John Christodoulou minions get the boot at Canary Riverside

– Controversial freeholder loses Docklands jewel
– Court-appointed managing agent takes over today
– Damning criticisms of ‘failures to manage the properties’
– Revenue streams lost
(… Now what about West India Quay which has the same set-up?)

Monaco-based freehold owner John Christodoulou failed in the Upper Tribunal yesterday (September 30) to stop a court-appointed managing agent taking control at prime Canary Riverside.

This means he can no longer appoint the management at one of the jewels of his Docklands portfolio, where the riverside site includes 325 flats, a five-star hotel, luxury gym and some of the most expensive apartments near Canary Wharf.

From today (October 1), management of the site passes to veteran managing agent Alan Coates, whose firm HML Andertons is part of the HML Holdings plc, which is accredited to the Leasehold Knowledge Partnership. (His role in managing Charter Quay, Kingston, is referenced here)

In a hearing attended by 40 leaseholders from the site, the freeholder’s barrister Justin Bates was unsuccessful in staying the lower tribunal’s order of earlier in September that Mr Coates take control.

An appeal to the Upper Tribunal was refused and Mr Bates accepted that he could not appeal Court of Appeal. In a final submission, his request that Mr Coates’s appointment be delayed for seven days pending a judicial review was also refused.

The court showdown in front of Martin Rodgers QC, deputy president of the Upper Tribunal, took place at the Royal Courts of Justice in The Strand, central London.

It is the culmination of a series of legal battles at Canary Riverside between leaseholders in the residents’ association and Mr Christodoulou, whose company Yianis Group owns the freehold through Octagon Overseas Limited Wikipedia here.

The management company is Marathon Estates, which was described as linked to the freeholder, although it appears to have separate ownership.

The disputes at Canary Riverside have been notably acrimonious, and the Upper Tribunal was told that at one point [in total more than 100] leaseholders in the residents’ association at the site had been sent solicitors’ letters alleging defamation.

Since the First Tier Tribunal decision in mid-September, residents at Canary Riverside have been sent anonymous letters discrediting the residents’ association for seeking a management company responsible to the court.

“The people who wanted to appoint a manager have failed!” reads the document, some of which have been pushed underneath residents’ front doors.

The leaflet comes from “everyone at riversideawareness.com”, a website that claims to be “a group of lessees, both residential and commercial” at Canary Riverside.

“We have come together as we are all against the proposed change in the management of the Estate, by having a manager appointed in place of Marathon Estates,” it reads.

The leaflet distributed to leaseholders claims Mr Coates “was ordered to collect a large amount of money [from leaseholders] but he fell short by a huge amount”.

It claims “a criminal action was brought against Mr Coates”: a reference to a failed initiative to prosecute an unknown party at Canary Riverside more than a decade ago when Mr Coates was the manager.

Before the hearing on Friday, LKP was contacted by two residents who had received the leaflet and were confused whether to pay service charges to Mr Coates or to continue to pay Marathon Estates.

But now the position is clear: Mr Coates’s court appointment is confirmed and the management connection with Mr Christodoulou’s interests is severed.

The First Tier Tribunal decision of September 15 (see below) ending Marathon Estates management of the site did not hold back its criticisms.

“The tribunal finds that Marathon Estate Limited does not have sufficient staff or experience to manage the residential blocks at Canary Riverside …

“The tribunal finds that Marathon Estates Limited has been unable to produce accurate financial information on time, including budgets and accounts, has not engaged with leaseholders and has a muddled hierarchy of command …

“Given the circumstances of the various failures by the respondents to adequately manage the properties, and the lack of the respondents to recognise any failings in their management, the tribunal considers that it would be just and convenient for a manager to be appointed.”

The tribunal visited Canary Riverside and found it “in a generally used and tired condition” and “not commensurate with what one would expect of a development of this type”.

The chief executive of Marathon Estates, Richard Paul, was a chartered accountant with experience of debt restructuring and the film and entertainment business.

“Mr Paul informed the tribunal that he was approached by Mr Christodoulou, of the Yianis Group (owners of the beneficial interest in the estate) to see if he was interested in managing the properties at Canary Riverside and West India Quay.

“The only criteria for any appointment appeared to be that the management should be undertaken for a lesser fee than other agents who had been approached … He [Mr Paul] confirmed that he had never personally acted as a property manager.”

The tribunal registered its surprise that he “did not keep notes of meetings with the freeholder, that there were no emails setting out the terms of the appointment, and it appears the only criteria was that he maintained his fees at the agreed level”.

Last Thursday (September 29), there was another hearing at the First Tier Tribunal with the freeholder asking for a stay of the order to appoint Mr Coates as the property manager, and leave to appeal. This was refused (attached below).

Only on Wednesday did the leaseholders learn that in any case an application to stay the order appointing Mr Coates was to be heard on Friday by the Upper Tribunal, the day before he took up his appointment.

The procedural issues – that is, the unusual swiftness of the property tribunal to deal with the freeholder’s applications – were unexplored at the Upper Tribunal.

However, it was noted by the residents’ association’s barrister Amanda Gourlay that an earlier tribunal hearing had had to be delayed for several months so that Mr Paul could attend the property trade show at MIPIM in Cannes.

The freeholder, on the other hand, got two FTT rulings and an Upper Tribunal hearing in the space of days.

Unfortunately for him, they have all gone in favour of the leaseholders.

The ruling of the First Tier Tribunal of September 15 is here: canaryriversideseptember152016

The ruling of the First Tier Tribunal of September 29 is here: canaryriversidefttseptember29