London College of Business Ltd v Tareem Ltd & Anor

Since 2006 the claimant, the London College of Business ("the College") has occupied office premises forming part of Monteagle Court, Wakering Road, Barking, Essex. Throughout that period Monteagle Court has been owned by the first defendant, Tareem Limited ("Tareem"). For much of the period, Monteagle Court was managed on behalf of Tareem by the second defendant, Montague Management Limited. That company has now been dissolved and plays no part in this litigation, although its former managing director, Tony Crabtree ("Mr Crabtree"), who died early in 2016, features prominently in the history of the dealings between the parties.

The College carries on business as a college of further and higher education. Its principal is Doctor Shaik Akbar Basha ("Dr Basha"). From 2008 until the end of 2012 it offered Master’s and Bachelor’s degrees in business administration under a validation agreement with the University of Wales. The majority of its students came from overseas. In early 2012 a Sky News broadcast suggested that the College had broken immigration rules and given improper assistance to MBA students. Although the College strongly denied this, it led to the revocation of the validation agreement with the University of Wales and the first of three suspensions of its licence to sponsor overseas students. Although the suspensions have been successfully challenged, the College has since January 2014 been able only to offer Edexcel level 7 courses and English language courses.

The College's occupation has on the face of it been governed by a succession of agreements, some of which were not signed by the parties, each of which purports to create a licence. There is an issue as to whether the true relationship between Tareem and the College was that of licensor and licensee or that of lessor and lessee.

In 2013 and 2014 a dispute arose between the parties about the amounts payable by the College in respect of its occupation and in respect of service charges. That dispute has not been resolved, and forms part of a wider issue as to the state of account between the parties that is now to be determined. However, on Sunday 21 September 2014 Tareem, relying on its view that the College was in arrears, excluded the College from the premises it occupied by changing the locks. Employees of the College discovered this when they arrived for work on the Monday morning. On Wednesday 24 September 2014 the Bow County Court granted an injunction requiring Tareem to deliver up the new keys within 30 minutes of service of the order. This was done, and the College was able to reopen for business on the following day; but it claims that the exclusion was wrongful, and that it suffered a substantial loss of profit and of goodwill as a result of its exclusion for the three days from 22 to 24 September 2014. It originally valued its claim at close to £1,000,000, but in the light of the evidence put forward by it as expert evidence has now reduced the amount claimed to £189,415.

In the circumstances I have outlined, there are issues between the parties as to the nature of the College's occupation, as to the legality of Tareem's resumption of possession in September 2014, as to the current state of account between the parties (although the state of account between them in September 2014 is relevant to Tareem's entitlement to take possession), and as to whether and if so what damages are recoverable in respect of the lockout.

Monteagle Court is a purpose-built block of offices. It is laid out in an L-shape, and consists of eight units: units 2 to 5 on one limb of the L, units 6 and 6A at the junction of the two limbs, and units 7 and 8 on the other limb. The College occupied at different times units 6, 6A, 7 and 8. At the time of its exclusion from the premises in September 2014, it was occupying all floors of units 6 and 6A. Units 6 and 6A share a common vestibule, from which unit 7 is also accessible.

The agreement under which the College was occupying units 6 and 6A at the time of the exclusion was dated 22 June 2012 ("the 2012 Agreement"). It was in the following terms.

“THIS LICENCE AGREEMENT is dated 22 JUNE 2012 and is made

BETWEEN TAREEM LIMITED c/o Burnhill House 50 Burnhill Road Beckenham Kent BR3 3LA (hereinafter called the Licensors)

AND LONDON COLLEGE OF BUSINESS of Trocoll House Wakering Road Barking IG11 (hereinafter called the Licensee)

WHEREBY IT IS NOW AGREED AND DECLARED as follows: –

1 IN consideration of the Licensee's obligations under the terms of this Licence, the Licensor gives the Licensee personal permission to occupy the PROPERTY situate at and known as UNITS 6 / 6A MONTEAGLE COURT (hereinafter called the licensed premises) as are shown for identification purposes only by red verge on plan 1 attached for the period commencing on 24 JUNE 2012 and ending on 23 JUNE 2013 (subject to the provisions of Clause 6 of this agreement). The Licence includes the right to park 6 vehicles on the surfaced car park (shown by Blue verge on Plan 1) and a further 6 vehicles on the unsurfaced area (shown by green verge on Plan 1)

2 THE Licensed Premises shall be occupied solely for the purpose of General Office Use/Educational purposes and for no other purpose whatsoever except with the prior written consent of the Licensor.

3 THE Possession Management and Control of the Licensed Premises remains vested in the Licensor, who is the deemed occupier for all material purposes. The Licensor has an absolute right of entry at all reasonable times for the purposes of exercising such management and control (and without prejudice to the generality of the foregoing) for the purposes of effecting any works to adjoining property in the ownership of the Licensor or for any other purposes deemed necessary by the Licensor. The said right of entry is exercisable by the Licensor or its servants or agents, and the rights conferred upon the Licensee by Clause 2 above are subject to all such rights of the Licensor.

