The liquidators of Frans Verhelst give up the fight over the De Lovie project: discontinuance after a negative auditor’s report, and costs follow
Frans Verhelst challenged the award of the structural works for the De Lovie youth project to Monument Vandekerckhove and claimed 301,275.19 euros in damages on top, but when the company went bankrupt and the auditor’s office concluded that the action should be dismissed, the liquidators discontinued the proceedings — leaving the Council of State only to record the discontinuance and allocate the costs.
What happened?
On 19 October 2019 the non-profit association De Lovie awarded the works contract ‘De Lovie youth project – lot 1: structural work and first finishing’ to Monument Vandekerckhove and declared the tender of Frans Verhelst, a company from Koekelare, substantially irregular. On 13 December 2019 Verhelst brought an action for annulment before the Council of State, coupled with a claim for restorative damages of 301,275.19 euros. The proceedings dragged on: written pleadings were exchanged, and in the meantime Verhelst went bankrupt, after which the Ostend lawyers Gregory Belpame and Jan Ferlin, as liquidators, resumed the proceedings. On 17 February 2022 first auditor head of division Ann Eylenbosch filed her report, concluding that both the annulment action and the damages claim should be dismissed. For the liquidators that was the signal to cut their losses — by letter of 4 April 2022 they discontinued the proceedings. The case was dealt with in writing, no party having requested a hearing. Chamber president Paul Lemmens recorded the discontinuance and ordered the applicants to pay the costs: a roll fee of 200 euros, a contribution of 20 euros and a procedural indemnity of 770 euros to De Lovie. One consolation: the 220-euro fee for the damages claim proved not to be due and had to be refunded.
Why does this matter?
This judgment highlights the least visible but often decisive hinge of proceedings before the Council of State: the report of the auditor’s office. When the auditor concludes that the action should be dismissed, an applicant knows its chances have shrunk considerably — the advice is followed in most cases. Continuing to litigate then means extra costs and time for an outcome already taking shape. For liquidators, who manage the assets of a bankrupt estate and must justify every expense, that trade-off is even sharper: a lost case with a procedural indemnity on top is a loss for the creditors. Discontinuance is then not capitulation but estate management. The judgment is also a reminder that discontinuance is not free: whoever started the proceedings bears the costs upon discontinuance, including the other side’s procedural indemnity. Finally, it is worth noting that the contracting authority here was a non-profit association — private legal entities covered by public procurement law, such as subsidised care institutions, also appear as defendants before the Council of State.
The lesson
After the auditor’s report, weigh up coolly whether continuing still makes sense: the report is not a judgment, but it is the best predictor of the outcome. Discontinuing after a negative report limits the damage to the costs already incurred and the procedural indemnity — here 990 euros in total, excluding one’s own counsel — instead of litigating for years towards a near-certain dismissal. For liquidators this applies twice over: resuming a procurement dispute of the bankrupt company is only defensible as long as the chances of success justify the costs. Contracting authorities — including private ones such as a non-profit — should note that declaring a tender substantially irregular is a defence that holds to the end: the auditor sided with the association, and the applicant gave up.
Ask yourself
Do you systematically reassess your chances after the auditor’s report, and do you dare to draw the conclusion when the verdict is negative? Do you know that discontinuance leaves you with the costs and the other side’s procedural indemnity, but avoids further escalation? As a liquidator, do you realise that continuing the bankrupt’s procurement dispute is an investment decision you must be able to justify to the creditors? And as a contracting authority: is your decision to declare a tender substantially irregular reasoned well enough to survive years of litigation?
About this database
The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →