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LAW2FPL – EXAM NOTES
ALISON DAVEY
Contents
1. TOPIC 1 – The Concept of Property ................................................................................. 3
What is Property – Property as a Bundle of Rights ..................................................... 3
What can be Objects of Property? ............................................................................... 3
Private Property, Communal Property, State Property and No Property .................... 4
Justifications for Private Property Rights .................................................................... 4
Recognition of New Property Interests ....................................................................... 5
Boundary between Property and Contract .................................................................. 5 Distinction between Real and Personal Property ........................................................ 6
2. TOPIC 2 – Key Land Law Concepts ................................................................................. 8
Definition of Land ....................................................................................................... 8
The Doctrine of Tenure ............................................................................................... 9
The Doctrine of Estates ............................................................................................. 11
NATIVE TITLE ........................................................................................................ 18
3. TOPIC 3 – Original Acquisition of Title ......................................................................... 23
New Things ............................................................................................................... 23
Accessories: The Doctrine of Accession ................................................................... 24 Doctrine of fixtures ................................................................................................... 25
Possession ................................................................................................................. 29
Possession of land ..................................................................................................... 35
Limitation of Actions ................................................................................................ 37
Adverse Possession of Land ...................................................................................... 39
4. TOPIC 4 – Transfer of Title ............................................................................................. 50
Sale: Goods ............................................................................................................... 51
Inter Vivos Gift ......................................................................................................... 56 Inter vivos express trust ............................................................................................. 59
Testamentary Disposition .......................................................................................... 61
5. TOPIC 5 – Bailment ........................................................................................................ 64
Types of bailment? .................................................................................................... 65
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What is bailment? ...................................................................................................... 65
Termination of bailment ............................................................................................ 66
Relationship between bailor and bailee ..................................................................... 67
Sub-bailment ............................................................................................................. 68
Position of bailee and bailor vis-à-vis third parties ................................................... 68
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1. TOPIC 1 – The Concept of Property
General tips: (1) Ascertain who the parties are and their relationship, (2) Determine what property is in question, (3) Determine what property or other rights are held by the parties (relevant law), (4) Explain how they are enforceable against other parties (apply the law)
What is Property – Property as a Bundle of Rights - Yanner v Eaton (1999) - it is a description of legal relations with a thing. It refers to a degree of
power that is recognized in law as power permissibly exercised over the thing. The concept of “property” may be elusive. Usually it is treated as a “bundle of rights”
- Yanner v Eaton (1999) - A degree of power that is recognised is law as power permissible exercised over the thing
- Moore v Regents of California (1990) – Rather than referring directly to an object such as a parcel of land or the tractor that cultivates it, the concept of property is often said to refer to a ‘bundle of rights’ that may be exercised with respect to that object – principally the rights to possesses the property, to use the property, to exclude others from that property, and to dispose of the property by sale or gift. But the same bundle of rights do not attach to all forms of property. For a variety of policy reasons the law limits or even forbids the exercise of certain rights over certain forms of property
- Milirrpum v Nabalco (1971) – the right to exclude others and right to alienate
What can be Objects of Property? Ø Dead human tissue - Courts have been reluctant to say that a human corpse is a thing capable of being subject to
property rights - Jones v Dodd (1999) – there is no property in a dead body, that is to say, it is incapable of being
owned by anyone o However, in certain circumstances the law would protect lawful possession of a corpse or
body parts- i.e. who has the rights to possession for the purpose of burial - Edmonds v Armstrong Funeral Home Ltd [1931]
- Re Gray [2001]There is a duty not to interfere with the body in the instance of rights for the purpose of burial – custody and control
- The right to possess something for a limited purpose is not ownership, but is nevertheless a property right
Ø Human remains for medical or scientific purposes v R v Kelly [1999] – ‘Parts of a corpse are capable of being property… if they have acquired different
attributes by virtue of the application of skill, such as dissection or preservation techniques, for exhibition or teaching purposes’
v *People can choose to donate their bodies to science or for medical training – problems only arise when ownership is acquired without the consent of the deceased - Relevant legislation: Human Tissue Act 1982 (Vic) and Assisted Reproductive Treatment Act 2008 (Vic) Ø Property rights to living human tissue
v Inclusive of blood, sperm, ova, bone marrow, and organs – important to note that ownership of living human beings is abhorred and the consequences of a market for body parts is feared
Regenerating tissues v Such as urine, hair, saliva, fingernails and blood – can be subject to property rights
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Non-regenerating tissues v ‘The removal of non-regenerating tissue from a living donor diminishes that donor’ v Human tissue is not prevented from being subject to property rights – however there is a prohibition
of certain types of contractual transactions with regard to human tissue v Moore v Regents of the University of California (1990)
Ø Plaintiff did not have right to possession of tissue removed from their body Ø D removed tissue from P and developed it into a valuable cell line without patient’s consent, for
purpose of treating P’s leukaemia with view of protecting patient’s best interests Ø Majority held that P did not have a sufficient property right to tissue being removed from his body Ø P seen as greedy – human tissue should not be subject to ownership for the purpose of selling
one’s own tissue for profit – commodification of this type is greatly feared (Judgment of Arabian, J.)
v Once tissue is removed from a living person, it takes on a separate identity as a thing which should be subject to property rights – someone (who?) should have the right to control the use of that tissue
Gametes and embryos v Gametes is sperm and ova – can be subject to property rights v While Australian law does not deal with the ownership of human embryos, it does give certain people
some rights to control their use
Private Property, Communal Property, State Property and No
Property Public Property
v Can be either common or collective – no government or individual member of society is entitled to the exclusive use of a thing which is common property
Limited Access Communal Property
v Membership of the community is restricted to a specific class v Usually involves particular use rights
State Property
v Management and control rights usually held by various government departments – tenancy can be granted but the property is state owned and not privately owned
Justifications for Private Property Rights Labour Theory
v ‘Though the earth and all the inferior creatures be common to all men, yet every man has a “property” in his own “person”. This nobody has a right to but himself. The “labour” of his body and “work” of his hands, we may say are properly his. Whatsoever, then that Nature has provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property....As much land as a man tills, plants, improves, cultivates, and can use the product of, so much is his property.’ (John Locke, Second Treatise of Civil Government (1690) Chapter V)
Idealist personality theory
v Give individual sphere through which they can realise their potential
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Economic efficiency theory
v If the law protects my rights to use the resource to the exclusion of others, than it can be used efficiently to the benefit of society
Recognition of New Property Interests v Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937)
Ø Facts: P owned Victoria Park racing track, race course was surrounded by high fence. Taylor had a house and front yard adjacent to the course, allowed 2UW to construct 5m platform so that the course could be seen and broadcasted. Races and information about horses posted with off-track betting – attendance to course plummeted.
Ø Quasi property considered Ø Held: while damage had been caused economically, there was no legal right that had been breached
– right of exclusion in this way not favoured. Democratic society benefits from free-circling of information. Claim did not fit within a pre-existing pigeon hole, courts are conservative
v Numerus Clausus: Ø Closed list principle – should private individuals be able to create new property rights which are
enforceable against people who played no part in their creation? Courts say no, specifically with regard to land, for policy reasons. However in some cases a novel case may succeed in the HCA
Boundary between Property and Contract Ø The enforceability question
v Contractual rights – enforceable only as between parties to the contract v Property rights – enforceable against the grantor and third parties
Ø The remedies question v Breach of contract – remedy is damages v Breach of contract to grant a property interest – possible remedy is specific performance
Land licences
v Licences: bare licence, contractual licence, licence coupled with an interest Ø Bare licence:
v A bare licence is the permission to use something v Permits the licence to do something which would otherwise be unlawful v R v Toohey; Ex parte Meneling Station Pty Ltd (1982); “it is a personal privilege conferring no interest in
the land… it is generally revocable and merely excuses a trespass until it is revoked v It is permission to use someone’s land
Ø Contractual licence v Permission to use something, but it is granted under a contract v The contract creates a legal right to use the thing which corresponds to the owner’s legal obligation to
permit that use v A licence may be created through the process of estoppel v The label says nothing about the method of enforcing the right
Ø Licence coupled with an interest v It suggests that there are two rights in existence: a personal right to use a thing combined somehow
with a property right to that thing Ø E.g. you may have licence (to enter my land) coupled with an interest (to take firewood)
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Enforceability of contractual licence against grantor
Ø Common law position: v Cowell v Rosehill Racecourse Co Ltd (1937) – a contractual licence is not a property interest
Ø FACTS: P purchased a ticket to view horse races. P was asked to leave before the end of the race meeting. P refused to leave so employees forcible removed him. P sued for damages and assault.
Ø HELD: D could not be compelled to grant a licence to attend the meeting, therefore P’s only remedy was to sue for damages caused by breach of contract. P was a trespasser when he refused to leave, even if D was wrong to ask him to leave
v Hurst v Picture Theatres Ltd [1915] Ø Licence to enter premises to view entertainment = licence coupled with interest Ø Licence deemed to not be irrevocable during the entertainment Ø Whereby contract, a licensor expressly or impliedly promises not to revoke the licence, equity will
grant an injunction to restrain breach of this promise rendering the licence irrevocable Ø Position in equity
v Heidke v Sydney City Council (1952) – there are instances of state courts granting injunctions to restrain revocation of licence in breach of a negative contractual stipulation
v Forbes v NSW Trotting Club Ltd (1979) – dicta of HC: Cowell may be overruled when the opportunity arises, therefore Australian position uncertain Ø Enforceability of contractual licence against third parties
v King v David Allen and Sons Billposting Ltd Ø FACTS:
§ Mr King owned picture theatre. § Mr King entered contract with David Allen and Sons Billposting Ltd giving it a licence to place
posters on wall of picture theatre. § Mr King later leased picture theatre to “Company X”. § Company X prevented David Allen and Sons Billposting Ltd from placing posters on wall. § David Allen and Sons Billposting Ltd sued Mr King for damages for breach of contract. § Mr King had given David Allen and Sons Billposting Ltd a contractual licence. § A Contractual licence is a personal not a proprietary interest. § Therefore, contractual licence is not enforceable against third parties. § This meant that Mr King had deprived David Allen and Sons Billposting Ltd of the benefit of
the licence by entering the lease with Company X. § Result: Mr King liable in damages
Distinction between Real and Personal Property v Real property (realty) and personal property (personalty) – usually divided between land and goods
Ø Forms of personal property: v Chattels Real (lease hold interests) v Chattels Personal
Ø Choses in action Ø Choses in possession (goods) Ø Legal equitable interests
v Two broad types of property interests: legal and equitable – be mindful of distinction Ø Hinges on the concept of trust
v A trust exits when: Ø A person [‘trustee’] Ø Has some proprietary interest [‘subject of the trust’/’trust asset’] Ø And is required by equity to hold/use that interest for the benefit of [‘holds in trust’] Ø Another person [‘object of the trust’/beneficiary] or a charitable purpose
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v Subject of the Trust (i.e. Trust asset): Ø May be a legal or equitable interest.
v Objects of Trust/Beneficiaries: Ø Can be one or more persons Ø Can include the trustee (as long as trustee is not sole beneficiary) Ø Have an equitable property interest in the trust asset entitling them to the beneficial use and
enjoyment of it (assuming the trust is not a discretionary trust) Ø Legal and equitable interests
v Property interests can be characterised as either legal or equitable. It is important to understand the distinction – many types of property interests may exist in equitable form as well as in legal form
v There are three aspects of equity which are especially important to the modern law of property: the order for specific performance, the injunction, and the trust Ø Specific performance: in addition to a common law award for damages, a court of equity can order
the specific performance of the contractual obligations Ø Injunctions: a court of equity can issue an injunction to stop someone from interfering with the
rights of another
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2. TOPIC 2 – Key Land Law Concepts
Definition of Land v Property Law Act 1958 (Cth) s 18: "land" includes land of any tenure, and mines and minerals whether or
not held apart from the surface, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments; also a rent and other incorporeal hereditaments, and an easement, right, privilege, or benefit in, over, or derived from the land and also an undivided share in land; and mines and minerals include any strata or seam of minerals or substances in or under any land, and powers of working and getting the same.
v Transfer of Land Act 1958 (Vic) s 4(1): “‘land’ includes any estate or interest in land but does not include — Ø a) an interest in land arising under the Mineral Resources (Sustainable Development) Act 1990; or Ø b) a carbon sequestration right or soil carbon right granted in relation to Crown land under a
Carbon Sequestration Agreement within the meaning of the Climate Change Act 2010; v Common law: “Land” the tangible immoveable object comprises:
Ø The ground/soil (NB land does not include water and there are special common law and legislative rules dealing with the banks and beds of naturally occurring bodies of water).
Ø Minerals etc. under the ground (NB legislation separates our mineral rights and vests them in the Crown).
Ø Buildings etc. fixed to the ground (see topic 3 – Dcotrine of Fixtures) Ø Airspace above the ground (but only to the height ‘necessary for the ordinary use and enjoyment”
of the land and its structures. § Baron Bernstein of Leigh v Skyviews & General Ltd [1978]: “the problem is to balance the rights of
an owner to enjoy the use of his land against the rights of the general public to take advantage of all that science now offers in the use of air space”
§ (Boundaries of Land): So far above the ground that airspace is not necessary for the ordinary use of and land and enjoyment of the structures on it – space at that level is not part of the land.
Ø On the question of whether one can exclude third parties from air space v LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989): one person should not be permitted to
use the land of another person for considerable personal gain, even if the use of that person’s land causes no significant damage Ø Land bounded by water
v If land is bounded by tidal waters (situated at sea, or on a tidal river or lake) the owner owns the land up to the mean high-water mark; Attorney General v Chambers (1954)
v Rule applies to land held under the Torrens system (Verall v Nott (1939), land below the mark belongs to the Crown in the right of the state (Hill v Lyne (1893)
v Non-tidal waters, owner retains exclusive rights to the bed; Orr Ewing v Colquhoun (1877)
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The Doctrine of Tenure
v Attorney General of NSW v Brown (1847) 1 Legge 312: the doctrine of tenure applied in Australia upon the British Crown’s acquisition of sovereignty. When Britain acquired sovereignty, at that time it acquired absolute ownership of that land.
v Crown is not the owner of all land in Australia, but has the power as sovereign, to grant land to others (creating the tenure relationship) or to take land for itself Ø Where Crown has taken possession of land for its own use, it cannot have a tenure
relationship with itself, but has absolute ownership, called allodial title (allodium/the entire property).
Ø Three main ways a government can obtain sovereignty over land: 1. Conquest 2. Cessation (voluntary surrender) 3. Occupation (of terra nullius)
v Occurred incrementally (Chambers) Ø E.g. Australia acquired sovereign rights to the EEZ (200 nautical miles beyond territorial
seas) by international treaty and statute v Date of acquisition
Ø 1788 – Eastern Australia Ø 1829 – Western Australia Ø 1879 – Torres Strait Islands
v The doctrine of terra nullius (‘land of no-one’) legitimated the British “settlement” of Australia and the dispossession of Aboriginal people.
v Prior to Mabo (No 2): Sovereignty = beneficial ownership of land Ø “On the foundation of New South Wales … every square inch of territory in the colony
became the property of the Crown [and all] titles, rights and interests whatever in land which existed thereafter in subjects of the Crown were the direct consequence of some grant from the Crown”: Blackburn J in Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141, 245 (Gove Island Land Rights Case)
v After Mabo (No 2): Sovereignty = ‘radical title’ does not equal beneficial ownership of land. “It is not a corollary of the Crown’s acquisition of a radical title to land in an occupied territory that the Crown acquired absolute benefical ownership of that land to the exclusion of the indigenous inhabitants.” (Brennan J in Mabo (No 2). Ø Doctrine of Terra Nullius was a legal fiction that ought not to be perpetuated. It was held
that the preferable position of the common law was that the pre-existing interests in land of the indigenous inhabitants of England settled colonies in Australia – could be accommodated by the Doctrine of Tenure.
Ø According to Justice Brennan, if the indigenous habitants at the time had interest in land under their own law, which were recognisable by the common law, then those pre-existing native title interests of the indigenous inhabitants persisted until those interests were extinguished or abandoned.
Ø Mabo (No 2): rejection of terra nullius, but HCA does not have jurisdiction to determine the sovereignty of Australia § However, if land had been terra nullius, there would be no possibility of native title
because there would be no existing property rights which the common law could recognise and protect
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v The acts and events by which that dispossession in legal theory was carried into practical effect constitute the darkest aspect of the history of this nation. Deane and Gaudron JJ in Mabo (No 2) 175 CLR 1, 109.
v What is the meaning of ‘radical title’? Ø It is a public law concept. It is not a proprietary interest in the land Ø The Crown’s ‘radical title’ can be exercised by granting a proprietary interest in land to
itself or to others. Mabo (No 2): Crown’s right to land called ‘radical title’. Ø Unless and until the crown actually does that, any native title over the land continues to
exist, or at least has the ability to continue to exist. (See Native Title Notes). Ø Wik Peoples v Queensland: “radical title is essentially a power of alienation controlled by
statute” (Chambers) § Does not give the Crown right to possession of land, unless it first exercises its
sovereign power to acquire the land for its own use.
