licenses Flashcards
what is a licence?
permission granted by the occupier of land to a person to do something on that land which would otherwise be a trespass. licenses are not an estate or interest in land and are generally understood as personal rather than proprietary interests
are licences able to be supported by caveats
no - they are a personal interest
does a licence run with the land
no, it only binds the licensee
different types of licences confer different kinds of privileges, how so?
- may be merely a defence to an action in trespass and a right to a reasonable period to leave the land after revocation e.g. a courier coming onto the property
- or may be part of a contractual relationship (supported by valuable consideration) or give rise to an equitable estoppel
a licensee with a right of occupation and sufficient rights of control over land has/may have a right to bring trespass action against third parties
what are some examples of licences
they vary enormously in their terms and complexity:
- social invitation to visit
- implicit permission to enter a garden and approach the door of a house
- exclusive right to use a “booth” in an airport terminal as a business base
- right for contractors to enter on property to complete work
- purchase of a ticket to see a show
what recent changes have occurred in the development of licence law
at common law, licences were:
- easily revocable by the licensor
- were not binding on third parties
- were clearly personal rather than proprietary interest
this has changes to some extent in modern NZ law, although the basic rule remains unchanged, the courts have recognised in certain circumstances they may be harder to revoke and may give interests:
- ability to raise estoppel arguments
- availability of equitable remedies
what are the four classifications of licences
- bare licences
- licences couples with an interest
- contractual licences
- licences supported by estoppel
what is a bare licence
- a mere permission to enter for some purpose, given gratuitously by the licensor in circumstances where there is no contract, estoppel, or trust argument
- subject to revocation by licensor at any time
- no formalities required
- purely personal; not assignable
a bare licence “passeth no interest, nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful”
what are the two forms of bare licence
- express - oral or written representation by licensor to allow the licencee onto the land for a specific purpose
- implied by law - may need to be distinguished from a mere toleration of minor trespass, common example is where a member of the public enters onto land to communicate with landowner. all implied licences are purposive and presuppose some genuine and legitimate reason for the entry
what is a licence couples with an interest
- traditionally recognised at common law where permission to enter land is coupled with the grant of a proprietary interest in the land or chattels, e.g. a right to enter to hunt animals - permission to enter for a purpose where that purpose has some greater proprietary interest.
it is suggested that the licence coupled with an interest category of licence is unnecessary in modern NZ law because it may be better treated as?
- profit a prendre - going onto land to have some proprietary interest in a part of the land e.g. minerals, hunting, fishing
- contractual licences - contractualisation of property law where they appear as an aspect of a contractual arrangement to enter to remove personal property
- if there is no contract, then as a bare licence
what is a contractual licence
- a licence supported by valuable consideration (making it a contract) - consideration does not need to be a periodical payment for use or occupation. takes effect as part of the contract by which it is conferred and is construed in its contractual context.
what are some examples of a contractual licence
accomodate diverse situations - limited and temporary as well as extensive and long term uses:
- agreement for use of a motel unit
- use of car-parking spaces in conjunction with leased property
- use of wall space for display of advertising
- enjoyment of land for timeshare units
- rights in some retirement villages
- builders contractor’s right to enter to perform work or services
- admission by ticket to a racecourse, theatre or place of entertainment
what is a licence supported by estoppel
- where licensor is precluded by estoppel from revoking or otherwise jeopardising the licence.
- estoppel will be recognised to prevent licensor from acting unconscionably by exercising licensor’s strict legal rights
what is the difference between a licence and a lease
a lease is a proprietary interest capable of assignment and binding third parties in certain circumstances. a licence is purely personal.
the decisive test is exclusive possession (a lease has this and a licence doesn’t)
what happened in Fatac Ltd v Commissioner of Inland Revenue in regards to the exclusive possession test for determining a licence or a lease
Puhinui Quarries Ltd owned a property, part of which was a quarry. In 1991, Puhinui granted a right to operate the quarry to Atlas Consolidated Ltd for 12 years, renewable for a further 3 years. In 1996, Puhinui entered into an agreement to sell the entire property to Mt Wellington Nurseries Ltd, subject to a “licence” to Atlas. if the occupation right granted to Atlas was a licence and not a lease, Fatac Ltd would need to GST.
The court held Atlas did not have an exclusive right of occupation or access, and there was no clearly defined area of which it has exclusive use = licence.
what does exclusive possession mean?
can they exclude others from the defined part of this property for a period of time? if so, it is a lease rather than a licence.
what is the difference between a licence and an easement
licences can exist in a wide variety of situations, some of which would not be possible to achieve with easements. easements generally require a closer connection with land and its use. there can be no easement where occupation or possession is given that amounts to use to the exclusion of the owner of the land - easements don’t grant a right of occupation, just an essential right of access.
an easement is an interest in the land that will run with the land and bind subsequent purchasers - it can be used to ensure public access that will continue to be recognised by subsequent purchasers
easements are able to be protected by a caveat
licences generally aren’t binding on subsequent purchasers
how is a licence created
- no specific formalities are required
- not a contract for the disposition of land so doesn’t need to follow PLA 2007 s 24 writing requirements
- can be created through written or oral grants or implication of the state of affairs - e.g. opening your gate to let someone in
how can a licencee confer sublicences
if acting with the authority of the owners, a person with an exclusive licence who has intention to exercise control over land may confer at least a bare licence on a 3rd party. in contrast, a casual visitor acting on his/her own initiative may not grant a licence or sub-licence
in what 5 ways can a licence be determined
- expiry
- occurence of certain events
- breach of condition subsequent
- revocation by licensor
- abandonment
how can a licence be determined by expiry
either it will have an express date stipulated when it will end and no notice will be required. in this case, the licence ceases to be a defence to any tort action e.g. trespass after the expiry date.
