Medway Council are facing a £3.7m damages claim in respect of a series of allegedly unlawful transactions to build “Splash” leisure centres.
In a claim issued at London’s High Court and just made publicly available, Manchester-based First Roodhill Leasing is suing the council for £3,774,762.51. In an alternative claim, a company called Rainham Pool Developments (RPD), which was linked with First Roodhill in the deal, is claiming £3,199,328.
First Roodhill’s claim centres upon a guarantee for rent due under a subunderlease, and the validity of a lease, underlease, subunderlease and guarantee given by the council. First Roodhill says that these transactions are valid and enforceable.
However, the claim says that the council contend that the leases formed part of a larger series of transactions involving the council, Co-operative Bank plc, Rainham, Clifford Barnet Group, the contractor, Roodhill, and Gillingham, and were part of a scheme to allow the council to avoid statutory controls on borrowing and expenditure. The council allegedly maintain that the transactions were unlawful, void and of no effect, as were the lease, underlease, subunderlease and guarantee.
The two companies are now seeking the money claimed, or such sum as the court considers just, as money paid under a mistake of law and fact. Alternatively, they seek declarations, together with an order for the land to be sold and for payment to be made out of the sale proceeds.
References: PLS News 5/3/03
