It appears that the vast majority of the £900,000 proceeds from the sale of Bembridge Point gravel yard with extraction rights, should have gone to the statutory harbour authority (BHIC) but have instead gone to the Thorpes’ property company, BIL.
According to records at Land Registry, in April 2022 the gravel yard and access road were transferred from BIL to JS Ag Ltd gravel contractors for £900,000 in payment for land which (crucially) is of almost no value without the gravel extraction rights – rights that belong NOT to the vendor BIL, but to the statutory harbour authority.
As you know, the directors of the statutory harbour authority are also director-shareholders of BIL. Having restricted its use by imposing covenants, BIL make the land value absolutely dependent on the harbour authority’s rights to extract sand and gravel from the channel and beyond. The Thorpes appear to have sought no recompense for those extremely valuable extraction rights on the harbour authority’s behalf; all the proceeds apparently going to BIL.
We asked Mr Thorpe for information. He responded this afternoon, saying “We have no legal or other obligation to provide any such information and will not do so” and “Please note that within the arrangements there is a confidentiality clause that forbids us from making any comments regarding the same”.
We note the latest BHAG minutes show that a query on the subject received a cursory reply from Mr Thorpe: “MT considered a query ‘out of interest’ about the status of the gravel yard to be beyond the remit of BHAG and declined to respond.” This is surprising as BHIC are a formal party to the agreement.
Property ownership is a public matter in the UK and Land Registry provided the copy transfer linked here. Please read this note in conjunction with the details of the transaction set out in the transfer. These include a restriction on use that means the land is of only minimal value without the simultaneous grant of rights by BHIC.
Maintaining the approach channel is a money-making opportunity, not a financial burden, as evidenced by the price paid for that very opportunity. Having met with Mr Smith we are comfortable that he has purchased in good faith and is keen to recoup his considerable investment. Our concern is that the price paid for the statutory harbour authority’s valuable rights appears not to have gone to the harbour authority, as it should, but has instead gone to another company its director-shareholders also own.
Many of you will have already joined the dots….
- If the statutory harbour authority BHIC had the bulk of this £900,000 (as it appears it should) it could build its own facilities and not have to pay rent on them, as if funded from housing development profits, the s106 agreement says it must.
- Even if BIL (wrongly) retain the money there is no need for the proposed ‘enabling’ housing development as BIL could fund the new facilities. (The only lawful reason to grant planning for the houses was if the profits generated fund a “public benefit” in the form of new facilities that were otherwise unfundable).
- But, if BIL use these funds to build the new facilities, it will be with funds that should have gone to the harbour authority.
- This loss to the harbour authority would be compounded as the s106 planning agreement sets out that the harbour authority will pay market rent for the new facilities into the distant future.
- And finally in this scenario the new houses could be built (unnecessarily) and none of the profit going towards harbour facilities. In other words, no benefit for the harbour authority.
We will be inviting Mr and Mrs Thorpe to correct this apparent error in allocation of funds, and ensure the statutory harbour authority gets its due proportion of the yard and rights sale.
Judicial review of the Statutory Harbour Authority
BHT is progressing an action specifically about the legality of £560,000 in loans by BHIC, the Statutory Harbour Authority (SHA) to other companies owned by Mr and Mrs Thorpe. The grounds also address the fact that BHIC provides security for the borrowings of other companies owned by the Thorpes, thus exposing the SHA to a risk which is not a function of its own activities. Those who remember 2011 will know that this was the type of mechanism that led the SHA into administration. (It was not due to its own trading issues, questionable though some of them were.)
We cannot share much information with you because of the restraints of the court. However, the case progresses, with the defence providing some of the information requested. The process is long winded and we are advised we cannot disclose much so as to avoid prejudicing the court process. We do not now expect the case to be completed before the Autumn.
However, on a positive note, coincidentally or not, since starting this JR process and the spotlight being on BHIC, the SHA recently published accounts showing that some of the contentious £560,000 has been repaid.
Outside the harbour itself, contractors working under the direction of the harbour authority have been doing some channel dredging. However, there has been considerable extraction of sand and gravel outside the areas authorised under an agreement between the IWC, NE and the harbour authority. This work includes depositing spoil in the resultant pits. The consequences of such work is damaging for various reasons, including splitting the channel flows, which would lead to a shallower main channel. Mr Thorpe generally declines to engage with us, however, we have had a positive meeting with the gravel contractors on this and the wider practical issues involved in achieving a mutual benefit for navigation, the environment and their commercial interest.
Bembridge Sailing Club
The commodore has advised that the club’s activities are under existential threat unless action is taken.
As the harbour authority has been unwilling to progress vital repair of the groyne, it appears the club has felt compelled to take some independent action for its own preservation. We believe that the club hopes to negotiate a long lease of the mooring pools, with a substantial up-front premium and low ongoing rent. The hope is that this would provide security that would justify capital investment and a ‘margin’ by which BSC could underlet moorings profitably.
This was an idea promoted in 2015 and BHT supported the principle. The negotiations were stopped when Mr Thorpe realised that an alternative source of income would undermine the case for “enabling development” as he was claiming BHIC, the harbour authority had no expectation of significant other incomes, so could not afford new toilets and offices. As such the justification for the housing would be removed.
Subject to some concerns, BHT would encourage such an effort. Issues include:
- Compliance with section 28(b) of the Local Harbour Act (so that BSC can be assured of a lawful transaction concerning land that will clearly be used for harbour purposes)
- Ensuring any payments are contractually linked to actually achieved improvements in the harbour (the groyne being one obvious example). Without such an arrangement this attempt to solve some of BSC’s and the harbour’s physical problems may fail as cash injected may simply be removed. BHT would be deeply concerned if funds were paid without clear evidence of work done to justify phased payments to the harbour authority. After all, even for BSC’s own interest such an investment must deliver solutions or BSC would be out of pocket and still face the same “existential threat” and the costs of addressing it themselves.
Bembridge Parish and St Helens Councils
Thankfully both parishes have now met and agreed in principle that they cannot simply ignore the harbour. It is clear that they cannot and should not get engaged in matters involved in the ongoing JR, as these are in the hands of the court.
However, with a positive engagement there are many other issues where their engagement can have a positive effect and protect the interests of the communities they represent.
BHT continues in its efforts to see the harbour run lawfully for the benefit of ALL and we urge all organisations to engage. Why? Because the interests of the population as a whole, as well members of clubs and organisations, rely on the whole harbour working well, not just a part of it.
All this costs money. Please consider making a donation. With enormous thanks to those who have helped us so far, please continue and maybe encourage others to help us press for good and lawful harbour management. Bank details below.
Chris Attrill, Jonathan Bacon, William Bland , Jeremy Gully (chair), Phil Jordan, Norman Marshall, Sara Smith, as Trustees
For and on behalf of
Bembridge Harbour Trust