Nick Grundy QC and Sean Pettit succeeded in the Court of Appeal overturning a previous appeal decision of HHJ Luba QC.
Global 100 Limited v Maria Laleva  EWCA Civ 1835 – a copy of the judgment can be found here.
This case raised three issues of general relevance: (1) The test that a judge (usually a DJ) should apply when considering whether to make a possession order or directions at an initial hearing on a possession claim; (2) How a court should interpret a contract that grants a person rights to occupy property; and (3) Whether a person who had a licence to occupy property can challenge the right of their licensor to bring a possession claim against them?
The first issue concerns the proper interpretation of CPR 55.8(2). CPR 55 creates a separate procedure for possession claims. It is a modified form of Part 8 Procedure; i.e., the claimant must file a claim form and evidence on which they rely to establish their right to a possession order. The court then lists the claim for a hearing. A significant modification to the Part 8 procedure is that the defendant can take part in the proceedings at that hearing whether or not she has filed a defence. At that hearing the court could do one of three things: 1. Decide the case; 2. Adjourn the case; or 3. Make case directions for a trial.
Pursuant to CPR Part 55.8(2) to follow course 3 the judge must find that: the claim is genuinely disputed on grounds which appear to be substantial.
In the instant case HHJ Luba QC set aside a possession order made by DJ Parker because HHJ Luba applied a lower threshold and he found that the DJ had been wrong to find that one of the defences raised by Maria Laleva did not cross that threshold.
The Court of Appeal held that the test applied by HHJ Luba was wrong and that the correct test is the same as the test for summary judgment; i.e., that the defence must have a real prospect of success . It follows that the jurisprudence that applies to the test for summary judgment under CPR 24 applies to summary determination of possession claims.
The Court of Appeal also held that a decision to make a possession order at that initial hearing is not a discretionary case management decision and therefore it can be set-aside on appeal if it is wrong. However, it is still the case a decision to adjourn a possession claim at that initial hearing is a case management decision and therefore only appealable if that decision is outside the range of reasonable case management decisions: Birmingham CC v Stephenson  EWCA Civ 1029.
The second issue arose because one of Ms Laleva’s defences was that the licence that she had been granted as a guardian in fact created a tenancy. The Court of Appeal confirmed that the approach to interpretation of a contract is that the court should have regard to the express terms of the contract in the first instance  & .
The Court of Appeal also confirmed the principle that, for an agreement to be classed as a ‘sham’, it must have been the intention of both parties that it would be a sham . It held that whilst Ms Laleva may have had the intention that the agreement granted to her by G100 Ltd. was a tenancy she had no real prospect of establishing that G100 Ltd. had that intention.  & .
The third issue was raised by Ms Laleva’s cross-appeal. She argued that as the Claimant, G100 Ltd., was itself only a licensee of the property of which it had granted her a licence, after the determination of her licence G100 Ltd. did not have a sufficient interest in the the land to bring a possession claim against her. She argued that only a person with a legal estate in land can bring a possession claim.
The Court of Appeal held that Ms Laleva was estopped from denying G100 Ltd.’s interest in the land. The estoppel that prevents a tenant from denying their landlord’s estate in land applies equally to licensees . In any event, the Court of Appeal pointed out that Ms Laleva was not a trespasser asserting title through occupation rather she was a trespasser holding over after the determination of her own licence, which she was asserting was a tenancy which had not been lawfully determined.
The Court of Appeal restored the possession order made by DJ Parker in March 2021.
- The test that a judge must apply in deciding whether or not to make a possession order at an initial hearing is whether any defence raised has a real prospect of success.
- At that hearing a judge can construe tenancies and licences by reference to the usual rules of construction of contracts.
- For a written agreement to be a sham it must have been the intention of all parties to it that their actual agreement was not reflected by the written terms.
- A licensee is estopped from denying their licensor’s title.