Property in human tissue



PropertyWhat 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 itDoesn’t have to be tangibleCan be owned by any registered legal entity – a natural person or companyWhat 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:TransferableHave value or be given valueOthers can be excluded from it if you are the ownerAus law is reluctant to extend property rights to living human tissue.Property Rights v Personal RightsProperty rights – rights in rem –a right over a thing enforceable against worldPersonal rights – rights in personam – a right to sue to bring about performance of obligationOWN THE LAND – NOT THE VIEW – VIEW IS NOT THE PROPERTYABC v Lenah Game Meats Pty Ltd (2001)Lenah Game Meats (LGM) processed possums for purposes of using possum meatA trespasser entered LGM’s premises and filmed the activities, particularly the stunning and killing of possums and sent it to ABCLGM 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.Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937)Victoria Park sought injunctions to prevent the broadcastingDixon 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 defendantYou can’t own a spectacle (quasi property)Human TissueProperty in human tissueHuman Tissue Act 1982 (Vic) ss.38, 39 and 44Infertility Treatment Act 1995 (Vic) s.43AB v Attorney-General (2005) 12 VR 485, para.[132]-[136]US Case – Moores Case (1990) – Human TissueMoore suffered from leukaemia, treated by Dr Golde at Uni CaliforniaGolde found Moores cells useful for research and Golde never informed MooreGolde 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 IPWhat is a property interest?Must be proprietaryAn interest in a thing – legally recognised and enforceable against the world.Transferability – exclude others, trade it, market in it – consequencesSphere of enforceability – most important thing is that you can enforce property rights yourselfHas the characteristics of propertyKing v David Allen: Want to put up posters on property but King held licence. King was no longer possessor of the property so no damages.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 propertyLand/GoodsReal/PersonalTangible/IntangibleOne thing may be the object of several proprietary interestsOwnership, title and possessionownership – a term of wide and general meaningtitle – factual basis upon which claim to proprietary rights madepossession – present legal right (or colour of right) to use propertyInterest: quantum of rightsOwnership A legal relationship between a person and a thingCan be shared/ fragmented (as between law and equity)– trusteeship, co-ownership (concurrently/ consecutively: life estates)Not absolute but relativeWho has the better possession – most important. Right to remain in controlRights: To possession, use and enjoy, sell and alienate, exclude others from use, destroy, security of ownership, manage, generate income, capital 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 lawConsequences 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 possessionEquated 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.Animus possidendi: An intention to control the thing and exclude others (intention to control)Corpus possidendi: The power to control the thing to the exclusion of others (control in fact)Presumption of Ownership – Possession gives rise to an evidentiary presumption of ownership (possessory title) and 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 objectLegal possession: The right to possess. ***Relative – who has a better right to possession 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. 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 ownerThe title of the RP is stronger than the title of the possessory interestTitleMore than ownership - a claim to some legal right/interest is based.Absolute Title – creation, manufacture, registered title (but can be defeated by AP)Interest – interest refers to type of right – leasehold/easement/fee simpleTypes of Title: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 interestsPossessory title:Adverse PossessionTitle and FixturesWhat is a fixture? What is a Chattel?Fixtures:A fixture is a chattel so attached to land as to become a part of the landOwnership of land entitles a landowner to ownership of fixturesMaterial objects which when physically attached to land are regarded as becoming annexed to realtyIntention - Objects which rest by own weight may be fixtures if they have intended to become part of land. So heavy there is no need to tie it to foundation – marble statues, substantial garden ornaments. If presence was integral to a permanent architectural design or if they were part of a general scheme for improvement of realtyDefinitive classes established from common law:Things bolted to floorcentral heatinginstalled pumpelevator, video/alarmpool filtersleepers embedded in stoneaircon in wallsFence erected to improve landChattels:Things that rest by their own weight – heavy machinery, kitchen appliances (although connected electrically remain in position by own weight)Where connection to mains supply involves no more substantial attachment than is necessary for effective useDon’t lose character - Physical objects which never lose their independent character as mere personalityNo Transfer - Do not pass on transferNot self evident - Chattel if not self evident intention that they should attach indefinitely.Definitive classes established from common law:Satellite dishMobile homes – intention demonstrably intended to be removableFirmly 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.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 salespecial rules apply to fixtures installed by a tenantStamp Duty - stamp duty is payable on the land component, but not on the chattelsMortgaged - if land is mortgaged, the mortgagee’s security includes fixtures but not chattelsA 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 estateHow 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):the degree of annexation (how is the article attached to land?)the object of annexation (for what purpose was the article attached to or placed on the land?)Burden of proofAffixed 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 proofNot 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 proofRebutting 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:Own Weight - where an article is simply resting on the land on its own weight, it is presumed to be a chattelAttached to Land - if it is attached to the land at all, it is presumed to have become a fixtureSecurely attached - the more securely attached, the stronger the presumptionIs the presumption rebuttable? (REFER NEXT PAGE)If yes, not a fixture and a chattelIf 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:to the land or buildings to which the article is attached; orto the article itselfAnnexation - 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 worthPurpose of annexationBetter right - was article attached for the better enjoyment of the article, or for the better enjoyment of the land or buildings? (Belgrave Nominees)Consider: the nature of the article affixed and its objective purposewhether the item was to be in position permanently or temporarily, durationthey shared reasonable understanding of purpose served by annexing the itemNAB v Blacker – Chattel or Fixture?degree of annexation:pumps and sprinklers were not attached to the land, so were presumed not to be fixturesvalves had to be attached to underground pipes to be used, so were presumed to be fixturespurpose of annexation: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 BlackerBelgrave Nominees – Afixed to the wallAirconditioner being installedUnit was connected to the plumbing – enough to raise the presumptionIntention – airconditioners usually stay put not intended to be removed, intended to improve the amenity of the premesisRelationship 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 plumbingWhat 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 fixtureLease - subject to the terms of the lease, a tenant who installs fixtures in leased premises retains the ownership of themapplies to short term residential leasessubject to the terms of the lease, a tenant must not install fixtures without the landlord’s consentif 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 landlordEntitled to Remove - the tenant is entitled to remove them during the time the tenant is in possession, but not afterwards unless the landlord consentsRestore - 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 OwnershipWhat is land ?Real Property – LandRights over a volume of space – covers the surface of the earth and part of the earth below and aboveAbove the land – Roughly 200m above the roof-lineLPJ: Scaffolding into neighbours airspace – injunctionIn 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.Exception made for landing and taking off aircraftEntitlement to self redressAccess to sunlight is not an ownership rightSuch height as is necessary for the ordinary use and enjoyment of land (Skyviews – mere over flight of commercial aerial photography) Surveillance differentBelow land:200m belowLandowners have right to assert title to subsoil within their effective controlMineral vested in Crown (Legislation)Improvements to LandAdded - anything which is added to land is an improvement. When you buy the land you also buy the improvement on it. 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 soilTwo rights over land: ?