An expert witness in a £100m negligence case said that landlord the Malmesbury Estate could have expected to receive a better rent than that agreed by Strutt & Parker.
The Earl is claiming that Strutt & Parker acted negligently in agreeing a fixed-rate, 24 year lease with no break clause for land used by Bournmouth International Airport as a car park, and that a rent based on turnover should have been agreed instead.
Graham Stuart, chief executive of Britannia Parking, told the High Court yesterday that, based on research the company undertook into car parking at Bournemouth International at the request of the Earl for the purpose of the case, Britannia would have offered a lease arrangement where the Estate took 90% of all revenue after costs, and the car parking company took 10%.
He stated that in his opinion: ‘Bournemouth International would have had no option but to use the Estate’s car park… because of its proximity to the airport. Customers would find it the most preferable, and use it first.’
Tim Lamb QC, acting for Strutt & Parker, raised several points questioning the protocol of how the report had been complied, and the information that had been made available to Stuart.
Stuart conceded that he was unaware when compiling his expert report that in 1999, when the lease was agreed, only staff used the car park, and not passengers, limiting the potential income. He added that he had not been made aware of other sites that the airport might have used had the Malmesbury Estate refused any deal.
He also confirmed that his report expressed no opinion on the conduct of Richard Ashworth, the consultant surveyor who worked for Strutt & Parker advising the Earl, during negotiations.
Stuart has produced two reports at the request of the Earl which have been disclosed to the court, the first of which was used as the basis for the size of the claim against Strutt & Parker. Stuart said it was the industry standard to presume that car park tariff prices would increase by 5% each year.
Earlier in the day, Glyn Jones, former managing director of Bournemouth International, said there was: ‘No possibility whatsoever’ that the airport would ever have accepted at a rent based on turnover with 80% going to the Estate. He said: ‘The Estate was in an extremely weak negotiating position. We felt we could push our ‘no’ a very long way.’
Upon prompting from Mr Justice Jack, the trial judge, he said that rent review mechanism agreed by Strutt & Parker for the Estate, where increases were linked to revenue from parking season tickets, was highly beneficial to the airport.
‘It was not lost on me that it was valuable,’ he said. ‘We were in control of the rent mechanism. We did not have to raise it [the price of a season ticket]. If we chose to keep it where it was then the cost of the lease would stay as it was.’
The case continues, with more expert evidence from accountants, engineers and quantity surveyors to be heard next week.