Binion v Evans [1972] Ch. 359

LAND LAW – CONTRACTUAL LICENSES – ENFORCEABILITY AGAINST SUCCESSORS IN TITLE – CONSTRUCTIVE TRUSTS

Facts

The defendants promised the sellers of land that they would permit the claimant to continue living in one of the cottages for the remainder of her life. In exchange for this promise, they received a significant discount on the price. The claimant had a mere license to remain on the land. The defendants later sought to evict her.

Issues

Personal rights are generally not enforceable against third-parties, in contrast to proprietary rights, which can be enforced against successors-in-title provided certain requirements are met. A contractual license is a form of personal, non-proprietary interest. Constructive trusts, by contrast, are proprietary interests that arise where the trustee has behaved in a manner such that it would be unconscionable to allow him to insist on his strict legal rights.

The issue in this case was whether the claimant could assert her contractual license to remain on the land against the defendants, who were not a party to that license: either by virtue of the license or because a constructive trust had arisen.

Decision/Outcome

The Court of Appeal held that by promising to allow the claimant to remain in the home in exchange for the significant discount, the defendants had caused a constructive trust to arise. In these circumstances, it would be unconscionable for the court to allow the defendants to rely on their strict legal right to evict her.

The Court also implied that a contractual license could itself be an enforceable equitable interest. However, this point is likely not good law, due to the decision of the House of Lords in National Provincial Bank v Ainsworth, which held that licenses are non-proprietary and therefore cannot bind third parties in and of themselves.