(Colonial Bank v Whinney)Corporeal hereditament:Physical presence, tangibleSurface of the earth and physical things attachedSubstantial or permanent objects constituted by or connected with immovable property (Mitchell v Mosely)Incorporeal hereditament:intangible rights which may be enjoyed in, over or in respect of landright to exclude othersright to sell and leaseDoctrine of TenureCrown owns all land absolutely – we are tenants of the Crownlandowners hold an interest ‘of the Crown’ [‘mediately or immediately from the Crown’]their interest must derive from a Crown grant (originally, derivatively or fictively)What is land ownership in Victoria?‘General Law’ land – old common law systemproperty by transfer and proof of chain of titlenow system of deed registration under Property Law Act 1958 (Vic)‘Torrens System’ land – title by registration: Transfer of Land Act 1958 (Vic)LOOK FOR WORDS ‘REGISTRATION’What is Land Possession ?Possession of LandPossession - prima facie evidence of titleConnection - connection between possession and title (Toohey J)Presumptive - possession and a basis for presumptive ownership (Toohey J)Real Action - real actions, ejectment and orders for possession (Toohey J)Example:a squatter has a possessory title, an inchoate legal estate in fee simplethe squatter can only be lawfully ejected by a person with a better right to possessionthe possessory title entitles the squatter to:recover possession from a subsequent trespasser who enters into possession adversely to himsell, give away or devise his interest 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 titleNSW could not raise defence of jus tertii. Clissold, a squatter, was entitled to compensationLord 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).Property Law Act 1958 (Vic) s.2525. Interests of persons in possessionNothing 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.What is adverse possession (AP) ?Definition -Adverse possession is a person’s possessory right in land against that of the true ownerS10 – 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 i.e. If a lessee has possession, and a person takes adverse possession then it against the lessee not the lessorWhat constitutes adverse possession?The claimant must prove:Factual, or actual possession (corpus possessionis), Intention to possess (animus possidendi); and Possession must be adverseActual Possession: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 timeExclusion - an appropriate degree of physical control of the land to the exclusion of others.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 CatchpolePurpose of possession - often indicative of whether person is in actual possession (e.g. use must be more than just temporary and limited) – Leigh v JackCultivation, 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 othersExclude the rightful ownerTrespasser must show clear positive actions, slight acts by the true owner are enoughPossession must be adverse – NEXT PAGEAdverse – without consentNot 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.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.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 enoughNOT ADVERSE Possession – Need Express Permission: must take some express form (not enough for true owner merely to know of adverse possession) – JA Pye v GrahaJA Pye (Oxford) Ltd v GrahamPart of Land – Only have adverse possession over part of land you occupy.Exception – if land is part of a larger tract that is a distinct whole – corner of a field. Corner is part of an indivisible wholeMulcahy 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 blockStaughton v Brown – if you possess part, may be intention to possession wholeHow long is adverse possession available for?When does time start to run?Time beings to run when both of these things occur:Owner is put out of possession (dispossessed or discontinued possession) (Limitation of Actions Act 1958 (Vic) s.9(1)); andThe land is in adverse possession (Limitation of Actions Act 1958 (Vic) s.14(1))Dispossession, Discontinuance and Death – Dispossession - Acts of user inconsistent with the rights of the true owner/prior possessorDiscontinuance - true owner/prior possessor has abandoned possessionDeath - 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; andthe 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: or6 years from the date upon which the cause of action accrues – whichever is longer (s10(2)).Limitation of Actions – 15 Years after possessionLimitation of Actions Act 1958 (Vic) s.8 – after 15 years adverse possession, owner can no longer bring an action to recover the lands8. Action to recover landNo 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.What are successive periods of adverse possession?AggregationGeneral principle: Adverse Possession has to be continuous. If there is a break you have to start againMust be Continuous - continuous adverse possession by multiple individualsExtinction of previous interests - extinction of previous property interestMust be open - The possession must be open, not secret, peaceful no by force and adverse not by consentCapable of being found – if owner wanted to find out who was in possession they couldCannot 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 CONSENSUALSquatter A, in possession for 5 years, assigns his interest to B who occupies for 6 years, then to C, who occupies for 10 yearsIf 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 possessionC now has the best title to the land, A and B having abandoned their possession in favour of their successorsNB: 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-CONSENSUALAs above BUT none of the squatters assigned their rights to the next. 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 possessionA person with a better right to possession is a person with an earlier rightA’s cause of action accrued when ousted by B (16 years ago) and is now statute-barredB’s cause of action accrued when ousted by C (10 years ago) and is not yet statute-barred.B has the best title to the land 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:Squatter A is in adverse possession for 10 years then abandons the land, a year later squatter B goes into possession. 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 posession 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 ownerOwner consents to possession – lease or licenseWhere possession ends - abandonmentGap between two intrudersIf intruder acknowledges in writing the true owner – offer to buy land – implied recognition of true owner. (JA Pye (Oxford) v Graham)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):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 periodExtinguished 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.60-62What 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:s7. No title by adverse possession against CrownNotwithstanding 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.8Immunities – Railtracks - Limitation of Actions Act 1958 (Vic) s.7A extends immunity to Victorian Rail TrackCouncils - 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 55Utilities (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 OWNERSHIPWhat is legal and equitable ownership ?Legal owner - owner of legal title – legal ownerEquitable Title - owner of equitable title – equitable or beneficial ownerDifferent Persons - each of these may be held by the same or different personsDKLR 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.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.Definitionan obligation enforceable in equity which rests ona 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 purposesDivision between the nominal owner of property (trustee) and the person entitled to benefit (beneficiary)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 ElementsTrusteeTrustee hold legal title to the trust propertyBeneficiarythe persons who are entitled to, on certain terms, the equitable interest in the property (except for charitable trusts – where purposes not persons are entitled)also personal rights against the trustee to ensure the trust is managed properlyTrust propertythe property that is divided as to legal and equitable interests in itTime of Purchase - Only considers contributions to the purchase price at the time of purchaseMortgage - Contributions to a mortgage are not direct contributions to a purchase price because they arise after purchase.3 How are trusts created?To create a valid trust, require a number of certainties.These are:Certainty of intention to create a trustCertainty of subject matter of the trustCertainty as to the object of the trustVesting of Property in Trustee***Key to Creation***MUST HAVECertainty of intention to create TrustCertainty of subject matter of TrustCertainty as to object of the TrustVesting of property in TrusteeWhat are the different types of trusts ?Express trustExpress Trust - created by deliberate intention of settlor (creator of trust)Legal and equitable ownership are splitOnce the author has expressed trust he has divested himself of the whole right of property in landTypes of trusts:Express Trust by transferSettlor gives legal title (and instructions) to the Trustee, Trustee holds the trust according to instructions given by settlor,Settlor specifies the beneficiaries equitable proprietary interest in the land Beneficiary will becomes the equitable owner.Express Trust by declarationSettlor declares to hold property on trust, become Trustee ? BeneficiaryMust give directions (to set up the trust) to hold the land on trust for someone elseImplied Trusts – constructive and resultingConstructive 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)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 rightIntention - Intention in resulting trusts cases is proven by the judicial creation of presumptionsVoluntary 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 transferorPossible forms:transfer from transferor (T) to volunteer (V) – V holds on trust for Ttransfer from T to V and T – V holds their share on trust for TPurchase 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 interestA holds the property on trust for the transferorUnjust Enrichment – Cannot have unjust enrichment of one person at the expensive of anotherCalverly 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 GreenDefacto 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 contributionLaw of resulting trusts is concerned with contributions at timeShe 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. 