Oval Chalet - Grounds of Challenge

See below for the grounds submitted for the oral hearing on 8th June when our request for permission for the claim to be granted to proceed to the substantive hearing was heard

6 Grounds of Challenge

Ground 1: Open Space Status

105. The Oval is open space and, as such, the Council was under a statutory duty

to advertise its intention to dispose of the land pursuant to section 123 (2A) of

the LGA 1972. The Council’s predecessor acquired and held the Oval

pursuant to an undertaking which it gave to the previous owner to develop

the land as open space. All of the other circumstances surrounding the

acquisition, holding and use of the Oval are only consistent with open space

status. Moreover, the Oval has been at all times used for the purposes of

public recreation, and continues to be so used to this day. It has not been

appropriated to any other use.

106. The Council has confirmed that it did not consider the need to undertake the

requirements set out in section 123 (2A) of the LGA 1972. As noted above, the

Council refused to consider this duty because it followed the erroneous

officer advice in September 2015 from the Head of Legal & Democratic

Services, referred to at paragraph 59 above, that the duty did not arise “from a

due process point of view, as the site was not an asset of community value there was

no requirement for the public to have been consulted with prior to the sale”

[CB/2/278]. The fact that the Oval is not an Asset of Community Value under

the Localism Act 2011 is irrelevant to the statutory advertisement

requirements of LGA 1972, which should have been undertaken in light of

the Oval’s status as open space.

107. Similarly, the Council have proceeded on the basis, flying in the face of the

chronology of facts set out in these grounds and the evidence submitted with

this claim, that the open space disposal advertisement requirements were not

necessary because there was no covenant in the conveyance of the Oval to

WUDC to keep the Oval as open space. Again, this advice is legally flawed

and incomplete. Because the Oval is open space the requirements of section

123 (2A) LGA 1972 must be carried out regardless of any private law rights in

favour of the seller that may be contained in the conveyance documents

attaching to the land. The absence of any such rights is evidence only that no

such rights were requested and/or granted; it has no negative probative

value in terms of whether the land conveyed is open space in terms of the

buyer’s statutory powers to acquire and hold land.

108. As the case law, especially Pepper confirms, the purported disposal of open

space land without the performance of the requirements contained in section

123 (2A) of the LGA 1972 amounts to a serious public law breach which

would be subject to judicial review challenge. That is exactly what has

happened in this case. The Council did not even consider the need to comply

with the sub-section and in the process it denied the public’s rights to be

consulted and to be afforded the opportunity to make representations

objecting to the proposed Contract if necessary.

109. The Council has therefore acted unlawfully and permission to judicially

review the Contract should be granted on this ground alone.

Ground 2: Contract Outside the Authority of the Resolution

110. It is clear even from the available documents, including those published in

redacted form, that the Council proceeded to enter into the Contract pursuant

to the Resolution, which was made based on misleading information about

the site, the nature of the IP’s proposal and what it involved.

111. Firstly, the Executive proceeded to make the Resolution clearly on the basis of

representations in the DR Report that the IP was planning to include a

“significant public realm element” to meet the “early aspiration for some open space

within the development”. As we have seen the DR Report continued to state

categorically that “Indeed the developer is keen to provide [open space and access

to the sea front] – and enter into a legal agreement with the Council in that respect”

[CB/2/249] and, as referred to above at paragraph 46, the DR Report

contained an explicit commitment to the execution of such an agreement.

112. These promises were not contained in the Contract, as the Council only

admitted in the CEO Review Report. It had previously on 1 July 2015 in a

belated response to an FOI request made by Mr Graham Cox on behalf of the

Claimant on 24 April 2015 implied with certainty that part of the Contract

dealt with open space [CB/3/361]. This is now known from the CEO Review

Report to have been highly misleading. Nor are the promises referred to

above reflected in the IP’s planning proposals. No “legal agreement” has

been entered into in respect of that aspect of the proposals whether within or

outside the Contract. The Executive therefore made the Resolution to enter

into the Contract on a misled basis. The Contract, absent a binding

requirement for open space provision to be guaranteed by “legal agreement”,

was not authorised by the Resolution.

113. Secondly, the Resolution authorised a sale of the land on the terms set out in

the DR Report, as described in paragraph 46 above. Paragraph 1 of the DR

Report identified “the land” as the Oval, and the access strip to Sea Street was

clearly excluded (see paragraph 48 above). The Contract, however, included

the access strip with no authority to do so.

114. The Council acted outside the scope of authority provided by the Resolution

to enter into the Contract. The Contract was therefore unlawful and

permission to bring this claim for judicial review should be granted on this

ground alone.

Ground 3: Excessive Secrecy of Resolution-making Meeting

115. The Resolution in any event was made pursuant to an unlawful breach of the

requirement in section 100B (4) (a) of the LGA 1972 to state the business of a

council, even when private, on the agenda in advance of the meeting.

116. In fact, the Council misrepresented the nature of the business to be concluded

at both the Overview Committee on 4 December 2014 and the Executive on 11

December 2014. In neither case were the key words, “disposal”, “sale” or

“contract for sale” of the land used. As a result, the Contract was entered into

without any public awareness of the issue being considered.

