PROPERTY LAW
CHAPTER 1 - THE CONCEPT OF PROPERTY
Property Law: Defines relationship between legal persons with respect to things. Influenced by political,
economic and social conditions.
What is Property? Refers to objects, relation between human beings, and relations between persons in
relation to things. Describes legal relationship with a thing. Institutions by means of which societies
regulate access to material resources. Rules vary according to time, place and historical circumstances.
Property Law (i) Real - (a) Corporeal (tangible such as land, fee simple estate) (b) Incorporeal (intangible such as
easement, profit a pondrence)
(ii) Personal - (a) Chattels Real (leasehold where lessee has rights). Coz of remedy of damages
historically that it was treated as personal property; (b) Chattels Personal (also called pure personal).
Subdivided into choses in action (such as shares, IP, etc.) and choses in possession (right to tangible
chattels such as cars, books)
Property provides to the owner:
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right to use,
right to exclude others from doing something in respect of the object of ownership and
right to alienate (transfer) the ownership to whoever the owner likes.
Full property rights mean complete right to use and enjoy, right to alienate (transfer or assign), right to
exclude. E.g. A tenant with property on lease has right to use/enjoy and exclude but not alienate. To claim
'property' in something is to assert a degree of control over it. It is feasible to measure quantum of
property which someone has in particular resource at a particular time. To have 'property' in a resource
may often be entirely consistent with the acquisition or retention of property by others of property in the
same resource. But Blackburn explains that possible for property to exist where one or other of the three
features - right to use, exclude, alienate - is missing. Property right is a degree of power - basically how
much do you control the thing. Spectrum of property right - from licence to complete ownership.
Thresholds apply to see if right you have a property right or personal right.
- Right to Use or Enjoy: Property comprises legal relations and not things. So not necessary that the
authority of the owner be absolute or fixed [Wily v St George Partnership Banking Ltd (1999)].
- Right to Alienate: Assignability (act of transferring ownership) in all circumstances may not be an
essential characteristic of right to property. Many non-assignable rights are treated as property rights by
courts. E.g. community land held by municipal.
- Right to Exclude: Private right exercisable against the general public, including state. Does not refer to
property rights over things that citizens own, referred to as public rights.
Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295 HCA
Facts: Respondent conducting mining on land. Appellant lodged objections to mining on
grounds that it will damage park. Warden concluded that evidence suggested mining will have
deleterious effect was overwhelming and refused to grant respondent a prospector's licence.
Respondent successful in appeal to SC and full court of Appeals
Issue: Whether any of the objectors had any estate or interest in the land sufficiently proprietary
that they could prevent the mining company from mining?
Decision: Appeal dismissed (favour of Respondent)
Ratio: Under Mining Act, the only permitted objectors are those claiming some estate or interest
in land. Possible implication is that the Act contemplates that objections will be based only on
conflicting interest in land or possible adverse effects upon estate or interest of the objector.
None of the objectors had any interest or estate in land. The meaning of 'right' in the context of
the Mining Act does not imply a public right but rather an individual right of proprietary nature.
All members of the with public rights may access the area of land but do not hold estate or
interest in the land. The usage of this right more often by some than other does not elevate their
public right to private right capable of being described as an estate or interest in the land. Right
to use or enjoy not enough to give you property rights. Once have proprietary interest, then you
can assert against the world. Mining company here did not have proprietary but a license.
According to Colin, right to exclude is fundamental. Here Stow had right to use/enjoy but not
exclude.
Private law has two categories: (i) Property rights and (ii) Personal Rights/Obligations.
Difference between property rights and personal rights: Property rights are in rem (enforceable in
respect of thing) while personal rights are in personam (enforceable against person). Personal rights
include contracts, torts and unjust enrichment, and are enforceable only against a specific person.
Property right enforceable against the world i.e. can exclude everyone if have right other than anyone
who has a prior right to possession.
Legal interest enforceable against world but not equitable interest. E.g. In sale of land, after contracts are
exchanged, purchaser pays 10% deposit. Here purchaser has equitable interest if K satisfied certain
formalities - compliance with statute of frauds i.e. written and signed by seller. This gives right to specific
performance. After exchange is settlement where purchaser pays balance amount. Third stage is
registration. Can have before settlement in theory but doesn't work like it practically. Purchaser now gets
legal interest.
Right to specific performance (SP) and injunction are remedies in equity while damages is remedy in
law. But SP is rarely used. More often is use of injunction.
Property Rights and Contractual Rights: Property rights are rights over things enforceable against a
person. Contractual rights are rights enforceable against particular persons. Since property rights may
arise from a contract, there is an overlap between the two systems of rights. E.g. If A offers to sell car to B
but later refuses to do so, B has right to sue A for damages. This right to get redress from A for loss is a
personal right. But if B gets a remedy of specific performance requiring A to perform his obligation, then
B said to have proprietary right over the car.
Licences: Bare, Contractual or Coupled with an Interest: License arises when permission given by one
person to another to do an act on the licensor's land which would otherwise constitute as trespass
(unauthorised interference with another's right to possession of land. Can be trespass to goods, land,
individual). When license is without a contractual relationship between licensor and licensee, and
without grant of any proprietary interest in the land, then called bare license. Bare licence can be
revoked at the will of licensor and for any reason. After revocation, if licensee doesn't leave the property
within reasonable time then equivalent to trespass. Contractual licence when licence created by means of
a contract such as purchase of movie ticket, deed. It is revocable at will. If ticket holder breaches terms of
contract pursuant to which license is granted then contract may be terminated. Though licensor has the
right to revoke licence at will but he might then become liable for breach of contract. In case of license with
proprietary interest, license cannot be revoked. Right to take fruits of the land. Mining companies, etc
have this right. Gives limited form of proprietary interest. E.g. - A grants B licence to quarry for gravel
from his land by entering his land. License to enter land cannot be revoked as long as quarrying is in
operation.
Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605
Facts: Pl. sued Df for damages for assault. Df says that Pf was trespassing on his land and that his
servants and agents asked him to leave. When he refused to do so, they removed him using no
more force than necessary for the purpose. Pl said it was assault. Df was conducting a race
meeting on the land and in consideration of the Pl paying 4 shillings the Df promised to allow
him to remain on the racecourse, gave him leave and licence to enter and promised not to
revoke. Pl paid 4 shilling but Df breached, revoked the leave and license and assaulted Pl.
Issue: Whether Cowell was a trespasser/licensee to be in property? Whether decision in Hurst v
Picture Theatres which said that the right to see is an interest granted and hence irrevocable by
grantor be followed in this case?
Decision: Appeal dismissed
Obitor: Whether he is trespasser or not depends upon whether the license revocable? In Hurst v
Picture Theatre [1915] it was decided that Wood v Leadbitter was no longer good law. Wood v
Leadbitter (1845) stated that if a man creates a proprietary right in another and gives him a
license to go upon certain land in order that he may use or enjoy that right, the grantor cannot
divest the grantee of his +proprietary right and re-vest it in the grantor by breaking the
agreement i.e. if license and proprietary interest, then cannot revoke. The 'grant' referred to in
the case (a license coupled with grant) was a grant of some ascertainable property which is
capable of being granted. In Hurst, majority modified this law by holding that a 'right to see' a
spectacle was an interest which could be granted so that a licence to go to theatre or racecourse,
when given for value, was irrevocable because it was license coupled with proprietary interest.
Treated 'right to see' as an interest which was granted. Court held that right to see a spectacle is
a license and proprietary interest so irrevocable.
Ratio: Right to see a spectacle cannot in the ordinary sense be regarded as proprietary interest
but a contractual right and obligation. Equity would not provide for specific performance of a
contract to provide entertainment nor an unconditional injunction restraining the proprietor of
an entertainment place from excluding someone who had bought a ticket. Any injunction
granted would only be subject to at least the condition that the plaintiff coming into equity
should behave himself with due proprietary during entertainment. Applying rule of Wood v
Leadbitter that no 'grant' of any proprietary right has been made to Pl. He has only obtained a
contractual right which is enforceable in personal law by an action for damages. Hurst's case
wrong as grave inconveniences involved in adopting it as sound law. Granting of equitable
remedy would mean giving equitable rights to Cowell and thereby setting wrong precedence.
A strict property interest must be the foundation of the intervention of equitable jurisdiction.
Such a case not where injunctions would prevail.
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More recent case law not followed Cowell. Equity may treat a contractual license as irrevocable and
determine the rights of the parties accordingly.
Specific Performance: General principles governing availability of specific performance central to grant
of equitable relief. Decree of specific performance is available to plaintiff in 2 situations - (a) where
contract is executory. Pl. seeks to have the transaction completed in order to put parties in position
intended by contract. Rights of parties settled by court ordering that a document be executed or other
formal act be performed; (b) Where parties have entered into a final and formally valid agreement but
decree of specific performance required to enforce particular contractual obligation. The remedy in each
case is discretionary and flexible.
Equity does not generally intervene to compel performance of services or to compel maintenance of a
personal relationship. Equitable remedies not available where licence to go upon land is granted such as
the following coz they are contracts which involve substantial element of personal service and thus, are
not susceptible to direct or indirect enforcement by equity.
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agreements under which employees have rights to use and occupy premises of the employer
agreements under which building contractors have a right to go on land and build
agreements under which share-farmers have right to use land of owner
agreements under which boarders are entitled to use premise of owners of the boarding
establishment.
Court will not grant injunction to prevent wrongful revocation of a contractual licence in respect of
contracts for which the decree of specific performance not available.
NSW Rifle Association Inc v Commonwealth [2012] NSWSC 818
Facts: Pf occupies part of Anzac Rifle Range under lease given on March 2000. Anzac Rifle Range
located on Malabar headland. Commonwealth proposes to transfer Malabar to NSW for national
park. Lot 2, proposed to be transferred is a safety template for Pf. If it is transferred to NSW then
Pf will be unable to use rifle range. Commonwealth proposes to purchase separate land and
construct new rifle range. Until then Pf holds the current land under a deed of license made
between Df and Pf (from June 1999 to 2001 June). Subsequently Df issues three remedy notice
pertaining to breach of terms of contract by Pf requiring it to maintain buildings, fire
management plan, etc.
Issue: Whether Commonwealth entitled to evict Pf from Anzac Rifle Range and other associated
buildings? If not, then can Commonwealth transfer part of Malabar, known as lot 2, to NSW to
use as National park?
Ratio: Commonwealth did not act in good faith. Established in common law that if the party
exercising the contractual power acts reasonably in all circumstances, the duty to act fairly will
ordinarily be satisfied.
What is required and is purpose of a contractual notice is to be determined by terms of contract.
In present case, purpose of notice under Cl. 1.1(b) is to enable Pf to remedy an asserted breach.
That requires particularity of alleged breach and not specification of how it is to be remedied.
Commonwealth required Pf to do things which it was not entitled to require and it did not give
the Pf reasonable time to do it. So First Remedy Notice was invalid and so Df. Cannot terminate
license on basis of non-compliance.
Third Remedy Notice by Commonwealth requiring Pf to fix breach regarding Fire Safety
Management within 14 days not a reasonable act. It has admitted that not all of the breaches
could have been remedied within 14 days.
So none of the Remedy Notices were valid. The commonwealth not entitled to give valid notice
in respect of breach or breaches of the license that is not remedied after the Commonwealth,
acting reasonably, gives a notice under Cl. 10.1 (b) and such notice is complied with.
Pf is entitled to declaration sought in 2011 proceedings that deed does not contain a term that
may be brought to an end upon the service of a notice by the Commonwealth giving reasonable
notice of intention to terminate deed. Pf also entitled to declaration that license has not been
terminated. Entitled to declaration that Commonwealth not entitled to transfer land allotted to
Pf without securing to Pf the right to enforce against a transferee the right to transfer land that
it enjoys under license. So Pf entitled to an injunction to restrain Commonwealth from
transferring land without securing those rights.
Commonwealth can transfer the land that it owns to NSW. Commonwealth trying to invoke the
property rights transferred under contract to Rifles. Commonwealth did not act reasonably the
way they should have as per the contract.
Rifles wants (a) a declaration that they are entitled to stay and (b) an injunction. Contract law
says that Rifles has a valid contract with Commonwealth
Difference between Cowell and Rifles: In Cowell, it was too late for Cowell to get an injunction whereas
here not too late. In Cowell, only an oral contract but here formal deed which is a written agreement.
White also says in Rifle that the terms of document such that it is form of lease not just a license. Grant of
equitable remedies are discretionary and one major determinant is the fact that the license was kind of
lease. Plus White J feels that Commonwealth has not acted with clean hands as not followed the contract
commitments.
1.25 Licences and Third Parties
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If it is accepted that the contractual license may be irrevocable by the licensor then at least in
certain circumstances, the licensee may have some limited property rights in the land.
Held in Federal Airports Corp v Makucha Developments (1993) that where equity grants the decree
of specific performance of a license, then the licensee acquires proprietary interest in the land
beyond a mere personal interest to use the land in common with others.
Measure of full proprietary interest established when the licensee can enforce it against not just
against the grantor but independently against third parties/world. If license so enforceable then it
has endured proprietary character where it’s not just the right against a person but a thing (land).
King v David Allen & Sons, Billposting Ltd (1916) 2 AC 54 – House of Lords
Facts: Pf makes an agreement with Df in July 1913 to give it permission to affix bills and posters
to a wall on the side of a picture theatre to be erected on the premises. The license was to last
for 4 years from the date of erection of theatre and thereafter was terminable by either party. Df
agreed to pay GBP 12 as rent. Pf promised that while the license remained in force, he will not
grant permission to any other person to fix bills/posters. In Aug 1913, Pf agreed with trustee of
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 Pf had formed with Df. Trustee agreed that when new company
was registered, the company would execute the lease and ratify the agreement between Pf and
Df. In due course, company was incorporated and executed lease but agreement made with Df
was not referred to in the lease and its benefit not assigned to company. Theatre completed in
