Property Lecture 1 What Is Property PDF

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LAWS 4011 PROPERTY LAW Lecture One:

What is property? Definitions and legal classifications

Property Law Lecture One Page 1

Dictionary definitions of property: The Concise Oxford English Dictionary defines property as “owning, being owned….; thing owned, possession(s)…” Quoted in Concise Oxford English Dictionary, p. 981. The Oxford Legal Dictionary is more detailed and is therefore potentially more useful: [Property is] anything that can be owned. A distinction is made between real property (land and incorporeal hereditaments) and personal property (all other kinds of property) and between tangible property (that which has a physical existence e.g. chattels and land) and intangible property (choses in action including intellectual property and incorporeal hereditaments). For the purposes of the law of theft, property includes all real, personal and intangible property although land can only be stolen under certain specified conditions. For purposes of the law of criminal damage, property does not include intangible property. Quoted in Oxford Legal Dictionary, fourth edition (Oxford University press, Oxford: 1997), p. 362. Supplementary Definitions The word “hereditaments” refers to real property capable of being passed to an heir. Corporeal hereditaments are tangible items of property such as land and buildings. Incorporeal hereditaments are intangible rights in land, such as easements and profits á prendre. Butterworths Concise Australian Legal Dictionary The Butterworths Concise Australian Legal Dictionary defines “property” as: Any type of right (that is a claim recognised by law), interest or thing which is legally capable of ownership, and which has a value. Quoted in Butterworths Concise Australian Legal Dictionary, third edition (LexisNexis Butterworths Australia: 2004), p. 348;

Statutory definitions of property: Statutory Construction of “Property” “Property” can be the subject of statutory construction: Yanner v Eaton (1999) 201 CLR 351 at 388389 per Gummow J. In Kirby (Inspector of Taxes) v Thorn EMI plc [1988] WLR 455; 2 All ER 947 at WLR 450; All ER 953 Nicholls LJ remarked that: Property Law Lecture One Page 2

“Property” is not a term of art, but takes its meaning from its context and from its collocation in the document or Act or Parliament in which it is found and from the mischief with which that Act or document is intended to deal.

Section 9 of the Corporations Act 2001 (Cth), for example, defines “property” as: [A]ny legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action. Section 3(1) of the Perpetuities Act 1984 (NSW) stipulates that “property” includes: “any interest in real or personal property and any thing in action.” A chose in possession is tangible item of property capable of physical possession. A chose in action is a right, such as to recover a debt, that can be enforced by legal action.

Scholarly Definitions of Property Samantha Hepburn Hepburn has suggested that: Outside the legal world, a reference to ‘property’ is generally understood as referring to a specific tangible object such as land or goods. From a legal perspective, however, property refers to a specific relationship that an individual has over an object or resource, whether that object or resource be tangible or intangible… Property Law Lecture One Page 3

Quoted in Samantha Hepburn, Australian Property Law: Cases, Materials and Analysis, second edition (LexisNexis Butterworths, Australia: 2012), pp. 1-2. Hepburn later continues by noting that: The primary defining feature of a property relationship in Western society is the capacity to exclude. In Western society, all property relationships confer exclusive rights and are essentially private in nature conferring upon the holder the right to exclude the rest of the world. This is not a characteristic inherent to indigenous relationships with land… The existence of a right to exclude gives the property relationship an in rem status. An ‘in rem’ relationship is distinguishable from an in personam right because it means that the right is enforceable against the rest of the world and not just enforceable between the parties who are privy to the relationship. Hence, the holder of a property relationship may enforce the rights to exclude against the rest of the world. Definitions of “property” can unwittingly be infected with cultural bias… John Cribbet Cribbet in his essay, “Concepts in Transition: The Search for a New Definition of Property”, published in University of Illinois Law Review, suggests that property ownership is increasingly subordinate to state regulations for the betterment of society. With reference to land law he suggests that changes occurring in property law: Represent a shift in concepts that require a new definition of property…The common thread [in such changes] is an increase in the social responsibilities of the land owner and a corresponding decrease in the owner’s rights. In other words, the state, as represented by various echelons of government, is slowly redefining the concept of property. Exclusionists: William Blackstone The most famous academic definition of property has been provided by the English jurist and legal philosopher Blackstone in his Commentaries on the Laws of England. Writing in 1765 Blackstone defined property as: That sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe. Blackstone also notes that: There is nothing which so generally strikes the imagination, and engages the affections of mankind, as the right of property. Blackstone therefore propounds a tripartite definition based on 

