Revisiting possession against guardians

At the first hearing of a claim for possession, Part 55.8 of the Civil Procedure Rules provides that the court may decide the claim summarily or it may give case management directions. Pursuant to CPR 55.8(2) case management directions can only be given in circumstances where the claim is “genuinely disputed on grounds which appear to be substantial”. The primary issue that arose in Global 100 Ltd v Laleva [2021] EWCA Civ 1835; [2021] PLSCS 207 was in respect of the proper test to be applied under CPR 55.8(2) in evaluating the defence filed. The facts In March 2016, NHS Property Services Ltd (NPS) entered into a guardianship agreement with Global Guardians Management Ltd (GGM). The agreement related to the Stamford Brook Centre, Hammersmith, W6, owned by NPS. The terms of the agreement included a requirement for GGM to install individuals as “guardians”. In January 2018, GGM entered into an “inter-company arrangement” with Global 100 Ltd. Under the terms of the inter-company arrangement, GGM gave Global “permission or licence” to grant temporary licences to individuals to occupy the premises as “guardians”. Global was also granted “sufficient interest… to bring claims for possession”. Key points The test to be applied under CPR 55.8 when evaluating the defence filed is the same as that for summary judgment In determining whether an agreement confers a licence or tenancy, the court may consider the circumstances in which the agreement was made It was possible to grant a right of legal possession (in the ordinary sense) with restrictions on what the possessor could do with the right In April 2020, Maria Laleva entered into a temporary licence agreement with Global in relation to her occupation of the premises. NPS subsequently notified GGM that it required vacant possession of the premises. Global served Laleva with a notice to quit the premises, but Laleva remained. Global then issued possession proceedings. The judgments below In Laleva’s defence she contended first that Global did not have legal standing. Secondly, Global did not have sufficient interest in the land to bring a claim for possession. Lastly, her licence agreement was a sham and she occupied the premises under a tenancy. Laleva’s defence was summarily dismissed by District Judge Parker at first instance. The judge found that Global had sufficient right to bring possession proceedings and Laleva was estopped from denying that right. Laleva appealed. Judge Luba QC allowed Laleva’s appeal on the ground that Judge Parker had erred in finding that the defence “did not even appear to raise substantial grounds for defending the claim”. Judge Luba QC observed that the threshold in CPR 55.8 was “a relatively low one”. Accordingly, unless the points pleaded by the defence were unarguable, the case should not be summarily decided. Judge Luba QC found that Global had standing to bring the claim, but he declined to determine if Laleva was estopped from denying that right. Global appealed and Laleva cross appealed. Substantially arguable The Court of Appeal found that the test to be applied under CPR 55.8(2) when evaluating the defence filed was the same test as that for summary judgment. Interestingly, the court observed that a lower threshold would result in a waste of resources for the parties and the court if the defendant could not show they had a real prospect of success in defending the claim. The court also underscored that a determination that a defendant did not have a real prospect of success was not a case management decision. It was a question of whether the first instance judge had been wrong in their evaluation of the merits of a defence. Licence or sham The Court of Appeal also found that, when determining whether an agreement was a licence or tenancy, the correct starting point was to identify the contractual rights and obligations of the parties. In so doing, the court may also consider the circumstances in which the agreement was made, including a consideration of the reason why an individual was let into occupation. Laleva was let into occupation to provide guardianship services. In light of the circumstances and the contractual rights and obligations of the parties, Laleva had no prospect of success in establishing that her agreement was a tenancy rather than a licence. The licence agreement was also found not to be a sham. Laleva had no prospect of success in establishing that she and Global shared a common intention that the agreement would not create the legal rights and obligations envisaged. She had admitted that the purpose of the agreement was to provide guardian services. Standing The Court of Appeal paid short shrift to Laleva’s assertion that Global did not have standing to bring the claim. The court found that it was possible to grant a right of legal possession (in the ordinary sense) with restrictions on what the possessor could do with the right. Laleva was given a right to enter into occupation by Global. She now disputed that right. Yet, the principle of estoppel as between landlord and tenant applied equally to a licence of land as between licensor and licensee. This case should provide a welcome steer for practitioners and judges in whether a claim for possession can be determined summarily when a defence has been filed. Elizabeth Dwomoh is a barrister at Lamb Chambers Image © Shutterstock