If you would like more information please contact John Redman.
Telephone (01684) 560285 or email firstname.lastname@example.org
Submissions received by the Inquiry Committee
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Questions arising from analysis of documents & submissions
Responses received by the Inquiry Committee
Response O Supporting docs Part one
Response O Supporting docs Part two
Response Q Supporting docs
In September 2012 the Malvern Hills Conservators Inquiry Committee formally presented the Inquiry Report to the Board at a Special Meeting:
Inquiry Committee and Board Minutes
Board Meeting Minutes (Jan 2013)
Inquiry Committee Minutes (Nov 2012)
Board Meeting Minutes (Nov 2012)
A&R Committee Minutes (Oct 2012)
Inquiry Committee Minutes (October 2012)
Minutes of the Special Meeting (Sept 2012)
Transcript of Inquiry Committee Meeting (June 2012)
Inquiry Committee Minutes (June 2012)
Inquiry Committee Minutes (May 2012)
Inquiry Committee Minutes (March 2012)
Inquiry Committee Minutes (Jan 2012)
Inquiry Committee Minutes (Dec 2011)
Documentation for St Ann’s Well Inquiry Committee Review (Produced by SSAW)
Overview (please follow the above link for detailed analysis and more information):
Malvern Hills Conservators spent two years (2009-2011) and about £120,000 of public money trying, and failing, to terminate John Redman’s business tenancy of St Ann’s Well Cafe. There is now to be an Inquiry into how they came to waste so much public money on litigation which they could not win.
The Inquiry must examine the motives for the litigation and why MHC seemed to disregard legal advice in November 2009 that they should stop the litigation and negotiate; they could not show that the tenant was in breach of his lease nor did they have the power to run the cafe themselves. They also knew by that date that the Cafe would at best be barely profitable under their management and so running it would not be an appropriate use of charitable assets.
Once they had decided to drop the allegations of breaches, because they had no evidence (ie objectively the tenant was not a bad tenant), was there any justification for continuing the litigation at all? What was the motive for continuing?
St Ann’s Well Cafe is owned by the Malvern Hills Conservators, a publicly funded charity, who have leased it to John Redman for the last 20 years. John Redman runs the cafe and lives in the small flat above it. He paid £35,000 to buy the lease 20 years ago (which equates to £61,500 in today’s terms).
The Malvern Hills Conservators are a body corporate responsible for the care and management of the Malvern Hills and Commons. They are governed by five Acts of Parliament, the Malvern Hills Acts 1884, 1909, 1924, 1930 and 1995. They became a registered charity in 1984.
They are a voluntary body of twenty-nine members. Eleven are directly elected under the Local Elections (Principal areas) Rules by the residents of the wards who contribute to the Conservators’ funds through a levy in their Council Tax, seventeen are appointed by local authorities and one by the Church Commissioners.
The lease is a business tenancy protected by the Landlord and Tenant Act 1954. This means that when the lease term comes to an end, John, as tenant, is entitled to be granted a new lease unless the Conservators, as landlord, can prove one of several reasons to require him to leave.
In September 2009 the Conservators gave John a Notice asking him to leave at the end of his current lease (March 2010) and indicated that they would oppose the renewal of his lease on two grounds: –
(i) they said he had been seriously in breach of the lease
(ii) they said they wanted to take over the Cafe and have an Information Centre in the upstairs Octagon Room.
The Conservators failed in all their attempts and have had to renew Mr Redman’s lease and pay all the costs of the litigation.
They lost because their case failed on all counts -
They could not prove any breaches by Mr Redman.
They were not legally allowed to run a cafe.
They were not legally allowed to run the proposed information centre.
If they had run the cafe it would have made a huge loss so their plan was not viable.
As a charity they would not have been allowed to run a cafe at a loss except through a separate company and they are not allowed to own a separate company.
They have spent a total of around £120,000 on this. They have not admitted the full cost yet. Their own legal costs were about £52,000, Mr Redman’s legal costs which they had to pay were £28,000. Their internal staffing and other management costs have been estimated (based on information on costs of answering public questions and Mr Rowat’s remarks that he has spent 25-30% of his time on the litigation) at £40-50,000. All the costs will be met by Malvern ratepayers.
There was a great deal of support for Mr Redman, including some very high profile supporters such as Benjamin Zephaniah, Martin Shaw, Jenny Seagrove, Mary McCartney and Virginia McKenna. Despite that, and petitions signed by about 6,000 customers of the Cafe, the Conservators ignored the public. Their reputation has suffered over it for the last 18 months and that damage is still ongoing.
