R v Pembrokeshire County Council, ex parte Coker and another

Respondents seeking offers for purchase of land – Applicants’ offer rejected – Whether respondents failing to obtain best consideration reasonably obtainable – Local Government Act 1972 section 123 – Application dismissed The respondent council sought to dispose of their land on a site at Milford Haven. In February 1998 the applicants put forward a proposal on behalf of unnamed clients to purchase the land and requested that the proposal be submitted to the Urgency Sub-Committee (USC), which was due to meet on 9 February 1998. On 9 February, the USC rejected the applicants’ offer on the grounds that it was late, lacked certainty and did not constitute as good a monetary offer as that of a rival bid from CSSL. In March 1998 the respondents granted a five-year lease to CSSL, which included provisions, granting to CSSL two options for further leases for 99 years in respect of the land and property on the land. The lease also included covenants that CSSL would use its best endeavours to employ specified numbers of employees at the site. The applicants sought to quash the decision, principally on the ground that the respondents had failed to obtain the best price reasonably obtainable for the options, contrary to section 123(2) of the Local Government Act 1972, in that their offer was the better offer. It was further submitted by the applicants that, even had the CSSL offer been the better offer, the inclusion of employment covenants in the lease, without the consent of the Secretary of State, placed the respondent in breach of section 123 of the Act. Held: The application was dismissed. The respondents’ decision to favour the terms offered by CSSL was not unreasonable. Any negotiations with the applicants were fraught with uncertainty and might have proved fruitless. It was common sense for the respondents to accept CSSL’s offer and make every effort to deal before CSSL moved elsewhere. In deciding whether the best consideration was obtained, the court had to consider those elements of the transaction of commercial or monetary value to the local authority. Undertakings to create a number of jobs or use land for a particular desirable purpose did not normally count as such consideration: see R v Middlesbrough Borough Council, ex parte Frostree Ltd unreported 16 December 1988. Accordingly, the respondents could not allow the perceived social value of job creation to be reflected as entitling CSSL to some discount on, or as part of the satisfaction of the monetary value it was required to obtain, without the consent of the Secretary of State. However, in light of all the evidence, it was CSSL who originated the proposal of employment covenants in the lease and their inclusion in no way affected the rent or other consideration agreed to be provided by CSSL. Nigel Giffin (instructed by Coker Vis) appeared for the applicants; Nicholas Huskinson (instructed by the solicitor to Pembrokeshire County Council) appeared for the respondents. Sarah Addenbrooke, barrister