Matt’s excitement at finding some Christmas decorations and an old bottle are quickly dispelled when he learns that Sir George, Fanny, Bodkin and the White Lady have all fallen out, and have decided that there will be no Yuletide festivities at Motley Hall this year. Meanwhile, two old ladies, Edith and Ethel, and their young niece, Elly, arrive outside, seeking shelter from the snow after having driven their car into a ditch. When Matt decides to let the visitors in, he finds that Elly can actually see him and his friends. Elly tells Matt that her father is an engineer living in Baghdad, and that ever since her mother died she has had to live with her selfish and manipulative aunts. Elsewhere, Fanny decides to open the old bottle, only to find that instead of gin, it contains a jinn – a genie named Saladin who has been trapped inside for centuries, and who immediately announces Fanny as his new master. Sir George is jealous, and, under the pretence that he bought the bottle while in the Far East, declares himself as the genie’s rightful master and proclaims himself as head of the household; then, when the other ghosts object, Sir George has the genie imprison them in the cellars. However, Saladin then rebels, stripping Sir George of his clothing and the ability to speak. Realising the error of his ways, Sir George turns to Elly, using mime to admit that he is sorry, and asking for help. Ellie agrees and leaves to convince the other ghosts to help; meanwhile, Sir George learns that Aunt Edith and Aunt Ethel have deliberately withheld all letters from Elly’s father, including one that has a ticket for her to join him in Baghdad. But before he can tell Elly, Saladin appears and announces to all the ghosts that he is now the master – and that they are all his servants.