PROPERTY FINANCE LAW NOVEMBER 2011
1.
a.Objects of property are the resources of value over which property
rights are claimed. The range of resources that can be recognised as
proper objects of property is significantly large. Objects of property are
continuously redefined by the changing social, economic and political
contexts, which defines what resources should be considered valuable
to human survival. Property has been claimed over the following
resources, Land, Movables and the like
These examples reveal one important fact: the limits to resources that
can be made objects of property are fixed not by the "thing likeness" of
particular resources but by orthodox legal doctrine.
A "subject of property" is a person who has legally recognised rights
over an object of property. There may be more than one subject of
property in respect to a particular thing.
b.A distinction should therefore be drawn between a "subject of
property" and an "owner" of property. A person described as an owner
is just one example of a subject of property and the term owner is used
to describe a subject who has a larger claim over the thing. It should
be noted that not everyone is recognised as a potential subject of
property. The society, through law, always defines who should be a
subject of property by setting out conditions that must be met.
Essentially, the conditions relate to the following matters: Mental
capacity; Physical maturity; Economic reliability, i.e., bankruptcies are
excluded; Legal capacity.
Kelvin Grey notes that key to the recognition of a resource as a proper
object of property is the "excludability" of the resource that is to be
made an object of property. A resource is excludable if it is physically,
legally and morally feasible to exclude other people from accessing its
benefits.
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The concept of ownership involves the parcelling of mutual rights and
obligations to different resource users. These rights can be allocated to
different subjects. For example, a landlord will have the right to have a house
registered in his name, and also the right to dispose, the tenant will have the
right to use and possess, the estate agent will have the right to manage and
control. What this means then is that all these people are subjects of the
same property. However, not all of them are owners of the object. Ownership
vests in the landlord.
2.
Jonathan works at the Department of Lands in Thukuta District. He
fraudulently acquires property by falsifying registration documents at
the Lands Department into his own name. Upon deliberations with his
uncle John, they design a scheme whereby Jonathan would sell the
property to his uncle at a nominal purchase price. Advise whether John
would be treated as a ‘bonafide purchaser for value’. (15 marks)
3(a).
Briefly explain any five key property rights. (10 marks)

Right to legal title versus duty not to assume title (e.g., the
offence/tort of conversion)

Right to use versus duty not to interfere or not to use without
permission (the offence/tort of trespass)

Right to possess etc

Right to exclude etc

Right to dispose etc

Right to benefit etc

Right to be included etc
3(b). Freehold estate is not distinct from leasehold estate. Discuss this
statement.
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Freehold estate
If one considers estates as the duration that a person is allowed to stay
on land, then the longest period of time in which a person may be
allowed to stay on land is called a freehold estate. Types of freehold
estates are fee simple, fee tail and life estate. The estate in fee simple
denotes tenure of unlimited duration. It is the longest period a person
can be allowed to stay on land. As was stated in Walsingham's Case,
"he who has a fee-simple in land has a time in the land without end or
the land for time without end." A freehold estate in fee simple is the
equivalent of full ownership.
The tenant of an unencumbered estate in fee simple has, without
question, the largest possible bundle of rights exercisable with respect
of land. Because it is an estate of infinite duration, the owners of a fee
simple may come and go, but the estate remains. The second type of
a freehold estate is called a fee tail estate (or an entailed estate.) Its
duration is limited to the life of the original grantee or any of his lineal
descendants, thus providing an ideal means of retaining dynastic land
within the family. The last type of freehold estate is called life estate. Its
duration is limited to the life of the original grantee. If it is conveyed to a
stranger, it will expire at the death of the original grantee.
Leasehold Estates:
We have seen that the fee simple, the fee tail and the life estate are
the three freehold estates. We should, therefore, turn to examine the
second type of estates: the leasehold estates. Suppose that T who is in
England acquires a fee simple estate in Chantunga after the death of
his father. He, however, has no immediate plans to develop the land.
But he knows that if the land remains idle for some time, the
department of physical planning will put him to task. He then enters
into an agreement with Y to occupy the land and develop it as long as
Y is paying an annual amount of K10, 000.00.
This arrangement was entered between the parties and was intended
to be binding on them. This is no more than any other contract. By this
agreement, T has created an estate in the land. But this is not a fee
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simple nor a fee tail nor a life estate. What has been created is called a
leasehold estate. The leasehold estate has the following two most
important characteristics: firstly, it indicates the holder's (tenant's)
duration in the land, and, secondly, the tenant is able to recover the
land from anyone who dispossesses him. To distinguish it from the
freehold estates noted earlier, the lease is sometimes referred to as a
"non-freehold estate."
4.
Briefly explain the property relationship that prevails between joint
tenants. (15 marks)
(a)
Right of survivorship: In cases like these, there is a joint ownership
of the object and the right of survivorship exists between the subjects,
meaning that on the death of one, his interest will pass to the surviving
co-owner(s).
(b)
Four unities: in order for co-owners to hold as joint tenants of
property, there must be four unities, viz.