Case Summaries:
v Milirrpum v Nabalco Pty Ltd (1971) Ø FACTS: Federal government granted mining leases to the D (Nabalco) without consulting the P’s
(Milirrpum). P’s claimed that their sacred sites were in danger, P’s sued predominantly for the purpose of overturning terra nullius
Ø ISSUES: (1) Do the aboriginal people have land rights based on the common law? (2) Was Australia actually terra nullius?
Ø Blackburn J: “I think property, in its many forms, generally implies the right to use or enjoy, the right to exclude others, and the right to alienate.”
Ø HELD: P was not entitled to exclude others from the land and could not sell or give their rights to others, so Blackburn J decided that they did not have property rights enforceable against other members of society. Aboriginals have connection to the land, but not a proprietary one (they had a religious relationship with the land, thus not proprietary). Court did not recognise the existence of Aboriginal laws which challenged the second issue of terra nullius
v Mabo v The State of Queensland (No. 2) (1992)
Ø FACTS: Island of Mer, part of the Murray Islands, lies in the Torres Strait – 1982 the Islanders initiated action against the government in claiming they owned their own land and always had. Mabo No 1 held that the Act passed by QLD was invalid based on RDA
Ø ISSUES: (1) Did the Meriam people have claim to the island of Mer as original owners of the land? (2) Did the Crown have absolute ownership of and legal possession of all land in the Murray Islands?
Ø HELD: Murray Islands not Crown land, Meriam people are entitled to it. Native title could exist at common law and it was determined by traditional customary law which required traditional connection to the land and could only be extinguished by a clear and plain intention
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The Doctrine of Estates v An “estate” is an interest in land which confers a right to possession of the land either immediately or
a time in the future and is of a defined duration v Tenure: it tells us how land is held (“of the Crown”). v Estate: the right to possess a volume of space for a defined period of time
Ø An abstract “legal fiction” inserted between the physical land and the feudal tenant.
Freehold estates: (estates of uncertain duration)
v Fee simple Ø Near absolute ownership (Closest to absolute ownership in our tenurial system of land holding). Ø Biggest possible of bundle of rights which can be held under our system. Confers the widest
powers, in respect to all the advantages of the land itself, and anything found upon it. Ø Fee simple estate does not come to an end when the tenant dies, so long as it passes to a beneficiary
of the tenant’s will. Ø Holder of a fee simple estate can dispose it freely in their lifetime, and to a beneficiary of a Will. Ø Where there is no beneficiary, (except in WA), it does not escheat (meaning it would return to the
Crown or lord from whom the tenant held tenure), but goes to the Crown as bona vacantia (ownerless).
v Fee tail Ø Identical to fee simple except with restricted rights of alienation
§ Restricted transfer of land to tenant’s lineal descendants (kept in the family) Ø Creation of new fee tails has not been possible since 1 January 1886 in Victoria Ø Fee tails created prior to that date can be converted to a fee simple (Property Law Act 1958, ss 250
and 251) Ø IGNORE THIS: Just alerting us to the fact that they may still exist – but unlikely.
v Life estate
Ø Estate of a duration defined by the lifetime of a particular person. (Defined by the lifetime of the grantee).
Ø Lasts only for the lifetime of the person – ends on the death of the person who’s life defines the estate.
Ø Can also be granted for the lifetime of a person other than the grantee (an estate “pur autre vie”) § Lecture example:
• X owns the fee simple in land and has his own children. He marries again and gives his second wife Camilla the interest in the land for her lifetime. But – the remainder (what comes after Camilla’s life) to the son of his first marriage William. Camilla is given the life estate, and William is given the remainder.
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Example 1: Life Estates ‘Pur autre vie’
1. The holder of a life estate can dispose of the estate during his or her lifetime, but they can only dispose
of what they have got. Camilla has an estate for her own life – the life of Camilla. Then – if she conveys while she is still living to William, William gets what Camilla had – which is an estate which is defined by reference to Camilla’s life. When Camilla dies – the estate ends because that was the defining life.
Example 2: Life Estates
2. If somebody happens to hold an estate that is defined by reference to somebody else’s lifetime, then it is possible that they are able to leave the estate in their Will.
If A has an estate for the life of C, and A dies at a point in time but C is still alive, the estate still exists because it is defined by reference to C’s life. In that scenario, if A purported to leave that interest to B, that will be perfectly alright, because as long as C is alive the estate exists. B would get what A originally had which is an estate for the life of C. So when C dies, the estate comes to an end.
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Leasehold estates: (estates of certain duration) – right of exclusive possession
Leases:
v While a lease is on foot, the tenant has possession of the land to the exclusion of everyone else including the Landlord. (Different to a topic 1 – bare licence, contractual licence or licence coupled with an interest – they give an ability to enter onto the land, the ability to be the only user of the land but NOT a right to exclude the landlord).
v The fee simple owner has given right to possession to the tenant/lessee – which makes it a leasehold estate. (In most lease contracts written into these will be a right of inspection back to the Landlord).
v Divided into fixed term leases, periodic, tenancy at will and tenancy at sufferance.
v Fixed term lease Ø Novel certainty. Ø Maximum duration is known at the time the lease takes effect (Could be for one day or could be
for 5 years). Ø Lance v Chandler [1944]: all leases must have a definite duration
v Periodic lease
Ø Lease for some definite period – but it automatically renews at the end of the period, unless the landlord or the lessee brings the arrangement to the end by giving appropriate period of notice.
Ø This lease is automatically renewed at the end of the initial maximum period, unless the lease is broke. For example, a month-to-month lease
v Tenancy at will Ø Where a person is in possession of land with the permission of the landlord, but there isn’t an
agreement about duration or rent. Ø Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945): tenant obtains right to possession
whilst understanding that it may be ended at any time by the landlord or tenant – can be bought to an end without any notice
Ø Tenant at will cannot transfer their interest to someone else – and doesn’t survive the death of the tenant or landlord.
Ø It could continue indefinitely.
v Tenancy at sufferance Ø Specialised situation Ø Arises by operation of law Ø Where a tenant under a previous lease continues in possession after the lease expires where the
tenant and landlord have said nothing after the lease expires
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Possession
v Anyone with a right to possess land must have either an estate, native title, or be the Crown v Radaich v Smith (1959); Wik Peoples v Queensland (1996) - language used by parties is the most important
clue to the right intended v Nature of the right to use the land depends on the intentions of the persons who created it
Waste
v The law limits what people in possession can do with their land, with a view to balancing their interests with the interest of those entitled to possession in the future
v Three types of waste: Ø Voluntary; doing some act of damage to the premises which the possessor is not permitted to do Ø Permissive; failure to take action to keep the premises in good repair Ø Ameliorating; an act which does not harm the land, but fundamentally changes its character Ø Under equity, there is equitable waste; acts of wanton destruction
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v Future Interests: GENERAL
Future interest: confers a right to possession not immediately but at some time in the future.
If a person is granted an estate of limited duration then there must be another person who is entitled to possession of the land after the limited person’s life comes to an end.
If it is a life estate, the person who is entitled to possession after the life estate comes to an end, has what is called a future interest.
v Future interest: REVERSION (inter vivos) Ø X is the fee simple owner of Blackacre. X grants Blackacre to A during A’s life (inter vivos grant). A
has been given a life estate in possession. (Immediate right to possession). X has something left – because X is the fee simple estate owner. X has given away the right to possession for only part of forever – which is measure by A’s life. A will die – X has the rest of forever.
Ø X has the fee simple reversion (that is what X has got left). X can dispose of the fee simple reversion – in his lifetime, or under his will or in any way that X pleases. At A’s death – if X is the holder of the fee simple reversion at that time – then X is able to sell it, give it away, X can deal with it. Whoever holds it at the point of A’s death is entitled to possession.
Ø Query: A present interest carrying right to future enjoyment; either reversion or remainder – which one is this?
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v Future interest: REMAINDER
Ø Y has the fee simple in Whiteacre. Y makes an inter vivos grant (during lifetime) to B for life and then to C.
Ø If there is no additional specification, it is assumed that everything else goes to C. Ø B has been given a life estate in possession. Ø C has been given is a fee simple estate in remainder. Ø Upon B’s death – C has what “remains” of the fee simple. Remainder is the term used to explain
future interest. Ø C has a presently existing interest even though it is called a future interest (right of possession is
deferred to the future). Ø C has an interest that C can dispose of in her lifetime, or by her Will in any way that she pleases,
the person who holds the fee simple remainder at the time of B’s death, which might be C or somebody else, because C is right to dispose of the interest, whoever holds the remainder at the time of B’s death becomes entitled to possession.
v
v Future Interests Ø A vested remainder is a remainder bound to take effect in possession
§ Precise identity of person to take the interest must be known; and
§ There must be no condition precedent to interest falling into possession (apart from the natural end of the prior estate or estates) • Prior example: C has a vested remainder because there were no conditions precedent (we
know who C is), and the only condition precedent to C’s interest falling into possession is the natural ending of the previous estate (b is going to die sometime).
Ø A contingent remainder is a remainder which may or may not take effect in possession
§ A precise identity of person to take interest is not known at the date of the grant; and/or § There is a condition precedent to interest falling into possession (apart from the natural end
of the prior estate or estates)
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Ø Where there is the possibility that the interest might not take effect in possession because either the precise identity to take it is not known at the date the grant is made, or there is some condition precedent to the interest falling to possession other than the natural ending of the prior estate.
Ø Example: § Y, the fee simple owner of Whiteacre grants Whiteacre “to B for life then to C if C attains the
age of 25.” At the time of the grant C is 19 years old § After the grant:
• B has life estate in possession • C has a contingent fee simple remainder which will vest when C turns 25
Ø So, it is contingent because there are contingencies that may prevent the estate ever falling into possession. Once those contingencies are removed, the condition is met, then the remainder vests. Contingent remainder becomes a vested remainder. § What if B dies before C turns 25? Under PLA s 192, the fee simple estate reverts to Y until C
turns 25 at which point it vests in C.
Crown land, General Law Land, and Torrens System Land
Land in Victoria
v Unalienated Crown land (about 30%) v General law land (only 3% in 1998) v Torrens system land (the rest)
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NATIVE TITLE NATIVE TITLE ANSWER GUIDE
Process
- Native title rights are recognised under common law and the Native Title Act 1993 (Cth) s 10 - Is the claimant authorised by all the members of their indigenous group to make a claim for native
title rights? S 61 NTA - Claimant needs to make a claim for these native title rights at the Native Title Tribunal and to prove
their claim according to rules set out in NTA s 223(1); Yorta Yorta
Membership of a Group: s 223(1)
- The claimant needs to prove that they have a “substantial degree of ancestral connection” with the people who lived in the area at the time the Crown acquired sovereignty and that there is mutual recognition (Mabo (No 2.)) of their membership in the clan by elders of the clan (Ward (2002))
The Content of the Native Title Rights
- The rights which the claimant might claim as native title rights need to be provided for as per s 223(1)(a)– “rights in relation to the land”
o E.g. right to exclusive or non-exclusive possession of land - Rights and interests must be recognised at common law, s 223(1)(c) - ‘Native title rights’ covers hunting and fishing rights; s 223(2); Yanner v Eaton (1999) - In this section, list the rights after stating: “as per s 223(1)(a), P must identify the rights they wish
to claim, which are consistent with the traditional laws and customs of the (X) people. This will likely include…”
Traditional Laws and Customs: s 223(1)(a)
- The claimant must identify the traditional laws and customs now acknowledged and observed by their people, that they are relying upon to support their claim for native title rights
- The claimant must then prove that they are substantially the same as the laws and customs their ancestors acknowledged and observed at the point Britain acquired sovereignty of the land (Yorta Yorta (2002))
- Some change or adaptation of traditional laws and customs would not be fatal to proving the existence of native title rights (Yorta Yorta; Yanner v Eaton) so long as substantial continuity can be established between the laws acknowledged and customs observed now and those acknowledged and observed prior to the Crown’s acquisition of sovereignty
Connection with the land: s 223(1)(b)
- The claimant must prove that the traditional laws and customs relied upon are of a character which established a connection between the people and the land or waters
- Lack of physical occupation does not negate this connection – Mabo v Queensland (No. 2) (1992)
Extinguishment
- Has NT been extinguished through abandonment? (Yorta Yorta) - The Crown can extinguish NT but there must be a “clear and plain intention to do so” (Mabo (No.
2)) – also apply ‘inconsistency of incidents’ test (Ward (2002)) - NT is extinguished by a grant in fee simple – Fejo v Northern Territory (1988)
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Mabo No. 2 v Brennan J v Recognition of Native Title rights v Relationship between Native Title rights and the Doctrine of Tenure
Ø Native Title is not an interest in land under the feudal doctrine of tenure. Rather, the Crown’s radical title is burdened by Native Title
v Relationship between Native Title rights and the CL Ø Native Title does not derive from CL, it is ‘recognised’ by CL
v Origin and Nature of Native Title Ø “Traditional laws acknowledged by and the traditional customs observed by the Indigenous
inhabitants of a territory” Ø Native Title rights are (usually) communal and inalienable Ø Native Title rights and proprietary not personal (majority decision)
v Deane and Gaudron JJ in Mabo No 2 Ø Native Title rights are (usually) communal and inalienable Ø Native Title rights are only personal (nb minority view)
v 6 out 7 HC judges in Mabo No 2 decided in favour of the Meriam people (Murray Islanders): Ø “The Meriam people are entitled as against the whole world to possession, occupation, use and
enjoyment of the island of Mer”
The Native Title Act 1993 (Cth)
v Provides for the recognition and protection of native title (s 10) v Provides that a “future act” which does not meet the requirements of Part 2 Division 3 of the Act is
invalid to the extent that it affects native title v Validates “past acts” and “intermediate period acts” by Commonwealth, including past grants of title,
and enables states and territories to validate their “past acts” and “intermediate period acts” v Specifies the effect on native title rights of the validation of “past acts” and “intermediate period acts”
and provides for compensation on just terms where there is an adverse effect v Establishes a bureaucracy for dealing with native title claims, including the National Native Title
Register and the National Native Title Tribunal
The legislative definition of native title
v Native Title Act (Cth) s 223 Ø “(1) The expression native title or native title rights and interests means the communal,
group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where: § (a) the rights and interest are possessed under the traditional laws acknowledged, and
the traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and
§ (b) the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and
§ (c) the rights and interests are recognised by the common law of Australia Ø (2) Without limiting subsection (1), rights and interests in that subsection includes
hunting, gathering, or fishing, rights and interests v Examples:
Ø Rights to live on country Ø Rights to conserve, use and enjoy natural resources, including rights to fish, hunt and gather Ø Rights to maintain, use and manage the land and travel across the land Ø Rights to control access to land
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Ø Rights to erect shelters on the land Ø Rights to perform traditional ceremonies on the land
§ Non-exclusive native title rights have been recognised in the territorial seas (Commonwealth v Yarmirr (2001) 208 CLR 1) and inland waters of Australia (Gumana v Northern Territory of Australia (2007) 153 FCR 349)
PROVING NATIVE TITLE
v [1] Section 223(1) requires claimants to establish that they are present members of an identifiable indigenous community, which existed at the time of the Crown’s acquisition of sovereignty, and they are, therefore, the possible inheritors of the native title rights held by the Indigenous community at that time. Ø Mabo No 2 – can include biological descent, and mutual recognition of a person’s membership of
the community Ø Ward – strict biological descent is not required. Rather, a substantial degree of ancestral connection
§ Can be through adoption or marriage Ø Note, s 61
v [2] Section 223(1)(a) (read together with 223(1)(c)) requires claimants to identify the traditional laws and customs they now observe and rely upon to support their claim to native title rights and prove: Ø That those laws and customs are substantially the same as those observed by their ancestors at
the time of Crown acquisition of sovereignty; and Ø That observance of the laws and customs has continued substantially uninterrupted since Crown
acquisition of sovereignty Ø * Case law makes it clear that traditional laws and customs can evolve with time, so modification
or adaptation of customs are not always fatal to native title claims, as long as contemporary practices have a connection to pre-sovereignty customs
v [3] Section 223(1) (b) requires the claimants to prove that “by those laws and customs” [i.e the laws and customs to which reference is made in s 223(1)(a)], they “have a connection with the land or waters” in relation to which native title rights are claimed. Ø Lack of physical occupation or use of the land of water at the time does not mean that there is lack
of connection Ø Burden of proof is placed on the claimants – often claimants will fail to discharge the burden of
proof v Yorta Yorta (2002) 214 CLR 422
Ø Yorta Yorta people made a claim for native title rights in public lands and waters around the Murray River in Victoria and New South Wales
Ø The claimants acknowledged that they had been physically dispossessed of their lands since 1788, which interrupted and/or modified their use and enjoyment of native title rights
Ø Olney J (trial judge) rejected their claim for native title rights. He said that the “force of circumstances” (cf Mabo Brennan J “tide of history”) of dispossession washed away any continued acknowledgement of traditional laws and observance of customs in relation to the claimed land
Ø High Court decided that, although there can be some change or adaptation in traditional laws and customs over time, there needs to be substantial continuity in the acknowledgement of laws and observance of customs in relation to the claimed land by the Yorta Yorta people from 1788 to the present.
