Benesco Charity Ltd v Kanj & Anor [2011] EWHC 3415 (Ch)

CPR55.8 has been the the subject of a surprising amount of appellate interest recently. For those of you not nodding sagely at this point CPR55.8 deals with the Courts obligations at a summary possession hearing. Put simply the Court has two choices at such a hearing, set out in CPR55.8(1). They can either decide the claim by making a possession order or give case management directions. CPR55.8(2) states that “where the claim is genuinely disputed on grounds which appear to be substantial” those directions must either include an allocation to track or enable that allocation to occur.

In this case Benesco granted a lease to Speedway Tyres Ltd for ten years. K was key in the incorporation of the company and his wife was a director but K himself had no official status. Speedway was placed into liquidation along with an associated company called Autocare Ltd. The liquidator disclaimed the lease in June 2011. On 7 September K applied for a vesting order on the basis that he had a personal sub-tenancy. This application has yet to be determined. K then appeared to change his position to state that he was the assignee of a sublease held by Autocare in the basis of an assignment which was made on 20 September 2011.

Benesco then issued proceedings against K and persons unknown as trespassers on 9 September. K defended this on the basis that Speedway had granted him or alternatively Autocare a sub-tenancy in October 2004. This was not actually something he could assert for Autocare until he had obtained the assignment on 20 September. There was also the issue that Benesco had granted a tenancy at will to ECRC Ltd (of which K was a director) in June 2011. K asserted that this tenancy was not binding due to misrepresentation on the part of Benesco but this was not something that the appeal court was prepared to give a view on.

In short, the Court at first instance was unimpressed by the witness statements produced by K and dismissed them out of hand, granting possession to Benesco. It was this decision that was appealed.

The High Court held that where witness statements supported by statements of truth are produced which allege reasons why possession should not be granted then these:

should be not rejected at a summary stage unless the evidence is incredible. A person is entitled where there are matters raised in the witness statement unless that high threshold is reached to take the matter to trial.

While K’s case was weak and the High Court made clear that it doubted the veracity of their story it was equally clear that K should not have had his case summarily dismissed. The appeal was therefore allowed and a trial date was set.