Two local authorities are poised to launch a landmark legal battle which could pave the way for them to claim hundreds of millions of pounds from developers.
Aberdeen City and Aberdeenshire councils were dealt a major blow last year when the Duke of Fife – whose company is behind the Chapelton of Elsick scheme near Newtonhill – successfully challenged an £8million developer contribution demand.
His firm the Elsick Development Company (EDC) had been asked to hand over the money to the strategic transport fund as part of its planning consent – but Court of Session judges reduced the bill to just £287,000.
Both councils warned the decision would open the door to challenges from further developers and jeopardise future infrastructure projects.
And yesterday, the Strategic Development Planning Authority (SDPA) – made up of representatives from both authorities – agreed in principle to appeal against the decision.
City council finance convener Willie Young said: “We have to test this judgment – we are speaking about hundreds of millions if we win as that is the potential money we can get from other developers towards infrastructure as we go forward.
“Councils going to court is very, very unusual, however the circumstance at Chapelton of Elsick is really, really significant for the people of Aberdeen and Aberdeenshire.
“The only people that lose out are the citizens.”
The £8million bill for the EDC, would have contributed towards a new bridge over the River Dee and Kintore Railway Station.
Aberdeenshire Council has already set aside £110,000 to cover its half of the appeal costs, and city chiefs are expected to rubber-stamp their share at an urgent business meeting next week.
The decision comes after the Supreme Court granted the authorities leave to appeal last month.
Councillor Peter Argyle, chairman of the SPDA, said in a statement last night: “The SDPA considered a report which set out the issues facing the SDPA and detailed the legal advice we had been given.
“After discussions, it was agreed to pursue the case subject to the support of both the Aberdeen City Council and the Aberdeenshire Council.”
Mr Young added: “The estimated legal costs of £220,000 are fair – it does cost money to go to the Supreme Court, but both councils could lose millions here.”
Since the Court of Session’s ruling that the £8million demand was “unlawful”, several developers have questioned their own agreements and the justification for paying towards the strategic transport fund.
Among those are Brick Developments, who last month launched a bid to get out of the £30,000 bill attached to its plans for a Hampton by Hilton hotel in Westhill.
A total of 4,045 houses have been given approval at the Chapelton of Elsick and the EDC hopes eventually to create 8,000 new homes at the site.
Last night the Duke of Fife, who is the director of EDC, said: “We have been notified of the decision of the Supreme Court to consider the appeal and are surprised. The inner house of the Court of Session was clear in its judgment on the case and in refusing leave to appeal.
“We remain very confident in the strength of our case but are disappointed that we have to go through the argument all over again.”