Topic2.1PossessionandTitle

Ø MeaningØ ScopeØ Enforceability

(1)Possession

• Possessionisnotoriouslydifficulttodefine(TooheyJ,Mabo2)• Possessionisthephysicalconceptreferringtooccupationoflandorcontroloveran

objectorathingforoneself• Componentsofpossession:

1. Factualcontroland;2. Intentiontopossess.

• Example:

o Aboughtabook.AgivesBabooktoread.Bisreading.XtakesbookfromBanddoesn’twanttogiveitback.Aistheownerofthebook.Acangetthebookbackbyclaimingdamages.Bhasarightofpossessionbutmay/maynothavearemedy.

Control• Appropriatelevelofcontrolisrequired

o Inthesensethatpossessormustbeabletoexcludeothers• Absolutepowerofcontroltotheexclusionofothersratherthantemporaryorfleeting

control• Somedegreeofpermanenceorsomeformofcontrolisrequiredforthefactual

elementofpossession• Degreeofcontrolrequireddependuponnatureofobjectandcircumstances(dwelling,

land,chattels)o Fullcontroloversmallobjectsinyourpocketo Explorecontrolforlargerobjects:

§ House=accesstohouseandhavethekeytoitequalspossession.§ Farm=differentformmightberequired,shouldbeabletoexcludeothers

andassertcontrolevenifyouleaveandreturn.§ Itdependsonthefactsofeverycase

Consent• Possessionmayarisebyconsensualornon-consensualway:

o Consensual:possessionisconsentedtoandlimitedortemporalinnature(lease/bailment)coupledwithrighttoreclaimthegoods

§ Enterintoleaseandacquirepossession.Expiryofleaseyoumustreturnpossession

§ Bailmentlookingaftersomethingandmayexercisecontroloveraperiodoftime

o Non-consensual:moreenduringpossessionwithoutconsentofowner

§ Withoutconsentoftheowner

Summary• Summaryofmethodstoacquirepossession:

o Consensualpossession:sale,lease,giftorbequestetc.o Misplaced/lostgoods(finder)

§ Finderfindstheobjectandexercisescontrol(factualcontrolwithintentiontopossess)

o Goodsneverpreviouslypossessed(discovery)§ Forexamplepickingupashellandexercisingcontrolandacquirepossession

andevenownership.o Stolengoods-evenwrongfulpossessionisprotected

§ Controlexercisedbythiefisstillrecognisedaspossessionandmayalsohaveconsequences

(1A)LegalConsequencesofPossession

• Uponacquisitionofcontrolwiththenecessaryintentionpossessionhaslegalconsequences:

• PossessionconfersalegaltitleuponaholderandarecognizableenforceablerightinEnglishcommonlaw

o Entitledtodefendyourpossessionasapossessorwitharightbutplaysoutagainstthehierarchyofrights

§ Example:AownsthebookandhasasuperiorclaimagainstBandXbyvirtueofownership.B’scontroloverthebookisatitle,whichisenforceableagainstthewholeworldexceptagainstthetrueowner.

§ Theproprietarytitleisstrongerthanpossessionarytitle.

• Possessormayacquiretitlewhichisalmostasgoodasownershipbecauseitisenforceableagainstthewholeworld,exceptowner

• Possessionmaybesubjecttocontractualduties(ii)AbsenceofOwner(Finder’sCases)Possessorytitleisimportantwhengoodsarefoundinabsenceofowner

• HannahvPeelo Hannahfoundabroochinaremotepartofhouse(whichbelongedtoPeel)The

housewasusedbythemilitaryduringthewar(Peelnevermovedintothehousewhichhebought)

o HannahhandedbroochtoPolicewhogaveittoPeel(whosoldit)o Hannahsuedtoregainpossessionofthebroochoritsvalue

• (i)Hierarchyoftitle:o Trueownerhasaproprietarytitleo Possessorhasapossessorytitleo Trueownerhasasuperiorclaimtoobjectthanpossessoro Possessor’stitleisenforceableagainstthewholeworld,exceptowner

o Ownercanalwaysclaimitbackfromyouo Proprietarytitleisstrongerthanpossessorytitle

o Peelassertedthathehadsuperiortitlebecausethebroochwasfoundonhisproperty

o Held:Finderofbroochwasheldtobeinpossessiondespitethefactthatthehousedidnotbelongtofinderandthetrueownerofbroochcouldnotbelocated

o Actoffindingandretainingbroochconstitutedphysicalactofpossessionandtherebyconferredpossessorytitleuponfinder

§ Hertitlewassuperiortothetitleoftheownerofthehouse,ownershipofthehouseisnotinquestionbutthelostpropertywithinit.

o Finderhassuperiortitletolostproperty

• TheTubantiao Theactofdivingtoinvestigateashipwreckindeepseaandemployingdiversfor

salvageworkforconsistentperiodsoftimeconstitutedpossession§ Acquirepossessionofwreckdespitenotbeingthere24hoursaday

(1B)ScopeofPossessoryTitle• Confersatitlewhichisgoodagainstalltheworld,exceptforthetrueowner

o E.g.iftrueownerofbroochwasdiscoveredandthatpersonwouldbeabletoclaimitback,butPeelwasnotasubsequentpossessor.

• Lostwalletexample(CB70)o Possessionisnine-tenthsoflawo Ifyouloseyourwalletandsomeoneacquirescontrol,hehaspossessionbefore

givingittothepolice.Lookingat‘Possession’inDefinition

• Twoaspects:o Factualaspect:physicalpossession(choateright):confersapresentenforceable

rightuponpossessor§ Ifyouhavephysicalpossessionyoucandefenditagainsttherestofthe

worldoutsideito Legalaspect:legaltitlewhichsuchpossessiongivestoholder

§ Youhavecontrolbutifsubsequentlylosingcontroloverit(notphysicalcontrolanymore)inanunlawfulmannerthenyoucanclaimitback.

Righttocontrolandadormantrightthat,iflosingpossession,youcanclaimitback.Thusdespitesubsequentlossthetitleismaintained

§ Priorpossessorytitle(inchoateaspect)confersadormantrighttoenforcepossessionifpriorpossessorhasbeenwrongfullydispossessed

• Dualnatureofpossessorytitle:containsapresentenforceablerightuponpossessorin

physicalcontrolanddormantrighttoenforcepossessionifwrongfullydispossessed(priorpossessorytitle)

o Canclaimitbackdespitesomeoneelsebeinginpossessionofitnow.o Priorpossessorytitleisanenforceabletitleagainstsomeoneelse

• Possessorytitlecannotbeacquiredoversomethingwhichcannotbeowned(humanlife\corpse)

o Ownershipoveracorpseisnotrecognised,theexecutormustdealwiththecorpse.DoodewardvSpence(CB71)

• Thepoliceseizedthebodyofatwoheadedstillbornbabywhichhadbeenpreservedinabottlefromanexhibitorshowingitatexhibitions.

o Wantedtoclaimitback.• GriffithsCJ:ifcorpseischanged(dissecting/preserving),itgainsanotherqualityandthusit

canbeowned.Uponexerciseofworkorskillahumanbodyacquiredsomeattributesdifferentiatingitfromamerecorpsearighttoretainpossessionmaybeacquired.Anorderwasmadeforitsreturntheflaskwithbaby.ImportantPossessionPrinciplesinDissenting:

• HigginsJ(dissenting):Ifpropertyincorpsewaspossible,propertyofplaintiffo Itisenoughthatplaintiffwasinpossessionofthecorpseandthedefendanttookit

havingnobettertitlethantheplaintiffo Merepossessoristreatedbylawashavingpropertyingoodsagainstonewhotakes

itfromhimwrongfullyo Thelawtreatstherightofmerepossessorasagainstsomeonewhotakesitfrom

himas‘specialproperty’o Basisforrecoveryofpossessionisirrefutablepresumptionagainstthewrongdoer

thatpossessorisownero Amerepossessorcanrecoverfullvalueofchattelo Possessorytitlecannotariseoversomethingwhichcannotbeownedo Ifnopropertyincorpse–nospecialpropertyincorpseo Noactionfortrover/detinueforthingwhichcannotbeowned(corpse)

• ImportantPrinciple:tobeabletoclaimpossession,itmustbecapableofownership.

