Index to Full Report
1. THE BACKGROUND
2. JANUARY 1999—THE
FIRST FLOOD
3. OCTOBER 2000—THE
SECOND FLOOD
4. THE FAILURE
OF THE
UNIQUE PUB
CO—APRIL
2001
5. THE NAIL
IN THE
COFFIN—AUGUST
2001
6. THE BULLYING
CONTINUES—TO
DATE
1. THE BACKGROUND
I moved into the Midland Spinner Public House
in December 1995 as a Manager for the company that held the Short
Term Tenancy Agreement at that stage. I am a married woman, and
moved into the living accommodation with my husband David and
our two children Rebecca (then aged seven) and Samuel (then aged
three). My husband had his own air conditioning business, and
would only assist in the running of the pub, which was to be my
job and career. The living accommodation was in a very poor state
of repair, and we spent over £4,000 (four thousand) decorating
and generally improving the living accommodation to a state that
was clean and habitable for two young children.
Business at the pub increased from £2,500
to in excess of £4,000 per week and I was paid a percentage
commission as my wage.
After approximately 30 months I was approached
by one of the owners of the company that held the Short Term Tenancy
Agreement and was effectively my employer. The owner explained
that although this pub was one of a group of six pubs, the company
was going to cease trading and surrender the Tenancy agreements.
Consequently I had the choice to either leave the pub (and my
home) or to negotiate with the owners of the pub—Unique
Pub Company to obtain a Tenancy or Lease Agreement for myself.
I managed to secure an Agreement on a Short
Term Tenancy and agreed an annual rent payment, to be paid in
monthly instalments and this payment was to cover the charges
of renting the pub, and its fixtures and fittings. There was also
a monthly Insurance premium which although I paid it, it was for
an Insurance policy in Unique's name, with me named only as an
"interested party". The policy was to ensure Unique's
property ie their building and their contents therein. I also
took out a separate Insurance policy to cover me for my business—stock,
contents, public liability and business interruption.
2. JANUARY 1999—THE
FIRST FLOOD
In the early hours of January 1999, the main
sewer, which serves the pub and runs below the road outside the
pub, became blocked. As a result of the blocked drain the pub
car park, cellar areas and skittle alley were flooded with a combination
of storm and foul effluent, up to a depth of three feet in sections
of the cellar. I was forced to stop trading immediately, as there
was a danger of contaminated beer and stock. At the instruction
of the two insurance companies (Mine for the loss of stock etc
and Unique's for the structural damage) I immediately contacted
a "clean up" contractor who removed all stock, disposed
of it and pumped out, cleaned and sterilised the damaged areas.
Within three days I was able to replace my stock and commence
trading in the Main Bar and upstairs Function Room. I was not
able to use the Skittle Alley because the Environmental Health
Officer condemned the alley and advised that extensive works would
be required, including the removal of all plaster on the walls,
all timber walls, bar and alley would need to be removed and replaced
with new.
Within five days I had arranged a meeting at
the pub that involved myself, the Environmental Health Office,
a loss adjuster (Cunningham Lindsey) appointed by my Insurance
company, a loss adjuster (Miller Pycroft and Arnold) appointed
by Unique's Insurance company and with Unique's surveyor, James
Martin. At that meeting it was agreed that the priority was to
reinstate the alley at the earliest opportunity, and a Schedule
of Works was agreed between the Surveyor, the Environmental Officer
and the M P and A adjuster. It was agreed that I should then take
this schedule to three (three) local reputable builders for quotations.
This I did within a few weeks, and forwarded the copies of the
quotes to M P and A.
At that stage all went quiet for almost six
months, and M P and A refused to accept my phone calls or requests
for an update. Eventually I was advised that the Loss Adjuster
for Miller Pycroft and Arnold was no longer dealing with the case,
and the local Director, a Mr John Farthing, was dealing with it.
It was only after a great deal of cajoling from myself that a
meeting was arranged at the pub. Those present were due to be
myself, my husband, James Martin, the Unique Surveyor and Mr Farthing.
Mr Farthing arrived 45 minutes late, and with
no apology for his tardy timekeeping set about claiming that my
husband and I were "gilding the Lily" and for the costs
of the repair works (that had already been agreed) he could completely
demolish the alley and rebuild it. He then introduced an independent
surveyor, who would, with the assistance of James Martin, compile
a new schedule of works, go out to retender to Unique's three
local contractors and appoint a builder from this tender process.
