Seminar-Discussion-Questions Answers PDF

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SEM 1 QUESTIONS(1) What is the difference between ownership and possession?Ownership (absolute title) = “the right to exclusive enjoyment of a thing” (Austin)Possession = To “possess” property means to have exclusive control (or dominion) over the item and an intention to exclude all others → an enf...

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SEM 1 QUESTIONS (1) What is the difference between ownership and possession?

Ownership (absolute title) = “the right to exclusive enjoyment of a thing” (Austin) Possession = To “possess” property means to have exclusive control (or dominion) over the item and an intention to exclude all others → an enforceable legal right ●

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There is a difference between outright ownership in a transaction and having something secured by finance → you can have possession of something without owning it Ownership arises depending on the circumstances of the transaction → secured lending means a lender will secure the lending against the asset (e.g.) so that they can take it back if payments do not occur Title can be separated from possession e.g. ○ They are two sets of rights

(2) What are choses in action and choses in possession?

Chose in possession (chose = thing) ● a movable corporeal (tangible) thing e.g. goods Chose in action ● a movable incorporeal (intangible) thing

(3) Give 2 examples of legal choses and 2 examples of an equitable chose

Legal - Rights under a contract - Shares in a company Equitable - Interest in a trust - A legacy under a will

(4) What circumstances might a person be said to have a right to possession of an item of personal property?

When they find the item and intend to have control over it

(5) What is the difference between actual possession and legal possession?

Actual possession (or de facto possession): Personal physical control of thing to the exclusion of all others. → Moors v Burke (1919) Legal possession: Possession in the eyes of the law. Includes actual possession but may also have legal possession without physical control of the thing or legal possession may arise unlawfully. → Pollok and Wright

(6) What is the difference

Joint tenants (e.g. if one party dies the other gets full

between ownership of personal property as joint tenants and ownership of personal property as tenants in common?

ownership) or

(7) What are 3 ways that personal property can be transferred?

Gift Sell Relinquish control

Tenants in common (e.g. if one party dies the estate gets the other 50% etc.)

Problem question 1 Mike and Mary Moss (the Moss’) together with their daughter Rachel and her husband Reuben Ross (the Ross’) have recently decided to purchase an existing car dealership on Princes Highway, Kogarah called “Spectacular Motors” from Vendor Pty Ltd. Vendor has registered the business name Spectacular Motors and also has a registered trademark over that name. They set up a company called Moss Ltd to purchase Spectacular Motors. Vendor Pty Ltd (through its managing director-Zachary) has promised in the conversations during the sale process that the business will generate more than $2 million in profit a year. Spectacular Motors will be run as a family business. Mike is the Managing Director of Moss Ltd, Mary is the Company Secretary and Rachel and Reuben are directors. The purchase contract is signed by Mike (as director of Moss Ltd) and Mary (as company secretary of Moss Ltd). Zachary signs the contract ‘for and on behalf of Vendor Pty Ltd’. The Moss’ and Ross’ come to you for legal advice with the purchase of the business.Specifically advise them in relation to the following questions. a) List the types of personal property they would expect to be included in the sale of the business. ● Choses in action: Trademark of the name ● Choses in possession: Cars/stock ● Liabilities for cars already sold, debts to banks, assets etc. b) List the types of real property they would expect to be included in the sale of the business. ● The land ● Building c) Explain to them the difference between Property Rights and Personal Rights. ● Personal rights are enforceable against other party in the contract or individual only (e.g. a tort claim) ● Property rights are enforceable against the world at large (rights in rem)

Problem question 2 The premises of Spectacular Motors are quite dated so the Moss’ and Ross’ are keen to renovate the dealership to make it more attractive to customers. The Moss’ engage the services of their nephew Pete from Compete Cleaners to do a thorough clean before the workmen commence renovations. Consider the following scenarios: Scenario 1 At the end of a long day of cleaning Pete opens the oversized dumpster, which is located on the premises, to throw out the last rubbish bag when something shiny catches his eye. He reaches in and pulls out a dirty large diamond encrusted watch. Pete can’t believe his luck at such a find! Pete initially thought it could belong to his careless cousin Rachel whom had just discarded it in the bin as she was always purchasing new flashy things, but he doesn’t call Rachel to verify this. Later that night Pete shares his good news with his neighbour and friend Louis Little. Pete explains to Louis how he found it amongst the garbage and that he had no idea who the true owner is. As Pete is very busy the next day with cleaning jobs, Louis offers to take the watch to get it valued. A few days later Pete pops by Louis’ house and asks Louis how the valuation went. Louis then refuses to hand it over saying as it was in his possession and Pete did not know who the true owner was he was entitled to keep it. -

