Requirements for a Lease.

Isaac v Hotel de Paris - Issac v. Hotel de Paris Ltd. where the P.C. used the ‘intention of the parties’ test to reach their decision. In that case, the respondent company was the lessee of part of a building in Port of Spain which was used as a hotel. In December 1955, the company let the appellant into possession of the first floor of the building under an arrangement that the appellant would operate a night bar for the company. In February 1956, after a dispute between the parties, it was agreed that the appellant would pay $250 month as ‘rent’ (the amount payable by the company as head rent) and all expenses incurred in the running of the bar, and in return that the appellant could retain all the profits for himself. In May 1956, the company gave the appellant seven days’ notice to quit the premises. It was held by the PC that the circumstances in which the appellant was allowed to occupy the premises showed that the company never intended to accept him as tenant and that he was fully aware of that fact. A licence had been created, and notice was sufficient to terminate it. Lord Denning said, “It was submitted by Counsel for the appellant that there were all the indicia of a monthly tenancy. There was not only exclusive possession but there was also the payment and acceptance of rent. (Furthermore, the appellant paid the disbursements, and so forth.) Counsel admitted that these would not be decisive to establish a tenancy in the case of premises within the Rent Restriction Acts such as Marcroft.

Street v Mountford - In 1985, the House of Lords in Street v. Mountford rejected the intention test and held that where there is (1) exclusive possession (2) a fixed or periodic term and (3) rent, there will be a tenancy, unless there are exceptional circumstances which point to a licence. Facts: by an agreement, S granted M the right to occupy two rooms for $37 per week, subject to termination by 14 days notice. Other conditions were set out in a document entitled ‘licence agreement’. It contained a declaration by M that she understood that there was no tenancy giving her protection under the Rent Acts. M and her husband moved into the rooms, having excusive possession. A declaration was sought as to whether a licence or a tenancy existed. The HL held that a tenancy had been created. There Lord Templeman stated that the true test is whether the occupier has been granted exclusive possession for a fixed or periodic term at a stated rent. If these requirements have been satisfied a tenancy arises unless there are some special circumstances which negative a presumption of a tenancy. Then it may be necessary to consider the intention of the parties. The usual special circumstances that will arise are:

Prudential Assurance v London Residuary Body - Here the LCC purchased a strip of land for future road widening and purported to lease it to the P‘s predecessor in title at rent of 30 pounds per anum under an agreement that provided that the tenancy would continue until the road was widened. The agreement authorized the construction of temporary buildings by the T until the road was widened, and the agreement could be terminated by 2 months notice. The LCC sold the land to the Ds none of whom were highway authorities with road widening powers. Prior to the sale the T was given 6 months’ notice. P sought to have the notice declared null & void on the grounds that the contract could only be determined if the land was required 4 road

widening purposes. HL: A grant for an uncertain amount of time did not create a lease, so no estate was granted in the land. However, as the T had entered into possession of the land and paid yearly rent he had become a T from year to year and that tenancy was for a certain term because each party had the power to determine it with 6 months’ notice. Since the LL had served such notice, the tenancy had been validly terminated.

Lace v Chandler - The plaintiff was tenant of a dwelling-house which she sub-let to the defendant. The agreement for the sub-letting was partly oral and partly by conditions contained in the rent-book, one of those conditions being expressed by the words "furnished for duration." The plaintiff alleged that the defendant had removed certain articles which were her property, contrary to the conditions of the agreement; and she gave him notice to quit. As the defendant did not comply with the notice, the plaintiff brought an action for possession in the county court. The county court judge found that the defendant had broken a condition of the agreement by removing the articles, and he made an order for possession in one month. The defendant appealed. Among the grounds of defence to the action in the county court was the following: "The said dwelling-house was let to the defendant for the duration of the war. " The question of the validity of a letting "for the duration of the war" was not argued in the county court, but it was raised at the hearing of the appeal:- Held, that a tenancy "for the duration of the war" does not create a good leasehold interest, the term, when the agreement takes effect, being uncertain, and, also, that it was impossible to construe this tenancy as a lease for a long period, e.g., ninety-nine years, determinable on the cessation of the war.

Term granted must be less than term held by the lessor/landlord or sub-lessor:

Lewis v Baker - Baker, (D) acquired the 2 yr remainder of a 40 yr lease. The reversioner agreed to grant him a 73 yr lease of the same property at the end of his current 2 yr lease. D then let Haddon the premises for 21 years. Haddon subletted the property to P. D distrained on P‘s goods as a tenant of haddon when Haddon did not pay rent. The court found that D could not distrain on P‘s good he did not have a reversionary interest in the property. D had assigned his interest to Haddon by granting a lease longer than his own. The lease for 73 years was an expectant lease, it was not an estate but an interessi termini until entry on or after the date as from which he was entitled to enter into possession under it. Held: If a lessee with an original lease and a reversionary lease or an agreement therefor under-lets the premises for a term exceeding the original lease, he cannot distrain for rent during the original lease under the common law for want of a reversion.

Implied agreement

Dougadeen v Ramsamooj - The appellant, D, was a monthly tenant of the first respondent, X, of a house where she lived with her family and ran a parlour business. Without X‘s consent D concluded a verbal agreement with the second respondent, Y, whereby Y was to occupy the premises for a few months in place of D, and pay the rent to X in D‘s name. The agreement was duly put into effect but when, after some months, D verbally requested the premises back, Y

refused. D took no special steps to recover possession and Y remained in possession, continuing to pay the rent to X in D‘s name, until after some 2 years had elapsed, when he purported to sell the parlour business and transfer the premises to the third respondent, Z, who thereupon went into occupation. Shortly afterwards D visited the premises which Z had left locked and, with a view to resuming possession of them, placed her own padlock on the door. Later that same day X, Y and Z together broke off D‘s lock. D sued X, Y and Z claiming damages for trespass, or in the alternative, for dispossession. Her claim was dismissed. Held: (i) The arrangement concluded between D and Y was not a mere licence but a tenancy agreement. As such it could only have been determined by proper notice or by lawful re-entry and resumption of possession. (ii) There had been no notice, and the mere placing of a lock upon the premises did not constitute a resumption of possession. Consequently at the time appellant‘s lock was broken she was not in possession of the premises and could not therefore maintain an action for trespass or dispossession in respect of them

How is the relationship created?

Estoppel

Meredith v Gary E.H. Lewis & Sons Ltd v Morelli Mackley v Nutting Harrison v Wells