Экзамен зачет учебный год 2023 / Dixon, Modern Land Law

Modern Land Law

Principle 1: enforcement between the original covenantor and the original covenantee

If the covenantor and covenantee are still in possession of their respective land, all covenants are enforceable and the covenantee may obtain damages, an injunction or specific performance (i.e. they may sue at law or in equity). If the original covenantor has parted with the land (or never had land) that was subject to the covenant, he remains liable on all the covenants to whomsoever has the benefit of them, although damages are available only because the covenantor has no land on which to perform the covenant. If the original covenantee has parted with the land that had the benefit of the covenant, he may still be able to enforce a covenant against whomsoever has the burden of it. However, at law, this right could easily have been given to another by an express assignment of the right to sue and, in equity, the court is likely in its discretion to refuse to grant an equitable remedy to such a claimant as he has no land capable of benefiting. Note that it is important to identify exactly who are the original covenantees and covenantors, especially as this may go beyond the actual signatories to a deed (section 56 of the LPA 1925).

Principle 2: enforcement against successors to the original covenantor (passing the burden)

It is not possible for the burden of any covenant to run at law. In equity, the burden of restrictive covenants only may pass, providing:

1The covenant is restrictive in nature.

2The covenant touches and concerns the land (except possibly where the Landlord and Tenant (Covenants) Act 1995 applies to a leasehold covenant not enforceable under ‘leasehold rules’; for example, a subtenancy granted on or after 1 January 1996).

3At the date of the covenant, the covenant actually did confer a benefit on land owned by the original covenantee.

4The burden of the restrictive covenant must have been intended to have run with the land of the original covenantor (section 79 of the LPA 1925).

5In registered land, the covenant must be registered by means of a Notice against the burdened land in order to bind a purchaser for value who becomes registered proprietor (section 29 of the LRA 2002).

6In unregistered land, the covenant must be registered as a class D(ii) land charge to bind a purchaser of a legal estate who gives money or money’s worth.

7The claimant is granted a remedy by virtue of the court’s discretion.

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Principle 3: enforcement by successors to the original covenantee (passing the benefit)

The benefit of both a positive and restrictive covenant may be passed at law or in equity. However, given that only the burden of a restrictive covenant may pass, and then only in equity, most practical examples concern the passing of the benefit of a restrictive covenant in equity. This will give us our claimant (benefit) and defendant (burden) in suit in equity.

If it is necessary to consider passing the benefit of a covenant at law (e.g. the original covenantor may be the defendant), then:

1The covenant must ‘touch and concern’ the land of the original covenantee.

2The claimant must have a legal estate in the land, although not necessarily the same legal estate as the original covenantee. For restrictive covenants only, this may include an ‘occupier’; for example, a squatter (section 78 of the LPA 1925).

3The benefit of the covenant must have been annexed to a legal estate in the land either expressly or by implication or by statute; that is, by express words or necessary implication from express words or by statute under section 78 of the LPA 1925.

In order to pass the benefit of a covenant in equity, then:

1The covenant must ‘touch and concern’ the land of the original covenantee.

2The claimant must have a legal or equitable estate in the land of the original covenantee, although not necessarily the same estate as the original covenantee. For restrictive covenants only, this may include an ‘occupier’; for example, a squatter (section 78 of the LPA 1925).

3The benefit of the covenant must have been transmitted to the claimant in one of three ways:

(i)By annexation, express, implied or by statute. The benefit of a covenant can be expressly annexed to the land in equity in exactly the same way as in law; that is, by express words or by statute under section 78 of the LPA 1925.

(ii)By assignment: express or implied. Following the general rule that the benefit of a contract may be assigned to another, the original covenantee may expressly assign the benefit of a covenant at the same time as he transfers the land. For future sales of the land, an assignment of the benefit of the covenant may be implied by section 62 of the LPA 1925, subject to criticism in Kumar v. Dunning (1989).

