Property in human tissue - storage.googleapis.com€¦ · Web viewnow system of deed registration...

Property

What is Property ? The relationship between a legal person (a subject) and a thing (an object) The person has a proprietary interest in the thing. Private property must at least exclude others from using it Doesn’t have to be tangible Can be owned by any registered legal entity – a natural person or company

What is a thing? Must be separate from us as people – you don’t own your arm (can’t sue from trespass to

goods. A ‘thing’ must be:

o Transferable o Have value or be given valueo Others can be excluded from it if you are the owner

Aus law is reluctant to extend property rights to living human tissue.

Property Rights v Personal Rights Property rights – rights in rem –a right over a thing enforceable against world Personal rights – rights in personam – a right to sue to bring about performance of

obligation

OWN THE LAND – NOT THE VIEW – VIEW IS NOT THE PROPERTY

Human Tissue

Property in human tissue Human Tissue Act 1982 (Vic) ss.38, 39 and 44 Infertility Treatment Act 1995 (Vic) s.43 AB v Attorney-General (2005) 12 VR 485, para.[132]-[136]

Notes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.

Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937)Victoria Park sought injunctions to prevent the broadcasting Dixon J: freedom of view may give value

to land but it is a characteristic that is not a legally protected interest

McTiernan J: no exclusive right to knowledge which is broadcast by defendant

You can’t own a spectacle (quasi property)

ABC v Lenah Game Meats Pty Ltd (2001) Lenah Game Meats (LGM) processed

possums for purposes of using possum meat

A trespasser entered LGM’s premises and filmed the activities, particularly the stunning and killing of possums and sent it to ABC

LGM sought an injunction. Had to prove a prima facie argument in law or equity.

Callinan J - why doesn’t a person have a right in a spectacle? They do not.

US Case – Moores Case (1990) – Human Tissue Moore suffered from leukaemia, treated by Dr Golde at Uni California Golde found Moores cells useful for research and Golde never informed Moore Golde found new drug and sold to Drug Co. Moore claimed didn’t give consent and wouldn’t have approved. Held no precedent, no cell line, no derivative IP

http://law.timdavis.com.au/

What is a property interest?

Must be proprietary An interest in a thing – legally recognised and enforceable against the world. Transferability – exclude others, trade it, market in it – consequences Sphere of enforceability – most important thing is that you can enforce property rights

yourself Has the characteristics of property King v David Allen:

o Want to put up posters on property but King held licence. King was no longer possessor of the property so no damages.

o The agreement did not create and interest in land but merely a personal obligation on the part of the licensor to allow the licensees the use of the wall for advertisements and that as he had put it out of his power to fulfil his obligation under the agreement he was liable in damages in breach of contract.

Classification of property Land/Goods Real/Personal Tangible/Intangible One thing may be the object of several proprietary interests



Ownership, title and possession

ownership – a term of wide and general meaning title – factual basis upon which claim to proprietary rights made possession – present legal right (or colour of right) to use property Interest: quantum of rights

Ownership A legal relationship between a person and a thing Can be shared/ fragmented (as between law and equity)– trusteeship, co-ownership

(concurrently/ consecutively: life estates) Not absolute but relative Who has the better possession – most important. Right to remain in control

o Rights: To possession, use and enjoy, sell and alienate, exclude others from use, destroy, security of ownership, manage, generate income, capital

o Duties: Prohibition from doing harm to others in the exercise of ownership. Ownership must be exercised within the prescribed limits of the law.

Possession (seisin: possessory interest in property) Factual possession or possession according to law Consequences of possession – presumption of ownership and possessory title (see

Clissold v Perry (1904) 1 CLR 363, upheld Perry v Clissold (1906) 4 CLR 374 in Privy Council)

de jure possession: a right to possession Equated with ownership but can be divorced from – leasehold estates, chattels –

bailor/bailee (owner/possessor with permission)

Actual (de facto) possession : - control or detention of a thing by a person. 1. Animus possidendi: An intention to control the thing and exclude others (intention to

control)2. Corpus possidendi: The power to control the thing to the exclusion of others (control in

fact) Presumption of Ownership –

o Possession gives rise to an evidentiary presumption of ownership (possessory title) and

o Possession gives rise to possessory title good against everyone except the true owner.

Can be defeated by the rights of the true owner. Degree of Control - The degree of control necessary to acquire control will depend on

the nature of the object

Legal possession: The right to possess. Notes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.


***Relative – who has a better right to possession o eg in case of thief – possession in fact and law but owner has a better right to

possess, title relative to that of any other title, true owner left with a right to possess which is distinct from actual or legal possession = constructive possession

Actual Possession (AP) - A person who has legal possession will normally have actual possession however a person with actual possession might not have legal possession.

Constructive possession (CP) - the person who has the right to possess but who is not currently in actual possession.

o A right to enter (land, personal property). A person who had a prior right to possession based on possession – possessory interest; probable that the person with prior possessory interest could eject the person who is now in possession.

Registered proprietor (RP) = true ownero The title of the RP is stronger than the title of the possessory interest

Title More than ownership - a claim to some legal right/interest is based. Absolute Title –

o creation, manufacture, registered title (but can be defeated by AP) Interest –

o interest refers to type of right – leasehold/easement/fee simple

Types of Title:o Title by registration:

Torrens system. Central register, when you buy land you become the registered proprietor. Title search.

Registered interests will take precedent over other interestso Possessory title:

Adverse Possession



Title and Fixtures

1 What is a fixture? What is a Chattel?

Fixtures:

A fixture is a chattel so attached to land as to become a part of the lando Ownership of land entitles a landowner to ownership of fixtureso Material objects which when physically attached to land are regarded as becoming

annexed to realty

Intention - Objects which rest by own weight may be fixtures if they have intended to become part of land.

o So heavy there is no need to tie it to foundation – marble statues, substantial garden ornaments.

o If presence was integral to a permanent architectural design or if they were part of a general scheme for improvement of realty

Definitive classes established from common law:o Things bolted to flooro central heatingo installed pumpo elevator, video/alarmo pool filtero sleepers embedded in stoneo aircon in wallso Fence erected to improve land

Chattels:

Things that rest by their own weight – heavy machinery, kitchen appliances (although connected electrically remain in position by own weight)

o Where connection to mains supply involves no more substantial attachment than is necessary for effective use

Don’t lose character - Physical objects which never lose their independent character as mere personality

No Transfer - Do not pass on transfer Not self evident - Chattel if not self evident intention that they should attach indefinitely.

Definitive classes established from common law:o Satellite disho Mobile homes – intention demonstrably intended to be removableo Firmly fixed – may remain chattel if purpose was merely to facilitate enjoyment

as chattel. Degree of connection was no more necessary for achieving that purpose – Tapestries, display cases, blinds.



2 What is the relevance of a fixture?

Land Sold - If land is sold, fixtures pass to the buyer with the land (subject to intention to the contrary in conveyance) , chattels pass only if expressly mentioned in the contract of sale

o special rules apply to fixtures installed by a tenant

Stamp Duty - stamp duty is payable on the land component, but not on the chattels

Mortgaged - if land is mortgaged, the mortgagee’s security includes fixtures but not chattels

o A mortgage ranks as a conveyance and mortgagee takes security over land and fixtures, irrespective of date of fixture (even after mortgage created)

Death - on the owner’s death, fixtures pass to those entitled to the real estate

3 How to determine the status of a fixture or chattel?

Consider all the circumstances to determine the objective intention with which the article was put in place, two considerations (Holland v Hodgson):

1 the degree of annexation (how is the article attached to land?)2 the object of annexation (for what purpose was the article attached to or

placed on the land?)

Burden of proof Affixed to the Land - where affixed to land (aside from resting on own weight),

presumed to be fixture and party asserting it is not bears the burden of proof

Not affixed to the land - where not affixed to land and merely resting on own weight, presumed to be chattel and party asserting it is not bears the burden of proof

Rebutting Presumption of Fixation - where a chattel is fixed to the land it raises a presumption even a slight amount of fixing that the chattel has become a fixture.

Tests:o Own Weight - where an article is simply resting on the land on its own

weight, it is presumed to be a chattel

o Attached to Land - if it is attached to the land at all, it is presumed to have become a fixture

o Securely attached - the more securely attached, the stronger the presumption

o Is the presumption rebuttable? (REFER NEXT PAGE) If yes, not a fixture and a chattel If yes, the onus shift to the contractor to rebut that and to show that in

the circumstances it was meant to remain a chattel



Presumption Rebuttable?

Assess:

Degree of annexation (NAB v Blacker) Mode of Removal - Whether removal of the object would cause damage:

o to the land or buildings to which the article is attached; oro to the article itself

Annexation - The mode and structure of annexation – in what way is it attached? Cost to Replace - whether it would cost more to replace it than the article is worth

Purpose of annexation Better right - was article attached for the better enjoyment of the article, or for the better

enjoyment of the land or buildings? (Belgrave Nominees) Consider:

o the nature of the article affixed and its objective purposeo whether the item was to be in position permanently or temporarily, durationo they shared reasonable understanding of purpose served by annexing the item


NAB v Blacker – Chattel or Fixture? degree of annexation:

o pumps and sprinklers were not attached to the land, so were presumed not to be fixtures

o valves had to be attached to underground pipes to be used, so were presumed to be fixtures

purpose of annexation:o No evidence of any ‘objective’ intention to

make any of the items part of the land. All were movable without damage. It was a modular system in which parts could be easily removed and replaced. Cost of removing them was much less than their value.

Held: all items held to be chattels, so belonged to Blacker

Belgrave Nominees – Afixed to the wall Airconditioner being installed Unit was connected to the plumbing – enough to

raise the presumption

Intention – airconditioners usually stay put not intended to be removed, intended to improve the amenity of the premesis

Relationship of party making the annexation with owner – contractor providing it to improve the building, there was no way he was intended to remain the owner.

Mode of annexation: bolted down, not easily removed, connected to plumbing


4 What are non-residential fixtures?

Non-Residential Tenants fixtures: Landlord and Tenant Act 1958 (Vic) s.28(2) Consent – a tenant must gain permission from the landlord before installing a fixture Lease - subject to the terms of the lease, a tenant who installs fixtures in leased premises

retains the ownership of themo applies to short term residential leaseso subject to the terms of the lease, a tenant must not install fixtures without the

landlord’s consento if the tenant has renovated or altered the premises or installed fixtures with or

without the landlord’s consent, he or she must restore the premises to their previous condition or compensate the landlord

Entitled to Remove - the tenant is entitled to remove them during the time the tenant is in possession, but not afterwards unless the landlord consents

Restore - the tenant must restore the premises to their original condition

Tenants’ fixtures: Residential Tenancies Act 1997 (Vic) s.6464. 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) Sub-section (2) does not apply if—(a) the tenancy agreement otherwise provides; or(b) the landlord and the tenant otherwise agree.



Land Ownership

1 What is land ?

Real Property – Land Rights over a volume of space – covers the surface of the earth and part of the earth

below and above

Above the land – Roughly 200m above the roof-lineo LPJ: Scaffolding into neighbours airspace – injunctiono In general a person should not be permitted to use the land of another for

considerable commercial gain for himself simply because his use of the land causes no significant damage to that person’s land.

o Exception made for landing and taking off aircrafto Entitlement to self redresso Access to sunlight is not an ownership righto Such height as is necessary for the ordinary use and enjoyment of land (Skyviews

– mere over flight of commercial aerial photography) Surveillance different

Below land:o 200m belowo Landowners have right to assert title to subsoil within their effective controlo Mineral vested in Crown (Legislation)

Improvements to Lando Added - anything which is added to land is an improvement. o When you buy the land you also buy the improvement on it. o An improvement to land becomes so fixed that it becomes part of it (Reid v

Smith). Most durable and substantial features of the built environment are view not

as fixtures but simply as having melded with the freehold. Building with foundations in soil

Two rights over land: (Colonial Bank v Whinney)1. Corporeal hereditament:

o Physical presence, tangibleo Surface of the earth and physical things attachedo Substantial or permanent objects constituted by or connected with

immovable property (Mitchell v Mosely)

2. Incorporeal hereditament:o intangible rights which may be enjoyed in, over or in respect of lando right to exclude otherso right to sell and lease

Doctrine of Tenure o Crown owns all land absolutely – we are tenants of the Crown

landowners hold an interest ‘of the Crown’ [‘mediately or immediately



from the Crown’] their interest must derive from a Crown grant (originally, derivatively or

fictively)2 What is land ownership in Victoria?

‘General Law’ land – o old common law systemo property by transfer and proof of chain of titleo now system of deed registration under Property Law Act 1958 (Vic)

‘Torrens System’ land – title by registration: Transfer of Land Act 1958 (Vic)o LOOK FOR WORDS ‘REGISTRATION’

3 What is Land Possession ?

Possession of Land o Possession - prima facie evidence of titleo Connection - connection between possession and title (Toohey J)o Presumptive - possession and a basis for presumptive ownership (Toohey J)o Real Action - real actions, ejectment and orders for possession (Toohey J)o Example:

a squatter has a possessory title, an inchoate legal estate in fee simple the squatter can only be lawfully ejected by a person with a better right to

possession the possessory title entitles the squatter to:

recover possession from a subsequent trespasser who enters into possession adversely to him

sell, give away or devise his interest

Property Law Act 1958 (Vic) s.2525. Interests of persons in possession

Nothing in this Division shall prejudicially affect the interest of any person in possession or in actual occupation of land to which he may be entitled in right of such possession or occupation.


