the rights or interests of third parties. Even if I had granted permission to apply for judicial review, and had found some error of public law in respect of the decision to appoint the Interested Parties as the preferred bidder, I would have refused to grant a remedy.

DISCLOSURE AND INSPECTION

[76]One other procedural matter arose at the hearing. The Claimant contended that it was entitled to inspect one particular document, namely a submission made to ministers and dated 19 December 2016. Some paragraphs contain legally privileged material and the Claimant does not seek to inspect those parts of the document.[77]Mr Norris had exhibited this document to his first witness statement and the Claimant had been provided with a copy. Ouseley J. ordered that the copy of the document be returned to the Defendants and, I understand, an appeal is being pursued in relation to that order. Ouseley J. also left open the prospect of the Claimant making an application for specific disclosure.[78]On usual principles, a court will order specific disclosure of a document in a claim for judicial review if disclosure is necessary for fairly and justly disposing of the claim: see Tweed v Parades Commission of Northern Ireland [2007] 1 A.C. 650 especially at paragraphs 3 and 32. I was provided with and considered the document. The bulk of it is concerned with events occurring after the decision in question and does not say anything relevant or material to the Claimant’s case. There are two paragraphs referring to the original decision. They briefly refer to the reasons why the decision was taken but add nothing to the material already before the court and add nothing that would assist the Claimant’s case. I would not therefore have ordered that this document be disclosed.[79]The Claimant contended however, that the fact that the document had been referred to in Mr Norris’ first witness statement meant that it had been disclosed for the purposes of CPR 31.2. That provides that “A party discloses a document by stating that the document exists or has existed”. Aldous L.J., with whom the other members of the Court of Appeal agreed, held in Smith Kline Beecham plc v Generics [2004] 1 W.L.R. 1479 that a reference in a witness statement to a document is a statement that it exists for the purposes of this rule. The Claimant then contended that it was entitled to inspect the document pursuant to CPR 31.3(1) which provides, so far as material, that “A party to whom a document has been disclosed has a right to inspect that document”. The Claimant accepted that use of the document following inspection was a different matter.[80]Historically, disclosure of documents was not provided for under the prerogative remedies. Following the changes in procedure brought about by the Rules of the Supreme Court, and now the Civil Procedure Rules, disclosure and inspection of documents is possible. CPR 54, and the Practice Directions to that part of the CPR, however, set out a specific procedural code for applying for a prerogative remedy or a declaration or an injunction in a public law matter. Paragraph 12.1 of Practice Direction 54A provides that “Disclosure is not required unless the court otherwise orders”. In those circumstances, in my judgment, a reference to a document in a witness statement filed in support of a claim for judicial review made under CPR 54 is not to be treated as disclosing the document for the purposes of CPR 31. The specific provisions of Practice Direction 54A contemplate that disclosure will only be required if the court so orders. A defendant public body may voluntarily provide copies of documents and is encouraged to do so (and it may be a method of discharging its duty of candour to ensure that a court is informed of the relevant facts underlying and the reasons for a decision). Until an order is made, however, a defendant is not required to disclose documents. In those circumstances, a reference to a document in a witness statement filed in the course of proceedings for judicial review would not amount to disclosure. Consequently, I ruled at the hearing that the Claimant had no right to inspect the document pursuant to CPR 31.3 and indicated that I would give my reasons for that ruling in this judgment as I have now done.[81]Lest that conclusion be wrong, I also ruled that the Claimant would not be entitled to use the document in these proceedings and could not read out or refer to the document in the course of these judicial review proceedings and would not be able to use the document in other proceedings without the permission of the court. That alternative ruling was intended to ensure that any subsequent use of the document (even if it could be inspected) would require the permission of the court and to prevent the exceptions in CPR 31.22(1)(a) applying and ensuring that a court would have to give permission for any subsequent use of the document or the parties would have to agree in accordance with CPR 31.22((1)(b) and (c). For completeness, I note that the document was not referred to or read out in open court.[82]The Claimant initially applied for disclosure of two further categories of documents, namely all e-mails and other documents sent by or to, or copied to, Mr Norris in connection with its offer and the assessment between specified dates and all drafts and final versions of the templates prepared by the panel. Those applications were not pursued at the hearing and I was not asked to make any order in relation to those documents. There was also an application for permission to use documents exhibited to the first witness statement of Mr Norris dated 1 February 2017 for the purpose of bringing a claim under part 7 of the CPR. It was agreed that that application did not have to be resolved at this stage.

CONCLUSION

[83]Permission to apply for judicial review of the decision of 27 September 2016 appointing the Interested Parties as the preferred bidder for the sale of the Bank is therefore refused for each of two separate reasons. First, the claim was not brought within time. Secondly, the Claimant has not demonstrated any arguable ground that the process was carried out unlawfully. Thirdly, in any event, even if permission had been granted and any error identified in the decision to appoint the Interested Parties as a preferred bidder, the court would have refused to grant any remedy as a matter of discretion.

Cited in 6 later judgments