London Borough of Brent, R (on the application of) v FED 2000 & Ors [2006] EWHC 2282 (Admin)

Case No CO/4376/2005[2006] EWHC 2282 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 12 th September 2006
Before
THE HONOURABLE MR JUSTICE BEATSON
Between
The QueenClaimantOn the application ofClaimantTHE LONDON BOROUGH OF BRENTClaimant(1) FED 2000First Defendant
(Transcript of the Handed Down Judgment ofWordWave International LtdA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7421 4040 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr P Oldham (instructed by Brent Legal Services) for ClaimantMr O Hyams (instructed by Witham Weld) for First DefendantMr E Davidson QC and Mr W Moffett (instructed by Witham Weld) for 2nd-6th Defendants
Judgment
[1]This application concerns the Avenue School, a co-educational Muslim primary and nursery school founded to deliver Koranic, Islamic and Arabic studies, together with the national curriculum in an Islamic environment. Its status as an independent or voluntary aided maintained school was before this Court in R (on the application of the London Borough of Brent) v FED 2000 and others [2005] EWHC 2679 (Admin). On 4 November 2005 Lloyd Jones J granted an application for judicial review brought by the London Borough of Brent (hereafter “Brent”) against FED 2000, the trust which was the Board of Trustees of the School, in respect of the failure by FED 2000 to run the school as a maintained voluntary aided school. The evidence before me is that all but one of FED 2000's trustees are also foundation governors of the school. An application against the school’s temporary governing body was dismissed.[2]Lloyd Jones J in effect held that the school had been a voluntary aided school from 1 April 2005 and since his decision the school has been run as a voluntary aided school. It currently has over 100 registered pupils and the autumn term was due to start on 5 September. On 16 August 2006, in circumstances which I shall set out, the freeholder of 5-7 The Avenue and 1A Brondesbury Park, the premises used by the school, the Charity Islamic Trust Elrahma, chained the premises and locked out the school staff and caretaker. In proceedings launched on 31 August, Brent claims that FED 2000 is in breach of Lloyd Jones J’s order and seeks to restrain it from surrendering or terminating the lease of the school’s premises. It also seeks to restrain Elrahma, who it applies to join as a second defendant or interested party, from terminating the lease or accepting its surrender. Brent’s application for interlocutory relief was considered by the court as a matter of urgency on Monday 4 September. The evidence consisted of statements and exhibits by Mr Clive Romain, a senior education lawyer employed by Brent, and Mr Patrick Daniels, one of Elrahma’s trustees. At the conclusion of the hearing I was satisfied that Brent’s claim raised a serious question to be tried, and that the balance of convenience favours relief for a short period. Accordingly I granted interlocutory relief, although not in the terms sought by Brent. The terms of my Order have been reduced to writing by the parties and are set out at the end of this judgment. In view of another urgent application which came into my list late on 4 September, I reserved the reasons for my decision, which I now give.[3]The links between FED 2000 and Elrahma are at the heart of Brent’s application for relief. Before considering those, however, I set out Lloyd Jones J’s order and the relevant statutory provisions, and summarise the proceedings before Lloyd Jones J.

Lloyd Jones J’s Order

[4]The material parts of the order made by Lloyd Jones J are:- "2. The first defendant implement the proposals to establish a voluntary aided school ("the school") referred to in the notice of 28 May 2004 issued by the first defendant under section 28 of the Schools Standards and Framework Act 1998. 3. There be a declaration that the school came into existence as a voluntary aided school on 1 April 2005 and has been such a school since then. ……… 5. The first defendant, whether by itself or others, be restrained until 16 January 2007 from surrendering or terminating the lease dated 17 January 2002 of premises known as 5-7 The Avenue and 1A Brondesbury Park, London, NW6."[5]In paragraph 72 of his judgment Lloyd Jones J stated “I should make it clear that in the light of the order of the court it will be for all parties to co-operate to give full effect to the new status of the Avenue School in the best interests of its pupils and the community which it serves”.

The background to the proceedings before Lloyd Jones J

[6]The factual background to the proceedings before Lloyd Jones J is set out in paragraphs 3-35 of his judgment. For the purposes of this application it suffices to record that FED 2000 founded and initially ran the school as an independent school with financial support from Elrahma which also leased the school buildings to it at a peppercorn rent, and provided bursaries. In 2002 FED 2000 applied for voluntary aided status for the school but this application was not successful. A further application in 2004 succeeded.[7]The position of a school which wishes to become a voluntary aided school is governed by the School Standards and Framework Act 1998. The machinery for establishing a voluntary school is contained in section 28 of the 1998 Act. By section 28(8) the procedure for dealing with a proposal for a school to become a voluntary aided school and its implementation, and the provision of premises or other assistance in connection with implementation is governed by Schedule 6 to the Act. Paragraph 3 of Schedule 6 deals with the process of approving proposals to establish voluntary aided schools. On 13 and 20 December 2004 Brent’s education authority and the School Organisation Committee (a body independent of the local education authority) respectively approved the proposal concerning the Avenue School pursuant to this provision. The new status was to take effect from 1 April 2005. Paragraph 5 of Schedule 6 deals with implementation of proposals which have been approved.

(a) provides that where:

“any proposals published under section 28, 29 or 31 have been approved under paragraph 3, or . . . then (subject to the following provisions of this paragraph) the proposals shall be implemented, in the form in which they were so approved or determined, in accordance with Part III of this Schedule.”
