Winter Garden Theatre (London) Ltd v Millennium Productions Ltd

Viscount Simon. My Lords, the appeal relates
to a licence under which the respondents were permitted to
use the Winter Garden Theatre, Drury Lane, which is the
property of the appellants, for the purpose of producing stage
plays, concerts or ballets, in return for a weekly payment which
at the time when the appellants sought to terminate the licence
amounted to 300/. per week. There was no express term in the
licence providing that the appellants could revoke it and the
principal question of the case is whether, as the respondents
contend, and as the Court of Appeal decided, the respondents
are entitled to continue their use of the theatre in perpetuity
if they so desire, and continue the weekly payments, or whether,
as the appellants contend, the licence is revocable by reasonable
notice. It isto be noted that, although the expression " rent "'
or "' rental'"' was used in the relevant documents, it is agreed
between the parties (as is plainly the fact) that the respondents
acquired no interest in land but were.pure licensees for.value,
the consideration taking the form-of a weekly payment. Such
a licence is a contract, and this contract contains the express
term that if the respondents, on proper notice, opt to continue
the use of the theatre beyond the first twelve months, they may»
do so with the right of giving one month's notice of their
intention of then terminating the licence. The licensors on the
other hand are given by the documents no express right to
terminate the licence at all: the question is, is cise a right to
be implied, and if so, on what terms ?

The effect of a licence by A. to permit B. to enter upon A.'s
land or to use his premises for some purpose is in effect an
authority which prevents B. frorn being regarded as a trespasser'
when he avails himself of the licence (Thomas v. Sorrell (1)).
Such a licence may fall into one of various classes. It may bea
purely gratuitous licence in return for which A. gets nothing at
all, e.g., a licence to B. to walk across A.'s field. Such a
gratuitous licence would plainly be revocable by notice given
by A. to B. Even in that case, however, notice of revocation
conveyed to B. when he was in the act of crossing A.'s field

(t) (1674) Vaugh. 330, 351.

A. C. AND PRIVY COUNCIL.

could not turn him into a trespasser until he was off the
premises, but his future right of crossing would thereupon cease.
There is is another 'class of licences which may be called licences
for value, in which B. gives consideration for the permission
he _obtains from A., and this last class may be further sub-
divided... _In-some: nhses the-consideration-may.be. given once
for all, as for example by the payment.of.a.capital sum or by
conferring a single benefit at the beginning. The case of
Llanelly Ry. & Dock Co. v. London and North Western Ry.
Co. (x), to which I will refer later, is an example of this.

189

H. L. (BE)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

Vv.
MOL-
LENNIUM
PRODUC-

Thi TIONS, LD,

other.cases, the consideration may take the form of a periodic | Viscount Simon,

_payment, as is the case in the appeal we are now considering.
There is yet.a third. variant-of-a.licence-for-value which. con-
stantly occurs, as in the sale of a ticket.to.enter premises and
witness a particular event, such as a ticket.for.a seat at a
particular performance at a theatre or for entering..private
ground to witness a day's sport. In this last class of case, the

in law, plainly is that the ticket.entitles.the-purchaser, to, enter

*

implication of the arrangement, however.it may. be classified
ear He i

and, if he behaves himself, to remain on the premises until.
end of the event which he has paid his money.to.witness< Such,
for example, was the situation which gave | rise to the decision
of the Court of Appeal in Hurst v. Picture Theatres, La. (2 YX
I regard this case as rightly decided, and repudiate the view
that a licensor who is paid for granting his licensee to enter
premises in order to view a particular event, can nevertheless,
although the licensee is behaving properly, terminate the licence
before the event is over, turn the licensee out, and leave him to
an action for the return of the price of his ticket, The licence
in such a case is granted under contractual conditions, one of
which is that a well-behaved licensee shall not be treated as a
trespasser until the event which hehas paid to see is over, and
until he has reasonable time thereafter to depart, and in Hurst
v. Picture Theatres, Ld. (2), where these rights were disregarded
and the plaintiff was forced to leave prematurely, substantial
damages for_assault and false imprisonment rightly resulted.

This brings up for reconsideration the oft-quoted and oft-
considered decision of the Court of Exchequer in 1845 in
Wood v. Leadbitter (3). 1 think that this decision can only
be rightly understood by bearing in mind the state of the
pleadings on which the decision depended. The old system of

(z) L. R. 7H: Le 550. (3) 13 M. & W. 838.
82) {99r§] mK. Bo:

Md

190

H. L. (E)

1947

WINTER
GARDEN
THEATRE
(LonDon),
Lp.

Uv.
Mit-
LENNIUM
PRODUC-
TIons, Lp.

Viscount Simon,

HOUSE OF LORDS [1948]

pleading was far more strict than the system now prevailing.
The action was an action for the tort of assault and false
imprisonment arising out of the circumstances that Wood had
bought a ticket for admission to the grandstand at the Doncaster
races but that while the races were going on the defendant,
acting under the orders of Lord Eglintoun who was steward of
the races, and must be treated as having sold Wood his ticket,
turned the plaintiff out. The defendant's plea was that the
plaintiff was on Lord Eglintoun's ground, to which the plaintiff
filed a replication that he was there " by the leave and licence
"of Lord Eglintoun" (rz). There was a traverse to this repli-
cation and issue was joined on that traverse. Alderson B.,
at the beginning of his judgment, sets all this carefully out and
the language of the replication is printed in italics in the report.
Kennedy L.J., pointed out in Hurst v. Picture Theatres, Ld. (2)
that in Wood v. Leadbitter (3) 'it was not there suggested by the
" plaintiff 'My right to remain is not merely by leave and
"licence of Lord Eglintoun ; I have an implied contract that
""T should be there and that contract is not subject to
" "revocation ',"" and went on " Therefore, as I say, one must
"deal with that case upon the pleading, and upon that pleading
"the judgment of the court cannot be put more specifically
"or more correctly than in the passage I have quoted from the
"headnote." The passage in the headnote referred to by the
Lord Justice (4) is as follows: " A right to come and remain for
"a certain time on the land of another can be granted only by
"deed ; and a parol licence to do so, though money be paid for
"it, is revocable at any time, and without paying back the
"money." It seems plain, therefore, that the only issue to be:
decided in Wood v. Leadbitter (3) was whether the plaintiff,
when he.was forcibly removed from Lord Eglintoun's land, '
continued to have the leave of Lord Eglintoun to be there;
and he had not this leave because it had been withdrawn.
On the pleadings in that case, the question was not open
whether the effect of the contract was not to preserve the
plaintiff from being treated as a trespasser until the races were
over. Untilthe Common Law Procedure Act of 1852 permitted
joinder of different causes of action in the same suit, a plaintiff
in the position of Wood had to sue either in tort (as he did) or
in assumpsit. In Kerrison v. Smith (5) Collins J. said of Wood
v. Leadbitter (3) " it was conceded that the grantor has a right

(1) 13 M. & W. 838, 839. (4) 'iors TAKS Bray 12.

