Ashburn Anstalt v Arnold [1989]

Was no provision for rent in agreement.
Did that exclude possibility of a tenancy, given Lord Templeman’s
‘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.
[Ashburn was overruled in Prudential v LRB, but unlikely that
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.
However stated obiter that contractual licences are
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.
Court could have found on other grounds such as
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 –
Court will not impose constructive trust unless it is
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.