Licences and Proprietary Estoppel Lecture

Last updated: 3 November 2026

LICENCES

A licence gives permission to do something on land and does not of itself create an estate or interest in it. There are four kinds of licences which exist in English law: bare licences; contractual licences; licences coupled with an equity; and licences coupled with an interest.

Bare licences

A bare licence is simply the giving of personal permission by the landowner for the licensee (the person with the benefit of the licence) to enter and remain on the land. The licensee will not be required to provide consideration for accessing the land. So long as the licence runs, it acts as a defence for the licensee against a claim in trespass, so long as the licensee has complied with the scope of the licence (Tomlinson v Congleton BC [2003] 3 WLR 275 per Lord Hutton and Lord Hobhouse of Woodborough). As Scrutton LJ observed in The Calgarth [1927] P 93 at 110, permission to use a staircase does not extend to sliding down the banisters. A bare licence effectively confers the right only of not being a trespasser so long as they comply with the terms of the licence; it does not confer any higher status than that. A licence ‘properly passeth no interest nor alters or transfers property in anything, but only makes an action lawful, without which it had been unlawful’ (Thomas v Sorrell [1673] EWHC (KB) J85 per Vaughan CJ). Therefore, a licensee may not transfer what few rights they have to another party. The licensee’s rights are vested in themselves, not the land, and are thus wielded only against the landowner where those rights of access are unlawfully infringed.

Creation

A bare licence may be created orally and be express or implied. Given their somewhat informal nature they often arise by circumstances or conduct (R (Beresford) v Sunderland CC [2003] UKHL 60 per Lord Rodger of Earlsferry and Lord Walker of Gestingthorpe). On public recreation land, the decision and reasoning in Beresford should no longer be relied on. The public may already have a statutory right to use the land (R (Barkas) v North Yorkshire County Council [2014] UKSC 31). In other cases permission may be inferred from the owner’s conduct, though mere toleration does not by itself amount to permission (Canadian Pacific Railway Co v The King [1931] UKPC 18 per Lord Russell of Killowen). Unless the occupier indicates otherwise, there is normally an implied licence for visitors on lawful business to pass through the homeowner’s front gate and towards the front door in order to request permission to enter the property (Robson v Hallett [1967] 2 QB 939). Parents of schoolchildren ordinarily have an implied licence to enter school premises for limited purposes. The school may withdraw it, subject in the case of a public authority to public law requirements (Wandsworth LBC v A [2000] 1 WLR 1246, CA).

Bare licences and trespass

The threshold between a licence and trespass is small and easily transgressed. As has been observed by Lord Camden CJ: ‘By the laws of England, every invasion of private property, be it ever so minute, is a trespass. No man can set his foot upon my ground without my licence’ (Entick v Carrington [1765] EWHC KB J98). The licensor can ordinarily revoke a bare licence at will, subject to any statutory duty, such as a service provider’s obligations under s.29 of the Equality Act 2010. A person already on the land must be allowed a reasonable time to leave after revocation (Robson v Hallett [1967]). Necessity can justify entry in exceptional circumstances. A belief that trespass serves a public purpose is insufficient (Monsanto v Tilly [1999] EWCA Civ 3044).

Contractual licence

A contractual licence is similar to a bare licence insofar as it grants the licensee permission to access the land. Where the two kinds of licences differ is that the contractual licence includes the giving of consideration by the licensee for the benefit of the licence (Horrocks v Forray [1976] 1 WLR 230 per Megaw LJ). The underlying contract may be either express or implied.

Examples of everyday contractual licences include cinema tickets and sports events tickets. A building contractor obtains a licence to work on the land over which they are contracted. Yet in all these instances, they cannot be described as conferring on the licensee a proprietary interest in the land (Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 305 per Latham CJ).