[8]Paragraphs 5(2) and (3) provide that proposals are to be considered by “the relevant committee”, the School Organisation Committee. That committee has power to modify the proposals after consultation, to specify the date of implementation, and, if implementation would be unreasonably difficult or inappropriate, to determine that paragraph 5(1) shall cease to apply. Paragraphs 5(5) and 5(7) make provision for recourse to an adjudicator in the event of dissatisfaction with decisions of the School Organisation Committee.[9]Notwithstanding the success of the proposal that the Avenue School become a voluntary aided school, by March 2005 some members of the school’s governing body were expressing doubts about the desirability of the status for it. There were fears that it would be possible for parents to require that their children not be given an education in accordance with the tenets of Islam, that parents could not be required to make payments for admission or in respect of most of the education provided, and that limits on the funding the trustees would be able to provide would leave a financial shortfall. These concerns were aired at a meeting on 9 March at which Dr Anas Al-Shaikh Ali, who chaired the school’s temporary governing body, also stated that there would not be any funds available from Elrahma either for the annual deficit, or for assistance to parents who were unable to pay fees. On 23 March FED 2000’s trustees told parents that they had decided that the Avenue School would continue as an independent school charging higher fees to enable them to meet its running costs without the need to be heavily subsidised by any charitable organisation. They stated that, as Brent had informed it that they needed to go through a legal process to revoke voluntary aided status the school would operate as a voluntary aided school only for the summer term, but that the decision to revoke the voluntary aided status would take effect from September 2005. On the same day, however, FED 2000’s trustees wrote to Brent requesting deferment of the implementation date until 1 September 2005, and indicating that a further application for variation would follow. FED 2000’s trustees thus sought to postpone the implementation of voluntary aided status indefinitely.[10]The legal process referred to in the letter to parents is that under paragraph 5 of Schedule 6 to the 1998 Act. This empowers the School Organisation Committee to postpone and vary the obligation to implement a proposal for voluntary maintained status which has been approved. On 27 May 2005, however, after it had consulted the parents, the School Organisation Committee unanimously rejected the trustees’ proposal. There were unsuccessful attempts at mediation between the parties (see paragraph 30 of the judgment of Lloyd Jones J) but it is not clear whether FED 2000’s trustees took the matter to an adjudicator pursuant to paragraphs 5(5) and 5(7), or whether the trustees or the governors of the school invoked the statutory procedure contained in section 29 of the 1998 Act for proposals for discontinuance of inter alia voluntary maintained schools. The material parts of section 29 provide:
“(1) Where a local education authority propose to discontinue--(a) a … voluntary school, … the authority shall publish their proposals under this section.(2) Where the governing body of a … voluntary school propose to discontinue the school, the governing body shall publish their proposals under this section.(3) Proposals under this section shall--(a) contain such information, and(b) be published in such manner,as may be prescribed.(4) Before publishing any proposals under this section, the relevant body shall consult such persons as appear to them to be appropriate; and in discharging their duty under this subsection the relevant body shall have regard to any guidance given from time to time by the Secretary of State.(5) Where any proposals published under this section relate to a school in England, the relevant body shall send--(a) a copy of the published proposals, and(b) such information in connection with those proposals as may be prescribed,to the school organisation committee for the area of the local education authority who maintain the school.…(7) Schedule 6 has effect (for both England and Wales) in relation to the procedure for dealing with proposals under this section and their implementation.”
[11]Given the position taken on 27 May by the School Organisation Committee in the light of the views of the parents and others consulted, it may be that it was considered that any application under section 29 was unlikely to succeed.[12]The next development is recorded in a letter dated 7 June 2005 from Elrahma to FED 2000. Elrahma stated that if FED 2000 gave permission for the school to be used as a voluntary aided school it would be in breach of clause 3.22 of its lease and Elrahma would, if necessary, initiate forfeiture proceedings. The letter also gave notice of Elrahma’s election pursuant to clause 5 to have the rent reviewed to a market rent. On 9 June FED 2000 wrote to the parents of pupils at the school. The letter stated that FED 2000 had been informed that if the school were to become voluntary aided the landlord would no longer support it by leasing the school to it, that in this event it would need to start paying a market rent for the property after a month and to vacate the property in 6 months. Brent launched its application for judicial review on 30 June 2005.[13]It appears from the submissions made to Lloyd Jones J (see paragraphs 53 and 58-59 of his judgment) that at that time FED 2000 may have considered that the change of status and the refusal to postpone it indefinitely were tainted by procedural unfairness which precluded Brent from enforcing FED 2000’s public law obligations. If this was its position, its stance was in effect that, as a result of such public law illegality, the change of status had not come into effect. At the start of the new school year on 5 September, it wrote to certain parents. The letter stated that as their children's fees had not been paid for the term, their child's name had been removed from the register, and that unless the outstanding amount was paid by 7 September their child would not be permitted to attend the school as from 8 September.[14]The next significant development was a letter dated 3 October 2005 from FED 2000 to Elrahma. In this letter FED 2000 informed Elrahma inter alia that from 1 January 2006 it would not be utilising the premises as an independent school and giving notice of its intention to surrender the lease as of that date. Notwithstanding the pending application for judicial review, Brent was not made aware of this until the close of the first day of the hearing before Lloyd Jones J, about three weeks later: see [2005] EWHC 2679 (Admin) at paragraphs [33-34].

Developments since Lloyd Jones J’s decision

[15]Approximately six weeks after Lloyd Jones J’s order, in a letter dated 14 December 2005 Mr Daniels wrote to FED 2000 giving it notice in accordance with clause 8 of the lease that the lease of the school premises would end on 20 June 2006. The notice was said to be given without prejudice to the landlord's rights under the lease arising out of actions or defaults by the tenant. Clause 8, headed "Landlord's option to determine" provides:
"8.1 The landlord may determine this lease at any time by not less than 6 months' written notice to that effect given to the tenant. The lease shall then end on the date specified in the said written notice. 8.2 The determination of this lease pursuant to clause 8.1 shall be without prejudice to any right of action of the landlord in respect if [sic] any breach non-observance or non-performance of any of the tenants covenants agreements or conditions contained in these presents."
