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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Smith v. Irish Rail [2002] IEHC 103 (9 October 2002) URL: http://www.bailii.org/ie/cases/IEHC/2002/103.html Cite as: [2002] IEHC 103 |
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THE HIGH COURT
DUBLIN CIRCUIT
THE COUNTY OF THE CITY OF DUBLIN
2002 9CA No. 8492/2001
BETWEEN
NOEL SMITH
APPLICANT
AND
CORAS IOMPAIR EIREANN AND IARNRÓD EIREANN – IRISH RAIL
RESPONDENTS
JUDGMENT of Mr. Justice Michael Peart delivered on the 9th day of October, 2002.
1. This matter comes for decision to this Court by way of an Appeal from the Order of the Circuit Court made by her Honour Judge Linnane on the 16th day of January 2002, wherein the learned judge dismissed an application made by the applicant for a new lease of premises set out hereunder, under the provisions of Section 21(2) of the Landlord and Tenant (Amendment) Act 1980. The premises in question (hereinafter referred to as "the premises") are those referred to in an agreement dated the 4th of December 1991 and made between Coras Iompair Eireann (thereinafter called "the Board") of the first part Iarnród Eireann – Irish Rail (thereinafter called "the Company") of the second part, and the applicant Noel Smith (thereinafter called "the licencee") of the third part, as follows:-
"ALL THAT the shop unit on the floor of (but excluding the subsoil thereunder) and within the airspace of the Railway arch (No 1) situate at Tara Street Railway Station in the City of Dublin and which shop unit is shown marked "shop unit" on Plan No (sic) annexed hereto and which Railway arch is shown edged red on the said plan (the said shop unit is hereinafter called "the premises") TOGETHER WITH permission for the Licencee and all persons authorised by the Licencee to use the staff toilet facilities at the station".
2. In his notice of application dated the 29th of June 2001 the applicant seeks the following reliefs:-
(a) an order pursuant to Section 21(2) of the Landlord and Tenant (Amendment) Act 1980 determining the right of the applicant to a new tenancy in the premises described in the schedule thereto (being "the premises") hereinbefore referred to, and in the event of the applicant being found to be entitled to a new tenancy, an order pursuant to Section 23 of the said Act fixing the terms of such a new tenancy;
(b) an order providing for the costs of this application; and
(c) such further or other order as to this honourable Court shall seem fit and appropriate.
3. In his said application, the applicant indicated that he would rely on the following matters in support of the application:
(1) the premises are a tenement within the meaning of the said Act of 1980 and the applicant is the tenant and the respondent is the landlord of same within the meaning of the said Act.
(2) the premises are held by the applicant under a contract of tenancy dated the 4th day of December 1991 and made between by the respondent of the first part, Iarnród Eireann – Irish Rail of the second part and the applicant of the third part for a term of ten years commencing on the 1st day of July 1991 which said term will expire on the 30th day of June 2001.
(3) on the 28th day of May 2001 the applicant served a notice of intention to claim relief upon the respondent pursuant to Section 20 of the said Act of 1980.
(4) the applicant and respondent have been unable to agree as to the entitlement of the applicant to a new tenancy or as to the terms of such tenancy.
4. Against the said order dismissing the application in the Circuit Court, the applicant filed and served a Notice of Appeal dated the 18th day of January 2002. The respondent Coras Iompair Eireann served Notice of Cross Appeal dated the 22nd day of January 2002 against so much of the said order as fails to award costs to the said respondent.
5. The operative part of the said agreement recites at clause 1 thereof that the board and the company "grant the licencee permission during the continuance of this licence to use the premises for the sale of the articles or items hereinafter described in clause 12(3) hereof". Those items do not require to be set out in detail, but are all items one would expect to find in a newsagents shop at a railway station such as newspapers, magazines, sweets, confectionary, sandwiches, etc. The applicant carries on this business under the name "Tara Nova".
6. Clause 2 of the agreement states that the licence shall commence on the 1st day of July 1991 and shall be for a period of 10 years from that date subject to earlier suspension or termination or revocation as thereinafter provided. Clause 6 contains provisions as to the annual licence fee payable during the term of the licence. Other clauses contain provisions one would expect to find in an agreement of this kind, or in some cases in a lease or tenancy agreement and some of these will be referred to later. However clause 10 is important and states as follows:-
"Nothing in this licence shall be construed as giving the licencee any tenancy in or right to possession of or any right or easement over or with respect to any part of the property of the Board or the property of the Company. In particular and without prejudice to the generality of the foregoing it is hereby declared that it is not the intention of either the board or the company on the one part or the licencee on the other part in relation to the premises or the said Railway arch or any part thereof to create between them the relationship of landlord and tenant or to confer such rights upon the licencee as would amount in law to a tenancy (including a tenancy at will) or to create any estate or proprietary interest for the licencee therein.?
7. Clause 11 states:-
The arrangement hereby evidenced is made by the Board and the Company for their respective temporary convenience which is that the Board or the Company while retaining the ownership possession occupation control and management of the said Railway arch (which is an integral part of the station and the railway undertaking and necessarily and essentially required in connection with the operation thereof) should use the airspace of the said railway arch to good purpose and not allow same to remain idle without profit or return"
8. It is clear from the licence agreement itself, and indeed from the evidence given by the applicant himself and on behalf of the Respondent that the intention of the parties was that a licence would be granted for a period of 10 years at an annual licence fee. Of this there can be no doubt whatsoever. However, Mr. Alex Owens SC for the applicant submits that, in spite of having the outward appearance of a bare licence and in spite of the uncontroverted evidence of the parties' intentions at the time the agreement was entered into, the nature of the agreement is such as to grant a tenancy for the period thereof under the principles set forth in the English case of Street -v- Mountford (1985) 1AC 809 which held in the circumstances of that case that on its true construction, and notwithstanding that it was described as "licence", the agreement in question had the effect of creating a tenancy. He submits that this is a legal consequence not dependant upon the intention of the parties at the time.
9. Mr. Maurice Gaffney SC for the Respondent submits to the contrary. He submits that the intention of the parties is clear and unambiguous from the pre-contractual correspondence and negotiations leading to the agreement, the wording of the agreement itself and the subsequent conduct of the applicant. With regard to the latter, he refers particularly to the failure of the applicant to take up an offer made on behalf of the respondent by letter dated the 18th of August 1995, wherein it was stated that it was now possible to grant a lease of a Railway Arch, which had not been possible in 1991 when the licence was granted. Mr. Gaffney seeks to distinguish the case of Street -v- Mountford on the basis that in the instant case the intention of the parties was and is clear, and also on the basis that Street -v- Mountford dealt with the letting of residential units to people of limited means.