Perry v Clissold (1906 Privy Council) Clissold a squatter, 10 years in possession, NSW compulsorily acquired land and refused to pay

Clissold compensation. Couldn’t find true owner – was Clissold entitled to compensation? The fact he did not possess the whole time did not stop him from claiming possessory title NSW could not raise defence of jus tertii. Clissold, a squatter, was entitled to compensation Lord Macnaughten - [A] person in possession of land in the assumed character of owner and

exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner (at 79).


4 What is adverse possession (AP) ?

Definition - o Adverse possession is a person’s possessory right in land against that of the true

owner

S10 – Limitations Act - AP against person in actual possession Adverse possession can only be taken against the person in ACTUAL POSSESSION.

If adverse possession is proven, then it is against the person in current actual possession

o i.e. If a lessee has possession, and a person takes adverse possession then it against the lessee not the lessor

What constitutes adverse possession? The claimant must prove:

1 Factual, or actual possession (corpus possessionis), 2 Intention to possess (animus possidendi); and 3 Possession must be adverse

Actual Possession: o must be open, not secret, peaceful, not by force, and adverse, not by consent of

the true owner. The owner and person claiming can’t both be in possession at same time

o Exclusion - an appropriate degree of physical control of the land to the exclusion of others.

o Acts of possession – will depend on type of land. Depends on type of land - degree of control required to show actual

possession depends on type of land – Redhouse Farms v Catchpole Purpose of possession - often indicative of whether person is in actual

possession (e.g. use must be more than just temporary and limited) – Leigh v Jack

Cultivation, fencing, enclosure, acts which are beneficial to the land acts which focus on excluding others, signs, acts that are consistent with ownership of land, improvements, grazing.

Intention to possess – intention to possess the land to the exclusion of otherso Exclude the rightful ownero Trespasser must show clear positive actions , slight acts by the true owner are

enough

Possession must be adverse – NEXT PAGE



Adverse – without consent o Not Temporary - Acts must not be temporary.

Must be fairly extensive and ongoing. Don’t have to exclude every other person from land, allowed to have

visitors. Focus is on excluding the true owner, may even grant a license to others.

o If trespassers acts are consistent with owners future plans? Used to be fatal (Leigh v Jack)

Buckingham Shire Council v Moran: The fact he knew council’s plans was important but there was sufficient AP by the defendant, it was enough that he had an intention to possess the land now, didn’t have to show intention in all future circumstances.

o Examples: Hunting or Shooting - Enough to claim possession through hunting and

shooting over land (type of land) Lease of license is consensual - Can be implied consent – failure

to object is not enough

NOT ADVERSE Possession – Need Express Permission: must take some express form (not enough for true owner

merely to know of adverse possession) – JA Pye v Grahao JA Pye (Oxford) Ltd v Graham

Part of Land – Only have adverse possession over part of land you occupy.

o Exception – if land is part of a larger tract that is a distinct whole – corner of a field. Corner is part of an indivisible whole

Mulcahy v Curramore Pty Ltd (1974 NSWCA) Triangular block fenced in with rectangular block, everyone who came to own

rectangular block was in AP of triangular block

Staughton v Brown – if you possess part, may be intention to possession whole



5 How long is adverse possession available for?

When does time start to run? Time beings to run when both of these things occur:

o Owner is put out of possession (dispossessed or discontinued possession) (Limitation of Actions Act 1958 (Vic) s.9(1)); and

o The land is in adverse possession (Limitation of Actions Act 1958 (Vic) s.14(1))

Dispossession , Discontinuance and Death – o Dispossession - Acts of user inconsistent with the rights of the true owner/prior

possessoro Discontinuance - true owner/prior possessor has abandoned possessiono Death - Time beings to run against an owner claiming under a will or intestacy on

the date of death of the deceased person when the deceased: was in possession at the time of death; and the last person rightfully in possession of the land (Limitation of Actions

Act 1958 (Vic) s.9(1)) The holder of the future estate has the full limitation period from the date

upon which the cause of action of the deceased accrues: or 6 years from the date upon which the cause of action accrues – whichever

is longer (s10(2)).

Limitation of Actions – 15 Years after possession Limitation of Actions Act 1958 (Vic) s.8 – after 15 years adverse possession, owner

can no longer bring an action to recover the land s8. Action to recover land

No action shall be brought by any person to recover any land after the expiration of [15] 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.

Limitation of Actions Act 1958 (Vic) s.18 – title of the owner is extinguished when the limitation period expires:s18. Extinction of title after expiration of periodSubject 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.



6 What are successive periods of adverse possession?

Aggregation General principle: Adverse Possession has to be continuous. If there is a break you have

to start againo Must be Continuous - continuous adverse possession by multiple individualso Extinction of previous interests - extinction of previous property interesto Must be open - The possession must be open, not secret, peaceful no by force and

adverse not by consento Capable of being found – if owner wanted to find out who was in possession

they couldo Cannot do it by force - Can be robust but cannot do it by force (can put a sign up

to say keep out)

Temporary Absence is not loss of possession as long as it is consensual transfer - Holiday or temporary absence is not loss of possession – a gap in time is not necessarily fatal as long as there is consensual transaction from one possessor to another (Mulchachy v Curramore)

Successive periods of adverse possession – by transfer or CONSENSUAL Squatter A, in possession for 5 years, assigns his interest to B who occupies for 6 years,

then to C, who occupies for 10 years If successive, owners right expire - If the successive periods of adverse possession are

continuous, the true owner’s title is extinguished 15 years after A took possession C now has the best title to the land, A and B having abandoned their possession in favour

of their successors NB: same answer if A and B each abandoned the land without assigning rights, so long as

the land was continuously in adverse possession

Successive periods of adverse possession – ouster case – NON-CONSENSUAL As above BUT none of the squatters assigned their rights to the next.

o A was dispossessed by B, and B in turn was dispossessed by C. (can loose it in a non-consensual way)

If the successive periods of adverse possession are continuous, the true owner’s title is extinguished 15 years after A took possession

o A person with a better right to possession is a person with an earlier righto A’s cause of action accrued when ousted by B (16 years ago) and is now statute-

barredo B’s cause of action accrued when ousted by C (10 years ago) and is not yet

statute-barred.o B has the best title to the land



7 When does adverse possession stop?

Limitation of Actions Act 1958 (Vic) s.14(2):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. Example:

o Squatter A is in adverse possession for 10 years then abandons the land, a year later squatter B goes into possession.

o How long before the true owner’s title is statute-barred? Time stops running against the owner when A abandons. When B takes possession, a fresh cause of action accrues. The owner has

15 years from that date to recover the land. How long must the gap in continuity be to have this effect?

Depends on the circumstances, the usual mode of use of the land in question, and whether the earlier squatter assigned his rights to the later.

How does the person having the cause of action stop time running? Legal Proceedings - Institute legal proceedings (writing a letter or calling to say get off

is not enough) Peaceful entry - Make a peaceable but effective entry onto the land and resume

possession and take posessiono a mere formal entry does not stop time running - Limitation of Actions Act

1958 (Vic) s.16 – formal entry means entry on land without attempting to take possession.

Proof of Possession - Possession requires less from a true ownero Owner consents to possession – lease or licenseo Where possession ends - abandonmento Gap between two intruders

If intruder acknowledges in writing the true owner – offer to buy land – implied recognition of true owner. (JA Pye (Oxford) v Graham)

8 Adverse possession and Torrens system?

Rights are protected under Torrens - right of a person in adverse possession of land is protected as a paramount interest under Transfer of Land Act 1958 (Vic) s. 42(2)(b):

o Notwithstanding [subs.(1)] land which is included in any folio of the Register or registered instrument shall be subject to— …

any rights subsisting under any adverse possession of the land; … this includes an inchoate possessory title – so registration of new owner

does not restart the limitation period



Extinguished Title - once title of registered owner has been extinguished by Limitation of Actions Act 1958 (Vic), adverse possessor can apply to be registered as owner of the land – Transfer of Land Act 1958 (Vic) ss.60-62

9 What is adverse possession on public or crown land ?

Limitation of Actions Act 1958 (Vic) s.7 – the right of the Crown shall not be affected by any possession adverse to the Crown:

o s7. No title by adverse possession against Crowno Notwithstanding any law or enactment now or heretofore in force in Victoria, the

right title or interest of the Crown to or in any land shall not be and shall be deemed not to have been in any way affected by reason of any possession of such land adverse to the Crown, whether such possession has or has not exceeded sixty years.

Transfer of Crown Land - where somebody is in occupation of Crown land at the time the Crown transfers it to another person, the transferee has 15 years to sue for recovery of the land: proviso to Limitation of Actions Act 1958 (Vic) s.8

Immunities – o Railtracks - Limitation of Actions Act 1958 (Vic) s.7A extends immunity to

Victorian Rail Tracko Councils - Limitation of Actions Act 1958 (Vic) s.7B (commenced 26 Nov 2004)

extends the immunity to Councils regarding council land, see Monash City Council v Melville [2000] VSC 55

o Utilities (water etc) - see also Limitation of Actions Act 1958 (Vic) ss.7AB (water authorities, commenced on 18 October 2006), 7C (common property of owners corporation, inserted by yet to be proclaimed Owners Corporations Act 2006 (Vic) s.222)



Trusts – LEGAL AND EQUITABLE OWNERSHIP

1 What is legal and equitable ownership ?

Legal owner - owner of legal title – legal owner Equitable Title - owner of equitable title – equitable or beneficial owner Different Persons - each of these may be held by the same or different persons

o DKLR Holdings: A company transferred legal title to another company by only transferring

bare legal ownership and make themselves beneficiaries by withholding the equitable interest.

Court said: you can’t transfer legal ownership without the equitable title. They couldn’t transfer bare legal title, there is no such thing as bare legal title.

Before the trust is made you can’t transfer legal title without equitable title.

2 What is a trust ?

A trust exists when a person has some right, and is required in equity to use that right for the benefit of another person or for a particular purpose.

Definitiono an obligation enforceable in equity which rests on

a person (the trustee) as owner of some specific property (the trust property) to deal with that property for the benefit of another person (the beneficiary) or for the advancement of certain purposes

o Division between the nominal owner of property (trustee) and the person entitled to benefit (beneficiary)a. Third Party - Beneficiary’s rights bind any third party with actual/constructive

notice; a personal representative creditor or donee of the trustee (bonafide purchaser for value without notice?)

Key Elements Trustee

o Trustee hold legal title to the trust property Beneficiary

o the persons who are entitled to, on certain terms, the equitable interest in the property (except for charitable trusts – where purposes not persons are entitled)

o also personal rights against the trustee to ensure the trust is managed properly Trust property

o the property that is divided as to legal and equitable interests in it Time of Purchase - Only considers contributions to the purchase price at the time of

purchaseo Mortgage - Contributions to a mortgage are not direct contributions to a purchase

price because they arise after purchase.Notes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.


3 How are trusts created?

To create a valid trust, require a number of certainties. These are:

Certainty of intention to create a trust Certainty of subject matter of the trust Certainty as to the object of the trust Vesting of Property in Trustee

***Key to Creation***

MUST HAVEo Certainty of intention to create Trusto Certainty of subject matter of Trusto Certainty as to object of the Trusto Vesting of property in Trustee



3 What are the different types of trusts ?

Express trust Express Trust - created by deliberate intention of settlor (creator of trust) Legal and equitable ownership are split

o Once the author has expressed trust he has divested himself of the whole right of property in land

Types of trusts: Express Trust by transfer

o Settlor gives legal title (and instructions) to the Trustee, o Trustee holds the trust according to instructions given by settlor,o Settlor specifies the beneficiaries equitable proprietary interest in the land o Beneficiary will becomes the equitable owner .

Express Trust by declarationo Settlor declares to hold property on trust, become Trustee ↔ Beneficiaryo Must give directions (to set up the trust) to hold the land on trust for someone

else

Implied Trusts – constructive and resulting Constructive trust - according to equitable principles, it would be unconscionable for the

legal owner of property to retain the beneficial ownership (Parkinson, Principles of Equity, p721)

o a constructive trust is a trust imposed by operation of law

Resulting trust (RT) – ARISE AT LAW (not actual trust) RT - transfer of property to another but retention of property right

o Intention - Intention in resulting trusts cases is proven by the judicial creation of presumptions

o Voluntary transfer Resulting Trust - legal title is transferred to a volunteer, presumed that transferor intended to retain beneficial interest, volunteer holds property on trust for the transferor

o Possible forms: transfer from transferor (T) to volunteer (V) – V holds on trust

for T transfer from T to V and T – V holds their share on trust for T

o Purchase money resulting trust - if property is paid for by one party (P) but legal title is in the name of another (A), presumed that P did not intend to dispose beneficial interest

A holds the property on trust for the transferor

o Unjust Enrichment – Cannot have unjust enrichment of one person at the expensive of another



Calverly v Green ***Resulting Trust - “Where a person purchases property in the name

of another or in the name of himself and another it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption there arises a resulting trust in favour of the purchaser.”

“If the purchase money is provided by two or more persons jointly and the property is put into the name of one only there is presumed to be a resulting trust in favour of the other or others.”

