HI, thanks for your question, my name is ***** ***** I am a solicitor of England and Wales.
Obviously it is disappointing to someone when they are not offered a job that they applied for, but you have made a decision between two candidates and the reason for that decision was based ultimately the location of the candidates. It is likely that the candidate who have you offered the job would have more local knowledge of the area of your business to be more successful. That is not discrimination or victimisation.
Obviously a rejected candidate can make a complaint but to be successful with a complaint they need to show that you have discriminated against them. I do not believe that this individual would be successful in bringing a claim against you/the company.
The main law which a candidate uses if they feel that they have been treated unfairly is the Equality Act, but the circumstances you describe do not give this candidate a meritous claim.
I would suggest you respond formally to the candidate and advise that you were disappointed by the message received, explain once again that he was one of the two candidates you felt more appropriate for the position, but ultimately you made a decision to employ another and wish him good luck with the future. You should also advise that whilst his threat of legal proceedings is most disappointing, if he does make the decision to proceed with legal proceedings any such proceedings will be vigorously defended.
I hope this assists. Any further questions please do let me know.