Introduction to Property & Commercial Law

Transcription

1 Intrductin t Prperty & Cmmercial Law (LAWS2012) *** The University f Sydney 1

2 Table f Cntents Overview... 3 Real Prperty [Nt Examinable]... 7 Chses in Pssessin... 8 OVERVIEW... 8 THE TAXONOMY OF PERSONAL PROPERTY... 9 IDENTIFYING LEGAL INTERESTS IN CHOSES IN POSSESSION TRANSFER OF OWNERSHIP TRANSFER OF POSSESSION (BAILMENT) Chses in Actin OVERVIEW IDENTIFYING A CHOSE IN ACTION DETERMINING WHETHER A CHOSE IN ACTION IS ASSIGNABLE EQUITABLE CHOSES IN ACTION Assignment & Dispsitin f Interests OVERVIEW LEGAL ASSIGNMENT OF LEGAL INTERESTS EQUITABLE ASSIGNMENT OF LEGAL INTERESTS THE CREATION OF EQUITABLE PROPRIETARY INTERESTS THE DISPOSITION OF PRE-EXISTING EQUITABLE PROPRIETARY INTERESTS DEALINGS IN FUTURE PROPRIETARY INTERESTS Pririty Regimes OVERVIEW INTRODUCTORY POINTS PRIORITIES UNDER THE SALE OF GOODS ACT GENERAL LAW PRIORITY RULES PPSA OVERVIEW INTRODUCTION SUBSTANTIVE FOCUS: WHAT ARRANGEMENTS AMOUNT TO A SECURITY INTEREST UNDER PPSA? Ntes

3 Overview Generally, this curse fcuses n tw questins: a. What prperty right des A have, that they re purprting t assign/transfer? and b. Has that prperty right been validly assigned r transferred t B? Tpic 1: Intrductin t Real Prperty [Nt Examinable] NB: yu may get issues relating t assignment r transfer f rights in real prperty (i.e. Trrens Land r Old System Land) in tpic 4, but these issues will cme up in ther tpics as needed. Tpic 2: Intrductin t Chses in Pssessin 1. Legal Interests in Chses in Pssessin: a. Ownership; b. Pssessin 2. Legal Transfer f Legal Interests Transfer f Ownership: a. By lsing and finding; b. By Gift [nt examinable]; c. Sale f Gds Transfer f Pssessin: 3. Other: a. Bailment a. Fr equitable transfer f legal interest see tpic 4. b. Fr equitable transfer f equitable interest see tpic 4. c. Fr legal creatin f legal security interests in chses in pssessin see tpic 5B. Tpic 3: Intrductin t Chses in Actin 1. Identifying a Chse in Actin a. What is the right r bundle f rights? (E.g. Bluebttle) 3

4 b. Is the right (r bundle f rights) a chse in actin? c. Is the chse dcumentary/pure; legal/equitable; present/future. 2. Determining whether a Legal Chse in Actin can be dealt with: Is it inherently incapable f being assigned e.g. as a matter f plicy? a. Bare right t litigate (Campbell) b. Persnal service cntract (Nkes) OR Is it capable f assignment, but a. There is a materiality f identity (Pacific Brands; Bluebttle), r b. There is a cntractual prhibitin n assignment (Linden Gardens). 3. Explring 2 types f equitable chses: 1. The Interest under a Trust A. Is the arrangement a trust r sme ther relatinship? B. Is there certainty f intentin? C. What is the nature f the interest arising under this trust? 2. An interest in an unadministered deceased estate A. What is an interest under an unadministered deceased estate? (Livingstn Rights) B. Is that right being dealt with? 4. Fr dealings in chses in actin: See tpic 4. Tpic 4: Assignment & Dispsitin f Interests 1. Dealings in Legal Prprietary Interests: Legal Assignment f Legal Interests: Deed under s23b CA (Old System Land); Registratin under s41 RPA (Trrens Title Land); Lsing/Finding, Gift, r Sale f gds (Chattels); S12 f CA (Chses in Actin); Equitable Assignment f Legal Interests 4

