by Delyth Williams
The recent case of Antoniades v Villiers [8] 1 EGLR 59; [1988] 17 EG 122 has again thrown the landlord and tenant world into confusion on the crucial question of whether an agreement constitutes a lease or a licence. Following the decision of the House of Lords in Street Mountford [1985] 1 EGLR 128, most commentators were of the opinion that the test enunciated by Lord Templeman for distinguishing between a lease and a licence was a watermark in a series of decisions on the question. However, that assessment may no longer prove to be the case and it is to be noted that the House of Lords has granted leave to appeal in the Antoniades case, so that the following analysis may need further revision in the future.
The Antoniades case
In Antoniades v Villiers the plaintiff was the owner of a top-floor flat (consisting of a bedroom and bedsitting-room) and, in 1985, the two defendants (an unmarried couple) each signed, on the same day, separate but identical licence agreements enabling them to occupy the flat. The agreement signed by the first defendant contained the statement that the licensor “is not willing to grant the licensee exclusive possession of any part of the rooms”. The agreement also contained a statement that Mr V agreed that the licence did not come within the Rent Acts and that the flat was for single people sharing. The agreement further provided that:
The licensor shall be entitled at any time to use the rooms together with the licensee and permit other persons to use all the rooms together with the licensee.
Further, Mr V agreed that no person would have exclusive possession of the flat. The Court of Appeal held that the present agreements were not shams as it could not be shown that the parties intended that the occupiers were to have exclusive possession. The agreements could not be construed as giving the occupants exclusive possession as the plaintiff reserved the right to introduce a third occupant, and each occupant was only contractually liable for the monthly payment in his agreement, not the sum of the payments. If, as was held in Street v Mountford, the licence agreements in Somma v Hazelhurst (1978) 246 EG 311 were a sham, that was because in Somma there was only one room with two beds in it and nominating a third occupant was impracticable; in the present case there were two single beds and one double bed: nominating a third occupant was feasible.
Bingham LJ made the point that the broad approach to be adopted was well settled and was as follows:
(1) The court should be astute to detect and frustrate sham devices and artificial transactions whose only object was to disguise the grant of a tenancy and evade the Rent Acts.
(2) A written agreement was a sham where it incorporated clauses by which neither party intended to be bound and which was obviously a smokescreen to cover the real intentions of both contracting parties. A sham existed where the parties said one thing intending another.
(3) It was not a crime, nor was it contrary to public policy, for a property owner to license occupiers to occupy property on terms which did not give rise to a tenancy.
(4) The Rent Acts must not be allowed to alter or influence the construction of an agreement.
(5) Where a written agreement made between the parties was held to be a sham, the task of the court was to identify and give effect to the true bargain between the parties which the written agreement was intended to conceal. Where it was not held to be a sham, the court’s task was to construe it and give fair effect to its terms in the context of all relevant surrounding circumstances.
The decision of the Court of Appeal in this case is to be contrasted with the guidelines enunciated by the House of Lords in Street v Mountford. In that case, the House considered the standing of an agreement under which the defendant had been occupying a single furnished room under a licence agreement and, by agreement with the “landlord”, extended her occupation to the whole of the top floor under an exclusive residential licence. This agreement contained several conditions which (inter alia) stated that the licence was personal, placed an obligation upon the occupier to pay for “damages and breakages” and prohibited the keeping of children and pets. The bottom of the agreement contained a declaration that “I understand and accept that a licence in the above form does not and is not intended to give me a tenancy protected by the Rent Acts”. The House of Lords held that where residential accommodation was granted with exclusive possession for a term at a rent, the landlord providing neither attendance nor services, the result was a tenancy, even though the agreement was called a licence and the occupier had signed a declaration that it did not give a tenancy protected by the Rent Act.