(2) [1915] 1 K. B. 1, 13. (5) [1897] 2 Q. B. 445, 448.

(3) 13 M. & W. 838.

A. C. AND PRIVY COUNCIL.

- to revoke a licence but the point set up by the plaintiff, that
"there was a contract, for the breach of which the plaintiff
was entitled to recover damages, was never properly dealt
"with." It does not seem necessary to discuss, now that we
are more than a hundred years from the decision, whether if the
Judicature Acts had then been passed, the Court of Exchequer
could have protected Wood from what was an injustice ; the
instances given by the judges who were in a majority in Hurst's
case (I) show how manifest the injustice is. Wood's position
really was that Lord Eglintoun had agreed with him for reward,
not to treat him as a trespasser till the races were over, and till
he had a reasonable time after that to withdraw, but this was
not the issue directly raised by the pleadings. It is enough to
say that, at any rate since the fusion of law and equity, no
court in this country would refuse to a plaintiff in Wood's
situation the remedy for which he asked, and the case, in my
opinion, should no longer be regarded as an authority.

I had reached this point in drafting my opinion when I had
the advantage of reading in print the opinion prepared by my
noble and learned friend, Lord MacDermott, in this appeal.
He has so precisely and clearly expressed the view which I had
formed on the case before us that it becomes unnecessary to
deal independently with the application of the principles I have
endeavoured to formulate to the matter in hand. I agree with
him entirely that the decision of this House in Llanelly Ry. &
Dock Co. v. London & North Western Ry. (2) does not assist the

present appellants, for the reasons he states. On the other
hand, I accept his conclusion that when the clauses of the
present licence are carefully studied, the proper inference from

6c

the language v used i is that, the licence was.not.perpetual_but that.

TABLET

"the intention of the parties, to be inferred from the.document,
though not expressly. stated, was. that, aye the. SH RDREY
indicating their dec
would be ite the sean dis 3 were iba Lasay a Heakonalls
time. é to 'withdraw, after. which they would become trespassers.
There is, in my opinion, no reason at all for saying that the
only alternative to a perpetual licence is an instant termination
of the respondents' right without any period of notice at all.

I entirely agree with the analysis to which my noble and
learned friend, Lord MacDermott, has subjected the arrange-

ment made between the respondents and Linnit & Dunfee, Ld.
of August 22, 1945, from which it follows that this agreement

(x) [r915) 1 K. Bur. (2) SLARE? RATE 5 50.

IQI

HL. (E.)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

v.
Mit-
LENNIUM
PRODUC-
TIons, Lp.

Viscount Simon.

—

WINTER
GARDEN
'THEATRE

(LonpDon),

Lp.

v.
MIL-
LENNIUM
PRODUC-

tions, Lp.

HOUSE OF LORDS [1948]

was really a sub-licence entered into without the appellants'
consent, thus constituting a breach of cl. 6 of the letter of
June I0, 1942. Consequently, the respondents are precluded
from relying on it in support of their plea that, if the licence
were revocable, reasonable notice had not been given. The
result is, as Lord MacDermott points out, that the respondents
failed to show that the time which the appellants were prepared
to give them to withdraw was insufficient ; the notice given by
the appellants must be considered valid and effectual. I move
that the appeal be allowed.

LorD PorTER. My Lords, on June 10, 1942, the appellants
granted to the Countess de la Marr a licence of the Winter
Garden Theatre for the purpose of producing stage plays,
concerts or ballets. As I understand, the terms of this licence
were meant to be a preliminary step towards establishing
a contractual relationship between the appellants and the
respondent company which had not then been registered. It
was, however, formed shortly afterwards and on October 1,
1942, a further agreement was entered into between the appel-
lants, the Countess, and the respondents, whereby she was
authorized to assign her licence to the respondents and they
in their turn were permitted to grant a sub-licence to Messrs.
Arnold and Hylton for a period which by a series of options
granted to those gentlemen might extend for seven years or
even longer if a successful play were running at the expiry of the
last optional period. The sub-licence to Messrs. Arnold and
Hylton in fact expired long before any date material for your
Lordships' consideration, and is, I think, only of importance
as indicating that the appellants were at one time contemplating
the possible continuance of the respondents' licence for seven
years and upwards. Two further documents are of importance,
viz.: An assignment of the licence by the Countess to the
respondents on October 1, 1942, and an agreement of August 22,
1945, whereby the respondents purported to engage Linnit &
Dunfee, Ld., to produce a play entitled '" Young Mrs. Barring-
"ton"' at the theatre. A question whether this agreement
constituted an unauthorized licence of the theatre to Linnit &
Dunfee will have to be considered later, but cannot be solved
until the terms of the original licence and the terms of the
(alleged) unauthorized licence are examined.

Before these matters are considered your Lordships must,
I think, decide what are the principles in the light of which a

A. ¢. AND PRIVY COUNCIL.

licence to enter into and carry out activities upon land has to
be construed. Upon this subject there is a wide divergence of
view, the appellants contending that prima facie a licence is
revocable at will, though it may be that due notice of the date
at which the revocation is to take place must be given and
though the licensee must at least be given reasonable time to
wind up his activities having regard to all the circumstances of
the case... They add that this view is, of course, not inconsistent
with the existence of a term in the licence whether express or
implicit, making it irrevocable altogether or for a named
period. The Court of Appeal, however, has held and the
respondents maintain that no such principle is to be applied,
even prima facie, in construing a licence. That contract, they
say, must be construed in the light of its own terms and with
no leaning towards revocability or irrevocability.

