Business

Court rejects bid to halt contract for building 58 social homes

Glenman Corporation had sought to challenge the awarding of the €10 million contract by Galway City Council to complete the Garraí Beag social housing scheme

Glenman said it had spent some €6.1 million on the project.

Thu Jun 22 2023 - 17:02

The High Court has rejected an attempt to halt a contract to complete 58 social housing units in Galway.

Mr Justice Michael Twomey said that if the court had allowed Glenman Corporation to challenge the awarding of the €10 million contract by Galway City Council to complete the Garraí Beag social housing scheme, Ballybaan More, it could potentially have delayed the project by up to two years.

Glenman previously won the contract to build these houses but the commencement of the project was delayed until June 2020 due to the pandemic. There were further practical and technical difficulties and, in June 2022, the council terminated the contract.

Glenman said it had spent some €6.1 million on the project, although it had only received €2.75 million from the council. The termination had a devastating impact on its business, it claimed.

READ MORE

When offers were invited for new tenders to complete the project, Glenman was excluded from the process.

Glenman then sought to bring proceedings against the council challenging its exclusion from tendering. However, it first needed the court’s permission to do so outside the 30-day time limit imposed under EU regulations for bringing such challenges.

The council opposed the application arguing that if Glenman was permitted to bring proceedings some two months after the expiry of the 30-day time limit, it would not be possible to award the contract to the winning bidder this June/July. It could then take up to two years to go through the court system if there was an appeal.

The council said it would then not have these houses completed as planned by October 2024 and they make up a substantial proportion of the council’s target of 224 for completion in 2024.

Glenman argued it could not bring the challenge within the time limit because the council refused to furnish it with a decision letter that did not refer to a confidential conciliation process and to consent to make reference to it in these proceedings.

This left Glenman in a position where it was impossible to mount an effective challenge to the substance of the decision in time, it said.

In his decision rejecting Glenman’s application, Mr Justice Twomey said that while there is undoubtedly a pressing public interest in the provision of housing, it was important to observe that the law does not permit this court to refuse Glenman’s application on the grounds that there is a public interest in houses being built as soon as possible.

However, he said, another public interest relevant to this case was in ensuring certainty regarding the validity of all public contracts (for housing, schools, hospitals, critical infrastructure, etc).

This requires that the time limit for any challenge to a public contract is strictly enforced and that the reasons for any applications for derogations from the time limit are very carefully scrutinised, he said.

That was in order to ensure that public contracts are not subject to endless challenges in the courts, he said.

There was a clear conflict of evidence, in the affidavits presented to court, as to who was responsible for the historic delay on the building works, which the court could not at this stage resolve.

The court could not, therefore, take into account the historic delay in making its decision on the application to take the case outside the 30-day time limit. Nor could it see how the legal disagreement between the council and Glenman, and the company spending two months trying to persuade the council of the error of its views, could be a good reason for missing the deadline allowing for the suspension of valuable public contracts, which is “one of the most powerful” legal tools available to a litigant, he said.

LATEST STORIES