Calverly v Green Defacto couple were joint tenants on title and he paid 1/3 upfront and 2/3 mortgage He made mortgage repayments, her name was on mortgage – means she is responsible

for mortgage and gave her some interest that can be treated as contribution Law of resulting trusts is concerned with contributions at time She was taken to contribute half of the mortgage portion (taken at the point of purchase) Equity said that she owned 1/2 of the 2/3 contribution (mortgage) even though she owned

1/2 of whole purchase price legally. The part of her legal title which exceeds 1/3 (1/2 of 2/3) she holds on trust for him.

Failed trust (FT) Settlor - Settlor (owner) transfers property to trustee and gives directions to the

trustee. Directions to Trustee - It is the directions to the trustee to hold the property for

benefit of someone else that splits off equitable ownership. o Ineffective trust directions - If the trust directions are ineffective (don’t specify

the trust property adequately) because the trustee is not meant to be the beneficial owner and some aspect of the transfer fails a resulting trust arises.

Ownership springs back to the settlor (this is rebuttable)



4 What are the FORMALITIES of EXPRESS trust creation?

Land Real Property and Creation of Trust

o S53(1) of PLA Paragraph (a)

no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law

Paragraph (b) a declaration of trust respecting any land or any interest therein

must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will

o Declaration of trust and transfer to another trustee – in respect to land – must be manifest and proved in writing – could be a collection of informal documents (doesn't have to be formal)

For both: Trusts by declaration and transfer Transfer of an equitable interest or trust

Milroy v Lordo to make a voluntary settlement effective

the settlor must have done everything which was necessary to be done in order to transfer the property and render the settlement binding on him

o to ensure property to beneficiary, settler may: transfer property to beneficiary [absolute gift] transfer property to trustee for purpose of settlement declare him/herself to hold in trust for purpose of settlement

Special Cases: What is an equitable interest or trust subsisting at the time of disposition?

o An equitable interest that has previously been created and sits side by side with the legal interests (eg a trust that is already in existence).

Applies to a trust of any sort – over land, chattels, choses in action


Wratten v Hunter (1978 NSWSC) oral declaration of trust of house house had been in full beneficial ownership of person

making declaration – ‘I promise to live in the home and care for the home and property for all of us’

inapplicability of fraud exception to Statute of Frauds PLA s.53(1)(b) applies


s53(1)(c) - Over a car – trust by transfer over car. The beneficiary has an equitable interest in car, (and they can assign it to someone else), this is known as a subsisting equitable interest because it is already in existence, if they want to deal with a substing interest they have to come within s53(1)(c)

Personal Express trust springs from intention –

o Intention must be made clear - ordinarily the intention has to be made very clear and the use of the words I am creating a trust.

o Can use create express trust through words or conduct - It is possible to create a trust without using the word.

Paul v Constance – o shared compo payout, he said it was as much yours as mine – o court declared there was an intention to create a trust – o court took into account they had not used any formalities but still

found intention to create trust.

Disposition of equitable interests Must be made in writing; and Signed by the person disposing of it s53(1)(c)

o Applies to all equitable interests – goods and land (Grey v Inland Commissioners)

o s.53(1)(c) to disposition of existing equitable interests – covers all interests therefore shares must be in writing

o Dispositions for para. (c) what is a disposition?

Something must be ‘disposed of’ If all or part of your interest in the ‘subsisting equitable interest’ is

disposed of that brings para. (c) into play How are interests disposed of?


Grey v Inland Revenue Commissioners (1959 UKHL) Grey and Randolph were trustees of 6 trusts created by Hunter in 1949 and 1950 on 1 February 1955, Hunter transferred 18,000 £1 shares to Grey and Randolph to hold as trustees under a bare trust for him

(Hunter) on 18 February 1955, Hunter orally directed G and R hold 6 parcels of 3,000 shares as trustees of each of the 6 already existing

trusts on 25 March 1955, G and R executed 6 declarations of trust, Hunter also signed each declaration recited that G and R held 3,000 shares, H made an oral direction on 18 February, G and R accepted the trust the giving of the (oral) declaration was evidenced by Hunter’s signature to the declaration the IRC argued that Hunter’s oral direction was ineffective to dispose of his equitable interest in the 18 000 shares (s.53(1)

(c)) and stamp duty was payable on written declarations of trust if oral declarations were effective, the later written declarations would not be subject to stamp duty note – s.9 of the Statute of Frauds only applied to ‘grants or assignments’, and had not been interpreted as requiring declarations

of trust of personality to be in writing


5 What is the presumption?

Presumption of advancement Presumption of resulting trust may be rebutted by the presumption of advancement Intention not presumed for Gifts unless intimate relations - Where a person provides

money to buy a property it is presumed they did not intend to give a gifto Gift Equitable Interest - is presumed to spring back to them

Absence of intention distinguishes from gifto Gift Presumption - rebuttable by evidence of actual (subjective) intention to the

contrary Unexplained apparent gift – the legal owner who did not contribute will

bear the onus of proving it was intended to be a gifto Legal ownership = joint tenants; o Equitable ownership = trust fragments it and you are tenants in

common as to the proportion you put in.o Donor Intention - Intention of the donor not the recipient

o Intimate Relations presume a Gift- where there are intimate relations between the parties to a transaction - it is

presumed that the person transferring the property, or providing the money for purchase, intended to make a gift of the property

Rebutting the presumption Only applies to relationships involving financial dependency:

o husband to wife (not clearly the reverse)o father to child (but not the reverse)o mother to child (unclear but likely) – Brown v Brown

At this stage does not apply to:o nephew, sibling, son-in-law, grandchildo de facto coupleso same-sex couples



Excluding the Presumption Onus on Person Rebutting - onus lies on the person seeking to rebut the presumption Did not intend to confer a beneficial interest - a resulting trust is based on the

presumption that the transferor did not intend to confer beneficial interesto Contrary Intention - the presumption of a resulting trust can be rebutted with

evidence of a contrary intention by the transferor (ie the intention to make a gift)o Intention at transaction time - evidence of intention must be found before or at the

time of the transaction, look at the transaction and the parties’ words and conduct Examples -

o Loans - where the transaction is intended as a loan (ie money provided for the purchase of property in the name of another but the money is provided by way of a loan)

o Indirect Contributions - where contributions towards the purchase price are indirect (eg. household expenses, actual mortgage repayments, domestic contributions)


Brown v Brown (1993 NSWCA) 1958 Mrs Brown contributed approx. ½ purchase

price of a dwelling for her family, registered in names of sons. The 2 adult sons paid the balance by borrowing with mortgage

presumption of advancement displacedo no intention decided at time

She died, court allowed her affidavit saying she always presumed she would have some interest in it.

Court agreed the presumption could apply to all parents but it was rebutted here, not prepared to accept that a widowed mother of modest means would intend a gift.

Presumption of resulting trust applied, meant that half of the title was held on trust for the mothers estate to reflect her contribution.

Looked at intention of the contributor – subjective intention is admissible but express intention is stronger.

Buffrey v Buffrey Husband and wife purchased house with

compensation money from his injury (145 000) and mortgage (50 000) in both names.

Joint tenants – own it equally Her employer was arguing presumption

of advancement Held: The presumption of advancement

was rebutted – Court looked at: it was his compo money

and an investment property (not residential), they kept finances quite separate, their relationship. They didn’t have joint tax returns (on accountants advice however)


Estates

1 What is an estate?

Estates relate only to lando Doctrine of tenure (crown owns all land) - a person doesn’t own land but only has

an estate or interest in it

Entitled to seisin (possession) not ownership - An estate is an object separate from the land itself – the owner of an estate is not entitled to ownership of the land but to seisin (something like possession)

o Nature of the estate - the nature of the estate determines the extent and duration of the right to seisin eg. in the case of a life estate, the seisin is for the life of that person

o Successive Estates - successive estates can be created in the same land, either in the present or in the future

Distinguishing between the right to present possession and the right to future possession - ownership can be divided between several people who simultaneously hold different interests in the same land taking effect in possession at different times

o ie. fragmentation on the basis of timeo these present and future interests can be alienated

2 Freehold vs. Leasehold estates?

Freehold Estates - the right to possession of a freeholder is uncertain Leasehold estate - interest has either a certain duration or one which is capable of being

made certain (REFER TO LICENCES AND LEASES)

3 What are the types of Freehold?

Fee simple estate – o Largest Estate in duration possible o Closest thing to absolute ownership o Right to exclusive possession

‘Fee’ – estate is inheritable ‘Simple’ – estate can pass to any heir or by will (unqualified) Uncertain duration – may descend from person to person so as to last

forever

Fee tail estate



o Abolished in Victoria - since 1886, cannot be created in Victoria – Property Law ct 1958 (Vic) s.249 PLA – will create a fee simple

4 What is a life estate?

Life estate o Life Duration - Last for the duration of a person’s life and end on that person’s

deatho 2 Types:

Life Estate is Alienable (can be sold) Life of the grantee – i.e. to Samantha for life Life of a person other than the grantee – i.e. to Samantha for the life of

Roberto Grantee can assign their interest to somebody else during that

lifetimeo Grantee is called a life tenant

o What if Samantha dies before Robert? May be disposed of by will - will form part of the

assets of the deceased to be distributed among the next of kin.

Cannot leave your own life estate by will – as there is nothing left to pass on but may be left by will or on an intestacy

Modes of Alientation for Life Estates o inter vivos - disposition is a grant during the life of the grantor:

words of limitation eg ‘to a and his heirs’ for a fee simple estate Property Law Act 1958 (Vic) s.60(1) for general law land - Clear words

showing an intention to create a life estate eg. ‘to A forever’o Disposition without words - of limitation passes the fee simple,

or the other whole interest of the grantor subject to contrary intention.

o Testam entary Disposition is a grant by will, takes effect on the death of the grantor

rights of possession and receipt of income but no right to commit waste (impairing the condition of the land received

by remainderman – the person entitled to possession after cessation of life estate)

Reversionary interest – Passing on a Life Estate o If give away, reverts back to you - If you give it to someone for life and at the

end of that term it reverts back to you.



Remainder: o A future interest given to a person (remainderman) that is capable of:

becoming possessory upon the natural end of a prior estate created by the same instrument.

o i .e. D gives property to A for life and then to B and his heirs. A receives a life estate and B holds a remainder which is not capable of becoming possessory until A dies. B cannot claim property until A dies.

o A is the life tenant, B is the remainderman o Each has a vested (i.e. currently existing) interest, but A’s

interest is in possession, whereas B’s interest is not in possession

o Remainderman - If a life estate is passed on to another they are called the remainderman – they get the ‘remainder’ of the interest

Current Interest - it is a current interest and can be assigned or left to somebody else in a will but is no yet vested in possession until the life estate finishes.

Will vest in possession at a later time.

o Two types – Contingent and Vested interests: Vested Interests – Where the interest is vested in possession at a later

time Contingent Interests:

o An interest only comes about if an even occurso Condition precedent: I give my property to A if they

become a barristero Condition subsequent: Where an interest falls away if a

certain thing happens (in which case the estate reverts to the Grantor)

Says it is valid as long as there is a possibility that it will vest in the perpetuity period.

Q – What is the perpetuity period? o In VIC – it is 80 years unless the

person creating it choses a lesser a time.

o Can chose by nominating a number of years or the length of another person’s life (eg until Queen Elizabeth dies).



o It won’t be treated as invalid unless it is certain that it won’t be vested in perpetuity period.

i.e. import for a contingent remainder – such as children not yet born)

5 What is WASTE in a life estate?

Doctrine of Waste - Reconcile the conflicting interests of life tenants and remaindermen where the activities of the former may harm the land

o Requires: The life estate holder to act reasonably, and Enables the holder of the remainder the right to sue the life tenant if there

is some harm to the land

Types of wasteThe liability of the life tenant depends on the type of waste:

Ameliorating waste – alterations which actually improve the land, enhancing its value; o nominal damages only and equity in the exercise of its discretion will not enjoin

Permissive waste – failure to keep in a satisfactory state of repair omission – o life tenant not liable unless instrument creating the life estate imposes an

obligation to repair

Voluntary waste – the positive act of doing injury to the land – o doing that which ought not to be done o life tenant liable unless instrument creating estate specifically makes him

unimpeachable for waste, ie. exempts him from that liability. o If no such provision, tenant is said to be “impeachable” for waste and therefore

liable for voluntary waste

Equitable waste – even where an instrument exempted a life tenant from waste, equity can step in

o Restrain life tenants who unconscionably exercised their legal rights - at the expense of the remainderman

covers flagrant or wanton destruction, see eg. Vane v Lord Barnard (1716) 23 ER 1082).

Tenant can still be exempted, see Property Law Act 1958 (Vic) s.133



6 What are FUTURE INTERESTS in life estates?

Future interests Doctrine of estates involves the recognition of future interests

o Leasehold Interest - a tenant has a leasehold interest vested in possessiono Landlord has the fee simple reversion - which gives possession at the end of the

lease – so too for a life interest and fee simple reversion Transferred - the fee simple reversion can be transferred prior to ‘falling

into possession’

Fee Simple and Life Estate occur at SAME TIME - if a fee simple estate is disposed of at the same time as the grant of a life estate, the fee simple is the remainder – a future interest

o Remainderman is not entitled to possession - until the end of the life interest, but their interest is vested in interest

o Remainder is transferable even before the end of the life estate

Future interests – vested and contingent remainders If the remainder is subject to a condition that may not occur, it is a contingent remainder

and therefore not vestedo contingent remainders are also alienable, although they may not have vested



Bailment

1 What is Bailment?

1. A bailor (deliveror) delivers goods to a bailee (deliveree)2. Must be a delivery3. Must be a transfer of possession from the bailor to the bailee (Ashbury v Tolhurst)4. If the bailee does something repugnant to the terms of the bailment – then the

immediate right to possession reverts back to the bailor5. If bailor gives goods to bailee, and then a third party damages them – action on the

case (unless terminal at will then can also sue in conversion)

2 What are the duties of a bailee?

1. Types of bailments a. Fixed Term – No right to immediate right to possession until term expires OR

bailee does something repugnant to the interests the bailor (Penfolds)a. Action on the case - only open for bailor where bailment is a fixed term

and has not expired.

b. Terminable at will – Bailor has right to immediate possession at all times. (Wilson v Lombank)

a. Does bailor have immediate right to possession at all times?

