Summary

An agreement to provide car parking facilities upon premises, taken as a whole, did not create a tenancy because exclusive possession was not granted under the agreement.

Facts

Appeal by National Car Parks Ltd ('NCP') from the decision of Judge Rich QC dismissing NCP's claim for a declaration that an agreement dated 18 November 1982 ('the agreement') created a tenancy between NCP and the respondent. The agreement concerned car parking premises ('the premises'). The agreement contained provisions which required NCP, inter alia, to maintain landscaped areas, provide, maintain and insure fencing and lighting, pay and be responsible for security and make good any damage to boundary walls. NCP was to operate the premises as a car park and provide car parking facilities for shoppers and provide 40 free spaces for employees of the respondent between specified times. Further, NCP was obliged not to impede the respondent in its exercise of rights of possession of the premises and was to give assistance and all reasonable facilities to the respondent for any resurfacing that was required. The agreement stated that it was not in the nature of a tenancy and was a licence for the parking of vehicles at the premises. The dispute arose when the respondent purported to give NCP notice under the agreement determining the licence. NCP argued that on its true construction the agreement created a tenancy and accordingly the notice was ineffective because the tenancy was subject to the protection of Part II Landlord and Tenant Act 1954. The respondent argued, however, that the agreement created a licence only. The issue was essentially whether the agreement conferred a right of exclusive possession on NCP. NCP argued that the fact that the agreement stated it was a licence and not a tenancy was something that was to be ignored on the principles stated in Street v Mountford (1985) AC 809 and argued that the nature of the agreement was such that NCP had exclusive possession of the premises for a rent, creating a tenancy. NCP sought to show that it had the right under the agreement to enter and occupy the premises, manage and administer the car parking business and the right of physical control of the premises. The judge found in favour of the respondent that the agreement created a licence between the parties.

Held

(1) The parties had agreed that the legal principles that determined the issue were not in dispute. Namely, inter alia, that in determining whether a licence or tenancy was created, regard had to be had to the substance of the agreement rather than the form, and where there was exclusive possession of premises for a term and on payment of a rent, then, except in exceptional circumstances, a tenancy was created. Exclusive possession meant the ability to exclude all, including the landlord, save the landlord's right of re-entry under the agreement (see Street (supra)). (2) It was going too far to say that following Street, the court was to ignore the clause that expressly stated that, the agreement was a licence. The statement that the agreement was not in the nature of a tenancy must have reflected what was in the minds of the parties when the agreement was made. Street did not require the court to ignore such express terms, but rather to consider them with the agreement as a whole. (3) Under the agreement the respondent did retain a certain amount of control over the manner in which NCP conducted its business. However, that was not determinative. (4) There was a certain amount of significance to be attached to NCP's obligations to provide maintenance, insurance and security for the premises. Those factors were not inconsistent with a tenancy. However, weight also had to be attached to a lack in the agreement of a right to quiet enjoyment and the absence of an express right upon the respondent of re-entry if NCP failed to fulfil its obligations. (5) Taken as a whole, the agreement gave no express right of exclusive possession to NCP. There were factors that were not inconsistent with a tenancy but as a whole the agreement created a licence which, under its terms, the respondent was entitled to determine.

Appeal dismissed. Application for permission to appeal refused.