More detail on why MHC lost -
1. Alleged breaches of the lease. MHC could not substantiate the alleged breaches. Mr Rowat referred to only 4 complaints (which did not constitute breaches) over the 5 years of the lease. They related to lack of soap in a dispenser, a blown light bulb and a broken hand-dryer (these last two being the responsibility of MHC in fact). The 4th complaint related to some recycling rubbish accumulating when snow made it impossible to take it down the hill. The EHO had inspected and confirmed that there was no issue. – See tenant’s Witness Statement which includes copy EHO report.
Mr Rowat’s June 2009 Paper to the Board lied about the Cafe not opening when it should. Opening times can be evidenced by the Tenant’s till receipts and staff records.
2. Intention of MHC to run the Cafe. MHC has only the powers granted to it in the Malvern Hills Acts. It did not have the power to run a cafe.
3. Intention to run an information centre. Similarly it did not have the statutory power to do this. MHC had specifically been told that any information centre should be sited in a place that people could visit before they set out onto the Hills and could not be on any land owned by MHC as at 1995 including the Cafe. Several current Conservators had been on the Board at the time.
4. Commercial viability of the Cafe. As part of the case MHC had to have a business plan showing that they had a genuine intention to run the Cafe and a reasonable prospect of achieving that. This they failed to do, quite possibly because their motive was primarily to remove Mr Redman rather that to run the Cafe themselves. They simply had to maintain that they wanted to run the Cafe themselves in order to fit within the Landlord and Tenant Act. In order to try to do this they used 3 separate consultants and still did not end up with a viable business plan.
Claire Dolan prepared a Business Plan for MHC. Her Plan (August 2009) suggested that MHC might make a marginal profit of £2,380 pa , but even a cursory look at the figures shows that that modest figure was unrealistic. Mr Redman’s Witness Statement of July 2010 exposed the detailed flaws in the figures. Rubus’ Feasibility Report of 27.09.10 demonstrated that the Business Plan prepared by Rubus themselves only days earlier was based on hopelessly over-ambitious figures and that “the potential risk to the charity is high”. Finally Turpin Smale (MHC’s cafe expert) said that it would “incur significant losses if [MHC] were to run it themselves”.
5. Need for a trading subsidiary. MHC is a registered charity. Under the Charity Commission’s rules a charity may not directly operate a loss-making business (as the Cafe would surely be if run by MHC). A charity has to keep such a business at arm’s length by setting up a separate subsidiary company to run the business. This was pointed out repeatedly to MHC by Mr Redman and members of the public asking formal questions but it was not seriously addressed until 1 December 2010 when Harrison Clark advised that a subsidiary would be required – and that was fatal to the case because the MHC had no power to own or finance a subsidiary.
MHC never had any real prospect of success in this litigation. It was inappropriate for a charity to act in this way and to persist with the litigation after their barrister’s advice in November 2009. Their motives must be examined.
The current position is that John has established his right to a new lease and the Conservators have granted him a further five-year term at the cafe.
Note – this summary is based on papers available to the SSAW group as at 5 August 2011 which do not include general correspondence between MHC and Harrison Clark.
UPDATE (May 2013)
At the Board meeting on May 9th the Board received an update regarding the Charity Commission:
The Director confirmed that the solicitors have now completed their report and are now in discussion with the Charity Commission. Until the Charity Commission have responded the solicitor has stated that the report should be kept confidential. The cost of discussions with the Charity Commission is covered by the insurance policy so there will be no additional costs to MHC. Once the discussions have been completed the solicitor’s advice will be communicated to the un-conflicted Members of the Board and then to the full Board.
The Board has paid £2,500 excess and the remainder of the costs of the solicitor’s report has been covered by insurance. The total amount to date is approximately £12,000.
Rev’d C Attwood stated that once the process has been completed, that the costs are shown in the report produced by the Inquiry Committee. Once that has been done, Part 1 of the Inquiry Committee’s report can be uploaded onto the website.
The Director confirmed that the un-conflicted Board Members are as follows:
Mr R Cousins
Mr D Hawkins
Mr P Hughes
Ms R Massey
Mr T Musgrove
Mrs G Rees
Mr D Street
Mr J Tretheway
Mr T Yapp
UPDATE (April 2013)
At the Finance Admin & Resources Committee meeting on April 18th the committee received an update regarding the Charity Commission:
The Director stated that MHC is still awaiting the report from the solicitors. The solicitor has apologised for the delay but this was due to the vast amount of paperwork. It has been indicated that the report will be available for the next Board meeting.
