Facchini v Bryson

Whether an occupier is a tenant or licensee depends on the true legal relationship, determined from the agreement’s operative provisions and surrounding circumstances. A tenancy cannot be converted into a licence by wording which merely declares that no tenancy is created. Controls on the landlord’s entry and prohibitions on underletting may indicate exclusive possession and a lease. Employment-related occupation for a weekly payment may amount to a service tenancy. Where the arrangement is a tenancy, possession cannot be recovered except in accordance with the Rent Acts.

The landlord appealed from His Honour Judge Gamon’s decision that an agreement between an ice-cream manufacturer and his assistant created a lease rather than a licence. The agreement required service, permitted occupation of a dwelling during the employment, required weekly payment, imposed repair and underletting obligations, and regulated the employer’s entry. It also stated that nothing in the agreement should create a tenancy. The central issue was whether the agreement, construed as a whole, created a tenancy or merely a licence to occupy.

1. Appeal dismissed. The agreement, construed as a whole, created a lease or service tenancy.
2. Per Lord Justice Somervell, the agreement had to be construed as a whole. Its operative clauses indicated rights characteristic of a lease. The employer’s power to enter on reasonable terms assumed that the occupier had a right to exclude the employer. The prohibition on underletting likewise implied a lease. The references to occupation, use and weekly payment did not alter that conclusion.
3. The statement that nothing in the agreement should create a tenancy could not determine the legal character of the arrangement. The parties could not turn a lease into a licence by attaching a label to it, just as they could not turn a licence into a lease by declaration.
4. Per Lord Justice Denning, the arrangement had the features of a service tenancy. The parties’ relationship was determined by law, not by the label chosen in the contract. The landlord was therefore not entitled to possession except in accordance with the Rent Acts.
5. Lord Justice Romer agreed without adding separate reasoning.

• Court of Appeal (Civil Division): Appeal from His Honour Judge Gamon’s decision that the agreement operated as a lease rather than a licence. Appeal dismissed.