Couple issue formal claim against businessman they claimed ‘duped’ them out of their hotel

Martin Shipton

A couple who claim they were effectively duped out of the hotel they ran by an unscrupulous businessman have issued a formal claim demanding compensation.

In June Nation.Cymru reported how Tony and Jane Jay have paperwork they say proves that David Lewis conned them out of the Maes Manor Hotel at Blackwood with the unwitting assistance of Deloitte, two of whose employees became joint administrators of the hotel company.

Mr Lewis ran the former Ffos-y-fran opencast mine at Merthyr Tydfil, and there are concerns that he is trying to avoid paying more than £90m to restore the site, leaving the clean-up cost to the public sector.

In a letter to Deloitte’s senior management, Mr Jay stated: “I have a background of being employed in hotel management. In around 2003, having worked at the Maes Manor Hotel for the previous five years, was offered by the owner, David Boden, the sole director of Jackson Properties Limited (JPL), the chance to take it over via a lease agreement.

“We agreed a 10-year term, with an initial rent of £75k per annum. My wife and I ran the hotel through a company we formed called Monnington Leisure Ltd. Thereafter, we operated successfully and were able to draw a good living. David Lewis then arrived on the scene. He was a business partner of David Boden in an unrelated civil engineering business. He had had prior input in JPL, but had resigned as a director of the property company in 1999.

Mr Jay stated: “Notwithstanding what appeared on the face of things to have no proprietary interest in the Maes Manor Hotel, he nevertheless turned up at the hotel in late 2009 or early 2010, suggesting that I and my wife Jane buy the hotel. While we were happy to continue as we were, in view of the profit generated, the idea of owning the hotel did appeal to us.

“We assumed, in view of David Lewis taking the lead, it was with the agreement of David Boden. We agreed to buy the hotel for £1.75m. Obtaining funding did prove problematic. David Lewis introduced us to a commercial manager of Barclays Bank, based in Cardiff. Barclays agreed to loan us £1.5m over a 15-year term. The outstanding balance of £250,000 was added as a loan payable to JPL at the rate of £25,000 over a 10-year period. That was what we were led to believe at the time.”

Local paper

Mr Jay went on to state that Barclays were keen to publicise their funding of the hotel, and a story appeared in a local paper. He wrote: “Following completion of the sale, David Lewis turned up at our house with what he stated was a Shareholders’ Agreement, giving him 51% of shares in the hotel as security for the £250,000 loan. We did not obtain any legal advice as we were somewhat ambushed by him turning up and at that stage trusted Lewis without realising we were putting our heads in the mouth of a shark. We retained 49% between us. Lewis had 51%.

“However, we have since discovered that Lewis did not have any authority to agree this share division in Monnington Leisure Ltd, as he was not a director of JPL and had not paid any hard cash to JPL to cover the £250,000. In view of the foregoing, his request for security was flawed and fraudulent.

“Following completion and the publication of the press release, Lewis began displaying worrying traits towards us. He was incandescent that our purchase had hit the newsstands and online. We were baffled by his conduct, which became increasingly hostile and intimidatory.

“We became increasingly uneasy and quizzed Boden when we had to start paying the instalment of £25,000, as we had received no paperwork or dates for payment. Boden reassured us: ‘Don’t worry, it will be all right.’

“We went on holiday for two weeks in August 2010. We went abroad. Upon our return, we were met with a torrent of abuse from Lewis, accusing us of reneging on paying the £250,000 loan. We reiterated to Lewis what Boden had told us. With no information about where to send the payment, we had reached an impasse.

“Lewis kept up his barrage of abuse throughout the summer following our return from holiday, culminating in his advising us he was calling in his security, which we now know to be fictitious, as he had not provided any. We were obviously not aware of this at the time.

“Unable to deal with the aggressive tactics of Lewis which were impacting on our health, we were effectively bullied out of the hotel. We left in September 2010, just months after completing the purchase. We were devastated.”

‘Lied’

In a letter of claim to Mr Lewis, the Jays stated: “Lewis lied to Deloitte, who dealt with the administration of Monnington Leisure Ltd, that he provided a bridging loan of £557,000 to cover the £250,000 + VAT, of £307,000. He didn’t.

“At the time Lewis was impecunious, having sustained large gambling debts circa £600,000.”

In a response to the Jays, solicitors acting for Mr Lewis have demanded that they retract the allegations. They dispute the claims, which they assert are out of time anyway. The Jays say they will not withdraw the allegations they have made.

Separately, Nation.Cymru has provided to another solicitors’ practice representing Mr Lewis details of bank withdrawals amounting to many thousands of pounds paid to him and associated entities from the hotel company’s bank account.

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