MLJ 711 property essay Final PDF

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I. INTRODUCTIONThe concept of property has long divided lawyers and philosophers leading to an array of imaginative perspectives focusing on natural, social and positive concepts. 1 It is argued in this essay that traditional views focusing on the object of property itself and the metaphors in regar...

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700052061 I.

INTRODUCTION

The concept of property has long divided lawyers and philosophers leading to an array of imaginative perspectives focusing on natural, social and positive concepts. 1 It is argued in this essay that traditional views focusing on the object of property itself and the metaphors in regard to a bundle of rights are not broad enough to adequately define property in modern times. Part I will discuss the common characteristics of property differentiating between a personal right and a property right. Part II discusses the difference between a contractual right and a property right, as well as the views that contractual obligations can form the basis of a property right. Finally, Part III will identify the legal boundaries of property before analysing the definition of property in the High Court decision of Yanner v Eaton 201 CLR 351, in Part IV.

II.

CONCEPT OF PROPERTY

A. Types of property The current legal position is reflected in the following quote: ‘property law seems to suffer from a characteristic disease of legal categories; everyone knows what it is, but no one can define it’. 2 From what is generally understood, property includes objects, rights, resources and obligations whether tangible or intangible and can be broken down into various categories: 3 1. Personal property, including corporeal things such as goods and chattels and incorporeal things such as choses in action; 2. Real property (land); and 3. Chattel real (leases).

B. In rem rights and excludability

1 Abraham Bell and Gideon Parchomovsky, ‘A Theory of property’ (2005) 90(3) Cornell Law Review 531,541551. 2 Ibid 533. 3 Samantha Hepburn, Australian Property Law Cases Materials and Analysis (LexisNexis Butterworths Australia, 2018) par 1.32.

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700052061 A property right can be differentiated from a personal right on the basis on which it is enforced. The former is enforceable in rem, that is against the world, whereas the latter is only enforceable in personam, that is ‘exclusively against persons specifically determinate’.4 The right to exclude others is a fundamental aspect of a property right. 5 Some have gone as far as to describe it as the ‘sine qua non’. 6 This concept promotes stable ownership by ‘repelling nonconsensual takers and users of the asset’. 7 In order for excludability to be enforceable in rem, it must not be limited to physical ability to exclude but must also encompass a normative ability to exclude.8 The duty of non-interference establishes the required societal norms necessary to allow for excludability.9 The negative aspect of the duty can be differentiated from a personal obligation, which would require a positive action to perform it. 10 It is argued that the right to exclude is merely a ‘symptom of property’.11 However, the right of exclusive use is a concept which support this fundamental characteristic of property, as it correlates with the ability to exclude within the concept of in rem rights.12

C. A personality-based characteristic of property An alternative way to define property is by reference to the personality-rich and personality-poor theory. 13 Given that ‘the thing of proprietary ownership is something that is uniform across persons’14, its character should not change upon transfer to another party, therefore it lacks personality. In other words, ‘objects that attract property interest are not dependent on the owner to derive their identity’.15 Only personality-poor objects would correlate to a negative duty of interference and therefore would allow rights enforceable in rem.16 While this seems applicable to tangible forms of property such as a car, a house or an animal, it is difficult to apply the concept to non-tangible forms of property. Indeed, contractual obligations,

4 Kunal Sharma, ‘A Relational Theory of Property’ (2013) 22 Australian Property Law Journal 70,76. 5 Ibid 81. 6 Thomas Merrill, ‘Property and the Right to Exclude’ (1998) 77 Nebraska Law Review 730, 732. 7 Abraham Bell and Gideon Parchomovsky (n 1) 587. 8 Sharma (n 4) 81. 9 Ibid 82; John Tarrant ‘Characteristics of Property Rights’ (2008) 16 Australian Property Law Journal 51, 53. 10 Sharma (n 4) 82. 11 Ibid. 12 Ibid. 13 Tarrant (n 9) 55; Andrew S Gold ‘A Property Theory of Contract’ (2009) 130(1) NorthernWestern University Law Review 49. 14 Sharma (n 4) 85. 15 Ibid. 16 Ibid.

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700052061 following this theory, would form an in personam or personality-rich category of rights on the basis that the obligation is often not separable from the person. 17

III.

