Commercial investments and associated reports

Dear Mr Davies

Thank you for your information request submitted under the Freedom of Information Act 2000.

Please be advised that your request is being dealt with and you will receive a response within 20 working days which will be 16 August 2019.

Regards

Louise Bircher
Customer Care Manager
Mole Valley District Council
Tel: 01306 879155
www.molevalley.gov.uk
Follow us on Twitter @molevalleydc

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Dear Mr Davies

Thank you for your information request submitted under the Freedom of
Information Act 2000

Your request for information has been considered under the Freedom of
Information Act 2000 (FOIA) and under the Environmental Information
Regulations 2004 (EIR), as certain aspects of your questions are
considered to fall within the definition of ‘environmental information’.

I can confirm that Mole Valley District Council holds the information
requested however the documents contain information which is exempt under
section 43(2) of the FOIA as its disclosure would, or would be likely to,
prejudice the commercial interests of the Council, the Council’s wholly
owned property investment companies, MHL (the parent and guarantor of MPL)
and MPL and/or to the extent that it contains environmental information
exempt from disclosure under section 12(5)(e) of the EIR as it would
adversely affect the confidentiality of commercial or industrial
information the legitimate economic interests of MPL, MHL and the Council.

Having considered the public interest, our decision is to withhold any
reports undertaken as part of the due diligence process. Although
disclosure enables the public to understand the Council’s activities, to
hold the Council to account for its decisions and for its use of public
resources, withholding information is in the public interest. The analysis
of the reports presented to MPL as the purchaser and to the Council as the
funder would adversely affect both MPL and the Council’s interests.
Furthermore, disclosure would be to the benefit of any future purchaser of
the site, running contrary to the caveat emptor doctrine, and would
undermine MPL and the Council’s negotiating position and exit strategy
which in turn prejudices and adversely affects the ability to dispose of
the asset at best consideration.

You may wish to refine your request by narrowing its scope or by being
more specific about what information you wish to obtain from those
particular reports.

If you are dissatisfied with the handling of your request, you have the
right to ask for an internal review. Internal review requests should be
submitted within two months of the date of receipt of the response to your
original letter and should be addressed to: Louise Bircher, Mole Valley
District Council, Pippbrook, Dorking, Surrey, RH4 1SJ.

If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted at: Information
Commissioner's Office, Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9
5AF Or by calling 0303 123 1113 (local rate) Monday to Friday 9am – 5pm.

Thank you and kind regards

Kate Butcher

Customer Care Officer

Freedom of Information Officer

Mole Valley District Council

01306 885001

[1]www.molevalley.gov.uk

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Dear Mr Davies

Thank you for your request for an Internal Review submitted under the
Freedom of Information Act 2000.

Please be advised that your request is being dealt with and you will
receive a response within 20 working days, which will be 16^th September
2019.

Regards

Kate Butcher

Customer Care Officer

Freedom of Information Officer

Mole Valley District Council

01306 885001

[1]www.molevalley.gov.uk

show quoted sections

Dear Mr Davies

Thank you for your e mail of 16 August when you requested an internal
review of MVDC’s original response to the following Freedom of Information
Act (FOIA) request.

The "advice, acquisition and investment rationale report" produced by ACRE
Capital Real Estate in relation to the acquisition of Touristik House,
Dorking Office Car Park (as described in invoice no INV-0037 dated 22 Oct
2018)

(2) The purchase report produced by DTRE in relation to the acquisition of
The Quadrangle, 106-118 Station Road, Redhill, as referenced by invoice
number SG18090960

(3) Any document equivalent to those mentioned above that was produced by
Lauderdale Investments Ltd in relation to the acquisition of BUPA Care
Home, Alveston Leys, Stratford upon Avon

Introduction

As you know, MVDC and its wholly owned companies (which I shall refer to
collectively as MVDC) are under a duty to release requested information
held by them into the public domain unless at least one of a number of
exemptions to this duty applies, and (if the exemption is a qualified
exemption) the public interest in releasing the information is stronger
than the public interest in maintaining the exemption. When making its
decision, MVDC applies a presumption in favour of disclosure, - something
that is required by statute.

