In R (on the application of London Borough of Enfield) (Appellant) v Secretary of State for Transport (Respondent) & (1) Abellio East Anglia Ltd (2) First Group East Anglia Ltd (3) National Express East Anglia Trains Ltd (Interested Parties) [2016] EWCA Civ 480 the claimant council ("Enfield") challenged the Secretary of State's decision to issue an invitation to tender without a minimum train service requirement to the detriment of its planned major regeneration project. The Court of Appeal rejected Enfield's appeal on the grounds of legitimate expectations, natural justice and irrationality.

Key Points

  • While, as a matter of law, reliance on a promise is not a pre-requisite to a successful claim for legitimate expectation, the court will carefully consider evidence (or a lack of evidence) of detrimental reliance when assessing the legitimacy of the claimant's expectation.
  • Natural justice does not require a single entity to be given further opportunities to make representations where a public authority is required to take into account broader stakeholder aspirations as well as an overriding public interest.
  • Depending on the language used, a public authority's comments made in consultation papers and briefing documents may be interpreted as general target duties expressed at a very high level of abstraction rather than giving rise to any binding commitment.
  • Public authorities have a broad discretion especially in a highly technical and complex field.

Background

Enfield had embarked on a major regeneration project valued at £2.5 billion covering the Meridian Water area in the Borough, and had already committed £70 million to the project. It was critical to the success of the project that a 4-trains-per-hour service ("4tph") was guaranteed by a rail franchise which would operate the train service passing the Meridian Water area. This was emphasised as a primary priority of Enfield's at the steering group meetings attended by, amongst others, a principal representative of the Secretary of State's Department of Traffic ("DfT").

Despite email correspondence to the steering group (later communicated to Enfield) which clearly set out Enfield's understanding that following the discussions DfT would include the 4tph requirement (the "DfT's Emails"), the DfT issued an invitation to tender ("ITT") for the rail franchise without the 4tph requirement.

Before the Court of Appeal, Enfield contended that:

  • The DfT's Emails gave rise to a procedural legitimate expectation that Enfield would have a chance to make further representations if the DfT concluded that the ITT should not include a minimum requirement of 4tph.
  • With regards to natural justice, Enfield should have been told of the true position by the DfT and given an opportunity to make further representations.
  • It was irrational for the DfT not to consider the regeneration project when determining whether the ITT should require 4tph.

Decision

The Court of Appeal concluded the following on each ground of appeal:

Legitimate expectation

A public authority may create a legitimate expectation (substantive or procedural) by making a clear and unambiguous representation upon which it is reasonable for a member of the public to rely. In this respect, the DfT's Emails did set out clear statements that 4tph would be specified, knowing that the emails would have been seen by Enfield, and were therefore capable of giving rise to a legitimate expectation. However in fact those emails were simply mistaken.

While, as a matter of law, reliance on the promise is not a pre-requisite to a claim based on legitimate expectation, the court carefully considered the evidence of detrimental reliance. On the facts the court concluded that by already spending £70 million on the regeneration project before receiving the DfT's Emails, Enfield had taken a calculated risk and the DfT's Emails did not make a significant difference.

Further Enfield knew that 4tph was not a "done deal" and that it would give rise to commercial and technical problems for others using the rail franchise. In those circumstances it was unreasonable for Enfield to rely on the DfT's "informal emails promising this great prize". Rather the DfT's Emails were an informal "heads up" in advance of the publication of the ITT.

The court went on to note that even if a legitimate expectation had been made out, this was a situation where the DfT would have been entitled to depart from it in the broader public interest. Enfield should not have been entitled to make further representations, especially given the delay likely to be caused by inviting a further round of representations from other stakeholders.

Natural Justice

The natural justice ground of challenge did not add anything to the legitimate expectations argument as it too was based on the idea that Enfield should have had the opportunity to make further representations.

Irrationality

The DfT had a wide statutory discretion as to how it should conduct its wider economic impact assessment in a "complex, technical, quasi-commercial field". It was up to the DfT to decide whether to take particular account of Enfield's regeneration project. The DfT's language emphasising the importance of supporting regeneration in the consultation papers was broad aspirational language which should not be elevated into a hard and fast requirement for the use of any particular methodology in developing the franchise specification.

A public authority's duty is to strike a fair balance between competing priorities, and as such it was not irrational for the DfT to adopt a procurement methodology responsive to current and projected demand of the rail franchise as a whole.

Comment

Whilst not technically necessary, this case indicates that persuasive evidence of detrimental reliance can be a key factor in a legitimate expectation claim. Even with specific emails from DfT, the court refused to find a legitimate expectation. This demonstrates just what an uphill struggle even a procedural legitimate expectations claim can be in the face of a competing public interest. The limits of the doctrine of legitimate expectations have been further re-iterated by the Privy Council recently in The United Policyholders Group v The Attorney General of Trinidad and Tobago [2016] UKPC 17.

Further, in the context of staged construction projects, it may be of concern that any spending or commitments made prior to a decision announced by a public body could potentially indicate a lack of reliance and defeat the ground of legitimate expectation.