PROPERTY VS CONTRACTUAL RIGHTS

It has been argued that contractual obligations ‘can achieve freedom from personality and become separable’18, thereby becoming the object of a property right. 19 In other words, ‘an obligation is the thing’ and ‘the benefit of the obligation is the property right’. 20 A debt, for instance, was recognised as a property right by the High Court in both Loxton v Moir and Yanner v Eaton.21 Whether the concept applies to non-monetary contractual obligations has been debated. In Commissioner of Stamp Duties (NSW) v Yeend (1929) 43 CLR 325 the concept of proprietary interests established by contractual rights was expressly rejected on grounds that a promise lacking any monetary terms is a mere contractual right and not a property right. However, this reasoning is illogical when consideration is given to remedies for breach of contractual rights. That is, compensation is expressed in monetary terms and gives rise to an obligation to pay and therefore a property right.22 In Australia, Trident General Insurance Co Ltd v McNiece (1988) 165 CLR 107 provides support for the proposition that a contractual obligation is a property right. Deane J held that a contractual obligation can be held on trust if expressly intended in the contract. 23 On that basis, itis logical to conclude that if an obligation can be the subject of a trust it can also be the object of a property right, despite the court not expressly referring to it in those terms. 24 However, to say that contractual obligations, as a whole, form property rights would be fanciful. While a lease confers an interest in the land and can be classified as proprietary in nature, a bare license to enter would not.25 The High Court found that a contractual license to enter premises did not confer a proprietary right on the licensee. While it allowed the licensee a right to enjoy the land, that right was revocable and thus did not confer rights of exclusive possession. 26 This can be 17 Ibid 86, Gold (n 13) 49. 18 Sharma (n 4) 88. 19 P J Badenhorst, ‘Towards a civilised theory of property right in Australian Law’ (2019) 27 Australian Property Law Journal 134, 138. 20 Tarrant (n 9) 57. 21 Ibid 55. 22 Ibid 57. 23 Trident General Insurance Co Ltd v McNiece (1988) 165 CLR 107, 121. 24 See also, Don King Productions Inc v Warren [2000] Ch 291; Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530. 25 Badenhorst (n 19) 138. 26 Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605, 616.

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700052061 distinguished from a leasehold contract, which confers on the lessee exclusive possession and can be classified as proprietary in nature. While contractual obligations remain a debatable topic of property law, in rem enforceability and ability to exclude still remain at the root of the distinction. 27 A personal right will seek performance of a contract, whereas a proprietary right will seek recognition of the thing in question.28 A legal framework that attempts to identify property boundaries is necessary to understand the extent to which the law will recognise a property right in a fast-developing economy, having regard to deeper public policy issues such as ethical considerations and resource allocation.

IV.

BOUNDARIES OF PROPERTY

A. Views As previously discussed, intangible things or resources are capable of becoming owned. However, there are limits to what a person can claim property rights to. The parameters must be identifiable to allow third parties to abstain from interfering with the property in question. This limitation was discussed by the High Court in Victoria Park Racing and Recreation Grounds Company Ltd v Taylor (1937) 58 CLR 479 (‘Victoria Park’). A majority of 3:2 held that a spectacle could not be owned. The court emphasised that while an owner is entitled to erect a fence to exclude other people’s ability to view inside his property, it is not feasible to propertise what one can see with his own eyes. 29 The parameters are virtually non-existent and would encroach on individuals’ ability to ascertain the legal scope of their view.30 A view cannot be owned, even in a metaphorical way, as it has no clear boundaries. However, courts today may be faced with challenges in response to technological and digital advances. The commercial development of events and exclusive rights to broadcast have challenged the idea that an event or a view cannot be owned, although moral boundaries must be considered. B. Moral boundaries Some resources with property characteristics are denied any rights of ownership on social and moral grounds in an attempt to protect human rights. This requires an acknowledgment that property is a concept arising from our current surrounding circumstances, including our personal, social and 27 Badenhorst (n 19) 145. 28 Ibid 146. 29 Victoria Park Racing and Recreation Grounds Company Ltd v Taylor (1937) 58 CLR 479, 496. 30 Ibid.

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700052061 technological circumstances. 31 On that basis, the ability to own a human life was technically abolished with the end of the slavery era. However, in typical property law fashion, courts have developed a number of exceptions. First of all, High Court has held that a dead foetus may be capable of being owned following the application of work and skill in its preservation. 32 This provides support for the John Locke’s natural theory in which individuals acquired property through the fruit of their labour. 33 Courts have also recognised character merchandising, accepting that individuals may have a proprietary interest in their identity and therefore a right to protect their image. 34 However, this is inconsistent with Victoria Park. It is also inconsistent with the American decision of Moore v Regents of University of California 51 Cal 3d 120 which denied the existence of a property right in the human tissue of a plaintiff. If courts are willing to enforce property rights in one’s image and identity, why should it not apply to human tissue; a tangible object that we are in possession of, which form the basis of such identity?35 No doubt social, ethical and moral considerations come into play, however, it indicates that having characteristics of property is not sufficient to be legally entitled to own it. 36 A clear tension therefore exists between utilitarian and socialist perspectives on property. The right of individuals to benefit from their image through commercialisation must be balanced the ethical and moral boundaries that recognise the greater good of society. It is no surprise that ownership in human tissue is now protected by statute and while it may form property in its linguistic sense, legal proprietary rights cannot attach to it.37

