Haringey: ‘Corbyn Council’ sued by developer Lendlease for scrapping HDV joint venture project

Haringey: ‘Corbyn Council’ sued by developer Lendlease for scrapping HDV joint venture project

Legal action has begun against Labour-run Haringey Council for its decision to scrap the formation of a 50:50 joint venture company with property giant Lendlease proposed by its predecessor Labour administration.

Haringey, now dubbed the “Corbyn Council” because of its control by admirers of Labour Party leader Jeremy Corbyn following their successful campaign last autumn to drive out sitting councillors, dropped the proposed Haringey Development Vehicle (HDV) in July in line with a manifesto commitment.

Lendlease is suing the council for recovery of costs incurred during the period in which the HDV plan was developed. Specialist journal Building.co.uk, which first reported the legal action, says that a nine-page claim lodged with the Technology and Construction Court describes the council’s decision as “unlawful” and argues that Lendlease has an “enforceable legitimate expectation” to be reimbursed for expenditure incurred after it had been formally picked as the council’s preferred bidder to be its partner in the project. Apparently, no figure is specified.

Haringey’s ten-page defence argues that there was “an agreement or understanding” with Lendlease that the company would be reimbursed for 50% of its costs, which the council puts at £,1,040,550, Building.co.uk reports. The council denies any wrongdoing in its decision-making process or breaches of its legal duties.

In a letter dated 16 July, the day before the council’s cabinet took its decision to abandon the HDV, Dan Labbad, chief executive of Lendlease Europe, told the council’s leader Joseph Ejiofor and its chief executive Zina Etheridge that a council officer’s report setting out grounds for cancelling the completion of the joint venture scheme, was “fundamentally flawed” and that cancellation would expose the council to a possible claim for cost recovery and “a significant loss of profits claim”.

Haringey says that funding cuts have required it to reduce its budget by £160 million since the “austerity” programme of the Conservative-Liberal Democrat coalition government was introduced. A medium term financial strategy for the council covering 2018/19 to 2022/23 set out last December said that £8.8 million of financial reserves had been used “help smooth the effects of cuts” and that a £15 million gap would “need to be tackled in the next and future financial years”.

The Stop HDV campaign, which comprises members of Corbyn-backing campaign Momentum and various Far Left and other political groupings, recently held a party to celebrate the scrapping of the project. Labbad, speaking at Wednesday’s Centre For London annual conference, said that despite the setback with Haringey, should a similar opportunity arise in the future “we would bid for it in a second”. Lendlease continues to be Haringey’s development partner for the regeneration of the Love Lane estate in Tottenham, whose residents are to be balloted about its continuation. The council appears to be encouraging a “yes” vote.

Opposition to the HDV was aggressively supported in the Guardian newspaper, which has yet to report that Labour lost more council seats in Haringey at the 3 May local elections than in any other London borough on a day when the party made gains across most of the capital.

Last month, a Guardian columnist criticised the “Corbyn Council” for not seeking to block a redevelopment scheme in Seven Sisters, but failed to inform readers that Haringey is bound by a 2007 legal agreement and a 2012 planning consent or that measures are in place to provide a new space for traders in the area’s “Latin Village” market, which would be demolished in its present form.

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