At common law a contractual licence for a fixed term normally expires at the end of that term without notice (Sandhu v Farooqui [2003] EWCA Civ 531). It was once the position that a licensor could prematurely terminate a licence and therefore the right of occupation by the licensee even if such a termination amounted to a breach of contract (Wood v Leadbitter (1845) 13 M&W 838). Whether a contractual licence can be revoked depends on its terms. An indefinite licence may be terminable on reasonable notice (Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173). If revocation would breach the contract, the licensee may be able to obtain an injunction or specific performance requiring the licensor to allow them on to the property for the remainder of the contractual period (Verrall v Great Yarmouth BC [1981] QB 202). A residential licensee in England may have statutory protection against eviction without a court order, subject to the exclusions in ss.3 and 3A of the Protection from Eviction Act 1977. In Wales a residential licence for rent or other consideration may be an occupation contract with statutory protection (Renting Homes (Wales) Act 2016, s.7 and Schedule 2).

Licences coupled with an equity

The notion of licences coupled with an equity has been an enduring form of licences, stemming from at least the early 17th century (Webb v Paternoster (1619) 2 Roll. Rep. 143). Unlike a bare licence, a licence coupled with an equity may not be terminated simply upon the wish of the licensor (the party which is burdened by the licence). These sorts of licences are found in situations where the landowner ‘grants a licence to another [person] to go upon land and occupy it for a specific period or a prescribed purpose, and on the faith of that authority the licensee enters into occupation and does work, or in some other way alters his position to his detriment’ (National Provincial Bank Ltd v Hastings Car Mart Ltd [1965] UKHL 1). The court may protect continued occupation or grant other relief sufficient to satisfy the equity.

Licences and proprietary estoppel

As you will see, this concept of a licence coupled with an equity is very similar to the framework of rights granted in proprietary estoppel. Those latter rights have come to accommodate a binding effect on third parties (Land Registration Act 2002, s.116(a)). We can see the overlap between the two doctrines in the case which immediately follows:

Case in focus: Tanner v Tanner [1975] 1 WLR 1346

A mother of twins had moved from a tenancy protected by the Rent Act to a house that was bought by the father of their children, Tanner. The father later attempted to evict the mother from the house. Upon doing so, the court subsequently awarded the mother a monetary sum in compensation for the loss of a contractual licence. The consideration was held to be the detriment suffered by her upon giving up the security of a tenancy. Lord Denning MR determined there was an implied contract, according to which the mother and children would be protected occupants ‘for the foreseeable future’, meaning ‘so long as the children were of school age and the accommodation was reasonably required.’ The relevance of this case to proprietary estoppel is that the court in this instance strained to invoke contractual licences (and thus withhold from the mother any proprietary interest), whereas in other, similar cases the court has instead opted for the framework of proprietary estoppel (Pascoe v Turner [1979] 1 WLR 431) and equitable licences (Re Sharpe (A Bankrupt) [1980] 1 WLR 219).

Key Points:

  • The licensee’s status changed upon moving from a protected tenancy to an unprotected licence.
  • The loss of protection was deemed to be the consideration.
  • The mother had already been rehoused and sought damages rather than reinstatement.
  • The court said there was an “implied” contract, and the unlawful termination of that contract entitled the licensee to said damages.
  • In other cases, the court has preferred to invoke other types of property rights i.e. proprietary estoppel and equitable licences.

Licences coupled with the grant of an interest

This type of licence confers upon the licensee the right to go on another person’s land so far as necessary to enjoy the interest granted, for example to remove something from the land (such as timber, minerals, and crops). This licence therefore includes the rights granted under profits à prendre to access an interest, coupled with the right to enter land in order to exploit the interest. The licence cannot be revoked while it is necessary for enjoyment of the grant (Wood v Leadbitter (1845); and Hounslow LBC v Twickenham Garden Developments Ltd [1971] Ch 233). The licence is beneficial to the holder of the licence in two ways: first, it binds the licensor and can bind successors in title who take subject to the underlying interest (Webb v Paternoster (1619)). Second, it can pass with an assignment of the interest (Muskett v Hill (1839) 5 Bing (NC) 694).

