- Information
- AI Chat
Licences and Proprietary Estoppel Revision Notes
Land Law (A10651W1)
University of Oxford
Recommended for you
Preview text
Licences and Proprietary Estoppel Introduction: A licence is where one party gives another party permission to do something (which would otherwise count as trespassing). In context of land law – this is permission to do something on someone else’s land. Important to remember that a licence is a permission as opposed to a right in/over the land. Difference between a lease and a licence is the substantive content of the agreement (as Street v Mountford held, even if you explicitly state that your agreement is a licence, if it has the substantive content of a lease, then it is a lease). Licences can take 3 forms: 1.) Bare licence 2.) Licence with a property right (interest) 3.) Contractual licence 3 main questions concerning licences: 1.) Can the person who granted the licence revoke or withdraw it? 2.) Can the person with the benefit of the licence assign or pass on its benefit to another person? 3.) Is a purchaser who buys land that is affected by the licence bound by it? 1.) Bare Licences: Stroud – Chapter 13 – Licences (Pages 328 – 329) Bare licences: Bare licence occurs where one party gives another permission to do something on his land and there is no consideration or payment between the parties. E. Robson v Hallett (1967) – you are taken to have given the postman permission to walk up drive to deliver post. Revocation – a bare licence can be revoked, however person revoking it must allow a reasonable amount of time for the person to leave, after this time is up, if he remains on the land he becomes a trespasser. - Licence is also automatically revoked upon death of licensor. Assigning the benefit of a bare licence – the benefit of a bare licence can be assigned to anyone. – however, if the licensor isn’t happy with the benefit of the licence being assigned to someone else, he can immediately revoke it (allowing reasonable time, of course). Is a bare licence binding on a third party? (e. a purchaser of land) - no, purchaser won’t be bound because a licence isn’t a proprietary interest, only proprietary interests in land can bind subsequent purchasers. - a bare licence is thus a personal right that is binding only between the original parties to the agreement. 2.) Licences Coupled with an interest: Smith – Chapter 22 – Licences (Pages 475 – 476) Licences coupled with an interest: Proprietary interests frequently require access on to land in order to be effective. Best example of this is profits (profits à prendre) – rights to take things from another’s land. Here, access onto that land is essential for the profit to be exercised: a licence to enter is thus implied. The law regards this right as having the same enforceability as the profit or other right to which it is attached. Thus, whilst licences on their own create mere personal rights, licences coupled with a proprietary interest will be treated as a proprietary interest (however, it is important to note that, without this proprietary interest, a licence is merely a personal right). The interest doesn’t need to be in the land itself, it can be in a chattel on the land (thus the courts have appeared to welcome the idea that there is a right to go on to another’s land to recover property that has been placed or left there with the landowner’s permission). 3.) Contractual Licences: A.) Overview: Stroud – Chapter 13 – Licences (Pages 329 – 333) Contractual Licences: A contractual licence arises when consideration or value is given for it. E. – paying for a ticket to watch a film or paying to stay in a hotel. A person who occupies land but cannot satisfy all of the requirements for a lease will have a contractual licence. Can be expressly granted, implied into a contract to make it make sense, or sometimes the whole contract can be implied from the parties’ conduct – e. Tanner v Tanner – man bought a house for his mistress and their children, she gave up her old flat (consideration) and so court held there was an implied licence for her to live there and look after the children whilst they grew up (this licence was implied from her conduct of giving up her old flat). E. – Fred owns Greenacres, he grants Emma a contractual licence to do something on Greenacres. Fred then sells Greenacres to Peter – q is, is Peter (third party) bound by Emma’s contractual licence? Traditionally (King v David Allen & Sons, Billposting Ltd (1916)) contractual licences weren’t seen as proprietary interests and thus the contract only took effect between the 2 parties who created it (couldn’t bind a third party), however in Errington v Errington and Woods (1952) Denning LJ claimed a contractual licence was a proprietary interest in land and thus could bind a third party. This idea set out by Denning LJ stemmed from the development of the equitable rules relating to the revocation of a contractual licence – if such a licence couldn’t always be revoked, then