Holsworthy livestock market auctioneers Kivells have said an expensive High Court decision against Torridge District Council could have been avoided.
The council could be forced to pay hundreds of thousands of pounds after Kivells Limited took it to court claiming it had lost money because of an ineffective animal effluent treatment system installed by the council at the new AgriBusiness Centre.
Finding in favour of Kivells, Judge Jonathan Russen QC ruled the council must pay damages but no figure was set, with the two parties invited to work out the amount or return to court.
Kivells had initially claimed of £1.1million on the basis it had been agreed that a 'reed bed system' be installed to take away effluent waste from animals, but instead a cheaper 'activated sludge system' was put in by the council.
Both sides have claimed they tried to settle the matter and avoid court.
Mark Bromell of Kivells said: "We tried strenuously to raise the issue with council officers before the market opened.
"As long ago as 2014, we offered to share the anticipated increased operating costs with the council on a 50/50 basis, however, council officers refused the offer.
"Between 2014 and 2017, we made repeated attempts to find a solution to the issue but the council refused to consider all proposals.
"Therefore, it was with the heaviest of hearts and greatest reluctance that in late 2017, we felt we had no choice to pursue the only option open to us of legal proceedings.
"Even then, we have continued to make further strenuous attempts to settle with numerous offers, all of which were rejected by the council despite being significantly more favourable to the council than the judgment award."
A statement from the council's senior solicitor Staci Dorey said there were 'no winners'.
She said: "We have tried on numerous occasions to negotiate directly with Kivells which included without prejudice meetings and settlement offers to avoid the need for court action, unfortunately none of the offers put forward by the council, or settlement attempts were accepted by Kivells who persisted in their court Claim and claim for significant damages against this council."
David Kivell of Kivells also commented: "We offered to carry out improvements to the defective system at our own cost, but the council officers also rejected this offer threatening to terminate the lease if we did try to improve the system. Against this position we had no choice but to seek a remedy.
"We have put huge effort into ensuring the inadequacies of the dirty water system have not impacted on clients' use of the new facility. The new Agri-Business Centre has delivered a raft of benefits for the local area and the wider rural economy and will continue to do so into the foreseeable future."
The council was set to hold a behind-closed-doors meeting on Monday, November 11 to discuss the issue and the Gazette has asked it for the outcome.