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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Global 100 Ltd v Laleva [2021] EWCA Civ 1835 (03 December 2021) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2021/1835.html Cite as: [2022] HLR 20, [2022] WLR 1046, [2022] 1 WLR 1046, [2022] 4 WLR 27, [2021] EWCA Civ 1835, [2022] RVR 58, [2021] EWCA Civ 1858 |
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ON APPEAL FROM THE COUNTY COURT AT CENTRAL LONDON
His Honour Judge Luba QC
G00WT956
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE MACUR
and
LORD JUSTICE SNOWDEN
____________________
GLOBAL 100 LIMITED |
Claimant/ Appellant |
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- and – |
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MARIA LALEVA |
Defendant/ Respondent |
____________________
Mark Wonnacott QC and Nick Bano (instructed by Edwards Duthie Shamash) for the Respondent
Hearing date : 25 November 2021
____________________
Crown Copyright ©
Lord Justice Lewison:
"… save in exceptional circumstances, three requirements have to be satisfied before an appeal, which is academic as between the parties, may (and I mean "may") be allowed to proceed: (i) the court is satisfied that the appeal would raise a point of some general importance; (ii) the respondent to the appeal agrees to it proceeding, or is at least completely indemnified on costs and is not otherwise inappropriately prejudiced; (iii) the court is satisfied that both sides of the argument will be fully and properly ventilated."
The procedure
"a claim for the recovery of possession of land (including buildings or parts of buildings)"
"(1) At the hearing fixed in accordance with rule 55.5(1) or at any adjournment of that hearing, the court may—
(a) decide the claim; or
(b) give case management directions.
(2) Where the claim is genuinely disputed on grounds which appear to be substantial, case management directions given under paragraph (1)(b) will include the allocation of the claim to a track or directions to enable it to be allocated."
"If the test in [that] case …were applicable, the court would have to apply a lower threshold than real prospect of success, and that would mean that it would be enough on an application to set aside a statutory demand if the dispute were merely arguable. However, that approach would give no real weight to the word "substantial" in the rule 6.5(4) ; nor would it give any meaning to the word "genuine" in para 12.4 of the practice direction. In my judgment, the requirements of substantiality or (if different) genuineness would not be met simply by showing that the dispute is arguable. There has to be something to suggest that the assertion is sustainable. The best evidence would be incontrovertible evidence to support the applicant's case, but this is rarely available. It would in general be enough if there were some evidence to support the applicant's version of the facts, such as a witness statement or a document, although it would be open to the court to reject that evidence if it were inherently implausible or if it were contradicted, or were not supported, by contemporaneous documentation… But a mere assertion by the applicant that something had been said or happened would not generally be enough if those words or events were in dispute and material to the issue between the parties. There is in the result no material difference on disputed factual issues between real prospect of success and genuine triable issue."
"[32] Prior to the CPR it had been held that the "bona fide disputed on substantial grounds" test in the context of a winding up petition could be satisfied even if the debtor could not resist summary judgment under Order 14: Re Welsh Brick Industries Ltd [1946] 2 All ER 197. But in that context the distinction has not survived the CPR. In Re The Arena Corporation Limited [2004] BPIR 415, 433 Sir Andrew Morritt V-C said that in the context of winding up proceedings the test is whether the debt is bona fide disputed on substantial grounds, which, for practical purposes, is synonymous with "real as opposed to frivolous." See also Hofer v Strawson [1999] 2 BCLC 336; Guinan III v Caldwell Associates [2004] EWHC 3348 (Ch), [2004] BPIR 531.
[33] It seems to me that a debate (see e.g. Kellar v BBR Graphic Engineers (Yorks) Ltd [2002] BPIR 544, 551) as to whether there is a distinction between the "genuine triable issue" test for cross-claims and "real prospect of succeeding on the claim" (i.e. on the cross-claims) involves a sterile and largely verbal question, and that there is no practical difference between "genuine triable issue" and "real prospect" of success and certainly not in this case."
The background facts
"The quality of our guardians is high due to our rigid vetting process. This enables us to be able to supply immediate occupation of a void property with no hesitation… When you need our guardians to vacate the property this is arranged by our Building Managers who return the building clear and empty with all keys to your chosen contact."
