Lecture 10
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PERSONAL PROPERTY
Other units
2
 Equity – choses in action
 Commercial Law – sale of goods and security over
personal property
 Competition and Consumer Law – consumer sale of
goods
 Intellectual Property Law – intangible property such
as copyright, trade marks, designs, patents
Real and Personal Property
3
 Personal property lies on the border of property / no property
 Land is permanent and immovable: The primary
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importance of
land historically has been for its use and for the status that it gave
rather than as a commodity to be traded to increase wealth
Personal property has traditionally been viewed as moveable,
tradeable and valuable only in monetary terms. Goods can be
physically transferred from hand to hand, may deteriorate over
time and are often fungible.
Personal property usually has a limited lifespan
Different means of transfer or real and personal property
require different rules
Different remedies
Personal Property
4
Personal Property
Chattels real
Chattels personal
Choses in
possession:
tangible
Choses in action:
intangible
Pure intangibles
Documentary
intangibles
Chose in possession v chose in action
5
R v Hawcroft [2009] ACTSC 145
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The accused was charged under s 89 Crimes Act 1900 (ACT) with
230 counts of theft of sums of money after she had misappropriated
the proceeds of a trust account of which she was the trustee.
The ‘property’ of the beneficiaries that she had stolen was a chose in
action not a sum of money
Kingdon v Western Australia [2012] WASCA 74
 Unicomb v Official Trustee in Bankruptcy 99 FCR 1

The passing of a resolution to demutualise a credit union was not
sufficient to vest any enforceable contractual right in the applicant.
Thus no chose in action arose at that time meaning that shares which
were to be later issues were not available to the a bankrupt’s trustee
in bankruptcy as they were not “property” at that time.
Further classification
6
 Choses in action may be further sub classified as pure
intangibles or documentary intangibles.
 Examples of documentary intangibles:
 documents of title to goods (for example a bill of lading)
 documents of title to payment of money (negotiable instruments)
 Documents of title to negotiable securities (eg, bearer bonds).
 Pure intangibles include:
 debts,
 goodwill, and
 intellectual property
 Personal property may be held at law or in equity
Fundamentals of Personal Property:
Ownership and possession
7
 the transfer of possession of personal property without
a corresponding transfer of ownership may create a
bailment, or, if the purpose of the transfer of possession
is to use the property by way of security then it may
create a pledge,
 ownership without possession will allow a creditor to
retake (repossess) an asset if the person who has
possession becomes bankrupt
 the transfer of ownership without a transfer of
possession gives the possessor rights over the goods
which may end up with the owner losing their ownership.
Ownership and Possession
8
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Ownership
The doctrine of tenures does not apply to goods; subject
to social controls it is possible to own them absolutely
Legal title to goods is indivisible but more than one legal
title may exist.
Title can be held concurrently either as a joint tenancy or
a tenancy in common
In common law countries, although not in civil
jurisdictions, ownership can be split into legal and
equitable title
‘Interest’ is the quantum of the right to an asset
‘Title’ is the strength of that right as against others
Gatward v Alley (1940) SR (NSW) 174
9
Jordan CJ: 178 – 180
“A good title to property, in the sense of such ownership as the law
allows, consists in having the legal right to exercise with respect to it
all such rights, as against all such persons as by law are capable of
being exercised with respect to property of the class in question. A
person who has possession of property but not ownership has, as a
general rule, the same legal rights as the owner, save to the extent to
which those rights are qualified as against the owner
...
De facto possession of a chose in possession is prima facie evidence of
ownership, and also of itself creates a legal right to possess which is
enforceable against anyone who cannot prove that he has a superior
right to possess: any person who interferes with this legal right,
without being able to prove a superior right, is therefore a wrongdoer”
Possession – why is it important?
10
 it is a root of title good against the whole world except
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the true owner.
it will form the basis of some security interests such as
pledges and liens and will also be important for bailees.
possession will often be the element that decides who
owns ‘found’ property.
it is an important element in the making of a gift
it applies only in the case of physical property ie that
which is capable of possession. Purely intangible
property cannot be physically possessed.
possession or a right to possession is a necessary
precondition for the granting of some remedies, such as
conversion
Possession
11
 It is possible to have possession in fact (de facto possession)
and/or possession in law (de jure possession).
 Possession has a physical and a
mental aspect
SS Tubantia
“Possession is not limited simply to physical possession or custody of
tangible property. Legal possession also denotes a state of mind where
the person in possession of tangible property (or goods) regards him or
herself as having exclusive control over the goods and this entitled to use
those goods free from interference by other persons”
 Pollock and Wright, An Essay on Possession in the Common Law
(1888)
Possession
12
 Possession may mean different things in different contexts
F H Lawson and B Rudden, The Law of Property (2nd edn,
1982)
‘Now in certain circumstances, although a person’s possession
passes the ordinary tests applied by the average layman, a
judge may think it improper to accord such rights to a person
whom an average laymen would not regard as a possessor; or
again he may wish to vary the concept depending on the
function it is to fulfil. Thus if money and heroin are slipped
into someone’s handbag unawares, the owner certainly has
possession of the money as against a thief, but not of the drug
so as to incur criminal liability.
