The authority’s appeal was thrown out by the Supreme Court in London.
A hearing was held last month, with the court’s decision being announced today (Wednesday, July 27).
Hastings Borough Council had appealed against the decision that it is liable to pay compensation to Manolete Partners under section 106 of the Building Act 1984 for loss to a business on the pier during 2006.
The council said it closed the attraction under its emergency powers between June and September 2006 because it was deemed unsafe.
Manolete had bought Stylus Sports’ claim after the latter went into liquidation in late 2011. Stylus ran the bingo hall and an amusement arcade on the pier. It reopened its operation in 2007, but closed it in 2008.
More than 90 per cent of Hastings Pier was destroyed in a devastating fire in October 2010.
The attraction reopened to the public in April this year with an official reopening in May.
Councillor Peter Chowney, council leader, said: “Although we are obviously disappointed to lose the appeal, we absolutely believe it was the right thing to do.
“The Supreme Court recognised that the Building Act as interpreted by the ‘lower’ courts was too strict, and they have effectively widened the application of what ‘in default’ means. Although this might seem a technical point, it is an important one and one which will in future help councils faced with the same dilemma.
“The judgement also recognises that the council can argue that any compensation must take into account the fact that the pier was in a poor structural condition. We will robustly challenge any large compensation claims, we do not think that the taxpayers of Hastings should have to pay significant sums of public money when all we have ever done is act in the best interests of public safety.
“We believe that we acted entirely correctly when we closed the pier. Our engineers told us it was dangerous with crowd loadings, and it would have been foolhardy to allow large events to go ahead.”
A statement from Manolete Partners plc said: “We are pleased to announce that Manolete has defeated Hastings Borough Council in the Supreme Court.
“This is the third successive victory for Manolete on this case, having won in the Technology and Construction Court in 2012 and then in the Court of Appeal a year later.
“The multi million pound claim relates to compensation under the Buildings Act 1984. The council is now liable to pay “full compensation” as set out in the Act.
“Stylus Sports Limited was forced into liquidation when Hastings Borough Council used emergency powers to close Hastings Pier in June 2006. No notice was given by the council to the pier tenants and the three-month closure, during the peak summer period, destroyed Stylus’ business.
“Manolete purchased the claim from Stylus and has financed the large legal and expert costs to take the claim through all three trials and an arbitration.
“The case will soon resume in arbitration, where the arbitrator will decide damages, interest and costs. At the end of that process the long-suffering creditors will finally receive compensation.”
Manolete chief executive officer, Steven Cooklin, said: “Most private companies and individuals who are the defendants of our claims, see the good sense in negotiating a sensible early commercial settlement, rather than expending large legal costs on both sides.
“However, this case amply shows that we are willing and able to go through an extended and expensive legal process if and when that is what is necessary to achieve justice for the creditors.”
Paul Maynard, partner at Gaby Hardwicke Solicitors, which acted for a number of tenants on the pier, including Stylus Sports in 2006, said: “We have succeeded today on a point that was first argued at the very outset of this case. At the time we pointed out to the borough council that the exercise of its emergency powers was premature and went too far.
“Had the council acted promptly when concerns about the pier’s structure were first brought to its attention, after Stylus Sports commissioned its own engineer’s report, it is quite possible that the closure of the pier could have been avoided altogether or, at the very least, remedial work could have been undertaken that gave the traders a fighting chance of survival.
“Yes, the council was concerned about the ability of the pier’s structure to withstand large numbers of visitors attending events at the far end of the pier that summer, but the steps that they took to close the entirety of the pier, having done nothing to act upon Stylus Sports’ concerns, caused entirely foreseeable and avoidable loss to the traders.
“We hope the borough council will now see sense regarding their statutory obligation to pay compensation without further tax payers’ money being spent on wholly avoidable legal costs.”
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