In Best Sharp Development Ltd v Lucky Shoe Repairing & Key Duplication Centre ([1988] HKEC 223, CA) BS were the tenants of a shop. They entered into an agreement that allowed LS to occupy part of the shop for its own business. The question was whether LS had a lease or a licence. This depended on whether LS had exclusive possession. Kempster J.A. pointed out that the label applied by the parties was irrelevant: the court had to look at the legal effect of the parties’ actual intention. In this case, there were several terms pointing to the fact that this was a licence (BS could enter at any time and for any purpose, it could remove items brought there without its consent and BS could not change any of the door locks). This was a licence.
