Introduction to Property Law (1) PDF

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LAWS11010 & LAWS20110 Property Law I 2019-2020 Introduction to Property Law

1. What is Property Law? In simple terms, it is the law governing the acquisition, use and transfer of objects. -

Why ‘objects’ and not ‘property’?

Property can be defined as the rights or interests of subjects in or over objects, or perhaps more precisely the relationship between subjects in respect of objects. Property law regulates and facilitates the changing relationships that subjects have in relation to objects. The objects of property can be tangible or intangible. The subjects of property include legal persons (individuals or corporations). A relationship that is governed by property law will give rise to property rights, including both ownership and other (lesser) rights. These rights serve or protect a subject’s property interest in an object. Several subjects may have different interests in one object. 2. Classification of Property 2.1. Which objects? 2.1.1. Land (real property or realty) “Land” includes buildings (or parts of buildings), fixtures, soil, minerals, trees, plants and airspace. It also includes intangible rights, for example rights of way. 2.1.2. Personal property (personalty or chattels) i) Choses in possession (tangible) (Chose is French for thing) – control is exercised by possession Examples: car, machinery, jewellery, clothing, consumables, products. ii) Choses in action (intangible) – control is exercised by legal action Examples: debts, shares, bills of exchange (including cheques), patents, copyright, trademarks and trade names.

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2.2. Which subjects? Property rights can be held by individuals, by the state, or in common. There are also objects and resources over which no-one has property rights. There are political and philosophical arguments as to whether or not private property rights should be enforceable, and as to the extent of private, state or commonly held resources in society. Different political and economic theories will prioritise each of these forms of property. 2.2.1. Private property Here an individual has the right to exclude others from enjoyment or benefit of object. e.g. ownership of house or copyright in a design There are different justifications for private property. e.g. natural rights and positive rights Different types of individuals can be subjects of property, which may reflect the power that they are granted in society. ‘“Property” is not a “thing”. It is instead a power-relation created by the state’s endorsement of private claims to regulate the access of strangers to the benefits or values inherent in particular resources.’ Kevin Gray, “The Teaching of Property Law” in Peter Birks (ed), Examining the Law Syllabus: The Core (OUP 1992) 19 2.2.2. Common property Individuals have no right to exclude others from enjoyment or benefit of object but a right not to be excluded. e.g. common land, parks, shore, public rights of way 2.2.3. State property State-owned or controlled resources, which may be allocated by state to individuals. e.g. Crown property, council-owned housing stock, natural resources. 2.2.4. No property May be objects which are abundant or which are not valued, or even those created for a purpose, where there is no right not to be excluded although a privilege to use them. e.g. air, light, radio signals, internet access Hunter v Canary Wharf [1997] AC 655

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2.3. Which system? Common Law or Equity? The systems of Common Law and Equity (fused by the 1873 Judicature Acts) each recognise and enforce property interests. Those enforced by Common Law are known as legal rights or interests, those enforced by Equity are known as equitable rights or interests. [N.B. The next lecture will examine the system of Equity and its role in property law.]

3. The Notion of Property Rights 3.1. What does it meant to say a person has a property right? Property may be seen as entailing a bundle of rights, liberties, powers and immunities. See Hohfeld, ‘Fundamental Legal Conceptions as Applied in Judicial Reasoning’ (1913) 23 Yale Law Journal 16 The “rights” are enforceable against others and can be broken down so that distinct rights can be transferred to others. e.g. mortgage e.g. power of appointment

3.2. Distinguishing between Property Rights and Personal Rights 3.2.1. Not all rights in respect of things are property rights! Property Rights or Rights in rem (Res is Latin for thing) Property (or proprietary) rights in respect of things are typically enforceable against everyone (they ‘bind the world’), including strangers to their creation (third parties). e.g. A, as the owner of a plot of land, can bring an action against anyone who trespasses on that land and so interferes with A’s interest. e.g. A, as the owner of a book, can bring an action against B, to whom he has lent the book, in order to recover that book (or perhaps to recover its value). Personal Rights or Rights in personam Personal rights in respect of things are only enforceable against specific individuals. e.g. A, who has a contract with B to do his gardening, can sue B for breach of contract if B fails to provide this service.

