Stow v Mineral Holdings (Australia) Pty Ltd (1977) public right is not a property right (does not give

e sufficient proprietary interest to make an objection) Facts Respondent was mining on land adjacent to the South West National Park in Tasmania. Appellant lodged objections to mining with the warden on the grounds that prospecting or mining would damage the Park. Warden concluded that the evidence suggesting that mining would have a deleterious effect was overwhelming and refused to grant the respondents a prospectors licence. Respondents appeal was successful in appeals to the Supreme Court and Full Court. Issue Did the appellants (bushwalkers, campers and naturalists) have a sufficient proprietary interest to make an objection? NO the rights of the bushwalkers and others were public rights Aickin J: Issue is whether the Mining Act confers power on the warden and the effect of an order made by him. Warden has no power whatever to accept or reject an application this is a power vested in the Minister who is to act upon the recommendation of the Director of Mines. The Minister should determine whether as a matter of policy it is desirable that the licence should be granted or refused weigh up the relative merits of the economic advantages said to flow from the successful establishment of a mining operation and the other competing contentions as to what it is, in the public interest, a suitable use to which the land may property be put The objectors did not have an estate or interest in the land and none of them claimed to do so. Estate or interest in land is an estate or interest of a proprietary nature in the land e.g. legal and equitable estates and interests such as freehold or a leasehold estate. Does not refer to public right. All members of the public have a public right to pass freely but none have in their capacity as members of the public any estate or interest in the land. statutes were relied on to give rights to all members of the publicall members of the public may have the right to go upon such land in the sense that they may freely walk thereon or in defined portions therefore and may resist attempts by the Crown or anyone else to eject them from such land. The fact that some are more disposed than others, derive more benefit therefrom and use the statutory right more often than others, DOES NOT elevate that which is a public right enjoyed by all embers of the public equally into a private right capable of being described as an estate or interest in the land.

Judgment/ social policy

Ratio

Federal Airports Corporation v Makucha Developments Pty Ltd (1993) must transform from a right against an identifiable person (in personam) into a right over the thing (in rem). To be granted the decree of speicifc performance of a licence, the licensee acquirea a proprietary interest in the land, beyond a mere personal interest to use the land Davies J: where equity will grant the decree of specific performance of a licence, the lincesee acquires a proprietary interest in the land, beyond a mere personal interest to use the land in common with others. A full propriety interest (which goes normal proprietary interest) is established not just by whether it is specifically enforceable against the grantor, but can also be enforceable independently against third parties. If the licence is so enforceable, it has assumed a more enduring proprietary character transformed from a right against an identifiable person (in personam) into a right over the thing (in rem) i.e. the land itself. (i.e. transform from contractual right to property right)

King v David Allen & Sons, Billposting Ltd (1916) House of Lords PREFERRED AUTHORITY licence does not confer sufficient plentitude of rights over the land to qualify as a proprietary right can only sue in contract or torts (Georgeski) other than trespass to land (which requires occupation in land/interference with possession.) The right conferred by the original contract was purely contractual. Facts Appellant (licensor) held estate in certain premises. Agreement made in July 1913 between the respondents (licensees) to give and appellants where the respondent was given permission to affix bills and posters to a wall on the side of a picture

Judgment

theatre to be erected on the premises. Licence was to last for 4 years from the date the theatre was erected and thereafter terminable on 6 months notice by either party. $12 p.a. Appellant did not permit any other person to affix any bills or posters on the wall. August 1913 the appellant agreed with the trustee for a company about to be formed to grant a lease to the company for 40 years and to assign his interest in the agreement the appellant had made with the respondents. Trustee agreed they would ratify the agreement between the appellant and respondents. Agreement was not referred to in the lease and its benefits were not assigned to the company. Respondents attempted to post their bills but were forcibly prevented by the company. Appellant protested against the action of the company and his co-directors but couldnt honour the July agreement. Respondents sued for damages for breach of the agreement and the appellant denied liability and tried to bring in the company as third party but was refused. Court of Appeal dismissed appeal and affirmed a judgment in favour of the respondents.

Lord Buckmaster LC: There is a contract between the appellant and the respondents, which creates nothing by a personal obligation. It is a licence given for good and valuable consideration and to endure for certain time. The sole right is to fix bills against a flank wall which have been taken away by the action on the part of the company who have been unable to prevent the respondents from exercising their rights owing to the lease granted by Mr King [appellant], and he is accordingly liable in damages, although it was certainly not with his will, and indeed against his own express desire, that the company has declined to honour his agreement. Earl Loreburn: The document does not create any interest in land at all it merely amounts to a promise on the part of Mr King and he would allow the other party to the contract to use the wall for advertising purposes, and there was an implied undertaking that he would not disable himself from carrying out his contract. Mr King altered his legal position in respect of his control of this land. The lessees have disregarded Mr Kings wishes and refused to allow his bargain to be carried out, and they have been allowed to do this by the reason of the deminse (lease) that he executed. There has been a breach of the July contract and Mr King has disable himself from giving effect to it as intended by parting with his right to present possession.

Ratio/notes

The parties failed to create a proprietary interest in the building. They could have created a proprietary interest if the instrument clearly conferred a lease or easement over the land. A licence does not confer a sufficient plenitude of rights over the land to qualify as a proprietary right a licensee does not have an interest in the land which denies him from having an estate or interest reognised a such by law or equity. Only proprietary rights are enforceable against third parties.

A licence is not a proprietary right. A license is only enforceable against the licensor however in this case the licensee tried to enforce the licence against the third party (the leasing company). Court ruled the licence was not enforceable against third parties. Georgeski v Owners Corporation Strata Plan 49833 (2004) NSW easement is a proprietary interest (fully fledged proprietary interest) against the whole world? (including tenants i.e. third parties)? Facts Plaintiff held a licence from the Crown over a portion of riverbank and the abutting riverbed on the Georges River in Sydney. Terms of the licence allowed the plaintiff to build a jetty and a slipway on it. Defendants held an easement (right to use without possession) of way along edge of the plaintiffs land down to the riverbank right to pass over somebody elses land. - It is not just a licence, it is a proprietary interest. - Often used when land is land locked: there is no road to get into the land. Plaintiff sought an order declaring her rights over the jetty and slipway, and an injunction prohibiting the defendants from trespassing on them. Judgment Barrett J: Numerus clausus principle: If an easement or lease had been created by the parties, either would have qualified as a fully fledged proprietary interest and would then have bound the incoming tenant. A licence, by contrast, does not come within the class of recognized proprietary interests.

The plaintiff has no leasehold or other right of possession in respect of the relevant land including the land where the jetty and slipway have been built. In respect to trespassing the plaintiff must occupy in relation to land to support a claim based on trespass to that land. Western Australia v Ward McHugh J: Unlike a lessee, a licensee whose occupation is wrongly terminated or interfered with, must sue in contract or for some tort other than trespass to the land. If the licensee is ejected from the land by the grantor, the licensee may be able to obtain an injunction restraining the grantor from breaching the personal contract. I ejected by a stranger, the licensee may have an action in trespass to the person or some other tort. But in neither case is the action of ejectment or trespass to land available to the licensee.

Why? Trespass to land entails interference with possession and is maintainable only by someone who has a right of possession someone with property rights which a licence does not confer. So a tenant may sue for trespass but a licensor (freeholder) does not have a right of possession and it is the licensor who can sue for trespass. However, where the licence is coupled with the grant of an interest, the licensee may sue in trespass for direct interference with the subject matter of the grant. The plaintiff has no legal right of possession in respect of the land the subject of the licence. Its effect is no more than to confer on her the landowners permission to occupy for a stated purpose. She is not in possession no property right no trespass. The land is unfenced and open and, under the terms of the licence, the plaintiff may not construct any fence or other barrier on the land without the Crowns consent. Plaintiff does not reside on the land or conduct any sustained activity, which causes other persons to be excluded. Her right to occupy is only for the limited purpose of Jetty and Slipway and that is not a purpose that contemplates sustained activity of a kind that would be expected to entail ongoing physical exclusion of other persons. The plaintiff is subject to an explicit requirement that she allow access by the public over the land. Claim dismissed. A LEASE gives right to exclusive possession. Licence does NOT. Manchester Airport plc v Dutton

Moore v Regents of the Univeristy of Caifornia (1990) Supreme Court of California Body parts may never constitute property for purposes of a conversion action. Tort of conversion requires actual intereference with his ownership or right of possession. Facts Moore (plaintiff) signed a routine consent to the removal of his spleen but did not consent to its use for scientific purposes and was unaware of the potential commercial value of his cells. Golde (defendant physician) established a cell line from Moores cells. Moore brought action against Golde, Quan (researcher), the Regents and licensees of the patented cell line, claiming damages for conversion of his cells. Moore brings: Breach of fiduciary relationship (equitable), failure to make informed consent, conversion. Moore thinks the protein produced by his cells is his property as well and presumably any other commercial activities that are generated. Issue: Was there conversion on the basis of the cell lines used for research? Conversion a tort (strict liability) that protects against interference with possessory and ownership interests in personal property. To establish a conversion, plaintiff must establish an actual interference with his ownership or right of possession. There is a precondition of a property interest to bring an action in conversion. In this tort, someone has exercised dominion over your personal property therefore, you must establish you have this property in the first place. Lack of direct authority therefore we must look primarily on decisions addressing privacy rights. The fiduciary duty and informed consent theories protect interests directly by requiring full disclosure. Californian law (health and Safety Code s7054.4) has a practical effect in drastically limiting a patients control over excised cells and the statute eliminates so many of the rights ordinarily attached to property that one cannot simply assume that what is left amounts to property or ownership for purposes of conversion law. The patented cell line and the products derived from it cannot be Moores property because the cell

line is both factually and legally distinct from the cells taken from Moores body Federal law permits the patenting of organisms that represent the product of human ingenuity but not naturally occurring organisms. Human cell lines are patentable because the growth and adaptation of human tissues and cells is often considered an art and the probability of success is low. (Lockean approach effort has been put into the cells to produce the cell line) Because of this inventive effort, patent law rewards such discoveries. Moores allegations that he owns the cell line and the products derived from it are inconsistent with the patent. The cell line Is the product of invention.

Panelli J: Once cells are excised from his body, he has no interest in it relied heavily on policy issues to justify his judgment; namely the research purpose of body parts outweighs the benefits of body parts if they remain personal goods the rest of the community will benefit if the research is done and this will not be able to be done if body parts are personal property. Policy Why is it inappropriate to impose liability for conversion based upon the allegations of Moores complaint? 1. Policy considerations protection of a patients right to make autonomous medical decision through principles of fudiciary duty and informed consent. These policies provide patient with a remedy when physicians act with undisclosed motives that may affect their professional judgment. Also, we need to protect innocent parties who engage in socially useful activities who have no reason to believe their use of a particular cell sample is, or may be, against a donors wishes. We need to balance these policy considerations we must ensure existing disclosure obligations protects patients rights of privacy and autonomy without unnecessarily hindering research. If we extend the tort of conversion, we would sacrifice the protection of innocent parties (i.e. researchers). Since conversion is a strict liability tort, it would impose liability on all those who handle the cells whether or not the particular defendant participated in, or knew of, the inadequate disclosures that violated the patients right to make an informed decision. In contrast, the fiduciary duty and informed consent theories protect the patient directly, without punishing innocent parties or creating disincentives to the conduct of socially beneficial research extending conversion would hinder research by restricting access to the necessary raw materials. Free exchange of materials would be compromised and cell samples would be potential subject matter of a lawsuit. doubted by Mosk J (above!) Problems in this area are more suited to legislative resolution. If scientific users of human cells are to be held liable for failing to investigate the consensual pedigree of their raw materials, the Legislature should make this decision. Since there are complex policy issues, which affect society, legislatures have the ability to gather empirical evidence, solicit the advice of experts, and hold hearings at which all interested parties present evidence and express their views (should be an executive function of government) Tort of conversion is not necessary to protect patients rights since enforcement of physicians disclosure obligations will protect patients against the type of harm with which Moore was threatened. . Disclosure obligations already protect patients directly without hindering the socially useful activities of innocent parties. As long as a physician discloses research and economic interests that may affect his judgment, the patient is protected from conflicts of interest. If there is conflict, the patient can make a decision to consent or to withhold consent and look elsewhere for medical assistance

2.

3.

Mosk J (dissenting) discusses reasons for which the majority based its rejection of Moores conversion claim: No reported judicial decision supports Moores claim, either directly or by close analogy. But then again, there is no reported decision rejecting such a claim. This issue is new due to the explosive growth of commercialization of biotechnology. We should look for guidance to the Legislature rather than to the law of conversion. Californian statutory lawdrastically limits a patients control over excised cells. The subject matter of the Regents patent cannot be Moores property legally and factally distinct from the cells taken the Moores body. Conversion would hinder the free exchange of materials but Mosk J argues 2 grounds to doubt this prophecy will be fulfilled. (i) Since some biological products of genetic engineering became patentable in 1980, it is not cheap or free to exchange these materials. Due to patentability, there has been a drastic reduction in the formerly free access of researcher to new cell lines and their products. (ii) Rise of biotechnology industry and increasing involvement of academic researchers in that

industry. When scientists negotiated with biotechnological and pharmaceutical companies to develop and exploit the commercial potential of their discoveries, layers of contractual restrictions were added to the protections of the patent law and these companies in turn demanded and received exclusive rights in the scientists discoveries. Also, trade secret protection is popular among companies. Mosk J (dissenting) argues lesser form of servitude (Slavery) haunt laboratories and boardrooms of todays biotechnological research industrial complex. Also he agues that it is inequitable when powerful companies are fighting against a single patient. It is inequitable and immoral that the companies deny the patient is entitled to any share whatever in the proceeds of the cell line despite supplying them with materials. If the courts could recognize that the patient has a legally protected interest in his own body and its products, there would be equitable sharing. Panelli J argues there is no precedent to show body parts are private property but Mosk J also argues that there is no precedent to show body parts are not private property. Ratio Majority: Body parts may never constitute property for purposes of a conversion action. Minority (Mosk J, Broussard J) where the physician is aware of the proposed use of the cells prior to their removal, an action in conversion is available to enable the plaintiff to recover the economic value of the righ to control use of his body parts but this does not necessarily include the value of the patent and the derivative products. Conversion would not be available where the doctor was unaware of the scientific or commercial value of cells when the patient consented to their removal since the patient would be treated as abandoning the property. He argued the plaintiffs are barred from obtaining the benefit of the cells value but permits defendants who allegedly obtained the cells from the plaintiff by improper means to retain and exploit the full economic value of their ill gotten gains free of their ordinary common law liability for conversion.

Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) HCA English (and therefore Australian) law does not recognize a general right of privacy. This case considers how judicial decisions to recognize or to refuse recognition of novel proprietary interests are influenced by more general theories about the purposes and justifications for the existence of private property. (appeal from a judgment for the defendants) This case is commonly cited as authority for the proposition that English (thus Australian) law does not recognize a general right of privacy. There is no proprietary right in a spectacle. However, there are a number of causes of action which may provide some protection e.g. invasion of privacy takes the form of an unlawful intrusion on a persons land action of trespass.(Encorp Pty Ltd v ABC [1988] Williams J issued an interlocutory injunction to restrain ABC from televising a film which was made by trespassing on the plaintiffs property.) It is not a trespass to take a photograph or video of property from the street (Bathurst City Concil v Saban (1985) 2 NSWLR 704) Facts Racecourse on Victoria Park. Taylor owns land near the racecourse and he placed an elevated platform on his land from which it is possible to see what takes place on the racecourse and to read the information which appears on notice boards. Angles stands on the platform and through a telephone comments upon and describes the race. The Commonwealth Broadcasting Corporation holds a broadcasting licence and broadcasts the commentaries and descriptions given by Angles. Plaintiff wants the broadcasting stopped because it prevents people from going to the races as seen by Angles to seeing the races for themselves. They tried to argue they had property not in the ground, horses, buildings etc but in the whole spectacle (i.e. the event of the race) Judgment Latham J: Plaintiff has not done anything wrong. Any person is entitled to look over the plaintiffs fence and see what goes on in the plaintiffs land. The plaintiff can erect a higher fence to prevent this and they can position the notice board so that it cannot be seen by people outside the enclosure. The law cannot by an injunction in effect erect fences which the plaintiff is not prepared to provide. The defendant does no wrong to the plaintiff by looking over the fence and describing to other persons what takes place on the plaintiffs ground. The plaintiff has not provided any principle of law which prevents any man from describing anything which he sees anywhere if he does not make defamatory statements, infringe the law as to offensive language etc, break a contract etc. The defendant did not infringe the law in any of these respects. Plaintiff argues that he has created a spectacle by the expenditure of money and so the spectacle is

a quasi property (American doctrine) which the law should protect. (i.e. wants to stop people from opening their eyes an seeing something and describing what they see.) The plaintiff has not referred to any authority, which supports this contention. The mere fact that damage results to a plaintiff from such descriptions cannot be relied upon as a cause of action. Property in a spectacle is a vague proposition.

Dixon J: English law makes it clear that the natural rights of an occupier do not include freedom from the view and inspection of neighbouring occupiers and of other persons who enable themselves to overlook the premises. Australian law does not recognize a general right of prviacy. it is difficult to regard the plaintiffs claim in this case as motivated by a desire to protect its privacy. Even if Australian law does not provide a general remedy for breach of privacy, there are a number of causes of action, which may provide some protection for those whose privacy has been invaded. E.g. Where the invasion of privacy takes the form of an unlawful intrusion on a persons land, an action in trespass will be available. Tapling v Jones (1865) Lord Chelmsford it leaves everyone to his self defence against an annoyance of this description (i.e. material interference with the comfort and of a neighbour); and the only remedy in the power of adjoining owner is to build on his own ground, and so to shut out the offensive windows. Broadcasting a description of the occurrences they can see upon the plaintiffs land is not given by law. It is not an interest falling within any category which is protected at law or in equity. Evatt J (dissenting): argues tort of nuisance can be established using the definition outlined in Donoghue v Stevenson. (Page 40) the use and occupation of land is interfered with, its business profits are lessened, and the value of the land is diminished or jeopardized by the conduct of the defendants. The defendants actions are conducted to the plaintiffs detriment. Basically, this case establishes that the tort of invasion of privacy is unknown to Australian law however, this is overturned in Australian Broadcasing Corporation v Lenah Game Meats Pty Ltd (2002) HCA class 1.2

If this case was decided today, it would be different. The notion of events e.g. concerts are more commonly conceived to be property.

WEEK 1-2 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2002) HCA there is no tort of privacy in Australia Facts Respondent was a processor of brush tail possums. Respondent tried to bring action against a breach of confidence. Did not argue on breach of tort of privacy (because it does no exist). Members of an animal rights group trespassed on respondents land and filmed activities handed over to ABC who were prepared to use excerpts from it in a documentary. Respondent sought injunction to restrain the showing of the program. ABC appealed to HC. Judgment Gleeson CJ: Just because you think it is private, does not mean it is private would it be highly offnece to a reaonsble person of ordinary sensibilities. We cannot draw a clear line between what is private and what is not. There is a large area between what is necessarily public and what is necessarily private. In this case, the activities secretly observed and filmed were not relevantly private. The premises on which it was filmed were private in a proprietorial sense and thus the respondent had the right to grant or refuse permission to anyone who wanted to observe and record its operations. Although the respondent has private ownership of the land, it does not mean everything he does on his land is a private act. An act also does not become private simply because the respondent does not want to display it to others. Although a person may trespass onto land, that does not mean that every activity observed by the trespasser is private.

The respondent must explain why the appellant is bound in conscience not to publish. In this case, the breach of confidence would be suitable to provide remedy if the nature of the information obtained is such as to permit the information to be regarded as confidential. If it is not confidential/private, then the circumstances that the information was tortiously (during trespass) obtained in the first place is not sufficient to make it unconscientious of a person into whose hands that information later comes to use it or publish it. Lenah could have sued the protestors for trespass.

Grosse v Purvis [2003] QDC requirements for tort of invasion of privacy. Facts The defendant was found liable in tort for invasion of privacy for recurrent acts of harassment of the plaintiff over a period of many years. Judgment Skoein DCJ held the defendant liable in tort for invasion of privacy. Essential elements for TORT OF INVASION OF PRIVACY: (i) Willed act by defendant, (ii) Which intrudes upon the privacy or seclusion of the plaintiff, (iii) In a matter which would be considered highly offensive to a reasonable person of ordinary sensibilities, (iv) and which causes the plaintiff detriment in the form of mental psychological or emotional harm or distress or which prevents or hinders the plaintiff from doing an act which she is lawfully entitled to do.

Hosking v Runting [2005] NZLR agreed with Lenah Games. Said there is no tort of privacy in NZ as well but think it will form in the future. th Facts A NZ celebrity couple brought at action on behalf of their 18 month old daughter who was photographed in a public place without permission, caiming an unlawful invasion of privacy. Judgment NSWCA approved Gleeson Js comment in Lenah Games in favour of protecting against disclosures that have the necessary quality of privacy to warrant the application of the law of breach of confidence and that the intrusion upon seclusion be highly offensive to a reasonable person There are 2 fundamental requirements for a successful claim for interference with privacy: 1. Existence of facts in respect of which there is a reasonable expectation of privacy; and 2. Publicity given to those private facts that would be considered highly offensive to an objective reasonable person e.g. affect welfare or aspect of private life. Technological advances have made it easier to intrude without a trespass being committed. Ratio Court rejected appellants claim that their privacy had been wrongfully invaded in this instance. The court held that the appellants could not have a reasonable expectation of privacy in public places. Also, the publication of the image of the appellants daughter could not reasonably be held to have affected her welfare or to concern any aspect of her private life if it is unaccompanied by any private details or material that might embarrass or inconvenience the child.

Dorman v Rogers (1982) HCA Facts A Disciplinary Tribunal (under s29 of the Medical Practitioners Act 1938 NSW) directed that the name of a medical practitioner be removed from the register of practitioners. The doctor said having his name on the roll gave him the right to work and having his name taken off took his right to work away from him. Appeal by practitioner was dismissed by the NSWCA. Practitioner appealed again to the HCA. Judgment Gibbs J: Follows Clyne v NSW Bar Association: a right to practice a profession is incapable of valuation. One person may, because of his imperfections or misfortune earn less than he could have obtained form unskilled employment. Another may earn an even larger income from some other occupation. The deprivation of the right to practise may not affect the existing employment of the person concerned in any way. A right to practise is in itself not capable of being valued for the purposes of s35 (Judiciary Act).

Stephen J: registration under the Medical Practitioners Act of itself possesses no such value, it merely certifies the possession of necessary personal qualities. It is only by employing these qualities that a medical practitioner derives economic advantage. Whatever loss may be suffered following the deregistration of a medical practitioner is no measure of the value of his registration by only reflects the monetary effect of the loss of one or more of those personal qualities which doctors are required to possess if they are to engage in the practice of their profession. Court said even if you name is not on the name, you can still work. (especially in the medical profession where there is no monopoly like taxi drivers etc) Right to work is NOT proprietary in nature. Forbes v New South Wales Trotting Club (1979) 25 ALR 1 Facts The plaintiff (professional punter) was warned off racecourses by the defendant. He brought an action challenging the order, inter alia, on the ground that he had a right to work, which the defendants were unlawfully preventing him from exercising. The plaintiff did not have a right to work enforceable against the respondents. Note: a decree of specific performance will not be granted as a remedy to for a breach of a contract of employment.

