Remedies
Q1. When will the court grant and
injunction.
A1. Due to the difficulties in assessing
damages, which will be explored below, it is considered
that injunctive relief should be considered as the primary
remedy, Partenaire Limited v Department of Finance and
Personnel [2007] NIQB 100 at 13.
When an aggrieved contractor receives notice from the
contracting authority that it intends to award the contract
to another, and where the contractor believes that there
has been a breach of the contracting authority’s duty
then it may apply for an interim injunction to restrain
the contracting authority from awarding the contract.
The court, when faced with such an application will
apply the American Cyanamid test (American Cyanamid
Co v Ethicon Co Limited [1975] AC 396). The criteria
laid out in that case are:
- is there a serious issue to be tried?
- are damages an adequate remedy?
- does an undertaking in damages provide adequate
protection?
- where does the balance of convenience lie?
It is, of course, correct that in applying these criteria
each case will turn on its own of facts. In Pantenaire
the Court, in considering whether or not damages would
be an adequate remedy, took into account that the exercise
to measure the damages would be difficult, but not impossible.
Nevertheless, the Court was not persuaded that damages
would be an adequate remedy in that particular case.
In that case the Court then went on to consider the
adequacy of the qualified undertaking in damages being
offered by the applicant. The Court took into account
that the potential loss could be overwhelming and that
if it imposed a “full” undertaking, it would effectively
prohibit a private sector contractor seeking interlocutory
injunction, and accepted the qualified undertaking offered.
In McLaughlin & Harvey Limited v Department of Finance
and Personnel [2008] NIQB 25 the Court was not persuaded
that the award of damages would be inadequate. The Court
then considered the fact that the cross undertaking
in damages might not fully compensate the defendant,
and although not an insurmountable barrier, was a factor
in the balance against the application. No injunction
was granted.
Q2. Overview of available remedies
A2. The primary remedies available
for either breach of the tendering contract, or for
breach of the PCR ‘06 is application for an injunction
and/or a claim for damages.
Should a challenge be made by way of application for
judicial review, the remedies would include a mandatory
order, a prohibition order, a quashing order or a declaration.
Although very rare, a claim could also be made founded
on the Tort of Misfeasance in Public Office.
Reg.47 of PWC ‘06 provides that:
“…without prejudice to any other powers of the Court,
in proceedings brought under this regulation the Court
may –
(a) by interim order suspend the procedure leading to
the award of the contract…or suspend the implementation
of any decision or action taken by the contracting authority…and
(b) if satisfied that a decision or action taken by
a contracting authority was in breach of the duty owed
…
i order the setting aside of that decision or action
or order the contracting authority to amend any document;
or
ii award damages to an economic operator which has suffered
damage as a consequence of the breach; or
iii do both of those things.”
It should be noted that Reg.47(9) provides that the
Court does not have power to order any remedy other
than an award of damages for breach of a duty where
the contract, in relation to which the breach has occurred,
has been entered into. |