1. Duties owed by the bailee 2. Duty of Care - The bailor gives goods to the bailee on the understanding that the

goods will be return once the purpose for the bailee having the goods is fulfilled.a. No Duty, No Bailment – If a bailee enters a contract with the bailor that

specifically excludes liability of reasonable care, then there is no bailment. (Ashbury v Tolhurst)

3. Duty not to Convert – bailee has duty not to do anything contrary to the interests of the bailor (Morris)

4. Duty of Directness – bailee must return goods or return in accordance with what bailor has directed.



3 What types of possession is there?

1. Actual Possession – The plaintiff has physical control and the intention to exercise that control

a. i.e. i own my sunglass and have them

2. Constructive Possession – The plaintiff had actual possession, but lost physical control. They have the intention to possess the goods and no one else is yet in possession.

a. i.e. i own my sunglass and have lost them, and no one else has them

3. Right to Immediate Possession – The plaintiff has a right to demand the goods from the person who is in wrongful possession.

a. i.e. i own my sunglass and have lost them, and someone else has them and I want them back.

b. Possession Restored – Right to immediate possession only allows possession to be restored to the person with right to possession. (Penfolds)

i. A gives sunglasses to B, and B losses them but C finds them. A can only demand that C return glasses to B – NOT to A.



Lease or Licence?

Lease or Licence ? – KJRR v Commissioner of State Revenue - gave pre-eminence to the language used by the parties

o Are words of licence or lease ?o Licence is NOT REQUIRED IN WRITING – Wells v Kingston-upon-Hull

Corporation

Factors: Fixed duration ? (more important)

o Yes – More likely leaseo No - More likely licence

Is there a reversionary interest? (more important)o Yes – More likely leaseo No - More likely licence

Is there exclusive Possession? (more important)o Yes – More likely leaseo No - More likely licence

Language Used? (less important)o Lessor/Lessee – More likely leaseo Licensor/Licensee – More likely licence



Leases

1 What is a lease

Lease - an interest in land given by a landowner to another person. MUST HAVE:

o Reversionary Interest – the interest which the lessor retains in a demised premises and it is an essential component of a lease that the lessor retain such interest on reversion. (Ex parte Henry; Re Cmr of Stamp Duties)

If no reversionary interest – then the transaction is a fee simply rather than a lease.

o Fixed Duration - a fixed or certain duration (Brilliant v Michaels) Void if no duration - A lease is void for uncertainty if the duration and

commence date of the lease cannot be ascertained at the time when the lease takes effect (Ex parte Murphy)

o Exclusive possession - which gives that person a right to exclusive possession of the land – owner and third parties can be excluded

Regulated by:o Retail tenancy – Retail Leases Act 2003 (Vic)o Residential tenancy legislation - Residential Tenancies Act 1997 (Vic)

Lease for Life? A lease for the duration of a life of a certain person The life may be that of the tenant or another person (Wright Plowden v Cartwright) If no reversionary interest is created in the lease, then the transaction creates a freehold

estate for the recipient (Borambil v O’Carroll)

Concurrent Lease The lessor, under an existing lease grants a further lease for the same property which is

effective with the existing lease (Stewart v Goldman & Co) The second lease, is a lease of reversion and the reversion has been assigned effectively

implying the second lease is the lessor of the original lessee (Stewart v Goldman)



The lessee of the second (concurrent) lease, cannot grant any rights beyond those held by the lessor (Cook v Evans)

Terminology Lessor - is the landlord, grantor of the leasehold estate, ‘lessee’ is the tenant Lease - ‘tenancy’ and ‘demise’ are synonyms to lease’, ‘to let’, ‘to demise’ are synonyms Leasehold reversion – landlord’s estate Assignee of the leasehold reversion – purchaser of landlord’s estate Assignee of the lease – purchaser of the tenant’s lease Tenant can sublease to a ‘sub-lessee’ - tenant is then a tenant under the ‘head lease’ and a

landlord under the sub-lease determines’ means the lease ends

2 What characterises a Lease ?

Require:1. Certainty of duration2. Right to exclusive possession

a. Intention/Language of the parties is the strongest indication – more likely to be a lease if the parties call it a lease, but courts will look at the substance of the agreement.

Certainty of durationo General rule: A lease must have an end date in order to be effective otherwise the court

will determine one.o Lace v Chantler: Lease for duration of war void because war may never end

Lord Greene - must be expressed either with certainty and specifically or by reference to something which can, at the time when the lease takes effect, be looked to as a certain ascertainment of what the term is meant to be.

In the present case, when this tenancy agreement took effect, the term was completely uncertain.

o Periodic Leases – o Rental Payment Period - The rental payment period for a periodic tenancy

usually determines the period of notice required to terminate the tenancy.

Is the lease part of a JOINT TENNANCY ? ( REFER to JT part 10 )


Prudential Assurance v London Residuary Body Lease as long as was required to widen

road. No fixed term lease because you couldn’t

ascertain how the lease could be ended. They found a periodic tenancy and

decided in the circumstances it was terminable with 6 months notice. There was sufficient certainty for each yearly payment of rent

Certainty of duration – Prudential Assurance (1992 UKHL)

1 Key issue £30 annual rent or £10,000 annual rent (value)

2 Lease to continue until land required for road, not a fixed term lease – no certainty of duration

3 As tenant had been in possession and paying rent annually, a yearly periodic tenancy arose

4 Periodic tenancy considered to be of certain duration because it is certain for the year

5 Terms of lease agreement apply to periodic tenancy so far as consistent with that type of tenancy


*****Lease by one JT suspends JT (doesn’t sever) where one joint tenant grants a fixed-term lease, the joint tenancy is suspended

(and operates as a tenancy in common) but it does not sever the joint tenancy Lease Continues - the lease continues until it expires, even if the joint tenant

lessor dies Death –

Lease Continues - if the JT lessor dies, the lessee and the surviving joint tenants remain as tenants in common until the lease ends and

then the leasehold reversion passes to the survivors Deceased entitled to rent - the deceased’s estate is still entitled to the rent during

the life of the lease see Frieze v Unger (1959 VSC)

Right to Exclusive Possession Right to Exclusive Possession requires:

o Intention of the parties - determined by examining the nature of the rights they have agreed upon

i. Tenant has exclusory powerii. Immunity from the owner’s supervisory control

iii. Substantive Rights - Court will look to the substantive rights (even if you call it a license but it looks like a lease courts will look at substantive rights and call it a lease)


Exclusive possession – Radaich v Smith (1959 High Court)

judgement – unanimous decision, ‘licence’ in law a lease Dixon CJ agreed with others McTiernan J: necessity, purpose of lease requires

control of premises Taylor J: terminology not determinative, question

is what rights are conferred, purposes of licence requires exclusive possession

Menzies J: exclusive possession from nature of rights and duties conferred

Windeyer J sought to reconcile the intention test with the

exclusive possession test intention of the parties is determined by

examining the nature of the rights they have agreed upon

if the grantee has the rights of a tenant, they must have intended to create a tenancy

KJRR Pty Ltd v Commissioner of State Revenue (1999 VCA)

Franchise agreement, granted licence to use premises

Franchisor retained right to enter at any time

Characterised as licence, no evidence to show licence was a sham transaction

Some provisions of agreement consistent with the absence of exclusive possession

Court gave pre-eminence to the language used by parties – licence

They had exclusive possession of a store, Clause 12 actually said there was no right to exclusive occupation and a clause saying landlord could enter at any time


3 What types of leases are there ?

Fixed Term Fixed Term - lasts for a fixed term (duration)

o lease determines (ends) when the term expireso the term must be certain or capable of being made certain

Periodic Tenancies – (typically RENT) Continue indefinitely - from one period to another

o Common Periods - weeks, months or years Ended by PROPER NOTICE - determined/ends by proper notice Created by:

o Written or Oral agreemento Invalid fixed term lease – tenant goes into possession and pays rent

periodicallytenant overholds after expiry of a fixed term lease and continues to pay rent periodically

Rent - Is any periodic paymento Period of certainty is for that month that rent is paid for

Tenancy at will Person in possession doesn’t pay rent - person is in possession with the consent of

the landlord but does not pay rent Terminated at any time - can be terminated at any time by either party without

giving notice Alienation will bring the tenancy to an end Can form by Express Agreement or by Implication, examples: tenant overholding after expiry of lease purchaser allowed to occupy before settlement tenant doesn’t pay rent

Tenancy at sufferance Tenant ‘holds over’ without landlord’s consent or dissent & pays no rent

o only arises by implicationo arises when a tenant enters lawfully (eg. under a lease for a fixed term) but the

lease is terminated and his continued possession is wrongful eg by ‘holding over’



Initial entry by consent distinguishes from trespasso landlord must re-enter before he can sue for trespass – not a genuine leasehold

estate Landlord may sue for recovery of possession at any time without notice

Adverse possession after 1 year -o (Limitation of Actions Act 1958 (Vic) s.13(1))

4 Formalities of Leases ?

General Law Land - Property Law Act 1958 (Vic): (Equitable Lease – not enforceable against a bona fide purchase of the legal estate for

value without notice) Interest in land is void unless made by a deed - s 52(1) Conveyances of land or interest

in land are void unless made by deed

Lease not required to be made in writing - s.52(2)(d) Leases or tenancies not required under law to be made in writing (exception to deed requirement)

Leases for less than 3 years, no writing – s54 - Leases for a term not exceeding 3 years taking effect in possession do not need to be in writing

Note:o ‘taking effect in possession’ - means a lease that is to commence

at or before the date it is madeo ‘best rent’ - means market rento a ‘fine’ is a premium paid to the landlord - for the grant, renewal

or transfer of a lease, not being a reasonable reimbursement of the landlord’s expenses

o No Writing under 3 years - leases under 3 years that commence at or before the date of agreement do not need to be in writing if they are at market rent and no premium is paid to landlord for the lease

Creation by Parol - 54(1) All interests in land created by parol and not put in writin and signed shall have force and effect in will only

s.54(2) – exception is the ‘creation by parol of leases taking effect in possession for a term not exceeding three years …at the best rent which can be reasonably obtained without taking a fine’

Torrens system – formalities A lease is not legal until registered

o TLA s42(2) - Equitable Lease is unregisterable, lease binds a registered owner if the tenant is in possession

Registrable after 3 years - only leases exceeding 3 years are registrable: o s.66(1) - Transfer of Land Act 1958 (Vic)



Leases for less than 3 years, no writing – s54 - Leases for a term not exceeding 3 years taking effect in possession do not need to be in writing

o Note: ‘taking effect in possession’ - means a lease that is to commence at or

before the date it is made ‘best rent’ - means market rent a ‘fine’ is a premium paid to the landlord - for the grant, renewal or

transfer of a lease, not being a reasonable reimbursement of the landlord’s expenses

No Writing under 3 years - leases under 3 years that commence at or before the date of agreement do not need to be in writing if they are at market rent and no premium is paid to landlord for the lease

5 Legal or Equitable Lease?

Assignment of Legal Leases – MUST BE BY DEED All assignments of leases must be made by deed

o Legal Lease must be in writing - PLA s.53 requires transfer of legal lease to be in writing, despite possibility of oral creation under PLA s.54

o Part Performance is possible - but part performance still possible, PLA s.55(d) Crago v Julian (1992 EWCA)

o Legal lease is a RIGHT

Equitable Lease IF NO FORMAL If a formal lease is not met, then an equitable lease is in force -

o Agreement is in writing – s126 – Instruments Act or

o Oral Contract plus part performance Refer Part Performance


Walsh v Lonsdale (1882 Court of Appeal) Parties agree that Lonsdale would lease to

Walsh for 7 years, rent quarterly in advance and if defaulted would pay 1 years in arrears. Formal lease would be drafted.

Formal lease never drafted, and W paid quarterly but not in advance. L sought to enforce year in arrears.

