Introduction
In English land law, the distinction between a proprietary lease and a personal licence is fundamental. A lease grants an estate in the land, binding on third parties, whereas a licence is a mere personal permission to use land, which does not create an interest in it. The House of Lords' decision in Street v Mountford [1985] AC 809 is the leading authority that established the modern test for identifying a lease. However, later cases, such as Manchester Airport plc v Dutton [2000] QB 133, have examined the rights of licensees, leading to some debate over whether the clear line drawn in Street has been blurred. This essay will compare and contrast the principles from these cases, arguing that while Street provided clear doctrinal criteria based on exclusive possession, Dutton demonstrated a more pragmatic judicial approach that granted a licensee a remedy traditionally associated with proprietary rights, creating a tension between the two decisions.
The Doctrinal Certainty of Street v Mountford
The case of Street v Mountford concerned an agreement that was labelled a "licence agreement." It gave Mrs Mountford the right to occupy two furnished rooms for a weekly "licence fee." Mr Street sought to avoid the provisions of the Rent Acts, which would have granted Mrs Mountford security of tenure if the arrangement was a tenancy. The House of Lords had to decide whether the agreement, despite its label, created a lease or a licence.
Lord Templeman, delivering the leading judgment, established a clear test to distinguish a lease from a licence. He famously stated that for a tenancy to exist, the occupier must be granted exclusive possession of the property for a fixed or periodic term at a rent (Street v Mountford [1985] at p. 818). The court held that the label the parties used was not decisive; what mattered was the substance of the agreement. If the agreement satisfied the three criteria of exclusive possession, a certain term, and rent, then a tenancy was created. The key element was exclusive possession, meaning the right to exclude all persons from the land, including the landlord, subject to any rights of entry reserved by the landlord in the agreement. By focusing on the objective reality of the arrangement rather than the parties' subjective intentions or labels, Street provided much-needed certainty and protected vulnerable occupants from being denied statutory protections through sham "licence" agreements. The case reinforced the traditional view that a licence is a personal right that does not confer sufficient control over land to ground a claim for possession.
The Pragmatic Approach in Manchester Airport plc v Dutton
The principles established in Street were challenged in the later Court of Appeal decision of Manchester Airport plc v Dutton. In this case, the National Trust, who owned the land, granted Manchester Airport a licence to enter and occupy a woodland area to carry out work in preparation for building a new runway. Before the airport could begin work, the land was occupied by peaceful protesters. The airport, who were licensees and had not yet entered into possession, sought an order for possession against the protesters.
The central issue was whether a licensee, who did not have exclusive possession or any proprietary estate in the land, could sue a trespasser for possession. Traditionally, only a person with a title to the land (like a freeholder or tenant) or a person in actual occupation could bring such a claim. However, a majority in the Court of Appeal held that the airport could obtain an order for possession. Laws LJ argued that if a licensee has a right to occupy the land under their contract, the court should grant a remedy that gives effect to that right (Dutton [2000] at p. 147). This decision was a significant departure from established principles, as it effectively allowed a licensee to claim a remedy—possession—that was seen as a hallmark of a proprietary right. The dissenting judge, Chadwick LJ, argued that the decision was wrong in principle, as it confused personal rights with proprietary rights and went against long-standing authority that a licensee cannot sue in trespass or for possession (Dutton [2000] at p. 150).
Comparison and Conclusion
When compared, Street and Dutton represent two different judicial approaches to rights of occupation. Street v Mountford stands for doctrinal clarity and principle, reinforcing the bright-line distinction between a proprietary lease and a personal licence based on the test of exclusive possession. Its purpose was to look past form to the substance of the right. In stark contrast, Manchester Airport plc v Dutton represents a more pragmatic and remedy-focused approach. The court prioritised giving practical effect to a contractual licence, even if it meant granting a remedy that blurred the conceptual line between personal and proprietary rights.
The key point of contrast is the right to sue for possession. Under the Street analysis, Mrs Mountford had a lease and therefore exclusive possession, which would unquestionably give her the right to exclude trespassers. Under Dutton, a party with a mere licence—who by definition lacks exclusive possession—was nonetheless given the power to remove trespassers by obtaining an order for possession. This has been criticised by some academics for creating uncertainty and undermining the clear principles of property law (Gray and Gray, 2021).
In conclusion, while Street v Mountford provides a robust and clear framework for identifying a proprietary lease, its principles can be contrasted with the decision in Manchester Airport plc v Dutton. The latter case demonstrates that the courts may be willing to grant remedies to licensees that are functionally similar to those held by tenants, prioritising practical enforcement of contractual rights over strict adherence to the traditional proprietary/personal distinction. This creates a tension in the law, showing that while the definition of a lease remains clear, the practical consequences of holding a licence are not always as limited as the principles in Street might suggest.
References
Gray, K. and Gray, S.F. (2021) Land Law. 12th ed. Oxford: Oxford University Press.
Manchester Airport plc v Dutton [2000] QB 133
Street v Mountford [1985] AC 809