My Lords, there are very few, if any, contracts which can be
construed without taking into consideration a long background
of gradual development and the implication of customary
provisions, and I do not think that the meaning of a licence can
be reached by considering the matter, as it were, in the air:
its incidents have a long history behind them. What is the
effect of that history or indeed what it is may well be in dispute,
but whatever it is I do not think it can be neglected. The
general proposition as to the rights conferred by a licence is to
be found as early as 1673 in the judgment of Vaughan C.J. in
Thomas v. Sorrel (1), in the words "a dispensation. or licence
'"' properly passeth no interest nor alters or transfers property
"in anything, but only makes an action lawful, which without
"it had been unlawful." This statement was quoted in Wood
v. Leadbitter (2) by Alderson B. delivering the judgment of the
court, and for the proposition that every licence is and must
be revocable so long as it is a mere licence he refers to Brooke's
Abridgment, Book II sub-tit. "Licences'' para. 15, to the
judgment of Doderidge J. in Webb v. Paternoster (3) ; to Rex v.
Horndon-on-the-Hill Inhabitants (4); and to. Hewlins v.
Shippam. (5).

It has been suggested that the decision in Wood v. Lead-
bitter (6) turned merely on the pleadings and decided only that
a right to enter and remain on land though for no more than a
limited period required a deed to make it effective. I cannot

(x1) Vaugh. 330, 351. (4) (1816) 4 M. & S. 562.
(2) 13 M. & W. 838, 844. (5) (1826) 5 B. & C. 221.
(3) (1619) 2 Roll. R. 143, 152. (6) 13 M. & W. 838.

A. C. 1948. 3 O

193

HLL, (BE)

1947

WINTER
GARDEN
THEATRE
(Lonpon),.
Lp.

v.
MIL-
LENNIUM
PRODUC-
TIONS, Lp.

Lord Porter.

194
H. L. (£.)

1947

WINTER

LENNIUM
Propuc-

Tions, Lp.

Lord Porter.

HOUSE OF LORDS [1948]

think so: It is true that the decision ultimately turned on this
point and equally true that the contention might not be good
after the passing of the Judicature Act, enjoining common law
courts to take into consideration the doctrines of equity.
But as I read the case it is assumed that a licence is prima facie
revocable. Throughout the whole of the judgment this point
is stressed. Indeed Alderson B. says (1): "It may further
"be observed, that a licence under seal (provided it be a mere
" licence) is as' revocable as a licence by parol.' It was said
on behalf of the respondents that this principle applied only
to licences given without consideration and that the phrase
""mere licence '' was used in order to exclude licences given
for a consideration. If the contention that licences given
for a consideration are' not revocable were confined to a
limited licence to do a particular act or series of acts, I do not
think I should disagree provided the performance ofa particular
act had been actually begun. So limited the proposition does
not conflict with the view that normally a licence' is revocable,
but if applied generally it does, as I think, conflict with the
principles laid down in Wood v. Leadbitter (2), and in particular
with the statement that a licence under seal (which does not
require consideration) is as revocable as a parol one. In Wood
v. Leadbittér (2) the licence was for a limited purpose and for a
limited time and for valuable consideration. It may well be
that now that common law and chancery remedies can be
administered by any branch of the High Court, a different
decision would be given, but even if that be conceded it does not
seem to me' to have any bearing on the casé'now presented to
your Lordships. It is one thing to say that a limited and
temporal licence remains in' force until the particular object
for which it is given is fulfilled or the definite period of time has
élapsed, it is quite a different matter to allege that a licence
once given! in general terms can never be terminated. To my
mind the whole historical development of the law is against
such a contention. Cornish v. Stubbs (3), Mellor v. Watkins (4)
Kerrison v. Smith (5), Wilson v. Tavener (6), Canadiaw Pacific
Ry. Co. v. The King (7), Minister of Health v. Bellotti (8),
are all against it and even Hurst v. Picture Theatres, Ld. (0)
is not antagonistic.

(1) 13 M. & W. 838, 845. (6) [roor] 1 Ch. 578.
(2) Ibid. 838. (7) [1934] A.C. 404.
(3) L. Re 5 C: Po 334. (8) [1944] K. B: 298.
(4) L. R. 9 Q. B. 400. (9) [1915] 1 K. B. 1.
(5) [1897] 2 Q. B. 445.

A. C: AND: PRIVY |COUNCIL,

The respondents, however, relied in particular on Llanelly
Ry. & Dock, Co. v.' London & North: Western -Ry. Co. (1).
Undoubtedly in that case running powers over their line given

by one railway company to another were held to be irrevocable,

but they formed: part ofa general agreement under which
a large sum was lent, and formed: part of the consideration
for the loan. In any) case running powers are in a class) by
themselves involving special arrangements, preparations and

expenditure, which may well influence the construction of an'

agreement under which they are granted. The actual decision
was that all the provisions of the agreement showed that it was
a permanent and not:a terminable one. It is true that Lord
Selborne said: (2) that 'an agreement de futuro, extending over
"a tract of time which, on: the face of the instrument, is in-
" definite and unlimited, must (in general) throw»upon anyone
" alleging that it is' not perpetual, the burden of proving that

" allegation either fromthe nature of the subject or from some:

" rule-of law:applicable thereto."". Whethersuch a proposition
is too: widely stated, though in general it:may be true, is not a
matter which, in) my opinion, it:is: material to decide: The
other 'members of the House gave their decision upon? the
construction of the documentvitself:and in;any case qualified

it by bringing to the inquiry:a consideration of the nature of the |

subject-matter involved.
The rule of law applicable to the licence granted to the respon-
dents in-the present) case, is; I think, that prima facie licences

are revocable: the circumstances of the case are (1.) that this)
wasca licence to -use-a theatre and» (2.) are:to be found in the)

terms of the document itself. Judging from the last consider-
ation alone! I should:think it:revocable.. The licence is for the
purpose of producing stage plays, concertsand balletsand starts

with options toiretain the Jicence for,two successive periods of»

six monthseach.» These provisions.are succeeded by an option of
further continuing the licence. Speaking for myself I should:not,
unless compelled, construe sucha) document as granting \a
perpetual licence. If it were a tenancy I should interpret it as
requiring no:more than reasonable notice, and indeed, as) rent
is payables weekly, it might: require only \a week's: notice.
I cannot think that the rights acquired by means of a licence
exceed those which:a tenancy would give.) But it is» said
(x.) the licensees were put to considerable expense in war time
(z): (1873) Le Rv 8+ Ch. 942; (2) LR. 7 HV L. 550, 567.
(1875); Li R. 7 Hol: 550;
3 Oj

195

H. Li(E)

WINTER |
GARDEN
THEATRE|
(London),
Lp.

