Council and Lendlease Settle out of Court over Development Vehicle

In a suit submitted to the High Court last August, Lendlease alleged that the council breached a contract between the two of them to form the Haringey Development Vehicle (HDV).

The HDV, which was predicted to be worth £4bn eventually, was a plan to transfer large swathes of council land into a jointly owned vehicle before demolishing estates, such as Broadwater Farm, and building new homes.

Haringey Council, in its defence documents, denied all wrongdoing, pointing out that the procurement documents for the vehicle 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.”

Lendlease claimed 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”.

Nevertheless, the two parties have now settled out of court for an undisclosed fee, bringing a likely end to the long HDV saga.

The HDV was originally planned by Haringey’s Labour council but a wave of deselections by local members saw leader Claire Kober lose control of the council in the elections last May.

The new Labour administration, led by former anti-HDV councillor Joseph Ejiofor, voted to scrap the vehicle in July last year, saying it did not agree with the large-scale transfer of public assets out of public ownership and thought the risks to the council were too great.

After the vote, the council was forced to pay £520,275 to Lendlease to cover the council’s share of setting up costs. It had already spent a further £2.5m, excluding staff costs, on the HDV.

Reported by Inside Housing