Radaich v Smith [1959] HCA 45
Landlord and tenant; whether agreement amounted to a lease even though labelled a license
Facts
The parties entered in to an agreement which was executed as a deed. The agreement allowed Radaich to occupy a lock up shop for a period of five years, where she would conduct a business as a milk bar. The document was labelled on its face as a license agreement and at no point were the words lease, lessor or lessee used. Radaich applied for a fair rent to be determined and Smith maintained that as the agreement constituted a license and not a lease, there was no jurisdiction under which a fair rent could be determined.
Issues
If the agreement amounted to a lease, a magistrate of the Fair Rents Board would hold jurisdiction to determine a fair rent for the premises. Radaich argued she held a lease in substance even though the agreement was labelled a license, because it effectively amounted to a right to exclusive possession for a term. Smith argued the deed amounted to an agreement to create a license only. At no point did the deed refer to a lessor, a lessee or a lease and, as such, it could not amount to a lease and the magistrate, therefore, had no jurisdiction to determine a fair rent.
Decision/Outcome
The agreement was found to be a lease and the magistrate had jurisdiction to determine a fair rent. Whether an agreement constituted a lease or a license depended on whether, if properly interpreted, the deed created in substance exclusive possession of the property for a term. Regard should be had to the substance and effect of the document itself, and not the label given to it by the parties.
Updated 21 March 2026
This article accurately summarises the High Court of Australia decision in Radaich v Smith (1959) 101 CLR 209; [1959] HCA 45. The case remains good law and is frequently cited in both Australian and English legal materials for the proposition that the substance of an arrangement — particularly whether exclusive possession is granted for a term — determines whether it constitutes a lease or a licence, regardless of the label the parties attach to it.
UK readers should note that this is an Australian authority. In English law, the equivalent and more commonly cited leading case is Street v Mountford [1985] AC 809 (House of Lords), which confirmed and applied the same core principle: exclusive possession for a term at a rent ordinarily creates a tenancy, not a licence, whatever the document is called. Radaich v Smith is cited in some English academic materials as a persuasive Commonwealth authority consistent with Street v Mountford, but English courts principally rely on Street v Mountford and its progeny. Students researching English land law should ensure they engage primarily with that case and subsequent English authorities. The article is otherwise accurate as a summary of the Australian decision.