Examination Consideration: Which type of licence is the most advantageous for the licence-holder? And what type of licence is most analogous to the rights claimed under proprietary estoppel?

Licences and third parties

As we have seen, a bare licence creates a merely personal right between the licensor and licensee. The right cannot be assigned by the licensee to a third party, nor is it binding on a third party successor of the licensor. Conversely, equitable licences and licences coupled with an interest are capable of binding a third party. The real dilemma lies with contractual licences, given their close similarity to proprietary estoppel.

Broadly, the case law says that ‘a contractual licence does not create a property interest’, meaning it is not binding against third parties (Ashburn Anstalt v Arnold [1988] EWCA Civ 14 per Fox LJ; Lloyd v Dugdale [2001] EWCA Civ 1754 per Sir Christopher Slade). This position has been maintained by the court at various points for a long period (King v David Allen and Sons, Billposting, Ltd (1916) 2 AC 54).

This view was not universally held, however. For example, Lord Denning MR suggested contractual occupation licences ought to be able to ‘override’ transactions in registered land, meaning that the licence would bind the third party purchaser, particularly in the context of long-running residential occupation licences (National Provincial Bank Ltd v Hastings Car Mart Ltd [1965]). However, the Court of Appeal has subsequently rejected this notion, particularly in Ashburn Anstalt v Arnold [1988]. In registered land a purely contractual licence does not become an overriding interest merely because the licensee occupies the land (Habermann v Koehler and another [2000] All ER (D) 1739).

Licences and constructive trusts: overlap?

In both registered and unregistered land, there may be instances in which an obligation to respect a contractual licence is enforceable by means of a constructive trust. Mere notice of a contractual licence does not bind a purchaser. Lord Denning MR relied on a constructive trust in Binions v Evans [1972] EWCA Civ 6. Subsequent case law has determined that a purchaser who has undertaken a new obligation to respect the licence may be bound by a constructive trust if it would be unconscionable to repudiate it. A greater focus is placed on the conscience of the third party than on the substance of the rights of the contractual licensee (Melbury Road Properties 1995 Ltd v Kreidi (1999) 3 EGLR 10). The following circumstances may be relevant:

  1. A third party has of their own volition ‘burdened their own title’ upon making their own obligation to the contractual licensee (Bahr v Nicolay (No. 2) [1988] HCA 16 per Brennan J); and/or
  2. The transfer of the property to the third party was based in part on the sale of the property at a lower than market value, with such sale given on the understanding that the terms of the contractual licence would be upheld (Ashburn Anstalt v Arnold [1988] per Fox LJ).

A restriction on the register can regulate the registration of a disposition. It does not give a personal licence proprietary status or priority (Land Registration Act 2002, ss.40-42). In Donington Park Leisure Ltd v Wheatcroft & Son Ltd [2006] All ER (D) 94 (Apr) the court considered how to give effect to an agreement guaranteeing parking at a race meeting. A restriction can protect an undertaking to obtain a fresh covenant from a purchaser. Whether there is a proprietary right is a separate question (compare the discussion of property in the Australian case of Yanner v Eaton [1999] HCA 53 per Gummow J).

Possession can also support a claim against a trespasser. A licensee in exclusive possession may sue in trespass (Hounslow LBC v Twickenham Garden Developments Ltd [1971]). By a majority the Court of Appeal allowed a contractual licensee to obtain possession against trespassers who had entered before the licence was granted, so far as necessary to carry out the authorised works (Manchester Airport v Dutton [1999] EWCA Civ 844).

Examination Consideration: The rights of third parties are dependent on what type of licence is present in an exam question. Therefore, make sure you are clear on the type of licence being relied on, and also look to see if the land is registered or unregistered. Which type of licence is most similar to proprietary estoppel? And which right - the licence or the alleged proprietary estoppel - is of greater assistance in favour of/against a third party?

