In 1952,however it appeared that the courts were substantially altering their position with the decision in Errington v Errington. In this instance the Court of Appeal bound the licensor's widow to allow the licensees to remain in occupation. The court reasoned that the licensee had a right to restrain the revocation of the licence because it was contrary to the implied contract and in this way they had an equitable interest capable of "binding the whole world except a bona fide purchaser for value without notice. "6 This apparent departure from the established principle, however has since received strong criticism.
It is argued that the widow should have been bound but not with reference to the contractual licence. Indeed the proposition in Errington that a contractual licence can be interpreted as an interest in land is now widely accepted to be bad law. Accordingly, in National Provincial Bank Ltd v Ainsworth Lord Upjohn and Lord Wilberforce expressed their disquiet at considering the contractual license to be anything more than a personal right. In Ashburn Anstalt v Arnold7 Fox J argued that the same decision could have been reached without the need to infer a proprietary interest into a contractual licence.
It was felt that a more reasoned approach would be to bind the third party by way of classification of the interest as an estoppel licence. It is evident then that the idea of a contractual licence creating an interest in land has asserted in Errington with apparent disregard for previous authority is now regarded as a "heresy that has received its quietus"8 In this way it seems that the an opinion that there has been a gradual change within the area of contractual licences towards a situation which allows for proprietary rights is without foundation, particularly when we look at the strong judge made assertions to the contrary.
On closer examination however, it becomes apparent that the argument is not entirely lacking in justification although a contractual licence by itself may not create an interest in the land it is evident that in some circumstances the effect of binding a successor might be brought about because for example a constructive trust arises, in this way the successor will be bound in much the same way as they would be by a trust. It is not the case however, that this added support will be widely applied in order to strengthen the position of a contractual licence.
Indeed, it is clear that at all times the courts will seek to find a strong case in support of imposing a constructive trust as in Binions v Edwards9. In this way the court will seek to test whether the conscience of the successor is so affected that to allow him to deny the claimant's interest in the property would be inequitable. Hence, we can see how the adoption of a constructive trust may allow the courts to manipulate the law in order to strengthen the position of a contractual licence.
The courts, however have been mindful to limit the application of this device within this area because of the need for due consideration to be paid to policy and practical issues, it is regarded as being of particular importance to preserve certainty in relation to transfer of title to land in order to prevent unnecessary difficulties within the conveyancing system being created as a result of too many undocumented proprietary interests. The situation in terms of estoppel licences differs somewhat. The doctrine of estoppel in relation to licences has enjoyed a remarkable development over the past fifty years.
Put simply proprietary estoppel can be classed as "encouragement and acquiescence" This was explained by Lord Kingsdown in the case Ramsden v Dyson and Thornton who felt it was necessary for the licensee to have an expectation encouraged by the landlord who then acts on that expectation to improve the property with the knowledge o consent of the landlord. In such circumstances the court will compel the landlord to give effect to such a promise or expectation. Fry J elaborated upon this in Wilmott v Barber10 where he set out the requirements in more detail known as the five probanda.