4 THE Licensee shall pay to the Licensor a basic Licence fee in the sum of £30,000 pa (Thirty Thousand Pounds Only) plus VAT for the period of the term granted and such fee shall be payable quarterly in advance on the usual Quarter days. In addition the Licensee will make an on account payment in respect of service charge in the annual sum of £5,000 (Five Thousand Pounds only) plus VAT such sum to be paid quarterly in advance.

5 THE Licence agreement merely confers upon the Licensee a personal privilege to use the premises in accordance with the terms of this Licence and for the avoidance of doubt, it is hereby declared that the Licensee may not part with or share possession or occupation of any part of the Licensed Premises nor assign the benefit of this agreement to any third party, company or partnership.

6 THE Licensee shall vacate the Licensed Premises on 30 JUNE 2013, but this agreement will continue thereafter on a month by month basis unless and until either party serves at least 28 days Notice in writing to terminate this agreement

7 THE Licensee further agrees with the Licensor as follows: –

A To use the Licensed Premises only for the permitted use and not to do or suffer to be done to the Licensed Premises anything which may be or become a nuisance, annoyance or disturbance to the Licensors or to the occupiers of any neighbouring units or which may invalidate the Insurance Policies of the Licensor,

B To be responsible for and indemnify the Licensor against any damage caused to the premises caused by the licensee’s use and occupation of the premises

C Not to make any alterations to the licensed premises without the Licensor’s previous written consent in accordance with the provisions of Clause 2 of this Licence.

D During the licence period to be responsible for Business and Water Rates payable in respect of the Licensed premises together with all electricity and utility charges, telephone charges and any other costs arising from the Licensee's occupation of the premises during the Licence period and for compliance with any and all statutory requirements which may be imposed resulting from the use and occupation of the premises for its permitted use.

8 IT is agreed that this agreement constitutes a personal Licence to occupy by the Licensee and shall not be deemed to constitute a tenancy within the meaning of the Landlord and Tenant Act 1954 (as amended) or otherwise and The Licensee shall not be entitled to any compensation under Part 2 of the Act (or any amendment thereto) upon the revocation or determination of this Licence.

9 THE Licensor shall not be liable to pay any compensation or damages which may be caused to the Licensee by reason of any defect in the Premises or by reason of the failure from any cause whatsoever of the water gas or electricity supply to the Premises, or by reason of act or omission (whether negligent or not) of any servant of the Licensor or independent Contractor.

10 THE Licensor shall have the right to terminate this Licence hereby granted by giving no less that (sic) 14 days Notice in writing in the event is in breach of any of the terms of this agreement or if licence fees remain unpaid for a period of 14 days after payment shall have become due, without prejudice to many (sic) right of action which the licensor may have against the Licensee in respect of damages arising from breach of any of the terms hereof.

AS WITNESS the hands of the parties hereto or their duly authorised representatives".

The licence was signed by Mr Crabtree on behalf of Tareem and by a Mr Shukur on behalf of the College.

The 2012 Agreement was preceded by five others, all of them in substantially similar terms except as to the premises and the payment. They may be summarised as follows:

A further agreement, intended to be dated 31 May 2014, was prepared in draft by Tareem but never signed or agreed between the parties. It would have related to units 6 and 6A, and have governed the position between 25 March 2014 and 24 March 2017. The annual fee would have been £30,000 plus VAT, and a further £19,000 plus VAT would have been payable "on account of general and Internal Service Charge". It would have provided for the Service Charge account to be independently audited as at 31 March each year, with balancing charges to be credited or paid as appropriate. It is unnecessary to consider the terms of this draft agreement further.

As I have said, the operative agreement at the time of the lockout in September 2014 was the 2012 Agreement. That agreement superseded those which had come before, and was not itself superseded by the draft agreement prepared in March 2014. It is accordingly the 2012 Agreement which determines whether the relationship between Tareem and the College is that of licensor and licensee, or that of the landlord and tenant.

That issue is to be determined, initially at least, by construing the 2012 Agreement. The question of construction is to be approached in the same way as the construction of any other document, namely according to conventional principles most recently set out in Arnold v Britton [2015] AC 1619. In essence, the object is to establish the intention of the parties by reference to what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the 2012 Agreement to mean. The focus is on the meaning of the wording in its documentary, factual and commercial context. The parties' subjective intentions, and their conduct subsequent execution of the agreement, are irrelevant to its proper construction.