(1C)PossessoryTitleofPersonalProperty• Physicalpossessionofpersonalpropertyisevidenceoftitle:personinpossessionis

treatedasownersaveagainstsomeonewithabetterrighttotitle• Dispossessedholderhasarighttorecoverchattel• Dispossessedholdermustprovearighttorecoverchattelfrompossessor• Problemwherechattelislostandlaterfoundbystranger

• ArmoryvDelamirie

Exampleoffinder’scaseillustratingthatthefindercanacquirepossessorytitledespitenoconsentfromtrueowner.

o Boyofchimneysweeperfoundaringwithjewel;tookittogoldsmithforanappraisalwhorefusedtohandbacktheremovedjewel

o Boysuedsuccessfullyformoneydamagesforthevalueofthejewelo Courtheldthatafinderofachattel,thoughhedoesnotacquireownership,has

sufficienttitletosueastrangero Boy’srighttopossessionisbetterthangoldsmith’sactualpossessiono Boy’stitleissuperiortoanyoneexceptowner–becausetheboydiscovereditand

founditpriortopossessionofgoldsmitho Finder’spriorpossessionenablehimtoholditagainstallbuttherightfulowner

• Summaryo Boyhadpossession,waswrongfullydeprivedofpossessionandsohehadtitleto

sueashehasapriorpossessoryright.Theboy’spossessionwassuperiorthanthegoldsmith’spossessionashediscoveredit,buttheboyspossessionwouldnotbesuperiorthanthetrueowner.

FindersKeepersRule(CB2.12)àLOOKATFINDERSPRINCIPLEatbottomoftopic• Apersonthatacquirespossessionofgoodscanclaimpossessiontoenablehimtokeepit

againstallbuttheownerwithabetterright(ArmoryvDelamirie)o Theowneronlyhastherighttorecovergoodsfrompossessor

• Theowneroutofpossessionwhoseekstorecoverpossession,mustshowanabsoluteright

• Iflostpropertyisfoundthefinderwillacquiretitle• Finderoflostpropertysupersedesallclaimsexceptthatofpriorpossessorortrueowner

ObjectIntegratedintoLand• Wheretheobjectbecomespartofthelandtheowneroflandis,however,awardedthe

objectoverthefinderbecauseheownsthelandandhadpriorpossessiono E.g.broachlostforyearsintegratedintothesoil,thentheowneroftheland

becomesowneroflostthingdespiteXdiscoveringit.§ Doctrineoffixture

• Ifgoodsarediscoveredonlandbelongingtoathirdpartythefindercanonlyacquirepossession(and,thereforetitle,)iftheownerofthelanddidnotmanifestaclearintentiontocontrolallgoodsdiscoveredontheland

WaverleyBoroughCouncilvFletchero Peopleusingmetaldetectorsovercouncil/publiclandfoundabroach–council

argueditbelongtothem• CollisionoftwonotionsofEnglishlaw:“finderskeepers”anddoctrineoffixtures• Raisestwoquestions:

(a)Whoasbetweentheownerandfinderofanarticleinorattachedtoland,isentitledtothearticle?(b)Howistheanswerin(a)affectediflandispublicopenspace?

• Whereanarticleisfoundinorattachedtoland,asbetweenowneroflandandfinderofthearticle,theownerofthelandhasthebettertitle

o Becauseofdoctrineoffixtures.• Whereanarticleisfoundunattachedtoland,asbetweenthetwo,theownerhasabetter

titlethanfinderonlyiftheownerexercisedsuchmanifestcontroloverlandastoindicateanintentiontocontrollandandeverythingthatmaybefoundonit.

o Howtoshowthisintention?Courtshowedthatcouncilhadsomeintentiontocontroltheland.

ControloverLandWaverleyBoroughCouncilvFletcher

• Sameprinciplesapplytolandwhichisapublicopenspace• Councilhad‘manifestcontrol’overtheland:

o Councilemployedarangertopatrolparko Declaredpolicytoprohibitmetaldetectors(Notices)o Noticespulleddownbutrangerstillapprehendedthoseusingdetectorso Detecting,diggingandremovalofpropertyinlandwasprohibited

• Diggingandremovalofbroochwasnotpermittedunderthetermscouncilheldland• Diggingandremovalwereactsoftrespass• Thecouncilhadthebetterrighttothebrooch• Asithadbeenfoundwithinorattachedtotheland,ratherthanonthesurface,itbelonged

tothepersonwhoownedthesoil

o Doctrineoffixtureso Butiflyingloose,thefindercanacquirepossessorytitleunlessownerindicates

controlovertheareaandtheland

(1D)Enforceabilityofpossessorytitle• Indisputesbetweenpartiesoverlandthecourtsfocusedonwhohadbetterrightof

possession• Possessorytitle(owner’srightenforceableagainstthewholeworldbutthetrueowner)

differsfromproprietarytitle(walletownerexampleashisrightisalwaysenforceableagainsteveryone)

o Possessoryaswideorextensiveasproprietarytitleunlessadversepossessioncomesintoplayasadefenceagainstaclaimagainsttheowner.

• Theprimarydifferencebetweenproprietarytitleandpossessorytitlethusliesinthescopeofenforceability:

o Proprietarytitleisenforceableagainstalltheworld(inrem)o Possessorytitleisenforceableagainstthewholeworldexceptforthetrueownero Possessorytitleisarelativeconceptinthesensethatitsscopeofenforceabilityis

notaswideasproprietarytitle• Inanycompetitionbetweenpossessoryandproprietarytitle,theownerwillalwaysdefeat

thepossessor(unlessthepossessorytitlehasacquiredadditionalstatutoryprotection(limitationsofaction)):possessorytitleistransformedintoadversepossession

(1E)Competitionbetweenpossessorytitleholders• Adistinctionismadebetweenlegal,priorpossessorytitleandfactual,currentpossessory

titleo AhasfirsttitleandthiefXhassecondtitle.Disputeastowhocanclaimbook

becausebothacquiredlegallyenforceablepossessorytitle.o Onerightwillbestrongerthantheother.

• Disputesmayoccurbetweenpriorpossessorytitleholderandcurrentpossessorytitleholder

o Bothpersonsacquirelegallyrecognisedandenforceabletitle

• Therightofthepriorpossessoroverlandwilldefeatthoseofsubsequent,physicalpossessor.

o Don’twantbreachofpeaceinthecommunityifthievescanacquirebetterpossessionoverpreviousowner.

