Contract for claimant to erect and operate advertising stations — Whether lease or licence of advertising sites — Whether exclusive possession granted — Whether occupation sufficient to qualify for protection of section 23 of Landlord and Tenant Act 1954 — Claim dismissed
The defendant council reached an agreement in principle with the claimant, under which the claimant would construct and operate M-shaped advertising stations placed on concrete bases at various sites. A draft written agreement dated March 2001 specified 13 sites, which were identified by address in a schedule. The schedule also provided for payment of “rent” and set out the term of the agreement as running from the date of the agreement to the end of October 2002. Although the agreement was never executed, the claimant paid rent on the basis of the draft.
In December 2002, the council informed the claimant that it was terminating the existing arrangements and putting the M sites out to tender for future advertising. The claimant objected, contending that it had a tenancy of the sites protected by Part II of the Landlord and Tenant Act 1954. The council subsequently accepted a tender from a competitor of the claimant. They served notices to determine the claimant’s rights to occupy the sites under any contractual arrangement, and, without prejudice to their view that no tenancy existed, notices under the 1954 Act. The claimant served counternotices and applied for the grant of a new tenancy. The council did accept a tender from the claimant in respect of another site at Chester Road, and, although a formal contract was never signed, the principal terms were agreed. The claimant built an advertising station on the site, and paid rent on the basis of the agreed terms. The council subsequently sought to terminate the claimant’s rights in respect of that site also.
The claimant brought proceedings seeking a declaration that it had tenancies of all the sites. It contended that, under the terms of the 2001 draft agreement, it was intended that it should enjoy exclusive possession, and hence a tenancy, of each area of the M sites occupied by the concrete base of each. By their defence and counterclaim, the council submitted that the claimant had held licences only of all the sites, which had been terminated. The counterclaim included a claim for damages in respect of the use of the Chester Road site.
Held: The claim was dismissed; the counterclaim was dismissed in relation to the Chester Road site.
The starting point, when determining whether there was a tenancy or a licence, was to ask whether the intention was to grant exclusive possession for a term at a rent. There was no intention to grant a tenancy of the areas occupied by the concrete bases. The 13 sites mentioned in the 2001 draft were not the areas of the concrete bases of the Ms, but larger, undefined areas of land owned by the council in which the concrete bases were placed. That being so, there was no grant of exclusive possession to the claimant. Even if the area of any demise had been intended to be limited to the concrete bases of the Ms, there was no intention to grant exclusive possession of them. The provisions of the 2001 draft pointed strongly against such an intention: Street v Mountford [1985] 1 EGLR 128 applied.
The claimant did, however, hold an annual tenancy of the Chester Road site. The draft agreement for that site showed a clear intention on the part of the council to grant a lease over the land occupied by the advertising station, rather than over some wider and ill-defined area of land. There was nothing in the draft to indicate an intention to give something less than exclusive possession. Had the 2003 agreement been executed, it would have been effective to grant a tenancy of the Chester Road site. The erection and maintaining by the claimant of the advertising station, coupled with the payment of rent, gave rise to a tenancy of the site. That tenancy was not merely a tenancy at will. The council took a substantial rent payment in respect of a lengthy period intended to be in the nature of a periodic annual payment rather than a payment for a one-off fixed term. Moreover, there was nothing to indicate that the council intended to exclude any tenancy from the statutory protection for business tenancies: Cardiothoracic Institute v Shrewdcrest Ltd [1986] 2 EGLR 57 and Javad v Aqil [1990] 2 EGLR 82 distinguished. The use of the site by the claimant was sufficient to amount to occupation for the purposes of section 23 of the 1954 Act. There had been continual use for the purposes of the claimant’s business.
John McGhee QC (instructed by Hammonds) appeared for the claimant; Jonathan Brock QC (instructed by the solicitor to Manchester City Council) appeared for the defendants.
Sally Dobson, barrister
