Multi-millionaire financier wins court battle

A multi-millionaire has won a court battle over the ‘shoddy’ concierge service at his £18 million flat.

Iouri Chliaifchtein, 60, objected to staff cuts at his block in Grosvenor Crescent, located in London’s exclusive area of Belgravia, and said one concierge on duty at times jeopardised security.

He added that residents and guests could be left stranded outside for up to half-an-hour at a time, rubbish was not always collected promptly leading to vermin being attracted and there was no one to park and retrieve his car.  

But retail magnate Simon Arora – whose family Judge Nigel Gerald said appeared to have ‘taken on the running and management of this block’ – responded there was nothing wrong with having a single concierge.

Mr Arora, whose family own three of the 15 apartments, claimed Mr Chliaifchtein was being ‘completely unreasonable’ and ‘making a scene out of nothing’, the judge said.

Ruling in Mr Chliaifchtein’s favour, Judge Gerald said the financier had perfectly reasonable concerns over security at the block and that two staff should be on duty at all times.

The building’s management company, owned and run by the block’s wealthy tenants, had breached the leases on the apartments and should pick up the huge legal bill for the case, he said

‘It appears the total costs of both sides approximates to four or five years worth of additional night and weekend shifts,’ he said.

‘But it is always up to parties how they wish to spend their own money.’

Central London County Court heard last week that the apartments had been developed in eight former town houses in Grosvenor Crescent in 2011-12.

At first, at least two members of staff were on duty 24 hours-a-day, but that changed in April 2015 when the management company decided to cut staff numbers.

After a straw poll of residents by email, the company reduced coverage to one concierge overnight and for much of the weekend.

Suing the company, Mr Chliaifchtein and the tenants of two of the other apartments said that was in breach of their leases.

They provided for ‘services appropriate to highest quality residential accommodation’ and having one staff member on duty at times did not do that, barrister Timothy Dutton QC said.

The staff reductions were a cost-cutting exercise and could not be done without the backing of all of the leaseholders, he argued in a weeklong trial at Central London County Court.

Ruling on the case, Judge Gerald said: ‘It is self-evident from the £15m to £34m price tag of the various apartments that they were designed for and marketed to extremely wealthy people who, when they pay that type of price, would expect the nature and standard of services provided to be of the highest standard.

Pictured is the interior of an apartment on Grosvenor Crescent in London

‘As Mr Arora said in evidence, all of the owners are millionaires or billionaires and he self-described himself as being “high maintenance”- which is sometimes not used in a complimentary fashion – and, indeed, so high maintenance is he that he engages the services of a life concierge.’

Judge Gerald said that having only one concierge meant the block’s 42 motion-detecting CCTV cameras were not always monitored and that its entrance system was not manned 24 hours-a-day.

Guests, visitors, delivery men and residents who had forgotten their keys could be left waiting outside for up to 30 minutes if the single member of staff was on a break.

Other services – including car parking, porterage and general assistance – would also not be available during those periods.

In giving his evidence, Mr Arora, whose family run the B&M budget store empire and are 65th on the Sunday Times Rich List with an estimated £1.92bn, had been ‘somewhat disdainful, if not contemptuous, of other people’s views’, the judge continued.

‘It was Mr Arora’s view that Mr Chliaifchtein was making a scene out of nothing,’ he said.

But the judge added: ‘So far as security is concerned, it seems to me that Mr Chliaifchtein was perfectly entitled to be as concerned as he was.’

He had moved into the block after his former home in Bishop’s Avenue – known as Billionaire’s Row – had been burgled and burned down.

Mr Chliaifchtein was also right to complain about a system which could leave guests and residents stuck outside on the street in the dark if the single concierge was not at reception.

Even residents of a ‘run-of-the-mill’ block would be ‘rather irritated’ if they found they had to wait outside for up to 30 minutes just to get into their flats.

‘In some respects, the fact it is during the night makes it all the more important for quick access to be provided,’ he added.

Mr Chliaifchtei who bought a 999-year lease on his apartment for £18 million, said there were enough concierge staff when he moved in, patrolling the building, dealing with guests and delivering his car to the front whenever he wanted to use it. However, he argued staff cuts in April 2015 meant the service deteriorated sharply

He continued: ‘Another aspect of Mr Arora’s evidence was that Mr Chliaifchtein was being completely unreasonable because all he needed to do was follow the example of Mr Arora himself and install a front door entry system.

‘Mr Arora is entitled to do as he wishes, but it seems to me that whatever Mr Arora wishes to do can have no impact on the contractual obligations of the management company.

‘Mr Arora also said that he drove his own car and used his own key fob on the rare occasions he did stay, and indeed had his own life concierge.

‘Again that can be of no relevance to the proper discharge by the company of its contractual obligations.’

The company had breached the leases and could only change the level or type of concierge services provided if every one of the leaseholders agreed, he said.

‘Even if the majority of lessees no longer wanted a particular service to be provided, they could not dictate to the minority,’ he said.

For the management company, barrister Edward Denehan said it would abide by the ruling and make sure at least two members of staff are on duty from now on.

Judge Gerald said the purpose of leaseholders becoming landlords of their own properties is to let them have some control over how their block is run.

‘But that is predicated on them being reasonable, rational and sensible, and cognizant of their legal duties, putting to one side common humanity,’ he said.

A previous offer to settle the dispute had not been made in the name of the management company itself, but by the Arora family, he continued.

‘The Arora family seem, for some reason, to have put themselves in the driving seat of the running of this company,’ he added.

He ordered the management company to pay the costs of the case, which are expected to run to £320,000.

A tenant with an £18 million flat in the block told the Standard: ‘I think the right man won.’