Mahdi & Ors v Al-Habi & Ors

I have before me an application of the first and Second Claimants for possession of the residential flat at 46 Goodge Street and the associated application for injunctive relief brought by all claimants, both applications having been adjourned by Teare J to yesterday’s date from 29^th August. On that day the First Defendant gave certain undertakings to the court concerning access to the premises and the integrity of funds donated by those attending the premises for religious purposes and Teare J abridged the periods provided for in CPR 55.5(3)(a) and (c) so that the possession hearing could take place, as it did, yesterday.

It is common ground between Mr Cohen and Mr Gatty, for whose helpful and succinct oral and written submissions I express my appreciation, that the essential issue I have to determine is whether the matters advanced on the First Defendant’s behalf by way of disputation of the claim for possession “appear to be substantial” such that it would be inappropriate to deal with the case summarily and direct that the issues should be dealt with at a trial. If I thought that course the correct one, I would need to give case management directions and consider the issue of injunctive relief pending the trial.

The premises at 46 Goodge Street comprise, in addition to the residential part of the fifth floor to which the possession claim relates, six other floors from the basement up to the fourth floor.

The premises are effectively the United Kingdom headquarters of the Muslim World League, which I have been told is an international charitable organisation, the purposes of which are religious and educational, its essential objective being to promote the teaching of and worship through Islam. The head office of the Muslim World League, the Third Claimant in this case, is based in Mecca.

The United Kingdom headquarters is operated through the Second Claimant, The Muslim World League London Office Trust, a charity registered in the United Kingdom. That organisation is effectively run by a director, the First Defendant having been appointed to that position on 24^th January 2004. The appointment was made by, and thus his employer was, the Muslim World League, the Third Defendant. Since there are extant employment tribunal proceedings between the First Defendant and the Third Claimant concerning the circumstances in which his employment was terminated (it not being in dispute that it has been), I will say nothing more about the contract than is necessary to determine this application. It does not seem that any concluded written contract was ever agreed, although the basis upon which the First Defendant was employed could doubtless be inferred fairly readily from the way he and the other parties involved conducted themselves over the period since January 2004 until the employment was terminated. There is one aspect of that to which I will refer shortly that may have some impact on the decision that I have to make.

On various of the floors other than the fifth floor are areas used for prayer at various times. It is not, I think, in dispute that it is the director’s duty to lead the five obligatory prayers each day in the mosque within the premises. Indeed, he asserts in his second witness statement that he does fulfil this role amongst other matters for which he is responsible.

As I have indicated, it is not in issue that his employment has been terminated. Whether he is entitled to any relief arising from the circumstances of that will, as I have indicated, be dealt with by an employment tribunal. The issue I have to consider is whether there are any truly arguable grounds for resisting the making of a possession order.

A number of matters were foreshadowed in Mr Gatty’s skeleton argument and, of course, a Defence drafted by him had been served on 3^rd September. However, the oral argument focused on two main areas which, it seems to me, are the two areas upon which I should also focus principally. There are certain ancillary matters with which I shall also need to deal. Although taken as Mr Gatty’s second point, I think logically it should be taken first, since, if valid, it goes to the integrity of the proceedings.

The freehold of the premises is owned by the First Claimant, Dr Ali Mahdi, on the trusts set out in a declaration of trust dated 6^th August 1984 and amended subsequently. The trust deed provides for a certain number of trustees, says the decisions of the trustees are to be taken at meetings of the trustees and that the decisions made will be in accordance with the wishes of the majority. After his appointment as director of the Second Claimant the First Defendant was made a trustee.

Mr Gatty argues that the decision to require the First Defendant to leave the residential part of the premises was taken at a meeting of the trustees to which the First Defendant was not invited and of which he had no notice. It is argued, therefore, that the trustees acted in breach of the trust deed and that either the decision to terminate the First Defendant’s right to occupation was invalidly taken and of no effect, or, by reference to somewhat broader principles, the court should not lend assistance to this breach of trust by permitting the claim as constituted to succeed.

