Desai v Mcfee and Another (Civil Case No. 85 of 1950) [1950] EACA 32 (1 January 1950)

ORIGINAL CIVIL

Before de LESTANG. J.

SUMANTLAL CHUNILAL DESAI, (Plaintiff)

$\mathbf{v}$ .

MRS. MCFEE and MRS. COOPER, trading as "RHOBEL", (Defendants'). Civil Case No. 85 of 1950

The facts appear sufficiently from the judgment.

Held (8-8-50).—That whether a person has a lease or a licence depends upon whether he has exclusive possession as opposed to exclusive use of the premises.

Cases referred to: Kamrudin Esmail Rajwani v. Govindji Kalidas Degamwala, 17 E. A. C. A. 37, Karamat Ali v. Champion Shoe Co., 16, E. A. C. A. 15

D. N. Khanna for the plaintiff.

Nazareth for the defendants.

JUDGMENT.—In this suit plaintiff seeks to recover possession of certain premises occupied by defendants, and the short point for decision is whether the defendants are licensees or tenants or partly licensees and partly tenants of the portion of the premises they occupy.

The facts are as follows. In 1947 plaintiff's brother, Survakant C. Desai, was the lessee of the ground floor of a shop. By an agreement dated 1st November, 1944, he purported to sub-let a portion of the shop to a Mrs. Pearse. That portion was marked in red on a plan attached to the Agreement and consisted of a show window and shelves at each end of the front entrance to the shop; a showcase inside the entrance to the shop; a passage five feet wide on the left side of the shop and separated from the front portion of the shop by means of a glass showcase. This passage extended from the front of the shop to a partition separating the front portion from the back portion of the shop; and slightly more than half of the back portion of the shop. By the same Agreement Mrs. Pearse was authorized to put in not more than six tailors to work in the remainder of the back portion of the shop. As there was only one entrance to the shop clause 3 of the Agreement provided that: $-$

"The Purchaser (i.e. Mrs. Pearse) shall be entitled to gain access to the said portion of the premises sub-let to her through the front door facing Government Road which door the Vendor shall keep unlocked between the hours of 8 o'clock and 1 o'clock and 2 o'clock and 5 o'clock each weekday and between the hours of 8 o'clock and 1 o'clock each Saturday; the said door shall be kept locked on Sundays and Bank Holidays. The keys of the whole premises shall remain with the Vendor (i.e. S. C. Desai)."

The front and back portions of the shop were separated from each other by means of a wooden partition six feet high, which however, did not reach the walls on each side of the shop. The gap on one side was five feet wide where the passage to which I have already referred to joins the back portion of the shop. Mrs. Pearse carried on the business of dressmaker on the premises. On the 30th June, 1949. she sold her business and assigned her interest in the portion of the premises occupied by her to the defendants. At the time of the transfer, however, the portion occupied by Mrs. Pearse was somewhat different from the portion purported to have been sub-let to her under the Agreement. Similarly the portion in which she was allowed to keep the tailors had also been altered. It would appear, however, that the area in each case was about the same. The defendants continued to occupy what Mrs. Pearse was occupying when she left. The plan, Ex. 3, shows in detail in green and orange the portion of the shop occupied by the defendants and plaintiffs respectively. The portion enclosed by the red lines which I have drawn on the plan shows the portion which is now the common workroom used by the plaintiff and the defendants and their predecessors in title. By comparing this portion with the portion marked "Workroom A" on the plan annexed to the Agreement, Ex. A, it will be seen that it is

vastly different in shape and boundaries from the original workroom. The plaintiff became the tenant of the whole shop in the place of his brother on the 25th July, 1949, and continued to accept the defendants as his tenants. (I use the word in a wide and neutral sense). He accepted rent from them and even entered into an agreement with them whereby he obtained from them "the space adjoining a small show window with the showcase standing on it"; and also for a reduction in the rent the temporary use of the small show window. It seems to me, therefore that the defendants are in a no better nor worse position than Mrs. Pearse. They occupy a portion of the shop which is separated from the portion occupied by the plaintiff by means of furniture except in one place where there is a partition six feet high which, however, does not extend to the walls on either side of it. The defendant's portion is also separated from the workroom, to which they have restricted use by pieces of furniture only. There is only one door to the premises, of which the plaintiff holds the key, and in order to enter their portion the defendants must go through the front part of the portion occupied by the plaintiff.

It is perfectly clear from the terms of Ex. A that it was the intention of the parties to it to create a lease in respect of a portion of the premises and a licence in respect of another portion. That is clearly the position on the face of the request but in deciding the legal effect of a document it is not so much the form as the substance of the document which must be considered. Vide Kamrudin Esmail Rajwani v. Govindji Kalidas Degamwala, Civil Appeal No. 64/1949 now in the course of being reported.

Although it is not always easy in any given case to draw the line between a lease and a licence the difference between the two legal positions may be easily formulated. Halsbury, Vol. XX, Part 1, para. 5 explains the distinction between a lease and a licence in these words: —

" $\ldots$ A grant under which the grantee takes only the right to use the premises without exclusive possession operates as a licence, and not as a lease. In deciding whether a grant amounts to a lease, or is only a licence, regard must be had to the substance of the agreement. If the effect of the instrument is to give the holder the exclusive right of occupation of the land, though subject to certain reservations, or to a restriction of the purposes for which it may be used, it is a lease; if the contract is merely for the use of the property in a certain way and on certain terms, while it remains in the possession and control of the owner, it is a licence. To give exclusive possession there need not be express words to that effect; it is sufficient if the nature of the acts to be done by the grantee require that he should have exclusive possession. On the other hand, the employment of words appropriate to a lease will not prevent the grant from being a licence merely, if from the whole document it appears that the possession of the property is to remain with the grantor ...."

A similar passage occurs in Hill & Readman's Law of Landlord and Tenant, 10th Ed. at p.

7. The test therefore appears to be whether the defendants have exclusive possession as opposed to exclusive use of their portion of the premises. It is conceded by Mr. Nazareth that the defendant's claim of tenancy relates only to the portion sub-let to Mrs. Pearse and not to the portion described as a workroom in respect of which the defendants have only a licence. The fact that the defendants claim to be tenants in respect of the part of the premises which they use exclusively, and licensees in respect of that part which they share with the plaintiff, tends in itself to throw doubt on the existence of a tenancy at all, since

these portions have sustained considerable alterations in form and shape. In the case of Karamat Ali v. Champion Shoe Co., which is being reported in 16 E. A. C. A., the facts were in my view much stronger than in the present case. In that case the respondent occupied a portion of a large room which was separated from the rest of the room by means of furniture. Each portion had its own front door and respondent had the key of his own door. The parties did not share any material portion of the room as in the present case, the toilet only being shared between them. The only real point for decision in that case was whether there was a letting of separate business premises and not whether there was a tenancy or a licence. Nihill, C. J., expressed the view, no doubt obiter, that the respondent's status was nothing very much higher than that of a licensee. In my view the status of the defendants in the present case is less than that of the respondent in the *Champion Shoe Co.* case. They had no key to the front door and they could not enter their portion of the shop when they pleased; they were entirely dependent for doing so upon the plaintiff. They shared a considerable part of their portion with the plaintiff; they had to go through the plaintiff's portion to get to their own portion of the shop and so forth.

On the facts of the present case I hold that although the defendants had the exclusive use of some space in the shop they did not have exclusive possession of any of it, and they were licensees and not tenants. The licence having been effectively determined there will be judgment for the plaintiff as prayed in paras. 1-5 inclusive of the plaint.