Killaree Lighting Services Ltd v Mayo County Council (Approved)

Factual and Procedural Background

The present case concerns a public procurement review application under the European Communities (Public Authorities Contracts) (Review Procedures) Regulations 2010 as amended. The Applicant, Company A, challenged the award of a public contract by the Respondent, Company B, to the Notice Party, Company C. The primary judgment was delivered on 13 February 2024, where the court found that Company A succeeded on one significant issue, namely the validity of the purported standstill letter sent by Company B. However, Company A did not succeed in its broader challenge to the contract award. A subsequent hearing on 29 February 2024 addressed two issues: whether a declaration should be made that the standstill letter was non-compliant with legal requirements, and the determination of costs related to the proceedings.

Legal Issues Presented

1. Whether the court should grant a declaration that the standstill letter issued by Company B was not compliant with the requirements of law.
2. How the costs of the proceedings should be apportioned between the parties in light of the partial success of Company A.

Arguments of the Parties

Applicant's Arguments

• Company A contended that it was successful in the proceedings due to the court's finding in its favour on the standstill letter issue.
• It argued that the hearing was not exceptionally long and did not involve discrete modules, thus apportionment of costs was unjustified.
• Company A asserted that much of the hearing time involved context and background relevant to all grounds of challenge, implying that costs would have been incurred even if only the standstill letter issue had been pursued.
• It claimed that unsuccessful issues did not substantially add to overall costs or court time.
• Company A further argued that Company B's failure to send a proper standstill notice breached mandatory regulations, warranting an adverse costs consequence as a form of consolation despite not obtaining statutory reliefs.

Respondent's Arguments

• Company B submitted that it was completely successful and should be awarded all its costs.
• Alternatively, it argued that any apportionment of costs related to Company A's success on the standstill letter issue should be minimal or nonexistent for reasons including the form of pleadings, unpleaded matters raised by Company A, difficulties in agreeing the issue paper, and limited time spent on the standstill letter at hearing and in papers.
• Company B contended that the failure to send the standstill notice did not inhibit Company A's ability to seek pre-contractual remedies.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Recorded Artists Actors Performers Ltd v. PPI (Ireland) Ltd [2022] IECA 8	Appropriateness of granting declarations in public procurement challenges.	The court distinguished the present case from this precedent because no declaration was sought in the original proceedings, which weighed against granting a declaration now.
Chubb European Group v. HIA [2020] IECA 183	Consideration of correspondence between costs incurred by parties in litigation.	The court referenced this case when deciding on the set-off in costs awarded, acknowledging that one party’s costs may not always match the other’s.

Court's Reasoning and Analysis

The court declined to grant a declaration that the standstill letter was non-compliant, noting that such a declaration was not sought in the initial proceedings and that effective remedy did not require it. The court recognized Company A’s success on the standstill letter issue but emphasized that Company A failed to secure any substantive relief such as invalidation of the contract or damages. Therefore, Company A was not the successful party overall.

In assessing costs, the court considered Company B largely successful but acknowledged that Company A’s partial success on the standstill letter issue warranted an adjustment. The court evaluated the proportion of costs attributable to the standstill letter issue, including hearing time and pleadings, but also considered the intellectual and strategic importance of the issue, which could increase costs beyond mere time spent.

Ultimately, the court awarded Company A 15% of its costs to reflect the successful standstill letter challenge, with Company B entitled to 75% of its costs. The court further adjusted the costs to impose a penalty on Company B for its failure to serve a proper standstill notice, recognizing the mandatory consequences under the relevant regulations. This adjustment reflected the legislative intent that breaches of standstill notice requirements must carry adverse consequences, even if statutory relief was not granted.

The court applied a straightforward set-off, awarding Company B 60% of its costs against Company A, balancing the partial success of Company A against Company B’s overall success and the regulatory breach.

Holding and Implications

The court refused to grant a declaration that the standstill letter was non-compliant but recognized Company A’s partial success on this issue. The court awarded Company A 15% of its costs and Company B 75% of its costs, resulting in Company B recovering 60% of its costs from Company A after set-off.

This decision ensures that Company B does not escape the consequences of failing to serve a proper standstill notice, consistent with the mandatory provisions of public procurement law. However, as Company A did not obtain substantive relief, the ruling does not alter the validity of the contract award. No new precedent was established beyond the application of existing regulatory principles to costs allocation in a partial success scenario.