Revision notes w301 law: ownership & trusteeship – rights & responsibilities

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1 What a licence is

  • Licences permit licensees to do something which otherwise would not be allowed, embracing (i) permissions by law & (ii) permissions by licensors to be on their land where permanent right is not intended & which range from permitting right of access to right of temporary occupation where length varies so = device permitting many short to long term functions where actions otherwise unlawful made lawful without passing interest or altering property in thing/ estate (Thomas v Sorrell (1673) so, in simplistic terms, describable as mere permission preventing actions which otherwise would be trespass & which are personal between licensor & licensee.

2 Express & implied licences

  • Express permission evidenced from words but need not be in writing, so formality isn’t required but where long term access/ use envisaged, written agreements sensible, albeit not mandatory unless land interest is being created but in certain situations permission is implied so where householder not lock gate, implied licence for anyone, who has lawful purpose, to go from gate to door to speak to householder, albeit implied licence rebuttable by express notice on gate (Robson v Hallett [1967].

3 Differences between licences/ easements & licences/ leases

  • With easements right has to benefit grantee’s land &, since = interest in land, must be expressly created in writing (s.53(1) LPA 25) or, to be legal interest, must be in deed (s.52(1)), albeit may also be equitable but licences = personal permissions which not need benefit land, can be created without formality & not give licensee legal or equitable land interest so right to occupy rooms where granted exclusive possession for term at rent was hallmark of lease, howsoever agreement was described but where others – including owner - could not be excluded, not exclusive possession so is licence (Street v Mountford [1985]) but where no rent charged this = strong indication of licence, albeit rent not essential to constitute tenancy (Ashburn Anstalt v Arnold [1989]);

  • Where landlords attempt to avoid exclusivity of possession by artificial means, courts likely to treat as leases (Antoniades v Villiers [1990]) but where arrangements made at different times & on different terms, neither joint tenancy nor overall or individual exclusive possession so was licence (AG Securities v Vaughn [1990]) & where keys held by owner, determinative by why has key so where for dealing with emergencies, would not indicate licence but if genuinely for services which can only be provided by unrestricted access, licence more likely (Aslan v Murphy [1990]), although provision of services not sufficient to constitute licence and where neither required unrestricted access or not performed although contractually due (Markou v Da Silvaesa [1986]) likely to be tenancy, whilst services initially provided but then ‘drop off’ indicates licence (Huwyler v Ruddy [1995]);

  • Arrangements indicating no right of occupation during certain limited hours, unrealistic & likely to be seen as a pretence (Aslan) but where exclusive possession denied genuinely because inconsistent with purpose for which accommodation provided, likely to be licence (Westminster City Council v Clarke [1992]).

4-5 Bare licences, licences coupled with interest & contractual licences

  • Where licence gratuitously granted = bare licence limited in scope to purpose stated (The Calgarth [1927], grantor may revoke at any time, following which, subject to reasonable time to comply, grantee becomes trespasser against whom no force can be used if complying & only reasonable force if not &, since purely personal between licensor & licensee, neither benefit nor burden may be passed to another;

  • Where licences coupled with rights, licensor may not revoke whilst right exists, & such right may = legal interest (s.1(2)(a) LPA 25) so implied right holder has licence to gain access which can’t be revoked whilst right exists & benefit & burden of related licence pass with right;

  • Contractual right to carry out activity embraces licence to enter & remain on premises for those purposes so where licences given for specific purpose or time, can’t be revoked whilst purpose/ time exist, provided licensees remain within licence terms (Hurst v Picture Theatres Ltd [1915]) &, in absence of express licence grant, courts may imply contractual licence to protect licensee (Tanner v Tanner [1975]);

  • Benefit may be passed to others under contract law permits but, based on Thomas v Sorrell, licences not create land interests so no prop right which can bind successors &, whilst Errington v Errington [1952] held where there is contractual licence not open to anyone – including those claiming through licensor - (other than purchaser for value without notice) to ignore, Ashburn Anstalt v Arnold [1989] decided Errington wrong in holding contractual licences could bind 3rd parties since conflicted with Lords’ decision in King v David Allen & Sons (Billposting) Ltd [1916] that contractual licences gave no estate or interest in land, but, although licences not create prop rights nor burden 3rd parties, could be enforced where evidence land owner’s conscience should be affected so courts may impose burden on 3rd parties in such circumstances by constructive trusts or prop estoppel.

