• In King v David Allen [1916], the Court of Appeal held that a contractual licence was not proprietary, and thus did not the new tenants of the property.

Facts of the case:

  • C had a contractual licence with the tenant of a cinema to advertise in there, in exchange for a fee.
  • A new tenant moved into the cinema and denied the continuance of this licence.
  • The claimant brought a claim against the new tenants, alleging that they were bound by the licence.

Issues in King v David Allen [1916]

  • The issue before the House of Lords in this case was whether the contractual licence that D had with the original tenants of the cinema was binding on the new tenants (was the contractual licence proprietary).

House of Lords (HL) held:

  • The HL held that the licence was not binding on the new tenant, as it did not create an interest in the land, but rather only a promise with the original tenant to use a wall for advertising.
  • [54] “that the agreement did not create an interest in land, but created merely a personal obligation on the part of the licensor to allow the licensees the use of the wall for advertisements, and that as he had put it out of his power to fulfil his obligation under the agreement he was liable in damages for breach of contract.”

Lord Buckmaster LC:

  • [59] I have looked anxiously and carefully through this document to see whether it was possible to derive from its construction anything except the creation of a personal obligation between the appellant and the respondents with regard to the use of this wall, and I am unable to find it.”
  • [61] “There is a contract between the appellant and the respondents which creates nothing but a personal obligation. It is a licence given for good and valuable consideration and to endure for a certain time. But I fail to see— although I have done my best to follow the many authorities which the learned Solicitor-General has thought it right to place before our consideration—that there is any authority for saying that any such document creates rights other than those I have described.”

Editor’s notes:

  • This case demonstrates that a contractual agreement with parties to grant a licence does not confer a proprietary right to the grantee, and thus will only be able to claim in for damages for breach of contract. Therefore, you would be well advised to, in problem questions, ensure that you look at licences carefully in order to see whether they are contractual.

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