Street v Mountford

2 May. LORD SCARMAN. Mr Lords, I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Templeman. I agree with it, and for the reasons he gives I would allow the appeal with costs here and below.

LORD KEITH OF KINKEL. My Lords, for the reasons given in the speech of my noble and learned friend, Lord Templeman, with which I agree, I too would allow the appeal.

LORD BRIDGE OF HARWICH. My Lords, for the reasons given in the speech of my noble and learned friend Lord Templeman, with which I agree, I would allow this appeal.

LORD BRIGHTMAN. My Lords, I agree that this appeal should be allowed for the reasons given by my noble and learned friend, Lord Templeman.

LORD TEMPLEMAN. My Lords, by an agreement dated 7 March 1983, the respondent Mr Street granted the appellant Mrs Mountford the right to occupy the furnished rooms numbers 5 and 6 at 5, St Clements Gardens, Boscombe, from 7 March 1983 for £37 per week, subject to termination by 14 days' written notice and subject to the conditions set forth in the agreement. The question raised by this appeal is whether the agreement created a tenancy or a licence.

A tenancy is a term of years absolute. This expression, by section 205(1)(xxvii) of the Law of Property Act 1925, reproducing the common law, includes a term from week to week in possession at a rent and liable to determination by notice or re-entry. Originally a term of years was not an estate in land, the lessee having merely a personal action against his lessor. But a legal estate in leaseholds was created by the Statute of Gloucester 1278 and the Act of 1529 Hen VIII, c 15. Now by section 1 of the Law of Property Act 1925 a term of years absolute is an estate in land capable of subsisting as a legal estate. In the present case if the agreement dated 7 March 1983 created a tenancy, Mrs Mountford having entered into possession and made weekly payments acquired a legal estate in land. If the agreement is a tenancy, the occupation of Mrs Mountford is protected by the Rent Acts.

A licence in connection with land while entitling the licensee to use the land for the purposes authorised by the licence does not create an estate in the land. If the agreement dated 7 March 1983 created a licence for Mrs Mountford to occupy the premises, she did not acquire any estate in the land. If the agreement is a licence then Mrs Mountford's right of occupation is not protected by the Rent Acts. Hence the practical importance of distinguishing between a tenancy and a licence.

In the course of argument, nearly every clause of the agreement dated 7 March 1983 was relied upon by the appellant as indicating a lease and by the respondent as indicating a licence. The agreement, in full, was in these terms:

“I Mrs Wendy Mountford agree to take from the owner Roger Street the single furnished room number 5 and 6 at 5, St Clements Gardens, Boscombe, Bournemouth, commencing 7 March 1983 at a licence fee of £37 per week.

“I understand that the right to occupy the above room is conditional on the strict observance of the following rules:

“1. No paraffin stoves, or other than the supplied form of heating is allowed in the room.

“2. No one but the above-named person may occupy or sleep in the room without prior permission, and this personal licence is not assignable.

“3. The owner (or his agent) has the right at all times to enter the room to inspect its condition, read and collect money from meters, carry out maintenance works, install or replace furniture or for any other reasonable purpose.

“4. All rooms must be kept in a clean and tidy condition.

“5. All damage and breakages must be paid for or replaced at once. An initial deposit equivalent to 2 weeks' licence fee will be refunded on termination of the licence subject to deduction for all damage or other breakages or arrears of licence fee, or retention towards the cost of any necessary possession proceedings.

“6. No nuisance or annoyance to be caused to the other occupiers. In particular, all music played after midnight to be kept low so as not to disturb occupiers of other rooms.

“7. No children or pets allowed under any circumstances whatsoever.

“8. Prompt payment of the licence fee must be made every Monday in advance without fail.

“9. If the licence fee or any part of it shall be seven days in arrear or if the occupier shall be in breach of any of the other terms of this agreement or if (except by arrangement) the room is left vacant or unoccupied, the owner may re-enter the room and this licence shall them immediately be terminated (without prejudice to all other rights and remedies of the owner).

“10. This licence may be terminated by 14 days' written notice given to the occupier at any time by the owner or his agent, or by the same notice by the occupier to the owner or his agent.

“Occupier's signature

“Owner/agent's signature

“Date 7 March 1983

“I understand and accept that a licence in the above form does not and is not intended to give me a tenancy protected under the Rent Acts.

“Occupier's signature.”

On 12 August 1983 on Mrs Mountford's application a fair...