Judgment

Davis v Commonwealth (1988) HCA Facts Plaintiffs produced shirts with designs similar to those of the defendant (Australian Bicentennial Authority). The Authority refused consent relying on s22 of the Act which makes it an offence to use a symbol capable of being mistaken for official symbols. A form of protest to Australian colonial development. S22 is invalid as to the extent that it refers to the expression 200 years. The provisions are beyond the Commonwealths powers. The propriety rights a party has can be cut back of burdened by the exercise of civil right. Civil rights can have a human rights dimension. We are no w seeing more and more that human rights are starting to impinge upon property rights but (Hyam v Graham UK case)

Judgment

Belgrave Nominees Pty Ltd v Barlin Scott Aiconditioning (Aust) Pty Ltd (1984) Supreme Court of Victoria Facts Plaintiffs (owners of a building) contracted with a builder (Guide) for renovation of their adjoining building. Builder subcontracted with the defendant for the supply and installation of air-conditioning systems. The defendant installed two air conditioning plants on the roofs of the plaintiffs buildings. The plants were installed and connected to water systems in the building and electrical supplies. However the builder failed to make progress payments to the defendant and later went into liquidation. Plaintiff entered into a contract with another builder to complete the renovations and the defendant agree with the builder to complete the installation of the system. The defendant (second contractor) resumed work of installing the air conditioning but later removed the plants. Plaintiff sought mandatory injunction compelling defendant to deliver up 2 air conditioning plants or paying damages for detention, conversion and trespass. i.e. plaintiffs claiming that at the time of removal from the building, each air conditioning plant was a fixture. Issue Was the annexation of the plants sufficient to constitute the plant fixtures? We need to look at the circumstances in which they were position on the platform and more particularly, the intention as evidenced by the degree of annexation and the purpose of annexation. The owners want to assert the air condition is a fixture. The contractors want to assert they are chattels.

Judgment

Kaye J (quotes Holland v Hodgson (1872) Court of Exchequer Chambers Blackburn J) General maxim of the law: what is annexed to the land becomes part of the land; but it is very difficult, if not possible, to say with precision what constitutes an annexation sufficient for this purpose. It is a question which must depend on the circumstances of each case the degree of annexation and the object of annexation. CHATTEL When the article in question is no further attached to the land, then *sic+ by its own weight it is generally considered a mere chattel. - However, we need to look at intention. It may still be regarded as part of the land if the intention is apparent to make the articles part of the land. E.g. blocks of stone on top of each other without any mortar or cement for the purpose of forming a dry stone wall would become part of the land. If the stones had been simply been stacked on top of each other just for convenience sake, they would remain chattels. However, if there are stones which are stacked up onto each other to act as a fence, they would be fixtures. An article may be firmly fixed to the land however the circumstances may be such as to show that it was never intended to be part of the land, and then it does not become part of the land. The general rule is that articles not otherwise attached to the land other than by their own weight (i.e. just placed) are not to be considered as part of the land, unless the circumstances are such as to show that they were intended to be part of the land . FIXTURE On the contrary, articles even slightly affixed to the land are considered as part of the land, unless the circumstances are such as to show that it was intended all along to continue a chattel (quotes Australian Provincial Assurance Co Ltd v Coroneo (1938) NSW Jordan CJ, Davidson and Nicholas JJ) TEST FOR DETERMING WHETHER AN ARTICLE IS A FIXTURE OR CHATTEL - INTENT A fixture is a thing once a chattel which has become in law land through having been fixed to land

Doctrine of fixtures:

2 types of ONUS OF PROOF

Fixture: a chattel will become a fixture if it has been fixed with the intention that it shall remain in position permanently or for an indefinite or substantial period (Holland v Hodges). If a thing has been securely fixed, and in particular if it has been so fixed that it cannot be detached without substantial injury to the thing itself or to that to which it is attached, this supplies strong but not necessarily conclusive evidence that a permanent fixing was intended (Holland v Hodges) ONUS lies on party who asserts the articles have ceased to be chattels (i.e. become a fixture) Chattel: a chattel will not be considered a fixture if it has been fixed with the intent that it shall remain in position only for some temporary purpose. If a fixing is very slight, it helps to support an inference that it was not intended to be permanent. ONUS: onus lying on those who contend it is a chattel. Must show from the relevant circumstances it was intended that the article remain a chattel.

TEST However, each case depends on its own faces the surrounding circumstances (Palumberi v Palumberi (1986), Leigh v Taylor [1902] Lord McNaghten) These include the following factors: Test for intent: the intention of the person fixing it must be gathered from the purpose for which and the time during which user in the fixed position is contemplated (Hobson v Gorringe [1897]). We must determine OBJECTIVELEY . (Permanent trustee Australia Ltd v Esanda Corporation Ltd (1991)) however Ball-Guymer says we should look at intention subjectively. Therefore, we need to look at the circumstances. 1. Nature of the chattel 2. Relation and situation of the party making the annexation vis a vis the owner of the freehold or the person in possession. Also look at the status of the person responsible for the affixing, and their relationship to the owner of the freehold. 3. Mode of annexation 4. Purpose for which the chattel was fixed. (Reid v Shaw (1906) Griffiths CJ) 5. (actual/subjective intention can be used as evidence although it is not always decisive.) (Permanent trustee Australia Ltd v Esanda Corporation Ltd (1991))

DEF

In this case, the air conditioning pants were intended to be affixed permanently to the building: Nature of the air conditioning plants the defendant who carries on the business of supplies and fitters of such plant, supplied positioned and connected up the air conditioning plants as a sub

ARGUMENT

COURT RESPONSE

contractor. Relations: The plaintiffs were registered proprietors of the freeholds. Mode of annexation: the chillers were positioned on the platforms and connected up pipes to the water pumps fitted to each platform which were also connected to the reticulation system of each building. Purpose: the plants, when fitted, formed an essential part of the buildings necessary for their use and occupancy as modern office premises. The defendant argued that his sub contract with Guide was partly performed and in the contract the defendant agreed to remedy any defect in the plant. It was said that because some repairs could not be carried out in situ (on site), they had to remove the plant for that purpose (repair). Counsel submitted that where by a contract for work and labour and supply of materials to be fitted to the premises of another, the supplied agreed that for a definite period he will maintain and repair the materials, the materials do not become annexed to the freehold before the maintenance period has expired. Used Appleby v Myers 1867 where Blackburn J said that the party who was to complete the whole for a fixed sum, and keep it in repair for two years, would have had a perfect right, if they thought that portion of the engine which they had put up was too slight, to change it and substitute another in their opinion without consultation or asking the leave of the defendant) The court said this Appleby was different. The plaintiff and defendant agreed the plaintiff would construct certain machinery on the defendants premises and keep it in repair for two years. There was a contractual relationship between the parties, however in this case, there was no such relationship. Appleby v Myers only applies where there is a contractual relationship between the person fitting the chattel and the owner of the freehold or person in possession. Rejected the counsels argument. The Defendant argued there was insufficient annexation of the chillers to cause the same to be fixtures. The chillers were connected to water pipes by means of bolts and nuts so that there was a connection with the building but they argued it was only a slight connection. (However, not that even slight fixing to the land is sufficient to raise the presumption that a chattel is a fixture.) The defendant bore the onus of proof to show the chillers were chattels and not fixtures however they failed to discharge this onus. The court drew from the facts of the case that the air conditioning plants were intended to be fitted permanently to each building and therefore the same were fixtures at the time of their removal by the defendant (even though the mode of affixation was not that great.)

Hobson v Gorringe [1897] - 3 PARTY PROBLEM & CONTRACTUAL TERMS ABUT FIXTURES Facts Gas engines were affixed by bolts and screws to the mortgagors land under a hire-purchase agreement made by him with the hirer (Hobson). The mortgagor/borrower (also the hiree) made default under his hire purchase agreement and the mortgagee/lender (Gorringe) entered into possession of the land. The hirer sought to restrain the mortgagee (Gorringe) from selling the machine, claiming ownership of it while the mortgagee claimed entitlement of the machine as a fixture. Judgment The third party (Gorringe) was not a party to the hire purchase agreement stating that the engine was Hobsons until the engine was fully paid for. The private agreement was irrelevant to third parties. The court held the gas engines were fixtures. Gorringe had an equitable interest to repossess Gorringe did not have any notice of the prior equitable right to repossess and argued that if there is no knowledge of the prior equitable right, the gas engine can be taken to become a fixture of the factory over which he has security. Hobson could make sure Gorringe did not have a claim over the gas engines by labeling the engines to give notice to the whole world then Gorringe would be bound by his equitable right to possession. Compare with Attorney-General (Cth) v RT Co Pty Ltd (No 2) (1957). Fullager J held that two printing presses, despite being attached by nuts and bolts to a concrete foundation in the basement of a building were not fixtures because the main reason for the annexation was for the purpose of holding the presses steady for their more efficient use as presses. No duty to deliver the presses during the delivery of possession of land. Fullager J relied on Reid v Smith (1905) where a dwelling house was erected but not affixed to the land. It simply rested by its own weight upon brick piers. It was a practice to erect buildings like this to avoid destruction of white ants. The building was erected as a temporary structure with the intention of ultimately removing it however, this was not decisive in assessing the intention of the parties. The circumstances showed (objective approach) the building was intended to be part of the freehold. (However, Griffith CJ added in some circumstances an unattached house would be a chattel. E.g. building erected on a gold mining lease.)

RD

Notes

Kays Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] The relevant intentions intention is to be gathered from the circumstances which show the degree and the object of annexation, which are patent for all to see, and notthe circumstances of a chance agreement that might or might not exist between an owner of a chattel and a hirer thereof.

Leigh v Taylor [1902] Lord McNaghten CHATTLE OWNERS INTEREST IN REALTY Facts A tenant for life affixed valuable tapestries to the walls of the drawing room using nails. The life tenant died and the competing claims to the tapestries were made by her executors and by the remainderman (person succeeding to the mansion upon the life tenants death). Judgment Halsbury LC: Although the tapestries were affixed to the walls, this was the only way they could be enjoyed as ornamental tapestries There was no intention to dedicate these tapestries to the house. Given their ornamental character, they could not have been affixed more lightly, and, moreover, were easily removable from the structure without causing damage. Lord Lindley observed that the life tenant would in all likelihood not have intended to annex the tapestries for the benefit of the remainderman.

To determine that question you must have regard to all the circumstances of the particular case to the taste and fashion of the day as well as to the position in regard to the freehold of the person who is supposed to have made that which was once a mere chattel part of the realty. The mode of annexation is only one of the circumstances of the case, and not always the most important Compare to Re Whaley [1908] where tapestries attached by an owner were considered fixtures because they were attached by an owner, and it would be reasonable to expect an owner to intend that they contribute to the improvement of the land. Also, the tapestries were designed to enhance the Elizabethan character of the room. Compare to Norton v Dashwood [1896] where tapestries were held to be fixtures because they could not be removed without damaging the brickwork, tearing the fabric and laving the room maimed and disfigured. If the chattel owners right to the realty is temporary, more persuasive that the object is a chattel. Palumberi v Palumberi (1986) NSW there has been a perceptible decline in the comparative importance of the degree or mode of annexation, with a tendency to greater emphasis being placed upon the purpose or object of annexation, or, to put in another way, the intention with which the item is placed upon land. This shift has involved a greater reliance upon the individual surrounding circumstance of the case in question as distinct from any attempt to seek to apply some simple rule r some automatic solution.

May v Ceedive Pty Ltd (2006) NSWCA Facts Appellant lived on respondents land. He signed a contract for sale, which specified that the subject matter of the contract was the house and not the land, which it was situated. Contract purported to lease the land to the appellant in return for the payment of ground rent. This arrangement was consistent with practice developed over many decades where miners would build their homes and retain ownership. Respondent sought to evict the appellant because he was in arrears of rent. The appellant wanted to argue he was a protected tenant under the Landlord Act. Trial judge sought that the house was a chattel. i.e. the respondent could kick the appellant off his land which meant the appellant would have to remove himself and his house from the land. He appealed. Judgment In this case, the house does not rest by its own weight and is affixed to the land thus there is a presumption (although rebuttable) the item is a fixture. The onus lies on the respondent to show the house is a chattel. The authorities in Australia emphasise the original affixers intention to be determined objectively

however actual intention may have limited bearing at least to the extent that it helps to indicate such matters as the period of time the item is intended to remain in position and the function to be served by its annexation. The primary judge erred in considering the intention of Mr May to be relevant to the question of whether the house had the initial status of a fixture or a chattel. Mr Mays (appellant) predecessors would be the ones who affixed the house a long time ago so the intial status depends not on Mr May but with his predecessors. Also, there was never any agreement that the house could be dealt with separately from the underlease, or even that it could be severed. Also the evidence shows that there was no suggestion that the house was intended to remain in position only for some temporary purpose such as a mining operation that had long ceased. The houses have remained whether for mining purposes or otherwise for their continued occupation. The house satisfies the Australian Provisional Assurance Co test (surrounding circumstances test: objective intention but look to context as well) if one were instead to lookat all the surrounding circumstances and not simply the degree of annexation to the realty and the function served by that annexation, the circumstances here in their totality do not rebut the presumption in favour of the house being a fixture. On the contrary, the circumstances indicate fairly clearly that the house is affixed to the land it must be taken as a matter of law to be a fixture constituting part and parcel of the relevant land, notwithstanding expressions of subjective intention to the contrary.

Examining all the surrounding circumstancesas emphasized in May v Ceedive Santow JA. Australian Provincial Co Ltd v Coroneo (1938) surrounding circumstances test. Facts A theatre had rows of seats which were bolted to the floor and fastened together. Judgment The seats remained chattels because the seats were regularly moved around. Compare with Vaudeville Electric Cinema Ltd v Muriset [1932] where the premises were used exclusively as a cinema and the chairs which were bolted in place by the owner were held to be fixtures because the object of annexation was to provide a permanent benefit for the building.

Eon Metals NL v Commissioner of State Taxation (WA) (1991) Facts Mining plant and equipment was sold to the appellant without it being moved from the mine where it was installed. Issue: Was the agreement for sale be charged with stamp duty at a personalty or realty rate? (i.e. is it a personal property or real property?) Ipp J decided it was chattel after taking into account the limited life of the mine, the transportable character of the equipment concerned, the common practice to transfer equipment of that kind, economic incentive to remove it, the relevantly slight degree of attachment to the ground, and the facility with which detachment could occur. National Australia Bank Ltd v Blacker (2000) Court held irrigation equipment were chattels. The electric pumps and sprinklers rested on their own weight for operational purposes and the valves attached to hoses could be easily removed. No damages would be caused to the land or chattel upon removal. Also the intention of the parties was that the equipment be readily moveable around the property whenever needed, thus indicating no intention to annex. Chelsea yacht and Boat Co Ltd v Pope [2000] A houseboat, despite being connected to electricity, gas and other services, was not considered a fixture. there was no sufficient degree of annexation, as the houseboat could be easily moved without injury to it, or to the land. Also, the parties did not demonstrate any intention to attach the chattel permanently to the land. (However, if moored securely, and on a more permanent basis, a boat may become a part of the land Rudd v Cinderella Rockerfellas Ltd [2003])

Chattels annexed without permission Chateau Douglas Hunter Valley Vineyard Ltd v Chateau Douglas Hunter Valley Winery and Cellars Ltd (Receivers Appointed) [1978] Facts A company built a winery on land owned by a vineyard company adjacent to its own land. No member of the vineyard company was aware the winery was not sited on the winery companys land. Judgment The winery and certain plant and equipment fitted to it were fixtures.

Brand v Chris Building Society Pty Ltd [1957] often seen as a problematic case because it seems unfair. Facts The defendant company, without the plaintiffs knowledge or consent, erected a house on his land, and he sought, inter alia, to restrain the defendant from entering upon his land and demolishing the house. The building was almost complete. The defendant was prepared to remove the house and put the plaintiffs land back into its previous state, or accept the cost without profit of the labour and materials, including the loose chattels. Judgment Judgment for the plaintiff fixture. the plaintiff as the owner is entitled to possession, the defendant under an honest mistake which was not contributed to by the plaintiff entered upon the land without any authority or licence of the plaintiff, became a trespasser and proceeded to build a house on it and when the plaintiff found out, he took immediate steps to prevent the continuance of the trespass it must be shown that the plaintiff was guilty of something in the nature of a fraud, and there is nothing of that kind here and I can fin no ground which could raise an equity in favour of the defendant. (i.e. if the plaintiff had induced the defendant fraudulently, the defendant could have recovered costs or demolished but there was no fraud, so the house belongs to the plaintff.) Issue of acceptance: the decision suggests that acceptance of a benefit is relevant as a basis for recovery in restitution. The court commented that the decision may seem unjust however, the court must be guided in its decision by principles of law. Hudson J (dissenting) rejected the plaintiffs submission on the basis of unjust enrichment (i.e. unfairly getting ownership of the house). However, in Pavery & Matthews v Paul (1986), Dean J defined unjust enrichment: the concept of monetary restitution involves the payment of an amount which constitutes fair and just compensation for the benefit or enrichment actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided. Issue of acceptance should not be the only factor for determining restitution Deane J added that it would be unfair if a payment of the full value of work performed had to be paid where the remuneration for unsolicited work calculated at a reasonable rate exceeded the enhanced value of the property. Angelopoulos v Sabatino (1995) the court held the defendant was unjustly enriched by the plaintiffs improvements to the property, and was therefore required to reimburse the plaintiff for this cost. Doyle CJ reviewed the judgment in Pavey & Matthews and said .one must also consider the basis upon which the provider of the benefit acted, the choice which the recipient of the benefit had in deciding whether or not to accept the benefit and the conduct of the defendant, by which I mean the defendants knowledge of what the plaintiffs were doing and the basis upon which they did it.

Sunstar Fruit Pty Ltd v Cosmo [1995] Facts Purchaser under a contract of sale went into possession prior to completion. A provision in the contract did not allow the purchaser to add to the property without the vendors consent. However, the plaintiff made various improvements. Vendor rescinded the contract for failure to complete, plaintiff sought restitution for improvements. Judgment Plaintiff was not entitled to restitution because the enrichment was not unjust on account of the breach of the agreement, and there was no inducement by the vendor.

WEEK 2-1

Jeffries v The Great Western Railway Co (1856) Court of Exchequer Chamber must pay full market value. 1. Own assigns trucks to the plaintiff (shifting/transfer title) 2. Assigns the same trucks to the Defendant too. (lending same thing twice) 3. Goes bankrupt the trucks are delivered into the plaintiffs hands. The defendant physically seizes the trucks from the plaintiff. Plaintiff brought an action of trover (conversion) in respect of the seizure by the defendants of certain trucks. Plaintiff proved the defendants had seized the trucks from his possession. Plaintiff claimed the trucks as his, under an assignment by Owen and claimed the goods under an assignment made by Owen, after the date of the first assignment, but before the plaintiff took possession of the goods. Def is trying to argue the best title in the trucks lies in the trustee in bankruptcy . Defs counsel stated he wished to prove that, before the plaintiff took possession of the trucks, Owen had become a bankrupt and that the Court of Bankruptcy had made an order requiring the goods to be sold for the benefit of its creditors. i.e he wanted to prove that at the time of the seizure, the goods did not belong to the plaintiff but to the persons having title under the order of the Court of Bankruptcy. Rejected evidence of bankruptcy because the defendant, if they were wrongdoers, could not set up the jus tertii as a defence (right of a third party normally used in the sense of a right superior to that of both the plaintiff and defendant.) Trial: plaintiff could succeed because the jus tertii would be able to be used by the defendant if the Def were an agent of the tertius but he was not. The agency line was not taken by the Def. appeal. Lord Campbell CJ: The law is that a person possessed of goods as his property has a good title as against every stranger, and that one who takes them from him, having no title in himself, is a wrongdoer, and cannot defeat himself by shewing that there was tile in some third person; for against a wrongdoer possession is a title. - The Def cannot say there is someone has better title because the very fact that the plaintiff has physical possession gives the plaintiff a requisite level of possession to rely on. (Relativity of rights at the pinnacle, it is the trustee in bankruptcy and creditors. But if they dont bring an action, the plaintiff can still sue following the pecking order. - The jus tertii rule can be used if the Defendant is an agent of the tertius. - The rule can be used when the plaintiff is out of physical possession. - The Def was the wrongdoer because he wasnt the one with the anterior possession interfered with the possession of the plaintiff. - Double liability full market value will have to be paid once then again if another action is brought. The defendant were strangers to the title which they propose to set up and the plaintiff had been for some time in possession, when the defendant seized the goods, claiming them as their own, but having no right to the goods and thus jus tertii could not be set up. The plaintiff had been in possession when the defendants seized the goods, claiming them as their own when they had no right to the goods and thus jus tertii cannot be set up - there was no third party who had a right to take the goods. Peaceable possession should not be disturbed by wrongdoers. The jus tertii cannot be set up because the presumption in law is that the person who has possession has the property.

Wightman J: the plaintiff was in possession of the trucks as his own. The defendant took them out of his possession and coverted them Quotes Wilbraham v Snow: So possession with an assertion of title, or even possession alone, gives the possessor such a property as will enable him to maintain this action against a wrondoer; for possession is prima facie evidence of property. A defendant who interferes with the plaintiffs possession is liable to pay the full market value of the chattel, without any deduction for the likelihood or the true owner taking steps to recover the chattel from the plaintiff. The defendant will have no defence to a subsequent action by the true owner for the recovery of the chattel or payment of its value.

Costello v Chief Contable of Derbyshire Constabulary [2001] plaintiff acquiring possession wrongfully The Defendant lawfully took possession of a motor vehicle from the plaintiff acting in the belief that it had been stolen. Under legislative powers, the defendant retained possession of the goods for the permitted statutory period but, upon expiration of the period, refused to return the goods the plaintiff. The Defendant contended the plaintiff knew the car was stolen. It was held the plaintiff was able to recover possession of the vehicle. Whether your possession is lawful or not, possession itself is enough to get your property back. If the rightful owner claimed the car, he would have a greater bundle of rights than Costello and Costello would not be able to claim back the car. Majority said: possession means the same thing and is entitled to the same legal protection whether or not it has been obtained lawfully or by theft or by other unlawful means. It vests in the possessor a possessory title which is good against the world save as against anyone setting up or claiming under a better title.

McKeown v Cavalier Yatchts Pty Ltd (1988) special interest/value, Future or reversionary right to possession is insufficient. Facts Defendant refused to deliver yacht. At the time of the yacht coming into the possession of the defendant, the yacht consisted only of a laminated hull but at the time of the action, the yacht was ready to sail. Plaintiff claimed specific restitution of a yacht. Under s93 of Supreme Court Act 1970, the Supreme Court had a discretion to order specific restitution. Judgment Young J held that a persons yacht was unique and therefore susceptible to the remedy of specific restitution. However, the chattel had significantly improved since its delivery into the possession of the defendant so an inquiry as to just compensation was ordered.

Ratio

A plaintiff suing for trespass to goods is entitled to damages for the depreciation of value in the chattel from the time it was taken by the defendant until the time it is restored to the plaintiff (Pargiter v Alexander (1995)) To succeed in an action in detinue or conversion, the plaintiff must show that he/she had actual possession or an immediate right to possession at the date of the interference with the goods, or at the date of the demand for the return of the goods.

Future or reversionary right to possession Bailment

A future or reversionary right to possession is not sufficient. E.g. where goods are bailed or hired to the bailee for a term. Where an owner has given possession to another, the terms of the arrangement will determine whether the owner has an immediate or merely a future right to possession. Bailment where the owner (bailor) gives possession to another (bailee) for a limited period and under certain circumstances. Rule of bailment: where a wrongdoer damages or converts bailed goods, the possession of the bailee is title, the loss or deterioration of the goods is his loss, and must be recouped to him. Therefore, the bailees obligation to the bailor in such a sitution is not relevant and the wrongdoer cannot plead jus tertii. (The Winkfield) - During the period: bailee has exclusive possession. Bailor has no right to immediate possession, but does have a revisionary property right. - After the period has elapsed, the bailee has mere legal possession and the bailors reversionary property right is stronger. - Can be a fixed period or at will when bailment are at will, the bailee has an immediate right to possession from the beginning of the deal. - Both the bailee and the bailor have a cause of action against a wrongdoer who intereferes with the goods in the bailees possession. (BIS Cleanaway t/a CHEP v Tatale [2007] NSWSC McDougall J)

The WInkfield against a wrongdoer possession is title. (Jeffries) Facts The Mexican (carrying mail) collided with Winkfield. The Postmaster-General claimed for a sum of the value of letters, parcels etc which were in his custody as bailee.

