The Wellcome Trust spent £114,000 to defeat a leaseholder in Onslow Square in Kensington over a £6,000 dispute – which came down from £8,247 originally demanded.
The gargantuan bill includes VAT.
The case means that the woman leaseholder will have to sell her home, it is claimed, but the Wellcome Trust has not to date pressed for forfeiture.
The Wellcome Trust – the world’s second largest charity ($27 billion) after the Bill and Melinda Gates Foundation – tells LKP that it is “working to resolve this matter”, adding: “We are not in a position to make any further comment as we are bound by a non-disclosure agreement.”
The Wellcome Trusts legal bills were racked up at a property tribunal that ruled in September 2016, although the dispute is still smouldering on, with LKP copied in to correspondence over this matter.
These are also directed at the Wellcome Trust chair Eliza Manningham-Buller, the former director general of the internal intelligence service MI5.
The case was yet another leaseholder car crash in the property tribunal.
LKP repeatedly urges leaseholders: Pay first. Fight second, to avoid precisely these bills if you do not win.
The leaseholder was a litigant in person, while the Wellcome Trust Limited deployed a barrister with a case prepared by leading solicitors CMS Cameron McKenna LLP. Knight Frank managed the building, and there were other professional witnesses.
The hearing was scheduled for one-day, but stretched to four separate days.
The tribunal noted in its ruling:
“The respondent [the Wellcome Trust] was concerned about the potential costs of these proceedings and wished to retain a one-day listing … “However, the respondent’s cross-examination of the applicant (which remained relevant to the points in issue) lasted for the whole of the first day …”
In total, the tribunal pondered the case for four separate days, racking up the costs that are to be paid by the defeated leaseholder.
On the other hand, the tribunal noted:
“At the applicant’s request, the evidence and submissions were carefully timed. The parties were given an identical amount of time in which to present their cases.”
It is perhaps likely that a barrister, a first-rank City solicitor and professional witnesses made better use of the time than a litigant in person.
The leaseholder relied upon estates agents’ sales particulars in nearby properties to argue that the service charges were too high.
The ruling notes:
“Accordingly, the Tribunal accepts the respondent’s [the Wellcome Trust] submission that the claim that the service charge is generally “too high” is not precise enough to amount to a prima facie case.”
A curiosity of the case is that the leaseholder obtained a management fee quote from LKP accredited managing agent Urang of £300 per flat against Knight Frank’s £700.
“The respondent asserts that Knight Frank’s management is of a “far higher level” to that which Urang would provide.
The tribunal noted:
“The Tribunal is not satisfied that it has been established on the evidence that the management provided by Knight Frank is of a “far higher level” than that which Urang would be able to provide.”
We understand that the site is now managed by Savills.
The Wellcome Trust was also a party in the Mundy case disputing current lease extension methodologies, although it did not participate in the recent Court of Appeal case.
The Wellcome Trust became a prime central London residential landlord in the 1990s when it took over 58 acres of Kensington’s “stucco ghetto” from the Henry Smith Estate.
It is among the most valuable residential property in the world.
Statement from the Wellcome Trust
Wellcome Trust’s investment portfolio includes the freeholds on approximately 1,200 properties in South Kensington in west London. We manage this estate professionally and have good relationships with the majority of our leaseholders. We are always sad when disputes occasionally arise and we have a rigorous complaints process which does lead to a resolution in most cases.
It is particularly difficult for us where, as with Ms Christie, the dispute runs over several years. We have tried hard to resolve the dispute, including a mediation with Ms Christie in 2014, which we hoped would reset our relationship more positively.
Unfortunately this did not happen and Ms Christie decided to challenge her service charge before the tribunal in 2016. We felt that the service charge was reasonable and that it was wrong to allow Ms Christie to avoid paying when other leaseholders were paying their fair share, so we defended this challenge. The tribunal found in our favour that the service charge was reasonable.
We tried to minimise the costs of the tribunal hearing, for example most of the work was done by a junior lawyer and the hearing was led by junior counsel.
However, the tribunal hearing took four days (rather than the one day that we had wanted) and involved a large amount of material, much of it material that Ms Christie wanted to put forward. Despite our efforts, this resulted in us spending a significant amount on costs. As the tribunal found in our favour, we are now asking Ms Christie to reimburse us for those costs.
We do not recognise the figures referred to in relation to the increase in service charge. The service charge for flat 2A Onslow Square was £2,935 in 2013 and £2,341 in 2015. We believe that Knight Frank have appropriate processes to ensure that spending is cost-effective and carried out in accordance with the statutory processes for amounts to be incurred through service charge.
We continue to hope that it is possible to resolve all of the issues with Ms Christie and find a productive way forward that will avoid further disputes, consistent with Wellcome’s role as landlord on the estate. We have said to Ms Christie that we would be willing to meet, with a mediator, to see how we can achieve that.
The tribunal ruling is here:
CMS Cameron McKenna LLP claims costs were £114,000:
06 CMS demand for 95K