Property firm fails in legal action over refusal by council to sell site

Manchester City Council was not obliged to sell a site to a particular buyer simply because of an earlier planning decision, the High Court has found.

His Honour Judge Stephen Davies ruled against property firm Daniel Johns Manchester.

The company sought to judicially review what it called the “continued refusal” of the council to consider its offers for the freehold of a commercial property.

Giving judgment, the judge said the case raised issues “as to the amenability of the decision to challenge on public law grounds” when the decision in question rescinded a previous resolution authorising the sale of the freehold to the claimant and that the council had previously indicated its willingness to sell the freehold to the previous owner of the long leasehold interest in the property but only on terms marked “without prejudice and subject to contract”.

Daniel Johns Manchester’s primary complaint was that the refusal to sell was rendered unlawful because it was motivated by the council’s disapproval of its intended development.

The vacant plot in the Newton Heath area is immediately adjacent to another known as Rosedale and both adjoined another known as the Yikman site.

Although planning permission had been granted for the site the council had subsequently decided it would prefer a scheme that redeveloped all three sites.

“In my judgment the fact that the city council in its capacity as local planning authority had previously granted planning permission for a particular development in relation to the property has no sufficient connection with its subsequent decision, in its capacity as a private landowner, to refuse to proceed further with a proposal to sell the freehold to the claimant”, the judge said.

Manchester had indicated it would sell on a without prejudice and subject to contract basis, but gave no commitment beyond that, he noted.

HHJ Davies said there was no question of impropriety being involved and the council’s actions “cannot be categorised as the knowing pursuit of an improper purpose [it] was motivated by a perfectly legitimate and genuine desire to seek to persuade the claimant to enter into constructive discussions in relation to the Yikman or some other alternative proposal”.

He also dismissed arguments that the council was obliged to provide formal notice of its concerns and failed to take into account material considerations.

Mark Smulian

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