Dominion;



Exclusion; and



External Things

Critical Comments Relating to Blackstone’s Definition Property Law Lecture One Page 4

 Relatively absolutist in scope;  Does not refer to the right to transfer or alienate;  Culturally rigid; and  Over emphasizes the right to exclusion (bailment, leases)

Felix Cohen Another interesting exclusionist definition of property has been provided by the scholar Cohen in his transcribed discussion, “Dialogue on Private Property” published in Rutgers Law Review. Here Cohen suggests that the definition of property does not centre on “things” or “objects” but rather relations between human beings concerning those objects or things: C: […] I could charge you for walking across the Brooklyn Bridge if you were willing to pay for it and that would not be proof that I had a property right in Brooklyn Bridge, would it? F: No, but in that case I could walk across Brooklyn Bridge without paying you… C: Well, then, we are really talking about a right to exclusion then aren’t we? What you are really saying is that ownership is a particular kind of legal relation in which the owner has a right to exclude the non-owner from doing something or other… F: Yes, I think that is where [to] find a difference between property and other rights.

Frank Snare Snare in an article entitled “The Concept of Property” published in the American Philosophical Quarterly has formulaically suggested that ownership exists when three primary rules are satisfied: 1) A has the right to use P; 2) Others may use P if, and only if, A consents; and 3) A may permanently transfer the rights under 1 and 2 to other specific persons by consent. Quoted in Frank Snare, “The Concept of Property”, American Philosophical Quarterly, Vol. 9 (1972), pp. 200, 202-204. To these three primary rules Snare suggests a further three supplementary rules can be added, namely: 4) Punishment rules, which detail what may happen to B if he or she wrongfully interferes with A’s use of P; 5) Damage rules, which require B to pay compensation if he or she damages P without A’s consent; and 6) Liability rules, which specify that if A’s use of P results in damage to others he or she will be held responsible.

Property Law Lecture One Page 5

Thomas Merrill Merill in an article entitled, “Property and the Right to Exclude” published in the Nebraska Law Review, has suggested that the right to exclude is the “sine qua non” of property: Give someone the right to exclude others from a valued resource, i.e., a resource that is scarce relative to the human demand for it, and you give them property. Deny someone the exclusion right and they do not have property. “Sine qua non” is a Latin phrase meaning “an essential element or condition” Thomas Merrill, “Property and the Right to Exclude”, Nebraska Law Review, Vol. 77 (1998), p. 730.

Merill also indicates that he believes there is consensus as to certain aspects of defining property. He tell us that: In sum, there is a general consensus that property refers to particular rights of persons or entities with respect to scarce tangible and intangible resources; that property is distinct from and superior to the mere possession of resources; that the rights associated with property require some institutional structure that stands ready to enforce these rights; and that property may be private, common, or both. Merill in conclusion summarises his position thus: I have argued in this essay that property means the right to exclude others from valued resources, no more and no less. This is not a novel idea. It can be found in Blackstone and Bentham, was reasserted by Felix Cohen, and has recently been discovered again by a new generation of philosopher-lawyers operating in the English Tradition. But this truth was obscured by the Legal Realists, with their metaphor of the bundle of rights.

