Mikeover Ltd v Brady

An occupation agreement must be construed in its factual and commercial matrix, including contemporaneous agreements, but a power to impose substitute co-occupiers will not be implied without clear language. A sham requires a common intention by all parties that documents should create an apparent but different legal relationship. Subsequent conduct may bear on genuineness, and the burden lies on the party alleging sham. Joint tenancy requires unity of possession, interest, title and time. Unity of interest includes joint rights and obligations. Separate agreements under which each occupier owes only a several share of rent and deposit do not create a joint tenancy, even where the occupiers have joint exclusive occupation.

Mikeover Ltd sought possession of a second-floor flat occupied by Gerard Brady. Brady and Miss Guile had each signed identical six-month agreements described as licences, paid separate deposits and agreed to pay separate monthly sums. They continued in occupation after the initial term on the same basis. Miss Guile later left, and Brady remained.

After Brady fell into arrears, Mikeover determined his agreement and obtained an order for possession in the Clerkenwell County Court. The appeal concerned the construction of the agreements, whether their separate form and payment provisions were a sham, and whether they nevertheless created a joint tenancy. The central issue was whether Brady had a tenancy or only a licence.

Appeal dismissed. Slade LJ gave judgment for the court.

1. The agreements had to be construed in their factual and commercial matrix. The contemporaneous identical agreement with Miss Guile was relevant. Clauses 1 and 2(4), properly construed, gave each occupier a right to use the flat in common only with the other named occupier. They did not reserve a power to impose a substitute co-occupier. Such an extensive implication was unjustified, and any reservation of that power should have been expressed in clear terms.
2. The court applied the legal concept of sham stated in Snook v London & West Riding Investments Ltd [1967] 2 QB 786, as adopted in Hadjiloucas v Crean [1988] 1 WLR 1006 and Hilton v Plustitle Ltd [1989] 1 WLR 149. A sham requires a common intention that the documents should create an apparent relationship different from the parties’ actual intended rights and obligations. Subsequent conduct was admissible on genuineness, but not construction. Brady failed to prove any sham in the separate rent and deposit provisions.
3. Street v Mountford [1985] AC 809 and Antoniades v Villiers [1988] 3 WLR 1205 established the relevance of exclusive possession and recognised that joint exclusive occupation can be capable of creating a joint tenancy. However, the four unities—possession, interest, title and time—were required. Unity of interest included the parties’ rights and obligations.
4. The agreements genuinely imposed only several liabilities for rent and deposits. They therefore lacked complete unity of interest and could not create a joint tenancy. The court declined to follow Lord Templeman’s dictum in Antoniades concerning separate liability for half the aggregate rent, relying instead on the reasoning of Lord Oliver, Lord Jauncey and Stribling v Wickham (March 15 1989, unreported). Brady and Guile accordingly held only several licence rights, and Brady did not become a tenant when Guile left.

The order for possession stood. The appeal was dismissed with costs, not to be enforced without leave; legal aid taxation was ordered and leave to appeal was refused.

• Court of Appeal (Civil Division) dismissed Brady’s appeal and upheld the possession order.
• Clerkenwell County Court His Honour Judge Honig made an order for possession on 26 November 1987 in favour of Mikeover Ltd.