Judge dismisses Derwent “bad faith” allegations

The High Court has dismissed allegations made by Derwent Holdings that Liverpool council had acted in “bad faith” when it made a traffic regulation order (TRO), in November 2006, that “adversely” affected its Edge Lane retail park. However, Collins J criticised Liverpool’s planners for failing properly to publicise the changes to Edge Lane. Accordingly, he made a declaration that the TRO procedure had not been complied with and Derwent, which is owned by Isle of Man-based tycoon Albert Gubay, must be allowed to apply to the council to modify the order. Derwent claimed that the TRO cut off access, thwarted a redevelopment scheme and put businesses in jeopardy at the retail park. The council denied bad faith and claimed that the purpose of the order, made on the application of Liverpool Land Development Co, was to create an urban boulevard in the centre of Liverpool and to ensure road safety. Collins J said that there had been a failure to give adequate notice to Derwent, its UK subsidiary Fairhurst Property Services Ltd or its directors concerning the introduction of the TRO, which banned right turns into the park. Collins J said: “Since I have concluded that the defendant council was at fault, it must consider properly an application to modify [the TRO] on its merits and must bear the cost of any modifications that would have resulted had the objections been made at the material time.” Rejecting Derwent’s claim that there had been “bad faith” on the part of the council, Collins J said: “It seems clear to me that those responsible were concerned to do as little as they could to comply with the law. The hope was that no objections would be made to delay the TRO and so the improvement of Edge Lane in aesthetic terms. There was no intention to break the law.” R (on the application of Derwent Holdings Ltd) v Liverpool City Council Administrative Court (Collins J) 12 December 2008. Paul Chaisty QC and Paul Tucker (instructed by Pannone LLP) appeared for the claimant; Stephen Sauvain QC (instructed by the legal department of Liverpool City Council) appeared for the defendant; Robert Palmer (instructed by the Treasury Solicitor) appeared for the second interested party; the first interested party did not appear and was not represented.