Uv.
MiL-
LENNIUM
PRopuc-
TIONS, LD.

Lord: Porter.

196

H. L. (E.)

1947

'WINTER
GARDEN
THEATRE

(LonDon),

Lp.
on
MIL-
LENNIUM
PrRopwuc-

TIONS, Lp.

Lord Porter.

HOUSE OF LORDS [1948].

in providing black-out material, and (2.) the licensees have to
give a month's notice to terminate the licence whereas no —
provision for its termination by the licensors is to. be found.
As to the first objection the answer, as I think, is that the
respondents were granted at least a year certain anda possibility
of seven years enjoyment ; and as to the second that, if my
view of the law be right, the licensees are entitled to a reasonable
time after notice to put an end to their commitments, whereas:
the licensors would have no protection against the licensees
walking out at any moment and, therefore, require some notice:
of an intention to do so. Primarily, of course, the question
whether the respondents' licence is revocable or irrevocable
must depend on the language of the document of June 10, 1942,
and from that contract I cannot find grounds for supposing
it to be irrevocable. Apart from the circumstances already
mentioned, the retention of the bars and cloak rooms, the right
on the part of the appellants to sell programmes, etc., their
retention of the possession of the theatre and their acceptance
of responsibility for payment of all rates, taxes, assesments and
theatre and excise licences are not obligations which one would: »
expect the grantor of a perpetual licence to undertake. Much
less would they render themselves liable for external: and.
structural repairs, external painting and decoration and repairs
to roof and main drainage. I have not forgotten that the
licence was granted and accepted in war time and at a substan-
tial and increasing rent. Such a consideration may have some
weight in a case where the construction of a document is.
doubtful. In the circumstances of the present case it cannot,.
I think, influence the decision.

There remains the subordinate question whether the appel-
lants did not bring their action too soon. On this issue the:
respondents put forward two contentions. (z.) that the month's.
notice given by the letter of September 11, 1945, is too short,
(2.) that in the case of a licence they are entitled to a reasonable:
time to wind up their commitments after the termination of the

time given by the notice for surrender of the premises.

My Lords, speaking for myself on an occasion when I do not:
think it necessary to come to a final conclusion.on the matter,
I take the provisional view that a licence is prima facie ter-
minable at once after notice to determine has been given, but
that the licensee must be given a reasonable time to:vacate the.
premises and what is a reasonable time must depend upon all.
the circumstances of the case. In the case of a theatre, it might.

A. C. AND PRIVY COUNCIL.

even extend to the run of a play, if no suitable alternative
premises could be found. But in the present instance I do
not think a question of this kind which may give rise toa marked
difference of view calls for decision. Whether the submission
be that notice to determine a licence is required and a month
'was too short in the circumstances, or that a month's notice
having been given the respondents were entitled to a reasonable
time to dispose of their commitments and that no 'sufficient
time had been given when the appellants delivered their
counter claim for a declaration and injunction on November 27,
1945, the issue is still the same: Was a month's notice suffi-
cient and was a reasonable time for vacating the theatre given,
whether that time is to count from the date of giving the notice
or from the time at which possession was demanded ?

In either case the respondents sought to rely on the agree-
ment which they had entered into with Linnit & Dunfee, Ld.,
and upon it alone as'a circumstance to be taken into con-
sideration in determining the time which should be given for
vacating the premises. If that agreement was permissible
under the terms of the licence of June 10, 1942, the time given
~-was undoubtedly too short. For the appellants however,

it is said; and Roxburgh J. who alone dealt with the matter
decided that it was a sub-licence, and void under cl..6 of that
document, as it had not been authorized by the grantors. The
material portion of that clause reads as follows "' You are not to
"enter into a sub-licence of the theatre without consent of the
"company, but this consent would not be unreasonably withheld
'' provided a mutual arrangement is made between us for our
'*"company to participate in any profit on any sub-licence to
"be entered into by you.' In fact no permission to sub-
" Jicence was asked, nor was any agreement made for participation
in the profit arising from the agreement between the respon-
'.dents and Linnit & Dunfee, Ld. That agreement had not been
authorized and if it was a sub-licence was entered into: in
defiance of'cl. 6 and cannot be relied upon as prolonging the
time to which the respondents were entitled before vacating
the premises. Is it then a sub-licence? I think it is. The
learned judge who tried the case has gone through the agreement
clause by clause and it is not necessary for me to repeat his
analysis. I think it is sufficient to say that the original licence
of June 10, 1942, authorized the use of so much of the theatre
as was required for the production of stage plays, concerts or
ballets, reserving only an office, the right to bars and cloakrooms

197

H. L. (E,)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
LBioys
v.
MIL-
LENNIUM
PRODUC-
TIoNns, LD.

Lord Porter.

198

H. L, (E.)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

Uv.
Mi-
LENNIUM
PRODUC-

Tions, Lp.

Lord Porter.

HOUSE OF LORDS _ [1948]

and some general control. Similarly, Linnit & Dunfee, Ld.
obtained the right to use so much, of the 'theatre..as they
required to produce a particular play with not. dissimilar reser-
vations. As the learned judge observed (1), there is only one
thing in the latter agreement which supports the contention of
the respondents, viz., the phrase "" The theatre company agrees
"to engage the production company to produce,'',and in his
opinion those words could not prevail against the substance of the
agreement aS a whole. With this view I concur. [also take
the same view as Roxburgh J. in thinking that there is no
sufficient evidence to prove that the appellants knew of and
acquiesced in the impugned agreement. A knowledge that the
programmes contained the,words ' By. arrangement,,with
"Mala 'de la Marr, Linnit-& Dunfee, present 'Young
""" Mrs. Barrington ''' seems to me quite insufficient for that,
purpose. On all points therefore I find myself in agreement
with the learned judge who tried the case and would allow the
appeal and restore his judgment.

