Leeds City Council defeats Montpellier Estates in arena case

JAN Fletcher’s Montpellier Estates has failed in its £43.5m damages bid against Leeds City Council over a contract to develop the city’s new arena.

Mr Justice Supperstone today ruled in favour of Leeds City Council following a lengthy High Court case.

Montpellier had claimed for damages from the Council, accusing it of deceit and breach of contract under European procurement law.

Reacting to the announcement this morning, Ms Fletcher said in a statement that Montepellier Estates may appeal against the verdict.

Coun Keith Wakefield, leader of Leeds City Council, said the Council would look to recover the £4m of legal costs it had incurred over the length of the case.

Mr Justice Supperstone also rejected allegations of fraud and dishonesty against eight named individuals connected to LCC, including senior officers, former council leader Andrew Carter and professional consultants.

The judge said that the Council was entitled to bring the competitive tendering exercise to a close when other bids were found not to be good value for money and then to develop the arena itself.

He added that the authority acted both in good faith and lawfully.

All of the individuals facing allegations of deceit were found not to have acted dishonestly.

Leeds City Council chief executive Tom Riordan welcomed the ruling and said: “This is absolute vindication of the honesty and integrity of Leeds City Council, its members, officers and professional consultants.

“Our processes have been held up to the most intense scrutiny possible over two months in the High Court. Our witnesses were subject to long hours of evidence-giving and rigorous cross-examination and many thousands of documents and statements were dissected in the finest detail.

“Cancelling the competition to develop the arena and progress with the scheme at Clay Pit Lane was always a difficult decision to take, but was a correct one given the state of the economic crisis in November 2008. There was certainly never any deceit involved.

“This court case has proved beyond any doubt that Leeds City Council has the highest standard of integrity and its operations are conducted openly, honestly and with robust, fully-accountable procedures. We are a principled public authority which has strong values of trust and transparency running through what we do.”

Coun Wakefield added: “I share all the chief executive’s sentiments and am delighted that after lengthy, exhaustive investigations one of the country’s most senior judges has decided that the Council has acted entirely properly and with total integrity.”

Ms Fletcher said: “Anyone who knew what went on in this arena bid, will understand why we took this action against Leeds City Council. 

“We are very surprised at the judgment and we are considering whether there are grounds for appeal. I continue to remain committed to and passionate about the city of Leeds and wish every success for the opening of the Leeds Arena later this year.” 

The dispute centred on the 2007 tendering process for the Leeds Arena when Montpellier Estates put forward its 10-acre “City One” site, in Holbeck, as a potential location.

Montpellier had already prepared and put in its bid when, in November 2008, Leeds City Council terminated the process. The council went on to build the arena on a site off Claypit Lane which it owned along with Leeds Metropolitan University.
Harrogate-based Montpellier argued the procurement exercise was “a sham” and that, from not later than October 2007, the Council planned to develop the arena itself on the Claypit Lane site.