1

Principles of Private Law

Table of Contents Introduction to Property & Licenses Including Contractual Licenses

Introduction

History

Property law is one of the categories of Private Law

What is Property?

The Idea of Property in Law, K Gray and S F Gray in Bright and Dewar (eds), Land Law: Themes

and Perspectives, Oxford University Press, 1998, pp15-18.

The right to use or enjoy

The right to alienate (right to transfer to whomsoever)

Examples of non-assignable rights treated as property rights:

The right to exclude

Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295

Property rights and contractual rights

Licenses: bare, contractual or coupled with an interest

Types of Licences:

Licences and Original Parties

Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605

Equity in property law

But equity will not intervene in the following (exceptions to the exception):

Agreements where equitable remedies will not be available:

A decree of specific performance is available to a plaintiff in 2 situations:

New South Wales Rifle Association Inc v Commonwealth [2012] NSWSC

Licenses and Third Parties, Numerus Clausus, New (Novel) Property

Licenses and third parties

King v David Allen & Sons, Billposting Ltd (1916) 2 AC 54

Georgeski v Owners Corporation Strata Plan 49833 (2004) 62 NSWLR 534

The Numerus Clausus Principle in Australian Property Law, B Edgeworth (2006)

Property rights and the rights of persons

Are Persons Property?

Are Persons Property? Legal Databases About Property & Personality, M Davies and N Nafine

Property and Body Parts

Moore v Regents of the University of California (1990) 793 P 2d 479

Proprietary Rights in Human Tissue, R Magnusson in Interests in Goods

Boundaries of Property Rights

Property rights and privacy

2

Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2002) 208 CLR 199

Property and human rights

Property rights in other jurisdictions (outside NSW)

Should Australian Bill of Rights Protect Property Rights? S Evans (2006)

Fixtures

The traditional classification and terminology

Land, or realty

Boundaries of land

Air space and below the surface rights

Chattels, or personalty

Boundaries between different types of property

The boundary between land and chattels: fixtures

The doctrine of fixtures

Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning (Aust) Pty Ltd (1984) VR 947

Tapestries cases

May v Ceedive Pty Ltd (2006) 13 BPR 24

Tenant’s right to remove fixtures (not chattels)

Right to remove fixtures

Agricultural and residential tenancies

Chattels annexed without permission

Solution: Unjust enrichment

Possession of Chattels, Bailment, The Possessory Torts

Introduction

Chattel interests and the torts that protect them

Actual possession

Right to immediate possession

Right to future possession or reversionary interest

Ownership

Fragmented property interests — Bailment

Types of bailment

Bailments at will and gratuitous bailments

Actions in tort to protect proprietary interests in chattels

Goods

Trespass

Conversion

Detinue

Negligence

3

Overlapping of remedies

The jus tertii defence

An exception — Permanent loss or damage to a reversionary interest

General rule

Nature of the exception

Rights of a bailee

Self-help

Jeffries v The Great Western Railway Co (1856) 5 El & Bl 802

The Winkfield (1902) P 42

Wilson v Lombank Ltd (1963) 1 WLR 1294

ISSUE: Trespass and constructive possession.

Claims by a bailor against a bailee

Possession of Land

Land

Recovery of Possession of Land

McPhail v Persons Unknown (1973) Ch 447

Forcible re-entry

Titles in actions to recover possession of land

Asher v Whitlock (1865) LR 1 QB 1

Perry v Clissold (1907) AC 73

Relativity of titles under the torrens system

Assignment of the interest of a person dispossessed by a squatter

The nature of possessory title

Relationship between possession and title: Does possession give rise to a presumptive title?

Proving occupation or possession

Adverse Possession Part I

Limitation of actions

How possessory title extinguishes documentary title with the passage of time

Justifications for the rule of adverse possession

Adverse possession and good faith

Adverse possession and human rights

The length of the limitation period

Commencement of the limitation period

General principles:

The elements of adverse possession

Whittlesea City Council v Abbatangelo (2009) 259 ALR 56

Adverse Possession Part II

Adverse possession claims to part parcels adjacent to boundaries

4

Does possession of part of a lot amount to possession of the whole?