Is the s43(2) exemption engaged?

In general terms, commercial and/ or legal reports commissioned by Buyers,
which are used to inform their decisions whether to proceed with property
purchases, are considered to be confidential. Ultimately, these types of
reports advise Buyers on whether the purchase price of a property
represents value for money. In doing so, they necessarily refer to a wide
range of facts, and include information about the potential risks of
proceeding to completion. In English and Welsh law, a legal presumption of
“caveat emptor” (buyer beware) applies to property purchases. Simply put,
Sellers do not disclose purchase reports to Buyers both because they are
confidential, and also because they are likely to contain information that
Buyers may use to try and improve their negotiating position.

I have seen the requested reports, and confirm that, as one would expect,
they do contain commercial information that could be of benefit to Buyers.
It is therefore clear to me that the exemption at s43(2) FOIA is engaged:
disclosing the requested information into the public domain would
necessarily make this information available to future tenants or
purchasers and provide them with a hook which they could use to try to
reduce the rent or purchase price of the relevant property in future.

What is the public interest in disclosure?

There is clearly a strong public interest in the disclosure of information
that informs the public about investment or other decisions involving
significant amounts of public money, - disclosure increases public
confidence in and is likely to increase participation in decision making.
There is also an intrinsic public interest in public authorities being
accountable to their electorate and others, and being transparent about
how public money is spent.  Where there are specific codes and policies
that impose procedural and other requirements on how decisions are made,
there is an additional public interest in ensuring the requirements of the
relevant codes and policies are met.

What is the public interest in maintaining the exemption?

The public interest in maintaining this exemption is, on the face of it,
straightforward: some of the released information in the reports, since
they necessarily contain both the pros and the cons of the proposed
transaction, would be more likely than not to be used by prospective
tenants and/ or purchasers against MVDC in the course of commercial
negotiations.  In addition, there are a number of safeguards that ensure
MVDC’s decisions are taken in line with internal and external policy.
Finally, there is a considerable amount of information which has already
been put into the public domain, and further information which will in
future be put into the public domain, which serves to inform MVDC’s
residents and others how public monies are being applied.

Balance of the public interest test

There is clearly a balance to be struck.  It is not, in my view,
sufficient to conclude that simply because information in any report is
likely to be used against MVDC in future negotiations that this, in
itself, can justify the public being entirely excluded from receiving any
information about the purchases or the decision making process.  The
requested reports, however, cannot be considered in isolation and it is
relevant that MVDC has an Asset Investment Strategy (focussing on
acceptable risk thresholds) and an Asset Investment Working Group (so
members can be consulted on decisions to purchase prior to them being
finalised) - these further improve MVDC’s governance arrangements.  There
is also a considerable amount of information already in the public domain
(see, for example  Item no 9 of MVDC’s 7 February Full Council. A link for
this report on MVDC’s Treasury Management Strategy, which includes, for
example, MVDC’s Asset Investment Strategy (Appendix B) and a risk register
(at Appendix B3).

[1]http://www.molevalley.gov.uk/media/pdf/8...

I note you referred to the question of whether the public interest in
maintaining the exemption has reduced with the passage of time since the
purchases.  My view is that while this is often the case, here it is not.
It seems to me that the public interest in maintaining the exemption is
very unlikely to decrease at all during MVDC’s ownership of the asset.  It
is clear to me that any release now would be more likely than not to
prejudice MVDC’s future commercial interests (for example when securing a
tenant or when disposing of its freehold interest).

Finally, the role of internal and external audit is also important in
determining whether appropriate measures are in place and whether they
have been followed.

Conclusion:

I trust the information contained in the report referred to in the above
link provides the assurance sought.  Given the governance arrangements
that are already in place, and that a substantial amount of information
about the property assets that you are interested in is already in the
public domain, however, my view is that the public interest favours
maintaining the exemption at s43(2) FOIA at this point in time.

If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted at: Information
Commissioner's Office, Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9
5AF Or by calling 0303 123 1113 (local rate) Monday to Friday 9am – 5pm.

