Agenda, decisions and minutes

Special, Lewes District Council Cabinet
Friday, 8th March, 2019 2.30 pm

Venue: Ditchling Room at Southover House, Southover Road, Lewes, BN7 1AB

Contact: Committee Services on 01323 415021 

Items
No. Item

77.

Minutes of the meeting held on 11 February 2019 pdf icon PDF 128 KB

Minutes:

The minutes of the meeting held on 11 February 2019 were submitted and approved and the chair was authorised to sign them as a correct record.

78.

Apologies for absence

Minutes:

Apologies for absence were reported from Councillor Franklin and visiting member Councillor Gardiner.

79.

Declarations of interest

Disclosure by councillors of personal interests in matters on the agenda, the nature of any interest and whether the councillor regards the interest as prejudicial under the terms of the Code of Conduct.

Minutes:

Councillors Smith and Maskell, Chief Executive and Assistant Director for Legal and Democratic Services declared a prejudicial interest in agenda item 6 (Potential withdrawal of a litigation claim against the council in relation to a property development scheme). They withdrew from the room whilst the item was considered. Councillor Merry chaired the meeting for the duration of the item.

80.

Exclusion of the public

The Chief Executive considers that discussion of the following items is likely to disclose exempt information as defined in Schedule 12A of the Local Government Act 1972 and may therefore need to take place in private session. The exempt information reasons are shown beneath the items listed below. Furthermore, in relation to paragraph 10 of Schedule 12A, it is considered that the public interest in maintaining the exemption outweighs the public interest in disclosing the information. (The requisite notices having been given under regulation 5 of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.)

 

(Note: Exempt papers are printed on pink paper).

Minutes:

Resolved:

 

That the public be excluded from the remainder of the meeting as otherwise there was a likelihood of disclosure to them of exempt information as defined in schedule 12A of the Local Government Act 1972. The relevant paragraph of schedule 12A and a description of the exempt information is shown below. (The requisite notice having been given under regulation 5 of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.)

81.

Potential withdrawal of a litigation claim against the council in relation to a property development scheme

Report of Assistant Director for Corporate Governance

Lead Cabinet member: Councillor Bill Giles

 

Exempt information reason 3 - Information relating to the financial or business affairs of any particular person (including the authority holding that information) and reason 5 - Information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

 

Decision:

It was resolved to agree to a discontinuance of the litigation on the basis that the Council makes no payment whatsoever to Karis, that Karis withdraws its misfeasance allegations and does not repeat them and that the project agreements are treated as lawfully terminated.

 

The Cabinet agreed that the Council would bear its own costs of the proceedings, save for those costs already paid to the Council by Karis during the course of proceedings, which the Council would retain.

 

This decision was made on the basis that neither party would bring any further action against the other including against any individual councillor(s) or officer(s).

 

The Assistant Director – Legal & Democratic Services was authorised to sign a settlement agreement reflecting the above terms.

 

In accordance with Scrutiny Procedure Rule 17 (a) as set out in the Council’s Constitution, for reasons of urgency the above decisions shall not be subject to the call-in procedure.

Minutes:

The Cabinet report explained that Karis Developments Limited and its subsidiary Karis Southern Housing Projects Limited had made a claim against the Council for £11.6 million. The basis of the claim was that the Council had wrongly terminated the New Homes Project, so depriving Karis of its share of the project profit.

 

The Council’s legal advisors had advised the Council that Karis’s claim was without merit and the Council accordingly resisted the claim and rejected all proposals from Karis that the case be settled on terms which involved the Council paying Karis any money.

 

Following an exchange of witness statements the Council and Karis were in a position to assess the factual evidence of the key individuals involved in the project and its termination, and to consider the strength or otherwise of their respective cases. An assessment of the evidence reinforced the Council’s view that it had a very strong case.

 

Following the exchange of evidence and with a trial scheduled for April 2019, Karis initiated the withdrawal of its claim.

 

It was prepared to treat the project agreements as having been lawfully terminated, to withdraw the misfeasance allegations it had made against a councillor and officers and not repeat them, and to drop its claim once and for all without being paid any money by the Council.

 

The Council now had an opportunity to exit the litigation without making any payment to Karis, whilst bearing its own legal costs.

 

The Council’s barristers advised that the advantages of settling the litigation on the above terms outweighed the risk of proceeding to a (very expensive) trial. Whilst it was highly likely that the Council would win its case at trial, this could not be guaranteed, and any award of costs was unlikely to cover more than 70% of what the Council would need to spend. There was a risk too that Karis would arrange its affairs in a way which would make enforcement and recovery of these monies a long and problematic process.

 

Councillors Smith and Maskell, Chief Executive and Assistant Director for Legal and Democratic Services declared a prejudicial interest in this item. They withdrew from the room whilst the item was considered. Councillor Merry chaired the meeting for the duration of the item.

 

Resolved (Key decision):

 

It was resolved to agree to a discontinuance of the litigation on the basis that the Council makes no payment whatsoever to Karis, that Karis withdraws its misfeasance allegations and does not repeat them and that the project agreements are treated as lawfully terminated.

 

The Cabinet agreed that the Council would bear its own costs of the proceedings, save for those costs already paid to the Council by Karis during the course of proceedings, which the Council would retain.

 

This decision was made on the basis that neither party would bring any further action against the other including against any individual councillor(s) or officer(s).

 

The Assistant Director – Legal & Democratic Services was authorised to sign a settlement agreement reflecting the above terms.

 

In  ...  view the full minutes text for item 81.