Possession Claims: Court of Appeal test for determination of possession claims which are disputed on ‘substantial’ grounds (Global 100 Ltd v Maria Laleva – 2021)

The Court of Appeal sets down its test for determination of a possession order where the claim is disputed ‘on grounds which appear to be substantial’.

The background

In Global 100 Ltd v Maria Laleva [2021], the claimant was a property guardian company which provided services to protect vacant properties. Property owners granted a licence of a vacant property to Global 100 and an associate company, GGM, which then granted rights of occupation to individuals to prevent property trespass or damage.

NHS Property Services entered into an agreement with GGM in respect of a vacant building whereby GGM took a head-licence from the NHS and made arrangements with G100 under a sublicence such that G100 could grant individual licences. A licence to occupy was granted to Maria Laleva, which stated that she shared the licence with others, including G100, and under which she agreed to protect the building through or other guardians’ presence. The licence also required her not to have more than 2 visitors at any time and not to allow children into the building.

After NHS gave GGM notice to return the property, notices to quit were served on 10 occupiers who then refused to leave. A claim for possession against them was issued by G100 and defended by the occupiers. At first instance, the District Judge concluded that none of the defences raised were ‘substantial’ and the possession order was granted. Laleva appealed to the High Court, which directed the case to trial. G100 brought a further appeal to the Court of Appeal.

The decision

The Court of Appeal concluded that the correct test in these circumstances was the same as that for summary judgment: the defence must have a real prospect of success. Laleva’s defence was not found to have a real prospect of success, and the possession order in favour of G100 was restored.

Laleva argued that her licence to occupy created a tenancy. The Court of Appeal stated that, when considering this argument, the court must have regard to the express terms of the licence. For the licence to be a ‘sham’, both parties must have intended it to be a ‘sham’, and Laleva had no real prospect of success in establishing that the licence constituted a tenancy, albeit that may have been her intention at the time the licence was entered into.

In her defence, Laleva also argued that G100 did not have a sufficient interest in the property to bring a possession claim, as it only held a licence. She stated that only those with a legal estate were able to do so. The Court of Appeal found that Laleva was estopped from raising this argument; licensees are unable to deny their landlord’s estate in land. Laleva’s status was as a trespasser, holding over following the determination of her licence.

Advice and action for landlords

When a District Judge considers a possession order, this case provides guidance as to the applicable test, which states that the defence must have a real prospect of success. The judgment sets out how contracts to occupy property should be interpreted, and whether licensees are able to raise challenge and defence against claims for possession brough against them.