Landlord & Tenant Flashcards
The Lease/License Distinction
What are the four indicators of a lease/license?
- Interpretation of the Agreement
- Intention of the Parties
- Exclusive Possession
- Payment of Rent
The Lease/License Distinction - Interpretation
What is the approach and what’s a case giving an example?
Courts look at the agreement or if none, words + conduct to get prima facie impression of the relationship. This isn’t determinative; can be discarded if incompatible w relationship as discerned under other 3 criteria.
Whipp v Mackey [1927]: If the label doesn’t match the operation of the agr, then liable to be discarded.
The Lease/License Distinction - Intention of the Parties
Gatien Motor Company v Continental Oil [1979]
- Garage premises under 3yr lease. 1919 Act gave tenant rights after 3yrs 3mths in occupation.
- T wanted to renew lease. L wanted a break. L asked T vacate for 1 week. T reluctant: might lose business.
- Agreed to a caretaker agr for 1 week. Both signed after indep legal advice, then after signed new lease.
- T said caretaker just a label + actually continued in occup as a tenant so should have rights under 1919 Act
- Failed: held nothing to suggest he didn’t understand the implications of the caretaker agr – indep advice!
- But laid down the principle that courts can disregard the label where the circumstances warrant it.
The Lease/License Distinction - Intention of the Parties
Irish Shell & BP v Costello [1984]
- SC held when assessing if arrangement is a lease/licence, apply Shell-Mex test: depends on nature not label of transaction: see if it grants a personal privilege (licence) or if it grants an interest in land (tenancy)
- Garage premises held under series of agrs all labelled as licences. Each new licence more liberal to L and licence terms were being omitted such that the docs now resembled a lease. P argued he was a tenant.
- Court looked at circs. Held the agreements permitted: (1) exclusive possession (2) occupier had only set of keys to pumps (3) occupier had freedom to hire/fire employees (4) Landowner can’t enter w/o permission
- On face, looked like lease. Periodic payment in the lease was described as a hire purchase for the pumps
but court held this was really rent for the premises. Held it was a lease.
The Lease/License Distinction - Exclusive Possession
Smith v Irish Rail [2002
- HC adopted Street v Mountford: EP results in a presumption of a lease unless one of three arise: (1) no intention to enter lease (2) Landowner has no capacity to grant lease (3) EP is referable to other legal relat
The Lease/License Distinction - Exclusive Possession
Antoniades v Villiers [1990]
- Principle: a court is entitled to sever a condition of a lease if it’s there to avoid landlord + tenant law.
- Couple renting 1 bed. Both signed agrs at same time w same terms. On face, licences: had clause that landlord could move in with them. Couple claimed tenancy. Had to show (1) was a lease (2) they were JTs
- Held JTs as four unities present. Landlord claimed no EP: court asked why the term was there and he said ‘in case of a fire and I’d nowhere to go’. Court not convinced: held it was a sham term. Held tenants.
The Lease/License Distinction - Payment of Rent
Is payment of rent required? What suggests it is?
Although s.3 Deasy’s Act mentions rental payments, not clear that it’s an absolute requirement of a lease (despite obiter comments in Irish Shell by Kenny J). Rather, it’s a strong indication but not absolutely required
The Lease/License Distinction - The Test
Governors of the National Maternity Hospital v McGouran [1994]
- D ran shop + café in hosp. In negotiations, agr referred to as lease but actual agr + terms were in a licence.
- Renewed frequently. 4yrs in, new hosp manager decided not to renew. D claimed tenant rights: 3 yrs there.
- Looked at terms: hosp retained lot of control eg approving menus + power to move D to other part of hosp
- But in reality, D exercised EP + hospital was v hands off. D claimed Irish Shell test deemed her a tenant
- HC focused on the terms + rejected that she had EP due to the control retained by the hosp. Not a lease.
The Lease/License Distinction - The Test
Kenny Homes Ltd v Leonard [1997]
Car park + garage labelled licence. 20yrs in possession (EP). Landowner
never interfered. Agr’s clauses more in line w licence. HC focused on the contract: not a lease.
