A businessman who claims she was conned by Leeds City Council into bidding for the Leeds Arena contract has launched a £30million High Court compensation bid.
Jan Fletcher, who owns Montpellier Estates Ltd (MEL), says her company was duped into competing for the £70m arena building contract when the council had already decided to carry out the project itself.
The council denies the accusations and is defending its reputation at a hearing which could last seven weeks.
The dispute dates back to 2007, when MEL put forward its 10-acre City One site, in Holbeck, as a potential location for the state-of-the-art arena.
MEL had only one corporate rival when it entered the competition in August 2007 and had already submitted its bid when, in November 2008, the council terminated the process.
The authority instead decided to build the arena on a site off Claypit Lane, on the outskirts of the city centre, which it owned along with Leeds Metropolitan University.
MEL is now claiming around £30m damages from the council, accusing it of deceit, fraudulent misrepresentation and breaching its duties under public contract regulations.
The company says the procurement exercise was “a sham” and the council induced it to participate in the procurement exercise by fraudulent misrepresentations.
Charles Hollander QC, for the company, told the court: “It was induced to enter and remain in the competition, and to retain the City One site in its ownership, on the basis of untruthful representations.”
MEL alleges that it could have sold its City One site for £38million at the time – but the land is now worth just £9.25million.
The company is also claiming back the millions it spent on professional fees and other costs and almost £2million in corporation tax it says it would have saved had its land been sold in 2007.
If Montpellier triumphs in court, the council will also be facing enormous legal costs bills. There are three top QCs, two junior barristers and numerous solicitors appearing in the case.
The council said it only decided to develop the arena itself after the procurement exercise failed.
Its lawyers say the property collapse in 2008 led to fears that the bids which had come forward might either not be value for money or not viable.