## Facts

- Mr. Street granted Ms. Mountford exclusive occupation of two rooms in his property under an agreement labeled a "license," with payments described as "license fees."
- Despite the wording, Ms. Mountford had the right to exclude others, including Mr. Street, subject to limited reserved rights such as entry for repairs.
- The agreement ran for a specific term and regulated Ms. Mountford’s occupation.
- The case arose due to a dispute over whether the arrangement was legally a lease or a mere license, affecting the level of protection afforded to Ms. Mountford.

## Issues

1. Whether an agreement that confers exclusive possession for a term, but is labeled a license, creates a lease or a license in law.
2. Whether the parties’ use of labels like "license" and "license fee" can override the substance of the agreement.
3. What distinguishes a lease from a license, particularly regarding the significance of exclusive possession, payment of rent, and the parties' intentions.
4. How to determine the true nature of an agreement when wording and practical circumstances conflict.

## Decision

- The House of Lords held that an agreement granting exclusive possession for a term, even if described as a license, constitutes a lease if the legal requirements are satisfied.
- The court found the substance of the arrangement took precedence over its label or form.
- Exclusive possession was considered the fundamental right distinguishing a tenant from a licensee.
- The House of Lords emphasized courts should detect and frustrate sham devices intended to disguise leases as licenses to avoid statutory protections.
- The payment of rent was not a necessary requirement for the existence of a lease, as clarified in subsequent cases.

## Legal Principles

- Exclusive possession is the core distinguishing feature of a lease compared to a license.
- The labels or express wording of an agreement do not determine its legal nature; the substance and practical realities are decisive.
- Courts are empowered to look past sham clauses or pretenses that conceal the true rights and obligations intended by the parties.
- Rent is not a necessary hallmark for the existence of a lease.
- Multiple occupiers can only have a joint tenancy if they share a single interest, as clarified in later case law.
- Proprietary status of the grantor is not always determinative for the existence of a lease, as illustrated by subsequent developments.

## Conclusion

Street v Mountford remains a foundational decision establishing that exclusive possession for a term creates a lease regardless of labels, ensuring substantive rights for tenants and curbing attempts to circumvent legal protections through formality or wording alone.

Street v Mountford [1985] AC 809