LW2252 LICENCES

LW2252 Topic 11 - Licences and Similar rights (1)

Licences, essentially is a permission allowing one person to use or occupy the land, not generally
regarded as a proprietary interest.

A licence is a permission entitling one person to use or occupy the land of another. Traditionally seen
as merely a defence to trespass. Thomas v Sorrell (1673) Vaugh 330, 351 per Vaughan CJ: “A ...
licence properly passeth no interest, nor alters or transfers property in anything, but only makes an
action lawful which without it had been unlawful.”

FOUR BASIC LICENCES:

(i) Bare Licence

 General permission to enter land. Ie do you want to come in for a cup of tea?
 This category is defined by exclusion; a licence which does not fall into one of the other
categories.
 Such a licence can be expressed (do you want to come in for a cup of tea?) or simply implied,
for example the right of any member of the public (in the absence of a contrary indication
such as a sign) to come through the gate of a private house to the front door to inquire if he
may come in or do something:
 Robson v Hallett [1967] 2 QB 939 – police officers making inquiries had an implied licence
to come up to the door and knock.
 A bare licence is also revocable in nature, upon the giving of reasonable notice and “packing
up time”. In the case of a casual visitor, the period of notice is so short as to be virtually non-
existent, although in a family situation a considerable notice period may be required.
Situations are going to differ based on background
 Gilham v Breidenbach [1982] RTR 328: police officer told to “f**k off you planks”; issue
was whether this was a request to leave (terminating the licence) or was merely vulgar abuse.
It was held, that it was abuse rather than a request to leave.

(ii) Contractual Licence

 Licence associated with some form of contractual arrangement. The occupation of the land
does not need be the primary purpose of the contract.
 Examples:
- Buying a cinema ticket, that confers a contractual licence to view film, purpose is to
occupy the cinema and be there
- Another example is a building contract, contractor need have a licence to enter building
site during constructionetc.
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 Can sometimes be difficult to distinguish from a lease – No exclusive permission chances are
it’s a contractual licence, if there is exlcusive permission may be a lease or a contractual
licence. – If the landowner retains a right to enter the premisses than not exclusive
permission. An example would be a hotel.
 see e.g. Street v Mountford [1985] AC 809 suggesting that, where there is exclusive
possession at a rent for a specific term, this will only exceptionally not be a tenancy.


Revocability of contractual licences?

 The contract may expressly address the question of revocability – see Woods v Donnelly
[1982] NI 257 (person entitled to licence could avail of it “for so long as he requires it”; this
indicated that the licence was not to be revoked during his lifetime). Otherwise, it will be
necessary to imply a term in relation to the possibility of revocation.

If it doesn’t explicitly say anything revocability:

 The old view was that a licence could be revoked in breach of contract: Wood v Leadbitter
(1845) 13 M & W 838 – plaintiff made to leave racecourse even though he had a ticket, the
ticket being his contractual licence to be there. He failed his action for assault/false
imprisonment on the ground that a licence was of its nature revocable; decided in a common
law court.

 In modern times, equity intervened and provides a measure of protection for contractual
licencees: Verall v Great Yarmouth Borough Council [1981] QB 202 – injunction obtained
to prevent breach of contract to make hall available for political meeting; Hurst v Picture
Theatres Ltd [1915] 1 QB 1 – reasonable force used to remove plaintiff from cinema,
although he had a ticket; succeeded in his action for assault/false imprisonment(entitled to
damage); Wintergarden Theatre v Millenium Productions Ltd [1948] AC 173 – explained
Hurst on the basis of equity’s intervention; plaintiff could have obtained an injunction if he
had been able to get to a judge prior to his ejection; since equity would be willing to protect
his right to stay on the land, it should not make a difference that he could not bring his claim
to court in advance of his ejection.