Yours sincerely,

Tom Penlington

Legal Services Manager and Solicitor to the Council

Mole Valley District Council

Pippbrook

Dorking RH4 1SJ

Tel: 01306 879354

This MVDC email is only intended for the individual or organisation to
whom or which it is addressed and may contain, either in the body of the
email or attachment/s, information that is personal, confidential and/or
subject to copyright. If you are not the intended recipient, please note
that copying or distributing this message, attachment/s or other files
associated within this email, is strictly prohibited. If you have received
this email in error, please notify the sender immediately and then delete
it.

References

Visible links
1. http://www.molevalley.gov.uk/media/pdf/8...

Dear Mr Davies

Following your complaint to the Information Commissioner, the Council has
reconsidered its position.

Having considered the public interest, it has decided to disclose the
three reports you requested, redacted of what it considers to be
commercially sensitive information under Section 43(2) of the Freedom of
Information Act 2000, as its disclosure would, or would be likely to
prejudice the commercial interests of the Council, the Council’s wholly
owned property investment companies, Mova Holdings Ltd (MHL) (the parent
and guarantor of Mova Property Ltd (MPL)) and MPL; and/or to the extent
that it contains environmental information exempt from disclosure under
Section 12(5)(e) of the Environmental Information Regulations 2004, as it
would adversely affect the confidentiality of commercial or industrial
information the legitimate economic interests of MPL, MHL and the Council.

Some personal information was also noted in some of the reports, and this
too has been redacted.

Accordingly, please find the three reports attached as requested:

 1. ACRE Capital Real Estate – Touristik House, Dorking – 22 October 2018
 2. DTRE – The Quadrangle, Redhill – August 2018
 3. Gerald Eve (not Lauderdale Investments Ltd) – BUPA Care Home, Alveston
Leys, Stratford-upon-Avon – 24 July 2018

Please note that the report by Lauderdale Investments Ltd was
sub-contracted to Gerald Eve; hence the report you referred to is in their
name rather than Lauderdale Investments Ltd.

I trust that as the Council has now provided all the information you
requested, that the matter has been resolved.

Yours sincerely

Kate Butcher

Customer Care Officer

Freedom of Information Officer

Mole Valley District Council

01306 885001

[1]www.molevalley.gov.uk

From: Penlington, Tom <[email address]>
Sent: 16 September 2019 21:27
To: [FOI #590818 email]
Cc: Freedom Of Information <[Mole Valley District Council request email]>
Subject: Internal Review - Acquisition Reports

Dear Mr Davies

Thank you for your e mail of 16 August when you requested an internal
review of MVDC’s original response to the following Freedom of Information
Act (FOIA) request.

The "advice, acquisition and investment rationale report" produced by ACRE
Capital Real Estate in relation to the acquisition of Touristik House,
Dorking Office Car Park (as described in invoice no INV-0037 dated 22 Oct
2018)

(2) The purchase report produced by DTRE in relation to the acquisition of
The Quadrangle, 106-118 Station Road, Redhill, as referenced by invoice
number SG18090960

(3) Any document equivalent to those mentioned above that was produced by
Lauderdale Investments Ltd in relation to the acquisition of BUPA Care
Home, Alveston Leys, Stratford upon Avon

Introduction

As you know, MVDC and its wholly owned companies (which I shall refer to
collectively as MVDC) are under a duty to release requested information
held by them into the public domain unless at least one of a number of
exemptions to this duty applies, and (if the exemption is a qualified
exemption) the public interest in releasing the information is stronger
than the public interest in maintaining the exemption. When making its
decision, MVDC applies a presumption in favour of disclosure, - something
that is required by statute.

Is the s43(2) exemption engaged?

In general terms, commercial and/ or legal reports commissioned by Buyers,
which are used to inform their decisions whether to proceed with property
purchases, are considered to be confidential. Ultimately, these types of
reports advise Buyers on whether the purchase price of a property
represents value for money. In doing so, they necessarily refer to a wide
range of facts, and include information about the potential risks of
proceeding to completion. In English and Welsh law, a legal presumption of
“caveat emptor” (buyer beware) applies to property purchases. Simply put,
Sellers do not disclose purchase reports to Buyers both because they are
confidential, and also because they are likely to contain information that
Buyers may use to try and improve their negotiating position.