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)What are the FORMALITIES of EXPRESS trust creation?LandReal Property and Creation of TrustS53(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 lawParagraph (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 willDeclaration 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 trustMilroy v Lordto 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 himto ensure property to beneficiary, settler may:transfer property to beneficiary [absolute gift]transfer property to trustee for purpose of settlementdeclare him/herself to hold in trust for purpose of settlementWratten v Hunter (1978 NSWSC)oral declaration of trust of househouse 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 FraudsPLA s.53(1)(b) appliesSpecial Cases:What is an equitable interest or trust subsisting at the time of disposition? 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 actions53(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)PersonalExpress trust springs from intention – 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. Can use create express trust through words or conduct - It is possible to create a trust without using the word.Paul v Constance – shared compo payout, he said it was as much yours as mine – court declared there was an intention to create a trust – court took into account they had not used any formalities but still found intention to create trust.Disposition of equitable interestsMust be made in writing; and Signed by the person disposing of it s53(1)(c)Applies to all equitable interests – goods and land (Grey v Inland Commissioners)s.53(1)(c) to disposition of existing equitable interests – covers all interests therefore shares must be in writingDispositions 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 playHow 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 1950on 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 trustson 25 March 1955, G and R executed 6 declarations of trust, Hunter also signedeach declaration recited that G and R held 3,000 shares, H made an oral direction on 18 February, G and R accepted the trustthe giving of the (oral) declaration was evidenced by Hunter’s signature to the declarationthe 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 trustif oral declarations were effective, the later written declarations would not be subject to stamp dutynote – 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 writingWhat is the presumption?Presumption of advancementPresumption of resulting trust may be rebutted by the presumption of advancementIntention 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 giftGift Equitable Interest - is presumed to spring back to themAbsence of intention distinguishes from giftGift Presumption - rebuttable by evidence of actual (subjective) intention to the contraryUnexplained apparent gift – the legal owner who did not contribute will bear the onus of proving it was intended to be a giftLegal ownership = joint tenants; Equitable ownership = trust fragments it and you are tenants in common as to the proportion you put in.Donor Intention - Intention of the donor not the recipientIntimate 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 propertyRebutting the presumptionOnly applies to relationships involving financial dependency:husband to wife (not clearly the reverse)father to child (but not the reverse)mother to child (unclear but likely) – Brown v BrownAt this stage does not apply to:nephew, sibling, son-in-law, grandchildde facto couplessame-sex couplesExcluding the PresumptionOnus on Person Rebutting - onus lies on the person seeking to rebut the presumptionDid not intend to confer a beneficial interest - a resulting trust is based on the presumption that the transferor did not intend to confer beneficial interestContrary 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)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 conductExamples -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)Indirect Contributions - where contributions towards the purchase price are indirect (eg. household expenses, actual mortgage repayments, domestic contributions)Buffrey v BuffreyHusband and wife purchased house with compensation money from his injury (145 000) and mortgage (50 000) in both names.Joint tenants – own it equallyHer employer was arguing presumption of advancementHeld: 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)Brown v Brown (1993 NSWCA)1958 Mrs Brown contributed approx. ? purchase price of a dwelling for her family, registered in names of sons. The 2 adult sons paid the balance by borrowing with mortgagepresumption of advancement displacedno intention decided at timeShe 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.EstatesWhat is an estate?Estates relate only to landDoctrine of tenure (crown owns all land) - a person doesn’t own land but only has an estate or interest in itEntitled 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)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 personSuccessive Estates - successive estates can be created in the same land, either in the present or in the futureDistinguishing 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 ie. fragmentation on the basis of timethese present and future interests can be alienated Freehold vs. Leasehold estates?Freehold Estates - the right to possession of a freeholder is uncertainLeasehold estate - interest has either a certain duration or one which is capable of being made certain (REFER TO LICENCES AND LEASES)What are the types of Freehold?Fee simple estate – Largest Estate in duration possibleClosest thing to absolute ownership 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 foreverFee tail estateAbolished in Victoria - since 1886, cannot be created in Victoria – Property Law ct 1958 (Vic) s.249 PLA – will create a fee simpleWhat is a life estate?Life estateLife Duration - Last for the duration of a person’s life and end on that person’s death2 Types:Life Estate is Alienable (can be sold)Life of the grantee – i.e. to Samantha for lifeLife of a person other than the grantee – i.e. to Samantha for the life of RobertGrantee can assign their interest to somebody else during that lifetimeGrantee is called a life tenantWhat 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 intestacyModes of Alientation for Life Estatesinter vivos - disposition is a grant during the life of the grantor:words of limitation eg ‘to a and his heirs’ for a fee simple estateProperty 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’Disposition without words - of limitation passes the fee simple, or the other whole interest of the grantor subject to contrary intention.Testamentary Disposition is a grant by will, takes effect on the death of the grantorrights of possession and receipt of incomebut 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 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: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. 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.A is the life tenant, B is the remainderman Each has a vested (i.e. currently existing) interest, but A’s interest is in possession, whereas B’s interest is not in possessionRemainderman - If a life estate is passed on to another they are called the remainderman – they get the ‘remainder’ of the interestCurrent 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.Two types – Contingent and Vested interests:Vested Interests – Where the interest is vested in possession at a later timeContingent Interests:An interest only comes about if an even occursCondition precedent: I give my property to A if they become a barristerCondition 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? In VIC – it is 80 years unless the person creating it choses a lesser a time. Can chose by nominating a number of years or the length of another person’s life (eg until Queen Elizabeth dies). 