CREATION & CLASSIFICATION OF LEASE: ANSWER GUIDE LEGAL DEFINITION OF A LEASE Elements 1. A grant by a lessor to a lessee 2. of a right to exclusive possession of land - Radaich v Smith 3. for a fixed or determinate period of time (that may be terminated earlier upon default) 4. typically in exchange for the payment of rent and/or other consideration (or otherwise entered into by way of deed). Radiach v Smith; Ashburn Anstalt v Arnold Q4 2018 ISSUE: Is it a lease or a licence? A licence is (expressly or impliedly) granted to permit a person to use and/or occupy land without a legal right of exclusive possession Thomas v Sorrell This is in contrast to a lease that grants exclusive possession - Radaich v Smith; Street v Mountford In determining whether a legal right to exclusive possession has been granted, consideration should be given to both the nature of the rights granted and the intention of the parties Lewis v Bell - Licence because the nature of the agreement did not evince an intention to confer a legal right for the licensee to control / exclude others from the stall - i.e. they couldn't lock it up. KJRR v Commissioner of State Revenue - is was not appropriate to ignore clauses 2.2 and 2.3 and its terms should be applied to confirm the document was indeed a licence. Must be cautious not to go too far in determining the legal rights under the contract Sharing of premises likely to indicate licence - AG Securities v Vaughan; Hamilton Island Enterprises (sharing with landlord) Swan v vecker -> airbnb ->vcat AIRBNB Result if it is a licence: · Cannot protect licence by caveat - no interest in the estate · Termination may give rise to damages through breach of contract
ISSUE: Is there a certainty of term? A lease must be for a definite period of time, which requires certainty in relation to the: a) commencement date; Caboolture Park Shopping Centre v Edelstein i. May be expressed by reference to an event - South Coast Oils v Look Enterprises ii. May be implied based on the date of entry into possession - Jopling v Jopling b) the duration of the term (end date) Say v Smith i. Fixed term requires ascertainable end date - Charles Clay v British Railway Board 1. Cannot be linked to external collateral method of measurement, such as "For the duration of the war" - Lace v Chantler 2. However, 5 year lease with the right to determine the lease if war ends would be certain - Prudential Assurance v London Residuary Body ii. Periodic tenancies - weekly / monthly - are certain because the original term is certain and such tenancies can be determined at any time by either party giving the appropriate notice - Prudential Assurance v London Residuary Body iii. Tenancy at will - no set duration but can be determined on proper notice DOES IT COMPLY WITH REQUIREMENTS OF WRITING