Contract for erection and operation of advertisement hoardings — Whether contract conferring lease or licence — Whether sufficient definition of land to give rise to right of exclusive possession — Appeal dismissed
The respondent council reached an agreement with the appellant under which the latter would construct and operate M-shaped advertising stations placed on concrete bases at various sites. Although no formal agreement had been concluded, it was common ground that the parties’ respective rights and obligations were set out in a draft agreement dated March 2001. In the schedule to that agreement, 13 sites were specified, although the locations were not precisely defined, being identified only by the relevant street. The agreement stated that it “shall constitute a licence in respect of each Site and confers no tenancy”.
In December 2002, the respondents informed the appellant that they were terminating the existing arrangements and putting the M sites out to tender for future advertising. The appellant objected, contending that it had a tenancy of the sites protected by Part II of the Landlord and Tenant Act 1954.
The appellant brought proceedings seeking a declaration that it had tenancies of all the sites. It accepted that in order to have a tenancy, it had to have been given a right of exclusive possession of an area of land that was capable of sufficiently precise definition. It argued that, under the terms of the agreement, it had been intended that it should enjoy exclusive possession of the area of each M site as defined by the area of the concrete base.
Dismissing that claim, the judge held that the sites referred to in the agreement were not the areas of the bases but larger, undefined areas of land owned by the respondents, and that there was no intention to grant exclusive possession. The appellant appealed.
Held: The appeal was dismissed.
The case turned on a preliminary issue of construction as to whether the agreement contained a sufficient definition of the land said, by the appellant, to be the subject of the tenancy. The judge had reached the correct conclusion on that matter for the reasons that he gave: Street v Mountford [1985] 1 EGLR 128; (1985) 274 EG 821 applied. Moreover, the appellant had negotiated the contract with the intention, as expressed in the contract itself, that it should not create a tenancy. Where a contract, negotiated between two substantial parties of equal bargaining power and with the benefit of full legal advice, contained a clause that set out in unequivocal terms the parties’ intentions as to its legal effect, the court would need to be persuaded that its true effect was contrary to that expressed intention.
John McGhee QC (instructed by Hammonds) appeared for the appellant; Jonathan Brock QC (instructed by the legal department of Manchester City Council) appeared for the respondents.
Sally Dobson, barrister