• AshervWhitlock:Priorlegalpossessionreceivespriorityoversubsequentfactual

possessiono Williamsonlivinginland,enclosedpartoflandofmanorbelongingtothelordof

manoro Builtacottageonthelanddespitenoownershipo Hedevisedhisinteresttohiswifeuntilherdeathorremarriageandthentohis

daughterinhiswill

o Whenhedied–ideawasthatshegotpossessionaslongasshedidn’tmarryetc.Thengoestothedaughter

o WidowmarriedWhitlockandlivedonwithactualpossessiono Widowanddaughterdiedo Whitlockremainedin(actual)possessiono Daughter’sheir(Asher)claimedpossessionoflandIssue:o Canasquatteracquiresrightswhichwouldentitlehimtobringanactionagainsta

dispossessor?Cantheserightspassbyawill?§ ActualpossessionorAcquiredpossession

o DecidedthatAsherhadabetterrighttopossessionthanWhitlocko Possessorytitleconfersarangeofrightsincludingtherighttoalienate(sell,

bequestordeviseunderwill)o Possessorytitleiscapableofbeinginheritedo Found:Williamsonsrightofpossessionpassedtohiswifeuponhisdeaththento

daughter(onwife’sremarriage)andthentoAsherwhendaughterdiedo Whichpossessorytitlewascreatedfirst?

§ PriorpossessorytitlearoselongbeforeWhitlock'stitleo Asher’sinheritedpriorpossessorytitledefeatedsubsequentpossessorytitleof

Whitlocko Proofthat3rdparty(ownerofland)hadbettertitlewillnotaffectenforceabilityof

priorpossessorytitleo Ifpossessorytitlehadbeendevisedbywillitwillunfairifinterestofbeneficiaryis

defeatedbypossessoryinterestofsubsequentpossessoro Possessionisagoodtitleagainstall(buttheowner)whocannotshowapriorand,

therefore,betterrighttopossessiono Reasonofthecourt–itwouldbeunfairifyouhaveawill,andsomeonedivideshis

possessorytitletowife,daughterthengrandchild,ifsomeonelikeWhitlockcouldcomeintoplayanddefeatthewill

• SO–whocanshowapriorandthereforebetterrighttopossession?o Grandchildcouldshowapriortitlewhichwascreatedlongbefore

• Whataboutthelordofthemanor?o Lordofthemanorhasaproprietarytitle,yesyoumayhaveinheritedthe

possessorytitleandpriorpossessorytitleasamatteroffact,butthereissomeoneelsewithownership.

o JustertiidefensePerryvClissoldPC(CB81)

• Facts?o Clissoldwasincontrolandpossessionoflandforalongperiodbutunclearwho

trueownerwas.Governmentwantedthelandandacquireditbycompulsoryacquisition(expropriation).

o Inthiscaseitwasn’tclearwhotheownerwasforentitlementtocompensation,andCsaidhewasapossessorandentitledtocompensationduetopossessoryright.Govtarguedhewasatrespasserdespiteexercisingintention.

• Issue:whetherholderofpossessorytitlehasaclaimforcompensationuponcompulsoryacquisition

• GeneralPrinciples:o Possessorhasagoodtitleagainstalltheworldexceptrightfulowner

o Possessorcanacquireabsolutetitlebyadversepossessiono UponcompulsoryacquisitionoflandtheMinisteracquirestitlesofownerand

possessoro Compensationispayabletoeverypersondeprivedoflandthatisresumedfor

publicpurposeso Iflandiscompulsoryacquiredtheholderofpossessorytitleisentitledtoobtain

compensation• CourtsaidthattheministercannottakeadvantageofinfirmityoftitleofCbeingonlya

possessorinordertoacquirelandfornothing• Ifpossessionconfersagoodtitle,enforceableagainstalltheworld,exceptforthetrue

owner,suchtitleshouldbecompensatedwhereitiscompulsoryacquiredo Clissoldmustbecompensatedasifownershipofthelanditself.

• JustertiidefenseunavailabletotheCrown:cannotarguethatanotherthirdparty/someoneelsethatistheownerhasabettertitleandpaycompensationtotheunclearowner.

o Thisdefenceisunavailable(1F)Priorpossessorytitleandnativetitle

(Mabo2)• TooheyJ–triedtofindananswerintheprinciplesofpossession• Commonlaw:

o Priorpossessorytitleholderscandefendtitleagainstsubsequentpossessorytitleholder

§ InUKifyouhadpossessionoverland,thenownershipwasvestedinyou.o Fromproofofpossessionlawpresumesthatpossessoryholderisseisedoffreehold

andpresumptionisnotdisplacedbysubsequentdisposition• ByparityofreasonTooheyJdecidedinMabo:

o WhenMeriampeoplebecameBritishsubjectsuponcolonisation,thelawpresumedfromproofofpossessionthattheywereseizedofafeesimpleovertheland

§ Seizedofpropertyinterestanddispossessedoftheirtitle,againstthewholeworldandthegovernment.TheyhadpriorpossessorytitlebeforeBritishcolony.

o Enforceableagainstrestoftheworldexceptpersonwithbetterclaimo Subsequentphysicaldispossessioncouldnotdisplacethevalidityofprior

possessorytitleo Priorpossessionisabetterright

• Priorpossessorytitle,thusprotectedindigenouspeopleagainsttheCrown’sassumptionofownership

HighCourtMajorityDiffers:• However,notacceptedbymajorityofHighCourtwhorefusedtoendorsethevalidityof

indigenouspossessorytitle

(1G)Bailment(notthatimportantinourcontext)• Ifgoods/chattelsentrustedinsomeone(courier/postman),thepersonacquiresbailment.

o Acquisitionofpossessionwithexpressconsentofownerisregulatedbycontractortortiousprincipleofbailment

o Enteringintooftherelationshipmusthavebeenintended• Upondeliveryofpossessionofgoodsforlimiteddurationoftimebytheowner,the

possessoracquiresbailmentinproperty• Deliverytakesplaceupontheexpresstermthatgoodswillberedeliveredtothebailor

(owner)• Consentcannotbewithdrawnbyoriginalownerduringtermonthepretenseof

repudiation• Bailee(possessor)isentitledtoretaingoodsduringtermofbailment• Baileeisentitledduringtermofbailmenttobringanactiontorecoverthevalueofthe

goodsTheWinkfield:PMG(bailee)couldsuestrangerforfullvalueoflostgoods(mail)andtoaccountforvaluetohisbailor

• Facts?o PostmasterentrustedmailtoMexicanshipthatcollidedwithWinkfieldandmail

waslost.o Postmastersuedsuccessfullyforfullvalueonbasisofbailment.

PRINCIPLES:• Bailleemustexercisereasonablecareinlookingafterthegoods• Bailor(owner)hasalegallyenforceablerighttoregainpossession• Termsofbailmentcanbechangedbycontract

(1H)JusTertiiDefence(rightofthirdparty)

• Itisadefencewhichpermitsthedefendanttoarguethat,althoughtheplaintiff’srighttopossessionmaybebetterthanthatofdefendant,anownershipstillexistsinathirdparty(thetertius).

o Example:ifAhasgotpossessionanddeprivedbyB,thenthedisputemustberesolvedbyAandB.Bcantraisedefencethatyes,Ahaspriorpossession

• Youcan’tdefendthefactthatyouhavedeprivedsomeoneofpossessionbysayingyes,butathirdpartyisactuallytheownerandhasaproprietarytitle.