or, there will be an implied date and the court may need to impute the intention of the parties. the ‘reasonable’ period will depend on the facts of the case e.g. courier not expected to be there 5 hours later
how can a licence be determined by the occurence of certain events
certain events are contrary to the nature of a licence and their occurence will determine any licence:
- alienation by the licensor of their interest e.g. decides to sell and burden doesn’t run with the land
- subject matter of the licence is destroyed e.g. theatre to which licensees previously had free admission was burnt down (Scott v Howard), no licence over new theatre
- death of licensor (if a revocable licence, which almost all are)
how can a licence be determined by breach of condition subsequent
this is relevant for contractual licences, where the licence is granted based upon an express or implied condition, e.g. condition for “good behaviour” implied into admission tickets for entertainment. a breach of a condition subsequent renders the licence voidable rather than void, so the licensor must give notice of their intention to determine the licence in reliance on the breach.
e.g. at R&V if you breached by bad behaviour they can’t just see and let you stay - they didn’t take a step to void the contract
how can a licence be determined by revocation by licensor
depends on the licence
how can a licence be determined by revocation by licensor for bare licences
they may be revoked at any time at the will of the licensor without liability for damages. the decision to revoke must be communicated to the licensee to be effective - this may be through express or implicit notice, by the licensor doing some act inconsistent with the continuation of the licence, or by threatening proceedings for trespass.
there is no requirement that the decision to revoke should be reasonable or that the licensor should observe rules of natural justice.
in the us reasonableness may be argued in the case of public places - not in NZ but there may be a claim under NZBORA
how can a licence be determined by revocation by licensor for a licence coupled with an interest
this kind of licence is irrevocable
how can a licence be determined by revocation by licensor for contractual licences
at common law, they were treated as revocable by the licensor, subject only to liability for damages measured by price paid for the licence (Wood v Leadbitter) but today in NZ, revocability is deduced from the terms of the contract (Half Moon Bay Marina Ltd v Manukau City Council) and are possibly irrevocable.
where there is no express provision, the court can imply the licence is to be irrevocable for the period granted, especially where it is a finite period or for a specific purpose. where there is infinite duration, the court is unlikely to find an agreement is perpetual and usually the licence will be determinable upon reasonable notice.
if the licence contains an express term that gives licensor right to cancel for breach, they must follow notice requirements, effect of cancellation and considerations relevant to a grant of relief under ss 244-264 PLA 2007. PLA 2007 does not cover situations where it is alleged that the licensor is in breach, only where the licensee is alleged to be in breach
how can a licence be determined by abandonment
the licensee may determine the lease by abandoning it, no formalities required. the licensee must behave in a way that justifies licensor’s belief that licence has been abandoned (Bone v Bone).
what happened in Bone v Bone
the licensees had a long term licence, potentially up to 15 years. 1 month in the licensees moved themselves and all their possessions out of the property. the court found this was not enough to justify the belief the licence had been abandoned because it was so long they could come back in two years and the licensees also paid substantial consideration for the licence.
what is the classical approach to licences and estoppel
5 probanda to raise an estoppel argument from Willmott v Barber:
- mistake: plaintiff must have been mistaken as to their legal rights
- expenditure or detriment: plaintiff must have made some expenditure or suffered some detriment because of the mistake
- awareness: representor/defendant must ave been made aware of their own rights (and should therefore have asserted them)
- knowledge: representor/defendant must know of the mistake made by the representee/plaintiff
- encouragement/silence: representor/defendant must have encouraged the representee in the expenditure or detriment, or at least stood by silently
what is the modern approach to licences and estoppel
courts evaluate estoppel arguments based on only unconscionability - ask whether it would be unconscionable, unfair or unjust to allow something (Westland Savings Bank v Hancock). the 5 probanda of Willmott v Barber are now viewed as guidelines only but remain relevant to the extent that issues or reliance, detriment, benefit and acquiescence are all indicators of unconscionability.
what are the remedies under the modern approach to licences and estoppel
where an estoppel argument is established, court has considerable scope for flexibility in the remedy.
proportionality is important: balance between giving effect to party’s expectations and tailoring the remedy to compensate for the detriment suffered.
e. g.
- equitable damages
- right to reimbursement supported by a charge/lien on the land
- transfer of the fee simple to P
- awarding 1/2 of an undivided half-share
- grant of a lease
- recognition of an equitable easement
- rendering the licence irrevocable
why are licence and estoppel arguments significant
they may radically enhance an otherwise precarious personal interest - the circumstances of the particular case may require the licence to be upgraded to a proprietary interest. the enhanced interest will then affect not only the original representor but also third parties
what is the licensees standing in tort in relation to trespass and nuisance claims
traditionally, the view was that because a licence is purely personal, it does not give the licensee standing to sue for trespass or nuisance. however, in nz today, it is suggested that if a licensee is in de facto possession, the licensee should have standing to sue in trespass or nuisance - plaintiffs should be able to demonstrate actual occupation and physical control of the land (Evans v Gardner)
will a licence support a caveat
bare licenses and contractual licenses, without more, should not be capable of supporting a caveat - no interest in the land.
however, where the proprietary aspect of the licence is enhanced through the support of estoppel, the position remains uncertain