[16]The Claimant’s evidence (see paragraph 12 of Mr Romain's statement) is that the first that it was aware of this notice was in mid-July 2006 when it was enclosed with a letter from Elrahma to Mr Christie, Brent’s Director of Children and Families.[17]There is no evidence from FED 2000 or the school governors, and Mr Daniels’s statement did not take issue with this. At the hearing, however, a letter dated 5 January 2006 was produced. The letter was from FED 2000 to Dr Al-Shaikh Ali, chairman of the schools governors. Mr Omar Megerisi’s name appears at the end of the letter, which is stated to be “dictated and signed in his absence for and on behalf of FED 2000”. In this letter FED 2000 refers to an appeal it was pursuing against the decision of Lloyd Jones J. It then states that;(a) its right to use the Avenue School site derived from its lease from another charity, a Muslim foundation which has made it plain to FED 2000 that it does not consent to sub-let the school premises to a third party,(b) as a consequence the foundation served formal notice under which the lease of the school will terminate before the end of the summer term 2006,(c) as the foundation is entitled to do under the terms of the lease, it demanded rent at a commercial rate, and(d) the first instalment of rent is overdue. The letter also states that the landlords have informed FED 2000 that if the rent due is not paid they would exercise their right to repossess the site without further warning or notification. The letter also states that FED 2000 had no funds and were therefore concerned that the landlord would repossess the site without warning. The letter invited the governors to consider deferring the start of the new school term and disclosing the uncertainties to the families of pupils. It states that a copy is being sent to the London Borough of Brent and it is marked as being copied to Mr Christie and Mr Stratford, another Brent official. On behalf of the claimants Mr Oldham stated that until the letter was produced in court during the hearing before me the claimant was not aware of it.[18]The next document is a letter dated 28 January 2006 from Elrahma to Dr Anas Al-Shaikh Ali, apparently in response to a letter dated 20 January 2006 from Dr Anas Al-Shaikh Ali. The letter dated 20 January is not before the court. In the letter dated 28 January Elrahma informed the school governors that it had decided for the present to postpone exercising its rights of re-entry and forfeiture until the end of the school summer term 2006. The letter stated that Elrahma reserved the right "upon resuming full exclusive possession of our premises to require you to pay mesne profits for your unauthorised use and occupation of our land and buildings at the rate of £300 for each day". Mr Romain states that this letter was also included with Elrahma's letter dated 18 July 2006 to Mr Christie.[19]The next relevant document is a letter dated 11 July 2006 from Mr Christie to Elrahma’s trustees stating that he understood the trustees were requiring the trustees/governors of the Avenue School to pay a commercial rent or vacate the premises from 17 January 2007 when the lease expires. The letter states that Mr Christie would be grateful if they would confirm this and, if so, give consideration to extending the lease temporarily to allow time for the governing body to make alternative arrangements. Mr Romain states that this letter shows that Mr Christie then understood that the school would not have to vacate the premises until 16 January 2007 and was asking Elrahma to give consideration to extending the lease beyond that date (paragraph 12). The letter also states that the governing body had been making considerable effort to try and find a new site for the school but for practical and planning reasons none of the sites considered were suitable. Mr Romain states that at that stage, "although there had been indications that Elrahma wanted the school to be out by the end of the summer term of July 2006 there was no formal communication of this to the council".[20]In a letter to FED 2000 and the school governors also dated 11 July 2006 Mr Christie sought information as to what action they intended to take if Elrahma forced eviction on 17 January 2007. FED 2000 replied in a letter dated 14 July signed by Mr Omar Megerisi. This letter states that, as Mr Christie would see from an enclosed copy of the notice letter of 14 December 2005, "the lease actually ended pursuant to its provisions last month, that is, in June 2006". It also states that a copy of the letter “was passed on to the Head teacher at the time”. The letter also refers to the provision for payment of a commercial rent. It also asked the council what advice Brent would give FED 2000 as to the future of the school and what financial or other assistance would it be prepared to offer should the landlord exercise its right to resume full exclusive vacant possession.[21]As I have noted Mr Romain states that Brent did not receive a copy of the letter of 14 December 2005 until the receipt of a letter dated 18 July 2006 from Mr Daniels. It is not clear whether this is because the letter of 14 December was not in fact enclosed with FED 2000's letter dated 14 July 2006.[22]In any event Mr Daniels’ letter dated 18 July states:(a) Elrahma’s lease to FED 2000 terminated on 20 June 2006 as a result of the notice of 14 December 2005,(b) it had previously notified FED 2000 that the failure to pay rent due entitled it to re-enter the premises, forfeit the lease and take possession for non-payment of rent, and(c) because Elrahma's trustees appreciated the adverse consequences for the pupils if it exercised its right to immediate possession the governing body had been informed in a letter dated 28 January 2006 that it would postpone exercising its rights of re-entry until the end of the summer term. The letter also states that none of the letters in which Elrahma protected its rights under the lease had been challenged and that it has been advised that there are no grounds upon which they could be challenged.[23]The letter dated 18 July also states that it seeks to give the background to the trustees' decisions to exercise their rights to require a market rent as from 1 December 2005 and to terminate the lease. It states Elrahma is a substantial charity which "assists and promotes not just education in accordance with Islamic doctrine but … also makes substantial donations towards the relief of poverty and disease, the relief of orphans and by giving financial help in areas in many parts of the world suffering from the consequences of earthquake, famine and other natural disasters, and that funds devoted to the advancement of education within the UK should only be a small part of its charitable activity and it wished to dispose of the property to realise and make funds available for providing such relief.[24]In letters dated 21 July Mr Christie informed Elrahma and FED 2000 that he had not been not aware until Elrahma's letter to him dated 18 July that Elrahma had purported to terminate the lease. The letter to FED 2000 states that the council did not accept that Elrahma had a right to claim possession of the site and that FED 2000 "should be careful, also in its dealings with Elrahma, not to accept any such right". The letter to Elrahma made no admission as to the validity of the termination and stated that the working assumption of the council had been that the school would be entitled to remain on the premises at least until the lease expired on 16 January 2007. The letter also refers to the judgment of Lloyd Jones J, stating : "… the Judge clearly intended that the property remain available for use by the school at least until the expiry of the lease. It is accepted of course that Elrahma was not a party to those proceedings, Elrahma was not joined as a party and nor did Elrahma apply to be a party.”[25]The letter also states that the council has been advised that Elrahma would not be able to enforce an order for possession before January 2007, and invites Elrahma to avoid a further round of court proceedings. It states that it is quite unrealistic to think that the school can remove itself from the premises and relocate after the end of the summer term.[26]Mr Daniels responded in a letter dated 27 July 2006 stating that the lease has been duly terminated, that he did not read Mr Christie's letter as directly challenging that statement, and that Elrahma was accordingly entitled to possession since the lease was outside the protection of part 2 of the Landlord and Tenant Act 1954. He invited Mr Christie to let him know the basis of any challenge to Elrahma's immediate right to possession. Mr Romain's evidence is that on 16 August Elrahma chained the front and back gates to the school, and effectively locked out the school staff. In a letter dated 16 August 2006, received by the council on 18 August, Elrahma stated that it "is now retaking full exclusive vacant possession of the whole premises". This letter was not received by the council until Mr Christie had sent a letter dated 18 August to Mr Daniels asking that the chains be removed to give the head teacher and staff access to the school to prepare for term.[27]On the same day Mr Christie wrote to Mr Omar Megerisi at FED 2000 urging him to use his influence to persuade Elrahma to withdraw from evicting the school and to confirm that, if it proved necessary, FED 2000 would apply for relief from forfeiture as a matter of urgency. Mr Omar Megerisi replied in a letter dated 22 August stating that FED 2000's understanding is that Elrahma have simply repossessed the site in accordance with the lease and that there had been no forfeiture. The letter states that the writer is not sure why Brent refers to forfeiture. Following this there were exchanges between the council and Witham Weld, the solicitors acting on behalf of Elrahma and FED 2000, before these proceedings were issued on 31 August.

