I am writing to you today to announce the outcome of the litigation with Mr Maunder Taylor, the Manager.
Judgment was handed down today in the court case between Mr Maunder Taylor and 37 Northwood Hall leaseholders (the Tenants). Mr Maunder Taylor has been comprehensively defeated on all issues in dispute.
Mr Maunder Taylor was heavily criticised by Mrs Recorder McGrath. Among other things she decided that he had:
Failed to carry out the comprehensive review of the heating project required by the First-tier Tribunal Order
Failed to exercise independent judgement about the way forward
Proceeded to complete the heating project even though he knew it breached the terms of the leases
Failed to demand interim service charges in accordance with the leases with the consequence that said demands are not payable with respect to the financial years 2016/2017 and 2017/2018
Mrs Recorder McGrath also found that the only costs lawfully recoverable on the entire heating project were for installing the new boilers.
Today among other things Mrs Recorder McGrath ordered that:
Within 28 days the Manager must make an interim payment of £675,000 + interest to the Tenants on account of costs.
The Manager must repay to the Tenants all ‘mistaken payments’ relating to the heating scheme.
The Manager is subject to an injunction ordering him at his own expense to restore heating to the flats without heating.
The Manager is also restrained by injunction from disconnecting or otherwise interfering with the supply of hot water to the Tenants.
Under S20C of the LTA 1985, the Manager may not recover any of the costs in these proceedings from the Tenants but he may otherwise charge all of the costs including the adverse costs order to all the other leaseholders.
The Manager must pay damages of £15,600 to the 12 Tenants whose flats were disconnected from the heating system.
The Manager was refused permission to appeal.
Conclusion
The Judgment handed down today and the Order made by Mrs Recorder McGrath have profound implications for all leaseholders in Northwood Hall.
Mr Maunder Taylor will attempt to recover his losses in costs and adverse costs by relying on his indemnity. The gross amount is about £1 million, or about £5,000 per leaseholder. Leaseholders can avoid liability for this sum by each making application to the First-tier Tribunal (FTT) under S20C of the LTA 1985.
I am organising that application to the FTT and invite all leaseholders to join me in making the application at no cost.
The Manager’s interim demands for service charge, including his current demands are unenforceable pending compliance with the leases, while arrears inherited from the RTM company are not recoverable at all.
Approximately £5 million pounds has been unlawfully paid out of the service charge funds.
I will shortly publish the Judgment itself and the Order in its final form and will provide further explanation of the implications of each.
Please let me know if you have any questions. I look forward to hearing from you.
Philip Whale
22 May 2019