May 1914. When Df attempted to post bills on theatre wall, company forcibly stopped it. Pf, who
was the director of the company, protested against action of company. Could not honourably
keep the earlier agreement. Df commenced action against him to claim damages for breach of
agreement. Pf, while denying liability, applied to bring company as third party but his
application was refused. Court of Appeals of Ireland gave judgement in favour of Df.
Issue: Whether there was a breach of contract creating liability for damages or was there
proprietary interest held by Df to decree specific performance?
Decision: Appeal dismissed
Ratio: (Buckmaster Lord Chancellor) There is contract between parties creating contractual
(personal) obligation given for good and valuable consideration for certain time. It is beyond
reasonable doubt that anything beyond personal rights was ever contemplated by parties.
These rights were subsequently taken away by the company, who has been enabled to prevent
the Df from exercising its right granted to it by Pf. So Pf liable in damages, even if it was not his
will to do so. So dismiss appeal.
(Earl Loreburn) If agreement of July 1913, which was a license, was equivalent to creating
sufficient interest in land, then Pf did not break his contract in making the lease with the
company and would not be responsible for trespassing. But the document in itself does not
indicate creation of any proprietary interest in land. It is only a promise by Pf of allowing the Df
to put posters on wall. Pf now has altered his legal position w.r.t. control in land. To those whom
he has granted the lease have refused to allow the promised bargain to be carried out. So a
breach of contract.
Summary: The judges here established that Df did not have sufficient proprietary interest in the
land but mere contractual/persona interest. They hence could not demand a decree of specific
performance. The license to Df did not have proprietary interest to make it specifically
enforceable by third party (the company here). But since there was a contract that Pf breached,
he was liable to pay damages.
If the lease between King and company was made subject to condition allowing David to post, then King
could have enforced his right to have the company perform either through specific performance or
damages.
Thus, a license does not necessarily confer sufficient rights over the property to qualify as
proprietary right. Only proprietary rights are enforceable against third parties. Although contractual
license is revocable at will by the licensor, he may still be liable for damages in case of breach of contract.
This was the case above. Also, irrespective of whether or not the license was irrevocable against the
licensor and might attract remedy of an injunction or specific performance, it was still not enforceable
against the third party coz of absence of substantial proprietary interest recognised by law or equity.
Proprietary interest is not simply one which is enforceable against third parties (anyone beside licensor
or licensee) i.e. where licensee can bring action of injunction or specific performance against third party.
It is a distinctive measure of despotic dominion over a thing which absolutely excludes right of any
other individual. Hence, license is not a proprietary right coz licensee is given insufficient dominion
(power/authority) over the land. There is little legal concentration of power. Therefore, the law does not
allow this right, even when enforceable against licensor, to bind third parties.
Georgeski v Owners Corporation Strata Plan 49833 (2004) 62 NSWLR 534
Facts: Pf has license from Crown over portion of riverbank and abutting riverbed on Georges
River. In accordance with terms of license Pf builds a jetty and slipway on the Crown land. Even
though a fixture, but it is fixed to a degree that it is on crown land. Df held an easement of way
along western edge of Pf’s land down to the riverbank. Pf sought an order declaring her rights
over the jetty and slipway, and injunction prohibiting defendant from trespassing.
Issue: Whether license to the Pf from Crown provided sufficient proprietary interest in the
nature of a profit à pendre in the land to enforce it on third party (Df)?
Decision: Appeal dismissed
Ratio: (Barrett J) Pf holds right to occupation in contract but not proprietary right over land.
The claim for injunctive relief that the Pf is seeking is based on the premise that second and
third Dfs are capable of committing a trespass if they enter upon the jetty or slipway and are
legally precluded from interfering with her enjoyment of the jetty and slipway. Thus, the Pf’s
declaration that she seeks is based on existence of such exclusive proprietary right that is
inconsistent with an entitlement of the second and third defendants to use the jetty other than
for certain purposes. In Western Aus v Ward, McHugh said that a licensee whose occupation is
wrongly terminated or interfered with must sue in contract for some tort but not for trespass to
land. If wrongly ejected from land, the licensee cannot maintain an action in ejectment1. If
ejected by grantor, the licensee may be able to obtain an injunction restraining the grantor from
breaching personal contract. If ejected by stranger, then action in trespass or other tort. But in
neither of the two cases is action of ejectment or trespass to land available to licensee. This is
coz trespass to land maintainable only by someone who has a right to possession of land.
Between landlord and tenant, the tenant may sue for trespass. Between licensor and licensee,
where no right to possession involved, the licensor may sue for trespass except when license is
coupled with grant of an interest in land. The notion that the action of ejectment means that it is
not available to licensee does not imply that no remedy by way of possession can be granted to a
licensee not in occupation. Nowadays no distinct remedy of ejectment: Pf can sues for an order
of possession whether he is himself in occupation or not against a trespasser if that is a
necessary remedy to vindicate and give effect to such rights of occupation as by the contract of
his licensor. The Pf’s remedy whatsoever is strictly limited to what is required to make good his
legal right.
In Manchester v Dutton, Manchester in factual possession. Two judges felt that the only way you
can get remedy is through possession. The principle that only bring claim if actually in
possession or have right to possession is inadequate. Manchester had contractual right against
trust but not protestors.
Here the Pf has no legal right to possession in respect of the land. The license only confers on it
the permission of landowner to occupy the land for a stated purpose. Pf actually also not in
possession. The land is unfenced and open. Pf not allowed to construct a fence without
permission of landowner. The activity conducted on the land also not of the kind to require
absolute exclusion of others for right to enjoy. The Pf is, by the terms of the contract granting
her license, subject to an explicit requirement that she allows access by public over the land. She
was not in factual possession of the jetty. To say someone in possession, he/she should have
some degree of power to land. Here she was in posession coz not fenced, not residing, etc.
It can be said that in most circumstance, license will give rise to contractual obligations (personal)
and not proprietary right. This is in contrast to case of lease where the lessee might hold some
proprietary interest to seek remedy of injunction or specific performance.
Numerus Clausus: Both an easement2 or lease created by the parties would have qualified as a fullyfledged proprietary interest and would have then bound the incoming tenant. A license, by contrast,
does not come within the class of recognised proprietary interests.
Numerus Clausus Principle in Aus Property law, B Edgeworth (2006) 32 Mon LR 387
1
2
Ejectment is the common law term for civil action to recover the possession of or title to land
Non-possessory right to use and/or enter into the real property of another without possessing it.
Principle holds that landowners are not at liberty to customise land rights in a sense of reworking them entirely to suit their particular individual needs and circumstances. Rather, any
new right must fit within the firmly established pigeonholes. Principle applies regardless of the
terms of any agreement that parties might reach for the purpose of creating such an interest. So
this makes it irrelevant that a specific contractual arrangement to create wholly novel interest
might be free and fair, even if the objectives expressed in the agreement are mutually
convenient, highly desirable, or economically efficient.
Thus property law is highly prescriptive: system of rights in regard to things is strictly
circumscribed with a tight regulatory regime governing the range and form of available rights
over land. This is contradictory to contract law where the parties have the right to bind
themselves to any type of arrangement of rights and responsibilities. Contract law not as
restrictive as property law. Property law is not as much concerned with the rights between the
parties to agreement but rather those rights that are capable of binding third parties. So any
right that does not fit neatly into the categories of corporeal and incorporeal hereditaments is
prevented from entering the pantheon of proprietary interests.
Rudden said that numerous clausus refers to a restricted list of entitlements which the law will
permit to comprise as proprietary interest or “real rights”. He identified less than a dozen
categories of entitlement of land that confer possession, stated in descending order of interest –
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possessory estates (fee simple, life interest and leasehold): Fullest interest in land,
conferring possession for various periods of time (infinite to short-period)
servitude (easements, profits a pendre, and restrictive covenants): Follows estates.
Easement is a temporary access to property. E.g. when accessing someone's property to
enter to own land, govt. accessing private property for rail line, etc.
Restrictive
covenant where cannot do some development or use of land. Anyone buying a land takes
control of the restrictive covenant or easement.
security interests (mortgage, lien, floating charge, and other charges): Least proprietary
interest.
To be ranked as an interest in land, the right must fall within one of these categories. If not, it
fails to be enforceable as property. List also implies that contractual license does not qualify as
proprietary interest.
The objective of adopting a restrictive approach to creation of property interest in land was to
target three mischiefs:
(i)
To allow efficient use of land. Concern to maximise the uses to which the land can be
used. Public Policy reason. In 19th century, there were overlapping networks of
property rights and multiple layers of feudal obligations that impeded efficient use
of land. So economically efficient use of land required fragmentation of property
rights into smaller, discrete bundles capable of individual ownership.
(ii)
To ease the difficulty that confronts third parties who purchase the land.
Proliferation of number and range of rights will make conveyancing more complex,
time consuming and hazardous. Will result in high transaction costs for persons
wanting to acquire an interest in land.
(iii)
To maintain systemisation and rationalisation of common law. Undermines
consistency and certainty in law.
These number of interests is a balance. While there is a restriction on the number of types of
proliferations and interests, too little of them would not be an efficient outcome coz land used
for a variety of purposes.
1.33 Erington v Erington: Son has an equitable proprietary interest acc to Lord Denning. A contractual
license can give rise to equitable proprietary interest.
1.35 Property Rights and Rights of Persons
 Inlcudes rights that a person has over own body - torts (assault and battery), protection of
reputation through tort of defamation
 Right on body relevant in case of right over body parts, tissues, organs.
Moore v Regents of Uni of California (1990)
Ratio: To establish conversion, the owner must establish an actual interference with his
ownership or right of possession. Pf here has relied on the distinctiveness of the genetic material
to him and hence, his right to protect its usage. But court says that scientifically, this material is
same in everyone and not unique to Moore. Furthermore, the statute requiring destruction of
infected cells, organs and other parts for overall safety and protection. It is eliminating so many
of the rights that are ordinarily attached to the property. It cannot then be assumed that what is
left is the property or ownership for purpose of law. Thus, the subject matter of patent - patented
cell line and the products derived from it - cannot be property of Moore. Patented cell line is
factually and legally distinct from the cells taken from Moore's body. Federal law permits
patenting of organisms that represent human ingenuity but not naturally occurring organisms.
Moore's allegation that he owns the cell line and the products derived from it is inconsistent with
the patent.
Should conversion liability3 be extended?
Three reasons why inappropriate to impose liability for conversion here:
 Fair balancing of policy considerations with extension of tort
 Problems in this area better suited to legislative resolution
 Tort of conversion not necessary to protect patients' rights
While protection of patients' rights is important, it is important not to disregard research
activities of doctors etc who are engaged in tasks of importance to society. Since conversion a
strict liability tort, it will impose liability on all those in whose hands the cells come. Finally, no
need to impose strict liability as enforcement of physician's disclosure obligations will protect
patients against the type of harm with which Moore was threatened. As long as physicians
disclose research and economic interests that may affect their judgement, the patient is protected
from conflicts of interest.
The majority thus concluded that a patient retains no ownership interest in a body part once the
body part has been removed from his or her body. A rejection of conversion clause says does not
mean that body parts may not be bought or sold for research or commercial purposes.
As a result of historical slavery, strong principle in English law that no property of other in body.
Own person owns own body.
Two types of tort claims:
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Actions on the case - e.g. negligence, nuisance. Need duty of care, breach, cause,
damage/harm/loss. Need to establish damage to have a claim
Trespassory Torts - Need to prove possession that gives you right. To have claim, only possession
and interference needs to be proved not damage.
Conversion liability is a common law tort where conversion is a voluntary act by one person inconsistent with the
ownership rights of another.
Victoria v Taylor
Class Discussion: What df doing was not enough to cause interference with enjoyment of pf. Pf
could have erected higher fence. Unless direct interference, nuisance cannot be implied.
Principle idea is of direct interference.
Considers US line of authority on quasi authority on spectacle. One cannot own viewing of
spectacle.
Dixon starts with position that no cases similar to this case. Evatt says that no precedent so
cannot do either. But from cases it is clear that principle eminent in cases that can be drawn
relevant to this cases. Though with limitations.
Core principle here is preventing economic exploitation of someone's property or venture or
skill or effort. Though not in English law that some overlooking is permissible, but the principle
can be deduced from the cases referred. Here commercial benefit that company is making.
Equity has two jurisdictions:
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Exclusive - when right arises in equity. Equitable right (only equitable remedy such as injunction,
specific performance, equitable compensations).
Concurrent - when equitable remedy (injunction/specific performance) protects a legal right.
Fundamental premise of common law is reasonableness while of equity is consciousness.
ABC v Lenah Game Meats (2002)
Facts: Df processor of brushtail possums. Animal rights group enters premise, takes pics of
animals and ABC makes documentary. Df seeking injunction - issued by SC. Pf appealed
Ratio: Bringing claim for injunctions. Breach of confidence brought here is an equitable
claim/right. Breach of confidence is an equitable wrong designed for cases such as passing of
confidential company information. Key is that information ahs to be secret/private.
Tort of privacy: Gleeson says that tort of privacy does not rule in this situation coz although
breach of confidence does not cover this case but
Gross v Purvis [2003] : Elements for cause of action in invading privacy - Willed act by the Df
Which intrudes upon privacy or seclusion of Pf
- In a manner which would be considered highly offensive to a reasonable person
- Causes Pf detriment.
Traditional Classification and Terminology
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Distinction between real property (land) and personal property (chattel).
Real property categorised into - corporeal hereditaments (rights of possession or tangible real
property i.e. land), and incorporeal hereditaments (lesser rights over land or intangible real
property such as an easement of way entitling the holder only to walk through the piece of land
owned by another person).
This distinction between real and personal property is not on proprietary interest themselves but
on the objects of those interest.

