3 friends (Ds) intended to share P’s flat and all entered separate agreements, but on the same terms and on the same date. It was acknowledged that on face value, the agreement would not give rise to a tenancy, so that CA considered whether there was any pretence that made it a licence. 2 had moved out and although the original occupier had chosen the replacements, the landlord had the final say. CA held that the clauses denying “exclusive possession” and an obligation to live with such future persons as the landlord might designate were not pretences and therefore it was not a tenancy. Also, each party was only responsible for a third of the amount owed.
Parker LJ: It would only constitute a pretence if the 3 original occupiers intended to remain in the flat together. In “substance and reality” it was a case of contractual licence. The clauses, especially the fact that each was responsible for a third, was inconsistent with a joint tenancy. “The task of the Court is to determine the true nature (Lord Oliver) or substance and reality (Lord Ackner) of the transaction”. The flat’s nature was to have a “shifting population” which makes it impossible to consider it a joint tenancy.
