AG Securities v v aughan [1988] UKHL 8

Facts

• AG Securities held a long leasehold interest in a four-bedroom property.
• Four individuals, including Vaughan, occupied the property under separate, individual agreements with AG Securities.
• The agreements were not signed simultaneously and each occupier entered into their agreement at different times.
• AG Securities sought to terminate the agreements and regain possession of the property.
• The occupiers argued that they held a joint lease, entitling them to statutory protection under the Rent Acts, while AG Securities contended that the agreements created only individual licences.
• The Court of Appeal initially found in favour of the occupiers, holding there was a joint lease.
• The House of Lords reversed the decision, holding that the agreements created licences rather than a tenancy.

Issues

1. Whether the agreements between AG Securities and the occupiers created a lease (joint tenancy) or a series of licences.
2. Whether the occupiers had exclusive possession of the property necessary to establish a lease.
3. Whether independent and separately executed agreements could amount to joint tenancy conferring statutory protection under the Rent Acts.

Decision

• The House of Lords held that the agreements were licences, not a lease.
• The lack of joint exclusive possession and coincidence of term among the occupiers was decisive.
• Each agreement was independent; there was no joint interest between the occupiers.
• The landlord retained control, including the right to nominate replacement occupiers, negating joint exclusive possession.
• The agreements did not confer the substantive rights or obligations of a tenancy, and thus the Rent Acts’ protections did not apply.

Legal Principles

• The fundamental distinction between a lease and a licence lies in the grant of exclusive possession: a lease transfers an estate in land with the right to exclude others (including the landlord), while a licence confers only a personal right to occupy.
• The substance and reality of the occupancy arrangement, not merely the form or wording of the agreements, determines whether a lease or licence is created.
• For a joint tenancy to exist, interest, term, title, and possession must coincide.
• Statutory tenant protections cannot be circumvented by labelling an agreement as a licence if it confers the rights of a tenancy.
• The case demonstrates that independent, non-simultaneous agreements lacking joint exclusive possession are likely to be construed as licences.
• Comparison with contemporaneous authority (Antoniades v Villiers) reinforces the focus on the practical reality and interdependence of agreements when determining occupancy status.

Conclusion

The House of Lords in AG Securities v Vaughan [1988] UKHL 8 affirmed that exclusive possession is the core test for distinguishing a lease from a licence, particularly in multiple occupancy cases; the court will look to the substantive arrangement rather than contractual language, denying tenancy status where occupants lack joint rights and shared possession.