£10m lawsuit boss denies being rude and unprofessional

May 8 2008 by Graeme King, The Journal

A FORMER director of Tees Valley Regeneration has denied being rude and unprofessional during a key meeting over the £500m Middlehaven redevelopment in Middlesbrough.

The allegation was made in a hearing at the High Court in London in which a Middlesbrough developer is suing English Partnerships and urban regeneration company TVR.

Chilli Developments claims EP did not keep to an agreement that Chilli should exclusively work on part of the development.

As part of its case, Chilli Developments said that at a meeting in June 2005, the behaviour of Peter James, then TVR’s director of development, discouraged Durham construction firm Esh Group from investing in Chilli’s scheme.

The court heard that the Middlehaven scheme was split into two phases – the first including 40 acres, and a second of 200 acres, with plans for 2,500 homes and 27,000sqm of commercial space.

Chilli was interested in developing a small part of the area to be worked on in both phases. But it says that, after the June 30 meeting, it was forced to pull out of the development when it could not get enough funding to go ahead.

Lawyers for Chilli say TVR and landowner English Partnerships acted with “malice and bad faith” and the company is suing for just under £10m.

EP is said to have breached its contract with Chilli, while TVR is said to have “procured” it to breach the contract.

Barrister Philip Noble, for Chilli, says a rival developer was encouraged to put in a bid for land already assigned to Chilli, that EP breached two lock-out deals signed with Chilli, that TVR and EP spoke to another potential backer of Chilli behind Chilli’s back – and that Mr James destroyed the company’s credibility with the Esh Group.

Earlier in the case, Neil Griffiths – a partner in project management firm Baker Mallett LLP, which was working with Chilli – testified Mr James had been “rude” and “unprofessional” in the June meeting.

But yesterday Mr James, now heading the New Swindon Company, said: “The meeting was businesslike. There were some issues that needed to be addressed, there was some robust questioning, but I was no more than robust.”

Responding to further questioning, he said: “These were businessmen supposedly experienced in bringing schemes like this to the table. They should be used to full and frank discussions.”

Tom Leech, for both EP and TVR, has denied any wrongdoing and described Chilli’s allegations as “thin” with “next to no evidence to support them”.

The case is due to finish this week.