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LOSING NATIVE TITLE
v Abandonment Ø Where aboriginal people have lost continuous connection between their traditional laws and
customs and the land (Yorta Yorta) § Does not have to prove native title rights have been abandoned § Onus on claimants
v Extinguishment Ø Native Title Act 1993 (Cth) s 11
§ (1) Native title is not able to be extinguished contrary to this act § (2) an act that consists of the making, amendment or repeal of legislation on or after 1 July
1993 by the Commonwealth, a State or a Territory is only able to extinguish native title: • (a) in accordance with Division 2B (which deals with confirmation of past extinguishment
of native title) or Division 3 (which deals with future acts etc. and native title) of Part 2; or
• (b) by validating past acts, or intermediate period acts, in relation to the native title.” § Section 11 NTA override state legislation because of s 109 of the Constitution
v Extinguishment – the common law principles Ø The Crown can extinguish native title rights but must evince “a clear and plain intention to do so.”
(Mabo (No. 2) per Brennan J; Mason CJ and McHugh J concurring.) § Or by an executive act authorised by such legislation § Native title rights more vulnerable to extinguishment then Crown rights, as Crown rights can
only be extinguished by statutory authority § Brennan – a law or an act in exercise in executive power would only extinguish native title if
the act displayed a clear intention to do so. This requirement flows from the seriousness of indigenous inhabitants extinguishing their rights to the land
Ø “Where the Crown has validly alienated land by granting an interest that is wholly or partially inconsistent with a continuing right to enjoy native title, native title is extinguished to the extent of the inconsistency.” (Mabo (No. 2) per Brennan J; Mason CJ and McHugh J concurring) § Brennan did not make reference to clear or plain intention
Ø Uncertainty: What is the relationship between the “clear and plain intention” requirement and the proposition re inconsistency of rights?
Wik (1996) 187 CLR 1
v How did the grant of pastoral leases under the under the Land Act 1910 (Qld) and the Land Act 1962 (Qld) affect the Wik people’s native title rights?
v The majority: (Gummow, Toohey, Gaudron and Kirby JJ) Ø Found that the rights granted under the legislation did not amount to grants of exclusive possession
but were more akin to grazing rights. Ø Considered whether the rights granted under the legislation were inconsistent with the native title
rights claimed. Ø Set a high bar for finding inconsistency informed by the requirement that the legislation or act
done under legislative authority must manifest a “clear and plain intention” to extinguish native title rights. § Granting of a pastoral lease is inconsistent with some native title rights, for example control
of access, right to burn off growth on the land Ø Found that the Crown granted rights were necessarily inconsistent with some native title rights but
not all (hence partial extinguishment) § Crown does not automatically acquire a fee simple reversion. If you have a fee simple holder
who grants somebody else a lease, they are carving out a smaller interest from their bundle
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rights, if they give someone else the rights of possession. But there is still something left in the hands of the landlord. The left over here is the fee simple reversion. In Wik, the Crown didn’t just by granting a pastoral lease to somebody itself automatically acquire a fee simple reversion, or beneficial ownership for itself. If it did automatically, that would be inconsistent with the continued existence of native title rights.
v All judges: (the test) must apply an ‘inconsistency of incidents’ test to determine whether and to what extent a Crown grant might extinguish native title rights
v Crown rights prevail, and native title rights extinguished only to the extent of that inconsistency v Confirmed in Ward (2002) 91 ALR 1
Fejo v Northern Territory (1988) 195 CLR 96
v Held: “Native title is extinguished by a grant in fee simple. And it is extinguished because the rights that are given by a grant in fee simple are rights that are inconsistent with the native title holders continuing to hold any of the rights or interests which together make up native title. An estate in fee simple is, ‘for almost all practical purposes, the equivalent of full ownership of the land’ and confers ‘the lawful right to exercise over, upon, and in respect to, the land, every act of ownership which can enter into the imagination’.” Ø Ratio confirmed that where the crown, relying on its radical title, grants a fee simple estate in land to
itself or someone else, any pre-existing native title rights are extinguished – fee simple leaves no possibility for native to continue, so necessarily inconsistent
Akiba v Commonwealth of Australia [2013] HCA 33
v French and Crennan JJ Ø Para 24 “‘Extinguishment’ in relation to native title refers to extinguishment or cessation of rights. Such
extinguishment of rights in whole or in part is not a logical consequence of a legislative constraint upon their exercise for a particular purpose, unless the legislation, properly construed, has that effect. To that proposition may be added the general principle that a statute ought not to be construed as extinguishing common law property rights unless no other construction is reasonably open. Neither logic nor construction in this case required a conclusion that the conditional prohibitions imposed by successive fisheries legislation in the determination area were directed to the existence of a common law native title right to access and take marine resources for commercial purposes. In any event, nothing in the character of a conditional prohibition on taking fish for commercial purposes requires that it be construed as extinguishing such a right.”
Ø Hayne, Keifel and Bell JJ Ø Para 64 “Of course, regulation may shade into prohibition, and the line between the two may be difficult
to discern. But the central point made in Yanner, and reflected in each of Wik, Fejo, Yarmirr and Ward, is that a statutory prohibition on taking resources from land or waters without a licence does not conclusively establish extinguishment of native title rights and interests of the kind found to exist in this case"
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3. TOPIC 3 – Original Acquisition of Title
New Things v Acquisition of title through means other than receiving a transfer of title from a previous owner – thus
not derivative title. v A person may acquire a proprietary interest in a thing by bringing it into existence from nothing, i.e.
from writing a song or a novel (copyright) v Default common law rule: The owner of the asset, is the owner of the income generated by the
asset. Owner of the tree owns the fruit, owner of the land owns the crops.
Specification
v Manufacture: pre-existing goods being transferred through labour Ø Specification is the technical term. Ø CL rule: manufacturer of a new thing is the owner of it. Ø Where the new thing was manufactured from ownerless things or from inputs owned all by the
manufacturer, the default rule makes perfect policy sense – people wouldn’t make things unless they could own the things they made.
Ø Where the CL rule seems unjust: What if one or more of the inputs belonged to someone else and manufacturer used them without permission? § Common law rule: as between the owner of the converted input (the stolen item) and the
manufacturer of the new thing – the converted input owner owns the new thing; McKeown v Cavalier Yachts Pty Ltd (1988).
§ If you take somebody else’s things, and make something with it you don’t get to keep that thing anymore, because you have used it without somebody’s else’s permission.
v Where a thing has been bought into existence from stolen materials: Ø “If the creator’s use of the raw materials is unauthorised, he or she will be liable to pay damages for conversion. If
the use is a crime, then punishment is also available” – p. 425 v Lampton’s Executors v Preston’s Executors (1829); a manufactured product is not a new thing if it can be
reconverted back to its original form. v Associated Alloys Pty Ltd v Metropolitan Engineering and Fabrications Pty Ltd (1996)
Ø Whether goods used as part of the manufacturing process still exist in those goods or have gone out of existence is a question of fact
Ø Restoring a manufactured thing to its original form in such a dispute is not the only consideration, but rather, whether it is practical to do so. Economic perspective also considered.
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Accessories: The Doctrine of Accession v Where one chattel has been attached to another in such a way that it is not practical to separate
them - because it would cause damage to one or both, or because they can’t be separately identified.
v Default common law rule: The owner of the principal chattel acquires title to the accessory chattel. v Accession does not result in a new thing, whereas specification does. (Baskets in take home – not a
new thing, but the waterproof membrane was). v Where an accessory becomes part of the principal object and the property rights to the accessory are
destroyed – e.g. when sugar is added to a cup of coffee. v If goods are joined together, accession will occur if it is impractical to separate them again and one
thing is regarded as an accessory to the other – E.g. embroidering a design onto an existing garment. Ø Ask: Is separation practical?
§ Separation will not be practical if it will injure or destroy one of the items or costs more than the accessory is worth – where damage/separation is possible, it is practical; Rendell v Associated Finance Pty Ltd [1957].
§ Note Personal Property Securities Act 2009 (Cth) which regulates the enforcement of security interests in accessories and the removal by secured creditors.
Ø Ask: Which item is the accessory or principal? § Is not dependent upon size or value § McKeown v Cavalier Yachts Pty Ltd (1988) P entitled to possession despite unknowingly using
someone else’s property – however had to pay the D for unjust enrichment. § When two things of equal status are joined together, it is impossible to determine the principal
and the accessory – is it a mixture whereby it belongs to its contributors proportionally, or is it a new thing of which the creator owns?
v Rendall v Associated Finance Ø Rendell sold an engine under a hire-purchase agreement to a man named Pell, who installed it in a utility
truck he had bought from the AF under another hire-purchase agreement. Pell had not paid dully for the engine or the truck and therefore merely had possession of both things. AF seized the truck and refused to return the engine to the plaintiff.
Ø Pell’s agreement with AF said that any accessories attached to the truck would become part of the truck. However, that contract could not cause ownership of the P’s engine to pass to the AF. So, AF claimed that the engine had ceased to exist as a separate thing when it was installed in the truck (AF’s defence was that title to the engine had passed under the Doctrine of Accession). The court rejected that argument, because the engine could be removed without damage to the engine or truck.
Ø “The Accessories continue to belong to their original owner unless it is shown that as a matter of practicability they cannot be identified, or, if identified, they have been incorporated to such an extent that they cannot be detached from the vehicle.’
Ø Judge held that doctrine did not apply to these facts because the engine could be detached from the truck without damage. AF had no title to the engine.
Ø If this had arisen today, the solution may have been different due to security interest as per Personal Security Interests Act (PPSA) (Mr Rendell had a security interest in the engine. The PPS Act contains legislative rules for resolving disputes for resolving holders of title). There would have been a legislative solution to the problem and not a CL solution.
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Doctrine of fixtures Opening paragraph: “On the facts, (X) has possession and control over (Y). However, to determine whether (X) is entitled to remove them from (Z’s) land, it must be established whether they have become a fixture. This is dependent upon whether (X) placed (Y) on the land with the intention that it become part of the land (Reid v Smith). This is question of law rather than fact (Reynolds v Ashby), and involves considering the following factors: the degree of annexation, and the purpose of annexation (Belgrave).” v The court will look at the terms of the contract to see whether it expressly deals with the thing that is
in dispute. If the contract does not deal with the thing – then the doctrine of fixtures will assist. v The terms of a contract cannot affect a person who is not a party to the contract. Example: If there is
a dispute over the playground equipment which arises between a party to the contract and a third party you have to go to the doctrine of fixtures.
v Keep in mind, CL doctrine of fixtures, may be rendered irrelevant by legislation. Ø E.g – Chattels Securities Act 1987 may well assist a person who is trying to enforce a security interest
in an item to get over the argument that a securities interest has been lost through the item becoming a fixture.
v The courts must look at all of the circumstances of the case; Australian Provincial Assurance v Coroneo
Need to establish whether the ‘thing’ has become a fixture or not:
v The question of whether a chattel placed on land is a matter of law, not a matter of fact: Reynolds v Ashby & Sons [1904] AC 466.
Intention (and then two sub elements – degree of annexation and purpose of annexation).
v The legal question is whether the chattel was placed on the land with the intention that it become part of the land: Reid v Smith [1905] HCA 54 Ø Answering the question involves consideration of two main factors:
1. Degree of annexation
AND
2. Purpose of annexation
Degree of annexation
Two presumptions:
v If a chattel is attached to the land simply by its own weight, it is not a fixture. § If a person claiming against the presumption on the balance of probabilities, may be considered
a fixture. v If a chattel is attached to the land by any means other than its own weight (e.g. screws and bolts), it is
a fixture. § The assumption is that goods merely resting on land continue to be goods and that any degree
of attachment (by bolts, nails, cement etc) turns them into fixtures. § Belgrave Nominees Pty Ltd v Barlin-Scott Air-conditioning (Aust) Pty Ltd
• “Even slight fixing to the land is sufficient to raise the presumption that a chattel is a fixture. In those circumstances, the onus of proving otherwise rests upon the party so contending.”
• Burden of proof is on the person claiming against the presumption – claiming that it is or isn’t a fixture?
• Greater the degree of annexation, more likely it is that the good has become a fixture.
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Purpose/Object of annexation
v The court must examine objectively whether attaching the chattel to land is intended to be a temporary measure or a more permanent measure. Ø Objective intention: p433 Reid v Smith (1905). The object of annexation does not depend on what
anyone was actually thinking when the thing was joined to the land. It is the apparent purpose for joining something to land, as revealed by observable circumstances. What would a bystander, with knowledge of the relevant facts, assume was intended?
Ø Go to the purpose which can be inferred from the surrounding circumstances. The court will ask itself, what would the reasonable person consider to be the annexation.
v Temporary measure: Ø A temporary measure may include displaying a chattel or steadying it (not usually a fixture). Ø If the purpose of attachment is found to be temporary measure for the better enjoyment of the
goods, even if there are bolts affixing the goods to the land – the goods will not be held to become fixtures.
v Permanent measure: Ø A permanent measure may include benefiting the freehold estate (usually a fixture). Ø Holland v Hodgson (1872)
§ “If the intention is apparent to make the articles part of the land, they do become part of the land… Thus blocks of stone placed one on top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder’s yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels.”
v If practical to remove a fixture, then it is asked: “Was it joined to the land for its better use as a chattel or for the improvement of the land?” Ø Leigh v Taylor [1902] (remained chattels)
§ Valuable tapestries were tacked to canvasses which were nailed to strips of wood, which were nailed to the walls of a mansion house. The circumstances revealed an intention that the tapestries would remain goods. They could be removed easily without damage to them or the land. Although their attachment improved the enjoyment of land, that was the only practical way to enjoy tapestries.’
Ø Belgrave Nominees (1984) (fixtures) § Air-conditioning plants installed on the roof of a building. It was resting on pads on the roof and
connected with nuts and bolts to water pipes and electrical cables in the building. § It could be removed easily without damage to the plant or building. § The purpose of installing the air conditioning plant was clearly not for the better enjoyment of the
plant, but for the permanent improvement of the land. Although the company that installed the plant did not own the land, it had been hired to make that improvement on the owner’s behalf.
§ Considered as fixtures due to it being for the permanent improvement of the land. § They were fitted for the benefit of the buildings uses and occupancy. The purpose was to
permanently affix the air conditioners to the office building so that they were fixtures at the time of their removal. You put air conditioning there – to be permanent.
§ Judge looked at: air conditioning plants are heavy, difficult to move, integrated into the design of an office building.
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Right of removal
v Property Law Act 1958 (Vic) s 154A Ø A tenant has a right to remove any fixtures that he or she has attached to the land at his or her own
expense before (or in some cases immediately after) the termination of the tenancy agreement. But note all the qualifications to the right. § Also note that if the lease is one to which the Residential Tenancies Act 1997 (Vic) applies
then s154A PLA does not apply. § Residential Tenancies Act 1997 s64(1)
• Tenants must not install fixtures without the consent of the landlord
v Tenant’s fixture or permanent fixture p 433. Ø At CL – tenants of leasehold or life estates are entitled to remove fixtures that they installed for
domestic, trade, or ornamental purposes and not for the permanent improvement of the land. § These are called tenant’s fixtures to distinguish them from permanent fixtures which tenants
are not entitled to remove. § The question is whether the tenant is permitted to remove them and turn them back into
goods. • Spyer v Phillipson
¨ “Must be able to be removed without making irreparable damage, and if this is the case, then it has no bearing upon the question of the tenant’s right to remove – except in so far as they throw light upon the question of the intention with which the chattel as affixed by him to the demised premises.”
