England and Wales High Court (Administrative Court) Decisions
Cite as:  EWHC 620 (Admin)
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT IN BIRMINGHAM
1 Bridge Street West,
Manchester M60 9DJ
B e f o r e :
| THE QUEEN (ON THE APPLICATION OF
MIDLANDS CO-OPERATIVE SOCIETY LIMITED)
|- and -
|BIRMINGHAM CITY COUNCIL
TESCO STORES LIMITED
David Elvin QC and Charles Banner (instructed by
Hari Toor, Birmingham City Council Legal Services) for the Defendant
James Goudie QC and Reuben Taylor (instructed by Ashurst LLP) for the Interested Party
Hearing dates: 1 and 2 March 2012
Crown Copyright ©
Mr Justice Hickinbottom:
Factual Background and the First Tender Process
i) At the Council's option, Tesco's responsibility for the construction of replacement facilities could be commuted into a money sum. Clause 4.3.4 required Tesco:"In the event that the Replacement Community Facilities are not constructed by [Tesco] to pay (at such time to be agreed by the Council) a sum of money (to be agreed by the Council) to cover the full cost of relocating the Existing Community Facilities elsewhere within the vicinity of the Site for the avoidance of doubt such costs to include the full costs of fitting out and re-locating the Existing Community Facilities.
ii) By condition C19 of the planning permission, the demolition of the Community Facility could not commence until at least temporary accommodation for the facilities had been provided to the Council's satisfaction; and, under clauses 4.3.2 and 4.3.3 of the section 106 agreement, Tesco was forbidden from (a) demolishing the existing Community Centre unless a (permanent) replacement facility had been constructed to the Council's satisfaction, and (b) occupying the retail store provided for by the permission until a (permanent) replacement bowls facility had been constructed to the Council's satisfaction.
iii) By paragraph 3.1 of the section 106 agreement, with exceptions irrelevant to this claim, the provisions of the agreement were not to take effect until "commencement [of the development] has occurred". By clause 4.1, the development could not be commenced until the site had been assembled; and, by virtue of the planning approval itself, it could not be commenced until the reserved matters had been approved and various conditions met.
"Replacement of the existing community centre and indoor bowling centre buildings and associated facilities will be provided to a specification to be agreed, and at no cost to the Council….
The outcome of those discussions is that Tesco have now agreed in principle to fund the costs of converting the baths building for use as a community centre…. Knight Frank confirms that this proposal provides the best option to the Council in respect of regenerative benefits and will utilise a longstanding vacant and increasingly dilapidated building. Ward Members are fully supportive of that arrangement. Following strong representation from local Members, it is clear that this is their preferred option…" (paragraphs 3.4 and 4.4).
"Given the time period that has elapsed since the 'in principle' resolution to select as the Council's development partner in October 2007 and the changed economic circumstances, Officers are of the view that it would be appropriate to commission an update report from Knight Frank before [the CCP] reconsiders that decision. The proposed terms of the instructions to Knight Frank are annexed to this letter and your client(s) are invited to comment on them. Any comments should be received before 5pm on Monday 1 June 2009.
Once the updated report has been received from Knight Frank, its findings will be reported back to [the CCP]. Your client(s) will be given the opportunity to comment on the Knight Frank update report and the draft report to [the CCP] before that Committee reconsiders the October 2007 decision.
I will write further to you in due course to clarify the timing for the preparation of the draft report to [the CCP] and for submission of any comments."
"The willingness and ability of Tesco and the Co-op to proceed with their respective schemes, including likely funding and deliverability having regard to market conditions" (paragraph 4).
"Your position here is noted. However, the Council does not accept that the proposed disposal of land to Tesco would constitute a public works contract.
The proposed contractual arrangement is likely to be for the sale and purchase of land. The provision of the replacement community centre and bowls centre are adequately dealt with under the terms of the planning permission (and related s106 agreement)."
