Land Law Issues - Case Study Example

Land Law In Bruton, Lord Hoffmann opined that tenancy by estoppel would not transpire. It was his considered opinion that the grant to Bruton of a right to exclusive possession, by the Housing Trust, was tantamount to a lease, despite the fact that the Housing Trust was devoid of any right to exclusive possession (Bruton v Lond and Quadrant Housing Trust , 2000). Apparently, Lord Hoffman had engendered a novel form of interest, namely a non – proprietary lease. In common and legal parlance, a lease constitutes a proprietary interest or a legal estate in the land; whereas, a licence is nothing more than a personal right (Royle, 2003, p.114). Thus, the entity created by Lord Hoffman is an incongruity. The convoluted explanation provided by Lord Hoffman, as to why the arrangement betwixt Bruton and the trust is to be understood as a lease, despite the absence of estate in the land by the Trust, is intrinsically a description as to why this arrangement is a contractual licence (Royle, 2003, p. 114). It is an onerous task to comprehend as to how London & Quadrant, which did not have a lease, could grant a lease. Lord Hoffmann determined whether Bruton had been granted a lease, by ascertaining exclusive possession by the latter. Since, it could be construed that Bruton had such exclusive possession; he was to be deemed to have been granted a lease. The fact that London & Quadrant did not hold estate was immaterial as the lease was created by the agreement between the parties, and not the previous presence of an estate in the landlord (Dixon, 2011, p. 209). As such Lord Hoffmann had made a departure from the principle that a proprietary interest was inherent in a lease. This implies that a lease need not be a proprietary right in the land. Moreover, a lease is a contract between the tenant and landlord, and its capacity to bind third parties results from the circumstances of its creation (Dixon, 2011, p. 209). The Street case dealt with a situation in which the court scrutinised the motives, circumstances and terms of the grant, prior to holding that it bestowed exclusive possession. Consequently, it was deemed to be a tenancy (Street v Mountford, 1985). The ruling in Street was based on the presumption that a lease is fundamentally proprietary, which automatically served to differentiate it from a licence. Nevertheless, to apply the reasoning in Street to Bruton, in accordance with the convoluted logic of Lord Hoffmann is extremely detrimental to the extant norms of property law. Moreover, it defeats the very purpose of the ruling in Street (Dixon, 2011, p. 209). It is essential to clearly distinguish that exclusive possession connotes exclusive control over an estate granted by the landlord. On the other hand, exclusive occupation can be understood as the possession of exclusive control, on account of other arrangements, and it could be presumed that the occupier in the Bruton case was in possession of exclusive control and not the former (Dixon, 2011, p. 209). According to Lord Hoffman, if the proper application of the principles established in Street v Mountford lead to the conclusion that a tenancy had been granted, then the presence or absence of title had no bearing on the issue (Routley, 2000, p. 426). It was concluded by the House of Lords that the agreement had given rise to a lease. Consequently, it was unnecessary to take into account proprietary interests or estoppel (Routley, 2000, p. 427). Lord Hoffmann opined that the principle in Street v Mountford created a tenancy. The grantor was estopped from declaring that it had not granted a tenancy (Routley, 2000, p. 428). However, section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, requires a contract for the disposition of an interest in land to be in writing. With this Act, part performance has been rescinded. Bruton dealt with the issue of whether a charitable organisation that had been empowered to provide accommodation to the homeless, on a short term basis, subsequent to a licence agreement with the Council that precluded grant of tenancies, was adequate to nullify the assumption of a tenancy (Bruton v Lond and Quadrant Housing Trust , 2000). In this context, the House of Lords relied on the decision in Family Housing Association v Jones to discard the idea that the performance of social functions could set aside the general rule in favour of tenancy (Family Housing Association v Jones, 1990). Similarly, in Bruton, the grant of licence to assist the homeless, was deemed to set aside the notion relating to tenancy. Section 1 of the Law of Property Act 1925 merely describes the rights that could be legal. The ultimate quality of the proprietary rights is determined by the manner, in which they had come into existence. Specifically, it is determined by whether the required statutory formalities have been complied with. In general, complete formality is essential for the creation of interests and legal estates. Section 1 of the Law of Property Act 1925, stipulates the rights that are legal. These include an estate fee simple absolute in possession and a term of years absolute (Dixon, 2011, p. 11). An agreement, in which the occupier had to administer and manage the premises, and pay a proportionate amount of the profit realised from the car park (National Car Parks Ltd v Trinity Development Co (Banbury) Ltd , 2001), was deemed to be a licence and not a lease, due to the absence of exclusive possession (Hewitson, 2005, p. 5). On various occasions, the courts have decided the issues relating to exclusive possession, with ramifications for differentiating between licence and lease. Categorisation of an agreement as a lease is unaffected by intention that is supplementary to what has been specified in the terms of the agreement. For instance, it was held in Westminster City Council v Clarke that the circumstances of the case would determine whether the agreement bestowed exclusive possession rights (Westminster City Council v Clarke, 1992). If the occupant can be transferred within the property by the owner, then it is to be construed that the occupier has been provided with a licence and not exclusive possession (Dresden Estates Ltd v Collinson, 1987). In Shell – Mex and BP Ltd v Manchester Garage Ltd (Shell – Mex and BP Ltd v Manchester Garage Ltd, 1971) and Esso Petroleum Ltd v Fumegrange Ltd (Esso Petroleum Ltd v Fumegrange Ltd, 1994) it was ruled that there was no exclusive possession, as the agreements precluded the occupiers from hindering the employees or agents of the owner, engaged in exercising the latter’s rights of possession. Section 1 of the Law of Property Act 1925, stipulates certain parameters for distinguishing between equitable and legal rights. In the Bruton case, lease was granted although no estate rights were held by the grantor. Legal rights are defined by the Law of Property Act. These consist of a term of years absolute and estate fee simple absolute in possession. However, the ruling in Bruton changed this situation, as Bruton merely had absolute possession, without any proprietary right. As per Lord Hoffmann, title over the property had no bearing on the grant of tenancy. References Bruton v Lond and Quadrant Housing Trust , 1 AC 406 (2000). Dixon, M. (2011). Modern Land Law . Taylor & Francis. Dresden Estates Ltd v Collinson , 1 EGLR 45 (1987). Esso Petroleum Ltd v Fumegrange Ltd, 2 EGLR 90 (1994). Family Housing Association v Jones, 1 WLR 779 (1990). Hewitson , R. (2005). Business Tenancies. Routledge. Law of Property Act (1925). National Car. Parks Ltd v Trinity Development Co. (Banbury) Ltd , 2 EGLR 43 (2001). Routley, P. (2000). Tenancies and Estoppel – After Bruton v London &Quadrant Housing Trust. Modern Law Review, 63(3), pp. 424 – 428. Royle. (2003). Briefcase on Land Law . Routledge. Shell – Mex and BP Ltd v Manchester Garage Ltd , 1 All ER 841 (1971). Street v Mountford, 2 WLR 877 (House of Lords 1985). Westminster City Council v Clarke , 2 AC 288 (1992). Read More