Published: Fri, 12 Oct 2018
Radaich v Smith  HCA 45
Landlord and tenant; whether agreement amounted to a lease even though labelled a license
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.
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.
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.
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