Bundle of Rights Wesley Hohfeld The genesis of the bundle of rights approach can be traced to Hohfeld, who in the course of an essay delineating the distinction between rights in rem and in personam, argued that property was not a physical or corporeal phenomenon, but a legal rights-based, de-physicalized, incorporeal one: All legal relations are “incorporeal” – consisting as they do or more or less limited aggregates of abstract legal relations…. The interest of the fee simple owner of land and the comparatively limited Property Law Lecture One Page 6

interest of the owner of a “right of way” over such land are alike so far as “incorporeality” is concerned; the true contrast consists, of course, primarily in the fact that the fee simple owner’s aggregate of legal relations is far more extensive than the aggregate of the easement owner. Wesley N. Hohfeld, “Fundamental Legal Conceptions as Applied to Judicial Reasoning and Other Legal Essays (1923), p. 30

Hohfeld thus distanced property away from the notion of legal rights over “things,” to a new method of thinking which centred on property as “more or less limited aggregates of abstract legal relations” between people. Property was therefore an in rem phenomenon. From this foundation, Hohfeld was able to devise the initial bundle of rights definition of property: Suppose, for example, that A is fee-Simple owner of Blackacre. His “legal interest” or “property” relating to the tangible object that we call land consists of a complex aggregate of rights (or claims), privileges, powers and immunities. This definition was, however, incomplete. It was unclear whether property should only be conceived of as incorporeal “rights (or claims), privileges, powers and immunities” or whether these should be coupled with responsibilities. Moreover, it was unclear exactly what the incorporeal “rights (claims), privileges, powers and immunities” might consist of and whether any of these were necessary or sufficient for property to coalesce.

Anthony Honoré Honoré further developed the bundle of rights definition of property in his essay entitled “Ownership” which outlined eleven rights and incidents that might be applicable to the establishment of property, namely, (1) the right to possess, (2) the right to use, (3) the right to manage, (4) the right to the income, (5) the right to the capital, (6) the right to security, (7) the power of transmissibility, (8) the absence of term, (9) the prohibition of harmful use, (10) liability to execution and (11) residuary rights. Importantly, Honoré argued that it was not necessary for all these rights and incidents to exist before property would coalesce.

We might note that some of these indicia are responsibilities – not simply rights. Liability to execution is a good example. This suggests that the “bundle of rights” label might be more accurately expressed as the “bundle of rights and responsibilities” … See Anthony M. Honoré, “Ownership,” in A. G. Guest (ed.), Oxford Essays in Jurisprudence (Clarendon Press, Oxford: 1961), pp. 107-147.

Bruce Ziff Ziff, in his work, Principles of Property Law, has provided one of the clearest articulations of the “bundle of rights” definitional approach to property: Property Law Lecture One Page 7

Property is sometimes referred to as a bundle of rights. That characterization means that property is not in fact a thing, but rather a right, or better, a collection of rights (over things) enforceable against others. […] The reference to rights reveals that property, to a legal positivist, means entitlements created by law. In Jeremy Bentham’s words, “[p]roperty and law were born and die together. Before laws were made there was no property; take away laws and property ceases”. Under that conception, property is necessarily a legal construct, born and bred under the law. However, there is no complete catalogue of that which is regarded as property. -Mentions that property and law go together… -Indicates that property is an essentially contested concept… Quoted in Bruce Ziff, Principles of Property Law, fifth edition (Carswell, Ontario: 2010), p.

Wily v St George Partnership Banking Ltd Some rare yet cogent judicial discussion of the bundle of rights approach, Hohfeld and Honoré, is rendered by Finkelstein J in Wily v St George Partnership Banking Ltd [1999] FCA 33 at paragraphs 31-38.

