#16146 - Licenses - Land Law

i. Introduction

• There is a huge variety of rights enjoyable under a license, which makes it difficult to consider them as a single category.

• Many categories are difficult to enforce which means it’s difficult to accord proprietary status to licenses

• Cases haven’t differentiated according to license type, but one way forward is to give greater protection to certain types of licenses (eg. those involving exclusive possession)

ii. Types of licenses

iii. Contractual Licenses

I. Is it revocable by the licensor?

• If it is to have any chance at being proprietary (binding purchasers), it first has to be irrevocable by the licensor

• Orthodox 19C approach: Wood v Leadbitter – licensor could always terminate a contractual license even if it would be in breach of contract because the license is seen as separate (Hurst therefore had to use the license coupled with an interest analysis to make it irrevocable)

• But in Hurst Buckley LJ said that a license with an agreement not to revoke also worked, because Equity will intervene:

  • Specific performance of the contract

  • Or prevent the licensor from revoking the license in breach of contract

  • So because an Equitable remedy is available Equity will treat the licensee as having a right to remain should the licensor evict him

• Problem with this analysis: Equity is acting retrospectively – Hurst had no opportunity to seek a remedy before eviction. But Equity nevertheless treats him as if he had obtained an injunction preventing eviction, which is the ordinary approach where there has been an interest in land and there’s no reason why it shouldn’t be applied to licenses

• Today’s position: Winter Garden Theatre v Millenium Productions – licensor purported to revoke a license to produce plays in licensor’s theatre.

  • Lord Greene MR (CoA): the license shouldn’t be regarded as an entity separate from the contract but as a contractual right subject to normal contractual rules. On the facts, the license was intended to be irrevocable and thus there was an undertaking not to revoke that the Court will give effect to. It didn’t matter that it had been purportedly revoked by the time the case came to court

  • HL found that on the facts the license was intended to be revocable, but the analysis remains authoritative

• Next case: Hounslow LBC v Twickenham Garden Developments – C landowner contracted with D to do building work. C was dissatisfied with D’s progress and sought to terminate the contract and applied for an order that D leave.

  • Megarry J: the claim failed. C would succeed if D had broken the contract (but this was disputed and still unresolved), but Equity would not help a landowner to break a contract (though accepting the alternate analysis that specific performance may well be available to assist D)

  • This is a different analysis of why Equity recognizes a license: it declines to assist the licensor

• Verrall v Great Yarmouth BC: The National Front had contracted to hold their conference in D’s premises, and when Labour took control of the council, the license was purportedly revoked (without having been entered into possession so only possible equitable remedy was specific performance).

  • CoA held that specific performance should be ordered as damages are inadequate because the National Front had been unable to find another venue.

I(b): Are all contractual licenses irrevocable?

• There are some contrasting 20C decisions:

• Thompson v Park: two headmasters agreed to share the school of one of them (licensor), the license purported terminating when disagreements arose.

  • CoA held that the license had been revoked (lawfully or not) and licensee had no right to return.

  • Justifications:

    • Goddard LJ: Licensors can revoke licenses in breach of contract subject to having to pay contractual damages (this was decided after Winter Gardens and considered to be inconsistent with it and bad law – Verrall)

    • The court cannot specifically enforce an agreement for two people to live peaceably under the same roof (more defensible)

    • Megarry J observed in Twickenham Garden that this court was undoubtedly influenced by the high-handed conduct of D (a ‘riot’) – as he couldn’t improve his position by forcible entry, he should be treated as if not in possession

• AUS and NZ took different approach:

  • Cowell v Rosehill Racecourse (High Court of AUS): accepted the general contractual analysis of English courts but Australian courts are far less willing to give equitable remedies – they will not assist licensees in entertainment contracts (eg. horse-racing) or building contracts

  • Mayfield Holdings v Moana Reef (NZ) – adopted similar approach to a building contract

• This restrictive approach is well-justified:

  • Specific performance is discretionary and courts should be cautious in giving it outside contracts for conventional proprietary interests – is it really right to force someone to continue to employ a builder that he doesn’t like? The Australian approach gives the licensor greater control over his own land – it reflects society’s expectations better than English cases

II. Licensees and Purchasers

• If licenses are to bind purchasers, it must be by equitable interest and not contract (no privity)

• Early decisions deny binding effect:

  • King v David Allen: HL held that a license to place an advert on a building didn’t bind a lessee from the licensor

  • Clore v Theatrical Properties: CoA held that a license to use the front part of a theatre didn’t bind licensor’s assignee

• Mid 20C developments:

  • Errington v Errington: a successor in title is bound. Licensor bought a house for son and daughter-in-law that they would own it provided they paid the mortgage (2/3 purchase price). He died and widow (successor) sought possession when son left his wife. Was either decided because 1) there was an estate contract for future entitlement or 2) the payment gave rise to estoppel (though estoppel didn’t develop until after this case was decided)

    • Denning: licenses can no longer (since cases like Winter Gardens) be revoked in breach of contract – a purchaser for value without notice is the only person who can escape this [Denning merely stated a principle without authority or explanation]

  • Bendall v McWhirter: Denning said that the equitable remedy available against the licensor binds the purchaser (like in restrictive covenant)

  • National Provincial Bank v Ainsworth: HL rejected Denning’s analysis, denying the deserted wife’s equity. Lord Upjohn and Lord Wilberforce said that equitable remedies do not bind purchasers unless there is a proprietary interest

  • Since Ainsworth most developments centred on estoppel but Denning decided Binions v Evans on the basis that a contractual license is a proprietary interest and Goff LJ applied it in DHN Food v Tower Hamlets

• Courts reviewed authorities in Ashburn Anstalt v Arnold (licensee sold his shop to a developer subject to a license to retain the shop rent free until redevelopment took place)

  • Fox LJ (CoA): contractual licenses cannot affect successors in title. Errington was the only contrary authority and it had not been supported by any authority so was unconvincing

  • Can be said that Fox LJ’s dicta was obiter (because the license in that case was held to be a lease) but he did give very full consideration to the license question – so for the time being licenses must be seen not to bind successors in title

• S4(1) LPA 1925 supports Ashburn Anstalt: ‘an equitable interest in land shall only be capable of being validly created in any case in which an equivalent equitable interest in property … could have been validly created’ before the...