In the present case, it is necessary to bear in mind that the object of the exercise is to determine whether a licence or a lease was created, and that means that it is necessary to determine whether or not the College was granted exclusive possession of the premises that it occupied from time to time. As Lord Templeman put it in the well-known case of Street v Mountford [1985] 1 AC 809, 816B-D:

“The traditional view that the grant of exclusive possession for a term at a rent creates a tenancy is consistent with the elevation of a tenancy into an estate in land. The tenant possessing exclusive possession is able to exercise the rights of an owner of land, which is in the real sense his land albeit temporarily and subject to certain restrictions. A tenant armed with exclusive possession can keep out strangers and keep out the landlord unless the landlord is exercising limited rights reserved to him by the tenancy agreement to enter and view and repair. A licensee lacking exclusive possession can in no sense call the land his own and cannot be said to own any estate in the land. The licence does not create an estate in the land to which it relates but only makes an act lawful which would otherwise be unlawful.”

I bear in mind the following matters.

Returning to the 2012 Agreement, it is plain that, as a matter of wording, the relationship that it creates is that of licensor and licensee. Few opportunities are missed to reinforce the message that the document is, as it says, a Licence Agreement; but clause 8, which contains an agreement that the 2012 Agreement constitutes a personal licence to occupy by the licensee and shall not be deemed to constitute a tenancy within the meaning of the 1954 Act or otherwise, is particularly explicit as to the parties' intentions. Tareem relied on the express wording; on the fact that – as demonstrated by the successive, overlapping agreements that related to different units – there was a flexibility in the arrangements that suggested licence rather than tenancy; on the fact that sometimes intervening floors of units occupied by the College were occupied by someone else; on the fact that there was no repairing obligation in the 2012 Agreement; and on the fact that Tareem had the right to enter the units at any time and kept a degree of control over the units in respect of cleaning and repairs.

Despite the apparently plain wording and the other indications relied on by Tareem, it seems to me clear that the 2012 Agreement created the relationship of landlord and tenant. The purpose of the agreement was to provide the College with premises from which it could conduct its educational business. By the time the 2012 Agreement came to be executed, the College had fitted out units 6 and 6A at its own expense so as to make them suitable for its business. That had been done without any formal licence from Tareem, although there is no question that Tareem (through Mr Crabtree) knew of it. It does not seem to me realistic to suppose that the parties genuinely intended that the College's business could be interrupted by the exercise by Tareem of a right to enter the units occupied by the College "for the purposes of exercising such management and control". Nor is it realistic to suppose that Tareem would have had any genuine commercial interest in doing so. Its concern was that the premises it owned should be turned to account. In substance, if not in form, the clear intent was that the College should be allowed to get on with running its business provided that it paid the stipulated amount. Although I have proper regard to the terms of the 2012 Agreement, I do not consider that the parties can be said to have had equal bargaining power: as Dr Basha said in his witness statement, "When LCB signed the first agreement, the College was not in a strong financial position and was not able to argue about the terms of the agreement. When it came to renewals, the occupation and management of the Building by LCB had not been disturbed at all by Tareem or by Montague so that we were relaxed in contemplating a renewal on similar terms". I accept this evidence, and Dr Basha's further evidence that the College at least did not take legal advice. Despite Tareem's arguments, the taking of a service charge and the ability to terminate on 14 days' notice in the event of breach of covenant or failure to pay the fee do not seem to me at all inconsistent with the creation of a tenancy. In my judgment, the 2012 Agreement as a matter of substance conferred the right to exclusive possession on the College, and accordingly it took effect as a tenancy.

If I am wrong in my construction of the 2012 Agreement, I nevertheless take the view that its terms do not reflect the reality of the situation. I heard evidence from Dr Basha, which on this point I again accept, that neither Tareem nor Mr Crabtree or other representative of Tareem’s managing agent had ever sought to exercise the right of entry apparently conferred by the successive licence agreements. Quraish Adamally, who worked with Mr Crabtree between 2009 and 2013 and is now the principal of the management company that succeeded Montague and gave evidence on behalf of Tareem, said that Mr Crabtree had usually arranged meetings with the College at the premises by telephone in advance, and that he himself did so by email. This seems to me to be not just a matter of courtesy, but to reflect the reality that Tareem did not have an unfettered right of entry. Such works as were done to the units on Tareem’s behalf related only to the common parts. I find that the College had, as a matter of fact, exclusive possession of the premises it occupied from time to time; and it follows that the College was a tenant of those premises. That finding applies in particular to the College’s occupation ostensibly governed by the 2012 Agreement.

My conclusion that the College was a tenant has the following implications. First, and most importantly, the tenancy was a business tenancy subject to the provisions of Part II of the Landlord and Tenant Act 1954 (“the 1954 Act”). There was no dispute by Tareem that this was so if the relationship between it and the College was that of landlord and tenant; but in any event it is clear that the tenancy fell within the 1954 Act, and I so find.

The second implication is that, despite the fact that the tenancy was subject to the 1954 Act, there was no obstacle in principle to forfeiture of the tenancy by the peaceable re-taking by Tareem of possession: see section 24(2) of the 1954 Act.

