September 7.
The following written judgments were delivered:-
DIXON C.J. In my opinion this appeal should be allowed. I have had the advantage of reading the reasons prepared by the other members of the Court and I have nothing to add to them. (at p213)

McTIERNAN J. Maria Radaich appeals to this Court from the finding of the Supreme Court of New South Wales upon a case stated by a magistrate of the Fair Rents Board. The magistrate found that a deed, made between the appellant and the respondents (George William Edward Smith and Ada Smith), constituted a lease and that he therefore had jurisdiction to determine a fair rental for the premises specified therein. Brereton J., exercising the jurisdiction of the Supreme Court over the case stated, held that the deed created no lease but a mere licence, and, consequently, that the Fair Rents Board had no jurisdiction in the matter. (at p214)

2. Neither party denies that all the terms of the agreement are embodied in their deed. The deed contains ten clauses. In form and matter, it resembles an ordinary lease; it contains, inter alia, a covenant that the "licensors" shall not unreasonably disallow an assignment of the "licence". Another clause, cl. 9, confers an option of renewal. The words "lease", "lessor" and "lessee", however, are entirely excluded from the document, and the term "licence", and its appropriate mutations, are sedulously applied to the rights purported to be created. This fact is, of course, far from conclusive in favour of the respondents. It is the substance of the deed that matters. As Denning L.J. said in Facchini v. Bryson (1952) 1 TLR 1386 " . . . the parties cannot by the mere words of their contract turn it into something else. Their relationship is determined by the law and not by the label they choose to put on it" (1952) 1 TLR, at pp 1389, 1390 . The true test of a supposed lease is whether exclusive possession is conferred upon the putative lessee. The validity of this test is confirmed by the judgment of the Court of Appeal in Addiscombe Garden Estates Ltd. v. Crabbe (1958) 1 QB 513 where Jenkins L.J. states: - "We were also referred by Mr. Blundell to Errington v. Errington and Woods (1952) 1 KB 290 . In that case it was held that in very unusual circumstances a lady was a licensee, and entitled to remain in occupation of premises so long as she paid the instalments on a certain mortgage; and in the course of his judgment, Denning L.J. said: 'The test of exclusive possession is by no means decisive'. (1952) 1 KB, at p 297 . I think that wide statement must be treated as qualified by his observations in Facchini v.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Radaich v Smith

Details

AGLC: Radaich v Smith [1959] HCA 45
Case: [1959] HCA 45
Decision Date: 7 September 1959

CaseChat Overview and Summary

Radaich v Smith concerned a dispute over a lease agreement. The appellant, Radaich, had entered into an agreement with the respondent, Smith, for the use of a shop and dwelling. Radaich claimed that the agreement constituted a lease, entitling her to certain protections under landlord and tenant legislation. Smith contended that the agreement was a licence, not a lease, and therefore did not grant Radaich the rights she claimed. The case was heard by the High Court of Australia.

The central legal issue before the High Court was to determine the true nature of the agreement between Radaich and Smith. Specifically, the court had to decide whether the rights granted by the agreement amounted to exclusive possession of the premises, which is the hallmark of a lease, or merely a personal right to use the premises for a specific purpose, characteristic of a licence.

The High Court unanimously held that the agreement created a lease. The court reasoned that the substance of the agreement, rather than its label, determined its legal character. By granting Radaich the right to "the sole and exclusive possession of the said shop and dwelling," the agreement conferred exclusive possession, a right fundamental to a leasehold interest. The court emphasised that the use of the word "licence" in the agreement was not determinative; the court looked to the rights and obligations created by the agreement to ascertain its true nature. The court found that the agreement gave Radaich the right to occupy the premises to the exclusion of all others, including the owner, for the duration of the term, which is the defining characteristic of a lease.

The High Court allowed the appeal, finding that the agreement was a lease and that Radaich was entitled to the protections afforded to tenants under the relevant legislation.

Orders