The Lease/License Distinction - The Test
Smith v Irish Rail [2002]
- Shop in Dart Station. Licence. Both got indep legal advice. Reality: P had total control and controlled pricing, security, refurbishment. Power to do this was retained by IR in agr. Reality v different.
- HC adopted Street: Found S had EP as this was the realistic position not formal one. Held lease
Post this courts follow Irish Shell.
The Lease/License Distinction - The Test - Commercial Agreements?
Clear Channel UK v Manchester City Council [2005]
- Business entities have legal advice + equal bargaining power (assumed). Need for judicial intervention?
Formation of a Lease in Law
What parts of the act operate and what do they require?
S.4 Deasy’s Act sets out the general requirements: Every lease must be executed by deed or note in writing signed by the landlord or his agent authorised in writing.
A leasehold relationship can also be formed by assignment (transfer of an interest under a leasehold arrangement). S.9 Deasy’s Act requires all assignments be done in writing even if lease was oral.
A leasehold relationship can also arise by means of a sub-lease (the lease of part of the tenant’s leasehold estate to another). Creates sub-level landl + ten relationship and doesn’t disturb original L-T relationship
Formation of a lease in Equity
How does Equity form a lease? What case sets out the rules and what are they?
If court convinced parties entered into a specifically enforceable agreement to form a lease but lease never formed, equity can enforce it as a lease by spec perf. SP in leasehold area: Rule in Walsh v Lonsdale [1882]
- The existence of the contract (agreement) to enter into a lease must first be proved in order to plead SP
- One can prove this by showing (a) compliance w Statute of Frauds or (b) doctrine of part-performance
- Discretionary remedy so onlt granted if damages shown inadequate remedy + SP not seen as futile
- Compliance with S.2 Statute of Frauds: Must show there’s a signed note/memo evidencing the contract to create a lease. Must include 4Ps: Price, property, parties and particulars (incl. start + duration of lease).
- Part Performance: Must show an action that, if not followed by enforcement of contract, would be a fraud on the acting party. Can take the form of taking possession, rent payment, etc.
The Continuing Influence of Deasy’s Act 1860
What does s.3 set out?
(a) S.3 Deasy’s Act 1860: the relation of landlord and tenant shall be deemed to be founded on the express or implied contract of the parties, and not upon tenure or service, and a reversion shall not be necessary to such relation, which shall be deemed to subsist in all cases in which there shall be an agreement by one party to hold land from or under another in consideration of any rent.”
Deasy’s Act 1860 fundamentally changed the relationship between landlord and tenant which was formerly based on feudal tenure.
The Continuing Influence of Deasy’s Act 1860
What does s.5 provide?
(c) S.5 Implied Tenancy: An IT may arise where, on the natural expiration of a prior written lease, the tenant holds over for more than one month, possession having been demanded by the landlord or his agent.
In such a situation a landlord has the discretion to consider the holding over as constituting a period tenancy for a period of one year, subject to the former rent and to any conditions or covenants in the former lease agreement.
If the landlord refuses to accept rent after the expiration of the original tenancy, then it can be said that he has used his discretion to decline from recognising the holding over as a new tenancy
The Continuing Influence of Deasy’s Act 1860
What do ss.12 and 13 provide?
(d) S. 12 + 13: Allowed assignees of landlord to enforce covenants against tenant and his assignees. Assignees of the tenant could also enforce a covenant against the landlord and his assignees.
The Continuing Influence of Deasy’s Act 1860
What does s.41 provide?
(e) S.41 implies that there will be a covenant of good title and a covenant of quiet and peaceable enjoyment
Restricting Alienation
What provisions of what act governs alienation? what does it provide?
