THE CONCEPT OF PROPERTY

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1 Property A The nature and essence of property THE CONCEPT OF PROPERTY What is property? Property is the institution by which societies regulate access to material resources. Private property is the relationship between people (subjects) in respect to things (objects), tangible or intangible, whereby one enjoys a bundle of rights over the property and may secure the assistance of the state in carrying out these rights. In his Dialogue on Private Property, 1 Felix Cohen suggests a definition of the term property which emphasises the notion that the discussion of property does not refer to tangible objects, rather the relations between human beings in regard to things. Cohen s dialogue raises the following key tenets of property law: Property does not always involve eternal physical objects, but always involves relations between people If something is your property, you have certain rights over it More than one person can have property in an object Because more than one person can have property in an object, the property lawyer is concerned with the merits of relative claims, and property law must consider the way in which rights to use things may be parcelled out amongst a host of competing persons. Property and ownership Property does not necessarily equate to ownership, as property can be had through control. Consider the following systems: Private property individual persons have right to private control and private enjoyment Common property Property is communally controlled for communal enjoyment (open access to everyone) Collective property collective control for private enjoyment Property distinguishes between ownership in the physical sense, and ownership in the legal sense whereby one enjoys certain interests or a bundle of rights. 1 F Cohen, Dialogue on Private Property (1954) 9 Rutgers Law Review 357 at

2 Justifications ad criticisms of private property Ziff s Hierarchy First order: Why do we have the institution of private property? Second order: Assuming we have private property, what should be an object of property? Should all resources be capable of being propertised? Third order: Assuming a thing can be owned, who should hold the right to it? First Occupation Theory Most primitive theory in that it is essentially finders keepers. The first to possess or occupy will have ownership. Locke s Labour Theory The right to the fruits of one s own labour. In the case of land, the man who uses it and labours it is entitled to have rights in it. This theory forms the basis for intellectual property. Personhood Theories (Hegel) Property is a basic human interest self- realisation through external expression of will and personality essential for human freedom. Utilitarianism (Bentham) Incentive effects of property promote aggregate welfare. Private property facilitates human happiness by creating an incentive for thrift and industry. Since the general welfare of society was enhanced by wealth creation, the advantages of private property outweighed the suffering created by inequality Economic Efficiency Theory In order to maximise efficiency and wealth in society, property rights should be universal, exclusive and transferable. Characteristics of property Property is a bundle of rights. Ownership generally entails: 1. The right to use and enjoy 2. The right to exclude others 3. The right to alienate Milirrpum v Nabalco (1971) Issue: Do Aboriginal people have land rights based on the common law? Members of an Indigenous group claimed a mining lease interfered with their native title rights which existed from time immemorial. Held: Although plaintiffs had proved an established recognisable system of law existed, their usage of the land did not fall within our system of interests which we ascribe as private property Ratio: Proprietary interests are characterised by the rights to use, exclude and alienate (Blackburn J) 2

3 The right to exclude The right to exclude has notably been identified as the defining characteristic. 2 According to Cohen, private property must at least involve the right of the owner to exclude others from doing something in respect to the object of ownership. Property is therefore essentially a private right, exercisable against the general public and facilitated by the law (i.e. torts). Power to exclude does not equate to the right to exclude. It must be a legally enforceable right. As such, the right to exclude is a consequence and not a cause. As Bentham stated, property and law are born together and die together. Proprietary and contractual rights Property rights o Rights over things enforceable against the whole world o Rights in rem rights that people have concerning particular objects, without much regard to the people against whom those rights might be enforced Contractual rights o Rights enforceable only against particular persons o Rights in personam rights against a person, enforced without much regard to the things they might have However, property rights may arise from a contract. Therefore there is an overlap between these two types of rights. King v David Allen Billposting (1916) Issue: Could the licensor bring the third party into the claim so as to pay less damages? King (licensor) contracted to give David Allen (licensee) the exclusive right for four years to post bills on the walls of his theatre (contractual license) King then leased the theatre to a company The company refused to allow the licensee to post bills Held: Licensee cannot enforce anything over the company. In order to do so, the licensee must show that the contractual license gave rise to a propriety interest. Licensee can only claim damages from licensor. Ratio: A license does not qualify as a proprietary right. This is because it delivers insufficient control over the land. Only proprietary rights are enforceable against third parties. However, an interest is not proprietary simply because it is enforceable against third parties. A proprietary interest could have been created through clear wording in the contract as a lease. 2 The right to use and enjoy is self- explanatory and fundamental The right to alienate is the right to transfer the property to whomever one likes However, the right to exclude is defining because of its reliance on the law - Cohen contested property is essentially having the right to exclude 3