However, thirdly, the tenancy could only be forfeited for non-payment of rent if the 2012 Agreement contained an express right of re-entry. In my judgment, it did: clause 10 provides so far as relevant that Tareem “shall have the right to terminate this Licence hereby granted by giving no less [than]14 days Notice in writing … if licence fees remain unpaid for a period of 14 days after payment shall have become due”. Leaving aside the effect of the 1954 Act as not relevant to the construction of this provision, the consequence of termination of the College’s right to occupy is to entitle Tareem to retake possession; and the provision for 14 days’ notice amounts in my view to an agreement that the notice will be a substitute for the requirement of a formal demand. Accordingly, Tareem will have been entitled to retake possession in September 2014 if, but only if, the College remained at that time in arrears of rent (in which I include service charge) despite 14 days’ notice having been given to it.

Fourthly, in considering whether or not the College was in arrears at the date of the lockout, it is necessary to have regard to section 24(1) of the 1954 Act. That subsection provides that a business tenancy is not to come to an end unless terminated in accordance with the provisions of the 1954 Act, and so has the effect of continuing the existing tenancy on the existing terms. In the present case, that means that the financial terms of the 2012 Agreement continued after the expiry of the initial term on 23 June 2013. As I have mentioned, a draft agreement was proposed in March 2014; and, had it been executed, it would have superseded the 2012 Agreement, which would have been impliedly surrendered. However, despite the insistence by Mr Crabtree that some of its terms must be performed (a matter to which I revert later in this judgment), it was not executed or agreed, and none of its terms took effect. Accordingly, it is the 2012 Agreement that governs the financial obligations of the College at all times subsequent to its commencement date of 24 June 2012.

It will be apparent from what I have said so far that the question whether or not the lockout in September 2014 was justified depends upon the state of account between the parties at that date. If the College was in arrears, Tareem was entitled to re-enter. If the College was not in arrears, Tareem's retaking of possession was an unjustified interference with the College's right to exclusive possession and a breach of the covenant for quiet enjoyment that is implicit in the 2012 Agreement.

I was provided with expert evidence on the state of account between the parties. This evidence was directed to Tareem's counterclaim for arrears of licence fees and service charge, and addressed the position as at 26 July 2017. Some of the points of principle on which the experts differed have relevance to the position as at 21 September 2014; but the only evidence that specifically addresses the state of account at that date is that of Mr Adamally, who provided a detailed schedule of what he identified as payments due and payments made from 26 December 2010 (prior to which it was common ground that both licence fee and service charge were up to date) up to and beyond September 2014. According to his schedule, the amount outstanding from the College to Tareem on 10 July 2014 (which he identifies as the date of the last payment made by the College until 25 September 2014) was £56,454.99.

I do not consider that I can safely rely upon this figure. That is not because Mr Adamally's evidence was unsatisfactory, but because the accounting position between the parties was a matter of correspondence between them in the latter part of 2013 and the early part of 2014. The background to this correspondence was the service on 26 October 2013 by Tareem of a notice to quit, following which there was much discussion about what amounts were due and what amounts had been paid. The correspondence culminated in a letter dated 31 May 2014 from Mr Crabtree to Dr Basha, that so far as relevant was in the following terms:

The licence agreement referred to in this letter was the one intended to bear date 31 May 2014 and, as I have said, it was not agreed or signed. Nevertheless, it appears to me that the terms of the letter preclude any investigation of the state of account at or prior to 25 December 2013, since that was a matter that was agreed to be referred to arbitration if not otherwise resolved by 30 June 2014 (which it was not). The focus therefore is on the position between the date of the letter and the lockout on 21 September 2014.

As to that, two points arise: what payments were made by the College, and were they more or less than the sums properly due under the 2012 Agreement? As to the first of those points, it is common ground that the College paid £8000 on 4 June 2014, £6700 on 12 June 2014 and £14,700 on 8 July 2014 – a total of £29,400. As to the second point, a basic fee of £30,000 plus VAT was due under the 2012 Agreement, and that equates to a quarterly sum of £9000 (£7500 plus VAT of £1500) - which was the quarterly amount required by Mr Crabtree's letter. In terms of service charge, however, the 2012 Agreement stipulated an annual sum of £5000, or £1250 per quarter, plus VAT – meaning a quarterly sum of £1500. By contrast, the amount required by Mr Crabtree was £5700 per quarter, which on the face of it is substantially in excess of what was properly due. The service charge payment under the 2012 Agreement was, however, expressly a payment on account; and Mr Crabtree's letter indicates that his figure was based on the budgeted sum for the year from March 2014 to March 2015.

In my judgment, Tareem was not entitled to demand any other figure on account of service charge than that set out in the 2012 Agreement. Once the true figure for the preceding year was established as at the following March, a balancing payment became due from the College; but it was not due simply on the basis of a budgeted figure for the ensuing year. It follows that the sums properly due as at 21 September 2014 were the quarterly payments due in advance on 25 December 2013, 25 March 2014, and 24 June 2014. These came to a total of £27,000 in respect of licence fees and £4500 in respect of service charge on account, a total of £31,500. The College having paid £29,400, there were arrears of £2100.