Lorp: Uruwartt. My Lords, the letter, of June 10, 1942,
gave to the licensees the option—which they duly exercised—
"of further continuing the licence of the theatre on the pay-
""ment each week of a flat rental of 300/..per week and you
" (i.e., the licensees) will. give us one month's notice of your
"intention of then termininating the licence." The letter did
not contain any other provision in terms directed to the period
for which the extended licence was to continue.

In my opinion a right to continue. without more does not
mean anything except a right to continue for a, period which is
left at large. The language of the letter is consistent with the
implication of the term for which the licensees contend, namely,
that the licence was to continue for ever subject only to the right
of determination given to them. But,unless that term can, be
implied—it is in effect a stipulation that the licensors will not
revoke the licence—it is to my mind an inevitable consequence
that the licensors might determine the licence by notice given
at any time.

The question whether any such term can be properly.implied
is purely a question of the construction of the contract... Upon
that the subject-matter of the, bargain, viz., the right to, the
exclusive use for defined purposes, of, practically. the, whole
theatre, possession being retained. by the licensors ; . the

(1) (1946) 125 L. J. (Ch.) 185, 191.

A.C. AND PRIVY COUNCIL.

presence in the contract of obligations incumbent on the
licensees the non-performance of which might subject the
licensors to serious loss, coupled with the absence of any power
of determination in the licensors in the event of breaches by the
licensees of their obligations ; and the personal relation between
the licensors and licensees arising out of the retention of parts of
the theatre for use by the licensors appear to me to negative the
propriety of making the implication suggested. If the impli-
cation is to be made, it can only be made by stressing the
contrast ,between the presence in the licence of a power to
determine given to the licensees and the absence of any such
power in favour of the licensors. Isit a proper inference from
this.contrast that the,true intendment of the bargain was that
the licence was to be determinable only at the wish of the
licensees? Inmy opinionitisnot. Ifthe provision.giving the
licensees power to determine were absent, it might be inferred
from the reversation of.a weekly rent that the licensees could
determine the licence by,a week's notice. I read the provision
requiring a month's notice as in substance only a proviso
directed to securing a notice longer than that thought to be
inherent in a transaction essentially determinable, the choice of
a month marching with the stipulation contained in the
accompanying letter of ven date as to maintenance in the
hands ;of the licensors of four weeks' rent. I.cannot read the
provision as marking out the only way in which, consistently
with, performance.of the bargain, the licence might be brought
toanend. J amjunable therefore,to imply a term providing for
continuance of the licence forever. The consequence.is, in. my
opinion, that the licensors might determine by notice given
at any time.

The next question is whether the notice given must bea
reasonable notice or whether -it may be a notice operating ,at
once to determine the licence, the licensees in that event having
a reasonable time within which to.vacate the theatre. In my
opinion itis the former. I cannot think that.any other notice
would reflect the intention of reasonable men in the position of
the licensors and licenseés,in the present .case. No reasonable
man would in that connexion deny the relevance of the general
proposition that he who sows should be allowed to reap. To my
mind -working effect to that proposition is best given in the
present case by requiring that the licence should determine when
the fruits have been reaped—i.e., at the expiration, of a notice
the length of which is determined by the commitments of the

199
HL. (E))

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

v.
Mix-
LENNIUM
PRODUC-
TIONS, ;LD.

Lord, Uthwatt.

200

H. L. (BE)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Esp.

v.
MIL-
LENNIUM
PRODUC-

TIons, Lp.

Lord Uthwatt.

HOUSE OF LORDS 1948}

licensees as they stood under the contract at the date of the
notice rather than by permitting an immediate determination
of the licence on the giving of the notice coupled with a right
in the licensees to work out the position that existed at the
date of the notice.

The latter alternative would resemble the exceptional position
of a tenant of land expressed to hold at will whose tenancy has
been determined by an immediate notice. He, under the law
relating to emblements, is entitled, paying no rent after his
tenancy has determined, to enter and gather his crops. Pre-
sumably in the present case, were notice other than a reasonable
notice sufficient and given, the licensees working out their
position would not, in respect of the period after the deter-
mination of the licence, be under any obligation to pay rent.
That is not a commercial proposition. The former alternative
that a reasonable notice is necessary accords with the law that a
reasonable notice is necessary to determine a tenancy of land
held under a general occupation at a rent, where the tenancy is
not expressly a tenancy at will: (Doe d. Martin v. Watts (1).)
Where rent is reserved by the year the rule has long ago been
rigidly fixed that a reasonable notice is a half year's notice
expiring on the last day of the year of the tenancy (cf. 15
H. 8, 150) and similar rules defining the application of the
principle have been laid down as respects general occupation of
land at a monthly or weekly rent. But these are rules only.
The assertion of the principle and an example of its application
will be found in Lowe v. Adams (2). The licence here very
closely resembles a tenancy under a general occupation and
I would, as respects the nature of the right of the licensors to
determine it, apply the principle which governs the right to
determine such a tenancy. In my opinion therefore, a
reasonable notice was necessary in order to determine the
licence.

In a case such as the present the question what is or is not a
reasonable notice to quit cannot be determined by reference
only to the nature of the user authorized by the licence. It is
necessary to take into account the actual user. Those commit-
ments of the licensees which exist at the date of the notice and
which are consistent with legitimate user of the rights granted
by the licence must be taken into consideration. That may
be thought to subject the licensors to practical difficulties in
determining the proper length of the notice to be given by them :

(T(E 797)"7" bed t8S. (2) [1901] 2 Ch. 508.

A. C. AND PRIVY COUNCIL,

but, in my opinion, the licensors are entitled to require from
the licensees—who alone may be assumed to know all the rele-
vant facts—such information as is necessary to enable them to
form an opinion as to the proper length of a reasonable notice.
A correct analysis of the licensors' position is that they have
the right to give notice ; but are subject to the obligation to
give a reasonable notice. On that footing the licensees are in my
opinion under an implied obligation upon request to give to the
licensors such information as is requisite for the proper per-
formance of the licensors' obligation (cf. Mackay v. Dick (z)).
The requirement of a reasonable notice does not, therefore,
create an impracticable position.

