A COSTLY High Court defeat has rocked Worcestershire County Council - after it lost a battle to wrestle back two thirds of a near-£1 million road improvement scheme from developers.

The cash was intended to be a condition of planning permission for the 180-home redevelopment of the former Ronkswood Hospital site on Newtown Road in Worcester.

Robert Hitchins had already paid out around £250,000 towards the roads but argued that it did not have a legal requirement to hand over the rest, sparking the court feud.

It applied to revamp the land in June 2012, and at the time by way of granting planning permission a £1 million transport contribution was sought under a tactic called a 'Section 106 agreement'.

It offered the initial £250,000, then raised its offer to £4,530 per house, taking it to more than £900,000 in three instalments as the development progressed.

In December 2012, the council accepted the offer, only for Robert Hitchins to sell its entire interest in Newtown Road to BDW Trading Limited in March 2013.

Robert Hitchins then submitted a second planning application which was not progressed in time by Worcester City Council, leading to the developer appealing, which was accepted back in January by an inspector.

In the High Court Robert Hitchins successfully argued that where more than one planning permission is in force for the same land, a developer should choose which permission to implement.

Mr Justice Hickinbottom, sitting at the High Court, said the poor economy had put Robert Hitchins in a "challenging commercial position".

He said: "The property crash precipitated by the financial crisis in the late 2000s had caused a significant reduction in the value of the land held by the claimant (Robert Hitchins) for the purposes of future development, such that the valuation of its assets was close to the amount of the bank loans that those assets secured.

"If the loans became under-secured, that would be a potentially calamitous breach of the claimant’s covenants with the bank.

"The claimant was consequently very anxious to obtain planning permission for the site - and sell it on - quickly."

He said the case had come to court after a period of "commercial horse trading", and that the land was sold to BDW Trading for £2.7 million before the second application.

The county council has not ruled out appealing the decision in light of the verdict.

The bitter fall-out means the burden of improving the roads will now fall on taxpayers in Worcestershire.

A spokesman said: "We have been dealing with this complex planning case. 

"Following the judgment we are considering our position."