6 Effect on licences of constructive trusts & proprietary estoppel (PE)

  • Whilst making sale subject to licence does not by itself create binding prop interest, constructive trust may be imposed placing burden on licensor’s successor(s) since ‘taking subject to’ results in equity binding on purchaser (Binions v Evans [1972]) but Binions found to be wrong in Ashburn which held, as per Lyus v Prowsa Developments Ltd [1982], that stipulation not included to confer new rights but to ensure encumbrances made known to purchasers, although, if buyer’s conscience affected court might justly impose constructive trust;

  • Where A encourages B’s expectation re interest in A’s land &, if B, relying on expectation, then acts to his detriment, A estopped from denying B’s expectation &, whilst Willmott v Barber (1880) laid down criteria (the five probanda) (i) claimant mistaken belief re legal rights; (ii) must have spent money/ done some act in reliance on belief; (iii) def had legal right knew inconsistent with belief; (iv) aware of mistake; & (v) directly/ indirectly encouraged claimant to act as he did, broader approach now taken & courts not permit reliance on legal rights where unconscionable to allow - in particular, whilst knowledge of true position by defendant was relevant factor, not always exist (Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982]) &, whilst in some situations claimants should pre-advise defs what they proposed to do, not always necessary so defs need not be forewarned of detrimental acts but need merely to be aware might occur (Crabb v Arun District Council [1976]);

  • Courts approach to PE allegations is (i) determine whether claimant established equity & extent; & (ii) decide how to be satisfied so reliance based approach seeks to compensate for loss incurred whereas expectation approach remedial & ascertains expectations encouraged which court seeks to fulfil but approaches must be overall flexible since some losses can’t be quantified & some expectations can’t be fulfilled, bearing in mind remedies should = minimum equity to provide claimants with justice (Crabb) so predicates overall reliance approach although generally not followed since expectation frequently only way compensation achievable, so main if rare use of reliance = where expectations out of proportion to loss & where losses compensatable without expectation fulfilment;

  • Where clear case of representation courts usually satisfy equity by fulfilling expectations even where quantifiable loss but only satisfactory & just remedy was expectation fulfilment (Dillwyn v Llewelyn (1862)) so courts balance detriment suffered &/ or likely to be suffered against pure compensation &, where former ‘stronger’, equity may be better satisfied by fulfilling expectations (Pascoe v Turner [1979]) but must be proportionality between parties & between expectation & detriment, meaning justice must also be given to def since what is to be satisfied is equity & not necessarily the expectations;& where detriment hard to quantify no exhaustive factor list to be considered but, as per Sledmore v Dalby [1996], courts must avoid unconscionable results which, inter alia, can arise from disproportionate remedies (Jennings v Rice [2002]);

  • Remedies should not exceed expectations (Inwards v Baker [1965]) &, where fulfilment forces those in disharmony to live together &, may result in potential windfall through Settled Land Act 1925 in excess of envisaged expectations, equity satisfied by allowing defs to remain in occupation until reimbursed for expenditure (Dodsworth v Dodsworth [1973]);

  • PE binds successors by Taylor v Needham (1810) which held those who take estate under deed not in better position than predecessor &, where licences provide mutual benefit, not open to A to revoke B’s whilst continuing to enjoy own (Hopgood v Brown [1955]);

  • Where right was not legal one since not created by deed & was not reg as equitable right (class C(iv) or Class D(iii)), it was void against successor but if was mutual benefit & burden, for buyer to continue to enjoy benefit, they & successors bound by burden (E R Ives Investment Ltd v High [1967]) or were estopped from relying on non-reg (Old & Campbell Ltd v Liverpool Victoria Friendly Society [1982]) &, alternatively, court could order retrospective registration of charge against original party;

  • With reg titles, pre-LRA 2002, whilst uncertain what easements included within overriding interests under s.70(1)(a) LRA 25, Celsteel Ltd v Alton House Holdings Ltd [1985] held equitable easements openly exercised & enjoyed were included so such right enforceable as overriding interest (Thatcher v Douglas [1995]) but, now, S.116 affirms equity effective from when arose & binds successors subject to rules re dispositions effect on priorities re which s.29(1) says where such interests not protected reg disposition for valuable consideration ‘postpones’ (i.e. avoids) them so, to be protected must, under s.29(2), either be protected by notice or fall within Sch 3 but, since Para 3 of Sch 3 only includes legal easements, equitable easement unenforceable so unprotected unless claimant either (i) protected himself by notice in the purchaser’s charge register (which unlikely rendering s.116 protection academic); or (ii) if in actual occupation of transferred land, may gain protection under Para 2 of Sch 3 as overriding interest, but, overall, rights post LRA 02 less secure.


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