5 Via cntract/agreement (with cnsideratin) Via gift (withut cnsideratin) Partial chses in Actin 2. Dealings in Equitable Prprietary Interests: Creatin f a trust: Declaratin f a trust; Agreements t declare a trust. Assignment f an equitable interest under a trust: Directins t trustee? Sub-trusts? Cntracts fr value t assign? Release t trustee? 3. Dealings in Future Prperty: What right des the assignr have? Present vs. Future Prperty. If future prperty, hw can the prperty be assigned? Turns n whether it is gratuitus r fr value; equity will nt view a gratuitus assignment as effective, but if fr value and cnsideratin is paid the future prperty is held n cnstructive trust (Taliby v Official Receiver) Tpic 5A: Pririty Regimes 1. Sale f Gds Act Pririty Regime; Threshld Questin: is the cntract fr the sale f gds? See Tpic 2. Determining Pririties: a. Fundamental principle: Nem Dat à can t pass better title than yu have. b. Exceptins: i. Defective chain f title (fraud/frgery): 1. Estppel s26(1); 2. Sale by a mercantile agent s26(2)(a) 3. Sale under vidable title s27 4. Sale by buyer in pssessin s28(2) ii. Cmmn grantr 1. Sale by seller in pssessin s28(1) 2. General Law Pririty Rules General idea is that earlier interest takes pririty unless Categry A: earlier interest lwer than later interest: Earlier interest has pririty unless the later interest was taken bna fide fr value withut ntice. Prir equitable v later legal; Prir mere equity v later equitable r legal. 5

6 Categry B: earlier interest higher than/equal t later interest: Earlier interest has pririty unless later interest purchased bna fide fr value withut ntice and the hlder f the earlier interest is guilty f sme frm f pstpning cnduct Prir legal v later equitable; Prir equitable v later mere equity; Prir legal v later legal; Prir equitable v later equitable 3. Cnsider impact f A s pririty ver B If A has pririty + fee simple, B s interest can take n effect, If A has pririty + less than fee simple, B s interest subsists but is subject t A s. If A has pririty and mrtgage, and B als has mrtgage, interests sit tgether but A gets their mney ut first in case f default and B gets what is left ver. Tpic 5B: The PPSA 1. Is the interest in questin captured by the PPSA? a. In Substance Security Interests (S12(1) see s12(2) examples and s8 exceptins) b. Deemed Security Interests (S12(3)). 6

7 Real Prperty [Nt Examinable] [Nt Examinable] 7

8 Chses in Pssessin This tpic initiates an analysis f persnal prperty, being prperty ther than land. It fcuses n that part f persnal prperty histrically classified as chses in pssessin, explaining the legal interests that arise. It then examines hw this type f prperty may be dealt with, in particular hw wnership & pssessin can be transferred. It emphasises dealings in the cmmercial cntext, explring hw wnership passes in sales transactins & hw a transfer f pssessin can give rise t a bailment. OVERVIEW 1. The Taxnmy f Persnal Prperty Cmpare: Clnial Bank v Whinney (traditinal taxnmy: chse in pssessin vs. actin) Cnsider the PPSA definitins as a pint f cmparisn (cme back t this in Tpic 5B) 2. Identifying the surce f a legal interest in a chse in pssessin: a. The Legal Interest f Ownership: Descriptin; Abandnment & Apprpriatin (Jigrse) b. The Legal Interest f Pssessin: Requires (Tibantia): Physical cntrl; Intentin t cntrl 3. Identify if there has been a transfer f wnership f the chse in pssessin: a. By lsing and finding (British Airways) b. By Gift (Nlan v Nlan; Public Trustee v Bussell) [nt examinable] c. Sale f Gds (Sale f Gds Act) 4. Alternatively, identify if there has been a transfer f pssessin by bailment. Cnsider: a. The cncept f a bailment (Cggs v Bernard) b. The nature f a bailment (Pineer Cntainer); c. Sub-bailment situatins (Pineer Cntainer), and; d. Liability f the bailee (Hbbs; Pitt Sn & Badgery) 8

9 THE TAXONOMY OF PERSONAL PROPERTY Taxnmy: NB: Persnal Prperty is a residual categry f all prperty that is nt real prperty (land); In Australia, we split persnal prperty int chses in pssessin and chses in actin, as per Clnial Bank v Whinney, which established this 19 th century distinctin. Other things t nte: NB that a widget t a cmmercial lawyer, is the Blackacre t a land lawyer. When d I wn a widget? What happens if I lse my widget? What happens if I gift yu my widget? Etc. 9