Ruled: equitable lease existed and was specifically enforceable


Licence

1 What is a licence ?

Licence - gives the licensee permission to do something on land that would otherwise be a trespass (eg to enter, use, occupy)

o Revokable, no property interests created o If supported by consideration may be contract and possibility of breach

i. King v David Allen - Court looked at the wording of the contract – licence used

IS IT A LEASE OR LICENCE ? LOOK AT FACTS

2 What types of licences are there ?

Bare licence Permission to enter onto the land of another (conditions may be attached) Features include:

o Express or implied - Created expressly or by implicationo No consideration, no contracto No proprietary rights or Interests (Commissioner Stamp Duties v Yeend)o Enforceable against the licensor onlyo Revocable at any time and cant be transferred (R v Toohey)o Grantor can enter the land (Radaich v Smith)o Cant sue in trespass (Western Australia v Ward)

Contractual licence (MOST COMMON) Contractual right to enter the land of another and to use or occupy it for a particular

purpose Features include:

o Express or implied - Can be created by express or implied agreemento Only contractual rights - Confers contractual rights onlyo Only Enforceable against the licensor o No exclusive possession – cf occupationo No certainty of duration



o Licensor cannot wrongfully revoke the licence – i.e. not to treat the licensee as a trespasser until the licence has been validly determined

Licence coupled with a grant – PROFIT A PRENDRE Definition - Right to take some part of the soil or minerals or natural produce of that tenement of the land and must indicate the land which is subject to the burden

(Alfred Beckett v Lyons)o Must have:

i. It is an interest in land (Webber v Lee) and ii. Can exist in perpetuity or for a number of years (Corporate Affairs

Commission v ASC Timber Pty Ltd)iii. Right to enter another persons land and created by:

1. Grant2. Express or Implied Reservation3. By Prescription

iv. Profit for General Law Land – must be created by a deed

Extinguishment – o If their subject matter is exhausted – (Clarkson v Woodhouse)o Abandonment – They can be abandoned which triggers extinguishment

(Tehidy Minerals v Norman)



3 What characterises a contractual licence ?

Require:1. Is the licence enforceable against a third party (successor in title to the licensor?)

a. ie. is it a property right? NO - King v David Allen Billposting

2. Is the licence revocable as between the original contracting parties?o Cowell v Rosehill Racecourseo Heidke v Sydney City Councilo Sigma Constructions v Marvell Investments

Third Party Enforcement

4 How is a licence revoked ?

Revoking a license: Cowell is correct that a contractual licence can be effectively revoked even if in

breach of contracto Upon Death of either party – Coleman v Foster


Binion v Evans Purchaser got a cheaper price because they

agreed to abide by the licensees interest Court said there would have to be more

that just saying they would abide by interests

Must also be some benefit – something that effects the purchasers interests

Ashburn Anstalt v Arnold Was a subsequent purchaser bound by a

contract between landlord and tenant whereby tenant allowed to remain rent free until redevelopment - the purchase was subject to the agreement?

Sometimes licensee may be able to sue a third party

Where the purchaser has represented and gets some benefit, discount on price, it would be against equity to let them depart from it)

Held: only very special circumstances will give rise to a constructive trust.

King v David Allen Billposting (DAB) Classification as a mere right in

contract meant not a licence and that DAB could not enforce it against 3rd party


o Grantor is no longer entitled to exclusive possession of the land subject to the licence – Wallis v Harrison

o Damages in Contract - the licensee has only an action in damages for breach of contract

o Trespass even if revocation was wrongful - If a license is revoked you become a trespasser even though the revocation was wrongful (Cowell)

o Reasonable Notice is required – (Murray Robson Wines v Oakdale)o If licensee acts in a manner contrary to the rights of the licensor – Baikie v

Fullterton-Smith

***Equity may grant an injunction - o REFER NEXT PAGE

***Equity may grant an injunction - to restrain a wrongful revocation of licence where there is an express or implied promise that the licensor will not revoke

o Courts (since Cowell) now granting an injunction to restrain the licensor from revoking a licence where (Heidke)

i. an express or implied term of the contract states that the licensor will not revoke, or will revoke only for specified cause; and

ii. the revocation is in breach of that term (ie wrongful)


Cowell v Rosehill Racecourse (1936 High Court) Demurrer – a defence that, on the facts pleaded by a plaintiff, no cause of action is made out C paid for admission to a race meeting on R’s land, R asked C to leave and ejected him by force when he refused, C sued R for

damages for assault, R successfully demurred HCA held by majority that:

o this was a contractual right, not a licence coupled with a grant (spectacle was not an interest in land)o a licence may be revoked, and the licensee thereby turned into a trespasser, even if the revocation is in breach of

contract so R was entitled to remove C, and was not liable in assault Dissenting judgment of Evatt J: equity should step in and provide an injunction against revocation of licence

Sigma Constructions (Vic) PL v Maryvell Investments PL (2004 VCA) M granted S a licence in writing to use its premises in

connection with construction of a hotel on S’s adjoining land

M revoked the licence, alleging breaches by S, then applied to VCAT for a permanent injunction to restrain S from entering M’s premises

VCAT applied Cowell, held that M had effectively revoked S’s licence, whether wrongfully or not, and so S became a trespasser

VCA held that VCAT erred in failing to consider discretionary factors including whether M’s revocation of the licence was in breach of contract – look to see if the license could be revoked

Heidke v Sydney City Council (1952 NSWSC) licence for the use of a council oval, council sought to

(wrongfully) terminate licence Hardie AJ identified and applied discretionary factors for

courts to consider in deciding whether to grant injunction:o are damages an adequate remedy for the

licensee? Noo would grant of injunction cause undue

hardship to the licensor? Noo would grant of the injunction force parties into

a continuing relationship requiring ongoing supervision?

injunction to preclude termination granted (confirmed Sigma)


Co-ownership - Joint Tenancy & Tenancy in Common

ONLY IF USE IF SOMEONE DEATH OR DIES

1 What is co-ownership?

Co-ownership ownership The capacity for property interests to be divided in time to successive periods of

possessiono Features:

distinct from derivative ownership of land (eg. freehold land purchased from prior owner)

Can have successive interests in land Examples:

Landlord and tenant Life estate and remainderman Land owner and licence Corporation Body corporate of strata title

2 How to establish co-ownership ?

Unity of Possession - central element of co-ownership Required for Joint Tenancy (JT) and Tenancy in Common (TIC) Each co-owner has an equal (simultaneous) right - to use and enjoy (to possession) of

the whole co-owned property without division (into shares, exclusive parcels etc) Elements of Co-Ownership:

Share Profits - Each co-owner entitled to share of rent or profits of the land Need Unity of Possession - No co-ownership without unity of possession Not subject to Trespass - A co-owner is not subject to an action in trespass by

another co-owner Liable for damage to property - A co-owner who damages part of the property,



or excludes another co-owner, is liable to the other co-owners Can separate or divide interests - Nothing to stop co-owners reaching an

agreement of separation or division

3 Co-ownership at LAW and in EQUITY ?

Different co-ownership at common law and in equity Co-owners can be:

JT at law and in equity TIC at law and in equity JT at law and TIC in equity

Equity Follows - where there is a tenancy in common at law, equity will always follow (ie. there cannot be a tenancy in common at law but joint tenancy in equity)

Different co-ownership at common law and in equity sole owner at law but a joint tenants or tenant in equity –

the legal estate is held on trust for the beneficial co-owners (including the individual), see Vedejs and Baumgartner

if co-owners are joint tenants at law and tenants in common in equity the legal estate is held on trust for each other as tenants in common in equity for

their respective shares

Equal Contributions to Land purchase presumes – Clark v Clark It doesn’t matter that the title is in one name only

May still be a presumption where unequal contributions of family members – presumption of advancement

Clark v Clark: Husband paid for land and had it registered in joint names: Presumption that he intended to give his wife a beneficial interest and that they hold as joint tenants in equity



4 How to establish Joint Tenancy (JT) ?

Joint Tenancy (JT)1 Treated as a single owner

Two or more persons registered as joint proprietors are deemed to be joint tenants (Transfer of Land Act s30(2)).

2 Each person’s share gives them entitlement to whole

3 Right of survivorship – when one dies interests go to other co-owners – can’t will it away with estate.

Cannot have joint tenancy without survivorship Interest does not pass as part of deceased estate Surviving Interests are enlarged – Death extinguishes that persons

interest and surviving tenants interests are enlarged to absorbed the interest of the tenant who is deceased

Last surviving joint tenant becomes sole owner Simultaneous or uncertain sequence of death - Property Law Act

1958 (Vic) s.184, a rebuttable presumption – most senior dies firsto Other methods of dealing with uncertain or simultaneous

death. If JT is ‘on hold’ (due to lease or licence) – then common law suggests

TIC

Must have each elements:**Essential that the four unities be present:

Unity of Possession (as above)

Unity of Time Interests vest at the same time - interest of joint tenants must vest

in possession or interest at the same timeo If later, no unity of time - if one party takes an interest at a

later time than another, then there is no unity of time even where the interests are the same



Exception : where interests are created by will or a conveyance to a trustee or beneficiary – JT can arise even if no unity of time

Unity of Interest Nature, extent and duration of interest must be that same

o eg. both freehold, not freehold and leasehold, same geographic space, same lease period etc

o Equitable Interest – differing portions

Unity of Title JT must derive interest from the same instrument

o or same act, where no instrumento adverse possession must also arise from same facts

Successive - No unity where X conveys fee simple to A and B. B Conveys his interest to C – interest not derived from same document

5 Presumption of JT at LAW ?

Presumption of JT Presumption applies to general law land Presumption of joint tenancy at common law (common law ‘favours’ joint tenancy)

UNLESS: one of the unities (other than unity of possession) is absent; or instrument creating interest includes words of severance

TORRENS LAND - for Torrens land Transfer of Land Act 1958 (Vic) s.30(2) - Joint proprietors are joint tenants and 33(4) - Multiple recipients of interests deemed joint tenants Parties must specify if JTs or TIC

6 How to establish Tenancy in Common (TIC) ?

Tenancy in Common (TIC)1 Distinct notional shares (eg. ⅓, ⅔) - over whole property

a. can arise at time of creation of interest, or by severance of joint tenancy2 No rule of survivorship3 Needs only the unity of possession – can have more but only require this4 Existence of TIC is indicated by:

absence of one or more of the unities of time, title or interest; or by words of severance, such as “to be divided between,” “in equal shares,” “share

and share alike,” “between,” “amongst”5 Each entitled to a separate duplicate certificate of title - s30(2) Transfer Land Act6 Method of transfer is by transfer or conveyance:

a. A, B and C are JTs. b. A sells interest to X. c. B and C remain JTs of 2/3 and are TICs with X who holds 1/3



7 Presumption of TIC in EQUITY?

Equitable presumptions - query whether the function of survivorship (which is attached to Joint Tenancy) is appropriate in the circumstances

o Generally - these presumptions are rebuttable with evidence of contrary intention

If A, B and C are TIC in equity (but JT in Common Law) and A dies, B and C hold 2/3 as JTs and A’s estate gets 1/3.

B and C hold the legal estate on trust for themselves as JTs as to 2/3 and for A’s estate as to 1/3.

Equity will presume a TIC where :

Unequal contributions to the purchase price i.e. at the time of the purchase resulting trust Equity presumes you did not intend gift

Money advanced as Mortgagees (equally or not). The mortgagee advances funds and in return gets a proprietary interest in the

property. (Thames Guaranty v Campbell) Presume TIC - Where two or more people advance money on security of a

mortgage (whether in equal or unequal shares) equity presumes their interests as TIC even though they may be joint tenants at law. (Vickers v Cowell)

S112 PLA – Mortgage is held in both their names legally.

what is the effect of a equitable mortgage on a TIC? the mortgage only binds the share of the tenant in common mortgagor on their death, the mortgage interest survives the mortgage must be repaid out of the deceased’s estate

Partners acquire property for a business venture a tenancy in common is presumed – view to make money (Lake

v Craddock) “the flexible approach” – lessees taking lease for separate business

purposes (Malayan Credit)


Malayan Credit Ltd v Jack Chia – MPH Ltd (1986 Privy Council) JTs at law for a 5 year fixed term lease Separate business activities, divided floor space and shared rent in proportion to division no words of severance on lease (presumption of JT at law) They should be regarded at TIC in equity, court emphasised the separate use of premises for business and that it was

always intended they would have unequal shares, paid rent in different proportions, had separate business interests, their behaviour reflected the separate proportions the whole way through. Entitled to separate proportions of sale


Concurrent ownership in Equity when sole ownership at CL

8 Severance & Alienation of JT ? Severance - conversion of JT into TIC ****Words of Severance – Unless words of severance JT becomes TIC

o It occurs through: inter vivos acts of one or more joint tenants (Williams v Hensman)

joint tenant operating on their own share (unilateral) mutual agreement (Williams v Hensman) a course of dealing

by acts of joint tenants homicide sequestration court order

Unilateral severance – (must be an actual alienation in law or equity) Alienation of whole interest

to a stranger A and B are JT’s

o B grants his interest to Co what is the relationship between A and C?

A and C hold as tenants in commono why? Corin v Patton (1990)

o Land Title Act 1994 (Qld) s.59

A, B and C are JT’so A grants his interest to Do what is the relationship between B and C, and D?

B and C are JT’s to 2/3 D is a tenant in common with B and C to 1/3

o why? D has no unity of time or title with B and C

to another joint tenant A, B and C are joint tenants A transfers interest to B

what is the relationship between B and C? Notes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.