The Second Tender Process
"…where the Council (as it has done here) takes the initiative to sell a site, it would be usual for it to be openly marketed to establish a competitive value."
"Comparable evidence suggests disposals of land for Class A1 Supermarket Schemes, command in the region of £1.8m per acre plus an additional amount for s106 contribution. In this case the s106 contribution for replacement of the Community/Bowls Centre is estimated at approximately £2,130,000 and the s106 contribution outweighs the value of the site. It has been assumed that the developer would spread the cost of the s106 Agreement across a development scheme of 11.61 acres. This valuation excludes the payment of the s106 contribution it is expected that the purchaser would pay this in addition to the land value of £1.8m per acre. It has been assumed that there will be no other s106 requirements other than re-provision of the Community/Indoor Bowls Centre.
It must be noted that the figures quoted here relate to current values which may be subject to sharp fluctuations in future months." (emphasis in the original).
In an attached sheet of calculations, Mr Lazar pro-rated the section 106 development costs over the whole of the Site, which resulted in about £160,000 being allocated to the Community Facility plot.
"… [Y]our letter… shows a misreading of the [Invitation to Tender]. The offering here is a straight sale of land.
You mention planning policies of [the Council] but these are not relevant to a sale of land without any specification or 'Work' (as defined in EU Procurement Legislation and case law). The City Council's Regeneration Agenda is therefore not engaged and it is for the bidders to price their bid in the knowledge of the City Council's Regeneration and other policies. "
Tesco was not, of course, privy to that letter: they did not know that the Co-op had not bid.
"… [Tesco] wishes to be able to proceed with the project, with the support of the Council. Reading between the lines, it appears that the Council's real concern is the potential uncertainty about timing and cost of provision of the replacement facilities.
We have given the matter further consideration with a view to resolving the impasse. As you are aware, the current planning permission and Section 106 Agreement for the scheme requires Tesco to be responsible for provision of replacement facilities. Rather than amend the planning permission and Section 106 Agreement to remove this requirement, the Council could simply agree to sell its land to Tesco at market value in the knowledge that Tesco will not be in a position to occupy the store until such time as the replacement facilities have been provided. The European Court case of [Helmut Müller] makes it clear that an agreement for the sale of land that does not contain any legally enforceable obligations to the economic benefit of the Council would not amount to a Public Works Contract, nor would the requirement to carry out works under Section 106 Agreement. Therefore, this approach would ensure that the transaction still falls outside the Public Works Regulations but would provide the Council with a certainty as to delivery of the replacement facilities."
"Note that a subsequent report will be submitted to advise of the outcome of the tender and seek approval to the appointment of a development partner."
The Third Tender Process
"Prior to the commencement of this new tender process we would like to offer you the opportunity to attend a tender clarification meeting if this would be of use to you. Alternatively we can arrange for the Invitation to Tender to be forwarded to you following publication of the advertisement [in the Estates Gazette]."
Neither Tesco nor the Co-op took the opportunity offered.
"The Tender Statements once submitted and accepted by the [Council] cannot be renegotiated. The amount offered will be assumed to have been submitted with the potential purchaser having full knowledge of the land, its condition, statutory requirements and planning status. It is recommended that independent professional advice be sought before offers are submitted."
i) The disposal of the Community Facility was not "a straight land deal", but rather formed part of a wider regeneration agenda, the next stage of which would involve the Council approving a development partner by a process which (it was said) "will inevitably again require compliance with the procurement rules".
ii) The invitation to tender for the Community Facility appeared to be a sham, because "any would-be tenderer with no prior involvement in the matter is bound to be misled as to the true purpose behind the disposal", i.e. to progress towards the development of the Site. Not only was the process not lawful, but the proposed terms were so "onerous, unprecedented, and are not justified in order to sell the asset" that they were bound to depress demand and result in reduced value for the Council such that the Council would be in breach of its duty under section 123(2) to obtain best consideration on any sale of land.
Marrons threatened (or, at least, indicated) that:
"These are all questions to which the Council will be held to account in due course."