it wasn’t such a huge leap of the imagination to claim that a contractual licence was a proprietary interest in land, moreover, such a leap was extremely convenient in the circumstances of this case. Mr Errington had bought a house with aid of a mortgage. He had allowed his son and daughter in law to live in the house on basis that they paid of the mortgage repayments. When mortgage was paid off he would convey the house to them. Mr Errington died and his wife (the son’s mother) inherited the house. The son returned to live with his mother, but she then tried to evict the daughter in law. Denning LJ held that the daughter in law’s contractual licence was an equitable property interest in the land and would bind Mrs Errington. This was because the land was unregistered and there was no provision for protecting an equitable interest arising under a contractual licence under LCA 1925, thus the doctrine of notice applied to equitable interests. This meant that equitable rights bound everyone except the bona fide purchaser of a legal estate for value without notice of the equitable interest, seeing as the interest acquired under the property was equitable, Mrs Errington would be bound by it unless she was a bona fide purchaser of a legal estate for value (which she wasn’t as she inherited the house) without interest of the equitable interest (which she had as she knew her daughter in law had an equitable interest in the house). Decision in Errington heavily criticised because it was contrary to decision in King v David Allen & Sons, Billposting Ltd (which had held contractual licences weren’t proprietary interests in land and so only bound the original parties to the contract). However in Ashburn Anstalt v Arnold & Co (1989) the court reaffirmed traditional view that contractual licences weren’t proprietary interests in land and so wouldn’t bind anyone who wasn’t party to the contract. Denning LJ’s decision in Errington held to be per incuriam (through lack of care). Thus, final word is that a contractual licence is NOT a proprietary interest. There are 3 alternative ways that Errington could have been explained so as to avoid the rule that a contractual licence is not a proprietary interest in land and so won’t bind a third party: 1.) By arguing there was an estate contract – had the son and daughter in law registered the estate contract as a class c(iv) land charge against Mr Errington on Land Charges Register, then it would have bound any purchaser of the legal estate, but one for money or money’s worth (which Mrs Errington wasn’t as she inherited it). 2.) By establishing a constructive trust – idea here (as shown by court in Binions v Evans (1972)) is that when a person buys land knowing perfectly well that someone else has an interest in it and pays less for the land because of the existence of that interest, then a trust will be imposed in the interests of fairness and equity (the purchaser will hold the land on constructive trust for whoever has the interest and has to honour that interest). 3.) By arguing proprietary estoppel (dealt with below). B.) Cases on establishment of a contractual licence: Tanner v Tanner [1975] 1 WLR 1346 Facts: D and P had children and agreed that a house should be purchased for D and the children. P paid for the house and D left her rent-controlled flat to live there. P later asked D to leave and sued for possession. Judgment: CoA awarded D damages, saying that in all the circumstances, the licence was a contractual one, lasting until the children were of school-leaving age. Lord Denning MR – The provision of a place to live was in return for D bringing up children to whom P had a duty and in return for which she had agreed to leave her flat protected by the Rents Act Legislation. It is to be inferred from the circumstances that the duration of the licence was to be until the children were capable of looking after themselves, since the purpose of the agreement was to enable the mother to afford them a better upbringing’. Chandler v Kerley [1978] 1 WLR 693 Facts: X and D bought a house. Hounslow LBC had entered into a building contract with Twickenham Garden Development under which the Ds were to carry out certain construction works on land owned by the Council. As part of the contract the Council granted the Ds a licence to enter the site to carry out the work. There was a clause in the contract that if the Council served notice that Ds work wasn’t progressing adequately, and this was not served unreasonably, then the Council would be entitled to determine the contract after 14 days of the notice being served. Council became unhappy as the building works were taking a long time and they purported to terminate the agreement, serving the notice. However after 14 days Ds refused to vacate the premises and refused to accept that the Council were entitled to do this. The Council sued for an injunction. Q was – (regardless of who was right on the main issue of whether the Council were entitled