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Lendlease sues Haringey Council over £4bn vehicle
Developer Lendlease is suing Haringey Council over the scrapped £4bn development vehicle originally planned to be a joint venture between them.
Lendlease has alleged, in documents submitted to the High Court and seen by Inside Housing, that the council has breached the contract between the two of them.
The developer also said in the documents that by abandoning the project, the council has breached its obligations under European Union procurement law.
Haringey Council, however, said in its defence that these claims are “inconsistent with the express terms of the procurement documents” and denies all wrongdoing.
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In the council’s defence, it quoted from the procurement documents, which said it “reserves the right at any time… to cancel or withdraw from the competitive dialogue procedure at any stage”.
The documents also said: “For the avoidance of doubt, the authority and its advisory team have no obligation whatsoever to reimburse any bidder in respect of any cost, economic loss or other loss of profit.”
Originally, the council agreed to form the Haringey Development Vehicle (HDV) with Lendlease, a joint vehicle into which it would transfer a large portion of its land.
It was predicted at the time that the HDV would eventually be worth £4bn and would pay fees to Lendlease for managing the developments.
After local opposition, however, pro-HDV Labour councillors were deselected by local party members and replaced with anti-HDV candidates, who took control of the council in May’s local elections.
In July, the new regime voted to cancel the HDV and establish instead a wholly-owned development company.
Lendlease claims in court documents that it “had an enforceable legitimate expectation that in the event of abandonment they would be reimbursed by the defendant in respect of expenditure that was incurred in respect of the HDV”.
As well as asking for reimbursement of costs, Lendlease said in court documents that Haringey Council’s commercial portfolio increased in value as a result of work done by Lendlease on the HDV that was unjust or unlawful enrichment.
Haringey Council admitted that its portfolio had increased in value, but said that its agreement meant it was only required to pay 50% of Lendlease’s costs to cover this, which it is prepared to do.
Lendlease and Haringey Council declined to comment.