Despite our protestations that we would lose more time (it was
now some four months since the flood) and we would not be able
to control the quality and speed of the works, we had no say over
the issue, as we were only "an interested party" and
not the policy holder.
There was then a further delay, when the appointed
surveyor could not prepare the schedule in the appointed time,
and a separate surveyor was appointed and the schedule prepared.
Works commenced in August 2000, during which
time I had signed and agreed to a new Long Term Lease with my
current Business Development Manager, Nick Scott, which entitled
me to a full 25-year lease. A business plan was prepared for this,
and a copy can be provided.
As a condition of the longer-term lease, there
were additional decorative and structural works that were carried
out by the same builder who was carrying out the Skittle Alley
repairs.
Works on the alley were complete in mid-October
2000 some 20 months after the initial flood. The delays were out
of my control and were despite the many efforts of both my husband
and myself. During the delay we were without the use of the skittle
alley and the trade from the alley. In no way can the small amount
of work involved justify the delay.
We approached our Business Development Manager
at this stage, and explained that we had noticed that our profit
was not as good as we had anticipated, because of the delay in
reinstating the alley. We were given some marketing support, but
this seemed to have little effect increasing trade.
It should be noted at this stage that the body
responsible for the main sewer, Wessex Water, had admitted that
the flood was their fault, as the drain had blocked further down
the line, and the effluent from further up the line had flooded
the pub.
Wessex water has since fitted a non-return valve
on the pub's connection into the sewer, to prevent a similar back-flow
into the pub. The letter admitting responsibility was passed to
Unique's insurers, and has since disappeared.
This long-term lease was what I had hoped for,
as we could now build the business over the next few years, retain
the profits within the pub and develop the pub into a flourishing
Restaurant that would considerably increase sale and profitability
and serve as a pension for both my husband and myself.
3. OCTOBER 2000—THE
SECOND FLOOD
Within the month that the alley was reinstated
we experience a torrential downpour, and between the hours of
1.00 am and 6.00 am, the pub was flooded again. We were aware
of the problem when my husband opened the cellar door at 6.00
am to find the cellar flooded to a depth of three feet and the
Skittle Alley lying in about 12 inches of water.
We are still not certain of the exact cause,
the most popular and logical reason being that the road gulleys
and drains could not cope with the water volume, spilled over
into the car-park and then consequently into the rear courtyard,
cellar and skittle alley.
Once again the damage was extensive, and it
was suspected that the water was again effluent and storm. This
would require all wood to be replaced, particularly in the Alley.
At this stage I appointed my own Loss Adjuster,
Mike Symonds of Principal Assessors, precisely because I wanted
to avoid the delays that had occurred after the previous flood.
Within two days I had arranged a meeting with James Martin, Unique's
surveyor, Mike Symonds, my loss adjuster, Cunningham Ellis &
Buckle, acting on behalf of my Insurance Company and Mc Clarens,
acting on behalf of Unique's Insurance Company.
At that stage it was stressed many times over
that time was of the essence, and delays in reinstating the alley
could not be accepted or tolerated, as we had only just reopened
with several new skittle teams. It was suggested that a temporary
alley be installed upstairs in the function room, and this was
then developed into moving the alley upstairs into what was the
Function Room on a permanent basis. What was the Skittle Alley
on the lower level could then become the Function Room. The obvious
advantages here were
— No delay in drying out of the alley
prior to reinstatement.
— Building works on the alley could
begin almost immediately, with virtually no delay or disruption
to the Skittle teams.
— Future floods would not affect the
alley, as it would be way above any past flood levels and the
new Function room could be made "wipe clean" in case
of future floods.
Within a week I received a spurious cash offer
from Mc Clarens, which they were not in a position to make to
me, as I was only "an interested party" and Unique owned
the pub and therefore the alley.
Despite vigorous efforts on the part of my husband
and myself, we made no progress with the reinstatement of the
alley, nor could we accept bookings for the existing Function
Room, as we were advised to expect building works to begin immediately.
Directly as a consequence of Unique's insurance company's delays
we were unable to use either our Skittle Alley or Function Room
from the end of October 2000.