The links between FED 2000 and Elrahma

[28]I now turn to the links between FED 2000 and Elrahma. The addresses of both Elrahma and FED 2000 are 3 The Avenue, NW6. They also share the same fax number and in these proceedings they are represented by the same firm of solicitors, Witham Weld.[29]The Charity Commission's Register of Charities lists the following as Trustees of Elrahma; Mr O Megerisi, Mr Patrick Daniels, Mr Abubaker Megerisi, Mr Hazem Megerisi, and Mr Otman Megerisi, who is referred to as "Othman" Megerisi in Mr Daniels' statement. Mr O Megerisi is Mr Omar Megerisi. Abu Baker Megerisi and Otman Megerisi are his brothers. Hazem Megerisi is his son.[30]The Charity Commission's Register lists the following as trustees of FED 2000; Mr O Megerisi, Mr Hazem Megerisi, Dr Basam, Mrs M J Badarwi and Dr Anas. Mr Romain states that Dr Anas's full name is Dr Anas Al-Shaikh Ali. In paragraph 7 of his statement Mr Romain refers to Mr Omar Megerisi as a FED 2000 trustee but also refers to Mr Otman Megerisi as such. With the exception of the lease of the premises and the letter of 3 October 2005 to Mr Daniels all the documents from FED 2000 in the bundle before me have been signed either by Mr Omar Megerisi or over his name but in his absence. Mr Romain states that four of the five trustees of FED 2000 are also foundation governors on the governing body of the school and, as I have observed earlier in this judgment, Dr Anas Al-Shaikh Ali chairs the governing body.[31]The registered proprietors of the premises occupied by the Avenue School are stated to be "Abubaker Megerisi, Omar Megerisi and Otman Megerisi in their capacity of trustees of the charity known as the Elrahma Charity Trust". The lease to FED 2000 is made between Abubaker Megerisi and Omar Megerisi as trustees of Elrahma as landlord. The lease was signed on behalf of FED 2000 by Tamim Ragab Osman and Dr Anas Al-Shaikh Ali. Both are described as “Director”.[32]Mr Romain states that Mr Omar Megerisi appears to be the leading personality on behalf of FED 2000 and Elrahma in these matters. I set out the material parts of paragraphs 10 and 11 of his statement."10. This pattern of relationships involving the Megerisi family has shaped the real nature of this dispute. On the one part there is the Megerisi family and other FED 2000 trustees and foundation governors who agree with them. This party having applied for VA status then changed their mind at the last moment. It then made strenuous attempts to prevent VA status coming about and this is detailed in Lloyd Jones J's judgment. The LEA believes that this party, in the form of FED 2000 and Elrahma, is now carrying on that battle by trying to arrange that the school is closed as soon as possible by terminating the lease of the school's land, even though the school needs the site for only one more term. On the other part there are the majority of the governors and the majority of parents and staff supported by the LEA who wish to maintain VA status, and who now wish that the school remain on the site rather than be ended pending the transfer of the pupils and staff to the expanded Islamia Primary School in January 2007. These have been the real parties to this dispute. This is the only way to explain why Elrahma and FED 2000 have not been acting as distinct bodies making their own decisions but have instead been acting to the same end.11. It is important to note that this is not the first time that FED 2000 and Elrahma have adopted the current tactic. Lloyd Jones J's judgment refers to the fact that during the course of the hearing, it came to light that, without telling the LEA or the parents of children at the school, FED 2000 and Elrahma had in early 2005 tried to arrange the termination of the lease (i.e. shortly before the hearing)…….This manoeuvre was criticised by Lloyd Jones J, see paragraph 61-64 of the judgment….and it led to number 5 of the order of 4 November 2005 which restrains FED 2000 whether by itself "or others" (my emphasis) from surrendering or terminating the lease until 16 January 2007. The LEA realised that the termination of the lease would make the school's survival impossible and that without such an order FED 2000 and Elrahma might well try the same thing again. In fact they are attempting the same thing notwithstanding Lloyd Jones J's order."[33]Mr Daniels’ witness statement responds to the allegation that Elrahma and FED 2000 should be treated as one body for the purposes of the court order against FED 2000. He states that only two of the five trustees of Elrahma, Omar Megerisi and Hazem Megerisi, are also trustees of FED 2000. He also states that there is absolutely no basis for the characterisation of Elrahma and FED 2000 as one party. They are, he states, distinct entities and the trustees of Elrahma have at all times acted in the best interests of Elrahma and mindful of their duties as trustees of Elrahma which is a charity with objects and considerations far broader than just the school. Mr Daniels states that Omar and Hazem Megerisi “have played no part in any of the decisions by Elrahma in relation to the premises from June 2005 onwards”. Neither of them had any responsibility for the letter dated 7 June 2005 referred to earlier in the judgment. He states that, following Lloyd Jones J's order, Omar and Hazem Megerisi “have continued to be meticulous in avoiding any participation in any decision of Elrahma concerning the exercise of any rights over the premises or in relation to any other matter which might involve FED 2000” (paragraph 11). In particular he states they did not participate in the decisions of Elrahma to accept a revised rent of £90,000 per annum or in the subsequent decisions to terminate the lease by notice given by the letter dated 14 December 2005 or to allow the school a short interval to remove its belongings before Elrahma went into possession of the premises following the termination of the lease on 20 June 2006 (paragraphs 10 and 12).