Proprietary interest over land is distinguished from right over other things only coz of its
permanence and immovability.
Land and Realty

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
Different remedies in common law for recovery of tangible objects.
If someone dispossessed of something could recover the object back, then categorised as real
property. Objects not recoverable were personal property, wherein person dispossessed could
claim damages. Goods categorised as personal.
Only land considered tangible
Boundaries of Land
Above Surface
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Baron Bernstein of Leigh v Skyviews [1978] QB 479: Right of owner in air space above land to such
height as is necessary for the ordinary use and enjoyment of his land and the structures upon it.
Above this height, he has no greater right.
LJP Investments v Howard Chia Investments (1989) 24 NSWLR 490: Person not permitted to use the
land of another for considerable personal gain for himself simply coz his use of other person's
land causes no significant damage to other.
Bendal v Mirac Projects (1991) 23 NSWLR 464: Construction facilities and objects encroaching
upon air space above adjacent land constituted a trespass if they were of nature and at height
which would interfere with ordinary use of land by occupier.
Below Surface

Bulli Coal Mining v Osborne [1899] AC 351: Df who mined coal beneath land of another person
held liable for trespass. If own land with valuable mineral resources then have right to it.
Air Space rights
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Uniting Church in Australia Property Trust v Immer Pty (1991) 24 NSWLR 510: Transfer of right to
construct building higher than would normally be permitted by council planning laws permitted
in certain circumstances from one plot owner to another.
Depsun Pty v Tahore Holdings Pty (1990) 5 BPR: Plaintiff sells building to Df with an ancillary deed
giving benefit of floating floor space rights. Deed stated that rights given were proprietary but
court said that rights granted under deed were personal rights.
Chattels or Personalty
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4
Personal property divided into 'chattels real' and 'chattels personal' to accommodate for leased
land
Chattels Real: Leasehold interest and is designed to indicate both personal nature of leasehold
interest (as leaseholder cannot recover land but is limited to obtain damages) and proprietary
interest created in land.
Chattel Personalty: All other forms of personalty (goods, chattels, movable property, articles).
Subdivided into choses4 in possession (movable physical objects such as books, furniture, etc.)
(protected by the property torts) and choses in action (immovable such as patents, copyrights,
shares in companies, goodwill, etc).
Means 'things'.

These forms of property refer to rights exercisable over such things rather than things
themselves.
Boundaries between Land and Chattels: FIXTURES

Doctrine of Fixtures: Chattels, by virtue of circumstances surrounding their annexation to
land, may change character from personal to real property. Chattel affixed to land may
become part of it. Depending upon ownership of land, this may result in transfer of ownership of
objects affixed.
Authority: Circumstances and Intention - two factors to determine whether a chattel remains
personal property or real property (become part of land)
Belgrave Nominees Pty Ltd v Barlin-Scott Air-Conditioning (1984) VR 947
Facts: Df who removed air conditioning plants. Pf seeking mandatory injunction compelling Df
to deliver 2 air conditioning plants or pay damages for detention, conversion or trespass.
Action: Mandatory injunction or damages for trespass, conversion and detention
Issue: Whether annexation of plants to the buildings sufficient to constitute plant as fixture?
Decision: In favour of Pf
Ratio: Claim of Pf founded on CL principle that property in material and fittings, once annexed
to a building, becomes part of the freehold. Determination of whether plants were fixtures
depends on circumstances - how were they positioned and intention behind positioning
When article in question no further attached to land then considered chattel. But even in such
cases if intention apparent to make the article part of the land, then they do become part of the
land. Eg: Stones placed on top of one another without any mortar or cement to form a dry stone
wall become part of the land. But if same stones put on top of each other in form of wall only for
convenience would remain chattels. Hence intention behind having the fixture in the form it is
present important to determine if chattel or part of land.
Principle is that whether chattel has become a fixture depends upon whether it has been fixed
to land and for what purpose. If a chattel is actually fixed to land to any extent, by means
other than its own weight, then it is a fixture and burden of proof lies on one asserting that
it is not a fixture. If it is not otherwise fixed but is kept in position by its own weight then it
is not a fixture and burden of proof lies on anyone asserting that it is.
Test to determine whether chattel fixed to land is a fixture or not is intention. Whether it has
been fixed with the intention that it shall remain in position permanently or for an indefinite or
substantial period (then a fixture) OR whether it has been fixed with the intent that it shall
remain in position only for some temporary purpose (then a chattel). Intention gathered from
nature of chattel, relation and situation of party making the annexation vis-a-vis owner,
mode of annexation, and purpose for which fixed.
Here consider nature of plant, business of defendant, Pf as registered owners of building,
connection of chillers with pipes, and that plants fitted formed an essential part of the building
necessary for its occupancy as office premise. The circumstances must be such that they show
degree of annexation and object of such annexation. The plants were connected to water
pipes by means of bolts and nuts so there was a connection with building, even if indirect and
slight. Even slight fixing to land sufficient to raise presumption that a chattel is a fixture. Thus,
AC plants were intended to be fitted permanently to each building and were fixtures at the time
of removal.
In applying doctrine of fixtures, imp to look at circumstances of the case, including position in regard to
freehold of the person who is asserting that chattel now a fixture. In modern times, purpose or object of
annexation more imp than degree or mode of annexation.
Hobson v Gorringe:
May v Ceedive Pty Ltd (2006) 13 BPR 24
Facts: Pf stays with Df. When took up residence, Pf signed contract with respondent’s
predecessor. Contract says that house, not land on which it is situated, is the subject matter.
Contract also purported to lease land to May in return for payment of ground rent. Pf defaults
payment of rent and Df wants to evict him. M can get rental protection only if land not vacant i.e.
house a fixture. If house not a fixture, then land is vacant and so Pf not protected by security of
tenure provisions.
Issue: Whether house chattel or fixture?
Decision: In favour of Pf
Ratio: If an item affixed to land to any extent, other than merely resting on it by its own weight,
then presumed to be a fixture. Burden of proof lies on party asserting that it is not fixture. Here
house doesn’t rest on land by own weight but is affixed to land. Its removable involves
significant destruction of house. An imp factor is the intention. All evidence points to the house
being affixed with intention of it remaining in that position permanently or for substantial
period. All surrounding circumstances also suggest this. Hence house a fixture.
For exam, look at all circumstances of the case and then draw out contrast or similarities with the
cases (Belgrave-AC and Tapestry case)

