The development company behind The Cube project in Birmingham have failed after a two-year legal bid for compensation from a previous neighbour they claim held up the project.

Birmingham Development Company (BDC) claimed it had suffered losses of more than £45,000 a week after it had to stop construction on the site because a neighbouring property was left in an unsafe condition.

But judges at both an initial hearing in 2007 and an appeal earlier this year found for Michael Jacob Tyler, who owned the factory on Wharfside Street that occupied the spot now taken by the Cube.

Last week, the appellate committee at the House of Lords refused to let BDC take the matter up with the law lords, effectively ending the case.

BDC had originally alleged that it had to stop demolition at the site of the 500,000 sq ft Ken Shuttleworth-designed building because of a crack in the wall of the factory on Mr Tyler’s property.

But the nuisance claim lodged by the development firm was rejected by a judge in February 2007. An appeal launched soon after was rejected 18 months later.

The judge found BDC’s demolition work had continued even after the crack in the wall was found, and had not been stopped until a phase of the development had been completed.

Dismissing BDC’s case, the Court of Appeal said that although the developer had a “genuine, subjective fear” that the wall was dangerous, the wall had not in fact presented any actual danger so that BDC’s “honest fears were unfounded”.

BDC director Mark Billingham said: “We acknowledge the court’s decision and we will review our options going forward.”

Work on The Cube development commenced in June 2007 and completion is due in 2010.