Westway Development Trust: market forces cast cloud over property developer - 4/5

This research document will make little sense if you haven't read Brian Deer's Notting Hell from The Sunday Times of June 17 2001. In July 2002 the trust renamed itself Westway Development Trust. A Westway Development Trust index of materials is also available

(H) NEW COMPANIES FOR THE WESTWAY MARKET CONTRACT

In emails exchanged with Mr Bailey [M18], he stated that as a result of the tendering exercise in March and April 2001:

"The market contract was awarded to Maurice Nixon, the incumbent operator, operating through his new company Westway Markets Ltd."

As it happens, there is no such company as Westway Markets Ltd with which the trust could draw up a contract. There are, however, three new limited liability companies of Mr Nixon's along similar lines, as follows [M19]:

Westway Market Place Ltd (incorporated 27/04/2001)

Westway Market Services Ltd (incorporated 05/06/01)

Westway Market Management Ltd (incorporated 05/06/01)

It may reasonably be inferred that the purpose of these new companies is to continue the pattern of conduct indicated above.

(I) THE TRUST'S 2001 TENDERING EXERCISE

The trust's tender document [M1] states under the heading "Instructions to Tenderers" that tenders would be received in plain sealed envelopes, addressed to Chris Ogden-Newton, Associate Director of property, no later than noon on Monday 23rd April 2001. It states:

"Tenders will be opened by Chris Ogden-Newton and a trustee of North Kensington Amenity Trust."

Mr Ogden-Newton held his post from July 1993 and is understood to have left the trust's employment shortly after supervising the tendering exercise. He appears elsewhere in Brian Deer's inquiries, turning up in section G (page 10) of Deer's report "North Kensington Amenity Trust and Subterania" in reference to Mr Ogden-Newton's selectively incomplete filling-in of claim forms for business rate rebates on behalf of the night-club [S25].

In the email exchange with Mr Bailey [M18], Brian Deer asked:

"In addition, I'd be grateful if you could let me know the name of the trustee who, with Mr Ogden-Newton, supervised the receipt of tenders during the recent round."

Mr Bailey replied to this point:

"The tender process and the award were approved by our Property and Planning Management Sub-Committee, chaired by Martin Owen, one of our Trustees."

Mr Owen appears in a number of places in Brian Deer's inquiries. He is a named party to the lease on Subterania, containing clauses intended to avoid business rates, issued to Vince Power in 1988, which the trust claims is a management agreement or arrangement [S5]. With Judge Gordon and Roger Matland, Mr Owen was part of a sub-group within the trust who passed the Ion Bar premises on Ladbroke Grove (financed with City Challenge funds originally earmarked for an employment centre) to Mr Power's Mean Fiddler [S8]. For some reason, it was Mr Owen's committee which dealt with Mr Hardy-Smith's complaint against Roger Matland in 1987, prior to the management committee taking charge, and Mr Owen supplied a proof of evidence in the libel prosecution, indicating that he intended to come to court against Mr Hardy-Smith [L8]. Mr Owen's colourful business connections are noted at section F (page 20) of the Subterania report, referenced to [S20].

Under a section headed "Financial Information", the trust's invitation to tender [M1] requires:

"1. The last three years audited accounts from the tendering company.

"2. The company's full name and registered address.

"3. A list of company directors and their roles.

"4. Your bank details so that we may take up a bank reference. We would require the name and address of your bankers; your account name; your account number; and written confirmation from you, addressed to your bank that you are happy to authorise your bank to provide North Kensington Amenity Trust with a bankers reference and that the cost of that reference be deducted from your account.

"5. North Kensington Amenity trust also require a licence fee deposit equivalent to three months licence fee which would be held by North Kensington Amenity Trust throughout the term of the licence...[continues]

"6. We ask that you submit with your tender a list of all current markets that you operate, together with details relating to the size and type of market; how long you have been operating the market and on whose behalf and a contact name and address of somebody in authority who would be prepared to provide us with a reference in respect of your operation of their market. Whilst we appreciate you may operate many markets, we would wish to select ourselves the ones we write to for a reference. We would not anticipate taking up any more than three references but reserve our right to take up further references."

