Facts
- Street granted Mountford the right to occupy two rooms in his house, with exclusive possession, for a weekly rent and determinable on 14 days’ notice
- Street had Mountford sign a declaration that the right to occupy constituted a licence and not a lease
- Mountford sought a declaration that the agreement constituted a lease
Issue
- Was the agreement a lease?
Decision
- Yes
Reasoning
- A lease can be defined as the grant of exclusive possession for a term at a rent (although rent is not strictly required)
- A court is entitled to look behind the label given to an agreement to decide whether in fact a lease was granted, but disguised as a licence
- The agreement here was clearly a lease, therefore Mountford was entitled to legislative protection under landlord and tenant legislation
- This case put an end to ‘sham’ licences, reversing cases such as Somma v Hazlehurst [1978]
- For context to the lease vs licence debate in land law, go to land law notes on leases