10 IDENTIFYING LEGAL INTERESTS IN CHOSES IN POSSESSION A legal interest in a chse in pssessin arises frm either: 1. The Legal Interest f Ownership, r; 2. The Legal Interest f Pssessin When an wner recvers their things, it is nt because they are wners, but because they have a greater pssessry right than thers. 1. Ownership There is n dctrine f tenure/estates in relatin t persnal prperty: wnership is an abstract relatinship between a persn a thing. Wrking definitin f wnership: The residue f legal rights in an asset remaining in a persn after specific rights ver the asset have been granted t thers. (Prfessr Gde) Yu have the greatest interest in the thing; Maybe yu have certain rights in my bk but ultimately, I wn the bk and it will cme back t me; I have the residue f legal rights. Cmpare sale/gift transfers wnership à dispses f wner s right t the thing with lease/bailment transfers pssessin à leaves wner with sme residual right Expresses the abstract idea f an bject being crrelated with the name f sme individual s that sciety will uphld that individual s decisin as final where there is any dispute abut hw the bject shuld be used (Waldrn). i.e., wner is persn wh decides wh enjys pssessin at any given time. Bundle f rights: Again, we talk abut a bundle f rights amunting t wnership (Hnre) Six rights als held by smene wh pssesses the thing 1. Right t pssess the thing 2. Right t use it 3. Right t manage hw it will be used 4. Right t incme frm it 5. Right t security frm interference with the right t the thing 6. Right t transmit that right t successrs f chice Three extra rights which d nt belng t a nn-wner with a right t pssess it: 1. Right t capital t destry r alienate the thing itself 2. Ptential t last indefinitely 3. Exclusive wnership Difference t pssessin? Ownership generally includes a right t pssessin; but pssible t wn intangible things that cannt be pssessed; r transfer rights in tangible things t thers (e.g. rent huse t tenant). Ptential t be permanent Owners generally free t bring wnership t an end 10

11 Abandnment & Apprpriatin: Can widgets exist withut an wner? Re Jigrse Pty Ltd [1994] 1 Qd R 382: Can chattels exist withut an wner? à Yes. Abandnment, as a matter f principle, is acceptable under the cmmn law. Why shuld the cmmn law care if a chattel exists withut an wner? (Kiefel J) What is the meaning f abandnment? Hw d yu determine when chattels are abandned? àbut hw d yu shw this in practice? Kiefel J said intentin is the critical issue. Thrwing smething away, putting it in the waste basket, is a clear act f abandnment. But if there isn t that clear act, then yu must lk t any acts f abandnment and representatins that the wner has n further interest in the chattel. Test à lk at the circumstances; can yu shw the relevant intentin t abandn? Hw d yu acquire wnership f an abandned chattel? à What yu lk fr is an act f apprpriatin (Kiefel J). Apprpriatin in this cntext means taking t urselves as ur prperty; purchaser did this by putting a pad lck n the fields with the hay bales. Intentin t exclude thers is clear example f this exercise f cntrl; apprpriatin. Facts: Cntract fr sale f farm prvided under clause 28: Vendr t remve prperty nt sld under the cntract prir t delivery f pssessin (cl 28.1); Prperty nt remved is deemed t be abandned (cl 28.3); Purchaser t cmplete the sale and apprpriate, remve, r therwise dispse f the prperty (cl 28.3). Issue: Wh is entitled t the bales f hay left by the vendr in the paddck, nw padlcked by the purchaser? This prperty wasn t remved by vendr, s under cntract wuld be deemed abandned and pen t apprpriatin by the purchaser. Hwever, issue fr determining this questin became: can prperty be abandned Judgement: Kiefel J n Abandnment: Intentin is the critical issue where an issue f abandnment is raised (384) As a general prpsitin, if a thrw smething away, I truly abandn it. I intend n lnger t retain pssessin. I d nt prpse t seek it ut and I have n further interest in wnership. If, hwever I lse smething I have nt thse intentins. Clause 29.3 seems t me t be equivalent t the vendr representing that it has n further interest in the chattels, neither in pssessin nr in wnership. (386) Kiefel J n Apprpriatin Title is nt hwever autmatically transferred t the purchasers n abandnment. I twill pass where there is an act such as apprpriatin. (387) Apprpriatin in this sense simply means taking t neself as ne s prperty. That wuld require in the cntext f an ccupier a manifest intentin t exercise cntrl ver it An intentin t exclude thers is in my view an exercise f cntrl ver the chattels. 11