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)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 landRequires: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 landTypes of wasteThe liability of the life tenant depends on the type of waste:Ameliorating waste – alterations which actually improve the land, enhancing its value; nominal damages only and equity in the exercise of its discretion will not enjoinPermissive waste – failure to keep in a satisfactory state of repair omission – life tenant not liable unless instrument creating the life estate imposes an obligation to repairVoluntary waste – the positive act of doing injury to the land – doing that which ought not to be done life tenant liable unless instrument creating estate specifically makes him unimpeachable for waste, ie. exempts him from that liability. If no such provision, tenant is said to be “impeachable” for waste and therefore liable for voluntary wasteEquitable waste – even where an instrument exempted a life tenant from waste, equity can step inRestrain 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.133What are FUTURE INTERESTS in life estates?Future interestsDoctrine of estates involves the recognition of future interestsLeasehold Interest - a tenant has a leasehold interest vested in possessionLandlord has the fee simple reversion - which gives possession at the end of the lease – so too for a life interest and fee simple reversionTransferred - 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 interestRemainderman is not entitled to possession - until the end of the life interest, but their interest is vested in interestRemainder is transferable even before the end of the life estateFuture interests – vested and contingent remaindersIf the remainder is subject to a condition that may not occur, it is a contingent remainder and therefore not vestedcontingent remainders are also alienable, although they may not have vestedBailment1 What is Bailment?A bailor (deliveror) delivers goods to a bailee (deliveree)Must be a deliveryMust be a transfer of possession from the bailor to the bailee (Ashbury v Tolhurst)If the bailee does something repugnant to the terms of the bailment – then the immediate right to possession reverts back to the bailorIf 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?Types of bailmentsFixed Term – No right to immediate right to possession until term expires OR bailee does something repugnant to the interests the bailor (Penfolds)Action on the case - only open for bailor where bailment is a fixed term and has not expired.Terminable at will – Bailor has right to immediate possession at all times. (Wilson v Lombank)Does bailor have immediate right to possession at all times?Duties owed by the baileeDuty 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.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)Duty not to Convert – bailee has duty not to do anything contrary to the interests of the bailor (Morris)Duty of Directness – bailee must return goods or return in accordance with what bailor has directed.3 What types of possession is there?Actual Possession – The plaintiff has physical control and the intention to exercise that controli.e. i own my sunglass and have themConstructive 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.i.e. i own my sunglass and have lost them, and no one else has themRight to Immediate Possession – The plaintiff has a right to demand the goods from the person who is in wrongful possession.i.e. i own my sunglass and have lost them, and someone else has them and I want them back.Possession Restored – Right to immediate possession only allows possession to be restored to the person with right to possession. (Penfolds)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 partiesAre words of licence or lease ?Licence is NOT REQUIRED IN WRITING – Wells v Kingston-upon-Hull CorporationFactors:Fixed duration ? (more important)Yes – More likely leaseNo - More likely licenceIs there a reversionary interest? (more important)Yes – More likely leaseNo - More likely licenceIs there exclusive Possession? (more important)Yes – More likely leaseNo - More likely licenceLanguage Used? (less important)Lessor/Lessee – More likely leaseLicensor/Licensee – More likely licenceLeases1 What is a leaseLease - an interest in land given by a landowner to another person. MUST HAVE: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.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)Exclusive possession - which gives that person a right to exclusive possession of the land – owner and third parties can be excludedRegulated by:Retail tenancy – Retail Leases Act 2003 (Vic)Residential tenancy legislation - Residential Tenancies Act 1997 (Vic)Lease for Life?A lease for the duration of a life of a certain personThe 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 LeaseThe 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)TerminologyLessor - is the landlord, grantor of the leasehold estate, ‘lessee’ is the tenantLease - ‘tenancy’ and ‘demise’ are synonyms to lease’, ‘to let’, ‘to demise’ are synonymsLeasehold reversion – landlord’s estateAssignee of the leasehold reversion – purchaser of landlord’s estateAssignee of the lease – purchaser of the tenant’s leaseTenant 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 ends2 What characterises a Lease ?Require:Certainty of durationRight to exclusive possessionIntention/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 durationGeneral rule: A lease must have an end date in order to be effective otherwise the court will determine one.Lace v Chantler: Lease for duration of war void because war may never endLord 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.Periodic Leases – Rental Payment Period - The rental payment period for a periodic tenancy usually determines the period of notice required to terminate the tenancy.Certainty of duration – Prudential Assurance (1992 UKHL)Key issue ?30 annual rent or ?10,000 annual rent (value)Lease to continue until land required for road, not a fixed term lease – no certainty of durationAs tenant had been in possession and paying rent annually, a yearly periodic tenancy arosePeriodic tenancy considered to be of certain duration because it is certain for the yearTerms of lease agreement apply to periodic tenancy so far as consistent with that type of tenancyPrudential Assurance v London Residuary BodyLease 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 rentIs the lease part of a JOINT TENNANCY ? (REFER to JT part 10)*****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 tenancyLease Continues - the lease continues until it expires, even if the joint tenant lessor diesDeath – 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 survivorsDeceased entitled to rent - the deceased’s estate is still entitled to the rent during the life of the leasesee Frieze v Unger (1959 VSC)Right to Exclusive PossessionRight to Exclusive Possession requires:Intention of the parties - determined by examining the nature of the rights they have agreed uponTenant has exclusory powerImmunity from the owner’s supervisory controlSubstantive 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)KJRR Pty Ltd v Commissioner of State Revenue (1999 VCA)Franchise agreement, granted licence to use premisesFranchisor retained right to enter at any timeCharacterised as licence, no evidence to show licence was a sham transactionSome provisions of agreement consistent with the absence of exclusive possessionCourt gave pre-eminence to the language used by parties – licenceThey 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 timeExclusive possession – Radaich v Smith (1959 High Court)judgement – unanimous decision, ‘licence’ in law a leaseDixon CJ agreed with othersMcTiernan J: necessity, purpose of lease requires control of premisesTaylor J: terminology not determinative, question is what rights are conferred, purposes of licence requires exclusive possessionMenzies J: exclusive possession from nature of rights and duties conferredWindeyer Jsought to reconcile the intention test with the exclusive possession testintention of the parties is determined by examining the nature of the rights they have agreed uponif the grantee has the rights of a tenant, they must have intended to create a tenancy3 What types of leases are there ?Fixed TermFixed Term - lasts for a fixed term (duration)lease determines (ends) when the term expiresthe term must be certain or capable of being made certainPeriodic Tenancies – (typically RENT)Continue indefinitely - from one period to anotherCommon Periods - weeks, months or yearsEnded by PROPER NOTICE - determined/ends by proper noticeCreated by:Written or Oral agreementInvalid fixed term lease – tenant goes into possession and pays rent periodicallytenant overholds after expiry of a fixed term lease and continues to pay rent periodicallyRent - Is any periodic paymentPeriod of certainty is for that month that rent is paid forTenancy at willPerson in possession doesn’t pay rent - person is in possession with the consent of the landlord but does not pay rentTerminated at any time - can be terminated at any time by either party without giving noticeAlienation will bring the tenancy to an endCan form by Express Agreement or by Implication, examples:tenant overholding after expiry of leasepurchaser allowed to occupy before settlementtenant doesn’t pay rentTenancy at sufferanceTenant ‘holds over’ without landlord’s consent or dissent & pays no rentonly arises by implicationarises 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 trespasslandlord must re-enter before he can sue for trespass – not a genuine leasehold estateLandlord may sue for recovery of possession at any time without noticeAdverse possession after 1 year -(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 deedLease 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 writingNote:‘taking effect in possession’ - means a lease that is to commence at or before the date it is made‘best rent’ - means market renta ‘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 expensesNo 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 leaseCreation 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 onlys.