… and wins the right to a recognised residents’ association
The residents at West India Quay in London’s Docklands have won their epic battle to have a recognised residents’ association.
Represented for free by Martin Boyd, a co-director of the Leasehold Knowledge Partnership, the residents faced a legal onslaught headed by Edwin Johnson, QC.
This added up to £74,560 in costs for an afternoon hearing at the London tribunal on March 27.
It was extraordinary that freeholder the Yianis group, owned by Monaco-based John Christodoulou, was prepared to exert such legal muscle. Johnson is regarded as one of the leading property barristers in the country, described as “commanding and extremely effective” by Legal 500.
To lose a case to a lay advocate is unlikely to go unnoticed among his “learned friends”.
Although the issue seems minor, a recognised residents’ association does have one very important power: the right to appoint a surveyor to examine the accounts.
These were last presented to the residents in June 2010, the tribunal was told.
The ruling (below) by chartered surveyor Aileen Hamilton-Farey, assisted by Judge Tim Powell, who heads the London region of the property tribunal, is a humiliation for the freeholder and his army of legal advisors.
As well as a QC (£30,120 inc VAT), this included grade A solicitor Stephen Hughes, of Lorrells LLP (£31,950), and chartered surveyor Bruce Maunder-Taylor (£5,850) as a professional witness. The breakdown of costs submitted to the tribunal is published below.
The fanciest residential block in Docklands, West India Quay is divided into 158 flats and a 12-storey Marriott hotel, which accounts for 47 per cent of the building.
Mr Johnson, QC, argued that the appointment of a surveyor by the residents would allow “unlimited access to documents that might be of confidential nature” concerning the freeholder’s relationship with the Marriott.
“We disagree,” the tribunal states.
“It is our view that any surveyor would only be entitled to view documents and make enquiries relating to service charges payable by the long leaseholders and not to any other extent.”
Furthermore, the tribunal said it was satisfied by the evidence of Jane Hewland, the residents’ representative, that
“Their [the residents’] desire is to ensure that they are able to exercise their rights in relation to service charges and nothing further.”
In issuing a certificate of recognition for the residents’ association, the tribunal ruled that they could not have access to the management agreement between the freeholder and the Marriott hotel.
Any inspection of the service charge accounts would similarly be restricted to the residential portion of West India Quay.
The tribunal also found in favour of the residents over legal costs:
“… we have found in favour of the Applicants in this matter and therefore make an order that none of the costs incurred by the Respondents are considered to be service charges and are therefore not chargeable to the Applicants.”
However, the tribunal disagree with residents who felt the freeholder was unreasonable in defending the action.
“The Respondents, given the confidentiality issues, were entitled to defend the matter and were entitled to use professionals to do so. We find that each party should therefore bear its own costs in this matter.”
Jane Hewland, a former television journalist, said: “We are so grateful to Martin Boyd and the Leasehold Knowledge Partnership for all their help in what has been a nine-month battle. They beat one of the top property QCs in the country.
“We simply could not have won this without their help. We just hope the landlord leaves it here and does not appeal.”
But Hewland is indignant at the unfair allocation of costs in leasehold tribunal cases.
“If the landlord had won he could have added his costs to our service charges. We did win, and we still do not get awarded our costs. This does not seem fair.”
The obvious injustice in this approach to costs is to be taken up by LKP in June when it meets Judge Siobhan McGrath, who heads the property chamber.
The full costs demanded by the freeholder’s team can be read here: LegalTeam’scosts
Also Edwin Johnson, QC, made a curiously splenetic plea for costs to the tribunal, in which he names Martin Boyd 15 times and talks of “mud-slinging”, “too outrageous and/or too misconceived”, “self evidently absurd”, “quite absurd”, “lack common courtesy”, “self-evidently absurd” (again) and “absolute nonsense”.
The full text of this document, which failed to persuade the tribunal, is here. WestIndiaQuaycosts
The tribunal ruling is here: WestIndiaQuayDecision
Related posts:
West India Quay’s victory against £74,560 legal onslaught … for a recognised residents’ association
Legal army to stop West India Quay getting … a recognised residents’ association
Tribunal to rule on whether West India Quay leaseholders are subbing the energy costs of the hotel below
Has The Times report ended bnb raves at West India Quay – where landlord John Christodoulou and manager Rendall and Rittner failed?
Legal arms race as Canary Riverside freeholder seeks judicial review
Engage Liverpool to hold public meeting with CMA
Great news and it proves what I said on a related thread about RTA’s and tribunals not needing the majority of units as the FTT has ( as did the old RAC and LVT) the ability to take that into consideration and awarding recognition.
However I think that there may be some argument to be had as in carrying out the 87 rights there may be some matters where examination will stray into areas of confidentialty such as service contracts ( especially where operators are tied into brand owning service providers or in house services) and potentially staff contracts to the extent that the reception. I imagine, provides concierge services, so there may be a return to the Tribunal for directions on what can be seen or not.
Still as they say its the first hill in a battle 🙂
.
Congratulations to LKP and to Martin Boyd especially for a fine win and for their courage in facing down not just the freeholder but his legal servants.
Surely there should be some reporting of the effect of Mr Boyd’s presence on the ability of the opposing side to conduct a cross-examination?
I hope to see a write-up in Private Eye. This case deserves it.
Well done too to the Residents’ Association.