Relatively insignificant though this sum is, it is in my judgment sufficient to entitle Tareem to invoke clause 10 of the 2012 Agreement. In order to do so, however, it must establish that it gave 14 days' notice of the failure to pay or the breach of covenant relied on. The notice it relies on is the notice to quit given on 26 October 2013. Reliance on this notice had been threatened by Mr Crabtree in an e-mail dated 1 May 2014, when it was said that possession would be retaken on 30 May 2014; and again in an e-mail dated 29 May 2014, when it was said that possession would be retaken on 4 June 2014. Subsequent to the letter of 31 May 2014, however, the only communication from Mr Crabtree that has survived is an e-mail of 9 June 2014, asking when the balance of the first tranche would be paid. No further notice or warning was given after the College fell into arrears, on the true basis, on 24 June 2014 before possession was retaken on 21 September 2014. By that stage, it was in my view far too late for Tareem to be able to rely on the notice of 26 October 2013. Looking only at 2014, three payments had been accepted by Tareem in respect of the College's occupation of the premises; and that acceptance amounted to an affirmation of the College's right to occupy and consequently a waiver of the notice to quit. It follows that no valid notice was given under clause 10 of the 2012 Agreement in relation to the arrears that became due on 24 June 2014, and it follows in turn that Tareem's re-entry of the premises on 21 September 2014 was a breach of the covenant for quiet enjoyment to be implied in the 2012 Agreement.

On that basis, it is necessary to consider what damage was caused to the College by Tareem’s unjustified retaking of possession.

As I have said in paragraph 4 above, the College's claim, initially put at around £1,000,000, is now £189,415. This figure, which is based on the evidence of the person put forward by the College as its expert, is made up of two elements: lost profit of £113,680, and loss of goodwill of £75,735.

The person put forward as its expert by the College was Anand Venkoba ("Mr Anand"), who described himself as "a freelance consultant with over 32 years of work experience in finance and accounting matters possessing suitable academic and professional qualifications in finance and accounting". He is a fellow member of the Institute of Cost Accountants of India and a fellow member of the Institute of Company Secretaries of India. He is a Chartered Insurance Practitioner in the United Kingdom, and has an LLB, a postgraduate diploma in personnel management, and Masters in commerce, economics, history, public administration and business administration. He produced two reports, the first dealing with the state of account, the second with damages. Each of these reports stated in terms that Mr Anand knew of no conflict of interest of any kind, other than any which he had disclosed in his report. None was in fact disclosed. In the course of his cross examination, however, it emerged that since 2008 he has been providing freelance services as a business consultant to the College, attending at the College's offices about once a week. He claimed that he regarded this as irrelevant, since his instructions were to provide an independent expert report and for the purposes of the report he was completely independent.

It goes almost without saying that this situation was completely unsatisfactory. It is bewildering that Mr Anand should feel himself able to present himself as an independent expert and to state explicitly that he had no conflict of interest. I required both Mr Simms, the director of the College who presented its case in court, and Westbrook Law, a firm of solicitors who remained on the record for the College, to provide me with explanations in writing as to how it came about that Mr Anand had been tendered as an expert witness. I was satisfied from those explanations that neither Mr Simms nor the solicitors had known of the business consultancy services provided by Mr Anand to the College, and that the suggestion that Mr Anand should be used as the College's expert came from Dr Basha. The position nevertheless remains highly unsatisfactory; and, although I have done my best to treat Mr Anand's evidence fairly, it is obvious that the matters I have referred to affect the weight to be accorded to his evidence. Moreover, where – as, in relation to damages, he often does – Mr Anand provides factual evidence, I think it necessary to treat that evidence with some scepticism.

Mr Anand based his figure for lost profit on his assessment of the number of students lost due to the lockout less the additional tuition and other costs that the College would have incurred had the students not been lost. As he acknowledged, it was not possible for him to pinpoint with accuracy the number of students who would have enrolled at the College but for the lockout. His estimate was based on certain historical data, which showed that the College had a higher intake of students in the September and October recruitment window than in the January and April windows; on the College's projections of student numbers set out in strategic plan documents; on 105 e-mails from potential students in the period May to October 2014; and on two letters from recruiting agents.

Of these factors, the only one which appears to me to have much validity is the first: it does appear that recruitment was typically higher in September and October, at the beginning of the traditional academic year, than at other times of the year. As to the others:

So far as reputational damage is concerned, Mr Anand's figure (which was initially £109,000) was based on the College's published accounts for the five years from 2010 to 2014, although he did refer to letters from staff members, current students and one of the directors of the College that suggested damage to reputation. In the joint expert's report, Mr Anand accepted that his figures in respect of two of the years did not correspond with the statutory accounts filed by the College at Companies House, and that resulted in a reduction in his figure for loss of reputation to £75,735.