However:• Defendant’sinterferencewithplaintiff’srightremainswrong• Defendantmustdefendonbasisofsometitleofhisownandnottheweaknessoftheprior

possessor'stitle• Canberaisedtosaythatthepriorpossessor’stitleisdefectivebecausetheactual

possessorhasacquiredpossessionfromathirdpartywithbetterright(seeexCB97)• Cannotbeclaimedinanactionforpossessionofland• NotraisedinAsherbutimpliedlyrejected:proofofownershipoftheLordofmanorwillnot

affecttheenforceabilityofpriorpossessorytitle• Useofpleaofjustertiiinrelationtolandrejected(andprobablyabolished)inPerryv

ClissoldContinued:

• Proofthatthirdparty(owner)mayhaveabettertitlewillnotprecludethepriorpossessorytitlefromdefeatingthesubsequentpossessorytitle:

o Courtmustdecidewhichofpartiesbeforecourthasthebetterrightandnotthebestpossibleright.AhservWhitlock–whohasthebetterright?

o Therefore,notadefencetoclaimthatthirdpartyhasbetterright• Mayberaisedinpossessorytitledisputerelationtopersonalpropertyunlessthe

possessorytitleholderhascommittedacivilorcriminalwrong• Byshowingalegitimatetitleinanotherperson,ajustertiiargumentimpliesthatthe

presentpossessor’sinterestisillegitimateorthatthepresentpossessorisathiefCostellovChiefConstableofDerbyshireConstabulary

• Costellowasincontrolofastolencar;hewasinpossessionofit.Hedidnothavetitletothiscar.Thepoliceseizedthecar,andinvestigatedthematter,andcouldn’tfindtheowner.

• Policeraisedjustertiidefencebyclaimingthatathirdparty(owner)hadabettertitleo Theycouldhavesaid:yesitisastolencar,andouttherethereisatrueownerof

thecar,youarethepossessor,youhaven’tstolenthecarbutactuallythereisatrueowner–ajustertii–whohasabetterrightthanyouMr.Costello.

o COURTSAIDNO• Possessionisprotectedinthesamewayevenifacquiredbytheft

o EvenifCostellowasproventobeathief(whichwasn’tproven),hispossessionisalsoprotected.

• Incaseoftheftpossessorytitleisfrailandoflimitedvaluebutremainsatitleprotectedbylaw

• Principle:ifyouacquirepossession,evenifyou’reathief,itisrecognisedforpurposeofprivatelaw,forpropertylaw,asapossessorytitle

• Couldhaveusedjustertiidefenceiffactswerethefollowing:

o Ifstolenpropertyisseizedbythepoliceandpursuanttostatutoryauthoritypossessionistransferredtoatransferee(butnototherwise),thetransfereeobtainspossessorytitleindefeasanceofthief.(Ifathiefislawfullydivestedofpossessionandpossessionisvestedinanother,hispriorpossessionwillnotavailhimtorecoverpossession(justertiidoctrine))

• Intheabsenceofsuchatransfer,thepriorpossessorytitleofCostellowasenforceableagainstthepoliceandthejustertiidefencecouldnotberaised

• “…evenifitisclearthatthereisathirdpartysomewherewithasuperiorright,thatjustertiiisofnomomentinthepossessorybattleofplaintiffanddefendant”(AtiyahCB96)

‘Seisin’

• Historicallyitmeantapersonheldownershipoffreeholdestateasapposedtobarepossession

• Personholdingpossessionalsoheldfreeholdestate• Historicallytenantheldpossessionbutnottitle:notseisedofland• Onlythosewhocouldutiliserealactionswereregardedasseisedofland• Theavailabilityofwritofejectmenttotenantsaswell,diminishedimportanceof

distinctionbetweenfreehold(seisen)andleasehold• Seisinreplacedbyregisteredtitle• Seisenasusedtodaymeanspossession

Importanceofpossession• Possessionisaphysicalconcept

o Involvesaphysicalaspect–exercisingcontrolwithacertainintention• Possessionhaslegalconsequences

o Becauseifyouhavepossession,youhavearightoratitle(AshervWhitlock)• Possessionisatitle/right• Possessionitselfisproperty(othermembersofsocietymaynotinterferewithright)• Possessiongivesrisetorights:to

o (a)defendpossession;o (b)sellpossession;o (3)devisepossession;ando (4)tobecompensateduponcompulsoryacquisitionthereof

• Possessiongeneratesasecondright,namelyarighttopossession(priorpossessionisprotectedagainstsubsequentpossession)

• Possessionprovidesevidenceofownership• Possessionovertimemaybecomeownership• Possessionisarootoftitle(AshervWhitlock)

QuestionsQ2.1:

• Inwhatsensewouldyourtitleberelative?o TheguywhomarriedWhitlock–whywouldwesayhistitleisrelative?Howcan

youillustratetherelativityofhistitle?§ Wasitenforceableagainsteverybodyelse?YES§ Wasitenforceableagainsttheowner?NO

• Wasitenforceableagainsttheholderofproprietarypossessorytitle?NO

o Sorelativityoftitlemeansthatitoperatesagainstthewholeworld,exceptthetrueownerandsomeonewithapriorpossessorytitle

o Itisrelativeintwosenses:§ Whitlock–theguywasinactualpossession.Histitleoperatedagainstthe

restoftheworld.§ Relativityalsoreferstothefactthatyoucannotenforcethistitleagainst

someonewithpriorpossessorytitleQ2.10

• Developerwhoisbankrupt,thecompanythatsuppliedthehousesthatwereerectedontheland,andabankthatwantstosellthelandasthelandistheobjectofasecurityinterestofthebank.

• Ifyouactonbehalfoflakeviewproperties(thecompanythatsupplied),whatwouldyouliketoestablish?

o Youwouldarguethatthehousesweren’tfixtures–becauseiftheyweren’tfixturesthentheywouldbepersonalproperty–chattels

§ Iftheywerepersonalproperty,theownerofthepropertywouldbetheclient(Lakeviewproperties)–andtheywouldsaywellitischattels,goods,personalpropertyandthereforebelongstous.Thefactthattheownerofthelandisbankruptisnotmyproblem,Iwantmypropertyback.

§ Youwouldarguethatitisstillownedbylakeviewandtheywillremovethehouses

• Ifyouwerethebankwhatwouldyouargue?o Youwouldsaythattheobjectofsecurityisnotjustthevacantlandthere

§ Youwouldapplythedegreeofannexation–lookatintegrated,bolted,removable,orcausedamage

§ Aspectthatneedstobetakenintoaccount–• Werethehousesdeliveredatthelandanderectedbeforeorafter

themortgagewasregistered?• Howwouldyouprotectlakeviewpropertiesiftheywereyourclient(priortoallthis

happening)?o Clauseinagreement–thatyouwouldhavereservedtherighttotakeitback,and

alsotherightofownershipuntilyouhavepaidforitandyouhavetherighttogoandremoveit

§ isthatapropertyrightintermsofcommonlaw?• Itisanequitableinterestthatiscreated

FINDERSPRINCIPLEPRIVATELandObjectontopofland Possession on private land assumed OWNED by land owner BOTH outdoors

and indoors BUT outdoor presumption STRENGTHENED if show MORE control: Parker as cited in WBC v Fletcher Armory v Delamirie (1722) 96 ER 664: That the finder of a jewel though he does not by such finding acquire an absolute property or ownership, yet he has such a property as will enable him to keep it against all but the rightful owner and consequently may maintain trover NOTE: Demonstrating intention to control is not as imperative here

Objectinorattachedtoland Where an article is found in or attached to the land the owner or lawful possessor of that land has better title: WBC v Fletcher Elwes v Brigg Gas Co (1886) 33 Ch D 562 as cited in WBC: Issue:

- Whether the lessor had better possessory title than the lessee over a ancient boat that was buried under the surface of the land

Held: - He was in possession of the ground, not merely of the surface, but of

everything that lay beneath the surface down to the center of the earth, and consequently in possession of the boat.