Future interests

Equitable estates

Adverse possession by a co-owner

Successive adverse possessors

Stopping time running

Extension of time

The effect of effluxion (expiration) of time

Tenancies

Formal Requirements for Land Transfers — Equitable Property

Introduction

Acquisition through taking possession

Land

Chattels

Manufacture or creation of objects

Patents, copyright and trademarks

Consensual transactions with proprietary interests — Legal and equitable

Sale

Goods

Formal requirements for the contract for sale of goods

Land — legal and equitable interests

Formal requirements for the passing of a legal interest in land

Formal requirements for contracts for the sale of land; equitable interests arising out of enforceable

contracts

Bunny Industries Ltd V FSW Enterprises Pty Ltd [1982] Qd R 712

Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR

Conveyancing risks

Walsh v Lonsdale (1882) 21 Ch D 9

Equitable and legal lease

Part Performance

Equitable doctrine of part-performance

Mason v Clarke (1955) AC 778

Estoppel Part I

The nature of estoppel by conduct

Estoppel by representation and equitable estoppel

Estoppel by representation (Assumption on fact)

Equitable estoppel (Assumption on conduct)

A brief history of estoppel

Fact and future conduct

5

From High Trees to Waltons Stores

Proprietary estoppel

Inwards v Baker (1965) 2 QB 29

Crabb v Arun District Council (1976) Ch 197

The development and elements of equitable estoppel

Je Maintiendrai v Quaglia (1980) 26 SASR 101

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

Estoppel Part II

Austotel Pty Ltd v Franklins Self-serve Pty Ltd (1986) 16 NSWLR 582

Remedies in cases of estoppel —— proprietary or compensatory; expectation-based or detriment-

based?

The problem of minimal detriment

Guimelli v Guimelli (1999) 196 CLR 101

Delaforce v Simpson-Cook (2010) 78 NSWLR 483

Equitable estoppel as a cause of action

W v G (1996) 20 Fam LR 49

Principles of Contracts Textbook

The elements of estoppel

Assumption

Fact or future conduct

Must the assumption relate to a legal relationship?

Inducement

The nature of the requirement

Detrimental reliance

The nature of the requirement

Types of detrimental reliance

The relying party’s circumstances

Non-financial detriment

Material detriment

Reasonableness

Unconscionable conduct

Departure of threatened departure

The effect of an estoppel

Estoppel by representation

Equitable estoppel

Satisfying the “equity”

The reliance interest and the expectation interest

Development of the current approach

Agency

6

Concept of agency

Essential concepts

Practical methodology

Capacity required of principal and agent

Principal

Agent

The sources of an agent’s authority

Actual authority

Actual express authority

Actual implied authority

Ostensible authority

What is ostensible authority?

The elements of ostensible authority

Element one: representation by the principal

Entrusting indicia of title to an ‘agent'

Possession of property for the purposes of sale

Occupancy of a particular position

Within the ordinary scope of business or custom of the particular agent

Provision in articles authorising delegation of a power to an officer acting on behalf of the company

Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd

7

Introduction to Property & Licenses Including

Contractual Licenses

Required reading

Property Casebook [1.1] – [1.24]

Introduction

Property is the institution that regulates societies access to material resources.

History

Capitalist societies: extensive protection to private property based on the belief that the ability to own

private property is an essential incentive for wealth creation.

Communist societies: traditionally favoured publicly-owned property, particularly in economic production,

on the grounds that private property is the source of oppression and inequality.

Property law is one of the categories of Private Law

● Governs the relationships between private individuals.

● Private law is subdivided into property law, contract, tort and unjust enrichment.

● Private law can be divided into 2 distinct categories:

● PROPERTY RIGHTS - are in rem (enforceable in respect of a thing; against the world).

● OBLIGATIONS - rights of persons against other persons that arise from certain events.

○ Personal rights - are in personam (enforceable against a person).

○ Categories of Obligations or Personal Rights: Contract, Torts, and Unjust

Enrichment.

What is Property?

According to Felix Cohen:

● Property is not about objects but the relations between human beings, or more accurately about

relations between persons in relation to things.