PROPRIETARY ESTOPPEL

The doctrine of proprietary estoppel is based on ‘the first principle upon which all courts of equity proceed… [which is] to prevent a person from insisting on his strict legal rights - whether arising under a contract, or on his title deeds, or by statute - when it would be inequitable for him to do so having regard to the dealings which take place between the parties’ (Crabb v Arun DC [1975] EWCA Civ 7 per Lord Denning MR).

The purpose of proprietary estoppel is to refrain, or ‘estop’, any attempt by a legal owner to inequitably go back on guarantees made by them in the course of dealing with another party regarding the owner’s land. An assurance can also be conveyed by conduct or, in a case of acquiescence, by standing by while another acts under a known mistake. It is invoked in family law disputes when attributing shares between the parties, and is also invoked to resolve business disputes, given that equity is ‘flexible and strong enough to ensure that any estoppel results in a sensible commercial outcome, which is not thwarted by archaic and technical rules of property law, unless those rules are based on public policy or are so fundamental as to be incapable of being overridden’ (PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch) per Neuberger J). But where both parties know a commercial property bargain remains subject to contract and essential terms are still open, expenditure in the hope of a concluded deal does not by itself give the claimant an equity in the land (Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55).

The advantage of proprietary estoppel is that it can help to make sense of, and thereby enforce, the sorts of arrangements that are entered into by laypersons, particularly licences.

In order for a landowner to be “estopped” from carrying on a certain act, it must be shown that in the ‘particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment’ (Taylor Fashions Ltd v Liverpool Victoria Trustees Ltd [1982] QB 133 per Oliver J). The court considers the elements together in deciding whether it would be unconscionable to insist on strict legal rights (Sledmore v Dalby (1996) 72 P & CR 196 CA (Eng) per Hobhouse LJ).

Essential Elements

A claim of proprietary estoppel depends on the person claiming the benefit being able to prove three elements (Thorner v Major [2009] UKHL 18 per Lord Walker of Gestingthorpe and Lord Neuberger of Abbotsbury):

1. Representation

The question is whether, in context, the representee (the person receiving the assurance) could reasonably understand the representor’s words or conduct as an assurance on which they could rely (Matharu v Matharu(1994) 26 H.L.R. 648, CA (Eng)). A representation is essential: a mere expectation of rights is not enough, because what is required is that the landowner has at some point encouraged or allowed any belief or expectation on the representee’s part that the latter would attain rights (Parker v Parker [2003] All ER (D) 421 (Jul)). A long-standing practice alone will not suffice (Keelwalk Properties Ltd v Waller [2002] EWCA Civ 1076).

Subject matter

The subject of the representation can take the form of almost any property right, so long as the assurance made was sufficiently clear in its context (Thorner v Major [2009], especially Lord Walker of Gestingthorpe at [56]). The farm was sufficiently identifiable even though the land comprising it changed over time. The test is whether the estoppel claimant, as a reasonable person, was led to believe that they had acquired or would acquire rights over the land based on the statement(s) made to them (Parker v Parker [2003]).

Case in focus: Pascoe v Turner [1979]

Following the breakdown of their relationship, Pascoe (P) left Turner (T) in occupation of their formerly shared house. P told T that the house and its contents would thereafter belong entirely to T. T later made repairs to the house at a cost of £230. P attempted to later recover possession from T, however the Court of Appeal ordered that the fee simple (the freehold) be transferred from P to T. Cumming-Bruce LJ said the circumstances gave rise to an ‘equity’ in favour of T based on the statements made by P to T.

Key Points:

  • The representor made representations to the representee that the house and its contents would thereafter belong to the representee.
  • The representee subsequently made repairs to the property.
  • The Court said this sequence of events meant, according to the doctrine of proprietary estoppel, that the claimant was entitled to the title of the property, not merely compensation.
Unclear representations

If the representations are not of a ‘sufficiently concrete character’, the claimant is not reasonably entitled to expect the alleged rights flowing from the representation (Orgee v Orgee [1997] EWCA Civ 2650). Even if the representor’s resiling from the representation is unconscionable, the detriment may be so uncertain in nature and extent ‘that even equity may not be able to devise an appropriate remedy for it… There are parts that sometimes even equity cannot reach’ (Willis v Hoare (1999) 77 P & CR D42 per Auld LJ). For example, no equity arises upon the legal owner assuring the representee of ‘financial security’ before and after the representor’s death where no reference is made to specific assets (Layton v Martin [1986] 2 FLR 227). Likewise, a statement by the representor that the representee ‘did not need to worry her pretty little head about money’ was not sufficiently concrete and specific (Lissimore v Downing [2003] 2 FLR 208).