"… [I]n order to clarify matters, we are willing to offer the following
(i) £[redacted] payable as a non-returnable deposit on exchange; and
(ii) £[redacted] when the Council serves a 'put option' and at Tesco's election, the Council will complete the sale
(i) £[redacted] payable as a non-returnable deposit on exchange; and
(ii) £[redacted] as a 'call option fee' payable when the Council services [sic] a 'put option' and
(iii) £[redacted] on completion of the sale, following the exercise of the call option by Tesco.
In both scenarios, payment of the final tranche of money £[redacted] dependent upon the Council delivering vacant possession of the Property.
All three options are subject to [Tesco's offer in the 8 September letter of] an additional sum of £[redacted] on top of the purchase price of £[redacted] subject to:
1. Grant of a satisfactory implementable planning permission.
2. Completion of all site assembly.
3. Full vacant possession of the wider Stirchley site."
Mr Hall's letter of 8 September also indicated that, insofar as "completion of site assembly" was a condition of the supplementary payment, Tesco would underwrite the cost of acquiring any remaining land and would indemnify the Council in respect of all costs of any necessary CPO.
"In the event that the Replacement Community Facilities are not constructed by [Tesco] to pay (at such time to be agreed by the Council) a sum of money (to be agreed by the Council) to cover the full cost of relocating the Existing Community Facilities elsewhere within the vicinity of the Site for the avoidance of doubt such costs to include the full costs of fitting out and re-locating the Existing Community Facilities save where the Council and [Tesco] agree that the Replacement Community Facilities have or will be secured in some other manner by the Council or [Tesco]".
That reflected the increasing likelihood that the community centre and indoor bowls hall at the Community Facility would be relocated off the Site, the former being housed in Bournville Lane Baths – with Tesco having no obligation to be responsible for the construction or refurbishment of alternative facilities.
"The demolition of [the Community Facilities] shall not commence until either permanent or temporary accommodation for these facilities has been provided in accordance with a phasing scheme to be submitted to and approved in writing by the [Council]."
".. for the Council to make a [CPO] to unify ownership of various sites to facilitate the development of a new retail superstore, additional retail units, new social facilities, residential accommodation, landscaping and associated works by the developer, [Tesco].
[and] … to enter into an indemnity agreement to ensure that all costs and compensation from the CPO are met by the developer."
i) that Tesco would continue to negotiate with landowners to seek voluntary acquisition, but compulsory purchase was likely to be necessary to secure all the land needed for Tesco's development particularly as some land was in the hands of the Co-op which had an interest in the land and extant planning permission for the Site (paragraph 4.3);
ii) that the development would "also lead to the replacement of existing community buildings resulting in improved facilities for the local community" (paragraph 4.5); and
iii) that a further report would be presented to the CCP to confirm the making of the CPO if voluntary negotiation to acquire the site had not been successful within 3 months (paragraph 2.5).
"[Tesco's] offer does not appear to be dependent upon reaching agreement with the freehold owner of the leasehold part of the subject property [i.e. the Co-op].… It should be noted that this ground lease has only 50 years unexpired and any redevelopment or change of use requires the freeholder's consent. This freehold owner could demand a high premium to allow the development to take place.
We have carried out development appraisals on similar sites with planning consent for supermarket/food retail development. Using rental levels that we know operators are prepared to pay for completed stores, the resultant land value appears to be in the order of £300,000 per acre. However, it is well known that the major supermarket operators are prepared to pay considerably more than this level for suitable land. It is clear that these operators do not wish to rentalise the potential profits that they can make from such developments.
Although we are not aware of the precise areas of land in Tesco's ownership, it is clear that this company had committed a considerable amount of money in assembling the sites around the subject property. For this reason it is prepared to make the above offer, in an attempt to complete its land assembly, which appears to be considerably above, by a factor of [redacted] times, that which a conservative development appraisal produces. We are of the opinion that this offer represents the best consideration for the Council's freehold and long leasehold land ownership."