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 – formalitiesA lease is not legal until registeredTLA s42(2) - Equitable Lease is unregisterable, lease binds a registered owner if the tenant is in possessionRegistrable after 3 years - only leases exceeding 3 years are registrable: 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 writingNote:‘taking effect in possession’ - means a lease that is to commence at or before the date it is made‘best rent’ - means market renta ‘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 expensesNo 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 lease5 Legal or Equitable Lease?Assignment of Legal Leases – MUST BE BY DEEDAll assignments of leases must be made by deedLegal 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.54Part Performance is possible - but part performance still possible, PLA s.55(d)Crago v Julian (1992 EWCA)Legal lease is a RIGHTEquitable Lease IF NO FORMALIf a formal lease is not met, then an equitable lease is in force - Agreement is in writing – s126 – Instruments Act orOral Contract plus part performance Refer Part PerformanceWalsh 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 enforceableLicence1 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)Revokable, no property interests createdIf supported by consideration may be contract and possibility of breachKing v David Allen - Court looked at the wording of the contract – licence usedIS IT A LEASE OR LICENCE ? LOOK AT FACTS2 What types of licences are there ?Bare licencePermission to enter onto the land of another (conditions may be attached) Features include:Express or implied - Created expressly or by implicationNo consideration, no contractNo proprietary rights or Interests (Commissioner Stamp Duties v Yeend)Enforceable against the licensor onlyRevocable at any time and cant be transferred (R v Toohey)Grantor can enter the land (Radaich v Smith)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 purposeFeatures include:Express or implied - Can be created by express or implied agreementOnly contractual rights - Confers contractual rights onlyOnly Enforceable against the licensorNo exclusive possession – cf occupationNo certainty of durationLicensor cannot wrongfully revoke the licence – i.e. not to treat the licensee as a trespasser until the licence has been validly determinedLicence coupled with a grant – PROFIT A PRENDREDefinition - 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)Must have:It is an interest in land (Webber v Lee) and Can exist in perpetuity or for a number of years (Corporate Affairs Commission v ASC Timber Pty Ltd)Right to enter another persons land and created by:GrantExpress or Implied ReservationBy PrescriptionProfit for General Law Land – must be created by a deedExtinguishment – If their subject matter is exhausted – (Clarkson v Woodhouse)Abandonment – They can be abandoned which triggers extinguishment (Tehidy Minerals v Norman)3 What characterises a contractual licence ?Require:Is the licence enforceable against a third party (successor in title to the licensor?) ie. is it a property right? NO - King v David Allen BillpostingIs the licence revocable as between the original contracting parties?Cowell v Rosehill RacecourseHeidke v Sydney City CouncilSigma Constructions v Marvell InvestmentsThird Party EnforcementKing 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 partyAshburn Anstalt v ArnoldWas 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 partyWhere 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.Binion v EvansPurchaser got a cheaper price because they agreed to abide by the licensees interestCourt said there would have to be more that just saying they would abide by interestsMust also be some benefit – something that effects the purchasers interests4 How is a licence revoked ?Revoking a license:Cowell is correct that a contractual licence can be effectively revoked even if in breach of contractUpon Death of either party – Coleman v FosterGrantor is no longer entitled to exclusive possession of the land subject to the licence – Wallis v HarrisonDamages in Contract - the licensee has only an action in damages for breach of contractTrespass even if revocation was wrongful - If a license is revoked you become a trespasser even though the revocation was wrongful (Cowell)Reasonable Notice is required – (Murray Robson Wines v Oakdale)If licensee acts in a manner contrary to the rights of the licensor – Baikie v Fullterton-SmithCowell v Rosehill Racecourse (1936 High Court)Demurrer – a defence that, on the facts pleaded by a plaintiff, no cause of action is made outC 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 demurredHCA held by majority that:this was a contractual right, not a licence coupled with a grant (spectacle was not an interest in land)a licence may be revoked, and the licensee thereby turned into a trespasser, even if the revocation is in breach of contractso R was entitled to remove C, and was not liable in assaultDissenting judgment of Evatt J: equity should step in and provide an injunction against revocation of licence***Equity may grant an injunction - 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 revokeCourts (since Cowell) now granting an injunction to restrain the licensor from revoking a licence where (Heidke)an express or implied term of the contract states that the licensor will not revoke, or will revoke only for specified cause; andthe revocation is in breach of that term (ie wrongful)Heidke v Sydney City Council (1952 NSWSC)licence for the use of a council oval, council sought to (wrongfully) terminate licenceHardie AJ identified and applied discretionary factors for courts to consider in deciding whether to grant injunction:are damages an adequate remedy for the licensee? Nowould grant of injunction cause undue hardship to the licensor? Nowould grant of the injunction force parties into a continuing relationship requiring ongoing supervision?injunction to preclude termination granted (confirmed Sigma)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 landM revoked the licence, alleging breaches by S, then applied to VCAT for a permanent injunction to restrain S from entering M’s premisesVCAT applied Cowell, held that M had effectively revoked S’s licence, whether wrongfully or not, and so S became a trespasserVCA 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 revokedCo-ownership - Joint Tenancy & Tenancy in CommonONLY IF USE IF SOMEONE DEATH OR DIES1 What is co-ownership?Co-ownership ownershipThe capacity for property interests to be divided in time to successive periods of possessionFeatures:distinct from derivative ownership of land (eg. freehold land purchased from prior owner)Can have successive interests in landExamples:Landlord and tenantLife estate and remaindermanLand owner and licenceCorporationBody corporate of strata title2 How to establish co-ownership ?Unity of Possession - central element of co-ownershipRequired 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 landNeed Unity of Possession - No co-ownership without unity of possessionNot subject to Trespass - A co-owner is not subject to an action in trespass by another co-ownerLiable for damage to property - A co-owner who damages part of the property, or excludes another co-owner, is liable to the other co-ownersCan separate or divide interests - Nothing to stop co-owners reaching an agreement of separation or division3 Co-ownership at LAW and in EQUITY ?Different co-ownership at common law and in equityCo-owners can be:JT at law and in equityTIC at law and in equityJT at law and TIC in equityEquity 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 equitysole 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 Baumgartnerif co-owners are joint tenants at law and tenants in common in equitythe legal estate is held on trust for each other as tenants in common in equity for their respective sharesEqual Contributions to Land purchase presumes – Clark v ClarkIt doesn’t matter that the title is in one name onlyMay still be a presumption where unequal contributions of family members – presumption of advancementClark 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 equity4 How to establish Joint Tenancy (JT) ?Joint Tenancy (JT)Treated as a single ownerTwo or more persons registered as joint proprietors are deemed to be joint tenants (Transfer of Land Act s30(2)).Each person’s share gives them entitlement to wholeRight of survivorship – when one dies interests go to other co-owners – can’t will it away with estate. Cannot have joint tenancy without survivorshipInterest does not pass as part of deceased estateSurviving Interests are enlarged – Death extinguishes that persons interest and surviving tenants interests are enlarged to absorbed the interest of the tenant who is deceasedLast surviving joint tenant becomes sole ownerSimultaneous or uncertain sequence of death - Property Law Act 1958 (Vic) s.184, a rebuttable presumption – most senior dies firstOther methods of dealing with uncertain or simultaneous death.If JT is ‘on hold’ (due to lease or licence) – then common law suggests TICMust have each elements:**Essential that the four unities be present:Unity of Possession (as above)Unity of TimeInterests vest at the same time - interest of joint tenants must vest in possession or interest at the same timeIf 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 sameException: where interests