(The people posting the letters were the bailors)

Judgment

Double liability

Issues: First judgment postmaster general successfully sued Winkfield in relation to the registered mail (i.e. pay extra as insurance to ensure your post is delivered but if it isnt, compensation is rewarded. Post master general appealed arguing he is entitled to claim damages for the unregistered mail that was lost. If mail is registered, the bailee will be accountable to the bailors (people posting letters) because they need to pay compensation if they lose the letters. However, the issue is whether the bailor can sue the bailee successfully if the mail is unregistered. If the bailor can demonstrate the bailee posted the letters, they would still have an action against the post master general because he was responsible for the letters for the term of the bailment. Should damages be given to the bailee for articles, which belong ultimately to someone else? Factually the Mexican is in possession, but legally the PMG is in possession and since possession is title, he can sue for the interference of goods. Possession gives rise to proprietary interest. The bailees right of possession was sufficient to get full damages. The bailor has no right to sue Winkfield technically/historically because they were not in possession. Collins MR: In an action against a stranger for loss of goods caused by his negligence, then bailee in possession can recover the value of the goods, although he would have had a good answer to an action by the bailor for damages for the loss of the thing bailed. Possession is good against a wrongdoer and that the latter cannot set up the jus tertii unless he claims under it. The wrongdoer must treat the possessor as the owner of the goods for all purposes irrespective of the rights and obligation as between him and the bailor. The presumption of law is that the person who has possession has the property (Jeffries v Great Western Railway Go Lord Campbell.) It is not open to the defendant, being the wrongdoer, to inquire into the nature of limitation of the possessors right, and unless it is competent for him to do so the question of his relation to, or liability towards, the true owner cannot come into the discussion at all and, therefore as between those two parties full damages have to be paid without any further inquiry i.e. dont question relationship between bailor and bailee. The right of the finder to recover full damages cannot be made to depend upon the extent of his liability over to the true owner. The root principle is that, as against a wrongdoer, possession is title. The chattel that has been converted or damaged is deemed to be the chattel of the possessor and of no other, and therefore its loss or deterioration is his loss, and to him, if he demands it, it must be recouped. As between bailee and stranger possession gives title not a limited interest but absolute and complete ownership, and he is entitled to receive back the full value for the whole loss or deterioration of the ting itself. As between bailor and bailee, the real interest of each must be inquired into, and, as the bailee has to account for the thing bailed, he must account for that which has become its equivalent and now represents it. The wrongdoer, having once paid full damages to the bailor, has an answer to any action by the bailor double liability. The presumption of the law is that the person who has possession has the property Wilbraham v Snow possession is prima facie evidence of property. Double liability single liability applies inc cases of bailment (Winkfield differs from Jeffries in that it is an exception to the rule that the tort fees are liable to each person who has a recognized property interest.) Rationale: at the time of the interference, the bailee is in possession and not the bailor. Bailment in these circumstances (post), will not compensate the bailor. (In normal bailments, the bailor has a reversionary right in interest and will be able to sue for damages after the term of the bailment). The bailor cannot sue because he doesnt have possession in this case and also they

dont have a reversionary right in interest because they will never get the letters back.

WEEK 2-2

The Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA breach of bailment and title to sue? The breach must be so serious to amount to a disclaimer of the bailment. Facts The appellant company hired a car under a hire purchase agreement from Esanda Ltd. The appellant left the car with the respondent (Tynan) to sell without Esandas written consent as required by the agreement. The car was stolen from the respondents premises. Esanda Ltd issued a notice seeking repossession and disputed the appellants title to sue, arguing that its breach of the agreement meant that at the time of the theft, only Esanda had the right to immediate possession. Tynan Motors is saying he has breached the hire purchase agreement he has with Esanda. The appellant tries to sue Tynan but Tynan argues the appellant does not have the requisite degree of possession to sue. The appellant was not in actual possession of the car and it is argued he also did not have an immediate right to possession since Esanda had the immediate right to possession because the bailment had been breached) the breach triggered the immediate right to possession. Judgment Young CJ: Even if a person breaks a bailment, if that person continues a possession of personal property then that person has a title to sue to defend his or her possession. However, if the breach is so serious as to amount to a disclaimer of the bailment, it could terminate the contract of bailment, giving the bailor an immediate right to possession. In this case, the appellants breach did not amount to a disclaimer and therefore had title to sue.

Esanda Finance Corporation Ltd v Gibbons estoppel and jus tertii. Essentially, the defendant in an action in conversion in modern times will be precluded from pleading and relying upon the title of a third party in order to defeat the plaintiffs assertion of a right to immediate possession, when: (i) Defendants conduct has contributed to the plaintiffs belief that its right to immediate possession exists; and (ii) The defendant does not act with the authority of the true owner.

City Motors (1993) Pty Ltd v Southern Aerial Super Service Pty Ltd (1961) HCA bailees possession may be protected even against the bailor. Jeffries still applies in circumstances of bailor/bailee. Facts The plaintiff purchased a new truck from the defendant and traded in an old truck as part payment of the purchase price. The plaintiff applied to a finance company. The defendant told the plaintiff that finance was available and signed an offer addressed to the finance company to hire a new truck. The defendant took possession of the old truck, and delivered the new truck to the plaintiff. The old truck broke down and the plaintiff offered to pay cash for the new truck. The defendant retook possession of the new truck and returned the cheque. The bailee could argue against the bailors claim that there was a breach of the bailment by claiming that there is an implied condition that the bailee has reasonable time to find financing. The bailment was actually on foot and there was no triggering of an immediate right to possession because of the implied term of reasonable time. The principle of Jeffries still applied in the circumstances of a bailor/bailee relationship. The trial judge held that property in the new truck had passed to the plaintiff who could accordingly

sue in trespass upheld by the HCA: the plaintiff had an exclusive possessory right to the truck which could not be terminated except on the default of the plaintiff (which he had not done). The title as bailee was sufficient to maintain an action of detinue against the defendant.

Wilson v Lombank Ltd exceptions to the jus tertii rule. Facts The plaintiff (Wilson) claimed damages for alleged trespass by the defendants (Lombank) The plaintiff bought the car for $470 from a man who had no title to sell. The plaintiff took the car for repairs and after it was completed ($27), an employee of the defendant took the car away telling the salesman he would bear full responsibility. The defendant took the car and only later found out who was the true owner of the car. A third party (Mercantile Credit) has best title tertius. Wilson sues in trespass but he is required to have actual possession. Wilson argues he was in possession when it was removed by the defendant i.e. actual possession. If you do not have actual possession , an immediate right to possession is enough. Constructive possession will be good as actual possession Judgment A person is in possession in law if he had actual possession, constructive possession or an immediate right to possession. the defendant claimed the plaintiff did not have actual possession or constructive possession since the car was in the hands of a garage for repairs. Also, he claims the plaintiff did not have an immediate right to possession since this is something which only arises in the case of gratuitous bailment, which this was not. Also, he argues that since the car was in for repairs, the garage had a lien on it and, therefore, that the plaintiff could not have an immediate right of possession. Also, he further submitted that even if the plaintiff did have an immediate right of possession, the plaintiffs claim was defeated when the defendants returned the car to the true owners. Exceptions to the jus tertii principle can be placed in two categories: 1. If the plaintiff was in actual possession, and even if the defendant got possession of the goods by a trespass against the plaintiff, the defendant can plead the just tertii if: (i) he defends the action on behalf and by authority of the true owner; (ii) when he committed the act complained of by the authority of the true owner; (iii) when he has already made satisfaction to the true owner by returning the property to him (defendants used this one but failed?) 2. If however, the plaintiff was not in actual possession he relies upon his right to possession, he must recover on the strength of his title, and proof of the jus tertii will destroy the only thing upon which he relies.

Exception to the jus tertii principle

Ancona v Rogers (1876) Mellish LJ: The contention may be true where the bailor has no right to demand an immediate return of the article at his will, but the better opinion is I think, that, where the bailor can at any moment demand return of the object bailed, he still has possession. (note: only in gratuitous bailment at will) in this case, the bailment was for a reward (repair charges etc) so it was not a gratuitous bailment at will. The taking of the car was intentional, direct and wrongful. The plaintiff was in possession of the car and he had the right to immediate possession and he could have demanded the return of the car. The plaintiff never lost possession of the car and there was no lien on the motor car. Therefore, the defendants wrongfully took the car and the plaintiff is entitled to damages. The Defendants delivery of the car to the true owner does not defeat the plaintiffs claim. Armory v Delamirie (1722) Court of Kings Bench a finding case for the principle that possession is title Facts The plaintiff found a jewel and carried to the shop of the defendant to know what it was. The apprentice weighted it and told the master the value of the jewel. The master offered the boy money but he demanded to have the jewel again. The apprentice gave back the socket without the stones.

Held

The finder of a jewel, though he does not by such finding acquire an absolute property or ownership, has such a property as will enable him to keep it against all but the rightful owner, and consequently may maintain trover (conversion). The boy can get it back since possession is title! (bailee is the one in possession and the bailor has no right to sue.) The action well lay against the master and is answerable for his neglect. The value of the jewel was estimated to using a jewel of the finest water and estimated size. The Chief Justice directed the jury, that unless the defendant did produce the jewel, and show it not to be the finest water, they should presume the strongest against him and make the value of the best jewels measure of the damages: which they accordingly did.

WEEK 3-1 & 3-2

McPhail v Persons Unknown (1973) Court of Appeal Facts McPhail was the owner of a leasehold house. There was some furniture but it was unoccupied. Some persons made entry by getting in the front door and put a new lock on. The next day McPhail went with a detective and asked them their name. they did not give them. McPhail took proceedings for possession under RSC O 113 which was served on them. They said the believed that the house had been empty for at least two years and, as they had nowhere to live, they decided to make their home there. Phillips J made an order that Mr McPhail do recover possession. Squatters appealed (dismissed). Judgment The squatters asked for four weeks. The issue is whether the court can give them this time when the owner of the house asks for an order for possession. The law as to squatters squatter one who, without any colour of right, enters on an unoccupied house or land, intending to stay there as long as he can. Homelessness and plea of necessity cannot be used as a defence. London Borough of Southwark v Williams [1971+: If homelessness were once admitted as a defence to trespass, no ones house could be safeSo the courts must for the sake of law and order, take a firm stand. They must refuse to admit the plea of necessity to the hungry and the homeless; and trust that their desires will be relieved by the charitable and the good. (i) The remedy of self-help The owner is not obliged to go to the courts to obtain possession he can take the remedy into his own hands. However, this is not a course to be recommended because of the disturbance which might follow. Sir Frederick Pollock: A trespasser may in any case be turned off land before he has gained possession, and he does not gain possession until there has been something like acquiescence in the physical fact of his occupation on the part of the rightful owner. As long as the owner uses no more force than is reasonably necessary, he is not himself liable either criminally or civilly. He is not liable criminally: The remedy by action s79 Supreme Court Act In a civilized society, the courts should themselves provide a remedy which is speedy and effective; and thus make self help unnecessary. The owner is entitled to go to the court and obtain an order that the owner do recover the land, and to issue a write of possession immediately. The courts are tempted to never suspended the order for possession (as this might encourage self help). The remedy by summons A summons can be issued for possession against squatters even though they cannot be identified by anem and even though, as one squatter goes, another comes in. It is an order that the plaintiffs do recover possession and this order can be enforced by a writ of possession immediately it is an authority under which anyone who is squatting on the premises can be turned out at once. There is no provision for giving any time. The court cannot give any time. It is for the owner to give such time as he things right to the squatters. The squatters must make their appeal to the owners goodwill and consideration and not to the courts.

(ii)

(iii)

The position of tenants

It is difference where there is a tenant who holds over after his term has come to an end or after he has been given notice to quit his possession was lawful in its inception and even after the tenancy is determined, he still has possession. If he remains in possession and in occupation, there is high authority for saying that the owner is not entitled to take the law into his own hands and remove the tenant by force he should go to the courts to get an order for possession otherwise he is guilty of a criminal offence contrary to the statute of forcible entry. (covered by Rent Act 1965 s32: where a tenancy has come to an end but the occupier continues to reside in the premises, it is not lawful for the owner to recover possession otherwise than by proceedings in the court.) Conclusion When the owner of a house comes to the court and asks for an order to recover possession against squatters, the court must igve him the order he asks. It has no discretion to suspend the order. But, whilst this is the law, I trust that owners will act with consideration and kindness in the enforcing of it remembering the plight which the homeless are in.

Hemmings v Stoke Poges Gold Club Ltd [1920] The Court of Appeal held that a person wrongfully retaining possession of land has no civil action for damages against the rightful owner who forcibly enters the premises unless more force is used than is reasonably necessary, or unless the owner fails to exercise reasonable care in removing the goods of the wrongful possessor. Scrutton LJ: the risk of paying damages and costs on this finding, and the danger of becoming liable to a prosecution under the statutes of forcible entry may well deter people from exercising this remedy except by order of the court. But I see no reason to add to the existing privileges of trespassers on property which does not belong to them by allowing them to recover damages against the true owner entitled to possession who uses a reasonable amount of force to turn them out.

McIntosh v Lobe (1993) Court of Appeall (followed Hemmings) Facts A tenant had remained in possession after the lease had expired and the landlord obtained a declaration from the Supreme Court that the tenant was a trespasser. The landlord could have obtained a writ of possession and had it executed by the sheriff but instead, he entered the premises and ejected the tenant using only such force as was reasonable in the circumstances. The tenant argued that s18 of the Imperial Acts Application Act 1969 prohibited such action and allowed possession to be obtained only by court processes. S18: No person shall make any entry into land except where such entry is given by law, in such case, with no more force than is reasonably necessary The statute does not extinguish the common law remedy of self held in regaining possession fo land and that a breach of s18 by the rightful owner of the land would not give a trespasser any civil right to bring an action for damages. Note: The landlords right of peaceable re-entry to recover possession of residential premises form an over holding tenant has been abrogated by elgislation in all jurisdictions. The legislation generally forbids reentry without the tenants consent except in accordance with a judgment, order or warrant of a court or tribunal given after notice to the tenant. The right of peaceable re-entry is rarely used because the landlord may incur criminal penalties if the re-entry is done in a manner likely to cause a breach of the peace.

Asher v Whitlock (1865) Court of Queens Bench only need to establish that at the date the proceedings are brought, he/she has a right to possession which is better than that of the defendant. Facts Thomas Williamson (Squatter- doesnt have best title and just claimed the land) enclosed some waste land of a manor. The holder of the freehold estate in the manor was the lord of the manor, not a party to these proceedings. Thomas enclosed more waste land and built a cottage on the newly enclosed portion. Thomas occupied all the enclosed waste land until his death. In his will, he devised all the land to his wife Lucy during her widowhood and after he death or remarriage to his daughter Mary Ann. The widow and daughter remained in possession of the enclosed land. His widow married Whitlock (defendant) who also came to reside on the land. The daughter died and the female plaintiff (Mrs. Asher) was the daughters heir.

The widow died but Whitlock continued to occupy the land. Plaintiffs brought an action of ejectment against Whitlock. At trial, the CJ directed a verdict for the plaintiffs. The defendant obtained the rule nisi to enter a verdict for himself on the ground that Thomas had had no devisable interest in any part of the land at his death. Issue: the defendant had adverse possession or not? Devise: to assign or transmit property under a will. (divesee: the person who receives property, testator: person who writes the will) Whitlock claimed he got interest/possession in the land by marrying the widow who had possession (who got it from the will). He is arguing he got his possession by virtue of the will. If he relies on this, there is a fundamental flaw because she loses the interest when she remarries. The title goes to the daughter which then passed to her heir. He is trying to affirm the will on one hand by saying the wife got title but he also denies the will by claiming the wife still has possession. STUPID MAN!

Judgment

Issue: can Thomas, being a squatter without best title, pass down his title through his will? You can only pass interest down the line if you had been in possession for the statutory period (or longer). Cockburn J: I take it as clearly established, that possession is good against all the world except the person who can shew a good title; and it would be mischievous to change this established doctrine. In Doe d Hughes v Dyeball (1829), one years possession by the plaintiff was held good against a person and turned him out. The widow was a prior devisee, but durante viduitate (widowhood) only, and as soon as the testator died, the estate became vested in the widow, and immediately on the widows marriage the daughter had a right to possession. The defendant had no right against the daughter, and had she lived she could have brought ejectment; although she died without asserting her right, the same right belongs to her heir. On the simple ground that possession is good title against all but the true owner, I think the plaintiffs entitled to succeed, and that the rule should be discharged. If Thomas had possession for any period protects him against everyone except for somebody who had better right to possession (established by anterior possession or documentary title). This possession would have entitled the possessor to bring an action in ejetment. The way you can prove better title is from: (i) by possession (anterior possession) (ii) documentary title holder. During his lifetime, could have transferred his interest to A (another person) or he could have done it by will (which he did). He passed the interest to Lucy (wife), Mary Ann and Mrs Asher. He thinks by 1865, possession had become the equivalent of seisin in the earlier law. i.e. he treats this case as though possession and seisin are the same. Mellor J: Does not treat possession and seisin as the same. Similar to Cockburn but he suggests in 1865, the plaintiff who is suing an ejectment still essentially needs to demonstrate unabandoned earlier seisin (show they hadnt given away or abandoned it they had earlier or anterior seisin (not possession)). Earlier possession is prima facie evidence of seisin. (do not need to evidence earlier ownership). Thomass earlier possession may not enable him to bring an action of ejectment against his dispossessor if he was not a squatter but a tenant at will (which he would have been if he entered with the consent of the ladlord) because he needs to be diseased to bring an action of ejectment. His earlier possession might not have given him title to bring an action of ejecment against the dispossessor if it were shown that he had entered the land in the first place with the consent lord of the manor and had thus become a tenant at will rather than someone who truly had seisin. In Doe d Carter v Barnard (1849), the plaintiff did not rely on her own possession merely, but shewed a prior possession in her husband with whom she was unconnected in point of title. The first possessor is connected in title with the plaintiffs; for there can be no doubt that the testators interest was devisable. In the common case of proving a claim to landed estate under a will, proof of the will and of possession or receipt of rents by the testator is always prima facie sufficient, without going on to shew possession for more than 20 years. Possession is good against all but the rightful owner. It is not good for Whitlock to argue the lord of the manor has better title and thus Mrs Asher should lose. Jus tertii doesnt apply in relation to land.

Doe d Carter v Barnard (1849) a clear authority in favour of the jus tertii plea. NOT a strong authority as the other

cases. (Possesion is not enough you must have the BEST TITLE) Facts Carter purchased land, but permitted his son John to go into possession (1815). He entered into possession as a tenant at will (with consent). There was a statute that operated which deemed that after 1 year of being a tenant at will you were no longer a tenant at will but were a squatter as a deseisor. In 1816, Johns continuing possession, which was deemed to be adverse statue barred his dad from passing title to Barnard. Robert could no longer say he had superior title. Between 1816 and 1836, the statute had been running to recover land and during this time Robert could have passed the land to Goody and then to Barnard but in 1836, the statute extinguished his right to do this because neither Robert not his successors in title had physically retaken possession or had commenced legal action to take possession and the statutory period at that time was 20 years and it had been reached. Robert had nothing to pass onto Goody and Barnard (his title was extinguished!) Johns widow, Mary, occupied the premises after his death until she was ejected by Barnard. He claimed the land under a mortgage given by Carter, but it had been previously decided that the title of Carter had been extinguished by adverse possession. She couldnt prove she had the requisite level of title to sue. In order to be able to sue Barnard, she had to establish not that she was just in possession but that she had best title in all the world. She did not have the best title but in fact his heir who was somebody else. Her possession was not enough she had to have THE BEST TITLE. Judgment Barnard, when he ejected the widow had no title at all to the land. However, her action of ejectment against Barnard failed on the ground that her own evidence showed that the best title to the land was Carters heir. Reason: the widows evidence proved that her husband had been in possession for 18 years and this was prima facie evidence that he had acquired seisin and a freehold (fee simple) estate.(this reasoning was used in Mellor Js argument in Asher v Whitlock) On his death this freehold estate passed to his heir and his heir was not his widow. Since Mary had been in adverse possession against the heir only for 13 years, a period insufficient to bar his title, the heir had the best title to the land. The son (John) was a tenant at will and a tenancy at will always determines on the tenants death. He had no transmissible possessory interest to leave to his heir. Accordingly the widows possessory interest was the best in the world because the titles of Carter and Barnard had been extinguished and Johns heir received nothing. A rule that puts land up for grabs can hardly be right. The better view seems to be that John Carter had a possessory interest which passed to his heir, because the tenancy at will was transformed into adverse possession for all purposes. That possessory interest was prior and therefore superior to Marys interest.

Perry v Clissold (1907) Privy Council Authority for the proposition that jus tertii does not apply to land in NSW. Facts The executors of Clissold made an action seeking a mandamus (compel a person to perform a duty which he/she has refused to perform) to compel the appellant, Perry, Minister of Public Instruction in NSW, to make a valuation of certain land compulsorily acquired by the Crown for the purpose of erecting a school. Clissold had taken possession (possessory title) of the land without any title and had fenced it adverse possessor/squatter. He collected rent from tenants treating land like his own. The owner of the land was at all times unknown. Clissolds executors argued the Asher v Whitlock: Clissold had possession. Minister tries to use jus tertii claiming there is a party with better title who should be applying for the valuation. Claims Clissold is a trespasser. Difference between trespasser and possession trespasser never has possession. Clissolds executors claimed to be entitled to compensation under the terms of the Act authorizing the acquisition, on the ground that Clissolds possession gave him an interest in the land. Valuation was a necessary step in assessing compensation. Judgment Lord MacNaghten: It cannot be disputed that a person in possession of land in the assume character of owner and exercising peaceably the ordinary rights of ownership has a perfectly god title against all the world but the rightful owner. It seemed, in 1881, Frederick Clissold entered into possession of the land, which was then open and vacant, and enclosed it by a substantial fencing, and that ever since the enclosure, up to the time of resumption, Clissold held exclusive possession of the land without notice of

any adverse claim, and let it to different tenants and received the rents for his own use and benefit, and duly paid all rates and taxes in respect of the land which stood in his name. The HC reversed the Supreme Courts decision to uphold the view of the Minister and granted a mandamus requiring the Minister to cause a valuation to be made it was Clissolds land! If the rightful owner does not come forward and assert his title by process of law within the period prescribed his right is forever extinguished, and the possessory owner acquires an absolute title. Doe de Carter v Barnard: the unknown owner can seek mandamus. The Act throughout from the very preamble has it apparently in contemplation that compensation would be payable to every person deprived of the land resumed for public purposes. It could hardly have been intended or contemplated that the Act should have the effect of shaking titles which, but for the Act, would have been secure, and would in process of time have become absolute and indisputable

Oxford Meat Co Pty Ltd v McDonald [1963] (NSW) relativity of title. You are entitled to maintain possession against all but the true owner. Brennan J: it is not that person in possession is entitled to maintain his possession as against all but the true owner; it is that he is entitled to maintain it against all but a person having a better right to possession.