Unity of interest: all co-owners must hold the same interest in
land.

Unity of title: all co-owners must acquire their title to land under
the same document.

Unity of time: all co-owners must acquire their interest at the
same time.

Unity of possession: all co-owners must have the right to
possession at the same time and not in exclusion of the other (s).
(c) Severance: A joint tenancy or personalty or realty can be severed
by an assignment (or agreement to assign) by one of the joint
tenants of his share; whereupon the assignee becomes an owner in
common.
The statement of the rule is that: "a bona fide purchaser for value of a
legal estate without notice, actual or constructive, of an equitable
interest to which the property acquired is subject takes free of that
interest."
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The defence of one being a bona fide purchaser was commented
upon in Pilcher-vs-Rawlins to be "an absolute, unqualified and
unanswerable defence" that once it proved, will apply immediately.
Bona fide: This aspect can be given two interpretations. Firstly, it means
that the purchaser must have had no notice of the existence of the
equitable interest or right and, secondly, he must not have been
actuated by "fraud or sharp practice." The second interpretation is
derived from the requirement that he who comes to equity must come
with clean hands.
Lord Wilberforce, in Midland Bank Trust Co. Ltd., -vs-Green [1981] AC
513, noted that the purchaser's plea must be "genuine and honest."
Purchaser: Purchaser in this respect is a technical term which means
and covers any mode of acquiring property excluded by the
operation of the law, (i.e., under intestacy rules.) But through the acts
of another or own acts and also include persons who have received
under a gratuitous transfer.
For value: 'value' here means any form of consideration (including
money), which would be a valid consideration in the law of contract.
It should be borne in mind that the purchaser needs not to give the full
value. As in the law of contract, the actual value of the consideration is
irrelevant.
SECTION B
5.
Possession is one of the central aspects of any theory of ownership. It
has been noted that possession has three distinct and separable
elements, that is, physical possession, legal possession, and the right to
possess. Discuss
Physical possession: essentially, this means physical control of the
object of possession in fact. It is an important incident in law and in any
theory of ownership. Indeed a person can have physical possession of
an object without having any claim whatsoever. This gives expression
to the right to exclude the whole world. For instance, in cases of finding
the physical control and the intention to exclude the whole world
becomes relevant in cases of finding.
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Just to give an example here: suppose A finds a bag full of money. He
then goes to his friend B and tells him about it. Both A and B goes there
and B carries the bag home to his house. He then refuses to share the
money with A. The question of who has physical control over the bag
will play a central role in resolving a dispute between the parties as to
who is the owner of the money in the bag.
Legal Possession: this is possession in the eye of the law. It arises in three
circumstances: firstly, when a person has both physical possession and
title to an object; secondly, when a person has physical control and an
intention to exclude the whole world, i.e., a thief. Lastly, it arises in cases
where an abject over which a person has legal title are in the hands of
his servant. In the last case, the servant has mere physical possession or
custody of the goods and it is the principle who has the legal
possession. Here legal possession exists in the absence of physical
possession.
Right to possess or to have legal possession: this is a right which is left to
a person who has lost either physical possession or legal possession of a
chattel by agreement or through the wrongful act of another, as in the
case of theft and conversion. Or it is a right of one who is entitled to but
has never obtained possession, as is the case of a person who has paid
the purchase price of goods bought but has never had possession.
Whilst possession is indivisible, that is, it is single and exclusive, the right
to possess is not exclusive. Hence, one is possession of an object at the
will of the owner has a right to possession as against all but the owner,
whereas the latter has a right of possession against everyone. (15
marks)
Mortgage
A mortgage is the transfer of an interest in property (or the
equivalent in law- a charge) to a lender as security for a debtusually a loan of money. While a mortgage in itself is not a debt,
it is the lender’s security for a debt. It is a transfer of an interest in
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land or the equivalent from the owner to the mortgage lender,
on the condition that this interest will be returned to the owner
when the terms of the mortgage have been satisfied or
performed. In other words, the mortgage is a security for the loan
that the lender makes to the borrower.
(5 marks)
6.
A popular music artist has released a platinum single entitled ‘ndifuna
mbewa zanga’. The artist has been informed that there are copyright
and related rights that confer various rights upon him. Explain, in
sufficient detail, the relevant legal rights to maximize the artist’s
commercial exploitation of the hit song. (20 marks)
Copyright and related rights
Copyright can be viewed as a 'bundle' of rights which a subject of
copyright (i.e., an author, artist, musician, composer, performer,
dramatist, broadcaster etc) has over an object of copyright. This
bundle contains a number of exclusive rights and some of them are:

