Seeing STARS again: Court of Appeal upholds High Court decision

As a postscript to the previous entry on the judicial review arising from the STAR project please note that the Court of Appeal has now upheld the decision of the High Court – albeit with some reservations: R (on the application of London Borough of Enfield) v Secretary of State for Transport [2016] EWCA Civ 480. To briefly recap, Enfield Borough Council sought judicial review of the terms upon which an invitation to tender had been issued in respect of the franchise for the East Anglia Franchise. In short, the Enfield BC argued that the Department for Transport had led them to believe that operators would be required to provide a 4 train per hour (4tph) service for a new station serving the Meridian Water development – a major £2.5 billion urban regeneration project. The communications with the Department for Transport were said to have created a legitimate expectation that this requirement would be included in the franchise agreement and that the failure to include it in the tender documents thwarted this legitimate expectation.

As regards the emails which were at the heart of the dispute the Court of Appeal agreed that they did not create a legitimate expectation for 2 main reasons. Firstly, it was held that the local authority was already firmly committed to the project as evidenced by the fact that it had already invested £70m. Secondly, its actions showed that it had taken a calculated risk in embarking upon the project. Both these factors demonstrated that the requisite degree of detrimental reliance was lacking. However, although it did not affect the outcome of the appeal, the Court of Appeal disagreed with the High Court’s finding that it was unforeseeable that the communications with the STAR working group would be communicated to the local authority. It also found that the emails were clear and unambiguous albeit mistaken. In this respect the Court of Appeal was highly critical of the performance of the Department for Transport in the matter:-

‘Regrettably, this was an inept performance on the part of the DfT, serving to undermine public confidence in its competence and the communications of its officials’ [para 49].

It was also argued that the Secretary of State had acted irrationally in failing to take into account the economic impact of the 4tph requirement and its effect on the regeneration project. The Court of Appeal held that, whilst various documents highlighted potential for local regeneration as a consideration to be taken into account in franchise agreements in so forth, such commitments were expressed with a ‘very high level of abstraction’. In this respect they were not sufficiently concrete to form the basis for judicial review of the decision. Moreover, the Department had adhered to its standard economic modelling practices and complied with the requirements of the Public Service (Social Value) Act 2012, s 1(3).

 

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