Westbrook Partners has finally won a long-running legal battle in London to buy a prime residential block in the capital.
New York-based Westbrook which operates a London office, today received news in a landmark judgment that it was legally entitled to acquire the freehold of Dolphin Square – a 1,229 apartment block in Pimlico.
The judgement is a key moment in a four-year saga that began when Westbrook launched a claim to buy the freehold in May 2010 under what is known as the UK collective enfranchisement legislation. It offered to pay freeholder Friends Life, a UK pension fund, £11.7 million having already acquired the underlease of Dolphin Square.
Following the favourable ruling, the price to be paid for the freehold must now be agreed between Westbrook and Friends Life, otherwise the decision will rest with the First Tier Tribunal, formerly the Leasehold Valuation Tribunal.
Westbrook, which is run in London by Mark Donnor, has been subsumed by the legal fight. So important is the result that the firm’s founder and chief executive officer, Paul Kazilionis, issued a statement today.
He said: “We are delighted that the High Court has confirmed our long held view that the Westbrook leaseholders have a clear statutory right to acquire the freehold from Friends Life and thereby allow for the long term future of Dolphin Square to be secured.” He continued: “We sincerely hope that Friends Life and their advisors at F&C REIT will now keep the best interests of their policyholders in mind and avoid the time and expense of further prolonged litigation, either in court or in the valuation tribunal.”
In a complex series of twists, the High Court decision followed a previous attempt by Friends Life to strike out the claim by Westbrook to the freehold, but the Court of Appeal ruled in Westbrook’s favour in May 2012. Friends Life next pursued nine other grounds to challenge Westbrook’s claim. Westbrook said three were abandoned by Friends Life a month before trial in February 2014 and the remaining six were considered at the trial. However, in what Westbrook called an “unequivocal” 215-page judgment, today the judge found that Friends Life’s challenges to Westbrook’s Collective Enfranchisement claim comprehensively failed. The judge also dismissed Friends Life’s counterclaim as being “misconceived” and failing on numerous grounds, said Westbrook.
The apartment complex in Pimlico contains 1064 long let apartments, 165 serviced offices, a fitness club, bar and grill and spa.
Since 2006, Westbrook has spent millions of pounds refurbishing the property. However, its decision to issue legal proceedings has attracted criticism not least from London’s influential free newspaper, The Evening Standard.
In a column called City Spy in May 2012, it reported how Westbrook had gotten “increasingly desperate”. The article said: “Westbrook Associates have been trying to force owners, Friends Life, to sell them the freehold of the block which was once home to Christine Keeler, Princess Anne and Charles de Gaulle. The Princess Royal didn’t stay long, after complaining that the corridors smelt of boiled cabbage. In 2009, Westbrook tried to force the sale by creating dozens of Jersey–listed companies — each owning two of the flats in the block — to take advantage of leasehold laws allowing a majority of flat-owners to buy the freehold. Friends Life argued that this was an artificial measure which should not be allowed to succeed. Westbrook withdrew the application. Last year, Westbrook went back to court with a similar scheme and Mr?Justice Arnold ruled that its claim for the freehold of the 1250–flat block amounted to an “abuse of process” and must be struck out. Now Westbrook is asking the Court of Appeal to overturn that ruling and reinstate the claim.”