It is imp to look at all surrounding circumstances of a case + intention of parties to determine if
something chattel or fixture. Same thing can be a chattel in one case and a fixture in another.
Hobson v Gorringe [1897]: King and Hobson enter into hire-purchase Contract. terms of contract that
engine will not become a fixture. But H has equitable intererst in it. King has legal interest. King enters
into debt with Gorringe (creditor) who has legal interest in the land. G won coz he was bonafide
purchaser.
Tenants Fixtures: In certain circumstances, CL held that a person who had affixed chattels to land has
the right to remove them, despite of them having been become fixtures, such as tenant fixtures.
o
Right to remove: When lease in force and fixture attached to land, lessor said to be the owner of
fixture subject to tenant’s right of removal. Tenant may remove fixture at any time up to expiry of
lease, unless lease prohibits or restricts the right. Right to remove after lease ends is unclear.
 If tenant of a lease for uncertain duration, for e.g. tenancy at will, then has
reasonable time after termination of tenancy to remove fixtures (exception to
general rule). When lease expressly states this right, then can remove within
reasonable time after termination of lease also.



If tenant remains in possession by virtue of new tenancy lease, then still entitled to
remove fixtures.
Tenant for fixed term cannot remove fixtures after expiration of lease term except
where a new lease was granted or where tenant remained in possession under
‘colour of right’.
Personal representatives of life tenant also entitled to remove trade, ornamental
and domestic fixtures (not agricultural fixtures) provided they remove it within
reasonable time.
Agricultural and Residential Tenancies: General CL rule that tenant’s right to removal does not exist
for agri fixtures. But NSW has modified to allow tenants of agri land the right to remove certain fixtures in
specified circumstances. Some provisions also entitling tenant to receive compensation from landlord at
determination of tenancy for specified improvements made by tenant to agri land. For residential
tenancies, general rule that tenant cannot affix or remove fixtures to residential premise without
landlord’s consent. But states have varied from the general rule.
Chattels annexed without permission: General rule that in absence of agreement, a person who
annexes chattel to owner’s land has no right to recover it (Brand v Chris Building Society Pty Ltd [1957] VR
625). Plaintiff wants an injunction and defendant wants cost . At that time no remedy for unjust
enrichment but now law has moved so remedy exists in CL (case of Victoria on page 82)
Previously did not exist, but case law developing for unjust enrichment where work performed on
property by tenant and landlord then compensates tenant for the cost incurred in improvement of land.
Compensation determined reasonable, not exceeding the enhanced value of property. Where tenant
makes improvement without inducement by vendor, then tenant is not entitled to compensation. If
landlord endorse improvement by advancing money to tenant, then tenant is entitled to compensation.
CHAPTER 2 - POSSESSION, SEISIN AND TITLE
Principle of Possession: Person in possession of land or goods, even as a wrongdoer, is entitled to take
action against anyone interfering with his possession, unless the person interfering is able to
demonstrate a superior right of possession.
Possession different from Ownership: Person in possession may not necessarily be the owner.
Types of Possession:
 Actual Possession (Possession in fact): Immediate physical contact with the property.
 Constructive Possession (Possession in Law): Extends possession to situations where the person
has no hands-on custody of the object. Where a person has knowledge of an object plus the
ability to control the object, even if the person has no physical contact with it. E.g. goods in
bank safety deposit. Although they do not have actual physical custody of these items, they do
have knowledge of the items and the ability to exercise control over them. Thus, under the
doctrine of constructive possession, they are still considered in possession of the contents of their
safety deposit box.
Goods: Categorised into real property (land) and personal property (personalty). Personal property
divided into chattel real (leasehold land) and chattel personal. Chattel personal divided into choses in
possession (tangible) and choses in action (intangible). Choses in possession capable of being held in a
person's physical possession.
Action for wrongful interference with goods (Possessory Torts - protect possession rather than
title or ownership of goods)
a. Trespass: When interference with plaintiff's actual possession. E.g. wrongful taking of goods.
Actionable without proof of damage.
 A non-owner in actual possession at the time of the taking can sue in trespass but an
owner not in actual possession either personally or through custody of servant or agent
cannot sue. [Pensfolds Wines Pty Ltd v Elliott (1946)]
b. Conversion: An unauthorised intentional act that deprives the person with right to possession
with his ownership or possession without his consent. Intentional act that is inconsistent with Pf's
dominion. Plaintiff's dominion implying factual possession or immediate right to possession. The
wrongdoer converts the good to his or her use and excludes the owner from its enjoyment. So
hence, there is an intentional denial a plaintiff's dominion over the good. To bring action,
important to show a degree of use amounting to employing goods as if they were one's own.
Remedy is damages.
c. Detinue: Defendant wrongfully retains the plaintiff's goods following his lawful demand for their
return. Retention following a demand by a Pf with factual possession or right to possession.
Plaintiff need not prove title or ownership but right to possession that must derive from some
proprietary or possessory interest in the chattel. E.g. - where defendant wrongfully took the goods
from the plaintiff's possession and refused to return them on demand (Conversion + Detinue).
Remedy is damages for detention + proprietary action for return of good/its assesses
value. At times can be only damages also when ordinary articles of commerce with no special
value or interest.
When claiming damages,


claiming direct loss (value of chattel) - claim in conversion
consequential loss - loss caused by not having the chattel for a period
If conversion dont have to prove that thing is unique. If detinue then have to prove that it is unique.
Title: Two kinds - (a) Absolute title based on acquisition of 'ownership' ; (b) Title born out of possession,
given by factual possession. Superior to absolute title.
Possession by Bailee - IMP
Person not owner of goods but has temporary possession over them as bailee.
 Bailment Without Reward for Specified Period (Gratuitous Bailment) or Until the Owner (Bailor)
Demands their Return (Bailment at Will): When possession without reward or consideration for
specified period of time. Bailor has right to regain possession at any time. Has immediate right to
possession during bailment. Both bailor and bailee have cause of action against wrongdoer who
interferes with the goods in bailee's possession (bailee in actual possession while bailor has
immediate right to possession)
 Bailment for a fixed period: Bailment for a fixed period as decided in agreement/K. During term
of K, bailee has actual possession and right to immediate possession of car. Bailor has right to
future possession at conclusion of hire. Action against wrongdoer can be brought only by bailee.
During terms of contract, bailee has actual possession and right to immediate possession of car;
bailor has right to future possession at the conclusion of hire.
For action in detinue or conversion, plaintiff needs to show that he/she had actual possession or an
immediate right to possession at the date of interference with goods or on date of demand for return of
goods. Future or reversionary rights not sufficient.
Bailor under bailment gives possession for a time to bailee. Bailee can sub-bail but that does not amount
to giving possession. Bailor cannot bring action in T/C/D unless in actual possession. Can be brought by
bailee if latter in actual possession.
Plea of Jus Tertii: Refer to right of a third party over goods in possession of non-owner. Where it is not
the bailor or the bailee who have the title but a third party with rights superior to that of bailor and
bailee. It is a defence available in property law, and it means that a plaintiff cannot bring an action
against a defendant if there is a third-party which has better rights to the property then him. Only
that third-party can bring an action.
Criterions for Jus Tertii - Goods stolen from A by B. C takes from B and B says you have trespassed my goods
then C can say that A has better title. C can show a better title than B if C can show that C is agent of A, A
assigned title to C, C has come to acquire a superior title to B
Jus tertii not applicable unless eviction by title paramount or authority of third person for bailor to act as
agency. Or if person has come to acquire a superior title to the second person. Case of Biidle v Bond Bond acting as R's agent. Once Bond discovered R had absolute title/better title than Biddle, seizure was
void. Biddle is a wrongdoer here. (2.25 - Read again)
Jeffries v The Great Western Railways Co (1856) 5 EI & BI 802
Facts: Pf bringing action against possession of goods by defendant. Bankruptcy order which
gives titles of trucks to group of creditors. Owen gives trucks to J. Df seizes the trucks. Df setting
up jus tertii claiming that at the time of seizure, goods belonged not to the plaintiff but persons
having title under Court of Bankruptcy. Seeking claim in conversion.
Ratio: Person possessed of goods as his property has a good title as against every stranger, and
person who takes these goods from him without title is a wrongdoer. This person/wrongdoer
then cannot defend himself by saying that there was title in some third person. Here Df was a
stranger to the title which they proposed to set up while Pf was in possession. Df seized the
goods, claiming them to be theirs, without any right on goods. Then jus tertii cannot be set up.
Also, Df admitted that they themselves had no title and was a wrongdoer when converted goods.
Thus, it is only the third party and not anyone else who can bring action under jus terii. The
defendant cannot set up jus tertii here against person in actual possession of property.
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Df would have been able to claim if Df were the agents for the creditors or if before they seize the
trucks, creditors would have assigned the title to Df.
Jefferies case used as authority to show that a defendant interfering with the Pf’s possession is
liable to pay in full market value of chattel without any deduction for the likelihood of true owner
taking steps to recover chattel from the Pf.
Mere contractual right to possession, in absence of prior actual possession or other
proprietary interest, is not sufficient to maintain detinue. E.g. A contracted to purchase goods
owned by B from C who at the relevant time was in actual possession of the goods. Contract did
not pass C’s property in the goods to A and A never took possession. If D wrongfully acquired



