Clear Channel UK Ltd v Manchester City Council

Whether an agreement creates a tenancy or a licence depends on the substantive rights and obligations it confers, rather than the labels used by the parties. The usual question is whether exclusive possession for a term at a rent was intended, subject to any alternative legal relationship. Commercial terms commonly associated with leases do not, by themselves, establish exclusive possession. The agreement must be construed as a whole. For business-tenancy protection under Part II of the Landlord and Tenant Act 1954, occupation requires physical use of the premises by the tenant for the purposes of its business. Continuous personal presence is unnecessary where the nature of the premises and the business explains the tenant’s physical use and control.

Clear Channel operated advertising hoardings on 13 sites owned by Manchester City Council. It sought declarations that the arrangements created tenancies protected by Part II of the Landlord and Tenant Act 1954. The Council contended that the M Sites were held under licences and counterclaimed for declarations concerning a further hoarding at Chester Road.

The M Sites were governed in practice by an unexecuted draft agreement granting permission to erect and maintain advertising displays. The Chester Road arrangements were based on a letter setting out principal terms, followed by an unexecuted draft lease. The central issues were whether the arrangements created exclusive possession and tenancies, whether any tenancy was merely a tenancy at will, and whether Clear Channel occupied the Chester Road Site for the purposes of section 23.

1. M Sites. The claim concerning the M Sites was dismissed. On the proper construction of the March 2001 Draft Agreement, “the Sites” meant wider, undefined areas of Council land rather than the concrete bases of the advertising structures. The absence of location plans and of an express right of way supported that conclusion. The permission to erect and maintain advertising displays therefore did not grant exclusive possession.
2. Even if the Sites had comprised the concrete bases, the agreement still pointed to a licence. Terms concerning rent, duration, user, maintenance, fencing, assignment, termination and compensation were consistent with either a tenancy or a licence. By contrast, the language of permission, the treatment of the advertising displays as Clear Channel’s property, the obligation to assist Council officers, the absence of rent reserved for the land itself, and the commercial treatment of 13 geographically separate sites as one holding pointed against exclusive possession.
3. The Council’s late application to re-amend its Defence was refused. The existing admission reasonably and correctly confined the issues to exclusive possession and occupation under section 23. Allowing a new tenancy-at-will argument would have required an adjournment, further evidence and consequential amendments, causing injustice and waste.
4. Chester Road Site. Clear Channel established an annual tenancy. The site occupied by the advertising station was identifiable, the parties had agreed its precise position, and the draft lease confirmed an intention to grant the land occupied by the structure. The reference to subletting or parting with possession also indicated an intended tenancy. The arrangement was not a tenancy at will: the facts differed materially from Cardiothoracic Institute v Shrewdcrest Ltd and Javad v Aqil.
5. Clear Channel’s regular use, maintenance, inspection and control of the structure and gravelled hard standing constituted occupation for the purposes of section 23. The counterclaims for declarations and damages concerning Chester Road were dismissed. The annual tenancy was not determinable before 15 June 2005.

First-instance decision. No prior appellate decision is stated in the judgment.