Addiscombe Garden Estates v Crabbe

Addiscombe Garden Estates v Crabbe [1958] 1 QB 513

Agreement to occupy clubhouse and tennis courts; whether lease or license

Facts

Addiscombe Garden Estates (AGE) entered an agreement with Crabbe and his fellow trustees of a tennis club under which the trustees could enter, use, and enjoy a clubhouse and tennis courts in return for a monthly fee. The agreement was stated on its face to be a license. At the expiry of the agreement period, the trustees remained in occupation claiming to hold a secured tenancy. AGE sought an order for possession.

Issues

Security of tenure is afforded to certain business premises under s23(1) Part II Landlord and Tenant Act 1954. The trustees maintained the agreement amounted to a lease in substance and effect, and they held security of tenure over the premises notwithstanding the fact that it purported on its face to be a license. The arrangement contained clauses whereby they could quietly enjoy the premises without interference, and they paid rent for a term. AGE argued the agreement clearly expressed an intention to create a license, and there was nothing within the document which indicated the creation of an interest in land. Even if the agreement was a lease, a tennis club is not a business for the purposes of the 1954 Act and, therefore, the club are not entitled to the protections afforded by the statute.

Decision/Outcome

The agreement was held to be a lease. On its true construction, the document created the relationship of landlord and tenant, even though it was described as a license. The arrangement satisfied the legal requirements of a tenancy, and the parties could not alter the substance of an agreement by labelling it a license. The club amounted to a business for the purposes of the statute, and they were entitled to security of tenure.