2. Reliance

Reliance occurs where the representee has changed their position and suffered a detriment because of the assurances received from the representor. This is effectively a requirement of causation: the change of position had to follow from a representation by the representor (Gillett v Holt [2001] Ch 210). This causal link is absolute; its absence will invalidate any claim for proprietary estoppel (Philip Lowe (Chinese Restaurants) Ltd v Sau Man Lee unreported, 9 July 1985, CA).

If an assurance was made and the representee acted to their detriment in a way from which reliance can reasonably be inferred, there is a rebuttable inference of reliance. The representor has to prove that the change of position was not caused by a statement they themselves had made (Wayling v Jones(1993) 69 P & CR 170, CA (Eng)). Further, it is not necessary that the representation be the only inducement to cause the representee to change their position, so long as the representation was among the causes (Campbell v Griffin [2001] EWCA Civ 990, CA (Eng) per Robert Walker LJ).

Knowledge

Knowledge matters particularly where the owner stands by in silence while the claimant acts on a mistaken belief about their rights. There is no general requirement in a case of an express assurance that the representor must have known of each act of reliance. Compare the question of a mortgagee’s knowledge in Barclays Bank plc v Zaroovabli [1997] Ch 321.

Change of position

There has to be evidence of a “relevant” disadvantage incurred by the claimant when they act upon the representation made by the representor. The required change, again, only needs to be relevant, and is ‘not a narrow or technical concept’ (Gillett v Holt [2001] per Robert Walker LJ), which means it is case-sensitive and takes into account informal dealings even in the absence of a binding agreement. The form that the change takes has to be ‘distinct and substantial’ (Sledmore v Dalby(1996)). The usual method by which change of position is demonstrated is where the claimant expends money or resources in improving or maintaining the landowner’s property (Dillwyn v Llewelyn [1862] EWHC Ch J67).

Here follows other examples of change of position that were upheld by the court as relevant:

  1. Leaving an existing job and home in order to live with the representor (Jones (AE) v Jones (FW) [1977] 1 WLR 438);
  2. Completely attending to ‘all the functions of a live-in carer’ (Campbell v Griffin [2001]);
  3. Selling part of one’s land without reserving access across it, in reliance on the availability of a second access (Crabb v Arun DC [1975]); and
  4. Not taking up offers of employment on the basis of representations regarding other employment or other means of self-financing (Gillett v Holt [2001]).

Case in focus: Gillett v Holt [2001]

Holt (H), a wealthy farm owner, had produced a number of wills in which he left the bulk of his estate to one of his farm workers, Gillett (G), promising G that ‘all this will be yours.’ G had worked for H for some 40 years, for comparatively low pay. Following an irretrievable breakdown in their relationship, H made a new will excluding G. The number and strength of the promises formerly made by H were said by the Court to establish an ‘exceptionally strong claim’ on H’s conscience, given the way G and his family had lived and worked in reliance on them. Despite the usual rule that wills are ambulatory and therefore capable of revision up to the death of the testator, nevertheless in this case the Court found that the consistent, repeated and substantial intimations of benefits accruing to G, alongside the acts of reliance on the part of G via his work, ‘make clear that the assurance is more than a mere statement of present (revocable) intention, and is tantamount to a promise.’ G and his wife were awarded the farmhouse and about 42 hectares of land at The Beeches, and £100,000 for G’s exclusion from the rest of the farming business.

