Posts Tagged ‘licence’

Adverse possession: death of licensor terminates a licence

June 26, 2017

The facts of Hsieh Haw Shane Gary v Chang Ho Ying ([2017] HKEC 1246) illustrate that a licensor’s death terminates a licence to occupy land.

Madam Chang was registered as the owner of a flat (‘the flat’). She died intestate in 1966. Letters of Administration were granted to Mr. Chang, her husband, in 1967. He was solely beneficially entitled to the flat but the legal title was never assigned into his name.

Mr. Chang married Madam Lee in 1970. He died intestate in 1984. Madam Lee did not seek Letters of Administration de bonis non in respect of Madam Chang’s estate. Madam Lee took possession of the flat on her husband’s death and rented it out.

Madam Lee moved to Malaysia in 1998. She gave the keys to the flat to her son, Gary. Gary paid all of the expenses in respect of the flat and collected the rents from then on. Madam Lee died in 2002.

The question was whether Gary had acquired title by adverse possession by 2013 when the flat (and the whole building of which it formed part) was acquired by a developer pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance (Cap. 545).

Mr. Chang’s death in 1984 brought an end to any licence that he may have granted to Madam Lee. Gary began a new period of possession in his own name when he was given the keys and managed the property from 1998. He had therefore been in adverse possession for more than twelve years by 2013.

Gary had defeated Madam Chang’s title and he was entitled to the proceeds of sale of the flat.

Michael Lower

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‘Licence’ pending completion of agreement for lease: A Street v Mountford exceptional case?

May 27, 2013

In Cameron Limited v Rolls-Royce plc ([2007] EWHC 546 (Ch)) RR was C’s tenant (with the benefit of two leases contracted out of Part II of the Landlord and Tenant Act 1954). The parties exchanged agreements for the grant of two further leases of the same properties, also to be contracted out of the 1954 Act security of tenure provisions). The agreements were conditional on the obtaining of the necessary court order sanctioning the contracting out and on obtaining the superior landlord’s consent to the proposed leases. In the meantime, RR was to remain in possession pursuant to licences contained in the agreements for lease.

It was accepted that these licences gave RR exclusive possession for a term at a rent. Did the licence agreements actually give rise to leases?

The court held that they did not. They fell within one of the exceptions identified by Lord Templeman in Street v Mountford. The licences were not ‘stand-alone’ arrangements but formed part of a bigger picture. Mann J. said:

‘As I have said, Mr. Small accepted that if the licence did not fall to be treated as a stand-alone document, then the vendor/purchaser exception to the prima facie Street v. Mountford position would obtain. He is right to accept that. I have come to the conclusion that this is plainly a case of a licence being granted in the context of the acquisition of the larger interest and, as such, the nature of the interest granted by Cameron and obtained by Rolls-Royce under the agreement itself and pending the grant of the lease is that of a licence only.’ ([26])

Michael Lower

Lease or licence? Licence coupled with option to call for the grant of a lease

May 21, 2013

In Essex Plan Ltd v Broadminster ((1988) 56 P & C.R. 353) D gave E a licence to occupy premises. It also gave E an option to call for the grant of a lease. The licence and option periods expired but E remained in possession. Negotiations for the grant of a further licence did not come to fruition. D conveyed the property to B. B gave notice to terminate the licence. E argued that it was a tenant, not a licensee, with the benefit of the security of tenure conferred by part II of the Landlord and Tenant Act 1954. They argued that they had exclusive possession for a term at a rent and therefore the Street v Mountford criteria for the grant of a lease were present. 

E failed. The case belonged to one of the exceptions identified by Lord Templeman in Street (occupation by a purchaser pending completion):

‘The option gave Essex Plan the right to call for the grant of the lease and therefore gave it in equity an immediate interest in the land. Its entry into occupation pending the exercise or expiry of the option was ancillary and referable to that interest. There is therefore no need to infer the creation of a tenancy which would give Essex Plan a different interest in the same land.’ (Hoffmann J, 356)

Hoffmann J. addressed the separate question as to whether E had exclusive possession. Had it been necessary, he would have held that E did not have exclusive possession. The licence expressly provided that D retained possession and there was no evidence to show that this was a sham. Had D entered during the licence period E could not have brought an action in trespass. The absence of any express right for D to enter was an interesting indicator that it did not need to be given a right to enter since it retained possession (356 – 357).

Michael Lower