Licences and proprietary estoppel

Licences and proprietary estoppel occupy a critical and contested boundary in land law, sitting between purely personal permissions and fully-fledged proprietary rights. Traditionally, a licence was understood as a personal permission to be on another's land, incapable of binding successors in title. But successive interventions by equity—first through estoppel by acquiescence and representation, later through the constructive trust and injunction—have blurred this boundary. Today, proprietary estoppel stands as an equitable doctrine capable of generating rights that, in appropriate circumstances, bind third parties.

This note examines the typology of licences (bare, contractual, coupled with an interest), the criteria distinguishing licences from leases (recall Street v Mountford [1985] AC 809 from Week 8), and the modern law of proprietary estoppel. After Thorner v Major [2009] UKHL 18 codified the elements—representation, reliance, detriment—attention has shifted to remedial discretion and proportionality, underscored by Guest v Guest [2022] UKSC 27. The enforceability of estoppel rights against successors depends upon their characterisation as equitable interests and compliance with registration or overriding-interest rules under the Land Registration Act 2002 (LRA 2002), topics examined in Weeks 2–4.

Key questions include: when does a licence generate more than a personal right? How do courts balance the claimant's expectation against minimum equity? Can estoppel claims survive sale to a purchaser for value? This note integrates the doctrinal framework with statutory machinery, landmark judgments, and academic critique, preparing you for problem and essay questions that demand both technical fluency and critical evaluation.

The classical position, articulated by Vaughan CJ in Thomas v Sorrell (1673) Vaugh 330, 351, held that a licence confers no interest in land but merely makes lawful an act otherwise tortious: 'a dispensation or licence properly passeth no interest, nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful'. This reflected equity's reluctance to recognise novel proprietary interests in land, preserving the numerus clausus principle and the primacy of legal estates.

By the mid-twentieth century, however, equity began to intervene. In Errington v Errington and Woods [1952] 1 KB 290 Lord Denning MR found that a contractual licence, when coupled with payment towards purchase, could be protected by injunction—a decision later doubted but symptomatic of equity's willingness to soften rigid property classifications. The watershed was Inwards v Baker [1965] 2 QB 29, where the Court of Appeal held that a son who had built a bungalow on his father's land in reliance on an informal assurance enjoyed an equitable right enforceable even after the father's death. Lord Denning MR described this as an 'equity arising out of acquiescence', rooted in estoppel by encouragement.

The doctrine consolidated further in Crabb v Arun District Council [1976] Ch 179, where Scarman LJ emphasised that proprietary estoppel requires an assurance or representation, reliance, and detriment, with the court enjoying 'the widest discretion' in fashioning relief. The House of Lords affirmed a structured approach in Thorner v Major [2009] UKHL 18, and recent Supreme Court decisions have grappled with proportionality and unconscionability.

Meanwhile, the land-registration revolution (see Week 2) posed new challenges: if an estoppel equity is an 'interest capable of binding successors of the estate owner' within para 2 of Sch 3 LRA 2002, when does it override registration? The interplay between estoppel and overriding interests remains doctrinally fraught.

Categories of licence

Licences are traditionally classified into three types:

1. Bare licence: A gratuitous permission, revocable at will (subject to reasonable notice to vacate). Example: inviting a friend for tea. No proprietary or contractual protection.
2. Contractual licence: A permission underpinned by consideration. Cannot be revoked contrary to contractual terms; breach may sound in damages or, occasionally, injunction (Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173). The licence remains personal and does not bind successors unless another doctrine (trust, estoppel) applies.
3. Licence coupled with an interest: A licence ancillary to a recognised proprietary right (e.g., a profit à prendre). The licence is irrevocable as long as the proprietary interest subsists.

Distinguishing licences from leases

Recall from Week 8 that Street v Mountford [1985] AC 809 held that exclusive possession for a term at a rent creates a tenancy, regardless of labels. A true licence confers no exclusive possession. Courts scrutinise sham clauses and substance over form. See also Bruton v London & Quadrant Housing Trust [2000] 1 AC 406 (non-proprietary 'lease' binding only inter partes, arising from contractual intention).

*Elements of proprietary estoppel (the Thorner framework)*

Thorner v Major [2009] UKHL 18 codified three requirements:

These questions are designed to test understanding at different levels. Attempt them under timed conditions and consult tutorial partners for discussion.

Foundation

1. What are the three elements of proprietary estoppel as set out in Thorner v Major [2009] UKHL 18? Illustrate each with reference to case law.

1. Distinguish between a bare licence, a contractual licence, and a lease. Why does the distinction matter for third-party enforceability?

Standard

1. 'Proprietary estoppel remedies should always fulfil the claimant's expectation.' Discuss with reference to Jennings v Rice [2002] EWCA Civ 159 and Guest v Guest [2022] UKSC 27.

1. Albert permits his daughter Beth to build a house on his land, saying 'it will be yours one day'. Beth spends £150,000 and lives there for ten years. Albert dies intestate; his estate seeks possession. Advise Beth. How would your answer differ if Albert had sold the land to Carlos, a registered proprietor for value, one year before his death and Beth remained in occupation?

Challenge

1. 'The recognition of proprietary estoppel as an overriding interest under paragraph 2 of Schedule 3 to the Land Registration Act 2002 undermines the policy objectives of the register.' Critically evaluate this statement, drawing on case law, academic commentary, and comparative insights.

Essential

• Ben McFarlane, 'Proprietary Estoppel and Third Parties After the Land Registration Act 2002' (2003) 62 CLJ 661

Rigorous analysis of when estoppel equities bind successors; essential for understanding Chaudhary and priority.

• Simon Gardner, 'The Remedial Discretion in Proprietary Estoppel' (1999) 115 LQR 438

Influential article shaping the Jennings framework; discusses expectation vs detriment.

• Elizabeth Cooke, The New Law of Land Registration (Hart 2003), ch 8

Accessible treatment of overriding interests and estoppel in the LRA 2002 context.

Academic debate

• Ben McFarlane and Andrew Robertson, 'The Death of Proprietary Estoppel' [2008] LMCLQ 449

Provocative critique post-Cobbe; argues estoppel should be replaced by unjust enrichment.

• Mark Pawlowski, 'Satisfying the Equity: Rationalising Proprietary Estoppel Remedies' (2014) 78 Conv 174

Surveys remedial oscillation; advocates clearer guidelines.

• Tina Nield, 'Remedies in Proprietary Estoppel: The Shift from Expectation to Proportionality' (2022) 138 LQR 536

Recent commentary on Guest; critical of uncertainty introduced by proportionality.

Comparative

• Australian Law Reform Commission, Traditional Rights and Freedoms (ALRC Report 129, 2016), ch 7

Includes comparative estoppel doctrine; useful for essay depth.

Advanced

• Lord Neuberger, 'The Stuffing of Minerva's Owl? Taxonomy and Taxidermy in Equity' (2009) 68 CLJ 537

Philosophical reflection on equity's flexibility and categorisation; sophisticated.

• Nicholas Hopkins, 'Conscience, Discretion and the Creation of Property Rights' (2006) 26 LS 475

Examines unconscionability as limiting principle; essential for critical essays.

• Roger Smith (ed), Property Law: Cases and Materials (4th edn, Pearson 2018), ch 8

Comprehensive collection of edited judgments and commentary; excellent for revision.