[34]At the core of Brent’s application is the allegation that, notwithstanding the existence of two separate legal entities, in this matter Elrahma and FED 2000 have acted together in relation to the school premises and should be regarded as a single entity. Underlying it is the suggestion that they have operated secretly in order to create conditions in which the school will cease to exist as a voluntary aided body. As to substance, it is submitted on behalf of Brent that further orders are needed to force FED 2000 to respect Lloyd Jones J's order, the purpose of which was to ensure that the Avenue School remains operational until January 2007. The order was necessary because FED 2000 had shown that it was completely set against the school existing as a voluntary aided body and was prepared to take steps to that end. Mr Oldham submitted that, notwithstanding Lloyd Jones J's order, FED 2000 still seeks to achieve this result.[35]Mr Oldham put his case that FED 2000 has breached the order in a number of ways. First, that FED 2000 breached paragraph 5 of the order because its acts and omissions led to the forfeiture of the lease or to its termination. FED 2000 had taken no action at all to ensure that notice was not given when it should have used its best endeavours to do so. If such endeavours failed, it should have applied for a variation of the order. He also submitted that, in view of the links between FED 2000 and Elrahma, FED 2000 should be regarded as having surrendered or terminated the lease "by others" and thus in breach of the order. Mr Oldham also relied on breaches of paragraph 2 of the order. He submitted that since the effect of its acts and omissions since Lloyd Jones J’s judgment will be to close the school, it has failed to implement the voluntary aided proposals as required by paragraph 5(1)(a) of schedule 6 to the 1998 Act, and has sought to close it otherwise than in accordance with the exclusive code for closures of such schools in section 29 of the Act. He also relied on FED 2000's failure to consult with parents or Brent about the proposed termination of the lease and closure of the school.[36]In relation to Elrahma, Mr Oldham submitted that its close involvement with FED 2000 and therefore with the creation of the Avenue School as a voluntary aided school has given it sufficient public law status to be joined as a defendant and that it has, as such, acted unlawfully in taking part in the breach or proposed breach of Lloyd Jones J’s judgment and order by causing the termination of the lease and causing the proposals for implementation of voluntary aided status not to be put into effect.[37]On behalf of FED 2000, Mr Hyams denied that it had either surrendered or terminated the lease or caused a forfeiture, and argued that it had not participated in any way in Elrahma’s decision to terminate the lease. FED 2000 could not have opposed Elrahma’s decision to terminate and it was thus not arguable that it was in breach of paragraph 5 of Lloyd Jones J’s order. Moreover, once the lease had been terminated FED 2000 had no power to do anything in relation to the school premises and could not therefore be in breach of either paragraph 5 or paragraph 2 of the order. Mr Hyams accepted that FED 2000 had come under public law duties because it was the promoter of a proposal to create a voluntary aided school but submitted that it had implemented its duties under paragraph 5 of Schedule 6 to the 1998 Act as a promoter by making the property it had available for the school and that, having done that, was functus. He submitted that “implementation” occurs once and the obligation in paragraph 5 is not an ongoing one. Section 29 was not applicable because it applied only to proposals for discontinuance by a local authority or the governing body of a school. Brent’s submissions based on a duty to consult were, Mr Hyams submitted, misconceived because since FED 2000 could do nothing to prevent the termination of the lease there was no point in consultation, and in any event Elrahma had given the school’s governing body six month’s notice. As to legitimate expectation, FED 2000 had made no statement or promise that the school would continue in existence until closed pursuant to the 1998 Act upon which such a representation must be founded: see R v North and East Devon Health Authority ex p Coughlan [2001] QB 213, paragraphs [55-56].[38]Mr Davidson QC submitted that the claim against Elrahma was misconceived. Elrahma was not susceptible to the judicial review jurisdiction and no claim based on trust, charity or landlord and tenant law had been made against it. It was entitled pursuant to clause 8 to serve notice to determine the lease and in the letter dated 14 December 2005 determined the lease on 20 June 2006. Any attempt to impugn the decision or notice to terminate the lease on public law grounds should have been made in charity proceedings and not in judicial review proceedings. Mr Davidson submitted that Brent’s claim against Elrahma turns on the allegation that it procured or was intimately involved with a breach of Lloyd Jones J’s order by FED 2000. Elrahma’s skeleton argument states: “3.2.2 FED 2000 has not since that order sought either to surrender the lease or to terminate it (which it cannot anyway do). FED 2000 is not in breach of the order. 3.2.3 Elrahma cannot therefore be said to have ‘procured or otherwise intimately involved itself with [whatever that means] FED 2000’s breach/proposed breach of the said order’ (Claimant’s skeleton para. 5). FED 2000’s tenure of the premises was always subject to termination of the Lease pursuant to clause 8 thereof."[39]Mr Davidson argued that, even on the footing that FED 2000 has breached the order, the claim against Elrahma must fail. This, he submitted, is because it is clear on the evidence that Elrahma and FED 2000 are separate entities whose separate trustees have separate responsibilities. Relying on the evidence of Mr Daniels, Mr Davidson submitted that the attempt to stigmatise them as a single party is inaccurate and speculative.[40]I deal with the submissions on the balance of convenience together with my conclusions.