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(iii)A scheme of development (building scheme). This allows the benefit of later purchasers’ covenants to be passed to the land already sold by a common vendor (i.e. to previous purchasers), notwithstanding that this should not be possible because the original covenantee (the common vendor) has already parted with the land. The conditions are that there must be a common vendor; the land must be laid out in definable plots; the benefit of every purchaser’s covenants must be intended to be mutually enforceable (i.e. to pass to every other purchaser); the purchasers must have bought the land on condition that this was intended; and the area of the scheme must be well defined.

Devices that may allow the passing of the burdens of positive covenants in practice

These include: a chain of covenants; the artificial long lease; mutual benefit and burden; reinterpreting section 79 of the LPA 1925; restrictions on the title of registered land; and the use of rentcharges coupled with a right of re-entry.

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CHAPTER 9

LICENCES AND PROPRIETARY ESTOPPEL

9.1 Licences

In Chapters 7 and 8 we examined in some detail two important ways by which one person could enjoy limited rights over the land of another. In many respects, these easements (Chapter 7) and freehold covenants (Chapter 8) were seen to be similar, especially where the effect on the ‘servient’ or ‘burdened’ land was restrictive in that it prevented the current owner from engaging in some activity on their own land. Of course, both easements and restrictive covenants are proprietary in nature; they are interests in land that may ‘run’ with the benefited and burdened land and are not personal to the parties that created them. However, a moment’s thought will reveal that easements and freehold covenants can cover only a small fraction of the situations in which one person may wish to use the land of another. For example, what is the position where I wish to park my caravan on my neighbour’s land, or my children play football there? Again, what are my rights if I pay an entrance fee to go to a play or a film on someone else’s land, or hire my neighbour’s garden for the day for a party, or wish to store something on their land or in their outbuildings? All of these are activities undertaken on another person’s land, but they may not fall within the realm of easements or freehold covenants.1

This is where the ‘licence’ to use land has a role to play. ‘Licences’ are a third way in which a person may enjoy some right or privilege over the land of another. However, as we shall see, they are fundamentally different in effect from both easements and freehold covenants and because they are personal rather than proprietary.

9.2 The essential nature of a licence

Licences involve a permission from the owner of land that is given to another person (who may or may not own land themselves) to use that land for some

1There is, however, potential overlap between licences and easements and it is clear that in some cases the same type of use may qualify as either a licence or an easement depending on the manner and circumstances in which was created. In Batchelor v. Marlowe, a right to park a number of cars was held to be a licence, even though a similar right may in the appropriate circumstances be an easement: Moncreiff v. Jamieson (2007). Dicta in Moncreiff suggests that Batchelor may have been wrongly decided. Likewise, absence of the proper legal formalities for the creation of an alleged easement will mean that the claimant obtains only a licence, as where no deed or written instrument is used.

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specific purpose. The permission (or ‘licence’) can be to do anything from attending a cinema (Hurst v. Picture Theatres Ltd (1915)), to parking a car (Colchester & East Sussex Co-op v. Kelevedon Labour Club (2003)),2 erecting an advertising hoarding (Kewall Investments v. Arthur Maiden (1990)), running a school (Re Hampstead Garden Suburb Institute (1995)), using buildings as a social club (Onyx v. Beard (1998)), or allowing children to play in your garden. They can even give a limited right of occupation as with the ‘occupation licences’ that can be difficult to distinguish from leases.3 Indeed, the range of activities that can be covered by the giving of ‘a licence’ is virtually limitless simply because it is impossible to foresee all the circumstances in which one person may wish to use the land of another! With this in mind, the following points about licences should be noted.