are created by will or a conveyance to a trustee or beneficiary – JT can arise even if no unity of timeUnity of InterestNature, extent and duration of interest must be that same eg. both freehold, not freehold and leasehold, same geographic space, same lease period etcEquitable Interest – differing portionsUnity of TitleJT must derive interest from the same instrument or same act, where no instrumentadverse possession must also arise from same factsSuccessive - No unity where X conveys fee simple to A and B. B Conveys his interest to C – interest not derived from same document5 Presumption of JT at LAW ?Presumption of JTPresumption applies to general law landPresumption of joint tenancy at common law (common law ‘favours’ joint tenancy) UNLESS:one of the unities (other than unity of possession) is absent; orinstrument creating interest includes words of severanceTORRENS LAND - for Torrens landTransfer of Land Act 1958 (Vic) s.30(2) - Joint proprietors are joint tenants and 33(4) - Multiple recipients of interests deemed joint tenantsParties must specify if JTs or TIC6 How to establish Tenancy in Common (TIC) ?Tenancy in Common (TIC)Distinct notional shares (eg. ?, ?) - over whole propertycan arise at time of creation of interest, or by severance of joint tenancyNo rule of survivorshipNeeds only the unity of possession – can have more but only require thisExistence of TIC is indicated by: absence of one or more of the unities of time, title or interest; orby words of severance, such as “to be divided between,” “in equal shares,” “share and share alike,” “between,” “amongst”Each entitled to a separate duplicate certificate of title - s30(2) Transfer Land ActMethod of transfer is by transfer or conveyance:A, B and C are JTs. A sells interest to X. B and C remain JTs of 2/3 and are TICs with X who holds 1/37 Presumption of TIC in EQUITY?Equitable presumptions - query whether the function of survivorship (which is attached to Joint Tenancy) is appropriate in the circumstancesGenerally - these presumptions are rebuttable with evidence of contrary intentionIf 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 trustEquity presumes you did not intend giftMoney 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 mortgagoron their death, the mortgage interest survivesthe mortgage must be repaid out of the deceased’s estatePartners 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 leaseSeparate business activities, divided floor space and shared rent in proportion to divisionno 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 saleConcurrent ownership in Equity when sole ownership at CLVedejs v Public TrusteeDe facto, purchased home together but in his name, she contributed to deposit and all household expenses, both contributed to repaymentsHe died intestateAt the leastRepayment of her financial contributionResulting trust due to her contribution of purchase price – TIC in equity and not entitled to husband’s share on deathConstructive trust based on contributions – BaumgartnerHeld:Entitlement extends beyond financial contributionAt 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 womanOnce 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 intended8 Severance & Alienation of JT ?Severance - conversion of JT into TIC****Words of Severance – Unless words of severance JT becomes TICIt 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 dealingby acts of joint tenants homicidesequestrationcourt orderUnilateral severance – (must be an actual alienation in law or equity)Alienation of whole interestto a strangerA and B are JT’sB grants his interest to Cwhat is the relationship between A and C?A and C hold as tenants in commonwhy? Corin v Patton (1990)Land Title Act 1994 (Qld) s.59A, B and C are JT’sA grants his interest to Dwhat is the relationship between B and C, and D?B and C are JT’s to 2/3D is a tenant in common with B and C to 1/3why?D has no unity of time or title with B and Cto another joint tenantA, B and C are joint tenantsA transfers interest to Bwhat is the relationship between B and C?B is a tenant in common with C as to ?B and C are joint tenants as to ?what happens if B then transfers half of the joint tenancy interest to A?A, B and C are joint tenants as to 2/3, B is TIC as to 1/3 with CPossible for A and B to sever the joint tenancy by cross transferring their interests to each other? YesWright v Gibbons (1949 HCA): 3 sisters JT; 2 sisters transferred interest to each other; Held to be effective in severing JTCan now convey to yourself to sever under legislation (PLA s72)to oneselfA, B and C are joint tenants - A wants co-ownership but not survivorshipA 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: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 contraryRight to encumber the land (MORTGAGE)– a co-owner is entitled to: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 shareEncumbrance affects interest of co-owner - the encumbrance affects on the interest of the co-owner undertaking it (remember unity of possession)Encumbrance must not interfere right to possession – must not interference with other with the other co-owners’ right to possessionMay Sever Joint Tenancy - an encumbrance may sever a joint tenancySeverance by mutual agreementEquityagreement 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 JTLand:Must be in writing - s126 of Instruments Act (Lyons v Lyons)Other courts have said as long as intention is clearly manifestImplied 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 dealingCourse of conduct such that all co-owners treat themselves as TICexamples:negotiations to sell and divide up proceeds before agreement is concluded (Re Pozzi)see also Abla: mutual wills leaving property to other peopleSeverance other than by an act of a JTMurder of a JT by another JT – severance immediately occursSequestration – severance immediately occursBankruptcy - 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-ownershipProperty 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 – takes effect as a conveyance of land to the mortgagee with an equity of redemption in the mortgagor (i.e. fee simple is actually transferred to mortgagee) – this severs the joint tenancyconveyance effects severance of joint tenancyunity of time and title no longer presentEquitable Mortgage - it is unclear whether an equitable mortgage severs a joint tenancyTorrens MortgagesOperates as a statutory charge and not a transfer - under the Transfer of Land Act 1958 (Vic)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. Bank won’t grant $ without consent of all co-ownersJoint Tenant mortgagor 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 land10 Leases, Easements and Mergers under JT?Co-owners’ right to LEASERight 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) (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-ownedExclusive possession - a lease by all co-owners can confer exclusive possessionthe lessee and another co-owner are bound to respect each other’s rights to exclusive enjoyment and use and neither can oust the otherFor a TIC – lessee of one co-owner and the remaining co-owners are TIC for the duration of the leaseoriginal co-owners are TIC of the leasehold reversionPartial alienation by LEASELease 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 tenancyLease Continues - the lease continues until it expires, even if the joint tenant lessor diesDeath – 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 survivorsDeceased entitled to rent - the deceased’s estate is still entitled to the rent during the life of the leasesee Frieze v Unger (1959 VSC)Partial alienation by EASEMENTThird 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 possessionEasement encumbrance not an estate – unlike a lease, an easement is not an estate but a mere encumbranceno unity of title is destroyed and therefore no severance or suspension of joint tenancyMergerExample:A has a life estate and B and C are joint tenants of a remainder in fee simpleA transfers interest to B, life estate merges with B’s remainderthe JT between B and C is severed because their interest is differentCompeting Interests 1 What is a priority dispute ?Land -Arises where:valid instruments create [legal or equitable] interests in land in different people at different times and those interests are incompatiblefor example, a short term lease for land and then a sale of the land which purports to give vacant possessionLack 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 – Nemo dat quod non habet – A person cannot sell what they do not ownChattel security registerEstablished by legislation.Changed nemo dat - a lot when it comes to mortgages over chattels. Old rule of nemo dat = purchaser took a risk, mortgagee would defeat buyer. Now not only does register set up notice, it has changed priority rules, 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 prevailsNemo dat rule – cannot give what you do not haveLAND - see Property Law Act 1958 (Vic) s.44 (p424 CM)i.e. attempt to sell same land twiceGOODS - Goods Act s27GOODS Exceptions to "Nemo Dat" and "First in Time" rules for sale of Goods: Sale under voidable title: where seller’s title is voidable, but has not been avoided, bona fide purchaser without notice acquires good title – s29s30 - Seller in possession after sale: where seller remains in possession after sale and re-sells goods, bona fide purchaser without notice acquires good title 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 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 