Allen v Roughley (1955) HCA authority for the proposition that you only need possession less that the statutory period in order to succeed. We cannot use this case to say we have a case that supports Asher v Whitlock Cockburn J. We have not yet have had a case that has overturned Doe de Carter v Barnard so the debate still exists. Facts Allen (testators son in law) appointed as trustee lived on the land for over 50 years. He gave evidence that he took possession of the land in 1989 and had been in adverse possession ever since, working the land for his own benefit. William (son) also appointed as trustee. Lived on the land with Allen from 1898-1900 then left for NZ returning in 1915. Lived on and off the homestead for several years. Died in 1942. After Williams death Allen continued in sole possession of the land. He is trying to say he is the actual possessor of the land. There were other trustees under the will. Allen lost the case at trial and at appeal because he had accepted the trustee. If he were not a trustee, he would just argue he had possession and he is able to protect that possession against anybody else who is claiming under a will. Decisive factor in Allens losing: he accepted the role of trustee therefore the land prima facie appeared to be part of Cusberts estate. His status of trustee prevented him from the normal stance as a possessor claiming the land. Allen as a defendant could have simply relied on his existing possession and could have insisted the plaintiff (Roughley) must affirmatively establish whatever the law requires to be proven to be entitled to sue in ejectment. But because the land was prima facie part of the estate and he was trustee, he couldnt use this approach. Argument 1: Allen tried to say he was in possession for long enough to extinguish any one elses title but this failed because the statue of limitation wouldnt run against the brother sand sister until 1962. He cant have the clock running against them until they have had the chance to claim their interest in land which is when William dies in 1942. Argument 2: Allen also tries by saying the block of land (Plunkett) is not part of the estate over which he has become a trustee. He is a trustee in regards to some property e.g. other blocks but this particular block is not part of property over which I am a trustee. He shows this by saying although Cusberts possession for any period (any less than statutory period) that possession would be enough to allow Cusbert to bring an action in trespass against someone who interfered the land but he argues this would not be enough to pass their title via a will. He argued he needed more title to be able to pass it in a will so he relied on Holsworths reading. - Holsworth proposition: mere possession for less than the limitation period would not entitled a party to bring an action of ejectment. - majority rejected this argument. Only Fullager J says possession itself is enough to bring an action to protect that possession. Only he took the same position as Cockburn J in Asher v Whitlock. - Fullager J disagrees with Holsworth: it is sufficient the plaintiff can succeed in ejectment by establishing that he/she (plaintiff) enjoyed unabandoned possession of any duration prior to

Judgment

that of the defendant. Dixon J: One on hand he upholds Holsworth but then he says it is only true in a strict and legal sense and in practice, this strict and legal sense doenst work very often. He thinks what matters is whether the palintiffs right of possession was superior to the defendant not the rest of the world. proof of the plaintiffs title to ejectment will be made out according to the circumstance by such admissible evidence as tends to prove that at the issue of the write the plaintiff was entitled as against the defendant to possession of the land (OBITER)

Fullager J: The plaintiff could make out a prima facie, although rebuttable, case by proving possession at a date earlier than the defendants possession, because de facto possession is prima facie evidence of seisin in fee and right to possession. It was once though that a plaintiff who relied on possession must prove possession for at least 20 years but it is now well established that proof of anterior possession for any period is sufficient to make a prima facie case. (Asher v Whitlock) WE CAN ONLY RELY ON OBITER FROM THIS JUDGMENT We can rely on Fullager Js poposition supporting Asher v Whitlock. Mabo v Queensland (1992) according to common law, possession of land gives rise to a title which is good against all the world except a persoin with a better claim. Such a possessor is seised of the land so that he or she acquires an estate in the land which is an estate in fee simple. It is a fee simple because the interest acquired is presumed to be such until shown otherwise. Therefore, even a wrongful possessor acquires a fee simple (tortious fee simple) The title arising from possession is presumed to be lawful and by right (presumed to be the best right in possession) unless the contrary is proved. In order to establish a possessory title, the indigenous inhabitants would have to prove occuption by their ancestors at the time of settlement such that it amounted in law to possession of particular areas of land. The relationship between possession and title: Does permission give rise to a presumptive title? possession: conclusion of law defining the nature and status of a particular relationship of control by a person over land. Title: abstract bundle of rights associated with that relationship of possession. Ejectment: the relationship between possession and title In order to show a title which would defeat the defendant in possession, the plaintiff in ejectment had to prove a right of entry; the defendant could rely on possession. Therefore, the plaintiff had to prove the strength of his own title rather than relying on the weakness of the defendants title. In an action for ejectment, the central issue is what gives a right of entry? So long as it is enjoyed (no abandoned), possession gives rise to rights including the right to defend or to sell or to devise the interest (Asher v Whitlock) A defendant in possession acquires seisin even if possession is tortiously acquired. i.e. a person in possession has an estate in fee simple in the land; it is this interest on which a defendant in an action for ejectment could rely. The disseisee loses seisin and acquires a right of entry in its stead. If no other factors come into play, then, regardless of the length of time, as between mere possessors prior possession is a better right. (Asher v Whitlock, Perry v Clissold) Possession is protected against subsequent possession by a prima facie right of entry. Possession is prima facie evidence of seisin in fee simple. Persons title arising from prior possession can be defeated either by a defendant showing that he or she has a better, because older, claim to possession or by a defendant showing adverse possession against the person for the duration of a limitation period. Did the Crown have a better claim in possession? Upon annexation, the Crown became the absolute owner of and was, in law, in possession of the islands and that this precludes any possessory title in the plaintiffs. Plaintiffs possession now cannot constitute good title against the State of Qld. McNeil: The Crown cannot, on the strength of its fictitious original title, require a person who is in possession of land to prove his right by producing a royal grant, for in most cases no grant exists. The grant is deemed in law to have been made, if not to a predecessor of the present possessor, then to someone else.

If the fiction that all land was originally owned by the Crown is to be applied, it may well be that it cannot operate without also according fictitious grants to the indigenous occupiers.

Possession Possessio is a conclusion of law while occupation is a question of fact. Sometimes the person in occupation is not the possessor of the land. E.g. he or she is an agent of the possessor. The Crown could not show it had possession of occupied land after annexation. At common law conduct required to prove occupation or possession will vary according to the circumstances including, for example, whether the claimant enters as a trespasser or as of right. Nature of the land will largely dictate the use that might be made of it. Possessory title The Meriam people may have acquired a possessory title on annexation.

WEEK 4-1 J A Pye (Oxford) Ltd v Graham (2003) House of Lords Although the documentary title holder had no present use for the land, the averse possessor won. This sort of restrictive approach of English courts has not been accepted in Australia. There is no equivalent of the Limitations Act 1980 (UK) Facts Graham entered into a grazing licence with the plaintiff in respect of 25 ha of rural land lasted less than 12 months. Land enclosed by a hedge and access was by means of a gate at all times kept padlocked by Graham Graham depastured cattle and cut hay. Grazing agreement expired in Dec 1983; plaintiff requested Graham to vacate the land because he wished to develop it. Graham didnt vacate and continued to use the land. He requested for an extension of the licence agreement but there was no response. 30 April 1998: plaintiff sought possession against the defendants (legal personal representatives of Graham) Judgment Lord Browne Wilkinson: defendants sought to establish possessory title to the 25 ha (the disputed land) to succeed, the Grahams will have to show that they dispossessed Pye more than 12 years before Pye started proceedings on 30 April 1998. The actions and intentions of the parties during this period (31 Aug 1984 30 April 1986) that will determine the proper outcome of the case: The Limitation Act 1980 s15(1)- 12 years limitation Schedule 1 paragraph 1: the right of action shall be treated as having accrued on the date of the dispossession or discontinuance. Schedule 1 paragraph 8(1): No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (adverse possession)no person is in adverse possession on that date, the right of action shall not be treated as accruing unless and until adverse possession is taken of the land. (4): for the purposes of determining whether a purpose occupying land is in adverse possession of the land it shall not be assumed by implication of law that his occupation is by permission of the person entitled to the land merely by virtue of the fact that his occupation is no inconsistent with the latters present or future enjoyment of the land.

2 issues: 1. Did Pye discontinue possession or was it dispossessed of the disputed land (within the meaning of Schedule 1 para 1) to the 1980 Act) before 30 April 1986 (and after 31 August 1984 when the licence expired) without consent? 2. Did the Grahams thereafter remain in possession of the land for a period of 12 years? Pye did not discontinue possession and so long as the Grahams were occupying the disputed land with Pyes consent, they could not be treated as having disposed by Pye.

Grand Chamber said Protocol 1 of Article 1 said there has to be a balance between beneift for community and individual rights the balance in favour is in favour of the adverse possessor (Pye loses) becase the European Court said Pye knew what the law of adverse possession was and he had 12 years to deal with it and he didnt. When we balance individual rights and communities objectives and goals, we find against Pye. - if they found in favour of Pye, the Euopean Court would have said the UK is in contravention of this convention and must change own domestic law to make sure they are not in contravention of your obligations under the convention.)

Was Graham dispossessed of the disputed land (some times between 1 Sep 1984 and 30 April 1986) on which that date Pyes right of action accrued for the purposes of Schedule 1 para 1 to the 1980 Act? Possession, Dispossession, Ouster and Adverse Possession Powell v McFarlan (1977) Slade J: traditional sense of that degree of occupation or physical control, coupled with the requisite intention commonly referred to as animus possidendi, that would entitle a person to maintain an action of trespass in relation to the relevant landpossessionas denoting simply the taking of possession in such sense from another without the others licence or consent possession as bearing the traditional sense of that degree of occupation or physical control, coupled with the requisite intention commonly referred to as animus possidendi, that would entitle a person to maintain an action of trespass in relation to the relevant landregarded the word dispossession as denoting simply the taking of possession in such sense from another without the others licence or consentI would have regarded a person who has dispossessed another in the sense just stated as being in adverse possession Slade J rejected the line of reasoning that the use of land by a squatter which was inconsistent with the intentions of the property titie owner did not amount to adverse possession for the purposes of the Act. Slade J states the question to ask is whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner. Slade J said, the words possess and dispossess are to be given their ordinary meaning. Ouster by the squatter is not necessary there will be a dispossession of the paper owner in any case where (there being no discontinuance of possession) a squatter assumes possession in the ordinary sense of the world. If the paper owner was at one stage in possession of the land but the squatters subsequent occupation of it in law constitutes possession the squatter must have dispossessed the true owner for the purposes of Schedule 1 para 1. Possession Slade J said : In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land as being the person with the prima facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or the person who can establish a title as claiming through the paper owner. He said that where the law is to attribute possession of land to a person who can establish no paper title to possession, there must be 2 elements necessary for legal possession: 1. Factual possession - sufficient degree of physical custody and control the acts themselves should not be observed without looking at intention (e.g. trespassing overnight or looking after the house would not amount to taking possession) therefore the acts done in any given period do not tell you whether there is legal possession. It is not the nature of the acts but the intention with which he does them, which determine whether or not he is in possession. 2. Intention to exercise such custody and control on ones own behalf and for ones own benefit (intention to possess) without this requisite intention, in law there can be no possession. this intention may be deduced from the physical acts themselves. Factual possession Slade J sais that Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possessionthus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. Whether acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyedeverything must depend on the particular circumstancesI think

what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no one else has done so. E.g. fencing off area, paying electricity bills, taking rent from someone else, excluding others by changing lock to bar documentary title holder and anyone else etc.

In this case, the Grahams were in occupation of the land which was within their exclusive physical control. Pye (paper owner) was physically excluded from the land by the hedge and the lack of any key to the road gate. The Grahams were in factual possession before 30 April 1986. Intention to possess (a) To own or to possess? Lord Browne Wilkinson accepts the Hoffman Js judgment in Moran case (1988): once it is accepted that in the Limitation Act, the word possession has its ordinary meaning (being the same as in the law of trespass or conversion) it is clear that, at any given moment, the only relevant question is whether the person in factual possession also has an intention to possess. He follows Slade; J: requiring an intention, in ones own name and on ones own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow. You do not need to have an intention to own you just need to have intentiont o exclude other people. Sometimes you need to have intention which may lead you to conduct like the owner. This doesnt necessarily mean you have an intention to own but simply indicates an intention to take control and possess the land. (b) Must the acts of the squatter be inconsistent with the intentions of the paper owner? If the squatter is aware of a special purpose for which the paper owner uses or intends to use the land and the use made by the squatter does not conflict with that use, that may provide some support for finding as a question of fact that the squatter had no intention to possess the land in the ordinary sense by only an intention to occupy it until needed by the paper owner. (c) Squatters willingness to pay if asked. In Ocean Estates Ltd v Pinder [1969] Lord Diplock said that an admission by the squatter to that effect (offering to pay) which would any candid squatter hoping in due course to acquire a possessory title would be almost bound to make did not indicate an absence of an intention to possess. Once it is accepted that the necessary intent is an intent to possess not to own and intention to exclude the paper owner only so far as is reasonably possible, there is no inconsistency between a squatter being willing to pay the paper owner if asked and his being in the meantime in possession. An admission of title if the squatter admits the existence of the true owner, that does not necessarily mean you are giving up your possession in the land.

Graham fenced off the land (factual possession) and had an intention to possess without consent. He was there for the limitation period therefore he can statute bar the true owner. 1. The grazing agreement (1 Feb 1983) did not give possession to the Grahams. It is important to construe the agreement against its background. The licence lasted for 11 months and a further term would only be granted by a new and distinct contract starting after the termination of the first agreement. There are substantial arguments that the document did create only a licence. Under the agreement the right granted is only a right to graze; the land could only be used for grazing or mowing. After the expiry of the agreement, the Grahams continued to use the land for grazing in the same way. The licence expired on 31 Dec 1983 and on 30 Dec 1983, the Grahams were expressly required to vacate the disputed land but they continued to use the land as before. From 1 Jan 1984 onwards the Grahams repeatedly did things on the disputed land which they would have had no right to do under the old grazing agreement even if it had still been in force. Also, Pye was advised to have all the land in hand for future planning purposes and the Grahams by grazing the land during 1984 and thereafter were not only acting without permission of the paper owner: they were acting in a way which, to their knowledge, was directly contrary to the wishes of the proprietors.. Both the nature and extent of the Grahams use of the disputed land, which did not amount to factual possession of it during the period of the licence, remained the same. Graham made admissions against interest that he continued to farm the disputed land in just the same way as in 1983. There was independent evidence that Graham treated the *disputed+ land as his own. When all the evidence is looked at although the Grahams would have been willing to pay for the use of the disputed land if asked, such willingness is not inconsistent with them intending to possess the land in the meantime as demonstrated by them treating the land as part of Manor Farm and maintaining it on the same basis as the rest of the farm.

2.

3.

For all practical purposes the Grahams use the land as their own and in a way normal for an owner to use it throughout the period from August 1984 onwards. During that whole period Pye did nothing on the disputed land from which they were wholly excluded save on foot. The Grahams did intend to possess the land.

WEEK 4-2 Zapletal v Wright (1957) Supreme Court of Tasmania condition subsequent but the limiting event was immoral therefore void. Facts Man lives with woman for 15 years with her children. She goes marries someone else. Man had originally owned the property and his de facto partner asked him to put her name in the house as well. She wants her name under the house too! The learned judge regarded the transaction as a gift, subject to a condition subsequent. Issue: who is entitled to the house now? Is the gift to that woman valid or should the man be able to get the property back? Judgment They didnt have the best relationship he knew he couldnt trust her. He had made a gift to her de facto wife but there was a limitation on the estate. Therefore the fee he had given her had some limiting event. It could be conceived of as a determinable fee or a conditional fee. The limiting event in this case was that if she ceased living with him, her interest would cease as well. She stopped living with him, her interest should drop and the land should be returned to the man. However, the limiting event was conceived of as immoral because it was sexually enticing her to stay in an adulterous relationship living with a married man. It was to induce and keep her in an immoral cohabitation. If it is immoral, you need to look at whether or not you can rid of the limiting event. In this case, the limiting event was void. If the limiting event was a determinable fee, the whole gift has to fail and the fee goes back to the man but if it was a conditional fee and the limiting event was void, the effect is that the fee is good for the woman without any limiting event attached to it. (joint owners) Found in favour of the woman it was a conditional fee. Void for immorality which could be cut off.

Andrews v Parker [1973] concepts of immorality have changed over time. In this case, the immorality was not such according to modern standards as to deprive the plaintiff of the right to enforce it. Facts The male plaintiff owned the house and he transferred title to the house to the defendant. (de facto). If the defendant returned to her husband she would retransfer title to the plaintiff. The husband eventually moved into the house. The plaintiff left the house and took proceedings to recover title to the property. The defendant argued that that transfer from the plaintiff was made conditionally upon her continuing in immoral cohabitation with the plaintiff and that this condition was not enforceable (essentially tried to rely on Zapletal v Wright.) Subsequent is that she has to remain living in the house in an immoral state, she can chop off the condition subsequent and still hold interest. Judgment Stable J upheld agreement and said it was not one to bring about immoral cohabitation. The agreement simply provded for a termination fo the relationship by stipulating for a return of the property rather than to induce the defendant to continue to live apart from her husband. Stable J also took the view that concepts of immorality had changed over time therefore even if the agreement between the parties was based on an immoral consideration, which he doubted, then the immorality was not such according to modern standards as to deprive the plaintiff of the right to enforce it

WEEK 5-1 & 5-2

Mabo v Queensland (No 2) 1992 HCA

Facts

Legal reasoning Problem with the proposition that the Sovereign acquired absolute beneficial ownership of all land

P (Murray Islanders) commenced proceedings in the HC in response to the Queensland (Aboriginal and Islander Land Grants) Amendment Act 1982, which established a system of making land grants on trust to Aboriginals and Torres Strait Islanders, which they refused to accept. The P claimed that the Meriam people were entitled to the Murray Islands as owners; as possessors; as occupiers; or as persons entitled to use and enjoy the said islands. In the SC, the court found Murray Islanders had a strong sense of relationship to the islands and regarded the land as theirs. Land was not the subject of public/general community ownership, but was regarded as belonging to individuals/groups. This case tests the legal rights of the Meriam people to land on the Islands of Murray Island, Dauar and Waier in the Torres Straight, which were annexed to the state of Queensland in 1879. They accepted that the Crown acquired a radical or ultimate title to the Murray Islands but challenged the notion that the Crown also acquired absolute beneficial ownership of the land in the Murray Islands when the Crown acquired sovereignty over them. The Meriam people had been in occupation of the islands for generations prior to first European contact and continued to live in villages on the islands to this day. The theory of universal and absolute Crown ownership AG v Brown (1947) later overruled: Stephen CJ concluded the interests of indigenous inhabitants in colonial land were extinguished so soon as British subjects settled in a colony, though the indigenous inhabitants had neither ceded their lands to the Crown nor suffered them to be taken as the spoils of conquest. The common law itself took from indigenous inhabitants any rights to occupy their traditional land, exposed them to deprivation of the religious, cultural and economic sustenance which the land provides, vested the land effectively in the control of the Imperial authorities without any right to compensation and made the indigenous inhabitants intruders in their own homes and mendicants for a place to live. It is said that the Crown is absolute owner because there is no other proprietor. The problem with this basis is that it denies that the indigenous inhabitants possessed a proprietary interests. This negative interest is buttressed by 3 positive bases to show why it is necessary to attribute absolute beneficial ownership to the Crown. Feudal basis: when English law was brought to Australia with and by British colonists, the common law to be applied in the colonies included the feudal doctrine of tenure. All land in a colony is the patrimony of the nation and on this basis, the Crown acquired ownership of the patrimony on behalf of the nation Prerogative basis mentioned by Stephen J in Seas and Submerged Lands case: in order to determine whether, on any or all of these bases, the Crown acquired beneficial ownership of the land in the Murray Islands when the Crown acquired sovereignty over them, we must review legal theories relating to the acquisition of sovereignty and the introduction of the common law this basis was rejected by Brennan J. The feudal basis of the proposition of absolute Crown Ownership The basic doctrine of land law in Australia is the doctrine of tenure. It is a doctrine which could not be overturned without fracturing the skeleton which gives our land law its shape and consistency. It is derived from feudal origins. The notion of radical title enabled the Crown to become Paramount Lord of all who hold a tenure granted by the Crown and to become absolute beneficial owner of unalienated land required for the Crowns purposes. In Australia, however, the Crown was granted radical title of land, but that is not necessarily to the exclusion of the indigenous inhabitants. If the land were desert and uninhabited (truly terra nullius), the Crown would take an absolute beneficial title (an allodial title) to the land for the reason that there were no other proprietors. Brennan J held that indigenous inhabitants in occupation of a territory when sovereignty is acquired by they Crown are capable of enjoying proprietary interests in land. The rights and interest in the land which they had theretofore enjoyed

Did the Crown also acquire absolute beneficial ownership of the land in the Murray Islands when the Crown acquired sovereignty over them?

under the customs of their community are then seen to be a burden on the radical title which the Crown acquires. The notion that feudal principle dictates that the land in a settled colony be taken to be a royal demesne upon the Crowns acquisition of sovereignty is mistaken. The radical title which is acquired with the acquisition of sovereignty cannot itself be taken to confer an absolute beneficial title to the occupied land. The doctrine of tenure applies to every Crown grant of an interest in land, but not to rights and interests which do not owe their existence to a Crown grant. Radical title is merely a logical postulate required to support the doctrine of tenure (when the Crown has exercised its sovereign power to grant an interest in land) and to support the plenary title of the Crown (when the Crown has exercised its sovereign power to appropriate to itself ownership of parcels of land within the Crowns territory). There is no reason why land within the Crowns territory should not continue to be subject to native title it is the fallacy of equating sovereignty and beneficial ownership of land that gives rise to the notion that native title is extinguished by the acquisition of sovereignty.

Several propositions can be made: 1. Unless there are pre-existing laws of the territory which provide for alienation of interests in land to strangers, the rights and interests which constitute a native title can be possessed only by the indigenous inhabitants and their descendants. 2. Native title, being recognised by the CL may be protected by such legal or equitable remedies as are appropriate to the particular rights and interests established by the evidence, whether proprietary or personal and usufructuary in nature and whether possessed by a community, group or individual. Where an indigenous people are in possession or are entitled to possession under a proprietary native title, their possession may be protected or their entitlement to possession may be enforced by a representative action brought on behalf of the people or by a sub-group or individual who sues to protect or enforce rights or interests which are dependent on the communal native title. Brennan J: At CL, NT could be extinguished without the consent of Aborigines and without compensation. However, exercise of a power to extinguish native title must reveal a clear and plain intention to do so, whether the action be taken by the Legislature or by the Executive. e.g. legislation, inconsistent grant of an interest, surrendered to the Crown, indigenous people died out. clear and plain intention is evidence in 3 ways: 1. by legislative provision expressed to extinguish NT. 2. Inconsistent grant of an interests in land over which NT subsists inconsistent with those rights. 3. Acquisition by the Crown of NT land. Deane and Gaudron JJ: Mostly agreed with Brennan Js argument. Rights of native title are personal only Enjoyment of the rights can be be varied under traditional law or custom. However, rights not assignable outside the overall native system The rights can be voluntarily extinguished by surrender to the Crown. The rights can be lost by abandonment of the connection with the land or by the extinction of the relevant tribe or group. The personal rights conferred by common law native title dont actually establish an estate or interest in the land. They can be extinguished by an unqualified grant of an inconsistent estate in the land by Crown e.g. grant in fee simple or a lease conferring the right to exclusive possession. They can also be terminated by other inconsistent dealings with the land by the Crown e.g. appropriation, dedication or reservation for an inconsistent public purpose or use. Our conclusion that rights under common law native title are true legal rights which are recognized and protected by the law would, we think, have the consequence that any legislative extinguishment of those rights would constitute an expropriation of property, to the benefit of the underlying estate, for the purposes of s51(xxxi) - the acquisition of property on just terms from any State or person for any purpose in respect of which the

What are the nature and incidents of native title?

Parliament has power to make laws. Tooehy J: What is required to prove native title? Judge agreed with the approach of North American authority. i.e. proof of existence is the threshold question; presence is insufficient to establish title if it were only coincidental/random It is presence amounting to occupancy which is the foundation of the title and attracts protection. Mason CJ and McHugh J: Agreed with Brennans judgement. 6 members of the court (Dawson J dissenting) are in agreement that the CL recognises a form of native title which reflects the entitlement of the indigenous inhabitants, in accordance with their laws or customs. Subject to the effect of some particular Crown leases, the land entitlement of the Murray Islanders is preserved, as native title, under the law of Queensland. However, Brennan, Mason and McHugh do not agree that extinguishment of native title is wrongful and gives rise to a claim for compensatory damages. Native title is only a form of permissive occupancy at the will of the Crown. Judgment The preferable rule is that a mere change in sovereignty does not extinguish native title to land. The incidents of native title: Rights and interests which constitute native title can be possessed only by the indigenous inhabitants and their descendants Native title may be protected by such legal or equitable remedies as are appropriate Where an indigenous people are in possession/entitled to possession under a proprietary native title, their possession may be protected and brought on behalf of the people by a sub-group or individual who represents them Mason, Brennan and McHugh held that traditional title could be extinguished by the exercise of an inconsistent Crown grant. They also concluded that such an extinguishment does not entitle native title holders to compensation.

