The Pallant v Morgan equity and competitive bidding

In Thames Cruises Ltd v George Wheeler Launches Ltd ([2003] EWHC 3093 (Ch)) the defendants and the claimant operated boat services on the Thames. They were members of an Association that participated in a competitive bidding process for the renewal of the Pier Licence needed for the operation of their services. At the last minute, the defendants informed the claimant that they had formed a rival consortium that was also going to bid. The defendants had legitimate concerns about the claimant’s contribution to the bid but they did not inform the claimant of these concerns until soon before the date for submitting the bids. The new consortium’s bid was successful. Peter Smith J held that the agreement of the defendants to submit a joint bid with the claimants gave rise to a Pallant v Morgan equity. The defendants had not informed the claimant of their concerns and rival bid until it was too late for the claimant to respond. Thus, the claim to a Pallant v Morgan equity succeeded.

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