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Johnson, George W.
1976.
1975 Annual Supplement.
p.
1.
Article contents
Licences and Constructive Trusts— “The Law is What it Ought to be”*
Published online by Cambridge University Press: 16 January 2009
Extract
In 1968, the Tredegar Estate made an agreement with Mrs. Evans, aged 76, whereby Mrs. Evans was allowed to live in a cottage rent and rates free for life, the agreement calling her interest a tenancy at will. Mrs. Evans's husband had worked for the Tredegar Estate all his life and Mr. and Mrs. Evans had always occupied the cottage rent and rates free. In 1965, Mr. Evans had died and the object of the agreement clearly was to provide a home for the remaining years of Mrs. Evans's life. Some two years later, the Tredegar Estate conveyed the cottage, in fee simple, to Mr. and Mrs. Binions, the conveyance being expressly subject to the 1968 agreement in Mrs. Evans's favour. Indeed, Mr. and Mrs. Binions paid a lower price for the cottage because of the agreement. In 1971, Mr. and Mrs. Binions gave notice to quit to Mrs. Evans, then aged 79, and subsequently issued a plaint for possession in the Newport (Mon.) County Court. Not surprisingly, the action for possession failed in both the county court and the Court of Appeal.
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References
1 Binions v. Evans [1972]Google Scholar Ch. 359.
2 Per Stephenson L.J. [1972] Ch. 359 at p. 373.
3 See, e.g., National Provincial Bank Ltd. v. Ainsworth [1965]Google Scholar A.C. 1175, per Lord Upjohn at pp. 1237–1238 and Lord Wilberforce at p. 1253. But cf. Lord Wilber-force in Shiloh Spinners Ltd. v. Harding [1973] 2 W.L.R. 28 at pp. 35–36.Google Scholar
4 Exceptions are rare, but see the Land Charges Act 1972, ss. 2 (4) Class C (i), 4 (5).
5 This ignores the effect of the Law of Property Act 1925, s. 1, which stipulates that many interests (e.g., life interests) can only exist in equity, although previously capable of being legal interests.
6 Wood v. Leadbitter (1845) 13 M. & W. 838; Thomas v. Sorrell (1673) Vaugh. 330 at p. 351.
7 Errington v. Errington and Woods [1952] 1 K.B. 290 at p. 296Google Scholar (Denning L.J.), quaere whether the dicta apply only to the position at law; Millennium Productions Ltd. v. Winter Garden Theatre (London) Ltd. [1946] 1 All E.R. 678 at p. 680Google Scholar (Lord Greene M.R.), [1948] A.C. 173 at p. 188 (Viscount Simon): R. v. Inhabitants of Horndon-on-the-Hill (1816) 4 M. & S. 562.
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11 [1972] Ch. 359.
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20 Of course, a license may in effect be protected by the estoppel, but the fact that it is a licence is irrelevant to its protection.
21 (1853) 17 Beav. 60. See also Somerset Coal Canal Company v. Harcourt (1857) 24 Beav. 571 and Mold v. Wheatcroft (1859) 27 Beav. 510.
22 At p. 79.
23 (1862) 4 De G.F. and J. 517.
24 (1884) 9 App.Cas. 699.
25 i.e., provincial government and Wellington Corporation. This effectively obscures the fact that a successor in title, although not a purchaser for value, was bound
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27 An easement is not possible as there is no dominant tenement and a fee simple subject to a restrictive covenant seems too artificial. However, at p. 713 it was said that “the equity arising from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated.” Does this not imply that some conventional interest in land does result from the equity?
28 At p. 714.
29 The judgments do not expressly suggest that an estoppel is an interest in land.
30 [1965] 2 Q.B. 29.
31 (1862) 4 De G.F. and J. 517.
32 It would also have bound a purchaser for value (presuming notice): Lord Denning at p. 37.
33 i.e., the equity arising from the estoppel. In other cases, presumably, the equity could be the entitlement to specific performance of a contractual licence.
34 Infra, p. 134.
35 [1965] A.C. 1175, especially at p. 1253. Lord Upjohn, at pp. 1236–1238, appears to have rejected the licence coupled with an equity theory. But cf. Shiloh Spinners Ltd. v. Harding [1973] 2 W.L.R. 28 at pp. 35–36.Google Scholar
36 Many more cases on estoppel could be cited, but it is believed that they would not be particularly relevant to the topic of licences.