When can native title be extinguished?

Western Australia v Ward (2002) HCA Facts Judgment Was there The connection Aboriginal peoples have with country is essentially spiritual. native title Milirrpum v Nabalco Pty Ltd Blackburn J: the fundamental truth about the aboriginals regarding the relationship to the land is that whatever else it is, it is a religious relationship land in question? There are difficulties in translating the spiritual or religious into the legal. This requires the fragmentation of an integrated view of the ordering of affairs into rights and interests which are considered apart from the duties and obligations which go with them. There are 2 critical points of importance: s11(1) of the NTA provides that native title is not to be extinguished contrary to the NTA. Claims that give rise to the present appeals are claims made under the NTA for rights that are defined in the statute. The immediately relevant elements of the definition in s233(1) of native title and native title rights has three considerations: 1. The rights and interests may be communal, group or individual question of fact. Need to identify the laws and customs said to be traditional laws and customs. 2. rights and interests consist in relation to land or waters need to identify the rights and interests in relation to land or waters which are possessed under those laws or customs found in point 1. 3. the rights and interests have 3 characteristics:

a. b. c.

they are rights and interests which are possessed under the traditional laws acknowledged, and the traditional customs observed by the relevant peoples by those traditional laws and customs, the peoples have a connection with the land or waters in question the rights and interests must be recognised by the common law of Australia. The CL is not the source of the relevant rights and interests; the role accorded to the CL by the statutory definition is that stated in par (c) of s223(1). This is the recogniition of rights and interests. There is no case law to date of what is involved in the notion of recognition.

Thus there are 2 inquiries required by the statutory definition: The rights and interests possessed under traditional laws and customs and, a connection with the land or waters by those laws and customs. The role of the CL is the recognition of those rights and interests. To date, the case law does not purport to provide a comprehensive understanding of what is involved in the notion of recognition. Some laws/customs which meet with (a) and (b) requirements may clash with the general objective of the CL of the preservation and protection of society as a whole. (but case law does not provide any examples.) The statement made in Mabo (No 2) that native title may be protected by such legal or equitable remedies as are appropriate is yet to be developed (what is appropriate?) In some circumstances, native title rights have been extinguished as a matter of law, even though, but for that legal conclusion, native title still subsists Yorta Yorta Aboriginal Community v Victoria (2002) HC Facts FC determined that NT did not exist in relation to land and waters in norther Vic and Southern NSW. Current appeal: claimed that the Court had erred in requiring the claimants to prove continuous aknowledgement and observance of traditional laws and customs in relation to land HC rejected the appeal (i.e. you need to show continuous acknowledgement and observance) Legal reasoning Gleeson CJ, GUmmow and Hayne JJ: The inextricable link between a society and its laws and customs If there is no society which acknowledges and observes them, it ceases to be useful, even meaningful, to speak of them as a body of laws and customs acknowledged and observed, or productive of existing rights or interests, whether in relation to land or waters or otherwise. When the society whose laws of customs existed at sovereignty ceases to exist, the rights and interests in land to which these laws and customs gave rise, cease to exist. if the former laws and customs are later adopted by a new society, those laws and customs will then owe their new life to that other, later, society and they are the laws acknowledged by, and customs observed by, that later society, not the earlier society. S223(1)(c) o the NTA seeks to provide for the recognition and protection of NT, of those rights and interests finding their origin in traditional law and custom, and does not create any new species of right or interest. S223(1)(c) emphasizes the fact that there is an intersection between legal systems and that the intersection occurred at the time of sovereignty. The NT rights and interests which are subject of the Act are those which existed at sovereignty, survived that fundamental change in legal regime, and now, by resort to the processes of the new legal order, can be enforced and protected. It is those rights and interests which are recognised in the CL. S223(1)(c): Mabo (No 2) decided that certain rights and interests relating to land, and rooted in traditional law and custom, survived that Crowns acquisition of sovereignty and radical title in Australia. It was this native title that was then recognised, and protected in accordance with the NTA and which, thereafter, was not able to be extinguished contrary to the Act. The term traditional doesnt only mean that which is transferred by word of mouth from generation to generation. Rather, traditional laws and customs are based in pre-sovereignty laws and

recognised rights and interests under s223(1)(c)

Definition of

traditional

customs the laws and customs acknowledged and observed by the ancestors of the claimants at the time of the acquisition of European sovereignty. (Compare this to s223(1)(a) and (b) questions about present possession of rights or interests and present connection of claimants with the land or waters. Adaptations of traditional law or customs or some interruption of enjoyment or exercise of NT rights or interests in the period between the Crown asserting sovereignty and the present will not necessarily be fatal to a NT claim. Adaptation: The key question is whether the law and custom can sill be seen to be traditional law and traditional custom. Is the change or adaptation of such a kind that it can no longer be said that the rights or interests asserted are possessed under the traditional laws acknowledged and the traditional customs? - where there s a substantial change in laws and customs, they can no longer be described as traditional laws and customs and a NT title claim must fail. Interruption of use or enjoyment presents more difficult questions: 223(1)(a) concerns the possession of the rights or interests, not their exercise. It is important to bear in mind that the rights and interests which are said now to be possessed must nonetheless be rights and interests possessed under the traditional laws acknowledged and the traditional customs observed by the peoples in question. Further, the connection which the peoples concerned have with the land or waters must be shown to be a connection by their traditional laws and customs. Traditional in this context must be understood to refer to the body of law and customs acknowledged and observed by the ancestors of the claimants at the time of sovereignty. Acknowledgement and observance of those laws and customs must have continued substantially uninterrupted since sovereignty. If not, the laws and customs acknowledged and observed now could not properly be described as the traditional laws and customs of the peoples concerned this is because they would not have been transmitted from generation to generation of the society for which they constituted a normative system giving rise to rights and interests in land as the body of laws and customs which, for each of those generations of that society, was the body of laws and customs which in fact regulated and defined the rights and interests which those peoples had and could exercise in relation to the land or waters concerned. The continuity in acknowledgement and observance of the normative rules in which the claimed rights and interests are said to find their foundations before sovereignty is essential because it is the normative quality of those rules which rendered the Crowns radical title acquired at sovereignty subject to the rights and interests then existing and which now are identified as NT. Acknowledgement and observance of laws and customs must have continued substantially uninterrupted since soereignty. Since we need to identify possession of rights and interests under traditional laws and customs, it is necessary to demonstrate that the normative system out of which the claimed rights and interests arise is the normative system of the society which came under a new sovereign order when the British Crown asserted sovereignty, not a normative system rooted in some other, different society. it must be shown that the society, under whose laws and customs the NT rights and interests are said to be possessed, has continued to exist throughout that period as a body united by its acknowledgement and observance of the laws and customs. Gaudron and Kirby JJ (dissenting): Whether or not there is continuity is whether there have been persons who have identified themselves and each other as members of the community in question. Whether a community has ceased to exist should not be determined by physical presence. Communities may disperse and regroup. Individuals may, on the dispersal of a community, continue to acknowledge traditional laws and observe traditional customs so that, on regrouping, it may be that it can then be said the community continues to acknowledge traditional laws and observe traditional practices. The term traditional does not necessarily signify rigid adherence to pat practice. Rather, it ordinarily signifies that which it describes has been handed down from generation to generation, often by word of mouth what is necessary for laws and customs to be identified as traditional is that they should have their origins in the past and, to the extent that they differ from past practices, the difference should constitute adaptation,

Continuity of traditional laws or customs

alterations, modifications or extensions made in accordance with the shared values or the customs and practices of the people who acknowledge and observe those laws and customs. The continuity of community is a matter that bears directly on the question whether laws and customs are properly described as traditional. However, we should not just depend on external indicia or the observation of those who are not or were not members of that community. The question of continuity is primarily a question of whether, throughout the period in issue, there have been persons who have identified themselves and each other as members of the community in question. Judgment The Yorta Yorta eople ceased to occupy their land in accordance with traditional laws and customs and, therefore, ceased to function as recognizable traditional community. The evidence established that this break in continuity was substantial and therefore fatal to the NT claim. An attempt to revive law and customs that had been effectively lost was not sufficient to establish NT.

WEEK 7-2 Australia and New Zealand Banking Group Ltd v Widin (1990) FCA What constitutes a sufficient note or memorandum for the purposes of the Statue of Frauds, parol evidence, reference to another document or transaction. Facts The issue in this case was the date on which a mortgage by Wardle to the ANZ Banking Group took effect. If it took effect on or after 24 Feb 1983, within 6 months of the date when Wardles creditors petitioned for bankruptcy, it would have been void as against the trustee in bankruptcy. On 5 Jan 1983, Wardle signed a mortgage form, which left blank the particulars of the land and the date. At the same time he signed an authority requesting the bank to complete the mortgage form. The proceeds of the mortgage were deposited in Wardles bank account on 14 Jan. However, it was not until 21 Sep 1983 that the mortgage form was completed and dated. An equitable mortgage would have come into effect if there had been a sufficient note or memorandum in writing. Judgment Hill J: o It was submitted for the bank that even if the title details were not included in the mortgage document on 5 January 1983 that document, taken together with the form of authority, constituted a sufficient writing for the purposes of s23C of the Conveyancing Act (NSW) It was not in dispute that, for there to be a sufficient writing either for s 23C or s 54A, that writing must describe the subject matter of the mortgage. A mortgage of land, which did not refer at all to the mortgaged property, would be unenforceable. Nor could parol evidence be given to fill the gap in the mortgage and supply the missing title reference. It is now not essential that the reference to the second document by express. Rather it is sufficient if the reference arises by necessary implication; Timmins v Moreland Street Property Co Ltd. In Thomson v Mcinnes, Griffith CJ said the rule has always been the same. The rule is thus stated by Baggallay LJ in Long v Millar (1879): The true principle is that there must exist a writing to which the document signed by the party to be charged can refer, but that this document may be identified by verbal evidence. In an appropriate case, two or more documents may be read together so as to constitute a sufficient memorandum in writing. The first inquiry must be whether the document signed by or on behla fo the erson to be charge don the contract contains some reference to some other document or transaction; Elias. If it does refer to some other document or transaction, parol evidence can be given to explain the transaction and to identify any document relating to it. If, therefore, a document signed by the

o o

party to be charged refers to a transaction of sale, parol evidence is admissible both to explain the reference and to identity any document relating to it. Parol evidence was admissible for the purpose of showing that a word capable of having a reference to a particular thing really does have such a reference; Thomson v McInnes. This use of parol evidence is an application of the well known doctrine of latent ambiguity. Even if parol evidence may be given of a transaction, it is a prerequisite of the rule which permits that course that the document signed by the party to be charged refers to the transaction. In this case, the mortgage document does not refer to any transaction. Nor does it refer to another document. The appellant is seeking to read the terms of the conversation which were summarized in the bank managers diary note of 5 Jan 1993 which does identify the relevant land in to the authority and the mortgage. But that would be to adduce oral evidence, not to clarify an ambiguity but to supply the deficiency in writing; precisely what the Statute of Frauds seeks to prevent. This case is merely a case where the only documents to which reference can be made are completely silent as to the property proposed as the subject of the mortgage. It follows therefore that there was no sufficient note or memorandum in writing to satisfy either s23C or s54A of the CA with the result that unless the appellant can show that there has been part performance o the oral agreement to mortgage the property the appeal must fail.

Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qld parties have made an enforceable contract for the sale of an interest in land but have not yet transferred the legal title. If a vendor has contracted to sell to A but later in breach sells to C, there is both a breach of contract and a breach of trust by the vendor. Facts o Plaintiff contracted to purchase land but later the defendant contracted to sell land to X, second def, and then executed transfer of land to X, who on registration of transfer, acquired legal title to land. o Plaintiff sought declaration that the first def held proceeds of sale on trust for the plaintiff, and an order for payment of proceeds. Judgment Connolly J: 1. On the execution of the contract, the vendor becomes a trustee for the purchase. However, he is not a bare trustee for he has a personal and substantial interest to the extent of the unpaid purchase moneys. He is in process towards bare trusteeship and finally becomes such when the whole of the purchase moneys are paid and he is bound to convey; Wall v Bright, Sir Thomas Plumer MR. 2. The purchaser may devise, alienate and charge his equitable interest so that it is plainly not a mere right in contract. 3. The extent of the equitable interest is measured by the amount of the purchase moneys paid. Therefore to the extent of the payments the purchaser acquires a lien exactly as if the vendor had given a mortgage to secure them; Rose v Watson (1864), Lord Cranworth. 4. Where there is a clear and undisputed contract, the Court will not permit the vendor to transfer the legal estate to a third person because in equity the property was transferred to the purchaser. (Hadley v London Bank of Scotland) 5. The incidents of trusteeship exist only if and so far as a Court of Equity would in all the circumstances of the case grant specific performance of the content; Howard v Miller [1915] Kitto J. under a contract for the sale of an interest in land the vendor becomes a trustee for the purchaser of the interest contracted to be sold subject to a lien for the purchase-money; butit is only true if so far as a Court of Equity would under all the circumstanes of the case grant specific performance of the contract. Central Trust and Safe Deposit Company v Snider [1916] If for some reason equity would not enforce SP, or if the right to SP has been lost by the subsequent conduct of the party in whose favour SP might originally have been granted, the vendor or covenantor either never was, or has ceased to be, a trustee in any sense at all. o The plaintiff had an enforceable contract. The plaintiff was entitled to a decree for SP and equity would have intervened to prevent the first defendant conveying the land in breach of the contract and the registration of the transfer. The decree for SP would of course have involved payment by the plaintiff to the first defendant of the balance of purchase moneys. o When the first defendant entered into the second contract of sale and indeed when he completed that contract he was in a relevant sense a trustee of the estate for the plaintiff and it seems equally plain that he must account for the plaintiff for his dealing with the trust estate in breach of trust o Lysaght v Edwards (1876); the vendor is a constructive trustee for the purchase of the estate from the moment the contract is entered into. A specifically enforceable contract of sale

confers an inequitable interest on the purchase of the land. o It is true that the unpaid vendor is not a bare trustee but in relation to the purchasers contractual right to have the estate conveyed to him on completion he is a trustee. o If the vendor in these circumstances is a trustee so as to enable the purchaser to trace the estate into the moneys into which it has been o SP be converted, that situation arises only upon payment of the balance purchase moneys or tender of completion. o The availability of the remedy of SP is essential to the existence of the constructive trust, which arises form a contract of sale. But even if the remedy of seem to be available, it obviously does not follow that the purchaser is entitled to the equivalent of conveyance without demonstrating in properly constituted proceedings that he has performed or tendered performance of his own obligations part performance. o The equitable principle applies only where there is an enforceable contract for the sale of an interest in land. It is not possible for the court to make an order for specific performance against the first defendant because the land had already been transferred to the second defendant. However, Connolly J held that it was sufficient to show that an order for SP would have been available to the plaintiff at the time when the first defendant entered into the contract with the second defendant.

Tanwar Enterprises Pty Ltd v Cauchi (2003), Supreme Court of Qld, Full Court the remedy of SP is the condition precedent for the acquisition of a proprietary interest by the purchaser. However, the proprietary interest cannot exist at law: at the point of contract, no deed of conveyance or actual transfer of interest has been executed. The essence of the contract is to promise a conveyance or transfer at a later stage (i.e. time of settlement). Facts o A new completion date of Monday 25 June 2001 was agreed on. o Time was expressed to be of the essence. o Funds were available on 26 June 2001 and that settlement could proceed. However, the vendors had already given instructions to terminate the contracts and on the afternoon of 26 June, notices of termination were issued. o Tanwar sought an order of SP of the contracts. o One of the appellants arguments was that it had equitable interests in the land and that it was entitled to relief against forfeiture. Judgment o Lysaght v Edwards describes the position of the vendor at the moment of entry into a contract for sale as something between a bare trustee for the purchaser and a mortgage who in equity is entitled to possession of the land and a charge upon it for the purchase money; the vendor had the right in equity to say to the purchaser either pay me the purchase money or lose the estate. This suggests: (i) The purchaser had before completion an equitable estate in the land which would be protected against loss consequent upon termination of the contract by the principles developed in equity for relief against forfeiture; (ii) In the same way as failure to redeem a mortgage upon the covenanted date for repayment did not destroy the equity of redemption without the proper exercise of a power of sale or a foreclosure suit in equity, failure to complete the contract on the due date did not bar the intervention of equity to order SP. o Stern: the interest of the purchaser is commensurate with the availability of SP. That availability is the very question in issue where there has been a termination by the vendor for failure to complete as required by the essential stipulation. What about the specified date? Equity would relieve the purchaser form the operation of an essential time stipulation, and from the forfeiture, if the provision was inserted as a penalty to secure completion of the contract at the purchasers risk of loss of the equitable interest in the land under the executory contract.

In Ziel Nominees Pty Ltd v VACC Insurance Co Ltd purchaser of property damaged by fire after making of contract was not entitled to benefit of insurance policy taken out by vendor. Because the vendor had received purchase price of property he no longer had any insurable interest in it and was not entitled to any indemnity for damage. Thus the vendor no longer had any right under policy to assign to purchaser. WEEK 8-2

Walsh v Lonsdale (1882) Court of Appeal courts of equity are prepared to give effect to a contract for the sale of land or other property, provided that the contract is specifically enforceable. This case sets the rule: 'A written lease not in proper form will, pending a decree of SP requiring the lessor to execute a lease in proper form, give rise to an equitable relationship of landlord and tenant between the parties under which the former (landlord) could, if necessary, be restrained by injunction from acting on the footing that the latter (tenant) was merely a tenant at will or a tenant from yr to yr. Facts Tenant took possession of premises pursuant to a written and signed agreement to grant a lease for a term of 7 years. No formal lease was ever drawn up. The tenant paid rent on a periodic basis and the landlord claimed that only an implied periodic tenancy arose. Judgment Jessel MR: The tenant holds under an agreement for a lease. He holds, therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance. There are not two estates one estate at common law by reason of the payment of the rent from year to year, and an estate in equity under the agreement. There is only one court, and the equity rules prevail in it. That being so, he cannot complain of the exercise by the landlord of the same rights as the landlord would have had if a lease had been granted. On the other hand, he is protected in the same way as if a lease had been granted He has a right to say: I have a lease in equity, and you can only re-enter if I have committed such breach of covenant as would, if a lease had been granted, have entitled you to re-enter according to the terms of a proper proviso for re-entry. That being so, it appears to me that being a lessee in equity he cannot complain of the exercise of the right of distress merely because the actual parchment has not been signed and sealed. Cotton LJ: I am of the same opinion. The question before us is whether we are not at once to deprive the landlord of any security which he has in his hands for the payment of his rent? In my opinion we ought not. Of course, before allowing the landlord to retain the security given by the distress we must be satisfied that there is a prima facie case in his favour, and in my opinion there is. In my opinion, therefore, there is at least such a prima facie case in favour of the defendant that we ought not to deprive him of the security which the distress gives him without the plaintiff paying into court that which will be a sufficient security for the defendant if he is right in his contention.

Mason v Clarke [1955] House of Lords part performance. Facts Clarke was tenant of an estate owned by company S. Lease specifically reserved S the right to hunt for game on the estate. S orally agreed with Mason that he should have the right to kill and take rabbits on the estate. Clarke prevented Mason from exercising his rights under the oral agreement. Mason and S sought injunctions to restrain Clarke from further interference and damages for trespass.

Judgment

Lord Morton: In the oral agreement between Mason and S, it was agreed that in consideration of 100, Mason should have the right to kill and take rabbit on the estate a profit a prendre. A profit a prendre is an interest in land, and no legal estate therein can be created or conveyed except by deed. Although at the time there was no grant by deed of profit a prendre to Mason, he had the benefit of an oral agreement.

Although there was no sufficient memorandum it is unnecessary to examine the relevant documents in detail, because the acts of Mason were a part performance of the oral agreement Mason set snares, took rabbits and paid helpers, and the work done and expense incurred were exclusively referable to the oral agreement.

Mason had a contract, specifically enforceable against S, for the grant of a profit a prendre and had entered into

possession thereof. Mason was entitled to bring an action for trespass against Clarke.

Where a profit arose from an agreement and was not granted by a deed, it was equitable only, and therefore could not attract the common law remedy of damages. (Moreland Timber Co Pty Ltd v Reid)

Maddison v Alderson (1883) part performance requires 2 steps: unequivocal part performance THEN look at the negotiations which constitute the oral agreement Facts Housekeeper agreed to look after master for all his life and forgo her wages, in exchange for a life interest in property. She argued that there was a contract in relation to land that he would grant her a life estate, and that she had performed her part of the contract in looking after him until he died, such that it would be inequitable of his estate to use the lack of writing to shun their side of the contract. In a suit founded on part performance of a parol contract relating to land, the defendant is charged upon the equities resulting from the acts done in execution of the contract, and not upon the contract itself. The court is not asked to give a better remedy; rather it is called upon to enforce an equity which has arisen by acts of part performance sufficient to attract the equitable jurisdiction of the court.

Judgment

The acts relied upon must unequivocally and in its own nature be referable to some such agreement as 2 that alleged ; it must be done with no other view than to perform such an agreement. (Does not have to refer to the exact terms of the contract).

Held: No part performance - she failed because acts did not unequivocally refer to the alleged agreement; she could equally have done all those things out of love and affection [if case was decided today, likely to have decided in favour of housekeeper].

2 stages to successfully prove PP 1. Unequivocal PP: Convince court that if it just looks at the acts in the factual context ONLY without paying any attention to oral evidence that constitutes the negotiations, acts wouldnt have been done unless the D was going to give them an interest in land. The acts themselves must suggest on the BOP that they wouldnt have been done unless there was some broad contract that was to confer an interest in land. If you cannot prove this, PP cannot be satisfied. If it can be satisfied, the court must look at: 2. Look at negotiations that constitute the oral agreement. Does the evidence establish there is a concluded oral contract, it can decree SP of those terms against the D to carry out the transfer of interest in land. If the judge, looking at the act of PP cannot say the acts of that kind in factual context (Without knowing anything about the oral agreement) were done pursuant of an agreement, the acts are not, on the BOP, sufficiently unequivocal. If the acts are not sufficiently unequivocal, the court should say, even though I have heard there was an oral agreement, I cannot take it into account because the acts are not sufficiently unequivocal!

Bare possession does not necessarily connote trespass or a contract at all; possession may be the result of mere permission. But if the circs of possession are proved then the court may judge whether the act indicates permission or contract. McBride v Sandland 2 Some contract of the general nature of that alleged.

McBride v Sandland (1918) restrictive approach. Contract of the general nature of that alleged. Some such agreement as that alleged (Maddison) means some contract of the general nature of that alleged. Judgment Certain elements of PP essential to raise equity: Some such agreement as that alleged in Maddison means some contract of the general nature of that alleged. The act relied on must unequivocally and in its own nature be referable to some such agreement as that alleged i.e. it must be such as could be done with no other view than to perform such an agreement. When does an act refer unequivocally to such an agreement as is alleged? Bare possession does not necessarily connote trespass or a contract at all (because it may be too broad); possession may be the result of mere permission. But if the circumstances of possession are proved then the court may judge whether the act indicates permission or contract, and, if contract, its general nature. It must be done on faith of the agreement, and the other party must have permitted it to be done on that footing. Otherwise there would not be fraud in refusing to carry out the agreement, and fraud, that is moral turpitude, is the ground of jurisdiction. It must be done by a party to the agreement. There was a completed agreement. The act was done under the terms of that agreement by force of that agreement.