1A licence is given by the owner of land (the licensor) to some other person (the licensee), permitting him to do something on the owner’s land. They are classically defined, in Thomas v. Sorrell (1673), as a personal permission to use land belonging to another which, without such permission, would amount to a trespass. As such, licences may cover any activity – long or short term – that may be undertaken on land. This versatility means that licences can arise in all manner of situations, and consequently it is crucial to be able to distinguish licences from proprietary rights such as leases, easements and freehold covenants, all of which also allow one person to use another’s land but which have the essentially different quality of being ‘real property’.

2There are no formal requirements for the creation of a ‘licence’ as such, although occasionally a licence may depend on the fulfilment of conditions imposed by some other branch of the law; for example, with contractual licences an ‘offer and acceptance’ is as essential as any other type of contract. Consequently, licences may be created orally, in writing, or even be found in a deed or registered disposition if they are ancillary to the grant of some right or interest in land. A good example of a licence found in a registered disposition is on a conveyance of a house from A to B, wherein B is given a personal right to park his car on land retained by A. As is obvious,

2This was the express intention of the parties. It is clear that the right to park a car may also qualify as an easement, Moncreiff v. Jamieson (2007).

3Chapter 6 and Street v. Mountford (1985) and Ogwr BC v. Dykes (1989). See also the distinction between licences and life interests in Chapter 5, Dent v. Dent (1996). Note also the decision in Bruton v. London & Quadrant Housing Trust (1999); discussed in Chapter 6, which suggests that ‘a lease’ is not always proprietary, but may give rise to a merely contractual landlord and tenant relationship. Whether this legal creature – the nonproprietary lease – really exists or is in fact just a licence is a matter of controversy.

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however, where licences are found in formal documents (and sometimes where they are not!), there is always the danger that they will be confused with true proprietary rights, especially if the substantive right granted (e.g. to park a car) is, in fact, capable of being either a licence or a proprietary easement. Importantly, if the formalities required by statute for the creation of a proprietary right are not satisfied – for example, if the required written instrument or deed is not used – the right thereby given to the claimant cannot amount to a proprietary right but it may still result in the claimant having a licence. For example, if A were to verbally permit B a right of passage across A’s land, this could have been an easement had it been properly granted by deed and correctly registered against the burdened title, but failing this it amounts to a licence such that B does not commit a trespass when he uses the right of way.4

3It follows from the above that a licence is a right to use the land of another that is either inherently incapable of being a proprietary right – for example, it does not fit within the definition of any known proprietary right (e.g. a right for my children to play in your garden) – or arises because the parties have deliberately or accidentally failed to use the proper formalities for the creation of a proprietary right, with the result that the claimant has merely a licence. This failure will be accidental where, as in the example above, the parties unwittingly omitted to use a deed or written instrument, but it can be deliberate as in Colchester v. Kelevedon Co-op where the parties’ express written intention was to create a parking licence even though the right could have been created as an easement. In this regard, it is noteworthy that the parties’ intentions are permitted to play a vital role when distinguishing an easement from a licence, but not (as we have seen) when distinguishing between a lease and a licence.5

4A licence may be given to any person for any lawful purpose, not only to someone who also owns land. In this respect, licences are different from easements and most freehold covenants. In other words, there is no need for a ‘dominant tenement’, although it is perfectly acceptable if the licensee does own adjoining or other land. So, using the example above, when A conveys land to B, he may grant a parking licence over his retained land to B (who is a landowner). But A may also decide to give or sell a parking licence to X, a person with no land who simply wants somewhere to park his car.

4Of course, being now only a licence, it cannot bind a successor to A’s land.

5Street v. Mountford, Chapter 6.