Conclusions

[41]At this stage of the proceedings there has been limited evidence, and no evidence at all on behalf of FED 2000. I first consider whether Brent has satisfied me that there is a serious question to be tried as to whether FED 2000 acted with Elrahma in relation to dealings with the premises used by the Avenue School. I will then consider whether the other elements of Brent’s claim have been made out to the appropriate standard for interlocutory relief, and the balance of convenience. (1). Has FED 2000 acted with Elrahma in relation to dealings with the premises used by the Avenue School?[42]I have concluded that in the light of the background to this case as set out in Lloyd Jones J’s judgment and the evidence of developments since then and summarised above, there is a serious question to be tried as to whether FED 2000 acted with Elrahma in relation to dealings with the property hitherto used by the Avenue School. I have so concluded for the following reasons. 1. Elrahma was a major financial backer of the school. It leased FED 2000 its premises at a peppercorn rent, and provided other financial assistance to the school and to some parents. As I am not concerned with issues of trust and charity law, I am not concerned with the consequences of Omar and Hazem Megerisi serving as trustees of both Elrahma and FED 2000 during a period when a school run by the latter was the beneficiary of significant support by the former. Elrahma must, however, have been aware of FED 2000’s proposals in 2002 and 2004 that the school be given voluntary aided status and of the implications for the lease should those proposals be accepted by the relevant authorities. 2. Mr Daniels’ statement states that Omar and Hazem Megerisi took no part in Elrahma’s decisions about the premises from June 2005; that is in particular, the decisions to charge a market rent and to terminate the lease. It is stated in Elrahma’s letter of 18 July 2006 that the background to the decisions to charge rent and to terminate the lease was a decision – no date is given - that funds devoted to the advancement of education within the UK should only be a small part of its charitable activity and that the property should be disposed of to make funds available for the relief of poverty, disease, and the consequences of natural disasters. I observe only that it is stated that the decisions in respect of the school were part of a significant change of direction by the trust. I also pass over the fact that Mr Daniels' evidence only concerns decisions about the property. There is no evidence that Omar and Hazem Megerisi took no part in discussions and decisions by Elrahma’s trustees concerning FED 2000 as opposed to the premises from June 2005. What is material, however, is that there is no evidence that Omar and Hazem Megerisi took no part in discussions and decisions by Elrahma’s trustees about the premises and concerning FED 2000 prior to June 2005. In particular it is not denied that they took part in such discussions and decisions:(a) during the period when FED 2000 decided to apply and did apply for voluntary aided status,(b) during the period between March and the end of May 2005 when FED 2000 sought to defer the implementation of the change of status, and(c) at the unspecified time Elrahma decided that funds devoted to the advancement of education within the UK should only be a small part of its charitable activity. 3. Prior to the decisions by Brent’s education authority and the School Organisation Committee in December 2004 to approve the proposal, there was no indication that Elrahma did not wish the premises to be used by a voluntary aided school, or that if FED 2000 gave permission for the school to be so used, it would be in breach of the lease. Moreover, neither before the trustees of FED 2000 changed their minds about voluntary aided status in March 2005, nor indeed before 1 April 2005 when voluntary aided status came into effect, did Elrahma give any indication of such concern. It appears that the first indication is in Elrahma’s letter to FED 2000 dated 7 June 2005, soon after the School Organisation Committee decision on 27 May 2005 to refuse FED 2000’s proposal to defer the implementation of voluntary aided status. 4. In the light of the overlapping membership of the trusts, the shared premises and common fax, Elrahma’s substantial financial support, and the absence of a denial in relation to the period before June 2005 that Omar and Hazem Megerisi took part in Elrahma’s decisions about the premises (see 2 and 3), it is arguable in the present state of the evidence that the trustees of the two charities were acting together in matters concerning the school before June 2005. 5. In the light of what is stated in sub-paragraph 4 above, at this stage of the proceedings it is also arguable that the mere fact that Omar and Hazem Megerisi thereafter took no part in Elrahma’s decisions about the property does not of itself suffice to preclude the continuation of the previous state of affairs. Establishing whether the trustees of the two charities were in fact acting together in relation to the school in, and since, June 2005 will be a matter for the hearing. 6. It was (see sub-paragraph 3 above) only after 27 May 2005 when FED 2000 knew that it was not going to be able to achieve its plan to defer or revoke voluntary aided status that Elrahma acted. It first did so by the decisions in June 2005 not to permit the premises to be used as a voluntary aided school and to require a market rent. Elrahma’s next significant action was in December 2005 when the notice to terminate the lease was sent. This only occurred after Elrahma’s remaining trustees knew from FED 2000’s letter of 3 October 2005 that FED 2000 wished to be rid of the lease, and after 4 November 2005 when Lloyd Jones J’s decision made it clear that FED 2000 was not going to be able to run the school as an independent school or to surrender the lease. 7. There is no evidence that FED 2000 protested against the decisions to require a market rent and to terminate the lease with effect from 20 June 2006. FED 2000 reacted to Elrahma’s letter dated 7 June 2005 by a letter to parents dated 9 June. Lloyd Jones J states that it appeared from that letter that by 9 June the trustees had decided not to comply with the decision of the School Organisation Committee not to allow deferment of voluntary aided status. The only evidence of FED 2000’s reaction to the December 2005 notice of termination is the letter dated 5 January 2006 produced during the hearing. The letter is from Mr Omar Megerisi as Chairman of the Board of FED 2000 to Dr Anas Al-Shaikh Ali, Chairman of the school governors, and also a trustee of FED2000 informing him inter alia of the service of the notice under which the lease would terminate before the end of the summer term of 2006. FED 2000’s position is that the steps were ones Elrahma was entitled to take and that any protest by FED 2000 would have been futile. This is, for example seen from Mr Omar Megerisi's letter dated 22 August. In view of FED 2000’s duties as the promoter of voluntary aided status it is however arguable that this was not sufficient in relation to both decisions. In view of Lloyd Jones J’s statement that the parties co-operate to give full effect to the school’s new status, there is considerable force in the argument that this was clearly inadequate in relation to the December 2005 notice of termination. If FED 2000 was acting independently of Elrahma and giving proper weight to the interests of the school and its pupils and governors, why did it not do anything to persuade Elrahma to relent. 