Legal ‘class action’ bid over restaurant rent demands
Villa Bianca, Coffee Cup and the Fish Cafe owner warn of a 'high street with no restaurants'
19 June, 2020 — By Tom Foot
Villa Bianca owner Rino Mollura
THE owner of a string of popular restaurants wants to bring a “class action” against legal demands for lockdown rent payment.
Rino Mollura, who owns the Villa Bianca and runs the Coffee Cup, the Fish Cafe and Piccola restaurants in Hampstead, argues Covid-19 restrictions have made it impossible for him to comply with his lease agreements.
He has called for rent to be reduced, suggesting businesses could be charged 10 per cent of takings until they can return to some form of normality.
Without such measures, Mr Mollura warned that Hampstead is facing a future without restaurants, with only corporate chain outlets serving “food fit for airports on the high street”.
He has started a petition and instructed a QC barrister who hopes to include fellow NW3 businesses in legal action which can be launched against landlords and insurance companies who refuse to negotiate.
Mr Mollura told the New Journal: “How can they charge me for what I was doing before? It’s not my fault, I have not been able to open. “It’s not the fault of Covid – but it is the fault of the government. I would really like to get this message across to the government. People are going to lose their businesses and some will lose their homes.
“The rent should be based on what I am taking. It should be 10 per cent [of turnover] calculated quarterly until things go back to normal. I am happy for them to see my accounts. “What is better for them, to get a little or to get nothing?”
Legal demands sent to Mr Mollura on behalf of landlords of the Fish Cafe, seen by the New Journal, said: “There is no ability in the lease or in law that allows you to renege on your obligation to pay the rents. Our client is prepared to allow you until June 19 to pay the arrears in full.”
The strongly worded letter said legal arguments such as “force majeure” – when an extraordinary event occurs which frees a business from liability – could not apply, partly because some of Mr Mollura’s businesses had been operating takeaway deliveries during the lockdown.
The New Journal phoned and emailed the landlords without reply.
Mr Mollura is in separate rent negotiations with landlords of his other restaurants but said the Fish Cafe had been scratching a tiny income from a takeaway service for the past two weeks. Restaurants without delivery services have been using Deliveroo, which takes 30 per cent from each sale.
All Mr Mollura’s restaurants, meanwhile, are above the £51k business rates threshold for receiving government support grants – in a similar predicament to many of the pubs and live music venues in Camden Town.
The government is under pressure to also protect commercial landlords from their own liabilities, investors and banks.
Mr Mollura has also presented a legal challenge to insurance companies who are refusing to pay out because Covid-19 is not specifically listed in contractual agreements.
His lawyer, Robert Griffiths QC, argues this must be wrong as Covid-19 was not listed as a “statutorily notifiable disease” by the government until mid-March. The same arguments are being used by insurance companies to avoid paying out to landlords.
Mr Mollura was born in Naples, Italy, and came to Britain in 1979, taking a waiter’s job in Peter’s restaurant in Fairfax Road, south Hampstead.
He said: “After five years, I managed to borrow enough to open La Cage Imaginaire. It was extremely small. I managed to make it and survived because at that time there was a possibility of earning money.
“We used to work on margins that were realistic.”
He added: “The margin could have been 30 to 35 per cent. You could buy your house, look after your family. “You have to love the job, because you do it 14 to 15 hours a day, but at least you had the chance to do it. “Now, anyone who comes as a waiter could not do this. Nowadays you would never take the risk. “If you take the risk you would be an idiot – who doesn’t do mathematics, who doesn’t know accounts?”
Mr Mollura revealed some of the challenges faced by restaurants.
He said: “Now 20 per cent goes on VAT, and at least 30 per cent on the cost of the food – that is if you are a very good restaurant that buys at market. Then say another 35 to 40 per cent in wages. You are left with less than 10 per cent. How do you manage to do it? The corporates can do it on 6 per cent margin, but how can the single operators?
“What will happen is we will have Hampstead without restaurants. The quality of the food, in life, the taste, the real flavour, it will not exist if the single operators go. “People are already getting used to buying takeaway, all that packaged rubbish at home.”
He added: “We will end up like the airports. I hate airports, I get upset there. The food is frozen. I don’t go, it makes me really mad. I just have a piece of cheese, because at least I know what it is. You go there and you know you will get rubbish food. But that is going to happen here. It is going to happen everywhere.”
Mr Griffiths said: “What we want to do is put together, potentially, a class action for small businesses in this area. It would enable them to have a say. There is no way for them to do it on their own at the moment. They need a way to lobby. Large corporations can take care of themselves. There is not enough real support. It’s a pretty parlous state.”
Camden Council has paid £196million in business rate relief since the start of the outbreak, and administered around £66m of government grants. It is now working through a discretionary grant system but has warned this will only amount to £3.6m.