In the House of Lords, all their lordships agreed with the opinion of Lord Templeman, who initially commented that the traditional distinction between a tenancy and a licence of land lay in the grant for a term at a rent with exclusive possession. Having remarked that an occupier of residential accommodation at a rent for a term is either a lodger or a tenant, the occupier being a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises, Lord Templeman commented:
If, on the other hand, residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession and is a tenant. In the present case, it is conceded that Mrs Mountford is entitled to exclusive possession and is not a lodger. Mr Street provided neither attendance nor services and only reserved the limited rights of inspection and maintenance and the like set forth in clause 3 of the agreement. On the traditional view of the matter, Mrs Mountford, not being a lodger, must be a tenant.
Of particular importance in the context of the Antoniades case is the view of the House of Lords in Street v Mountford on two previous cases decided by the Court of Appeal, namely, Somma v Hazelhurst and Aldrington Garages Ltd v Fielder (1978) 247 EG 557. In the Somma case two persons signed separate licences to use a double bedsitting-room, but such agreement was subject to the power of the licensor to permit such other persons to share the room as he wished. When one of the persons requested the registration of a fair rent, the county court judge held that the two documents should be construed together as a joint tenancy. The Court of Appeal was of the opinion that two questions should be posed: (i) did the parties intend to be bound by the written agreement? (ii) can it be said from the words that they used in the agreements that they intended to create a licence rather than a tenancy? The Court of Appeal concluded that the agreements were merely personal licences to occupy the room. The Court of Appeal’s decision was heavily criticised and disapproved by Lord Templeman in Street v Mountford.
Similarly, in Aldrington Garages Ltd v Fielder two occupiers of the same flat entered into separate but identical agreements with the owner. The agreements were framed as licences so as not to confer exclusive possession on the occupiers and each contained a statement that they were entered into to avoid the creation of a tenancy. When one of the occupiers terminated her occupation under a clause in the agreement, the remaining occupier claimed to be a tenant. The Court of Appeal held that the agreements created separate non-exclusive licences and the fact that they enabled the operation of the Rent Act to be avoided did not prevent effect being given to them if the documents truly created licences and, a fortiori, represented the intention of the parties.
In Street, the decision in Somma was heavily criticised on the grounds that the Court of Appeal did not ask itself whether the two persons who occupied the double bedsitting-room in that case were lodgers or tenants and did not draw the correct conclusion from the fact that they enjoyed exclusive possession. In these circumstances, the Court of Appeal was diverted from the correct inquiries by the fact that the landlord obliged the two persons to enter into separate agreements and reserved the power to determine each agreement separately. Lord Templeman highlighted the sham nature of the obligation to share the room in common with such other persons as the landlord might nominate by analysing the consequences of the agreements for a married couple.
The landlord also insisted that the room should not in form be let to either H or S or to both H and S but that each should sign an agreement to share the room in common with such other persons as the landlord might from time to time nominate. The sham nature of this obligation would have been only slightly more obvious if H and S had been married or if the room had been furnished with a double bed instead of two single beds. If the landlord had served notice on H to leave and had required S to share the room with a strange man, the notice would only have been disguised notice to quit on both H and S. The room was let and taken as residential accommodation with exclusive possession in order that H and S might live together in undisturbed quasi-connubial bliss, making weekly payments. The agreements signed by H and S constituted the grant to H and S jointly of exclusive possession at a rent for a term for the purposes for which the room was taken and the agreement therefore created a tenancy. Although the Rent Acts must not be allowed to alter or influence the construction of an agreement, the court should, in my opinion, be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy and to evade the Rent Acts. I would disapprove of the decision in this case that H and S were only licensees and for the same reason would disapprove of the decision in Aldrington Garages Ltd v Fielder (supra) and Sturolson & Co v Weniz (1984) 272 EG 326.
In Antoniades, the Court of Appeal considered the facts of the case in great detail, but it is respectfully submitted that the case is virtually indistinguishable from Somma, which was so forcefully criticised in the House of Lords. The main factual distinction appears to be that in Somma there were two bedrooms and only one in Antoniades.