"G100 is an approved supplier of "Guardians" who, in order to perform their Guardian Functions to protect vacant properties from intruders, anti-social behaviour and metal theft, must occupy certain properties as designated by G100.
The Guardian is an individual who is willing to pay a weekly licence fee for use and occupation of the designated space in order to perform the Guardian's Functions."
"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."
The defence
The judgments below
i) That G100 had been granted sufficient right to pursue the possession claim and that in any event Ms Laleva was estopped from denying its right.
ii) The agreement and its terms (together with "contextual information" about the background) supported the proposition that it created a licence.
iii) There was no arguable defence that it was a sham.
i) G100 had sufficient interest to bring the claim.
ii) He declined to decide whether Ms Laleva was estopped from denying that interest.
iii) 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.
iv) The district judge was wrong to decide that the defence "did not even appear to raise substantial grounds for defending the claim."
Is the written agreement a licence or a tenancy?
"Both parties enjoyed freedom to contract or not to contract and both parties exercised that freedom by contracting on the terms set forth in the written agreement and on no other terms. But the consequences in law of the agreement, once concluded, can only be determined by consideration of the effect of the agreement. If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence."
"The court is often called upon to decide whether a written contract falls within a particular legal description. In so doing the court will identify the rights and obligations of the parties as a matter of construction of the written agreement; but it will then go on to consider whether those obligations fall within the relevant legal description. Thus the question may be whether those rights and obligations are properly characterised as a licence or tenancy (as in Street v Mountford [1985] AC 809); or as a fixed or floating charge (as in Agnew v IRC [2001] 2 AC 710), or as a consumer hire agreement (as in TRM Copy Centres (UK) Ltd v Lanwall Services Ltd [2009] 1 WLR 1375). In all these cases the starting point is to identify the legal rights and obligations of the parties as a matter of contract before going on to classify them."
"In considering one or more documents for the purpose of deciding whether a tenancy has been created, the court must consider the surrounding circumstances including any relationship between the prospective occupiers, the course of negotiations and the nature and extent of the accommodation and the intended and actual mode of occupation of the accommodation."
"There can be no tenancy unless the occupier enjoys exclusive possession; but an occupier who enjoys exclusive possession is not necessarily a tenant. He may be owner in fee simple, a trespasser, a mortgagee in possession, an object of charity or a service occupier."
"A lodger in a house, although he has the exclusive use of rooms in the house, in the sense that nobody else is to be there, and though his goods are stowed there, yet he is not in exclusive occupation in that sense, because the landlord is there for the purpose of being able, as landlords commonly do in the case of lodgings, to have his own servants to look after the house and the furniture, and has retained to himself the occupation, though he has agreed to give the exclusive enjoyment of the occupation to the lodger."
"From the point of view of the council the grant of exclusive possession would be inconsistent with the purposes for which the council provided the accommodation at Cambridge Street. It was in the interests of Mr. Clarke and each of the occupiers of the hostel that the council should retain possession of each room… If the occupier of a room had exclusive possession he could not be obliged to comply with the terms and the conditions of occupation…. In the circumstances of the present case I consider that the council legitimately and effectively retained for themselves possession of room E and that Mr. Clarke was only a licensee with rights corresponding to the rights of a lodger. In reaching this conclusion I take into account the object of the council, namely the provision of accommodation for vulnerable homeless persons, the necessity for the council to retain possession of all the rooms in order to make and administer arrangements for the suitable accommodation of all the occupiers and the need for the council to retain possession of every room not only in the interests of the council as the owners of the terrace but also for the purpose of providing for the occupiers supervision and assistance."
"Where the occupation is necessary for the performance of services, and the occupier is required to reside in the house in order to perform those services, the occupation being strictly ancillary to the performance of the duties which the occupier has to perform, the occupation is that of a servant."
"… there is no defined list of special cases in which a person who is let into, or allowed to remain in, another's property, with exclusive possession and paying for his occupation may be a licensee rather than a tenant."
Is there a real prospect of establishing that it is a sham?