The expert who gave evidence on Tareem's behalf was Adam Anstey, a Fellow of the Institute of Chartered Accountants in England and Wales and a partner in Wilkins Kennedy LLP, Chartered Accountants. He took the view that it was impossible on the material available to him to estimate whether any, and if so how many, students were lost as a result of the lockout. He approached the matter by looking at the College's year-end accounts, prepared to 31 December each year, commenting that the accounts prior to 2014 would be unaffected by the lockout whereas the accounts for 2014 and 2015 would potentially be affected. He produced the following table.

In approaching this issue, I have borne in mind, as Mr Simms urged me to do, the following passage from the judgment of Toulson LJ in Parabola Investments Ltd v Browallia Cal Ltd [2011] QB 477 at [22]-[24]:

I have also borne in mind that the court should incline to resolve difficulties in the assessment of damages in favour of the innocent party to a breach of contract or – to use a phrase frequently used in the authorities – to give "a fair wind" to the innocent party.

However, even with a fair wind, I am not able to accept Mr Anand's estimates of the numbers of lost students or the even more exaggerated estimates given by Dr Basha. Toulson LJ's statements in Parabola are directed to uncertainties that are incapable of objective resolution, not to matters that a party could have elucidated by evidence but chose not to. All the material advanced by the College in support of its claim to damages requires inference or speculation, in circumstances where significant parts of it could have been proved by direct evidence. Calling even one of the students who had expressed interest to explain why he did not enrol, or even one of the agents to explain what had occurred on 23 September 2014 and how it had affected subsequent referrals to the College, would have provided the College with at least some evidential foundation for the assessment of damages. As it is, the College's case on damages appears to me to be almost entirely wishful thinking that ignores the influence of other events, in particular the loss of validation from the University of Wales and the repeated suspensions of the College's licence, including that in December 2014. Although Mr Anstey's evidence is limited, and the table he produced demonstrates a continuing fall-off in turnover after 2014, I consider that the limited inference he draws from the annual percentage decline in turnover is valid. In the circumstances, I am not prepared to find that any substantial damage flowed from the three-day closure of the College's premises.

Despite that, it seems to me that the College is entitled to limited damages. In the first place, it was deprived for a short while of the use of premises for which it had to pay in the form of licence fee. The fee, including VAT, was £9000 a year; and, on the basis of a year of 260 days made up of 52 five-day weeks, the wasted amount is in round terms £104. Secondly, there was undoubtedly disruption to the College's ordinary business during the period of the lockout, and wasted expense on wages, and I assess the damages for that at £5000. Thirdly, and in particular because of the notices attached to the premises stating that the College was in arrears of rent, I consider that there was some damage to the College's reputation, which I consider is to be viewed in the context of the prior suspensions and the Sky News allegations. I assess the damages on this ground at £10,000. Finally, I do not consider that I can wholly discount the possibility that a few potential students changed their minds about enrolling because of the lockout, and I award a further £10,000 to take account of that possibility. The total award of damages is accordingly £25,104.

As I have indicated, the state of account as at 26 July 2017 was a matter addressed by Mr Anand and Mr Anstey. This area of Mr Anand's evidence is much less open to criticism on the grounds of lack of independence than his evidence in relation to damages. Before I deal with the expert evidence, however, it is necessary to resolve two questions of construction arising out of the 2011 Agreement.

The first of them concerns the meaning of the payment obligation in the 2011 Agreement. The dispute centres on the expression "the period of the term granted", Tareem contending that the fee of £82,000 was an annual fee, the College contending that £82,000 was a total fee for the period of two years and eight months from 1 February 2011 to 28 September 2013. In my judgment, Tareem's contention is correct. The 2011 Agreement represented the high point of the College's occupation of premises at Monteagle Court. In 2005, it had occupied merely the second and third floors of unit 6A, and in 2006 it added the ground floor of that unit. The 2007 Agreement applied not only to the ground, second and third floors of unit 6A but also to unit 6, the ground and first floors of unit 8, and six parking spaces. In 2009 the College took on in addition the first floor of unit 6A and the third floor of unit 7, with a further four parking spaces. The total amount payable for the premises it then occupied was £109,818.50 a year (£21,512 per quarter, inclusive of service charge and VAT under the 2007 Agreement, plus £20,670 per annum, including the separate service charge, plus VAT of £3100.50 at 15% (the applicable rate at the date of the agreement) under the agreement made in 2009). The 2011 Agreement comprised the ground floors of units 6 and 6A, the whole of unit 7, and the ground floor of unit 8, together with 10 parking spaces. That meant that the College had relinquished the first, second and third floors of units 6 and 6A and the first floor of unit 8, but had taken on the ground, first and second floors of unit 7. The stated amount of the fee in the 2011 Agreement was £82,000 plus VAT for the period of the term granted, a total of £98,400 including VAT at 20%; and that amount included some element of the service charge. On the assumption that the £98,400 was an annual sum and included only the service charge relating to unit 8 (which is a matter of dispute that constitutes the second issue of construction), there is a broad similarity between the amount payable under the 2007 Agreement and the additional agreement made in 2009 on the one hand and that payable under the 2011 Agreement on the other, just as there is a broad similarity between the premises comprised in the first two of those agreements and those comprised in the 2011 Agreement. However, if the £98,400 is a total payment for the whole 32 month term, it works out as £3,075 a month or £36,900 a year. That is a reduction of over £72,000 a year when compared to the previous regime. Nothing in the adjustment of the premises (or, indeed, in the evidence I heard), provides any justification for so substantial a reduction in the amount payable. It is in my view plain that the amount payable under the 2011 Agreement was an annual amount. That view is supported by two further matters. First, the 2011 Agreement contemplated that it would continue from month to month after the end of the original term. If, as the College contended, the stipulated payment was for the totality of the term, it must follow that no payment would be due in respect of any continuation of the arrangement after the original term came to an end. That cannot have been the parties' intention. Secondly, the agreement made in 2009 stipulated that the College should pay "for the period granted an annual sum" of £14,750 plus VAT. The period granted under that agreement was one of two years and seven months; but it is plain that the payment was not for the totality of that period but was due on an annual basis. It is accordingly clear that the parties understood that use of the expression "for the period granted" did not carry the implication that the stipulated payment was due in respect of the whole period. In context, it meant no more than that the stipulated amount was payable during the period of the agreement.

