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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Stirling v Leadenhall Residential 2 Ltd  EWCA Civ 1011 (29 June 2001)
Cite as:  HLR 3,  WLR 499,  L & TR 14,  3 All ER 645,  EWCA Civ 1011,  1 WLR 499,  NPC 112
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CROYDON COUNTY COURT
Strand, London, WC2A 2LL
Friday 29th June 2001
B e f o r e :
LORD JUSTICE LATHAM
MR JUSTICE LLOYD
| WILLIAM WATSON STIRLING
|- and -
|LEADENHALL RESIDENTIAL 2 LIMITED
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Paul Morgan Q.C. and Nicholas Allen instructed by
Henriques Griffiths for the Respondent
Crown Copyright ©
MR JUSTICE LLOYD:
"I refer to your letter dated 4 July 1996 sent to Ross McLaren regarding your repayment plan of outstanding rent amounting to £2,643.45 as at end of June 1996. I would confirm that your offer to pay £100 per month is accepted by your landlord and by ourselves. I look forward to hearing from you and receiving your first payment of £100."
The Housing Act 1988
Burrows v. London Borough of Brent
"I agree to pay the rent charge of £2.67 due every week and, in addition, to reduce the arrears by regular instalments of £3.00 per week."
Licence or tenancy: the general law
"There is no doubt that the intricacies of modern life, as reflected in the Rent Restriction Acts, have made, in many respects, the relationship between landlords and tenants sometimes assume an artificial and indeed unfriendly character, which is somewhat to be deplored. In particular landlords, who may have ordinary human instincts of kindliness and courtesy, may often be afraid to allow to a tenant the benefit of those natural instincts in case it may afterwards turn out that the tenant has thereby acquired a position from which he cannot subsequently be dislodged. In the general interest it may be necessary that the relationship should have to assume a much more formal character than would otherwise be necessary; nevertheless I would be extremely sorry if anything which fell from this court were to have the effect that a landlord could never grant to a person in the position of the Defendant any kind of indulgence, particularly in the circumstances which existed in March 1950 when the Defendant lost her mother. It seems to me that it would be quite shocking if, because a landlord allowed a condition of affairs to remain undisturbed for some short period of time, the law would have to infer that a relationship had arisen which made it impossible thereafter for the landlord to recover possession of the property, when admittedly by taking proper measures from the start he could have recovered possession."
"Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy."
Licence, tenancy or trespass: the facts
"[A landlord] can of course obtain an immediate order under Ground 8 and then simply not follow it up, depending no doubt on whether the tenant pays the arrears outstanding."
LORD JUSTICE LATHAM:
Firstly, if by contract an occupier is granted exclusive possession of premises for a fixed or periodic term certain in consideration of a premium or periodical payment, that will prima facie constitute a tenancy: see Lord Templeman in Street v Mountford at page 118 E.
Secondly, where a person is in exclusive possession of another's land for a term in return for a periodical payment, the relationship may not amount to a tenancy if the parties did not intend to enter into a legal relationship, or where the relationship between the parties was that of a vendor or purchaser, master and servant occupier, or similar such exceptional circumstance: see Lord Templeman in Street v Mountford at page 821 B and 826 H ff.
Thirdly, parties cannot simply by choosing to describe the relationship as a licence, affect its legal nature: see Street v Mountford per Lord Templeman at page 822 F.
Fourthly, the grant of exclusive possession for the payment of a periodical sum will not however of itself amount to the grant of a new tenancy where the agreement is between the landlord and the existing occupier where the landlord is seeking or has obtained a possession order under Part IV of the Housing Act 1985 in circumstances in which s. 85(2) of the Act could revive the previous tenancy: Burrows v London Borough of Brent.
LORD JUSTICE JUDGE:
"If ….. residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor service, the grant is a tenancy."
"The only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent."
"….. Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy."
"The distinction between a tenancy and the licence of a dwelling house in the context, as here, of security of tenure under Part IV of the 1985 Act is immaterial, for …. the provisions of that Part apply to a licence to occupy as they apply to a tenancy."
In the House of Lords Lord Browne-Wilkinson,  1 WLR at 1451, emphasised:
"It is important to note that ….. the provisions of Part IV of the Act apply to a 'licence to occupy a dwelling house ….. as they apply in relation to a tenancy.' Therefore nothing in this case turns on the distinction between a licence and a tenancy; if, by making an agreement not to enforce a possession order, the local authority is to be taken to have granted a licence for the tenant to continue in occupation the position will be just the same as if they had granted a tenancy."
"quo animo the parties have so acted: depending upon the circumstances, their conduct may give rise to a new tenancy, a licence or some other arrangement."
In Burrows he concluded that:
"The parties plainly did not intend to create a new tenancy or licence but only to defer the execution of the order so long as Miss Burrows complied with the agreed conditions. It cannot be right to impute the parties an intention to create a legal relationship such as a secure tenancy or licence unless the legal structures within which they made their agreement forced that conclusion."
Accordingly, the answer to the critical question in each case depends on the terms of the agreement itself, (if any) the intentions of the parties, and the inferences to be drawn from their conduct, a question not of law but of fact. Ms Burrows was held to be a "tolerated trespasser, a former tenant who the landlord had agreed not to evict", pending either the revival of the old tenancy or the breach of the agreed conditions, or, I would add, as happened here, the eventual creation of a new tenancy.