Licensee estopped from challenging licensor’s title

Where a licensee takes a licence on the basis of a clear understanding as to the title claimed by the licensor then he is estopped from denying that title. The death of the licensor terminates a licence. If a licence fee is paid to a new licensor there is an implied grant of a new licence.

Terunnanse v Terunnanse ([1968] AC 1086, PC) concerned a licence of land in Sri Lanka (then Ceylon). The landowner executed a deed conferring rights on the appellant. The appellant granted a licence to the respondent. The landowner died in 1944. The respondent stopped paying the licence fee in 1953. In his defence, the respondent claimed that the appellant had no title to the land. The Privy Council held that the appellant had made it quite clear to the respondent that he was claiming the licence fee as something that he was entitled to as of right and the payment was clearly made on that basis. The respondent / licensee was therefore estopped from disputing the licensor’s title. The death of the original landowner had terminated the original licence and there had been an implied regrant.

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