S.66(2) Landlord and Tenant (Amendment) 1980 states a landlord can’t unreasonably refuse to consent to an application for change of use or a proposed alienation. Significance:
(1) It gives tenants more autonomy in terms of the alienation of the leasehold; and
(2) A T who alienates a leasehold w consent of the landlord is free from liability for leasehold covenants
S.67 LTA 1980: It is no longer possible to insert a covenant that prohibits a tenant from changing the use either. Linked to s.66, the landlord can’t unreasonably refuse consent to an application for the change of use.
Restricting Alienation - Reasonableness
Rice v Dublin Corporation [1947]
- Held burden of proving refusal of consent was unreasonable is on the tenant and that the landlord need not produce a reason for it until hearing. This is controversial: reduces chances tenant will bring case.
Restricting Alienation - Reasonableness
White v Carlisle Trust [1977]
- P tenant of D. Applied to change use from tailor to sweet shop. Refused: other unit holders said it would affect their business (similar to sweet shop). Challenged refusal. Successful on appeal.
- Held landlord can refuse on basis of general policy in relation to management of the estate but made distinction: landlord’s refusal here arbitrary as there was no expectation of loss to the L himself
Restricting Alienation - Reasonableness
Green Properties v Shalain Modes [1978]
- D rented 2 units from P in shopping centre. Term in lease required the premises be used as a hardware store (covenant re use). D started selling toys. Done w/o consent of landlord.
- D claimed he gave verbal consent + by implication by the manager of the SC as failed to act against subleases for 2 yrs. Also claimed P didn’t act quickly when it came to their attention.
- Held no undue delay in complaining to D. Not estopped from refusing consent now. L not unreasonable as he’d considered the other users in the centre in maintaining good estate management.
Restricting Alienation - Reasonableness
OHS v Green Properties [1986]
- L refused consent on basis of good estate mgmt as already large no. of financial institutions in SC
- P sought declaration refusal was unreasonable: good estate mgmt is a valid reason for refusing consent!
Restricting Alienation - Reasonableness
International Drilling Fluids v Louisville Investments Ltd [1986] UK
- Held L couldn’t refuse consent on basis of reason not based on the relationship of landlord + tenant
- Also, it was unreasonable for him to refuse consent if the tenant would suffer a detriment of a disproportionate level as a result. NOTE: proportionality crucial in UK. Not in Ireland!
Restricting Alienation - Reasonableness
Irish Glass Bottle Ltd v Dublin Port [2005] summaries the case law and principles on ‘reasonableness’
(1) Onus is on the lessee to prove the premises are a tenement + consent is unreasonably withheld:
Rice v Dublin Corporation [1947]
(2) The Lessor must consider the app for the change of user on its merits: can’t have blanket policy on refusal: Rice v Dublin Corporation [1947]
(3) The Lessor is entitled to consider its own interest in deciding whether or not to give consent:
W&L Crowe Ltd v Dublin Port [1962] and Murphy v O’Neill [1948]
(4) A lessor is entitled to know precisely the nature of the proposed user and all details that might affect the question of whether to give consent or not: Lloyd v Earl of Pembroke [1954]
(5) This case held that the tenant must intend to use the premises itself for the change of use.
(6) The reasonableness of the lessor’s refusal doesn’t depend on the special circumstances of the tenant’s case. The tenant’s trading difficulties do not mean the landlord must facilitate the tenant:
OHS v Green Property [1986]
(7) The landlord may state the grounds for refusal to the court even if no reason previously given:
Rice v Dublin Corporation [1947]
(8) The landlord is prohibited from charging a fine or increasing the rent before giving consent to a change of user (s.67(2) LTA 1980)
Restricting Alienation - Reasonableness
Perfect Pies Ltd v Chupu [2015] - Perfect Lies
- HC reviewed law under s.66. Held the L here was guilty of ulterior motives: failed to get possession in tender process + used refusal of consent as way of forcing T into liquidation so it could get possession
- Issue of financial position of assignee was raised. Held even if was a good reason, the spurious reasons meant the court shouldn’t allow the L rely on it. L can’t deliberately keep real reason a secret then produce it later like rabbit out of a hat and rely on it in court.
