Ms Brown wanted a flat to live in. Mr White owned a flat but would only let it to a company, because a company would not be entitled to the protection afforded to individuals under the tenancy protection legislation then in force. Ms Brown, at Mr White's suggestion, incorporated the company Ajax Ltd. Ajax Ltd rented the flat for six months from Mr White under a lease agreement which gave Ajax Ltd the right to nominate the occupier of the property. Ajax Ltd nominated Ms Brown as occupier. The lease agreement was subsequently extended for three months, after which Mr White asked for possession. (Under the tenancy protection legislation, Mr White would not have been able to proceed this the flat been let to an individual.) Ms Brown refused to leave. When sued by Mr White, Ms Brown contended that the company was a sham to evade the tenancy protection legislation and that the lease was truly between her and Mr White.

Advise Ms Brown of the legal situation and her chances of success.

This problem is reproduced from Jonathan BarrettUnderstanding Company Law(4th ed, LexisNexis Wellington, 2019) at 25-26.