The law prior to Street
Although Lord Templeman’s analysis encompassed the case law dating from Taylor v Caldwell (1863) 3 B & S 826, the following is a summary of the more recent case law prior to the decision in Street:
(a) Marchant v Charters [7] 3 All ER 918
In this case, the defendant occupied a furnished bedsitting-room in a house with a resident housekeeper. The rooms were cleaned daily and had linen changed weekly. When the defendant made an application for the registration of a fair rent, the plaintiff brought proceedings for possession. The Court of Appeal held that the defendant was a contractual licensee and commented that, in determining whether a lease or a licence existed, all the circumstances had to be considered; the eventual decision depended upon the nature and quality of the occupation.
(b) O’Malley v Seymour (1978) 250 EG 1083
An occupier signed a non-exclusive occupation agreement which was stated to be a licence. It emerged in evidence that it had never been the intention of the owner to impose any other person to share with the single occupier. The court found that, prior to the signing of the non-exclusive occupation agreement, the parties had concluded an agreement which amounted to a tenancy. On these facts, the Court of Appeal held that a tenancy had been created. Stephenson LJ commented that:
The questions which arise are, it seems to me: first, what on its true construction is the nature of the written agreement which the plaintiff relied and relies [on] in his claim for possession, against the background of the evidence? Secondly, does the evidence prove and entitle the judge to hold that the document, on its proper construction, does not truly represent or reproduce the real transaction between the parties?
(c) Demuren v Seal Estates (1979) 249 EG 440
Two postgraduate students seeking accommodation in London signed separate “licence” agreements. The Court of Appeal found that the two occupiers had concluded an oral agreement for a joint tenancy prior to the signing by them of two written licence “agreements”. Megaw LJ agreed with the conclusion of the county court judge that a joint tenancy had been created.
(d) Sturolson & Co v Weniz (1984) 272 EG 326
In this case, the agreement in question was framed as a non-exclusive right of sharing a flat with such other person or persons as were approved by the owner. In the court proceedings, it emerged that the owner’s agent had sought to reassure the defendant that strangers would not be imposed on him to share the flat and, further, that he would be able to stay in the flat for a few years because such formalities in the agreement were merely designed to get around the Rent Acts. The defendant and a friend then proceeded to sign a separate but identical sharing agreement in which they agreed to pay £100 per month each. The Court of Appeal held that, provided the agreement truly constituted a licence and not a lease, there can be no objection to the owner of the premises granting a licence which will not attract the protection of the Rent Act 1977. In this case, both the defendant and his friend fully understood what they were signing and were not led to suppose that the real agreement was something different, and neither the owners nor the flat sharers treated the document as a sham. Finally, the agent’s reassuring words merely indicated that the owner’s attitude would be benevolent, but it did not amount to an assurance of the security of tenure given by a tenancy. The agreement was held to be a licence.
(e) Annen v Rattee (1984) 273 EG 503
In this case, the plaintiff and Mr W purchased the freehold of a flat in 1978 and, some time thereafter, Mr W granted the defendant a licence to occupy the flat when both the plaintiff and Mr W were in Canada. One of the co-owners served a notice to terminate the licence without the knowledge or consent of the other. In the Court of Appeal the suggestion of the existence of a trust conferring an equitable right upon the occupier by reason of certain financial contributions made was rejected and the occupier was held to have no proprietary interest but merely a simple licence to occupy. Further, the Court of Appeal was of the opinion that one co-owner could terminate the licence without the concurrence of the other co-owner(s).
How has Street v Mountford been applied?
