Was no provision for rent in agreement.
Did that exclude possibility of a tenancy, given Lord Templeman’s
‘three hallmarks’ in Street?
‘three hallmarks’ in Street?
Court of Appeal held not.
Fox LJ –
When Lord
Templeman in Street made reference to
‘a term at a rent’ he was not saying that reservation of a rent is necessary for creation of a tenancy.
Templeman in Street made reference to
‘a term at a rent’ he was not saying that reservation of a rent is necessary for creation of a tenancy.
[Ashburn was overruled in Prudential v LRB, but unlikely that
specific argument above will be affected by that overruling]
specific argument above will be affected by that overruling]
NB Court of Appeal decided tenancy existed and hence
avoided having to decide directly whether a contractual license could bind a
third party purchaser.
avoided having to decide directly whether a contractual license could bind a
third party purchaser.
However stated obiter that contractual licences are
not property interests and are therefore not enforceable against third parties.
not property interests and are therefore not enforceable against third parties.
Fox LJ – To achieve proper result in Errington it was not necessary to state
such a broad principle.
such a broad principle.
Court could have found on other grounds such as
constructive trust.
constructive trust.
Also narrowed Lord Denning’s proposition in Binions that through imposition of a
constructive trust a contractual licence can bind purchaser who acquires land
‘expressly subject’ to rights of licensee –
constructive trust a contractual licence can bind purchaser who acquires land
‘expressly subject’ to rights of licensee –
Court will not impose constructive trust unless it is
satisfied that conscience of estate owner is affected.
satisfied that conscience of estate owner is affected.
Mere fact
that land is expressed to be conveyed ‘subject to’ a contract does not mean
grantee is under obligation to give effect to contract.
that land is expressed to be conveyed ‘subject to’ a contract does not mean
grantee is under obligation to give effect to contract.
