A Northamptonshire council has lost a £2.4m dispute over housing stock.
On Friday, High Court judge Vos J dismissed a claim by Daventry District Council’s (DDC) that it was over £2.4m by Daventry & District Housing (DDH) following the handover of council houses in Daventry.
The dispute centred on a November 2007 agreement under which the council agreed to transfer around 3,000 of its council homes and garages to registered social landlord DDH.
Together with the transfer of the properties, DCC also agreed to transfer its housing department staff, who were members of a local government pension scheme administered by Northamptonshire County Council (NCC).
At that time, the pension scheme was underfunded and an actuarial estimate revealed that a payment of £2.4m was necessary to make up the deficit.
Following negotiations, a transfer contract was executed on 5 November 2007. One of its clauses stipulated that in respect of the transferring employees, DCC would pay £2.4m within five business days of the completion date.
Although DCC accepted that its solicitor and lead negotiators had consented to the clause, it contended that both parties had intended the clause to provide for DDH to make the deficit reduction payment to NCC.
Accordingly, the council sued seeking rectification on the grounds of mistake.
Ruling in favour of DDH, Vos J said that although there had been a “common intention” during negotiations that DDH would pay the £2.4m to NCC in respect of the pension deficit, by the date of the transfer contract “the parties are to be taken as having intended to include [the clause], which unambiguously provides that DDC should pay the pension deficit to NCC.”
Daventry District Council v Daventry & District Housing Ltd Chancery Division
(Vos J) 30 July 2010.
Ian