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5The orthodox (and correct) view of licences is that they are not proprietary in nature. As Vaughan CJ makes clear in Thomas v. Sorrell (1673), the traditional analysis of licences is that they ‘properly passeth no interest nor alter or transfer property in any thing’. A licence is not an interest in land, but rather a right over land, and one that is personal to the parties who created it (the licensor and licensee). This is so whether the licence is inherently non-proprietary in substance or arises because of failure to create a proprietary right. As a consequence, the right conferred by a licence can be enforced only against the person who created it. It does not ‘run’ with the land, and unlike easements and freehold covenants, cannot be enforced against a purchaser of the land over which it exists. The licence is not within the realm of ‘real property’, and is incapable of binding third parties when the licensor transfers the ‘burdened’ land. So, assuming A has indeed granted a parking licence over his retained land to B, if A then transfers (by sale or gift) the ‘burdened’ land to P, P is under no obligation whatsoever to continue to allow B to park his car. The point is, simply, that a licence is incapable of binding land: it is personal to licensor and licensee. In recent years, this fundamental theoretical distinction between ‘interests in land’ and ‘licences’ has been unsuccessfully attacked (thus generating much needless comment), and we shall consider the matter in more detail when examining ‘contractual licences’ and so called ‘estoppel licences’.

6If the relationship between the licensor and the licensee is based in contract – a permission given in return for a counter-benefit such as a fee – then obviously the parties are susceptible to the normal principles of contract law concerning remedies and damages for breach of the contractual licence. The fact that the subject matter of the contract is land does not elevate the status of the licence to anything more than a personal relationship between licensor and licensee. However, given that the licensor and licensee are likely to have been in close contact over the use of the land, it is possible that their relations with each other may have generated a separate and independent claim in proprietary estoppel. The existence of such an estoppel – considered later in this chapter – is not dependent on any prior relationship of licensor and licensee, but many successful claims of estoppel have arisen out of such a relationship precisely because the parties are dealing with each other concerning the use of land. A recent example is Parker (9th Earl of Macclesfield) v. Parker6

6 High Court, 24 July 2003.

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where according to the court, the claimant’s entitlement to use land arose either under a licence or out of estoppel depending on how one viewed the facts. Unfortunately, given that the nature of proprietary estoppel as a property right has now been settled7 and that a licence is clearly personal, it is important to know which of these solutions is correct.

9.3 Types of licence

Although a licence to use land may be given for any lawful purpose, it is possible to classify types of licences according to the functions they serve, the circumstances in which they arise, or the way in which they are created. The following classification draws the traditional distinctions between different types of licence and will seek to answer the four most important practical questions concerning the operation of licences. These practical issues, rather than an artificial classification of licences, should be at the forefront of any discussion of the law relating to licences. The four questions are:

1What is the nature of the licence and how is it created?

2What are the obligations of the licensor to the licensee and vice versa?

3Is the licence in any sense an ‘interest in land’?

4Are there any circumstances in which a licence can take effect against a third party; that is, can a person who purchases land over which a licence already exists ever be bound to give effect to that licence?

9.3.1 The bare licence

A bare licence is probably the most common form of permission that a landowner gives to another person to use his land. It is, in essence, permission to enter upon the land, given voluntarily by the owner, who receives nothing in return. The giving of the licence is ‘gratuitous’ in that it is not supported by ‘consideration’ moving from the licensee. There is no contract between the parties, merely a bare permission to do that which the landowner has allowed and which otherwise would be a trespass. Typically, such licences allow the licensee to carry on some limited activity on the licensor’s land, as where permission is given to hold a garden party, to deliver some previously ordered goods or to enjoy a limited and revocable right of access. Necessarily, these bare licences can be given in any shape or form, and many are oral or

7 Section 116 of the LRA 2002 and see below.

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implied from the landowner’s lack of objection to the activity taking place. It is also inherent in a bare licence that it lasts only for so long as the licensor wishes. Thus, the licensor may terminate the licence by giving reasonable notice to the licensee (Robson v. Hallet (1967); Re Hampstead Garden Suburb Institute (1995)), and the licensee has no claim in damages or specific performance should this happen. Importantly, there is no doubt that a bare licence is not an interest in land; it is personal only to the original licensor and licensee. Such a licence per se is incapable of binding a third party and any person who subsequently acquires the licensor’s land may disregard the bare licence with impunity.

