PERSONAL PROPERTY NOTES. - all things owned by a person other than land. Divided into choses in action and choses in possession.

Size: px

Start display at page:

Download "PERSONAL PROPERTY NOTES. - all things owned by a person other than land. Divided into choses in action and choses in possession."

Ezra Walsh
5 years ago
Views:

1 NOTES PERSONAL PROPERTY - all things owned by a person other than land. Divided into choses in action and choses in possession. Chose means thing Choses in action Intangible. personal right of property. Can only be claimed through legal action: Torkington v Magee e.g. debts, copyrights, trademarks, shares, patents. Choses in possession Tangible property, physical form e.g. car, piano, desk Capable of possession Statutory licenses can be considered choses in action. Legislation often requires a person to get a license before conducting certain types of business. If a business is profitable, the license may be a chose in action. License to operate a taxi was considered a chose in action in Taxiway Pty Ltd v Commissioner of State Revenue (1995) Equitable choses in action exist. e.g. interest in a trust estate, right to a legacy under a will, interest in a partnership. Choses can be transferred by gift, deed, sale or statutory assignment. Commonly acquired by purchase but can also be transferred by will or gift. (Gifts there must be delivery and acceptance). Can also be transferred deed. Two persons separated choses may be mixed/joined. e.g. one persons engine in another persons car. legal effect: common intention of the owners of the goods in their original form prevails. If that can t be defined, ownership is presumed to be unchanged as long as the parts remain distinguishable. Where goods are mixed by consent, the item is then owned by the contributing owners. If mixed without consent of one party, the innocent party is entitled to get back the same quantity of his goods that went into the mixture.

2 OWNERSHIP - legal rights over property (title to) - capable of transfer TRANSFER OF OWNERSHIP *Voluntary: consent of both parties Assignment of things in action: immediate transfer of any interest capable of ownership Gifts: must be an intention to give, delivery of the goods and acceptance. Re Wasserberg; Union of London and Smiths Bank Ltd v Wasserberg - husband showed wife a parcel with her name on it - said this is yours - did not hand it to her - husband died - Court: no delivery, he never gave his wife the parcel. *Involuntary Accession: affixing one chattel permanently to another, resulting in damage to overall chattel if removed. - the owner of the principal chattel becomes owner of both it and the attachments - the owner of the attachments loses ownership but may be entitled to compensation. McKeown v Cavalier Yachts - The doctrine of accession only need be applied when the accessory cannot be removed from the major chattel. Commingling: mixture of goods Specification: variation/transformation of a good through manual &/or chemical/industrial input/application POSSESSION - Physical control over property - Intention to have exclusive control of property - a person with possession has exclusive control over property against all people except someone with better title (e.g. the owner) - Button v Cooper - Moors v Burke: emphasis on exclusivity of possession - the power to exclude against others CUSTODY - lowest form of holding goods ACTUAL POSSESSION - owner of property can transfer actual possession to someone else - exclusive physical control and intention to exclude others.

3 Waverly Borough Council v Fletcher - brooch found in park - held to be property of council regardless of the fact they were not aware it existed - the lawful possession of land includes possession of everything in the land Two main principles from case: - objects attached to the land: owner or possessor of land has better title than the finder - objects not attached to the land: owner of land only has better title if they have exercised control over the land with intention to control everything on the land. LEGAL POSSESSION - state of being in possession - generally founded upon actual possession - person in legal possession is presumed to be its owner - can exist without actual possession in the case when an employee, agent, guest, licensee or bailee has physical custody of the goods - in that case, the person in legal possession can bring a claim against a stranger but not against the person who has the actual possession. POSSESSORY TITLE - ownership against all except those who can prove better title. CONSTRUCTIVE POSSESSION - legal possession without actual possession; or - right to possession without actual or legal possession - has all the rights as a person with legal possession HISTORICAL TITLE - better title than possessory - can provide a chain of title (e.g. receipt, sale of land contract) - the further back someone can prove a chain of title, the stronger their claim to ownership - ownership can only be proved by tracing title back to an un challengeable beginning. This is more difficult with goods than land. DELIVERY - transfer of possession and control of goods - Actual: physical delivery of goods - Constructive: Delivery through change in control of goods, not possession Gamer s motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd: - delivery can be constructive. - some situations physical delivery is not practicable e.g. large equipment, cars etc ABANDONMENT - goods may be abandoned and possession/ownership is relinquished - Re Jigrose Pty Ltd if I do not wish to retain possession or property in goods, there is no reason in principle why the common law would require me to remain an owner.

