Interim costs awarded against former chairman of failed arena developer

A High Court judge today granted permission to Leeds City Council to pursue former Montpellier Estates Ltd (MEL) chairman Jan Fletcher for its legal costs in defending the company’s failed Leeds Arena court case.

Mr Justice Supperstone also issued an order that Ms Fletcher pay interim costs of £2 million before November 14, pending a final decision on the total amount due. This was after he agreed an application from the council at the High Court in Leeds to join her into its claim for costs against MEL.

The council’s application was based on an earlier personal undertaking from Ms Fletcher to cover the costs should the company be unable to do so. She gave the written undertaking to the council in July 2012, guaranteeing payment in the event of MEL both losing the case and not being able to pay up.

This was more than three months before her company’s claim for damages over not winning the contract to develop the Leeds Arena was heard at the High Court in London. When the company did ultimately lose their case, MEL then failed to pay £2 million interim costs awarded to LCC by Mr Justice Supperstone.

The council then served a winding up petition on the company in July and announced it was still seeking to recover legal costs from their former chairman Ms Fletcher.

A Leeds City Council spokeswoman said:

“We’re pleased that Mr Justice Supperstone has granted this order. As we have stressed previously we gave MEL and Ms Fletcher every opportunity to meet the interim costs, including agreeing to extend the legal deadline for payment.

“This has left us with no choice but to take this action and we would be failing in our duty to the council tax payers of Leeds if we did not actively pursue these very large costs.”

Notes to editors:

Legal proceedings background: on April 25 2013 Mr Justice Supperstone, sitting in the High Court in Leeds, awarded Leeds City Council interim costs of £2m against Montpellier Estates Ltd (MEL) following their failed attempt to sue the council over the awarding of development rights to the £60m Leeds Arena.

The costs were an interim payment pending a future decision on the total amount to be paid.

Mr Justice Supperstone had originally handed down a ruling on February 6 2013 dismissing entirely claims for more than £43.5 million in damages for alleged deceit and flawed procurement under European regulations brought by MEL against the council.

He also rejected allegations of fraud and dishonesty against eight named individuals connected to LCC and the arena project.

The judge said that the council was perfectly entitled to bring the competitive tendering exercise to a close when other bids were found not to be good value for money and then develop the arena itself. The original hearing took place in London’s High Court over nine weeks towards the end of 2012.

For media enquiries please contact:

Donna Cox, Leeds City Council press office, 0113- 224 3335

Email donna.cox@leeds.gov.uk