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Ashburn Anstalt v Arnold

384 words (2 pages) Case Summary

28th Oct 2021 Case Summary Reference this In-house law team

Jurisdiction / Tag(s): UK Law

Legal Case Summary

Ashburn Anstalt v Arnold [1989] Ch. 1



The defendant was the successor-in-title to a company which persuaded the claimant to sell his lease to the company in exchange for a promise that he would continue occupying the property rent-free until the defendant gave him one quarter’s notice to leave. No end-date was given. The defendant sought possession of the property without notice.


The case of Street v Mountford held that a lease requires an exclusive grant of possession for a certain period of time and the payment of rent.

The claimant argued that it had a valid lease over the property, binding the defendant by virtue of the ‘actual occupation’ overriding-interest provisions of Land Registration Act 1925. In the alternative, it argued that if the interest was a mere license, it should be a binding license or constructive trust.

Decision / Outcome

The Court of Appeal held that the claimant had a binding lease.

The court held that the ‘period of time certain’ requirement would be satisfied if the lease terminated on a sufficiently certain event (such as after the expiry of notice). However, this case has been overruled on this point by the House of Lords in Prudential Assurance v London Residuary Body, and is therefore likely wrongly decided.

The court’s second holding, that rent is not necessary for the creation of a tenancy, has yet to be overruled despite conflicting with the requirements of Street v Mountford.

The court also held that if a lease had not existed, the license would not have bound the defendant, as licenses do not bind third parties. A constructive trust required it to be unconscionable to deny the claimant occupation, and the mere fact that the defendant knew about the license was insufficient to give rise to unconscionability.

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Content relating to: "UK Law"

UK law covers the laws and legislation of England, Wales, Northern Ireland and Scotland. Essays, case summaries, problem questions and dissertations here are relevant to law students from the United Kingdom and Great Britain, as well as students wishing to learn more about the UK legal system from overseas.

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