Legal battle threatening future of proposed new village at Flaxby

In November 2014, the Advertiser exclusively revealed that Skelwith Group, the course’s landowners, were developing plans to build a new village containing up to 2,500 homes.

But the original owners, Alan and Margaret Armstrong, are now hoping to re-sell the land amid growing frustrations with the seven-year wait for Skelwith to pay off their £7m investment.

The Armstrongs decided to sell the golf course to a local Harrogate family’s company, ‘Flaxby Park’ owned by the Wards, in January and argue they made a formal demand to Skelwith to pay the remaining £4m of the investment.

On February 19, Skelwith were granted an injunction to block the sale between the Armstrongs and Flaxby Park, which had been agreed on February 11.

A date for a hearing on Skelwith’s application for a summary judgement on its claim, and for the Wards to discharge the injunction, has yet to be set after an initial hearing on June 17 was adjourned.

Despite the ongoing legal battle, Skelwith have confirmed they are still ‘fully committed’ to building the village and stressed they have ‘full ownership’ of the land.

A Skelwith spokesperson commented: “ We are working with all stakeholders to build a sustainable village that will not only deliver Harrogate’s future housing needs, but will be a scheme that is exemplar in developing sustainable communities. 

“We acknowledge the nearby owners’ legal activity, but it is important to note that while there are legal issues ongoing, we are confident that they will be resolved in the near future.

“It is important to recognise that these actions will have no impact on taking the site forward and delivering homes for the people.”

Skelwith have argued that the Armstrongs could not sell the land as they were never in full possession of it.

They also claimed the Armstrong’s agreed sale of around £3.4m was at a ‘substantial undervalue’ with Skelwith arguing the true value being around £27.5m.

However, the Armstrongs have argued that Skelwith does not have ‘full ownership’ and that it is ‘misleading’ for them to commit to developing in the near future.

Patrick Elliot of Dragon Associates, advising the Armstrongs, said: “Even if Skelwith is successful, the Armstrongs remain as mortgagees in possession, with the right to sell the land which they intend to do whatever the outcome of the court proceedings.

“They need to do so to recover the monies outstanding under the terms of their sale agreement with Skelwith, monies unpaid by Skelwith for seven years.”

Skelwith have warned that, if the sale goes ahead, they would be left with ‘substantial debts that are no longer secured when they should have been’.

The company purchased the property in 2008 with the aim of turning the golf club ‘up market’ by securing planning permission to build a luxury hotel.

According to Land Registry documents, the company had sold 159 rooms in the hotel but the only work that has taken place to date is the construction of a £4m roundabout.

Skelwith have confirmed that they are still ‘wholly committed’ to building the hotel but admitted the finished project will likely be different from the luxury 5 star spa hotel which was originally planned.

Harrogate Borough Council have confirmed any dispute over land ownership would not affect Skelwith’s right to submit a planning application providing they give sufficient notice to the landowner.