The remaining question is whether the notice given by the
licensors was, in fact, a reasonable notice. The notice given
was a calendar month's notice. It was, therefore, notice for a
date later than the expiry of the period for which the licensors
had rent in hand. No difficulty therefore arises on that head.
The only point taken was that, consistently with the licence,
"Young Mrs. Barrington "' was being produced at the theatre
by the licensees and that the arrangements for its production
could not be terminated before the calendar month expired.
The month was on that ground said to be too short. The
contention of the licensors was that the play was not being
produced by the licensees but was being produced by Linnit &
Dunfee, Ld. (the production company) under an agreement
which involved a sub-licence of the theatre, and that the
agreement so made was a breach of the provisio contained
in the licence "' not to enter into 'a sub-licence of the theatre "'
without the consent of the licensors. If this construction of the
agreement with Linnit & Dunfee, Ld., is correct, there is no
doubt that the demands on the theatre for the paIpese of the
play should be disregarded.

The agreement opens with a provision that the licensees agree
to engage "'the production company to produce... . the
"play ' Young Mrs. Barrington ''' for a specified term. The
form of words used to describe the arrangements made does not
determine its character. The terms of the whole agreement
must be taken into account. Under those terms the licensees
had no control over the casting of their play, the salaries paid,
or the production of the play. They were given no voice in
fixing the tariff. Employees, other than the acting manager
and box office employees, were taken over by the production

(1) (r881) 6 App. Cas. 251, 263.

201

H. L. (E,)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

v.
Mit-
LENNIUM
PRODUC-
TIONS, Lp.

Lord Uthwatt.

202

H. L. (E.)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

v.
Mit-
LENNIUM
PrRoDUC-
TIONS, LD.

Lord Uthwatt.

HOUSE OF LORDS [1948]

company but the salaries of the excepted employees were to be
recouped to the licensees. The production company were to
pay the running charges for light and gas and heat. Not even
the electric globes were forgotten. Broken globes were to be
paid for and a fixed payment per unit of electricity consumed
was to be made in respect of the maintenance of electric globes.
On the other hand, the licensees remained in charge of the box
office but they were bound to account to the production com-
pany for the gross receipts less the sums properly retainable by
them. That provision is only machinery. The licensees were
to be responsible for the rent payable to the licensors, and
certain small accommodation and a few boxes and seats were
reserved to the licensees. The financial arrangement was a
division of gross receipts under which the licensees received the
first 330]. weekly and 17} per cent. of the gross receipts in
excess. of 1,750/. The production company received the balance
of the gross receipts. The outstanding features are that the
licensees had no control over production or expenses and had no
interest in net profits.

In these circumstances it is, to my mind, merely toying with
words to say that the play was being produced for the Jicensees.
The control of the theatre was for all the purposes of a particular
play handed over to the production company and there was,
therefore, in truth, a sub-licence of the theatre. The exceptions
from the subject-matter handed over are immaterial.

My view as to the construction of the agreement renders it
unnecessary to consider whether Hurst v. Picture Theatres,
Ld. (1), was rightly decided, or to express any concluded opinion
on the question of the remedies now open/in every court \to a

'bare licensee who claims thatthe licensor -has in -breach of his
bargain affected to revoke it. I merely confess my present

inability to see any answer to the propositions of law stated by
the Master of the Rolls inhis judgment inthe case under appeal.
The settled practice of the courts of equity is to do what they
can by an injunction to preserve the sanctity of a 'bargain.
To my mind, as at present advised, a licensee who has refused
to accept the wrongful repudiation of the bargain which jis
involved in an unauthorized revocation of the licence is as much
entitled to the protection of an injunction as.a,licensee who,has
not received any notice of revocation ; and, if the remedy of
injunction is properly ;available in 'the latter case against
unauthorized interference by the licensor, it,is.also available in
(1) [7905] 1 K.B. 1.

A.C. AND PRIVY COUNCIL.

the. former case. :In a. court of equity,,wrongful.acts are no
passport to favour.
'I would. allow the appeal.

LorpD /MacDermotr. . My Lords, the: first question in this
appeal, is,whether the licence granted by the appellants was,
according to the contract creating it, revocable when the present
dispute arose. The answer depends, in.my view solely, on the
true'construction of the letters of June 10, 1942,.as.ascertained
in conformity with the ordinary, principles applicable to the
interpretation. of written instruments. On this aspect. of the
case the respondents. relied on) the decision of this House in
_Llanelly Ry..& Dock Co. v.. London & North Western Ry. Co. (1),
and, in' particular,,on the passage in. Lord Selborne's speech
'which reads (2): "An agreement.de futuro, extending over a
"tract of time-which, on the face. of the.instrument, is. in-

" definite and. unlimited, must (in ;general). throw upon any

""one-alleging that. it isnot, perpetual, the burden of proving
"that allegation, either from the nature of the subject, or from
"some rule of law applicable thereto."' My Lords, when the
facts of that case are examined it is plain that the contract for
running powers, which. was. there. held .to .be permanent in
character had little in common with.the contract between the
. parties to this appeal, save that in neither instance was express
oprovision made. for, revocation: by the, licensors. In. the
Llanelly case (1) the agreement not only contained terms which
indicated the construction adopted but,,as a perpetual arrange-
ment,/it conferred rights of a kind contemplated by the railway
_legislation)then in force—a circumstance which Lord Cairns L.C.
obviously, regarded as important, for, he observed (3) that :
"as those other terms, secured by Act of Parliament,..would
'"' have been, continuing, so. this agreement, carrying more
'' favourable terms, appears to,me;in its nature to be a con-
"' tinuing agreement."' In the, present, case there is no. such
statutory background and a close scrutiny of what the parties
shave, agreed has failed to reveal any stipulation which I can
regard. as. manifesting an intention that the licence was to go on
for ever if the licensees so desired. .No doubt the dictum of
Lord. Selborne, which I have quoted. above, is in wide terms.
But itis not expressed as a universal rule.of construction (as the
cautionary.words "' in general "' show) and I doubt. very, much
(x) LieR. 7 He L. 550. (3) Ibid. 559.
(2) Ibid. 567.

203

H. L. (E.)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

ws
MIL-
LENNIUM

PRODUC-
TIons, Lp.

204

H. L. (£.)

1947

WINTER
GARDEN
THEATRE

{Lonpon),
Lp.

v,
Mit-

- LENNIUM

PRODUC-

TIONS, Lp.

Lord

MacDermott.

