Shell-Mex and B. P. Ltd v Manchester Garages Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER of THE ROLLS,LORD JUSTICE SACHS,LORD JUSTICE BUCKLEY |
| Judgment Date | 13 January 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J0113-5 |
| Date | 13 January 1971 |
| Court | Court of Appeal (Civil Division) |
[1971] EWCA Civ J0113-5
The Master of The Rolls (Lord Denning),
Lord Justice Sachs and
Lord Justice Buckley.
In The Supreme Court of Judicature
Court of Appeal
Appeal of defendants from judgment of Mr. Justice Geoffrey Lane on 17 November, 1970.
Mr. G. B. M. Dillon, Q. C., And Mr. J. K. Henty (instructed by Messrs Lickfolds Wiley & Powles, agents for Messrs. Taylor, Hindle & Rhodes of Manchester) appeared on behalf of the appellant defendants.
Mr. Richard Scott (Instructed By Messrs. Abbott, Baldwin & Co.) appeared on behalf of the Respondent Plaintiffs.
Shell-Mex and B. P. Limited. own the Greyhound Filling Station at Kirkmanshulme Lane, Manchester. In 1966 they allowed a company called Manchester Garages Limited. to go into occupation. There are two documents for two different parts of the premises.
The front land is covered by a document called a licence. It consists of the site of the filling station itself, where there are three petrol pumps, a kiosk, car sales display canopy, and offices. Manchester Garages Ltd. supply petrol on this site to customers. I will refer to the licence in detail later.
The back land is covered by a document called an under lease. It is used for the storage of motor vehicles, and general servicing work. There is also a car wash on it. Manchester Garages Ltd. use this back land, together with the front land, as part and parcel of their one business. The under lease of the back land is for twenty-one years with provisions for determination in certain events. No question arises on it now. We are only concerned with the front land which is the subject of the "licence".
The latest licence of the front land was for one year, from the 1st August, 1969, expiring on the 31st July, 1970. Difference arose between the parties. Shell-Mex decided not to continue the licence. On the 30th July, 1970, they wrote to Manchester Garages Ltd., saying: "This Licence expires on 31st July, 1970, and our clients will expect and require Manchester Garages Ltd. to cease all use of the Filling Station under the said Licence after that date."
Manchester Garages Ltd. did not comply. They continued to use the filling station. So on the 7th August, 1970, Shell-Mex issued a writ claiming an injunction to restrain ManchesterGarages Ltd. from entering on the premises and from trespassing thereon.
If this licence were truly a licence, than Manchester Garages have no defence. But they say that the word "licence" was only a label put on it. It was, in truth, they say, a tenancy. It was a tenancy of business premises: and, accordingly, they are entitled to the benefit of the Landlord and Tenant Act, 1954. By Part II of that Act a tenancy of business premises does not come to an end unless terminated in accordance with the Act; and the parties cannot contract out of it. So, if it is a tenancy, and not a licence, Manchester Garages Ltd. are entitled to stay in the filling station.
Shell-Mex took out a summons under Order XIV and asked for an injunction. I notice that there is a note in the White Book under Order XIV which says at page 120: "A claim for an Injunction is by its nature not appropriate for Order 14 proceedings, since the Master has no power to grant an injunction."
It is true that a Master has no power to grant an Injunction. But the Judge has ample power. I see no reason whatever why a plaintiff cannot go straight to the Judge and ask for summary judgment under Order 14 for an injunction. If and in so far as that note suggests the contrary, it is wrong. Shell-Mex were quite entitled to go under Order 14 to the Judge for an injunction.
I turn, therefore, to the point: was this transaction a licence or a tenancy? This does not depend on the label which is put on it. It depends on the nature of the transaction itself: See Addiscombe Garden Estates Ltd. v. Crabbe (1958) 1 Q. B. 513. Broadly speaking, we have to see whether it is a personal privilege given to a person (in which case it is a licence), or whether it grants an interest in land (in which case it is a tenancy). At one time it used to be thought that exclusive possession was a decisive factor. But that is not so. It depends on broader considerations altogether. Primarily on whether it is personal in its nature or not: See Errington v. Errington & Woods (1932) 1 K. B. 297.
Applying this principle, I turn first to the document itself. It is called a licence. By the first clause the Shell-Mex company "grants to the Licensee licence and permission to use upon the terms and conditions and solely for the purpose hereinafter specified the land and buildings situate at and known as Greyhound Filling Station." By the second clause "the purposes for which this licence is granted are to enable the Licensee to carry on upon the premises the business of selling such grades of the brand or brands of motor fuel as the Company may from time to time nominate", and also rendering such services as are commonly supplied at service stations.
By the conditions the licensee agrees "to use every endeavour and due diligence to sell and foster the sale of the Company's motor fuel and other petroleum products in such manner as the Company may from time to time direct". And the company agree "to supply or cause to be supplied to the Licensee at the premises such quantities of the Company's motor fuel and other petroleum products as the Licensee may from time to time reasonably require and order from the Company at the wholesale price ruling at that date."
The provisions seem to me to be personal in their nature. There is a personal tie between the parties whereby the licensees are to deal in Shell petrol only and are to take all their supplies from Shell, who are to supply them.
It is noticed also that there is no proviso for a right to re-enter. There is a special stipulation which seems to me to connote that the Shell-Mex company remain in possession themselves. It is clause 19 of the first schedule under which Manchester Garages agree:
"Not to impede in any way the officers servants or agents of the Company in the exercise by them of the Company's rights of possession and control of the premises and in particular to give all reasonable assistance and facilities to such officers servants or agents for the alteration at any time of the layout decorations or equipment of the premises."
That shows that the Shell-Mex company's men can go and visit the premises whenever they like. The Manchester Garages Ltd. are not to impede them in any way, but are to give them assistance.
Those provisions point to a licence and not a tenancy. But Mr. Dillon says that Manchester Garages Ltd. have exclusive possession, and that that carries with it a tenancy. That is old law which is now gone. As I have said many times, exclusive possession is no longer decisive. We have to look at the nature of the transaction to see whether it is a personal privilege, or not.
Next Mr. Dillon says that all these clauses are just what you would find in an ordinary tenancy of a filling station. He suggests that, if this case were to go for trial and he was to have discovery, he would find many a tenancy agreement of a filling station in which there were parallel...
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