UPDATE (March 2013)
At the Board meeting on March 14th the Board received an update regarding the Charity Commission:
The Director stated that the solicitors were still working on the Board’s behalf to determine if there was a breach of trustee duty. The solicitors will provide a report by the next Board meeting.
The next meeting of the Board will be held at the Council Chambers (formerly Priory Lodge Hall), Avenue Road, Malvern on Thursday 9th May at 7:00 pm. The public are invited to attend.
UPDATE (January 2013)
At the Board meeting on Jan 10th the Board received an update regarding the Charity Commission:
The Director stated that a letter had been received from the solicitors who had been appointed by the Board’s insurers. The solicitors are asking for minutes of meetings, the documentation that had previously been sent to the Charity Commission and details of the Board’s decision making processes. These documents will be sent to the solicitors. It was confirmed that the solicitors will report directly to MHC, not the insurers. £2,500 has been set aside to cover the excess premium on the insurance policy.
The next meeting of the Governance Committee will be held at Manor House, Grange Road, Malvern, WR14 3EY, on Thursday 31st January at 6:00 pm. The public are invited to attend.
UPDATE (November 2012)
At the Board meeting on Nov 8th the Board received a paper regarding the Charity Commission’s letter:
The Director explained that the Charity Commission has instructed that this item can only be discussed and voted on by Members who are ‘un-conflicted’ on this issue. Un-conflicted is defined as Members who were NOT on the Board during the period of litigation over the St Ann’s Well dispute. The litigation ceased on the 2nd December 2010, therefore only Members who joined the Board after this date may discuss or vote on this issue. The Charity Commission has further stated that it considers Mr S Ginn to be conflicted as he acted as solicitor to the tenant during the dispute.
Those Members who are un-conflicted under this definition are as follows: Rev’d C Attwood, Mr R Cousins, Mr D Hawkins, Mr P Hughes, Mr T Musgrove, Mrs G Rees, Mr D Street, Mr J Tretheway, Mr T Yapp…
The Director presented the paper and stated that the Charity Commission want to test the Inquiry Committee’s findings that there had not been a breach of Trustee’s duty and that the Board seeks legal advice regarding this matter. The Board’s insurers have been approached and it has been confirmed that this cost of legal fees falls under the Board’s policy but that there would be an excess on the policy of £2,500. The Director has sought confirmation from the Charity Commission that they think spending a further £2,500 was a reasonable use of charity funds. In the email dated 16th October it is clear that the Charity Commission believes that a legal test should be undertaken. If the Board declines to undertake a legal test, Members that are considered un-conflicted would be neglecting their duties as Trustees…
It was confirmed that the total cost of obtaining legal advice would be a far greater amount than the £2,500 excess that the Board would be required to pay…
On the proposal of Rev’d C Attwood, seconded by Mr D Street it was AGREED by 7 votes for, with 1 abstention to approve the expenditure of £2,500 to cover the excess specified in our insurance policy, in order to obtain legal advice on the question of breach of Trustee duty in relation to the unsuccessful litigation regarding St Ann’s Well cafe.
UPDATE (October 2012)
On October 18th the Malvern Hills Conservators A&R Committee discussed a letter from the Charity Commission regarding the findings of the Inquiry Committee (which have not been legally tested) and utilising their Trustee Indemnity Insurance to seek legal advice as to any breach of Trustees’ Duties:
“The Director circulated the written response from the Charity Commission.
The Director stated that a meeting with the Charity Commission had taken place in September and whilst the Commission acknowledged the findings of the Inquiry Committee that this had not been legally tested. MHC is to utilise the Trustee Indemnity Insurance to seek legal advice as to any breach of Trustees’ Duties. As the Insurance has a £2,500 excess on the policy, the Charity Commission were asked whether this was a reasonable use of the charity’s money.
The circulated letter is the Charity Commission’s response.
Mr C Smith suggested that conflicted members should not be involved in this decision.
Rev’d C Attwood clarified that the Charity Commission’s interest in this matter is to determine if there was a breach of trustees’ duties regarding the costs of litigation involved in the St Ann’s Well dispute.”
Archive of MHC Board Minutes including Public Questions (See Nov 2009 – Present).
Archive of Press Coverage of St Ann’s Well Dispute (Nov 2009 – Aug 2012).
Video of Public Questions at Malvern Hills Conservators Board Meeting (Nov 2009).
Save St Ann’s Well Facebook Group.
Online Petition: MHC, Reconsider Plans for St Ann’s Well plus comments.
Online Petition: Hold a Public Inquiry into the St Ann’s Well dispute plus comments.
Save St Ann’s Well Twitter Timeline (Sept 2010 – April 2013).