• In Clore v Theatrical Properties Ltd [1936] the House of Lords confirmed the approach to contractual licences taken in King v David Allen [1916], which was that they are not proprietary in nature. Therefore, they are unable to bind new owners of properties and also third parties.

Facts of the case:

  • C had rights, under an assigned written agreement to use several facilities contained within a theatre.
  • The agreement stated that it was between the lessor and the lessee and granted the predecessor of the claimant exclusive use of the facilities.
  • The lessor sold the theatre, and C sought to argue that the agreement was binding upon the new owner of the theatre as an overriding interest under s70 (1) (g) Land Registration Act 1925. He argued the agreement was a lease, as it stated it was between the lessor and the lesee. If this was the case, then it would bind the new owners.
  • He also argued should that in any case, the agreement, if a licence, would still bind the new owner.

Issues in Clore v Theatrical Properties Ltd [1936]

  • It was held by the House of Lords that the agreement was not a lease under the Land Registration Act but rather was a licence.