The application of the criteria enunciated in Street is of crucial importance to the practitioner dealing with residential tenancies and the following is a summary of the main cases in which the criteria have been applied:
(a) Royal Philanthropic Society v County [5] 2 EGLR 109
The appellant had been employed by the first plaintiffs as a houseparent in a school which was owned by the charity but managed by a local authority. When he was appointed to his post, the appellant occupied a flat in the school on the basis of a service licence. On marriage, he vacated this flat and was, with the agreement of the school and the local authority, accommodated in a house owned by the school. After about a year, the appellant’s employment at the school came to an end and he was requested to leave the house. The appellant refused this request and proceedings were commenced in the county court. In the county court, the recorder determined that the appellant was a licensee and made an order for possession. (It should be noted that the recorder’s decision was given before that of the House of Lords in Street v Mountford.) The Court of Appeal reversed the recorder’s decision and held that the appellant was a tenant of the school house accommodation.
As there was no suggestion that he required this accommodation for the better performance of his duties as a servant, it did not amount to a service occupancy.
The Court of Appeal applied the guidance of Lord Templeman and noted that the appellant had exclusive possession of the accommodation at a rent for a term and, as he was not a lodger, he was a tenant.
(b) Caplan v Mardon (1986) (unreported, Sheffield County Court)
In this case, the premises consisted of a large Victorian house with a ground floor of a hall, two rooms, kitchen and bathroom. The first floor comprised two rooms, kitchen and bathroom and with an attic bedroom on the second floor. Separate doors in the lobby provided access to the ground floor and upper floors. The three students who were seeking accommodation signed separate agreements to occupy the house, with all three agreements being identical and stating:
(i) that the licence granted was not exclusive;
(ii) that the licensor had the right to agree other licences as he thought fit; and
(iii) that there was nothing in the relationship which created a tenancy or the relationship of landlord and tenant.
The defendant made an application for the determination of a fair rent.
The county court judge held that, at the material time, the house was physically split into two parts, with the three students having, in effect, exclusive possession of the upper parts of the premises. Reviewing the facts of Street v Mountford, the learned county court judge found that the defendant was not a lodger and so must be a tenant and was of the opinion that he was a joint tenant (together with the other two students) of the upper parts of the premises.
(c) Bretherton v Paton [6] 1 EGLR 172
The parties had entered into an agreement by which the appellant was allowed into occupation of a dwelling-house with the ultimate intention that she would purchase the property. The owner did not want to grant a tenancy of the premises, as she had had some difficulties with previous tenants, but agreed that the appellant could move in and undertake the repairs necessary to enable her to obtain a mortgage. In the interim period, the appellant agreed to pay the rates and £1.20 weekly towards the costs of the insurance premium for insuring the property until completion. The appellant eventually decided that she did not want to proceed with the purchase, but still wished to continue in possession, but the respondent served a notice to quit and thereafter commenced proceedings for possession. It was common ground that the appellant had exclusive possession of the premises. The Court of Appeal held that, although a possible sale was ultimately in contemplation when the appellant went into occupation, the only intention which was relevant was that demonstrated by the facts of the transaction, namely the grant of exclusive possession at a rent for a periodic term. In the circumstances, the tenant held under a tenancy protected by the Rent Act 1977.
(d) Crancour Ltd v Da Silvaesa [6] 1 EGLR 80
This case concerned consolidated appeals against an order for possession. The two appeals concerned the construction of agreements under which the occupier occupied certain rooms in a house which was owned by the plaintiff. The terms of the “agreement” included inter alia:
(i) the licensee was allowed to use the one-room flat only between midnight and 10.30 am and between noon and midnight;
(ii) the possession, management and control of the flat were vested in the licensor, who had an absolute right of entry at all times for that purpose and for carrying out repairs;
(iii) the licensor was to provide attendance which included the services of a housekeeper, the cleaning of the flat, the removal of rubbish, the laundry of bedlinen and a telephone;
(iv) the licensor could, at any time and for any reason, require the licensee to vacate the flat and move to any other flat of comparable size in the building.