goods from C, A could sue in neither detinue nor conversion (coz he was not in actual possession
and did not have proprietary interest). D could successfully plead B’s ownership to defeat A’s
claim using jus tertii. By showing ownership of goods in B, D has demonstrated that A cannot
show immediate right to possession.
Even when Df brings action against Pf who himself is a wrongdoer as he acquired the
possession of the goods wrongfully, the Pf is liable for protection under the law. It has been
held that possession is entitled to same legal protection whether or not obtained lawfully or by
theft or by other lawful means. It vests in possessor a possessory title which is good against the
world. Even though this title is weak in case of stolen goods, but it is nonetheless a title that is
protected in the law. There is disinclination to recognise it on grounds of public policy but courts
have decided that even a thief is entitled to protection of criminal law against the theft from him
of that which he himself has stolen. The right of the thief here can be defeated only by the actual
owner with continuous rights.
Possession, however acquired, will find a title which will prevail against all claimants whose
rights are subsequent to those of the possessor. Conversely, it will be defeated only by those
who have the continuing rights which are prior to that of the possessor.
Possession not just evidence of ownership but effective ownership against the whole world
except someone who can prove a better title
CLAIMS BY BAILEE AGAINST A THIRD PARTY
The Winkfield (1902) P-42 Court of Appeal
Facts: Steamships collide and a portion of mail is lost. Postmaster claims to recover out of the
sum paid by one steamship to another the value of letters, parcels, etc in his custody as bailee
and lost on board. Postmaster-General is the bailee and owners of mail are the bailor. Claim of
negligence.
In negligence, need to show damage also. Can show that only if Pf has right to possession in
letters
Issue: Whether Postmaster liable for this claim?
Decision: Appeal allowed. Postmaster General given the claim to recover the loss.
Ratio: In action against a stranger for loss of goods caused by his negligence, bailee in
possession can recover the value of goods. Bailee might have a claim to an action by the bailor
for damages for loss. Bailee in constructive possession of letters. The bailee here can recover the
total value of the goods in an action on the case for their loss through tortious conduct of
defendant. Moreover, the wrongdoer who is not defending under the title of bailor is
unconcerned with arrangement and rights between bailor and bailee. He must treat the
possessor as the owner of the goods. Follows from Jefferies that the person who has possession
has the property in good title against every stranger and one who takes it from him without
having a title is a wrongdoer. Wrongdoer then cannot defend himself by saying that there was
title in some third person, coz against a wrongdoer, possession is title. Basis for claim here is
title.
In this case, the Df is the wrongdoer and so is not in a position to inquire into the nature of
limitation of the possessor’s right. The Df is liable to pay full damages to the Pf. The right of the
Pf to recover full damages cannot be made to depend upon the extent of his liability over to the
true owner. That discussion is irrelevant here.
Once bailee recovers damages, he has to account to bailor. But whether is accountable to bailor
or not before is not imp. His right to sue does not matter on accountability.
Bailor or bailee can bring action here. Not both.
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
Two people cannot be in possession at the same time unless they are sharing possession (p 150)
Possession is title against a wrongdoer which gives absolute and complete ownership.
Wrongdoer cannot bring action under jus tertii unless authorised to act by party with better
title. Possessor (bailee) here is entitled to receive back a complete amount for the whole loss
or deterioration of the thing itself.
General Rule: Damages in contracts and tort are compensatory
 Exceptions
 Above rule that bailee may recover full value of chattel even though not liable to
the bailor for loss
 Insured person who has been indemnified by the insurer for loss sustained may
bring an action against the third party
 Consignor of goods lost in transit could recover their full value notwithstanding
that title of the goods had passed to consignee before breach which caused the loss
and that the consignor sustained no financial loss. Not applicable when original
contract of carriage contemplated that the carrier would enter into a separate
contract of carriage with consignee.
In Bailment at Will/Gratuitous Bailment, Bailee has actual possession and Bailor has
immediate right to possession so both can bring action of T/C/D against wrongdoer.
In Bailment for Fixed Period, Bailee has actual possession and Bailor has right to future
possession so Bailor cannot bring action against wrongdoer only Bailee can.
Wilson v Lombank Ltd
Facts: Case of car bought by Pf from someone who did not have right to sell. Lombank takes the
car. Pf claimed damages for trespass
Ratio: Counsel for Df present that Pf not in actual or constructive possession of the car nor had
an immediate right to possession. Even if Pf had an immediate right, his claim was defeated by
the fact that the defendant returned the car to true owner. Pf claim on possessory title is also
defeated on proof of jus tertii. Counsel for Pf quotes speech of Lord Porter that when bailee has
possession and bailor has property, then bailee an sue in his right to possession and bailor can
sue in right to property. This holds true when bailor has no right to demand an immediate
return of the article at his will.
Hinchcliffe J Pf had immediate right to possession at all times as he could demand return of the
car at any time. Pf had a line of credit with garage implying possession. Df wrongfully took the
car and so Pf entitled to recover damages. Df’s delivery of car to true owner does not defeat the
claim of the Pf.
Textbook says the above case is good law only for narrow cases now. Narrow proposition.
Salmond on Torts (13th ed.) p 280 writes that
“the general principle is that the defendant cannot plead the jus tertii. Exceptions to this principle may be
placed in 2 categories: (1) if the Pf was in actual possession and even if the Df got possession of the goods
by trespass against the Pf then Df can plead jus tertii in three cases – (a) when he defends the action on
behalf and by authority of the true owner; (b) when he committed the act complaint of by the authority of
the true owner; (c) when he has already made satisfaction to the true owner by returning property to him;
(2) If Pf not in actual possession and relies upon his right to possession, he must recover on strength of his
title and proof of jus tertii destroys the only thing he relies upon.”
LAND
1. Absolute title
2. Possessory Title - If possessing land without consent of absolute owner, then have adverse possession.
After a specific period elapses, absolute title people cannot bring a claim against you. Adverse possession
does not convert it to absolute title but just bars the absolute title holder to bring the action.
2.46 Recovery of possession of land


Action of Ejectment: Common law action for recovery of possession of land. Functions to provide
a remedy to possessor of land in respect of damage caused by the intrusion of another person.
For this action, possession is imp. If land possessed but there has been an interference, then
action in trespass. But action of ejectment abolished in NSW and substituted by claim for
possession under s 20 Civil Procedure Act 2005 .
Mesne Profits: In recovery of possession of land, Pf wishing to recover the loss suffered due to
defendant's wrongful occupation of land can do so by seeking remedy of mesne profits. Includes
rental value of premise during the period of Pf's ouster. May be claimed in proceedings for
recovery of possession.
McPhail v Persons Unknown (1973) Ch 447 - Court of Appeal
Facts: Case of people entering the house to live there thinking that its vacant. Court made order
for owner McPhail to regain possession. Unknown people ask for 4 weeks.
Issue: When the owner of the house asks for an order of possession, whether the judge is bound
to make an order which is enforceable forthwith or can it be suspended?
Decision: Tenant given order of possession but extension of time on discretion of tenant
Ratio: Unknown persons without any colour of right over house/land were 'squatters'.
Squatters, who enter an unoccupied house/land intending to stay as long as they can, cannot
use the argument of homelessness to their defence. W.r.t. squatters, owner can take action
himself and take them out using reasonable force. But his action of not taking action but
resorting to court is lawful. (s 32 of Rent Act that says that where tenancy come to an end but
the occupier continues to reside in premise, it is not lawful for the owner to recover possession
other than by proceeding to court). In case of tenant, owner needs to go to court for order. Here,
court has power to give tenant's extra time. But not in case of squatters coz of lack of legal rights
compared to tenant + landlord has power of self-help (policy explanation).
They were trespassers who had not retained ownership. Courts are entitled to give rightful
possession to the owner.
Order for possession can be obtained summarily by the owner who can then seek writ to
possession giving authority to remove squatters. There is no provision in this writ of giving time
to squatters. The court so cannot give any time but the owner can upon his discretion. So the
owner should act with consideration and kindness.
2.51 Forcible Re-entry


Imperial Acts Application Act 1969 (NSW): Lawful for a person in peaceable possession of land
with a claim of right to use such force as he/she reasonably believes to be necessary to defend
his/her possession against another person whether entitled by law to possession of property or
not, subject to limited on the extent of bodily harm.
Legislation generally forbids re-entry without the tenant's consent except in accordance with a
judgment, order or warrant of court or tribunal given after notice to tenant.
2.55 Title in Actions to Recover Possession of Land


Jus Tertii w.r.t. land: When the defendant resists the plaintiff's claim to possession of land on the
ground that, although the plaintiff's claim may be better than the defendant's, there is an even
better claim in some third person who is not a party to the legislation.
Doctrine of Relativity of Titles: Idea that no such concept as absolute title to land but only
relatively good and bad right to possession.
Asher v Whitlock - Df is not entitled to resist a superior claim to possession on the ground that a
third party has an even better claim to possession. Possession is good against all except true owner
Facts: Thomas acquires land of manor. Dies after 18 years. Devises will to wife and then when
wife marries Whitlock, passed to daughter. Wife dies and Whitlock occupies. Then daughter
dies. Daughter passes to heir (Asher) who brings action against Whitlock for occupying.
Decision: In favour of Asher as she holds the right of possession. Action can be brought only by
the rightful owner here (landlord) and not Whitlock.
Ratio: (Cockburn CJ) Possession good against all the world except the person who can show a
good title. Here, Thomas the possessor. That is an interest he could have passed by will and
brought action of ejectment against defendant. Now the right passed on to Asher. Df has not
acquired any right to possession title by length of his stay. Lord of manor who had better title
here is the only one who could have brought action but he did not. So a stranger then cannot
disturb possession.
(Mellor J): In case of proving a claim to landed estate under a will, proof of will and of
possession or receipt of rent by testator (person who has written and executed his last will) is
prima facie evidence. Source of Pf's proprietary interest was seisen5 rather than possession.
Here Thomas was in possession and Asher is now. Possession is good against all except rightful
owner. In absence of any evidence that he was not seisin of land, law treats him as seisin of land.