8. The timing of the decisions contained in the letters dated 7 June 2005 and 14 December 2005 also gives support to the argument that Elrahma and FED 2000 were acting together. The first decision occurred (see sub-paragraph 6 above) only after it appeared that FED 2000 was not going to be able to achieve its plan to defer or revoke voluntary aided status. The second occurred only after it was clear that FED 2000 was not going to be able to surrender the lease without being in breach of Lloyd Jones J’s order. Elrahma had informed FED 2000 over six months earlier in the letter dated 7 June 2005 that, should FED 2000 permit the premises to be used for the purposes of a voluntary school, FED 2000 would be in breach of clause 3.22 and Elrahma would forfeit the lease. Once the court held that in effect the school had been a voluntary aided school since 1 April, if Elrahma was correct, it could have forfeited the lease forthwith. No reason has been given either in the evidence or in counsel’s submissions for Elrahma choosing to serve six month notice under clause 8 rather than forfeiting the lease forthwith for breach of clause 3.22, nor why this was in the interests of Elrahma rather than FED 2000. It is arguable that Elrahma served notice under clause 8 in an attempt to preclude the argument that, if the lease was forfeited, this was as a result of FED 2000’s conduct or inaction, and thus constituted a breach of paragraph 5 of the order. 9. It is clear that by the time Elrahma’s trustees received FED 2000’s letter dated 3 October 2005 they knew that FED 2000 wanted to be rid of the lease. In view of the fact that it is not denied that Omar and Hazem Megerisi took part in Elrahma’s decisions concerning FED 2000, the Avenue School and the school premises before June 2005, it is arguable in the present state of the evidence that the trustees of Elrahma shared FED 2000’s views as to the desirability of voluntary aided status and the future of the school throughout. That is, prior to March 2005 they favoured voluntary aided status and thereafter they did not. Mr Daniels states that “the trustees of Elrahma have at all times acted in the interests of Elrahma and mindful of their duties as trustees of Elrahma”. He does not, however, deny that the trustees who made the decisions were not also motivated by what they knew were the desires of the trustees of FED 2000 and wished to help them. Given this background, the mere fact that Omar and Hazem Megerisi withdrew from decision-making concerning the premises before the letter dated 7 June 2005 does not preclude it being arguable that the remaining Elrahma trustees were so motivated. (2). Has FED 2000 itself breached Lloyd Jones J’s Order?[43]I am satisfied that Brent satisfies the requirements for interlocutory relief in respect of its claim that FED 2000 has breached paragraphs 2 and 5 of the order.[44]I first deal with paragraph 5. Although there are references in the correspondence to forfeiture, I do not grant relief on the basis that the lease ended as a result of FED 2000's actions because it was forfeited. Despite those references, on the material before me, it appears that the lease ended because it was terminated pursuant to clause 8 once it was clear that Lloyd Jones J’s order prevented FED 2000 surrendering it. I, however, accept Mr Oldham’s submission that, even if the lease terminated because Elrahma gave notice, in the circumstances of this case it is arguable that FED 2000 should be regarded as either having surrendered or terminated the lease itself or “by others”. With respect to conduct by FED “itself”, this does not depend upon the fact that I consider it is arguable that FED 2000 and Elrahma acted together in relation to dealings with the property, although that reinforces my decision on this point. I have concluded that FED 2000 should be regarded as having surrendered or terminated the lease itself because of its failure to do anything to resist Elrahma, or to seek to persuade it to relent. I consider (see paragraph 42(7)) that FED 2000 should arguably have resisted or sought to persuade Elrahma to relent because of its duties as the promoter of voluntary aided status and the consequent need to give proper weight to the interests of the school and its pupils and governors. For reasons which I set out in paragraph 47 of this judgment I reject Mr Hyams’s submission that by the time the notice of termination was served any public law obligations upon FED 2000 as a promoter had ended.[45]There is another aspect of the question whether FED 2000 should be regarded as having surrendered or terminated the lease itself. This concerns whether it co-operated with Brent and kept Brent informed of developments concerning the school. It was submitted on behalf of FED 2000 that Brent was given six months notice of the termination. Reliance was placed on the letter of 5 January 2006 from Mr Omar Megerisi on behalf of FED 2000 to the Chairman of the school governors at the end of which is marked “cc Mr Christie and Mr Stratford”. As I have noted, however, FED 2000 has submitted no evidence at all. The only evidence as to when Brent learned of the notice of termination is that of Mr Romain who states that Brent was not aware of the notice until mid-July. Mr Daniels, perhaps understandably, does not take issue with this. The suggestion that Brent knew in January that notice to terminate the lease in June 2006 is not consistent with Mr Christie’s letter to Elrahma dated 11 July 2006 seeking an extension of the lease beyond 17 January 2007. Unless he was being deliberately disingenuous, why should he seek an extension from that date if he knew Elrahma had given notice to terminate the lease on a date prior to his letter? Mr Christie’s letters dated 21 July 2006 to Elrahma and FED 2000 state he did not know about the termination until he received Elrahma’s letter dated 18 July 2006. Neither Mr Daniels nor Mr Omar Megerisi disputed this in their replies, respectively on 27 July and 22 August. On the material before me it is not possible to say that FED 2000 informed Brent of the termination until its letter dated 14 July 2006. It is clearly arguable in the light of the duty to co-operate, implicit in Lloyd Jones J’s order, but made explicit by what his Lordship stated when giving judgment, that FED 2000 came under a duty to keep Brent informed of matters which put the continuation of the voluntary aided status of the school in question and did not do so.[46]Alternatively, in the light of my conclusion that it is arguable that FED 2000 and Elrahma acted together in relation to dealings with the property, it is also arguable that FED 2000 should be regarded as having surrendered or terminated the lease "by others".