Cases - Pratt Contractors Ltd v Transit New Zealand

Record details

Name

Pratt Contractors Ltd v Transit New Zealand

Date

[2003]

Citation

UKPC 83

Legislation

Transit New Zealand Act 1989

Keywords

Tendering and procurement

Summary

Pratt Contractors had been unsuccessful in a tender for a highways contract in New Zealand despite receiving only a slightly lower score from Transit New Zealand's Tender Evaluation Team (TET) than the successful tenderers. The difference largely arose from evidence from a member of the TET who had previously worked with Pratt and raised doubts concerning its record of delayed completions and aggressive claims.

Pratt claimed damages for breach of its tender contract with Transit. The case came to the Privy Council from the New Zealand Court of Appeal. The Privy Council agreed that there was an implied obligation on Transit to act fairly. Lord Hoffmann said that the duty:

'... required that the evaluation ought to express the views honestly held by the members of the TET. The duty to act fairly meant that all the tenderers had to be treated equally. One tenderer could not be given a higher mark than another if their attributes were the same.'

However,

'... Transit was not obliged to give tenderers the same mark if it honestly thought that their attributes were different. Nor did the duty of fairness mean that Transit were obliged to appoint people who came to the task without any views about the tenderers, whether favourable or adverse.... The obligation of good faith and fair dealing also did not mean that the TET had to act judicially. It did not have to accord Mr Pratt a hearing or enter into debate with him .... It would no doubt have been bad faith for a member of the TET to take steps to avoid receiving information because he strongly suspected that it might show that his opinion on some point was wrong. But that is all.'

The contractor's appeal was dismissed.