On the expiry of the 26 weeks’ agreements, the appellants refused to leave and the owners applied for possession under Ord 113. In the High Court, both judges took the view that the occupiers were clearly “lodgers” within the exceptions enunciated by Lord Templeman in Street v Mountford. The Court of Appeal allowed the appeals and remitted the cases to the county court. The Court of Appeal was of the opinion that, although the agreements were not necessarily shams, the owner’s claim was not sufficiently clear for the use of Ord 113.
In so deciding, the Court of Appeal made several important observations and concentrated on the two provisions of the denial of any right to use the rooms between 10.30 am and noon and the licensor’s right to remove articles of furniture from the rooms.
The Court of Appeal was of the opinion that, while these provisions were not in themselves evidence that the agreement as a whole was a sham, it could be argued that they were sham provisions and they amounted to a factor to take into account in deciding whether the matter was clear enough to justify a summary order for possession. The appeals were therefore allowed and the cases remitted for trial.
(e) Brent People’s Housing Association v Winsmore (1986) (digested in the Case Law Guide of the Institute of Rent Officers)
The defendant was granted the occupancy of a bedsitting-room and the right of a shared use of a kitchen and bathroom with two others. The flat was part of a house which had been converted into several flats and was managed by a group concerned with single homeless people on behalf of a registered housing association. Two full-time social workers were employed at the house to provide support, advice and assistance to the occupants. When the defendant failed to conform with the rules of the house, the licence was terminated. There was a power in the agreement for the project to move the occupant against her will if necessary. The county court judge held that there was a sharing of the flat between the three residents so that there was no exclusive possession present to the degree which would create a tenancy. Alternatively, upon consideration of all the circumstances, including the charitable aspect, the temporary nature of the whole scheme and the presence of the full-time counsellors, the agreement fell within the exceptional circumstances envisaged by Lord Templeman in Street v Mountford. The agreement was a licence revocable upon reasonable notice.
(f) Sharp v McArthur (digested in the Case Law Guide of the Institute of Rent Officers, June 9 1986)
The premises had been refurbished with a view to sale and were empty with a “For Sale” sign prominently displayed outside when the appellant met the respondent and stressed that he was in urgent need of living accommodation. The respondent decided to let the appellant into the flat as a favour and pending the sale, and it was agreed that the appellant should be given a month’s notice of when he had to leave. The appellant was given a rent book when he explained that he needed documentary evidence in the form of a rent book to prove his outgoings to the Department of Health and Social Security. When a month’s notice was given, the appellant maintained that he had a tenancy, contending that he had his own furniture, that he had a rent book and that all the indicia of a tenancy were present, Sir John Donaldson referred to the comments of Lord Templeman in Street where he stated that sometimes it may appear from the surrounding circumstances that there was no intention to create legal relations or that a right to exclusive possession is referable to a legal relationship other than a tenancy. The Court of Appeal held that, in spite of the undoubted presumption of a tenancy, there were exceptional circumstances, so that the respondent had rebutted the presumption.
(g) Brooker Settled Estates Ltd v Ayers [7] 1 EGLR 50
In this case, the respondent occupied a double bedsitting-room in a flat which consisted of this room, two single bedsitting-rooms, a kitchen/dining-room, bathroom and lavatory. The two other rooms were each occupied by another woman. The respondent entered under an oral agreement and subsequently signed a written agreement which was described as a licence. The written agreement purported to licence each occupier of a room to occupy the entire flat and repeatedly stated that no one had exclusive possession of anything. The agreement also reserved a right to put another person in the respondent occupier’s room. The county court judge held that there was no evidence that attendance or services were provided and that, under the ruling in Street, she was a tenant. The Court of Appeal held that, where it was found as a fact that the occupier of property was not a lodger in that the landlord did not provide attendance or services, it did not necessarily follow that there was exclusive possession giving rise to a tenancy. Exclusive possession was a question of fact in each case and had to be decided by reviewing the evidence.
