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Licences

Previous: Leases

In the words of Chief Justice Vaughan in Thomas v Sorrell (1673), a licence:

“[P]roperly passeth no interest, nor alters or transfers property in any thing, but only makes an action lawful which, without it, had been unlawful”

A licence is, therefore, a permission to do something on land. There are several types of licence, each of which will be examined in turn: bare licences, licences coupled with interests and contractual licences. As a quick side note, please note the spelling of licence. When used as a noun, it is spelled as ‘licence’ in the UK, whilst the verb uses an ‘s’: ‘to license’. A licence is granted by a licensor (usually a landowner) to a licensee, for the licensee’s benefit.

Bare licences

A bare licence is the simplest form of a licence: gratuitous permission to do something on land. When you invite guests around for dinner, you are granting them a bare licence to enter onto your property without being classed as a trespasser.

Creation

A bare licence can be created expressly, as in the example above, or impliedly. A bare licence can be revoked at any time, as occurred in Robson v Hallett [1967]. It will be a question of fact as to whether a bare licence was excluded or revoked.

Effect

A bare licence merely prevents liability for trespass to land. Although, there may be implied terms attached to a bare licence, as illustrated in The Calgarth [1927], where it was said that permission to enter did not extend to permission to slide down a staircase’s balustrade.

Successors

Bare licensors will not affect the interests of a licensor’s successors. Following my invitation to you to attend my dinner party, a week ago, it would be nonsensical to suggest that even though I moved house during the last week, your invitation now allowed you to join my purchaser for dinner instead.

Licences coupled with interests

A licence coupled with an interest is an implied licence necessarily granted to facilitate the enjoyment of another interest. For example, in James Jones v Earl of Tankerville [1909], having been granted the right to take timber from some land, James Jones was also deemed to have been granted a licence to enter that land to retrieve the timber. Hounslow LBC v Twickenam Garden Developments [1971] illustrates that the ‘interest’ from which a licence is granted need not be proprietary in nature; it is enough that, by virtue of a contract, possession or control of land has been granted.

The creation and effect of a licence coupled with an interest is dependent on the particular factual situation in question and leads to little debate.

Contractual licences

A contractual licence is a licence granted as a result of a contract and its accompanying consideration. Contractual licences can be for a short-term, such as a licence to park a car in a car park; for a medium term, such as a licence for a builder to carry out works; or for much longer terms. Longer-term licences can lead to difficult questions surrounding successors and where a licence can continue through changes in ownership.

Creation

A contractual licence can only be created through a contract. There are no formal requirements, but there must be an agreement, consideration and an intention to create legal relations for that contract to be binding. Courts will readily imply contractual licences, as occurred in Tanner v Tanner [1975], where consideration was provided through the surrendering of rent-controlled accommodation.

Effect

Just as with bare licences, contractual licences prevent liability for trespass to land. The question is how revocable a contractual licence is. It is taken for granted that if a contractual licence is revoked contrary to the terms of a contract, damages will flow accordingly. This was the common law position taken in Wood v Leadbitter (1845). However, there has since been case law suggesting that some contractual licences cannot be revoked.

In Hurst v Picture Theatres [1915], it was found that a short-term contractual licence to watch a theatre performance was irrevocable. Where, a licence could theoretically last indefinitely, it may be revoked on reasonable notice, according to Winter Garden Theatre (London) v Millennium Productions [1948]; but in Hounslow LBC v Twickenham Garden Developments [1971], a 4 year licence was deemed irrevocable, preventing the licensor from obtaining an injunction, as was a meeting hall licence, in Verrall v Great Yarmouth BC [1980].

Tanner v Tanner [1975] provides us with uncertainty as to whether a licence could last indefinitely until ‘circumstances change’, but it is certain that licence will be revocable where it forces people to live together, as in Thompson v Park [1944].

Successors

It is the orthodox view that, with the exception of personal representatives, contractual licences cannot bind successors, as said by the House of Lords in King v David Allen [1916]. If a successor prevents the continued effect of a licence, loss caused may be recoverable in the law contract only.

However, Lord Denning has attempted to alter this orthodox position from the Court of Appeal. In Errington v Errington and Woods [1952], it is uncertain in what capacity the claimant was acting. If acting as a personal representative, the case can be explained in the law of contract. However, if acting as her late husband’s executrix, it appears that contractual licences can bind successors. Denning went on to confirm the latter approach in National Provincial Bank v Hastings Car Mart [1964]. On appeal, the House of Lords did not consider this approach. Finally, in Binions v Evans [1972], 2 members of the Court of Appeal were happy to deem a licensee a tenant for life, but Denning relied on his own judgment in Errington v Errington and Woods [1952] to rule that the licence in question was proprietary in nature.

As the Court of Appeal cannot overrule itself, Errington is still good law, however, the approach in Ashburn Anstalt v Arnold [1989] is to be preferred, restoring the orthodox view but providing that if a purchaser’s conscience is affected, a constructive trust may arise. A constructive trust (a device binding a purchaser of land to an obligation) will only arise, however, if other factors exist beyond the disclosure of the licence itself, as such disclosure will be required in an ordinary transaction. Ashburn Anstalt v Arnold [1989] therefore approved Binions v Evans [1972], as beyond disclosure, a purchaser also agreed to pay a lower price as a result of the licensee’s occupation.

It is arguable, following Lyus v Prowsa Developments [1952], whether successive constructive trusts could arise to protect a licensee through multiple ownership changes, and it has yet to be seen whether the Contracts (Rights of Third Parties) Act 1999 could have any effect on this position. But, where not prohibited by contract, there is no reason why a licensee could not assign the benefit of his contractual licence.

Next: Proprietary estoppel

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