Brian Deer's survey of Mr Nixon's business affairs suggests that any reasonably prudent execution of these requirements by the trust would either rule out Mr Nixon as a potential market operator for a charity headed by a circuit judge, or be met with false submissions. Obviously, Mr Nixon's tendering company - presumably Westway Market Place Ltd, since this was incorporated in April - could not supply three year's audited accounts. Therefore, the contract would need to be guaranteed by another entity supplying audited accounts. None of Mr Nixon's limited liability companies appears capable of meeting that requirement. It is hard to see for what entity Mr Nixon is likely to be able to produce bank references. If the trust took financial information and bank references from an unlimited entity, it would have to guess at the purposes for which Mr Nixon traded without limited liability and, in effect, collude with those purposes. Further, if Brian Deer's telephone inquiries are anything to go by, the taking up of references at other markets would yield a worrying picture about Mr Nixon's activities.

Under a section headed "Sponsorship", the invitation to tender introduces one of a number of subjective factors into the competition which might be inferred to give potential grounds for the trust to reject bids which on objective measures would be most advantageous to the charity:

"The trust would wish to know what other kind of sponsorship, donations or assistance your company has given to local community initiatives in the areas where you operate markets. We would want a contact name, and telephone number of the recipients of all or any support given over the last three years."

It is understood that an advertisement was placed in a market trade publication. While it is impossible to be definitive without the trust's co-operation, Brian Deer has canvassed half a dozen prominent members of the Association of Private Market Operators and, in addition to Mr Nixon, identified two who wanted to operate the Westway market. At the end of the tender process, both companies - whose principals do not know each other - consulted solicitors and made serious complaints to the trust. They were:

xxx xxx xxx xxx xxx

xxx xxx xxx xxx xxx

(J) xxx xxx xxx xxx xxx

xxx xxx xxx xxx Ltd is one of two or three national leaders in market operations - if not the leader. It saw the advertisement seeking tenders. In a letter to the trust dated 17th May 2001 [M20], Mr xxx xxx xxx, the managing director, complained to Mr Matland that despite requesting the tender documents in logged telephone calls, he never received them.

Mr xxx xxx also alleges in this letter that he was contacted by Ricky Taylor of Countrywide asking him not to tender for the contract. xxx xxx xxx xxx, another blue-chip market operator, which did not submit a bid, has stated to Brian Deer that it too was contacted by Mr Taylor with a similar invitation to collude.

On 22nd May, Mr xxxxxx received a letter from Mr Ogden-Newton [M21] stating, among other things:

"I appreciate that one of your staff may have telephoned our office and left a message with our receptionist for a pack, but for some reason or other, that didn't come to my attention."

(K) xxx xxx xxx xxx xxx xxx

xxx xxx xxx xxx xxx Ltd is a company formed by one of the significant market operators in the Portobello Road area. On 19th April 2001, Mr xxx xxx xxx, its principal, submitted a bid to run the market [M22]. The proposal includes numerous undertakings which address the subjective elements in the tender invitation. At its core, however, are hard figures. It offers to pay the trust:

"Year One: £200,000 per annum

"Year Two: £225,000 per annum

"Year Three: £250,000 per annum

"In addition, we will donate 10% of our profits, either in additional rental or to local charities nominated by the Trust."

After this bid was rejected and the contract re-awarded to Mr Nixon, a complaint was lodged with the trust, copied to Judge Gordon, Mr Owen and others. The tenderer simply did not believe the outcome of the process was legitimate. On 25th May 2001, Mr Ogden-Newton wrote to Mr xxx xxx [M23] (who did not supply this material to Brian Deer), stating among other things:

"The trust was quite clear in its tender pack, and reserved its right not to accept any of the tenders, and not to accept the highest license fee bid."