This judgement, relating to the Silver Hill scheme in Winchester, deals with a development agreement (DA) for the comprehensive redevelopment of a site by way of a mixed-use development comprising residential, retail, car parking, a replacement bus station, a civic square, a CCTV office, shop mobility, Dial-a-Ride service, market store and changes the Council attempted to introduce in favour of the developer. The original 2004 DA had been put in place without a proper public procurement process and could not be challenged for time limitation reasons.
This judgement is important for contracting authorities (including housing associations) because:
In August 2014, the Council agreed to a number of variations to the DA including removing the requirement for affordable housing and replacing a requirement for a bus station, market store, Shop Mobility and Dial a Ride with extra retail space including a new department store which was not part of the original scheme.
Mr Gottlieb, a (Tory) Councillor for the (essentially Tory) Winchester Council and a property developer himself, was concerned by these variations and subsequently challenged the lawfulness of the Council’s decision by means of a judicial review.
Mr Gottlieb’s challenge was based on the argument that the Council had acted unlawfully by failing to carry out a public procurement process in circumstances where the nature of the changes meant that it was obliged to do so.
The Court concluded that the variations to the DA, taken as a whole, resulted in a contract which was materially different in character; the use of the contract variation clause to effect the changes was not a justification as it was general and unspecific (such approach would circumvent the legal requirement and legalise the breach in all contracts). The Court noted in particular:
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