Street v Mountford [1985]

An agreement purporting to grant a licence actually conferred on the occupant a tenancy; the label attributed to the agreement did not affect its legal consequences. This case concerns the distinction between a lease and a licence and the Rent Act 1977 Mrs Mountford entered into an agreement described as a licence by which Mr Street granted her the right to occupy furnished rooms in a house for £37 a week, subject to clause 10, 'This licence may be terminated by 14 days written notice ...' Mrs. Mountford was granted exclusive possession of those rooms. Mr Street did not provide any attendance or service, and only reserved the limited rights of inspection. Mrs Mountford contended that as she had a tenancy she was protected by the Rent Act 1977, and Mr Street applied to the County Court for a declaration that the occupancy was a licence rather than a tenancy. The court declared that Mrs. Mountford was a tenant, but on appeal the Court of Appeal held that she was a licensee.

 

On appeal:
HELD: The House of Lords reversed the decision of Court of Appeal, holding that Mrs. Mountford had a tenancy, rather than a licence as the agreement dictated. As Lord Templeman said, “The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.” The order of the Court of Appeal was set aside as, 'If Mr Street has succeeded .. in driving a coach and horses through the Rent Acts, he must be left to enjoy the benefit of his ingenuity unless and until Parliament intervenes..' As a result of this case, courts should look to the tenancy, and its three requirements of exclusive possession, payment in the nature of a rent and the term, rather than what is stated in the agreement.

Citation: Street v Mountford [1985] All ER 285