Judicial review — Disposal of land — Council advised on disposal of development land — Obligation to obtain best consideration — Whether breach of statutory duty — Application dismissed
Between 1987 and 1988 the applicant company, Indescon Ltd, was in consultation with the respondent council for the development of land at Yarm Road, Darlington, which belongs to the council. In the event, a further company, Gazeley Properties Ltd, put proposals to the council for the development of the site for a superstore and a non-retail unit, and on the advice of Chestertons the council resolved on February 23 1989 to accept the recommendations of its policy and resource committee (February 14 1989) and to proceed with the Gazeley proposal, subject to contract. The applicants challenged that decision on the grounds that (1) there was a contravention of section 123(2) of the Local Government Act 1972 in that the price was “for a consideration less than the best that can reasonably be obtained”; (2) the resolutions were unreasonable in that there were mistakes in the reports before the committee and the council; and (3) there was a lack of fairness in that Indescon were not afforded a proper opportunity of tendering.
Held The application was dismissed.
The applicants had been given ample opportunity to present their proposals for the development of the site within the known financial constraints of the council; by January 1989 they had clarified their scheme, but when Gazeleys presented their scheme on a slightly different basis and involving a different acreage of land, there was no obligation on the respondent council further to invite the applicants to put forward a proposal on the same basis. To the applicants’ complaint that the council’s financial constraints made their task impossible because of a fluctuating financial market, the answer is that a fluctuating market is a background against which developers always have to operate.
A court is likely to find a breach of section 123(2) of the 1972 Act only if the council (a) failed to take proper advice, or (b) failed to follow proper advice for reasons which cannot be justified, or (c) although following proper advice has followed advice which was so plainly erroneous that in accepting it the council must have known, or at least ought to have known, that it was acting unreasonably. On the evidence of the material and advice before the council and its committee there had been no breach of section 123 and accordingly the other grounds of challenge fell away as well.
R v Essex County Council, ex parte Clearbrook Contractors Ltd
April 3 1981 (McNeill J), unreported, considered.
Michael Mark (instructed by Booth & Co, of Leeds) appeared for the applicants; and Duncan Ouseley (instructed by the solicitor to Darlington Borough Council) appeared for the respondents.