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Pete can get it back on finders right but Louis has rights arising from possession (but unless pete expected it back it is hard to argue based on just these facts The proprietor would be able to argue that they manifested intention to acquire possession of all goods on their premises - Was it on or attached to land → no - Was it during course of employment → can argue yes or no - Does Pete have custody or possession → yes but spectacular motors might have better rights If pete said he wanted the watch back then he has right of possession but so does louis because he is holding Pete because he handed it to lousi with the expectation of getting it back would have better right than louis but if the watch was found in the course of Pete's employment then they might argue that they will exercise manifest control The true owner would be rachel and have greatest right it it was actually her watch

Scenario 2 Pete is scrubbing the inside wall of the showroom when one of the wall panels comes loose and falls on the ground. When Pete bends down to pick up the panel to replace it, he notices that there is a large hole inside the wall. Inside the wall is a large black garbage bag, which is filled with $100 notes. Pete rings his uncle Mike Moss and tells him what he has found. Mike had no idea about the

large sum of money and immediately calls the police. The Kogarah police come to Spectacular Motors and seize the bag of money “pending further investigation”. -

If your in occupation of the premisis then it is assumed you have thr possession of any goods on the premisis even if you didnt know it was ther FOR A HIGH D → Consider the true owner Pete found in the course of his emplyment the money that was hidden so it was not in public property The motor has a greater claim in the hierachy because they own the propery True owners might be the past owners of the business etc. so they should be Police have a statutory right to take the money away

Scenario 3 Pete is pressure washing the concrete driveway when he spots a large gold ring in one of the potholes which was concealed by dirt. Scenario 4 Pete is vacuum cleaning the fleet of Peugeots. As he is vacuum cleaning one of the cars, he finds a small diamond ring under the mat in the front seat. A label on the windshield of each Peugeot reads that they are proudly exclusively imported and commercially leased to dealers by “Prestige Motor Dealers Botany”. Pete finds a terms and conditions document in the glovebox which reads “The lessee is at all time responsible for all items of personal property. The lessor accepts no responsibility for loss or damage to personal property.” Pete stops by Prestige Motor Dealers Botany on his way home and hands in the diamond ring to an employee. Pete leaves his phone number and address and says to the employee that if the owner is not found to call him and return it to him. -

Spectacular motors could get it from presitige and pete wouldnt be able to complain because he found it in the course of his employment

a) Who has the better claim to the watch/ring in scenarios 1, 2, 3 and 4? b) Would your advice be any different if Pete wasn’t working as a cleaner at Spectacular Motors but instead found the watch/ring when he was there as a customer of Spectacular Motors? c) What could the Moss’/Ross’ have done to assert property rights in the watch/ring? d) What rights does Pete have in relation to the watch/ring in the above scenarios? e) Explain to Pete the difference between: a. Ownership and possession; and possession and title b. Actual possession and legal possession. Justify your answer with reference to relevant case law