37 20 Conv.(n.s.) 281. See also Maudsley and Burn, Land Law: Cases and Materials (2nd ed., 1970), p. 347.
38 Wood v. Leadbitter (1845) 13 M. & W. 838; King v.David Allen and Sons (Billposting) Ltd. [1916] 2 A.C. 54Google Scholar ; Clore v. Theatrical Properties Ltd. [1936] 3 All E.R. 483.Google Scholar
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41 [1952] 1 K.B. 290. See, inter alia, 68 L.Q.R. 337 (Wade); 16 M.L.R. 1 (Cheshire); 69 L.Q.R. 466 (Hargreaves); 20 Conv.(n.s.) 281 (Maudsley).
42 See the comments of Lord Wilberforce in National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175 at pp. 1251–1252.Google Scholar
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45 (1858) 4 De G. & J. 276.
46 [1926] A.C. 108.
47 See n. 39, supra.
48 [1951] Ch. 808.
49 [1965] A.C. 1175.
50 Lord Hodson at p. 1221, Lord Cohen at p. 1228, Lord Upjohn at pp. 1237–1238 and Lord Wilberforce at p. 1253. See also Reeves v. Pope [1914] 2 K.B. 284.Google Scholar But cf. Lord Wilberforce in Shiloh Spinners Ltd. v. Harding [1973] 2 W.L.R. 28 at pp. 35–36.Google Scholar
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52 I.e., those cases illustrating the limits of restrictive covenants: London County Council v. Allen [1914] 3 K.B. 642Google Scholar ; Haywood v. Brunswick Permanent Benefit Building Society (1881) 8 Q.B.D. 403; London and South Western Railway Co. v. Gomm (1882) 20 Ch.D. 562; Rogers v. Hosegood [1900] 2 Ch. 388.Google Scholar
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54 [1915] 1 K.B. 1.
55 [1948] A.C. 173.
56 (1845) 13 M. & W. 838.
57 [1952] 1 K.B. 290.
58 [1951] Ch. 808.
59 At p. 812.
60 [1965] A.C. 1175.
61 This was the conclusion of Professor Crane: 31 Conv. (N.s.) 332.
62 [1952] 1 K.B. 290.
63 At p. 1239.
64 (1619) 2 Rolle 152.
65 [1967] Ch. 573 at p. 585. A different view was taken by Baker, 81 L.Q.R. 353 at p. 355, who took it as a reference to estoppel. Maudsley also argues that Errington v. Errington and Woods is estoppel based—20 Conv. (n.s.) 281. See also Maudsley and Burn, Land Law: Cases and Materials (2nd ed., 1970), p. 345.
66 [1916] 2 A.C. 54. But see infra, p. 141.
67 [1936] 3 All E.R. 483. But seeintra, p. 141.
68 See, e.g., Bendall v. McWhirter [1952] 2 K.B. 466 at pp. 482–483Google Scholar and National Provincial Bank Ltd. v. Hastings Car Mart [1964] Ch. 665 at p. 688.Google Scholar
69 See the cases quoted supra, n. 39.
70 See National Provincial Bank Ltd. v. Ainsworth [1965]Google Scholar A.C. 1175, per Lord Upjohn at p. 1239 and Lord Wilberforce at p. 1251.
71 The contractual licence may still be important, for equity might only be prepared to recognise such an interest if supported by consideration or an estoppel— equity will not aid a volunteer.
72 [1965] A.C. 1175.
73 At p. 1239, at least if the licence is for a defined period.
74 At p. 1251.
75 Thomas v. Sorrell (1673) Vaugh. 330 at p. 351.
76 Lord Denning M.R. in National Provincial Bank Ltd. v. Hastings Car Mart [1964] Ch. 665 at p. 686Google Scholar ; Denning, L.J. in Errington v. Errington and Woods [1952] 1 K.B. 290 at p. 296Google Scholar ; Tayler v. Waters (1816) 7 Taunt. 374.