Even if those matters had any validity, Mr Cohen responds, they cannot overcome the proposition that the legal owner can do whatever he wishes in relation to land he owns, subject of course to any statutory or legal restraints that may be placed upon him. Here Mr Cohen says that the First Claimant has asked the First Defendant to leave, which is not disputed, and, subject only to the question of whether proper notice has been given, if any formal notice is required, there is nothing that the First Defendant could do to prevent him reaching that decision and proceeding in the way the First Claimant has.

Mr Cohen also submits that there is no authority that supports the proposition that a decision taken in the way that it was in this case by the Second Claimant, even assuming it to be invalidly taken, can be impugned in the possession proceedings.

It does seem to me that these submissions have considerable force and I accept them. I would add that, even had the First Defendant been given notice of the trustees’ meeting, it is highly unlikely that the majority would have been persuaded to alter its view in the light of anything that he might have contributed to the meeting.

I say nothing about the merits of either party’s position one way or the other, but it seems an inescapable conclusion on the material before me that, for whatever reason, a fundamental difference of view arose between the First Defendant, on the one hand, and those representing or constituting the claimants, on the other, and it is to my mind unlikely in the extreme that the majority would have favoured the First Defendant’s position.

For those reasons, shortly expressed, I do not think that Mr Gatty’s first point (as I have characterised it) affords a basis for saying that an arguable defence arises from it.

His second point (as I shall call it) is that it is arguable that the First Defendant is a tenant, not a service occupier or licensee, and is accordingly entitled to the protections afforded by section 3A of the Protection From Eviction Act 1977. He accepts that the First Defendant has not paid rent, which does not, of course, exclude the possibility of a tenancy arising, but argues that certain additional work that the First Defendant claims to have done arguably amounts to the provision by him of “money’s worth” within section 3A subsection 7(b) of the Protection From Eviction Act 1977, for which his right to occupy the residential part of the premises was granted. If that is so, he argues, the tenancy is not an “excluded tenancy” and accordingly requires a notice to quit complying with the statute to be valid and effective.

The evidence upon which Mr Gatty relies in support of this particular argument at trial is set out in paragraphs 15 and 16 of the First Defendant’s second witness statement, and I quote from part of that. What the First Defendant says is this:

“Since I took over the organisation it has flourished. I have streamlined its organisation and increased the community involvement at local and national level. I also increased its income. The organisation is now open seven days a week with five prayers being conducted by me, classes for the children and numerous other activities.”

He continues:

“I should add that I consistently worked for the Second Claimant seven days a week carrying out much more work for far longer hours than my employment contract with the Third Claimant could reasonably have required.”

In the light of the submission that this could amount to “money’s worth”, I asked whether there was any authority that helped with its interpretation and received some further written submissions by email after the oral hearing. Mr Cohen drew my attention to West Wiltshire District Council v Snelgrove [1997] EWHC Admin 285, but submitted that it did not take the matter further forward. Mr Gatty agreed with that analysis but drew my attention to Polarpark Enterprises v Rupert Allason [2007] EWHC 1088 Ch, where Briggs J found that where beneficiaries under a deed of settlement occupied property by virtue of an informal licence which required them to repair and insure the property, they did so for “money’s worth” within the 1977 Act. He submitted that this countered Mr Cohen’s proposition that for something to constitute money’s worth it must be quantified in some way.

I do not doubt the correctness of the decision in Polarpark Enterprises at all, but it seems to me far removed from this case. The arrangement there did, apparently from the outset, identify precisely the obligations that had to be met to secure the continued occupation of the licensees, even though the amounts may have varied over time. What is being relied upon here is a very loose and diffuse suggestion that, because the First Defendant did more than his contract could reasonably have expected him to do, that additional work must have been referable, at least in part, to his right to occupy the residential part of the premises. I am quite unable to accept that an argument along these lines could succeed at a trial and accordingly do not consider that this can avail the First Defendant.

