Licences & Proprietary Estoppel

_______________________________________________________

Why are these topics taught together?

• Usually licences & estoppel are rights that arise informally

• Historically, estoppel arises out of a licence i.e. parties start off having a licence and then do something more, resulting in an estoppel situation

  • Today however estoppel is a free-standing doctrine; you don’t have to start with a relationship

Licences

Licences are personal rights to use land; they are what differentiate you from trespassers & those with property rights

They are personal not property rights (Ashburn Anstat v Arnold). The difficulty in defining a licence is that it is defined in the negative i.e. it is not a property right

Being a personal right to use land:

• Inherently personal

  • No rules about its creation - no need to use a deed or written instrument (however sometimes you do get contractual licences)

  • They cannot be put on the register

  • It will never bind the land, and therefore cannot be an overriding interest

  • It is only enforceable vertically between the licensor and licensee

• Occurs when there is a failed property right i.e. a failed property right

  • e.g. a right to park on a driveway may be an easement, but if it isn’t in writing then it will be a licence

Conceptual distinction between licences & leases, and licences & other property rights

Types of Licence

Conceptually all personal rights

Bare licence

• Non-contractual licence (i.e. there is no consideration for the promise)

  • Express

  • Implied

• Can be terminated by reasonable notice (reasonableness determined by the facts)

Licence “coupled with” a grant

• A licence to enter the land in order to obtain someone’s profits, which are property rights to profit from someone else’s land i.e. profit of pescary, profit of commons, profit of estovers

  • Jones v Earl of Tankerville

Contractual licence

• A licence given with contractual consideration

• Whether you can transfer that benefit of the licence to someone else is dependent on the licence

• This brings with it its own terms & conditions

• Remedies arising from a breach are contractual - breach of contract damages, or occasionally an injunction/specific performance to stop the licensor breaching. Any transfer will not enable an injunction against the purchaser - so a breach arising from a transfer to a purchaser would only give rise to damages against the initial registered proprietor

  • Lord Denning argued that, because the contract is irrevocable between parties, this should be matched in equity (Errington v Errington)

Equitable methods of forcing P to honour the licence

There is no method in land law for affecting the purchaser; this is a rule of equity

If a purchaser of land explicitly promises the seller that he will honour the licence, and thereby pays a lower price, then the purchaser is subject to a personal constructive trust (a remedial constructive trust). This is triggered by the unconscionable conduct of P.

If P then sells on to Z, the personal constructive trust is not applicable to Z

Difference with an estoppel; focus on unconscionability (Lord Browne-Wilkinson in Westdeutsche Bank) & the fact that the promise is between P & Z, not the licensee & Z

Lyus v Prowsa

A property right which had not been registered

Groveholt v Hughes

Alleged personal constructive trust, but there was no lower price paid

Held: rejected

Differentiate between:

• Equitable property right

• Equitable beneficial interest under a trust

Estoppel

Prevents party A from denying the right of party B if they have relied on A’s assurances as to the right to their detriment, and it would be unconscionable to allow him to deny such a right’s existence

All types of estoppel arose from the law of evidence; parties were banned from raising certain types of evidence when it would be unconscionable to do so

Estoppel can be both a shield & a sword in litigation

Creating a legal right would usually go via a deed (legal) or a contract (equitable). There are very few types of property right which arise without writing - short leases or CICT

Estoppel is what the claimant alleges when they can’t produce the required writing. Its context is the lack of formalities. It will succeed exceptionally.

Usually in the alternative to a constructive trust, though:

• Much overlap with constructive trusts with regards to detriment

• However a crystallised estoppel will not guarantee an equitable property right but could be a monetary award or licence

Historical development

Historically it was more difficult to prove, as all 5 probanda had to be proven (Wilmot v Barber) - it focussed on the point of view of the landowner. Ocassionally, the law would return to this rule Orgee v Orgee

However the modern law of estoppel comes from a HC case Taylors Fashions v Liverpool Victoria Trustees which reformulated the rules

• Oliver LJ: focus on the claimant, not the landowner. The key element in estoppel is to think about what has happened to him.

This has made it slightly easier to prove, though the trend in land law has been to increase the formalities required for property rights to arise. LRA established that more things need to be solemnised by a deed. Thus estoppel is creeping in in the face of this.

Gillet v Holt (2000)

Held: first time where estoppel was used to contradict the terms of a will, in the face of freedom of testamentary disposition

In establishing an estoppel, there is a two-part process:

• Equity by estoppel / uncrystallised estoppel / inchoate estoppel = a landowner has generated a claim in estoppel in the claimant’s favour, and that equity is a property right (S.116 LRA). This right can be registered, and it can also be an overriding interest. This can kind a 3rd party.

• The court crystallises the estoppel, and can grant any remedy it chooses (it must do the minimum necessary to do justice between the parties) - it can give money, an easement, a lease, a mortgage or a...

Buy the full version of these notes or essay plans and more in our GDL Land Law Notes.