(h) Hadjiloucas v Crean [7] 2 EGLR 60
In this case, the appellant and another lady friend each signed an agreement, called a licence, to share a flat with one other person, with the licensee not to have exclusive possession. The term was for six months and the “licence rental” was £260 per month with a provision that the overall total from “all” licensees should not exceed £260 per month. After about two months, the other lady sharing the flat with the appellant left, but her place was taken by someone else who remained in the flat until the expiry of the terms. The appellant continued to stay in the flat, refusing to sign a new licence agreement at a higher figure, and she subsequently obtained a registered fair rent from the rent officer of £130 per month. The Court of Appeal was of the opinion that the correct approach in the “non-sham” cases was to consider the factual matrix, inquire into the true contractual effect of the agreement, eliminate any artificial provisions and be astute to prevent the protection of the Rent Act from being excluded by an artificial device even if it is not a sham. In the case of multiple occupancy, the facts must be analysed to see whether a joint tenancy has been created. The Court of Appeal held that there were not sufficient findings by the county court judge to decide the matter.
(i) AG Securities v Vaughan [8] 1 EGLR 36; [1988] 06 EG 112
A flat (consisting of four bedrooms, a sitting room, bathroom and wc) was occupied by four individual occupants. Each of the occupants had separate short-term licence agreements granting a right to use the flat in common with others but expressly negativing a right to the exclusive possession of any part of the flat. The licence agreements began at different dates and there were some variations in the rents charged. When the leaseholders wished to let the flats on long subleases, they served notices to quit. The local authority, as a result, applied to the rent officer for the determination of a fair rent on the basis that the occupants were, in law, joint tenants of the flats. A majority of the Court of Appeal held that the occupants passed the three tests in Street v Mountford because, despite differences in the periods of occupancy, it could be said that there was a joint right of occupancy for a “term”. Further, as regards the “rent”, the aggregate amounts payable could be regarded as constituting “rent”. Accordingly, when the notices to quit were given, the occupants were jointly entitled to exclusive possession of the flat for a term at a rent. Sir George Waller (dissenting) drew attention to the considerable difficulties involved in regarding the transactions as constituting a joint tenancy.
Street v Mountford and business premises
It should not be overlooked that the criteria for differentiating between a lease and a licence may also have crucial consequences for the operation of the Landlord and Tenant Act 1954 Part II. This issue has been considered on several occasions by the courts:
(a) Smith v East Anglian Entertainment Activities Ltd [5] 6/4 RRLR 343
In this case, the plaintiff took over the business of a sea-front cafe and premises in Southend from Mr S in May 1979. In November 1980, the second, third and fourth defendants (who had acquired the first defendant’s interest in the premises) dispossessed the plaintiff and removed all his fixtures, fittings and chattels. The plaintiff brought a. action claiming that he was a tenant of the premises and that the defendants had no right to oust him since he was protected under Part II of the Landlord and Tenant Act 1954. The defendants contended that the plaintiff was a bare licensee or, at most, a tenant of the premises for the summer season only, a period spanning five months, and therefore unprotected under the 1954 Act. Judge Thomas (sitting as a High Court judge) held that the evidence showed that Mr S had the exclusive possession of the cafe and premises, paying rent for it, and accordingly it was a yearly tenancy prior to the plaintiff’s emergence on the scene. The plaintiff acquired Mr S’s yearly tenancy when he took over from him in May 1979.
(b) Dellneed Ltd v Chin [7] 1 EGLR 75
The premises in question had been rebuilt following a serious fire. The tenant (who was a well-known restaurateur and had previously used the premises as a restaurant) let a company, D Ltd, into occupation under a management agreement called a “Mai Toi” agreement. The agreement, under which a well-established restaurant allows a young and inexperienced man to operate a restaurant business on his own account under supervision, provided that nothing in the management agreement should be construed as creating a legal demise and that “this agreement confers no tenancy”. The main issue was whether this document between the tenant and the restaurant operator created a tenancy. Millett J held that the agreement created a tenancy within the rule in Street v Mountford, as there was exclusive possession of the restaurant for a term at a rent. The transaction was a commercial one from the outset. D Ltd had exclusive possession of the premises, paid a weekly rent, was under a duty to repair and prohibited from redecorating, altering or changing the name of the premises. All these factors clearly pointed to the agreement being a tenancy.
