Contractual Licences Notes

CONTRACTUAL LICENCES A contractual licence is a licence supported by a contract. It can be formed in two ways: (1) where a licence is created through a contract; (2) where a licence is supported by a contract on the side. The concept of a contractual licence was endorsed by the House of Lords in Winter Garden Theatre (London) Ltd v Millenium Productions Ltd [1948]. The contract provided for a licence to hold plays and concerts in the defendant's theatre. In the Court of Appeal, Lord Greene MR pointed out that a licence could not be considered separately from the contract which created it. While agreeing with this principle, the House of Lords reversed the decision of the Court of Appeal on the basis that the contract did entitle the theatre owner to revoke the licence. Even before a contractual licence comes into operation, equitable relief may be necessary to secure compliance. As the legal remedy of damages will usually be inadequate where one person repudiates an agreement to allow another to use his land for a certain period, the licensee may be able to secure a decree of specific performance, evidenced by the decision in Verrall v Great Yarmouth Borough Council [1981], where the defendant local authority recanted upon an agreement to permit the National Front to use council property for its annual conference. On occasion, a person may occupy land without much consideration being given to his status due to the subsistence of a personal relationship. It is usually only when these relationships come to an end that attention is directed to the basis upon which the non-owning party occupied the land. In Tanner v Tanner [1975], the defendant gave up her rent-controlled flat in order to live in a house belonging to the plaintiff, who was the father of the defendant's twin daughters. After ceasing to pay maintenance and forming a relationship with another woman, the plaintiff offered the defendant £4,000 to leave his house. When this was refused, he purported to revoke her licence to occupy. In the Court of Appeal, Lord Denning MR held that it could be implied from the circumstances that the defendant had a contractual licence entitling her to "accommodation in the house for herself and the children so long as they were of school age and the accommodation was reasonably required". Although there had been no express contract, Lord Denning felt that one should be implied or, if necessary, imposed on the plaintiff. However, the Irish courts have refused to follow this expansive approach. In McGill v S [1979], the parties had cohabited in Germany for 9 years before the end of their relationship. During that time, the plaintiff had purchased a holiday home in Cork which he renovated using his own money. He received help form the defendant, who spent £1,000 on outbuildings, describing it as a present for the plaintiff. The defendant argued that she was entitled to occupy the house for as long as she wished by reason of an implied agreement for a licence coupled with an interest. Gannon J refused to follow Tanner as he had considerable difficulty with "the concept of a wavering licence terminable not at the will of the grantor but upon the possibility of changeable circumstances affecting the licensee". It was impossible to infer any particular point in time for either the commencement or termination of the licence claimed by the defendant, which was fatal to its validity. Transfer of Contractual Licences (1) The Traditional Doctrine The traditional view is that contractual licences are personal to the parties and do not create interests in land. According to this view, contractual licences are not transferable. In King v David Allen & Sons Billposting Ltd [1916], the plaintiff had a contractual right to place posters on the wall of the defendant's premises. The defendant leased the land to a company which prevented the plaintiff from affixing the posters. The House of Lords held that, since it was not an interest in land, the lessee could not be compelled to recognise the plaintiff's contractual licence and so the defendant was only liable for breach of contract. Thus, the 1

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