Winter Garden Theatre (London) Ltd v Millennium Productions ...

Facts

• Winter Garden Theatre (London) Ltd (the licensor) granted Millennium Productions Ltd (the licensee) a contractual license to use the theatre for a specified period.
• Millennium was authorized to use the theatre pursuant to this agreement.
• Before the agreed period expired, Winter Garden sought to revoke the license and terminate Millennium's use of the theatre.
• Millennium Productions objected to the revocation and pursued equitable relief to restrain it, arguing reliance on the license and the contract’s terms.
• The dispute centered on whether the licensor could lawfully revoke a contractual license prior to the expiration of its agreed term and whether equity should intervene to prevent this.

Issues

1. Whether a contractual license granted for a specific purpose or period may be revoked by the licensor at will.
2. Whether equity may intervene to restrain revocation of a license where it would be unjust or inequitable to permit revocation.
3. What factors determine the appropriateness of equitable relief in the context of revoking a contractual license.

Decision

• The House of Lords held that a contractual license is generally revocable, as it is a personal right and not an interest in land.
• However, equity may restrain the revocation of a license if to do otherwise would be unjust or inequitable, having regard to the circumstances of the case.
• The court found that where a licensor's attempt at revocation is inconsistent with the terms of the agreement and with the licensee's reasonable expectations based on those terms, equity may prevent the revocation.
• The potential for equitable control is not absolute and will depend upon factors such as the contract’s duration, the licensee’s reliance, and the harm that revocation would cause.
• The principles of equitable estoppel may prevent a licensor from acting inconsistently with prior representations or conduct.

Legal Principles

• A contractual license does not confer a proprietary interest and is, at law, generally revocable by the licensor.
• Equity may intervene to restrain revocation where to permit it would be unconscionable or inequitable.
• The doctrine of equitable estoppel can apply in the context of licenses, preventing parties from revoking rights in a manner inconsistent with prior representations or the licensee’s reliance.
• Clear and precise contractual drafting is essential to clarify revocation terms and reduce uncertainty.
• Equitable intervention reflects the flexibility of remedies and the need to balance parties' interests based on case-specific facts.

Conclusion

Winter Garden Theatre (London) Ltd v Millennium Productions Ltd clarified that while contractual licenses are, at law, generally revocable, equity may restrain revocation if it would be unjust or inequitable. This principle affords greater protection to licensees and highlights the importance of contractual clarity and good faith in licensing arrangements.