In the case above however, the defendant did not show or prove that actual title was of the lord of
manor. Otherwise could have relied on Jus Tertii.
Authority for Jus Tertii: Doe d Carter v Barnard (1849) 13 QB 945; Perry v Clissold (1907) AC 73
Privy Council
Perry v Clissold (1907) AC 73 Privy Council
5
Seisin - Title recognized by the feudal system which gave absolute title + possession
Facts: Clissold takes possession of piece of land without any title. Owner unknown. Perry
(Minister) compulsorily acquires land under name of Crown to build school. Clissold wants
compensation. Clissold collected rent, paid taxes, and land stood in his name in municipality
books. HCA held that land in possession of Clissold
Decision: Favour of Clissold
Ratio:
 Clissold is an adverse possession i.e. possessory title with peaceable ownership.
 Cannot be disputed that a person in possession of land in the assumed character of
owner and exercising peaceably the ordinary rights of ownership has a perfectly good
title against the world but the rightful owner.
 If rightful owner does not come and asserts title through process of law within
prescribed period, then his right is forever extinguished and possessory owner acquires
absolute title.
 So title to Clissold here has become absolute in absence of true owner. So need to pay
the compensation
Allen v Roughley (1955) 94 CLR 98:
1880 - Cusbert in possession
1895 - HC dies and makes will. Life estate given to William and remainder to children.
1937 - Old trustees die and new trustees are Allen (son-in-law) and Roughley (son).
1942 - William dies
1950 - Allen in possession
Decision: Favour of Roughley
Ratio: Possession of land good title against all but the true owner/Person with better title
Prior possession defeats later possession.
2.64 Relativity of Titles under the Torrens System
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Torrens System: Establishment of a register that authoritatively records, subject to limited
exceptions, the state of title to the land.
Real Property (Possessory title) Amendment Act 1979: Inserted Pt 6A where a person who has
been in adverse possession of land in circumstances which would have extinguished the title of
the holder of the fee simple estate had the land been old system, may apply to the RegistrarGeneral to be registered as proprietor of the fee simple estate.
Nature of Possessory Title
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Defined by Toohey J in Mabo v Queensland (1992) 175 CLR 1: Possessory title is the group of
rights which result from possession but which survive its loss, including the right to possession.
Ejectment – The relationship between possession and title: To show a title that would defeat
defendant in possession, the Pf in ejectment had to prove right to entry; the defendant could rely
on possession. Therefore, the plaintiff was put to proof of the strength of his own title and could
not rely on the weakness of the defendant’s title of possession. Thus possession gives rise to
rights, including the right to defend possession or to sell or devise interest.
Defendant in possession acquires seisin even if possession acquired tortiously. But the last
possessor only in any succession would enjoy the entitlement.
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Possession of itself gives rise to not title which survives dispossession i.e. in the absence of any
other factors and regardless of the length of time, as between mere possessors, prior possession
is a better right.
Possession is protected against subsequent possession by prima facie right of entry: In losing
possession, the plaintiff loses the right associated with possession, including the right to defend
possession as well as an estate in the land. However, this does not upset the presumption that the
Pf’s possession and his fee simple were lawfully acquired and hence good against the entire
world. It is held that ‘possession is prima facie evidence of seisin in fee simple’. Thus, although a
dispossessed Pf in ejectment must prove the strength of his/her own title and cannot rely on the
weakness of the Df’s title, the presumption of lawfulness arising from prior possession is positive
evidence.
o It then follows that a person’s title arising from prior possession can be defeated either by
a defendant showing that he/she has a better, because of older, claim to possession or by a
defendant showing adverse possession against the person for the duration of a limitation
period.
Possession different from Occupation in law: Occupation a question of fact. In some cases,
person in occupation is not the possessor of land e.g. where occupier is the agent of the possessor.
But in the absence of circumstances showing possession held by someone else, it may be
presumed that occupier of land is also in possession. Conduct required to prove P or O will vary
according to circumstances including whether claimant enters as a trespasser or as of right.
Nature of land will also dictate the use that might be made of it. In case of Winkfield, even if PG not
in ship but he was in possession of the mail.,
Limitation of Actions
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Applicable law in NSW – Limitation Act 1969 (NSW)
In summary, possession of land or good, of itself, generates a proprietary interest, recognised
and protected by the legal system, although the possessor will be forced to yield to a person
with a superior title or interest. In all CL jurisdictions, statute has the effect that a possessory
interest will, after the lapse of a certain period of time, develop into the best interest in the world.
E.g. – A holds fee simple estate but dispossessed by B. B may be ousted at the suit of A. But if B
dispossessed of land by C (another possessor), B has proprietary interest sufficient to enable him
to regain land from C. (Asher v Whitlock (1865)). Now, when A dispossessed by B then A’s right to
sue B for possession of land expires after elapse of specified period. B will then hold interest
effectively enforceable against whole world. Hence, B’s interest here becomes superior to A just
because the only person with a superior title has become incapable of asserting that title. (s 6368A Real Property Limitations Act 1833)
2.69 Rule of Adverse Possession6
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6
Possession without paper owner's consent - When in factual possession and intention to
possession (intention to have the degree of physical control as under factual possession)
Bars claim against everyone - owner also. Highest degree of possessory title. Person with
documentary title is barred from getting claim. Against everyone. Torrens recognise them as
documentary owner.
Adverse possession is a doctrine under which a person in possession of land owned by someone else may acquire valid
title to it, so long as certain common law requirements are met, and the adverse possessor is in possession for a sufficient
period of time, as defined by a statute of limitations. (Source: Cornell Uni Law School website
https://www.law.cornell.edu/wex/adverse_possession)
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Held in Marquis Cholmondeley v Lord Clinton (1820) that person who has omitted to assert his
right within the prescribed period should lose his right in order to avoid exposing the parties to
interminable litigation.
Policy arguments for having principle of limitations - ensure certainty of title, putting an end to
litigation, protecting those in possession from stale claims, encourage holders of documentary
title not to sleep on their rights, facilitating a conveyance of the land in event when documentary
title holder of land not available, facilitate investigation of title to unregistered land (last two
points may not apply under Torrens system). Encourages land owners (owners of Documentary
title) to monitor their land and eject squatters.
Concerns that encouraged Aus to allow adverse possession (AP): Initially not allowed but later
allowed to resolve problems arising from missing owners and informal conveyancing. E.g. in
Vitoria and Tasmania, land sold without conveyancing formalities or abandoned if no buyer. Some
land bought and sold off the register over decades, by occupiers who paid rates and taxes. But
land acquired through possessory title not accepted as security against loan from bank. So such
land mostly remains underdeveloped.
AP and Good Faith: Cases when person taking possessory title is in fact the true successor to the
last documentary owner but lacks documentary proof. Limitation of law of AP that it does not
distinguish between trespasser and person who takes possession under colour of right. No legal
requirement that a person in AP believes that he/she entitled to the land. But some jurisdictions
have stricter conditions for AP, to ensure that AP of land in good faith not intentional wrongdoing.
AP and Human Rights: Concept of AP and principle of limitations challenged on grounds of
inconsistency with human rights pertaining to protection of property rights. Protocol 2 of
European Convention for the Protection of Human Rights and Fundamental Freedom (ECHR)
provides for peaceful enjoyment of possession by the legal person. Role of state in rightfully
enforcing law to control the use of property in accordance with general interest or to secure
payment of taxes or other penalties. An interference with the right to the peaceful enjoyment of
possession must strike a fair balance between the demands of the general interest of the
community and the protection of the individual's fundamental rights. These provisions of
protection of possession in accrodance with human rights also provided under Human Rights Act
2004 (ACT) and Victoria's Charter of Human Rights and Responsibilities Act 2006 (Victoria).
(Page 143).
Limitation period for action in NSW for action to recover land is 12 years. If AP claim against
Crown then it is 60 years
Commencement of Limitation Period


12 years - time starts running from day 1 when possessor takes possession.
Commences from the time the relevant cause of action accrues. But circumstances in which an
action accrues not specified. This is ascertained from the pre-existing rules of the common law.
J A Pye (Oxford) Ltd v Graham (2003) AC 419 House of Lords
1983: Grazing agreement of Graham with JA expired. Agreement gave license to Graham to
departure cattle and cut hay in JA's land. He kept land enclosed and locked. JA asks Graham to
vacate. Graham does not. Graham makes multiple requests to renew licence but they go
unanswered
April 1984: Grass cutting agreement which gave consent to Graham to be on land
1984-1986: Time when dispossession started.
30 April 1986: Date of dispossession (12 years before - limiation)
1998: Claim brought
1999: JA sought possession against defendant, the legal personal rep of Graham
Issue: Whether the defendant in possession of land for a period of 12 years during which JA was
excluded? Two aspects to this - First, did Pf discontinue possession or was it dispossessed of
disputed land before 30 April 1986; and if so did Df thereafter remain in possession of land for
12 years?
Ratio: Action brought in 1998....12 years before the date of claim is 30 April 1986. There was
consent till August 1984.
Df seeking to establish possessory title on land. Pf holds documentary title. Established that as
long as the Df occupying land with the consent of the documentary title owner (Pf here), Df
could not be treated as having dispossessed Pf. Ouster by the squatter necessary to establish
dispossession.
Person without any paper title to possession must show both factual possession (custody and
control) and requisite intention to possession (custody and control). Intention being deduced
from physical acts.
Factual possession: Appropriate degree of physical control - single and exclusive
possession. Can bring claim in trespass. Single possession or on behalf of persons jointly.
Sufficient degree of exclusive physical control depends upon circumstances, such as nature of
land and manner in which land of that nature is commonly used/enjoyed. Needs to be
shown that alleged possessor dealing with land as an occupying owner might have been
expected to deal with it and that no one else has done so. Df here in factual possession. Pf
excluded by hedges and no key to gate. (page 150 Justice Slade)
Intention to possess: Based on circumstances where the person is entitled to show an intention
to possess not to own or trespass land. Intention to exclude everyone including the paper
owner, if he is not the possessor, as far as practicable. Intention of the squatter not of the
owner. If act are open to more than one interpretation and he has not made intention clear to
exclude the owner as best as he can, the courts will treat him as not having the requisite
intention and consequently not dispossess the owner. (Read Brambell B on page 151) If paper
owner intends to use land in a way and paper owner knows it and does in line with it then it
indicates squatter does not manifest an intention to possess. But if he does otherwise then it
shows intention to possess. Intention of paper owner (Pye) does not matter but squatter
intention to possess does unless Pye can point some modification in behaviour of squatter
which shows that squatter not intending to possess but only temporarily occupying land or if
there is consent between paper owner and squatter.
Legal possession - factual possession with intention to possess. Graham dealt with land exactly
the way they dealt with their own farm (Manor farm).
So basically focusing on ownership is not correct for possession. It is not the necessary
condition to establish possession.
Summary: Clear that factual possession. Squatters will willing to pay plus intention that they
Australian Counterpart of the Above Case - English practice not followed in Aus
Whittlesea City Council v Abbatangelo (2009) 259 ALR 56
Facts: Df bought land that effectively enclosed Pf's unregistered land n three out of four sides.
Df used from 1958 to 2004 for various purposes - cleaned, pest free, mowed grass, etc. without
any contribution from Pf. Pf bringing action against Df. Trial judge said Df in adverse possession.
Issue: Whether the trial judge erred in finding that the respondent entitled
Decision: Appeal dismissed
Ratio: Limitation of Actions Act provides for no action by any person to recover land after
expiration of 15 years from the date the right accrues - person's title to land extinguishes. Basic
principles of possession (Powell v McFarlene):
 Paper Owner with right to possession unless some other person can establish a better
title
 Non-paper owner - Factual possession (physical control) and intention
o Intention made clear to everyone to exclude world at large, even paper owner,
which shows intention to exercise exclusive control for own benefit. If his acts
open to more than one interpretation, then intention not clear and hence, not
possessor. No ambiguity in displaying intention. (Point of animus possidendi Imp definition of intention)
o presence of enclosure. More rigid the enclosure, stronger the evidence
(strongest possible evidence of AP).
o Intention based on objective inquiry
o Intention not to own but to possess
 Should be no gaps in possession
 Acts of possession in a part of land = acts of possession in all land claimed
 The use to which the possessor puts the land to should not just be special benefit (such
as grazing, playing, the interest of the adverse possessor cannot be abandoned;
 No requirement that the use to which the possessor puts the land to be inconsistent
with the paper owner's present or future intended use of land.
Here, Df in exclusive possession for 15 years without consent of Pf = Factual possession.
Inconsistency in usage not necessary. Df presented required degree of control and exclusivity.
Special benefit: Proximity of the possessor to disputed land means that she will be able to put
that land to a variety of uses and derive greater benefits, including special benefits such as
grazing, vegetation. In such a case of proximity with possessor's owned land, best to take
advantage of physical characteristics of land that compliment own land. Special benefit and
exclusive possession not mutually exclusive. Possession to be more than trespass.
2.86 of Book - IMP
Adverse Possession Claims to be Part Parcel Adjacent to Boundaries
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Part parcels of land - boundary strips of land adjacent to the boundary of the adverse possessor's
land as conveyed.
In NSW, adverse possession only for whole parcel of land except for residue lot which is not
vested in council
Part -parcel adverse possession in NSW only through special legislation
If a landowner who mistakenly believes himself to be the documentary owner of a boundary strip,
provided that the landowner manifests the intention to possess the mistake does not prevent
acquisition of title of strip by adverse possession.
Possession of Part of Lot
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Constructive Possession: Where a person has knowledge of an object plus the ability to control
the object, even if the person has no physical contact with it.
If AP's usage of only part of surface of a lot, then he has been able to establish constructive
possession of the whole surface i.e. if possessed part of surface, then can possess whole
depending upon circumstances
Future Interests
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
Right of action of the holder of a future estate is deemed to accrue on the date on which the estate
falls into possession.
If A has life estate and B has fee simple. A dispossessed by X. B's cause of action will accrue on A's
death and B has the full limitation period from that date. But X's possession from A till the time of
A's death will be counted in the 12 year period.
Equitable Estates