● Private property must at least involve the right of the owner to exclude others from doing

something in respect of the object of ownership.

According to Wesley Hohfeld ‘property’ tends to be used in 3 different senses:

1. To indicate the physical object to which legal rights, privileges, etc. relate.

2. To denote the legal interest pertaining to such physical object.

3. The term is sometimes used in such a blended sense to convey no definite meaning.

8

The Idea of Property in Law, K Gray and S F Gray in Bright and Dewar (eds), Land Law: Themes and

Perspectives, Oxford University Press, 1998, pp15-18.

The main concepts:

● Property is NOT a thing but rather a relationship which one has with a thing.

○ It is more accurate to say that one has a property in a thing, than to declare that the thing

is one’s property

○ To ‘claim’ property is to assert a degree of control over the resource.

● Property is not absolute but relative.

Gradations (levels) of property:

● The amount of ‘property’ which a specified person may claim in any resource is capable of

calibration — along some sort of sliding scale — from a maximum value to a minimum value. If

value is towards zero, person has practically no ‘property’ in the resource in question.

○ (Justin can also own 98% of a property, while Celine owns 2%).

Ambivalent (conflicting) conceptual models of property

● How Common law/English law jurisprudence handles the idea of property in land.

● 3 different perspectives in property:

○ Property as a fact - land is understood in terms of empirical facts, substance of property

resides in raw data of human conduct, behavioural idea of property.

○ Property as a right - land in terms of artificially defined rights, property resides in raw

data of positive claims of abstract entitlement, conceptual idea.

○ Property as a responsibility - land in terms of duty-laden allocations of social utility,

resides in socially directed control land use, obligational idea.

Milirrpum v Nabalco

● Property in its many forms, generally implies:

○ the right to use or enjoy

○ the right to exclude others

○ and the right to alienate

● EXAMPLE: One has a full property right in his car because he has the right to use and enjoy it, to

alienate it (transfer it to whomsoever he likes), and the right to exclude it from others.

Generally, the meaning of property in legal discourse implies the 3 elements, however it is still possible for

‘property’ to exist where one of the features are missing.

The right to use or enjoy Yanner v Eaton (1999)

● The term ‘property’ does not necessarily mean full, exclusive or beneficial ownership.

● They interpreted the term ‘property’ in s 7(1) of the Fauna Conservation Act 1952 (Qld) as follows:

● ‘Property’ is not a thing; it is a description of a legal relationship with a thing (a bundle of

rights).

● Degree of power permissibly exercised over the thing.

● Legal concentration of power over things.

Wily v St George Partnership Banking Ltd (1999)

● Finkelstein J stated that it was not necessary that ‘the dominion of the owner be absolute or

fixed’.

9

The right to alienate (right to transfer to whomsoever) R v Toohey; Ex parte Meneling Station Pty Ltd (1982)

Mason J:

● ‘Assignability is not in all circumstances an essential characteristic of a right of property. By statute

some forms of property are expressed to be inalienable. It is generally correct to say, as Lord

Wilberforce said in National Provincial Bank Limited v Ainsworth that a proprietary right must be

‘capable in the nature of assumption by third parties’

Examples of non-assignable rights treated as property rights:

● Non-assignable leases.

○ In Re Potter, a beneficiary under a will was held to have acquired a non-assignable right to

reside in a certain house as long as he desired. It was regarded as proprietary in character.

● In Hamilton v Porta, it was held that the so-called ‘statutory tenancy’ of a tenant whose lease has

expired, but who remains in possession pursuant to legislation controlling rents and security of

tenure, has a non-assignable interest in the land.

○ Statutory tenancy — a tenant whose tenancy has expired under the ordinary rules of law but

who has rights by statute to pay rent and continue in occupation under rent control or other

emergency legislation.

● In, Kogarah Municipal Council v Golden Paradise Developments Pty Ltd, ‘community land’ held by

local councils for the community benefit is declared by statute to be inalienable.

The right to exclude ● Property is an essentially private right exercisable against the general public, including the State.

