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Good news for property guardian companies in the midst of misunderstanding

On 31 August 2018, the High Court handed down judgment in the appeal of Khoo v Camelot Guardian Management Limited [2018] EWHC 2296 (QB).

The High Court determined that Mr Khoo was not a tenant – which is fantastic news for property guardian companies (PGCs), having a precedent judgment made in their favour.

Background

Mr Khoo claimed that he was a tenant. However, the guardianship agreement made it very clear that guardians do not have the same legal rights as a tenant, instead, they are given protection as licensees.  The PGC cannot evict a guardian without giving notice, and if that fails, the PGC must get a court order to evict the guardian.

The County Court disagreed with Khoo’s claim and ordered that he vacate the premises. Mr Khoo appealed the decision to the High Court.

Greenwoods GRM were engaged by Camelot, due to our reputation as property guardianship legal experts (we were recognised by the Legal 500 as leaders in the field this week), to ensure the appeal decision at the High Court was successful, in favour of Camelot and the property guardianship sector.

Questions considered by the High Court

  1. Did Mr Khoo have exclusive possession?
  2. Was the agreement between the parties a true reflection of the intentions of the parties at the time of signing the agreement?

The High Court found that Mr Khoo was entitled to occupy the property ‘as a whole’ and not a room as he claimed.  As other guardians occupied the property ‘as a whole’, Mr Khoo could not have exclusive possession.

Mr Khoo argued that the licence agreement was a sham.  After persuasive arguments were given, the High Court disagreed stating both parties knew the basis of the agreement when they entered into it.  The licence agreement was scrutinised by the High Court, as well as the overall nature of the property guardian scheme.  The High Court stated that it was essential to the operation of the guardianship scheme that the premises should be able to be returned to the freehold owner, with vacant possession, at short notice.  The High Court upheld the County Court’s decision.  Mr Khoo was indeed only a licensee.

Comment

As a High Court appeal decision, this judgment will come as good news to PGCs.

However, it is now crucial that PGCs ensure their licence agreements reflect the legal position between the parties; and that they include terms setting out the nature of the relationship and the rights of the licensee.  If you need any support with this, please do let us know.

This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoods.co.uk




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      By completing and submitting this form, you consent to Greenwoods Legal LLP processing your personal data to provide you with the email update services you have selected and any other materials and information about our services that Greenwoods Legal LLP reasonably believes will be of interest to you. You are free to withdraw your consent at any time by emailing mailinglists@greenwoods.co.uk