Payment clears way for court case over project

9:28am Monday 25th June 2007

A COURT battle between a small Teesside development company and the two key names behind Middlesbrough's Middlehaven project looks likely to go ahead.

Middlesbrough-based Chilli Developments has found the £54,000 required for its breach of contract case against Tees Valley Regeneration (TVR) and English Partnerships (EP) to proceed.

TVR said it had not received conformation that the payment had been made into court, but said its legal team would offer a robust defence should the case continue.

Chilli brought the case against TVR and EP, saying both parties went back on a lock out, or exclusivity, agreement relating to redevelopment of five acres of the 50-acre Middlehaven site.

In January, Chilli filed court papers for breach of contract, claiming almost £10m in loss and damages. In March, TVR and EP filed their own papers, demanding that Chilli pay £325,000 to the court to prove it had the funds, should it lose its case.

They also requested that Chilli pay outstanding costs of £40,000, relating to a previous court case last year.

In April, the High Court ordered Chilli to pay £54,000, including £20,000 as security for future legal costs, by June 13.

Chilli was granted an extension to find the money by 4pm last Friday.

Simon Brown, managing director of Chilli Developments, said: "The money has been paid into the courts and we are ready to take this all the way. We have had support from a lot of people."

TVR, the Government agency set up to develop Middlehaven, has always said Chilli's £10m case will be defended in full.

A spokesman for the group said: "As of now, we have yet to receive confirmation from the court that payment has been received from Chilli. In any event, we do not believe that they have a case against either Tees Valley Regeneration or English Partnerships.

"We believe that the claims are entirely without foundation or merit and our legal team is prepared and ready to offer a robust defence in court.

"Further action from Chilli runs the risk that further court costs will be incurred, which they may ultimately be directed to pay."