Archive for the ‘exclusive possession’ Category

Terms of agreement meant that there was no exclusive possession

March 20, 2013

In Westminster City Council v Clarke ([1992] 2 A.C. 288, HL) the council and C entered into an agreement that gave C the right to occupy a room in a hostel for homeless, single men. Some of the occupants had personality disorders or physical disabilities. The agreement provided that C did not have exclusive possession. The council could change the accommodation or require C to share his room. C had to be back in his room by 11 pm and any visitors had to leave by then. C had to comply with the directions of the warden or his staff. The question was whether C had exclusive possession of his room (and, therefore, a tenancy).

The House of Lords held that he did not have exclusive possession. It looked at the purposes underlying the agreement: these could not be achieved if C had exclusive possession. The restrictions imposed on C were incompatible with exclusive possession.

Lord Templeman said:

‘From the point of view of the council the grant of exclusive possession would be inconsistent with the purposes for which the council provided the accommodation at Cambridge Street.’ (300 – 01)

and later:

“The conditions of occupancy support the view that Mr. Clarke was not in exclusive occupation of room E. He was expressly limited in his enjoyment of any accommodation provided for him … These limitations confirmed that the council retained possession of all the rooms of the hostel in order to supervise and control the activities of the occupiers, including Mr. Clarke. Although Mr. Clarke physically occupied room E he did not enjoy possession exclusively of the council.’ (301 – 02)

Lease: did the parties agree on exclusive possession for a term?

March 13, 2013

In Radaich v Smith (101 CLR 209) S had entered into an agreement that allowed R to occupy a lock-up shop for a five year term to carry on a business. R applied for a fair rent to be determined. R argued that the agreement gave rise to a licence, rather than a lease, so that there was no jurisdiction to determine a fair rent. The High Court of Australia held that whether there was a lease or a licence depended entirely on whether, properly interpreted, the agreement conferred exclusive possession for a term. If it did then a lease had been created. Any label applied by the parties was irrelevant (for example Windeyer J. at 222). The court held that the agreement in this case did give rise to a lease.

Lease? Did parties intend there to be exclusive possession?

March 12, 2013

In Best Sharp Development Ltd v Lucky Shoe Repairing & Key Duplication Centre ([1988] HKEC 223, CA) BS were the tenants of a shop. They entered into an agreement that allowed LS to occupy part of the shop for its own business. The question was whether LS had a lease or a licence. This depended on whether LS had exclusive possession. Kempster J.A. pointed out that the label applied by the parties was irrelevant: the court had to look at the legal effect of the parties’ actual intention. In this case, there were several terms pointing to the fact that this was a licence (BS could enter at any time and for any purpose, it could remove items brought there without its consent and BS could not change any of the door locks). This was a licence.

No exclusive possession means no lease

June 19, 2012

In Tai Tung Industrial Equipment Ltd v Crown Honor Distinction Ltd ([2012] HKEC 852) T allowed C to use property under the terms of an agreement. When C fell into arrears with the fee payable for the use of the property under the terms of the agreement, T took out a warrant of distress. C argued that it had a licence, not a lease, and that therefore distress was not available as a remedy. The District Court found as a fact that C did not have exclusive possession (it only had access during specified hours and could not exclude the landlord). This was a licence and the warrant of distress was discharged.

Courts give effect to the true bargain

March 19, 2012

Aslan v Murphy (Nos 1 and 2) ([1990] 1 W.L.R. 766, CA (Eng)) followed soon after A.G. Securities v Vaughan ([1990] A.C. 417). In one of the cases, there was an agreement (labelling itself a ‘licence’) for the occupation of a small room. There was a clause to the effect that the licensor could enter at any time or introduce others. The English Court of Appeal found that this was a tenancy. The true intention of the parties was that there would be exclusive possession. The other case concerned a similar agreement but this time in relation to a house with three bedrooms and two reception rooms. Sharing would have been possible but again the court decided that the true bargain was that there would be exclusive possession. The fact that the agreements provided that the landlord would have a key and that the lock would not be changed was ambiguous. Its significance would depend on why the landlord needed a key.

‘Licence’ – sometimes it means what it says

April 19, 2011

It is possible to allow someone to occupy land without giving them possession. In such a case, no lease has been granted.

