Global 100 Ltd v Maria Laleva
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lady Justice Macur,Lord Justice Snowden |
| Judgment Date | 03 December 2021 |
| Neutral Citation | [2021] EWCA Civ 1835 |
| Docket Number | Case No: B5/2021/1543 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1835
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT CENTRAL LONDON
His Honour Judge Luba QC
G00WT956
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lady Justice Macur
and
Lord Justice Snowden
Case No: B5/2021/1543
Nicholas Grundy QC and Sean Pettit (instructed by Kelly Owen Ltd) for the Appellant
Mark Wonnacott QC and Nick Bano (instructed by Edwards Duthie Shamash) for the Respondent
Hearing date: 25 November 2021
Approved Judgment
The issue on this appeal is whether HHJ Luba QC was wrong to reverse the decision of DJ Parker that a claim by Global 100 Ltd (“G100”) against Ms Laleva for possession of 14–16 Stamford Brook Avenue “the Property” “was not genuinely disputed on grounds which appear to be substantial.”
The case came before us in the form of an application for permission to appeal and an application to cross-appeal, with the appeal and cross-appeal to follow if permission is granted.
There is, however, a further procedural wrinkle. Since the hearing before HHJ Luba a second action was brought against Ms Laleva by NHS Property Services Ltd, which owns the property. An order for possession has been made against her. In those circumstances it could be said that the appeal is now academic.
In Hutcheson v Popdog Ltd [2011] EWCA Civ 1580, [2012] 1 WLR 782 Lord Neuberger MR set out the principles applicable to appeals which have become academic. He said at [15]:
“… 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.”
At the outset of the hearing, we informed the parties that we considered that the appeal and cross-appeal satisfied these criteria. The first of them also corresponds to the second appeals test. We therefore granted permission both to appeal and to cross-appeal.
The procedure
The claim was brought under the procedure laid down by CPR Part 55. CPR Part 55.1 contains a definition of “a possession claim” in the following terms:
“a claim for the recovery of possession of land (including buildings or parts of buildings)”
Part 55.2 provides that the procedure under that Part must be used where the claim includes (among other things) a claim by a licensor (or former licensor). When the claim is issued the court will fix a hearing date. Part 55.8 provides:
“(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.”
Before going into the remaining issues it is important to establish what is the test to be applied under rule 55.8 (2); both by the judge who conducts that hearing, and also any appellate court which is asked to overturn the decision of a first instance judge. This is a question on which HHJ Luba QC said in terms that a “clear steer” from this court would be helpful to first instance judges.
HHJ Luba held that the threshold which a defendant must surmount “must be a relatively low one”. He reached that conclusion in part from the contrast between grounds “which appear” to be substantial (which is what the rule provides) and grounds “which are substantial” (which is not what the rule provides). He also reasoned that a low threshold was supported by the rule ( CPR Part 55.7) that a defendant who has not filed a defence may still “take part in any hearing”. So far as the latter point is concerned, in my opinion that is simply a matter of timing. It may be procedurally unfair to decide a case against an occupier who turns up unannounced at a hearing without having filed a defence, but who tells the district judge that there is (or may well be) a substantive defence which he wishes to advance. But that does not tell you much, if anything, about the test to be applied once an occupier has filed a defence.
That was in effect the position in Birmingham City Council v Stephenson [2016] EWCA Civ 1029, [2016] HLR 44 (a judgment of mine with which Moore-Bick LJ agreed; and which HHJ Luba cited in support of his conclusion). Stephenson was a very different case from this one. The evidence before the district judge in that case was that Mr Stephenson had paranoid schizophrenia, which could be alleviated by medication, but which he was not taking. The council began possession proceedings against him on the ground of noise nuisance. The council acknowledged that he had “mental health” issues. By the time that the matter came before the district judge (following one adjournment) Mr Stephenson had only just managed to make contact with a solicitor. The solicitor asked for a short adjournment in order to file a pleaded defence. It was that opportunity which Mr Stephenson was denied by the refusal of the adjournment. In other words, the district judge simply refused to allow Mr Stephenson even to articulate what might have amounted to a defence. I held that he had made no allowances for Mr Stephenson's mental health problems; and that there was potentially a real question whether the possession proceedings were a proportionate means of pursuing a legitimate aim (in which event the burden of proof would have been on the council). That case did not consider what the appropriate threshold in a case in which a defence has actually been put forward. I do not consider that it is of any relevance to the question before us, where a defence has been pleaded. The question in this case is what test is to be applied in evaluating that defence.
I turn, then, to the phrase used in the rule: “genuinely disputed on grounds which appear to be substantial”. The judge emphasised the word “appear” but does not seem to have given any weight to the word “substantial”. Under rule 10.5 (5) of the Insolvency (England and Wales) Rules 2016 a court may set aside a statutory demand in bankruptcy if “the debt is disputed on grounds which appear to the court to be substantial”. That phrase is strikingly similar to that which is used in CPR Part 55.8 (2). The predecessor of rule 10.5 was considered by this court in Collier v P & M J Wright (Holdings) Ltd [2007] EWCA Civ 1329, [2018] 1 WLR 643. Arden LJ discussed the meaning of the phrase in some detail. She expressly disapproved an earlier case which had held that the threshold under the rule was lower than the threshold required to resist summary judgment under CPR Part 24. She said at [21]:
“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.”
Mr Grundy QC did place some emphasis on the adverb “genuinely”. He suggested that that might import a test that was higher than the test applicable to an application for summary judgment. In that connection it is pertinent to refer to the decision of this court in Ashworth v Newnote Ltd [2007] EWCA Civ 793, [2007] BPIR 1012 (to which Arden LJ referred in Collier). In that case Lawrence Collins LJ said:
“[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...
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