§ The personal representative, the executor can detach things which had previously sbeocme fixtures if they fall within the category of trade etc.
v You don‘t have to rely on the statutory right if it hasn‘t become a fixture in the first place – they are goods, always been goods – a right of removal doesn‘t come in.
v Tenants are liable to repair the damage caused by removing fixtures, but this does not affect their right to remove them.
v Registrar of Titles v Spencer (1909) – “tenants should be able to improve the estate for his own enjoyment without being thereby compelled to make a present to the remainderman”
v As per statute, in Victoria, all tenants must remove their fixtures unless the parties agree otherwise. v S 154A Property Law Act 1958 (Vic) – tenants in Victoria may remove fixtures before the relevant
agreement terminates or during any extended period of possession of the premises, but not afterwards.
S 154A Property Law Act 1958 (Vic) Tenant may remove buildings and fixtures (1) A tenant who at his or her own cost or expense has installed fixtures on, or renovated, altered or added to,
a rented premises owns those fixtures, renovations, alterations or additions and may remove them before the relevant agreement terminates or during any extended period of possession of the premises, but not afterwards.
(2) A tenant who removes any fixtures, renovations, alterations or additions under subsection (1) must— (a) restore the premises to the condition they were in immediately before the installation, renovation,
alteration or addition, fair wear and tear excepted; or (b) pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition.
(3) This section does not apply to the extent that— (a) the lease otherwise provides; or (b) the landlord and the tenant otherwise agree
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RTA 1997 (Vic) s 64 Tenant must not install fixtures etc. without consent (1) A tenant must not, without the landlord's consent—
(a) install any fixtures on the rented premises; or (b) make any alteration, renovation or addition to the rented premises.
(2) Before a tenancy agreement terminates, a tenant who has installed fixtures on or renovated, altered or added to the rented premises (whether or not with the landlord's written consent) must— (a) restore the premises to the condition they were in immediately before the installation, renovation or
addition, fair wear and tear excepted; or (b) pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition.
(3) Subsection (2) does not apply if— (a) the tenancy agreement otherwise provides; or (b) the landlord and the tenant otherwise agree.
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Possession v OPENING: A person is able to obtain possessory title to goods by taking possession of them – e.g.
exerting exclusive physical control with the intention to do so (The Tubantia) v To have possession of a thing, a person must have exclusive physical control of the thing and
intend to possess it. Both are required.
Possession of a thing is constituted by:
- Exclusive physical control of the thing - And, intention to possess (animus possidendi)
v Exclusive physical control of the thing
Ø What counts as sufficient physical control depends on the nature of the thing and other relevant circumstances (The Tubantia [1924] p. 78) § Tubantia concerned a steamship which sank in 1916 to a depth of 20 fathoms (37 metres). In
1922, the P’s (who were not acting on behalf of the ship’s owner) began salvage operations. Over 15 months, they spent 25 days trying to recover the ship’s cargo. They had moored buoys to the ship and cut a hole in its side, but their divers could spend only eight minutes each day inside the ship. Although the P’s could not control access to the wreck and had spent little time there, they had sufficient control to give them legal possession. That level of control was measured against what was possible in the 1920’s.
§ Remember, always depends on relevant circumstances Ø Essential question is whether a person is able to control access to the thing Ø Essential question is whether someone has taken sufficient steps to use or otherwise limit access
to the land in question; Red House Farms (Thorndon) Ltd v Catchpole [1977] Ø Control – sometimes called factual possession – means physical control. Ø Only refers to tangible things as control here means physical control. Ø Popov v Hayashi
A California court invented the concept of a ‘pre possessory interest’, which can be acquired when someone intends to possess a thing and then makes a serious attempt to control it. The case concerned a baseball hit into the stands during a professional baseball game. It was the record breaking home run of the season – ball later sold for U$450,000. The P attempted to catch the ball, but could not control it because he was mobbed by the crown around him. The ball rolled to the D, who picked it up and thus became the first person to control and possess it. The P sued the D and was awarded half the proceeds from the sale of the ball even though the D did not take part in the mob attack and had done him no wrong. (This is not the law in Australia). – attempt to take possession is not sufficient.
Controlling spaces and places Ø Controlling a space allows people to control smaller things within it. Ø Whether people who possess those places control the things found there:
§ General rule, things attached to the land are controlled by the possessor of the land. § Waverley Borough Council v Fletcher [1995]
The D used a metal detector to find a medieval gold brooch nine inches beneath the surface of the plaintiff’s public park. The P controlled the brooch because public access to the park did not include the right to dig in the soil.
§ Things found on (but not attached to) land to which the public enjoys access are not controlled by the possessor of that land. • Bridges v Hawkesworth (1851); Parker v British Airways Board [1982]
Owner of a shop did not control a bundle of bank notes that had been dropped by an unknown person in the part of the shop to which the customers had access.
• Parker v British Airways
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The D did not have control over a gold bracelet found lying on the floor of its international executive lounge at Heathrow Airport. Access to the lounge was restricted to passengers who had cleared customs and held first class tickets or were members of the defendant’s passenger club. However, that level of public access meant that the D did not have control over everything in that space.
• Riley v Penttila [1974] It is possible to fence an area of land and not control it. The Owners of homs adjoining a park had a property right (called an easement) to use that partk for recreation or a garden. One of the owners built a tennis court on the park and put a fence around it. However, the other owners were invited to use the tennis court as part of their right to use the park for recreation. The fence did not amount to control over the tennis court because it was used not to keep people out, but to keep tennis balls in.
v Intention to possess Ø Animus Possidendi Ø All that is required is the intention to possess something for the time being – no requirement of
permanence Ø In most cases – this requirement does not create a problem. Ø It is possible to intend to possess something without knowing it exists. For example if you intend
to possess a suitcase, then you intent to possess its conent, even though you do not know what it caontains. § The same is true of a house or flat. § In Flack v National Crime Authority:
• A bag containing $433,000 in cash was seized lawfully by police from the P’s home. She had never seen the bag before and did not know it was there. Its true owner was never discovered, but the policy suspected that the P’s son had used his key to the home to hide the bag there.
• The P’s intention to possess her home meant that she intended to possess the things inside it, including the bag and money.
Possession of Goods: Capture
v Common law treats wild animals as starting off as ownerless – NB LEGISLATION Ø However it is possible under CL of a person to acquire possession of an animal by capture. Ø Intention will be obvious. Ø Usual issue is whether the person claiming title by possession is whether they have achieved
control.
Possession of Goods: Rights of Finders
v Armory v Delamirie Ø The proposition for which this case stands – prior possession of goods (He wasn’t the
owner), in and of itself gives a person (the little boy who was a P) a right to immediate possession which is superior to that of a subsequent possessor (the goldsmith).
Ø An example of one of these finding cases. P had found a piece of jewellery which he handed to the goldsmith to inspect. The goldsmith offered to buy the jewel for three halfpence. When the boy refused, the goldsmith removed the gems from the jewel and returned the empty socket. The goldsmith was guilty of trover (conversion) and liable to pay damages to the boy for the full value of the gems converted.
Ø The boy voluntarily handed over the jewel to the goldsmith. Therefore, the goldsmith interfered, not with his actual possession (Trespass) but his right to possession. The only possible source of that right was his previous possession. The Boy’s right to possession was better than the goldsmith’s actual possession because he had possession before the goldsmith.
Ø Prior possession of goods gives a person a right to possession which is superior to that of subsequent possessors
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v Parker v British Airways Board Ø As between the occupier of land and a trespasser on that land, the occupier is regarded as having
a better right to possession of goods found on the land. Ø Where goods are found attached to land, the occupier of that land has a better right to possession
than the finder. v Parker v British Airways Board per Donaldson LJ v Concluded: British Airways (lessee of the lounge) had not manifested an intention to exercise control
over goods lost in its lounge prior to the finding of the bracelet. As between British Airways and parker, parker was the prior possessor of the bracelet and had a better right to possession of it. This meant – by selling the bracelet and keeping the proceeds, it had converted the bracelet – and applying the doctrine of conversion British airways was liable to pay damages to parker. Ø The P found a gold bracelet in the defendant’s airport lounge and delivered it to the defendant for the
purpose of locating its true owner. The deliver to the defendant was not a gift by a a bailment, in which the D had possession and the plaintiff had a right to possession if the true owner could not be located.
Ø The D tried to establish a better right to possession than the P by showing that it had possession before the P found the bracelet.
Ø This it could not do since it neither controlled nor intended to possess the things left in the lounge by members of the public.
Ø The General rule that the earlier right is the better right is not applied in cases where the D acquired possession by doing wrong to the P. If the D found something while trespassing on the P’s land, he or she would not be permitted to assert a better right to possession against the P. This is true even if the P routinely invited members of the public onto the land and therefore did not have possession before the D.
Ø “An occupier of a building has rights superior to those of a finder over chattels upon or in, but not attached to, that building if, but only if, before the chattel is found, he has manifested an intention to exercise control over the building and the things which may be upon it or in it.”
Ø “If a bank manager saw fit to show me round a vault containing safe deposits and I found a gold bracelet on the floor, I should have no doubt that the bank had a better title than I, and the reason is the manifest intention to exercise a very high degree of control. At the other extreme is the park to which the public has unrestricted access during daylight hours. During those hours there is no manifest intention to exercise any such control.”
Ø “There was no evidence that they searched for such articles regularly or at all … [O]n the evidence available, there was no sufficient manifestation of any intention to exercise control over lost property before it was found such as would give the defendants a right superior to that of the plaintiff or indeed any right over the bracelet.”
Ø Parker v British Airways Board per Donaldson LJ Ø “[British Airways] claimed the right to decide who should and who should not be permitted to enter and use the lounge,
but their control was in general exercised upon the basis of classes or categories of user and the availability of the lounge in the light of the need to clean and maintain it. I do not doubt that they also claimed the right to exclude individual undesirables, such as drunks, and specific types of chattels such as guns and bombs. But this control has no real relevance to a manifest intention to assert custody and control over lost articles. There was no evidence that
Ø They searched for such articles regularly or at all … Ø [O]n the evidence available, there was no sufficient manifestation of any intention to exercise control over lost property
before it was found such as would give the defendants a right superior to that of the plaintiff or indeed any right over the bracelet.”
Wrongful Possession: Breach of duty
v The most common torts of wrongly interfering with possession or a right to possession are trespass, conversion, and detinue.
v Trespass Ø Wrongful interference with persons or their possession of things Ø To constitute trespass the interference must be unauthorised, direct and done voluntarily. Ø Trespass to goods or land involves interference with possession or damage to the thing
possessed.
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Ø Trespass is not committed unless there is a direct connection between the trespasser’s actions and the interference with possession or damage.
Ø Remedy is damages (nominal if no actual loss).
v Conversion Ø Unauthorised interference with another’s possession or right to possession of goods,
documents or cash. Does NOT include land (so is unlike trespass in this regard). Ø Must be voluntary. Ø Can be direct or indirect Ø Conversion (used to be called trover) is some dealing with goods, documents, or cash
which is repugnant to someone else’s right to possess them. Using them for your own benefit or purporting to sell, give, or lend them to another would be conversion.
Ø Usually involves intention to exercise dominion over thing Ø Temporary interference with a right to possession can be conversion if that interference
amounts to a repudiation of that right; § In Aitken Agencies Ltd v Richardson [1967]. The D took the P’s van for a joy ride and damaged it. He
was guilty of conversion because, as McGregor J said, he “intended to exercise a temporary dominion over the van. He assumed possession of it for his own purpose, and such act was inconsistent with the rights of the owner.”
§ Compare to: Schemmell v Pomeroy. 14-year-old boy took his mother’s car for a joy ride while she was at work. He intended to put the car back safely before she got home, but wrecked it in an accident. Hi intention to return the car meant that he was guilty of trespass, but not conversion (at least not before the accident).
Ø Unlike trespass which is interference with someone’s possession of a thing, it is conversion to interfere with a right to possession § A person who does not possess, but has the right to possess goods, can sue for
conversion of them. • Motor Dealers Credit Corp Ltd v Overland (Sydney) Ltd (1931) the P had a right to possession of a
car, which had been improperly seized by a car dealer. The dealer sold it to the defendant, who resold it without ever taking possession of the car. Even though neither the P nor the D had possession of the car at the relevant time, the D was guilty of conversion. “There may be a conversion of goods even though the D has never been in physical possession of them, if his act amounts to an absolute denial and repudiation of the plaintiff’s right.”
v To sue, P must have right to immediate possession of the goods. A right to possession at some time in the future would not suffice. Ø E,g – If you borrowed a book from the library for four weeks and that book was taken
from you the next day, the library could not sue for conversion until its right to possession revived 27 days later. (but problems for lease of a car – for a number of years). p 65.
v Possible to sue for conversion of money, but only if the money exists in a physical form as cash, cheques, or other negotiable instruments. Ø Where misappropriating money occurs, must be tangible, in the form of a cheque –
intangible forms such as electronic funds transfer cannot be subject to conversion in Australia
v Jeffries v The Great Western Railway Co (1856) Ø Dispute over ownership, P and D claimed ownership of some trucks per an assignment from a third
party Ø D seized trucks in the P’s possession, whilst third party was in apparent ownership Ø P brought an action in conversion Ø “The law is that a person possessed of goods as his property has a good title as against ever stranger,
and that one who takes them from him, having no title in himself, is a wrongdoer, and cannot defend himself by shewing that there was title in some third person”
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Ø Even though the trucks belonged to the third party, P was in their immediate possession – therefore D has no right to claim the trucks
Ø As wrongdoers, could not rely on jus tertii defence
JUS TERTII - means 'the right of a third party'. It is a defence available in property law, and it means that a plaintiff cannot bring an action against a defendant if there is a third-party which has better rights to the property then him. Only that third-party can bring an action.
v Detinue Ø Involves goods, documents and cash, but NOT land Ø It is the wrongful detention of them from a person with a right to immediate possession. Ø A person who commits the tort of detinue will know of the P’s claim to possession, since
the essence of the tort is the failure to deliver things on demand. Ø (This sets it apart from trespass and conversion, which can be committed by people who
have no idea that their actions are interfering with another’s property rights). Ø It is no defence to a claim of detinue that the D honestly believed that the P was not
entitled to possession. Ø Remedy is order for return of goods and/or damages for loss suffered.
Jeffries v The Great Western Railway Co (1856)
v Possession of goods (even wrongful possession) is as good as title against all except those with a better right to possession.
v If C wrongfully interferes with B’s possession of goods, C cannot defend a tort action brought by B by pleading jus tertii, i.e. that a third party has a better right to possession than B
Responses to breach of duty
Ø Direct enforcement v Equates to protection of a P’s right to possession through enforcement of that right and restoring
possession to the P Ø E.g. damages, injunction, or an action recover land (ejectment)
Ø Damages v Award of damages might cover the cost of repair or replacement or it might make up for the loss of
use of the thing v Damages for trespass and conversion do not depend on loss to the P, or gain to the D, but are measured
by the value of the right interfered with, as a vindication of that right Ø The Mediana [1900] Ø Inverugie Investments Ltd v Richard Hackett Co [1995]
Rights to possession p 73 (NOT ON SLIDES – CHECK WITH RACH)
v Law protects not just possession, but rights to possession
v Obtaining the right to possession Ø Right to possession is normally acquired by consent, through a sale, gift, or loan from someone
who previously held that right. v Can be acquired simply through taking possession of a thing, and by having it ‘first’ – Armory v Delamirie
(1722)
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v Relativity of property rights Ø Court must decide which party has a better right Ø Generally speaking, when two rights to possession are in competition, the earlier right is the better
right; Asher v Whitlock (1865) v Lost and found
Ø When someone finds and takes possession of a lost chattel, he or she acquires a right to possession which is enforceable against everyone else except someone with a better right (usually being the original owner)
Ø General rule that earlier right is the better right does not apply if D acquired possession by doing wrong to the P
Ø One person cannot obtain a better right to possession than another by committing a tort against that person
v Master and servant Ø When an employee takes possession of something on behalf of his or her employer, that possession
is treated as the employer’s possession; Willey v Synan (1937)
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Possession of land Possession of land at CL v Possession of land for any length of time gives the possessor an interest in the land (Allen v. Roughley
(1955) 94 CLR 98). v Such a possessory interest is fully alienable (Asher v. Whitlock (1865) LR 1 QB 1). v The law will protect a possessory interest in land as against everyone except a person with a superior
right to possession. v The person with documentary title has a superior right to possession to a person claiming a possessory
interest. v A prior possessor (other than one who has abandoned possession) has a superior right to possession
to subsequent possessors (Allen v Roughley). v Possession is presumed to be title against everyone except a person with a superior right to possession
(Perry v. Clissold [1907] AC 73). v Asher v Whitlock
Ø Williamson took possession of land without the owner’s permission. He died and in his will left the land to his widow until she died or remarried and then to their daughter. The widow married the defendant, Whitlock, and both she and her daughter died, leaving him in possession of the land. The P, Asher, was the daughter’s heir and therefore able to obtain possession of the land from Whitlock through an action of ejectment. Asher had a better right to possession than Whitlock, not because she was the owner, but because she had inherited Williamson’s right to possession, which had passed first to his widow, then to his daughter (when the widow remarried), and then to her (When the daughter died). That right first arose when Williamson took possession of the land, long before Whitlock’s possession, and therefore it had priority.
