Auctioneers Kivells say the High Court ruling vindicates their position as Torridge District Council may be forced to pay them hundreds of thousands of pounds.

The council had been taken to court by Kivells Limited, with a claim that they lost money because of an ineffective animal effluent treatment system at the new Holsworthy AgriBusiness Centre they lease from Torridge.

HHJ Jonathan Russen QC in his High Court judgement published last week ruled in favour of Kivells.

Kivells was represented by leading law firm Stephens Scown LLP, and speaking after the hearing, Richard Bagwell, Partner of the Property Litigation Team at Stephens Scown, said: “The recent High Court judgment in respect of the dispute about the dirty water system serving Holsworthy Agri-Business Centre has more than vindicated the stance of our client, Kivells Limited.

“The judgment makes clear that the council was in breach of its contractual agreement with Kivells. The court concluded that the dirty water system implemented by the council was not the system it had agreed to install.

“In addition, the system it did choose to install without the agreement of Kivells was inherently defective. The court also concluded that the council had acted ‘unconscionably’ in choosing the system without the agreement of Kivells, despite knowing that the system it was installing would mean much higher discharge and running costs for Kivells as tenant compared to the system that the council was contracted to deliver.

“To reflect the fact that the council refused the offers made on more than fair and reasonable terms by Kivells, they have been ordered by the court to pay penalty damages of an additional 10 per cent, as well as all Kivells’ legal costs.”

Read more: Holsworthy Livestock Market row: Court rules in favour of Kivells

In a statement issued after the ruling, Torridge District Council’s Senior Solicitor, Staci Dorey, said that there were no winners in the case but that following independent legal advice they had little choice but to defend the case.

She said that the council had tried on numerous occasions to negotiate directly with Kivells and put forward settlement offers to avoid the need for court action, but that unfortunately none of the offers were accepted.

Mrs Dorey added: “We are not in favour of spending public money in such a manner and would not do so lightly, but following independent legal advice regrettably we had little choice but to defend the case. Had we not done so a greater sum of money would have been lost in settling a case where we did not feel the council was at fault.”

But Mark Bromell of Kivells said: “We are disappointed that we have all ended up in this situation as it could have been avoided. We tried strenuously to raise the issue with council officers before the market opened. As long ago as 2014, we offered to share the anticipated increased operating costs with the council on a 50/50 basis, however, council officers refused the offer. Between 2014 and 2017, we made repeated attempts to find a solution to the issue but the council refused to consider all proposals.

“Therefore, it was with the heaviest of hearts and greatest reluctance that in late 2017, we felt we had no choice to pursue the only option open to us of legal proceedings. Even then, we have continued to make further strenuous attempts to settle with numerous offers, all of which were rejected by the council despite being significantly more favourable to the council than the judgment award.”

David Kivell of Kivells, added: “We offered to carry out improvements to the defective system at our own cost, but the council officers also rejected this offer threatening to terminate the lease if we did try to improve the system. Against this position we had no choice but to seek a remedy.

“We have put huge effort into ensuring the inadequacies of the dirty water system have not impacted on clients’ use of the new facility. The new Agri Business Centre has delivered a raft of benefits for the local area and the wider rural economy and will continue to do so into the foreseeable future.”

Kivells had asked for £1.1m in damages to be awarded. The ruling said that installing a ‘minimal treatment plant’ for the site could cost Kivells £1,532 per week in trade effluent costs. Kivells were told they could recoup the costs from the council, plus money already spent on repairs, which over the lifespan of the 21 year lease means Torridge could be faced with a bill of £457,000.

Judge Russen QC asked the two parties to come to an agreement over the figure. If they fail to do so, another court hearing will take place.

Next Monday night, an extraordinary full council meeting has been added to the calendar of meetings. An update on the recent legal case and judgement is the only item listed on the agenda and is set to take place in a closed session with the public and press excluded.

The new £6m Holsworthy Livestock Market in Holsworthy opened for business in September 2014 when the first market saw over 4,000 animals pass under the hammer.

Since trading began, the Holsworthy Livestock Market has seen a £2m turnover increase, along with a “marked” rise in the value and numbers of livestock passing through the pens each week.

The numbers of calves and stirks being sold at the market have increased by 2,000-head per year since 2014, with store cattle up by 3,500-head, fat sheep by 7,000-head, store sheep by 4,500-head and cull ewes by 3,500-head.