(c) Dresden Estates Ltd v Collinson [7] 1 EGLR 45
In this case, the respondent was a builder and scaffolder and occupied a workshop and store under an agreement which throughout described itself as a licence, emphasised that exclusive possession was not conferred and further provided that (in clause 4(b)):
It is agreed between the Licensors and the Licensees as follows:
(a) this Licence is personal to the Licensees and the Licensees shall not transfer this interest in the same in any manner whatsoever
(b) this Licence confers no exclusive right for the Licensees to use and occupy the Premises and the Licensors shall be entitled from time to time on giving the Required Notice to require the Licensees to transfer this occupation to other premises within the Licensor’s adjoining property
(c) this Licence does not constitute any tenancy or lease of the Premises.
The agreement also contained a number of provisions normally found in tenancies and included an express grant of a limited right to the owners to enter for the purpose of carrying out any work that was deemed to be necessary by the licensors. The county court judge was of the opinion that the agreement constituted a tenancy. The Court of Appeal held that, considering the agreement as a whole, the indications were in favour of a licence and, in particular, the provision by which the occupier could be required to move to other premises was wholly inconsistent with a right to exclusive possession during the continuance of the agreement. While exclusive possession was one of the more important factors, the decisive consideration was the intention of the parties. Further, the decision in Street v Mountford was a decision in regard to residential premises, and the suggested restriction of the inquiry to whether the occupier was a tenant or a lodger had no application to business premises, where there is no such person as a lodger.
(d) Smith v Northside Developments Ltd [7] 2 EGLR 151
The appellants were initially co-occupiers, with a third party, of the shop space. After a time, the third party left and the appellants occupied the whole of the space (paying double the previous weekly amount), but there was no agreement in writing to this effect. The legal basis of the occupation became a critical issue when the appellants were given notice to leave. The appellants claimed that they had not merely taken over the space previously occupied by the third party but had obtained an exclusive right of occupation which was good against the whole world. The Court of appeal held that there was no evidence indicating an agreement for exclusive possession, as there was merely an arrangement to have a replacement for the departed third party.
Conclusions
The following conclusions are offered as being consistent with the developing case law as it stands at the present time and will be subject to the decision of the House of Lords in the Antoniades case:
(a) The tests enunciated by the House of Lords in Street v Mountford are applicable for determining the lease-licence question in the case of both commercial and residential premises.
(b) The factors of exclusive possession for a term at a rent are slightly modified in the case of commercial premises where the need to consider whether the occupier is a lodger would rarely, if ever, arise; Dresden Estates Ltd v Collinson.
(c) The question of whether an occupier or occupiers have exclusive possession of the premises is one of fact in each case to be determined on the evidence; Brooker Settled Estates Ltd v Ayers.
(d) The Rent Acts must not be allowed to alter or influence the construction of an agreement; Street v Mountford and Antoniades v Villiers.
(e) The court should be astute to detect and frustrate sham devices and artificial transactions whose only object was to disguise the grant of a tenancy and evade the Rent Acts; Antoniades v Villiers.
(f) Where a written agreement made between the parties is held to be a sham, the task of the court is to identify and give effect to the true bargain between the parties which the written agreement was intended to conceal. Where it is not held to be a sham, the court’s task is to construe it and give fair effect to its terms in the context of all relevant surrounding circumstances; Antoniades v Villiers.
(g) It is difficult to reconcile the decision in Antoniades v Villiers with the strong disapproval of Somma v Hazelhurst in the House of Lords in Street v Mountford. The differences of fact between the Antoniades and Somma cases appear to be de minimis.