Ø Asher had the earlier right to possession, prior to Whitlock’s possession Ø Asher v Whitlock demonstrates the relativity of property rights:
§ Whitlock had possession of the land, which was a property right enforceable against other members of society except someone with a better right. There were two people with earlier and better rights to possession: the owner of the land and Asher. That the owner had a better right to possession than Asher was not relevant to the dispute between Asher and Whitlock. It would have been relevant if Whitlock had obtained his right to possession from the owner. In that case, Whitlock would be claiming the owner’s right, which was earlier and better than the right acquired by Williamson and passed to Asher.
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§
- O has a fee simple in Black Acre as a crown grant. - S1 moves in with no documentary title to Black Acre, treats it as their own without permission. - Further down the track S2 kicks S1 off the land, and started using it. - S2 possession is presumed to be title as against everyone except S1 and O both of whom have a
right to possession which is superior to that of S2. - Suppose that S1 brings an action against S2 for the recovery of the land - can S2 defend the action
by arguing that the land does not belong to S1 but to O? - This appeal to the superior right of a third party is called raising the JUS TERTII defence? – and
you can’t do this for goods. - In the same way, according to Perry v Clissold – a ‘jus tertii’ defence (pleading the better right of a
third party) is not available to the position of S2. - S1 is presumed to have a legal fee simple estate. - Title to land is relative not absolute. Who has the better right, and it is no answer to that question
that somebody else has a better right than the people to the dispute.
The concept of abandonment
v A person abandons a property interests in goods if they are not exercising their rights over the goods and formed the intention of never exercising rights over those goods again.
v Just because they are not exercising the rights doesn’t mean they have abandoned them v Same applies to land v If test is met, then the person who has abandoned the interest loses the interest v Forgetting about goods does not amount to abandonment; Moffett v Dillon [1999] v Same applies to losing goods v Inferences can be made on the basis of the nature of the item
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Limitation of Actions Limitation of actions legislation: Policy
v Need for certainty v “You snooze, you lose” v Evidentiary difficulties
Limitation of actions legislation: limitation period
Limitation of Actions Act 1958 (Vic) Section 5 “(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued —
Ø (a) … actions founded on tort…;”
Section 8 “No action shall be brought by any person to recover any land after the expiration of fifteen years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person:
Provided that if the right of action first accrued to the Crown the action may be brought at any time before the expiration of fifteen years from the date on which the right of action accrued to some person other than the Crown.”
v Not possible for anyone to obtain title to land by adverse possession against: Ø The Crown (s7 LAA) Ø Public Transport Corporation, Victorian Rail Track (s7A LAA) Ø Water Authorities (s7AB LAA) Ø Local Councils (s7B LAA)
v What is the effect of the expiration of the limitation period on the title of the person who loses the
right to bring an action? Prevent a person bringing an action to enforce those rights after the limitation period has expired – they don’t affect the existence of the rights. For sections which affects rights, see below: Ø Extinguishment of title
§ Goods – see s 6(2) LAA § Where—
• any cause of action in respect of the conversion or wrongful detention of a chattel has accrued to any person; and
• before he recovers possession of the chattel, a further conversion or wrongful detention takes place—
no action shall be brought in respect of the further conversion or detention after the expiration of six years from the accrual of the cause of action in respect of the original conversion or detention.
§ Where— • any such cause of action has accrued to any person; and • the period prescribed for bringing that action and for bringing any action in respect of
such a further conversion or wrongful detention as aforesaid has expired; and • he has not during that period recovered possession of the chattel—
his title to the chattel shall be extinguished. § Land – see s 18 LAA
Extinction of title after expiration of period Subject to the provisions of section eleven of this Act, at the expiration of the period prescribed by this Act for any person to bring an action to recover land (including a redemption action or an action to compel discharge of a mortgage) the title of that person to the land shall be extinguished.
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v Chambers [8.05-.10] Ø Possession can become ownership through the passage of time Ø Assume that priority of rights to possession are: (1) owner, (2) possessor, and (3) world.
The best possible right to possession is equivalent to ownership. If the owner loses her or his right, the possessor moves to the front of the queue.
Ø Limitation period is measured from the date when the cause of action accrues (which is the day on which the right to sue first arises). The limitation period to recover possession of land is 15 years; Limitation of Actions Act 1958 (Vic) s 8
Ø The limitation period of the torts of conversion, detinue, and trespass to goods is six years s 5 LAA
Ø There is no time limit for the government in Victoria.
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Adverse Possession of Land ADVERSE POSSESSION ANSWER GUIDE
Does the LAA apply?
- Has the claimant been in possession for requisite statutory period (15 years)? – s 8 LAA o 15 years continuous occupation by 1 or more possessors. (Mulcahy v Curramore [1974])
§ Multiple Possessions: If 1 adverse possessor is dispossessed by another, the 2nd adverse possessor can add the first period of adverse possession to their own for the purpose of satisfying the limitation period (unless abandonment occurred by AP 1)
o Limitation period may be suspended if paper title owner = under a disability or affected by fraud. (S23(1))
- When the limitation period has ended, the title of that person to the land shall be extinguished – s 18
Is the possession adverse?
- For possession to be adverse, it must be enjoyed without the permission of the owner; Whittlesea City Council v Abbatangelo [2009]
- Can X’s occupation be described as amounting to factual possession with the intention to possess? (Abbatangelo)
Factual possession:
- In order to establish factual possession, X must establish that their occupation of the land was open, continuous and exclusive (Abbatangelo)
Intention to possess - animus possidendi:
- X must establish that they had an intention to possess the land to the exclusion of all other persons, including the true owner, “so far as it is reasonably practicable and so far as the process of the law allows” (Malter & Anor v Procopets [2000])
- It must be possible to infer the existence of the requisite intention from the objective circumstances (Malter)
Accrual of cause of action – when does the clock start ticking?
- Has there been dispossession or discontinuance as per s 9(1) - Right of action not to accrue or continue unless there is adverse possession – s 14(1) - If a person brings an action to recover land from a deceased person, and the deceased person was in
possession of the land at the date of their death, the right of action shall be deemed to accrue on the date of his death – s 9(2)
Stopping the clock:
- Has there been abandonment by the adverse possessor? – s 14(2) - Person with the right of action institutes an action to recover land - Person with the right of action resumes possession of land
Result
- Does it operate against a registered title holder (true owner)? – s 18 - Does it operate against a future interest holder? See time frame in s 10(2)
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Adverse Possession of Land = Possession without the consent of the true owner
Factual possession, intention to possess WITHOUT the consent of the true now.
v Whittlesea City Council v Abbatangelo [2009] Ø 1908: Whittlesea Council obtained land as gift. Planted trees and fenced southern boundary. Ø 1958: Mr & Mrs Abbatangelo purchased property on western, northern and eastern sides of the
Council’s land and began to treat the Council land as their own. Ø 2004: Dispute arises between the Abbatangelo’s and the Council over ownership of the Council
land. (Although Adverse Possession claim was made against the council (now it is put in the LLA – and you can’t accrue title by adverse possession against a Council).
ELEMENT 1: Factual Possession
v Required to be actual, open, continuous and exclusive. v ‘Open’ means ‘would be noticed by a documentary owner reasonably careful of his or her interests’
(must be sufficiently obvious – not actually noticed. v Basically what the person claiming by adverse possession has to show is that they have dealt with the
land as an owner had been expected to deal with it and that no one else has done so. v Also looking for sufficient degree of exclusive physical control of the land in view of all the
circumstances including the character and value of the land and the suitable and natural mode of using it.
Whittlesea City Council v Abbatangelo [2009]The council argued that because A had not improved the land, they had failed to exercise factual possession. Just having animals graze on the land was not sufficient to establish physical control and possession of the land. They argued that in order for their to be physical control there had to be something built. The Court of Appeal did not accept this argument. Failure to change appearance, particularly the trees, did not resemble lack of possession. They were using it in a way that you would have expected if they had owned the land. The Abertangelo’s had: installed a gate, bath on the land for water trough, their livestock grazed on their land, they held BBQ’s and social gathering, played on the land, maintained the land by removing the weeds and mowing the grass and they hunted for rabbits on the land.
v Adverse possession is so heavily dependent upon the circumstances of the case. Look at examples to see how to go about a particular set of facts. Remember to look at all of the facts. While the facts may be broadly similar, it could change the outcome of a test. You can’t just rely on other cases and say ‘they found this important’
v If the true owner has also been using the land, it might well be that the person claiming adverse possession has actually been exclusive (the squatter) Ø Generally exclusive possession can only be shown that no one else used the land except for with
the possession of the adverse possessor
ELEMENT 2: INTENTION TO POSSESS: Animus Possidendi
v Intention for the time being to possess the land to the exclusion of all other persons, including the true owner, ‘so far as is reasonably practicable and so far as the processes of the law allow’ (Pye v Graham endorsed in Whittlesea City Council v Abbatangelo)
v Not necessarily an intention to exclude the true owner knowing that s/he is the true owner i.e. intention to exclude the person who is in fact the true owner in the mistaken belief that s/he is not the true owner is good enough (Malter v Procopets [2000]) Ø All that is required is an intention to exclude all others, including the actual owner. (Exclude the
world at large).
v What if the adverse possessor mistakenly believes themselves to be the true owner of the land? Ø Can you have adverse possession in such a situation? – The courts have quite clearly have said
YES. All that is required is an intention to exclude all others including the person who is the true owner, regardless of whether the person claiming by adverse possession realising that that person was the true owner.
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§ Malter v Procopets – person claiming title of adverse possession of a small strip of neighbours land. Boundary fence had been put in the wrong place, that had caused the person claiming adverse possession to wrongly believe that the land belonged to them. The Victoria court of appeal accepted the mistaken belief did not stand in the way of claiming acquisition of title by adverse possession. That is the most common adverse possession – encroachment, boundary fence in the wrong place.
v The courts tend to say that the intention should be clear from the acts themselves, or the intention should have been made clear to the world at large, Must be possible to infer the existence of the requisite intention from the objective circumstances.
v NB The Victorian Court of Appeal in Whittlesea City Council v Abbatangelo has confirmed that there is no additional “inconsistent use” requirement.
Accrual of the cause of action
When does the clock start ticking?
v Dispossession or Discontinuance LAA s 9(1) But:
v There must be someone else in adverse possession LAA s 14 (1)
Accrual of right of action in case of present interests in land
SECT 9
Where the person bringing an action to recover land or some person through whom he claims— - has been in possession thereof; and - has while entitled thereto been dispossessed or discontinued his possession— the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.
Right of action not to accrue or continue unless there is adverse possession
SECT 14 No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as "adverse possession"); and where under the foregoing provisions of this Act any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date the right of action shall not be deemed to accrue until adverse possession is taken of the land.
Just because someone has been dispossessed or discontinued possession – doesn’t mean the clock starts ticking because you also need someone else in adverse possession. Won’t start ticking when someone has gone out of possession, ONLY when someone is IN adverse possession.
Deceased person
v When does clock start ticking if a deceased person died in possession but their heir seeking to recover land never took actual possession?
LAA s 9(2) ‘Where- (a) any person brings an action to recover any land of a deceased person, whether under a will or on
intestacy; and (b) the deceased person was on the date of his death in possession of the land... and was the last person
entitled to the land to be in possession thereof- the right of action shall be deemed to accrue on the date of his death.’
But: v There must be someone else in adverse possession
Ø LAA s 14(1) (see above) § So s 14 and 9(2) read together
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Deceased person: Lecture Example:
Following someone's death a squatter takes possession of the land, or perhaps they were living with the testator after their death.
The person with better right to possession is the person who inherited (the heir) of the deceased person. How long has the beneficiary under the will go to bring a claim against a squatter? The answer to that question is found in s 9(2) of the limitations act.
If you read s 9(2) and s 14(1) together – if a person entitled to possession of land dies while they are in actual possession but their successor in title never takes actual possession then a cause of action accrues to the successor in title from the first day that both of those things are met – the predecessor's entitled has died, and the land is in the possession of someone in whose favour of the period of limitation can run. Even if the requirements of 9(2) are met, which is just that they have died, you STILL not going to have the clocks start running, unless there is someone in whose favour the clock can tick – someone is actually in adverse possession.
Inter vivos transfer – clock starts ticking
v When does the clock start ticking where the transferor was in possession at the time of an inter vivos transfer but the transferee seeking to recover the land never took actual possession?
LAA s 9(3) ‘Where- (a) any person brings an action to recover land, being an estate or interest in possession assured*
otherwise than by will to him or to some person through whom he claims by a person who at the date when the assurance took effect was in possession of the land... ; and
(b) no person has been in possession of the land by virtue of the assurance- the right of action shall be deemed to have accrued on the date when the assurance took place.’
* ‘assurance’ = any disposition of an interest in land
But:
v There must be someone else in adverse possession Ø LAA s 14(1) (see above)
v If there is someone who is entitled to possession of land and made some inter vivos transfer of title to that land while they are still in actual possession of it, but the person they make the transfer to, the successor in title, never takes actual possession, then a cause of action accrues to the successor in title from the first day on or after the date of transfer that the land is in the possession of someone in whose favour the period of limitation can run.
v What is important – even if the requirements of s 9(3) are met, the time is not going to start running until the requirements of section 14(1) are also met.
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Future Interests
v LAA s 10(1): Time starts to run when the future interest becomes an interest in possession. E.g. for an interest taking effect after a life estate, time starts to run when the life tenant dies.
v [NB This provision has no effect if the land is already in adverse possession when the future interest is created: LAA s 10(3).]
But:
v LAA s 14(1)There must be someone else in adverse possession
Explanation of diagram:
X – fee simple owner of land makes a grant to A for life and to B in fee simple remainder. Adverse possession begins while A’s life estate is on foot. (That is the diagram).
In these circumstances, B’s right to bring an action against the adverse possessor accrues on the date of A’s death, that is the date on which B get’s a possessory interest. That is the scenario that s 10(1) applies to. It doesn’t apply if the land was in adverse possession when the future interest was created. It is only contemplating a situation where the future interest has been created without plot(?) on it and then during that intermediate estate period, adverse possession commences.
Second thing to keep in mind, need to read s 10(1) in conjunction with s 14(1). If on the date that the future interest becomes an interest in possession and there is no one in possession of the land, - no adverse possessor, then time doesn’t run (unless someone is in adverse possession).
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Limitation of Actions Act 1958 (Vic) Section 10 “(2) If the person entitled to the preceding estate or interest, not being a term of years absolute, was not in possession of the land on the date of the determination thereof, no action shall be brought by the person entitled to the succeeding estate or interest after - the expiration of fifteen years from the date on which the right of action accrued to the person entitled
to the preceding estate or interest, or - six years from the date on which the right of action accrued to the person entitled to the succeeding
estate or interest, whichever period last expires.”
First diagram: the life tenant A was dispossessed in 2005 and then they died in 2008. Two alternate periods. You rely on the better of them.
The holder of a future interest has either 15 years when the cause of action accrued to A, or 6 years from when their own cause of action accrued, when A died.
First diagram.
- the 15 years from when the cause of action accrued to A, because that takes us to 20/20, whereas 6 years when the right accrued to the future interest would have expired in 2014. 15 year period – (given a choice between 15 years from when it accrued for the life estate holder, or 6 years when the future interest fell into possession). 15 years expires later so that is the one you go for.
- In the first example – it made a huge difference, given that we are now in 2017.
Second diagram
- In this situation, 15 years from when the right of action accrued to A, gets us to 2020. But because of the difference about when A died and when the future interest holder fell into possession, the alternative period of 6 years, when the right accrued to the future interest goes to 2021. 6 years – expires later, that is the one we pick.
Two alternative periods, that is available in this very special situation – the 15 or 6, one might have expired but the other not.
Leasehold situations
v Stranger takes adverse possession of leased land during lease (if a third party wrongfully takes possession of land during the term of the lease). Ø Landlord’s right of action accrues when lease comes to an end (LAA s 10(1)). Ø Landlord has 15 years from accrual of his right of action to recover the land (LAA s8). Note that
s10(2) LAA does not apply.
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Ø The third party is considered to be in adverse possession against a tenant but not against the landlord, for as long as the lease remains on foot.
