Contractual licence coupled with actual occupation: is it an interest in land?

There is a clash of views as to whether a contractual licence coupled with actual occupation (possibly also combined with some other equitable restraint on the licensor’s right to revoke the licence) should be regarded as an interest in land.

In National Provincial Bank Ltd v Hastings Car Mart Ltd ([1964] Ch 665, CA (Eng)) title to the matrimonial home was in the husband’s name. He deserted his wife and children. he transferred title to the property to a company he controlled which granted a mortgage to the bank. The company fell into arrears with the bank and the bank sought possession. The Court of Appeal pointed to a long line of authority to the effect that a wife (in the absence of any other interest in the home) had a contractual licence to occupy it which the husband could not revoke. The land in question was registered land and so the question was whether the licence was an interest in land. If so, it was protected as an overriding interest because of the wife’s occupation (Land Registration Act 1925 section 70(1)(g)). The majority of the Court of Appeal thought that since equity would grant an injunction to prevent the husband from revoking it, it was an equitable interest in and so protected. Russell L.J. dissenting stuck to the orthodox view that a contractual licence is a personal arrangement not binding on third parties even if they have notice of it. The fact that an injunction might be granted made no difference on his analysis.

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