In Shell Mex BP Ltd v Manchester Garages Ltd 1971 1 All ER 841 1971 1 WLR 612

In shell mex bp ltd v manchester garages ltd 1971 1

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that the occupier was a lodger and was therefore a licensee not a tenant. In Shell-Mex & BP Ltd v Manchester Garages Ltd [1971] 1 All ER 841, [1971] 1 WLR 612 the Court of Appeal, after carefully examining an agreement whereby the defendant was allowed to use a petrol company’s filling station for the purposes of selling petrol, came to the conclusion that the agreement did not grant exclusive possession to the defendant, who was therefore a licensee. Lord Denning MR in considering whether the transaction was a licence or a tenancy said ([1971] 1 All ER 841 at 843, [1971] 1 WLR 612 at 615): Broadly speaking, we have to see whether it is a personal privilege given to a person, in which case it is a licence, or whether it grants an interest in land, in which case it is a tenancy. At one time it used to be thought that exclusive possession was a decisive factor. But that is not so. It depends on broader considerations altogether. Primarily on whether it is personal in its nature or not: see Errington v Errington and Woods .’ In my opinion the agreement was only ‘personal in its nature’ and created ‘a personal privilege’ if the agreement did not confer the right to exclusive possession of the filling station. No other test for distinguishing between a contractual tenancy and a contractual licence appears to be understandable or workable. Heslop v Burns [1974] 3 All ER 406, [1974] 1 WLR 1241 was another case in which the owner of a cottage allowed a family to live in the cottage rent free and it was held that no tenancy at will had been created on the grounds that the parties did 82
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not intend any legal relationship. Scarman LJ cited with approval the statement by Denning LJ in Facchini v Bryson [1952] 1 TLR 1386 at 1389: ‘In all the cases where an occupier has been held to be a licensee there has been something in the circumstances, such as a family arrangement, an act of friendship or generosity, or such like, to negative any intention to create a tenancy. (See [1974] 3 All ER 406 at 415, [1976] 1 WLR 1241 at 1252.) In Marchant v Charters [1977] 3 All ER 918, [1977] 1 WLR 1181 a bed-sitting room was occupied on terms that the landlord cleaned the rooms daily and provided clean linen each week. It was held by the Court of Appeal that the occupier was a licensee and not a tenant. The decision in the case is sustainable on the grounds that the occupier was a lodger and did not enjoy exclusive possession. But Lord Denning MR said ([1977] 3 All ER 918 at 922, [1977] 1 WLR 1181 at 1185): ‘What is the test to see whether the occupier of one room in a house is a tenant or a licensee? It does not depend on whether he or she has exclusive possession or not. It does not depend on whether the room is furnished or not. It does not depend on whether the occupation is permanent or temporary. It does not depend on the label which the parties put on it. All these are factors which may influence the decision but none of them is conclusive. All the circumstances have to be worked out.
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