Please Note: This Article is 9 years old. This increases the likelihood that some or all of it's content is now outdated.

Precedent and Common Law

In the UK common law forms the basis of the legal system and as such judgements and case law are particularly important as the doctrine of precedent applies.

The court system has a hierarchical structure which results in judgements of each case becoming bind on all subsequent cases depending on the seniority of the court.

Judgements result in case law becoming part of the law of the land by either setting legal precedents, where there is no legislation, or interpreting the statutory legislation. The doctrine of judicial precedent is based on stare decisis. That is the standing by of previous decisions. Once a point of law has been decided in a particular case, that law must be applied in all future cases containing the same material facts. This gives the law a degree of consistency which changed as events and time move on, but only by a higher court.

For the doctrine of judicial precedent to work, it is necessary to determine what the point of law. In the course of delivering a judgement, a judge will set out the reasons for reaching a decision known as the ratio decidendi of the case.

The ratio decidendi forms the legal principle which is a binding precedent and must be followed in future cases containing the same material facts. Obiter dicta (An obiter dictum is a remark or observation said in passing) is things stated in the course of a judgement which are not necessary for the decision. In addition to binding precedents, there exists persuasive precedents. These consist of judicial statements which are not binding but may be taken into account.

In England and Wales the lowest courts are the magistrates and county and crown courts. Next in the hierarchy comes the High Court (with its many divisions depending on the topic) and then the Court of Appeal (both Civil and Criminal). These courts are topped by the highest court in the country the Supreme Court (formally the House of Lords), European Court of Justice.

Historical Basis of Property Law

English land law has a long history and has its roots in a mixture of Roman, Norman and more modern legislative sources including parliamentary and EU legislation.

Such terms as “fee” or “homage” (fee simple absolute in possession, meaning freehold) take us back into feudal times. Rights of common and “distress” (distress for rent) are based on even older institutions, forming the very basis of primitive law.

The concept of tenure is fundamental to land and “real property”, or real estate real, as opposed to personal possessions or chattels. The division into real and personal correlates to immovable and movable, generally used by legal systems founded on Roman Law. The Greeks and the Romans were nations of citizens; the Teutons (northern peoples) were essentially nations of land-folk; the Roman empire bridged the gap between these two.

Some Important Real Estate Case Law:

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Street v Mountford [1985]

This is an important House of Lords judgement in English property law. The case sets out the principles an English court will follow to decide whether a tenant’s occupation of a property (land) is a tenancy (a lease), or a licence. A tenancy creates an estate or interest in land, and this gives the tenant significant protection at common law and by statute. A tenant can exclude everyone from a property over which they have exclusive possession, including the landlord.

A licence on the other hand is a purely personal contract, valid only between the two original parties to it, and attracts little in the way of legal protection. It is a licence to occupy, not a legal interest, much as one would have with an hotel stay.

Roger Street granted occupation to Mrs Mountford for a rent. The written agreement was headed “licence” and included several references to this being the case. Several clauses claimed a landlord’s right to retain rights of entry and termination. The occupier was also restricted in what she could do on the property. The agreement was drafted to avoid creating a tenancy under the Rent Act, which would create security for life. Mrs Mountford claimed a tenancy the case progressed to the House of Lords.

Lord Templeman delivered judgement that an agreement for exclusive possession for a term at a rent creates a tenancy, regardless of what the parties call it. This makes clear that its the situation not the wording of the agreement that counts: Lord Templeman famously said: “a five pronged implement for manual digging is a fork, whatever the manufacturer chooses to call it”.

Where an occupier has exclusive possession, with a term certain at a full market rent then a tenancy exists. There have been a lot of cases around the question of lease or licence and each case has to be judged on its merits and the particular circumstances. However, the key distinctions are, the intentions of the parties, and did the occupier have exclusive possession?

A licence, sometimes called a “tenancy at will” permits occupation on a non-exclusive basis, for example a lodger sharing a house with his landlord, or a trader with a concession in a store or workshop, shared with the landlord. A commercial licence does not always necessitate sharing, but the landlord must retain a high degree of control.

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Please Note: This Article is 9 years old. This increases the likelihood that some or all of it's content is now outdated.


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