Holland v Oxford City Council

A recent case has highlighted to landlords that care should be taken when granting licences to occupy land for any period of time, even for a few days. In the absence of express agreement between the parties of the terms of occupation, the court will decide whether a tenancy has been created based on the conduct of the parties.

Mrs Holland is a fairground operator and for several years had been granted a licence to use two pitches on a fairground for a couple of days each year. In order to secure a plot at the fair each year, Mrs Holland was required to send an application form and annual fee to the council identifying the site sought and the type of attraction proposed. The council then sent a letter of authority to use the site and a set of conditions governing the use of the site.

In 2009 a dispute arose due to a complaint that Mrs Holland’s dodgems encroached onto a neighbouring plot. In response the council reduced the size of the plot Mrs Holland was usually granted. Mrs Holland then proposed to bring a new fairground ride to the fair but was refused permission as it would not fit onto the smaller plot. Mrs Holland brought proceedings and claimed an annual periodic tenancy of the plot and damages for breach of covenant for quiet enjoyment.

The court had to determine from the conduct of the parties whether a tenancy had been created. The key issues were: whether Mrs Holland had exclusive possession of the plot during the fair; and whether the arrangement gave rise to a periodic occupancy.

The court decided Mrs Holland was a licensee and did not have exclusive possession, crucially because the council had not reserved a right of re-entry or right of access which showed the council had not intended to exclude itself. This is consistent with the realities of a working fair and a council’s need to exercise control to ensure the safety of fair-goers. As a licensee Mrs Holland did not benefit from the implied covenant for quiet enjoyment, so was not entitled to damages.

However, the court said it was possible in principle for a tenancy to arise. Mrs Holland could have acquired a periodic contractual licence and a contractual right to return each year. However, in this case as an application process was followed each year, that meant Mrs Holland entered into a new contract each year which discharged the previous year’s. The conditions governing the use of the site also changed each year, so the terms were not the same year on year.

When granting licences, no matter how long or short, landlords should take care as to the rights they do and do not grant.