77 See, especially, Crane, 16 Conv. (n.s.) 323.
78 See, e.g., Marcroft Waggons Ltd. v. Smith [1951] 2 K.B. 496Google Scholar; Crane v. Morris [1965] 1 W.L.R. 1104.Google Scholar Also Landlord and Tenant Act 1954: Shell-Mex and B.P. Ltd. v. Manchester Garages Ltd. [1971] 1 All E.R. 841.Google Scholar
79 This factor is stressed by Harris, 32 M.L.R. 92.
80 E. R. Ives (Investments) Ltd. v. High [1967] 2 Q.B. 379.Google Scholar If the plaintiffs had been tenants at will they would have acquired by limitation a right to have the footings of their flats on the defendant's land. See also Cobb v. Lane [1952] 1 All E.R. 1109.Google Scholar
81 i.e., of the whole or part of the premises involved.
82 See Lord Upjohn [1965] A.C. 1175 at p. 1239
83 If there is no exclusive possession, then one may be in the realm of easements. However, it has been clear since the mid-nineteenth century that one cannot have easements in gross—there must be a dominant tenement. The lack of this restriction must be remembered when dealing with the earlier case.
84 The Law of Property Act 1925, ss. 1, 4 (1). The proviso to section 4 (1) may cause difficulty:” after the commencement of this Act… an equitable interest in land shall only be capable of being validly created in any case in which an equivalent equitable interest in property real or personal could have been validly created before such commencement.” Cases such as the Strathcona [1926]Google Scholar A.C. 108 on personalty might ease the difficulty—see Crane, 16 Conv. (n.s.) 323.
85 Cf. Baker (1972) 88 L.Q.R. 336.
86 Land Registration Act 1925, s. 70 (1) (g) (”actual occupation”); Hunt v. Luck [1902] 1 Ch. 428.Google Scholar
87 Supported, perhaps, by Denning, L.J. in Bendall v. McWhirter [1952] 2 Q.B. 466 at p. 483.Google Scholar
88 Hodgson v. Marks [1971]Google Scholar Ch. 892.
89 Caunce v. Caunce [1969] 1 W.L.R. 286Google Scholar , questioned in Hodgson v. Marks [1971] Ch. 892 at pp. 934–935.Google Scholar
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91 [1936] 3 All E.R. 483.
92 [1971] Ch. 892.
93 See Thomas v. Sorrell (1673) Vaugh. 330 at p. 351.
94 National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175 at p. 1238Google Scholar (Lord Upjohn).
95 [1965] 2 Q.B. 29, supra, p. 128.
96 See, e.g., the judgment of Lord Denning M.R. in National Provincial Bank Ltd. v. Hastings Car Mart [1964]Google Scholar Ch. 665.
97 National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175 at pp. 1236–1238Google Scholar (Lord Upjohn). Cf. Armstrong v. Sheppard and Short Ltd. [1959] 2 Q.B. 384 at pp. 401–102Google Scholar (Lord Evershed M.R.).
98 Webb v. Paternoster (1619) 2 Rolle 152, as interpreted in Re Solomon [1967]Google Scholar Ch. 573.
99 James Jones and Sons Ltd. v. Earl Tankerville [1909] 2 Ch. 440.Google Scholar
1 [1915] 1 K.B. 1.
2 At p. 7. Kennedy L.J. was much more cautious in saying that the court “protects a right in equity, which, but for the absence of a seal, would be a right at law” (at p. 14).
3 Lord Greene M.R. was equivocal in Millennium Productions Ltd. v. Winter Garden Theatre (London) Ltd. [1946] 1 All E.R. 678.Google Scholar A recent article by Stern, 32 Conv. (n.s.) 49, is critical of this reasoning. The case can rest on other reasoning.
4 [1972] Ch. 359.
5 See Stephenson L.J. at pp. 371–372.
6 This was not the sole ground for this decision: a constructive trust was also relied upon.
7 (1619) 2 Rolle 152.
8 [1952] 1 K.B. 290. No purchaser for value was involved—a point not taken in Binions v. Evans or, seemingly, any other case.
9 Re Carne's Settled Estates [1899] 1 Ch. 324; Re Boyer's Settled Estates [1916] 2 Ch. 404.Google Scholar
10 Browne v. Warner (1807–08) 14 Ves. 156, 409 (Chancery), cf. (1807) 8 East 165 (King's Bench, sub nom. Doe d. Warner v. Browne).
11 Foster v. Robinson [1951] 1 K.B. 149Google Scholar ; Zimbler v. Abrahams [1903] 1 K.B. 577.Google Scholar
12 [1965] A.C. 1175.
