Sat. Sep 26th, 2020

Isle of Wight Observer News

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Christ the King College not liable for £7 million debt says High Court

2 min read
A legal agreement between the College and the company that financed and built their sixth form building ended up in court, with the College winning the latest round of the proceedings

The High Court has ruled in favour of Christ the King College in Newport in a £7 million dispute with the owners of various buildings on their site.

The dispute arose between the owners of the buildings, Boshire/GCP Asset Finance and the College when three years ago they became unable to pay the agreed annual rent of £700,000, which include the sixth form college block.  The building owners then terminated the agreement and claimed through the courts that the College then became liable for all future payments due, which together with interest and costs totalled more than £7 million. However, the legal agreement between the parties required the written agreement of the Secretary of State for Education, which was never obtained and was thus unenforceable according to this latest judgement.

The Council’s former Chief Executive Steve Beynon agreed the Council would permit the borrowing by the College in March 2012,  extending their deficit to cover the costs of the hire, despite having been told by another senior officer that the College’s financial case ‘had more holes in it than Gouda cheese’. The Council’s Chief Financial Officer had not been consulted over the plans.  The court also ruled that the rental payments of £700,000 per year were too high and should have been in the region of £250,000 to £270,000 per year – not £700,000.

The College was represented by lawyers Stone King.  Jonathan Copping who acted for the College who said after the hearing that the judgement was a ‘useful reminder to maintained schools, and other public bodies, to check statutory regulations when they enter commercial contracts’.  There are believed to be other similar contracts in place in various places across the country, thus if the ruling stands it could therefore have wide ranging repercussions.

The former Principal of the College Mrs Patricia Goodhead and the Business Manager for the College Kathrin Williams were both called to give evidence with the judge describing them as ‘honest witnesses’, he also praised Mrs Janet Giles who was the Council’s Head of Education Finance from 1983 to 2014 saying he found her evidence to be ‘reliable’.

The judge asked the parties to negotiate an agreement between them which would reflect his findings, but Boshire/GCP Asset Finance have asked the High Court for permission to appeal against the ruling.

The IW Observer has contacted the College for a comment.