SEM 2 QUESTIONS

(1) How are goods defined under the Sale of Goods Act? (2) What is a sale of goods? How is this different from a license, lease or hire purchase? (3) What remedies does a seller have if the purchaser refuses to accept delivery? (4) How is merchantability assessed under the Sale of Goods Act? (5) How would you establish that goods sold to a purchaser are not fit for the purpose under the Sale of Goods Act? Must they be fit for all possible uses? Problem questions Rohan Wright is the owner of Best Build Ltd which distributes a pre-fabricated shed known as the “Ready Shed” that the Moss’ and Ross’ recently saw on a popular television home renovation show. The Ready Shed can be moved relatively easily (with the use of a few tools), or can be left in place for a prolonged period. The shed will store cleaning equipment and tools and will be installed on an existing level section of concrete behind the main office of Spectacular Motors. They believe this will be a cheaper and quicker alternative than building a shed from traditional construction methods. Rohan had agreed to sell it to Mike for $10,000 and advised him it was “built to last” as it was made of galvanised steel, which is resistant to corrosion. One day on a site visit with Mike, Rohan agrees that his company will install the Ready Shed upon delivery for a “small service charge” but that he would need to get back to Mike about the exact price. On 10 November 2015, Moss Ltd enters into a written document with Best Build Ltd in relation to the Ready Shed. The document includes the following provisions: ● 1. Moss Ltd agrees to buy from Best Build Ltd one (1) Ready Shed measuring 9x9x3.4h on the terms and conditions as set out below. ● 2. Best Build Ltd will deliver and install the Ready Shed to 533 Princes Highway Kogarah NSW (“the Premises”) on 28 November 2015 (“the Agreed Date”) ● 3. On the Agreed Date Moss Ltd will ensure that the plumbing and electrical services will be connected on the Premises in order to effect the installation. ● 4. Payment is to be made in four (4) instalments over four weeks from the date of this agreement. ● 5. In the event that the steel manufacturer of the Ready Shed goes into liquidation or any other unforeseeable event occurs during the term of this agreement before the same has been delivered to the Premises, the agreement will automatically be terminated and neither party shall have any action against the other for damages or otherwise.

Apply the provisions of the Sale of Goods Act 1923 (NSW) and any applicable cases to answer the following questions. a) Is the agreement between Moss Ltd and Best Build Ltd a Contract for the Sale of Goods? Consider what further information (if any) that you would need to determine this. - Element of a service → an agreement to sell and it is contingent on the shed being built and installed - S 5 it is difficult to determine when title is transferred -

How to answer → go through - Transfer of title in goods from one to another - What sort of contract is it (e.g. an agreement to sell or contract of sale etc.) - What is the contingency - If it is attatched to land and attachted to power it become part of real property - Interrogate the law which relates to the real property law

b) Would your answer be different if in the contract Best Build Ltd agreed to build the shed on its premises and on completion transport and install it on Spectacular Motors premises? -

It would be classified as a good because it can be moved and therefore would not be real property

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A specific good has to be the exact same thing → e.g. an item on tv is not the exact same one you will get

SEMINAR 3 (1) How do you determine if title passes in a sale of goods?

When is property passed? → part 3 ss 22 and 23

(2) In what circumstances can a buyer receive good title to goods where the seller does not have title?

If the seller doesn’t have good title then the buyer cant have good title → nemo dat Nemo dat rule means innocent buyer can end up with nothing S 26 and 28 (1) and 2 → The owner through their conduct is not able to prevent

Problem questions - Title and Risk Who bears the loss in the following scenarios? ● (1) B advertises that she has a second hand car for sale for $10,000. A vists B and

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inspects the car. A is unsure about whether he’ll buy the car. B offers to sell the car to A and, if A takes it and is not happy with it, he can return it. A takes the car. Two weeks later it is wrecked in a car accident, which is not the fault of A. Question to ask: - Is there a contract of sale → if not title cannot pass - Offer? Acceptance? - Can argue there is no agreement to sell because no money has been handed over - Has A decided he will buy the car? - Can say no and that it was a test drive A has possession of the vehicle but no agreement so title hasn’t been transferred so B bears the loss For title to pass there has to be an agreement and the agreement has to spell out the intention for when title will pass or if the contract is signed then the transfer of risk passes straight away

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On the other hand → can argue that having a car for two weeks means the title has been transferred and an agreement has occurred → because there has been an unreasonable length of time - S 38

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(2) B advertises that she has a second hand car for sale for $10,000. A visits B and inspects the car. A agrees to purchase the car for $10,000 subject to B cleaning and polishing the car. The next day B has the car cleaned and polished and calls A the day after that to let him know that the car is ready to be picked up. A picks up the car that afternoon. On the way home, the car is wrecked in a car accident, which is not the fault of A. Is there a contract of sale? → it is a conditional contract because somehting needed to be done before it is finalised → so yes A bear the loss because he bought and the car was appropriated