Three distinguishable situations:
A. Right of action accrues to the holder of an equitable interest against the trustee. Trustee is entitled to
claim benefit of any statute of limitations to the same extent as if he/she had not been a trustee, except in
case of fraud. Beneficiary has 12 years to bring action
B. Cause of action accrues to the trustee against beneficiary. Beneficiary is absolutely entitled and is in
possession to the exclusion of the trustee, the statute may run against trustee.
C. Where right of action accrues to the holder of an equitable interest or his trustee against a stranger
who has taken possession. Here general rules of limitation period will apply.
Adverse Possession by a Co-Owner
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Co-ownership - General rule that time begins to run out when one co-owner takes possession of
more than his or her share of the land, rents or profits.
Paradise Beach Transportation v Price-Robinson [1968]: SC held that R and U were in possession
for their own use and benefit, and that respondent's title was extinguished.
Wills v Wills [2004]: Where PC held that the wife who left her husband in sole possession of home
and another joint property and in sole receipt of the rents was found to have discontinued
possession or been dispossessed for the limitation period.
Successive Adverse Possessors

B dispossesses A but after 10 years of adverse possession is ousted by another adverse possessor
C. General rule that time of B and C can be added to extinguish A's title. But who has better
between B and C? (refer to Mulcachy v Curramore [1974])
1. A in adverse possession for less than 20 years and then abandons property, then true
owner has his title to same position. Later owner who then enters property cannot add the
time of A to his time to extinguish title of true owner
2. When series of persons in adverse possession by virtue of transfer of possessory title for a
total period of 20 years, then true owner's title is extinguished and last successor gets the
title against all world including true owner
3. Where series of adverse possessor's not deriving title from each other but in possession
for a continuous period will result in extinguishing title of true owner. Abandonement by
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any one adverse possessor followed by a break in time when land is not in possession of
some person adversely to true owner will restore the title of true owner.
If a, b, c, d, e are successive trespassers who have been in AP for the required period, then title
exists in the first of successive trespassers - a. Final trespasser - e - who is in possession at the
time when the true owner's title is extinguished would have the title in fee simple good by virtue
of possession against all world except a, b, c, d. But of any of them abandoned, then title of e
exists against whole world including one who abandoned but not those who did not abandon. .
(IMP read this properly - page 168)
Stopping Time Running
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Time stops running when:
o Person having the cause of action effectively asserts his title OR
o When squatter admits existence of superior title by acknowledgement or part payment of
debt
Ofulue v Bossert [2009]: Squatter made without prejudice offer to purchase property.
Documentary owner refused offer. Proceedings lapsed. Owner claimed that running time
interrupted by commencement of proceedings and by squatter’s acknowledgement of title. But
HoL held that when proceedings permanently stayed, time will not be considered to have been
interrupted by commencement of proceedings.
Chapter 4 – Equitable Property
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Land - Property may be acquired by taking possession of it and without consent or through
consensual transaction with previous owner (sale or gift) or without consent (e.g. when person
goes bankrupt, dies without will, etc.)
Chattels – Acquisition through possession varies from case to case. But it is mostly only when the
person takes possession of the animal that he acquires them to seek legal protection against third
parties.
Manufacture or Creation of Objects – Original proprietary interest of manufacturer. If goods
owned by A are changed by B by manufacturing process into an entirely different object, then new
object owned by B.
Patent, Copyright and Trademark – Protected through statutory code regulating patents,
copyrights, trademarks.
Contract for sale of an interest (leasehold/fee simple/life estate) in land
o Exchange - Contract is written and signed by purchaser to be charged (party against
whom trying to enforce. Normally purchaser seeks specific performance so vendor should
have signed). S 54A of Conveyancing Act gives purchaser equitable interest subject to
conditions that court of equity will grant specific performance. Purchaser pays 10%
deposit. But needs to comply with Conveyancing Act (NSW) s 54A (read this) (need
formalities that it should be written and signed by party to be charged. Charged means
party against whom you want to enforce the contract should be signatory. If enforced
against vendor, then they have to be the signatory.). Purchaser has equitable interest with
right to get specific performance conditional that he can show his ability to pay balance
amount on due date or vendor has got out due to some unforeseen circumstances.
o
o
Settlement - Balance of purchase price (90%). Purchaser gets legal interest in old system
through deed of conveyance and in Torrens system through registration. Almost same
procedure but different formalities.
Legal title transferred to Purchaser
Consensual Transactions with Proprietary Interest
 Sale– Even where statutory formalities are absent, equitable doctrine may determine that the
purchaser has acquired equitable interest in the property.
o Goods: Codified law. No formal requirement for transfer of legal title in the chattels.
o Land – Legal and Equitable Interest: In case of sale of fee simple interest in land, there is a
time lapse between making of the contract and passing of legal title by the vendor to
purchaser by conveyance7 or registered transfer. The time lag between sale and
settlement (conveyancing) allows vendor to make arrangements to vacate possession and
purchaser to investigate title and arrange finances.
o Formal requirements for the passing of legal interest in land: Depends on whether
land held under the old system or Torrens system
 Torrens: Duly executed transfer requires proper registration for transfer of legal
interest in land.
 Old System: All conveyances or disposition of legal interest be made by deed – a
document signed, sealed and delivered.
 Delivery requires some conduct by the person executing the deed which
indicates an intention to be bound by its terms.
 Evidenced by grantor passing possession of the deed to grantee, but
delivery of land may occur even while grantor retains possession of the
document.
 Deed may be delivered in escrow, in which case it takes effect only when a
condition is specified.
 When delivered in escrow, it cannot be recalled by the person executing it
but if condition on which it is to operate is not performed, then it will
never take effect.
 A document bearing the words ‘signed, sealed and delivered’ will not be a
deed if there is not sufficient indication that it is intended to be a deed or if
it does not comply with the substantial requirements for a deed
 Deed needs to be attested by one witness who is not party to the deed
o Formal requirements for contracts for the sale of land; equitable interests arising out of
enforceable contracts:
 There are two parts of sale of land – (a) enforceable contract for sale of land; (b) settlement
through transfer of legal title. Latter has more documentary requirements than former.
 Equitable Principles: A contract may create equitable interest in land that parallels legal interest.
After contract, purchaser pays some amount as deposit (10%). This creates his equitable interest.
This creation of equitable interest fractures the legal title of previous owner.
 Express Trust: Trustee is a bare trustee to act as a trustee for the beneficiary in respect of
property. Not a complete trustee coz does not have to act in the benefit of the beneficiary all times
as he holds lein over the land till all money paid off.
Bunny Industries v FSW Enterprises (1982) Qd R 712; SC of Queensland
7
Document used to convey legal title of land to purchaser
Facts: Pf contracts with first Df to buy land. First Df sells and transfers land to X. Pf seeks
declaration that the first Df held the proceeds of sale on trust for the Pf and an order for
payment of the proceeds.
Decision: Appeal allowed
Connolly J: Traditional principle that from the time when contract for the purchase of an estate
is entered into, the vendor is a trustee of the estate for the purchaser. According to an equitable
principle, the making of the contract to an extent transferred the beneficial ownership to the
purchaser. Deceased holds a position between a bare trustee and mortgagee for the purchaser.
If purchaser fails to pay the remaining amount, deceased takes over the absolute control of
property.
Vendor in progress towards trusteeship and incidents of trusteeship exist only if and so far as a
court of equity would in all circumstances of the case grant specific performance of the contract.
Principles for sale of land:
1. On execution of contract, the vendor becomes a trustee for the purchaser. But he does
hold substantial and personal interest to the extent of the unpaid purchase money. He is
progress towards bare trusteeship and finally becomes a mere trustee when the whole
of the purchase money is paid and he is bound to convey.
2. The purchaser may devise, alienate and charge his equitable interest so that it is not
merely a right in contract.
3. Extent of equitable interest is measured by the amount of the purchase money paid.
4. Where a clear undisputed K, 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
5. Incident of trusteeship exists only if and so far as the Court of Equity would in all the
circumstances of the case grant specific performance of the contract
The fact that under the contract for sale of land, the vendor becomes a trustee for the purchaser,
subject to the purchase money paid so far, is true only if and so far as the Court of Equity would
under all circumstances of the case grant specific performance of the contract.
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 could have been given, then the vendor
either never was or has ceased to be a trustee.
Here, the respondent was in a position of a trustee for the plaintiff. The content of the trust
allowed the Pf to get specific performance from Df. But specific performance is no longer
possible as land has already been conveyed to another party. The Df wrongfully repudiated the
contract and the Pf was entitled to a decree of specific performance. Equity would have
intervened to prevent conveyance of land in breach of contract and registration of transfer. But
for the Pf to get specific performance, he would have been required to pay the balance amount
to Df. It is clear that when the Df entered into the second contract of sale and when he
completed the contract, he was a trustee of the estate for the Pf and so must account to the Pf for
his dealings with the trust estate in breach of trust.
Held in Lysaght v Edwards (1876): Vendor is a constructive trustee for the purchaser of the
estate from the moment the contract is entered into.
But vendor has rights of his own till he has not been paid in full. Vendor is a trustee for the
purchaser only to the extent to which the purchaser had paid the purchase money. (The
relationship between Pf and Df is like that in a constructive trust). Even if the remedy of SP is
available, it does not follow that the purchaser is entitled to the equivalent of conveyance
without demonstrating his own ability to perform his own obligations.
Here, not possible for the court to grant SP as land has already been conveyed to another person
but it is sufficient to show that an order for SP would have been available to the Pf at the time
when the Df entered into contract with the other party.
Thus, Df here dealt with land in breach of trust and is accountable to Pf for his dealings.
How is trustee a mortgagee? In old system mortgage, bank from where purchaser takes loan holds legal
interest in land and purchaser has equitable interest referred to as equity of redemption (opportunity to
redeem the legal title of land). Purchaser will have to pay off mortgage to bank to get all legal title. Legal
title merges with equitable title once he gets legal title. So here the vendor is like a mortgagee where he
transfers legal title of land to purchaser once all money paid. Purchaser loses equitable interest if the
purchaser defaults, cannot pay the remaining amount and the bank sells it to bona fide purchaser for
value without notice.
Lysaght v Edwards: Specifically enforceable contract of land confers an equitable interest on the
purchaser of the land and the position of the vendor is somewhere between a bare trustee for the
purchaser and a mortgagee who in equity is entitled to possession of land until final price is paid. Vendor
holds the right to retain any profit or rent in land till sale complete. If something unforseen happens to
the land between the time of sale and the time of completion of the purchase then it is at the risk of the
purchaser.
Equitable Doctrine of Conversion: Equity deems as done that which ought to be done and therefore,
regards the contract as having been effectively implemented. When will Equity take this view?


