" We are at the moment witnessing the gradual evolution of both contractual licences and licences by estoppel from personal to proprietary rights. There are strong policy reasons against any further development in this direction" Discuss. When framed in the most basic of ways it is apparent that the function of a licence is to make lawful what would otherwise be a trespass. That is to say a licence will confer in general a mere personal permission to occupy another person's land for an agreed purpose.
It is evident in this way that a licence is not an interest that will run with the land it is an agreement, which in theory applies exclusively to the two parties; the licensor and the licensee that is to say that it is a personal interest. As the above question suggests, however, the situation surrounding this area of land law is no longer as easily defined, in order to assess the stated opinion it becomes necessary therefore to consider how far, and in what ways, the law has moved away from this initial purpose of licences.
Over the years the law has changed quite dramatically and licensees have begun to enjoy a higher level of protection against their licensor, and in some cases in relation to third parties. If one first begins to examine contractual licences it is evident that such modification has brought about some significant and clearly quite radical changes. This becomes evident if we look at the position of contractual licences within the common law.
A contractual licence is described as "a licence supported by consideration"1 that is to say a mere permission which is granted for value as in situation of paying to enter a cinema or usage of the facilities at a leisure centre. At common law the rights of the licensee in such an instance are limited. The licensor was able to revoke the licence at any time this rule was applicable regardless of the fact that in some cases the licences were subject to a fixed term agreement that had not yet expired.
Thus, even if the revocation of the licence was in breach of contract the only remedy available to the licensee was to sue in damages for breach of contract. Accordingly, the interest created by a licence was held to be strictly personal in the sense that it could not create a claim over the land, and would not be capable of binding successors to the licensor's title.
As Megarry states "each of these propositions has now been substantially modified"2 This is due in part to the availability of equitable remedies as a result of the passage of the Supreme Court of Judicature Act 1875. In the house of Lords case Winter Garden Theatre ( London) Ltd v Millennium Productions Ltd3 it was made clear that a contractual licence was no longer to be considered as distinct from the contract creating the licence in the first place.
Instead it was decided by their Lordships that a revocation of the licence, which would be in breach of contract, would be for the most part prevented by injunction. In this way "equity does what it can to preserve the sanctity of bargain"4 It is important to note, however that the position in terms of altering the power of licences so that they can be interpreted so as to run with the land has not been altered in such an unequivocal manner.
As a matter of principle despite the development of equity the common law position has been well supported by authority form the courts. Thus, in King v David Allen & Sons Billposting, Ltd5. it was held that the effect of a new lease to a third party was to discontinue the licensee's previous right to "affix advertisements to the walls of a cinema", in this way the principle that the burden of the interest created by a licence would not run with the land and would remain as a personal interest.