● Public rights — rights equally shared with other members of the public over land or goods. Public

rights are often conferred by statute.

○ Going to the park.

● Different to public rights: Public ownership of utilities or industries — state owns assets on

behalf of the public so as to regulate their use for the public benefit.

○ In this instance, State ownership is of a similar nature to that of a large corporation. There

are no ‘public rights’ exercisable in relation to such assets.

○ In public rights, you have the right to enjoy, however you do not have the right to alienate

and exclude. In private rights, you have all three rights.

○ What we think: Use of roads are a public right. Public ownership is when the state manages

Sydney rail for public benefit.

Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295

FACTS

● Mineral Holdings were conducting mining activities on land adjacent to the South West National

Park in Tasmania.

● Stow lodged objections to the mining with the warden on the grounds that mining would damage

the park.

● The warden concluded that the evidence suggesting that mining would have a damaging effect

was ‘overwhelming’ and refused to grant the respondents a prospector’s licence.

● The respondents were successful in appeals to the Supreme Court and to the Full Court.

ISSUE: Whether Stow had an estate or interest in the land.

HELD

AICKIN J:

10

● As held in the Supreme Court, the warden has no power whatever to accept or reject an

application; that is a power vested in the Minister who is to act upon the recommendation of the

Director of Mines. It is up to the Minister to determine whether as a matter of policy it is desirable

that the license should be granted or refused.

● Stow did not have an estate or interest in the land.

● ‘Estate or interest in land’ is an estate or interest of a proprietary nature in the land in an

individual capacity (private proprietary interest).

○ Types of proprietary interests

■ Legal & equitable assets and interests, eg. a freehold or a leasehold estate, or

incorporeal interests such as easements, profits a prendre (right of taking).

○ It does not embrace interests in which the person concerned has no greater claim than

any other member of the public.

○ EXAMPLE: All members of the public have a right to pass freely along or across public

highways but none have in their capacity as members of the public any estate or interest

in the land.

Recreational interests in a land, with no proprietary interest in the land, are not sufficient to create a

property right. Also, Stow had no private right in the park (no right to exclude, no right to alienate).

Property rights and contractual rights

● In general, property rights are rights over things enforceable against other persons (in rem).

● Contractual rights, by contrast, are rights enforceable against particular persons (in personam).

They do not necessarily give rise to rights over things.

● Property rights, however, may arise from a contract, so there is an overlap between the 2 systems

of rights.

EXAMPLE: A contracts to sell a car to B.

● If A offers to sell the car to B for a particular sum, and B agrees, but A later refuses to do so, B’s

primary right is to sue A for damages.

● This right to get redress from A for the loss is a personal right.

● If B can secure an order from a court that A perform his or her obligations under the contract - the

remedy of specific performance — it is possible to say that B then has a proprietary right over the

car: the seller is under an obligation to deliver up possession, and transfer title of the car to the

purchaser.

○ #Theoverlapbetweenthetwo

● Sale of land — overlap between property right and contractual right.

○ Sue for damages (contractual right) and specific performance even when created by contract

(property right).

● Licenses — separation between the two.

○ Sue for damages only. No specific performance because it is created by contract only and

not enough to create property interest.

Licenses: bare, contractual or coupled with an interest Licence — an example of a right which is an insufficiently substantial ‘concentration of power’ over the

thing in question.

● Insufficient to confer on the non-owner a proprietary interest or right in the thing.

● Licence arises when permission is given by one person to another to do an act on the

licensor’s land which would otherwise constitute as trespass: Thomas v Sorrell

11

Types of Licences:

BARE LICENCE — not associated with a contractual relationship between licensor and licensee, nor with

the grant of a proprietary interest in the land.

● No contract; no grant of proprietary interest.

● May be revoked at the will of the licensor, and for any reason whatever: Wood v Leadbitter.

● The licensee becomes a trespasser if he or she does not leave the land within a reasonable time

after revocation of the licence.

● No consideration.

● EXAMPLE: When Chris permits Celine to stay over his apartment for the night.

CONTRACTUAL LICENCE — created by means of a contract.

● If licensee breaches the contract, then the contract may be terminated. The license can be

terminated without consequence.