"… the demolition of some or all of the buildings and structures on the… Site and construction on the… Site of a mixed use scheme including [a retail store] or some other form of development for which Tesco secures a satisfactory full and implementable planning permission in respect of the… Site which is free from challenge and which in all cases does not require the reprovision by Tesco of any of the Council's facilities which currently exist at the… Site"."
The Current Position
The Grounds of Challenge
Ground 1: Procurement
The disposal by the Council to Tesco of its interests in the Community Facility would contravene the Public Contracts Directive and 2006 Regulations.
Ground 2: Best Consideration
The disposal by the Council to Tesco of its interests in the Community Facility on the terms agreed would breach the Council's duty under section 123(2) of the Local Government Act 1972 not to dispose of land for a consideration less than the best that can reasonably be obtained.
i) The Third Tender Process in relation to the sale of the Council's interest in the Community Facility was legally unfair so as to render the resulting contract with Tesco unlawful, particularly because of the inconsistency between that which was offered on the market and the terms on which the Council has agreed to sell to Tesco.
ii) The authorisation of the making of a CPO to facilitate site assembly for Tesco's redevelopment was legally unfair so as to render the decision to authorise unlawful, because the Council failed to comply with assurances it gave to the Co-op on 22 May 2009 that the choice of Tesco as its development partner would be reconsidered in the light of a reassessment of by Knight Frank into which the Co-op would be able to have input. Those assurances gave the Co-op a legitimate expectation that there would be such an assessment with the opportunity for such input.
iii) In authorising the making of the CPO on 14 March 2011, the Council both failed to take into account a number of material considerations and took into account immaterial considerations. In particular, the decision to authorise was taken on the basis that the Co-op had abandoned its planning permission for its own scheme of development for the Site, which was incorrect.
Ground 1: Procurement
"… to ensure that public bodies award certain contracts above a minimum value only after fair competition, and that the award is made to the person offering the lowest price or making the most economically advantageous offer…" (Risk Management Partners Ltd v London Borough of Brent  UKSC 7 at  per Lord Hope, with whom the other members of the Supreme Court agreed):
"… a contract, in writing, for consideration (whatever the nature of the consideration)
(a) for the carrying out of a work or works for a contracting authority; or
(b) under which a contracting authority engages a person to procure by any means the carrying out for the contracting authority of a work corresponding to specified requirements…;"
For the purposes of this regulation, the Council is a "contracting authority" (Regulations 2 and 3); relevant "works" include the construction or demolition of all types of building (Regulation 2 and Schedule 2); the regulations apply whenever a contracting authority "seeks offers in relation to a proposed… public works contract" (Regulation 5(1)); and, if and insofar as Tesco entered into a contract with the Council for works otherwise falling within the definition of "public works contract", then that contract would fall within the scope of the Regulations because Tesco would be an "economic operator" within the meaning of Regulation 4.
"[T]he sale or lease of land or property by a public body is not within the scope of the public procurement rules, so a simple disposal of land is not caught as there is no acquisition (and thus no procurement) of any goods, works or services. Therefore the lease or sale of land by a contracting authority to a developer for the purposes of development will not be subject to the public procurement rules unless this lease or sale contains or is accompanied by a requirement to undertake a work or works as defined in the rules….".
"Is a work or works required or specified by a contracting authority?
Is there an enforceable obligation (in writing) on a contractor to carry out that work or works?
Is there some pecuniary interest for carrying out this work (not necessarily a cash payment)?"
It suggests (at paragraph 15) that, if the answer to any or all of those questions is "no", then it is unlikely that the arrangement will be subject to the public procurement rules. As I understood his submissions, Mr Holgate accepted that the answer to at least the first two questions must be, "Yes", for the procurement provisions to apply.
"… [T]he concept of 'public works contracts', within the meaning of [the Directive], requires that the contractor assume a direct or indirect obligation to carry out the works which are the subject of the contract and that that obligation is legally enforceable in accordance with the procedural rules laid down by national law."