Effect of Contractual Licence on Third Parties

 Clore v Theatrical Properties Ltd [1936] 3 All ER 483: licence allowing exclusive use of
refreshment rooms for supplying visitors to a theatre; when the theatre was sold, the licencees
were unable to enforce their rights against the new owner; their remedy lay against the
original owner for breach of contract

 King v David Allen and Sons Billposting Ltd [1916] 2 AC 54: promise to allow posters to be
displayed on the wall of a cinema in Dublin; new lessees of cinema prevented this; Irish Court
of Appeal held that the contractual licence could not be enforced against the lessees; decision
upheld by the House of Lords.

 However, in Errington v Errington [1952] 1 All ER 149, Denning LJ (as he then was) took a
different view. A father had purchased a house on mortgage. He paid the deposit of one-third
of the purchase price and gave the mortgage book to his son and his daughter-in-law. He
allowed them to take possession of the house, telling them that it would be theirs when the
final mortgage instalment was paid. Prior to this, however, the father died and left the house
to the mother. The son left the daughter-in-law and moved back in with his mother. The
mother then tried to eject the daughter-in-law, even though she continued to pay the mortgage
instalments. Denning LJ regarded the daughter-in-law as a contractual licencee and held that
her licence was enforceable against the mother.
He stated that: “The infusion of equity means that contractual licences now have a force and
validity of their own and cannot be revoked in breach of the contract. Neither the licensor nor
anyone who claims through him can disregard the contract except a purchaser for value
without notice.”

 Errington was criticised heavily (and, in modern times, a decision in favour of the daughter
could be justified on other grounds, e.g. proprietary estoppel or some form of implied trust).
The decision was not followed by the Court of Appeal in Ashburn Anstalt v Arnold [1989]
Ch 1: defendant had a licence to trade rent-free from a premises; new owner required him to
leave; held that arrangement constituted a lease but, in case this was mistaken, the Court
considered the position if it had been a contractual licence. While the Court was unable to
overrule it, Errington was dismissed by Fox LJ as “neither practically necessary nor
theoretically convincing”.

 However, in special cases, a contractual licence may still bind a third party on the basis of a
constructive trust, this being a type of trust that is not deliberately created by the parties but is
imposed by the court, in the interests of justice and good conscience, in certain defined
situations. See e.g. Binions v Evans [1972] 2 All ER 70: elderly widow allowed to live rent-
free in a cottage on an estate. The owners later sold the property to Binions at a reduced price
which reflected the fact that the conveyance was being made subject to her rights. He then
sought to evict her. Lord Dening MR held that her right amounted to a contractual licence and
held that the purchaser could not evict her because to do so would be fraudulent. Equity
would impose a constructive trust which would transform her licence into a proprietary right
which could be held on trust and could bind the purchaser.

This reasoning was regarded as acceptable in Ashburn Anstalt. However, Fox LJ emphasised
that the argument in favour of enforcing the contractual licence against a third party was not
assisted by the bare assertion that a constructive trust should arise. In order for a constructive
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trust to arise, the conscience of the third party must be affected. It is not sufficient that he or
she merely knows of the existence of the contractual licence (since a vendor may, in order to
protect himself or herself, inform the purchaser of any possible rights affecting the land).
Certainty is vital in land transactions and it is important not to impose a constructive trust in
reliance on inferences from “slender materials”. There must be some factor which makes it
unconscionable for the purchaser to ignore the contractual licence, e.g., as in Binions, the fact
that the property has been sold at an undervalue on the strength of an undertaking to respect
the contractual licence.

The transfer of the benefit, rather than the burden, of a contractual licence is possible under
ordinary contractual principles which allow the benefit of a contract to be assigned to a third
party, provided that it is not too personal in nature: see s.28 of the Judicature Act, 1877.

LW2252 Topic 11 - Licences and Similar rights (2)

(iii) Estoppel Licences

Doctrine of Proprietary Estoppel: Ramsden v Dyson (1866) LR 1 HL 129.

