£10m legal claim against Northumberland County Council dropped

The legal claim against the local authority as well as council leader Peter Jackson, chief executive Daljit Lally and cabinet member for planning John Riddle has been discontinued.

The news comes as it is also revealed that Lugano Dissington Estate Ltd, which brought the action over how its planning application for up to 2,000 new homes and other facilities near Ponteland was handled, is no longer in the ownership of Lugano Property Group, whose directors were originally behind the claim.

Coun Jackson, who represents the Ponteland South with Heddon ward, described it as ‘the most humiliating admission of defeat’, calling for a public apology for the ‘wild and unsubstantiated allegations’, while saying that they would be pursuing the claimant for the ‘very substantial legal costs’.

However, Newcastle-based Lugano Property Group says that despite not being involved in the decision to discontinue the legal action, it still ‘stands fully behind the claims made in both the legal proceedings and our previous complaints to the council’.

Lugano first made its allegations against the council and the three individuals back in May last year, with a number of threats before writs were served in late August/early September. This was followed by defence statements and the claimant’s response to the defence.

But in November, it was rumoured that Lugano, or at least its arm dealing with the Dissington Garden Village application, was in financial difficulties.

As reported at the time, it appears the source of the rumours was that fixed charge receivers had been appointed for the Estate, with letters going out to tenants to inform them of this, but the company denied Lugano Dissington Estate Ltd was in administration and said discussions were ongoing relating to the longer-term refinancing of the Estate.

Then, late in January, we reported that the planning application for the garden village, which previously had a minded-to-approve resolution, had been withdrawn by the applicant just days before going in front of the council’s strategic planning committee again, where it was to be recommended for refusal.

Lugano said it was continuing with its High Court action and that it would resubmit the plans in the future, but it appears that it is no longer in their control.

Coun Jackson said: “This capitulation has to be the most humiliating admission of defeat by Lugano. All along we said that there was no foundation for their wild and unsubstantiated allegations against councillors, council staff and the county council itself, all of whom have just been carrying out their proper functions.

“The particularly vitriolic statements from the Lugano directors, Allan Rankin and Richard Robson, have been shown to be indefensible and without foundation. They should publicly apologise without delay.

“This has been a long saga which has concerned many in the local community. They will be delighted that the planning system in Northumberland has been shown to be both robust and fair, not bending to the demands of the large developers, treating all applications according to clear criteria withoutfear or favour. The green belt has been preserved in the face of rapacious and unjustified development.

“Not only will we be pursuing Lugano Dissington Estate Ltd for the very substantial legal costs which have been incurred in defending against their ridiculous claims, but the very least we deserve is a clear and unreserved apology for all of the personal upset they have caused not just to ourselves, but to the wider community of Ponteland.”

However, a statement from Lugano Property Group said: “We cannot comment on recent events as these are the decisions of the new owners of the Estate and associated company (LDE ltd).

“Notwithstanding this, we stand fully behind the claims made in both the legal proceedings and our previous complaints to the council concerning the named individuals.

“As yet neither of these have been suitably or independently investigated, yet significant public monies have been expended to protect their unlawful conduct and frustrate due legal process.

“We will continue to invest in development projects throughout the North East and beyond and to show our commitment to creating projects of real value economically and which contribute to the wider regeneration of the region.”

The notice of discontinuance is signed by Simon Conway, described as director of Lugano Dissington Estate Ltd. He is also listed on Companies House as a director of Matterhorn Capital, one of those to provide a loan to Lugano, according to its High Court claim.

An attempt to contact Mr Conway has received no response.

Ben O'Connell, Local Democracy Reporting Service