A judge has ruled that the South Tees Development Corporation and Teesworks Ltd must pay the vast majority of the costs incurred by PD Ports after a High Court battle over access routes.

Mr Justice Rajah said, in principle, PD Ports should receive 80 per cent of costs incurred prior to September 21 last year when an offer to settle by the port operator was rejected and 100 pc of its costs thereafter. PD Ports said STDC and Teesworks Ltd have now been instructed to pay an interim cost within the next 14 days, estimated to be in excess of £1.2m, with further costs to be awarded following “a detailed assessment”.

A spokesperson said an additional hearing will take place to determine the exact amounts taking into account the total budgeted and unbudgeted costs. Meanwhile, Teesworks has released a statement, revealing it intends to appeal the judgement made in the case while a spokesperson for STDC said they will not.

The legal case was brought by the publicly-owned STDC – run by the Tees Valley Combined Authority with mayor Ben Houchen at its head – as to whether port operator PD Ports had access to its own land holdings across the Teesworks redevelopment site. Following a six-week trial, Mr Justice Rajah found PD Ports had established six of its access claims over three key routes on the site, which was acquired by STDC and its land-owning company South Tees Developments Limited (STDL), while four claims ruled in STDC’s favour.

At a subsequent High Court hearing on Wednesday to address costs, Mr Justice Rajah said PD Ports was “clearly the successful party”. “In these proceedings, the claimant [STDC} and third party [Teesworks] have maintained that the defendant has no rights of way across its land and has sought declarations to that effect,” he said.

“The defendant has established that it has rights of way over three significant routes, including importantly, the emergency secondary access to Teesport over South Bank. On the face of the issues at trial, the defendant has clearly won by establishing a right to emergency access and egress; the rights to which the claimants and third parties thought carried a ransom value.

“It has also established other rights of access to South Gare and rights of access to Redcar Quay which the claimant and third party have sought a declaration that the defendant did not have.”

Regarding conduct, he said the only matter he was going to take into account related to an offer made by PD Ports to the claimants in September two weeks before the trial, which he said was rejected “out of hand”. In real terms, PD Ports had substantially beaten that offer, he said, establishing rights of way over South Bank, including emergency rights of access.

He said they had matched what it had offered in respect of an access route to South Gare and almost matched what it offered to accept in respect of Redcar jetty. “Had that offer been accepted, significant parts of the costs of the trial would have been avoided,” he said.

“I say significant parts because, of course, there were costs incurred prior to that offer being made but the defendant [PD Ports] says those costs, just to give an idea of all parties, may be between £1.5m and £2m which have been incurred since that offer was rejected. The reality is no attempt was made to engage with this offer… I would be very surprised if it had not been possible to reach an agreement which would have avoided this trial.”

The judgement in the case outlined that in PD Ports’ revised schedule, which was served in July last year before the trial began, there were 15 separate categories of rights claimed. However, in its trial skeleton argument, PD Ports abandoned many of its claims to rights of way.

Mr Justice Rajah said the idea that the abandoned claims meant that the claimant and third party had won before the trial had started was, in his judgement, “simply wrong, having regard to what those abandoned claims actually added to the substantive issues between the parties.”

He said the abandoned claims did not affect his assessment that PD Ports was “clearly the overall winner”. The general rule, he said, is that the PD Ports would therefore, be entitled to be paid costs by STDC and Teesworks.

“The significant issue in this case is that, at the outset of the trial, the defendant abandoned a raft of claims to other arguments and claims to rights of way of many other routes,” he said. PD Ports had not “pinned down its claims it was advancing” until the start of the trial and that it was “simply too late” and “should have been dealt with a long time ago”, he said.

STDC and Teesworks had incurred costs for preparing to deal with these issues at trial. However, the judge accepted they were “largely secondary claims or alternative claims”. Regarding those abandoned claims, Mr Justice Rajah said, in principle, a deduction of 20 per cent should be made to reflect those costs.

Addressing a suggestion that the claims had been made to impede building on the land, he said there was no evidence that building on the land had been held back. “From the site visit, it seemed building and construction on the South Bank at least is continuing without reference to the rights of way,” he added.

A spokesperson for Teesworks Limited said: “Teesworks Limited welcomed the judgment’s confirmation that no rights existed preventing the development of the Teesworks site. However, after further careful examination of the Court Judgment and legal advice, Teesworks Limited now intend to submit an application to the Court of Appeal, challenging several other matters contained within the Judgment which, in the opinion of Teesworks
Limited, were wrongly applied.

Recommended reading for you:

Don't miss out on the latest news and stories. Subscribe to the Northern Echo for just £2 for 2 months.

“The Court of Appeal application will be submitted without delay. Teesworks Limited will not be making any further comment on the case until the completion of the Court of Appeal process.”

A spokesperson for the STDC said its focus has always been “to clarify PDT’s rights to accommodate them and prevent hindrance to future economic development”, adding: “STDC made extensive effort to avoid legal action but the lack of documentary evidence supporting PDT’s claim left no option other than to seek a legal determination.

“The judgment has now clarified the rights of respective parties. It now gives the required certainty for strategically important projects to move forward without the potential of disruption from any future legal claims.”