C. Natural resources Overuse of natural resources would cause significant ecological damage which have created a need to differentiate between property and ownership. 38 Resources such as the seas, park, beaches, water

31 Sharma (n 4) 86. 32 Doodeward v Spence [1908] 6 CLR 406, 414. 33 Lee Aitken, ‘Antipodean vivisection? Recent analysis of ownership of sperm, body parts, and other disiecta membra’ (2019) 47 Australian Bar Review 266, 271. 34 See eg Hogan v Pacific Dunlop Ltd (1989) 23 FCR 553. 35 Sonia Harris, ‘Made to order- customised human tissue and the regulation of future organ sources; Part 1’ (2013) 21(4) Australian Health Law Bulletin 338, 341. 36 Susan Corbett, ‘The case for joint ownership of copyright in photographs of identifiable persons’ (2013) 12 Media & Arts Law Review 330, 343. 37 Human Tissue Act 1982 (Vic) s 38-39. 38 David Grinlinton,’ Property Rights and the Environment’ (1996) 4 Australian Property Law Journal 1, 5-6.

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700052061 and minerals would ordinarily fall into the category of things which could form the basis of a property relationship. However, in an attempt to limit the unrestrained use of these natural resources, many of them cannot be privately owned.39 Rather, they are in control of the State.40 This policy reasoning aligns with contemporary views of private property and the attachment to social, economic and environmental considerations. Again, it seems obvious that fitting into a category of property does not necessarily equate with full proprietary rights.

V.

THE MODERN THEORY OF PROPERTY

The High Court held in Yanner v Eaton that a property right refers to the relationship between an individual and a thing.41 It is a comprehensive concept including a vast array of different interests. The High Court also observed that ‘property refers to a degree of power that is recognised in law as power permissibly exercised over the thing’. It emphasised that property must form part of an accepted legal framework. This approach gives room to include all types of proprietary interests such as ownership, possession or right of control.42 In Yanner v Eaton, having property in the fauna did not equate to full ownership, rather it gave the Crown rights of control to regulate the fauna. The relational aspect of property was applied by the High Court in Telstra Corporation Limited v The Commonwealth (2008) 234 CLR 10 referring to property as a ‘legally endorsed concentration of power over things and resources’. 43 Property, as previously established, can be private, public or common.44 It is more than mere possession, as it relates to the legal rights that can arise from such possession. It is argued that the idea that property is the relationship between a person and a thing is better suited to the modern world as it allows a better understanding of how possession and ownership interact with the concept of property. The legal doctrine focusing on a metaphorical ‘bundle of rights’ 45, representing all the rights a person has over a thing, seems to provide a closer analogy to the High Court analysis in Yanner v Eaton. 39 Ibid. 40 Ibid. 41 See also, J E Penner, ‘The “Bundle of Rights” Picture of Property’ (1995-1996) 43 UCLA Law Review 711, 801 42 John Tarrant (n 9) 53. 43 Telstra Corporation Limited v The Commonwealth (2008) 234 CLR 10, 44. 44 Merrill (n 6) 732. 45 Sharma (n 4) 74.

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700052061 However, it is argued that neither the traditional focus on the object itself, or a ‘bundle of rights’ metaphor can be truly reconciled with the view of the High Court because the focus on a relationship between a person and a thing allows for the recognition of social, economic and moral considerations which are not holistically encompassed by more traditional views. The rights to control an object and to exclude others, whilst an important aspect of defining property, do not account for these holistic considerations which are necessary to understand the public policy issues underpinning property boundaries.46

VI. CONCLUSION

Property as understood in a modern legal world is more than a simplistic definition, a bunch of categories or a creative metaphor. Possession, ownership, exclusion and in rem rights are all symptoms of property but, on their own, lack the underpinning policy considerations that create the boundaries of property. The concept of property evolves with time and society therefore focus should be placed on the relationship concept established by the High Court. This will enable account to be made for the complex framework of social, moral, economic and environmental considerations that interact with the basic characteristic of property. There is little doubt that individuals will continue to debate the legitimacy of emerging forms of property, however, a relational approach that encompasses broader societal concepts will enable the law to allocate proprietary rights appropriately. Nevertheless, a legal framework cannot realistically and conclusively define such a complex concept, therefore it is unlikely that any definition will truly stand the test of time.

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46 Ibid 83; Badenhorst (n 19) 149.

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