The Court of Appeal has dismissed an appeal by Student Transport Scheme Ltd. (STS) over the failure to put the school transport scheme out to tender for the 2011–2012 school year.
STS argued that the Minister for Education and Skills had a written contract with Bus Éireann to provide the service and that EU procurement rules entitled the company to tender. The appeal followed a High Court decision against STS in 2012. The Court of Appeal, in a judgment delivered by Mr Justice Gerard Hogan on 27 May 2016, agreed with the High Court’s ultimate conclusion and dismissed the appeal.
The court said reimbursement of Bus Éireann’s costs did not, by itself, mean that an agreement could not be one for “pecuniary interest” under the procurement directive. It referred to a later Court of Justice ruling that a contract may meet that requirement even when payment is limited to reimbursement of expenditure.
However, the appeal failed on two independent grounds. First, the court said that even if there had been a contract, it was of indefinite duration and STS had not identified a material change in the six months before it began proceedings in October 2011. The judgment said such a contract fell outside the scope of the 2004 procurement directive in those circumstances.
Second, the court concluded that there was no concluded written contract between the Minister and Bus Éireann for the purposes of that directive. The arrangements developed from letters dating to 1967 and 1969, a 1975 agreement, and later departmental circulars. The court described them as an administrative arrangement, rather than a written agreement creating mutually binding legal relations in the required sense.
The judgment noted that the scheme began in 1967 and was administered by Bus Éireann as the Minister’s agent. At the time of the evidence in the High Court, about 110,000 pupils used it each school day, serving roughly 3,000 schools on about 6,000 routes. Around 90 per cent of the transport services were tendered by Bus Éireann to private contractors.
The court also discussed whether the arrangement had the ordinary features of a commercial contract, including freedom to negotiate prices or refuse the work. It said it was unnecessary to reach a concluded view on those questions after its findings on the written-contract and indefinite-duration issues. The court’s order was to dismiss STS’s appeal.