Whilst I have not been pressed to form a concluded view on whether the First Defendant was merely a licensee, Mr Cohen did invite my attention to a number of considerations that militated in favour of that conclusion. He drew my attention to the terms of a draft contract which the First Defendant was prepared to sign that afforded evidence that he accepted that it was part and parcel of his employment to live where he did. I will quote from that draft contract. At paragraph 2.6 and following the First Defendant’s obligations in relation to employees are set out and the following appears:

“2.6

He is to be responsible for appointing and dismissing all employees working at MWLLO.

2.7

To ensure that all employees are paid a reasonable living wage on a regular monthly basis and their salaries are reviewed on an annual basis and increased in line with inflation.

2.8

To supervise the day-to-day running of the MWLLO including the activities of all employees working there.

2.9

To act as the direct line manager of the MWLLO assistant to the Director and to define his duties as he saw fit in accordance with whatever strategy he may formulate in order to administer the financial and administrative affairs of the MWLLO as officially as possible and avoiding duplication of effort.

2.10

To give reasonable directions to all employees working at the MWLLO.

2.11

To deal with all disciplinary matters and with all grievances, however minor or serious, concerning all employees at the MWLLO.”

Under “Security and Maintenance” the obligations were expressed to be as follows:

“To be ultimately responsible for the overall security of the MWLLO premises and to supervise the three security officers who provide a 24/7 round the clock security every day of the week.

2.13

To ensure that the premises are kept clean and in a fit state of repair and that regular maintenance is carried out in respect of the structure of the MWLLO premises exterior and interior, all office equipment, fixtures and fittings and all service utilities including the supply of water, gas and electricity to the MWLLO premises.”

Further, and perhaps fundamentally, further down under “Religious and education” the following obligations are set out:

“2.19

Since the MWLLO is a registered charity whose objects include the advancement of Islam to ensure that the MWLLO is open for all five obligatory prayers every day of the year, including weekends, and for certain special prayers that Muslims working in or visiting the premises are able to fulfil their religious duties freely and comfortably.

2.20

To lead the five daily prayers in the mosque situated in the premises throughout the year except when on annual holiday, even when these occur outside normal working hours.”

There is then a provision relating to ensuring the quality and suitability of the teaching and of the establishment and maintenance of good relations with other associated organisations.

So that is the way the various obligations were set out, some of which I have summarised, some of which I have quoted in extenso.

Then under “Job location” the following paragraph appears at 3.2:

“In view of the wide range of your administrative and religious duties which require your presence on the premises outside normal working hours both early in the morning and late at night, while required to live in the MWLLO premises in the flat on the fifth floor which is reserved specifically for the use of the director of the MWLLO and his family.”

Whilst that agreement was not formally adopted by the parties, it does, or at least those parts that I have quoted do, evidence what the First Defendant’s job involved. Indeed, his own evidence supports the proposition that living on the premises, as he and his family have done, is essential to the efficient execution of his work as director. To that extent it seems to me to be virtually inevitable that at a trial the court would conclude that this was a service occupancy or licence rather than a tenancy.

For those reasons, I see no substance in any of the points taken on the First Defendant’s behalf and, subject only to what I will call ancillary matters, I will grant an order for possession.

I should perhaps say this. The First Defendant has been in post for four years and is doubtless a familiar figure to those who worship at the mosque or who have other reasons to use the facilities at 46 Goodge Street. He may well have considerable support amongst those people and indeed I have seen some evidence to that effect. My task, as I trust will be apparent, is not to adjudicate on matters of that nature but merely to decide whether he has an arguable legal answer to the claim for possession brought against him. For the reasons I have given, I am unable to accept that he does, which is why I must make an order for possession.

The ancillary matters that I will need some assistance with is whether any time should be provided for in relation to the order for possession; secondly, what injunctive relief, if any, is required pending the vacation by the First Defendant and his family of the premises; thirdly, whether the proceedings have to be transferred to the county court for enforcement purposes; and finally, as far as I can perceive it, whether it is necessary to give formal permission for Mr Farouk Torfiq to be joined as a claimant, as was suggested yesterday.

That completes what I have to say by way of the reasons for the decision and I would be grateful for any assistance from counsel with regard to those particular matters.