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(3) B advertises that she has a second hand car for sale for $10,000. A visits B and inspects the car. A agrees to purchase the car for $10,000. A says that he will return the following day to pay for the car and take it. Overnight the car is badly damaged in a car accident caused by a third party negligently crashing into the parked vehicle. Is there a contract of sale? → Rule 1 → title is transferred as soon as there is a contract A would (4) B advertises that she has a second hand vintage car for sale for $100,000. A visits B and inspects the car. A is unsure about whether he’ll buy the car as he doesn’t think that it is worth more than $85,000. B offers to have the car valued by two valuers - one chosen by A the other by B - and then to sell the car at the price which is midway between the two valuations. A agrees to this. B has the car valued over the next week by two valuers with the midway price set at $95,000. While driving the car home from the second valuation, the car is wrecked in an accident which is not the fault of B. S 23 rule 3 B would bear loss because money hasn’t been transferred → and A didn’t agree to the final price after the valuation yet → but if B had called up and told A of the price then A

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would be liable S 14 → doesn’t really apply (5) B advertises that she has a second hand car for sale for $10,000, which she is expecting to receive under a will from a deceased relative. A and B inspect the car and A agrees to buy it. B says that she’ll let A know ‘when all the will stuff is finalised’. One month later, the estate is finalised and B takes possession of the car. She telephones A to let him know the car is available. A says that he will pick it up in the morning. Overnight the car is badly damaged in a car accident caused by a third party negligently crashing into the parked vehicle. A → because B did call and the contract has been fulfilled and finalised → was a conditional agreement that has been fulfilled and act has been appropriated → property has passed to A (6) B advertises that she has a second hand car for sale for $10,000. A visits B and inspects the car. A is unsure about whether he will buy the car because he can’t afford $10,000. B offers to sell the car to A for $10,000 and accept $1,000 payment immediately, then $1,000 each month until the car is paid off. B says that she won’t transfer registration, etc, in the car to A until the $10,000 is fully paid. A agrees, pays $1,000 and takes the car. A pays $1,000 a month for the next eight months. The day after the eighth payment, the car is damaged by the negligence of a third party. B → title hasn’t been transferred but A still has possession Romalpa clause → intention is clear that property won’t pass until final payment (7) B advertises that she has a second hand car for sale for $10,000. A visits B and inspects the car. A is unsure about whether he’ll buy the car. B offers to sell the car to A, and if A takes it and is not happy with it, he can return it. B says that ‘obviously, if anything happens to the car while you’ve got it, that’s your problem.’ A takes the car. Two days later it is wrecked in a car accident, which is not the fault of A. Question? is 2 days a reasonable amount of time? A bears the loss → If B did say that then he would be liable Can argue there has been a sale and the risk passes to a on a conditional contract But could also be a contract of bailment (8) B deals in restored second hand cars. A visits B’s stores and looks at a brochure of new cars that B is expecting to receive in the next month. A vintage Lotus Elan is advertised in the brochure for $150,000. A agrees to buy it on the spot and pays for it. One month later, the Lotus Elan is delivered to B’s showroom. B telephones A to let him know that the car is available to be picked up. A says that he will pick it up in the morning. Overnight the car is badly damaged in a car accident caused by a third party negligently crashing into the parked vehicle. A → there was a contract of sale unascertained goods = new car arriving Specific car that is bought on the spot → risk is transferred S 23 (4) ?? - check

Problem questions - Nemo dat ● (1) Mary is a DJ and drives a late model Ford Transit van. But she’d like to drive something that makes more of a statement than a white van when she isn’t working. But she doesn’t want to sell the van because it is essential for her business. A financial adviser friend Simon has a solution. This is to transfer title to a finance company for a lump sum and enter into a lease agreement which will enable her to maintain possession of the van and enjoy a tax deduction on her monthly payments. She would then have enough money to buy a second hand Svalbard X1. ○ Mary thinks this is a great idea and hands Simon the Transit Van registration papers so he can negotia...