to do this) was whether the Council could obtain an injunction to force the Ds to leave the site. Judgment: Megarry J refused to grant the injunction on basis that the Ds’ licence to remain on Council’s land was a contractual one, due to last for a specific period. Unless this contract had been validly determined by the Council, the court would not grant an injunction as this would be to aid the wrongful repudiation of contract as, in this case, the Council had failed to show that Ds had breached contract and therefore was not entitled to determine (terminate) the contract. Thus the licence would not be ended by injunction. Megarry J summarised his argument that injunctions will not be granted to end contractual licences where this will help a wrongful repudiation of a contract – (1) A licence to enter land is a contractual licence if it is conferred by a contract; it is immaterial whether the right to enter the land is the primary purpose of the contract or is merely secondary. (2) A contractual licence is not an entity distinct from the contract which brings it into being, but merely one of the provisions of that contract. (3) The willingness of the court to grant equitable remedies in order to enforce or support a contractual licence depends on whether or not the licence is specifically enforceable. (4) But even if a contractual licence is not specifically enforceable, the court will not grant equitable remedies in order to procure or aid a breach of the licence. D.) Cases on the effect of a contractual licence on third parties: As a right in rem? King v David Allen [1916] 2 AC 54 Facts: Licensor had a property on which he intended to construct a theatre. Licensor formed agreement in the form of a contractual licence with the licensee allowing the licensee to put up posters on the property walls. Licence was for a minimum 4 years from the date of theatre construction and thereafter terminable by either party on 6 months’ notice for a rate of 12p per annum and agreed that licensor would not allow any other companies to put up posters. The licensor then leased the property to another company, which did not refer to the original agreement with the licensee. After completion of the theatre, the licensee attempted to put up posters, but was forcibly stopped by the new company from doing this. The licensee commenced an action against the licensor, claiming damages for breach of agreement. Q here was whether the new company who were leasing the property would be bound by the contractual licence – thus, could the licensor bring in the third party (the new company leasing the property) into this claim so as to pay fewer damages? Judgment: Lord Buckmaster – despite the situation being beyond his control, the licensor is in breach of his obligation to the licensee and thus must be made responsible. - The agreement (between the licensor and licensee) did not give the licensee an interest in land (in rem – a property right) which would be enforceable against anyone (like the new company), but merely created a personal obligation on the part of the licensor to allow the licensee the use of the wall for advertisements. The rights can only be enforced against the licensor. - As the licensor was now unable to fulfil his obligation under the agreement, he was liable for breach of contract. Thus, a contractual licence doesn’t qualify as a proprietary right and thus isn’t enforceable against third parties. Errington v Errington [1952] 1 KB 290 Facts: Father (Mr Errington) purchased a house for his son and daughter in law to live in. Facts: Mr and Mrs Binions promised the trustees of Tredgar Estate to allow Mrs Evans to remain in her cottage for life when they bought the property from Tredgar Estate. The Binions paid less for the land because of the existence of the interest. Mrs Evans had been widowed and was said to be a ‘tenant at will’. Q for court was whether Mrs Evans’ rights were enforceable against the Binions. Judgment: Lord Denning MR – Mrs Evans could assert her right to remain in the cottage against the Binions even though she had no legal or equitable property rights as such – the Binions would hold the land on constructive trust for Mrs Evans and has to honour her interest in it. He said – if it is the case that a person buys land, knowing perfectly well that someone else has an interest in it and pays less for the land because of the existence of this interest, ‘in these circumstances, this Court will impose on the purchaser a constructive trust for her benefit: for the simple reason that it would be utterly inequitable for the purchaser to turn the widow out contrary to the stipulation subject to which he took the premises.. the imposing of a constructive trust is entirely in accord with the precepts of equity. As Mr Justice Cardozo once put it: ‘A constructive trust is the formula through which the conscience of equity finds expression’. Ashburn Anstalt v Arnold [1989] Ch 1 Facts: Arnold & Co had a lease of some business