Right of reproduction;

Right of distribution;

Right of adaptation;

Right of translation;

Right to communicate a work to the public;

Right to be mentioned as an author of a work;

Right not to have a work adversely altered or in any other way
used in a disparaging manner;
The right of reproduction is generally considered as the most basic right
under copyright. Suffice to mention that the rights listed above are
exclusive: in other words, copyright vests in the holder of the rights "an
exclusive property right in the work against all persons."
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Section 3 of the Copyright Act (Cap. 49:03)
Because of its restrictive aspect, a copyright is said to be a "negative
right." Copyright subsists for a defined period of time. As noted in the
introductory remarks, no system of intellectual property protection
favours a perpetual restriction on the activities of third parties over
something.
Under section 13 of the Copyright Act, protection is "for the life of the
author and for fifty years after his death," etc.
One fundamental principle in copyright law is that there is no copyright
in ideas, but only in their expression.
In Whelan Associates Inc.-v-Jaslow Dental Laboratory Inc. [1987] F.S.R. 1
(Fleet Street Patent Office Law Reports) it was held that copyright
protects works and not ideas.
For one to have copyright, he must satisfy all the requirements of the
law. Copyright is owned quite independently of the ownership of the
physical material that reproduces it, e.g., the owner of the manuscript
of a play is not necessarily the owner of the copyright in the play. As to
the right of the owner of a copyright:
Copyright infringement
Copyright infringement involves doing any of the prohibited acts which
the law reserves for the copyright holder. In other words, it involves the
infringement of the exclusive rights of the copyright holder. These rights
include:
(a)
Reproduction/copying;
(b)
Adaptation;
(c)
First publication/issue of copies to public;
(d)
Letting/offering copies for hire;
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7.
(e)
Performance in public;
(f)
Broadcasting;
(g)
Communicating to public;
(h)
Authorisation - applies to all exclusive rights;
(i)
Altering a work in a disparaging manner;
Hillview Estates limited owns 400 hectares of land in Mchinji and their
title dates as far back as 1929. The Magwembe family forcefully
occupied 2 hectares of the land at the dawn of independence in
1964. The Magwembe Family has remained on this land to date. During
a talk on the local radio station, the family now believes that they can
acquire the land by way of adverse possession. Explain the meaning
and justification for adverse possession. (20 marks)
Adverse possession is a mode of transferring rights in land. It is a special
feature of land law and has no equivalent in personal property law
and intellectual property law. The central feature of adverse possession
as a mode of transferring property rights in the idea that, if an owner of
property fails, within a specific period of time, to secure the eviction of
a squatter from his land, and upon certain legal conditions being
present, his own title in the land is extinguished and he is therefore
statutorily barred from recovering possession of the land.
In short, long uncontested possession of land effectively confers a valid
title upon land on the actual occupier irrespective of the way or
manner he came and regardless of any "formal or documentary
period of ownership." If it were not so, and according to K. Grey, "every
grantor of land would be required to trace his title back to the Garden
of Eden." This mode of acquisition of property rights in land is the laws
attempts to reflect long and uncontested realism that (and to quote
Oliver Wendell-Holmes:
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"In the nature of a man's mind, a thing which you have enjoyed and
used as your own for a long time…takes root in your being and cannot
be torn away without your resenting the act and trying to defend
yourself, however you came by it."
Justification of Adverse Possession
There are a number of arguments that have been advanced to justify
this mode of acquiring property.
a) Possession, Title and Ownership: The first justification of acquisition of
property rights by adverse possession relates to English property
law's notion of the three most important concepts in any property
systems; possession, title and ownership. In English property law,
possession and title are not discrete concepts and possession on its
own serves as prima facie evidence of title and hence ownership
against the entire world but one who has a better title. The law on
adverse possession transcends this notion and says that after a long
uncontested possession, the better title is even extinguished and the
possessor stands not only against all, but even he who had a better
title.
b) The pre-eminent position that the English property law accords to
de facto possession ensures that there is no such a thing as
"absolute title" to land. And hence, even a person who is said to
have absolute title is liable to have the register of title rectified to his
prejudice in certain circumstances. In short, title in land is relative.
Hence, title of the present paper owner, however secured through
registration and documentation, is liable to be defeated when
unexercised for a long period of time.