12 2. Pssessin Backgrund Pssessin is the rt f title; hwever, it has cntinued t evade cmprehensive definitin; NB definitin is very imprtant as PPSA says yu can grant security interest in smething yu merely pssess; s pssessin vs. n pssessin is very imprtant At its simplest, pssessin cnntes pwer ver the article pssessed (Knapp v Knapp [1944] SASR 257 at 262] Test Pssessin can be categrised as actual r cnstructive: Actual = where a persn has physical pssessin f gds accmpanied by an intentin t cntrl r exercise pwer ver the gds; Cnstructive = where a persn, having the requisite intentin, has taken symblic delivery, as ppsed t physical pssessin f gds thrugh, fr example, btaining the physical means f cntrl ver the gds r entering int an arrangement where the gds are held t the rder f the persn The elements f pssessin are intentin and cntrl. Thus, must establish: 1) Physical cntrl (Tubantia) 2) Intentin t cntrl (Tubantia) The Tubantia [1924] The Elements f Pssessin Facts: Dutch steamer sunk in X fund it, put buys arund it and salvaged ship (arund 8 minutes per day). In 1923, a rival salvage cmpany attempted t wrk the ship and secure pssessin f the wreck. Issue: Did cmpany 2 have pssessry title? Nt talking abut wnership, talking abut wh has the better right t pssessin. Held: On the facts, cmpany 1 had pssessin, despite irregular pace f wrk. Reasning: Judgement stuck very clsely t the facts. Nted that althugh the plaintiffs hadn t wrked n the site cnsistently, they had brught their equipment there, carried ut wrk, etc. and curt lked at thse facts t ascertain what physical cntrl the plaintiffs actually had. Emphasized the need t: 1. Ascertain extent f the physical cntrl; What kinds f cntrl and use is this thing practically capable f? Especially given it s a shipwreck. Has physical cntrl been applied t it as a whle? Has there been a cmplete taking? Was there a sufficient ccupatin s that they culd prevent thers frm interfering. 2. Lk at the intentin animus Came t the cnclusin that yu need bth physical cntrl and intentin t assert legal pssessin. Harped back t Pllck and Wright t figure ut these tw elements. 12

13 A. Physical Cntrl f a thing (crpus pssessnis) Level f cntrl required: Cntrl may be physical r legal: FCT v ANZ Des nt require abslute pssessin, but maximum pssible: Tubantia Once enugh cntrl has been btained, that cntrl can be relaxed withut lsing pssessin (unless abandned). Of things: this is a questin f fact turning n factrs such as: (Tubantia) Central questin: can they prevent thers frm interfering? Factual elements: Nature f the thing Lcatin f the thing: a ship at dck will be treated differently t a shipwreck at bttm f the cean Size f thing Whether thing is mveable Technlgical elements E.g. in Tubantia fact divers spent 8 mins per day was result f technical limitatins. nte this decisin subject t technlgy in the 1920s. Fish in nets were in pssessin f wners; but wuld lst cntrl if they escaped: Ohi v Shaw. Scial elements Fence surrunding tennis curt did nt amunt t cntrl as its purpse was t keep tennis balls in: Riley v Pentilla Animals hming instinct will ften prvide pet wner with enugh cntrl t be in pssessin: Hamps v Darby. What kinds f cntrl/use are these capable f? Has physical cntrl been applied t the thing in whle r in part? Has there been a cmplete taking? Des nt depend n cntractual agreements: FCT v ANZ. Of space, leading t cntrl f things: Things attached t land are generally cntrlled by pssessr; things fund n but nt attached t land are nt cntrlled by pssessr f land. Central questin: whether the wner f land has taken sufficient steps t limit access. Examples: Regular use f parcel f land: Red Huse Farms v Catchple Cntrl f things buried in sil: Waverly Cuncil v Fletcher Level f public access may negative cntrl: Parker v British Airways Putting a fence arund gds: Re Jigrse Nte in Australia we d nt have a pre-pssessry right cf Califrnian psitin: Ppv v Hayashi. B. Intentin t cntrl that thing (animus pssidendi) Pssess intentin fr the time being (nt necessarily permanently). Acts f cntrl usually reveal intentin t pssess e.g. if yu lck a bicycle, pick up milk at the shp. This is a questin f fact, prved by the acts f cntrl and surrunding circumstances. Must establish: Re Jigrse 1. That the gd was abandned (i.e. an intentin t abandn) if relevant. 13