10. What I have to decide is, in a nutshell, whether the licence agreement dated the 4th of December 1991 already referred to creates a relationship of landlord and tenant, or merely that of licencor/licencee. If the latter then no rights to a new tenancy can arise. Before dealing with the legal issues involved I will summarise the evidence given by the applicant himself, and evidence given on behalf of the respondent by Mr. Ross Shorten who was employed at the time of the agreement by Lisneys on behalf of CIE, Mr. James Gahan the Group Property Manager at the time in CIE and Mr. Niall Grogan who succeeded Mr. Gahan as Group Property Manager within CIE. Having done so I will then consider in more detail the relevant provisions of the said Agreement.
The Evidence of Noel Smith
11. Mr. Smith gave evidence that in 1991 he was in his early 20's and was already experienced in the newsagency business having had a premises in Clondalkin which he rented under a lease. Around 1991 he became aware that the Respondent was seeking applications in relation to the letting on a ten year licence of circa 750 square feet of shop premises at the Tara Street Dart Station. He went to see the property which was simply a shell unit consisting of a space underneath one of the arches under the railway line at Tara Street. He said that there was a pub about two or three arches down from that premises. When he saw the premises he was interested in, there were simply bare walls, bare brick and bare concrete floor when he looked at it. There was a water pipe which he would have to connect into and he would also need to connect into the ESB and put in a separate electric supply. He gave evidence that he put a proposal to CIE by completing an application form to take the premises on a 10 year licence. He said that he put a proposal to CIE offering £75,000 key money and a rent of £20,000 per annum or 6% of turnover exclusive of VAT. In due course Mr. Ross Shorten of Lisneys told him that he was successful with his application. He instructed his solicitors Messrs PJ O'Driscoll & Sons to communicate with CIE's solicitor with regard to the legal documentation. He gave evidence that CIE refused to give him a lease of the premises. What was on offer was a licence and he accepted that. His evidence was that when he took possession of the premises, he put in a pine timber ceiling, fixed various leaks coming down from the top of the arch, he raised the floor level by about 2 feet and tiled it, and put in security grills. He also fitted out the premises as a newsagents shop and stored all his stock on the premises. He was not apparently required to give a set of keys to CIE. He gave evidence that no cleaning services were supplied to the premises by CIE and that CIE had never had to come into the premises for the purpose of repair. CIE were not to be responsible for any break-ins. His opening hours were 7am to 10pm. His evidence was that he took the licence for 10 years under the terms of the licence agreement and in due course at the end of the period he received a letter from CIE requesting that he vacate the premises. Apparently after that CIE made him aware of their development plans for the station. There was some discussion as to what was to happen. He was also offered a unit at Connolly Station in substitution. He said that he had enjoyed a good relationship with CIE and that they knew that he had invested a lot of money in the business and the premises. When cross examined by Mr. Gaffney for the respondent, Mr. Smith agreed that in 1991 he was already experienced in the business having operated a similar type of business in the Clondalkin area. He agreed that Messrs PJ O'Driscoll & Sons were his solicitors at all material times. He agreed that he had seen the advertisement put out by Lisneys and that he had been informed that Lisneys would take applications in respect of the premises. Mr. Gaffney then referred Mr. Smith to some correspondence contained in a book of correspondence handed to the Court. Mr. Gaffney brought Mr. Smith through the correspondence and in particular to the references within those documents at all times to a licence agreement. In particular Mr. Gaffney referred him to correspondence that was exchanged between Messrs PJ O'Driscoll & Sons and the solicitors office for CIE when certain terms were sought to be negotiated into the agreement. In particular that the licence agreement would have to be with Mr. Smith personally and not with any company on his behalf and that the licence would terminate on Mr. Smith's death, subject to a rebate of £7,500 for each full year of the licenced period then unexpired. It had also been sought to include a clause guaranteeing quiet possession but the solicitor for CIE responded at clause 12 of their letter dated the 16th of July 1991 that "a clause guaranteeing quiet possession is not appropriate for a licence as the agreement herein is in fact just a licence". In fairness to Mr. Smith, he accepted that at all times it was a licence agreement and not a lease or a tenancy that he was taking. Mr. Gaffney referred in his cross examination to clause 8 of the licence agreement which states "this licence is not transferable and the licencee shall not purport to transfer, let or in anyway dispose of any of the benefits or privileges granted by this licence or any interest therein". Mr. Gaffney also referred Mr. Smith to clause 12(31) under which Mr. Smith agreed "at the request of the board or the company to remove temporarily at the licencee's own expense …… any building, structure or other work (or any part thereof) which may be at any time on the premises for the purpose of enabling the Board or the Company to inspect maintain or carry out other works to the said railway arch (No 1) or the other railway arches and to the railway formation generally and to keep such part so removed for as long as the board's or the company's engineer may require". He also referred to clause 10 of the agreement which I have already quoted and which, briefly stated, acknowledges that nothing in the licence shall be construed as giving the licencee any tenancy in or any right to possession of the respondent's property, and in particular that it is not the intention of either the board or the company or the licencee, in relation to the premises or the said railway arch or any part thereof, to create between them the relationship of landlord and tenant or to create such rights upon the licencee as would amount in law to a tenancy, or to create any estate or proprietary interest for the licencee therein. Mr. Smith acknowledged that these clauses were in the agreement and took no issue with same. Mr. Smith was asked by Mr. Gaffney whether he had ever had any discussion with CIE on the basis that a licence was not what he had intended. Mr. Smith indicated that he had mentioned at some point that O'Reilly's Pub had got a lease, and that if he (Mr. Smith) were to agree to a rent increase, that CIE might be in a position to give him a lease also. Mr. Gaffney suggested that in 1995 Mr. Gahan of CIE had encouraged Mr. Smith to surrender his licence and enter into a lease and had indicated that Mr. Smith would be in a more advantageous position if he got a lease, but that it would be necessary to surrender first what he had namely a licence agreement. A copy letter dated the 18th of August 1995 from Mr. Gahan to Mr. Smith was handed into Court in this regard. It would appear that Mr. Smith did not avail of the offer to substitute his existing licence for the proposed lease.
12. Mr. Gaffney in his cross examination also referred to the fact that in 1992 CIE had cause to rebuke Mr. Smith because of rubbish being left on the station concourse and also in relation to the parking of cars. Mr. Smith accepted that this might have happened but that it was always sorted out when it was brought to his attention. Mr. Smith also accepted in answer to Mr. Gaffney that he was limited by the terms of the licence agreement as to the times he could open the shop and referred to clause 12(32) of the agreement in that regard which contains certain provisions regarding opening hours. Mr. Gaffney suggested that when he was asked to vacate the premises at the expiry of the licence agreement, Mr. Smith's response was that he didn't want to move and that in spite of everything in the licence agreement, that the effect of the document was to grant him the status of a lessee and not a licencee. Mr. Smith stated that he went to his solicitor and got legal advice in that regard. At the conclusion of his cross examination, Mr. Smith accepted that the licence agreement was to him personally and only to him, that clause 10 clearly indicated that there was no intention to confer any tenancy rights, that his solicitor had got the best terms possible at the time, and that being a young man in his early 20's he had taken the risks attached to a licence agreement, namely that at the end of the 10 years he would not get a further licence. Mr. Smith agreed that all of that was the case and that he was happy to sign the document on offer.
