Cilldara Group Holdings Limited v West Northamptonshire Council

A local authority disposing of land must obtain the best consideration reasonably obtainable, but section 123(2) of the Local Government Act 1972 imposes an outcome duty rather than a prescribed competitive process or procedural fairness between rival bidders. Commercial value may include the likelihood that an offer will complete and the risk that it will fail.

The court will not substitute its assessment for the authority’s judgment. It may intervene where the authority failed to take proper advice, followed unjustifiable or plainly erroneous advice, or reached an irrational conclusion. A late higher offer need not be preferred where the authority reasonably considers it less reliable or commercially less valuable. Community benefits may be recognised separately, provided they do not dilute the statutory best-consideration requirement.

West Northamptonshire Council decided to sell approximately 8.25 hectares of land at Sixfields, adjacent to Northampton Town Football Club’s stadium, to County Developments (Northampton) Limited, a company owned by the Club.

Cilldara Group Holdings Limited, which had submitted competing offers, sought judicial review on six grounds: procedural fairness, the Tameside duty of inquiry, predetermination, breach of section 123(2) of the Local Government Act 1972, irrationality and relevant or irrelevant considerations, and failure to give adequate reasons.

The principal issues were whether the Council had lawfully assessed competing offers, including a later offer by Cilldara for a higher price, and whether the decision-making process and reasons were legally adequate.

1. Expert evidence. Permission to rely on Cilldara’s valuation report was refused under CPR 35.1. The report was not reasonably required to resolve the judicial review. The Council had considered the value of the Running Track Land, and the remaining expert disagreement did not establish irrationality.
2. Procedural fairness. The common law duty of fairness applied, but the demands of fairness towards rival bidders were at the lighter end of the spectrum. Section 123(2) itself imposed no procedural obligation. The Council had deferred its decision repeatedly, engaged with both bidders, and was entitled to decide that a further written report was unnecessary in response to Cilldara’s very late offer. Oral advice and subsequent correspondence adequately demonstrated that the offer had been considered.
3. Tameside duty. The Council had taken reasonable steps to inform itself. It obtained valuation reports, legal advice, detailed officer reports, and information from both bidders. It was rational to conclude that further inquiry into Cilldara’s latest offer was unnecessary, particularly given the risk that delay might cause the competing offer to be withdrawn.
4. Predetermination. The repeated deferrals and detailed consideration of Cilldara’s offers were inconsistent with a closed mind. The fair-minded and informed observer would not infer predetermination.
5. Section 123(2). The Council was entitled to treat litigation risk, joint-landlord complications, and the reliability of the offers as commercial considerations affecting value. It reasonably regarded Cilldara’s offer as less credible because of its timing, unusually high price, limited engagement with the complex tenure and remediation issues, and lack of detail concerning development. CDNL’s existing interests and conduct provided a reasonable basis for greater confidence that its offer would complete. The Council therefore lawfully concluded that CDNL’s offer represented the best consideration reasonably obtainable.
6. Relevant considerations and reasons. The Council had considered the higher price, indemnity, financial support, reliability risks and the possibility of non-completion. Community benefits could be identified in addition to the statutory conclusion, provided they did not influence the best-consideration assessment unlawfully. The combination of the officer reports, meeting records and post-decision correspondence adequately explained the decision. The claim was dismissed on all grounds.