Land - Landlord & Tenant (4)

5. Old Mrs. Williams was persuaded, for tax reasons, by her son, Jason, to sell him her house for $50,000 and Jason was duly registered as proprietor. The purchase price was considerably less than the true value of the house, because Jason had agreed that his mother could stay in the house rent-free for the rest of her life. Two years later Jason sold the house David for $150,000, informing David falsely that he and his mother were emigrating to Canada. David was registered as proprietor of the house and Jason disappeared with the purchase money. David now seeks possession of the house from Mrs. Williams, while she claims she is entitled to be registered as owner in his place.
Discuss.
Nature of Mrs. W’s interest in the house
- choices of freehold, leasehold, licence and squatter (irrelevant here)

Freehold?
- Bannister v Bannister 1948
- Sale of cottage at undervalue on the oral undertaking of rent-free for life
- The oral undertaking created a licence for life rather than one determinable at will, so long as the defendant continued to live there
- P held the cottage on constructive trust for D
- It would have been a fraud on the part of P to renounce the agreement with D by reason only of the absence of writing
- It was not necessary to show that the conveyance had been fraudulently obtained
- here, since there was an irrevocable licence for life which fell within the definition set out in s20(1)(iv) SLA 1925 of ‘a tenant for years determinable on life, not holding merely under a lease at a rent’, the licensee becase a tenant for life under the SLA and was entitled to have the legal title vested in her
- Court will likely rule to Mrs. W’s favour, impose a constructive trust of tenant for life (based on Settled Land Act)

Estoppel Licence?
- Mrs. W has acted to the promise
- Mrs. W has relied upon the promise
- Mrs. W has acted detriment to it
- Court likely to order an estoppel licence in favour of Mrs. W

Leasehold?
- Consider Skipton case
- There is uncertain maximum duration of term
- LPA 1925 s149(6): Lease for life / until marriage will be considered a 90-year term lease; but only if there is consideration
- Mrs. W’s reduced purchase price can be considered a premium / lump sum paid as consideration

Interest of David, the purchaser
- Subject to registered interest (Mrs. W’s interest is not registrable)
- Subject to overriding interest
- LRA 1925 s70(1)(g) Mrs. W has actual occupation
- LRA 2002 Schedule 3 Mrs. W has actual occupation which is obvious to reasonable inspection; Mrs. W can apply to rectify the register
- LRA 2002 s116: Estoppel licence is capable of binding 3rd parties via registration and actual occupation