Errington v Errington and Woods

Exclusive possession creates a prima facie inference of a tenancy, but it is not decisive. The circumstances and conduct may show that the parties intended only a personal privilege, creating a licence rather than an interest in land.

Where an owner promises a house in return for completion of mortgage payments, without obliging the occupants to make those payments, the arrangement may be a unilateral contract. Once performance has begun, the promise cannot be revoked while performance continues. A contractual licensee may rely in equity on the promise against the licensor and successors in title, except a purchaser for value without notice.

A father bought a house for his son and daughter-in-law. He contributed £250, borrowed the balance from a building society and promised that the house would become theirs when the mortgage was paid. The couple entered into possession and paid the mortgage instalments, although they had not promised to complete the payments.

After the father's death, his widow inherited the house and sought possession. The county court dismissed her claim, holding that the occupants were tenants at will and that the Limitation Act 1939 barred recovery. It added that, if the instalments were rent, the Rent Acts also prevented possession. The widow appealed. The central issue was whether the arrangement created a tenancy, a bare licence or an enforceable contractual licence.

1. The appeal was dismissed unanimously. The county court's order refusing possession was upheld, although on different grounds. The son and daughter-in-law were contractual licensees, not tenants, and possession could not be recovered while the mortgage instalments continued to be paid.
2. Somervell and Hodson LJJ agreed with Denning LJ's conclusion that exclusive possession did not determine the legal relationship. It raised a prima facie inference of a tenancy, but that inference yielded where the circumstances showed that the parties intended a personal privilege carrying no assignable interest in the land.
3. A tenancy at will was inconsistent with the father's promise that the occupants could remain while the instalments were paid. Such a tenancy must be determinable at the will of either party. Nor were the building-society payments rent. The couple were not obliged to make them, and the father could neither sue nor distrain for them.
4. Per Denning LJ, the father's promise was a unilateral contract: the house was promised in return for the act of paying off the mortgage. The couple assumed no obligation to complete that act. Once they entered on performance, however, the promise could not be revoked while performance continued. It would cease to bind the promisor if performance were left incomplete.
5. The licence was protected in equity. A licensor cannot eject a licensee in breach of a contractual promise, or a promise upon which the licensee has acted. The same restriction binds a successor claiming through the licensor, subject to the position of a purchaser for value without notice. The widow therefore could not disregard the father's promise.
6. Somervell and Denning LJJ considered that completion of all instalments would entitle the couple to a conveyance. Somervell LJ observed that, although the agreement was oral, part performance would clearly answer any issue under sections 53 and 55 of the Law of Property Act. Hodson LJ left the conveyance question open. Any dispute between husband and wife concerning their respective interests fell to be determined under section 17 of the Married Women's Property Act 1882.

1. Court of Appeal: The widow's appeal was dismissed unanimously with costs. The refusal of possession was upheld because the occupants held an enforceable contractual licence.
2. County Court: The claim for possession was dismissed. The judge held that the occupants were tenants at will and that recovery was barred by the Limitation Act 1939. He alternatively considered that the Rent Acts would prevent possession if the mortgage instalments were rent.