13. The first witness called by the respondent was Mr. Ross Shorten of Lisneys. He was responsible for preparing the brochures and posters and advertisements in respect of the advertising of the premises. He said that he had no discussions with any party in relation to this premises other than on the basis of the granting of a licence and not a lease. In cross examination by Mr. Owens, Mr. Shorten agreed that the distinction between a lease and a licence was a legal matter. He also said that he had been asked by all enquirers why there was only a 10 year licence on offer. His response to all was that CIE were only in a position to offer a licence because the railway line was of strategic importance for the national railway operation. He said in evidence that CIE did not enter into leases. The next witness called by the respondent was Mr. James Gahan, the Group Property Manager at the relevant time. Part of his responsibility was the Tara Nova shop and to make sure that the business carried on was the business permitted by the licence agreement. He agreed that Mr. Smith was a very good trader/operator, that he ran a very good business and gave a good service to the public. He gave evidence that a licence agreement was the only agreement on offer. He said that subsequent to the agreement he had met Mr. Smith on a number of occasions and had complained about rubbish on the station concourse and the parking problems already referred to but that these were dealt with when they brought to Mr. Smith's attention. He also gave evidence that in or around 1994/1995 the Urban Renewal Scheme had come into operation in Dublin. He said that he had discussions with Mr. Smith about a lease since the property was in one of the designated areas under the Urban Renewal Scheme but that if a tenant was to benefit from the scheme he would require a lease. He had some sympathy with Mr. Smith about not having a lease. Mr. Smith had indicated that he was anxious to improve the status of his occupation and have a lease of the premises rather than a licence. Mr. Gahan indicated that if he were to surrender his existing licence he might be able to recommend him to CIE for a lease. However he gave evidence that Mr. Smith had not reverted to him about that following his letter to Mr. Smith of the 18th of August 1995 already referred to. When cross examined by Mr. Owens, Mr. Gahan stated that part of the driving force of this licence agreement was that the premises were in the middle of the station concourse. He stated that Irish Rail needed an arrangement that was simply a licence arrangement and not a lease. He further stated that CIE had to make sure of their position in that regard, as part of good estate management and also because of safety issues since the premises were under a solid railway arch. He indicated that there may be circumstances in which CIE might have to move or extend the arch in the future and that CIE did not want to be tied into a lease situation. He stated that the licence agreement was drafted with this in mind. He accepted, when asked by Mr. Owens, that in a lease situation, compensation might in some circumstances be required to be paid to the tenant.
14. Some further evidence was given on behalf of the respondent by Mr. Niall Grogan who apparently succeeded Mr.Gahan as the CIE Property Manager. He confirmed what Mr. Gahan had said concerning CIE having a problem about leasing a premises. He said that CIE could only lease a premises, as opposed to grant a licence in respect of it, if the premises was "surplus to CIE's requirements". He said that this is the specific reason in this case why a licence was granted in 1991. He said that some three or four years later a different decision could have been made. He said that in 1991 the board of CIE had decided that only a licence would be granted. It was not a decision he personally made. He said that CIE were trying to get value out of C.I.E.'s assets, and trying to get a good return.
15. He said that the option to grant a lease in this case was not made available by the board of C.I.E.
16. I have set out the evidence in some detail from my notes for the purpose of demonstrating that there is no dispute whatsoever on the facts that the agreement entered into between the parties was known to be, and accepted by the applicant to be, a licence agreement and that it was not intended that any tenancy rights should arise. It is clear from the evidence and from the documents produced in evidence that this is the case. In fact there is no dispute on the facts. What has to be decided is, in the main, a legal issue.
THE APPLICANT'S LEGAL SUBMISSIONS
17. Mr. Owens submitted that the question to be decided was whether the premises comprising the space beneath the railway arch, constituted a "a tenement" for the purpose of The Landlord and Tenant (Amendment) Act, 1980, and that to decide this question the Court needed to decide whether the agreement dated the 4th of December, 1991 constituted a lease or other contract of tenancy, express or implied or arising by Statute.
18. He submitted that although the agreement was described as a licence throughout and indeed the parties thereto were described as licencor and licencee respectively therein, that did not determine the matter, and he referred to Irish Shell and P.B. Limited v. John Costello Limited (1981) I.L.R.M. 66, where Griffin J. stated that:
"Although a document may be described as a licence, it does not necessarily follow that, merely on that account, it is to be regarded as amounting only to a licence at law".
19. Mr. Owens submitted that it was necessary to look at the transaction as a whole in order to draw a legal conclusion from it, and that the parties' own intentions in respect of the legal or other consequences of arranging their relationship in a particular way cannot affect the construction of the agreement they make. He submitted that it was a matter for the Court to determine in this case, in spite of the existence of Clause 10 of the agreement, whether taking the transaction as a whole, it should be classified as a tenancy or merely a licence.
20. Mr. Owens referred also to Professor Wylie's Landlord and Tenant Law (2nd Edition), paragraphs 2.26 to 2.38, wherein Professor Wylie discusses the many uncertainties and difficulties which the courts in this Country have encountered when attempting to determine whether a tenancy or a licence has been created, and he refers to paragraph 2.34 of this work, where Professor Wylie suggests that it is likely that Irish Courts would follow the decision of the House of Lords in Street v. Mountford (1985), 1AC 809, to which I shall return in more detail later in this Judgment.
21. It was further submitted that Irish Shell and. P.B. Limited v. John Costello is authority for the proposition that where an agreement confers an entitlement to exclusive possession and provides for a payment which is capable of constituting rent, and contains other provisions which would be inconsistent with a licence, the agreement will be a tenancy agreement and not a licence agreement, even though it is labelled as the latter.
22. Mr. Owens then referred to specific provisions in the agreement which he submitted were indicative of a tenancy being created. He pointed to the fact that under the terms of the agreement, the applicant was entitled to enjoy exclusive possession of the premises the subject of the agreement. For example, he submitted, the applicant could not under the terms of the agreement have been required to relocate to any other part of the Respondent's property or to share the premises the subject of the agreement with any other party. This submission was made in the context of the decision of Morris J. (as he then was) in Governors of the National Maternity Hospital Dublin -v- Ann McGouran (1994) 1 I.L.R.M. 521. In that case, the agreement the subject of the proceedings had contained a clause which stated:
The licence hereby granted shall be granted on a non-exclusive basis and the licencees shall be entitled to use the premises in common with the licencor and her duly authorised representatives and any persons deriving title from her for the purposes of the licencees business of running a coffee shop in the hospital."