Ø The landlord’s interest is considered to be a future interest for as long as the lease is on foot. Because the landlord doesn’t have a possessory interest for as long as the lease is on foot.
Ø The Landlord’s right of action accrues only when his or her interest falls into possession when they are able to take exclusive possession.
Ø Key case: Ø Authority for proposition that landlord interest is future interest for purposes of LAA is found in
Fairweather v St Marylebone Property Co Ltd [1963] AC 510; S&N CB [2.101] Ø Landlord has 15 years from the date that the landlord’s interest falls into possession to bring an
action for recovery of the land. That follows from reading s 8 and 10(1) together. Important: subsection 10(2) does not apply in this situation. Section 10(2) talked about a future interest holder where subsection (2) applied having either 15 years from the when the cause of action accrued, or 6 years – see slide. But that subsection (2) does not apply where what you are talking about is a landlord’s interest. § If you look at 10(2) provision, not being a term of years absolute – was not a leasehold estate
is what that means. § Section 10(2) does not apply here.
Ø If the LL has 15 years from when the LL’s interest falls into possession it is important to work out when does the LL”s interest falls into possession. § According to Fairweather v St Marylebone Property Co Ltd [1963] if a person takes adverse
possession of land while a lease is on foot and remains in AP for the statutory period against the tenant – for 15 years against the tenant. The tenant’s title is extinguished as against the adverse possessor but remains on foot as against the landlord.
§ According to the house of lords in Fair-weather –w hat follows from this, the LL’s interest does not fall into possession – because the lease is continued to continue as against the LL, even though from the tenant’s interest is considered to be extinguished from the perspective of the adverse possessor – who has been in possession for the statutory period.
§ If the lease remains on foot against the LL, what follows is the LL’s interest does not fall into possession and LL’s right of action against the adverse possessor does not accrue until the lease which continues as between the landlord and tenant expires or is terminated by one of the parties to the lease according to how the lease provides for termination.
§ The landlord’s cause of action won’t accrue until the lease comes to an end. § No case says anything contrary to fair-weather – no Australian or Victorian authority that says
anything different.
v A stranger goes into adverse possession against the landlord – that is, stranger takes ‘adverse possession’ of rent Ø While the lease is on foot the landlord does have the right to receive rent. If someone else
wrongfully receives the rent instead of the landlord, then the landlord can take action against that person.
Ø LAA s 13(3) tells us – landlord’s title to land can be extinguished to the term of the lease, if someone takes adverse possession of the rent for the entire limitation period. (Pretty negligent landlord not noticing they weren’t being paid rent for 15 years).
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v The tenant goes into adverse possession against the landlord - when does time start to run against landlord? Ø Lease expires but tenant continues in possession as tenant at sufferance or despite express
disallowance - possession is adverse from expiry of lease. Ø special rule re tenancies at will – LLA s 13(1)
§ LAA s13(1) – v A tenancy at will shall for the purposes of this Act be deemed to be determined at the expiration of a
period of one year from the commencement thereof unless it has previously been determined, and accordingly the right of action of the person entitled to the land subject to the tenancy shall be deemed to have accrued on the date of such determination.
Lecture explanation: s 13(1) - Provides that a tenancy at will comes to an end and a LL’s right of action is deemed to accrue at the end of 12 months of the tenancy at will. Tenant at will’s possession is deemed to become adverse 12 months after the tenancy at will commences. If the tenant continues in possession beyond the 12 month period without coming to some other arrangement with the LL, the LL and tenant might reaffirm the existence of a tenancy and do something that means there is permission given again, it’s only if you have this tenancy at will coming to an end because of s 13(1) and then nothing else happens – that you might have a situation where the tenant just keeps on in possession for 15 years after the tenancy at will has come to an end – that they will have extinguished the landlord’s title by adverse possession.
Ø Special rule re oral periodic leases LAA s13(2) § LAA s13(2) A tenancy from year to year or other period without a lease in writing shall for
the purposes of this Act be deemed to be determined at the expiration of the first year or other period; and accordingly the right of action of the person entitled to the land subject to the tenancy shall be deemed to have accrued at the date of such determination:
Examples:
Ø Where a lease comes to an end and the tenant continues in possession as tenant in sufferance or despite the LL expressly saying get off my land, the tenant’s possession is regarded as being adverse. The LL’s right of action will be bared and their title will be extinguished 15 years later.
Ø If someone is being in possession of land pursuant to a lease, and the lease comes to an end, and nothing is said thereafter (tenant continues), or the landlord says ‘leave’ and the tenant continues – if either of those goes on for 15 years, (hard to) but if it does, the LL’s right of action will be barred and the LL’s title will be extinguished. If someone overholds – that situation continues for 15 years, then the LL’s title will be extinguished.
v The tenant goes into adverse possession against a stranger – the land becomes part of the leasehold estate Ø What if the tenant has leased a particular parcel of land from the LL, and then the tenant encroaches
into an adjacent parcel of land and is basically in adverse possession of the parcel of land that belongs to someone else? For Who’s benefit does the adverse possession accrue? § The position is considered to be – usual case the land encroached upon is presumed to be
annexed to the leased land. If the clock ticks for 15 years in favour of the tenant while the lease is on foot the tenant would have the best possessory title to the land encroached upon, but when the lease comes to an end, then the tenant will have to surrender encroached upon land to the landlord together with the land that was leased to the tenant. The tenant extinguishes the title of the person of the adjacent parcel by adverse possession. The tenant doesn’t get to keep that, it is considered to become part of the land that the tenant had leased from the landlord. They are doing it for the benefit of their landlord.
§ If the tenant hasn’t been in possession for the full 15 years, the clock will keep ticking in favour of the landlord that the tenant began encroaching on.
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The running of time
v Assurances made after the clock has started ticking
LAA s10(3) ‘No person shall bring an action to recover any estate or interest in land under an assurance taking effect after the right of action to recover the land had accrued to the person by whom the assurance was made or some person through whom he claimed or some person entitled to a preceding estate or interest, unless the action is brought within the period during which the person by whom the assurance was made could have brought such an action.’
v Diagram explained: Assurances made after the clock has started ticking
Ø X was fee simple owner of land Ø Squatter in adverse possession of land that x owned sin fee simple since 01/01/96. Ø Adverse possession had commenced. Ø X sells the fee simple to A on the 1st of January 2008. Ø Clock started ticking on 1 January 1995. Ø According to s 10(3), the fact that X has sold the land to A doesn’t mean the clock starts ticking
fresh for A. A gets the number of years already accrued. Time runs out for A on 1 January 2010 – 15 years after cause of Action accrued to X.
v Additional lecture example Ø X was fee simple owner of land Ø Squatter in adverse possession of land since 01/01/96 Ø X died on 01/01/07 and in x’s Will leaves the land to A for life and then to B in fee simple
remainder. Ø All that passes under X’s Will is an interest with 12 years of adverse possession already clocked up
against it. A only has until 1 January 2011, 15 years from the date on which the right of action accrued to X, to bring an action to recover the land.
Ø If X had died before the final 3 years had run, B would have had until 1 January 2011 to bring an action to recover the land. If A had of died after 1 Jan 2011 B would have just had no right of action.
Ø Important: s 10(2) does not apply to this example – because adverse possession commenced against the fee simple estate of X, the person who made the assurance to B rather than against the holder of the X’s estate.
Ø **You need to realise that this situation is different to the future interests slide and s 10(2) – where adverse possession commences against the life estate holder. In this situation, the adverse possession commencing against X, the person who made the dispossession to A for life and then to B.
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v Successive adverse possessors transfer possessory title to next person along
Ø True owner’s title extinguished once successive periods of adverse possession add up to statutory period.
Ø Person in adverse possession at the expiration of the statutory period has title that is good against the whole world.
Ø Successive periods of adverse possession by different possessors can be added together to bar a claim to recover land. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464.
Ø If someone with possessory title has purported to pass it onto the next person and uses it to transfer to the next person, the title of the legal fee simple owner will be extinguished once the period of adverse possession add up to the statutory period (add them together). But since each adverse possessor has transferred his or her possessory title to the next person, the person in adverse possession at the expiration of the statutory period will acquire a fee simple title that is good against the whole world.
v Successive adverse possessors each dispossessing the previous
v Where you have a series of adverse possessors – and each of them have acquired it by dispossessing
the previous possessor. v The title of the fee simple – will be extinguished once the successive periods have added up – BUT
there is a difference about what happens with the relationship between those squatters. v In this scenario, it is not a situation where each of them has transferred their interest to the next person
along. Each of them has purported to acquire title originally by dispossessing the previous one. All of those prior possessors who have been dispossessed, each one has the 15 year period in which to recover the land.
v In this example – S1, S2 and S3, comprise the chain of adverse possessors – but each take their interest independently of the others.
v S3 – if she lasts 15 years, will have good title barred against everyone except S1 and S2 because they have been dispossessed.
v This shows that, a person who acquires title by adverse possession is just as vulnerable to having their title extinguished by subsequent adverse possessors as any person with documentary title. Ø In table, the very first adverse possessor would have the better right at the end of the statutory
period § If s 3 is in possession at the end of the statutory period, they have better title, except for s 1
and s 2, unless after a period of time, the clock ticks over.
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v The effect of intervening abandonment
LAA s14(2) Ø “Where a right of action to recover the land has accrued and thereafter before the right is barred
the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right of action be deemed to accrue until the land is again taken into adverse possession.”
Ø The most likely scenario is if there has been abandonment somewhere along the line, there will be a period of time under which no one has been in adverse possession.
Ø When there has been a break , s 14(2) the time that is run against the true owner up until that point, gets scrubbed out it doesn’t count. When the next person moves into adverse possession, the true owner once again has the full statutory period in which to bring an action to recover the land.
Ø Theoretically – in the highly implausible situation where someone abandons possession and someone else moves into adverse possession at the same time – if there is no gap, then you can add the period together – highlight implausible that there would be a situation where there was no gap.
v Stopping the Clock Ø 99.9% of scenarios in which there will be a break in any one being in adverse possession the clock
will stop ticking. Ø Abandonment by adverse possessor (LAA s 14(2)) Ø Acknowledgement in writing and signed by adverse possessor or their agent of the title of the
person to whom the right of action has accrued made to that person or their agent (LAA s24 and s25)
Ø 26(1) – the acknowledgement binds everyone during the ensuing period Ø Person with the right of action institutes an action to recover land Ø Person with the right of action resumes possession of land Ø Time will also stop running where the person having the right of action brings an action to recover
the land. Starts litigating. Ø S 16 of the LAA time does not stop running just by the owner making a formal entry onto the
land. Just to walk on the land and say ‘I’m here taking it back doesn’t cut it. If they want to rely on resuming possession of the land they have to physically resume possession of the land. That might end up not being very peaceful could end up in all sort of other actions. Better to litigate (Start proceedings which will stop the clock) than try to physically take possession of the land.
Ø Making a formal entry onto the land – s 16 – making a verbal and written claim to ownership isn’t good enough. Basically what you need is to issue a writ to recover the land.
Title of the adverse possessor
v Title of adverse possessor is independent of the title of the person he or she dispossesses (Fairweather’s case)
v Fairweather’s case – it was emphasised that the title of the adverse possessor is independent of the title of the person that he or she dispossesses. The adverse possessor is not the successor in title of the person they dispossessed. It is acquiring title through your own action – by taking possession. Independent source of title.
v Pye v Graham CASE –
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4. TOPIC 4 – Transfer of Title
A preliminary question: capacity?
v As a general rule a person with title to property has the capacity freely to dispose of that property, unless s/he is a minor or person of unsound mind
Sale: Contractual intention
v Involves a contract, intention to enter legal relations and a meeting of minds about all essential terms). v Consensus ad idem about all essential terms. In our context:
Ø The alleged vendor must appear to a reasonable person to have agreed to sell a particular proprietary interest in a particular thing to the alleged purchaser for a particular price; and
Ø The alleged purchaser must appear to a reasonable person to have agreed to buy that interest in that thing from the alleged vendor for that price
• Note: general contract law doctrines such as non est factum apply v All the usual contract law doctrines apply. Just background knowledge is required: consideration, etc.
Intentional transfer
v Intention to transfer right to property is necessary, but not sufficient alone to cause right to pass v To give effect to the intention, delivery of that possession to another must be completed v Method of transfer depends on:
Ø Nature of right involved, and Ø Nature of thing subject to that right.
v There are four main ways in which legal property rights are transferred: Ø Delivery of a thing Ø A document transferring the right Ø A contract for the sale of the thing, and Ø Registration of a document transferring the right
v Four main categories of things Ø Goods Ø Money Ø Intangible Ø Land
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Sale: Goods SALE OF GOODS ANSWER GUIDE
Contract of Sale
- On the fact, is there a valid contract of sale which contains offer, acceptable and consideration? – GA s 8
- Was the property identified at the time of making the contract of sale? – GA s 3 - Where there is a contract for the sale of specific goods, title passes to the buyer when the parties
intend it to pass – GA s 22
GA s 23 Rules:
- Rule 1: Where is an unconditional contract for the sale of specific goods in a deliverable state, the intention presumed in the absence of evidence to the contrary is that the property in the goods passed to the buyer when the contract was made
- Rule 2: Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing be done and the buyer has notice thereof
- Rule 3: Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weight measure test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done and the buyer has notice thereof
GA s 25A:
- Contract of sale for goods forming part of bulk quantity
Formalities
v Goods Act 1958 (Vic) Section 8 Making of control of sale “Subject to the provisions of this Part and of any Act in that behalf a contract of sale may be made in writing (either with or without seal) or by word of mouth or partly in writing and partly by word of mouth or may be implied from the conduct of the parties: Provided that nothing in this section shall affect the law relating to corporations.”
v Distinguish between the making of the contract and the transfer of title.
Passing of title to specific or ascertained goods
v Goods Act 1958 (Vic) Section 22 Property passes when intended to pass (1) Where there is a contract for the sale of specific or ascertained goods the property in them is
transferred to the buyer at such time as the parties to the contract intend it to be transferred. (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of
the contract the conduct of the parties and the circumstances of the case.” § Specific goods: goods identified and agreed upon at the time a contract of sale is made (s 3) § Ascertained goods: not identified at the time the contract was made but have been identified since.
Passing of title to specific goods.
v Goods Act 1958 (Vic) Section 23 Rules for ascertaining intention “Unless a different intention appears the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer:
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- Rule 1. (common rule) Where there is an unconditional contract for the sale of specific goods in a deliverable state [defined in s3(4)] the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery [defined in s3(1)] or both be postponed.”
- Rule 1 - Most everyday transactions covered by rule 1.
- Postponement of delivery postpones transfer of possession – but title could of passed. – Just because you postpone delivery doesn’t mean you postpone transfer of ownership. People assume title doesn’t pass until the goods have been delivered – all that means is possession hasn’t passed but title could have passed (that’s what rule 1 means).
- Postponement of payment may postpone transfer of right to immediate possession (GA s47 (unpaid vendor’s lien) dealt with in Topic 6)
Rule 2. (something needs to be done by the vendor after entering the contract of sale in order to get the goods in a deliverable state) Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state the property does not pass until such thing be done and the buyer has notice thereof.
§ Presumption: unless a different intention appears, is that title to the goods is not intended to pass until the vendor has done what needs to be done to put them in a deliverable state, and his given the buyer notice that they have done that.
Rule 3. (something needs to be done by the vendor after entering the contract of sale in order to get the goods in a deliverable state) Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh measure test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done and the buyer has notice thereof.”
