The High Court has rejected an attempt to halt the contract to complete 58 social housing units in Galway.
Mr Justice Michael Twomey said if the court had allowed Glenman Corporation to challenge the awarding of the €10 million contract by Galway City Council to complete he Garraí Beag Social Housing Scheme, Ballybaan More, it could potentially have delayed the project by up to two years.
Glenman had 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 though it only received €2.75 million from the council. The termination had a devastating impact on its business, it claimed.
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 permission of the court 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 224 houses target for completion in 2024.
Glenman argued it could not bring the challenge within the time limit because the council refused either to furnish it with a decision letter which did not refer to a confidential conciliation process or to consent making 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 the Glenman 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.
This 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.
The court could not see how the legal disagreement between the council and Glenman, and Glenman’s 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.
