Binions v Evans [1972] Ch 359

Court: Court of Appeal

Basic Facts: X agreed with D that D could stay in a cottage rent-free as a tenant at will for the rest of her life, provided she maintained the cottage and garden. When X sold the land to C, he notified C of D's rights and reduced the sale price accordingly. C, after purchasing the property, gave notice to D to vacate and attempted to take possession.

Issue for the Court: Was D’s interest in the property enforceable against C, who had notice of D's rights when purchasing the property?

Held: The court found that a constructive trust could arise where a purchaser takes property subject to an existing licensee’s occupation, particularly if the purchaser agrees to be bound by the license.

Lord Denning MR (dismissing the appeal)

• Tenancy at Will:
  The agreement did not fulfill the criteria for a tenancy at will, despite being named as such.

• Tenancy for Life:

• D was not paying rent, so under section 149(6) of the Law of Property Act (LPA) 1925, this could not be a tenancy for life.

• The Settled Land Act 1925 was also inapplicable, as the arrangement didn’t align with D's intent to sell or lease the land.

• Contractual License:

• This was not a tenancy but a contractual license.

• Equity would prevent C from evicting D in breach of the contract.

• A purchaser with notice of such an agreement (like C) would be bound by a constructive trust in favor of D.

• Constructive Trust:

• Where a property is sold subject to a contractual license, equity imposes a constructive trust on the purchaser.

• The stipulation for C to take the property subject to D's rights, even though D was not a party to the contract of sale, was valid and enforceable (similar to Beswick v Beswick).