#7349 - Acquisition Possession And Consensual Transactions With Proprietary Interests - Property, Equity and Trusts 1

• 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).

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

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

• 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

• 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

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

  • 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)

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

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

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

  • Racing Pidgeons – remains property of owner as long as they retain animus revertendi (an intention to return to the keeper)

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

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

• 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)

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

• 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

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

• 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)

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

• Previously all statutes had formal requirements for goods worth $20 or more; these have been repealed in all jurisdictions

• 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

  • 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)

  • Courts can re-open 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)

  • 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

• 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

• 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])

• ANZ v Widin is one of many cases where courts have considered what is sufficient for the Statute of Frauds

  • 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

• 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)

• 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