23. There were other clauses also in that case consistent with the granting of a licence rather than a tenancy, and Mr. Owens seeks to distinguish the McGouran case from the present case on the basis that in the present case the provisions of the agreement indicate exclusive possession.
24. He also submitted that the term of the agreement was a fixed term of ten years subject only to the provisions for early suspension, termination or rectification to be found primarily in Clause 12(41) of the agreement. Under that clause, these powers are only exercisable
"if the board or the company is at any time of the opinion that the continuance of this licence is incompatible with or would prevent the exercise or discharge by the board or the company of its statutory powers or duties in relation to the operation of the station or the railway undertaking."
25. He submitted that this restriction on the exercise of those powers was inconsistent with the granting of a mere licence. He submitted also that the obligation on the Applicant to pay what was described in the agreement as "an annual licence fee" is clearly capable of interpretation as an obligation to make a payment constituting a rent. He also drew attention to the fact that under clause 12(30) the agreement provided for the reservation of easements and wayleaves over the premises granted to the applicant and that clearly this reservation would not only be unnecessary in the case of a licence, but would be wholly inappropriate if the agreement created a mere licence. He also drew attention to clause 29 which provided that the applicant should not be entitled to any right of light or air and submitted that such a right would be an easement and that this could only be acquired if an interest was held in the land rather than a mere licence. He drew attention to clause 12(3) which contained a restrictive user clause, clause 12(7) prohibiting the premises from being used as a place for lodging, dwelling or sleeping, clause 12(9) which prohibited the Applicant from storing explosive or inflammable substances on the premises, clause 12(12) which prohibited the Applicant from permitting any sale or auction to take place on the premises, clause 12(13) which prohibited the Applicant from erecting advertising signs on the premises, clause 12 (18) which prohibited the Applicant from making any additions or alterations without the written consent of the board or the company. He drew attention also to clause 12(19) and clause 12(28) both of which required the applicant to permit the respondents' servants or agents to enter the premises to inspect same or carry out works to same. It was submitted that if this agreement was in truth a licence agreement, none of these clauses were appropriate or necessary. In support of this submission, Mr. Owens referred to a passage of the Judgment of Lord Templeman in Street v. Mountford (supra) at page 818 where he states:
"If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession and is a tenant."
26. Having referred the Court to these and other specific provisions in the agreement, and which he indicated were consistent with the agreement creating a tenancy rather than a licence, Mr. Owens submitted that clause 10 (already quoted in full) and the fact that the agreement referred to the terms "licencor, licencee, licence and licence fee" supported the respondent's contention that the document was a bare licence and not a tenancy. He submitted that clause 10 purports to express a conclusion of law as to the consequence of the contract between the parties and does not create inter-party obligations. He submitted that it was an attempt to contract out of the provisions of the 1980 Act and that accordingly it was void pursuant to Section 85 of that Act which states:
"So much of any contract, whether made before or after the commencement of this Act, as provides that any provision of this Act shall not apply in relation to a person or that an application of such provision shall be varied, modified or restricted in any way in relation to a person, shall be void."
27. It was submitted also that clause 8 of the agreement which states that the licence is not transferable and that the licencee shall not purport to transfer, let or in any way dispose of any of the benefits or privileges granted by the licence or any interest therein is clearly a covenant against alienation and is thereby caught by Section 66 of the 1980 Act which states:
"A covenant in a lease (whether made before or after the commencement of this Act) of a tenement absolutely prohibiting or restricting the alienation of a tenement, either generally or in any particular manner, shall have effect as if it were a covenant prohibiting or restricting such alienation without the licence or consent of the lessor."
28. In conclusion, Mr. Owens submitted that when the applicant negotiated and accepted the agreement which was on offer from the respondent, he needed exclusive possession and security of tenure, and that in reality what he needed was a lease. He submitted that the respondent had no difficulty with the applicant's requirements but did not wish that the applicant should acquire any statutory rights. He submitted also that if the applicant had been offered simply what might normally be contained in a mere licence, that the applicant would not have accepted same. The result, he submitted, was that all the conditions one might normally find in a lease were inserted into a document which was labelled "a licence" and in order to try and secure that position, inserted clause 10 whereby both parties purported to agree that what was being granted was a licence. In spite of this clause he submitted that on an objective analysis of what was agreed between the parties, the agreement created a tenancy.
THE RESPONDENT'S LEGAL SUBMISSIONS
29. Mr. Gaffney referred in his submission to what the parties stated as their intention, namely the creation of a licence and referred to the correspondence which took place between the parties and their respective lawyers, and submitted that if in the light of that intention and correspondence, the agreement had proceeded to state that the applicant should hold the premises as a tenant for the term of years granted, that this would be an impossible contradiction on the face of the document. It would be impossible to reconcile the two factors. He said that it was this that distinguished the present case from Street v. Mountford. He added that Lord Templeman, in his Judgment in Street v. Mountford was dealing with a case involving a residence being let to a poor person who may or may not had legal advice, and that Lord Templeman had found that the agreement in question was a sham for the purposes of avoiding the effect of the Rent Acts. He stated that the applicant, Mr. Smith was an experienced businessman who had been well advised by the solicitor whom he had consulted and that he knew exactly what he was getting, namely a licence. Mr. Gaffney stated that the intention of the parties in this case was completely clear and undisputed. He submitted that there was nothing illegal about entering into a licence agreement and that the law of contract is there to ensure that agreements are kept and not broken. He emphasised the fact that the applicant was clearly aware that what he was getting was merely a licence by reference to the fact that in August, 1995, the applicant had received a letter from the respondent offering to exchange the licence arrangement with a lease arrangement on certain conditions, but the applicant had taken no steps subsequent to receiving that letter. In his written submissions, Mr. Gaffney referred to the fact that the 1980 Act clearly envisages that parties can enter into a relationship that is not governed by either a lease or tenancy agreement, and that clearly therefore a licence agreement is a permitted type of relationship. He stated that there was nothing improper happening where parties constructed their arrangements in such a way as to ensure that the 1980 Act would not apply, and in this regard he referred to Gatien Motor Company Limited v. Continental Oil Company of Ireland Limited (1979) I.R. 406 where the Supreme Court held that there were no grounds for implying the creation of a tenancy contrary to the express terms of a Caretaker's Agreement, notwithstanding the use of certain words in that agreement which might indicate the contrary.
