Our public face along with fifteen residents, past and present, of the Grand Folkestone, attended Folkestone Magistrates Court on Thursday 3rd Aug 2017. The residents past & present were led by the chair of the Association of Residents in the Grand (AORG), Mr
Peter Cobrin (pictured). He represented the AORG in Court 1 held in front of Judge Tidesley OBE & Mr P.A.Gammon MBE, to resolve and decide upon case number CHI/29UL/LRA/2017/0001. They were sitting as the First Tier Tribunal (Property Chamber), to hear an application for recognition of AORG by their landlord, Hallam Estates Limited, represented by Mr Michael Stainer, a director of the company. Many of the residents who came along for a Grand Day out, were part of the 2014 class action that saw Hallam Estates managing agent removed and replaced by a tribunal appointed manager and receiver, Mr David Hammond of CR Childs of Hythe.
The original application was filed in Oct 2016 and after months of protracted submissions and counter-submissions between AORG & Mr Stainer, came before the tribunal.
In his opening submission, Mr Cobrin described the situation in which residential leaseholders, who number 43 out of 62 flats, meet the entire costs of maintaining the Grand. He quoted Mr Stainer who had conceded that the Commercial occupants of 25% of the Grand were occupying their space “rent free” and therefore not contributing to the overall maintenance of the Grand. He went on to describe how 18 flats, all jointly or individually owned by Mr & Mrs Stainer, were used exclusively as holiday lets and also did not pay towards the maintenance of the building. Mr Cobrin concluded his introduction by producing chunks of concrete moldings that had fallen onto his balcony, as evidence of years of neglect of the Grand, that now requires over £1 million for repair and restoration. The main principal of his submission was that the application for recognition, fulfilled all the basic criteria as to numbers and percentages of service charges, and that there was a history of very poor realtions with the landlord dataing back to the 1980’s. He also made reference to the uncertainty caused by the compulsory winding up of the Grand Folkestone Ltd, in Sept 2016 by HMRC and the ongoing situation following Mr & Mrs Stainer’s arrest in 2015, at the instigation of HMRC.
(Mr Stainer leaving court on Aug 3rd 2017)
Mr Cobrin concluded by stating that he acknowledged recognition was not a cure all, but that it would send a very clear message to Hallam Estates and the Stainers that the Grand was not a “petty fiefdom where tribunal decisions can be ignored, where residents’ interests are secondary to those of the Stainer’s commercial activities.”
Mr Stainer’s counter submission was whether sufficient leaseholders out of the total had supported the application, and whether the 18 flats already owned by the Mr & Mrs Stainer should be included in the calculation, especially as Hallam Estates had created six additional leases in June 2017, in areas as yet undeveloped although in receipt of planning approval.
This led to a protracted discussion as to whether these flats should be deemed to be independent of Hallam Estates as asserted by Mr Stainer, who claimed independence from the landlord, or whether they should be included as they were tied to the landlord as asserted by Mr Cobrin. Upon this hung whether or not the applicants’ case met whatever threshold the tribunal might determine – the 60% pre-Rosslyn or the post Rosslyn approach.
Mr Cobrin made the point that as Mr & Mrs Stainer were and are officers of Hallam Estates Ltd, namely director and company secretary respectively, and that in the 2014 case, Mr Stainer had admitted “he was the sole director of the respondent [Hallam Estates Ltd]” there could be no doubt that the claim of independence from the landlord was a fiction
Shock Admission: Michael Stainer Does NOT Own the Grand & concedes Recognition.
Mr Cobrin argued that Mr Stainer was “the individual who has the right to exercise, or actually exercises, significant control or influence over the company” and Mr.Stainer conceded the point although he was not the owner of Hallam Estates Ltd but “merely an appointed director”. The real owner by virtue of his shareholding was Peter Sarstedt, a German business man from Hanover, and a family friend of the Stainer’s
Mr Stainer in his submission made a variety of procedural points as to whether or not some supporters of the application were eleigible by virtue of their tenure, and to when they had actually signed the application. He expressed concern that he had not been able to verify signatures or eligibility until far too late in the application process, and that Mr Cobrin had persistently refused to provide him with the list of applicants, signed and dated. He now having seen the list, and having conceded its accuracy, was prepared to concede recognition but would seek costs that he had incurred by having to prepare for what, in his opinion was an unnecessary hearing.
In his closing response, Mr Cobrin pointed out as long ago as Dec 2016 he had offered Mr Stainer the opportunity to inspect the list, and as late as March 2017 the Tribunal has asked Mr Stainer why this was not good enough for him, to which no response was offered. Mr Cobrin reiterated that he had never requested a hearing and had been content to rely on written submissions.
Mr Hammond, of CR Childs, the Tribunal appointed manager and receiver was asked to comment on the application and he expressed his unqualified support for it, and confirmed that the application met all the relevant criteria for formal recognition.
The tribunal reserved its final decision as to recognition and costs for 28 days.
The Shepwayvox Team
There’s lot more to the Rosslyn case than arguments over numbers of qualifying leaseholders, and anyone who is leaseholder should be aware of this. The Rosslyn Mansions decision overturned a standard and very narrow approach adopted for the last thirty years and should be seen against a background of increasing empowerment of leaseholders. As it was a decision in the High Court, it also binds lower Courts.
The formal powers of a recognised residents’ association are quite limited and focus on issues such as service charges, accounts and building works, so why the fuss?
In reality, a vigorous residents’ association can do a lot more beyond these formal powers. They can apply for the removal of a landlord’s managing agent as happened in 2014 when residents at the Grand successfully secured the removal of Hallam Estates Ltd.’s managing agent, Fell Reynolds. Under certain circumstances they can take over the management of the building in its entirety or even secure the freehold itself, as at the Metropole. Paradoxically, those highly significant powers required a lower proportion of supporting leaseholders than mere recognition.
In removing this anomaly, Rosslyn also left open the possibility when considering recognition, of looking at issues relating to the management of the building such as a history of complaints and the apparent breakdown of relations — both familiar to Grand residents over many years. Recognition clarifies and facilitates communications between the landlord and the leaseholders and when communications have broken down between landlord and leaseholders, reconciliation may even be facilitated by the existence of a recognised association.
Above all, it gives a single voice, democratically chosen by, and accountable to fellow leaseholders. This must be a good thing!
I believe one commentator has mentioned the fact you could write a Phd thesis on Mr Stainer and the Grand. The excellent article above just demonstrates that Mr Stainer, might be wishing to fill a library on his own.
How much public money was wasted on this farce?
Yes, I still reckon there’s a PhD thesis here.
The foundations of which could be to investigate why he is obsessed with making everything so bloody complicated for himself – when surely his life would be massively easier without constantly trying to ‘buck the system’.
Or perhaps he’s a secret anarchist – his haircut in the photo reminds me of Keith Flint from the popular beat combo, the Prodigy.
Not only do the commercial enterprises in the Grand live rent-free, they’ve just announced a major refurbishment of carpets etc. https://twitter.com/The_Grand_RR . Pssst!! Don’t tell the taxman……..
Can’t wait to see if the Judges see through Stainer’s obfuscations!!!