"I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the "sham" which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities … that for acts or documents to be a "sham," with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a "shammer" affect the rights of a party whom he deceived. There is an express finding in this case that the defendants were not parties to the alleged "sham." So this contention fails." (Emphasis added)
"[34] I consider that a case that there was a relevant sham or pretence in the present case was not made out. In entering into the Agreement, as both parties knew and must be taken to have intended, the basis of the arrangement was that CGML was providing some protection to temporarily-vacant premises against vandals and trespassers by arranging for accommodation by Guardians. As I have set out above, it was essential to such an arrangement that the Guardians should not have tenancies. The inference I would draw is that CGML did indeed intend, when entering into the Agreement, that its terms would be enforceable by and capable of being enforced against it. It was in its interests that they should be."
"[36] This is not a case where there is "an air of total unreality" (to use the expression of Lord Oliver of Aylmerton in AG Securities v Vaughan at 467H) about reading the Agreement as meaning what it says in the light of the circumstances in which it was entered into. Those circumstances include that this was an unusual arrangement whereby office accommodation would be occupied by a number of different people who might be entire strangers to each other at the outset of their occupation, where their presence was desirable because of concerns as to the security of the premises, and where it was essential that the building should be capable of being restored to its owner at short notice. Given those matters, I cannot for my part see how it can be concluded that the true bargain was not that in the Agreement or that there was a sham or pretence. Nor do I see a basis for considering that there was any element of dishonesty on the part of CGML."
Is Global 100 entitled to the order?
"The position of a licensee who under a license is working a patent right, for which another has got a patent, is very analogous indeed to the position of a tenant of lands who has taken a lease of those lands from another. So long as the lease remains in force, and the tenant has not been evicted from the land, he is estopped from denying that his lessor had a title to that land. When the lease is at an end, the man who was formerly the tenant, but has now ceased to be so, may shew that it was altogether a mistake to have taken that lease, and that the land really belonged to him; but during the continuance of the lease he cannot shew anything of the sort; it must be taken as against him that the lessor had a title to the land. Now a person who takes a license from a patentee, is bound upon the same principle and in exactly the same way. The two cases are very closely analogous; in analogies there are always apt to be some differences, but I know of none in this. … If he has used that which is in the patent, and which his license authorizes him to use without the patentee being able to claim against him for infringement, because the license would include it, then, like a tenant under a lease, he is estopped from denying the patentee's right, and must pay royalty. Although a stranger might shew that the patent was as bad as any one could wish it to be, the licensee must not shew that."
"There is no doubt that under English law as it stood in 1872 and stands today there was and is no difference as regards the matter in hand between a tenant and a licensee. Each is estopped from denying the title of the person from whom he accepted the tenancy or licence so long as he remains in possession under it but each is permitted to deny that title as from the time that he is no longer in possession under it. Counsel for the defendants was unable to suggest any plausible reason for drawing the distinction between tenant and licensee for which he contended … The person who is not permitted to deny his licensor's title is a person who 'came upon' the land under the licence and those words themselves suggest that he is still upon the land."
"This form of estoppel, although it has since the decision in Doe d Johnson v Baytup been extended to licensor and licensee and other similar relationships, originated out of the relationship of landlord and tenant."
"In this transaction the defendant waived any title which she might previously have been able to assert. She held possession through a licence, whether for a longer or a shorter time is immaterial. She cannot claim against the party by whom she was let in; that party, as between them, has the title." (Emphasis added)
"Possession having been fraudulently obtained, if the title is to be disputed, the lessor of the plaintiff may insist upon being first put into the situation in which she was before the possession was taken."
"The rule, as to claiming title, which applies to the case of a tenant, extends also to that of a person coming in by permission as a mere lodger, or as a servant."
"There is no distinction between the case of a tenant and that of a common licensee. The licensee, by asking permission, admits that there is a title in the landlord…. Here is a party quietly in possession. The defendant comes and asks for the key. If she had intended to make a claim of title, she might have come as a trespasser to disseise, and, having entered, might have stood upon her right. But here that was not done; and under the circumstances of this case, the defendant, before she could dispute the title, was bound to put the lessor of the plaintiff in the situation in which she stood before the leave was granted."
"This state of law in reality tends to maintain right and justice, and the enforcement of the contracts which men enter into with each other (one of the great objects of all law); for so long as a lessee enjoys everything which his lease purports to grant, how does it concern him what the title of the lessor, or the heir or assignee of this lessor, really is. All that is required of him is, that having received the full consideration for the contract he has entered into, he should on his part perform it."
Result
Lady Justice Macur:
Lord Justice Snowden: