ARTICLE
24 December 2021

Did You See? You May Have Missed Global 100 Ltd v Laleva [2021] EWCA Civ 1835, 3 December 2021

GC
Gatehouse Chambers

Contributor

Gatehouse Chambers (formerly Hardwicke) is a leading commercial chambers which specialises in arbitration and all forms of ADR, commercial dispute resolution, construction, insolvency, restructuring and company, insurance, professional liability and property disputes. It also has niche specialisms in clinical negligence and personal injury as well as private client work.
Global 100 Ltd v Laleva [2021] EWCA Civ 1835, 3 December 2021...
United Kingdom Real Estate and Construction

Global 100 Ltd v Laleva [2021] EWCA Civ 1835, 3 December 2021

Possession claims; test under CPR r.55.8(2); tenancy or licence, locus standi; estoppel

The facts

NHS Property Services Ltd ("NHS") are the owners of a building. They entered into an agreement with Global Guardians Management Ltd ("GGM") for the provision of property guardian services. GGM entered an inter-company arrangement with the Appellant ("A"), granting A the right to grant temporary, non-exclusive licences to persons selected by A to be guardians. The agreement also purported to confer on A "sufficient interest in the properties for [A] to bring claims for possession if required against the Guardians who whom it has granted licences."

A granted the Respondent ("R") a written agreement, described as a temporary licence agreement. The agreement provided, amongst other things, that the Guardians are allocated properties "from which they perform those Guardian functions which necessarily required them to occupy their designated space with others for the period of the agreement." Clause 1.5 stated that the agreement did not give the Guardian a right to use any specific room as living space within the property.

NHS gave notice to GGM terminating their agreement. NHS and GGM then entered a further agreement which provided:

"To the extent that such a right does not already exist on an ongoing basis under the terms of the agreement . NHS PS Ltd hereby grants GGM Limited a right of possession of the Property for the sole purpose of enabling eviction of GGM's former licensees and any other person occupying the Property."

A issued proceedings against R and others. She defended, on the basis, amongst other things, that she was as AST tenant as the "factual reality" was that she had exclusive possession of her room. In the alternative it was alleged that the written agreement was a sham arrangement in consequence of the pleaded factual realities. The defence also challenged A's right to bring possession proceedings at all, because it had no sufficient interest in the land and the remedy sought exceeded its rights as pleaded.

The courts below

DJ Parker granted A possession at the first hearing as she held that the possession claim was not genuinely disputed on grounds which appeared to be substantial. On appeal, HHJ Luba QC allowed the appeal. He held that the threshold for defending a claim under Part 55.8 was "a relatively low one"; and that unless the points pleaded by the defence were unarguable, then the case should not be summarily decided. The district judge had been wrong to decide that the defence "did not even appear to raise substantial grounds for defending the claim."

The Court of Appeal

The Court of Appeal allowed A's appeal and dismissed R's cross-appeal.

The Court of Appeal held that the test under r.55.8(2), whether "the claim is genuinely disputed on grounds which appear to be substantial", is the same as the test for summary judgment. Were the test to be a lower test, it would be a waste of resources (both the parties' resources and the court's resources) to give directions for trial on the basis of a defence (whether pleaded or not) that would not survive an application for summary judgment. Were it to be a higher test, it is difficult (if not impossible) to formulate it with any precision. The question was whether R had shown a real prospect of success.

The Court of Appeal held that R's claim that the agreement created a tenancy rather than a licence had no real prospect of success. When determining whether an agreement is a tenancy or a licence, the court may consider the circumstances in which the agreement was made, which include the reason why the occupier has been let into occupation. In this case, the admitted purpose was for R to be a guardian; her occupation was therefore as a service occupier. Further, the right to alter the location and extent of the living space is inconsistent with the grant of exclusive possession. No tenancy could therefore have been granted.

The Court of Appeal also held that the claim that the agreement was a sham had no real prospect of success. To be a sham, it must have been a common intention, shared by all the parties to the agreement, that the document was not to create the legal rights and obligations which they give the appearance of creating. A had admitted that the purpose of her occupation was in order to facilitate the provision of guardian services by R. There could therefore have been no shared intention of a "sham".

Finally, R appealed the decision that A had standing to bring the possession claim by way of cross-appeal. The cross-appeal was dismissed as the claim had no real prospect of success. First the Court of Appeal held that it possible to grant a right of legal possession (in the ordinary sense) with restrictions on what the possessor could do with the right. This would be sufficient to allow A to bring the proceedings. Secondly, R was estopped from disputing A's title under the principle of estoppel as between landlord and tenant, which applies equally to a licence of land as between licensor and licensee.

Lesson learnt

The case gives welcome clarity as to the test to be applied at the first possession hearing. In circumstances when summary judgment is not available under Part 55, this decision may allow landlords to try to get possession claims dealt with on a summary judgment basis at the first hearing. In particular, in rent arrears claims when the tenant has challenged only the level of rent arrears, applying Part 24 authorities is likely to make it easier to persuade a judge to grant a possession order at the first hearing, but give directions to determine the quantum of the rent arrears.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More