Key Points:

  • The representor had repeatedly assured the representee that he would inherit the farming business and had made wills consistent with those assurances.
  • Given these statements, the representee had stayed on the representor’s land and worked there on comparatively low pay for some 40 years.
  • The weight of these two factors meant that it was unconscionable simply to withdraw the assurances. The wills themselves remained revocable.

3. Detriment

Detriment may consist of work, expense or opportunities forgone in reliance on the assurance. The court assesses the disadvantage in all the circumstances when the owner seeks to depart from the assurance (compare the Australian analysis in Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58 per Dixon J). The test for the claimant is to demonstrate that the withdrawal of the representation causes such ‘prejudice… that it would be inequitable to allow the party who made the relevant representation to go back on it’ (Watts and Ready v Story (1984) 134 NLJ 631 per Slade LJ, LawTeacher case reference (1984) NLJ 631 301).

Standard of unconscionability

When the representor insists on enforcing their legal right, the question is whether in the circumstances they are ‘taking advantage of [the representee] in a way which is unconscionable, inequitable or unjust’ (Crabb v Arun DC [1975] per Scarman LJ). The unconscionability is in part measured by the material detriment suffered by the claimant. Countervailing benefits received in the course of relying on the representation may outweigh the disadvantages. Where a claimant has committed their working life to the land, the claimant need not identify a specific better alternative or put a precise value on the opportunities forgone (Winter v Winter [2024] EWCA Civ 699). The court looks at the whole position (Wilkie v Redsell [2003] All ER (D) 154 (Jun)).

Duration of equity

The courts have been willing to keep the doctrine of proprietary estoppel flexible insofar as its timing is concerned. An Australian formulation looks to whether the detriment has been removed or compensated (Commonwealth of Australia v Verwayen (1990)170 CLR 394 per McHugh J). Conversely, once the hitherto-inequitable detriment is ‘ceased or been paid for’, McHugh J considered there was ‘nothing unconscionable in a party insisting on reverting to his or her former relationship with the other party and enforcing his or her strict legal rights’ (Commonwealth of Australia v Verwayen (1990) per McHugh J). In England and Wales, the starting point in a promise case is to hold the owner to the promise. The court may grant a different remedy where fulfilment would be impracticable, unfair to others or out of all proportion to the detriment. The relief may take the form of a transfer, a right of occupation or a sum of money. An immediate payment in place of a promised future inheritance will generally require a discount for early receipt (Guest v Guest [2022] UKSC 27, [74]-[80]).

Case in focus: Sledmore v Dalby (1996)

Sledmore (S) and her husband purchased a house. They let their daughter and her husband, Dalby (D), occupy it, at first for rent and later rent-free. D went on to carry out substantial maintenance and improvement works on the couple’s home. He did so in reliance on the expectation - generated from a representation made by S’s husband - that the couple would one day inherit the house. Upon the death of S’s daughter, D lived rent-free at the premises for 17 years. S, a widow, attempted to obtain a possession order against D, and thus exclude him from occupation on the grounds that she required it for her own occupational needs, and D anyway lived elsewhere with his partner. The Court of Appeal held that an ‘equity’ had been acquired, however that equity had expired in the intervening years. The Court of Appeal balanced the duration of D’s rent-free residence with the occupational needs of S, and reasoned that it was ‘no longer inequitable’ for D’s expectations of occupation to be displaced by S’s rights as legal owner. In a concurring judgment Hobhouse LJ also considered the ‘proportionality between the remedy and the detriment which is its purpose to avoid,’ and concluded that S was not acting unconscionably.

Key Points:

  • The claimant had carried out substantial works. This was the change of position.
  • They had relied on statements made to them by the husband of the defendant that the house would one day be theirs. This was the representation.
  • By the time of the possession claim both the claimant’s wife and her father had died. The claimant lived mainly elsewhere.
  • The defendant’s needs changed, such that she chose to resile from the original representation. The expenditure on the house had been the detriment.
  • However, given the passage of time and the changes in the needs of the respective parties, the court held that an enduring equity had since expired.
  • Therefore, there was no unconscionability.