4 AGENCY A relationship between the Principal and Agent - called agency. Agent: person bestowed with powers to contract and make representations on behalf of P. An agent is a person who is authorized, expressly or implied, to act for a principal so as to create or affect legal relations between the principal and a third party: Peterson v Moloney Principal: person who gives authority to the agent. Provided that A acts with express, implied or ostensible authority, P is bound by any representations made by A. Third Parties: parties that contract with P through dealings with A. An agent can be an employee, but not always. Also, not all employees are agents. Contracting parties usually classify their relationship as either being one of agency or not, however the importance is placed on the conduct between the parties and the type of authority bestowed on one party. A relationship may be seen by the courts as agency even when parties have expressly stated to the contrary: Garnac Grain Co Inc v HMF Faure & Fairclough Ltd COMPARED TO OTHER RELATIONSHIPS... - Agency: fiduciary relationship, exercising powers in good faith for the benefit of another. - Employee: some have the power to bind their employer and are agents as well as employees, but not all. - Independent Contractor: some contractors may be agents, but not all - Trustee: usually not agents - Bailee: does not necessarily include agency, depends on terms of bailment. - Company Directors: usually agents of company Corporations Act 2001 (Cth) s 198A - Company directors may exercise all the powers of the Company except any powers that Corporation Law or the Company s Constitution requires the Company to exercise in general meeting. Generally, a company can only act and contract through its Directors: Smith v Hull Glass Co s 125 Corporations Act 2001 (Cth) (1) If a company has a constitution, it may contain an express restriction on, or a prohibition of, the company s exercise of any of its powers. The exercise of a power by the company is not invalid merely because it is contrary to an express restriction or prohibition in the company s constitution. 2) If a company has a constitution, it may set out the company s objects. An act of the company is not invalid merely because it is contrary to or beyond any objects in the company s constitution. Equiticorp Finance Ltd v Bank of New Zealand - Equiticorp comprised of a number of companies - Hawkins director on boards of many companies within group - Bank loaned money to one company for take over - Hawkins used funds of two other companies to repay the bank

5 - claim that he had no authority - Court: no breach of duty. Applied test from Charterbridge Corporation Ltd v Lloyds Bank Ltd. - Found that if the director believes they are acting in the best interests of the company then there is no breach. In this case the welfare of the group was intimately tied up with the welfare of the individual companies. Therefore he was acting in what he believed to be the best interests for all parties concerned. - Franchisee: not usually an agent - Partners: each partner is both Principal and Agent of all the partners of the firm. - Selling Agent: a person who has the exclusive right to resell the goods of a manufacturer or distributor. Usually very restricted powers to bind the principal. CREATION OF AGENCY *Express agreement (written/verbal) - Agent has express actual authority - does not have to be by contract - may be verbal - no need for consideration There are some situations where an agent must be appointed under seal: - if A is to be authorized to execute other documents under seal on behalf of P. - appt. under seal is called power of attorney. Appointment in writing is required in some circumstances: - auth. to create or dispose of an interest in land (Property Law Act 1958 (Vic) s 53) *Implied Agreement - gives rise to implied actual authority - implied through conduct or circumstances e.g. what is usual or customary - extends authority necessary or incidental to perform authorized duties under agreement. e.g. sales agent may have implied authority to entertain prospective clients and be reimburse - Courts are concerned with giving business efficacy to contracts. (efficacy is the ability to produce the intended result) Australia and New Zealand Bank Ltd v Ateliers de Constructions Electriques de Charleroi - P company (Belgium) appt. Australian company as A through written agreement - A contracted with TP. Contract required money payable in Aust., in Aust currency to P. - Progress payments were payed by cheques to the P through A - A deposited cheques into its own bank account - A failed to pay some of cheques to P, went into liquidation - P sued bank for wrongly crediting the cheques into A s account, there being no express or implied authority for the A to do that. - Privy Council: agent could be seen by an outsider to the K as having the implied authority from the P to banquet cheques. The P had no bank account in Australia, and the cheques could not be sent overseas to be indorsed so from a business point of view it was logical for the cheques to be deposited into A s account. - implied authority was necessary to give business efficacy to the contract.

