A hotel chain has been forced to pay back hundreds of thousands of pounds in unpaid rent.
Following a string of court hearings, defendant Firmdale Hotels plc landed back in court over the outstanding rent payments for the Durley House property in Sloane Street, London. The property was under the lease of the Cadogan Estates Limited.
Durley House Property stood as the claimant in these proceedings.
In December 2013, Judge Morris QC concluded that as a matter of the 2000 Management Agreement, Firmdale Hotel was liable for the rent under the lease, and so responsible to pay back the rent up to January 2009 amounting to £932, 386.88 (the Relevant Rent). Then from January 2009 onwards the defendant was required to pay the relevant interest in relation to the time lapsed.
Clarifying the details of the repayments, Judge Morris said: “I further concluded that the Defendant is not liable for rent under the Lease or for management fees in respect of any period after 19 January 2009 and that the Defendant's counterclaim against the Claimant in respect of contribution to the costs of the 2000 rent review succeeds to the extent of £170,963.11.”
In last week’s case, the issues addressed were:
- The appropriate amount of relief the Defendant is liable for;
- Whether the court should make an order for payment by the Defendant;
- Whether this rent should be paid to Durley House or Cadogan Estates;
- Whether the Defendant is liable to pay interest for the sums awarded.
Judge Morris found that as Firmdale Hotels was in breach of contract as it failed to pay the relevant rent by the agreed deadline. Once that date past, the breach crystallised and the claimant became entitled to damages.
The judge also concluded that the claimant is equally entitled to a money judgement by way of damages for breach of the obligation to pay Cadogan Estates for the outstanding relevant rent under the Possession Action Order.
Firmdale Hotels also has not paid any interest under the lease and consequently it is now liable under the terms of the Possession Action Order. The interest includes, but is not limited to, the interest on the relevant rent.
Thus the appropriate amount of interest now to be awarded is that portion of the interest for which the Claimant has been found liable under the Possession Action Order. Once this figure has been ascertained, there will be judgment for that amount.
The final conclusion from Judge Morris was: “There will be judgment for the Claimant in the sum of £932,386.88 together with such part of the sums ordered to be paid in the Possession Action Order, as represents interest on that amount. Secondly, the Defendant is entitled to interest on the counterclaim at the rate of 6% per annum.”
B&C works this out to be just over £10,000.
“Thirdly, the Defendant will pay the Claimant 70 per cent of its costs of the action up to and including 23 December 2013. I will hear further submissions on the question of costs since December 2013.”
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