Developer sues MJ Gleeson over Sheffield landmark

Property developer Devonshire Green Holdings is suing troubled contractor MJ Gleeson for £9m in a row over the West One mixed-use scheme in Sheffield.

Devonshire has issued a High Court writ claiming Gleeson has been overpaid for its work on the scheme, which was the largest project to be built in Sheffield for 10 years. Devonshire also claims that Gleeson, which was main contractor on the project, failed to finish parts of its work.

The price Gleeson charged for the scheme jumped from £34m to £43.6m by the time it was completed in June 2004, and the firm then claimed it was entitled to a further £8.4m.

Devonshire challenges this, and in its writ claims it is instead entitled to a refund of £7.8m, together with £1.4m in damages for work that was not completed. Devonshire has already recovered £1.1m in damages.

Gleeson was given a four-week extension on the scheme in March 2003 after a fire caused substantial damage to its work.

Gleeson acknowledged that it had received the writ but declined to comment further. Devonshire was unavailable for comment.

This week Gleeson announced that showed losses had fallen to £500,000 during the six months to 31 December 2006, compared with £5m in 2005. Turnover at the company, which is refocusing on regeneration after offloading its construction arm, rose 18% to £79m.

Chief executive Paul Wallwork said: “We are at the mid-point of a period of extreme turbulence, but the regeneration business is profitable and will continue to grow.”