Huwyler v Ruddy

Whether residential occupation is a tenancy or a licence depends on the true contractual arrangement. Following [1985] AC 809, exclusive possession for a term at a rent normally creates a tenancy, but attendance or services requiring the landlord to enter the room at the landlord’s convenience may prevent exclusive possession. The contractual right to cleaning and linen remained relevant even though the services later ceased in practice. An informal forbearance did not reconstruct the agreement. The arrangement therefore remained a licence, which had been validly terminated.

The owner of a flat granted an occupier a six-month written agreement described as a licence to occupy a specified room, with shared facilities and services including cleaning and linen. The occupier later moved to another room after the kitchen was converted, and the services gradually ceased in practice. The Central London County Court held that the arrangement remained a licence and ordered possession. It alternatively found that the value of attendance was substantial under section 7 of the Rent Act 1977. The occupier appealed, arguing that the services were insufficient to prevent a tenancy and that the later arrangements created one.

1. Appeal dismissed. The licence had been validly terminated and the order for possession was upheld.
2. Per Lord Justice Peter Gibson, the court must determine the true contractual arrangement and then decide whether it gives rise to a tenancy or a licence. Under [1985] AC 809, residential accommodation granted with exclusive possession for a term at a rent normally creates a tenancy, subject to exceptional circumstances. Attendance or services requiring the landlord or servants to enter and leave the room at the landlord’s convenience may prevent exclusive possession.
3. The court adopted the guidance in Crancour Ltd. v Da Silvaesa, [1986] 18 HLR 265, that unrestricted access primarily concerns the landlord’s ability to enter and leave without the occupier having to admit him. The cleaning obligation was genuine, not a sham, and gave the landlord the necessary access. The occupation of room A was therefore under a licence.
4. The move to room C did not alter the contractual position. There was no new agreement, the same rent continued, and the obvious inference was that the original terms continued, including the contractual entitlement to services. The later informal arrangement was only a forbearance from requiring performance. It did not amount to a complete reconstruction of the agreement, and the occupier could have required the services to resume.
5. The court accepted that section 7 of the Rent Act 1977 becomes relevant only if there is a tenancy, and that attendance of insubstantial value may coexist with a tenancy. It was unnecessary to decide that issue. Lord Justice Schiemann agreed that the findings were open on the evidence and that the correct principles had been applied.

1. Court of Appeal (Civil Division): Dismissed the appeal and upheld the order for possession.
2. Central London County Court: Assistant Recorder Huskinson held that the defendant’s occupation was under a licence and ordered possession. He alternatively held that the value of attendance was a substantial part of the rent under section 7 of the Rent Act 1977.