Examination Consideration: As a quick refresher, which case summarised the three elements of proprietary estoppel? Can any one element establish the claim on its own, or must all three be shown?

Proprietary estoppel and third parties

The word “proprietary” refers to the expectation of rights in property. Whether the equity binds a third party is a distinct question of priority. A personal contractual right may itself be assignable without binding a purchaser of the land.

The particular right to occupy a home may be personal to the claimant (Jones (AE) v Jones (FW) [1977]). Other equities may pass to a successor.

The terms of the assurance matter. For example, the death of the promisee need not prevent the estate from claiming relief (Hughes v Pritchard [2023] EWHC 1382 (Ch), [18], citing Cameron v Murdoch (1986) 63 A.L.R. 575).

Transmitting the burden of a proprietary estoppel has also seen a similar evolution. Prior to the enactment of the Land Registration Act (LRA) 2002, the court had seen in estoppel a sufficiently proprietary character that made it possible for the burden of a proprietary estoppel to bind a successor in title to the original representor (Lloyd v Dugdale [2001]). Subsequently, the LRA 2002 provides that an ‘equity by estoppel’ takes effect ‘from the time the equity arises as an interest capable of binding successors in title’ (LRA 2002, s.116(a)). In registered land an earlier equity normally keeps its priority (s.28). A purchaser for value who completes by registration takes free of it unless its priority is protected, for example by a notice or, subject to the statutory exceptions, by the claimant’s actual occupation (s.29 and Schedule 3, para.2). An equity taking effect through a trust of land may instead be overreached on payment of capital money to two trustees or a trust corporation. In unregistered land, an equity outside the land charges scheme may bind a purchaser with notice, but a bona fide purchaser of a legal estate for value without notice takes free of it.

Examination Consideration: In what circumstances would a purchaser of registered land take subject to the claimant’s equity? Consider whether the claimant is in actual occupation, whether an exception applies and whether the interest has been overreached.

Proprietary estoppel and constructive trusts: overlap?

The same facts can give rise to both a proprietary estoppel and a constructive trust, but the two are distinct (Birmingham Midshires Mortgage Services Ltd v Sabherwal [2000] 80 P & CR 256 per Robert Walker LJ). A common intention constructive trust can arise from an express or inferred common intention to share beneficial ownership and detrimental reliance on it. Proprietary estoppel does not require an agreement to share ownership. Its remedy depends on what is required to satisfy the equity (Yaxley v Gotts [2000] Ch 162 per Robert Walker LJ and Beldam LJ).

HANDS-ON EXAMPLES

Given that we have been examining two discrete areas of property law, it makes sense to separate the elements that guide the application of each of these forms of property rights. Thus, when analysing a problem question pertaining to these areas, we can summarise the steps taken as follows:

Licences

(Establishing that the right is a licence):

  1. Is the person claiming a right of occupation?
  2. Has the landowner granted permission to remain on the land but has not granted any further rights e.g. the right to possess the land?
  3. If yes, go to steps 4 and following below.

(Establishing the type of licence):

  1. Is the licence a bare licence?
  2. Alternatively, is it a licence coupled either with an equity or an interest?
  3. Was the permission given under a contract? If so, it is a contractual licence.

If you answer “yes” to 4, permission can ordinarily be withdrawn at any time, allowing a reasonable time to leave. If you answer “yes” to 5, the right to remain depends on the equity or the underlying interest and may bind third parties. If you answer “yes” to 6, the licensee’s rights of occupation depend on the agreement and any applicable statutory protection.

Proprietary estoppel

(Establishing that the right is a proprietary estoppel):

  1. Has the owner by words or conduct given a sufficiently clear assurance of rights in identifiable property, or knowingly stood by while the claimant acted on a mistaken belief in such rights? If not, go to step 5.
  2. If “yes”, has the claimant reasonably relied on that assurance or belief and altered their position to their own detriment? If not, go to step 5.
  3. If “yes”, would it be unconscionable in all the circumstances for the owner to insist on rights inconsistent with the assurance or belief? If not, go to step 5.
  4. If “yes” to all the above, there is a right of proprietary estoppel.
  5. If “no” to any of 1-3, there is no proprietary estoppel.