Socially constructivist Kevin Gray Gray has authored a famous article looking generally at the meaning of property. In a manner similar to Blackstone, Gray suggests to us that: If our travels in search of “property” have indicated one thing, it is that the criterion of “excludability” gets us much closer to the core of “property” than does the conventional legal Property Law Lecture One Page 8

emphasis on the assignability or enforceability of benefits. For “property” resides not in consumption of benefits but in control over benefits. “Property” is not about enjoyment of access but about control over access. “Property” is the power-relation constituted by the state’s endorsement of private claims to regulate the access of strangers to the benefits of particular resources. Quoted in Kevin Gray, “Property in Thin Air”, Cambridge Law Journal, Vol. 50 (1991), p. 294. Gray, however, moves beyond the Blackstonian definitional approach by considering why a given resource may or may not be the subject of exclusion: If, in respect of a given claimant and a given resource, the exercise of such regulatory control is physically impractical or legally abortive or morally or socially undesirable, we say that such a claimant can assert no “property” in that resource and for that matter can lose no “property” in it either. Herein lies the important key to the “propertiness” of property.

Gray’s Three Conclusions First, that property is a relative concept. In other words, the physical, legal and moral conditions of excludability may vary according to time and circumstance. Property is therefore not an absolute or fixed concept. Second, that property has moral limits. In other words, property is a value-laden phenomenon which is dictated by prevailing morality and morays. Where a potential property right might infringe a more basic human right or freedom, the latter will prevail and the property right will be denied. Hear we must bear in mind the interconnection between point one and point two – namely, that morality and morays are themselves constantly shifting and so property is not an absolute or fixed concept. Third, that property is a term of wide signification. This means that property could potentially be found in a very wide of resources. The limitations on this potentially wide field of operation are, according to Gray, set “not by the “thinglikeness” of particular resources but by the physical, legal and moral criteria of excludability.”

Judicial definitions of property

Property in a Judicial Nutshell In Jones v Skinner (1835) 5 LJ Ch 87 at 90 Lord Langdale MR remarked: [Property is] the most comprehensive of all terms which can be used, in as much as it is indicative and descriptive of every possible interest which the party can have. Property Law Lecture One Page 9

A definition of similar import has been rendered by Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175 at 1247-1248: Before a right or 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.

In Minister for the Army v Dalziel (1944) 68 CLR 261 at 285 Rich J intimated support for the bundle of rights definitional paradigm stating that: Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle. In Knapp v Knapp [1944] SASR 257 at 261 Mayo J, although not defining “property” nonetheless expounded on the related concept of “ownership” as follows: The general right of ownership embraces subsidiary rights such as exclusive enjoyment, to destroy, to alienate or to alter, and, of course, the right to maintain, and to resume and recover possession from other persons. Should we think of “property” and “ownership” as closely related concepts? Is it possible that ownership is a culturally conditioned concept?

In Milirrpum v Nabalco (1971) 17 FLR 141 at 272 Blackburn J propounded a definition of property which was very closely aligned with Blackstone’s: I think that property, in its many forms, generally implies the right to use or enjoy, the right to exclude others, and the right to alienate. I do not say that all these rights must co-exist before there can be a proprietary interest, or deny that each of them may be subject to qualifications.

In Yanner v Eaton (1999) 201 CLR 351 at 365-366 Gleeson CJ, Gaudron, Kirby and Hayne JJ indicated support for the so-called “bundle of rights” approach to defining property: The word “property” is often used to refer to something that belongs to another. But in the Fauna Act, as elsewhere in the law, “property” does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of “property” may be elusive. Usually it is treated as a “bundle of rights”. But even this may have its limits as an analytical tool or accurate description.... We like the bundle of rights approach but we are leaving our options open….

Incidentally… The “bundle of rights” approach has also drawn support from Hepburn, who has suggested that: The law has long used the ‘bundle of sticks’ metaphor as a way to describe and think about the nature of rights associated with the property relationship and this is particularly true where the Property Law Lecture One Page 10

property relationship applies to land. As signified by the bundle, ownership of land does not indicate title to a physical portion of the earth so much as a power to enforce certain rights over the land. Collectively, these ‘enforcement’ rights make up the bundle: the sum total of property rights one can have over a parcel o...