30. Mr. Gaffney also drew attention to the particular situation faced by railway companies in relation to managing premises under their control. He pointed out that a railway company, in conducting its affairs, had to be mindful of the operational needs of the railway, and the fact that the land in question may originally have been acquired by Special Act under compulsory powers which provided that land not required for the railway should revert to the previous owner. He stated that the premises the subject of this Agreement are affected by both of these factors since the arch in question is under a railway line and that trains pass overhead. He pointed to the fact that the lands in question in this case were acquired for the City of Dublin Junction Railway under an Act of 1884. That act is in fact the Dublin, Wicklow and Wexford Railway (City of Dublin Junction Railways) Act, 1884 (47 and 48 Vict. C. clxx11). I shall return to that act in due course as it has some significance later. Mr. Gaffney submitted that under this act, no letting of land which is acquired by Special Act can validly be made by a railway company except for temporary convenience. He submitted that accordingly, it would be ultra vires the powers of the respondent to grant a lease or tenancy in respect of any of the respondents property other than property that was superfluous to their requirements as a railway operator. He submitted that this was the reasoning behind the granting of a licence only to the applicant, and that to do otherwise would have been an ultra vires Act. This is a point to which I shall return later because it is of significance in the context of the judgment in Street v. Mountford .
31. In relation to the applicant's submission that under the terms of the agreement he had "exclusive occupation" , Mr. Gaffney referred to Pierce and Mee on Land Law (2nd Edition) wherein it is stated that
" it is now accepted that a contractual licence can confer a licence to exclusive possession, although a tenant cannot be a tenant unless he has the right to exclusive possession ……where exclusive possession is given then a lease or a licence may be created".
32. He submitted that the existence of a right to exclusive possession did not therefore of itself determine the question. He submitted that in order to determine whether the agreement is a licence or a tenancy, three factors need to be considered, namely, the construction of the agreement, the contention of the parties and the significance of exclusive possession.
33. In relation to the construction of the agreement, Mr. Gaffney referred to the judgment of Morris J. (as he then was) in Governors of the National Maternity Hospital Dublin v. Anne McGouran and to the judgment in Irish Shell and P.B. Limited v. John Costello Limited where it was found to be necessary to scrutinise the clauses and covenants contained in the relevant agreement in order to elicit the true legal status of the agreement. In identifying clauses in the agreement consistent with it being a licence agreement, Mr. Gaffney referred to clauses 7, 9, 10, 13, 14, 15 and 16. In identifying clauses or covenants that are characteristic of either a licence agreement or a tenancy agreement, Mr.Gaffney referred to clauses 1-6 and clauses 8 and 17. In identifying clauses or covenants that are characteristic only of a tenancy agreement, Mr Gaffney referred to clause 11. He also drew attention to the numerous sub-clauses to clause 12 of the Agreement identifying some of those sub clauses as being consistent only with a licence agreement, others consistent with the agreement being either a licence agreement or a tenancy agreement, and yet others consistent only with a tenancy agreement.
34. Mr. Gaffney's written submissions deal in some detail with the reasoning of the judgment of Morris J. (as he then was) in the McGouran case, pointing out in particular that the agreement in that case contained a clause 3 which stated:
"The provisions of this agreement are intended to constitute a licence only. Possession of the premises shall be retained for the hospital subject to the rights granted and to the provisions of this agreement and nothing in this agreement is intended to confer any tenancy on the licencee."
35. Mr. Gaffney pointed to the obvious similarity between this clause and Clause 10 of the agreement in the instant case. He referred particularly to clause 11 of the instant agreement which states that:
"The arrangement hereby evidenced is made by the board and the company for their respective contemporary convenience which is that the board or the company while retaining the ownership, possession, occupation control and management of the said railway arch (which is an integral part of the station and the railway undertaking and necessarily and essentially required in connection with the operation thereof) should use the air space of the said railway arch to good purpose and not allow same to remain idle without profit or return."
36. Mr. Gaffney referred to a number of clauses to be found in the agreement which would be also likely to be found in a tenancy agreement. He submits however that the fact that those clauses exist cannot turn the agreement into something that was clearly never intended, when they are read in conjunction with many other clauses which he submits are consistent with a licence agreement.
37. In relation to the intention of the parties, Mr. Gaffney urges that clause 10, already quoted, is beyond argument and expresses in the clearest possible terms what the intention of the parties was and again reiterates that Morris J. in the McGouran case was faced with an almost identical clause and of which the learned Judge commented "nothing could be clearer". In relation to the significance of exclusive possession, Mr. Gaffney again referred to the fact that exclusive possession is an essential requirement of a tenancy agreement, but submitted that the fact that exclusive possession might be granted by a licence, did not of itself convert the licence into a tenancy agreement. In this regard, he referred to the Judgment of Barron J. in Texaco (Ireland) Limited v. Murphy (unreported), 11th July, 1991. Mr. Gaffney submitted that in deciding the significance of "exclusive possession" it was necessary to look also at the needs of the railway, the completely frank and open course of dealing between the parties in 1991 prior to the grant of the licence and also to the fact that the applicant, a business man, was fully and independently legally advised about certain terms within the agreement whereby the applicant could recoup a balance of his investment should the arrangement come to an end before the expiry of the ten year term, and he also referred again to the fact that in 1995 the applicant was offered by the respondent an opportunity to alter the nature of his occupation to that of a lease but that he chose not to avail of that opportunity.
38. In conclusion Mr. Gaffney submitted that the first decision of the respondent was to grant a licence and not a lease. The applicant accepted that decision and took a licence. Nothing in the clauses of the agreement altered that intention of the parties and that unless those clauses are inconsistent with the intention of the parties, they should not be interpreted as granting anything other than a licence. He submitted that that the fact that some clauses in the licence agreement might also be found in a tenancy agreement does not alter that position. He submitted that what distinguished the instant case from the case of Street v. Mountford was that in the instant case the intention of the parties was completely clear as evidenced by Clause 10 of the agreement.
CONCLUSION
39. As I have already stated, the facts in this case are clear and not in dispute in any material way. The question to be decided is whether the agreement created a tenancy or simply a licence. I am satisfied that clause 10 of the agreement, and the negotiations and correspondence which preceded it do not determine that issue. The entire document must be looked at, as stated in Irish Shell and P.B. Limited v. John Costello Limited (1981) I.L.R.M. 66 and Governors of the National of Maternity Hospital v. Anne McGouran (1994) 1 I.L.R.M. 521, in order to see what the legal consequences of the document may be. This is not simply a question which arises solely from the expressed intention of the parties. It is in essence a matter of law. For a tenancy to exist, there is no doubt that exclusive possession of the premises is a pre-requisite, but, as Mr. Gaffney pointed out in his submissions, the fact that there is exclusive possession does not preclude the agreement from being a licence. But in this case, it is the fact of exclusive possession which removes the case from the ambit of the McGouran case, which found on the facts of that case that a mere licence existed. Of critical importance in that case was the existence of a clause 2(b) in the agreement between those parties, which specifically provided that the licence was granted on "a non-exclusive basis" , and another clause which entitled the plaintiff to substitute for the premises in question, any other premises within the hospital which were reasonable equivalent. This distinction is important because of the significance attached by Mr. Gaffney to the finding in that case as to the terms of clause 3 of that agreement as to the expressed intention of the parties thereto that no tenancy should be created.
