Fast-food giant McDonald's is claiming £100,000 from Ashfield District Council after the authority rejected plans for a drive-through restaurant.
Councillor Jason Zadrozny, the new council leader, said the burger chain is currently claiming costs after its plan to build in Hucknall was turned down "on no grounds".
McDonald's had hoped to create more than 65 full and part-time jobs with the new restaurant next to Tesco at the junction of Station Road and Ashgate Road - but was refused permission by members of the council's planning committee, despite planning officers recommending it be approved.
Coun Zadrozny said: "McDonald's, which wanted to build in Hucknall, was turned down and is now claiming costs against the council of £100,000, because we refused them on no planning grounds."
A spokeswoman for the council said at the time of the refusal that the committee refused planning "due to concerns about potential health and amenity issues in the vicinity of the area, in particular the potential for noise, anti-social behaviour, odour and litter."
However, as the councillors voted against the officers' recommendation, it opened the doors for McDonald's to appeal the decision and claim costs.
McDonald's has now launched a formal appeal to the planning inspectorate over the disicion but there is no mention of costs.
Coun Zadrozny also claimed the council's planning department is "failing".
He said: "Our planning department is failing in a number of ways - it is on the cusp of being taken over by the government at the moment.
"We have lost so many appeals that if it reaches 10 per cent of appeals lost, the government take it into special measures - we are at 9.8 per cent."
Coun Zadrozny said he is going to look into the problem "straight away" after being elected leader last night, after a vote of no confidence in the previous leader, Labour's Coun Cheryl Butler.
He said: "They don't think about transport - there is no current plan to extend the tram, we are already the biggest distinct in Nottinghamshire with the highest population.
"We have a lot of new and inexperienced planners, so I think this is a training issue.
"They either need to refocus very quickly, or we need to get new people in.
"They are under-resourced - too many cuts have been made in the past.
"My preference going forward is to reinvigorate our own team
"My intention is just to try to make it work, not to demotivate them, that would be counterproductive."
McDonald's has been contacted for comment.