Various leases of properties had been granted. D occupied the property under an arrangement under which they paid no rent. The landlord sought possession, saying that the agreements were licences not tenancies because of the absence of rent and licenses were not interests in property. Held: The payment of rent is not an essential qualification for a tenancy agreement. The tenants occupied the land with an overriding interest.
Fox LJ: On using constructive trusts: “The test, for the present purposes, is whether the owner of the property has so conducted himself that it would be inequitable to allow him to deny the claimant an interest in the property”. This does not automatically arise where a contract sells something “subject to” another interest, as this may simply be a way of giving notice the buyer of other interests currently existing and NOT requesting that the seller respect such interests. “The court will not impose a constructive trust unless it is satisfied that the conscience of the estate owner is affected.” Constructive trust is invoked if “the owner of the property has so conducted himself that it would be inequitable to allow him to deny the claimant an interest in the property”.