40. In the present case I am satisfied that the applicant was granted exclusive possession. Clauses such as 12(7), 12(9), 12(19), 12(30) and 12(31) do not reduce the applicant's status of possession from that of "exclusive possession". But I accept of course that there can be exclusive possession within a licence agreement as well as a tenancy agreement or lease. Other factors must also be looked at.
41. Other features of the agreement such as the payment of "a licence fee" and being for a fixed period of ten years, and the use of expressions such as licencor, licencee, licence fee and licence, do not of themselves confine the agreement to being a licence. For example, the fact that the annual payment is referred to as "a licence fee" does not mean that it cannot be regarded as a rent, simply because it bears a different label.
42. The applicant gave evidence that during the period of the agreement, he was left alone by C.I.E. apart from the occasions when he was called upon to desist from leaving rubbish on the station concourse and in relation to the parking of cars. No cleaning or other services were provided by C.I.E., C.I.E. never came in to the premises to inspect or carry out repairs, neither did they have a key to the premises. The applicant's stock for his shop was stored at all times within the premises. In all respects this was a self-contained business, save that the applicant and his staff were able to avail of toilet facilities within the station complex.
43. There is no doubt that in 1991 the applicant invested heavily in this business venture. He paid £75,000 by way of premium to the Respondent. He expended, according to his evidence, approximately £25,000 on fitting out the premises, and committed himself to a substantial annual sum (to use a neutral term). There is also no doubt, however, that while he clearly would have preferred a lease of the premises, he accepted what was on offer from C.I.E., namely the licence agreement. He was a clearly an energetic and motivated young man who was prepared to take a risk that at the end of ten years he might have to vacate the premises and close the business.
44. However, I am satisfied that the agreement represents far more than "personal privilege" referred to by Mr. Gaffney in order to bring this case within the ratio of the decisions in Irish Shell and P.B. Limited v. John Costello, and the decision in Shell-Mex v. Manchester Garages Limited (1971) 1 W.L.R.612.
45. I am satisfied that there is nothing within the document itself, apart from Clause 10 and the use of certain words such as licence agreement, licencor, licencee and licence fee, that can distinguish the document from a tenancy agreement. If the Court had been handed the same document, but excluding clause 10 and replacing the licence labels by tenancy labels, it would bear a significant resemblance to any normal tenancy agreement.
46. The Courts have on a number of occasions being called upon to decide whether the terms of agreement between parties constitute a tenancy or a licenced occupier. I have been referred to a number of these cases such as Gatien Motor Company Limited v. Continental Oil Company of Ireland Limited (1979) I.R. 406; Irish Shell and P.B. Limited v. John Costello Limited (1981) I.L.R.M. 66; Texaco (Ireland Limited v. Mark Murphy (unreported), Barron J. 17th July, 1991; and Governors of the National Maternity Hospital v. Anne McGouran (1994) 1 I.L.R.M. 521.
47. While none of these cases is on all fours with the present case, they nevertheless confirm, if that were needed, that the occupation of a premises can constitute a tenancy even though one or even both of the parties were aware that what they were signing was a licence agreement. There is nothing in any of these cases which suggests that a view of the matter contrary to the Judgment of Lord Templeman in Street v. Mountford (1985) 1A.C. 809 would be taken. I refer again to Professor Wylie's comment already referred to that it was likely that the Irish Courts would approve the approach shown in Street v. Mountford. Curiously there is no reference in Texaco v. Murphy or the McGouran case to that Judgment in Street v. Mountford, although the latter case was decided in 1985.
48. I propose dealing with the case of Street v. Mountford in some detail because of its significance for my conclusions. As appears from the judgment of Lord Templeman commencing at page 814, the facts of the case were simple enough. By an agreement dated the 7th of March, 1983, Mr. Street granted Mrs. Mountford the right to occupy furnished rooms at St. Clement's Gardens from the 7th of March 1983 at a rent of £37 per week subject to termination by fourteen days written notice and subject to certain conditions set forth in the agreement. As he states, the question raised in the appeal is whether the agreement created a tenancy or a licence. At page 816 he states:
"There is no doubt that the traditional distinction between a tenancy and a licence of land lay in the grant of land for a term at a rent with exclusive possession."
49. He goes on to give examples of certain instances where possession was not to be regarded as exclusive possession such as in the case of Taylor v. Cauldwell (1863) 3 B & S 826 where the Defendant agreed to let the plaintiff have the use of the Surrey Gardens and Music Hall on four specified days giving a series of four concerts and day and night fetes at the gardens and hall on those days in exchange for a payment of £100 per day. This was held not to be a right to exclusive possession but merely a right to use the land for limited purposes and was therefore a licence. He also referred to the status of a lodger in residential accommodation as opposed to a tenant. At page 818 he states:
"The occupier is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. A lodger is entitled to live in the premises but cannot call the place his own".
50. He goes on:
"If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasis the fact that the grantee is entitled to exclusive possession and is a tenant. In the present case it is conceded that Mrs. Mountford is entitled to exclusive possession and is not a lodger. Mr. Street provided neither attendance nor services and only reserved the limited rights of inspection and maintenance and the like set forth in Clause 3 of the agreement. On the traditional view of the matter, Mr. Mountford not being a lodger must be a tenant".
51. At page 819 Lord Templeman states:
"In the present case the agreement dated the 7th of March, 1983 professed an intention by both parties to create a licence and their belief that they had in fact created a licence. It was submitted on behalf of Mr. Street that the Court cannot in these circumstances decide that the agreement created a tenancy without interfering with the freedom of contract enjoyed by both parties. My Lords, Mr. Street enjoyed freedom to offer Mrs. Mountford the right to occupy the rooms comprised in the agreement on such lawful terms as Mr. Street pleased. Mrs. Mountford enjoyed freedom to negotiate with Mr. Street to obtain different terms. Both parties enjoyed freedom to contract or not to contract and both parties exercised that freedom by contracting on the terms set forth in the written agreement and on no other terms. But the consequences in law of the agreement, once concluded can only be determined by consideration of the effect of the agreement. If the agreement satisfied all of the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the affect of the agreement by insisting that they only created a licence. The manufacture of a five-pronged implement for manual digging results in a fork, even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade".
52. At page 820 of the Judgment, Lord Templeman refers to a decision of Errington v. Errington and Woods (1952) 1 KB 290 which concerned a contract by a father to allow his son to buy the father's house on payment of the instalments of the father's Building Society loan. In that case, he quotes from the judgment of Lord Denning at pages 297-298 of that Judgment as follows:
"The result of all these cases is that, although a person who is let into exclusive possession is prima facie to be considered a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice. Parties cannot turn a tenancy into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege, with no interest in the land, he will be held to be a licencee only."
