Homeowner's victory lost in the fine print: A leaseholder who won a court fight for his flat risks losing it under legal aid rules. Andrew Bibby reports

LIKE MOST owner-occupiers living in flats, Peter Williamson owns the leasehold to his property but has to pay a token ground rent - in his case pounds 25 a year - to the company owning the freehold.

The strange story of how this freehold was sold over his head to a small company run by a disbarred US lawyer, and how this firm promptly tried to seek possession of the flat for a few hundred pounds of alleged arrears, should have ended happily in October 1991. That was when a county court rejected the company's case, ordered it to pay Mr Williamson's legal fees, and awarded a further pounds 750 in damages.

There is no happy ending. Despite his legal victory, Mr Williamson has not received the money awarded to him by the court. Worse, he now faces the prospect of losing the flat, this time to the state.

Mr Williamson, a retired miner, was eligible for legal aid. However, the law obliges the Legal Aid Board, a government body, to try to recover the legal costs involved, if necessary through a charge on the property. Costs have already risen to about pounds 12,000.

'I'm sick and tired of the whole situation. The problems of working underground for about 30 years have been far outweighed by the traumas I've sustained over the past three years,' Mr Williamson said.

Like Mr Williamson, many thousands of leaseholders have reason to rue the day Sam Antonelli entered their lives. Mr Antonelli is an American, convicted of arson and disbarred from working as an attorney in Michigan, who moved to Britain about 14 years ago. Once here he set up a web of companies that bought up portfolios of freehold titles.

Income from ground rents is normally very small, but Mr Antonelli found a way to exploit the small print of lease agreements. Leaseholders found that they were being asked to pay substantial sums for alleged technical breaches, such as erecting garden fences or undertaking small property improvements without prior permission from the freeholder. Many homeowners paid the fees and legal costs demanded.

With good reason, Mr Antonelli named one of his companies Munny Ltd. It was Munny that sued Mr Williamson and three of his neighbours in a pleasant modern development in Prestwich, near Manchester, for alleged arrears or contract breaches.

Munny is still trading but has so far failed to pay the legal costs and damages awarded by the court. Mr Antonelli is no longer registered as a director.

David Sumberg, MP for Bury South, has taken up Mr Williamson's case and is calling for a Department of Social Security inquiry, after reports that Mr Antonelli is claiming more than pounds 500 a week in benefits. 'He's a rogue who has made misery for a lot of my constituents and for a lot of other people,' Mr Sumberg said.

Leaseholders in Ashton under Lyne, Greater Manchester, Todmorden, West Yorkshire, Warrington, Cheshire, and Woolwich, south-east London, are among those who have been affected by Mr Antonelli's business activities.

Paul Eyre, one of several householders in Ashton who successfully fought off a repossession threat from Mr Antonelli, explains: 'I was a little bit naive when we won the court case. I said to the solicitor: 'When does the court go after him?' He replied: 'You're wrong, we've got to go after him.' '

The Ashton residents finally settled out of court, agreeing to accept their freeholds in lieu of other payment. 'This had been going on for four years, and the stress levels for some people were enormous,' Mr Eyre says.

Mr Williamson's solicitor hopes shortly to prise the freehold of his Prestwich flat from Munny's grasp. However, the threat to his home from the legal aid rules will remain.

On the back of the standard form signed by Mr Williamson is an easily overlooked sentence stating that if an opponent does not pay the legal expenses as ordered, the individual remains responsible for repaying legal aid costs from the value of 'property recovered or preserved' in the court action. Since Mr Williamson's flat was indeed preserved from Munny's repossession attempt, the Legal Aid Board has a claim on the property.

As Colin Stutt, legal adviser to the Legal Aid Board, points out, the board has a duty to pursue the money, known as the statutory charge. 'We have absolutely no discretion about when the charge arises,' he says. 'So far as property is concerned, in matrimonial proceedings the first pounds 2,500 is exempt from charge. But that wouldn't apply in this case.

To make matters worse, while the board permits partners to remain in their homes after marital disputes (though the registered charge is increased by interest, currently 8 per cent a year), no such concession exists for cases like Mr Williamson's.

Technically, the board has a duty to take immediate enforcement action, although Mr Stutt says that the Government is considering relaxing this rule. The logic of the legal aid rules is based on the view that those receiving aid should not receive advantages over those paying privately for advice. But in Mr Williamson's case, it seems a harsh way to reward someone who stood up for his rights - and was supposed to have won.

(Photograph omitted)