Mahdi & Ors v Al-Habi & Ors

On an application for possession, the court should proceed summarily unless the defendant’s grounds of disputation appear substantial. A breach of internal trust-decision procedures does not ordinarily provide an arguable defence to a possession claim brought by the legal owner, absent a recognised legal restraint. An occupation granted because an employee must live on the premises to perform extensive administrative, security and religious duties is properly characterised as a service occupancy or licence rather than a tenancy. Unquantified additional work, without a defined connection to the right of occupation, does not ordinarily constitute “money’s worth” for the purposes of section 3A of the Protection From Eviction Act 1977.

The first and second claimants sought possession of the residential flat at 46 Goodge Street. All claimants also sought injunctive relief. The first defendant, who had been appointed director of the London office operated by the second claimant, resisted possession on the grounds that the trustees’ decision had been procedurally invalid and that his occupation was under a tenancy protected by section 3A of the Protection From Eviction Act 1977.

The possession hearing had been brought forward by Teare J. The central issue was whether the matters advanced in disputation of the possession claim appeared substantial so that the issues should be tried rather than dealt with summarily.

1. Possession application. The court held that the issues raised did not appear substantial and granted an order for possession. The question was whether there was a genuinely arguable legal defence, not whether the defendant had personal or community support.
2. Trustee decision. The alleged failure to notify or invite the first defendant to the trustees’ meeting did not provide an arguable defence. The legal owner had required him to leave, and no authority or principle was identified by which an allegedly invalid decision of the second claimant could be impugned in the possession proceedings. The court considered it highly unlikely that notice would have altered the majority’s decision.
3. Money’s worth. The first defendant relied on additional work said to exceed his contractual obligations. The court accepted that Polarpark Enterprises v Rupert Allason [2007] EWHC 1088 (Ch) was correctly decided, but distinguished it. In that case, the obligations securing occupation were identified from the outset. Here, the alleged additional work was loose and diffuse and was not shown to have been provided in return for the right to occupy. It therefore could not support a tenancy protected by section 3A of the Protection From Eviction Act 1977. West Wiltshire District Council v Snelgrove [1997] EWHC Admin 285 did not materially advance the interpretation of “money’s worth”.
4. Service occupancy. The draft employment terms and the evidence showed that residence on the premises was essential to the efficient performance of the director’s administrative, security and religious duties, including leading daily prayers. The court considered it virtually inevitable that the occupation would be characterised at trial as a service occupancy or licence rather than a tenancy.

The court left ancillary matters, including the timing and enforcement of possession and any interim injunction, for further assistance from counsel.