[2025] EWHC 2336 (Ch)

The defendant argued that the proposition in [47] regarding a normal case was derived from the judgment of Arden LJ in Brown v City of London Corporation [1996] 1 WLR 1070, in which at pp1082-1083 she had held as follows.

“As there cannot in general at least be two persons in different capacities in possession at the same time … it must follow … that a person is entitled to possession for the purposes of section 65(1) of the Act of 1988 only if he is immediately entitled to possession. It is not enough that a person has a right which if exercised would result in his having possession. Accordingly the fact that the receivers could have displaced the possession of the company, or exercised their power under … the debentures is not enough to make them ‘owners’ for the purposes of section 65(1) of the Act of 1988.”

On that basis, it was suggested on behalf of the defendant that there was a ‘Brown test’, which was applicable in ‘normal’ cases, and an extended ‘Rossendale test’, which applied in unusual cases. This then founded a submission that there was nothing unusual about the Wigan scheme or the Trafford scheme so to justify the application of the Rossendale test.

I do not accept that there are two separate tests to identify the person entitled to possession for the purposes of section 65 (1) of the 1988 Act, one for normal cases and one for unusual cases. It would be a very odd way of approaching statutory construction, rather as if one were to say that the section meant one thing on Mondays, Tuesdays and Wednesdays, and a different thing for the rest of the week. In my judgment, there is only one test, and that is the Rossendale test. The case of Brown, in the excerpt quoted, did not purport to establish all the necessary and sufficient conditions for the satisfaction of any test for identifying the person in possession, but only a necessary condition: that they should be immediately entitled to possession. There is nothing inconsistent with the Rossendale test in that. The distinction drawn in Rossendale between normal cases and unusual was not to suggest that the test differed according to circumstance, but that what the phrase “the person entitled to possession” denoted in different circumstances: in other words, what person the application of the test identified. In the Brown case, that was simply the person immediately entitled to possession, because the circumstances were not unusual. In the Rossendale case, on the facts as agreed and assumed, it identified PAG.

The only point, therefore, in attempting to persuade the court that there is nothing unusual about the present cases is, not to secure the application of a more favourable test, but simply to say, when applying the Rossendale test in the present case, that there is no point in asking whether the candidate has real or practical control, because it is a normal case. But that is to beg the question. Moreover, it sits very uncomfortably with the view of the Supreme Court that, if the schemes were designed so as to ensure that the SPV to whom a lease was granted had no real or practical control over whether the property was occupied or not, and such control remained at all times with the landlord, that would be precisely the unusual situation which their Lordships had in mind.