ActGoods in Trade – Goods Act s1958 (Vic)1. SALE OF GOODSSpecific (i.e. identified) goods: property passes at the time when the contract is entered into – s22 Goods Act 1958 (Vic)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) – s23S29 – Sale under voidable title 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 enforceabilityLegal interests (L)Enforceable in a court of law against the whole worldEquitable interests (E)enforceable by a court of equity against all except a bona fide purchaser for value without noticeA mere equity (ME)enforceable by a court of equity against a limited number of third parties, ie. those with notice of its existence or are volunteersLegal v LegalFirst in Time WinsNemo Dat - Cant sell what you don’t have – Except where the sellers title is voidableBona fide purchaser without noticeGOODS - Goods Act s27GOODS Exceptions to "Nemo Dat" and "First in Time" rules for sale of Goods: Sale under voidable title: where seller’s title is voidable, but has not been avoided, bona fide purchaser without notice acquires good title – s29s30 - Seller in possession after sale: where seller remains in possession after sale and re-sells goods, bona fide purchaser without notice acquires good title 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 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 ActEquitable estate v subsequent legal estateSubsequent legal will defeat prior equitable if:Subsequent legal is:purchaser for valuebona fide (good faith)without notice of the prior equitable estate 1 Purchaser for value without notice?Evidence of a transaction supported by consideration – not a giftConsideration is valuable, money or money’s worth – not nominalConsideration exchanged at time of acquisition of the legal interest2 Good faith and noticeGood faithsometimes knowledge can qualify as “bad faith”NoticeIf have Notice, therefore not bona fide - actual, constructive or imputed at time of consideration If have you imputed notice, 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.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.44physical search of landsearch of title documentsconduct investigations relating to titleActual 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...”Negligent Acts – 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)i.e. A has equitable mortgage and deeds, A loses deeds to B and not registered a cavet – B sells land to C. 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 encumbrancerLegal Estate v Subsequent Equitable EstatePrior 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 Whipp2 Types:“fraudulent intent”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 propertyAgent - 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.Exampleeg 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)Reckless or grossly negligentFailure to get in the title deeds - may suffice to postpose the holder of a prior legal interestMust be gross negligence – some special degree of want of prudence must be showni.e. Walker v Linom: - parting with title deeds without good reasonThe first person has taken the risk by not taking possessionEquitable estate v equitable estatebetter equity prevails if equities not equalOnus rest on the later claimant to show they are preferred – Platzer v Commonwealth BankBetter equity prevails – Nature and condition of the equitable interestsEquity 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.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) Negligent Acts – 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)i.e. A has equitable mortgage and deeds, A loses deeds to B and not registered a cavet – B sells land to C. 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 encumbrancerpriority 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 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 LtdExample - Where A enters contracts to sell to B, and then A also enters into contract for C equity will search for the better equityconduct and circumstances will affect priorityThe Circumstances and manner of acquisitionThe Conduct of the parties with respect to the acquisition of their interests – conduct that arms the third party to present himself as unencumbered v taking precautionsSecond interest holder - If second equitable interest holder has knowledge of earlier postponing conduct they cannot gain priorityMere equity v subsequent equitable interestEXCEPTION 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 – 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 equityRelevant to Torrens landEquitable MortgagesInterest postponed if parallel reationshipThe 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 rightApart 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 Formalities1 Kinds of Acquisition ?Derivative acquisition – transfer from someone who already has a proprietary interest, acquisition from another by sale or gift (consensual transactions)action of law/equity (bankruptcy, imposition of trust)Adverse Possession - property may also be acquired without that person’s consent (eg. adverse possession)Original Acquisition – absolute title via creation, manufacture etc2 Formalities required for Sale of Goods ?Property (title/ownership) passes when intended to pass –specific goods in a deliverable stateproperty passes at the time of contractdifferent treatment for ascertained goods and unascertained goodsGoods Act 1958 (Vic) ss. 21 (unascertained) and 22 (ascertained)Specific goods – property passes at the time the contract of sale is madeno gap between the making of the contract for sale and the passing of title3 Formalities required for Sale of Real Property ?Agreement in Writing - s.126 of the Instruments Act 1958 (Vic) Contract must be evidenced in writing and signed by the party to be chargedREFER 4 belowTime lapse between contract of sale and when legal title passes to purchaser – allows purchaser to investigate defects in title and organise financeFormalities needed for an effective sale of real property (including leases)The consequences of failure to comply with the formalitiesTorrens land - Transfer of Land Act 1958 (Vic) – s40(1)the legal interest passes on registrationthis requires the following steps:Execution of memorandum of transferDelivery of transfer to doneeDelivery of (‘duplicate’) certificate of titleLodgement of documents for registrationRegistration 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….’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 deedContained in ss.52-55 of the Property Law Act 1958 (Vic)s.52(2) where this requirement does not applydeeds:Conveyances must be by deed - otherwise they are void***Must be ‘signed, sealed and delivered’Execution of deeds: PLA ss.73, 73APLA s57 - Description of deedsPLA s73 - Execution of deeds by an individual – must either sign or place mark upon the deed. Sealing alone is not sufficientPLA s73A - Sealing of deeds – An executed deed does not need to be sealedGeneral 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 meaningInstrument - includes deed and will but does not include a statute, unless the statute creates a settlementLand - 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)Contract must be evidenced in writing and signed by the party to be chargedS53 of the Property Law Act 1958 (Vic)What interest the purchaser acquire by contract and before settlement?For Land – legal title passes on:execution of deed of conveyance (general law land)registration of an instrument of transfer (Torrens system land)equitable title passes on: entry into a specifically enforceable contract of saleRefer TO 5 BELOW4 What if not in WRITING? – Part PerformanceContract is not void, or voidable, but “unenforceable” – Mason v ClarkeSpecific Performance – to be specifically enforceable, a contract for the sale of land must:either be in writing (s126) etc. OR be oral and supported by sufficient acts of part performance; and damages must be inadequate; andthere must be no bar to specific performance hardship must not be caused to D by decreeOral 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 –Requirements: oral agreement; and sufficient acts of part performanceProperty 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:That Plaintiff relied on the acts as part performance of the contractMaddison 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 SandlandWas there reliance? Usually very clear.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.The sufficiency of the actsMust 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.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 yearthe 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 itNon-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 titleWidin also signed authority to ANZ to complete the details, diary note made referred to the propertymoney credited to Widin on 14 January 1983mortgage form completed in September 1983Held (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 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 banksubsequently 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 allegedthe acts did not have to be required obligations by the contract – enough that they were carried out under ithere, 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 PERFORMANCEThe equitable doctrine of conversionInterest prior to the agreement finishingInnocent party must have to been willing and able – Bunny Industries v FSWAn 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 – FSW sold land to BI, and then sold to another. BI claimed property was on trust for them and wanted specific performance. 