A new judicial review case concerning the interface of development agreements, judicial review and public procurement has recently been decided by the High Court.
The case concerned changes made to a historic development agreement (awarded in 2002) relating to the East Street area of Farnham. Under the original agreement with Waverley Borough Council, the developer needed to pay at least £8.76m for the Council's land. The changes to the agreement appear to allow the developer to proceed with a far lower minimum land valuation of £3.19m (as well as other changes relating to the developer's profit element).
The changes met with resistance in the form of five claimants, two of whom were parish councillors of Farnham, with the other claimants being members of local civic societies.
On its face, the case has some startling similarities with the Gottlieb v Winchester City Council case, where Cllr Gottlieb challenged his own Council's proposals to unlawfully amend a historic development agreement (the changes also had the objective of making the scheme viable for the developer). Cllr Gottlieb was successful and the development proposal came to a juddering halt after 12 years.
So in view of the similarities, was the same result reached here? No.
Mr Justice Dove decided that the claimants did not have "legal standing" to bring judicial review proceedings, because they do not have a sufficient interest in the outcome of the competition (in contrast to the position of Cllr Gottlieb in his case). So none of the arguments concerning public procurement were explored. No doubt this is a bitter blow to those towns folk who are struggling to understand why a developer should be allowed to re-write the terms of a deal in their favour (resulting in the viability of a development scheme they vehemently oppose).
Standing in judicial review cases
There have been a number of cases on standing in judicial review, and Dove J's reasoning is largely consistent with those rulings. Some have resulted in permission being granted. Others not. This is a case where the pendulum has swung back in favour of the defendant public authority.
It cannot be disputed that the vagaries of the case law means that merely being a council tax payer is probably not enough (alone) to get standing to bring judicial review proceedings.
That said, Mr Justice Dove is critical of the Gottlieb decision. We think that this criticism is misplaced. Unlike a parish councillor complaining about a decision of the borough of which his/her parish forms part, Cllr Gottlieb was (and is) an elected member of the authority of who had taken the unlawful decision. In our view this would have given him standing anyway, given his special ability to enforce the general public law obligations and fiduciary duties of the council – but this point was never properly addressed in the Gottlieb case. The proper approach would have been for Dove J to distinguish the circumstances in Gottlieb from those of Wylde.
The judgment will no doubt be a relief to developers facing significant local opposition to their schemes, but, to make a broader point, we believe that it is in some ways regrettable that council tax payers are written out of the picture when it comes to judicial review in public procurement cases. The public procurement rules ensure fair play between bidders, encourage competition which is not only about price (or receipts for land disposal) but quality. The inability to enforce those rules robs the public of an opportunity to influence place, something in which they certainly have a legitimate interest.
(Dentons acted for Cllr Gottlieb in his successful challenge against Winchester City Council.)
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