Dear Wirral Metropolitan Borough Council,
Referring to the Development Agreement between Wirral Borough Council and the Nicklaus Joint Venture Group, clause 6.11 clearly states that WBC are not held under any obligation to procure borrowing to assist the Developer with funding the project.
When the Business Overview and Scrutiny Committee met on 27 June 2019 to review the application made by the NJVG for a Council-provided loan, can the Council confirm that no amendments had been made to the original Development Agreement which nullified the Council's legal ability to remove itself as a potential funding provider for the Developer?
Can the Council also confirm that it did not put itself into a position where the Developer could pursue it for 'Breach of Contract', due to exercising its right not to procure borrowing for the Developer's funding plan under clause 6.11?
Many thanks once again for your assistance.
Dear N J T Lauro
Thank you for your most recent FOI request regarding the Development
Agreement between Wirral Borough Council and the Nicklaus Joint Venture
Wirral Council can confirm that no amendments have been made to the
Development Agreement between Wirral Borough Council and the Nicklaus
Joint Venture Group, including clause 6.11, since it was entered into.
The Council is not aware of any breach of contract.
Principal Information Management Officer
Email: [Wirral Borough Council request email]
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Dear InfoMgr, FinDMT,
Many thanks or this very useful clarification, especially in light of recent claims made by a councillor that Wirral Council are potentially liable for a £20m financial penalty for not proceeding with the non-contractually binding loan-provision agreement.
As nothing has changed in the signed Development Agreement, it appears the funding strategy still lies solely with the Developer, leaving the Council without any contractual obligation to provision a loan for the purposes of enabling the Developer to fund the works.
At this point, I surmise the Developer can choose to either:
a.) Continue to seek a loan provider in order to meet the needs of the financial strategy within the Development Agreement, up to the point at which the Development Agreement expires.
b.) Take action against the Council (at its own cost) in a claim for potential loss of future revenue as a result of the Council exercising its contractual right not to proceed with provisioning a loan to the Developer.
I suspect option 'b' is the idea which has been fuelling rumours the Council could be liable for £20m of financial penalties. However, as your reply states the Council do not believe they are in any sort of 'breach of contract', it would not be deemed wise for the Developer to seek damages for loss on this basis.
Thank you again for providing this information.
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