Yet again, leaseholders of the Grand turned up in numbers at Folkestone Magistrates Court on January 31st for the third and final day of the Property Tribunal hearing. They were to hear the closing submissions as their Tribunal-appointed manager, David Hammond, sought to recover over £165,000 in historic unpaid service charges owed by Mr. and Mrs. Michael Stainer (pictured) on their 19 holiday lets.
And yet again, the chief protagonist, Michael Stainer, was absent, this time as the result of the widely-reported assault which resulted in facial injuries as he fought off two burglars at the Grand. The two previous absences were explained away by Mr. Stainer’s absence at the High Court in London although we have been unable to verify this. It has been suggested by one source close to Mr. Stainer that this in fact was a tactical absence, and this explanation is supported by his failure to produce a witness statement or defence to the claim. Another source claims to have seen Mr. Stainer in the Grand on the first day of the hearing.
It’s worth a moment to consider this as Mr. Stainer has been a most forthcoming litigant over many years. Here, he was failing to defend an action in which he and his wife are personally liable, if the case is proven, for a sum which with costs and interest could easily exceed £200,000. We have already documented the business liabilities of the companies of which he is a director which exceed £1.2 million, plus of course the ongoing investigations by the Official Receiver into the demise of the Grand Folkestone Ltd, wound up by HMRC for a sum in excess of £800,000.
So what defence was put forward by the remaining witnesses? The only direct defence was offered by Mrs. Stainer who owns 15 of the flats and hinged around the alleged non-production of Mr. Hammond’s insurance policy. This policy was required as part of the Tribunal order that appointed Mr. Hammond. She stated that were this to be produced, “we would settle our account”. Other witnesses, including Mr. Hammond, gave evidence that this policy had been handed over to Mr. Stainer as long ago as March 2016 in front of a large meeting of leaseholders. When the Stainer’s solicitor, Andrew Duncan (pictured above) returned to this theme in his closing submission, Mr. Gammon MBE, sitting with Judge Tildesley OBE as part of the judicial team, reminded him that there was no obligation to produce the insurance policy to any leaseholder, it was the Tribunal’s responsibility to examine and confirm its suitability. “Was Mr. Duncan questioning the Tribunal’s competence?”
The three other witness were Robert Richardson (pictured), who described himself in his witness statement as ‘employed as the General Manager of the Grand….. since November 2009’. However, under cross-examination he stated that he in fact worked for Mr. and Mrs. Stainer, and when asked specifically for which company he actually worked, was unable to recall. The rest of his evidence focused on issues relating to fire prevention measures and refuse collection. Notable in this interchange were the production of emails that showed him demanding a rent from Mr. Hammond of £80 per week for garage storage used for refuse bins, up from £80 a month. He dismissed this as a “misprint” even when emails between Mr. Hammond and Mr. Stainer in which he was copied in, confirmed this hike.He was also challenged over two other emails in which he stated, in relation to fire issues, that “I would suggest we are as bad as it is possible be”. In another email to Councillor Russell Tillson (pictured below left) discussing how Richardson (pictured right) would respond to an email from Mr. Hammond, he wrote that Mr. Hammond could “expect a filthy response. This is a pack of nonsense.” Just how the Information Commissioner’s Office would view passing on a private email from an officer of the Court to a third party (Cllr Tillson) remains to be seen.
Mr. Richardson (pictured right) also took the Tribunal on an extensive tour of the commercial part of the Grand, showing off new carpets, fire prevention upgrades and numerous other example of money being well spent. Adam Rosenthal, the barrister acting for Mr. Hammond, certainly took a dim view of Richardson’s credibility, asking the Tribunal to “treat this evidence with caution, and that he was clearly acting on the instructions of his boss” and in his summing up commented on the contrast between the commercial areas, and the threadbare carpets, damp penetration and other example of long-term neglect in the residential areas, reminding the Tribunal that the commercial interests pay nothing to the maintenance of the Grand.
Mr. Rosenthal (pictured) dismissed the defence as consisting of “excuses not reason” and “failing to dispute any of the actual service charges”. He reminded the Tribunal that “not a penny had been paid” since Mr. Hammond’s appointment in 2014. He went on to say the tactics of the Stainers “were to grind Mr. Hammond into submission” and that Mr. Stainer in particular, had “treated the Tribunal process with disdain” and that the Stainers must be “well aware of the impact of their non-payment”. Judge Tildesley OBE had to remind another witness that the Stainers’ non-payment predated Mr. Hammond’s appointment in 2014 as was highlighted in that case by Judge Norman.
For the sake of completeness, a parallel case was heard in which two leaseholders, Mr. Julian Daggett and Mr. Steve Bispham asked the Tribunal to determine if the service charges were reasonable, and the Tribunal grouped the cases together. It might have been anticipated that Mr. Stainer’s case would have followed this line of defence, but he offered no evidence.
A decision is expected in four to six weeks.
We understand that there is a follow-up case to be heard at Mr. Hammond’s request at the end of April to review the management order imposed in July 2014. This order is widely held to have failed to give leaseholders the protection they sought, or to give the manager the powers he needed to effectively manage the building in the interests of residents.
The Shepwayvox Team
PS Michael Stainer is NOT the owner of the Grand, he is a mere director of the Company which does. Furthermore the Grand is NOT a hotel. This is to correct inaccuracies reported by both the Folkestone Herald & Folkestone & Hythe Express online and in print.
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Cunning plan A seems to have worked….
Time for cunning plan B ?
Leasehold is a feudal system, where the freeholder can sell a property in perpetuity. It should be banned asap! Unprincipled freeholders are allowed to get away with misusing the maintenance fees they charge, and not take adequate care of their freehold property. The law does not protect the leaseholder, and they can spend their lives fighting the insecurity and injustices that this antiquated system creates. I hope that some future government will have the courage to ban the system altogether.