TC09667 - [2025] UKFTT 01254 (TC)

The self storage licence agreement is on its face not a lease (as Len Lothian’s skeleton suggests) but a licence. This is evident from clause 22 that denies “exclusive possession”. Although, as a practical matter however, given that the user applies their own padlock to the door, it is difficult to see how in practice they do not enjoy exclusive possession.

More fundamentally, again in clause 22, a user can be required to relocate on 14 days’ notice which suggest that the area used is subject to change and so not adequately defined to be a lease: Magistrates of Perth v Assessor for Perth & Kinross 1937 SC 549.

Further the user can only access the unit during Access Hours, so there is only intermittent possession on the part of the hirer: see by analogy Joint Administrators of Rangers Football Club plc, Noters 2012 SLT 599 at [29] to [31].

It is also suggested by the title to be a “licence agreement” – although legal rights rather than labels are determinative.

In any event, we find Chelsea Kelly did not enter the agreement as it has not been shown she has had any involvement with this matter. From HMRC’s response to our pre-hearing questions, we understand the Scots law position on this to be that:

“Where an agent purports to contract on behalf of a principal for whom he has no authority the purported agreement is not binding on the principal.

The principal then has a choice as to whether or not to ratify the agreement. If the principal ratifies the agreement then it is treated as always having been authorised.

Where the principal does not ratify the agreement, the agreement is void. The agent is not personally liable on the agreement unless the terms of the agreement make it clear that this was intended (see Halifax Life Ltd v DLA Piper Scotland LLP [2009] CSOH 74). Instead, the agent is liable to the third party for a breach of warranty of authority (see Irving v Burns 1915 SC 260).”

Thus if, as we find most likely, Kami entered the agreement falsely purporting to have authority from Chelsea Kelly the agreement is therefore void, as there is no evidence she has ratified the agreement.

It follows that at the relevant time Unit B1022 was the property of Len Lothian. However, we accept that Len Lothian thought there was (and acted on the basis that there was) a valid licence agreement.