King v David Allen & Sons Billposting Ltd

King v David Allen & Sons Billposting Ltd [1916] 2 A.C. 54

LAND LAW – CONTRACTUAL LICENSES – ENFORCEABILITY AGAINST SUCCESSORS IN TITLE

Facts

A tenant of a lease over a cinema gave the claimant a license to advertise within the grounds in exchange for a fee. The tenant brought their lease to an end, and a new lease was granted to a different tenant. The claimant sought to continue advertising within the grounds, but the new tenant refused to honour the agreement.

Issues

The issue in this case was whether the claimant’s contractual license to advertise could be enforced against the new tenant, and if not, whether the original tenant would be liable in damages for breach of contract.

Decision/Outcome

The House of Lords held that the license could not be enforced against the new tenant for two reasons.

Firstly, the House of Lords held that the termination of the lease by either party would also terminate the possession of any license granted by the tenant to another. As such, there was no existing license which could be enforced against the new tenant. If the license is contractual (as it was in the present case), the tenant will expose himself to an action for breach of contract if he is the one to end the lease. As such, the original tenant was liable to the claimant in damages for breach of contract.

Secondly, the House of Lords reiterated the principle that contractual licenses are personal, non-proprietary rights which do not inure to the land. As such, they do not bind successors-in-title to the land: they only bind the parties that entered into them. As the new tenant was not a party to the agreement, they could not have been bound by the license even if it had still existed.