Two types of proprietary estoppel which may give rise to a licence:

(i) The expectation limb: claimant is led to act to his detriment on the basis of a
representation from the owner of land that the claimant has, or will have, an interest in the
relevant land. In an appropriate case, the remedy for estoppel can sometimes be an
irrevocable licence: see e.g. Cullen v Cullen [1962] IR 268 – father led son to believe that
he would be able to remain in occupation of land belonging to father on which the son
placed a “portable house” that he had won in a newspaper contest.
(ii) Estoppel by mistake: claimant mistakenly builds on the land of another person, who fails
to assert his or her rights at the time and afterwards seeks to profit from the mistake. See
McMahon v Kerry County Council [1981] ILRM 419 – Council built houses by mistake
on the McMahon’s land and, in a somewhat generous decision, the McMahons were held
to be estopped from claiming the houses which, because they were attached to their land,
would have belonged to them under standard land law principles. The Council had an
irrevocable licence which would, after 12 years, lead to them obtaining title to the land by
adverse possession (an odd application of that doctrine). McMahons entitled to monetary
compensation.

(iv) Miscellaneous Licences

(a) Licence Coupled with an Interest

This is an old-fashioned term, generally used to describe the right to occupy land which goes along
with a profit à prendre (e.g. the right to walk along a river bank while exercising a right to fish in a
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river). This kind of licence cannot be revoked because it is an inherent part of a proprietary interest
(i.e. the profit à prendre).

(b) Licence Arising by Operation of Law

For example, the right at common law for a wife to live in a family home owned by her husband. Note
also the Family Home Protection Act, 1976 and the Civil Partnership and Certain Rights and
Obligations of Cohabitants Act 2010.

(c) Conacre and Agistment

Conacre and agistment are short-term hiring contracts for the use of land: conacre for the growing of a
crop; agistment for grazing. The contract is usually confined to a single season, so that the contract is
sometimes called a letting on the 11-month system.

RIGHTS OF RESIDENCE

Considerable debate about exact legal nature of rights of residence. They involve a right to occupy
land and, therefore, have similarities to licences. Note that these rights are sometimes associated with
a right to be maintained.

Regularly associated with wills.

Two types of right or residence: National Bank v Keegan [1931] IR 344.

(i) Exclusive right of residence: exclusive right to reside in one portion of a larger property. See
National Bank v Keegan above: Aunt entitled to occupy the drawing room and the bedroom above it
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in a house belonging to her nephew. Note also Re Walker [1999] NI 84, right to reside in a farmhouse
which formed part of a larger farm property.

(ii) General right of residence: right to reside in the property, along with the owner, with no specific
parts of the property identified for exclusive use. – Common use of all the property.

Legal Categorisation of Rights of Residence:

 Exclusive right of residence: held by Supreme Court in National Bank v Keegan that this
constituted a life estate. Prior to the 2009 reforms, this was seen as creating the difficulty that,
under the Settled Land Acts 1882-1890, the life tenant could in principle sell the fee simple in
the relevant part of the property. Compare the Northern Irish case of Re Walker [1999] NI 84
– not a life estate but a special type of irrevocable personal licence which would be
enforceable against third parties with notice.
 In relation to registered land, s.81 of the Registration of Title Act, 1964 now provides that a
right of residence (whether general or exclusive) is not to be treated as a life estate but is
deemed to be a right in the nature of a lien for money or money’s worth over the land. This
has the effect, in relation to registered land only, of extending the judicial categorization of
general rights of residence (discussed below) to both forms of right of residence. Note Tynan
v County Registrar for Kilkenny [2011] IEHC 250: right of residence cannot constitute an
overriding burden under s.72(1(j) of Registration of Title Act 1964; though note also Jacob v
Walsh [2015] IEHC 710 where (as we noted in the context of the topic of Priorities) the court
refused to strike out, as bound to fail, a claim that required the conclusion that Laffoy J’s
approach in Tynan was incorrect. – the ef
 In relation to unregistered land, the position is more muddled. The effect of s.11(2)(c)(iii) of
the Land and Conveyancing Law Reform Act 2009 is that exclusive rights of residence can no
longer give rise to a life estate. Unfortunately, unlike in respect of such rights in registered
land, no alternative categorisation has been imposed by the legislature. Presumably, the
intention was that such rights of residence would continue to be enforceable but it is not clear
on what basis this is to occur.