Vedejs v Public Trustee

De facto, purchased home together but in his name, she contributed to deposit and all household expenses, both contributed to repayments

He died intestate At the least

o Repayment of her financial contributiono Resulting trust due to her contribution of purchase price – TIC in equity and not entitled to husband’s share on deatho Constructive trust based on contributions – Baumgartner

Held:o Entitlement extends beyond financial contributiono At time of acquisition there was an implied common intention that the property should be acquired on the joint behalf of

the man and woman. The deceased held the property on trust for himself and the womano Once the parties are presumed to hold equally despite any inequality in their contributions equity would

presume a JT in the absence of clear indication that a JT was not intended


o B is a tenant in common with C as to ⅓o B and C are joint tenants as to ⅔

what happens if B then transfers half of the joint tenancy interest to A?

o A, B and C are joint tenants as to 2/3, B is TIC as to 1/3 with C

Possible for A and B to sever the joint tenancy by cross transferring their interests to each other? Yes

o Wright v Gibbons (1949 HCA): 3 sisters JT; 2 sisters transferred interest to each other; Held to be effective in severing JT

o Can now convey to yourself to sever under legislation (PLA s72)

to oneself A, B and C are joint tenants - A wants co-ownership but not survivorship A wants to achieve severance involvement of B and C but A does not wish

to dispose of interest. how to achieve this? Transfer to self under Property Law Act 1958 (Vic) s.72(3)

Alienation of part interest (‘encumbering the property’ – MORTGAGE) Right to alienate (sell or give away) – a co-owner may:

o sell or give away their interest to a third party without the consent of the other co-owner(s) unless there is an agreement to the contrary

Right to encumber the land (MORTGAGE)– a co-owner is entitled to:o Can encumber with other co-owners consent - encumber his or her share of

the property without the consent of the other co-owner(s) but can only bind his/her share

o Encumbrance affects interest of co-owner - the encumbrance affects on the interest of the co-owner undertaking it (remember unity of possession)

o Encumbrance must not interfere right to possession – must not interference with other with the other co-owners’ right to possession

o May Sever Joint Tenancy - an encumbrance may sever a joint tenancy

Severance by mutual agreement Equity

o agreement that demonstrates parties intended to hold as TIC (Pfeiffle) Immediate Severance regardless of future plans - immediate

severance even if yet to determine some future plans (eg. sale) Cannot revive JT - once severed subsequent repudiation does not

revive JT

Land:o Must be in writing - s126 of Instruments Act (Lyons v Lyons)o Other courts have said as long as intention is clearly manifesto Implied agreements:

Equity will recognise an implied agreement to sever tenancy e.g. when the parties agree to deal with the land in a particular way (similar to next point); but where they have not concluded the details of that agreement (e.g. because of the death of one of the joint tenants).



Severance by course of dealing Course of conduct such that all co-owners treat themselves as TIC examples:

o negotiations to sell and divide up proceeds before agreement is concluded (Re Pozzi)

o see also Abla: mutual wills leaving property to other people

Severance other than by an act of a JT Murder of a JT by another JT – severance immediately occurs Sequestration – severance immediately occurs Bankruptcy - trustee in bankruptcy holds estate as TIC for creditors (see Bankruptcy

Act 1966 (Cth) s.58) Order of court (eg. Corin v Patton)

Judicial termination of co-ownership Property Law Act 1958 (Vic) ss.221-234I (part 4) - added by Property (Co-

ownership) Act 2005 (Vic)

9 Mortgages under Common Law & Torrens ?

Mortgage and JT: General Law Land Legal Mortgage –

o takes effect as a conveyance of land to the mortgagee with an equity of redemption in the mortgagor

o (i.e. fee simple is actually transferred to mortgagee) – this severs the joint tenancy

conveyance effects severance of joint tenancy unity of time and title no longer present

Equitable Mortgage - it is unclear whether an equitable mortgage severs a joint tenancy

Torrens Mortgages Operates as a statutory charge and not a transfer - under the Transfer of Land Act

1958 (Vic)o Transfer of Land Act 1958 (Vic) s.74(2) provides that a mortgage ‘shall when

registered have effect as a security and be an interest in land, but shall not operate as a transfer of the land thereby mortgaged’

No severance results – mortgagee can only sell up the share of the granting co-owner.

o Bank won’t grant $ without consent of all co-owners Joint Tenant mortgagor

o Mortgage Extinguished - If JT Torrens mortgagor dies before other joint tenants, the mortgage is extinguished (Lyons v Lyons (1965 SCV))

If the joint tenant mortgagor of a Torrens mortgage survives all of the other joint tenants, the mortgage probably becomes a security over the entire land



10 Leases, Easements and Mergers under JT?

Co-owners’ right to LEASE Right to lease – a co-owner can lease his or her (co-owned) share of property but cannot

grant the lessee exclusive possession of the land as against the other co-owner(s) o (unity of possession)

leases by one co-owner unusual, in practice only likely to happen where the other co-owner(s) are passive and the tenant is unaware that the property is co-owned

Exclusive possession - a lease by all co-owners can confer exclusive possession the lessee and another co-owner are bound to respect each other’s rights to

exclusive enjoyment and use and neither can oust the other For a TIC –

lessee of one co-owner and the remaining co-owners are TIC for the duration of the lease

original co-owners are TIC of the leasehold reversion

Partial alienation by LEASE Lease by one JT suspends JT (doesn’t sever)

where one joint tenant grants a fixed-term lease, the joint tenancy is suspended (and operates as a tenancy in common) but it does not sever the joint tenancy

Lease Continues - the lease continues until it expires, even if the joint tenant lessor dies

Death – Lease Continues - if the JT lessor dies, the lessee and the surviving joint tenants

remain as tenants in common until the lease ends and then the leasehold reversion passes to the survivors

Deceased entitled to rent - the deceased’s estate is still entitled to the rent during the life of the lease

see Frieze v Unger (1959 VSC)

Partial alienation by EASEMENTNotes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.


Third Party Easement - a co-owner can grant an easement to a third party, provided this does not unduly interfere with another co-owner’s right to possession

Easement encumbrance not an estate – unlike a lease, an easement is not an estate but a mere encumbrance

no unity of title is destroyed and therefore no severance or suspension of joint tenancy

Merger Example:

A has a life estate and B and C are joint tenants of a remainder in fee simple A transfers interest to B, life estate merges with B’s remainder

the JT between B and C is severed because their interest is different

Competing Interests

1 What is a priority dispute ?Land -

Arises where:o valid instruments create [legal or equitable] interests in land in different people

at different times and those interests are incompatible for example, a short term lease for land and then a sale of the land

which purports to give vacant possession Lack of Information - often result from lack of information (eg. one

party (or both parties) to transaction doesn’t know of the existence of a former legal/equitable interest)

Chattels – o Nemo dat quod non habet – A person cannot sell what they do not own

Chattel security register o Established by legislation.o Changed nemo dat - a lot when it comes to mortgages over chattels. o Old rule of nemo dat = purchaser took a risk, mortgagee would

defeat buyer. o Now not only does register set up notice, it has changed priority

rules, o bona fide purchaser defeats an unregistered security.

Eg buy a prime mover Esanda mortgage, owner of truck sells to someone else, if Esanda have registered their mortgage, buyer who has paid $ to owner would get nothing.

If Esanda not registered, innocent purchaser would beat Esanda.



2 Competing Legal Claims ? First in time prevails

o Nemo dat rule – cannot give what you do not haveo LAND - see Property Law Act 1958 (Vic) s.44 (p424 CM)

i.e. attempt to sell same land twiceo GOODS - Goods Act s27

GOODS Exceptions to "Nemo Dat" and "First in Time" rules for sale of Goods:

o Sale under voidable title: where seller’s title is voidable, but has not been avoided, bona fide purchaser without notice acquires good title – s29

o s30 - Seller in possession after sale: where seller remains in possession after sale and re-sells goods, bona fide purchaser without notice acquires good title

o s31 - Buyer in possession after sale: where buyer takes possession of goods encumbered with lien/other security, and buyer sells those goods, bona fide purchaser without notice acquires good title

o Chattel Securities Act: register of securities; if security interest is not registered under the Act, a bona fide purchaser will acquire full title – Chattel Securities Act

Goods in Trade – Goods Act s1958 (Vic)1. SALE OF GOODSo Specific (i.e. identified) goods: property passes at the time when the contract is entered

into – s22 Goods Act 1958 (Vic)o Unascertained goods: property passes at time when property is saleable; i.e. when

property is identified and appropriated to the contract (e.g. when apples are selected and packed into the carton) – s23

o S29 – Sale under voidable title o When the seller of goods has a voidable title thereto but his title has notbeen

avoided at the time of the sale the buyer acquires a good title to thegoods provided he buys them in good faith and without notice of the seller's defect of title.



***Pyramid of interests*** (LEME)Hierarch of enforceability

Legal interests (L)o Enforceable in a court of law against the whole world

Equitable interests (E)o enforceable by a court of equity against all except a bona fide purchaser for

value without notice A mere equity (ME)

o enforceable by a court of equity against a limited number of third parties, ie. those with notice of its existence or are volunteers

Legal v Legal1 First in Time Wins2 Nemo Dat - Cant sell what you don’t have –

Except where the sellers title is voidable Bona fide purchaser without notice

o GOODS - Goods Act s27

GOODS Exceptions to "Nemo Dat" and "First in Time" rules for sale of Goods:

o Sale under voidable title: where seller’s title is voidable, but has not been avoided, bona fide purchaser without notice acquires good title – s29

o s30 - Seller in possession after sale: where seller remains in possession after sale and re-sells goods, bona fide purchaser without notice acquires good title

o s31 - Buyer in possession after sale: where buyer takes possession of goods encumbered with lien/other security, and buyer sells those goods, bona fide purchaser without notice acquires good title

o Chattel Securities Act: register of securities; if security interest is not registered under the Act, a bona fide purchaser will acquire full title – Chattel Securities Act



Equitable estate v subsequent legal estate Subsequent legal will defeat prior equitable if:

Subsequent legal is:1 purchaser for value2 bona fide (good faith)3 without notice of the prior equitable estate

1 Purchaser for value without notice? Evidence of a transaction supported by consideration – not a gift Consideration is valuable, money or money’s worth – not nominal Consideration exchanged at time of acquisition of the legal interest

2 Good faith and noticeGood faith sometimes knowledge can qualify as “bad faith”Notice If have Notice, therefore not bona fide - actual, constructive or imputed at time of

consideration If have you imputed notice,

Negligent Acts –


Actual and constructive noticeProperty Law Act 1958 (Vic) s.199(1)

(a): A purchaser shall not be prejudicially affected by notice of any instrument fact or thing unless:“… it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him...”

Constructive noticeWilkes v Spooner:The purchaser of land/lease from one who has purchased it for value without notice, either actual or constructive of a restrictive covenant is not bound by the covenant although he himself had notice of it.duty imposed: see Property Law Act 1958 (Vic) s.44

o physical search of lando search of title documentso conduct investigations relating to

title

Imputed noticeProperty Law Act 1958 (Vic) s.199(1)(b) A purchaser shall not be prejudicially affected by notice of any instrument fact or thing unless:…in the same transaction ... it has come to the knowledge of ... his solicitor or other agent, as such, or would have come to the knowledge of his solicitor or other agent, as such, if such inquiries and inspections had been made as ought reasonably to have been made by the solicitor or other agent.


The prior interest will be postponed where the holder has been guilty of some negligence which has led a subsequent taker to assume the non-existence of the prior equity. (Lloyds Bank v Bullock)

o i.e. A has equitable mortgage and deeds, A loses deeds to B and not registered a cavet – B sells land to C.

o C is innocent and cannot be imputed for A’s negligence.

Farrand v Yorkshire Banking Co - Negligent Acts of Prior Interest - prior interest holder failed to get in the title deeds when he could have done so and his interest was held to be postponed to that of a subsequent encumbrancer

Legal Estate v Subsequent Equitable Estate

Prior legal estate prevails - unless the conduct of the legal interest holder constitutes postponing conduct (postponement of the legal estate will occur)

Failure to register a mortgage under Torrens Land NOT SUFFICIENT – not sufficient to postpone the mortgage to a later taker. (Lynch v OKeefe)

postponing conduct by legal owner – the prior interest will be postponed where the holder has been guilty of some negligence which has led to a subsequent taker to assume the non-existence of the prior equity (Bulter v Fairclough)

see Northern Countries Fire Insurance Co v Whippo 2 Types:o “fraudulent intent”

o Legal Estate - Holder of the legal estate has been a party to a fraud and the fraud has led to the creation of the equitable interest; the legal interest holder will lose priority.

A holds legal fee simple and enters into a mortgage in favour of B and then A and B collude to induce C to believe that there is no other outstanding mortgage over the property

o Agent - Where the owner of the legal estate has constituted the mortgagor his agent with authority to raise money and the estate thus created has by the fraud or misconduct of the agent been represented as being the first estate.