13 Still to be seen in Lord Denning's judgment at p. 367.
14 [1967] Ch. 573. Supra, p. 131.
15 (1873) L.R. 16 Eq. 521.
16 (1807–08) 14 Ves. 156, 409.
17 At pp. 368–369.
18 Hodgson v. Marks [1971] Ch. 892Google Scholar , decided on the Land Registration Act 1925, s. 70 (1) (g), is cited, but there the occupier clearly had an equitable interest in land. For a discussion of constructive trusts in this situation, see infra, p. 141.
19 Cf. National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175.Google Scholar
20 [1965] A.C. 1175.
21 Might counsel's concession in Re Webb's Lease [1951]Google Scholar Ch. 808 (supra, p. 131) have been based on such ideas? On the facts of Binions v. Evans it is not clear that there was a contract: see infra, p. 137.
22 [1965] Ch. 1140. The appeal to the House of Lords ([1967] A.C. 250) is not relevant to the present problem. See Fairest [1965] C.L.J. 38 and 210 and [1966] C.L.J. 169. I am indebted to Mr. Fairest for drawing my attention to the decisions in the lower courts.
23 S had no neighbouring land, as required for a restrictive covenant: London County Council v. Allen [1914] 3 K.B. 642.Google Scholar
24 (1885) 29 Ch.D. 750.
25 See supra, at n. 51. The principle established by these cases lacks the need for the equivalent to adjoining land, which is an essential element of a restrictive covenant: London County Council v. Allen [1914] 3 K.B. 642.Google Scholar
26 Could one distinguish Sefton v. Tophams Ltd. on the grounds that Mr. and Mrs. Binions were causing not inducing a breach by the Tredegar Estate? Cf. Weir, A Casebook on Tort (2nd ed., 1970), p. 485 (n.). However, G.W.K. Ltd. v. Dunlop Rubber Ltd. (1926) 42 T.L.R. 376, 593Google Scholar and Daily Mirror Newspapers Ltd. v. Gardner [1968] 2 Q.B. 762Google Scholar probably refute such a distinction.
27 Binions v. Evans [1972] Ch. 359 at pp. 365–366.Google Scholar and, more explicitly, at p. 371.
28 Cf. the offer: “I will give you £100 if you cut your finger.” This will only be a contract (ignoring illegality issues) if there is a request that the offeree should cut his finger. See also 86 L.Q.R. 69 at pp. 79–80 (F. J. Odgers).
29 At pp. 366, 369.
30 At p. 372, citing Sir Raymond Evershed M.R. in Foster v. Robinson [1951] 1 K.B. 149 at p. 156.Google Scholar and Somervell L.J. in Errington v. Errington and Woods [1952] 1 K.B. 290 at p. 293.Google Scholar
30 At p. 372, citing Sir Raymond Evershed M.R. in Foster v. Robinson [1951] 1 K.B. 149 at p. 156.Google Scholar and Somervell L.J. in Errington v. Errington and Woods [1952] 1 K.B. 290 at p. 293.Google Scholar
31 69 L.Q.R. 466.
32 Lord Denning at pp. 366–367, citing Lace v. Chantler [1944]Google Scholar K.B. 368, but not Clay v. British Railways Board [1971] Ch. 725.Google Scholar
33 By lessor or lessee, or those deriving title from them.
34 Blamires v. Bradford Corporation [1964] Ch. 585.Google Scholar It might be argued that the Settled Land Act 1925, s. 1 (1) (ii) (c), is applicable. If it were, then most equitable leases would seem to create settlements (for most leases are subject to forfeiture and so determinable)—a result too ghastly to contemplate.
35 At p. 366.
36 Law of Property Act 1925, s. 205 (1) (xxiii). Cf. Montague v. Browning [1954] 2 All E.R. 601.Google Scholar
37 Land Charges Act 1972, ss. 2 (4), Class C (iv), 4 (6). The result may be inequitable, but the certainty of the registration scheme would be the culprit.
38 Law of Property Act 1925, s. 205 (1) (xxvii).
39 See, inter alia, Littleton, Tenures, Book 1, Ch. 6; Challis, The Law of Real Property (3rd ed., 1911), pp. 65, 102, 107, 340; Megarry and Wade, The Law of Real Property (3rd ed., 1966), p. 621. Cf. the Settled Land Act 1925, s. 20 (1) (iv).
