Gliddon v Latham Professional Services – What is required for a court to infer the essential terms of a lease?
The recent case of Gliddon v Latham Professional Services [2026] VSC 338 provides important guidance for landlords and tenants on the distinction between a lease and a licence. This summary sets out the key points you should be aware of when entering into occupancy arrangements.
What is the difference between a lease and a licence?
A lease grants the tenant exclusive possession of the premises, meaning the landlord cannot enter without permission (except in limited circumstances). A lease provides greater security for tenants, including statutory protections under retail and commercial leasing legislation. In contrast, a licence is simply permission to occupy property. It does not grant exclusive possession, and the licensor generally retains more control over the space. A licence offers less protection to the occupier and can often be terminated more easily.
Case background
Dr Gliddon and Dr Latham were both dentists operating their own dentistry practices. Dr Latham was leasing a premises from his related corporate entity, NickelA Pty Ltd, and his wife in her personal capacity to operate his practice.
In 2013, Dr Gliddon and Dr Latham entered into an oral agreement which saw Dr Gliddon relocated his practice to occupy two rooms within the premises. Despite Dr Gliddon’s attempts, a written lease agreement was never provided.
For the duration of Dr Gliddon’s occupation of the two rooms, rent and outgoings were paid to the Landlord on an adhoc basis with the first invoice for rent being produced 14 months after occupation commenced and an invoice for outgoings three years after occupation. At the time the first invoice was issued it was accompanied by a letter from Dr Latham stating “I have enclosed four invoices for the rent. I am not sure what the final agreement was on Wednesday night. You need to choose one for payment and I will cancel the other three.” This showed that there was no clear understanding of the arrangement between the parties. It was eventually agreed that that Dr Gliddon would pay rent at $265 per square metre in rent and 27% of premises outgoings and 6% of all property outgoings.
In August 2021, after Dr Latham sold his dental practice, Dr Latham gave Dr Gliddon notice that his occupation of the two rooms would end, and Dr Gliddon vacated on 9 September 2021 and sought proceedings against Dr Latham.
Dr Gliddon’s primary case was that the 2013 oral arrangement was an oral sublease or agreement for sublease and that the defendants breached that arrangement by requiring him to vacate in 2021. He pleaded that the alleged sublease gave him exclusive access to the two rooms and required him to pay rent and outgoings by reference to proportions of the head lease, and contemplated preparation of a written sublease.
What did the Court decide in this case?
The Court found that the occupancy arrangement was a licence, not a lease. This was primarily because:
there was no agreed duration for the arrangement – a lease requires certainty as to when it will end;
the occupier did not have true exclusive possession – one room had no door, neither room was locked, and the property owner entered without notice to perform maintenance; and
the parties’ conduct suggested they were focused on operational convenience rather than creating legal rights of exclusive occupation.
The court was clear in their determination that mere occupation and use of a premises (whether exclusively or not) does not constitute a legal right to exclusive possession where other essential terms of a Lease cannot be proven.
What are the essential terms required for a valid lease?
For a lease to be valid and enforceable, the following essential terms must be established:
the identity of the parties (landlord and tenant);
the commencement date of the lease;
the duration or term of the lease; and
the rent payable.
If any of these essential terms are missing or unclear, a court will find that no valid lease exists.
Can a court imply missing terms into an agreement
While courts can imply terms into agreements, they will not do so lightly. A term will only be implied if it is: reasonable and equitable; necessary for the contract to work properly; so obvious that it ‘goes without saying’; capable of being clearly expressed; and does not contradict any term the parties actually agreed to. In this case, the Court refused to imply a duration into the agreement because the evidence was conflicting – one party said a term was intended, while the other denied any duration was ever discussed.
Key lessons for landlords and tenants
For Tenants: If you want the security and protections of a lease, ensure all essential terms are documented in writing before you take possession. Do not rely on verbal agreements or assume a lease exists simply because you pay rent. Insist on a written lease that clearly states the term, rent, and your right to exclusive possession.
For Landlords: Be clear about what type of arrangement you are creating. If you intend to grant a licence (retaining more control and flexibility), ensure the arrangement reflects this – for example, by retaining rights of access, not granting exclusive areas, and documenting the arrangement as a licence. If you intend to create a lease, ensure all essential terms are agreed and documented.
For Both Parties: The Court will look at the substance of the arrangement, not just what you label it. Calling something a ‘lease’ does not make it one if the essential elements reference above cannot be proven with absolutely certainty. Written documentation is essential – oral evidence and witness recollections are given less weight by courts, particularly where memories may have faded over time.
Vittoria De Stefano
Principal
M 0407 091 301 | T 03 5226 8520
E vdestefano@ha.legal
Ashleigh Goodwin
Senior Associate
M 0400 998 552 | T 03 5226 8560
E agoodwin@ha.legal