premises on Gloucester Road. It sold the lease to Matlodge Ltd who promised Arnold & Co that they could remain there for free in occupation as ‘licensees’ until any redevelopment on a quarter’s notice in writing, and that on redevelopment they should get a lease of a shop in prime position at the development with 1000 square metres and care parking. Cavendish Land Co Ltd then acquired both the freehold and the lease, accepting the contractual duties to Arnold & Co. Cavendish Land Co was then taken over by Legal & General Assurance Society Ltd which also accepted the contract. L&G then sold its freehold to Ashburn Anstalt, which took the freehold subject to the Arnold & Co contract. It had no redevelopment plans but sought possession anyway. Arnold & Co argued that its interest bound Ashburn Anstalt, as it was a lease, and thus an overriding interest under S70 LRA 1925. In addition, they argued even if it was just a licence, it should bind anyway – either under Errington v Errington or as a constructive trust. Judgment: Fox LJ – held the lease bound Ashburn Anstalt. Rent was not necessary to create a tenancy, the occupation agreement was certain enough, and it was thus an overriding interest, as they were in actual occupation, and when though it was not registered as an estate contract. If they had only had a contractual licence, Arnold & Co could not have asserted its right against Ashburn Anstalt. Any suggestion in Errington v Errington that a licence creates an interest in land is wrong, according to Thomas v Sorrell. A mere contractual licence could not bind as a constructive trust without there being an express promise. Radaich was held to be the authoritative definition that rent was not necessary for a tenancy. Fox LJ – there would only be a constructive trust, if, ‘it is satisfied that the conscience of the estate owner is affected … The fact that the conveyance is expressed to be subject to the contract may often, for the reasons indicated by Dillon J be at least as consistent with an intention merely to protect the grantor against claims by the grantee as an intention to impose an obligation on the grantee. The words ‘subject to’ will, of course, impose notice. But notice is not enough… we do not think it is desirable that constructive trusts of land should be imposed in reliance on inferences from slender materials. In our opinion the available evidence in the present case is insufficient… it seems to us highly unlikely that it would have relied upon such vague words as ‘subject to’ without the addition of an express obligation… we would have expected a clearly expressed obligation… we see no indication in the 1973 agreement that [A] was concerned with he protection of [B]… In general, we should emphasise that it is important not to lose sight of the question: ‘Whose conscience are we considering?’ It is [C’s], and thus the issue is whether [C] has acted in such a way that, as a matter of justice, a trust must be imposed. For the reasons which we have indicated, we are not satisfied that it should be’. Chaudhary v Yavuz [2012] 2 All ER 418 Facts: The appellant (Y) appealed against a decision that the respondent (C) was entitled to a right of way over his property. C and Y owned neighbouring properties, numbers 37 and 35 respectively. An alleyway between the properties was included in the title to number 35 (owned by Y). C had paid for construction of a metal stairway in the alleyway which provided access to the first floors of both properties. When Y bought number 35, the contract incorporated the Standard Conditions of Sale, with a provision resolving any conflict in favour of the agreement. The property was sold ‘subject to the incumbrances on the property’, with the incumbrances defined as entries in the Property Charges Registers. There were no relevant entries in the register. Y removed the connection between the staircase and number 37. Introduction: Proprietary Estoppel is an equitable remedy which has developed considerably over recent years. It has provided a further avenue for claiming an informally created interest in land, particularly in the context of the family home. Proprietary Estoppel arises when person A has either actively encouraged person B to believe that he has present or future rights in person A’s land or when person A has stood by knowing that person B is mistaken as to his present or future rights in A’s land. Even though the formalities for the creation of an interest in land haven’t been followed in such a situation, it is possible for person B to claim an interest in the land. This is because person A is estopped, or stopped, from relying on the lack of formalities if he tries to deny person B an interest because it would be unfair for him to do so. The elements of proprietary estoppel: Four elements: 1.) An assurance or representation. 2.) Reliance on the assurance or representation. 3.) Detriment. 4.) Unconscionability. 