40 Cf. Stephenson L.J. at p. 373: “On the whole of the document the defendant appears to me to agree to assume the rights and obligations of a tenant and the plaintiffs' predecessors those of a landlord, not those of a licensee and licensor…. Accordingly, I prefer to regard the defendant as a tenant for life and not a licensee.”
41 [1948] 2 All E.R. 133.
42 The lack of a deed seems irrelevant—the Settled Land Act 1925, s. 1 (1), refers to agreements as well as deeds in defining a settlement. S. 4 (1), referring to the need for two deeds, only strikes at the creation of legal estates. S. 9 (1) (iii), (2) seems to provide the right to call for a vesting deed; before there is one, s. 13 applies.
43 Settled Land Act 1925, s. 9 (2).
44 ss. 20, 38 and 72.
45 Settled Land Act 1925, s. 1 (1) (i).
46 Law of Property Act 1925, s. 1.
47 Law of Property Act 1925, s. 1 (1) (3).
48 It is not impossible now: a settlor can require that consents be given before property held on a trust for sale is sold (Re Inns [1947] Ch. 576)Google Scholar and cf. the Matrimonial Homes Act 1967.
49 i.e., under the Settled Land Act 1925.
50 s. 1 (1) (i).
51 [1916] 2 A.C. 54.
52 [1936] 3 All E.R. 483.
53 At pp. 368–369.
54 [1952] 1 K.B. 290.
55 [1965] 2 Q.B. 29.
56 [1948] 2 All E.R. 133.
57 Cf. National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175Google Scholar, especially at pp. 1223, 1237–1239, 1253–1254: Inwards v. Baker [1965] 2 Q.B. 29 at p. 37.Google Scholar
58 As in Ferris v. Weaven [1952] 2 All E.R. 233.Google Scholar
59 Beatty v. Guggenheim Exploration Co. (1919) 225 N.Y. 380 at p. 385.Google Scholar It should be remembered that in the United States of America the constructive trust is regarded much more as a remedy than a conventional trust: see Goff and Jones, The Law of Restitution (1966), pp. 36–37. This approach was further discussed by Lord Denning in Hussey v. Palmer [1972] 1 W.L.R. 1286 at pp. 1289–1290.Google Scholar
60 [1971] A.C. 886 at p. 905.
61 Cf. the wording of the clause in the contract for sale of the cottage. The result may be different if in the conveyance the purchaser promises to continue the licence, for then the licensee can sue the licensor who in turn can sue the purchaser. This is based on the law of contract, not the law of real property.
62 [1948] 2 All E.R. 133. Presumably the constructive trust in Binions v. Evans is to give effect to the original licence, rather than a life interest as in Bannister v. Bannister.
63 Law of Property Act 1925, ss. 53, 54.
64 Booth v. Turle (1873) 16 Eq. 182; Chattock v. Muller (1878) 8 Ch.D. 177; Re Duke of Marlborough, Davis v. Whitehead [1894] 2 Ch. 133: Rochefoucauld v. Boustead [1897] 1 Ch. 196. The only third parties involved are purchasers of the land already burdened by the constructive trust—they are, of course, bound by the interest protected by the constructive trust. See also Hutchins v. Lee (1737) 1 Atk. 447: Lincoln v. Wright (1854) 4 De G. & J. 16; Davies v. Otty (No. 2) (1865) 35 Beav. 208 and Haigh v. Kaye (1872) L.R. 7 Ch.App. 469.
65 At p. 136. Italics added.
66 See, e.g., Snell's Principles of Equity (26th ed., 1966), p. 177Google Scholar; Pettit, Equity and the Law of Trusts (2nd ed., 1970), p. 56; Hanbury, Modern Equity (9th ed., 1969), p. 235; semble Goff and Jones, The Law of Restitution (1966), p. 286, n. 15.
67 (1968) 19 P. & C.R. 836. Pettit, supra, n. 62, cites the case in this context at p. 56.
68 It is not universally agreed that even fully secret trusts are constructive trusts.
69 i.e., in which the would-be trustee has no interest.
70 Cf. the incompletely constituted trust cases.
71 It now appears that secret trusts take effect dehors the will: Re Young [1951] Ch. 344.Google Scholar
72 [1972] 1 W.L.R., 1286 at p. 1290.
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