Stainer sent packing (again) in Tribunal humiliation
Update: 27 May 2021 @13:00
The latest full determination in a six-year saga of defeats in Tribunal and High Court hearings, was published on 11th August. The owners of the Grand, Hallam Estates, along with Michael and Doris Stainer, supported by four residents, saw their application to sack the incumbent Tribunal-appointed Manager, Mrs Alison Mooney, unceremoniously thrown out. The basic decision was announced immediately after the hearing on July 1st, but we had to wait until now for the detailed reasoning – and there isn’t a crumb of comfort in it for the applicants.
The grounds for removing any manager, Tribunal-appointed or otherwise, are very clear. In the absence of a finding of fraud, serious and repeated breaches of the RICS Service Charge Residential Management Code, or a refusal by the Manager to manage the building at all, it would not be “just and convenient” for an appointment to be discharged. There needed to be “good and weighty reasons” to do so and revisiting the reasons why a manager was appointed in the first place, in this case in July 2018, most definitely were not.
The decision makes this point brutally clear as early as paragraph 14 when quoting Counsel for the Manager, Sam Madge-Wylde:
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“Variation applications should not be used to enable continuous re-litigation of the original issues in the 2014 and 2018 Management Orders which might hamper the manager in carrying out her functions.”
The Hallam case was put forward by Tanveer Qureshi, a London-based barrister who specialises in “matters involving allegations of fraud, money laundering, asset forfeiture, bribery and other misconduct by companies, directors, financial professionals and corporates entities.” It boiled down to four headings:
(a) Failure of Mrs Mooney to maintain the property adequately.
(b) Her failure to communicate.
(c) Her failure to act fairly and impartially in dealings with the premises.
(d) The Applicants originally also argued there were “massive accounting irregularities” but no evidence of such irregularities was produced
The key witness was Michael Stainer himself, and he suggested:
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“The Manager’s failure to get things done was driven by a motivation to acquire the freehold, and that delays in carrying out work contributed to that objective. Undermining maintenance reduced the value of the property. He suggested “Mr. Cobrin’s [chairperson of the residents’ association AORG] agenda” had overtaken “the agenda to repair” the property and that there was an intention to “scupper the commercial operation”. The Manager tried to deter customers from coming to the Grand and she “had become the operating arm of the Cobrins.”
More remarkable was his denial that he and his wife owed any service charges, despite the Tribunal decision of January 2018:
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“It was further put to Mr. Stainer there was an outstanding service charge liability of around £300,000 (around 30% of the total sums in the bankruptcy), but Mr. Stainer did not accept anything was owed in respect of service charges for the apartments. The alleged arrears were “completely concocted” and he had never seen any evidence to show any sum was owed at all.”
Not mentioned in the determination but confirmed by attendees, was Mr. Stainer’s admission that he had made £60,000 available to the managers he proposed to nominate in place of Mrs. Mooney. In view of his subsequent failure on July 20th to prevent the filing of new bankruptcy petitions against him and his wife, Doris, this admission will provide some comfort to their creditors.
It is in the response to the evidence from the applicants that the Tribunal makes some very telling comments. They referred back to the circumstances which led to the 2014 and 2018 Management Orders. They were that the First Applicant (Hallam Estates) had neglected its responsibilities to maintain the building for a significant period time and that it did not collect service charges and outstanding arrears (from the Stainers). The Tribunal made it clear that in view of the efforts to collect money owed from Hallam and the Stainers, replacing the Manager would lead to a recurrence of the very circumstances relating to non-payment which gave rise to the current 2018 management order.
On the allegations of unfairness on the part of Mrs. Mooney, the Tribunal heard from Mark Foley who recently acquired a tenanted flat in the Grand.
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“Mr. Foley suggested the Manager made a deliberate decision to inflate the cost of maintenance in order (i) to facilitate Mr. Cobrin’s acquisition of the freehold of the Grand at a lower price and (ii) to fund this scheme at the cost of lessees. As a consequence, he suggests the Manager acted unfairly to some lessees, including himself. As Mr. Foley says, if such a scheme existed, it would be a wholly “improper” alliance between the Manager and Mr. Cobrin – not to mention being a clear breach of the 2018 Management Order and possibly a contempt of this Tribunal.”
