Hampstead Garden Suburb Trust is committing “financial suicide” by fighting a High Court battle with banking tycoon Sir Victor Blank, insists one of the body’s own trustees.
Last month, Sir Victor’s lawyers attempted to persuade a judge at the Royal Courts of Justice to pass an injunction preventing the trust from approving plans for a basement extension to a six-bedroom mansion near his home.
It is understood Sir Victor launched the legal bid after the trust refused his request that they carry out a hydrology report to explore the effect of any excavation on underground water levels.
Dr Saul Zadka, 52, a group trustee, believes the trust is needlessly gambling with Suburb residents’ money and estimates that more than £40,000 has already been spent defending the High Court action.
He said: “Instead of settling it out of court they decided to defend the court action – claiming that the trust doesn’t have any power over basements.
“If Victor Blank wins the case, it could go on and on and cost residents £500,000. A hydrology report would have cost £5,000 – it’s financial suicide.”
The legal saga follows plans, originally submitted to the trust in June 2011, for a basement extension to a luxury six-bedroom mansion in the Suburb.
Sir Victor, 70, a former chairman of Lloyds Banking Group, brought the legal action after objections from a group of 12 residents, including judge Lord Justice Leveson and TV presenter Richard Madeley, who live in the area.
The group fears that removing earth to dig the new basement could result in damage to neighbouring homes.
Freeholders are required to pay the trust, set up in 1968 to preserve the character of the Suburb, an annual £125 charge to support the management of the area.
The fees are also used by the trust to defend legal challenges.
Angus Walker, trust chairman said: “The trust has no powers to enforce the production of a hydrology report.
“There were 14 months of hydrology reports and this request was for testing outside the confines of the applicant’s property.
“Some of the issues raised by the application to the court relate to the powers of the trust.
“There are some powers which have never been tested in court.
“A ruling from the court on these issues will hopefully clarify the extent of these powers.
“We would like people to believe that we are acting in good faith – there is no hidden agenda. If we are wrong then the sooner we are told the better.”
At the High Court hearing on February 20, lawyers for the trust and Sir Victor put their cases to the judge and await his decision.
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