AC-2025-LON-001414 - [2025] EWHC 2840 (Admin)

The first challenge was on the basis that the decision to transfer the Carnegie Library Building to TGT was ultra vires and/or there had been a breach of the Council’s fiduciary duties. The concern of the Trust is that the value of the Carnegie Library Building had been provided as being £599,000 in April 2019 as its depreciated replacement cost. That sum is going to be higher than the value of the property on the market, but the Trust also point to the value of the property as recorded at the Land Registry being £450,000. The basis of that figure is not clear and the valuations that the Council were permitted to rely upon were the RICS compliant valuations undertaken respectively in November 2022 showing a commercial value of £400,000 to £425,000 and between £100,000 and £125,000 for community use, and January 2024 which provided a lower valuation of £220,000 to £240,000 if sold for commercial use, or £90,000 to £100,000 if sole for community use.

The Council was entitled to rely upon the general consent provided by the Secretary of State Circular 06/03: Local Government Act 1972 general disposal consent (England) 2003 paragraph 2. Both the 2022 and 2024 valuations clearly establish that the difference in the unrestricted value of the land and the consideration for the disposal did not exceed £2 million. The only other requirement is that the local authority considered the purpose for which the land is disposed is likely to promote or improve social well-being.

In disposing of an asset at less than best consideration, the Council’s constitution provides that the disposal must be authorised by the Cabinet and on 2 September 2024, the Cabinet resolved to authorise the Director of Property to dispose of the of the Carnegie Library Building through “a closed market exercise to charity and community groups in the first instance” and that “If an agreement cannot be agreed within 12 months of the date of this meeting the Director of Property is to dispose of the property on the open market.” This was an explicit authorisation for the disposal of the Carnegie Library Building and the decision to dispose for the sum of £95,000 was neither ultra vires nor in breach of fiduciary duty.

The Council had consent to sell for less for full consideration by virtue of the general disposal consent. The Council was obliged by its constitution to have a cabinet resolution, and it did. Grounds 3 and 8 do not give rise to an arguable challenge.