A CHAMPION showjumper could face a £150,000 legal bill over hotly disputed claims she sold a riding pupil an elderly horse "ready for the knacker's yard."

Top three-day eventer, Patricia "Paddy" Muir of Stokesley, North Yorkshire, is being sued by John Palmer, who claims she sold him a "defective" horse in October 2007 that had to be put down months afterwards.

The 55-year-old financial advisor, of Corbridge, Northumberland, sued Miss Muir, a previous winner of the Blenheim Palace horse trials and a Badminton regular, claiming she sold him a mount "unfit for purpose."

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However, Ms Muir, who runs a riding stable at Stokesley, insists she never owned the horse - a hunter named Toby - and merely acted as "agent" for Mr Palmer at his request.

She denied responsibility for Toby's health or that he "lacked merchantable quality...or was unfit for purpose."

Mr Palmer lost the argument after two previous court hearings, but top judges in London upheld his appeal - opening a new chapter in saga where the legal costs are estimated at £150,000.

Mark Anderson QC, for Mr Palmer, said he asked Miss Muir to "keep an eye out" for a horse to use as a novice in eventing and initially agreed to pay £5,000 for Toby believing he was an 11-year-old. He later paid £2,750 after learning he was 14.

Mr Palmer then found it had an "abnormal hopping gait" causing balance issues.

Mr Anderson added that the horse went lame and was put out to grass. A vet later declared him unfit to ride and he was destroyed in June 2008 for other medical reasons.

The barrister added: "He says he bought it from Miss Muir in the course of her business as a horse trainer and occasional dealer and that the sale was therefore subject to the statutory implied terms as to quality and fitness".

Patrick Limb QC, for Miss Muir, said she had not owned own the horse adding: "Miss Muir was merely seeking to help him find a horse in response to requests that she source one for him."

Appeal Court judge, Sir Stanley Burnton lamented the case's "disproportionate costs" estimated at £150,000 in a claim for less than £9,000.

It was originally heard over several days by a judge who found in favour of Miss Muir.

There was an appeal to a county judge, who dismissed it, before it went to the Appeal Court.

"We are now hearing a second appeal in this case - in which the costs by now must inevitably be many times the value of the claim."

Allowing Mr Palmer's appeal, Sir Stanley concluded: "There was no sensible finding of fact as to the condition of Toby at the point of sale."

The case will now return to county court to be reheard by a different judge.

Speaking afterwards, Mr Palmer said: "I would never have bought it if I had known what it was - it was ready for the knacker's yard".