○ If the licensee is not in breach, revocability becomes difficult. The licensor might become

liable for breach of contract.

● The theatre proprietor is entitled at law to eject the patron at any time despite the ticket purchase

and is not liable in assault provided no more than reasonable force is used: Wood v Leadbitter.

● The proprietor’s contractual liability in general is limited to the price of the ticket, although the

measure of damages may be greater if the contract can be interpreted as containing an express or

implied promise to provide enjoyment or pleasure: Jackson v Horizon Holidays.

● Contractual licence has no right to exclude or alienate: Cowell v Racecourse Co Ltd.

● EXAMPLE: When Justin purchases a ticket to see a film.

LICENSE COUPLED WITH INTEREST — licence is coupled with the grant of a proprietary interest.

- The licence cannot be revoked..

- Freehold, lease, easement, profits a prendre — contractual license coupled with interest

- Tenant has proprietary right - right to enjoy, exclude during the terms of the tenancy.

- If Chris grants Celine a profit a prendre (a right to remove a natural product from the land of

another), permitting Celine to enter Chris’s land and quarry for gravel, the licence to enter the land

cannot be revoked as long quarry is in operation: Australian Softwood Forests Pty Ltd v Attorney-

General (NSW).

Licences and Original Parties

Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605

FACTS

● Cowell (appellant) sued the Racecourse (respondent) for damages of assault.

● P was allegedly trespassing on D’s land. D’s servants and agents requested him to leave the

land, which he refused to do, and D’s servants and agents removed him using reasonable force.

● P misbehaved and breached contract.

● Full Court of SC ordered judgment be entered for D following Naylor v Canterbury Park

Racecourse Co Ltd.

● P appeals to HC.

ISSUE: Whether there was a right in a spectacle

HELD

LATHAM CJ:

● The right to see a spectacle cannot in the ordinary sense of legal language, be regarded as

proprietary interest.

12

○ 50 thousand people who pay to see a football game do not obtain 50 thousand interests in

the football ground.

○ An issue of regulation in public places

○ Everyone would have a right to exclude everyone

● If Hurst was applied

○ A building devoted to entertainment becomes overcrowded by persons who bought tickets.

○ If law in Hurst’s is applied, it is impossible for anyone to be removed, either for the safety

of the audience as a whole or in order to secure observance of the law.

● Hurst’s case is manifestly wrong, and it not possible to extract from it any general

principle which is consistent with well-recognised principles of law.

● Appeal dismissed.

● Cowell only had contractual interest, not proprietary.

● Cowell can only sue for damages.

EVATT J (dissenting):

● Used equity so Hurst’s case is convincing

● Court of equity should regard licence as irrevocable in all proceedings in which equitable

principles have to be recognised

● Revocation though good at law would be contrary to equitable principle of irrevocability of licence

and the equity prevails.

● Application of equity does not have a proprietary right as its condition

Equity in property law

● More recent case law has not followed Cowell’s case. Equity will now intervene.

○ In certain circumstances courts have determined that equity may intervene to prevent a

contractual licensor from pleading that the licence has been effectively revoked (although in

breach of contract).

○ Equity may treat a contractual licence as irrevocable and determine the rights of the

parties accordingly (discretion)

● Equity cases which treat a contractual license as irrevocable

○ Heidke v Sydney City Council

■ Council agreed to allow a youth group to use an oval for sporting purposes on a

number of agreed dates. Council revoked agreement and refused to allow members

of the group to use the oval.

■ HARDIE AJ concluded that the contract was irrevocable because (a) contract did not

allow revocation; and (b) that the award of damages to P would not be adequate

compensation for their loss

■ He granted an injunction preventing the council from repudiating the agreement

● P’s were able to exercise their rights to use the oval.

NOTES:

● The terms of a contract are still important in determining remedies for revoked contractual licence

○ General rule: A contractual licence is generally revocable, but a breach of contract would

arise (sue for damages).

○ Exception: If expressed/implied in the contract that it is irrevocable — specific

performance and injunction (equitable proprietary remedies) will apply to avoid revocation.