Kingswood Estate Co Ltd v Anderson [1963] acts of performance relied upon must suggest the existence of a contract such as that alleged, but they need not establish the exact terms of the contract. Going into actual occupation is good evidence of PP with respect to tenancy agreements NOT FOLLOWEDApproved by HOL in Steadman v Steadman Facts An oral agreement for a tenancy was entered into between the company and Mrs. Anderson. Court of appeal decided that the agreement was for a lease for the joint lives of Mrs Anderson and her invalid son and the life of the survivor. Pursuant to the agreement, Mrs Anderson entered into possession of a flat and paid rent. She was also given a rent book of the sort supplied to weekly tenants. The company gave Mrs Anderson a notice to quit appropriate to a weekly tenancy, and brought an action for possession. Mrs Anderson resisted the claim, relying upon the oral agreement for a lease. Court of Appeal ruled in favour of Mrs. Anderson. Acts of performance relied upon must suggest the existence of a contract such as that alleged, but they need not establish the exact terms of that contract. If there is any evidence of such part performance, that is sufficient to warrant the admission of oral evidence to prove what the exact terms of the contract were. more liberal approach than requirement in McBride. In agreements for a tenancy: although the tenant going into actual occupation might be referable to any kind of tenancy agreement, part performance is not required to be referable to the particular agreement. Fact of the tenant going into actual occupation is good evidence of part performance with respect to tenancy agreements. The present case proved sufficient part performance within that principle.

Judgment

Steadman v Steadman [1976] HOL Approved Kingswood Estate Co Ltd v Anderson [1963] Acts of part performance must, on the balance of probabilities, point to the existence of some such contract as alleged NOT FOLLOWED Facts A divorced husband and wife were negotiating a settlement of the wifes claim for an order that the matrimonial home be sold and the proceeds of the sale divided between the parties. The husband was arrears in payment of maintenance and applied to the Magistrates Court to vary the maintenance order. The parties met outside the Magistrates Court and orally agreed:

(i)

The wife would surrender her claim to the house in return for the payment to her by the husband of $1500 (ii) The maintenance order for the wife would be discharged; (iii) Childs maintenance order would continue; (iv) Arrears of maintenance would be remitted, save as to $100 which the husband was to pay to the wife. The husband paid $100 and $1500 to his solicitor for payment to wife on assignment of her interest in the house. The solicitor prepared the deed of transfer and forwarded to the wife for signature. Property values increased sharply and the wife refused to signed and renewed her application to have the house sold. The husband pleaded the oral agreement as a defence to this application but the wife argued that the agreement was unenforceable, as the act could not be regarded as unequivocally referable to an agreement of the kind alleged. The husband countered by contending that his conduct in assenting to the maintenance order, paying the sum of $100 and preparing and forwarding the deed of transfer to the wife, amounted to PP of the oral agreement.

Judgment

Acts of part performance must, on the balance of probabilities, point to the existence of some such contract as alleged.

The husbands acts amounted to part performance of the oral agreement.

Commentators disagree on the extent to which the case has brought about a significant expansion of the doctrine of part performance.

Ogilvie v Ryan [1976] NSW love and affection not unequivocal acts. Facts Defendant claimed that she had orally agreed with the testator that in return for her looking after him, he would allow her to live in the house for as long as she wished.

Judgment

The Court applied the strict test of PP.

The acts of changing residence and providing unpaid services was not unequivocally referable to a promise to grant her an interest in land. Her acts were consistent with a voluntary association maintained through love and affection, perhaps coupled with an expectation of a testamentary disposition in her favour did not satisfy the unequivocal test!

Note: It is possible the Court would have found differently on the basis of traditional gender roles in the case of carers. As in this case, it is not uncommon for women to look after older partners as they get older. If the defendant was a man the unusualness of the arrangement may have led the court to conclude that it is less likely a man would have promised to care for a woman unless there was some agreement that he receive an interest in her house in return.

Mills v Stokman (1967) Facts Mills was the owner of an area of land, which was partly general law land, and partly under the Torrens system. She wanted to prevent Stockman from entering her land and taking away slate. Mills predecessor in title had made a written agreement purporting to sell the slate to W. In 1960 W made a written agreement with Stokman selling him the slate and appointing him his agent to enter onto the land and remove it. In 1961 Mills disputed Sotkmans right to remove the slate and later she

and Stokman made a written agreement under which Stockman agreed to employ Mills husband to assist in the selection and loading of the slate and to pay Mills for each load. Later, Mills refused to allow Stokman to continue removing the slate.

Judgment

The agreement between W and Mills predecessor in title was not a contract for the sale of goods, but created an equitable profit e pendre. This was because the slate had either never been severed from the land, or had been abandoned after severance for such a period that it was to be regarded as part of the land. Mills was bound by this profit, because she had purchased with notice of its existence. Hence, Mills could not prevent Stokman from removing the slate under the agency arrangement with W. In relation to the Torrens system land, Mills took free of the equitable profit because she had registered her interest.

Corporate Affairs Commission v ASC Timber Pty Ltd (1989): it was held that the effect of an agreement between investors and a company, under, which pine seedlings would be planted, cultivated and harvested when mature, was to create a profit a pendre and a contract for the sale of trees: is to be found in the intention of the parties: is it the intention that the trees may be, or are to be, felled and removed within a reasonably short period of time in which case the arrangement is one of sale or is it intended that the trees shall be retained for a considerable period of time while they grow to maturity in which case the arrangement is one involving the grant of a profit a pendre.

WEEK 9-1

Milroy v Lord (1862) leading case! Donor has to do everything necessary to be done to make the transfer binding on him in the sense of taking all the steps for transferring title that was necessary for him to personally to take. Facts The donor intended to establish a trust of shares for the benefit of his niece. He executed a deed poll, setting out the terms of the trust, but never executed a document transferring the shares to the trustee. According to the memorandum of association of the company in which the donor held the shares, the shares were transferable upon registration of a transfer executed by the donor. The donor had not even taken the first step of executing the transfer, the gift of the shares to the trustee was incomplete and no assistance could be derived from equity. Judgment If the donor has done everything necessary to make the transfer binding, then there will be a complete gift in equity but what does this mean? 3 versions: (i) Griffiths J: where there is a legal multi step process for transferring legal title, so long as the donor has done everything necessary to be done to make the transfer binding on him in the sense of taking all the steps for transferring title that was necessary for him to personally to take, then even though legal title has not passed, equitable title will pass apply this view: as soon as he signs the deed, he has taken all steps which was necessary for him to personally take. The intending donor doesnt have to give notice; the assignee can do this does not have to personally do this. The only step he must personally take is sign the written assignment. i.e. so long as the creditor signs the written assignment, equity will regard equitable title as being transferred. (ii) Higgins J: If he has done everything necessary to make the transfer binding on him, he must have taken all the steps he could have that was in his power. There is no gift in equity until the donor does everything, which lays in his power to do. (iii) Isaac J: Whenever there is a procedure for transferring legal title to property, Milroys statement means that he must take all the steps that are required at law. i.e. you would never have equitable title passing to a donee ahead of a legal title. To transfer debt in equity, the creditor needs to do everything he needs to do in law! In this case, the donor had executed a deed setting out the terms of the trust, but failed to execute a transfer of the shares to the trustees. The gift failed. Re Rose [1952] further refined Milroy v Lord principle Facts The donor executed documents in the appropriate form, transferring the shares to his wife in one case, and to his wife and the company secretary on certain trusts in the other. The donor handed the transfers to the company secretary, as agent for the wife, and the transfers were lodged for registration. Donor having died, the question concerned the date at which the gift of the shares were dutiable

as part of the donors estate. It was argued by the Crown that the gifts of the shares were not complete until registration of the transfers if so, the shares formed part of the dutiable estate of the donor rejected. Since the donor had done everything necessary to transfer the gift, the beneficial interest in the shares passed at the time the transfers were executed and handed to the transferees. The donor had done all that lay in his power to transfer legal title to his shares, and accordingly, an equitable interest in the shares had passed to the donee, even before registration. If a document is apt and proper as to transfer the property is I truth the approach way in which the property must be transferred then it does not seem to me to follow from the statement that, as a result, either during some limited period or otherwise, a trust may not arise for the purpose of giving effect to the transfer. In certain cases, an equitable interest in the subject matter of a gift may pass to a donee before legal title passes. Thus, it demonstrates that the maxim equity will not assist a volunteer requires considerable qualifications.

Judgment

Legal rules for transfer of particular property may require several steps: (a) Some acts can only be done by the donor. E.g. execution of a document. (b) Some acts can be done by either the donor or the donee. E.g. lodgement of documents for registration. (c) Others can only be done by a third party. E.g. registration of a document. It is unclear which steps need to be taken by the donor such that equity may regard the gift as complete. In this case, the donee was held to have an equitable interest in the shares on the basis that the donor had done all in his power to transfer title to them. Anning v Anning (1907) transferring debt, multi step procedure and creating FCET Facts Donor attempted to assign various types of property by deed. Most of these were capable of transfer at law. HC had to consider whether those items which were not effectually transferred y the deed, were assigned in equity. Judgment There were 3 different views in the HC: 1. Griffiths J: a gift would be complete in equity if category (a) had been done supported in Corin v Patton (1990) 2. Higgins J: it was necessary for both (a) and (b) to be done. 3. Isaacs J: All 3 types of action had to be completed. i.e. he though that where the legal title was assignable, the gift couldnt be complete in equity before it was complete in law.

Jones v Lock (1865) Court of Appeal in Chancery gifts/chattel Facts Father put away a cheque for his child. He had previously informed his executor of his intention of investing it for the childs benefit. Shortly afterwards, Jones died and the cheque was found in his safe by the executor of his state. The childs mother made a claim against the estate on behalf o the child arguing that it had been given to the child. Judgment Has there been a gift or not? Or has there been a declaration or not? The question is whether Jones intended to make a declaration that he held the property in trust for the child. In this case, Lord Cranworth LC cannot come to any other conclusion that that he did not hold it in trust. It all turns upon the facts in this case the facts did not conclude that the testator meant to deprive himself of all the property in the note, or to declare himself a trustee of the money for the child. An expression of intention to give title to the donee, even when accompanied by a symbolic but temporary handing over, will not be sufficient for an effective gift. Corin v Patton (1990) HCA gift/land, sever joint tenancy by disposing of legal or equitable interest (gift): must take all necessary steps which must be taken personally by the titleholder.

Facts

The respondent, Patton and his deceased wife, were joint registered proprietors of land under the TPA 1900 (NSW). When a joint tenant des, the remaining joint tenants become entitled to the property by virtue of the principle of survivorship. A joint tenant can be severed (converted into a tenancy in common) if a joint tenant effectively disposes of his/her interest in the property prior to death. Wife was terminally ill and had attempted to transfer her interest in land to her brother (Corin) to sever joint ownership between her & her husband so that the husband couldnt get whole interest to property (per principle of survivorship) & children could obtain interest. She executed a transfer of her interest in the land to her brother, Corin. At the same time, a deed of trust was executed under which Corin agreed to hold the property on trust for Mrs. Patton, or as she directed, or in accordance with any order of the court. The transfer of property & deed were handed to wifes solicitors. The wife died prior to registration without taking any action to obtain the certificate of title from Bank of NSW which would have enabled the transfer to be registered. She didnt make duplicates of the certificate of title. She did not take steps to have the duplicate certificate of title produced so that the transfer could be registered.

Issue

Did she effectively dispose of her interest in the land prior to her death, thus severing the joint tenancy and defeating her husbands right of survivorship? Did she effectively alienate the property in equity? NO Mason CJ & McHugh J: what does necessary to be done mean? A joint tenancy could be severed in one of 3 ways: 1. An effective disposition of a joint tenants legal or equitable interest in the property; 2. Mutual agreement between the joint tenants; 3. Course of dealing sufficient to show that the interests of all joint tenants were mutually treated as constituting a tenancy in common. The rule in Milroy v Lord: 1. The donor must have done everything necessary to be done, according to the nature of the property, in order to transfer the property and render the gift binding; 2. If the gift was intended to have been effectuated by one means, the court will not give effect to it by another means. The question is whether by his acts the donor has placed the intended donee in such a position that under the statute (RPA), the latter has a right to have the transfer registered, a right which the donor, or his executors, cannot defeat or impair. Milroy v Lord is part of the law. Legislation enables donee to secure registration of a transfer of the donees interest when he has an instrument of transfer in registrable form & can produce/ arrange for production of appropriate docs. But if donor lacks power to recall transfer, then lack of power comes from principles of equity, not legislation. Considered 3 judgements in Anning v Anning: Griffiths CJ: the words necessary to be done from Milroy v Lord mean necessary to be done by the donor...if, however, anything remains to be done by the donor, in the absence of which the done cannot establish his title to the property as against a third person, the gift is imperfect, and in the absence of consideration the Court will not aid the done as against the donor. But, if all that remains, to be done can be done by the done himself, so that he does not need the assistance of the Court, the gift is, is think, complete Higgins J: He state that necessary refers to the nature of the property, not to any obligation upon the donor. Issacs J took a stricter view: If the legal title is assignable at law it must be so assigned or equity will not enforce the gift. If for any reason, whether want of a deed by the assignor, or a specifically prescribed method of transfer, or registration, or statutory notice, the transfer of the legal title is incomplete when the law permits it to be complete, equity regards the gift as still imperfect and will not enforce it. In such a case, the fact that the assignor has done all that he can be required to do is not applicable. But maxims are not universal inflexible rules. Whats important about the 2 maxims is that theyre related to the rule that a voluntary covenant is not enforceable in equityc Rationale for refusing to complete an incomplete gift donor should not be compelled to make a gift & should be at liberty to recall the gift at any time before its complete. But does not justify refusal to recognise the donees interest after the point where the donor has done all that is necessary to be done on his part to complete the gift. It is possible to sever a joint tenancy by declaration of trust, however, a failed gift will be construed

Judgment

as a declaration of trust. *T+he principle is that, if an intending donor of property has done everything which is necessary for him to have done to effect a transfer of legal title, then equity will recognise the gift. So long as the donee has been equipped to achieve the transfer of legal ownership, the gift is complete in equity. Necessary used in this sense means necessary to effect a transfer. The question to ask is whether what the donor has done is sufficient to enable the legal transfer to be effected without further action on his part s41 Real Property Act until registration, instrument of transfer shall be ineffectual to pass an estate or interest in (Torrens) land, but held that s 41 doesnt prevent the passing of equitable estates to the donee under a completed transaction because while the injunction applies to legal and equitable estates, it does not touch whatever rights are left behind the instrument. So where a donor delivers instrument of transfer in registrable form and certificate of title so that donee can register property, then equity arises from the execution & delivery of the certificate in title, not the transfer. So s41(1) doesnt stop operation of equitable doctrines relating to gifts. S97 Real Property Act a joint tenancy may be severed unilaterally by the registration of a transfer by the joint tenant to himself or herself without production of the certificate of title. This provision would have made it unnecessary for Mrs Patton to involve he brother to effect a severance. Held: The gift was not complete because wife had not arranged for the production of the certificate & Corin couldnt compel production. Transfer to Corin couldnt be perfected by treating it as a declaration of trust Deane, Brennan & Toohey JJ: gift not complete & not severed joint tenancy Brennan J: s41(1) of RPA does stop an equitable estate passing until registration Toohey J: view consistent with Issacs J in Anning but also held that a donee in possession of a transfer of Torrens title may present it for registration without concurrence of donor. Deane J: agreed with Mason CJ & McHugh J regarding s41(1). Also proposed 2 fold test regarding Torrens system land: whether donor has done all that was necessary to place the vesting of legal title: (1) The donor has done all that is necessary to place the vesting of the legal title within the control of the donee and beyond recall or intervention of the donor, then, (2) Once the first stage is reached and the gift is complete and effective in equity, the equitable interest in the land vests in the donee and, that being so, the donor is bound in conscience to hold the property as trustee for the donee pending the vesting of the legal title once the transaction is complete so far as the donor is concerned, he has no locus poenitentiae (opportunity to change ones mind).

Costin v Costin (1997) NSW Court of Appeal gift/land Facts Father purported to make a gift to his son. He was a co-owner of the property with his other son. He signed the transfer and instructed his solicitors who held the title to produce the duplicate certificate of title to permit registration. Judgment The solicitors refusal to produce the certificate without the agreement of the other co-owner rendered the gift imperfect. Gift was incomplete!

WEEK 10-1

Wratten v Hunter (1978) NSWSC A voluntary oral declaration (after receiving full beneficial interest without conditions) is not an effective declaration of trust. Equity will provide relief where a person acquires property on terms that he would hold as trustee. S23C(1)(b) should not be used as an instrument of fraud: does not apply to a transaction which purports to create and declare a trust. Facts Father transferred land to son (Bertram). At the fathers funeral B said to siblings: I promise to live in the house and care for the home and property for us all makes a declaration of trust however it is not in writing.

B argued s 23C(1)(b): a declaration of trust must be manifested and proved by some writing The siblings argued that Rochefoucauld v Boustead applied to this case (ie that the Statute of Fraud does not apply) the plaintiff submitted that the principle established in the Statute of Frauds cannot be used so as to cloak a fraud. It is a fraud on part of a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land himself. (Rochefoucauld v Boustead)

Judgment

Equity did not prevent the Statute of Frauds applying to a voluntary oral declaration of trust by a person who obtained the full beneficial interest in land. However equity did give relief where a person acquired property on terms that he would hold as trustee for the person transferring to him. (Hope J in Last v Rosenfeld) i.e. Acquired property on terms that he should hold as trustee VS person holding property, after he acquires it, constituted himself as trustee.

The Statue of Frauds does not prevent the proof of a fraud; and that it is a fraud on the part of a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land himself.; Rochefoucauld v Boustead [1897]. Statute of Frauds applies to a mere voluntary declaration of trust by a person who is at all material times the owner of the relevant property; Organ v Sandwell This principle also applies where land is conveyed to a person as a mortagee by absolute coneyance, and he subsequently seeks to rely upon the absolute conveyance so as to deny the equity of redemption of the mortgagor. The principle does not apply to a voluntary oral declaration of trust by a person who obtained the full beneficial interest in land, untrammelled by any consideration of trust, or of beneficial interest in any other person. These decisions turn upon the fact that but for the conveyees acceptance of the trust the conveyor would never have transferred the land to him; they do not go so far as to waive the statue where A, having acquired land independently, later ineffectively declares himself trustee for volunteer.

Statute of Frauds is applicable here: Unless there is a binding decision that in the case of a voluntary oral declaration of trust by a person who is the owner of the whole beneficial interest in land the declaration is unaffected by the statute, and the court must apply the statute in accordance with its terms.

The plaintiffs lost - Principle does not apply in this situation but s23C(1)(b) does and the statute itself is the authority of this.

Note: If he acquired his legal title on the basis of a clear understand once he got the title he would hold on trust for bothers/sister, he cannot repudiate his duty by relying on the statue of frauds.

Baloglow v Konstantinidis (2001) NSW Court of Appeal Facts Lawyers for appellants & respondents entered into negotiations to sell apps assets & land to resp. Heads of agreement drafted by respondents lawyer in front of apps lawyer who agreed to terms. Amendments to draft agreement sent via fax to apps lawyer. The Court is considering whether retainer of apps lawyer (not being in writing) failed to meet s23C(1)(c) of CA Act.

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Gibbs JA: agreement did not purport to transfer property but contractually bound appellant & respondent to make or cause the transfers only. Contract organised that there would be settlement at time of payment. Application of s23C (so far as land was subject to a step) (i) The only interest created in land within s23C(1)(a) was any equitable interest arising because equity could enforce contract and s23C(1)(a) dos not apply to equitable interests. (ii) There was agreement to dispose of an interest in land, with disposition to come when the agreement was performed. But no agreement disposed of within s23C(1)(a) and, (iii) So far as an equitable interest subsisting at the time was subject of a step (i.e. Baloglows equitable interest in property) there was agreement to dispose of that trust, but interest not disposed of within s23C(1)(c) An agreement disposes of an existing equitable interest if the parties agreed to immediately hold their beneficial interests for different people from before. Interest is not disposed if is only agreed to dispose at a future time. Issue: what is nature of the interest created under an executory contract for sale for land? Circulatory nature of the interest makes it difficult to bring executory contracts for sale of land within s23C(1)(a) [i.e. contract is said to be susceptible to specific performance if equitable interest, but if specific performance is not decreed then there is no equitable interest]. Eng CA: equitable interest created under a specifically enforceable agreement to assign an interest in property is created by the operation of an implied/constructive test Issue: whether equitable rights are and equitable interest for purposes of s23C(1)(a)? S23C(1)(a) doesnt apply at all creation/disposal of trust if there is no more than agreement to assure property in future. Held: s23C only applies to the actual creation of an interest in land and not to agreements as such. s54A, by contrast, is concerned with the bringing of actions upon contracts for the sale or other disposition of land or any interest in land

Cowan v Scargill [1985] (UK) must not be swayed by trustees personal, social or political views. Must exercise their power fairly and honestly for the purpose which they are given and not for some ulterior purpose. Facts Board of trustees of a mineworkers pension trust comprised union and employer representatives. Union representatives (led by Scargill) refused to approve an annual investment plan unless the investments were restricted to exclude certain investemtns. The beneficiaries of the turst were retired coal miners and widows and children of exminers. Trustees were held to be in breach of their fiduciary duty for failing to put the best interests of their beneficiaries first i.e. financial interests of the beneficiaries. Judgment Megarry VC: in some rare instances the interests of the beneficiaries might transcend the financial such that it would not be in their interests to obtain financial reward from investment in companies associated with the excluded products. Beyond that, he said that in exercising powers of investment for the financial benefit of the beneficiaries of a trust the trustees must not be swayed by their own personal, social or political views. The power to invest must be used, as all powers conferred on a trustee must be, fairly and honestly for the purpose for which they are given and not for some ulterior purpose; Duke of Portland v Lady Topham (1864). The power must be exercised with due care what is the standard? The standing being that of a reasonable and prudent person of business. Trustees when exercising their powers of investment, have a duty to consider the need for diversification.

Pateman v Heyen (1993) insure as an ordinarily prudent person would. Do not need to insure against full replacement value; may be sufficient to insure for the present value of the property. Facts A claim was brought against the trustee of a deceased estate seeking compensation for the loss resulting from a fire which destroyed the house which was the major asset of the estate. The sole beneficiary was the plaintiff who was aged 13 at the death of the deceased. After giving consideration of selling the house, the defendant leased it for the purpose of

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preserving the assets while waiting for the plaintiff to come of age. The defendant insured the property initially but didnt renew it. The property was not insured when it was destroyed by a fire.

A trustee is under a general duty to insure such a way and in such an amount as would an ordinarily prudent person. There are circumstances where it would not be reasonable to expect a trustee to insure, for instance where there was no income available to pay premiums. In this case, Cohen J held that the trustee was under a duty to insure but only for present value and was thus liable to compensate the estate for the value of the house as it was at the date of the fire, the difference between the improved and the unimproved value of the property. SA Perpetual forests Limited 1964 Trust Deed (1995) Bollen J held that, provided reasonable terms could be obtained and there were sufficient funds to pay the premiums, the trustee should insure.

WEEK 10-2

Trustees of the Property of Cummins (A Bankrupt v Cummins (2006) HCA contribute unequal shares, property purchased in joint names presumption that the property is held by the purchaser in trust for themselves as tenants in common in the proportion in which they contribute to the purchase money. However in the case of the matrimonial home each of the spouses have one half interest regardless of the amounts contributed. Must contribute AT THE TIME OF PURCHASE to create resulting trust. Facts Appellants were trustees of Mr Cummins bankrupt estate. Mrs C. did not pay part of the purchase price but did pay the stamp duty on the contract and the valuers fee. Sackville J held that presumption of resulting trust to reflect the contribution to the purchase price had not been rebutted (i.e. Mr. C was holding on trust for Mrs. C) Mrs. C successfully appealed to Full Court of Federal court trustees successfully appealed to HC who reinstated Sackville Js judgment. Judgment Majority: The generally accepted principle by Calverley v Green (1984) Gibbs J: If 2 persons have contributed the purchase money in unequal shares, and the property is purchased in their joint namesa presumption that the property is held by the purchaser in trust for themselves as tenants in common in the proportions in which they contribute the purchase money. At the time of acquisition of title to the land, Mrs C contributes more than her husband but legal title does not reflect her contribution to the acquisition therefore there is a presumption of resulting trust in her favour beneficial title is held in 76% for her. Prof. Scott : where a husband and wife purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them, it may be inferred that it was intended that each of the spouses should have a one-half interest in the property, regardless of the amounts contributed by them. Pettitt v Pettitt: where spouses contribute to the acquisition of a property then, in the absence of contrary evidence, it is to be taken that they intended to be joint beneficial owners. There is no presumption of advancement to rebut the presumption of resulting trust she is not making a gift to the husband but if the husband had paid the 76% it would be assumed he was making a gift of his greater share of equitable interest. However, if she has a greater share under a resulting trust, she is not presumed to have given that up. Is there any other evidence that will rebut the presumption of resulting trust? YES. At the time they acquired the title, she would not have intended to hold the full 76% for her on; she would have intended her husband to have a joint interest under joint tenancy e.g. building of matrimonial home.

