Global 100 Limited v Maria Laleva

The threshold under CPR rule 55.8(2) is the summary judgment test. A defendant must show a real prospect of successfully defending a possession claim. An appeal against that evaluation concerns the merits of the defence, rather than the exercise of a case-management discretion.

Whether an occupation agreement creates a tenancy depends on the rights and obligations it confers, construed in their surrounding circumstances. A property guardian required to occupy premises to provide security may be a service occupier without exclusive possession.

A sham requires a common intention that the apparent rights and obligations should differ from those actually intended. A former licensee who entered under the licensor’s permission is estopped, while remaining in possession under the licence, from denying the licensor’s title.

Global 100 Limited granted Maria Laleva occupation of part of a property owned by NHS Property Services Limited under an agreement described as a temporary licence. Her occupation formed part of a property-guardian arrangement intended to protect the vacant building. After the arrangement was terminated, Global 100 sought possession under CPR Part 55.

A district judge concluded that Global 100 could bring the claim, that the agreement created a licence and that the alleged sham was unarguable. HHJ Luba QC reversed that decision, holding that CPR rule 55.8(2) imposed a relatively low threshold and that the pleaded defence raised apparently substantial grounds.

The Court of Appeal considered the correct threshold, whether the agreement arguably created a tenancy or was a sham, and whether Global 100 had sufficient standing to recover possession. Although a later possession order obtained by the owner made the appeal academic between the parties, the court permitted the appeal and cross-appeal to proceed because the applicable principles were of general importance.

1. Appeal allowed; cross-appeal dismissed. The appeal, though academic between the parties, satisfied the requirements for determination of an academic appeal. It raised a point of general importance, the respondent was adequately protected and both sides were fully represented.

2. The threshold under CPR rule 55.8(2) is the same as the summary judgment threshold under CPR Part 24. A defence must have a real prospect of success; a merely arguable case is insufficient. Directing a trial for a defence which could not survive summary judgment would waste party and court resources. An appellate court reviewing that conclusion asks whether the first-instance evaluation of the defence’s merits was wrong. It does not apply the restricted standard governing appeals from case-management discretion.

3. The written agreement had no real prospect of being classified as a tenancy. Under Street v Mountford, the court must identify the contractual rights and obligations and then classify their legal effect, considering the surrounding circumstances. Sole occupation or use does not necessarily amount to exclusive legal possession. The agreement’s purpose was the provision of guardian services. Global 100 could change the guardian’s living space, select other occupiers and require continuing occupation to protect the property. Those terms were inconsistent with exclusive possession.

4. The arrangement also fell within the principle of service occupation. Occupation was necessary for the performance of the guardian functions and was ancillary to them. The principle could apply to property guardians although they were not employees of the guardian company.

5. The sham defence had no real prospect of success. A sham requires a common intention that the document should not create the legal rights and obligations which it appears to create. Non-exercise of contractual rights is not evidence that the rights are unreal. The commercial purpose required an enforceable licence enabling the property to be returned to its owner.

6. Global 100 was entitled to use CPR Part 55. Its contractual right to possession was supported by the later grant of a possession right to its grantor, which fed the estoppel. Independently, a licensee who entered under the licensor’s permission is estopped, while remaining in possession under the licence, from denying the licensor’s title. Ms Laleva had received everything granted by the licence and was required to perform her obligation to leave.

1. Court of Appeal (Civil Division): By [2021] EWCA Civ 1835, allowed Global 100 Limited’s appeal and dismissed Maria Laleva’s cross-appeal.
2. County Court at Central London, HHJ Luba QC: Allowed Ms Laleva’s appeal from the district judge. He held that Global 100 had sufficient interest to claim possession but that the relatively low threshold under CPR rule 55.8(2) was met by her defence.
3. County Court, DJ Parker: Held that Global 100 could pursue possession, that the agreement created a licence and that the alleged sham was not arguable.