If the holder of the legal estate hands the title document to an agent with authority to raise a limited amount of money using the deeds as security for that amount and the agent borrows a larger sum than the authority permitted the legal owner would be bound by the security so created.

o Example eg Bike get stolen (legal interest in bike bc never disposed of it)

and thief sells bike to third party (legal interest – possess it); Forging of signature, sells land to third party for value (both

legal interests)Notes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.


o Reckless or grossly negligent o Failure to get in the title deeds - may suffice to postpose the holder of a

prior legal interesto Must be gross negligence – some special degree of want of prudence

must be shown i.e. Walker v Linom: - parting with title deeds without good

reason The first person has taken the risk by not taking possession

Equitable estate v equitable estate

1 better equity prevails if equities not equal Onus rest on the later claimant to show they are preferred – Platzer v

Commonwealth Bank

Better equity prevails – 1. Nature and condition of the equitable interests

a. Equity to the latest - Latec Investment v Hotel Terrigal – the later interest will succeed if the conduct on the part of the owner of the earlier interest has led the other to acquire his or her interest on the basis that the earlier didn’t exist.

b. TORRENS LAND - Failure to register a mortgage of Torrens system land or to lodge a caveat is not sufficient negligence to postpone the mortgagee to a later taker. Later interest is lost. (Lynch v OKeefe)

o Negligent Acts – o The prior interest will be postponed where the holder has been guilty of some

negligence which has led a subsequent taker to assume the non-existence of the prior equity. (Lloyds Bank v Bullock)

o i.e. A has equitable mortgage and deeds, A loses deeds to B and not registered a cavet – B sells land to C.

o C is innocent and cannot be imputed for A’s negligence.

o Farrand v Yorkshire Banking Co - o Negligent Acts of Prior Interest - prior interest holder failed to get in the title

deeds when he could have done so and his interest was held to be postponed to that of a subsequent encumbrancer

2 priority in time is a last resort Rule in Rice v Rice (1853):

“if their equities are in all other respects equal, priority of time gives the Notes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.


better equity; or, qui prior est tempore potior est jure” –interest first in time prevails only if “equities (merits) are equal”, and therefore:

Australian Guarantee Corp (NZ) Ltd v CFC Commercial Finance Ltd Example -

o Where A enters contracts to sell to B, and then A also enters into contract for C

o equity will search for the better equity

3 conduct and circumstances will affect priority

The Circumstances and manner of acquisition The Conduct of the parties with respect to the acquisition of their

interests – o conduct that arms the third party to present himself as unencumbered v

taking precautionso Second interest holder - If second equitable interest holder has

knowledge of earlier postponing conduct they cannot gain priority

Mere equity v subsequent equitable interest EXCEPTION TO ‘BETTER IN TIME RULE’ Subsequent Interest will defeat Mere if have Security Interest –

Where the holder of the prior interest has a mere equity: albeit one which could flower into a full equitable estate if exercised,

and

the subsequent holder has an equitable proprietary interest in the form of a security interest or an equitable estate which has been acquired for value and without notice of the previous equity,

the latter interest will prevail as ‘the better equity’. (Latec Investments Ltd v Hotel Terrigal Pty Ltd)

Exception Explained – o The recognition of a ‘mere equity’ in the Latec Investments decision

— is an exception to the rule ‘where the equities are equal, priority in time of creation is considered to give the better equity’ — has been applied in subsequent priority disputes. (Swanston Mortgage Pty Ltd v Trepan Investments Pty)

Prior Mere Equity defeats Third Party Subsequent Equitable – the prior [mere] equity will prevail against third parties - who are not

bona fide purchases for value of the land without notice of the equity Relevant to Torrens land



Equitable Mortgages Interest postponed if parallel reationship The interest of the prior holder will be postponed to that of a subsequent taker where the

holder of the prior interest vests the property in someone else and gives the other person the indicia of title to that property, enabling that other person to deal with it as his or her agent, regardless of any parallel relationship of trust thus created. (Abigail v Lapin)

Has an agent borrowed money beyond authority? Where an agent is armed with authority to borrow money on the security of deeds and

does borrow on that security, the sum borrowed will be a charge on the deeds even though the agent has fraudulently borrowed beyond his authority and appropriated the excess. (Hall v Commercial Bank of Australia)

Any guilty acts ? If yes, no right Apart from priority in time, the test for ascertaining which encumbrancer has the better

equity must be whether either has been guilty of some act or default which prejudices his or her claim. (Abigail v Lapin)

Loss of the priority claim also depends upon the status of the owner of the prior equity. A cestui que trustee is in a different position to that of a person who has another type of equitable estate or interest such as an equitable mortgagee, an unpaid vendor or the holder of a mere equity (Abigail v Lapin)



Acquisition and Formalities

1 Kinds of Acquisition ?1 Derivative acquisition – transfer from someone who already has a proprietary

interest, a. acquisition from another by sale or gift (consensual transactions)b. action of law/equity (bankruptcy, imposition of trust)

2 Adverse Possession - property may also be acquired without that person’s consent (eg. adverse possession)

3 Original Acquisition – absolute title via creation, manufacture etc

2 Formalities required for Sale of Goods ?

Property (title/ownership) passes when intended to pass –o specific goods in a deliverable stateo property passes at the time of contracto different treatment for ascertained goods and unascertained goods

Goods Act 1958 (Vic) ss. 21 (unascertained) and 22 (ascertained)

Specific goods – property passes at the time the contract of sale is madeo no gap between the making of the contract for sale and the passing of title

3 Formalities required for Sale of Real Property ?

Agreement in Writing - s.126 of the Instruments Act 1958 (Vic) o Contract must be evidenced in writing and signed by the party to be chargedo REFER 4 below

Time lapse between contract of sale and when legal title passes to purchaser – allows purchaser to investigate defects in title and organise finance

o Formalities needed for an effective sale of real property (including leases)o The consequences of failure to comply with the formalities



Torrens land - Transf er of Land Act 1958 (Vic) – s40(1) o the legal interest passes on registration

this requires the following steps:1 Execution of memorandum of transfer2 Delivery of transfer to donee3 Delivery of (‘duplicate’) certificate of title4 Lodgement of documents for registration5 Registration

o KEY FOR REGISTRATION - TLA s.40(1) ‘….no instrument until registered…shall be effectual to create vary extinguish or pass any estate…in land…but upon registration the estate…shall be created…or pass in the manner and subject to the covenants….’

o TLA s.40(2): ‘Every instrument when registered shall be of the same efficacy as if under seal and shall be as valid and effectual to all intents and purposes as a deed duly executed and acknowledged…’

General law land – conveyance must be by deed o Contained in ss.52-55 of the Property Law Act 1958 (Vic)

s.52(2) where this requirement does not apply deeds:

Conveyances must be by deed - otherwise they are void ***Must be ‘signed, sealed and delivered’ Execution of deeds : PLA ss.73, 73A

o PLA s57 - Description of deedso PLA s73 - Execution of deeds by an individual – must either

sign or place mark upon the deed. Sealing alone is not sufficient

o PLA s73A - Sealing of deeds – An executed deed does not need to be sealed

o General law land – Property Law Act 1958 (Vic) s.18(1) Conveyance - includes a mortgage, charge, lease, assent, vesting

declaration, disclaimer, release, surrender, extinguishment and every other assurance of property or of an interest therein by any instrument, except a will; “convey” has a corresponding meaning

Instrument - includes deed and will but does not include a statute, unless the statute creates a settlement

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)

3 Formalities required for Contract for Sale ?

Agreement in Writing - s.126 of the Instruments Act 1958 (Vic)o Contract must be evidenced in writing and signed by the party to be chargedo S53 of the Property Law Act 1958 (Vic)

What interest the purchaser acquire by contract and before settlement?



For Land – o legal title passes on:

execution of deed of conveyance (general law land) registration of an instrument of transfer (Torrens system land)

o equitable title passes on: entry into a specifically enforceable contract of sale Refer TO 5 BELOW

4 What if not in WRITING? – Part Performance

Contract is not void, or voidable, but “unenforceable” – Mason v Clarke Specific Performance –

o to be specifically enforceable, a contract for the sale of land must:1 either be in writing (s126) etc. OR be oral and supported by sufficient

acts of part performance; and 2 damages must be inadequate; and3 there must be no bar to specific performance 4 hardship must not be caused to D by decree

Oral Agreement supported by Part Performance - Where plaintiff establishes sufficient acts of part performance to justifty that the contract

was oral, the defendant is required in equity, to fulfil the contract (JC Williamson v Lukey)

Part Performance –o Requirements:

oral agreement; and sufficient acts of part performance

Property Law Act 1958 (Vic) s.55 – savings in regard to ss.53 (requirement of writing for creation of interest in land) and 54 (creation of interests by parol): ‘Nothing in the last

*****Test of Part Performance – *****Must have:

1 That Plaintiff relied on the acts as part performance of the contract Maddison v Alderson – The acts relied upon must be done by a party to the

contract. Taking Possession is a Typical Act of Performance – McBride v Sandland Was there reliance? Usually very clear.



2 The extent to which the plaintiff relied on those acts Ogilvie v Ryan - The acts must point to some contract between the parties

that on the balance of probabilities would indicate an oral agreement occurred or is consistent with the acts which happened.

3 The sufficiency of the acts Must be ‘unequivocal’ – (McBride v Sandland)

Regent v Miller - ‘the acts did not have to be required obligations under contract – it is enough that they were carried out – indicated oral agreement asserted is suffice’

Must be directly referable to the oral agreement (McBride v Sandland) Maddison v Alderson (1883) AppCas 467 at 475: ‘… the acts relied upon as part performance must be

unequivocally and in their own nature referable to some such agreement as that alleged’

Are there acts, sufficient enough to constitute exclusivity – Mason v Clarke – Hunting rabbits for lease reversed to hunts for game (profit a

prendre). No deed, no written licence. Acts were sufficient as ‘set snares, paid helpers, took rabbits’

Regent v Miller – P paid for part of house, D alleges no contract. Ruled that P improved house, took keys, moved stuff in – sufficienct acts.


Non-compliance with s.126ANZ Banking Group v Widin (1990 FCFCA) mortgage form signed by Widin on 5 January 1983 did not

include the date and particulars of title Widin also signed authority to ANZ to complete the details,

diary note made referred to the property money credited to Widin on 14 January 1983 mortgage form completed in September 1983 Held (Hill J): details of the land as the subject of the

mortgage had to be included in whatever was signed by Widin.

Although incorporation by reference to another document was permissible, the diary note could only be related to the mortgage by oral evidence, so inadmissible.

Oral Agreement – Performance allowed AgreementMason v Clarke (1955 HL) the written lease reserved the right of SMT to hunt for game

(ie. a profit à prendre) SMT orally agreed with Mason that in consideration of

£100, he could hunt rabbits on the land for 1 year the question whether SMT (and Mason) had a right to hunt

etc. depended on whether the oral agreement was enforceable

Held: although no deed, so no legal profit à prendre, and no note or memorandum evidencing the oral agreement, Mason had set snares, taken rabbits, paid helpers, and these acts were part performance of the oral agreement and exclusively referable to it

Oral Agreement – Performance allowed AgreementRegent v Millet (1976, HCA) Regents paid $4,500 for a house of which $1,000 was paid in cash and the balance borrowed under a mortgage from a bank subsequently they agreed with their daughter and son in law (Millets) that in consideration of the Millets paying off the mortgage

and repaying the $1000, they could take possession of the house, and once paid off, it would be transferred to them (creation of interest in future)

Millets took possession and started paying off the mortgage, making repairs, renovations etc – then the Regents renegedQuestion: had there been sufficient acts of part performance? Held: Yes, it was sufficient if the acts unequivocally and in their own nature were referable to some contract of the general

nature of the one alleged the acts did not have to be required obligations by the contract – enough that they were carried out under it here, the taking of possession was critical, in itself sufficient, and strengthened by the expenditure on improvements etc. for Regent, if the alleged acts of part performance, in all the circumstances, point on the balance of probabilities to some

contract and indicated the nature of or were consistent with the oral agreement asserted, that would suffice


5 Equitable Doctrine of Conversion ? SPECIFIC PERFORMANCE

The equitable doctrine of conversion Interest prior to the agreement finishing

Innocent party must have to been willing and able – Bunny Industries v FSW

An act of stoppage - An agreement being created between original parties and then some event occurring which stops the agreement being carried out.

Bunny Industries v FSW Enterprises – o FSW sold land to BI, and then sold to another. BI claimed property was on

trust for them and wanted specific performance. o Held: Although specific performance was no longer available, it is

sufficient to show it would have been available when FSW first contracted with BI. BI was then ready willing and able to perform and FSW had wrongfully repudiated.

Example Assume a contract of sale between A and B –

o Before settlement, A has the legal title, but B is recognised in equity as the beneficial owner

o Trust - A holds legal title to the property as [constructive] trustee for B.o A has a right to the purchase money and a charge/lien as security for it, and a right

to retain possession until paid (to the extent of the balance owing, ie 90%)o so A’s interest is characterised as personality, B’s is real property


Interest prior to completion – i.e. Death before Completion of ContractLysaght v Edwards (1876 Eng) L contracted to buy land from E and had paid a deposit, but E

died before settlement. Under E’s will, his widow was the executor who was to inherit his personal property. H&M were to take the realty.

was L entitled to specific performance? Jessel MR held Yes. The land was held on trust for L when E died and legal title passed to H&M, as trustees for L.

o if anything happens to the land between the time of contract and settlement it is at L’s risk

the Vendor has:

Sold to Third Party before Contract FinishedBunny Industries v FSW Enterprises Pty Ltd (1982 FCSCQ) FSW entered into a contract for the sale of land to BI who paid a

deposit. Later, FSW sold to P2 for a price that may have been higher. P2 settled and became registered as owner.

BI claimed FSW held the property on trust from the time of the contract and that it had breached the trust in selling to P2. BI sought a declaration that FSW held the proceeds of sale from P2 on trust for BI.