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.ExampleAssume a contract of sale between A and B – Before settlement, A has the legal title, but B is recognised in equity as the beneficial ownerTrust - A holds legal title to the property as [constructive] trustee for B.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%)so A’s interest is characterised as personality, B’s is real propertyInterest 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.if anything happens to the land between the time of contract and settlement it is at L’s riskthe Vendor has:(a) a charge or lien on the land as security for the purchase money and (b) a right to retain possession of the land until the purchase money is paidSold 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 repudiated.FSW held as constructive trustee of the property for BI from the time of contract.Since the sale to P2 was in breach of trust, FSW was accountable to BI for the proceeds of sale received from P2.GIFTS - LANDGifts of real propertyGifts:Not supported by consideration - A transfer of property not supported by considerationEquity will not assist - Equity will not assist a volunteer Gifts of General law landAn effective gift - of general law land requires execution of a deed(Refer Acqusition and Formalities)The donor must execute a conveyance in favour of the donee Property Law Act 1958 (Vic) s.?52(1)If not 1 & 2 then gift fails in equity and law:Equity will not assist a volunteerEquity will not perfect an imperfect giftGift of Land in EQUITYEquity may recognise a gift as effective before the legal formality of registration is completedCarrying out that intention matters – eg. execute transfer and give it to doneeTo complete a gift in equity MUST HAVE:Corin v Patton (1990) 169 CLR 540Vesting 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. 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 doneMust 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:Memorandum of TransferAny necessary title documentsOnce these things have occurred:Equity enforces assignment and donor is restrained from derogating from the gift. (Corin v Patton)Torrens landthe legal interest passes on registrationTransfer of Land Act 1958 (Vic) s.40(1)this requires the following steps:Execution of memorandum of transferDelivery of transfer to done (Corin v Patton)Delivery of (‘duplicate’) certificate of titleLodgement of documents for registration (Cope v Keene)Registration 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….’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 EQUITYAs 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 GIFTS1 What is a chose in action ?Chose in action:Intangible property (Incorporeal) – Brice v Bannister PersonalDebts, goodwill, rights under insurance policy, shares in a company, bill of exchange, intellectual propertyDuty on individuals not to interfere with the use and enjoyment of the personality by its rightful owner or possessorPurely a means by which others can be called upon to do or refrain from doing somethingMoney:Deposit of money into a bank account creates a debtor/creditor relationshipBanco 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 paperRights can be transferred and signed over to someone elseBearer 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-howCopyrights – 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 lawWheatley 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 applyOxford 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 propertyShares in a company:Shareholders are owners, voting rights, dividends, capital if co wound upBank Account:Right to sue bank for debtno obligation to repay you the actual notes you gave themFuture Chose in ActionA future chose in action is the prospect or possibility of becoming entitled in the future to a proprietary right. HYPERLINK "" \l "315-50.6" (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. HYPERLINK "" \l "185-480.2" (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. HYPERLINK "" \l "185-480.4" (Norman v FCT)Future choses in action include:the possibility that a debt may mature; ?Bakewell v DCT(SA)? the possibility of monetary benefit upon the intestacy of a person; (Redman v Permanent Trustee Co of New South Wales Ltd)??ora 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 law4 Critical Steps are involved from Norman v FCTMust be writtenMust be signedWritten 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 particularNot 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)First in time prevails – Redman v Permanent Trustee of NSWSpecial CasesNegotiable 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 checkSharesA 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 lawLimitations of Action – Limitations Actions Act s6 Successive conversion of goods: no action shall be brought after 6 years3 What are incomplete GIFTS CHOSE IN ACTION?S134 – PLA – Legal Assignments of Things in ActionMust be in WritingEquity may recognise a gift as effective before the legal formality of registration is completedCarrying out that intention matters – eg. execute transfer and give it to doneeTo complete a gift in equity MUST HAVE:Corin v Patton (1990) 169 CLR 540Vesting 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. 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 doneMust be in writingNorman v FCTChose 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.express or implied authority is what is crucial – actual or constructive delivery would constituteNorman v FCT (1963) 109 CLR 9FactsUnder 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:to the dividends on shares he ownedto the interest on ?3,000 of a ?4,600 loan to a firmUnder 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 noticeThe FCT argued that the assignment was ineffective, and that the dividend and interest income were both taxable in the taxpayer’s handsWindeyer 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.’GIFTS – PERSONAL PROPERTY – CHOSES IN ACTIONCHATTELSdeed of giftdeliverywilldeclaration of trustRequirements for valid gift of chattels by deliveryThe donor MUST:have legal capacity to make a giftown the propertyhave intended the transaction as a gift (donative intention)Gift intended to be made immediatelyThe gift must be accepted by the doneeThere must be delivery of possession 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 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)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 bankruptthe house was owned by and in possession of bankruptwife claimed (against trustee in bankruptcy) that the furniture was hersHeld – there was no delivery, words of gift are insufficient without a change of possessionDelivery – 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 themthe grandfather died and a contest developed over ownership of furniture, arms and armour between Stoneham and those taking chattels under the grandfather’s willHeld – 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 futileDelivery – Rawlinson v Mort (1905) EW King’s Bench)if actual delivery is impractical (eg. chattel is too large and bulky), symbolic delivery may sufficethe 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 organthe owner then handed over the receipts he’d received form the organ builder and a letter from the vicar acknowledging the loan of the organlater, in front of the organist and 2 witnesses, he put his hands on the organ and said he had given it to the organistHeld –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 plaintiffThomas 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 itThomas mentioned various places where it might have been leftC searched for the manuscript and eventually found it at a hotel which had been identified by Thomas, who subsequently diedC sold the manuscript to another who sold it to the defendantsCaitlin Thomas, the administratrix of his estate, sued the defendants for return of the manuscriptHeld – 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 deliverySpecial CasesDeed of Gift (Cochrane v Moore)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 considerationDeclaration of TrustEquity will not transform an imperfect gift into a declaration of trustJones v LockJones 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 safeJones died 6 days later, his will left his estate to the children of a previous marriageJones had told his solicitor (Mr Lock) of his intention to invest the sum for the child, his widow claimed ?900 on behalf of the infant son, arguing that the cheque was a giftHeld – the gift was imperfect, no intention to make an immediate gift.could it be argued that Jones had created an express trust?no trust – in making a declaration of trust a person must clearly manifest an intention that they will be holding property on trust, the words “I give this to baby” did not show such an intentionequity will not transform an imperfect gift into a declaration of trustWords are not sufficient – Words of gift are insufficient without a change of possession (Re Cole)Donationes Mortis Causa 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 deathThe gift will be completed by the death of the donor if there is a short in the rest of the estateSmith v CasenReal property is not capable of being a subject under this – as no delivery of deeds of title (Watts v Public Trustee) ................
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