Intention and the Creation of Proprietary Rights: Are Leases Different
![handle is hein.journals/legstd16 and id is 208 raw text is: 200 Legal Studies
Intention and the creation of proprietary
rights: are leases different?*
Jonathan Hill
Reader in Law, University of Bristol
1. INTRODUCTION
1.1 Preliminary
There are various angles from which the role of intention in the creation of
proprietary rights can be approached. First, since proprietary rights are rights
which are legally enforceable, rights which are established by a particular
transaction or arrangement cannot take effect as proprietary rights unless the
parties intend to create legal relations. So, even in a case where Y is in exclusive
occupation of land owned by X and pays X a periodic sum in return for use of
the land there is no tenancy - and no contractual licence - if the parties do not
intend to enter legal relations.
The law does not impute an intention to enter a legal relationship where the
circumstances and the conduct of the parties negative such an intention.' Where
the parties to a transaction are members of the same family or where a particular
arrangement can be explained by reference to the charitable motives of the owner
the court may conclude that the parties had no intention to create legal relations.2
There is, however, no rule of law that members of the same family cannot enter
legally binding arrangements; much depends on the surrounding circumstances.3
Secondly, there are informal situations in which the law may determine that
proprietary rights have been created notwithstanding the fact that the parties'
intentions have not been formally expressed through the use of the appropriate
documentation. Although legal rights in land will normally arise only if formally
created,4 entitlements may arise in equity where the parties' intentions - although
not recorded - are expressed informally or may be inferred or presumed from
the surrounding circumstances.5
Thirdly, a right which does not display the characteristics of a recognised
proprietary right will take effect as a personal right regardless of the intentions
of the parties. This is the numerus clausus principle6 which was expressed by
Lord Brougham LC in Keppell v Bailey in the following terms:
* I am grateful to David Cowan for his comments on an earlier version of this article.X
The usual disclaimers apply.
1. See Lord Greene MR in Booker v Palmer [1942] 2 All ER 674,677.
2. Marcroft Wagons v Smith [1951] 2 KB 496; Heslop v Burns [1974] 1 WLR 1241.
3. Nunn v Dalrymple (1990) 59 P & CR 231; Ward v Warnke (1990) 22 HLR 496.
4. By way of exception an oral agreement for a lease taking effect in possession for a
period not exceeding three years at the best rent which can be reasonably obtained creates
a legal estate: Law of Property Act 1925, s 54(2).
5. See Howard & Hill 'The Informal Creation of Rights in Land' (1995) 15 LS 356.
6. See Rudden 'EconomicTheory v Property Law: the Numerus Clausus Problem' inEeklaar
& Bell (eds), Oxford Essays in Jurisprudence (Third Series) (Oxford: OUP, 1987) 239.](ViewImageLocal?handle=hein.journals/legstd16&div=18&collection=&method=preview&ext=.png&size=3)
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Intention and the Creation of Proprietary Rights: Are Leases Different
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