When contract enforceable (formalities required under Statute of Frauds have been done)
No bar to the award of equitable remedy to enforce agreement
This view that after an enforceable contract, the vendor becomes a trustee to the estate for a bona fide
purchaser and is liable for his dealings with the trust property in case of breach of trust is applicable for
the sale of:
o
o
o
o
the fee simple estate in land +
enforceable agreements for the grant of a lease +
easement +
Any other legal proprietary interest in land
Although equity characterises the vendor in a specifically enforceable contract as a constructive trustee,
with the purchaser as a beneficiary, not all features of the trustee-beneficiary relationship apply.
Tanwar Enterprises Ltd v Cauchi (2003) 217 CLR 315: SC of Queensland (IMP)
Facts: Contract of sale of land made between parties but was not executed on the due date. Date
of completion was postponed and decided that time of essence (means it is essential, the other
party has right to terminate if the obligation breached). On the date, international money
transfer of the fund delayed and representative promised that would be available the next day.
Next day, funds available but vendors gave orders to terminate contract. Pf issued order seeking
specific performance of contract arguing that it had equitable interest in land and was entitled
to relief against forfeiture (equitable interest should not be forfeited).
Judges: Reference to the above equitable principle in Lysaght, later stated by Kitto J that ‘to an
extent’ the purchaser does acquire the beneficial ownership upon entry into the contract. The
principle also suggests that:
o The purchaser had before completion an equitable interest in the land which would be
protected against loss consequent upon termination of the contract
o Failure to complete the contract on the due date did not bar the intervention of equity to
order specific performance
Held in Dagenham Co that equity would relieve the purchaser from the operation of an essential
time stipulation and from the forfeiture if the time provision was inserted as a penalty to secure
completion of the contract at the purchaser’s risk of loss of equitable interest in the land under
the executory contract. Implies Equitable remedy is at the discretion where it should not be
unfair to either party. Depends on circumstances in which equitable remedy will be granted.
Equity considers done what ought to be done and the principle is effective only in so far as the
Court of Equity would, in all circumstances of the case grant specific performance of the
agreement.
Case of Stern: Held that interest of purchaser is commensurate with the availability of SP. Eq.
interest only if Court of Eq. will grant SP. But this comes under question when the vendor
terminates the K for failure to complete as required by the essential stipulation. So here the SP
is not available so eq. interest is defeated. Hence, bedevilled by circularity. Reliance on interest
does not assist as there is circularity.
In the case, issue of circularity did not arise coz court did not grant SP
Also when purchaser entered into the agreement with the bank does have the risk that the
money may not come on time.
Decision: Here there was no breach of contract by vendors and the contract was terminated in
exercise of a contractual right to do so. So there was no equity found here for the Pf.
Ziel Nominees v VACC Insurance (1975): If house bought by purchaser is burnt before completion of
sale, then purchaser not entitled to receive the benefit of an insurance policy taken out by the vendor.
HCA held that if the vendor has received the purchase price of the property, he no longer had any
insurable interest in it and is not entitled to any indemnity for damages. So the vendor holds no right
under the policy to assign to the purchaser.
In NSW, changed by Conveyancing Act 1919 sec 66J – 66O: risk to damage of land should not pass to the
purchaser until the transaction is complete or until the time stipulated by the parties. If land damaged
after making of a contract for sale of land and before passing of the risk to purchaser, purchaser may
serve notice in the vendor withdrawing the contract, or if he still wishes to continue with purchase then
price to be reduced.
Insurance Contracts Act 1984 (Cth) s 50: damage occurring after a contract of sale, providing that the
purchaser is deemed to be insured under the vendor’s contract of insurance.
Df mortgages the land while awaiting completion of sale under contract: Held in Shanahan v Fitzgerald
[1982] that no term preventing vendor from mortgaging the land could be implied into the contract,
unless the circumstances such that this would put it beyond the Df’s power to complete contract or it can
be shown that the Df intention for mortgaging was to not complete the contract.
Walsh v Lonsdale (1882): Court of Appeals
Facts: Case of agreement to lease where the Pf failed to pay rent to Df. This lease never became
legal lease as did not comply with legal requirements of lease. Another lease contains a covenant
that rent paid in advance. Df issued order for selling tenant’s goods to cover arrears. Pf claimed
action, seeking injunction restraining Df from selling under distress and SP of lease.
Tension between equitable and legal lease. Under legal lease can get (a) CL right and (b) CL
remedies (damages) and equitable remedies (injunction); equitable remedies gives equitable
right and only equitable remedies. So here there is a fusion fallacy coz Df trying to get legal
remedy for an equitable lease
Decision: In favour of Df. Appeal Dismissed
Ratio: An agreement for a lease may be as good as formal lease but only in equity as it creates
equitable interest. Implies that only court able and willing to decree specific performance will be
able to execute this but a court which lacks equitable jurisdiction cannot. In equity, the court will
treat it as a formal lease and therefore, protect rights of both parties, including the right of the
landlord to recover rent.
Pf holds the property under an agreement for lease, implying that even in equity he holds it
under the same terms as if a lease has been granted and thus relief is capable of being given by
SP. Here the Pf and Df both hold rights and are protected in the same way as lease had been
granted. So being a lessee in equity, the Pf cannot complain if the Df is exercising his right of
distress. It will not be right to take the only means that the Df has to secure his rent.
Raises fusion fallacy - enforcing equitable right with common law remedy (IMP). Years to
rent in advance was under equitable lease but the remedy they were seeking of getting damages
was a common law remedy. So fallacy coz can get equitable remedy under common law but not
common law remedy under equitable lease.
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Above case suggests that sometimes an agreement for a lease is as good as a formal lease.
But such interest is liable to be defeated by a bona fide purchaser of the legal estate for value
without notice.
4.33 - Walsh shows that agreement to lease as good but Chan v Cresdon says that not always. But
enforceability of equitable interest narrower than legal interest. Here the agreement to lease was
equitable but its enforceability will be narrower than that of a legal lease. Also holder of equitable interest
is likely to be defeated by bona fide purchaser of value without notice.
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Chan v Cresdon (1989): Case exemplifies the difference between equitable lease/interest
and legal lease/interest. Distinction between an equitable and a legal lease. Cresdon made
agreement to lease to S. Chan was the guarantor of S's (fault in book) obligations under the lease.
S defaulted rent. Cresdon took proceedings against Chan to enforce the guarantee. HC held Chan
not liable coz guarantee operated only in respect of obligations under lease. Effect of agreement to
lease is only to create an equitable interest between lessor and lessee. Also, according to law S
acquired tenancy at will terminable at one month’s notice. Lease was not registered. 'under the
lease' was reference to the legal lease which never came into force. Neither the obligations
imposed by equitable lease nor those imposed under statutory provision came within the
language of the guarantee.
A court which lacks equitable jurisdiction cannot grant equitable remedy of specific
performance on the assumption that a court which has equitable jurisdiction will grant it.
(Foster v Reeves [1892]). Following Walsh, most states have conferred jurisdiction to grant SP on
intermediate courts but subject to monetary limits
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Equitable interest arises only if he is entitled to SP of agreement. If not then cannot be granted.
When granting proprietary interest, equitable relief is only available where legal remedy is
inadequate. Specifically in cases of contract for sale of land due to the value of land. But this has
been held for chattels also such as taxi cabs with license coz of the value of the license and hence
HC granted specific performance (Dougan v Ley).
Equitable Doctrine of Part Performance
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Doctrine of Part Performance: When contracts not signed for sale of land but nonetheless lead to
the parties being bound in equity under the doctrine of part performance.
Mason v Clarke (1955) AC 778
Facts: Df an yearly tenant in Pf's estate. Pf has an oral contract with Df to hunt rabbits on his
part of the estate. Df prevents Pf from exercising these rights under the oral agreement. Pf sues
seeking injunction to restrain further interference and damages for trespass (trespass coz Df
interfered with Pf's exercise of rights and caused him damage).
Decision: Appeal upheld.
Ratio: Pf's acts were a part performance of the oral agreement. His acts and the expense he
incurred referable to the oral agreement. At the time, Pf had a contract specifically enforceable
against Df for the grant of profit a pendre and hence entered into possession.
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Maddison v Alderson: In case of part performance, the Df is charged for the equity that results
from the acts done in execution of the contract. In such a case Court is not asked to give common
law remedy but equitable remedy which has arisen due to part performance . Certain elements
necessary to raise equity in part performance:
o Acts relied on must be referrable to the agreement as that alleged so as to show that it
could be done with no other view but to perform such an agreement
o there should be some contract of the general nature that was alleged to be performed
o Circumstances in which act done should be considered. Possession should not be a mere
permission but a contract
o Should be done by the party relying on faith of the agreement and other part must have
permitted it to be done on that footing
o Must be done by party to the agreement
o Shown that there was a completed agreement
o Act done under the terms of the agreement by force of that agreement
Kingswood Estate v Anderson [1963] QB: Tenant going into occupation is evidence of part
performance. Here there was an oral agreement for tenancy but the Df went into occupation and
was issued a rent book. The evidence of part performance can be sufficient to warrant admission
of oral evidence to prove the exact terms of the contract. Not necessary that PP be referrable to
the particular agreement. In this case, the evidence proved that part performance was within this
principle. (A liberal view than in Aus)
But Aus adopts more restrictive approach to doctrine of PP
McBride v Sandland (1918): Involved oral contract for sale. Held that acts of part performance
must be referrable to some contract of the general nature of that alleged. Different from the
liberal view taken in Kigswood v Anderson.
Mortgage by Deposit of title Deeds: The act of lender taking physical possession of the
borrower's title deed in exchange of money is effective to create a mortgage in equity. The deposit
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of title deed regarded as evidence of an agreement to enter into a mortgage. Deposit of deed
considered part performance by both parties sufficient to take the oral agreement outside Statute
of Frauds.
Other examples of part performance: Improvements to the property made by the lessor at
request of lessee. Payment of purchase price and making improvements or taking possession of
land in case of contract for sale of land. But only paying purchase money is insufficient.