I have seen the requested reports, and confirm that, as one would expect,
they do contain commercial information that could be of benefit to Buyers.
It is therefore clear to me that the exemption at s43(2) FOIA is engaged:
disclosing the requested information into the public domain would
necessarily make this information available to future tenants or
purchasers and provide them with a hook which they could use to try to
reduce the rent or purchase price of the relevant property in future.

What is the public interest in disclosure?

There is clearly a strong public interest in the disclosure of information
that informs the public about investment or other decisions involving
significant amounts of public money, - disclosure increases public
confidence in and is likely to increase participation in decision making.
There is also an intrinsic public interest in public authorities being
accountable to their electorate and others, and being transparent about
how public money is spent.  Where there are specific codes and policies
that impose procedural and other requirements on how decisions are made,
there is an additional public interest in ensuring the requirements of the
relevant codes and policies are met.

What is the public interest in maintaining the exemption?

The public interest in maintaining this exemption is, on the face of it,
straightforward: some of the released information in the reports, since
they necessarily contain both the pros and the cons of the proposed
transaction, would be more likely than not to be used by prospective
tenants and/ or purchasers against MVDC in the course of commercial
negotiations.  In addition, there are a number of safeguards that ensure
MVDC’s decisions are taken in line with internal and external policy.
Finally, there is a considerable amount of information which has already
been put into the public domain, and further information which will in
future be put into the public domain, which serves to inform MVDC’s
residents and others how public monies are being applied.

Balance of the public interest test

There is clearly a balance to be struck.  It is not, in my view,
sufficient to conclude that simply because information in any report is
likely to be used against MVDC in future negotiations that this, in
itself, can justify the public being entirely excluded from receiving any
information about the purchases or the decision making process.  The
requested reports, however, cannot be considered in isolation and it is
relevant that MVDC has an Asset Investment Strategy (focussing on
acceptable risk thresholds) and an Asset Investment Working Group (so
members can be consulted on decisions to purchase prior to them being
finalised) - these further improve MVDC’s governance arrangements.  There
is also a considerable amount of information already in the public domain
(see, for example  Item no 9 of MVDC’s 7 February Full Council. A link for
this report on MVDC’s Treasury Management Strategy, which includes, for
example, MVDC’s Asset Investment Strategy (Appendix B) and a risk register
(at Appendix B3).

[2]http://www.molevalley.gov.uk/media/pdf/8...

I note you referred to the question of whether the public interest in
maintaining the exemption has reduced with the passage of time since the
purchases.  My view is that while this is often the case, here it is not.
It seems to me that the public interest in maintaining the exemption is
very unlikely to decrease at all during MVDC’s ownership of the asset.  It
is clear to me that any release now would be more likely than not to
prejudice MVDC’s future commercial interests (for example when securing a
tenant or when disposing of its freehold interest).

Finally, the role of internal and external audit is also important in
determining whether appropriate measures are in place and whether they
have been followed.

Conclusion:

I trust the information contained in the report referred to in the above
link provides the assurance sought.  Given the governance arrangements
that are already in place, and that a substantial amount of information
about the property assets that you are interested in is already in the
public domain, however, my view is that the public interest favours
maintaining the exemption at s43(2) FOIA at this point in time.

If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted at: Information
Commissioner's Office, Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9
5AF Or by calling 0303 123 1113 (local rate) Monday to Friday 9am – 5pm.

Yours sincerely,

Tom Penlington

Legal Services Manager and Solicitor to the Council

Mole Valley District Council

Pippbrook

Dorking RH4 1SJ

Tel: 01306 879354

This MVDC email is only intended for the individual or organisation to
whom or which it is addressed and may contain, either in the body of the
email or attachment/s, information that is personal, confidential and/or
subject to copyright. If you are not the intended recipient, please note
that copying or distributing this message, attachment/s or other files
associated within this email, is strictly prohibited. If you have received
this email in error, please notify the sender immediately and then delete
it.

References

Visible links
1. http://www.molevalley.gov.uk/
2. http://www.molevalley.gov.uk/media/pdf/8...