The second issue of construction is about the extent of the service charge covered by the payment provisions in the 2011 Agreement. It will be recalled that that agreement stated that the licence "includes liability for any service charge payable, NNDR liability, electricity and water consumption in respect of the ground floor of Unit 8 Licensed premises". On the face of it, it is unclear to what the phrase "in respect of the ground floor of Unit 8 Licensed premises" applies; as a matter of grammar, it is capable of qualifying the entirety of the provision or simply of relating to "electricity and water consumption". If the former is correct, it is only the cost of works and outgoings in respect of Unit 8 that is included in the licence fee; if the latter, the service charge for the entirety of the premises occupied by the College, as well as the NNDR liability in respect of those premises, is included in the licence fee, together with the College's electricity and water consumption in respect of Unit 8.

In my judgment, the former construction is correct. That is for the following reason. As I have said, clause 7D of the 2011 Agreement required the College to "be responsible for all charges levied in respect of the licensed premises including Business and Water rates (in respect of Units 6 and 6A but not in respect of Unit 8 where these are included in the Licence fee)". That appears to me to make clear that "all charges levied" in respect of Unit 8, including business and water rates, are included in the licence fee. By contrast, the College was obliged to pay the same outgoings in respect of Units 6 and 6A. That regime makes sense only if the inclusion of liability to service charge etc in the payment obligation relates only to Unit 8. The reference to the NNDR liability is particularly telling: that abbreviation stands for "national non-domestic rates", or in other words business rates. If the NNDR for Units 6 and 6A were included in the licence fee, there would be a conflict between the provision to that effect and clause 7D requiring the College to discharge the business rates for those units. If, on the other hand, the service charge, NNDR liability, electricity and water charges are included in the licence fee only so far as relates to Unit 8, there is consistency between that provision and the matters – all charges levied, including business and water rates – excluded in relation to Unit 8 by clause 7D. I have not overlooked the fact that no specific mention is made of Unit 7, which is also included in the 2011 Agreement, and might have been expected to be mentioned at least in clause 7D; but I regard this omission as neutral on this question of construction.

I have considered whether doubt is cast on this construction by the context created by the prior agreements. The first two agreements, those made in 2005 and 2006, required the licensee to pay for all levied charges and services as well as making payment of the licence fee. The 2007 Agreement was the first to include unit 6 and part of unit 8 as well as unit 6A, and it specifically included the service charge in the licence fee, as well as other outgoings in respect of unit 8. By contrast, the agreement made in 2009 (which added the first floor of unit 6A and the third floor of unit 7) expressly stipulated for an additional payment in respect of service charge. There was thus prior to the 2011 Agreement no consistency in the way in which service charge and other outgoings were dealt with. Moreover, as I have pointed out in paragraph 8 above, on the footing that £98,400 was an annual sum (as I have held it was) and included only the service charge relating to unit 8, there is a broad similarity between the amount payable under the 2007 Agreement and the additional agreement made in 2009 on the one hand and that payable under the 2011 Agreement on the other. Accordingly, I do not consider that anything in the context casts doubt on my conclusion as to the true construction of the provisions allocating service charge in the 2011 Agreement.