9.3.2 Licences coupled with an interest (or ‘grant’)

This is a rather loose category of licences covering a range of activities that are grouped together because the licences are said to be ‘coupled’ with an interest in land or with the grant of an interest in land. As discussed in Chapter 7, a landowner may grant another person a profit à prendre over their land; that is, a right to take from it a natural resource, such as fish, pasture, wood or turf. Necessarily, in order to exercise this ‘profit’, the grantee must be able to enter upon the land and remain there for an appropriate time. This is achieved by means of a licence attached (or coupled) to the profit, as in

James Jones and Son v. Earl of Tankerville (1909). To some extent, of course, to call this a ‘licence’ at all is misleading for the licence is merely incidental and ancillary to the right which has actually been granted over the land (the profit). The licence merely facilitates the achievement of the primary purpose; it is not a purpose in itself. So where, as is the case with profits, the right granted is proprietary in nature (i.e. it is an interest in land), the licence which attaches to it appears also to be proprietary, because it lives or dies with the profit. The licence will last for as long as the profit exists and will be enforceable against whomsoever the profit is enforceable against because it is an inherent component of the greater right. Likewise, should the grantee of the profit be unlawfully denied the right granted, the normal remedies will be available to prevent interference with it or to compensate for its denial. Nevertheless, the licence only has these characteristics because it is coupled with a grant; it has no proprietary status of its own.

9.3.3 Contractual licences

Contractual licences are, in nature, similar to bare licences with the important difference that contractual licences are granted to the licensee in return for valuable consideration. Two examples are the purchase of a cinema ticket and the ‘occupation licence’ discussed in Chapter 6. Simply put, there is a contract between the licensor and licensee, the subject matter of which is the giving of a licence to use land for a stated purpose. Crucially, therefore, contractual

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licences are governed by the ordinary rules of the law of contract, and like most contracts, do not need to be created with any particular formality. Indeed, although they are contracts concerning the use of land, they are not contracts for the disposition of an interest in land (they are not proprietary) and so need not meet the requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. They may be oral or written. The characteristics of contractual licences are discussed below.

9.3.4 Remedies and contractual licences

As these licences are founded in contract, both licensor and licensee may rely on the normal remedies for breach of contract in the event of a failure to carry out the terms of the licence. Thus, either party may sue for damages for breach of contract, although it is usually the licensee that needs such a remedy when the licensor fails to allow him to use the land for the purpose for which the licence was purchased. More importantly, it is now clear that, as with other contracts, an injunction or a decree of specific performance may be obtained by the licensee in appropriate circumstances. An injunction can be obtained to prevent the licensor from revoking the licence before its contractual date of expiry,8 or a decree of specific performance may be awarded requiring the licensor to permit the activity authorised by the licence to take place.9 Indeed, the effect of the availability of these last two remedies can be to make the licence de facto irrevocable between the original parties throughout the contractual period of the licence. In this respect, a contractual licence is vitally different from a bare licence and can assume the character of an unbreakable arrangement between the original parties lasting for the agreed duration of the licence. So, if A gives B a parking licence for three years, at £100 per year, this is a contractual licence of three years’ duration. If A should then seek to deny the right, A may be liable in damages for breach of contract or held to the licence for the three years by injunction. Note, however, that if A breaks the contract because he has sold the land to P within the three years and simply has no land on which B can now park, A will remain liable in damages, but, of course, P cannot be subject to an injunction because the licence is not proprietary and cannot ‘bind’ a third party. The liability of P in these circumstances (if any) is discussed in section 9.3.7.

9.3.5Are contractual licences interests in land? Can they affect purchasers of the licensor’s land?

The above is clear enough, for there is no reason why a contractual licence should not be irrevocable between the original parties for the duration of the

8Winter Garden Theatre v. Millennium Productions Ltd (1948).

9Verrall v. Great Yarmouth BC (1981).

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