Buffrey v Buffrey (2007) HCA legal title was vested in both parties as joint tenants, wife was jointly liable under the mortgage but husband paid most of it off. Court held the husband kept legal title and was holding it on trust for the wife he did not intend to make a gift (presumption of advancement was rebutted). Facts Legal title to an investment property was vested in the parties as joint tenants. The husband (plaintiff) provided most of the purchase money for the property, the balance being made up by mortgage for which he and his wife were jointly liable. In income tax returns the parties declares that they jointly owned the home.

Judgment

Following Calverley v Green (1984), Palmer J held that the presumption is not rebutted lightly. Despite the declarations in the tax returns of factors that indicated equal ownership, the following indicated that the presumption (of resulting trust) should stand (not rebutted) i.e. he is holding the legal title on trust for the wife: Bank insisted on the husband and wife being co-mortgagors as a condition of advancing the loan monies. (i.e. wouldnt let them borrow unless she put her name on the mortgage too.) It was an investment property The parties arranged their financial affairs separately The plaintiff did not know that the accountant had arranged the tax returns in the way that he did. The presumption of advancement was rebutted (i.e. he was not making a gift) by the fact that the plaintiffs purchase of the property was made with substantial damages he received after suffering a severe injury at work. The purchase was for his own benefit as representing is own superannuation fund, while his wife had her own fund.

WEEK 11-1

Ogilvie v Ryan [1976] NSWSC Facts (similar facts to Madison v Alderson except in this case the woman won!) R agreed with the testator that she would be able to live in the house as long as she looked after him. R lived in a house next to a theatre and O was managing director. When his wife died he lived in the house his company owned but rented it to R. After Rs mum died, R set up a defacto relationship with O. Os company wanted to sell this house and I told R he would buy a house in his name and she would be able to live in the house, rent free and look after him until he died in return for a life interest in the house. R moved in after Os death, Os son argues the agreement was not in writing and therefore he is not bound by it. R argues that although the agreement was oral, there was sufficient PP, so she has an interest under a constructive trust.

Judgment

Ryans 2 arguments: 1. There was an oral contract to give her an interest in the house and she scan enforce this. Was the contract to give life interest a contract that is SPable or at least enforceable? Is there a written memorandum to satisfy s54A? NO, however if there is equitable PP, thi can make up for the lack of written memorandum and make the agreement enforceable. 2. She argues the Court should recognize she has an equitable property interest under a constructive trust. Argument 1: Was there unequivocal PP? NO She has to show her acts of their own nature suggest on the balance of probabilities there is no other explanation for doing those acts other than acting under the contract alleged. She left the house, which she is in control, moved into the new house and looked after O, unpaid, until he died she argued that these acts viewed in context suggest they wouldnt have been done unless they were done under some contract. If you apply Madison v Alderson, her acts are not unequivocal and also, she was in a relationship which means she could have done these acts out of love and affection. If you applied Steadman v Steadman (not good law in NSW), there would be PP because you take into account the agreement and see whether her acts were consistent with the contract.

Argument 2: Can she establish she has an interest under a constructive trust? To prove constructive trust she must establish: Common intention, Detrimental reliance and It will be unconscionable for O to try and renege on his part. The judge identifies 2 groups of cases where constructive trusts will arise: 1. The titleholder derived his title from the claimant on terms that he recognised the claimant as having beneficial interest. The titleholder acquired his title from somebody else on the basis of an

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oral understanding that when the title was acquired the titleholder would recognise the beneficial interest in the claimant. The trustee does not obtain his legal title from the cestui que trust, or on terms that he would recognise the interest of the cestui que trust however he acquires the propery in his own name and having so acquired it, had its value increased by means of direct or indirect financial contributison or work and labour provided by the cestui que trust on some common understanding, express, implied or imputed, that the cestui que trust would have a beneficial interest in the property. This group stands on the principle that if the title holder an claimant had the common intention and subsequently the claimant acts on the basis of the common intention and renders the services, it is unconscionable for the title holder to assert his legal title to defeat a beneficial interest in the property to which he has agreed to or promised; or which it was the common intention of the parties that the plaintiff should have, in return for benefits to be provided by the plaintiff in connection with their joint use or occupation of the property. It is unconscionable for the titleholder to renege of his part of the common intention and justify his reneging by saying the agreement was not put in writing pursuant to the statue of frauds. He would be forced to recognise a beneficial interest in the claimant.

The common ingredient of both categories is an unconscientious use of the legal title. In my opinion, the facts proved establish a constructive trust of the beneficial interest promised to the defendant, and the defendant is entitled to have this court declare that trust in appropriate terms, and to rely upon it as a defence to the plaintiffs claim for possession based upon his legal title. Counsel for the plaintiff submitted that where, in answer to a claim for possession by the legal owner of land, the defendant pleaded a contract for the disposition of an interest in the land to the defendant, and the court found that there was such a contract, but it was unenforceable by reason of the Statute of Frauds, it was not open to the court to give effect to that disposition of land by any other means, because to do so would fly in the face of the statute, since the statute expressly said that no action or proceedings might be brought upon that contract. The only point of difference between the second category of cases and the present case is in the nature of the benefits the deceased was to have from his arrangement with the defendant. In this case, R provided services pursuant to the common intention but they are not services that improve or increase the value of the house BUT the judge said that this shouldnt really matter and the important thing is that it is unconscionable for the title holder to renege on a common intention that the claimant would get interest after the services are performed (specifically performed) does not matter whether the services added or did not add to the value! It does not matter that eh benefits were of a different character; the fraud on the defendant of using the legal title to defeat her interest, after the benefits have been taken and she has earned her interest in the property in accordance with the arrangement, is just as great as it is I the case where th benefits were directed towards the acquisition or enhancement of the value of the property. Therefore, R gets beneficial interest and the executor is forced to hold on constructive trust outflanks Madison v Alderson! The judge let this strict test to be outflanked. It was submitted that a court of equity would hold that such a constructive trust arise because of the following elements in the facts: The evidence proved expressly a common intention, before the property was acquired, that the defendant was to have a beneficial interest in it, and that the property was acquired by the deceased for the purpose of giving effect to common intention. The defendant was induced to alter her position and undertake a course of conduct greatly beneficial to the deceased upon the faith of his assurance that their common intention would be carried out. It would be a fraud on the defendant for the deceased or his executor now to assert his legal title to the property in order to defeat the promised beneficial interest with a view to which the legal interest was acquired, after having had the full benefit of her performance of the obligations which she undertook so that she might earn and maintain her right to that interest. Hussey v Palmer [1972] Lord Denning put the equitable doctrine of resulting and constructive trusts on a broad base when he said that they were imposed by law, whenever justice and good conscience required it. Eves v Eves [1975] Lord Denning founded the trust on a statement of principle by Lord Diplock in Gissing v Gissing [1971]: A resulting, implied or constructive trust is created by a transaction between the trustee and the cestui que trust (beneficiary) in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act in his own detriment in the reasonable belief that by so acting he was acquiring a

beneficial interest in the land. Viscount Dilhorne said (at 900): Where there was a common intention at the time of the acquisition of the house that the beneficial interest in it should be shared, it would be a breach of faith by the spouse in whose name the legal estate was vested to fail to give effect to that intention and the other spouse will be entitled to a share in the beneficial interest. A constructive trust may arise in circumstances where there is nothing that the law would call a contract, and a contract for the sale or other disposition of land may occur in circumstances which would not give rise to a constructive trust; but, in my opinion, the enforceability of a constructive trust of a beneficial interest in land is not inhibited by the presence of an oral contract otherwise unenforceable, because that would make the statute an instrument of the fraud which the constructive trust is designed to prevent. The result is that the plaintiff cannot succeed on his claim for possession. The plaintiff holds the property on trust for the defendant during her life, to permit the defendant to occupy the same rent free for as long as the defendant may desire to do so, and, subject thereto, upon trust for the plaintiff, that is to say, for the plaintiff in his capacity as executor of the will

Baumgartner v Baumgartner (1987) HCA Facts A man and woman were de facto partners for 4 years and had a child during this period. Initially they lived in a home unit owned by the man. The man bought land in his own name, a house was built on it and the couple moved into the house. The woman gave the man her pay packet. The man used the pooled funds to meet household expenses, including repayments of the mortgage loan relating to the home unit. Because of the womans contributions, the loan was reduced more rapidly than would otherwise have been the case. The woman sough a declaration that she had an equitable interest in the house. NSWCA held that there was sufficient evidence to infer a common intention that the woman should have an interest in the property. HC held the finding of common intention could not be sustained. Judgment Mason CJ, Wilson and Deane JJ: The question remains whether in the circumstances the respondent is entitled to relief by way of constructive trust. In Allen v Snyder the Court of Appeal held that in the absence of a common intention to create a trust, there was no basis for holding that the man was a trustee of the house for the two of them in equal shares. Glass JA said (at 693): But when it is called a constructive trust, it should not be forgotten that the courts are giving effect to an arrangement upon the actual intentions of the parties, not a rearrangement in accordance with considerations of justice, independent of their intentions. On the other hand, Mahoney JA correctly acknowledged as did Samuels JA, that a constructive trust may be imposed, even though a person on whim the trust is imposed had no intention to create a trust or to hold the property on trust. His Honour observed that in such situations an intention may be imputed in circumstances where the imputation is necessary in good faith and in conscience Thus, he said It will be necessary, from time to time, to determine whether, in such situations, the failure to recognise that the one or the other has a proprietary interest in the home is so contrary to justice and good conscience that a trust or other equitable obligation should be imposed. The significance of this statement so understood is that it asserts that the foundation for the imposition of a constructive trust in situations of the kind mentioned is that a refusal to recognize the existence of the equitable interest amounts to unconscionable conduct and that the trust is imposed as a remedy to circumvent that unconscionable conduct. Muschinski v Dodds Deane J pointed out that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle. Toohey J: Is the imposition of a constructive trust as a remedy for unconscionable conduct any more principled that the imposition of such a trust in order to prevent unjust enrichment? Unjust enrichment is at the very least a unifying legal concept. Put this way, it is not enough that one

spouse has benefited from the contributions of another. What is required is that the contributions of one spouse have enabled or assisted in enabling the other to acquire the asset in dispute. The notion of unjust enrichment, qualified in this way, is as much at east with the authorities and is as capable of ready and certain application as is the notion of unconscionable conduct. The object of a constructive trust is to redress a position which otherwise leaves untouched a situation of unconscionable conduct or unjust enrichment. It is equally applicable to persons in a de facto relationship as it is to spouses. An approach based on unconscionable conduct or one based on unjust enrichment will inevitably bring about the same result. The result proposed by Mason CJ, Wilson and Deane JJ is consonant with an approach based on unconscionable conduct or one based on unjust enrichment. Result: This case is accordingly one in which the parties have pooled their earnings for the purposes of their joint relationship. The appellants assertion that the property, which was financed in part through the pooled funds, is his property beneficially to the exclusion of any interest at all on the part of the respondent, amounts to unconscionable conduct which attracts the intervention of equity and the imposition of a constructive trust at the suit of the respondent. It therefore becomes necessary to determine the terms of that constructive trust. There was a constructive trust - beneficial interests are held 55% to the appellant and 45% to the respondent. Where there is no common intention and the titleholder isnt reneging on it, it may nevertheless be unconscionable for the titleholder to deny beneficial interests. If the endeavor fails without attributable blame leaving one person who happens to have money or property, equity will not allow the one who has the lion's share of what's being contributed at the point when the endeavor breaks down to run away with it! Equity will force him to hold them it on trust in a way that equalizes the parties' rights. In this case, the joint endeavor has failed without attributable blame. She contributed 45% and Mr B used these funds. Mrs B gets an interest not simply because Mr B would be acting unfairly in all the circumstances if he denies her beneficial title but his denial would be unconscionable by settled equitable principles. Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind.

McKenzie v Storer (2007) ACTSC must look to the actual common intention of parties Facts M is a mildly retarded woman with 2 handicapped children. She is a widow and S is a middle aged public servant. They meet a church group in Canberra and create a plan under which S and M will both be liable for the mortgage. Although S will go on the legal title to pay off the mortgage and get a loan etc as well M as joint tenants, she will have no beneficial interest and be removed from the title when she has paid off enough of the mortgage. Parties were registered as tenants in common of a property in Kambah in proportion 75:25. Purchased by money advanced by plaintiff as well as loan given out to both defendant and plaintiff. Condition of loan that defendant be registered on title of property and be signatory to mortgage. Agreement that defendant would not have any rights to property (she was given remainder of loan to pay her personal loans) Judgment Stone J: In circumstances like this, normally, you would say at the time the house was purchased, the whole of the purchase price came from the mortgage. M and S each made themselves jointly liable. At the time of acquisition, S contributed half the purchase price because she was jointly liable on it. There would be a presumption that however legal title is held, there is half of the beneficial interest for the person equally liable on the mortgage presumption of resulting trust. However, this presumption is whittled down so S has 1/4 not half of the interest because that is how they acquired the legal title. This would rebut the presumption of the resulting trust to give S half of the beneficial title. However, this is not all the evidence in this case. There was clear evidence that although she was on the legal title, the clear intention was to have she was to have no interest in beneficial title. Were it not for this clear agreement, there may have been a presumption of a resulting trust because

of her liability on the mortgage or at least 1/4 of the interest but because there was a CLEAR COMMOIN INTENTION she would not get beneficial title, it would be unconscionable for her to assert she has interest in the beneficial title. Therefore, she does not have interest and must have her 1/4 interest in legal title to M. (but if she has paid more of the mortgage, there will be an adjustment). The common intention negates what would otherwise be a constructive trust. Evidence shows that neither parties intended the defendant to get any interest from being on the title to the property beyond holding mere legal title on registration. Agreement was consensual and not contractual. On basis of oral and written evidence, parties had an actual intention that Storer should not hold a beneficial interest in the property and that, once her debt had been repaid, she would transfer her registered interest in the land To refuse to give effect to this intention would be unconscionable and it is this that equity will act to prevent by the imposition of a trust

WEEK 11-2 Inwards v Baker (1965) Court of Appeal where a landholder encourages a licensee to expend money in the expectation of being allowed to stay on the land, an equity arises in the licensee. It is not necessary for the landholder to promise a particular proprietary interest in return for the expenditure. The court will determine the equity from the circumstances. Facts B (father) was the owner of 6 acres of land. His son, Jack was living in those parts and thinking of erecting a bungalow. He built it on his fathers land with his own labour with the help of one or two men and he got the materials. Jack bore a good deal of the expense himself but his father helped him with it and he paid his father back some of it. When it was finished, he went into the bungalow and lived there ever since from 1931 down to date (1965). His father visited from time to time. The father died and he appointed Miss Inwards as executrix in his will, which was created before the land was bought or the bungalow was built. B lived with Inwards as his wife and by whom he had two children. He left nearly all his property to her and her children by him. He left his son (Jack) $400. Inwards appointed her two children as trustees of the will with her. The trustees did not take any steps to get Jack out of the bungalow. They were friendly but they took proceedings to get Jack out. Inwards died during these proceedings. Her two children continue the proceedings as the trustees of the fathers will. The trustees argued Jack had a licence to be in the bungalow but that it had been revoked and he had no right to stay trial judge found in their favour. Judgment Relying on Dillwyn v Llewelyn (1862), Plimmer v Wellington Corp (1884) it is plain from these authorities that if the owner of land requests another, or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity in the licensee such as to entitled him to stay. He has a licence coupled with an equity. Plimmers case: The court must look at the circumstances in each case to decide in what way the equity can be satisfied. In this case, even though there is not binding contract to grant any particular interest to the licensee, nevertheless the court can look at the circumstances and see whether there is an equity arising out of the expenditure of the money. All that is necessary is that the licensee should, at the request or with the encouragements of the landlord, have spent the money in the expectation of being allowed to stay there. If so, the court will not allow the expectation to be defeated where it would be inequitable so to do. In this case, the father allowed an expectation to be created in the sons mind that the bungalow was to be his home. It was to be his home for his life or, at all events, his home as long as he wished it to remain his home. If the father sold the land, any purchaser who took with notice would clearly be bound by equity. So here, too, the present plaintiffs, the successors of the title of the father, are clearly themselves

bund by this equity. If the later purchaser does not have notice of Jacks equitable interest, it may be defeated by the purchasers later legal interest. If Jack has equitable interest from the date of facts, It is for the court to say in what way the equity can be satisfied in this case it can be satisfied by holding that the defendant can remain there as long as he desires to as his home.

Appeal allowed enter judgment for the defendant.

Dillwyn v Llewelyn (1862) Court of Chancery the agreement becomes binding by virtue of the subsequent part performance. Facts The plaintiffs father made a will devising his real estate on trust for his widow for life, remainder on trust for the plaintiff for life, remainder on certain other trusts. Later, the father expressed a wish that his son, the plaintiff, should live nearby. He offered him a farm on which a house could be built. Father signed a memorandum in which he stated that the presented the farm to his son for the purpose of building a house. The legal fee simple estate in the farm was never conveyed to the son. Nevertheless, with his fathers knowledge and approval, the plaintiff built a house on the property. On the death of the father, the plaintiff brought an action seeking a declaration of his rights, and a conveyance of the farm to him in fee simple. Although equity does not perfect an imperfect gift, the plaintiff was successful in his action he got the farm. Judgment Lord Westbury LC: So if A puts B in possession of a piece of land, and tells him: I give it to you that B may build a house on it, and B on the strength of that promise, with the knowledge of A, expends a large sum of money in building a house accordingly, I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made. The case is somewhat analogous to that of verbal agreement not binding originally for the want of the memorandum signed by the party to be charged, but which becomes binding by virtue of the subsequent part performance.

Crabb v Arun District Council (1976) Court of Appeal The relief which may be granted is that which is necessary to prevent unconscionable conduct and to do justice between the parties The court should determine what was the minimum equity to do justice to the plaintiff. Facts The plaintiff had access at point A to the road and had a right of way from this point over the road to another road. Crabb was led by the local council to believe that he would be granted an additional right of access to a part of his land that he was proposing to subdivide point B. After subdivision, the council decided not to proceed with the grant of an access point and right of way. They fenced off access point B and refused to open it except on payment by the plaintiff of about $3000. As the plaintiff refused to pay, his land could not be used. He argued he would not have subdivided if I knew I had to pay that sum. Plaintiff commenced proceedings, claiming a declaration that he was entitled to access to the road at point B and a right of way over the road, and injunction restraining the defendant interfering with the reasonable enjoyment of the right of way. Trial judge rejected the plaintiffs claim on the ground that, although there had been an agreement in principle to give the plaintiff access to the road at point B: there was no definite assurance to that effect and, even if there had been, it would not have been binding in the absence of consideration or writing. Plaintiff appealed. Judgment Lord Denning MR: Conduct of the council: They had an initial conversation then subsequently the council put gates at B. The plaintiff relies on the representation that he will get a right of way. In strict law, on the conveyance, the defendants were entitled to their land, subject only to an easement at point A, but not at point B. To overcome this strict law, the plaintiff claimed a right of access at B on the ground of equitable estoppel, promissory or proprietary. In the species of estoppel called proprietary estoppel, it does give rise to a cause of action. The

new rights and interests, so created by estoppel, in or over land, will be protected by the courts and in this way give rise to a cause of action. The basis of this proprietary estoppel as indeed of promissory estoppel is the interposition of equity. Equity comes in to mitigate the rigours of strict law: it is the first principle upon which all courts of equity proceed, that it will prevent a person from insisting on his strict legal rights whether arising under a contract, or on his title deeds, or by statute when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties.

What then are the dealings, which will preclude him from insisting in his strict legal rights? If he makes a binding contract that he will not insist on the strict legal position, a court of equity will hold him to his contract. Short of a binding contract, if he makes a promise that he will not insist upon his strict legal rights then, even though that promise may be unenforceable in point of law for want of consideration or want of writing then, if he makes the promise knowing or intending that the other will act upon it, and he does act upon it, then again a court of equity will not allow him to go back on that promise. Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights knowing or intending that the other will act on that belief and he does so act, that again will raise an equity in favour of the other; and it is for a court of equity to say in what way the equity may be satisfied. The cases show that this equity does not depend on agreement but on words or conduct. The question then is: were the circumstances here such as to raise an equity in favour of the plaintiff? They led the plaintiff to believe that he had or would be granted a right of access at point B. The defendants representative agreed that he should have this access. I do not think the defendants can avoid responsibility by saying that their representative had no authority to agree [to] this. The defendants knew that the plaintiff intended to sell the two portions separately and that he would need an access at point B as well as point A. Seeing that they knew of his intention and they did nothing to disabuse him but rather confirmed it by erecting gates at point B it was their conduct which led him to act as he did; and this raises an equity in his favour against them. In the circumstances it seems to me inequitable that the council should insist on their strict title as they did. On the basis of these represtatntion, the plaintiff has suffered a detriment by selling the first block of land without getting a right of way. In what way now should the equity be satisfied? At the present time, it seems to me that, in order to satisfy the equity, the plaintiff should have the right of access at point B without paying anything for it. I would allow the appeal and declare that he has an easement, accordingly. He receives an equitable easement [Lawton and Scarman LJJ also concluded that the appeal should be allowed.] What if before Crabb took his case to court the council entered a contract of sale to a purchaser and the purchaser has no notice of Crabbs claim? There would be a competition between whatever rights Crabb has under equitable estoppels and the purchasers equitable rights under the contract of sale? Do we say Crabb has mere equity until the court hands down its decision and he has to compete with the purchasers fully fledged equitable interest? The purchasers later interest beats a mere equity of Crabb (until the court hands down judgment). If the court takes the view, that at the time of the facts he had a fully fledged equity interest, there is a competition between earlier fully fledged interest of Crabb andthat of the purchaser, the earlier one prevails. If Crabb has a mere equity at the time the purchaser takes his fully fledged equitable interest, the later fully fledged equitable interest will prevail. Does the interest under proprietary estoppels give the claimant a mere equity OR fully fledged equitable interest? rd If he has a mere equity but goes to court, if there are no 3 parties, the court will say he has a fully fledged equitable interest however, if a third party intervenes, the court will not say he has a fully fledged equitable interest otherwise it will impinge on the innocent third partys later equitable interest.

