Local authority disposals must be for the best consideration reasonably obtainable

A council may dispose of land held in any manner it wishes but is obliged to obtain the best consideration which can reasonably be obtained under section 123 of the Local Government Act 1972. In Childara Group Holdings Ltd v West Northamptonshire Council and others [2023] EWHC 1675 (Admin), the High Court dismissed a claim for judicial review of WNC’s decision to sell 8.25 hectares of land adjacent to Sixfields Stadium, home of Northampton Town Football Club, to County Developments (Northampton) Ltd, a company owned by NTFC. The case concerned the disposal of former landfill land owned by WNC and let to CDNL on two leases: i) the main site, excluding an area sublet to WNC and used as a household recycling centre; and ii) a running track. Under the lease of the main site, WNC could trigger early termination if CDNL failed to carry out necessary remediation work. The main site was also affected by clawback provisions enabling Homes England to recover 50% of any increased value above the permitted use for up to 300 open-market dwellings and 85,000 sq ft of retail floorspace. The dispute arose following failed attempts by Childara, to acquire NTFC. CDNL and Childara made competing bids for the land, both eventually offering £2.05m. CDNL’s offer was conditional on it constructing an east stand at the stadium within five years, with buy-back and overage provisions for WNC. Childara’s offer for the main site only was marginally higher, but meant two landlords for the site and possible litigation risk. A red book valuation valued WNC’s interests at £685,000 and its value to CDNL as an interested party at £820,000. WNC resolved to sell to CDNL as being more invested in the land and able to deliver, despite a last-minute increase in Childara’s offer to £3m. In determining the best consideration that can reasonably be obtained for the purposes of section 123 of the 1972 Act, elements of social value – the completion of the east stand or increased likelihood of land development in line with WNC’s policies – were not relevant but prudence and common sense were. The court rejected Childara’s allegations that the process was procedurally unfair, that WNC failed to make sufficient enquiry or that it had predetermined the outcome of its decision to dispose of the land. WNC’s assessment that it had grounds to have higher confidence in CDNL’s bid than Childara’s and that the former represented the best consideration reasonably available was reasonable. WNC’s decision was rational and on balance it had provided adequate reasons. Louise Clark is a property law consultant and mediator