PublicLandObjectontopofland If ‘on’ the land in public space, the possessor of the land does not control them

thus NEED to demonstrate express or implied manifest intention to control before chattel is found: WBC v Fletcher EXAMPLE: signs, searches Bridge v Hawkesworth (1851) 21 LJQB 75: That the finder of bank notes dropped by someone unknown accidentally on the floor of a shop had a better claim to them than the shop-owner who, until the finder drew his attention to them, did not know they were there Parker v British Airways Board [1982] QB 1003:

An occupier of a building has rights superior to those of a finder over chattels upon or in, but not attached to, that building if, but only if, before the chattel is found, he has manifested an intention to exercise control over the building and the things which may be upon it or in it. THUS finder entitled to bracelet as there was no sufficient manifestation of any intention of the defendant to exercise control over lost property before it was found which would otherwise give the defendants a right superior to that of the plaintiff or indeed any right over the bracelet

Objectinorattachedtoland Where an article is found in or attached to the land the owner or lawful possessor of that land has better title: WBC v Fletcher For objects under the ground WBC did NOT need to show CONTROL

- Whether the lessor had better possessory title than the lessee over a ancient boat that was buried under the surface of the land

Held: - He was in possession of the ground, not merely of the surface, but of

everything that lay beneath the surface down to the center of the earth, and consequently in possession of the boat.

Topic2.2Fixtures

Ø MeaningØ Tests

Fixtures• ‘Land’includesfixtures

o Afixtureisachattel/goodthathasbecomepartofalandbecauseitisfixed/nextto/integratedtothelandinsuchamannerthatithaslostitsownidentity.

§ Deskintegratedintothebuilding,lostitsidentityofbeingwoodbutnowformspartofthelecturetheatre–formspartoftheland.

o Includescorporeal(physical)andincorporeal(notphysical)distinctionusefulasitispossibletopossesslandorgoods,butwhenitisincorporeal,theserightscannotbepossessed.

• Principle:quicquidplantatussolo,solocedit:whateverisannexedtothesoilbecomespartofthesoil

o Everythingyouplantonlandbecomespartofland.

• Fixturesareattachedtolandwiththeintentionthattheybecomepartoftheland• Ifthereisacontractbetweenparties,ownershipoffixturesisdeterminedin

accordancewithexpresstermsofthecontract;intheabsenceofacontract,thedoctrineoffixturesapplies

o Butifthereisnotcontractortermwithreferencetoannexure,thenthepropertylawprinciplesfindsapplicationàinotherwords“there’sthepropertyrule.Ifyoudon’tlikeit,thenchangeitbycontract.”

• Uponannexationthefixtureformspartoftheland• Fixturesloosetheirindependentidentity• Legaltitleofownerofchattelisextinguished

o Forexample,ifyouareahiringcompanyleasingoutanairconditioneryouhaveinstalledinyourofficeandbuilding,thenitisthepropertyoftheownerofthebuilding,notyou(asyoulease)orthecompany(losesownership).

o Whendoesannexuretakeplace?

RelevanceoftheRuleCanbeimportantindifferentrelationships

• Relevantinthefollowingrelationships:o Vendorandpurchaser

§ VendorsellsthehouseandiftheCTisnotdetailedenoughofwhatisincluded,afterthesalequestionsarise.

§ Forexample,theequipmentusedtocleanthepoolformpartofthesale?

§ Curtains/antennae’setc.§ Doesitformpartofthebuilding–doesitformpartofthesell?

o Landlordandtenant§ Relevantiflandlordacquiresownershiporiftenanthasrightto

removeit.o Mortgagorandmortgagee

§ MortgageeborrowsmoneyfromthebankandentersintoaCTtobuyandbuildland.Whateverisbuiltonthelandformspartoftheland.Ifthereisnore-paymentthebankmayexerciserightofsecurity,theninsellingtheproperty,ifthereisahouse/improvementsontheandthenitformspartoftheobjectofsecurityofthebank.

o Lifetenantsandremaindermeno Dutiesonland/chattels

• Disputemayariseastoownershipofchattelo Chattelorformingpartofthelandfortaxpurposes?

TwoTests

• Todeterminewhetherachattelhadbeenannexedtothelandtwotestsareused(HollandvHodgson)(traditionalapproach):HollandvHodgson

o Ownerownedamillland,boughtsomeheavy-dutyequipmenttouse.Itwasnailedtothefloor.

o WhenmortgagorwantedtoexerciserightofSecurityduetonorepayment,therewasaquestionastowhethertheequipmentnailedtothefloorwasfixedtothelandorwhetheritbelongedtothetenant.Ifitbelongedtothetenantthenthevalueofthelandwouldbereduced.

o Judgestatedtwotests:1. Degreeofannexation

o Towhatextenthaveyouintegrated/fittedthechattel?o Didyouusenails,didyouusescrews?Wasitbuiltintothe

buildingo Logicalandfactualquestion

2. Objectofannexationo Youmusthavetheobjectiveintentiontoattachthechattelthere

permanently.o Whatmusthavebeentheintentionwhenthiswasinstalled?

• Useoneortwotests?o Historically,UKusedthetestputemphasisonthefirstoneandfound

agriculturemachinerytoformpartofit.Aftertheindustrialevolutionthereisnowmoreemphasisplacedonthesecondtestinfindinganobjectiveintention.

Amoreholisticapproach:o Inamodernapproach,youlookatbothtestsandtakeintoaccountarange

offactors,notonlyifitcanbeeasilyremoved.Itwillgobyacase-by-casebasis.

§ Therehasbeenadeclineinthecomparativeimportanceofthedegreeofattachment

§ Greateremphasisisbeingplaceduponthepurposeorobjectofannexation.

§ Theobjectofannexationistheprimarytestfordeterminingwhetherachattelhasbecomeafixture

• Circumstancesandintentionaremoreimportantratherthananautomaticapplicationofapresumptionundertest1.

