Dear Members and friends,
We bring you up to date on our efforts towards ensuring the Harbour is lawfully operated and properly funded for a sustainable future.
1 Judicial Review of Harbour management
The High Court granted BHT permission to proceed with its JR of BHIC
On 1st October a judge granted BHT leave to pursue the Judicial Review (JR) of Bembridge Harbour Improvement Co Ltd (BHIC). BHIC is the Statutory Harbour Authority (SHA). The claim is that the SHA has made loans to other companies owned by Mr and/or Mr & Mrs Thorpe in breach of harbour legislation. The case progresses and may be heard as soon as the second half of January 2022.
Court protocol precludes reference to the evidence in any detail while the case is being determined. However we can say that BHT is of the view that the evidence provided by the defence does not address BHT’s concerns but rather, supports our case. We refer below to the background that led up to it.
Statutory Authority status is confirmed
Only public bodies can be challenged at Judicial Review. The fact that the High Court has agreed to hear this case finally puts to bed the erroneous view expressed by some of our critics that BHIC is not a statutory body, accountable to, and with a duty to, the public interest.
Why and how this is relevant
BHIC is the Statutory Harbour Authority. As such it must comply with the Harbour Act[1], which states under Section 31 that revenues must be used for defined harbour purposes. BHIC has constantly and repeatedly acknowledged their statutory obligations under Section 31[2]. BHT’s concerns are focused on these clauses.To answer BHT’s claims any defence response must, of necessity, acknowledge and relate to BHIC’s performance under the Harbour Act.
Harbour money was lent to other companies
BHIC’s 2020 accounts[3] show it had lent well over half a million pounds to other Thorpe-owned companies. We are advised that those funds should have been available to BHIC for harbour works, e.g. the groyne and new wash facilities – works which the directors themselves had declared to be the priority[4]. However, the accounts indicate that Mr and Mrs Thorpe as BHIC’s sole directors instead prioritised lending to other companies they own.
No justification for ‘enabling’ housing development
Bembridge Investments Ltd (BIL) – a Thorpe-owned development company – applied for planning permission for housing, on the grounds that it was the only way BHIC could fund harbour improvements. However, accounts show that BHIC did have money available but had chosen to lend it. They chose not to disclose this to the planners. Had they done so it would have been obvious that there was no justification for ‘enabling development’ of the housing (as we have consistently argued). When pressed Mr Thorpe and his accountant Mr Crook[5] led the IWC to believe that the loans were not loans, but repayment of SHA debt. Moreover, the vast majority of the funds Mr Thorpe claimed BHIC did not have available, had already been lent to the Thorpe-owned development company, Bembridge Investments Ltd (BIL).
Delayed accounts would have shown true position
BHIC accounts to 31st March 2020 were submitted to companies house very late[6] (on the 25th May 2021). These accounts showed loans of well over half a million. Had they been posted on time, under normal rules, the IWC could have been aware of the ability to fund improvements well before their final decision to issue a planning decision on 30th March 2020. With that information it is unlikely that the IWC would have granted consent because it would conflict with planning officers’ advice.
BHIC lending was vastly more than declared profits
Accounts show that in 2020 lending to BIL and BBS (Bembridge Boat Storage) was increased by over £210,000 (nearly one and a half times BHIC’s disclosed profit figure for the year). In the year to March 2018 lending to BIL was increased by £334,351 (over 28 times BHIC’s disclosed the profit figure for the year).
BHIC loans echo another company’s debt repayment pattern
Our accountant advisers had noted that coincidentally or otherwise, the repayment of BIL’s long term loans closely echoes the years in which BHIC lent it money and that BIL (and BBS) may not be in a position to readily repay BHIC.
Worrying similarities to 2011
Cross guarantees secured by a debenture put all BHIC assets at risk in order to secure other companies’ borrowings.[7] BHIC being made responsible for other companies’ bank debt is worryingly reminiscent of the lead up to BHIC going into Administration in 2011. This is particularly worrying as BIL and BBS accounts have shown losses indicating they could have difficulty settling their own obligations without relying on loans from BHIC.
