Redbank Schools Ltd v Abdullahzadeh and others [1995]

Redbank Schools was the leasehold owner of property under a 999 year lease. It used the property as a training school for delinquent boys, and on the school campus were dwellings a intended to accommodate school staff and employees. The school had been used by Redbank as an approved school under a management committee, but from April 1973, the school became a controlled community home managed by Lancashire County Council pursuant to the Children and Young Persons Act 1969. About a third of the 160 teachers employed by the council were accommodated on or near the the campus, in property belonging to Redbank.
It was later decided that the school should be run by the local Borough Council. After that date, the staff were employed by the county council school, and provided with accommodation. Each employee had exclusive occupation of their house or flat, occupied on a periodic basis, and each paid rent by way of deduction from their salary. None of them had been required to occupy their houses for the better performance of their duties.

In 1992 the teachers received notices to quit from the county council, purporting to be from Redbank and requiring possession to be given up to the county council.  Redbank claimed that the responsibility to manage the premises that had been conferred by the council under the 1969 Act gave the council a licence but did not enable them to grant tenancies on their own behalf or on behalf of Redbank. The council did not have title or authority to grant tenancies. Therefore, the employees permitted to occupy the houses on the campus could not acquire better rights than the council had, and were merely licensees.
In the County Court, the judge held that the county council did not have statutory authority to create tenancies.

On appeal:
HELD: The Court of Appeal dismissed the teachers’ appeal, holding that just because the management of the school was vested in the council, this did not give the council title or authority to grant tenancies. Consequently, the employees held only licences.