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Acquisition Of Proprietary Interests Notes

Law Notes > Property, Equity and Trusts 1 Notes

This is an extract of our Acquisition Of Proprietary Interests document, which we sell as part of our Property, Equity and Trusts 1 Notes collection written by the top tier of University Of New South Wales students.

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Class 9 - Acquisition of property through possession and consensual transactions with proprietary interests, Formal requirements for sale of goods and contracts for sale of land Introduction

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There are different ways to acquire/transfer interest in property - the most usually way is the result of a consensual transaction (e.g. sale or gift). o

Others include disposition by will, transfer by a trust or transfer when a person dies intestate

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Proprietary interests can also be obtained by creating an object or by taking possession of it

Acquisition through taking possession Land

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Property can be acquired without consent (original acquisition, adverse possession) The principle of relativity of title ensures that a possessor is protected against all others with a lesser right

Chattels - wild animals

* At common law one couldn't have property in a wild animal and only took possession in certain circumstances; this is the result of the development of an ancient system of law o

Wild fox - not caught unless wounded/circumvented/ensnared to deprive of natural liberty (Pierson v Post)

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Whale - 'occupied' when harpooned even if it is detached if it impedes the movement, making it such that it is easily recaptured (Littledale v Scaith)

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Fish - possessed when within enclosed net but not before (Young v Hichens)

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Oysters - are ferae naturae (wild animals); can't be stolen but statute can make this an offence (Ex Parte Emerson)

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Bees - Proprietary interest established when hived but lost when escape to neighbouring land (Kearry v Pattinson)

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Racing Pidgeons - remains property of owner as long as they retain animus revertendi (an intention to return to the keepr)

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Fishing license - right to go on land to fish includes a right to keep fish when caught (Fitzgerald v Firbank)

Manufacture of objects

* An original interest can be acquired by manufacturing/creating the object by oneself

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If goods are changed in a manner by a process which makes it entirely different so that it can no longer be identified as what it was previously, the new object is owned by the manufacturer (Doodward v Spence)

Patents, copyrights, trademarks

* At first the common law recognized very few patents/copyrights/trademarks but statutory intervention ahs changed this (allowed under s51(xviii) of the Constitution)

Consensual Transactions with Proprietary Interests Sale

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The most usual method of acquiring an interest in property is by purchasing from the previous owner -t his lies at the heart of an economic system based on private property Certain formalities are required for title to pass effectively at law but where these are absent equitable interest may be present

Goods

* Sale of goods is codified in all states based on equivalent UK legislation - e.g. SGA 1923 (NSW); it is complex

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When chattels are sold, the vendor and purchaser make an agreement when property will pass (e.g. at a shop it passes when the contract of sale is made) o

In the absence of an agreement as to title passing the SGA regulates passing of title

Formal requirements for the contract of sale of goods

* Previously all statutes had formal requirements for goods worth $20 or more; these have been repealed in all jurisdictions

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Land

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A Customer Credit Code has been enacted in all jurisdictions which regulates contracts for the sale of goods when the requirement for payment is deferred - it has wide application and a 'truth in lending' requirement requiring the credit provider to disclose all significant information o

If a debtor has reasonable cause for default they could meet altered terms; they can apply to the credit provider to change the terms (s66 of the Code)

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Courts can reopen unjust contracts (s70)

Preliminaries accompanying the sale of a fee simple is more elaborate than goods transfer - reflecting the variety of interests in land and also their general expensiveness There is almost always a lapse of time between the contract of sale and the passing of title (which is called conveyance - while a transfer is the document on registration of which legal title to Torrens land is passed) o

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This time lag is to allow vendors to make arrangements to vacate possession and purchasers to investigate title and arrange finance for purchase

Both contracts for lands and goods must satisfy formal requirements under statute

Formal requirements for the sale of land

* Most formal requirements are contained in legislation derived from s4 of the UK Statute of Frauds; which is roughly: "No action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such an action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged or by some person by the party lawfully authorized"

Conveyancing Act 1919 (NSW) s54A

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This applies to all Torrens system land (Wallis v Moreton)

If property is sold at auction; the auctioneer has authority to sign a memorandum on behalf of the vendor or purchaser (but he must be authorized to do so in writing) and this can only be exercised as part of the sale transaction, not at a later time (Wright v Madden [1992])

Australia and New Zealand Banking Group Ltd v Widin (1990) 102 ALR 289 Facts: The issue was when a mortgage by Wardle (W) to the ANZBG took effect. If before 24 Feb '83 (within 6 months of when W's creditors petitioned for bankruptcy) it would have been void against the trustee in bankruptcy. On 5th Jan, W signed mortgage leaving blank the particulars of the land and date. He also signed authority requesting the bank to complete the mortgage form. The proceeds were deposited on 14 th Jan but it wasn't until 21st Sep that the mortgage form was completed and dated, The court held that an equitable mortgage comes into effect if there was sufficient memorandum in writing

Hill J: Was there sufficient memorandum? It was submitted by the bank that even if the details weren't included in the 5th Jan form the document as well as the form of authority together constituted sufficient writing for s23C of the Conveyancing Act

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It is not in dispute that the writing must describe the subject matter of the mortgage. Parol evidence can't be used to fill the gap; this would be contrary to the Statute of Frauds There is no doubt that two documents can be read together to constitute sufficient memoranda in writing but only certain cases it is appropriate to do so and questions exist as to what extent parol evidence can be adduced to link the two documents together After resolving the English authority his honour cited Timmins (referring to Long v Millar):

* The first inquiry is whether the document signed on behalf of the person contains some reference to another document (in that case it did). Then parol evidence can be given to explain the other transaction or to identify a document relating to it o In that case it brought light to a document containing all terms of the bargain; once identified both can be placed alongside each other; satisfying the statute The court also referred to the more liberal authorities of Thomas v McInnes and its subsequent acceptance in Cth v John White & Sons but declined to decide whether it was still good law
? They noted that in this case the document didn't refer to any transaction or any other document or any clear reference to the land in question ('Description of Land rather than something more specific like 'on account of house being sold for $500 in Auerback v Nelson) - he sought to adduce oral evidence to supply a deficiency in writing rather than to clarify an ambiguity; defeating the purpose of the Statute of Frauds In this case the documents to which reference could be made were silent as to the property proposed and subject of the mortgage; and thusly s23C and 54A could not be satisfied ANZ v Widin is one of many cases where courts have considered what is sufficient for the Statute of Frauds o

Sometimes courts strain the establish doctrine to satisfy the Act - reflecting a judicial dislike of vendors who accept a bona fide offer and then repudiate the oral agreement and seek a higher price ('gazumping')This has been legislated against in Pt IV of the Conveyancing Act 1919

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Sometimes it's necessary to decide whether the contract is for the sale of an interest in land (in which case the Statute of Frauds applies) or the sale of goods on land (in which case different formalities apply)

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Bunny Industries examines the effect of a transaction in which parties have made an enforceable contract for the sale of an interest in land but have not yet transferred the legal title

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