Passing of title to unascertained goods
v Goods Act 1958 (Vic) Section 21 Sale of unascertained goods “Subject to section 25A, where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.” v E.g mother goes into uniform shop and pays for a uniform but tells the shop that her son is going to
pop in and try them out and pick the size that fits. At the time of the making of the contract we don’t know which uniform the son is going to pick. The goods are unascertained.
v Title cannot pass until the goods are ascertained
Future goods
v Goods Act 1958 (Vic) Section 10 Existing or future goods (1) The goods which form the subject of a contract of sale may be either existing goods owned or
possessed by the seller or future goods. (2) There may be a contract for the sale of goods the acquisition of which by the seller depends upon a
contingency which may or may not happen. (3) Where by a contract of sale the seller purports to effect a present sale of future goods the contract
operates as an agreement to sell the goods.” v The goods act does not prevent the making of such contract, but what you need to keep in mind is that
title cannot pass from the vendor to the buyer under the contract until the vendor themselves actually gets title to the goods and they are ascertained.
v Subject to those limitations the rule is that title passes when it is intended to pass. There are rules about unascertained goods and future goods. You can’t pass title until the vendor has title and the goods are ascertained. Apart from those statutory limitations, title passes when it is intended to pass.
v Example: E.g. – uniform shop example, the mother might have run our of the size, but she has paid the uniform. Text the son when the new stock has come in, and he can pick it up. Uniform is not
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owned by the uniform shop yet. By not be existing in the wold net – might not be manufactured, either way the contract is a contract for the dale of future goods
Passing of title to unascertained or future goods
v Goods Act 1958 (Vic) “do not worry about it.” Section 23 Rules for ascertaining intention “Unless a different intention appears the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer:… Rule 5 (1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied and may be given either before or after the appropriation is made.” v Default rule that can be applied if there is no evidence of when title is intended to pass. Sale: choses in action (DEBT)
v Two ways in which intangible property rights are transferred Ø 1. By a document assigning the right
§ Legal title passes when the assignment or other document is executed and the new owner then registers that document to protect the priority of her or his new right
Ø 2. By registration of such a document § Registration is the event which causes legal title to pass.
v Transfer of legal title to choses in Action is covered by s 134 of the Property Law Act. v Section 134 sets out the formalities which need to be followed in order to transfer legal title to a
presently existing debt, or other legal thing in action. v The amount you are required to pay the bank is the debt. v The bank has a contractual right to obtain payment of the debt. v Can transfer the right of the debt to another person – term used for a transfer of a choses in action is
an assignment.
v PLA 134 legal assignments of things in action v “Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of
charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, shall be and shall be deemed to have been effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice— (a) the legal right to such debt or thing in action; (b) all legal and other remedies for the same; and (c) the power to give a good discharge for the same without the concurrence of the assignor:..”
v Section 134 PLA Ø Applies to an absolute assignment (transfer) “not purporting to be by way of charge only”.
§ It is possible to assign part of a debt, however not at law. It is possible to assign part of a debt in equity.
Ø Applies to an unconditional assignment rather than an assignment that is subject to some kind of condition precedent.
Ø The assignment must be “by writing under the hand of the assignor” § The transfer must be accomplished by a written document which is signed by the assignor, or
is executed as per the corporations act if it is a company § The signature of a person other than the assignor will not meet that requirement, even if there
is authorisation for the other person to do so (strict interpretation) (point has not been interpreted in court – likely to not be interpreted in this strict way)
Ø Express notice of the assignment must be given in writing to the debtor
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§ That requirement does not say who needs to give the notice, and the notice need not be given by the assignor. In practice, the person to whom the assignment is made, gives notice to the debtor
§ Notice given at time of assignment, or after assignment has taken place v If the requirements above are met, then:
Ø The legal right to the debt passes to the assignee from the date that notice is given to the debtor. Ø Thereafter, the debtor can only discharge the debt by making payment to the assignee. (Because
the assignor no longer owns the debt). Ø Once that legal assignment has been made, the assignee can exercise the remedies associated with
that legal right, but is no better position vis-à-vis the debtor than the assignor was at the date of notice.
Incomplete transfer of value
v A specifically enforceable contract for the assignment of an existing legal chose in action results in equitable assignment of it from the time of entry into the contract.
v Where there is a valid contract to assign an existing legal chose in action, or a purported assignment of it for valuable consideration, the assignment is considered complete in equity as soon as the consideration has been paid or executed. Ø Lecture notes: Assume for LAW2FPL – it is a specifically enforcebale contract.
§ The assignment is considered complete in equity as soon as the consideration has been paid or executed. When the consideration has been received, that is considered binding – and they have to deliver on their side of the promise.
§ An assignment is complete in equity – the assignor is regarded as holding legal title (which they still have because there hasn’t been transfer of legal title yet) from the moment that the transfer is considered complete in equity, the assignor is regarded as holding the legal title to the chose in action on constructive trust for the assignee. From that point – the assignee is considered the equitable title to the chose in action.
§ An assignment will be considered in equity prior to the giving of notice to the debtor. But it still makes good sense for the assignee to ensure that the debtor receives notice of the assignment. That is because prior to notice of the assignment given (section 134 that says legal transfer is only accomplished (1) when there is an absolute assignment, (2) express notice given in writing to the debtor) Once you have done 1, then you have equitable title, because prior to the notice been giving the debtor can discharge the debt by paying off the assignor person who was owed the debt.
v Lecture Example: Ø Helen Smith borrowed $500 from her friend, Bill Brown. Helen was determined to be business-
like about the transaction with Bill so she wrote down on a piece of paper that she owed Bill $500 plus interest of 8% pa re-payable in 12 months in exchange for his immediate loan of $500. Both Helen and Bill signed the agreement, which was dated 2 April 2016.
Ø Helen has just received a letter from Jack Jones which has enclosed within a copy of the agreement by Helen to pay Bill Brown $500 plus interest of 8% pa. and also a copy of a note signed by Bill stating that he “hereby assigns” Helen’s debt to Jack Jones. The letter informs Helen that Jack bought the debt from Bill some time ago and, since the 12 month period of the loan has expired, he demands payment of the amount by Helen.
Ø Advise Helen whether she should pay Jack $500 plus 8% interest, explaining your advice fully. v Answer to lecture example
Ø Bill’s contractual right – was a chose in action. Bill has purported to assign that chose to of action to Jack. Property law act s 134 provides that the assignment must be in writing under the hand of the assignor and that express notice of the assignment must be given to the debtor in writing.
Ø Here, we have the assignment in writing, signed by bill the assignor. We also have Jack having paid for the assignment. At that point – Bill had written the note and Jack had handed him the agreed price for the debt, equitable title to the debt passed to Jack.
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Ø She could have discharged the debt by paying the money to Bill. By sending the letter of demand to Helen, jack has done that next step to give express notice in writing of the assignment, and at that point, legal title to the debt also passes to Jack. The person who Helen absolute has to pay is Jack, because Jack has the legal title, no excuse to pay it to anyone else.
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Inter Vivos Gift v Donative intention
Ø NB inter vivos = during life Ø For valid inter vivos gift of a proprietary interest, alleged donor must have had intention to make a
gift, i.e. must have intended to confer a benefit on the alleged donee by: § divesting himself or herself of the proprietary interest; and § vesting that interest in the alleged donee.
v Relevant intention is the intention of the alleged donor inferable from words and actions at the time of the alleged gift.
v Burden of proof is on the person alleging that a gift was made.
Gift of goods requires:
Transferred by:
v Deed - ss73 and 73A PLA OR v Delivery
Deed
Ø A deed is a document that has been signed sealed and delivered. Signing is a requirement by s 73 of the PLA. Sealing and delivering are common law requirements.
Ø Delivery is releasing any kind of acts over and above demonstrates the intention of the person executing the deed to be bound by the terms of the deed. Usually the intention is demonstrated by the grantor of the interest handing over the document to the grantee interest.
Delivery
v “Delivery” in this context means a change in possession. v The most common way to transfer a property right to goods is by delivery of possession, coupled with
the intention to transfer that right. v The transferor’s intention defines the right and transfer of possession gives effect to that intention. v The two elements of intention and delivery must coincide at some point for the property right to
pass. Ø Examples of delivery requirement being met: Re Stoneham and Thomas v The Times Book Co Ltd
§ Re Stoneham [1919]: The gift was effective, without a separate act of delivery, because the donee’s possession coincided with the donor’s intention to give (P possessed the furniture 2 years before he was told he could keep it. • The Grandfather gave furniture to his grandson and then died. Since, the grandson already
had possession of the furniture, the gift was complete without a further act of delivery. However, the court also said that, if the gift had not been completed during the grandfather’s life, it would have been complete on his death. This is because the grandson was the executor of his grandfather’s estate and legal ownership to that estate passed to the grandson by operation of law.
§ Thomas v Times Book Co [1966]: Thomas lost a manuscript and told BBC producer that he could have it if he could find it. The gift was complete when the producer later found the manuscript in a pub. Since Thomas was still alive and had not revoked the gift, his intention to give continued until until the producer obtained possession.
Ø Example of delivery requirement not being met: Re Cole § Problem of delivery. In 1945, a husband leased a mansion and spent $20,000 pounds furnishing
it. He took his wife to the mansion, showed her around the rooms and told her it was all hers.
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They lived together in the mansion until 1961, when the husband became bankrupt. The furnishings still belonged to the husband (and could be sold to pay his creditors) because he never ceased to have possession. It was not enough that the wife also had possession. In order to complete the gift, she had to have possession which excluded her husband. The result should have been different if the husband had eased to reside in the home at a time when he still intended to give the furnishings to his wife.
v “The transferor’s intention defines the right and the transfer of possession gives effect to that intention.”
Choses in action
v Tolhurst: equitable assignments of choses in action: the assignment of legal interests Ø Equity treats the transfer as having already occurred.
v The gift must be by writing under the hands of the assignor and express notice of the assignment must be given in writing to the debtor.
v PLA s 134 legal assignments of things in action “Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, shall be and shall be deemed to have been effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice— Ø (a) the legal right to such debt or thing in action; Ø (b) all legal and other remedies for the same; and Ø (c) the power to give a good discharge for the same without the concurrence of the assignor:..”
Incomplete voluntary transfer
v NB voluntary = made without valuable consideration being received in exchange. v Person A embarks on making a gift for chose in action to B, but a dispute arises between person A and
B before all the steps are completed. In such a case, person B cannot argue that he has a legal property interest in the chose of action. But in some cases the court will be prepared to treat the gift as complete in equity.
v Corin v Patton (1990) 169 CLR 540, 559 per Mason CJ and McHugh J: “the principle is that, if an intending donor of property has done everything which it is necessary for him to have done to effect a transfer of legal title, then equity will recognise the gift. So long as the donee has been equipped to achieve the transfer of legal ownership, the gift is complete in equity. ‘Necessary’ used in this sense means necessary to effect a transfer. From the viewpoint of the intending donor, the question is whether what he has done is sufficient to enable the legal transfer to be effected without further action on his part.”
v The donee will be treated in having the equitable interest. (donor passed it to the donee). v The question that arises, when will a court treat a gift as compete in equity before it is complete at law.
Ø Need to divert: § s 134 transfer process is not the only transfer process which involves more than one step. The
same question that is when will a court treat a gift as complete in equity before it is complete at law, that same question arises in Torrens system land and transfers of shares.
§ Starting point for considering the question is an 1862 (missed the case) Lord something. legal interest – property and shares. They hadn’t completed all the steps to pass legal title. I take the law of this court to be settled that in order to render a voluntary settlement – “she said a quote’ The problem with the proposition in this case it was ambiguous. Anna and annie – HC case – each court interpreted this proposition is a different.
§ HOWEVER – 1990 – cleared up the confusion in s Corin v Patton. Deslw th attempted voluntary of transfer of interest of Torrens system. All that we need to get out the case in this
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subject is the majorities formulation of the principal to be applied in determining whether a gift is complete in equity though not yet complete at equity.
§ Even though it is a transfer of land, It is applicable to transfer of property interest in other things.
v Applying the Paton principal to voluntary assignment of a debt, when will such an assignment be considered completed in equity.
v Only the Assignor can carry out the first step – in writing under the hand of the signor. The second step – the giving of express notice of assignment in writing to the debtor doesn’t have to be carried out by the signor, can be carried out by the assignee. Applying the Corin v Paton test, once that all that remains to be done is giving notice to the debtor, the assignment is complete in equity.
Non-rejection by the Donee v Gift of personal property is complete in law or equity as the case may be when the donor has carried
out the formalities of the transfer of title to the property in law and in equity with the intention of making the gift.
v IN the absence of evidence to the contrary the law presumes the donee’s acceptance of the gift. It is possible to have a situation in which title has been transferred to the donee without the donee knowing about it. Ø E.g - accepting a gift in work related environment might contravene workplace policy. Ø Romantic gift another example – be wise to reject it if you don’t want to encourage it.
v Obviously undesirable for a donor to be able to impose a gift on a donee even if that person doesn’t want the gift.
v In the case of goods by delivery, the intended donee may be able to avoid the gift by refusing to take the gift. However, where a gift has been completed the donee may disclaimed and thereby under the transfer of title in equity at least, in order order for disclaimer to be effected it must be communicated in some way to the donor or the donor’s agent.
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Inter vivos express trust v Capacity (as for disposition by sale or gift) v In order for an express trust to rise the person alleged to have created it must have had an intention to
create the trust. The relevant intention is the intention of the alleged creator at the time of the alleged creation.
v Intention Ø Need evidence of intention at time of alleged creation Ø What matters is the outward manifestation of intention (Byrnes v Kendle [2011] HCA 26)
§ Byrnes v Kendle – can’t say they had a mere intention. Prior to the HC decision iN kindle there was some confusion.
Ø Burden of proving intention is on the person alleging that a trust has been created. Ø All that is necessary is that the substance of what the alleged creator intends is what our legal system
would describe as a trust v Formalities required depend on whether trust is created
Ø By declaration or (declaring themselves to be a trustor) § A trust by declaration involves the creator declaring him or herself to be a trustee of the
property interest for the beneficiaries. There aren’t any formalities that must be complied with in order to create a trust by declaration of the legal interest in personal property.
Ø By transfer/settlement (see diagram below).
Trust by Transfer
A trust by transfer or settlement involves the creator C, transferring the property interest to another person T to be held on trust for the beneficiary B. The transfer may be made in exchange for valuable consideration or may be made without any consideration being provided (usually the latter – consideration isn’t provided).
The formalities with which C a creator must apply in order to transfer the property interest to T to be a beneficiary are the same as those that the creator must apply with in order to transfer the property interest as outright gift as the case might be. There are several steps involved in transferring the legal interest. What if the creator of the trust purports to make the transfer of the legal interest – and a dispute arises before the steps are completed? IN such a case, the trustee – (the transferee) can’t argue that he or she has acquired a legal interest. There may be a point where the court will create the transfer as equity transfer – even though not complete.
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IN the case of a transfer for value there needs to be executed consideration or a contract for the transfer of the property to the trustee. If a court is prepared to treat the transfer as complete in equity – the transferor will be completed as holding the interest on trust for the transferee – the trustee is treated as having equitable interest. This is the point in which the trust is constituted – and it becomes too late for the creator to change their mind. The trustee, the transferee in this scenario will in turn be holding their interest in trust for the beneficiary.
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Testamentary Disposition TESTAMENTARY DISPOSITION ANSWER GUIDE
Wills Act 1997 (Vic)
- Has a person, through their will, disposed of their property which is entitled to them? – s 4
Capacity
- S 5 & 6 - Testator must be “of sound min, memory and understanding” – Bailey v Bailey (1924)
Intention
- S 9 – did the party intend the document to be their will? - Look at evidence of the testamentary intentions of the testator (s 9(3)(b))
Formalities
- Has the will been signed? – s 7 - Witness need not know the contents of the will – s 8 - See also s 10 & 11
Alteration and revocation
- S 12 – has the will been revoked by writing which declares a clear intention of revocation? - S 13 – has marriage effected the will - S 14 – has divorce effected the will? - S 15 – has the will been altered in accordance with this section? - S 16 – has a revoked will been revived?
When does the will take effect?
- Upon testators death – s 34
Administration and probate
- See s 37 & 90-91 of Administration and Probate Act 1958
Passing of title to beneficiaries
- Has the executor given assent to the testator?
v Wills Act 1997 (Vic) section 4 “(1) A person may, by will, dispose of— (a) any property to which the person is entitled at the time of his or her death, whether or not the
entitlement of the person did or did not exist at the date of the making of the will…” v Two elements you need to consider in relation to the transfer of a property interest, intention and
formalities.
Has a person through their Will disposed of their property which is entitled to them? S 4
Capacity
v For purpose of Law2FPL – assume capacity is satisfied. Ø Minor cannot make a will (Wills Act s5), unless married (Wills Act s6) or authorised by a court (Wills
Act s20)
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Ø Testator must be “of sound mind, memory and understanding” (Bailey v Bailey (1924) 34 CLR 558) unless making of will authorised by a court (Wills Act Part 3 Division 2)
Ø Elaboration of what testamentary capacity means § “It is essential to the exercise of such a power that the testator § [1] shall understand the nature of the act and its effects; § [2] shall understand the extent of the property of which he is disposing; § [3] shall be able to comprehend and appreciate the claims to which he ought to give effect; and § [4] with a view of the latter object, that no disorder of the mind shall poison his affections,
pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.” (Cockburn CJ in Banks v Goodfellow (1870) LR 5 QB 549 at 565)
Intention
v Wills Act 1997 (Vic) section 9 “(1) The Supreme Court may admit to probate as the will of a deceased person—
(a) a document which has not been executed in the manner in which a will is required to be executed by this Act; or
(b) a document, an alteration to which has not been executed in the manner in which an alteration to a will is required to be executed by this Act—
if the Court is satisfied that that person intended the document to be his or her will…. (3) In making a decision under subsection (1) or (2) the Court may have regard to—
(a) any evidence relating to the manner in which the document was executed; and (b) any evidence of the testamentary intentions of the testator, including evidence of statements made
by the testator…. (6) In this section document has the same meaning as in the Interpretation of Legislation Act 1984.”
v S 9 provides where a document, which is being purported as a person’s deceased person’s will, does not comply with the formalities specified part of the will act , court will treat it as a will if court is satisfied that it the deceased person intended to be that person’s Will.
