Wigan Borough Council has won a ruling that it was entitled to terminate the 199-year lease of Grade II* listed stately home Haigh Hall owing to the lessee’s failure to fully redevelop it as a luxury hotel in time.
Judge Hodge QC found that the council had validly exercised its break clause with effect from 22 November 2019, and is entitled to possession of the “austerely impressive” Haigh Hall, which was leased to British Virgin Islands-incorporated Scullindale Global for 199 years in May 2016 for £400,000.
The council had, in 2015, granted planning consent for a change of use of the stately home, set in Haigh Hall Country Park, to a hotel, but successfully claimed that Scullindale had failed to achieve a specified “milestone”, triggering the break clause, because it did not succeed in redeveloping and refurbishing the premises as a four-star boutique hotel by 23 May 2018.
The decision means it was entitled to terminate the lease and repurchase Haigh Hall for its market value. The final sum is yet to be calculated but is expected to be around £5m.
Scullindale had argued that the lease remained on foot, claiming that, while works had not been completed, Haigh Hall nevertheless achieved a four-star rating from the AA following an overnight inspection on 17 April 2018.
However, the judge found that only 15 hotel bedrooms had been completed by October 2019, with the remaining 15 “being at various stages of development”, adding that the delay “was not caused or contributed to by any conduct, still less any default, on the part of the council”.
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.”
The judge found that the lease ended on 22 November 2019 as a result of the valid service of the break notice by the council, and that Scullindale was in breach of the lease in failing to give up vacant possession of Haigh Hall on that date.
Using local sporting analogies to sum up his decision, the judge 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.”
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