Boating company wins permission for judicial review over decision not to offer interim concession contract

A High Court judge has granted a company permission to bring judicial review proceedings in relation to a decision by The Royal Parks Limited (TRP) not to grant it an extension to a concession contract for the operation of boating facilities in Hyde Park, on the Serpentine and in Greenwich Park.

In Bluebird Boats Ltd, R (On the Application Of) v The Royal Parks Ltd [2020] EWHC 3647 (Admin) Bluebird Boats, which has been running the boating services since March 1998, also applied for interim relief pending the full decision of the court but this was unsuccessful.

The background to the case was that on 17 December 2004 the claimant entered into a contract with the Secretary of State for Digital, Culture, Media and Sport to provide the boating services in the two parks, the contract expiring on 30 November 2019.

On 10 October 2007 the Secretary of State granted the claimant a licence to demolish the former boathouse on the Serpentine and carry out preparatory works relating to the construction of a new boathouse and a new licence to construct and erect a boathouse was granted on 22 February 2008.

TRP took over the functions of the Royal Parks Agency in 2016. In October 2019 two of its employees met Peter Scott, the owner of Bluebird Boats, when it was explained to him that TRP intended to conduct a tender exercise further to the forthcoming expiry of the contract.

An issue was subsequently raised in relation to the ownership of the boathouse, with Mr Scott claiming it had vested in Bluebird Boats upon its completion and the TRP being of the view that it owned it at the end of the contract.

In April 2020 TRP made it clear that it was not prepared to enter into any discussions or negotiation concerning an extension of the existing contract until the dispute over the ownership of the boathouse was resolved.

A subsequent mediation was not successful in resolving the dispute.

In October 2020 Bluebird Boats informed TRP of its intention to apply for an extension of the contract to 21 March 2023 by way of relief under the Covid-19 public procurement policy notes relating to supplier relief and recovery and transition from Covid-19.

This was rejected on the grounds that The Royal Parks is a registered charity contracted by DCMS to supply services but is not a contracting authority as defined in the PPNs and so was excluded from the PPN guidance.

On 2 November 2020 the law firm acting for TRP rejected the claimant’s suggestion of a contract extension.

The position as at 11 November was that the original contract had expired, Bluebird Boats (BBL) remained in occupation of the boathouse and remained providing boating services on the lake until told not to by the Metropolitan Police the following day, and were proposing that there be a new contract granted by way of an interim contract for a year and also, pending the agreement of the terms of an interim contract, that Bluebird Boats be permitted to continue to provide boating services on the same terms as before.

These proposals were rejected by TRP the following day (12 November) in a decision letter that became the subject of the legal proceedings. This stated that TRP was not prepared to grant an interim concession contract, giving eight reasons for this position.

Bluebird Boats sent a pre-action protocol letter before claim on 13 November, challenging TRP’s decision on four grounds:

(i) It was to be inferred that the real reason for the decision was that TRP was unwilling to consider the proposals for an extension because of the property (ie Boathouse) dispute between the clients and asserted that this was not a proper parks management purpose.

(ii) TRP had failed properly and with an open mind to exercise the discretion contracted out to it.

(iii) The decision was irrational or took into account irrelevant considerations. The consequence of the decision would be that no boating services would be provided in the relevant parks pending the conclusion of a new tender, which would be damaging to TRP's finances as well as to the users of the relevant parks and would cause severe financial consequences for Bluebird including redundancy of employees and the risk of failure to repay loans.

(iv) It was pointed out that the irrational nature of the decision and the improper purpose which vitiated it was demonstrated by the different approach it had taken in the case of the boating concession to another concessionaire in Regents Park where, in fact, a contractual extension had been granted, and it was asserted that there was no proper or lawful basis for treating BBL any differently from other concessionaires.

In Bluebird Boats Ltd, R (On the Application Of) v The Royal Parks Ltd [2020] EWHC 3647 (Admin) Mr Justice Spencer said: “The question for me today is whether permission to bring judicial review proceedings should be granted and whether the claimant has raised a prima facie case that the decision represented by the letter of 12 November 2020 was unlawful. In my judgment, it is arguable that the letter was unlawful.

“It seems to me to be arguable that in relation to the dispute between the parties over the ownership of the boathouse the [Royal Parks] has allowed itself to lose sight of the wood for the trees. By that I mean that it has taken a decision which arguably has been taken for the wrong grounds, namely a negotiating tactic in order to, as it were, bring [Bluebird Boats’ owner] Mr Scott to heel in relation to the boathouse dispute and has lost sight of the significant benefit to the public and its charitable objectives, which it is obliged to follow.”

The judge said: “To close down all boating on the Serpentine effectively for almost two years and, in particular, for the whole of the summer of 2021, is a huge decision because it deprives the public of an amenity which is not only of enormous benefit and enjoyment to the public but also of significant lucrative value to both parties in this case.

“I understand that the income from the summer season is expected to be a sum approaching £2 million and with its right to 15 per cent under the old contract, which expired on 10 November 2020, the defendant could have expected a sum in the region of £175,000 and, of course, it would have provided income for the defendant, employment for its employees and a much valued amenity.”

Mr Justice Martin Spencer considered it arguable that the defendant, in making the decision that it did in the way that it did, had lost sight of the wider picture and the benefits to both parties and that, if it was to make a decision which had the effect of closing down the facility of boating on the Serpentine, then it must do so for the right reasons.

The judge though declined to impose any contract condition as interim relief and said that should be left for a further hearing.

He noted that boating was an activity allowed under Tier 3 restrictions, indicating the benefit to the public which is considered by the Government to be derived from such activities. [By the time of the publication of the judgment, England had moved to Tier 4 and the restrictions applicable as a result meant boating activities on the Serpentine were prohibited]

“I would hope that the somewhat entrenched positions that have been taken in relation to this matter could be reconsidered and revisited and the parties come to an accommodation,” he said.

Mark Smulian