All during this period we continued to pay our
regular monthly rent payments, based on an annual rent of £37,000
per annum. We also continue to have quarterly stock-takes and
profit and loss sheets prepared, at the cost of over £300
per quarter. These P and L sheets showed that although the percentage
profit remained good (between 49 and 55%) the turnover or sales
were far too low to support the rent.
During a meeting with James Martin and his superior,
Tony Rushforth, in April 2001, some six months after the flood,
I explained my predicament and also explained that we had been
forced to use some of my husband's wages from his business to
support the operation of the pub, and we were not able to continue
doing so for much longer. I stressed to both James and to Tony
the importance of having the alley reinstated at the earliest
opportunity, as there was no reason for the delay. I also wrote
to Tony Rushforth as a result of the meeting, and confirmed my
fears over the loss of my business and home if the alley was not
reinstated at the earliest opportunity.
Despite my warnings, nothing more was done until
July 2001, when I requested a meeting with my Business Development
Manager, who by this time had changed to Denis Lovell. Denis was
away on sick leave, and my husband and I met with his temporary
replacement Maria Spotto. I explained the situation, that I had
the use of only one-third of the total pub area, had done so for
nine months and could no longer continue to support the level
of rent without some additional support from Unique. I explained
that without their support my business would fail, and I would
lose it all. It could be rectified if Unique instructed their
Loss Adjuster to speed up the rebuilding process and offered me
a Rent Honeymoon.
I received no further communications from Unique,
and received no further support.
Despite being aware that my business was in
very real danger of changing, Unique failed to reinstate the Skittle
Alley and failed to consider a rent reduction.
4. THE FAILURE
OF UNIQUE
PUB CO—APRIL
2001
Despite my requests I received no response from
Unique. On 27 July I instructed my bank to decline the Standing
Order with Unique for the Monthly Rent payments, and I calculated
a "reasonable" monthly rent repayment. The Trade Purchases
(Purchase of beers and ciders) remained unaffected and I purchased
these and paid for these as normal.
Within the Tied House trade there are two general
formulas for calculating Rent payments:
(i) Rent should be between 12-15% of sales.
On this basis, the rent was calculated to be
£1,785 (plus VAT) per month instead of £3,083 (plus
VAT) per month.
(ii) Rent should be half of the Gross profit,
the other half of the Gross profit being wages. As my wages were
less than £9,000 for the six months to date the rent should
be £1,500 (plus VAT) per month.
I decided to go with Option 1, rent at a percentage
of sales. I wrote to Unique on 27 July 2001, advising them of
my predicament, and enclosing a cheque for the new value plus
my trade sales.
I explained to Unique at this stage that I was
forced to pay reduced rent at this rate because of their failure
to have the alley reinstated at the earliest opportunity.
I continued to pay the reduced rent on regular
monthly repayments. Copies of these letters can be provided.
I received no further correspondence from Unique,
although I had several meetings with my BDM Denis Lovell. At each
of these meetings I handed over a copy of my quarterly Profit
and Loss Sheets, which clearly showed a downward spiral for the
business operating without a Skittle Alley and without the ability
to book the Function room. Although it was patently obvious that
if I continued to pay the rent at £37,000 per annum my business
would go bust, Dennis could offer no resolution to my predicament,
other than to insist that I pay my full rent.
It was apparent to me at this stage that Unique
did not care for my survival, or for the pub's well being, and
could not see the long-term picture. All they were interested
in was that I needed to return to my full rental immediately.
5. THE NAIL
IN THE
COFFIN—AUGUST
2001
Once I began making reduced payments I started
getting some action from Unique. In August 2001 James Martin arranged
a meeting at the pub between my husband, himself and Simon Berry
from McClarens, Unique's Loss Adjuster. At that stage it was agreed
that because of the delays incurred, an immediate cash settlement
would be agreed. The figure was agreed at £19,603, which
was for the repair and remedial works.
Because I was not the holder of the Insurance
Policy, and only "an interested party" the money would
have to be paid to Unique. I would then need to employ local builders
to carry out the works, and invoice Unique for the money, up to
the total amount. I could envisage problems because McClarens
couldn't find a builder, but I had no alternative. The first issue
was the payment of the contractors who carried out the works immediately
after the flood—in October 2000, some 10 months ago. I immediately
raised an invoice for these works. It is worth noting that although
this was a payment for immediate release, I did not receive payment
until early December 2001, some four weeks later.
