Allan v Liverpool Overseas

Allan v Liverpool Overseas (1873-74) LR 9 QB 180

Exclusive possession is required to create a lease.

Facts

The joint appellants, Allan and Inman, owned steamship companies. They were given a licence to use part of a docks including some sheds and a coal depot. The Docks and Harbour Board who controlled the docks charged the appellants rent on these. The sheds were locked, with keys kept by both the company and the Board. However, the Board’s agents could enter the sheds and use them for other vessels whom they also charged a rent without the appellants’ consent. When the land came to be assessed for rates, the company owners appealed as to whether they or the Board should pay rates.

Issues

The issue was whether the appellants were classed as a lodger or a tenant. If they were tenants they would have to pay rates. If they were only lodger, only the Board was liable. The respondents argued that the appellants kept the keys during the night while the Board did not. They also suggested the coal depot was separate from the sheds.

Decision / Outcome

Tenants must have exclusive possession of the land. A person does not have exclusive possession if the landlord or his servants can enter at any time. Here, the Board had retained the ability to enter the premises at any time. It did not matter whether the premises consisted of sheds, quay space or a depot. Nor did it matter that the landlord only had keys during the day. Consequently, the appellants were only lodgers, not tenants, and the Board and not the appellants were liable to pay rates on the premises.