• Modernapproach:o Nosingletest:Allthecircumstancesofthecaseareexamined.o Annexationisdeterminedbyarangeoffactors(NABvBlacker)o Holisticapproacho Eachcasedependsonitsownfactso A“questionofmoreorless”

• Criticism:Testsareambiguousandintertwined(1)DegreeofAnnexation(startingpoint)

• Lookstomannerinwhichthechattelisattachedtoland• Askwhetherandtowhatextentthechattelhasbeenaffixedtotheland• Applicationofasimplerulewhichprovidesanautomaticsolution• Twopresumptionsapplywhichassistinprovidingananswer(apportionsburdenof

proof):o Ifchattelisattachedtoland(otherthanbyitsownweight)itispresumedto

beafixtureandtheburdenofproofwilllieonthosewhoareassertingitisnotafixture

o Ifthechattelisonlyattachedbyitsownweightitispresumedthatitisnotafixtureandtheburdenofproofwilllieonthosewhoassertitisafixture(NABvBlacker)

• Thegreaterandstrongertheannexationthemorelikelythechattelswillhavebecomefixtures

• Evenifchattelsareattachedslightlythesechattelsarepresumedtobefixtures• Purelyphysicalmatter/questiontoanswer• SubTestwithintest

o Degreeofdamagethatwillbecausedbyremovingstructureisrelevantfactor:substantialdamagepointertowardsannexation

• Degreeofannexationshouldbeusedasastartingpoint

Factorsdeterminingdegreeofattachment• Anoverallassessmentofthecircumstancessurroundingtheattachmentmusttake

place• Thefollowingfactorscouldbeconsideredindeterminingdegreeofannexation:

o Themodeandstructureofannexationo Whetherremovaloffixturewouldcausedamagetolandorbuildingsto

whichitisaffixed§ Muchdamagecausedtowalls/floorsornone?

o Whetherremovalwoulddestroyordamagethefixtureitself§ Anythingdamagedintheremovalprocess?

o Whetherthecostofremovalwouldexceedthevalueofthefixture

• Nosinglefactorshould,however,bedeterminative-lookatallfactors.(2)ObjectofAnnexationTheobjectiveintentionwhenthearticlewasbeinginstalled

• Examinestheobjectiveintentionwithwhichtheitemwasputinplace:permanentlytobenefittheestateortemporarilytodisplaychattel(separateexistence)

• Thistestwasaddedbythecourtsasanadditionalconsideration• Objectiveintentionofaffixertobegatheredfromcircumstancesatthetimeof

annexationo Lookatallofthefactstodrawaninferenceofintention.

• Onceitisclearthatattachmentorannexationhastakenplacetheobjectunderlyingattachmentmustbeconsidered

• Objectofannexationhasbecomeprimarytesto E.g.Chairsinstalledtoservethefunctionofalecturevenue.

Factorsdeterminingdegreeofobjectivity• Arangeoffactorsareconsideredinabroadassessment:

o Natureofchattel§ Somechattelscanonlybeusedbyattachment

o E.g.circustentisachattelremovedtwoweekslaterbutnowwefindwecanliveinluxurioustentsinthecitynowwithelectricityandahotelmightargueitformspartoftheland.

§ Somechattelsbynatureremainsindependento E.g.bridgesstructuredtocarryweaponryacrosslandsfora

fewhoursbutotherslikeWestgatebridgeisnotthesame.ObjectofAnnexation• Mannerinwhichchattelcanbeeffectivelyused• Titleofaffixer

o Universityownsland/buildingandonewouldfocusonthequestionthatistheownerofthelanddoingcertainthings.

• Intentionofaffixero Intentionoftheuniversitytocreatealecturevenueusedforlectures.

• Intentionthatitshouldbeaffixedpermanently/indefinitelyorforasubstantialperiodorfortemporarypurpose

o University’sintentiontousethelecturesforalongtime• Broadaimsofaffixerinattachingchatteltoland

o Unviersityaimstoofferateachingvenue• Relationshipofaffixervis-a-visowner

Standardsocialorarchitecturalpracticesinrelationtouseofchattelsmayformpartofcircumstanceswhichindicateobjectofannexation:

o Airconditionsystemcommonfeatureofmodernhighrisebuildingso Stoveandcarpetsarefixtureswhereasantennaisregardedasachattel

Factors

• Thefollowingfactorscanbeconsideredtodeterminethepurposeofannexation:o Whetherattachmentwasforthebetterenjoymentofthelandandbuilding

orthefixture§ Deskisinstalledforlecturingpurposes§ Coffeemachineinstalledforthebetteruseofarestaurant

o Natureofpropertywhichisthesubjectofaffixation§ Intendedforapermanentorshortperiodoftime

o Whetherthefixturewastobeinthepositioneitherpermanently/indefinitelyortemporarily

o Thefunctiontobeservedbyannexationoffixtureo Subjectiveintentionoftheaffixer

§ Nottoconfusewiththeintention(objectivedeterminedbylookingallofthefacts)butevidencegivenbytheaffixerissubjectiveintention.

Natureofchattel• Somechattelsareofsuchacharacterthattheycouldonlybeeffectivelyutilised

wheretheyareattachedtolandandshouldnotbetreatedashavinganindependentoperation

o Lookatthenatureofthechattel• Somechattelswillretainanindependentidentitytothatoftheland,thepurposeof

annexationbeingtomaximisetheiroperation.Examples(natureofchattel)Sometimeswhenyouapplyrelevantfactors,youmaystillarriveatcontraryconclusions• LeighvTaylor

o Lifetenantattachedvaluabletapestriesbymountingthemonwoodenframeswhichwerenailedtothewall

o HLheldthattheobjectofannexationwastoenjoychattelsaschattels(ornamentation),nottoannexthemtorealty

o Couldberemovedwithoutdamageo Notexpectedoflifetenanttomakesuchimprovementso Attachedtobeeffectivelyviewed(admiredetc.)

• Inopposite:ReWhaleyo Tapestry(andpainting)affixedbyownerwereheldtobefixtureso Affixedbyowner(presumedanownerwantstoimproveland)o TapestriesweredesignedtoenhancetheElizabethancharacterofroom

ratherthantapestriesasindependentobject• NortonvDashwood

o Tapestrieswereheldtobefixtureso Couldnotberemovedwithoutdamage:brickwork,tearingfabricandleaving

theroommaimedanddisfigured

ElitestoneLtdvMorris(HL)UK• Issue:whetherbungalowbecomespartandparcelofland.• ElitestonearguedthatthebungalowofMorriswasseparatefromthelandsinceit

restedonitsownweightonconcretepillars(whichwerethemselvesattachedtoland);bungalownotphysicallyattachedtoland.

o Morris&Otherinhabitantsofbungalowswereupsetbecauselandlordwanedtodemolishbungalows,soMorrishadtoshowthatthebungalowsformedpartoftheland.

§ Ifpartofland,immovablepropertyandbungalowsareattachmentandrelyonprotectionofAct.

§ Ifnotpartofland,remainedgoodsandchattelstheycouldnotrelyontheprotectionoftheAct

• Avoiduseoftermfixture:(1)onethinksofafixtureasbeingsomethingfixedtoabuildingratherthanthebuildingitself;and(2)termfixturesismisunderstoodinlightduetoterm“tenant’sfixtures”whicharefixturesthatmayberemovedduringandatendoftenancy.

• Ratherusetheclassification:(a)chattel;(b)fixture;and(c)partandparcelofland.

Dependsoncircumstancesofthecaseandmainlytwofactors:1. Degreeofattachment• Importanceofdegreeofattachmentvariesfromobjecttoobject:

o Largeobjectsuchashouse-affixationgoeswithoutsaying• Auscase:ReidvSmith(houserestingonstumps):courttreatedthisasquestionof

commonsense:o Absenceofattachmentdidnotpreventhousefrombeingpartofrealtyo Athingmaybeaffixedbymeregravitationasfirmlyasbycementandclampso Acceptedbygravitationalforcesthatsomethingcanformpartoftheland.If

theweightisofsuchanatureheavythereissometimesnodisputeinformingpartoftheland.