December 2001
Early in December 2001, my husband and I submitted
a Business Plan to Unique, to detail the losses suffered and attempt
to get the business back from the brink of failure onto an even
footing. For that to happen we needed a Honeymoon period of three
years, as the business had been operating with reduced space for
over two years.
Unique's response was the first correspondence
that we had received on the subject of a Rent Honeymoon for over
six months, and was bland and offered no consolation. Instead
it forced me to conclude that Unique did not give a damn, all
they wanted was to turn the screw a little tighter and force my
business into the ground.
March 2002
In March 02 we had yet another meeting with
our BDM, but this time we were also introduced to his Business
Development Director Simon Lucas. There was not a great deal to
be taken from the meeting, but both my husband and myself remember
the following quotes from Simon Lucas:
"I'm not sure that this pub will ever make
it as a food outlet, as you've envisaged" and "don't
look to Unique for hand-outs—market and trade your way out
(of the predicament that Unique have put me in?)".
Just by looking at the business plan you could see that I would
need to double my turnover to get to where I should be after three
years in the pub.
I also attempted to contact the Managing Director
of Unique—David Charnock, and my husband even spoke to him
briefly on his mobile phone, as I was increasingly anxious to
resolve this issue. Mr Charnocks response was to pass the issue
back to Denis Lovell and Simon Lucas. My biggest concern is and
always has been that the management in their Ivory towers have
no idea exactly what is happening to their pubs and Simon Lucas'
and David Charnock's response have reinforced that opinion.
Eventually we received two separate concession
offers, amounting to a reduction of £5,000 per year over
two years. These offers were not sufficient to rescue the business,
so I again wrote to Unique, with a revised rent concession figure
of £36,164 over three years. In an effort to push the issue
further, I even copied the information to Mr Charnock, to no avail.
Unique's response to our continuing dispute
was to tighten the screw another notch, and withdraw our supply
of beer and ciders by placing our account on a Cash with order
basis. We were forced to buy out of tie at this stage.
When no further information was forthcoming,
we again wrote to Mr Charnock asking for his involvement, but
to no avail.
My health was suffering as a result of the uncertainty
facing me and my home, and I was forced to admit defeat and stop
paying any rent as a result of Unique's decision to place my account
on cash-with order.
Unique then issued me with a Notice to Quit,
and subsequently with County Court Proceedings.
At this stage, I enlisted the help of my local
MP, Roger Berry, who wrote to Unique, but again the response was
evasive and of no help.
6. THE BULLYING
CONTINUES
In November 2002, at a County Court Hearing,
Unique's Solicitors applied for and obtained my eviction from
the pub at the end of January 2003. On 31 January 2003, I was
forced to leave the pub, and our family home, together with my
husband and two young children. Fortunately my husband had always
kept his own business, and therefore we were able to move into
our own house.
It was only on the day of departure from the
pub that Unique further added insult to injury by refusing to
pay me my deposit, nor the value of the inventory or stock.
It has since emerged that there is in actual
fact a specific clause within Unique's own lease which allows
for precisely the "Honeymoon Period" I had asked for:
The Sixth Schedule, Section 5, Part (1) "If
the property (or any part of it except fixed glass and the Tenant's
Inventory) is damaged by an Insured Risk so that it cannot be
used (and provided that no insurance money is withheld due to
default of the Tenant) the Rent (or a fair proportion of it according
to the extent of the damage) shall not be payable until the Property
is made fit for use again (or for three years from the date of
the damage if less).
Once I left the pub and continued with my counter-claim,
Unique increased their bullying tactics in the following manner:
— They made a "Without Prejudice"
offer for both parties to walk away. This can be used at the end
of the trial, such that if I win my case and the damages awarded
to me are less than I claim, they can bring this offer to the
court, and I will be liable for their costs, which can be as much
as £50,000.
— They served a "Statutory Demand"
on me, which would effectively render me Bankrupt had I not defended
the claim. The minute I defended the claim, they rescinded the
Statutory Demand. The only possible motive could have been to
"soften me up" prior to the trial.
— They have since applied for and spuriously
obtained an attachment to our family home, yet the trial has not
yet begun.
I am fully committed in this "David v Goliath"
fight, and am willing and able to give oral evidence at any hearing.
Travelling to London is not a problem, as my husband frequently
visits London for work.
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