14 2. That apprpriatin ccurred (i.e. an intentin t have exclusive pssessin). Pssible t intend t pssess smething withut knwing it exists: Flack v Natinal Crime Authrity. NB the effect f prving pssessin: Yu can separate wnership and pssessin; hwever, pssessin can be used as evidence f wnership. Legal pssessin cnfers pssessry title. If I am in legal pssessin, the argument ges that I can defend that pssessin against everyne else, against the whle wrld, except the true wner. S if smene wrngly takes my pssessin frm me, I can defend that pssessin. NB Cf. custdy and pssessin: Generally, if yu re in a master/servant relatinship with smene, yu dn t have pssessin f their widgets yu have custdy f their widgets. E.g. Sheila with the cmputer in the lecture theatre; she isn t in pssessin f the cmputer, she has custdy f it as a servant f the University, wh wns it. Federal Cmmissiner f Taxatin v Australia and NZ Banking Grup Ltd (1979) 143 CLR 499 Facts: Smrgn had safety depsit bxes with ANZ. One key was with ANZ, ne with custmer (althugh ANZ had duplicate custmer key, was frbidden t use it by cntract.) FCT issues ANZ with ntice t prduce the bx, as Smrgn was being investigated fr tax fraud. Issue: Did ANZ have pssessin f the dcuments fr the purpses f the Act in questin, r were they merely in the bank s custdy? Held: The Bank had pssessin. Reasning: Critical issue is physical pssessin, nt cntractual terms Appeared that ANZ s intentin in making duplicate custmer key was s it culd have physical pssessin if the need arse. This was nt legal pssessin, but physical pssessin, which was sufficient t satisfy the Act. NB Pllck & Wright n Degrees r Levels f Pssessin: 1. Custdy = lwest level; 2. De fact pssessin/physical pssessin = physically hlding the bject but n legal pssessin; 3. Legal pssessin à physical cntrl + legal intentin (Tubantia) 4. Cnstructive pssessin 5. The right t pssess NB this is all a starting pint and the terminlgy is very, very lse. NB the cncept f delivery (Gamers Mtr Centre) Delivery is vluntary transfer f pssessin frm ne persn t anther (Masn J at [12]) NB that delivery can be: Actual delivery: change in pssessin Cnstructive delivery: change in character f pssessin Symblic delivery: chattel incapable practically f actual delivery e.g. key t place where gds are stred (Masn CJ at [14]) 14

15 TRANSFER OF OWNERSHIP Ownership f a chattel can be transferred via: 1. Lsing and finding; 2. Gift; 3. Sale f Gds 4. By way f security (see tpic 5 PPSA) 1. Lsing and Finding When dealing with transfer f wnership by lsing and finding, must ask: 1. Has the chattel been abandned r lst? [E.g. Necklace has been abandned.] 2. Wh is claiming wnership f the chattel? [E.g. bth the wner/ccupier f the huse it was abandned n, and the gardener wh fund the necklace, are claiming wnership] Lk at the ptential claimants; What is the basis fr their claim? Are they the wner f the premises it was fund n? The ccupier? The finder? 3. Cnsider the impact f the lcatin f the chattel [Necklace was in the ccupier s land but didn t take measures t make sure lst chattels were fund etc.] Where is the chattel? Is it in r attached t land? Is it n the land? This is imprtant because the cntent f the ccupier s claim changes depending n whether the thing was attached t the land r in the building, r if it was lse. Key Case: Parker v British Airways Bard [1982] 1 QB 1004 Facts: Parker fund a bracelet in British Airways Airline Lunge. The bracelet had been lst by its rightful wner. Plaintiff delivered the bracelet t an emplyee f British Airways and then gave his details and requested that in the event the bracelet wasn t claimed by the rightful wner, that it shuld be returned t him. The bracelet was never claimed. Hwever, despite the plaintiff s requests fr its return t him, BA sld it. Issue: Did Parker r BA r neither have wnership ver the lst item? Judgement: Dnaldsn LJ gave this summary f the Law: Rights and bligatins f the finder: 1. Acquired n rights ver the chattel unless (a) it has been abandned r lst, and (b) he takes it int his care and cntrl. 2. The finder will acquire very limited rights if he takes the chattel int his care and cntrl with dishnest intent r in the curse f trespassing. 3. A finder f a chattel, whilst nt acquiring any abslute prperty r wnership in the chattel, acquires a right t keep it against all but the true wner r thse in a psitin t claim thrugh the true wner, r, ne wh can assert a prir right t keep the chattel, which was subsisting at the time when the finder tk the chattel int his care and cntrl. 15