53. Referring to Lord Denning's Judgment in Errington, Lord Templeman states at page 821:
"There were exceptional circumstances which negatived the prima facie intention to create a tenancy notwithstanding that the occupier enjoyed exclusive occupation. The intention to create a tenancy was negatived if the parties did not intend to enter into legal relationships at all, or where the relationship between the parties was that of vendor and purchaser, master and service occupier, or where the owner, a requisitioning authority, had no power to grant a tenancy",
54. The last mentioned exceptional circumstance is of relevance in the present case in the light of one of Mr. Gaffney's submissions, namely that it would have been ultra vires the powers of the Respondent in the instant case to grant a lease in view of the fact that the premises in question are not, in his submission, superfluous to the operational needs of the Respondent. I shall return to that matter in due course.
55. At page 824 Lord Templeman refers to Shell-Mex and P.B. Limited v. Manchester Garages Limited (1971) 1 W.L.R 612. In that case, the defendant was allowed to go into occupation of the plaintiff's premises solely for the purpose of selling the plaintiff's brands of petrol and the defendants undertook to use every endeavour and due diligence to sell and foster the sale of the plaintiff's products. The plaintiffs also were entitled to considerable rights of access to the premises for the duration of the agreement. He refers to a passage from Lord Denning's judgment where it states:
"Broadly speaking, we have to see whether it is a personal privilege given to a person (in which case it is a licence), or whether it grants an interest in land (in which case it is a tenancy). At one time it used to be thought that exclusive possession was a decisive factor. But that is not so. It depends on broader considerations altogether. Primarily on whether it is personal in its nature or not."
This case is of relevance to Mr. Gaffney's submission on behalf of the respondent that the applicant's occupation of the premises the subject of the instant agreement is in the nature of a personal privilege. I do not accept that submission. The expression "personal privilege" seems to emanate from the Shell-Mex decision and it is clear from that judgment that there were limitations to that defendant's occupation, in the way referred to, which rendered the occupation to be non-exclusive, in much the same way as Morris J. (as he then was) found the defendant's occupation of the plaintiff's premises in the hospital to be non-exclusive. At page 825 of his Judgment, Lord Templeman states:
"If exclusive possession at a rent for a term does not constitute a tenancy then the distinction between a contractual tenancy and a contractual licence of land becomes wholly unidentifiable".
56. Finally, Lord Templeman concludes at page 826 of his judgment as follows:
"My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred. Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive possession might be referable and which would or might negative the grant of an estate or interest in land include occupancy under a contract for sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy."
57. Before reaching a final conclusion in the present case, it is necessary to consider Mr. Gaffney' submission that for the respondent to either to grant a lease, or enter into any agreement which could be interpreted as creating a tenancy, the Respondent would be acting ultra vires its powers. It will be recalled that in Errington v. Errington and Woods (1952) 1 KB 290, Lord Denning referred to a number of "exceptional circumstances which negatived the prima facie intention to create a tenancy, notwithstanding that the occupier enjoyed exclusive occupation." One of those exceptional circumstances was where the owner had no power to grant a tenancy.
58. The question which arises therefore is whether the creation of a tenancy by the respondent was ultra vires its powers. In this regard, Mr. Gaffney has submitted that the property in which the subject premises are situated was acquired by the respondent under a Special Act of 1884, which I have identified earlier in this judgment as the Dublin, Wicklow and Wexford Railway (City of Dublin Junction Railway) Act, 1884. That act enabled the Dublin, Wicklow and Wexford Railway Company to construct connecting railways between Westland Row terminus and the Railways of the Great Northern Railway (Ireland) and the Midland Great Western Railway (Ireland) on the Northside of the River Liffey to be called the City of Dublin Junction Railways, and within three years from the passing of that Act to compulsory acquire certain lands and buildings, or portions thereof as may be necessary for the construction of the railway line in question. That provision appears at Section 10 of the Act. Throughout the 19th Century there were a large number of private or special acts of parliament passed to enable various local railway companies to construct a railway line and those companies were empowered to acquire land for that purpose. In almost all cases, the land concerned was rural land whereas the Act of 1884 referred to by Mr. Gaffney was clearly land or property situated in the City of Dublin. This is of relevance to what is meant by the term "superfluous lands". It is necessary to understand that term in order to deal with Mr. Gaffney's submission. Almost all the other Railway Acts to which I have referred contain a clause similar, if not identical, to the following which I have extracted from an Act of 1844 namely 7 & 8 Vict. C headed in the margin thereof "lands not wanted to be sold":
"CCXXIII. And for the purpose of making provision respecting the sale of lands acquired by the Company under the provisions of this Act, but which shall not be required for the purposes thereof, be it enacted that the Company shall sell all such superfluous lands in such manner as they may deem most advantageous, and convey the same to the purchasers thereof by deed under the Common Seal of the Company; and a receipt under such Common Seal shall be a sufficient discharge to the purchaser of any such lands for the purchase money in such receipt expressed to be received; and such sales and conveyances shall take place within ten years after the passing of this Act."
59. The following clause is also typical of a clause in other Railway Acts and which I have taken from the aforementioned Act
"CCXXIV. And be it enacted, that if the company do not sell such superfluous lands within the period aforesaid, then such lands remaining unsold at the expiration of such period shall thereupon vest in and become the property of the owners of the lands adjoining thereto, in proportion to the extent of their lands respectively adjoining the same."