BHT’s interpretation of the accounts is robust
BHT has not misinterpreted BHIC’s published accounts, as has been claimed in the past.[8]
2 Other issues are not addressed by Judicial Review
Overall the sums that concern us now run to well over £1,500,000 of harbour incomes that have been diverted away from harbour maintenance. However, due to strict time limits under the rules of JR, older issues (e.g. the allocation of houseboat plot sales incomes, interest payments and amounts in opaque inter-company loan accounts cannot be addressed at this stage.
Mr and Mrs Thorpe have always had the opportunity of explaining these matters with the transparency directed in government guidance for all SHAs and as repeatedly requested by us and the harbour community (e.g. at the public meeting in 2018). However, they actively and consistently resist on the grounds of commercial confidentiality.
Success could lead to reunification of the SHA with its operational land
Success at JR would result in a ruling that using Harbour funds for non harbour purposes is unlawful. This would relate specifically to the loans and would pave the way for their recovery in cash or value. As BIL appears not to have the resources to pay in cash, it is possible that its land could be transferred back to BHIC (the SHA) in settlement of the debt, with the obvious enormous benefits to BHIC.
3 BHT’s JR of IWC awaiting leave to appeal
Our other claim and JR is against IWC on BIL’s permission for houses on operational harbour land, a planning decision that we believe damages the interests of BHIC, the SHA. This proposal involves unnecessary housing proposed contrary to planning policy and only justifiable if funds for the harbour were not otherwise available). Having been refused leave to progress this, we have applied to the Court of Appeal on our barristers’ advice, and we await a decision. There has been nothing to alter their advice to us that we were right to progress these issues.
If we are granted leave to proceed on this appeal, we will bring forward new compelling evidence on the grounds pursued.
4. Why are we going to all this trouble?
Because when harbour money goes elsewhere, we ALL pay the price:
- SHA neglect of a key groyne is accelerating siltation, and shortening harbour’s life, as argued by many, including BSC and BHYC
- The public are pressed into funding the shortfall on a vital groyne repair.
- Boats damaged due to pontoon maintenance failures (e.g. Reference the recent court case, Tangent 2020)
- Sporadic and inefficient dredging that leaves many key areas untouched (e.g. fishermen’s pontoon, angling club, BHYC and most of the inner harbour channel)
- Professional fishermen’s working time is reduced as siltation reduces the tidal window
- Recreational harbour use progressively curtailed
- BSC predicts the club’s activities will be severely curtailed in 10 years, while its own dredging liabilities increase
- Experts predict that without intervention a navigable harbour entrance could be lost altogether within a matter of decades.
- All of this will continue, and will worsen – unless something is done
And we can only do it with your help
Every other effort by BHT and the harbour community over several years to make the SHA accountable for its actions has failed. JR is an expensive and time-consuming process, made the more so by Mr Thorpe’s continual inconsistencies. We are making good progress, but we need more money to see us through to success. Even if you have donated before (for which we thank you) we ask that you dig into your pocket again; no matter how small an amount it will be gratefully received.
A victory in the case would give a solid legal platform for the harbour community to insist on well over half a million pounds being applied to the harbour’s pressing needs, and to insist on seeing evidence that this is being done. That platform would also help to get focus on the other £1,000,000 plus that has left the harbour in ways that cause us concern and may not be lawful, but that could not be directly addressed in this JR process.
If you possibly can help us then please do, as doing nothing – i.e. letting the harbour slide into further decline – is simply not an option.
PLEASE MAKE A DONATION TO
Bembridge Harbour Trust
Lloyds Bank 30-97-21
A/C 00950539
[1] Pier and Harbour Order ( Bembridge Harbour) Confirmation Act 1963
[2] For example in email to IWC 16th May 2016
[3] BHIC accounts files at Companies house to 31 March 2020
[4] For example Mr Thorpe IWCP 02.04.2020 and open letter 17.11.2019
[5] Mr Crook letter 13th June 2019 submitted by Mr Thorpe to IWC
[6] Normally accounts are to be submitted by 31st December 2020 i.e. within 9 months of the close of the accounting period , if applied for and agreed, a covid exception extended the deadline by 3 months i.e, to 31st March 2021
[7] See debentures registered at Companies house , and where disclosed the notes to BHIC accounts e,g, 2013, 2014,2015 and 2018. This may include any or all of BIL,BBS and Hawk.
[8] E.g. BHT accountant Mr Crook’s letter 13th June 2019
Leave a Reply