The reference there to "direct or indirect obligation to carry out the works" does not detract from the firm requirement that there must be a legally enforceable obligation on the contractor, the reference to "indirect obligation" simply reflecting the flexibility with which the obligation may be met, (e.g. through sub-contractors.
"In my view, however, it is clear that… the obligation to carry out the work and/or works constitutes an essential element in order for there to be a public works contract….
This follows, first and foremost, from the provisions of [the Public Contracts Directive] itself which… define public works contracts as contracts for pecuniary interest. The concept is therefore based on the idea of an exchange of services between the contracting authority, which pays a price (or, alternatively, grants a right of use), and the contractor, who is required to execute a work or works. Thus, public contracts are clearly mutually binding. It would obviously be inconsistent with that characteristic to accept that, after being awarded a contract, a contractor could, without any repercussions, simply decide unilaterally not to carry out the specified work. Otherwise, it would mean that contractors were entitled to exercise discretion with regard to the requirements and needs of the contracting authority."
Hence, to fulfil the purpose of the Directive, a required element is a commitment by the contractor, legally enforceable by the contracting authority, to perform relevant works. It is insufficient if, legally, the contractor has a choice and is entitled not to perform the works.
"There is no question of these works being undertaken or commissioned by Tesco".
The fact that it is now, at the least, very unlikely that Tesco will ever perform any works in relation to the replacement facilities highlights the legal position that they are under no legally enforceable obligation to perform any such works.
Ground 2: Best Consideration
"Except with the consent of the Secretary of State, a Council shall not dispose of land under this section, otherwise than by way of a short tenancy, for a consideration less than the best that can reasonably be obtained."
The same substantive provision applies to other public bodies, such as the New Towns Commission (section 37(3) of the New Towns and Urban Development Corporations Act 1985). The policy behind these provisions is plain:
"… [I]t is to ensure, so far as reasonably possible, that public assets are not sold at an undervalue save on the authority of the Secretary of State. The public interest underlying the policy is obvious." (R v Commission for New Towns (1989) 58 P&CR 57 at page 65, per Bingham LJ).
The provision is in the public interest, to protect public assets and the public purse. There is a similar constraint on trustees, to protect beneficiaries (section 39(1) of the Settled Land Act 1925).
i) section 123(2) imposes a duty to achieve a particular outcome, namely the best price reasonably obtainable, rather than a duty to conduct a particular process; and
ii) an authority's purported discharge of its duty under section 123(2) can only be challenged on ordinary public law grounds.
I respectfully agree with those propositions.
"… [A] court is only likely to find a breach or intended breach by a council of the provisions of [section 123(2)] if the council has (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, 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."
"All the major operators employ teams of in-house or consultant development advisers, frequently with defined regional responsibility, which means that they tend to have detailed knowledge of suitable sites up and down the country. They have specific locational requirements for new stores and collate a wealth of data on sites in their target areas. In addition they monitor market activity and planning proposals (including site allocations) to defend trade of existing stores with a view to extension or relocation to keep the competition at bay. In my opinion, the major operators interested in this area would have been well aware of the circumstances surrounding the site and would have investigated them in detail."
"Tender Statements once submitted and accepted by the [Council] cannot be renegotiated."
The Tender Statement was the proforma that tenderers were required to complete, indicating the amount and structure of the proposed payment. The intention behind that provision was to prevent a tenderer reducing an offer made and accepted: it was not intended to be an indication that the Council would not negotiate any of the terms in the draft Sale and Purchase Agreement that also formed part of the tender documents (Kathryn Elizabeth James 30 January 2012 Statement, paragraphs 37 and following). Indeed, the tender documents looked at as a whole clearly contemplated such negotiation. Clause 17 of the draft Sale and Purchase Agreement made clear that:
"All offers and subsequent negotiations are subject to contract" (emphasis added).