2.Purposeofannexation• Courtsaidmanytestsareused

o Fixedforbetterenjoymentofchattel;or

AnsweringanExamQuestion:• Setoutrelevantprinciples,applytofactsandcometoconclusion.Intention• Stateofmindofpersonwhohasdoneaffixing• Itmaybeappropriatetotakeintoaccountsubjectiveintentionbutusuallythe

relevanttestistodetermineobjectivelyfromthefactswhattheintentionwas• Inmanyinstancessubjectiveintentionisnotavailable• Courthastorelyontheobjectivecircumstancestodetermineintention:

o Capacitytoremovechattelwithoutdamageo Economicconsequenceofholdingthatchattelhasbecomeafixture

• Objectiveintentionisrelevant

o Fixedwithviewofeffectingapermanentimprovementoffreehold• Thesetestsareusefulattimesonly(tapestries)–notincaseofhouseitself(rather

commonsense)• HouseExample:

o Housewhichisconstructedinsuchawayastoberemovablemayremainachattel,eventhoughconnectedtemporarilytomainsservices

o Housewhichisconstructedsothatitcannotberemovedatall,savebydestruction,nolongerintendedtobechattel.Itmusthavebeenintendedtoformpartofrealty(degreeofdamagerelevantfactor)

ElitestoneLtdvMorris(HL)cont.

• Courtapplieda“Commonsense”approachthatsuchhousehasbecomefixture• Thecourtheldthatthebungalow(byanalogywithdrystonewall)becamepartof

land:Courtusedananalogywiththisexampleforitsfindingthatthisbungalowwaspartoftheland:

o Blocksofstoneplacedupontopofanotherwithoutmortarorcementforthepurposeofformingadrywallwouldbecomepartoftheland

o Thesamestonesifdepositedinabuildersyardandforconveniencesakestackedontopofeachotherintheformofawallwouldremainchattels

• Timberframesbecomepartofstructure(partoftheland)• Theobjectofbringingtheindividualwoodsonthesiteseemssoclearthatthe

absenceofattachment(savebygravity)becomesirrelevant• Intentionofpartiesisonlyimportanttotheextentthatitcanbederivedfromthe

degreeandobjectofannexation• Subjectiveintentionofthepartiescannotaffectthequestionwhetherchattelhas

becomepartofrealty• Notpossibletoremovebungalowwithoutdestruction–becamefixture

Tenant’srighttoremove

• GeneralPrinciple:Allfixturesbelongtolandlordunless“tenantsfixtures”.o Tenantmayremovecertainfixturesiftheyaretenantfixtures.

• Tenant(validlease)hasacommonlawrighttoremovetrade,domesticorornamentalchattelsthathavebecomefixturesduringcurrencyoflease

o Musthavetakenplaceduringthecurrencyofthelease!• Rightofremovaldidnotincludeagriculturalfixtures

o Tenantleasingfarmforagriculturalpurposes,unlessstatedinCT,cannotremoveit.

• Rightdoesnotapplytofixturesattachedbeforecommencementorafterexpiryoflease

o Criticalperiodisthatfixturesmustbeattachedduringcurrencyofthelease.• Ifyouwanttoremovetenancyfixtures,youmustremoveitbeforeexpiryofthe

leaseorelseitbecomesownershipofthelandlord.o Onlyuponexerciseofpowerandseveranceof“fixture”titleisacquiredby

tenanto Ifrightofremovalisnotexercisedachattelremainsafixture

• Ifafixturecannotberemovedwithoutdamagetofixtureorpremiseitwillremainfixture

o Ifitcannotberemovedwithouttotaldamagethisisrelevanttoexplore.Tenant’srighttoremovecont.

• Damagecausedbyremovalmustberepairedandpremisemustbeleftinreasonablecondition

• Uponexpiryofleasetherightofremovalexpires• Rightofremovalisanequitablerightandtransferable• S154APLA1958(Vic)

o Givestenantrighttoremoveallfixtureso Givestenantrighttoremove“renovations,alterationsoradditions”

§ Ifonlyitissuchthingse.g.renovationo Tenanthasobligationtorestoretopositionpriortoremovaloffixtureso Alternativelytenantmayneedtopayrestorationcost

• Other:Holderofminingrighthasrighttoremoveaminingplantbroughtonlandduringcurrencyofminingleaseofwithin3monthsofexpiryofminingtenement(MininhAct1978,s114(WA))

o Meaningof“miningplant”notdeterminedbylawrelatingtofixtures–determinestatutorymeaning

Thirdparties

• Example:o Joeworkingassolicitor.Leasesanofficefromalandlord.Buildingisnotnice

soJoemustinstallairconditionersystem.Itisportablebutmustbeintegratedintothebuildingwithpipesetc.Installed.Hisintentionwheninstalledistoremovetheairconditioneruponexpiryoflease.However,heisnottheownerofthemachine,butpaysthecompanywhosuppliedit.Theyareconcernedthattheywillloseownershipifintegratedintothebuilding.TheyhavetherightthatifJoehasn’tpaid,theycanenterthebuildingandremovethesystem.Beforeexpiryoflease,thebuildingissoldtothenewlandlord.NLarguestheairconformspartofthebuilding,Joearguescontrary.Hestopspayment.Outsidecompanysupplierswanttosuehimforoutstandingmoneyorenterandremoveairconsystem.NLarguesitisafixture.

o Toresolvethisdispute,theTPmayacquireacontractualrighttoremoveafixture.CompanyhasthisrightIfachattelishired/leasedorpurchasedlikethisexample,andthepossessor(Joe)affixesittothelandinsuchamanneritbecomesafixture,thencompetinginterestsarecreated.

o ApplyCommonlawpropertyprinciples.Ifitisafixture,itbecomespartoftheland.

o Equityalsocreatesrights.§ SoftensconsequencesoftheCLsystem.Thetrueownerwillhavean

equitablerighttoenterpremises,andseizetheobjectonthebreachoftheCT.

§ Sothisisanequitablepropertyinterest,itisnotaninterestbyvirtueofthecommonlaw,itdoesn’tformpartofanownership

• Thirdpartymayacquirea(contractual)righttoremoveafixture• Example:achattelishiredorleasedoutandthepossessorytitleholder(exhireror

lessee)affixesachatteltolandofanothersothatitbecomesafixture• Commonlaw:chattelhasbecomepartofland• Equity:Trueownerwillholdequitablerighttoremovethechattelifownerhasa

contractualrighttoenterandsever(righttoseizeonbreach)Enforceability• Equitableproprietaryinterest–notafeesimpleinterestandissourcedin

contractualrighttoretaintitleandreclaimpossessionondefault• Equitableinterestisenforceableagainstland(object)(propertyinterest)butnot

againstbonafidepurchaserforvaluewithoutnotice.o Illustratingtheprinciple:

§ RightofcompanytoenterandremoveitisremainedachattelHOWEVER

§ Notoperatableagainstsubsequentnewownerwhoactedingoodfaithanddidn’tknowaboutthis.

• Rightenduresforaspecificpurposeandcanonlybeexercisedwithinareasonable

period• Equitablerightmayariseifacontractisenteredwhereby:

(a)ownershipofunseveredchattelsistransferredwithretentionofownershipofland(b)ownershipoflandistransferredsubjecttoretentionofownershipofunseveredchattels(retentionoftitleclause)

Twoexampleswhereyoucanhaveanequitableright–ExampleOne

• Owneroffarm,situatedonitiswindmill.Sellwindmilldespitebeingintegratedontoland.Ownerremainsownerbutpurchaseracquiresrightoverwindmill.

o Iremaintheownerofthefarm,butyouacquiretherighttoenterandremovethemill,andtakeitwithyou.Inthatcaseyouhaveanequitableright,andImaintainmyownershipofthefarm.