60. There are no such clauses in the Special Act of 1884 to which Mr. Gaffney referred, but even if they can be implied, they cannot, in my view, be of any relevance to the present case. They were clearly inserted into acts which were enabling a railway company to compulsorily acquire rural land. Having acquired such land and having constructed the railway upon it, it was always going to be clear that, even allowing for extensions to the line, additional sidings etc, the company would be left with certain areas of the land acquired which they could not reasonably require in the future. It was in those circumstances that the company was empowered to revest those superfluous lands in the adjoining owner, or to the owner from whom they were originally purchased. That scenario clearly has no relevance of property acquired in the region of Tara Street in the City of Dublin. Mr. Gaffney's contention that the area beneath the arch below the railway line at Tara Street Station could not be regarded as "superfluous" and therefore is incapable of being the subject of a sale or granting of tenancy rights, is misplaced. In support of this finding, I need to refer to two cases to which Mr. Gaffney himself refers in his written submissions namely Foster –v- London Chatham and Dover Railway Company (1985) 1 QB 711 and an Irish decision in Hamilton –v- Dublin Wicklow and Wexford Railway Company (1895) 28 ILTR 76. In his written submissions, Mr. Gaffney states that "the principle is that no letting of land acquired by Special Act can validly be made by a railway company save for temporary convenience". The Hamilton case to which I have just referred concerned land consisting of approximately 10 acres at Shanganagh in South County Dublin. It appears that the company having utilised part of the lands for the construction of railway lines, made a letting of the land not utilised for the purpose of the railway lines. The tenant in due course applied to have a fair rent fixed and an order was duly made. That order was appealed on the basis that the holding was let only for temporary convenience and was therefore excluded from the operation of the Land Act of 1881. This judgment refers to the fact that the company was not given any special powers as to alienating any portion of the lands so acquired and that it was therefore subject to the provisions of Section 127 of the Land Clauses Act of 1885. At p.77 of the judgment it is stated
"And it would appear therefore that if any land acquired by the company was not required for the purpose of its undertaking it should have been absolutely sold and disposed of before the 25th of July 1865. No evidence was given on behalf of either the tenant or the company for the purpose of showing that the lands constituting the present holding were or were not superfluous. The fact that these lands have not been used for the purposes of the railway up to the present time is not itself conclusive that they have become superfluous …… all lands taken by a railway company are presumptively intended to be used for the purposes of the company's undertaking, and if they are alleged to be superfluous the onus of proving that they are lies upon the party making the allegation. If the lands are not superfluous and may at sometime be required for the purposes of the company, it is hardly necessary to observe that no letting can be made by the company except one of a temporary character".
61. The judgment goes on to refer to the fact that if the land is superfluous, and the railway company does not sell and dispose of it absolutely within the statutory period the land vests in the adjoining owner or owners and the title of the company to it comes entirely to an end.
62. I refer to this judgment to demonstrate the context in which the term "superfluous lands" is used in the various Special Acts of the 19th century. It does of course decide that lands which are not superfluous can be let only for temporary convenience. I question whether the inability of a railway company to dispose of or grant a tenancy in land or property other than superfluous land or property can be construed reasonably as meaning that the respondent in the instant case cannot create a tenancy in respect of the space beneath an archway at Tara Street without being found to be acting ultra vires. In this regard, I refer to the case of Foster –v- London Chatham and Dover Railway Company (1895) 1 QB 711, which, as I have said, was referred to by Mr. Gaffney in his written submissions. It is a case very similar to the present case. The head note states as follows:-
"A railway company authorised by their Special Act to acquire land for the purposes of the railway and works have also the implied power of using land so acquired in any manner which is not an infringement of the rights of other persons and which is not inconsistent with the purposes for which the company was constituted.
A railway company acquired in fee simple, under their compulsory powers, a strip of land on which they constructed a railway carried over a series of arches. The company afterwards let the interior of the arches for shops and other business purposes to diverse persons upon short tenancies, reserving power to resume possession when they deemed it necessary for the purposes of the railway so to do".
63. It was held in that case that such a letting of the arches was not inconsistent with the purposes for which the company was constituted. What had happened was that the defendant company had made lettings of certain archways beneath the railway. The plaintiff owned land immediately adjoining the arches and clearly regarded the presence of the traders in the arches as a nuisance and sought an injunction to restrain the defendants from continuing the letting of the arches. The plaintiff contended that the defendants, having taken the land in question compulsorily for the purpose of their railway, had no right to let the arches or the pieces of land behind them for business purposes and that he was entitled to restrain them from doing so. At p. 718 Lord Halsbury states:-
"I have now to see whether there is anything in the Act of Parliament which prevented this use of the railway arches; and I think the question must come to that. If the company have the right to let the railway arches it is impossible to contend that they cannot let these little pieces of land, which give additional accommodation to the railway arches in the form in which they are let. I for one entirely deny that there is any established proposition of law which prevents the railway company using this land and their arches for some collateral purpose that may give profit to them. A great variety of examples have been given by various judges of things which may be done by railway companies besides their own particular business. It is familiar to us all that coal stores and book stalls, and a great variety of things may be set up by railway companies which, although not actually used in the business of carrying passengers and goods, are nevertheless things which they may do and yet carry on their own particular business quite consistently. I for one should be sorry to place any restriction on their power to make, to the best of their ability, their undertaking profitable to their shareholders and a convenience to the public."
64. Lindley L.J. in his judgment at p. 719 refers to the plaintiff's contention that the railway company have exceeded their statutory powers by making the lettings of the archways. In considering that matter, he refers to the fact that the law on the point "is now well settled". In that regard he quotes from the judgment in Attorney General –v- Great Eastern Railway Company, 5 App Cas 473 in which Lord Selborne stated:-
"It appears to me to be important that the doctrine of ultra vires as it was explained in that case should be maintained. But I agree with James L.J. that this doctrine ought to be reasonably, and not unreasonably, understood and applied and that whatever may fairly be regarded as incidental too, or consequentional upon, those things which the legislature has authorised ought not, (unless expressly prohibited) to be held by judicial construction to be ultra vires."
65. Lord Halsbury went on to say at p. 720:-
"There is nothing in the company's Act which expressly authorises the letting of these arches. Then comes the question whether it is to be fairly implied, and if so, what is the limit of power? Now it appears to me that with the exception of one single case before Mallins VC. all the authorities are consistent with the proposition that any mode of enjoying a company's own land is impliedly permitted if it is not inconsistent with the provisions of the company's Acts, and is not an infringement of the rights of other persons".
66. In the light of the judgment in Foster above, I am completely satisfied that it is not necessary to decide whether the arch which the applicant occupies at Tara Street is or is not "superfluous lands" in the context in which that phrase is used in the old Acts, in order to decide whether or not the respondent is acting ultra vires in creating a tenancy. The creation of a tenancy within the arch at Tara Street is clearly within the activities of the company to which Lindley L.J. refers at p. 20 of his judgment in Foster. There is no modern day reality in any contention made by the respondent that the creation of a tenancy in the arch in question in some way affects the ability of the respondent to operate a railway company. It was never the intention of the old special Acts, such as the Act of 1884 referred to, to prevent the railway company from gaining revenue from a source such as the renting of the space beneath an archway.
67. Having found that the agreement dated the 4th of December 1991, the subject matter of these proceedings, is a tenancy agreement, and that it is not ultra vires the powers of the Respondent I allow the appeal and substitute for the order of the Circuit Court, an order pursuant to Section 21(2) of the Landlord and Tenant (Amendment) Act 1980 declaring the applicant entitled to a new tenancy in the premises described in the schedule to his application dated the 29th day of June 2001, the terms of which are to be fixed in accordance with the provisions of Section 3 of the Landlord and Tenant (Amendment) Act 1980. In that regard, subject to hearing further submissions, I propose allowing the parties an opportunity to agree the terms of such new tenancy and in the absence of such agreement, liberty to re-enter the matter in the Circuit Court for determination.
68. Lastly, I dismiss the respondent's cross appeal dated the 22nd of January 2002.