That, in substance, is repeated in clause 20. Those terms made it reasonably clear to any would-be tenderer that the terms of the draft agreement were open to negotiation. Had there been any doubts in the mind of the Co-op, then, before the Third Tender Process had started, on 10 August 2010 the Council had written to them indicating that they would be prepared to meet to discuss the new process with them (see paragraph 47 above), and the tender documents indicated to all prospective tenderers that, if any were in doubt as to the interpretation of any part of the tender documents, the Council would endeavour to answer any written queries before the tender was submitted (see paragraph 50 above). The Co-op asked for no such meeting, nor did they make any such enquiry.
"… is a very strong disincentive to any offer being made with an inevitable depressing affect (sic) on price. Without the expectation of becoming the preferred development partner this requirement alone makes the offer commercially absurd."
With regard to the timescale, the advertisement commencing the bidding period was inserted into the Estates Gazette on 14 August, with a final date for tenders of 9 September, i.e. a period of under a month which included the August Bank Holiday. Mr Smith said that, for a tender process such as this, this was an "extremely short" period and a 2-3 month period would be usual (Statement 17 February 2012, paragraph 3).
i) By obtaining a 50% deposit, the Council could start work on the Bournville Lane Baths refurbishment, in order to provide a new community centre there as soon as possible; which, in turn, would ensure that the Council could deliver vacant possession of the Site (Kathryn Elizabeth James 30 January 2012 Statement, paragraph 42).
ii) Whilst the Council concede that it would not be possible to keep a deposit (even if labelled "non-refundable") if the receiving party was responsible for the failure to complete – because a party cannot benefit from its own wrong – far from being "unprecedented", a clause in terms of a non-refundable deposit is standard in the Council's documentation as it is perceived as discouraging "time-wasters" (Carole Pullan 30 January 2012 Report, paragraph 3.20).
i) The actual price obtained is not known. Tesco have not disclosed it, as a matter of commercial confidence.
ii) For the reasons set out above (see paragraphs 125-6), realistically the highest bid would very probably derive from a developer intent on a development with a foodstore anchor. That excluded the development for which the Co-op had planning permission.
iii) Tesco proposed such a development. Given the fact that they already own 70% of the Site (so CPO costs would be higher for any other developer) and that Tesco had incentives to make a premium offer likely to exceed that of any rival, Tesco were likely to bid high. Miss Pullan considered that Tesco was "likely to be able to afford and to be willing to pay a higher price than any other bidder" (Report, paragraph 3.42).
iv) With regard to Mr Lazar's valuation of 5 May 2010 (see paragraph 35-6 above), he puts the development value at £1.5m. In that, he took into account the special purchaser element: he refers to it in the first paragraph of his valuation, and he spreads the proposed section 106 costs across the entire Site. The acreage values used by Mr Lazar for sites of this sort in the circumstances of this case is not challenged by Mr Smith. Miss Pullan (in unchallenged evidence) said that that values had not risen for two years, making Mr Lazar's valuation good at the time of the decision to accept the Tesco bid and at the time of the land contract. I accept that there is scant evidence that Mr Lazar's valuation was before the CCP when they decided to accept the Tesco bid: but we are here concerned with value, rather than process. Mr Lazar's evidence is of some weight in respect of value.
v) Immediately prior to exchange of contracts, Mr Payne advised the Council that Tesco's offer was for best consideration, and that was backed up by his (post-exchange) report of 13 April 2011 (see paragraphs 73-4 above). I do not find that report convincing. Whilst purporting to accept that the Tesco bid is for best consideration, the reasoning in the report is thin. It gives an apparently very low valuation of £300,000, which appears not to take account of the special purchaser point.