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3.2.2. Property rights are typically seen as stronger than personal rights since they can bind third parties, including purchasers and creditors. e.g. A grants a lease to B and then sells the property to C. Although C is now the legal owner of the land and did not grant the lease, C may be bound by B’s lease because it is a property right. e.g. B books a hotel room with A, but A then sells the venue to C. B can sue A for breach of contract but cannot bring an action against C because B’s right is personal. e.g. A and B enter into a contract for B to purchase a mobile phone but A then goes into insolvency before the phone has been delivered to B. Unless a particular phone has been identified, B’s right against A is personal. B ranks alongside A’s other creditors and is unlikely to receive full repayment.

3.3. Determining whether a right is Proprietary or Personal Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 Fearn and others v The Board of Trustees of the Tate Gallery [2019] Ch 369 National Provincial Bank v Ainsworth [1965] UKHL 1 ‘Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.’ (National Provincial Bank v Ainsworth [1965] UKHL 1, 19, per Lord Wilberforce)

3.4. The Numerus Clausus principle There is a numerus clausus (closed number) of property rights in relation to different types of property. In relation to personal property, the different property rights that can exist are ownership (legal and equitable), a mortgage or charge or other security interest, and bailment (possession for a period of time.) In relation to real property (land) the property rights include ownership (legal and equitable), leases, mortgages or charges, easements and restrictive covenants. In each case ownership is viewed as the most important right, with the other rights constituting lesser rights. The person who can enforce these rights is often known as an interest holder, for example a leaseholder or shareholder, rather than the actual ‘owner’ of the land or the company, emphasising that ownership is a separate legal category. The interest holder can enforce the particular rights that are associated with each interest.

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4. Ownership, Possession and Title 4.1. Ownership Ownership is the predominant de jure relationship that exists in relation to an object – the highest possible right. (De jure means as a matter of legal right.) In general terms ownership may be acquired originally by taking possession of an object that is ownerless, or has been abandoned, or is fixed to or mixed with another object. Ownership may be fragmented and lost or alienated (sold or given away), whether by action of the owner or a third party, or by courts. It can be vested (conferred) solely or jointly, concurrently or consecutively. e.g. A + X (+ Y + Z ….) (concurrent) e.g. A for life, then B (consecutive) How can ownership be fragmented? Examples of the incidents of ownership include the following rights and powers: right to possess right to use right to manage right to income right to capital right to security

(exclusive physical control) (personal use) (controlling use by others) (receiving value from land, rent, investment) (dealing with the asset) (excluding others from using)

power of sale power of appointment power of attorney

4.2. Possession Possession is the de facto relationship between a subject and an object, and may be defined as control of the object by the subject. (De facto means as a matter of fact and can be contrasted with de jure, above.) Possession may be viewed as an incident (element) of ownership, and may itself be viewed as de jure or de facto, in other words legal control (where there is no actual possession, although there may be constructive possession, which means a right to take immediate actual possession from a wrongdoer, for example) or factual control (based on actual possession or control, and intention to possess or control). Possession raises presumption of ownership (for example, the expression that possession is nine-tenths of the law) but this presumption may be rebutted. Possession is also important as in many situations it is possession that is protected at law rather than ownership.

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In common law possession begins the chain of ownership, and where ownership is not claimed then the possessor may be viewed as having title (entitlement to possession). In the case of personal property, ownership must normally be transferred by delivery of possession. 4.3. Title Title (entitlement to possession based on a set of facts) may be seen as relative since others may also have title which could be stronger and so entitle them to take possession instead. For example, the true owner may rebut the presumption of ownership by a possessor and demonstrate better title based on a set of facts.

5. Studying Property Law 5.1. Structure of Property Law I and II Property Law I

Property Law II

5.2. Language of Property Law Because of its historical foundations, much of the language is traditional and specific to property law. Remember to check the meaning of any words that you don’t understand when you first come across them, either in a legal dictionary or your textbook glossary.

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