Paul,
As far as I can tell I’ve not turned into a version of Matt Lucas’s character “Kenny Craig”. I think QC Johnson must just be is a bit over sensitive to people looking at him in hearings. He also accused Jane Hewland of supposedly being able to stonewall him under cross examination. Not the sort of recommendations likely to appear on his profile.
I was not the one who used hypnotic powers to convince QC Johnson he should turn up with two witnesses, including one deemed an expert, without a single page of exhibits to support their arguments. Not a single page.
The 233 bundle was made up of an overly large 171 pages of correspondence between the parties and the Tribunal. A 7 page applicants witness statement supported by with 29 pages of exhibits. The landlords submission was 4 pages of substantive text with 0 pages of exhibits from the property management company together with 10 pages of substantive text from the expert witness again with 0 pages of exhibits.
The information from this and other cases including the various tactics used by the landlords legal teams in the build up to hearings will also be used as part of our discussions with the Tribunal, MoJ and DCLG looking at the impact of the new Tribunal rules which came into force last July.
A stalwart defense Martin, congratulations to you and all of the team.
It doesnt matter how good you are when you dont have much of case to argue
“”Jane Hewland, a former television journalist, said: “We are so grateful to Martin Boyd and the Leasehold Knowledge Partnership for all their help in what has been a nine-month battle. They beat one of the top property QCs in the country.”” from article.
I am delighted and very pleased. Thank you to those who flag up the facts and save Leasehold flat owners. Campaigners/LKP are regaining happiness for millions of people
who bought leasehold properties.
A brilliant result; many congratulations Martin Boyd. Thanks also to LKP for sharing so much information that would not otherwise be made available and which makes fascinating reading. Given the obvious sensitivity displayed in the freeholder’s submission on costs it would be surprising if there is no appeal on that issue but even if they were partially successful (30%?) that would in no way detract from what is a wonderful achievement in the face of sustained and powerful opposition.
I must add my congratulations as well. I think I will call you Martin (Lord Shaftesbury) Boyd in future!
I believe it is the right of all resident associations to appoint their own auditors to examine service charge trust accounts.
That being the case, for the few pounds it would cost leaseholders, would Campaign against retirement leasehold exploitation/LKP recommend that resident associations should appoint their own auditors to examine their service charge trust accounts?
Unlike West India Quays, does Campaign against retirement leasehold exploitation/LKP believe Peverel or Mcarthy and Stone would have any objections?
Michael,
Thanks for the support. Changing the rules on RTA is something we have been working on for over a year and a half though so even I could learn enough.
Your comments on independent auditors if a very good one. We had submitted it as an amendment to s152 of the 2002 Act if they were ever to consider bringing it forward. The existing provisions under the 1985 Act are about as valuable monopoly money. Since the leaseholders have to pay for the audit why should an RTA not be able to choose who they want to do the auditing and indeed decide what level of audit they want. Those customers who have been through the Peverel – John Needham system will know what sort of accounts that gets you.
Thats because its not an audit 🙂 merely a certification of costs and income that for more than four flats is signed by an auditor.
In most cases that it sufficient for simple blocks of flats with simple if extensive services, WIQ is one of the complicated properties which have complicated services and services procurement that needs expert analysis to establish if they are fair and reasonable.
As all should now know it is very hard for those to be obtained if your council is unwilling to take.
What you are asking for is the 85 Act rights to be an audit or have an audit option in addition to the 87 Act rights or simply that the person that signs the report is appointed by the leaseholders, but under the 85 Act and the 2002 amendment, its still NOT an audit.
if you read the ICAEW technical releases on where an audit is required ( as some leases require) there is significantly more work to be done to achieve what you desire. While WIQ is a case in point ( and one that takes some particular expertise) I doubt that a block 6 flats with the one keyboard warrior who can unilaterally demand an audit, will impress the others with a 4 figure accounting bill on the SC. The difficulty as it always is in finding a way that caters for all without such unintended consequences. I can think of one example of 10 flats and 2 shops where the lease requires an audit and, even using a “man in a shed” type auditor it still tops £1000. Despite the managers offering as normal the s21 certificate and all invoices sent in in a scanned file for all owners to read and enquire, one chap insists, resulting in about £700 additional costs.
A great result. Well done Jane Hewland and members of the West India Quay RTA for standing up to the bullying tactics of a landlord. The only “stonewalling” I can see in this case is a landlord running up £74,560 in legal costs attempting to stonewall the legitimate right of residential leasehiolders to form a recognised residents’ association under Section 29 to allow access to matters relating to service charges. Residential leaseholders are only concerned about the quantum of management fees payable to a managing agent under a management agreement. They are not interested in the confidential terms of the management agreement and indeed would have no right to have access to confidential commercial agreements, either individually or through a RTA. Who cares about such terms anyway?
The landlord, in this case, seemed perfectly happy and willing to sell 158 residential leases to hardworking people but does not appear to be so happy or willing when it comes to openness, transparency and accountability for service charges levied under such leases.
Also well done to Martin Boyd, Sebastian O’Kelly and the LKP team for supporting West India Quay RTA and for continuing to support leaseholders in general.
Congratulations Martin/Sebastian.. Just shows what can be acheived with determination and grit..
This is a lesson to us all that if you stick at it and refuse to be bullied, you can win…
It is proposterous that they even wanted to challenge the claim for a RTA in the first place.
A bloody nose and black eyes I think 🙂
Imagine turning up at court with no evidence and hoping to win the day on words…. arrogant beyond belief….