Former Liverpool regeneration boss Nick Kavanagh gave the wrong information to the council's chief executive over the sale of land to the Elliot Group, a tribunal heard.
The information has been revealed in a judgement handed down by Judge Rachel Mellor, who presided over Nick Kavanagh's unfair dismissal case against the council. Nick Kavanagh, the director of regeneration at the city council, was arrested at the Cunard Building by Merseyside Police as part of the force's Operation Aloft in December 2019.
He was subsequently suspended from his chief officer job and was eventually dismissed in March 2021 following a council disciplinary hearing. Mr Kavanagh, who denies any wrongdoing and has not been charged, lost his unfair dismissal case against the council.
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In her judgement Judge Mellor has revealed how Mr Kavanagh gave incorrect information to the council's then chief executive Tony Reeves in relation to the sale of land to the Elliot Group. Mr Reeves resigned earlier this month.
Her judgement reads: "The information given by NK to the Chief Executive that Elliot Group made the highest offer for Percy Street which was incorrect."
The mention of Percy Street featured in a summary of a report carried out by Simon Goacher of Weightmans solicitors into city land deals. Judge Mellor's summary makes reference to other transactions involving the Elliot Group.
It read: "The process followed in respect of the disposal of Falkner Street in Liverpool 7.
"The reduction in price of the disposal of Falkner Street based on the section 106 contributions made by Elliot Group."
The Elliot Group acquired a site on Falkner Street from Liverpool Council for £325,000. Planning permission was granted and the Elliot Group went on to sell the completed development to a Jersey-based ground rent investment company in July 2018 for £1.496m. Section 106 payments typically require developers to pay money to the local authority which is used to benefit the immediate community.
The judgement reveals Mr Kavanagh's involvement in the Percy Street and Falkner Street sites contributed to his dismissal. Councillor Wendy Simon chaired the disciplinary panel that dismissed Mr Kavanagh on March 22 2021.
The judgement reads: "She (Cllr Wendy Simon) then went on to give examples of where the panel concluded that the claimant’s conduct amounted to gross misconduct in their view. This related to Percy Street and Falkner Street. After hearing the evidence they concluded “we needed to see how the procedures were made and the whole panel felt that there wasn’t an officer at that level with sufficient oversight to ensure that processes were followed; in some instances there was a lack of clarity in how the decisions were made particularly in respect of Falkner Street.
"Initially the claimant wasn’t directly involved and then the Mayor asked him to sort it, so knowing that and given the Mayor raised it you would expect additional oversight”. They did not feel that the claimant was doing that."
Robert Fazakerley, who represented Mr Kavanagh in court, argued that any transactions involving his client were counter-signed by other senior officers. Mr Fazakerley also made reference to a successful legal challenge launched by Elliot Lawless, owner of the Elliot Group.
The judgement reads: "The claimant submits that the system of delegated authorities required counter signatories from the Head of Finance and the Deputy Solicitor and therefore the responsibility for these transactions cannot lie with him alone, as Mr Fazakerley submitted ‘no one person can act alone’.
"He says that the High Court agreed with this, but I have not been provided with any judgment and I understand the case before the High Court was Mr Elliot Lawless seeking a judicial review of his arrest and search of his home. It therefore is very different to the issues I have to decide, which is whether this respondent acted reasonably in treating the conduct they found as a reason to dismiss."
Elliot Lawless, chairman of the Elliot Group, was arrested in December 2019 along with then Liverpool Council regeneration chief Mr Kavanagh. More than £300,000 in cash was seized during raids on property linked to Mr Lawless, who was questioned on suspicion of conspiracy to defraud, bribery and corruption. He also denies any wrongdoing and has not been charged. The seizure of the money was later ruled unlawful.
The high court judgement which followed a judicial review into Mr Lawless's arrest The document revealed that Mr Lawless was arrested in relation to two sites who bought from the council in the city's Georgian quarter. The sites were 40-50 Percy Street/53-57 Upper Parliament Street, Liverpool L8 and 68 Falkner Street, Liverpool L7.
In making her decision to dismiss Mr Kavanagh's case for unfair dismissal, Judge Mellor said she believed there were legitimate reasons for the city council to have launched the investigation into the New Chinatown case and the disciplinary investigations that followed it. Developers PHD1 failed to deliver the promised New Chinatown scheme which resulted in a major controversy.
She said: "The circumstances and allegations were not manufactured and they were supported by witnesses and documentary evidence. They were subject to a thorough investigation which the claimant was fully able to participate in. The respondent did have a genuine belief in the claimant’s misconduct."
She said there is 'no basis that Mr Reeves colluded or scapegoated' Mr Kavanagh.
Judge Mellor added: "The matters complained of by the claimant, whether viewed individually or collectively, did not result in the respondent acting unreasonably in treating the reason they have found as a sufficient reason to dismiss. The sanction was within the band of reasonable responses. I therefore find the claim is not well-founded and dismiss the claim."
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