HOUSE OF LORDS [1948]

if it was intended to have any applicability to circumstances
such as those now under consideration. If it has I would, for
my part, be prepared to arrive at the same conclusion as if it had
not, for, even if an onus rests on the appellants in this matter,
the whole tenor of the letters of June 10, 1942, and the nature
of their subject-matter, seem to me to negative, quite definitely,
the idea of irrevocability so strongly urged on behalf of the
respondents. The expressed purpose of the licence, the
periodic payments, the complete retention of possession by the
appellants, the various stipulations which give each of the
parties a close and lively interest in the conduct and integrity
of the other while the licence lasts and, not least, the provisions
of para. (c) of cl. 6 of the letter agreement as to the maintenance
of the premises and the state and condition in which they are to
be left on the termination of the licence, all point to this
conclusion and away from the notion that the permission of the
appellants was perpetual. For these reasons, which I need not
elaborate, I am of opinion that on the construction of this
contract the licence was revocable during the period material
to this appeal.

But if so, how could revocation be effected ? Like the first,
this question involves the construction of the contract and it also
Tequires consideration as to what term, if any, should be implied
therein to give effect to the intention of the parties. My Lords,
the profusion and diversity of licences and the freedom of
contract regarding them are such as to discourage any unneces-
sary formulation of general propositions on the subject. But it
is, I think, safe, as well as desirable for the decision of this case,
to say that one who remains on the land of another after his
licence to use it has terminated will not be considered a
trespasser before he has had a reasonable time in which to
vacate the premises. That is well settled, though the assess-
ment of what is reasonable may depend on a great variety of
factors and cause considerable difficulty in particular instances.
This period of grace can, of course, be the subject of agreement,
but it exists for gratuitous as well as for contractual licensees
and, on that account, must, I think, be generally ascribed to a
rule of law rather than to an implied stipulation. For that
reason it need not be read into this contract. It has, however,
a bearing on the question which I am now discussing. It super-
venes after the licence has terminated. Its purpose is to enable
the former licensee to adjust himself to the new situation by
vacating the premises. Measured reasonably and fairly it will

AwGs AND PRIVY COUNCIL.

often provide sufficiently for the consequences of the licensor's
change of will. But its object is not to prolong the user
sanctioned by the licence merely for the benefit and convenience
of the licensee for, ex hypothesi, the licence has ceased; and
where, as for example in cases of a specialized user involving
obligations to third parties or the public, the circumstances or
the contract are such as to show that an immediate cessation
of the authorized use or activity was not contemplated or
intended, the rule of law to which I have referred may well,
and notwithstanding a liberal measurement of its reasonable
period, fall short of meeting the just. requirements of the
position.

Turning to the present case, the question then arises whether
the true, intendment of the contract was such as to permit an
immediate withdrawal of the licence. My Lords, on that I think
it is as clear that the parties did not contemplate an immediate,
out-of-hand, revocation as it is that they did not intend a

perpetual arrangement. What was granted was. a licence to .

use the theatre, "for the purpose of producing stage plays,
"concerts. or ballets.'' That. purpose, as everyone. knows,
connotes a wide range of activity and a highly specialized user
of the premises. It involves considerable expenditure and a
host of contractual relationships with those who provide and
those who.seek the entertainment offered. . Whatever the legal
attributes ,of a bare and unqualified licence may be, the
expressed, object of this licence makes it hard to believe that

either of the parties ever intended that it could be withdrawn |

instanter, regardless of the respondents' commitments and
leaving them only such time as they might require to remove
themselves and their possessions from the theatre. This view
must, of course, be subject to the terms which the parties have
agreed. I cannot, however, find anything in the contract. to
modify it.. On the contrary the provisions as to (a) the payment
of rent in advance, (6) the continuation of the licence after the
first year, and (c) the granting of sub-licences, though
insufficient to raise an implication of permanence, all go, in my
opinion, to support the conclusion which the nature of the
subject-matter suggests.

If this be the position, it is clear that the right to revoke must
necessarily be the subject of an implied term. It is, perhaps,
not so clear what, precisely, the term should be, My Lords, in
approaching that question I think it well to recall the warning

-given by Lord Wright in Luxor (Eastbourne), Ld. v. Cooper (1),
(a) [ro41}A. C. 108; 137.

205,

H. L. (E).

1947

WINTER
GARDEN
THEATRE
(Lonpon),.
Lp,

v.

MIL- »
LENNIUM
PRODUC-

TIons, Lp.

Lord
MacDermott..:

206

HL. (E.)

1947

WINTER
GARDEN
THEATRE

(Lonpon),

Lp.

v.
Mi-
LENNIUM
Propwuc-

TIons, LD.

Lord
MacDermott

HOUSE OF LORDS 11948]

when he said: '' The general presumption is that the parties
'""have expressed every material term which they intended
"should govern their agreement, whether oral or in writing.
"But it is well recognized that there may be cases where
"obviously some term must be implied if the intention of the
"parties is not to be defeated, some term of' which it can be
"predicated that 'it goes without saying,' some term not
"expressed but necessary to give to the transaction such
"business efficacy as the parties must have intended. This
"does not mean that the court can embark ona reconstruction
"of the agreement on equitable principles, or on a view of what
"the parties should, in the opinion of the court, reasonably
"have contemplated. The implication must arise inevitably
"to give effect to the intention of the parties." With that
caution in mind and-leaving what I may call the: packing-up
period to the general rule of law already mentioned, the
conclusion I'reach is that in this contract there should' be
implied a stipulation, to the effect that, after the expiration 'of
the first year, the licence might be terminated by the licensors on:
the expiration of a reasonable notice period duly communicated
to the licensees. That, to my mind, is what accords best' with
the express terms of the contract and the nature of the:trans-
action. Whatever the results of disregarding such a stipulation:
as to notice may be (and'on that I express no opinion as it does
not call for décision on the view' I take) it'is, I think, beyond'
question that the parties were at liberty so to agree if they chose.
I am not unmindful that animplication of this nature makes it
incumbent upon the licensors to specify a'reasonable' period'
and'that they may not be fully versed' concerning all the: rele-
vant circumstances when they have'to do so. Ido not think
the appellants can well complain on this score, however, when
their own document is silent on the point ; and; apart from that
consideration, I'see no practicable alternative which would not:
leave both parties in a state'of even greater uncertainty.