The Tribunal rejected the existence of this plan as no evidence had been provided:
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“Mr. Foley’s recollection of a telephone call which took place on an unspecified date some five months before the witness statement setting out the gist of the words used. That recollection was unsupported by any contemporaneous or near contemporaneous written evidence, and the details of the conversation is wholly unreliable. The Tribunal concludes that if the conversation ever took place, Mr Foley’s recollection is wholly unreliable. …….. there is no evidence of any earlier complaint about what would have been a quite disgraceful and unlawful scheme. Some of the Applicants have shown their propensity to complain to courts, tribunals and professional bodies about a number of fairly minor management issues, and it is surprising there is no evidence of any earlier complaints about the scheme some months after Mr Foley allegedly became aware of it………….. the Tribunal is entitled to take into account the history of attempts to frustrate the operations of the Management Orders recorded by the Tribunal in its decisions of 5 July 2018 and 29 May 2020.”
Finally:
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“The Manager did not deal with Mr. Foley less favourably than supporters of the alleged scheme. This contention can only be characterised a wholly baseless and unpleasant attack on the personal integrity of the Manager, which the Tribunal has no hesitation in rejecting.”
Further into the determination, the Tribunal finally bares its teeth:
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“There is also the conduct of the First and Second Applicants [Hallam Estates and the Stainers]. One of the two reasons given for the 2014 and 2018 Management Orders was to deal with the problem of obstruction by Mr. Stainer and the freeholder and their unwillingness to pay anything at all towards the management of the premises. Mr. Stainer was cross-examined at some length on this, and it was clear that neither the First nor the Second Applicant will willingly contribute anything at all to maintenance of the Grand. Apart from the lack of any financial contribution, the First and Second Applicants have shown they will frustrate the Manager by seizing every opportunity of legal proceedings available………. The present application must be viewed in the context of what can only be described as a sustained campaign aimed at subverting the orders of this Tribunal made in 2014 and 2018.”
The determination goes on:
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“The First Respondent has a significant level of support amongst leaseholders and changing manager would be a retrograde step at this late stage in her appointment. The First Respondent has been able to manage the premises in accordance with the 2018 Management Order, despite a sustained campaign by certain Applicants to frustrate its implementation.”
Stainers, don’t play the game you can’t win!!!
But they are winning, they are not in jail, despite showing utter contempt to, and a refusal to adhere to, rulings against them.
Stainer stood in court (virtually) and claimed that the upper part of the south elevation of the Grand was at great risk of collapse due to failing ties beams. He said he had been aware of this since 2013 when Christopher Hore, a now retired structural engineer made a report. He has never made this report available to Tribunal-appointed managers and has even claimed it didn’t really exist. It now turns out it does exist and he handed a copy to Tersons, who he wished to see take over as managers. He still refuses to hand it over despite a court order. What can we say about this man?
“What can we say about this man?”
I’ve said this many times before – but someone should be able to get a decent PhD out of all this.
Lots of words, lots of judgements against him and his wife, but still they go free. That is the real disgrace, that justice is not served. No real surprise in this Country sadly.
To correct what i said earlier when I said “he had been aware of this since 2013”. There is correspondence from 2002 from Fell Reynolds warning lessees “that the Southern elevation is at real risk of structural failure if the work is not tackled.” There is another letter from them advising lessees “that the landlord is unlikely to finance his share of the costs for the essential work to the Southern elevation”. Surprise, surprise!
Just been doing some historic reading around the Grand and the Stainer financial shenanigans. This all relates the self-same southern elevation that he seems so worried about in 2020. This is from a letter of July 25th to residents from Fell Reynolds, [his then managing agents]
“Mr Stainer said that Fell Reynolds would not be given the authority to place a contract until the Landlord was confident of its funding position.” The letter goes on to describe some convoluted explanations as to how and why funding was a challenge and how Stainer was proposing to resolve this. The letter concluded that “it is unlikely that funding for these major works will be obtained this year…… unless some miracle funding was received during the course of the summer.”
A structural engineer was asked to provide a “letter of comfort” if the works to the southern elevation were delayed a year. They were not prepared to issue such a letter.
The letter concludes:
“The building will continue to deteriorate as long as these major work are left unattended”.
One could add: “for as long as Michael Stainer has anything to do with the Grand”.
To misquote quote Henry II, “will no one rid us of this turbulent landlord?”
One would think that these reputable local property companies like Tersons and Fell Reynolds would want their reputations sullied doing business with Stainer, however fit and proper the business relationship between them.
I`m no legal expert but surely a building in disrepair that had not been managed adequately or starved of contingency funds by the building’s owner would not be subject to the Building Act 1984.
Is the building insurer of the Grand aware of these problems? I would assume that the report would have been disclosed to them when it was written and at each subsequent renewal. If this has not been done, the policy could be voided by the insurer on the grounds that the report should have been disclosed to them as it contains material information about the risk being insured.