Aslan v Murphy (Nos 1 and 2) (Duke v Wynne)

The distinction between a tenant and a lodger depends on the true bargain, principally whether the occupier has exclusive possession, rather than on labels used in the agreement. The court must examine the whole factual situation and may disregard provisions that are pretences or wholly unrealistic. Exclusive possession may exist where the owner reserves a right to require sharing, if that right is not part of the true bargain as an immediate or genuine arrangement. Retaining keys is not decisive; their significance depends on the underlying reason, including whether genuine services require access. A closing order removes statutory security of tenure but does not itself terminate a contractual tenancy or provide an independent ground for possession. The tenancy must first be determined, ordinarily by notice to quit.

Three conjoined appeals concerned whether occupiers described as licensees or lodgers were in law tenants. In Aslan v Murphy (No 1), a county court judge rejected the claim that Mr Murphy was a tenant of a small room. In Duke v Wynne, a possession order was made against Mr and Mrs Wynne, who occupied a house under an agreement denying exclusive possession. In Aslan v Murphy (No 2), a further possession order was sought after a local authority closing order under the Housing Act 1985. The central questions were whether the arrangements created tenancies and whether the closing order itself ended the tenancy or entitled the owner to possession.

The Court of Appeal allowed all three appeals with costs. The court delivered a single judgment to which all three judges contributed.

1. True bargain. Whether an occupier is a tenant or lodger depends on the true bargain. Contractual labels are not conclusive. The court must consider the substance of the rights and duties agreed, the surrounding facts and the parties’ conduct. Provisions that are sham arrangements or pretences do not determine the legal relationship.
2. Exclusive possession. Exclusive or non-exclusive occupation is the principal touchstone, but the answer usually depends on a combination of factors. An occupier may be a tenant where the true bargain gives exclusive possession unless and until the owner genuinely requires sharing. The owner cannot later convert that tenancy into a lodging arrangement merely by requiring the occupier to share.
3. Keys and services. Retention of keys has no magic in itself. It may support lodger status where it forms part of a genuine arrangement for services requiring access, but it does not do so merely because the agreement reserves entry. On Mr Murphy’s facts, the provisions were insignificant because virtually no services had been supplied.
4. Closing order. Sections 276 and 277 of the Housing Act 1985 remove statutory security of tenure where a closing order is in force, but do not themselves create a ground for possession or terminate a contractual tenancy. The statutory offences do not alter that conclusion. The landlord must first determine the tenancy, ordinarily by serving a notice to quit. The court distinguished Buswell v Goodwin [1971] 1 WLR 92 because the landlord in that case had served the appropriate notice.
5. Mr Murphy was a tenant, although the closing order meant that he no longer enjoyed Rent Act protection. The Wynnes were tenants because their true bargain gave them exclusive occupation unless Mrs Duke wanted to exercise a genuine right to introduce a lodger. The possession orders were set aside. Mr Murphy remained a contractual tenant in the absence of an effective notice to quit.

• Court of Appeal: Allowed all three appeals with costs. The possession orders in Aslan v Murphy (No 1) and Duke v Wynne were set aside. In Aslan v Murphy (No 2), the court held that the closing order did not terminate the contractual tenancy and that possession could not be claimed without first serving a notice to quit. The judgment is reported at [1989] EWCA Civ 2.
• County courts: Possession orders had been made on the basis that the occupiers were insecure lodgers or licensees. A further possession order was made against Mr Murphy after the closing order.