[47]I turn to paragraph 2 of the order. Mr Oldham relied on what he described as free-standing public law points based on the relevant provisions of the School Standards and Framework Act 1998 and the public law duties FED 2000 came under as a result of its application to establish the school as a voluntary aided school. Mr Hyams submitted that those obligations had been fulfilled because “implementation” is not an ongoing process and had been completed when FED 2000 made the property it had available for the school. On that reasoning, however, FED 2000’s public law obligations terminated on or shortly after 1 April 2005 when the property was first made available. Lloyd Jones J, however, considered FED 2000 remained under public law duties after that date and was obliged to use the statutory mechanism for modifications or deferral of the proposals: see paragraphs 64 and 66 of his judgment. That is, with respect, surely clearly correct. If it is not, FED 2000’s attempt in September 2005 to charge fees and exclude pupils whose parents had not paid and in its letter of 3 October to surrender the lease would not have been susceptible to public law protection.[48]Mr Hyams also submitted that section 29 has no application to FED 2000; it only concerns proposals for discontinuance of voluntary aided schools by local education authorities and governing bodies. While this is so, it is to be recalled that Mr Romain’s evidence is that four of the five trustees of FED 2000 are also foundation governors of the school. To that extent those individuals could be said to be failing to act in accordance with their public law duties under the 1998 Act.[49]For these reasons I accept Mr Oldham’s submissionsthat because the effect of FED 2000’s acts and omissions since Lloyd Jones J's judgment will be to close the school, it is arguable that it has failed to implement the voluntary aided proposals as required by paragraph 5(1)(a) of schedule 6 to the 1998 Act, and has also breached the Order by failing to co-operate with Brent, the local education authority, by keeping it informed of developments concerning the school premises. (3). Should Elrahma be joined as a defendant and did it take part in FED 2000’s breach of Lloyd Jones J’s order by acting with FED 2000?[50]I have had some concern about the fact that Brent chose not to proceed against Elrahma in the proceedings that came before Lloyd Jones J. Its suggestion in correspondence that Elrahma chose not to be party to those proceedings and Mr Oldham’s suggestion that, if it contemplated doing something to undermine the effect of the judgment it should have sought to be joined, do not meet the point. Although Brent only learned of the contents of the letter of 3 October during the course of the hearing before Lloyd Jones J, it was aware of Elrahma’s letter dated 7 June 2005 before then.[51]I have, however, concluded that for the purpose of interlocutory relief, on the evidence before me it is arguable that Elrahma and FED 2000 acted together in relation to dealings with the property and Elrahma procured or was intimately involved with a breach of Lloyd Jones J's order by FED 2000. In so finding I rejected Mr Davidson’s submissions. In the light of my finding on that matter, the fact that Brent did not seek to join Elrahma before or during the hearing before Lloyd Jones J should not preclude joinder now.[52]Elrahama’s close involvement with FED 2000 and the school in the period before and after the submission and approval of the proposals for voluntary aided status until the letter of 7 June 2005, and indeed thereafter, in my judgment suffices to make it arguable that Elrahma is not to be regarded purely as a charitable body acting in pursuit of its charitable objects and in the capacity of lessor or landlord. If, on fuller examination at the hearing, it is considered that it did not come under public law duties in relation to the school as a result of its involvement, joinder as an interested party can arguably be justified on the principles in the decisions cited in Fordham’s Judicial Review Handbook 4th ed.,p. 460, in particular R v Secretary of State for Health, ex p Scotia Pharmaceuticals Ltd [1997] Eu L.R. 625, at paragraph 47, per Laws J as he then was. (4). Balance of convenience and equitable grounds for denial of relief[53]As I have stated, the matter came before me on 4 September, within 5 days of the launch of proceedings and the day before the new school year was due to start. In these circumstances prima facie the balance of convenience clearly favours relief.[54]Mr Hyams argued that since Brent had no proposal to pay rent it was improperly attempting to obtain the use of the premises free of charge when it is the duty of a local education authority to meet expenditure concerning the site of a voluntary maintained school. Any loss would, however, be sustained by Elrahma. Mr Davidson argued that relief should not be given because to do so would result in considerable prejudice to Elrahma both in loss of rent and because of the risk that an interim right of occupation would create a new tenancy. In view of the undertaking as to damages offered by Brent to Elrahma at the hearing and reflected in my order, the provision in the order that no tenancy of any kind is to be created by its terms or effects, and the fact that the order is to have effect for only fourteen days, these arguments fall away.[55]Mr Davidson also submitted that interim relief cannot be justified because of delay by Brent. He submitted that it is improbable that Brent was not informed of the termination of the lease and were taking a relaxed attitude as late as 11 July. The only material supporting that was the letter of 5 January 2006 with which, because it was only produced during the hearing, Brent was not able to deal. For the reasons I have given, and in the absence of any evidence by FED 2000 or the school governors disputing Mr Romain’s evidence, on the evidence before me there is no justification for concluding that before receiving the letter dated 18 July 2006 Brent knew Elrahma had formally served notice. It is not argued that there has been delay since the receipt of the letter of 18 July.[56]The parties drew up an order in the light of the indications given at the hearing. It contains an undertaking by Brent to Elrahma to pay damages, and states that no tenancy of any kind it to arise by its terms and effects. There were exchanges as to the proper description of Elrahma if it is to be properly joined and to make it clearer that the order is to cease to have effect on 18 September 2006 at the latest but it is my understanding that the terms have now been agreed. The order states:-[1]The second Defendant be joined as such. [that is by setting out the names of the five trustees of Elrhama “in their capacity as the trustees of the Charity Islamic Trust Elrahma jointly and severally"].[2]The former second Defendant (Temporary Governing Body of The Avenue School) having ceased to exist, the action be discontinued against it.[3]Until 18 September 2006 the first and second Defendants each be restrained from preventing or hindering howsoever, and whether by themselves or any other person, access to 5-7 The Avenue and 1A Brondesbury Park London NW6 (“the Premises”) to any person who would normally be authorised to attend the Premises in connection with their use for the purposes of The Avenue School.[4]It is declared and directed that no tenancy of any kind of the Premises (or any part or parts thereof) shall be created by the terms or effects of this order.[5]Meanwhile there shall be liberty to apply to vary or discharge this order on 48 hours’ written notice.[6]Costs reserved.

Cited in 1 later judgment