Q1. Albus and Bertha purchase a house and they allow their son-in-law, Charlie, to live with them. Charlie offers to improve some of the roof tiles and construct a conservatory at his own expense. Albus agrees to this and says Charlie can live in the house rent-free for the rest of his, Charlie’s, life if he does so. Bertha is aware of the arrangement, and does not expressly agree or disagree to it/ Charlie thus conducts those works. Some years later, Albus has died and Bertha needs to adapt the house for her own needs. She needs to have Charlie excluded from the property.

Advise Bertha.

Q2. Dangerous Productions (DP) are hoping to stage a risqué political event at an events centre in Ealing for five consecutive nights. Ealing Borough Council, owners of the centre, agree to let DP stage the event upon payment. DP duly make the required payment. After the first night, Ealing Council receive complaints about the language used in the production, and decide to “uphold the morals of the community” by forbidding DP from entering the centre again to stage the subsequent events.

Advise DP.

Q3. Frank is the owner of Blackacre. He invites Geoff over to the property, and upon seeing his guest says Geoff can “stay for as long as he likes.” No money changes hands. Geoff stays for several weeks. The two get into an argument and Frank tells Geoff that Geoff has to leave. Geoff refuses, saying he was entitled to stay.

Advise Frank.

Q4. Zack owns Whiteacre, a large plot of farmland. He invites an acquaintance, Yasmin to the farmland. She tells Zack that she has long wanted to work on a farm, and starts to do so without payment. Zack is impressed by the quality of her work and amends his will to say that Yasmin would be entitled to a portion of the farmland. As she continues to work on the farm, Zack further amends his will, increasing the size of Yasmin’s portion of the farmland. Zack and Yasmin fall out, and Zack amends his will in such manner that Yasmin would not be entitled to any part of Whiteacre.

Advise Yasmin.

A1. Compare Sledmore v Dalby. As you will recall from that case, the passage of time and the changing needs and priorities of the parties was such that the equity, which had validly arisen, was now extinguished. Charlie has carried out the promised works in reliance on an express assurance of a home for life. Bertha’s knowledge and silence matter if she understood that Charlie believed he could stay against her as well as Albus and reasonably should have corrected that belief. Her need to adapt the house does not by itself extinguish any equity. The court would consider the value of the works, the rent-free occupation Charlie has already enjoyed, his continuing need for a home and whether continued occupation or another remedy would do justice.

A2. This is a contractual licence situation: payment has been made for temporary occupation of space owned by the landowner for a fixed duration. Given that Ealing have attempted to interfere with the exercise of the contract by prematurely revoking the right of access and occupation, DP can seek an urgent injunction or specific performance for the remaining nights if the agreement confers no right to cancel. The remedy is discretionary, and the difficulty of replacing the venue in time may make damages inadequate (see Verrall v Great Yarmouth BC).

A3. The situation here is that of a bare licence. Geoff appears to have given no consideration or acted to his detriment in reliance on an assurance of rights. As the owner, Frank is at liberty to revoke permission for occupation of the property at any time. There does not appear to be any grounds of necessity or public purpose, therefore Frank can withdraw the invitation and must allow Geoff a reasonable time to leave.

A4. The facts in this case resemble the facts in Gillett v Holt. As you will recall, in that case all of the elements of proprietary estoppel were found to subsist. The will remained revocable, but the assurances given to Gillett were ‘tantamount to a promise.’ A change to a will that Zack never communicated would not, by itself, have induced Yasmin to work. She began before the first change. If Zack later gave her a sufficiently clear assurance and she continued working without pay in reasonable reliance on it, it may be unconscionable for him to go back on it. The terms of the assurance and her reliance would determine whether the court should give effect to the promise or award other relief.

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