Street v Mountford [1985] 2 WLR 877 House of Lords

Mr Street,  by an agreement which stated that it was a licence,  granted Mrs Mountford the right to occupy rooms 5 & 6 of the property 5 St Clements Gardens in Boscombe for a rent of 37.00 per week. The question for the court was whether the agreement was, as expressed in the agreement, a licence, or whether it was in fact a lease. The terms of the agreement included that Mr Street could enter the rooms at any time to inspect , to read the meter, to carryout maintenance and install or replace furniture or for any other reasonable purpose.  No one other than Mrs Mountford could occupy or sleep in the room without permission. No children or pets were allowed. The licence could be terminated by 14 days written notice. The agreement also stated the that the licence did not and was not intended to give a tenancy and conferred no protection from the Rent Acts.

Held:

The agreement was a lease.

Lord Templeman

“My Lords, there is no doubt that the traditional distinction between a tenancy and a licence of land lay in the grant of land for a term at a rent with exclusive possession.”

“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.”

“In the present case, the agreement professed an intention by both parties to create a licence and their belief that they had in fact created a licence. It was submitted on behalf of Mr. Street that the court cannot in these circumstances decide that the agreement created a tenancy without interfering with the freedom of contract enjoyed by both parties. My Lords, Mr. Street enjoyed freedom to offer Mrs. Mountford the right to occupy the rooms comprised in the agreement on such lawful terms as Mr. Street pleased. Mrs. Mountford enjoyed freedom to negotiate with Mr. Street to obtain different terms. Both parties enjoyed freedom to contract or not to contract and both parties exercised that freedom by contracting on the terms set forth in the written agreement and on no other terms. But the consequences in law of the agreement, once concluded, can only be determined by consideration of the effect of the agreement. If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.”

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