Clore v Theatrical Properties Ltd and Westby & Co Ltd [1936] 3 All ER 436
Whether agreement lease or license; whether binding upon third party with notice
Facts
Mr Clore held rights under an assigned written agreement to use refreshment rooms at the front of house at a theatre. The agreement was stated to be between lessor and lessee, and granted Mr Clore’s predecessor exclusive use of the refreshment rooms. The lessor sold the theatre, and Mr Clore sought to argue the agreement was binding upon the new owner as an overriding interest under s70(1)(g) Land Registration Act 1925.
Issues
Mr Clore argued the agreement with the theatre amounted to a lease because the document was stated on its face to be an agreement between lessor and lessee. As such it would bind a third-party purchaser with notice, and was enforceable as against this third party as an overriding interest by virtue of s70(1)(g) Land Registration Act 1925. Further, and in the alternative, Mr Clore argued that even if the court found the agreement to be a license, it would still qualify as an overriding interest which would bind a third party with notice. Theatrical Properties Ltd contended the agreement amounted to a mere license in substance and therefore, would only bind the original contracting parties to the agreement. As there was no privity of contract between the parties, it was non-enforceable.
Decision/Outcome
The agreement between the parties was held to be a contractual license which had not created an estate in land. Whilst the benefit of a contractual license could be assigned to a third party and enforceable against the original licensor, the burden of the contract would not pass with the title. Therefore, the licensee cannot enforce the contract as against a successor in title.
Updated 21 March 2026
This case summary remains legally accurate as a statement of the 1936 decision. However, readers should note two important developments affecting the surrounding legal landscape.
First, the statutory provision relied upon in the case, s70(1)(g) of the Land Registration Act 1925, has been repealed and replaced. The Land Registration Act 2002 now governs overriding interests in England and Wales. The equivalent provision for overriding interests arising from actual occupation is found in Schedule 3, paragraph 2 of the 2002 Act. The substantive effect on the core reasoning in Clore is limited, since the court held the agreement was a licence rather than an interest capable of binding third parties, but students should be aware the statutory reference in the article is to repealed legislation.
Second, the article’s statement that the burden of a contractual licence does not pass with title remains good law. The broader question of whether contractual licences can bind third parties was definitively addressed in King v David Allen and Sons Billposting Ltd [1916] and reaffirmed in subsequent cases. The Court of Appeal in Ashburn Anstalt v Arnold [1989] Ch 1 confirmed that a contractual licence does not, of itself, create an interest in land capable of binding a purchaser, consistent with the outcome in Clore. That position has not been altered by subsequent legislation or case law.
