Licences and proprietary estoppel

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A licence is essentially having permission. No one should interfere with anothers property rights. Licences make wrongful acts permissible. 

Thomas v Sorrell 1673- 'a dispensation or licence properly passeth no interest, nor alters or transfers property in anything but only makes an action lawful which without it had been unlawful.' 

B has a liberty to make us of A's thing. Licence only grants personal rights. Liberty isnt a property right. 

Our concerns- irrevocability, enforceability and alienability.

The types of licence- 

  • Bare licence
  • Licence coupled with an interest
  • Contractual licence
  • Estoppel licence
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Bare licences- these are the most frequent and simple eg inviting someone over for dinner. No formalities are required. 

Creation of a bare licence- express licence (party invite) v implied licence (conduct, leaving a gate open). 

Robson v Hallett 1967-  'when a householder lives in a dwelling house to which there is a garden in front and does not lock the gate of the garden, it gives an implied licence to any member of the public who has lawful reason for doing so to proceed from the gate to the front door or back door, and to inquire whether he may be admitted and to conduct his lawful business.' 

Shopping malls give an implied licence to go in.

Holden v White 19820- can a milkman use a path to deliver milk? Yes he can, it is an implied licence. 

Revocation of a bare licence? can happen at any time. Can be unfair and need no reason. Can ask to leave. Needs to be sufficiently clear. 

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Gilham v Breidenback 1982- '**** off'- Inappropriate language to a police man. This is abuse, not revocation. The revocation needs to be appropriate. 

Excessive use- The Carlgarth 1927- 'when you invite a person into your house to use the staircase you do not invite him to slide down the bannisters.' Certain limited expectations come with the licence. 

Reasonable notice of termination- an extra period of grace. There is no solid rule. Depends on circumstances of case. Need to allow packing up/leaving time. 

Licences are personal rights. B cant enforce or bind X or C (the new owner).

Licences coupled with an interest- this interest is proprietary. Means you have an interest where you can take something from someones land- profits a prendre. Have licence to enter. eg fishing or logging. 

James Jones and Sons v Earl of Tankerville 1909- T estate owner agreed with J that they can cut wood and take it. T wanted to stop and forced them out. Had to go to property to do their job. 

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'A contract for the sale of specific timber growing on the vendors property, on the terms that such timber is cut and carried away by the purchasers certainly confers on the purchaser a licence to enter and cut the timber sold.' 

Hurst v Picture Theatres 1915- 'that which was granted to him was the right to enjoy looking at the spectacle. That which was called the licence, the right to go on the premises, was only something granted to him for the purposes of enabling him to have that which had been granted to him, namely the right to see. His right to go into the building was something given to him to enable him to have the benefit of that which had been granted to him, namely the right to hear the opera.' 

Proprietary right means it can be enforced against a new buyer. 

Contractual licences- long term eg a lodger. Difference between a bare licence and a contractual licence is the contract. Usually have a short term implication. eg cinema. May be medium term eg having builders in your house. 

eg A buys a ticket to legoland. He has a contractual licence. Permission to go on the land. Express or implied contract between A and B. Valuable consideration.

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Creation- express licence v implied licence. Tanner v Tanner 1925. 

Revocability of a contractual licence? 1) common law 2) equity. 

Statutory Protection: Protection from Eviction Act 1977 s5(1A)- says you have to have a minimum of 4 weeks notice if a dwelling. Cannot forcibly eject them, need a court order. 

Common law- Wood v Leadbitter 1845

Equity- wanted more remedies- Millenium Productions v Winter Garden Theatre 1946-  cannot just be revoked at anytime by the licencor. 'The settled practise of courts of equity is to do what they can by an injunction to preserve the sanctity of bargain. To my mind, as present advised, a licencee who has refused to accept the wrongful repudiation of the bargain which is involved in an unauthorised revocation of the licence is as much entitled to the protection of an injunction as a licensee who has not recieved any notice of revocation.' Equity wants to protect licensee. Implied obligations on licensor not to revoke. 

'The power of equity to grant an injunction to restrain a breach of contract, is of course a power exercisable in any court. The general rule is that before equity will grant such an injunction...

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there must be, on the construction of the contract, a negative clause express or implied.' 'In the present case it seems to me that the grant of an option which, if I am right, is an irrevocable option, must imply a negative undertaking by the licensor not to revoke it. That being so, such a contract could be enforced in equity by an injunction.' 

Verrall v Great Yarmouth BC 1981- look at terms of the contract. The remedy may vary- available remedies are damages, specific performance, and injunction. If not already on the land, you have to ask the court for an order to go on. 'Since the Winter Garden case, it is clear that once a man has entered under his contract of licence, he cannot be turned out. An injunction can be obtained against a licensor to prevent from being turned out. On principle it is the same if it happens before he enters. If he has a contractual right to enter, and the licensor refuses to let him come in, then he can come to the court and in a proper case get an order for specific performance to allow him to come in.' 

Do you become a trespasser when the licensor revokes the licence? Do not immediately become a trespasser if already on the land, has to have a court order to remove. 

Thompson v Park 1944- contractual licence in principle irrevocable. Have to look at contract terms.

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Effect on third parties- 

Common law- King v David Allen and Sons 1916 and Clore v Theatrical Properties 1936- both said that burden of contract cannot be passed. New licences as irrevocable unless in contract terms. 

Dennings Intervention- Errington v Errington and Woods 1952- significant case- blurred personal and property rights. Should the mother be a third party? She wasnt. 'Infusion of equity means that contractual licences now have a force and validity of their own and cannot be revoked in breach of contract. Neither the licensor nor anyone who claims through him can disregard the contract except for a purchaser for value without notice.' Mother had notice and the house was a gift so it protected daughter in law. 

Binion v Evans 1972- Denning again. Contractual licences= equitable interests. This was quite extreme and confused academia. 

The return of reason- Ashburn Anstalt v Arnold 1989- was obiter- 'Down to this point we do not think that there is any serious doubt as to the law. A mere contractual licence to occupy land is not binding on a purchaser of the land even though he has notice of the licence.' 

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'Before the Errington case the law appears to have been clear and well understood. It rested on an important and intelligible distinction between contractual obligations which give rise to no estate or interest in the land and proprietary rights which, by definition, did.' Have to apply contract law, no third parties. 

'The far reaching statement of principle in Errington was not supported by authority, not necessary for the decision of the case and per incuriam in the sense that it was made without reference to authorities, which, if they would not have been compelled, would surely have pursuaded the court to adopt a different ratio. 

Lloyd v Dugdale 2002- continued Ashburn- 'notwithstanding some previous authority suggesting the contrary, a contractual licence is not to be treated as creating a proprietary interest in land so as to bind third parties who acquire the land with notice of it, on this account alone.' 

Creative approach- Smith v Nottingham CC 1981, Wettern Electric v Welsh Development Agency 1983 and Manchester Airport v Dutton 2000.

Attempt to make contractual licence a proprietary interest. Still personal and will take a long time to change. 

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Estoppel licence

Estoppel licence- remedy for proprietary estoppel. Have to give remedy if estoppel is found. 

Raising the equity needs-

  • assurance
  • reliance
  • detriment

Satisfying the equity- Inwards v Baker 1965- 'it is quite plan from these authorities that if the owner of the land requests another, or at least allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity in the licensee such as to entitle him to stay. He has a licence coupled with an equity.' Once licence generated should become irrevocable. 

Effect of estoppel licence upon a transferee? LRA 2002 s116- 'an equity by estoppel.' 

Back to Ashburn- difference between the equity and the remedy which satisfies it. 

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