It remains to be determined whether the licence has 'been
revoked in accordance with this implied term. The precise:
meaning of the notice given by the appellants on September' r1;
1945, is not beyond debate. But taken in conjunction with its
covering letter of the same date I' have little doubt that: it
should be read as intimating that the licence would be termi-
nated on October 13, 1945, and it is clear that this was what it'
conveyed to the respondents, for their reply: of September: 14;
inquires. concerning the appellants' authority "to give a

A. C. AND PRIVY COUNCIL.

"month's notice terminating the said licence."" But was this a
reasonable period ? Apart from the term providing for pay-
ment of four weeks' rent in advance, the only evidence adduced
upon this issue was the agreement dated August 22, 1945,
between the respondents and Linnit & Dunfee, Ld., which the
respondents pleaded and proved and under which Linnit &
Duntee, Ld. produced a play at the appellants' theatre entitled
"Young Mrs. Barrington." It was admitted that the respon-
dents were unable to terminate this agreement sooner than
they did (which was on January 5, 1946), but the appellants
contended that it constituted a breach of cl. 6 of the agreement
of June 10, 1942, which provided that the respondents were
"not to enter into a sub-licence of the theatre '' without the
appellants' consent and that the respondents were, accordingly,
precluded from relying on it in support of their plea that, if the
licence were revocable, reasonable notice had not been given.
The respondents argued that this agreement was not a sub-
licence and, further, that the appellants knew of the agreement
and had acquiesced in the production of '' Young Mrs. Barring-
"ton '' so as to waive the alleged breach of cl. 6. This last
point the respondents entirely failed to establish and it need
not be further noticed. Nor need very much be said on the
question whether the agreement of August 22, 1945, was a
sub-licence of the theatre. It is true that it denied Linnit &
Dunfee, Ld. the use of certain relatively small portions' of the
premises which were the subject of the agreement of June Io,
1942, and this, it was said, avoided a breach of cl. 6 just as a
sub-lease of part only of demised premises avoids contravention
of a covenant against sub-letting. My Lords, whatever the
virtues of that analogy may be in the abstract, I do not consider
that this contention has substance in the present case. When
cl. 6 speaks of a sub-licence '' of the theatre" I think that as a
matter both of good sense and sound construction, it refers to
the theatre premises or so much thereof as will enable the
purpose of the licence, the production of "stage plays, concerts
"or ballets,'' to be achieved by the sub-licensees. Clause 6
proceeds to stipulate that the appellants' consent to a sub-
licence will not be unreasonably withheld if a mutual arrange-
ment is made between them and the respondents for sharing the
profits. It is difficult to conceive that the true meaning of this
clause was such as to enable this financial provision to be
circumvented to the loss of the appellants and the advantage
of the respondents by the reservation of a few seats in the

207

H. L. (E,)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

v,
Mit-
LENNIUM
PRODUC-
TrIons, Lp.

Lord
MacDermott.

208

H. L. (E.)

1947

WINTER
GARDEN
THEATRE
(Lonpon),
Lp.

v,
Mit-
LENNIUM
Propuc-
TIons, Lp.

Lord
MacDermott;

HOUSE OF LORDS [1948]
auditorium or some unessential office accommodation. It is
also difficult not to feel that this profit-sharing term of the
contract may explain why the agreement of August 22, 1945,
was cast in the form of an engagement. It is now admitted
that Linnit & Dunfee, Ld. were not the respondents' agents or
employees. They made the agreement on their own account
and by its terms were given the use of the theatre for a
production, the financial risks of which they were to bear.
My Lords, I find it unnecessary to detail the various clauses of
this somewhat peculiar document. Whatever its guise I am
satisfied that, as Roxburgh J. has held, it was in its substance
a sub-licence and. amounted toa breach of cl. 6. It must there-
fore be left out of account. This means, that there is virtually
no evidence before your Lordships as to what would, in the
circumstances, have been a reasonable period of notice. But.
having regard to the course of the proceedings and the issues
they chose to raise, the onus in this matter rested, in my
opinion, on the plaintiffs and present respondents. They have
not discharged that onus and the result, in my view, is that the
notice given by the appellants must be considered valid and
effectual. On similar, if not identical, grounds I think the
time between October 13. and November 27, 1945—the date of
the counterclaim—must be taken as a sufficient period of grace
to enable the respondents to vacate the theatre.

For these reasons I would allow this appeal.

My Lords, my noble and learned friend, LorD SImonDs,
authorizes me to say that, having read this opinion, he concurs
in its reasoning and conclusion, and wishes to add nothing te it.

Appeal allowed.

July 29. Counsel having made submissions as to the form
of the order of the House, having regard to the rectification
action pending at the suit of the respondents, their Lordships
delivered the following additional opinions :

Viscount Simon. My Lords, the decision at which the
House now arrives is, of course, on the documents before us,
but we are informed that the respondents have instituted a
rectification action alleging that the documents do not truly
represent the bargain between the parties. This creates a
situation which has to receive special care, and we have con-
sulted Mr. Registrar Jones as to the Chancery practice. Lord

A: C. AND PRIVY COUNCIL.

Buckmaster in Nitrate Producers Steamship Co. v. Short
Brothers {x), explained the effect of a restoration in this House
of an order made by the trial judge in the following words :
"Where the effect of an order in this House is to restore a
"judgment of the court of first instance which has been
" reversed by order of the Court of Appeal . . . . the judgment
"of the court ef first instance is expressly restored and remains
"standing as from the date when it was given." This House
has nothing to do with the rectification issue, except to make
sure that it does not prejudge any question arising in the
rectification action. Accordingly, I move that in addition to
the judgment of the House already given, the further order be
made that: "' It is ordered that the cause be, and the same is
-" hereby, remitted back to the Chancery Division of the High
"Court of Justice, to do therein as shall be just and consistent
"' with this judgment, and in particular to consider whether it be
"" just to grant any, and if so what, further stay of the operation
"of the injunction granted by the said judgment and for what
"time, and upon what terms as to the payment of money or
"' otherwise, any such further stay should be granted."

Lorp Porter : My Lords, I concur.
LorD UtuwatTt : My Lords, I agree.
Lorp MacDermotr : My Lords, I agree.