Wigan Council’s delight as judge backs them in Haigh Hall row
Wigan Council is set to take control of Haigh Hall after a High Court judge ruled the decision to end its lease with a hotel operator was valid.
Town hall bosses took their case to the court after Scullindale Global Ltd remained in the historic building, despite the council using a break notice in the contract in 2019.
They argued the firm did not complete work on the hall by an agreed date, so the council was entitled to terminate the lease and reacquire the building at market value.
The hotel operators, along with director Amir Madani and Craig Baker, from Haigh Hall Hotel Ltd, disputed this, claiming the work had been done in accordance with planning permission and it was operating as a four-star hotel.
He said the authority’s use of the break notice was valid and that Scullindale was in breach of the lease when it failed to give up vacant possession of the historic building in November 2019.
He said: “For followers of Wigan Warriors, I would adjudge the final score to be in the order of 20-6 to the council. (Followers of Warrington Wolves may have reason to recall that score.) For followers of the Latics (Wigan Athletic FC to the incognisant) the score is probably in the order of 4-1 to the council.”
He dismissed the claim against Mr Baker and Mr Madani.
A further hearing will be held to determine a final order, including the date on which any order for possession should take effect and costs, as well as any application for permission to appeal.
Judge Hodge QC continued: “I would invite the parties to consider whether the terms of this judgment may assist them in coming to some form of sensible accommodation over the future of Haigh Hall.
“The world has changed considerably since the cabinet first resolved to determine the lease on August 29, 2019. The Covid pandemic means that the council will have to pay Scullindale over a million pounds more than Haigh Hall is presently worth when it comes to vacate the property.
“Scullindale has delivered a first-class hotel and wedding and events venue in an appropriately, and splendidly, restored and refurbished Grade II* listed building.
“It has become clear during the course of this trial that there are tensions between the ability to operate the hall successfully and profitably and maintaining unrestricted public access to its grounds, which IHL and the council will need to address but which they are likely to find difficult to resolve. Even at this late hour, the council may feel that permitting Haigh Hall Hotel Limited to operate the hotel business and act as a buffer between itself and the public, but with more clearly defined, but restricted, rights of public access, may prove to be a sensible, and more cost-effective, way forward.”
The hall, built between 1827 and 1844 by the seventh Earl of Balcarres, was subject to a lease agreed by the council and Scullindale in May 2016. It was to run for 199 years and £400,000 was paid to the council.
But concerns were raised about work on the building and the council decided to use the break notice in 2019, stating Scullindale had not met a “milestone” in May 2018 by which time certain work should have been done.
Scullindale contested the validity of the break notice and claimed the council breached the covenant of quiet enjoyment, causing loss and damages to the business. This was claimed to include more than £66,000 for refunding deposits for cancelled weddings and over £1m on the loss of profit from reservations.
Judge Hodge QC heard evidence from eight council employees, all of whom he said were “competent and honest”, describing Penny McGinty, assistant director for corporate contracts and assets, as “particularly impressive”.
However, he did find building control manager Robert Thorpe to be “overly combative” in cross-examination.
Craig Baker, who was appointed by Scullindale to oversee the refurbishment and operation of the hotel, spent nine hours giving evidence, some of which was disputed.
Judge Hodge QC said: “Generally, I find Mr Baker’s evidence on disputed matters of fact to be unreliable. In the main, I am satisfied that this is due to a combination of imprecise, or faulty, recollection, and Mr Baker’s mis-reading of documents and his enthusiasm for the project of delivering Haigh Hall as a fully restored, five-star country house hotel, spa and wedding and events venue, rather than being down to deliberate fabrication on his part.”
He said Mr Baker “clearly deserves the gratitude of the council, its council tax payers, and the nation generally” for the hall being removed from Historic England’s Heritage At Risk register.
Judge Hodge QC was satisfied that the serving of separate prohibition notices by the council and fire authority on consecutive days in October 2018 was “not orchestrated by the council as part of a deliberate, and concerted, campaign to persuade Scullindale to leave Haigh Hall”.
He also found the council was entitled to use the break notice when it did and that work was not completed by the agreed dates.
He said: “The development was not completed in accordance with the planning permissions by either May 23, 2018 or September 16, 2019 (or a couple of days later) because there was no ceremony room on the roof of Haigh Hall or any stairs leading to it and no new cast stone urns had been installed along the palisade to match those historically removed as shown on the approved plans.”
Mr Baker had claimed all 30 bedrooms had been booked for a wedding in September 2019, but the judge said there was not a “shred of documentary evidence” to support this.
Instead, he said by October 2019 only 15 of the hotel bedrooms were operational, with the remaining 15 at various stages of development.
He said: “I find that following the service of the break notice, Scullindale accelerated the pace of the works in order to ensure that by the termination date as much work as possible had been completed. This was done deliberately (and understandably) with a view to enhancing the open market value of the hotel and thus the amount of the termination payment due to Scullindale.”
Judge Hodge QC ruled any delays in completing the work were not caused by the council, as claimed by Scullindale. They had cited changes in the building control officer, duplicate requests for information and delays in providing an alternative picnic site for the public as some of the problems.
He said: “I am satisfied from the documents that any delays in considering and approving building and planning matters were the result of Scullindale’s own failures in making relevant applications and requests and providing relevant information and documentation. Scullindale was itself the author of any delays and difficulties by the manner in which it chose to proceed, by carrying out works first and seeking approval later rather than the other way around.”
The trial heard from two valuers, one who believed Haigh Hall to be worth £4.2m when the lease was terminated in 2019, while the other said it was worth £5.19m. More calculations were requested ahead of the final hearing.
Scullindale claimed to have spent £4.4m working on the building, though this was disputed by the council.
Judge Hodge QC ruled the council suffered no financial loss and Scullindale made no gain from continuing to occupy Haigh Hall since 2019 due to the coronavirus pandemic.
A council spokesman said: “We are delighted with the verdict and the contents of the judgement which praised the conduct of council officers and dismissed the defendants’ allegations of an orchestrated campaign against them.
“In terms of next steps, the current lease has ended and possession will be returned to the council. A hearing will take place in a few weeks to agree the finer details, including possession date and financial arrangements.”
The Wigan Post attempted to contact Haigh Hall Hotel but did not receive a response.
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