1.) An assurance or representation: Must be an assurance or representation by the landowner that the claimant will have an interest in or over the land. The assurance or representation need NOT be express, it can be implied (as shown in Thorner v Major (2009) – where Thorner successfully claimed entitlement to a farm through proprietary estoppel on the grounds he had devoted his life to helping Peter run his farm and had relied upon implicit understandings that he would inherit the farm from Peter, but Peter then revoked his will following a disagreement with one of the intended beneficiaries (not David) and never made another will so David hadn’t inherited the farm. HoL in this case decided than implicit assurance/representation was adequate, as long as the assurance was ‘clear enough’ (whether it was clear enough or not depended on the context – here the judge found a continuing pattern of conduct by Peter that David should inherit the farm)). As this case (and Re Basham (1986)) show – it matters not if the interest in question was a future interest – it can still be a valid assurance. With cases like this that concern wills – a party will be able to rely on an assurance promising a future interest (even if the deceased has changed the will) only if the deceased has made clear that the promise will not be revoked. The assurance can be imprecise as long as some type of interest in the land is promised and the land is identifiable although this identification does not have to be precise. 2.) Reliance on the assurance or representation: Reliance means a change of position by the claimant induced by some assurance or representation. The change of position must be such that if the assurance was withdrawn, the claimant would suffer detriment. Examples of changes of position: 1.) Spending money on land is the traditional way of proving a change of position (however the spending must be for building on the land or substantially improving it, it can’t just be for minor repairs or keeping the property in a useable state). 2.) Moving in with someone in the expectation that you will inherit that property (Re Basham). 3.) Working for lower wages (Gillet v Holt). 4.) Giving up a flat (Maharaj v Chand). The acts themselves that make up the reliance on the assurance don’t have to be detrimental in and of themselves, the detriment only has to arise from the action of the landowner withdrawing the assurance. Landowner must be aware of the claimant’s reliance, although he doesn’t have to have actual knowledge of it. It is also sufficient if he should have realised that the claimant might act on his representation or failure to do something. If a landowner has no idea that a claimant is relying on his assurance then there is nothing unconscionable in his behaviour if he refuses to acknowledge the claimant’s expectation. There must however be a direct link between the assurance or representation and the change of position – the claimant must believe that by changing his position, he will acquire the promised interest in the land. In determining whether there was this link, courts look at whether a reasonable person would have acted otherwise. As court held in Campbell v Griffin (2001) – the assurance need not be the sole factor that caused the claimant to act, there must just be a direct link between this assurance and the claimant’s change of position. Has been held that the court must award the ‘minimum equity to do justice to the plaintiff’ (Crabb v Arun District Council). The court thus has a wide discretion in determining the remedy, taking into account proportionality and all the circumstances of the case. 6 potential remedies: 1.) Grant of the freehold estate. - E. Pascoe v Turner - a woman was awarded ownership of her partner’s house having spent a substantial amount of money on furnishing and decoration. This reflected her expectation, but the court also took into account her financial position and the possibility that her partner would continue to aggravate her unless there was a clean break. 2.) Grant of a lease. - E. Griffiths v Williams – court awarded the claimant a long lease. 3.) Grant of a licence. - E. Inwards v Baker – son had built a bungalow on father’s land in expectation that he could live there for as long as he wanted. Court granted son a licence to live there for rest of his life. 4.) Grant of an easement or right of access. - E. Bexley London BC v Maison Maurice Ltd – Maison Maurice was led by Council to believe that it could construct a new safer right of access to Butler’s Yard from the road to replace an existing right of access. It was led to believe that it could do this without additional payment other than the Council’s costs, the costs of the works and consulting with the Works and Contracts Department. Some years later, the Council stated it owned the half metre strip of land between Butler’s Yard and the road and demanded over £1m from Maison Maurice to cross the strip as a permanent access if planning permission for development of Butler’s yard was obtained – this is called a ransom strip. Court held Council had acted unconscionably by letting Maison Maurice believe it could have permanent access over the land. It was now estopped from denying Maison Maurice this access which it could legally grant either by a right of access under Highways Act 1980 or by means of a licence. 