Lawyers tell Town Hall: Forget £3million debt – it can’t be collected
The 36-flat Talacre development that’s built on a land sale scandal
06 August, 2020 — By John Gulliver
The apartment building next to Talacre Park
LAWYERS advised Camden Council officials three years ago to abandon attempts to reclaim a debt of several million pounds over the sale and development of a large block of flats in Kentish Town because the developer, who ran a chain of offshore companies, was beyond their reach.
I can disclose that council sources show that this piece of legal advice was given in 2017 though there does not appear to have been any discussion or decision-making process involving the borough’s elected representatives.
It seems as if there was an aura of confidentiality about it.
The scandal revolves around an extraordinary exposure by a Kentish Town resident, Nick Harding, a retired forensic accountant, who has been pursuing the ramifications of the sale of land at the edge of Talacre Park since development plans emerged 17 years ago.
He sent officials countless emails questioning aspects of the sale over the years as well as Freedom of Information requests.
His bombardment of officials resulted in him being dismissed at one stage as “vexatious”. But nothing seemed to deter him.
He was so concerned with what appeared to be unsatisfactory replies from officials that he carried out his own investigation at the Land Registry, as well as contacting several councillors. But the years passed by – his first questioning emails go back more than 10 years – and he approached me recently with his allegations. By then his dossier of enquiries and replies ran into scores of pages that clearly were making a substantial case.
He was convinced that the developer had reneged on an agreement to pay an additional amount, over and above the agreed price for the piece of land, a payment known as an “overage” by which the developer tops up the price depending on the final total sale price of the 36 flats in the block.
The land was sold initially by the council for £300,000. The flats were sold for nearly £21million.
According to Nick Harding’s analysis this figure was reached after he had carried out his own investigation into the information supplied publicly by the Land Registry. At that level his research can hardly be questioned. Nonetheless I showed his cache of correspondence to an experienced architect who agreed that Nick Harding had developed a prima facie case.
According to council sources, a recent document refers to Nick Harding’s enquiries as well as my piece in the New Journal and stresses that one of the difficulties facing the Town Hall is that all the officials involved in the land sale appear to have left the council which seriously complicates a thorough investigation.
This would in fact be the case if this were – as it no doubt is – a civil matter and not a more serious form of investigation though there appears to be a ready acceptance of events.
Nick Harding told me this week that he believes he knows one official from his early enquiries who is still employed by the council but this has yet to be tested.
However, faced with this impasse, it is understood from sources that a “briefing” document on what is certainly a scandalous affair is being prepared for two senior Labour councillors, Danny Beales and Richard Olszewski.
The admission that the “overage” – a kind of promissory note – cannot be pursued, that Camden Council has lost, according to Nick Harding, more than £3m, opens up several questions that need to be debated in the public domain.
It should be known that several local authorities in London have successfully arranged overage deals over the years with developers and payment has been honoured. What has happened in Camden appears to be exceptional.
However, is there nothing Camden can do to put matters right?
Nick Harding argues that though the developer may be an offshore company it is possible to pursue the debt through the courts by applying for the right to foreclose on the freehold status of the block which, at the moment, is owned by the developer
One of the mysteries that hangs over the sale of the land in the first place is why did the council – and the councillors who endorsed it – accept such a low price of £300,000 for a prime piece of land in one of the most sought after parts of London.
Cllr Richard Olszewski and Cllr Danny Beales
That is the sort of price of a backstreet garage that can be developed into a small block of three or four units. Not, as in this case, the purchase of land, overlooking a park, near an Overland railway station, and on which 36 flats can be built.
From the exchange of emails between Nick Harding and council officials it can be seen that at the time of the sale of the land it appeared it was assumed that the total sale of the flats would fetch about £8m, whereas they were eventually sold for nearly £21m, almost three times that amount.
Then a further question arises. On whose valuation was the original sale agreement made? Though an air of controversy hung over the development plans as they unfolded 17 years ago – the scheme was on the council’s agenda in the early days of the Lib-Dem/Conservative coalition – the apparent low price offered for the land by the developer did not seem to have met stern opposition.
The promise of a later additional payment – the overage – may have assuaged concerns felt by some councillors but it surely should have been recognised that to claim and settle a “top up” figure at the completion of the block, three or four years later, would have to be carefully monitored and not allowed to become a bed debt. In fact this is what happened though only now is an admission of the council’s inability to collect the debt emerging.
As for counsel’s three-year-old advice that the debt is uncollectable one assumes it was copied to the council’s chief executive.
Was it also made known to the then Labour leadership? If it wasn’t, a question looms over what is an unacceptable level of secrecy at the Town Hall.
Of course the legal advice may have been put to one side while allowing attempts to recoup the debt to continue.
In an emailed reply to a Freedom of Information request by Nick Harding sent on June 16, an official in the Information Rights department informed him that the “matter is still subject to internal review service”.
Does this mean that two departments at the Town Hall are pursuing different courses of action – one abandoning the debt, the other formally chasing it?
In one of his earlier email exchanges with officialdom, Nick Harding was told that the collection of the overage was very “complex”. Now, after his years of dogged pursuit, an admission appears to have been made by the council at a high level that, essentially, he has been right after all. His efforts are even recognised by officials who have taken note of his emails requesting replies under Freedom of Information.
Bearing all this in mind, surely something is wrong with a system which manages to conceal a debt of this nature involving such a large sum of public money over such a long time – and that it takes years of stubborn probing by an individual member of the public to bring it to light.