c) Those who sleep on their rights: Underlying this mode of acquiring
property rights is the laws refusal to come to the aid of a certain
class of applicants- those who sleep on their rights or those who fail
to help themselves. According to K. Grey, the law here gives effect
"to some pragmatic expectation, born in the more physical climate
of earlier times, that a property owner will rise with rigged fortitude
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to asset his title against unlawful intruders. These people should
always be reminded that their neglect has allowed a "gradual
dissociation" between themselves and what they claim and the
"gradual association of it with another. And as was put in R.B.
Policies at Lloyd's v. Butler "those who go to sleep upon their claims
should not be assisted by the courts in recovering their property."
d) A devise for certainty and predictability: The law of adverse
possession also is a legal devise that ensures certainty and
predictability which ultimately confers security. The gospel here is
that "there must be an end to litigation." After a period of time, the
actual possessor who has had peaceful and uncontested
possession should be conferred title irrespective of the way he
came by it. If it were not so, and according to Grey, for sure "every
land owner would live under perpetual shadow of apprehended
repossession at the behest of some earlier and more meritorious
claimant of title."
Thus, as was noted by the Land Reform Committee of England,
certainty of title to land is a social need. Critics of adverse possession
have labelled it "title by theft or robbery" or "a primitive way of
acquiring property without paying for it." But to this, all we can say is
that with time, the guilty will be erased and the blame will always go
away.
e) The active should be rewarded: Adverse possession also rewards
those who are constructive and economically active at the
expense of the sluggish.
8 (a).
Compare and contrast the terms ‘detinue’ and ‘trespass to goods’.
(10 marks)
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Detinue: this is a wrongful retention of goods after the person entitled
to possession has made a demand for their restoration. From the
definition, it is apparent that there are similarities between detinue and
conversion. But detinue is distinct from conversion in two major ways:
firstly, in detinue there is no actual denial of the plaintiff's title. Secondly,
an action for detinue is appropriate where the Plaintiff is actually
claiming the return of the goods and not damages, as is the case with
conversion.
Trespass: trespass to goods consists of any legally unjustifiable act of
direct physical interference with the chattels in the possession of
another. Trespass, unlike conversion and detinue, is actionable per se.
The action of the alleged trespasser must be either willful or negligent.
And here the burden of proof is on the plaintiff.
Leitch (Williams) Co. Ltd v. Leydon [1931] A.C. 90
Just like detinue, trespass can be committed without any denial of the
plaintiff's title to goods. Trespass lies only in favour of a plaintiff who has
possession or the immediate right to possession.
8 (b).
Mary Jere is a renowned prolific athlete and wears jersey number
9. She wants to register a trademark styled ‘MJ9’. Advise Mary.
(10 marks)
The most important requirement for a registrable mark is that it must be
distinctive, in the sense of being suitable for distinguishing goods or
services with which its owner has some business connection from those
of others. Section 14 (2) provides that distinctiveness means "adapted,
in relation to the goods in respect of which a trade mark is registered or
proposed to be registered, to distinguish goods with which the
proprietor of the trade mark is or may be connected in the course of
trade…'
This requirement is logical because the very purpose of a mark is to
distinguish the goods of one trader or businessman from those of others.
Section 14 of the Trade Marks Act lists essential particulars which must
be present before a trade mark can be registered. These are:
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(a)
The name of a company, individual or film represented in a
special or particular manner.
(b)
The signature of the applicant
predecessor in his business.
(c)
for registration or some
An invented word(s)
(d)
A word or words having no reference to the character or quality
of the goods and not being, according to its ordinary signification, a
geographical name or surname.
(e)
Any other distinctive mark; but a name, signature or word or
words, shall not be registrable except upon evidence of its
distinctiveness.
From the foregoing, the basic principle is that the mark must be
"adapted to distinguish" goods or services with which the proprietor is
connected in the course of business or trade from those with which he
is not. From what is stated in section 14, a distinction must be drawn
between non-word marks and word marks. It is also important that the
mark is not deceptive. There are two kinds of deceptiveness that call
for separate treatment: firstly, deceptiveness may be due to the fact
that the mark is identical or closely similar to that of another trader or
businessman; or it may create a misleading impression in some other
way about the goods sold under it or the services provided.
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