5.) Monetary compensation. - In some cases monetary compensation is more appropriate. 6.) Combined remedies. - Courts can combine remedies if they feel this will produce a more just outcome. - E. may award ownership of land as well as compensation. The protection of estoppel rights: Depends if the land in question is registered or unregistered. Unregistered land: - If Emma has been successful in a claim based on proprietary estoppel and the court has already awarded her a remedy before Peter buys Greenacres, then if necessary, the successful claimant (Emma) must protect whatever interest in the land she has been awarded in the usual way in unregistered land before Peter buys Greenacres. - If Emma has acquired an equity by estoppel but has not asked the court to determine a remedy before Peter buys Greenacres, then the situation is more difficult. An equity by estoppel cannot be entered as a land charge on the Land Charges Register under the LCA 1972 and thus it is covered by the doctrine of notice. This means that equitable interests will bind everyone except a bona fide purchaser of a legal estate for value without notice of the equitable interest. In above example, we can assume Peter is a bona fide purchaser for value and thus, the question is whether he had notice of it (this could be actual notice – notice that he has received, constructive notice – notice he should have picked up on from physical inspection of the land or imputed notice – what his solicitor or agent knew and should have told him. - In such a case, if the court decides that Emma should own Greenacres, then Peter will have to transfer it back to her, regardless of what he paid for it. - If Peter doesn’t know about Emma’s equity and it is thus not binding on him, Emma can still plead to court that she has an equity by estoppel, but this will only be able to give her a personal right of compensation from the former owner of Greenacres who made the assurance to her – it wouldn’t bind Peter (third party). Registered land: - Governed by LRA 2002 – there are 3 categories which determine how interests are protected in registered land: After sale had gone through, but prior to the erection of the fence, Mr Crabb decided he wanted to split his plot into 2 and sell half. For this he would need another access point and so he approached the council. Council informally agreed to a second access point and when they erected the fence they left two access points with gates at each. Mr Crabb then sold half the land which had the formal access point and retained for himself the piece of land with the informal access point. He didn’t reserve any right of way on the land he sold (presumably because he thought he had an access point). The Council pulled down the gate and erected a fence at the access point leaving Mr Crabb’s land with no access. They then asked him for £3,000 to grant him access (ransom strip kind of idea). Mr Crabb claimed he had a right of access through proprietary estoppel. Judgment: Held, Mr Crabb entitled to an easement granting right of access arising through an estoppel. (He wasn’t required to pay for it). Scarman LJ – on the principles to be applied for proprietary estoppel – ‘First, is there an equity established? Secondly, what is the extent of the equity, if one is established? And, thirdly, what is the relief appropriate to satisfy the equity?’ Lord Denning MR – had the Council brought up the issue of payment for the second right of access when Mr Crabb first asked them about it, then this would have been acceptable. However, because of the Council’s conduct, the back land has been landlocked and Mr Crabb has sold off the other portion etc and so the court needs to take into account his loss when assessing whether to grant him an easement arising through an estoppel. Greasley v Cooke [1980] 1 WLR 1306 Facts: Kenneth and Hedley Greasley owned a home in Derbyshire. Ms Doris Cooke moved in in 1928 as a maid for Hedley and became Kenneth’s partner. Both Kenneth and Hedley assured that she would have a ‘home for life’. Kenneth died and left nothing. Doris stayed in the home after 1976 and had received no payment since 1948. The new owners of the house wanted to remove her, she didn’t look for another job, instead she stayed in the house looking after Kenneth and Clarice. Doris claimed proprietary estoppel, and to stay in the house. Trial judge – didn’t make a declaration that the house was Doris’ as he was unsatisfied that she had acted to her detriment.
Licences and Proprietary Estoppel Revision Notes
Module: Land Law (A10651W1)
University: University of Oxford
This is a preview
Access to all documents
Get Unlimited Downloads
Improve your grades