In Camden LBC v Shortlife Community Housing ((1993) 25 H.L.R. 330) the Council granted Shortlife (a company limited by guarantee) a licence of Council property that the Council intended to redevelop. Shortlife would then grant licences to occupy the property to homeless people. Millett J. held that Shortlife did not have a lease. Although its agreement with Camden did not expressly reserve control / access rights to the Council, it was clear that the Council had them and needed them. The use of the ‘licence’ terminology was consistent with the parties’ true intentions. The Council intended to redevelop the property imminently and Shortlife knew this. In any event, statute (Housing Act 1980, s.91) meant that it was ultra vires the Council to grant a lease without Ministerial consent; it had not obtained any such consent. Paving the way for what he was later to say in the Court of Appeal in Bruton, Millet J said that the occupiers did not have a tenancy by estoppel since they knew that Shortlife had no power to grant them a tenancy.

Lease or licence? The label might matter.

January 17, 2011

When deciding whether or not an agreement creates a lease or licence the Court considers whether or not they intended that the occupier should have exclusive possession. Where the parties have equal bargaining power and the benefit of legal advice then a declaration that they intend to create a licence rather than a tenancy is a pointer towards their true intention

In National Car Parks Ltd v The Trinity Development Co (Banbury) Ltd ([2001] EWCA Civ 1686, CA (Eng)) National Car Parks had entered into an agreement to manage a car park. This agreement described itself as a licence and contained a declaration that there was no intention to create a tenancy. The licensor’s successor in title sought to terminate the licence and the licensee claimed that it had a lease and the benefit of the security of tenure conferred by Part II of the Landlord and Tenant Act 1954. The English Court of Appeal considered the agreement and held that the parties had not intended that the licensee should have exclusive possession. Although the declaration of the parties’ intention to create a licence could not be determinative neither was it appropriate to ignore it when the parties were of equal bargaining power and had the benefit of legal advice.

Did a management agreement create a lease?

November 6, 2010

In Yip v Wong Shun ([2002] HKEC 505) Yip had appointed Wong as the manager of a restaurant under the terms of a management agreement. Wong argued that this created a lease. The CFI (Deputy Judge Reyes SC) disagreed. The landowner had retained such extensive rights to possession as to negative Wong’s claim to exclusive possession. (at para 35)

Exclusive possession

September 14, 2010

Exclusive possession is one of the central characteristics of the lease. Giving importance to the concept of possession emphasises the proprietary character of the lease: possession does not simply mean occupation but requires that the person in possession should be acting as the owner of the property. Exclusive possession can be distinguished from the exclusive occupation that, for example, a student might enjoy in a room in student accommodation:

‘[T]he notion of possession extends far beyond a mere physical occupancy of land to incorporate some kind of conscious will to control that occupancy and to defend it against all comers.’ (Kevin Gray and Susan Francis Gray, Elements of Land Law, (Oxford, Oxford University Press, 2009) (5th ed), p. 335)

So there is no lease if the tenant cannot exclude the landlord (if the tenant grants the landlord a right to enter, however, this simply emphasises the fact that the tenant has exclusive possession).

There can, however, be cases where there is exclusive possession but no lease. Thus, there is no lease where the exclusive possession is attributable to some other relationship (such as a person given possession between contract and completion of the sale and purchase of a property). There is no lease where there was no intention to create a contractual relationship (where, for example, the person has been given possession as an act of kindness as in Marcroft Wagons Ltd v Smith [1951] 2 KB 496).

There are some cases where exclusive occupation by one person is just an extension of the exclusive possession exercised by another. So, for example, where someone occupies property for the better performance of their duties as an employee then it is the employer who has the right to possession. The same can be said of family members who live with the owner of the property.

Lam Man-Yuen v Lucky Apartments [1964] HKLR 689

September 13, 2010

This case looked at whether the occupier of a room in Kowloon was a tenant or a licensee. The court decided, not without hesitation, that the occupier was a lodger or licensee. The court was influenced by the degree of control retained by the owners of the room. They washed and changed bed-linen and servants could be summoned to provide tea and water. If occupiers got back after midnight, they had to be let into the building by a servant,