Could proprietary estoppel turn a licence to carry out alterations into an ownership right?

In East Surplus Investments Ltd  v Tincho Industrial Co Ltd ([2012] HKEC 778) the owner of a shop in a multi-owner building (T) obtained a licence to install roller shutters in the external wall of the building. The external wall was owned by a company in liquidation and the licence was given by the liquidator. The shop owner carried out the work for which a licence had been given but also made other, more extensive, alterations to the external wall. The liquidator sold the external wall to E which brought proceedings in trespass as a result of the work carried out by T. T claimed that the licence granted by the liquidator amounted to an assurance that T would become the owner of the external wall. This failed since the licence plainly could not be construed as such an assurance. Even if T had any sort of equity, it did not bind E which was a bona fide purchaser for value without notice (the relevant time for this purpose being the date when E’s firm offer to buy the wall was accepted by the liquidator). T was ordered to reinstate the external wall and to pay a market rental for its use from the time when E’s agent wrote to complain of T’s actions.


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