Email may cost Sefton Council £1.7m

May 20 2008 by Ben Schofield, Liverpool Daily Post

A FOUR-PARAGRAPH email could cost a Merseyside council £1.7m, the Liverpool Daily Post can reveal.

The short message – sent three years ago – might also scupper one of the region's flagship housing market renewal initiatives (HMRI).

The 5.5-acre industrial estate was due to be part of a major housing development, and was included in a Sefton Council compulsory purchase order (CPO). But a company that owns the Bootle plot claims it has poured money into the site to prepare it for development themselves. It says it did so only after being told to go ahead in a message from Sefton. The council is now locked in a legal dispute over the email with landowner Belfields Ltd.

The message was written by Alan Lunt, Sefton's then assistant director of housing and regeneration, in July, 2005.

In it, he appeared to tell an agent for Belfields – which owns Penpoll industrial estate, on Hawthorne Road, Bootle – that the council would not seize the land if it was developed for housing in a timely fashion.

Belfields understood the email to be a green light and pressed ahead with their plans to build 149 houses on the site. They claim to have invested £1.2m off the back of the email.

But, at the beginning of April, Sefton served notice on Belfields saying they would complete the compulsory purchase of Penpoll by May 1.

At a trial scheduled for July 14, Belfields will claim the council have broken the contract made in the email and should either pay them damages on top of the market value of the land or rescind the Vesting Orders – which finalise the CPO – and allow them to proceed with their plans.

In a defence document seen by the Daily Post, Sefton’s legal team say Mr Lunt, who has since been promoted to director of housing market renewal, did not have “actual or ostensible authority” to make CPO policy.

Belfields claim they have racked up £600,000 in architects’ fees, lost £500,000 in rental income after moving their tenants on, and spent a further £100,000 in consultants’ fees and drawing up a remediation strategy to decontaminate the land.

And both sides’ legal fees could top £500,000 – meaning, if a judge finds in Belfields’ favour, Sefton could have to pay out £1.7m.

The case is due to go to trial in Manchester’s Chancery Court on July 14. The judge could also overturn the Vesting Orders and tell the council to stand aside and let the company develop Penpoll themselves.

On July 6, 2005, Mr Lunt sent an email to Appollo Leong, an architect appointed by Belfields, to clarify minutes of a meeting Mr Leong had written up. It was also copied on to council colleagues.

Mr Lunt wrote: “As I said when we met a few weeks ago, the CPO will be made but will be utilised as a last resort.

“Therefore, if there is evidence of the owner of the site or a developer being able to progress the development of the site, in accordance with the SPG [supplementary planning guidance] for the area, in a timely fashion, then the council would see no requirement in acquiring the land by compulsion, despite the potential existing to do so.

“Our aim is to see the land developed, not to become a land owner in the long term!”

Sefton’s legal team claim Mr Lunt did not have the authority to bind the council.

Their defence rebuttal reads: “In circumstances where the powers, duties and discretions in relation to the making and confirmation of a CPO and in relation to the vesting of any property pursuant to a CPO are vested in the Defendant [Sefton Council] as opposed to being delegated in any way to Mr Lunt, the Claimant knew or ought to have known that Mr Lunt had no authority to fetter the exercise of those powers, duties and discretions.”

They go on to say Belfields have not abided by Mr Lunt’s “conditions” to progress the development in a timely manner.

A spokesperson for Belfields denied the company should have questioned Mr Lunt’s authority, and added any communication they receive from a council is taken as read.

The spokesperson continued: “To allege that a senior official doesn’t have the authority to send an email such as this is absurd. “And it’s taken Sefton hundreds of thousands of pounds in legal fees for them to make the point that their now director of housing was acting beyond this remit.

“This is not acceptable to us and we will be pursuing this robustly because we are determin-ed to produce a stunning develop-ment for the people of Bootle.”

In February, Belfields accused Sefton of over-egging an estimate of how much it will cost to clean the land of industrial pollutants in order to reduce its value. The council denied the slur.

The land was included in Sefton's Klondyke CPO that should see a swathe of Bootle's brownfields sites cleared for new housing – a proportion of which would be affordable homes under the HMRI project.

Sefton wants its preferred developer Bellway Homes to build the houses en masse.

The CPO was issued in August, 2006, and confirmed at an inquiry the following November. Vesting orders were served on Klondyke landowners on March 31.

The council took formal owner-ship of much of the land on May 1, but Belfields won an injunction against the order on their land.

The email Mr Lunt sent to Belfields’s architect to correct the minutes of a meeting

From: Alan Lunt

Sent: 06 July 2005 06:51

To: Appollo Leong; Joanne Storey

Cc: Chris Rodgers; Seamus Smyth

Subject: Re: Penpoll Mixed Use Development

Appollo

I think the notes are inaccurate.

For clarity, the situation is that the Penpoll site WILL be included within the Compulsory Purchase Order, in respect of which notices will be served this week.

As I said when we met a few weeks ago, the CPO will be made but will be utilised as a last resort. Therefore, if there is evidence of the owner of the site or a developer being able to progress the development of the site, in accordance with the SPG [supplementary planning guidance] for the area, in a timely fashion, then the council would see no requirement in acquiring the land by compulsion, despite the potential existing to do so. Our aim is to see the land developed, not to become a land owner in the long term!

I hope this provides clarity and certainty on this important matter.

Kind regards

Alan Lunt LLb (Hons) MSc

Assistant Director, Housing Market Renewal

benschofield