National Car Parks Ltd v Trinity Development Co (Banbury) Ltd

National Car Parks Ltd v Trinity Development Co (Banbury) Ltd [2001] EWCA Civ 1686

Landlord and tenant; whether agreement in relation to a car park was a lease or license

Facts

National Car Parks (NCP) entered an agreement with Trinity Development Co (TDC) under which they agreed to manage a car park. The agreement was stated to be a license and TDC had 40 spaces reserved for their employees free of charge. TDC served notice to end the agreement, and NCP sought a declaration that the agreement amounted to a lease in substance and effect.

Issues

NCP argued the agreement as a matter of construction amounted to a lease, and they were entitled to the statutory protections of Part II Landlord and Tenant Act 1954. NCP had the right to enter and occupy the premises, manage the car park, the right to control the premises and responsibility for the running of the car park. They claimed this amounted to their holding exclusive possession. TDC contended there was no ambiguity in the agreement and it was labelled correctly as a license. There were several clauses which pointed against exclusive possession. There was no reservation of a right of re-entry and nor was there any covenant for quiet enjoyment. TDC were expressly stated to remain in possession throughout, and the reservation of 40 parking spaces also pointed against exclusive possession.

Decision/Outcome

The agreement was held to be a license. Although the labelling of the agreement was not conclusive, it did carry weight, and there was nothing in the agreement which suggested it was a sham to avoid conferring statutory rights. It was significant that the agreement commenced with the imposition of numerous obligations on NCP, rather than conferring a right of occupation. It was also significant that there was no covenant of quiet enjoyment, which is a usual characteristic of a tenancy.