Formalities
v Wills Act 1997 (Vic) section 7 “(1) A will is not valid unless—
(a) it is in writing, and signed by the testator or by some other person, in the presence of, and at the direction of the testator; and
(b) the signature is made with the testator's intention of executing a will, whether or not the signature appears at the foot of the will; and
(c) the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the same time; and
(d) at least two of the witnesses attest and sign the will in the presence of the testator but not necessarily in the presence of each other.”
v Section 8 “A will which is executed in accordance with this Act is validly executed even if a witness to the will did not know that it was a will.”
v Section 10 “A person who is unable to see and attest that a testator has signed a document, may not act as a witness to a will.”
v Section 11 “A person who witnesses a will or his or her spouse or domestic partner, at the time the will is witnessed, is not disqualified from taking a benefit under the will.”
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Alteration and revocation of wills
v This is the last will of (insert your name) of (insert your address) (1) I revoke all wills and other testamentary dispositions that I have previously made…
v See ss 12, 13, 14, 15 & 16
When does a will take effect
v A will takes effect upon the testator’s death and not before. v Wills Act 1997 (Vic) section 34
(1) A will takes effect, with respect to the property disposed of by the will, as if it had been executed immediately before the death of the testator. (2) Subsection (1) does not apply if a contrary intention appears (whether in the will or elsewhere).”
Administration and probate
v S 37 Administration and Probate Act 1958 (Vic) – estate of deceased asses for payment of debt Ø Executor applies for and receives grant of probate. (proof that the Testator or Testatrix is dead
and had testamentary capacity when the will was made). Ø Under common law, personal property of the deceased is treated as vesting in their personal
representative from the date of death. Ø First duty of personal representative is to use the deceased’s assets to pay the deceased’s
debts. v Possibility of court ordering that provision be made out of deceased’s estate for “the proper
maintenance and support of an eligible person” (A&P Act s91(1)). (“Eligible person” is defined in s90).
v Where an executor has not been nominated, or the one that has been nominated is unwilling or unable to take the job – the court will appoint an administrator to go through the function of the deceased persons’ personal representative.
Passing title to beneficiaries
v Beneficiaries have no property interest in specific assets of the testator until executor gives assent. v After assent has been given, the property interest received under the will can usually be treated as having
vested in the beneficiary at the time of the testator’s death. Ø Once executor has determined that a particular asset of the Testator is not needed to payment of
debts – the executor can assent to property in that asset, vesting in whoever is supposed to get it under the terms of the will.
Ø Only when consent has been given that beneficiary obtained the property interest in the consent. After assent has been given, the beneficiaries property interest is usually been vested at the time of the testators death.
v If left the residue – can’t be determined until all distributions are complete. Statutory requirements might be required in order to pass the title.
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5. TOPIC 5 – Bailment
BAILMENT ANSWER GUIDE
Temporary Transfer of Possession?
- Has there been a transfer of possession from the bailor to the bailee? – Ashby v Tolhurst [1937] - Is the transfer temporary? - Has the putative bailee voluntarily accepted the transfer of possession? – Rolfe v Investec Bank [2014] - Note: bailor retains some right to possession – Chapman Bros v Verco Bros & Co Ltd (1933).
Termination of bailment
- Has the bailment been terminated upon: o Expiry of a term? o Pursuant to contract? o Upon destruction of goods? o Upon bailee acting in a manner repugnant to the existence of bailment; Penfolds Wines Pty
Ltd v Elliot (1946); The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (2006)
Is there a contract between the bailor and bailee?
- Where is a contract between bailor and bailee, terms of the contract prevail - Does any legislation modify the common law?
Bailor’s duties
- Has the warned of any dangers associated with the goods? (Pivovaroff v Chernabaeff (1978)) - Has the bailor interfered with the bailee’s lawful possession of the goods? (City Motors)
Bailee’s Duty
- Has the bailee failed to take care of the goods? (duty of care) - Has the bailee failed to retain possession? - Has the bailee used or misused the goods in any way? - Has the bailee failed to redeliver the goods? - Do any exemptions apply? (s 60 ACL)
Defences:
- Jus Tertii: Is the law identified that a bailee is estopped from a jus tertii defence unless evicted by title paramount or if the bailee is defending with the authority of the true owner? (Biddle v Bond)
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Types of bailment?
v Coggs v Bernard (1703) 2 Ld Raym 909; 92 ER 107 per Sir John Holt CJ v “The first sort of bailment is, a bare-naked bailment of goods, delivered by one man to another
to keep for the use of the bailor; (Example: convince a friend to look after a car while I am off on holiday by keeping it in his garage).
v The second sort is, when goods or chattels that are useful, are lent to a friend gratis, to be used by him; … (driver of his car borrowed it from a friend – second type of bailment)
v The third sort is, when goods are left with the bailee to be used by him for hire; v The fourth sort is, when goods or chattels are delivered to another as a pawn, to be a security
to him for money borrowed of him by the bailor; … v The fifth sort is when goods or chattels are delivered to be carried, or something is to be done
about them for a reward to be paid by the person who delivers them to the bailee, who is to do the thing about them. (Repair for reward)
v The sixth sort is when there is a delivery of goods or chattels to somebody, who is to carry them, or do something about them gratis, without any rewards for such his work or carriage, which is this present case.” (Free repair?)
What is bailment? v Bailment involves the temporary transfer of possession from bailor to bailee, with the bailee
voluntarily accepting the transfer. v ELEMENT 1: If there is no transfer of possession, there is no bailment (Ashby v Tolhurst [1937] KB 242
(CA)). Ø Remember the gift by delivery cases in topic 4. There needs to be delivery of the goods from bailor
to bailee for a bailment to be constituted. What makes the difference between gift by delivery and bailment is the intention with which the delivery is made. In order to understand the importance of possession being transferred.
Ø Example 1: Suppose I park my car at airport long term public car park. I grab a ticket at the boom gate, and fly out on holiday and take my car keys with me. I know I can take my car when I get back as long as I pay $7 per day. I didn’t hand my keys over or put them in the control of the car – unlikely that there has been a change of possession of the car. Most likely scenario is that I have just been given a contractual licence to use the car park while I am on holiday. The CP owner has not become a bailee of my car. Ashby v Toll illustrates this point.
Ø Example 2: At the airport car park I hand my keys to a parking valet who parks it on the understanding that it would be brought back when I pay the fee. Clearly possession has been transferred and a bailment has been created.
Ø Example 3: Terms of the contract matter as well. In the example where I left the car with the carpark storage for safe keeping, the purpose of the contract necessitated the car parking having possession of it. Whatever I did in leaving the car with the storage company amounted to transfer of possession.
Ø IN first version of airport example – If the carpark owner was contracting to keep it safe, a court may well infer that possession had been transferred to the car park owner even in that variation where I park it myself and took the keys with me.
v ELEMENT 2: Transfer of possession must be temporary. Ø Example 1: Referring to examples above, each of them contemplated the return of the goods into
the owner’s possession at a future date. Future date does not need to be specified in advance. E.g. Give the book back when you finish reading it – arrangement is still a bailment. Arrangement does not have to be one that contemplates return of possession to the bailor. A Variation that still counts as bailment, is an arrangement under which the bailee is required to hand the goods over to the party as instructed by the bailor. § Example – mother day’s present, I might use a parcel courier. I transfer possession of the
parcel to the courier with instructions to deliver it to my mother. From that point I am the
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bailor and the courier is the bailee until the parcel is delivered to the mother and the bailment ends. (5th sort of bailment example).
v THIRD ELEMENT: The putative bailee must have voluntarily accepted the transfer of possession (Rolfe v Investec Bank [2014] VSCA 38) Ø This was a case in which premises leased by a shopping container business JRT had been mortgaged
to Investec by owners of the premises. Invested to possession – glowdale defaulted I on the payment.
Ø Held no bailment, investec had simply given Mr Rolfe a licence to leave the containers on the premises. Not assumed liability for keeping them safe. Court when on to say even if Investec became bailer of the containers, it had not become bailee of the contents of the containers. Contents were not of a character, value and quantity likely to be found.
v BAILOR retains some right to possession – Chapman Bros v Verco Bros & Co Ltd (1933)
Termination of bailment v Upon expiry of term (if fixed term bailment) v On demand (if bailment at will)
Ø Example, if I lend you a textbook and say you can keep it until I want it back, the bailment will end until I tell you I want it back. No value provided – end the bailment before you finish reading it or the week is up.
v Pursuant to contract (if contractual bailment) v Upon destruction of goods bailed v Upon bailee acting in a manner repugnant to the existence of a bailment (Penfolds Wines Pty Ltd v Elliott
(1946) 74 CLR 204). Ø Acted in a matter repugnant to the existence of the bailment, not only will the bailment terminate
but the bailee could be sued by the bailor for conversion. Ø Looking for: use or misuse of the goods which basically amounts to the bailee treating the goods
as the bailee’s owns goods and denying the title of the bailor. Ø When the Bailee purports to sell the goods, the test would be met.
v The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (2006)
Ø Young CJ Ø “[I]t must be remembered that the act that is necessary to terminate the bailment must be a very serious act and one
which is virtually a disclaimer of the contract of bailment…. Before us it was argued that not only was there a failure
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to insure, there was also a parting with possession and an attempt to sell. So be it, but the evidence also indicated that there was no attempt, as there was in the Union Transport case, to defraud the hirer, since the appellant had asked for a payout figure from Esanda. I cannot see how it could be found as a question of fact that the hirer had repudiated the bailment.”
Relationship between bailor and bailee v Where there is a contract between bailor and bailee, terms of the contract prevail (subject to any
overriding legislation). v Legislation may modify the common law position in relation to particular bailment situations.
Contracting out may or may not be possible depending on the legislation. Examples: Ø Accident Towing Services Act 2007 (Vic) Ø Australian Consumer Law and Fair Trading Act 2012 (Vic) Ø Carriage of Goods by Sea Act 1991 (Cth) Ø Civil Aviation (Carriers Liability Act) 1959 (Cth) Ø Competition and Consumer Act 2010 (Cth) Ø Dangerous Goods Act 1985 (Vic) Ø Goods Act 1958 (Vic) Ø Personal Property Securities Act 2009 (Cth) Ø Second-hand Dealers and Pawnbrokers Act 1989 (Vic)
Bailor’s duties
v Under the common law Ø Duty to warn of dangers associated with the goods (Pivovaroff v Chernabaeff (1978) 21 SASR 1). Ø Duty not to interfere with the bailee’s lawful possession of the goods (eg City Motors (1933) Pty Ltd
v Southern Aerial Super Service Pty Ltd (1961) 106 CLR 477).
Bailee’s duty
v Under the common law Ø Duty to take care of the goods (eg Challenge Charter Pty Ltd v Curtain Bros (Qld) Pty Ltd [2004] VSC
1) Ø Duty not to use or misuse the goods outside the terms of the bailment. Ø Duty to retain possession of the goods unless authorised by the bailor to transfer possession to
someone else. (If a third party claims a better right to possession than the bailor, the bailee’s safest course of action is to interplead.) – Edwards v Newland & Co [1950]
Ø Duty to redeliver goods to the bailor or deliver them to a third party as directed by the bailor at the end of the bailment. Jus tertii defence not available unless defending on behalf of, and with authority of, the true owner (Biddle v Bond S&N CB [2.25])
v Duty of care Ø Duty owed is that of a reasonable person in the circumstances; Houghland v RR Low (Luxury Coaches)
Ltd [1962] 1 QB 694 Ø Onus on Bailor to show that the goods were damaged or lost while in the bailee’s possession
v Exemptions Ø S 60 ACL on guarantees of supply of services to a consumer – guarantee that the services will be
rendered with due care and skill Ø Duty to retain possession – if bailor parts with possession without consent of the bailor they will
be liable for loss or damage that occurs because they have not fulfilled their obligations as bailee Ø However, where there is a failure to redeliver the goods to the bailor, the bailee will be excused
where the loss was unavoidable by any action of the bailee Ø Delegation is allowed where it is normal industry practice
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Sub-bailment
Morris v C W Martin & Sons Ltd
v Is a sub-bailee able to rely on the terms of its contract with the head bailee as against the head bailor? v The Pioneer Container [1994] 2 AC 324, 339 v “It must be assumed that, on the facts of the case, no direct contractual relationship has been created between the owner
and the sub-bailee, the only contract created by the sub-bailment being that between the bailee and the sub-bailee. Even so, if the effect of the sub-bailment is that the sub-bailee voluntarily receives into his custody the goods of the owner and so assumes towards the owner the responsibility of a bailee, then to the extent that the terms of the sub-bailment are consented to by the owner, it can properly be said that the owner has authorised the bailee so to regulate the duties of the sub-bailee in respect of the goods entrusted to him, not only towards the bailee but also towards the owner.
v ….[W]here, as here, the consent is very wide in its terms, only terms which are so unusual or so unreasonable that they could not reasonably be understood to fall within such consent are likely to be held to be excluded.”
v The Pioneer Container [1994] 2 AC 324, 345-6 v “[U]nder clauses 6 and 4(1) of the Hanjin and Scandutch bills of lading respectively, there was vested in both Hanjin
and Scandutch [Head Bailees] a very wide authority to sub-contract the whole or any part of the carriage of the goods ‘on any terms’. Since the sub-contracting of any part of the carriage to another will ordinarily involve a bailment (or sub-bailment) to that carrier, it must follow that both the Hanjin and Scandutch plaintiffs [Head Bailors] had expressly consented to the sub-bailment of their goods to another carrier on any terms….[W]here, as here, the consent is very wide in its terms, only terms which are so unusual or so unreasonable that they could not reasonably be understood to fall within such consent are likely to be held to be excluded.”
Position of bailee and bailor vis-à-vis third parties v The Winkfield (1902)
Ø The Postmaster General (bailee of mail) brought an action to recover value of mail lost when The Mexican sank from money paid into court by the owner of The Winkfield (wrongdoer).
Ø Held: As between the bailee and a third party wrongdoer, possession is title and the bailee can recover the full value of goods lost.
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v Wilson v Lombank (1963) Ø Wilson (plaintiff) sues Lombank Ltd (defendant) for damages for trespass to the car Ø 1. Sold car, 2. Gave car for repair, 3. Sold car (again), 4. Collected car from garage after repair, 5.
Handed over car on discovering ownership Common ground between plaintiff and defendant Ø Action for trespass to goods will lie if at the time of the taking of the goods, the plaintiff had actual
possession, constructive possession or an immediate right to possession. Arguments for the defendant Ø 1) Since the motor car was with repairer, Wilson did not have actual or constructive possession at
time of taking. Ø Repairer would have had a lien over the car so Wilson did not have an immediate right to
possession at that time either. Ø Follows that Wilson could not bring an action for trespass. Ø 2) Even if Wilson had an immediate right to possession, Lombank Ltd can successfully defend
action: Ø By proving the better right of Mercantile Credit (jus tertii); or Ø By fact of having handed car over to Mercantile Credit. Held
§ Since Wilson had a credit arrangement with garage, there was no repairer’s lien over the car. § Therefore, Wilson had right to immediate possession of the car while it was at the garage. In
fact, he “never lost possession”. § Lombank Ltd wrongfully took the car. § Since Wilson was “in possession of the car” when Lombank Ltd took it, delivery of the car by
Lombank Ltd to the true owner (i.e. Mercantile Credit) did not defeat Wilson’s claim. § Wilson was “entitled to recover the full value of the article wrongfully taken”.
v Bailments at will Ø Includes all gratuitous bailments. Ø Bailor and bailee both have right to immediate possession so both can bring action for detinue or
conversion of goods. Ø Assuming bailee has actual possession, bailee can bring action for trespass. Probably, bailor can
too (Wilson v Lombank Ltd). v Fixed term or conditional bailments for reward
Ø Bailee has right to immediate possession so can bring action in detinue and conversion. Ø Assuming bailee has actual possession, bailee can bring action for trespass.
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Ø Bailor will only have right to immediate possession at the end of the fixed term or upon fulfilment of the condition.
Ø As long as bailor’s right to possession is deferred, bailor cannot bring action in trespass, detinue, or conversion.