vi) In her report, Miss Pullan considered (i) the valuations of Mr Lazar and Mr Payne, (ii) comparable land deals where land has been bought by a supermarket developer in the Birmingham area, and (iii) the guideline starting point figure for such land used by the Council (£1.8m-2.4m per acre). She states that the price agreed for the Community Facility "exceeds this level of value by a substantial amount" (Report, paragraph 3.38), "exceeds the Council's benchmark figure by a substantial margin" and "exceeds those paid for all of [the comparable] sites" (paragraph 3.44). She says that the sum offered by Tesco (even excluding the sum offered in the Overage Agreement) "was far greater than that which could have been anticipated from any other party". "Put simply", she says, the Council "has secured for itself … an exceptionally good deal" (Report, paragraph 3.48), satisfying its obligation to obtain best consideration (paragraph 4.1).
vii) In relation to best consideration reasonably obtainable, Miss Pullan appears to consider the appropriate factors, and to adopt the correct analysis. She takes into account the point that Tesco is a special bidder. Mr Holgate criticised her opinion for being after the event; but she is an independent expert, she gives reasons and supportive data for her opinion, and her evidence is compelling.
viii) Interestingly, Mr Smith does not offer an indication of what he considers best value: nor does he challenge the figures of £1.5m and £1.8m per acre which are used in the Council's evidence, upon which the assessment of best value is made by them Further, the Co-op's solicitor (Simon Stanion), in a statement dated 8 February 2012 in support of an application for further disclosure, appears to have accepted (at paragraph 7) that:"It thus appears that [Tesco] has paid over the odds for the [Council's] land…".That is difficult to square that with the plea that the Council has not obtained best value; except insofar as it is suggested that, had the Council acted differently, they could have obtained an even higher bid from Tesco.
ix) However, that possibility is covered by Miss Pullan. She considers that Tesco "bid the absolute maximum to secure the land" (21 February 2012 Statement, paragraph 13)
i) First, he submitted that the sale of the Community Facility was presented publicly, in the Estates Gazette advertisement and invitations to tender, as if it were an independent event (i.e. independent from the wider development of the Site, including the replacement for the Community Facility) without any suggestion that the Council might make its CPO powers available to the successful bidder.I have dealt with the substance of this ground already. The sale of the land was "independent" in the sense that it was not linked to any commitment on the part of the purchaser to develop the land, or on the part of the Council to make its CPO powers available to the successful bidder; and there was no commitment by the purchaser to replace the Community Facility. For the reasons I have given (see paragraphs114-5 above), the Council did not intend to make its CPO powers necessarily available to any successful tenderer for the Community Facility; but only for the preferred developer, when chosen.
ii) Mr Holgate submitted that the tender process was unfair, because it effectively determined the development partner, whereas the August 2010 report indicated that the appointment of a development partner would be the subject of a separate report and a separate decision by the CPP. However, as I have indicated above (paragraph 45), "development partner" here does not connote a partner with development obligations – only a preferred developer. It was never envisaged that the successful tenderer for the Community facility would automatically be the preferred developer. Whoever won that tender, Tesco would still have at least 70% ownership of the Site: they would be in a good position, in any event, although, of course, a much better position if they were the successful tenderer for the Community Facility.
iii) It was submitted that the process was unfair because Tesco knew what was going on, and no one else (including the Co-op) did. However, all those in the Third Tender Process knew that the sale and purchase of the Community Facility would be effected without any development obligations being imposed upon the successful tenderer and without a legal commitment by the Council to make a CPO or otherwise support the successful tenderer in any planned development of the Site as a whole.
There is nothing in these complaints.
i) that the Council would have an opportunity to comment on the updated Knight Frank report;
ii) that the findings of the updated report would be reported back to the CCP;
iii) that the Co-op would have an opportunity to comment on the draft report to the CCP; and
iv) that any formal decision to make a CPO would "follow" the reconsideration of the issue of whether the Council would dispose of the Community Facility to Tesco.
Those assurances (it was submitted) gave the Co-op a legitimate expectation that there would be such an assessment with the opportunity for such input. It is said that the report for the 4 August 2010 CCP meeting(referred to in paragraph 44 above) is consistent with the assurances given on 22 May 2009, which refers to seeking "approval to the appointment of a development partner".