6 If the Principal has previously acquiesced/allowed Agent to exercise certain authority, then it may be implied that A has that authority. Unless P has expressly told A he no longer has that power: Freeman and Lockyer v Bucharest Park Properties (Mangal) Ltd Express actual auth. to sell has been interpreted as implied authority to sell in the usual manner. - reasonable conditions of sale. Cumming v Sands Agreement between principal and agent may be implied in a case where each has conducted himself towards the other in such a way that it is reasonable for that other to infer from that conduct consent to the agency relationship. - focus is on the conduct of the parties when looking at implied auth. Agency By Operation of Law - Necessity 4 Requirements: 1. A entrusted with P s property 2. Genuine necessity for A (e.g. immediate expense/action required to preserve P s property) 3. The impossibility of communication by A with P to obtain instructions 4. A must act in good faith in the interest of P. Agency by Ratification - Where P confirms an act done by A for P after A has acted - not binding on P until after P ratifies, otherwise A has acted without authority - Retrospective authority 1. A must have represented to contract as P s agent and TP must be aware 2. P must have existed at the time when contracting on behalf of them. P must have contractual capacity. 3. P must know all essential facts re. A s making of the K on P s behalf. - express or implied - implied through conduct e.g. performance of the K. - entire contract must be ratified, not partial Re. implication: may occur even through silence, inaction or acquiescence but ONLY if: - P knows all material facts about A s actions - P knows it is now regarded as having assumed position of P - P takes no steps to repudiate this situation within a reasonable time. Keighley, Maxsted & Co v Durant [1901] AC 240 Facts: P instructed A to purchase wheat from TP on a joint account for P&A at $1. A unable to buy at $1. Instead, bought at $2, in own name, without P s authorisation, and, A did not disclose to TP that was acting for P. P later became aware, and purportedly ratified A s contract with TP. A later did not pay purchase monies, causing TP to sell wheat at loss. TP sought to hold P to its purported ratification Held: TP failed. Ratification was ineffective, as A contracted w/o P s authority and did not disclose P s existence.

7 AGENT S AUTHORITY Express Actual Authority: - powers given expressly to A - powers actually given to A, through contract or orally Implied Actual Authority - A has authority to do anything incidental to or necessary for carrying out acts with A s express auth. - business efficacy: ANZ v Ateliers^ - custom or trade usage - course of past dealings - where agency presumed because of operation of law - where A acts in accordance with usual authority - where A acts as an agent of necessity Apparent/ostensible Authority The appearance of authority where no real authority exists. - P holds out A, or has allowed A to hold himself out, as being authorized to exercise certain power. - P acts in a way that leads TP to believe that P has authorized A s actions. - Only where P s conduct induces TP to contract with A. - IF A acts with ostensible authority, P is bound by A s actions. - Conduct of A alone cannot bind P, P must have held A out as having authority. - If it is found that P made no such representation, and the TP relied solely on the Agent, then P is not liable to the TP. They will have to take action against A. - If TP is aware that A has limited authority, then no ostensible authority: Overbrooke Estates Ltd v Glencombe Properties Ltd Freeman and Lockyer v Bucharest Park Properties (Mangal) Ltd The representation which creates "apparent" authority may take a variety of forms of which the commonest is representation by conduct, that is, by permitting the agent to act in some way in the conduct of the principal's business with other persons. By so doing the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal's business has usually "actual" authority to enter into. - allowing an Agent to act in a role without formal appt. - representation made to TP by a person who has actual authority - TP induced by that rep. Pacific Carriers v BNP Paribas Where an officer is held out by a company as having authority, and the third party relies on that apparent authority, and there is nothing in the company's constitution to the contrary, the company is bound by its representation of authority. "The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract."13 It is not enough that the representation should come from the officer alone. The company s conduct must be the source of the representation.

COMMERCIAL LAW SUMMARY NOTES

COMMERCIAL LAW SUMMARY NOTES Contents: Page 02 Commercial Transactions Page 06 Agency Page 11 Australian Consumer Law: Statutory Guarantees Page 31 Leasing Finance and Bailment Page 37 Personal Property