Held: Although specific performance was no longer available, it is sufficient to show it would have been available when FSW first contracted with BI. BI was then ready willing and able to perform and FSW had wrongfully


GIFTS - LAND

Gifts of real property Gifts:

o Not supported by consideration - A transfer of property not supported by consideration

o Equity will not assist - Equity will not assist a volunteer

Gifts of o General law land

1 An effective gift - of general law land requires execution of a deeda. (Refer Acqusition and Formalities)

2 The donor must execute a conveyance in favour of the donee a. Property Law Act 1958 (Vic) s. 52(1)

o If not 1 & 2 then gift fails in equity and law: Equity will not assist a volunteer Equity will not perfect an imperfect gift

Gift of Land in EQUITY Equity may recognise a gift as effective before the legal formality of

registration is completedo Carrying out that intention matters –

eg. execute transfer and give it to donee

o To complete a gift in equity MUST HAVE: Corin v Patton (1990) 169 CLR 540

1 Vesting title within control of done - Must place the vesting of the legal title within the control of the donee and beyond the control or intervention of the donor.


Interest prior to completion – i.e. Death before Completion of ContractLysaght v Edwards (1876 Eng) L contracted to buy land from E and had paid a deposit, but E

died before settlement. Under E’s will, his widow was the executor who was to inherit his personal property. H&M were to take the realty.

was L entitled to specific performance? Jessel MR held Yes. The land was held on trust for L when E died and legal title passed to H&M, as trustees for L.

o if anything happens to the land between the time of contract and settlement it is at L’s risk

the Vendor has:

Sold to Third Party before Contract FinishedBunny Industries v FSW Enterprises Pty Ltd (1982 FCSCQ) FSW entered into a contract for the sale of land to BI who paid a

deposit. Later, FSW sold to P2 for a price that may have been higher. P2 settled and became registered as owner.

BI claimed FSW held the property on trust from the time of the contract and that it had breached the trust in selling to P2. BI sought a declaration that FSW held the proceeds of sale from P2 on trust for BI.

Held: Although specific performance was no longer available, it is sufficient to show it would have been available when FSW first contracted with BI. BI was then ready willing and able to perform and FSW had wrongfully


2 Once done, gift is complete - Once that stage has been reached and the gift is complete and effective in equity, the equitable interest in the land vests in the done

3 Must be in Writing

**TEST for whether Gift is Complete FROM Milroy v Lord :** ***Milroy v Lord (1862) Turner LJ:

the [donor] must have done everything which, according to the nature of the property comprised in the [gift], was necessary to be done in order to transfer the property…

Must consider whether the donee has been given property in, rather than mere possession of:

o Memorandum of Transfero Any necessary title documents

Once these things have occurred:o Equity enforces assignment and donor is restrained

from derogating from the gift. (Corin v Patton)

o Torrens land o the legal interest passes on registration

Transfer of Land Act 1958 (Vic) s.40(1) this requires the following steps:

1 Execution of memorandum of transfer2 Delivery of transfer to done (Corin v Patton)3 Delivery of (‘duplicate’) certificate of title4 Lodgement of documents for registration (Cope v Keene)5 Registration

o KEY FOR REGISTRATION - TLA s.40(1) ‘….no instrument until registered…shall be effectual to create vary extinguish or pass any estate…in land…but upon registration the estate…shall be created…or pass in the manner and subject to the covenants….’

o TLA s.40(2): ‘Every instrument when registered shall be of the same efficacy as if under seal and shall be as valid and effectual to all intents and purposes as a deed duly executed and acknowledged…’

Gift of Torrens land in EQUITY o As above AND must have done:

All that is necessary to effect a legal transfer in order for equity to recognise the transfer (Costin v Costin)

Execution of Memorandum of Transfer CAN OCCUR after the death of the transferor (Corin v Patton)



GIFTS – PERSONAL PROPERTY –

CHOSE IN ACTION/INCOMPLETE GIFTS

1 What is a chose in action ?

Chose in action: Intangible property (Incorporeal) – Brice v Bannister Personal Debts, goodwill, rights under insurance policy, shares in a company, bill of exchange,

intellectual property Duty on individuals not to interfere with the use and enjoyment of the personality by its

rightful owner or possessor Purely a means by which others can be called upon to do or refrain from doing something

Money:o Deposit of money into a bank account creates a debtor/creditor relationshipo Banco de Portugal: The proper measure of damages was the exchange value

expressed in sterling of the genuine currency given in exchange for the spurious notes together with the cost of printing the genuine notes withdrawn.

Bills of exchange/Cheques: (Willingale (Inspector of Taxes) v International Commercial Bank Ltd )

Negotiable instrument: it has value worth more than the paper Rights can be transferred and signed over to someone else Bearer instrument – bearer is transferred by delivery. Order instrument – is transferred

by signature, forged signature is ineffective.



Intellectual Property: Patents, trademarks, registered industrial designs, trade secrets, know-how Copyrights – the exclusive entitlement of the creator of an intellectual work to copy,

publish and distribute the work: s196(1) Copyright is personal property and subject to this section is transmissible by assignment, by will and by devolution of law

o Wheatley v Bell: There are no property rights associated with an equity to restrain a person from acting in breach of confidence. So that the equitable defence of bona fide purchaser for value does not apply

o Oxford v Moss: Theft can only operate in relation to property and confidential information is not property so you cannot be charged with theft of information. Confidential information did not fall within the definition of intangible property

Shares in a company:o Shareholders are owners, voting rights, dividends, capital if co wound up

Bank Account:o Right to sue bank for debto no obligation to repay you the actual notes you gave them

Future Chose in Action

A future chose in action is the prospect or possibility of becoming entitled in the future to a proprietary right. (Norman v FCT) MUST HAVE:

The beneficial interest passes to the assignee as soon as the assignor acquires legal ownership - provided that the property has been sufficiently described to be identifiable. (Palette Shoes v Krohn)

The assignee’s interest in the after acquired or future property is sufficient to survive the assignor’s bankruptcy - (Industrials Finance v Lind)

Consideration is essential in order to bind the conscience of the assignor.

(Norman v FCT)

Future choses in action include:

(1) the possibility that a debt may mature; Bakewell v DCT(SA)

(2) the possibility of monetary benefit upon the intestacy of a person; (Redman v Permanent Trustee Co of New South Wales Ltd) or

(3) a right to dividends not yet recommended or declared that may arise in the future. (Southern British National Trust Ltd (in liq) v Pither)



2 What is the legal assignment of a CHOSE IN ACTION IN EQUITY?

s.134 PLA - Transferring choses in Action - s.134 PLA - creates a method of transferring choses in action at common law

4 Critical Steps are involved from Norman v FCT 1 Must be written

2 Must be signed

3 Written notice must be given to the party with the corresponding obligation (the person from whom the obligation is owed eg written notice to the Bank who is obliged to pay money)

Written notice does not have to be given to anyone in particular

4 Not used for assigning part of a chose in action (if you only want to assign $100 out of bank account this must be done in equity, all you have to do is manifest a clear intention)

5 First in time prevails – Redman v Permanent Trustee of NSW

Special Cases

Negotiable Interests (Cheques) Assigned by simply handing over paper - can be assigned simply by handing

over the paper (A combination of a chattel which has value built in) Delivery chattel is giving right - by simply delivering the chattel you are also

giving them the right to the proceeds of the check

SharesNotes by All Things Law – http://law.timdavis.com.au - A Law Forum to discuss everything about Studying Law - from Law Subjects, Notes and Questions to Law Clerkships and Jobs.


A share is personal property and a chose in action. A share is transmissible and transferable as provided by the company’s constitution. A share is capable of devolution by will or by operation of law

Limitations of Action – Limitations Actions Act s6 Successive conversion of goods: no action shall be

brought after 6 years

3 What are incomplete GIFTS CHOSE IN ACTION?

S134 – PLA – Legal Assignments of Things in Action Must be in Writing

Equity may recognise a gift as effective before the legal formality of registration is completed

o Carrying out that intention matters – eg. execute transfer and give it to donee

o To complete a gift in equity MUST HAVE: Corin v Patton (1990) 169 CLR 540

1 Vesting title within control of done - Must place the vesting of the legal title within the control of the donee and beyond the control or intervention of the donor.

2 Once done, gift is complete - Once that stage has been reached and the gift is complete and effective in equity, the equitable interest in the land vests in the done

3 Must be in writing

Norman v FCT o Chose in Action – MUST:

To make an immediate gift of a chose in action - executes an instrument that meets the requirements of the statute

Delivers it to the donee, actually or constructively - he has put it out of his power to recall the gift.



o express or implied authority is what is crucial – actual or constructive delivery would constitute

GIFTS – PERSONAL PROPERTY – CHOSES IN ACTION

CHATTELSo deed of gifto deliveryo willo declaration of trust

Requirements for valid gift of chattels by delivery1 The donor MUST:

a. have legal capacity to make a giftb. own the propertyc. have intended the transaction as a gift (donative intention)

2 Gift intended to be made immediately

3 The gift must be accepted by the donee

4 There must be delivery of possession o Principles are:

Must have Control of the Thing (Re Cole) Must have Intention to Possess (Re Cole)

Already in Possession - If the donee is already in possession of the chattels (as bailee or in some other capacity), no further act of delivery is necessary (Re Stoneham)

If not in possession, only delivery required - When the words of gift are made, actual delivery only required where chattel not in possession of


Norman v FCT (1963) 109 CLR 9Facts Under a deed made in 1956, Norman purported to (gratuitously) assign to his wife ‘all his right, title and interest’ for the 1957-8 tax

year:o to the dividends on shares he ownedo to the interest on £3,000 of a £4,600 loan to a firm

Under the loan agreement, the firm was at liberty to repay all or part of the principal without notice, while Norman could demand repayment only with 18 months notice

The FCT argued that the assignment was ineffective, and that the dividend and interest income were both taxable in the taxpayer’s hands

Windeyer J – ‘to make an immediate gift of a chose in action that is his, executes an instrument that meets the requirements of the statute [PLA s.134] and delivers it to the donee, actually or constructively, he has put it out of his power to recall the gift.’


donee, to require taking back and redelivery would be futile. (Re Stoneham)

Words are not sufficient – Words of gift are insufficient without a change of possession (Re Cole)

If delivery is impractical, symbolic delivery enough – If the gift of a chattel is too large or bulky, then symbolic delivery is enough (Rawlinson v Mort)

Intention and Delivery Coincide – If both intention and delivery coincide, then a gift is effectively delivered (Thomas v Times Book Company)

Special Cases Deed of Gift (Cochrane v Moore)

o The deed has the same formal requirements as for a deed Is an absolute method of transferring legal title to the donee. Contract with nominal consideration

Declaration of Trust o Equity will not transform an imperfect gift into a declaration of trusto Words are not sufficient – Words of gift are insufficient without a change of

possession (Re Cole)


Delivery – Re Stoneham (1915 EW Chancery Division) Robert Stoneham had possession of his

grandfather’s furniture, arms and armour for 2 years before his grandfather said he could keep them

the grandfather died and a contest developed over ownership of furniture, arms and armour between Stoneham and those taking chattels under the grandfather’s will

Held – if the donee is already in possession of the chattels (as bailee or in some other capacity), no further act of delivery is necessary when the words of gift are made, actual delivery only required where chattel not in possession of donee, to require taking back and redelivery would be futile

Delivery – Re Cole (1964 EW Court of Appeal) in 1945, husband leased a mansion and spent

£20,000 furnishing it, he took his wife to the mansion, showed her around the rooms and said “it’s all yours”

they lived together there until 1961 when husband became bankrupt

the house was owned by and in possession of bankrupt

wife claimed (against trustee in bankruptcy) that the furniture was hers

Held – there was no delivery, words of gift are insufficient without a change of possession

Delivery – Rawlinson v Mort (1905) EW King’s Bench) if actual delivery is impractical (eg. chattel is too

large and bulky), symbolic delivery may suffice the owner of a church organ which had been lent

to a church visited the organist at home and said he would like to give him the organ

the owner then handed over the receipts he’d received form the organ builder and a letter from the vicar acknowledging the loan of the organ

later, in front of the organist and 2 witnesses, he put his hands on the organ and said he had given it to the organist

Held –gift was effective because there had been actual delivery of possession, or at the least, a symbolic delivery, by the handing over of documents to the plaintiff

Thomas v Times Book Company Ltd (1966 EW ChD) Dylan Thomas told Cleverdon that if he found

the original manuscript of Under Milkwood, he could keep it

Thomas mentioned various places where it might have been left

C searched for the manuscript and eventually found it at a hotel which had been identified by Thomas, who subsequently died

C sold the manuscript to another who sold it to the defendants

Caitlin Thomas, the administratrix of his estate, sued the defendants for return of the manuscript

Held – Thomas was still alive when Cleverdon found it and didn’t revoke the gift, intention and delivery coincided and there was effective delivery even if the donee had to effect that

Jones v Lock Jones put a cheque for £900 made out to himself in the hands of his baby son and said “look you here, I

give this to baby; it is for himself and I am going to put it away for him” Took the cheque away from his son and said to the nurse “I am going to put this away for my own son”, and

locked it in his iron safe


Donationes Mortis Causa o Where a person is in immediate risk of death or high risk of death and they make a

gift of personal property: Conditional upon his or her death and delivers the property which is the

subject of the gift or some other symbol of it to the done prior to death The gift will be completed by the death of the donor if there is a short in

the rest of the estate Smith v Casen

o Real property is not capable of being a subject under this – as no delivery of deeds of title (Watts v Public Trustee)


Jones v Lock Jones put a cheque for £900 made out to himself in the hands of his baby son and said “look you here, I

give this to baby; it is for himself and I am going to put it away for him” Took the cheque away from his son and said to the nurse “I am going to put this away for my own son”, and

locked it in his iron safe


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