WEEK 11-2

Walton Stores (Interstate) Ltd v Maher (1988) HCA Facts Mahers were owners of the land. They negotiated the grant of a lease over the land with the appellants. Negotiations reached a stage where a lease was drawn up and executed by the Mahers, which was then sent to Waltons solicitors to be signed. Waltons decided to go slow on the deal and failed to sign the lease in full knowledge that the Mahers were engaged in extensive demolition work in accordance with the terms of the lease. Mahers were acting in the belief induced by Waltons that they would proceed with the execution of the lease. Judgment Mason CJ and Wilson J: To make out a case of common law estoppel by representation, the representation must be as to an existing fact, a promise or representation as to future conduct being insufficient: Jorden v Money (1854); Maddison v Alderson (1883) This brings us to the doctrine of promissory estoppel on which the respondents relied in this Court to sustain the judgment in their favour. Promissory estoppel certain extends to representations (or promises) as to future conduct: Legione v Hateley (1983) 152 CLR 406. In principle there is certainly no reason why the doctrine should not apply so as to preclude departure by a person from a representation that he will not enforce a noncontractual right: Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968; Attorney-general (NZ) v Codner [1973] Promissory estoppel, it has been said, is a defensive equity and the traditional notion has been that estoppel could only be relied upon defensively as a shield and not as a sword. But this does not mean that a plaintiff cannot rely on an estoppel. Even according to traditional orthodoxy, a plaintiff may rely on an estoppel if he has an independent cause of action. But the respondents ask us to drive promissory estoppel one step further by enforcing directly in the absence of a pre-existing relationship of any kind a non-contractual promise on which the representee has relied to his detriment. The principal objection to the enforcement of such a promise is that it would outflank the principles of the law of contract notably offer and acceptance and consideration. One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption. Because equitable estoppel has its basis in unconscionable conduct, rather than the making good of representations, the objection that promissory estoppel outflanks the doctrine of part performance loses much of its sting. Holding the representor to his representation is merely one way of doing justice between the parties. Was the appellant entitled to stand by in silence when it must have known that the respondents were proceeding on the assumption that they had an agreement and that completion of the exchange was a formality? The mere exercise of its legal right not to exchange contracts could not be said to amount to unconscionable conduct on the part of the appellant. But there were two other factors present in the situation which require to be taken into consideration: 1. The first was the element of urgency that pervaded the negotiation of the terms of the proposed lease. 2. The second factor of importance is that the respondents executed the counterpart deed and it was forwarded to the appellants solicitor The assumption on which the respondents acted thereafter was that completion of the necessary exchange was a formality. It seems to us, in the light of these considerations, that the appellant was under an obligation to communicate with the respondents within a reasonable time after receiving the executed counterpart deed and certain when it learnt that demolition was proceeding. The appellants inaction, in all the circumstances, constituted clear encouragement or inducement to the respondents to continue to act on the basis of the assumption which they had made. It was unconscionable for it, knowing that the respondents were exposing themselves to detriment by acting on the basis of a false assumption, to adopt a course of

inaction which encouraged them in the course they had adopted. To express the point in the language of promissory estoppel the appellant is estopped in all the circumstances from retreating from its implied promise to complete the contract. Brennan J: The element which both attracts the jurisdiction of a court of equity and shapes the remedy to be given is unconscionable conduct on the part of the person bound by the equity, and the remedy required to satisfy an equity varies according to the circumstances of the case. However, in moulding its decree, the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct. What, then, is unconscionable conduct? In all cases where an equity created by estoppel is raised, the party raising the equity has acted or abstained from acting on an assumption or expectation as to the legal relationship between himself and the party who induced him to adopt the assumption or expectation. The assumption or expectation does not relate to mere facts, whether existing or future The party raising the estoppel assumes that a particular legal relationship exists or expects that a particular legal relationship will exist between himself and the party who induced the assumption or expectation. It is essential to the existence of an equity created by estoppel that the party who induces the adoption of the assumption or expectation knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation. The unconscionable conduct which it is the object of equity to prevent is the failure of a party, who has induced the assumption or expectation and who knew or intended that it would be relied on, to fulfill the assumption or expectation or otherwise to avoid the detriment which that failure would occasion. The object of the equity... is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon. A non-contractual promise can give rise to an equitable estoppel only when the promisor induces the promisee to assume or expect that the promise is intended to affect their legal relations and he knows or intends that the promisee will act or abstain from acting in reliance on the promise, and when the promisee does so act or abstain from acting and the promisee would suffer detriment by his action or inaction if the promisor were not to fulfil the promise.

The remedy offered by promissory estoppel has been limited to preventing the enforcement of existing legal rights. But there is a logical difficulty in limiting the principle so that it applies only to promises to suspend or extinguish existing rights. There is no logical distinction to be drawn between a change in legal relationships effected by a promise which extinguishes a right and a change in legal relationships effected by a promise which creates one. Moreover, unless the cases of proprietary estoppel are attributed to a different equity from that which explains the cases of promissory estoppel, the enforcement of promises to create new proprietary rights cannot be reconciled with a limitation on the enforcement of other promises. It does not accord with principle to hold that equity, in seeking to avoid detriment occasioned by unconscionable conduct, can give relief in some cases but not in others. The better solution of the problem is reached by identifying the unconscionable conduct which gives rise to the equity as the leaving of another to suffer detriment occasioned by the conduct of the party against whom the equity is raised. Deane J: Upon analysis, there is no acceptable reason why the doctrine of promissory estoppel should be seen, in a fused system, as exclusively equitable or as raising some new or heightened conflict between law and equity. As a matter of authority, the previously accepted prima facie exclusion of assumptions or representations as regards future action or inaction from the operation of doctrines of estoppel by conduct applied equally in equity and at law. Once it is accepted that the doctrine of estoppel by conduct is one of substantive law, the question of what is encompassed by the preclusion resulting from the operation of an estoppel must be seen as a practical question of fact to be resolved by reference to matters of substance and common sense. In the ordinary case, when regard is had to substance and common sense, an estoppel precluding departure from a representation or assumption about future action or inaction will be as effective to preclude unconscionable conduct as will an estoppel precluding departure from an assumption or representation of existing fact.

An estoppel precludes a departure from an unqualified representation or assumption that a state of affairs existed, exists or will exist precludes the party estopped from subsequently denying that that state of affairs existed or exists at the relevant time, regardless of whether that time was past, present or future when the representation or assumption was made.

WEEK 12-1

Austotel Pty Ltd v Franklins Self Serve Pty Ltd (1989) NSWCA Facts F was negotiating with A for the grant of space in a shopping centre to be built by A, which F was to use as a supermarket. In the course of negotiations, F provided A with detailed specifications for the supermarket, based on Fs experience in running supermarkets. At As request, F also provided letters to A to produce to financial institutions, which indicated Fs intention to lease the completed premises. The supermarket was erected in accordance with Fs specifications and F ordered equipment for installation on the premises, some of which could not be used elsewhere. F also failed to renew a lease it held over other premises, on the assumption that it would be granted a lease of As property. However, the parties never reached agreement on the rent to be paid and F declined to execute a lease to assist A to obtain finance for the project. When A decided to leave the supermarket to one of Fs competitors, F sought a declaration that a binding agreement for a lease existed between the parties and, in the alternative, argued that A was estopped from denying the existence of an agreement because it would be unconscionable to do so. Judgment Kirby P: For equitable estoppel to operate, there must relevantly be the creation of encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence, or a promise be performed, or a transaction carried out between the plaintiff and the defendant, and reliance on that by the plaintiff in circumstances where departure from the assumption by the defendant would be unconscionable. The difficult, which I have in this case, lies not in the principle but in its application to the facts of this matter. We are not dealing here with ordinary individuals invoking the protection of equity from the unconscionable operation of a rigid rule of the common law. The court has before it two groupings of substantial commercial enterprises, well resourced and advised, dealing in a commercial transaction having a great value. This is not, of itself, a reason for denying them the beneficial application of the principles developed by equity. But it is a reason for scrutinizing carefully the circumstances, which are said to give rise to the conclusion that an insistence by the appellants on their legal rights would be so unconscionable that the court will provide relief from it. Courts should in my view, be wary lest they distort the relationships of substantial, well advised corporations in commercial transactions by subjecting them to the overly tender consciences of judges. Result: There was no binding agreement of a lease because the parties had reached no agreement about rent, and that A was not estopped from denying the existence of an agreement for any such agreement would not contain a term as to rent and hence would not be enforceable. The principle in Waltons Stores was inapplicable since, in the circumstances of the case, it was not unconscionable for A to refuse to enter in to a lease. Giumelli v Giumelli (1999) HCA court will look at the circumstances of the case to determine the appropriate remedy. Sometimes the court will not be able to hand down an equitable remedy (e.g. SP) and just give damages if the equitable rememdy will disadvantage an innocent third party too much. Facts Appellants were the parents of Roberrt Giumelli. They had represented to him over a number of years that: He could have part of a property that he had developed, working without wages; He could have that part of the property on which he built a house, on completion of construction; and If he did not accept work elsewhere, he could have the subdivided lot where the house stood. Robert claimed that each of the 3 promises gave rise to an estoppel.

HC granted relief relying on the notion of unconscionability and the equitable discretion relevant to cases such as these.

Judgment

Gleeson CJ, McHugh, Gummow and Callinan JJ: Constructive Trust and Estoppel The term constructive trust was used to identify the nature of the equitable remedy granted by the Full Court. The Full Court so interpreted the circumstances as obliging the appellants, in good conscience, not to retain their beneficial interest in the whole of the Dwellingup property and as requiring them to answer the respondents equity by bringing about a subdivision of the Promised Lot and conveying title to it. The equity of the respondent was seen by the Full Court as sufficiently strong as not only to prevent the appellants from insisting upon their strict legal rights but also, in respect of the Promised Lot, to convey it to the respondent. A constructive trust of this nature is a remedial response to the claim to equitable intervention made out by the plaintiff. It obliges the holder of the legal title to surrender the property in question, thereby bringing about a determination of the rights and titles of the parties. In the present case, the constructive trust is proprietary in nature. It attaches to the Dwellingup property. The equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognized variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant. The Circumstances of the Case Before making an order designed to bring about a conveyance of the Promised Lot to the respondent, the Full Court was obliged to consider all the circumstances of the case. When these matters are taken into account, it is apparent that the order made by the Full Court reflected in Verwayen was described as the prima facie entitlement of Robert. However, qualification was necessary both to avoid injustice to others and to avoid relief which went beyond what was required for conscientious conduct by Mr and Mrs Giumelli. The result points inexorably to relief expressed not on terms of acquisition of title to land by in a money sum. Conclusion The Full Court erred in the measure of relief which it granted in respect of the Promised Lot. This is a case for the fixing of a money sum to represent the value of the equitable claim of the respondent to the Promised Lot.

WEEK 12-2

Northern Counties of England Fire Insurance Company v Whipp (1884) Court of Appeal Facts Crabtree gives legal mortgage to NC (insurance company) who is his employer. Give legal FS in return for payment but it isnt a straight out sale (it is more like a loan). He transfer his legal title for a sum of money subject to a contract that that NC will transfer legal title back if the mortgagor repays the initial amount + interest. There is a transfer of a legal fee simple but a contract that NC will transfer back. After a mortgage transaction, NC has legal fee simple and Crabtree only has a contractual right to have the title given back to him court said this case wasnt really about the sale of legal FS but just a transfer of legal FS as a form of security for repayment of the loan. Crabtree has access to the safe, which contains the title deeds. He takes them and tried to create a mortgage over the land in equity in favour of Whipp. Equity has long said that the mortgagor retains full equitable interest: equity of redemption. Judgment Fry J: The plaintiffs being possessed of mortgages earlier in date than the mortgage of the defendant, and, under these instruments, being the owners of the legal estate, are prima facie entitled to priority over the defendants, but the defendant seeks to postpone the plaintiffs legal estate on various grounds. What conduct in relation to the title deeds on the

part of a mortgagee who has the legal estate is sufficient to postpone such mortgagee in favour of a subsequent equitable mortgagee who has obtained the title deeds without knowledge of the legal mortgage? It has been contended on the part of the plaintiffs that nothing short of fraud will justify the court in postponing the legal estate. It has been contended by the defendant that gross negligence is enough. In the case of a person taking the legal estate, and not seeking for or obtaining the title deeds from the mortgagor, the question may arise between the legal mortgagee and either a prior or subsequent encumbrance or purchaser. But in such a transaction, the fraud about which the courts are most solicitous is that which is practiced when a man takes the legal estate with knowledge of a prior equitable sale or encumbrance, and yet strives to place himself in a position to show that he took without notice: Le Neve v Le Neve (1747). On the other hand, when the legal mortgagee has obtained the possession of the title deeds and subsequently gives them up, no question can arise between him and a prior equitable owner It must be shown that he concurred in some project to enable the mortgagor to defraud a subsequent mortgagee, or that he was a party or privy to some other fraud in fact: Thatched House (1716). It will be found that the cases which have arisen on the conduct of the mortgagee in not obtaining possession of the title deeds may be ranged in the following classes: 1. Where the legal mortgagee or purchaser has made no inquiry for the title deeds and has been postponed, either to a prior equitable estate or to a subsequent equitable owner who used diligence in inquiring for the title deeds In these cases the courts have considered the conduct of the mortgagee in making no inquiry to be evidence of the fraudulent intent to escape notice of a prior equity, and in the latter case that a subsequent mortgagee who was, in fact, misled by the mortgagor taking advantage of the conduct of the legal mortgagee, could as against him take advantage of the fraudulent intent. 2. Where the legal mortgagee has made inquiry for the deeds and has received a reasonable excuse for their non-delivery, and has accordingly not lost his priority. 3. Where the legal mortgagee has received part of the deeds under a reasonable belief that he was receiving all and has accordingly not lost his priority. 4. Where the legal mortgagee has left the deeds in the hands of the mortgagor with authority to deal with them for the purpose of his raising money on security of the estate, [411] and he has exceeded the collateral instructions given to him. In these cases the legal mortgagee has been postponed as they had left the deeds in the hands of the mortgagor for the purpose of raising money, they could not insist, as against those who in reliance on the deeds lent their money, that the mortgagor had exceeded his authority. The cases where the mortgagee having received the deeds has subsequently parted with them, or suffered them to fall into the hands of the mortgagor, will be found to fall into the following classes: 1. Where the title deeds have been lent by the legal mortgagee to the mortgagor upon a reasonable representation made by him as to the object in borrowing them, and the legal mortgagee has retained his priority over the subsequent equities. 2. Where the legal mortgagee has returned the deeds to the mortgagor for the express purpose of raising money on them, though with the expectation that he would disclose the existence of the prior security to any second mortgage In such cases the court has, on the ground of authority, postponed the legal to the equitable estate. The authorities which we have reviewed appear to us to justify the following conclusions: That the court will postpone the prior legal estate to a subsequent equitable estate where: 1. The owner of the legal estate has assisted in or connived at the fraud which has led to the creation of a subsequent equitable estate, without notice of the prior legal estate; 2. 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. 3. The court will not postpone the prior legal estate to the subsequent equitable estate on the ground of any mere carelessness or want of prudence on the part of the legal owner. That there was great carelessness in the manner in

which the plaintiff company through its directors dealt with their securities seems to us to admit of no doubt. But is that carelessness evidence of any fraud? Their carelessness may be called gross, but in our judgment it was carelessness likely to injure and not benefit the plaintiff company, and accordingly has no tendency to convict them of fraud. [Cotton and Bowen LJJ agreed.]

Pilcher v Rawlins Court of Appeal in Chancery a purchaser who has acquired later legal interest bona fide, for value, without notice is an absolute, unqualified, unanswerable defence a subsequent, equitable interest holder cannot get priority if he or she had notice of the existence of that earlier interest; Abigail v Lapin [1934] Facts Rawlins makes a deal with Pilcher. P is a trustee in receipt of trust funds and lends the funds to R. Deed of mortgage given to P. P holds his legal FS on trust for beneficiaries whose money he has used. R and P decide to go into a fraudulent scheme to give a mortgage to SL. P will give the title back to R so he can fake his identify as the legal fee simple holder. When R approaches SL, he tells them, I have legal FS and i can give you an unencumbered mortgage. He proves he has legal FS by showing the documents and conceals the deed of conveyance to P etc. He doesnt have legal mortgage at the time they agree to take the mortgage. SL reasonably believe he does have it and so on the day of the transaction, there is a last minute change of mind. P decides to reconvey on 2 April 1856, deed of conveyance, the legal title to R even though R does not repay the loan. P transfer the nd legal title back and the result is, later on 2 April 1856 that day, R has the legal FS and he actually transfers to LS! The fraud comes to light and the beneficiaries who have never recovered the money from R assert they have an earlier equitable interest assert the earlier mortgage was held on trust for them and should be asserted against SL. SL had a legal fee simple, which was acquired without notice to the beneficiaries interest. Judgment James LJ: I propose simply to apply myself to the case of a purchaser for valuable consideration, without notice, obtaining, upon the occasion of his purchase, and by means of his purchase deed, some legal estate. Such a purchasers plea of a purchase for valuable consideration without notice is an absolute, unqualified, unanswerable defence and an unanswerable plea to the jurisdiction of this court. Once he has satisfied the terms of the plea of purchase for valuable consideration without notice, then let him depart in possession of that legal estate. In such a case a purchaser is entitled to hold that which, without breach of duty, he has had conveyed to him. Mellish LJ: Issue: which of the two groups of beneficiaries will bear the loss? Result: Later purchaser of any legal interest takes it free of earlier legal interest if there is no notice! (This is what happened here). It does not matter they thought they were getting the LS though a different path in which they really got. A bona fide purchaser of legal estate for value (not volunteer) takes priority over earlier equitable interest.

Smith v Jones (1964) Chancery of Division the purchaser does not need to cross examine the tenant. Facts Jones (defendant) contemplates purchase of FS and knows tenant is in possession. He goes to the tenant and asks him what are your rights? The tenant produces his lease documents and Jones wont need to inquire any further. Judgment Upjohn J: In Barnhart v Greenshields (1853) the law is conveniently and compendiously stated: If there be a tenant in possession of land, a purchaser is bound by all the equities which the tenant could enforce against the vendor, and that the equity of the tenant extends not only

to interests connected with his tenancy but also to interests under collateral agreements. The possession of the tenant is notice that he has some interest in the land, and that a purchaser having notice of that fact, is bound, according to the ordinary rule, either to inquire what the interest is, or to give effect to it, whatever it may be. The tenant argues that the purchaser had constructive notice not only what rights were set out in the lease but also the rights of the tenant to amend the lease. Court said NO we will not push constructive notice that far. The purchaser does not need to cross-examine the tenant. Constructive notice would not have extended to the tenants equity to rectification. What inspection and inquiries ought reasonably to have been made by the defendant of the plaintiff before the sale? The only relevant inquiry which should have been made was: May I see your tenancy agreement? He was under no obligation to proceed further and say: Does that correctly represent your rights? In my judgment, it would be extending the doctrine of notice and the obligation to make inquiry far too much if the doctrine was intended to cover an equity of rectification. A purchaser is not only entitled but bound to assume, when he is looking at the agreement under which the tenant holds, that the agreement correctly states the relationship between the tenant and the landlord. Jones is entitedl and bound to rely on the terms of the document, and the documents speaks for itself.

Hunt v Luck [1902 it is not reasonable to require a purchaser to ascertain, at his or her peril, the ultimate destination of rental payments. Facts Hunt owns legal fee simple and he is induced by a fraudulent representation by Gilbert. As a result of being induced he signs a conveyance of the legal estate to Gilbert. Gilbert obtains the legal fee simple estate but Hunt had an equitable right o have the conveyance set aside by reason of the fraud. Gilbert mortgaged the land to the defendants, receiving the loan moneys himself. In due course, Hunts personal representatives (Hunt died) sought to have the conveyance to Gilbert set aside, claiming in addition that Hunts equitable interest took priority over the legal interest of the mortgagees. Hunt argued that the mortgagees had notice of Hunts interest because at the time the mortgagees were negotiating with Gilbert, the tenants paid their rent to Woodrow, an estate agent, who in turn paid the moneys to Hunt. Therefore it was argued, if t the mortgagees had inquired as to the ultimate destination of the rent they would have realised that Gilbert was not the beneficial owner and this would have led them to Hunt interest. Judgment There is an assumed constructive notice of the tenants rights. Ie. Luck should have reasonably inspected the premises and be aware of the possessor/occupant other than Gilbert and inquire what his right are directly. (Even if there is no actual knowledge). Luck finds the tenant is paying rent to estate agent. Assume that estate agent is holding rent on behalf of Gilbert however, it is actually on behalf of Hunt Does luck have constructive notice of rights of Hunt who wasnt in occupation? NO. A reasonable person in the purchasers position will make an inspection and discover there is a person in actual possession and ask him what their rights are but he wont go any further doesnt need to ask if he is paying rent to Gilbert etc. If he had followed the rent to their relevant source, he would discover Luck had interest in the land but a reasonable person wouldnt go this far. It is not reasonable to require a purchaser to ascertain, at his or her peri, the ultimate destination of rental payments.

WEEK 13-1

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) HCA Phillips v Phillips person with right to have voidable conveyance set aside has but mere equity, Kitto J: Defence of purchase for value without notice is good against assertion of mere equity. Facts Terrigal was registered proprietor of land subject to mortgage to 1st appellant, Latec. Once the mortgage was in arrears Latec seized the property under its powers of sale and sold it to its wholly-owned subsidiary Southern Hotels Pty Ltd. Southern was the registered proprietor of the land in fee simple. Southern gave MLC Nominees security by way of floating charge over the property to support a guarantee. The claim is between Terrigal and MLC Nominees. Terrigal contends: 1. Mortgagees (Latec) sale was voidable; 2. Terrigal has equity or equitable interest in land taking priority in absence of postponement over later equitable interest of MLC; 3. Terrigal should be restored to register as proprietor of land subj to original mortgage. Menzies J - Sale by Latec to Southern was not honest sale, thus sufficient ground for avoiding sale to Southern (Kennedy v De Trafford). Hence, Terrigal entitled to be registered as proprietor of land. - Phillips v Phillips person with right to have voidable conveyance set aside has but mere equity Terrigal has mere equity. - Stump v Gaby result of eventual avoidance of conveyance upon position ab initio and throughout of the persons by whom and to whom conveyance of property was made and says that, in event of successful suit, conveyor had equitable estate capable of devise and conveyee holds, and has always held as trustee. - Btw Terrigals mere equity and MLCs equitable interest, maxim has no application so MLCs equitable interest takes priority over mere equity of Terrigal. Kitto J - Defence of purchase for value without notice is good against assertion of mere equity. - Where claim to earlier equitable interest is dependent for its success upon setting aside or rectification of instrument, court, notwithstanding that fraud or mistake is established, leaves rd instrument to take effect according to its terms in favour of 3 party whose rights have rd intervened, the alleged earlier equitable interest is unprovable against 3 party, and so no prior equitable interest to which his conveyance can be held to be subj. - Appeal allowed. Taylor J - Not interfere and so MLCs interest prevails over Terrigals. - Appeal allowed.

Judgment

Ruthol Pty Ltd v Mills (2003) Court of Appeal The maxim that a party may not take advantage of its own wrongdoing rd does not apply if it will affect the rights of an innocent 3 party acquired from the wrongdoer. Facts - Ruthol granted Mills option to purchase its land provided option exercised within a period. Option was conditional on non-exercise of existing lessee of right to renew its lease. Before time had expired for Mills, Ruthol said lease was renewed, thus no attempt to exercise the option by Mills. - Mills later became aware that lease wasnt renewed, they purported to exercise the option. However, Tricon entered into lease with Ruthol and exercised the option to purchase, and had no notice of Mills interest. Judgment Sheller JA - Maxim that party may not take advantage of its own wrongdoing will not apply to affect right of rd innocent 3 party acquired from wrongdoer. - Maxim didnt enable Mills to defeat Tricons claim to priority. - According to Latec, Tricons equitable interest as purchaser took priority over Mills equity to proceed against Ruthol for breach of contract in reliance on their late exercise of their option to purchase. Cripps AJA - Similar to Latec, equitable interests arising subsequently were acquired without notice of earlier interests. So in favour of Tricons equitable interest in property prevailing over equitable interest of Mills.

Rice v Rice (1854) Court of Chancery per Kindersley VC Issue: A wants to convey legal fee simple to B. A hands over everything without even receiving purchase money and gives him a receipt. A is guilty of misleading conduct by giving the purchaser the deeds so the purchaser can purport himself to be the title holder. Whether the plaintiffs equitable interest of a vendors lien for unpaid purchase money takes priority over the defendants equitable interest of an equitable mortgage. Held: Looking at whether the two equitable interests are equal in merit - both arises out of money due to each party, but mortgage based on a special contract and lien is not. However this is not enough to prefer the mortgage. Then looked at the special circumstances, including conduct of the parties mortgagees possession of the title deeds is significant enough