Accordingly, I approach the determination of the state of account between the parties in September 2014 on the basis that the 2011 Agreement stipulated for an annual fee of £82,000 plus VAT, and that that amount included the service charge payable in respect of the ground floor of unit 8 only. It was implicit in the 2011 Agreement that the College would be liable for service charge in relation to the other units it occupied under that agreement. The service charge payable under the 2012 Agreement was a basic annual sum of £5,000, but that was expressly on account. The mechanism for assessment of the service charge was not stipulated under either agreement; but, as the draft agreement propounded in May 2014 partially indicated, the arrangement adopted by the parties was that the service charge would be calculated as at 31 March in each year and allocated to the occupiers according to the space they occupied.

The joint report prepared by Mr Anand and Mr Anstey proceeds by identifying the amount said by each of them to be due (£114,050 owed to the College in Mr Anand's case, £67,060 owed to Tareem in Mr Anstey's case) and then identifying the items in dispute between them that make up the difference in the figures. Depending on the outcome of the disputes, amounts are to be deducted from Mr Anstey's figure of £67,060.

One of the items in dispute is an amount of £69,425, which represents the difference of opinion about the period of time to which the licence fee in the 2011 Agreement related. Since I have determined that the figure was an annual figure, and that is the basis on which Mr Anstey's figure is calculated, no deduction is to be made from his figure in respect of this item. Similarly, a second item, amounting to £25,006, represents the dispute about service charges. On the basis of my determination of that dispute, Mr Anstey's assumption is correct; and again no deduction is to be made from his figure in respect of this item.

In relation to a third figure, of £22,899, which reflects a dispute as to how to deal with the fact that the first floor of unit 8 was occupied until the end of September 2011 but was not included in the 2011 Agreement, Mr Anand and Mr Anstey are now in agreement that £8,904 should be deducted from Mr Anstey's figure but £13,995 should not. That is on the basis that service charges were to be allocated between the units on the basis of occupation, which I have held to be the correct basis. Mr Anstey's figure accordingly comes down to £58,156.

A fourth dispute relates to a figure of £16,939. This figure is made up of two elements: a sum of £7,000 representing advance payment of licence fee and service charge, and a deposit of £9,939 paid by the College in 2006. Mr Anstey's figure assumes that neither of these sums was re-payable on 26 July 2017: the deposit would only be repayable, if at all, at the end of the term, and all payments under the occupation agreements were payable in advance until the agreements came to an end. Mr Anand's position was that the account was designed to produce a snapshot of the accounting position at the specified date. In my judgment, Mr Anstey is right about this, for the reasons I have outlined as underlying his assumption. No deduction is to be made from his figure on this account.

The fifth dispute concerns the way in which certain works done by the College to Monteagle Court are to be accounted for. The sum in issue is £27,430. The works in question were works which would ordinarily have been carried out by Tareem and paid for through the service charge. Tareem concedes that the College is entitled to a credit of £8,200, representing 50% of the cost of certain refurbishment works, that apportionment having been expressly agreed between the parties. As to the remainder, the issue is whether the College is entitled to a credit of 100% (as Mr Anand asserts) or merely of 48% (as Mr Anstey asserts). In my judgment, the correct credit is 48%. That is because at the relevant time the proportion of service charge costs allocated to the units occupied by the College was 52%, the remainder being borne by other units. Although the College incurred 100% of the expenditure, it would have been ultimately liable for 52% whoever did the work, and it is entitled to credit only for the difference. In relation to this dispute, therefore, Mr Anstey's figure is reduced only by the conceded sum of £8,200. That brings it down to £49,956.

A sixth figure, of £14,411, relates to a number of undocumented charges, primarily related to service charge. Mr Anstey and Mr Anand are agreed that the amount should be deducted from Mr Anstey's figure, meaning that it comes down to £35,545.

The final item in dispute is a cash payment of £5,000, which the College claims to have paid but which cannot be traced in Tareem's surviving records. Those records are incomplete, primary because Mr Crabtree's record keeping seems to have been less than perfect. The College complained that Montague Management Ltd had been liquidated in haste after Mr Crabtree's death , and that there was much ground for criticism in the structure of companies which Tareem formed part. Having heard Mr Adamally about this, and also Mr McGrath, a director of the related companies, I am satisfied that there is no proper ground of criticism and no deliberate attempt to conceal documents. Nevertheless, I am persuaded by the College's documents that the payment was made, even though it is not observable in such of Tareem's documents as are still available. Accordingly, a further deduction of £5000 is to be made from Mr Anstey's figure, bringing it down to £30,545.

Accordingly, I hold that the state of account between the parties on 26 July 2017 was that £30,545 was owed by the College to Tareem.

For the reasons I have given, I will declare that the College occupies the premises comprised in the 2012 Agreement under a tenancy to which the 1954 Act applies. The terms of that tenancy are those of the 2012 Agreement so far as consistent with a tenancy. Tareem has already served a section 25 notice, and the question whether or not a new tenancy should be granted is the subject of separate proceedings. I award the College damages of £25,104. I declare that the state of account between the parties at 26 July 2017 was that £30,545 was owed by the College to Tareem. I will deal with matters such as interest and costs at a convenient time if they cannot be agreed.