117. Taken in isolation in circumstances where the Council had otherwise been

scrupulously fair in complying with its duties in other respects, this breach

may have been forgivable, though still unlawful. In the circumstances of this

case, however, it is another unlawful act, evidence of which should be

enough to grant permission to proceed with this application for judicial

review.

Ground 4: Failure to obtain Best Consideration

118. The CEO's Review Report states that the sale was at best value, and this is

indeed the only way that the report of December 2014 (so far as published)

can be read, consistently with the reported advice in 2014 from Urban

Delivery. The brief and other information given to Urban Delivery for its

valuation exercise has not been released despite requests from the Claimant

and councillors, although this is of no real relevance to the Resolution in any

event because there is no evidence whatsoever that that brief was before the

Executive when it made the Resolution.

119. The Claimant obtained professional valuation advice on 30 November 2015

which establishes that the value advised to the Council’s Executive was so

wide of the mark as to be irrational [CB/2/334-338]. This is a Red Book

Conflict Valuation from the Canterbury office of BTF (qualified Royal

Institution of Chartered Surveyors registered). BTF’s valuation is on the basis

that the whole title is being sold including the access strip even though this is

not consistent with the Resolution. It is on this basis because this is the subject

matter of the Contract. Either the Contract is wrong in including the access

strip, or the sale price is wrong because the access strip is included. The

Council cannot have it both ways.

120. Based on the CEO Review Report that £600,000+ would be the magnitude of

any damage that might be claimed by the IP pre-planning permission if the

transaction did not proceed, there is a likelihood that the contract price was

substantially below best value. Further, in the CEO Review Report, at

paragraph 1 [CB/2/284], the CEO contends that the “undervalue sale” was

“authorised” by the General Disposal Consents 2003 (“the GDC”). This

confuses the issue. The Resolution was (purportedly) on the basis that best

value was being obtained, as the DR Report made clear. The Resolution thus

endorsed this (although the Claimant contends this was wrong in fact). The

CEO cannot now claim that the sale was at an undervalue and thus

authorised by the Secretary of State under section 123 (2) LGA 1972 since the

sale must stand or fall on the basis put in the DR Report. Ex post facto

recategorisation of a purported best value sale as an “undervalue” one will

not do. There is no knowing whether if the Executive had been presented

with an undervalue sale, it would have agreed to it. Even if the GDC had

been invoked in the DR Report, it is a condition thereof that for a decision to

sell at undervalue to be covered by the GDC, the decision-making body has

to identify that the sale is made at undervalue and identify the social,

economic and/or environmental, benefits that justify the price being below

the value – see paragraph 2 (a) GDC. No such statement was made in the

Executive’s Resolution of 11 December 2014. Therefore the GDC cannot be

prayed in aid in any event by the Council.

121. Further, since the Contract does not include any requirement to secure the

public open space, any ‘best value’ considerations, which depended on the

assumption that public open space would be secured, would be legally

invalid as relying on immaterial and/or incomplete information. Put shortly,

the failure to secure any public open space as a term of the Contract has had

the effect of increasing the value of the Contract to the IP as it freed up

additional development land. It follows that greater consideration should

have been paid to the Council and the Resolution to approve the contract was

unlawful.

122. In its pre-action response, the Council appears to accept that it may have been

in breach of the best value requirements of section 123 (2A) of the LGA 1972

and the GDC. It claims such matters do not go to the heart of the Contract.

However, if the Council have acted in breach of the ‘best value’ requirements

then this is also unlawful and permission to apply for judicial review should

be granted on this ground. Furthermore, an Order for disclosure of all

evidence relating to the valuation of the Oval, the consideration for its

disposal and whether this was ‘best value is needed to resolve this matter

expeditiously, and is justified in the circumstances.

Ground 5: Breach of the Public Sector Equality Duty

123. The Council has not had due regard to its public sector equality duty in this

case as regards the qualifying characteristic of disability. There was no

Equality Impact Assessment undertaken in relation to disabled people

pursuant to section 149 of the EA 2010.

124. The public open space in the development scheme proposed by the IP, which

was verbally described to the decision-making Executive, would be accessible

only up a narrow flight of stairs and hence would not be available to disabled

people who would thus be excluded from using it, a material disadvantage.

This means that the statement in the report “Equality Impact assessment: No

adverse implications are envisaged” was plainly wrong and could not fulfil the

Council’s obligations under the Act.

125. For similar reasons, the RPC’s decisions in September and October 2015 not

to take any further action, despite being informed that the public open space

would not be secured by the sale, was likewise in breach of the Act. The CEO

Report simply contained no assessment whatsoever of the implications of his

finding, and his advice to do nothing, for protected groups.

126. Once again, the Council in their pre-action letter appear to acknowledge that

it may have made a “failure of process” but that “this would not invalidate the

contract” [CB/6/400-405]. The attitude of this Council to its potential unlawful

acts is telling. However, again, if the Council have acted unlawfully then

permission to bring this claim should be granted.