 General right of residence: following Kelaghan v Daly [1913] 2 IR 328, this has been
regarded as a right in the nature of a lien for money or money’s worth; confirmed in relation
to registered land by s.81 of the Registration of Title Act, 1964. The concept of the lien is
normally used only in relation to obligations to pay money and there are difficulties in
applying it to a right of residence. In Kelaghan, a mother had conveyed a house to her son, in
consideration of (amongst other things) a promise that she and her daughter would retain a
right of residence. In these circumstances, it was held that she had a lien over the house which
was enforceable against a successor in title who took with notice, along the lines of the lien
which equity raises in favour of the vendor of property in respect of unpaid purchase money.
While the reference to a lien made sense in Kelaghan, it is unfortunate that later judges
applied the “right in the nature of a lien” analysis in cases which lacked the special features of
Kelaghan.

Possible Valuation of Rights of Residence

Lavan J entered into a somewhat inconclusive discussion of the possibility of valuing her right of
residence:

“Neither the case law nor the statute clarifies whether or not the beneficiary of the right or the owner
of the property can insist on the right being converted into money's worth. .... I have no doubt but that
there are circumstances in which a court could enter by agreement of the parties into a valuation of
their respective interests. There are also circumstances where a court might compel such a valuation
in the general interest of the administration of justice or under its equitable jurisdiction.

....

In so far as the court has to arrive at a valuation, that valuation should be measured as a periodic sum.
The periodic sum should not be capitalised. It is only in circumstances where such periodic sums are
not being paid or that the property is being disposed of that the lien becomes a lien secured or
enforceable by way of additional security in the form of a capitalised sum if necessary.”

Ultimately, Lavan J concluded that the nephew lacked the intention or the means to pay a periodic
sum, so that the appropriate solution was to award damages for past interference with the right of
residence (£7,500) and to grant an injunction preventing the nephew from interfering with the exercise
of her right of residence (even though this forced the two people to live together notwithstanding the
obvious difficulties in their personal relationship). See Coughlan “Enforcing Rights of Residence”
[1993] Irish Law Times 168 (on [Link]).

Bracken v Byrne [2006] 1 ILRM 91: plaintiff was entitled ‘whilst unmarried’ to a general right of
residence (and support) in a house belonging to her sister. When relations deteriorated, the beneficiary
of the right of residence sought to have it valued. Clarke J stated that “Having regard to the fact that
the primary entitlement of the beneficiary of the right is to exercise of the right conferred upon them,
it seems to me that the appropriate test must be that in addition to satisfying the court that it has
become unreasonable in all the circumstances of the case to require the beneficiary to be content with
the exercise of the right, it is also necessary for the beneficiary to satisfy the court that the balance of
the responsibility for that situation lies upon the owner .... It is not, however, necessary for the
beneficiary to establish that they are entirely free from responsibility.” The claimant in the case was
held to satisfy this test and the right of residence was valued at €160,000 (and the right to support at
around €76,000). There appear to be serious difficulties with the idea of trying to assess where the
blame lies for the breakdown of the personal relationship between the parties.

Note also Bank of Ireland v O'Donnell [2016] IECA 227: right of residence held to be a personal right
which, despite its economic value, does not vest in a bankrupt’s assignee in bankruptcy.
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In Ryan v The Governor of the Bank of Ireland [2020] IEHC 45 the deceased left the house and farm
to his son with a right of residence, support and maintenance in favour of his wife for the duration of
her life. This was registered as a burden on the land in 2006. The bank registered a charge in 2010.
The maintenance was not paid and the mother sued in 2015 and obtained a judgment for the sum of
€779,225. The question arose whether the monetary award of damages for breach of the right of
maintenance attached to the burden registered in 2006 and so took priority over the bank’s 2010
charge?