• ThenownersellsfarmtonextpersonnotknowingabouttheaboveCT,andhepaidforfarm.Heisnotboundbyequitableright.

ExampleTwo(aconverseexample)

• Ownersellsfarmtoyou,situatedonitiswindmill.Sellsfarmhoweverownerreservestherighttoenterashepleasesanddismantlewindmill.

• Ownerhasequitablerightoverwindmill;youbecomeownerofthefarmandwindmill.

ExampleThree

• University.Lecturerleasesroomandinstallschairsnailedintotheflooretc.Itisnowafixtureoftheuniversityàgothroughtests.LectureralsoborrowedmoneyfrombankandtheyhaveaCTwithmonthlyrepayments.Ifthereisnon-paymenttheBankonlyhasequitableinterestandnotownershipoverthegoodsthelecturerpaysfor.If

DeakinsellsbuildingtoFortandtheypaidandactedingoodfaithanddidntknowaboutCT,theBankcannotenforcetheirequitableinterest.

MetalManufacturerLtdvFCT–arighttopropertythatisrecognisedundertheequityjurisdiction

• MMT(thetaxpayer)securelyaffixedheavyplantandequipment(cables,tubesandlines)infactorieserectedonthelandofABM.Plantandequipmentweresoldtobankandleasedbackinreturnforpaymentofrentals.Bankwouldhaverighttorepossess,dismantleandremoveplantandequipment.FederalCommissionerofTaxationclaimedrentalswerenotdeductionsbecauseplantandequipmentconstitutedfixtures.MMTarguedthatBankacquiredanequitabletitledespitebecomingfixtures

• Fixtureissue:Indeterminingwhetherplantandequipmentbecamefixturesthecourtlookedatthefollowingfactorspertainingtoplantandequipment:

o Weight–veryheavyo Notlikelytobecomeredundanto Wereattachedtosteadyitandforsafetyreasonso Degreeofintegrationwithlando Attachedforbetterenjoymentofplantandequipmento Waspossibletoremove-timeconsuminganddifficulttasko Removalwouldrequirejack-hammeringo Landwasmodifiedforbetteruseofplantandequipmento Degreeofintegration(importantfactor)

• Courtfoundwithreferencetoallrelevantfactorsthatplantandequipmentwereintendedtobecamepartoflandtowhichattached

• Lawoffixturesincommonlawmayoperateharshlyo Doctrineoftenant’sfixturesamelioratesthatharshness

• InterestofBankissue:Interestofbankcannotbealegalinterestintermsofthe

commonlaw(fixturesformpartofland),becauseintermsofthecommonlaw,afixtureformspartoftheland.

• Butthecourtsaid:thisCreditpurchaseagreement(betweentaxpayerandbank)vestedanequitableinterestinthebankwithrespecttoplantandequipment

o Interestwouldbeavailabletothebankifthereisnon-payment,andtheycouldenterthepremiseandremovetheequipment–thatinterestwasexpresslygrantedintheagreement.

o Ifthefactorygetssoldtoanotherperson,thatequitableinterestofthebankwouldn’tbeenforceableagainstanewownerofthepropertyàhoweverinthiscasetheownerremainedthesame,sothecourtrecognisedanequitableinterestinfavourofthebank.Sothebankcouldreservetherightirrespectiveofthenatureofthecontract,toenterthepremiseuponnonpaymentandremoveit.

o Thecommonlawdoesn’tgiveyouthisright,thecommonlawtellsyouifyouaffixittotheland–itbecomesafixtureandpropertyoftheowneroftheland.Sotheharshnessofthecommonlawprincipleisamelioratedorsoftenedbyrecognisingequitableinterest.

o Interestwouldbedefeatedbybonafidepossessorforvaluewithoutnoticeo Ifathirdpartyacquiredequitableinterest:prioritydispute

• Transferofownershiptobankwasintendedbydeliverywithretentionof

“dominion,possessionandcustody”overplantandequipmento ConstitutumpossessoriumintermsofRomanlaw

o Isellsomethingtoyouandyouacquireownership,andImaintainpossessionofthearticle.

o Constructivedeliveryincommonlaw:changeofpossessionwithoutchangeofcustody

o Iftheplantandequipmentwerefixtures,ownershipdidnotpassbyconstitutumpossessoriumascontemplatedintheagreement

• AnequitableinterestinthenatureofpropertycreatedinfavourofBank• OurinterestistheBank,somehowintheiragreement,retainedanequitableright

overtheheavymachinery.

Statutoryprotection• ChattelsSecuritiesAct1987(Vic)• S6:goodssubjecttoasecurityinterestshallnotbecomefixturesforpurposesofthe

securityholder’srighttotakepossession,removeorsellthegoods.• Protectionforgoodssubjecttosecurityinterestisattachedtoabuildingbelonging

toalandlordthenitisnotafixtureforpurposesofsecurityholdersrightofpossessiontosellthegoods.

• IfyoubuyanairconsystemfromAfor3years,andifthereisnonpayment,Acantakebacktheequipmentandifitisattachedtothebuilding,therulesoffixturesdonotcomeintoplayandpropertylawprincipleisoverruledbythisstatute.

• Thusifafixturehappensthereisapropertyrule(ownerofarticleattachedtolandbecomesownerofchattelaswellwithexceptionoftenantsthatremovesometenantsfixtures),TPmayhaverights(Banksleasingtoyouwithequitableinterestintheobject).

FixturesExercise2.1

Ø AirRights/TransferdevelopmentrightsØ CarbonSequestrationrights

Question1Exercise:isaminedump/mineraltailingafixtureorchattel?Explainwhetheryouregarddumpaspartoflandorchattel.

Ø Underlandyoufindfixturessosomemayendupformingpartofthelandduetodoctrineoffixtures.Ifonedayremoved,itcanbecomeachattelonceagain.

Ø Theminingdumpmaybeconsideredlandasitseemsquiteimmoveable.o NatureandDegreeofAnnexation?o Integrationintoland?

§ Treesgrowingonthedumpandtreesformspartoftheland

o DamageTest?§ Willlandbedamagedinremovingthedump?Perhapsthelandwould

bebetteroffinremovingthedump?§ Thistestdoesnotworkinthiscase.

o ObjectofAnnexationTest?§ Whoseintentiontobedeterminedobjectively?TheMiningCompany.§ Don’tfocusonwhatCEOtellsussubjectivelybutallcircumstancesto

arriveatobjectiveintention.§ Intentionofminingcompanywouldbetomineitonedayagain.

Ø IntheSouthAfricandecisionofDeBeersConsolidatedMinesLtdvAtaquaMining(Pty)Ltditwasheld,withreferencetocriteriaforaccession,thattailingsdumpsaretobeconsideredasmovables(chattels).

Ø SimmerandJackMinesvGFIndustrialProperty–didnotmakeoutthatminedumpwasimmovable(chattels)

Ø AustraliaRvParker[1989]WAR233(mineraltailings(orminedumps)arechattels,unlessspreadandmingledwiththeearthsoastoloosetheirseparateness–itmightintermsofthisprincipleberegardedasformingapartoftheland)

Ø MiningAct1992(NSW)S11mineraltailingsremainpropertyofmineranddonotbecomepartofthelanduponwhichsituated(unlessthemineralleaseorclaimceases,inwhichcasetheybecomepartofthelandonwhichtheyaresituated).