4 The subjects and objects of property Irrespective of political viewpoint, it is undeniable that the law of property embodies a broad range of value judgments. Value judgments reflect the body of cultural norms, the social ethic - and also necessarily the political economy - prevailing in any given community. It is inevitable that property law should thus serve as a vehicle for ideology, for property has commonly been the word used to identify that which people most greatly value. As Gray has commented, property is a power- relation. Subjects (those who can have rights over objects) and objects (what things subjects can have rights over) are determined by historical power relations, social contexts, economic and philosophical decisions. Some groups have been excluded from being subjects and some groups have even been included as objects. Allowing an object to become property has enormous implications. Recognition of new forms of proprietary interests Recognition by the courts Restrictive Covenants Tulk v Moxhay (1848) Issue: Is a restrictive covenant enforceable against a non-contracting party? Does the covenant become a proprietary right? T owned a garden block in the middle of Leicester Square and some surrounding houses T sold garden block to E E made a contractual promise to T (a covenant) that he, his heirs and assigns would keep the garden block undeveloped M later purchased the garden block with notice of the covenant M argued that the covenant was not enforceable against him as he was not a party to the contract Held: The covenant was enforceable against M. The court s decision was influenced by the restrictive covenant s continued effect to T s use and enjoyment of the land he retained, and by the lower price paid (because of the covenant) and the inequitable consequences that might flow from the resale. Ratio: A contractual promise can attach with the land, and run with the land. In equity, a restrictive covenant (a negative promise) becomes a proprietary interest with notice. 4

5 Native Title Issue: Does the common law recognise native title? Mabo v Queensland (No.2) (1992) The Plaintiff [Mabo, representing the Merriam people] had occupied certain islands in Queensland long before colonial occupation The present inhabitants were direct descendants of those people The islands were annexed to the Crown in 1879 Queensland declared that upon annexation of the islands in 1879, everything became vested solely in the state of Queensland Cf. Milirrpum the Merriam people s usage of the land was recognisably proprietary in nature Held: Native title exists in Australia. When the Crown acquired sovereignty, the Crown acquired radical title. Radical title only extinguishes native title if the Crown decides to do something with the land. Ratio: The common law of Australia recognises a form of native title. This title reflects the rights of the indigenous inhabitants in accordance with their laws and customs. Native title exists where: i. The indigenous can prove a continuous connection (from before the time of colonisation) to the land through traditional customs; and ii. This title hasn t been extinguished or modified subsequently once it is lost, it is lost forever Property in a spectacle Victoria Park Racing v Taylor (1937) Issue: Do proprietary interests apply to a spectacle? T had land adjoining VPR s racetrack Taylor built a high platform on his land overlooking the racetrack and broadcast races Held: No property in a spectacle. VPR could not show there was interference with a property right. Ratio: There must be interference of a recognised proprietary interest to which legal protection attaches. Therefore, no property rights exist in a spectacle. Obiter: Places undue restraint on the freedoms of individuals (consequences of having rights enforceable against the whole world). If such a proprietary right existed, then the plaintiff would have an action against any interference, large or small (Latham CJ) Dissent: Evatt J s judgment appears to justify property rights in a spectacle based on labour theory. ABC v Lenah Game Meats (2001) Confirmed no property in a spectacle Similar to VPR, no proprietary interests exists simply because something will damage business interests. Callinan J strongly dissented: o Criticised majority decision in VPR as a product of a different time and an anachronism. It may be time for the recognition of a form of property in a spectacle. There is no reason why the law should not, as they emerge, or their value becomes evident, recognise new forms of property. 5

6 Property in the human body 3 Traditionally, the common law position asserts that a human corpse cannot be an object of proprietary interests. However, an exception has been made by the Doodeward Principle. Bazley v Wesley Monash IVF (2011) Issue: Could the sperm extracted and stored be described as property and thus form part of the deceased s estate? Mr. Bazley arranged for the collection and storage of his semen at the respondent IVF clinic Mr. Bazley subsequently died without leaving any written directive (respondent s policy required written directive in regard to semen) His wife sought an injunction against the destruction of the semen on the grounds that it was property Held: The sperm can be described as property. White J was bound by Doodeward v Spence Ratio: There are property rights in materials or samples taken from the human body. Moore v Regents of the University of California (1990) Issue: Are human cells, once removed from the body, property? Who should have the property right? In the course of receiving treatment for leukemia, the plaintiff s spleen was removed The spleen was valuable for research and commercial purposes His doctor retained the cancerous cells and established a cell line Upon discovering of the patent of his cells, the plaintiff sued for conversion Held: There is no property in cells. The researches applied their own skill, ingenuity and effort. Ratio: A patient retains no property interests in their cells once they have been removed from the body (California, US). The court made a number of policy considerations: i. Hindrance of research. Must not threaten with disabling civil liability innocent parties engaged in socially useful activities. ii. iii. Legislative better placed to make these decisions Other causes of action are more appropriate in protecting right to make autonomous medical decisions and therefore it is not necessary to distort property law. Dissent: i. (Mosk J) Promotes respect for the human body. It would not be analogous to slavery. It is also unfair and immoral for the source not to benefit when others can. ii. (Broussard J) Recognition of property rights in body parts does not commodify them. Digital property There is no certainty or consistency as to the status of digital assets as property. The legal dilemmas associated with the status of virtual property for the consumer and user are neatly illustrated by the question as to whether virtual theft can occur. Also, information, knowledge and personal details are increasingly passed, presented, and dealt with online. There is no overwhelming reason to reject the notion of property in virtual and digital objects. 4 3 Trend in case law seems to be recognition of property rights in reproductive material - Yearworth v North Bristol NHS Trust (2009)(UK). 4 Lynden Griggs, The Consumer And Virtual Or Digital Property Is This An Oxymoron? (2014) 4 Property Law Review 35 6

Sample only Oxford University Press ANZ

Sample only Oxford University Press ANZ Sample only 1 Chapter 1 Introduction Covered in this chapter Australian property law The classification of property How does property law link into other areas of law? Australian property law Property