Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173

The revocability of a contractual licence

Facts

The appellant was a company that owned a theatre and which had given the respondent a licence to occupy the theatre for an initial period of six months, with the option to continue to occupy for a further period of six months at an increased rent. Following the expiration of the second six month period, the licence allowed for the ongoing occupation by the respondent at a weekly rate of three hundred pounds per week, with a month’s notice being required for the termination of the licence by the respondent. It was also necessary for the rental payment to be made to be four weeks in advance. The licence did not contain any provision for notice of termination by the appellant. The respondent company took up the options contained within the licence, but on 11^th September 1945 the appellant served notice on the respondent to terminate the licence on 13^th October 1945. The appellant did not assert that the respondent had breached any of the terms of the licence. The respondent company asserted that the licence was only revocable by the appellant if the respondent was in breach of its terms, or alternatively, the licence was valid for a reasonable period after notice of its termination had been given and that this period had not expired.

Issues

The issue in this context was whether a contractual licence could be revoked when the licensee was not in breach of any of its terms.

Decision/Outcome

It was held that licences without consideration are revocable at any time. However, where a licence is granted for a particular purpose, such as where a person buys a ticket to view a performance or a sporting event, providing that they are not in breach of the terms of that licence, they should be allowed to remain on the property until such time as the performance or event has ended. In the current case, the licence granted by the appellant was not however perpetual. It could be terminated by the appellant on giving reasonable notice. On the facts, the respondent had failed to demonstrate that the notice given was insufficient and therefore, the notice was valid. The appeal was allowed.