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According to Mr Brown-Constable in a letter to Mr Begg of 14 June 2016 (see Item 8) the service charge reserves at that time amounted to only £98,262.75 to meet this budget of £105,019. Accord- ingly he collected in a further £18,000 (£2,000 per flat) to meet the expected shortfall of £6,756.25. The surplus of £11,243.75 was for "unforeseen works within the AR Lawrence quote ..... and for any out of the blue emergencies, the lift requiring repairs (quite usual) and any other repairs etc etc". In other words for contingencies.
Having collected in the supplement of £2,000 per flat MHML had total reserves available to them of £116,262.75 (£98,262.75 plus £18,000). This was more than enough to complete the budgeted works, including a reasonable 10% contingency reserve. However according to Tony White's Witness State- ment Mr Brown-Constable pleaded lack of money to Mr White in order to justify a reduction in the scope of works to be undertaken by AR Lawrence.
After making "savings" against the original budget totalling £32,496, achieved primarily by reducing the AR Lawrence specification, (a saving of £29,311 against the originally anticipated AR Lawrence bill) and by reducing by £3,185 the originally anticipated surveyor's bill, MHML's actual expenditure on items within the reduced Schedule of Works totalled only £72,523 (comprising £62,010 paid to AR Lawrence and £10,513 paid to the surveyor).
By way of explanation to the leaseholders Mr Brown-Constable has asserted in correspondence (see again Item 8) that the leaseholders, and in particular Mrs Hillgarth, were insisting that certain items within the Schedule of Works should be excluded in order that other improvements outside the Sched- ule of Works could be included. This was entirely untrue. For her part Mrs Hillgarth has confirmed in a Witness Statement (attached as Item 9)) that she never requested anything but the work which was agreed in the Section 20 Notice issued on 22 June 2014.
As previously stated, once a specification/schedule of work has been approved by the leaseholders under the Section 20 process, and contractors approved to carry it out, it is not open to MHML, except with the consent of the leaseholders (which MHML did not have), to deviate unilaterally from the ap- proved scheme of work or from the contractors engaged to carry it out. The legal consequence of that is to render any charge to the leaseholders in excess of £250 per leaseholder irrecoverable from them. The leaseholders will make application to the court for the recovery of sums paid by them in excess of £250 for the refurbishment.
Mr Brown-Constable was challenged to explain how MHML had managed to spend the sum of £33,354 (this being MHML's aggregate expenditure of £105,877 according to the Service Charge Ac- counts, less their actual expenditure paid to AR Lawrence and to the surveyor totalling £72,523) on im- provements which the leaseholders allegedly wanted MHML to make outside the Schedule of Works. In a letter dated 30 June 2016 (Item 10) Mr Brown-Constable admitted that the sum of £31,765.21 had been charged by "MHML and their various sub-contractors" although he has so far failed to say how much of this sum was retained by MHML and how much was paid to MHML's sub-contractors. He has also declined to explain how much he personally had charged to MHML for the work undertaken by him. This remains unclear.
Mr Brown-Constable has also admitted (Item 11- see his letter dated 30 June 2016 which attaches his comments superimposed on a letter from Mr Begg dated 21 June 2016) that a retention sum of £1,590 due to AR Lawrence and which still remains unpaid (see Witness Statement of Tony White) had been included in the "Reserves utilised" figure of £105,877 in the Service Charge Accounts, notwithstanding that this sum had not yet been paid.
By way of explanation of his role Mr Brown-Constable has claimed in a letter to Mr Begg dated 10 June 2016 -Item 12) that he was doing the work as a sub-contractor of AR Lawrence or under their su- pervision. He says that had his work been of "substandard or unprofessional quality ..... it would have been required to be corrected by both AR Lawrence and our Surveyor." This is denied absolutely by Tony White (see his Witness Statement). According to Tony White, Mr Brown-Constable was not in fact, as he had claimed, working as a sub-contractor of AR Lawrence or under their supervision. AR Lawrence operatives may well have seen what Mr Brown-Constable was doing, but they were in no way responsible for his work in the way Mr Brown-Constable had suggested.
In the latest letter from Mr Begg to Mr Brown-Constable dated 7 July 2016 (Item 13) Mr Brown-Consta- ble was asked (a) How much had been charged by him personally to MHML for the work he did on the refurbishment? (b) What profit did MHML make on the £31,765.21 it charged to the lessees for the re-