Possession
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“Delivery is favourably construed, taking is put to strict
proof”
a) of what kinds of physical control and use the thing in
question is physically capable’
b) with what intention the acts in question were done,
c) the knowledge and intention of other relevant people,
Moors v Burke (1919) 26 CLR 265
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 Moors was charged with having possession of stolen
property. Was the property in his ‘actual’ possession
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“Possession is proved by various acts varying with the nature of the
subject matter. But exclusiveness is essential. That, of course, does
not mean that several persons may not in concert have and exercise
that exclusive possession as against the rest of the world”
 Williams v Douglas (1949) 78 CLR 521: … It is wide enough to
include any case where the person alleged to be in possession has hidden the
thing effectively so that he can take it into his physical custody when he
wishes and where others are unlikely to discover it except by accident …
 R v Delon [1992] 29 NSWLR 29
 Perna v Police [2007] SASC 306
Acquiring and Divesting Possession
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 delivery; this is a voluntary transfer,
 finding (its counterpart is loss),
 abandonment and occupation
 original acquisition eg foraging for plants
Delivery
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 Actual delivery is sometimes described as manual
delivery and usually entails a physical handing over
of the goods
 Constructive delivery “takes place by an alteration in
control over goods without any change in their
physical possession”
Finders Law
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Armory v Delamirie (1722) 1 Stra 505
 A chimney sweep found a jewel, Delamirie (de Lamerie) attempted to
wrongfully keep it
 de Lamerie who was unable or unwilling to produce the original stone
was ordered to pay the value of the best jewel of that size.
Finders Keepers?
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Parker v British Airways Board [1982] 1 QB 1004
 Parker found a gold bracelet in the British Airways executive lounge.
He handed it in, left his details, and when the owner was not found,
requested its return.
 BA refused to return it and sold it as part of a lost property sale.
 Donaldson LJ: The issue is decided by the degree of control that is
exercised: “an honest finder acquires good title against all the world
except the true owner”
 Waverley Borough Council v Fletcher [1996] QB 334: “Where
an article is found in or attached to land, as between the owner or
lawful possessor the land and the finder of the article, the owner or
lawful possessor of the land has the better title.”
Finders Keepers
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 Tamworth Industries Ltd v Attorney General [1993] 3 NZLR 616:
$52,452 cash and 20 to 30 bags of cannabis found on leased property in boxes and bags secreted below the
floorboards of an abandoned building
 Chairperson, National Crime Authority v Flack 156 ALR 501: $433,000
cash in a briefcase in a cupboard in Mrs Flack’s home
Pollock & Wright's Essay on Possession in the Common Law p41 :
"The possession of land carries with it in general, by our law, possession of everything which is
attached to or under that land, and, in the absence of a better title elsewhere, the right to possess it
also. And it makes no difference that the possessor is not aware of the thing's existence... It is free
to anyone who requires a specific intention as part of a de facto possession to treat this as a positive
rule of law. But it seems preferable to say that the legal possession rests on a real de facto
possession constituted by the occupier's general power and intent to exclude unauthorised
interference.”
 Criminal Assets Recovery Act 1990 (NSW) (amended in 2010 by the Criminal
Assets Recovery Amendment (Unexplained Wealth) Bill 2010): Allows recovery “if
the Supreme Court finds there is a reasonable suspicion that the person has engaged
in a serious crime related activity (or has acquired any of the proceeds of any such
activity of another person) unless the person can establish that the wealth was
lawfully acquired” (s 3(a1))
Roger Rogerson
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Transfer of ownership of personal property
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 sale
 accession, commingling and specification
 abandonment
 barter
 gift
 finding
 will or donations mortis causa
Sale
22
 Competition and Consumer Act 2010 (Cth) governs
transactions involving the sale of goods or the provision
of services at a cost of $40,000 or less or, if more than
that, where the goods or services were provided wholly or
predominantly for private, domestic or household
purposes.
 Non consumer sales - Sale of Goods Acts of the various
States and Territories unless the parties exclude the
operation of that legislation.
 International sales may be covered by the Sale of Goods
(Vienna Convention) Acts of the States and Territories.
Roman law
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 accessio (alteration or the doctrine of accession)
 confusio and commixtio (commingled goods)
 specificatio (the doctrine of specification in which
the original good loses its physical identity through
its inclusion in a manufacturing process)
 Principles applied in the Personal Property Securities
Act 2009 (Cth)
Accession
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 “Accession takes place where one chattel is added to
(or accedes) to another chattel in circumstances
where the chattel attached (the accessory) cannot be
removed from the chattel to which the accessory is
attached (the principal) without the destruction or
serious injury to the article as a whole” (Pearson et al,
Commercial Law, Commentary and Materials, 3rd ed, 2010, Thomson
Reuters)
 McKeown v Cavalier Yachts Pty Ltd (1988):
$24,409 worth of work acceded to a yacht hull worth
$1,777
Commingling
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 “Commingling refers to the mixing together of goods
which belong to two or more people in such a way as
to result in common ownership of the resultant mass
or bulk. Commingling takes two forms and they
derive from the Roman legal doctrines of commixtio
(solids) and confusio (liquids).” (Although the
Romans apparently used the terms somewhat
interchangeably) (Pearson et al, Commercial Law, Commentary
and Materials, 3rd ed, 2010, Thomson Reuters)
Indian Oil Corp Ltd v Greenstone Shipping [1988] 1
QB 345, “The Ypatianna”
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 Mixture of crude oil in tanker
 Straughten J (QB):
“If the wrongdoer prevents the innocent party providing how
much of his property has been taken, then the wrongdoer is
liable to the greatest extent that is possible in the
circumstances....If the components are proved to be of equal
value, the innocent party is entitled only to the given quantity,
which I take to be that which he contributed. It is only if the
innocent party cannot tell what was the original value of his
property that he is entitled to the whole.”
Specification
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 Specification is the process under which a raw
material or other material or input is altered by the
application of manual work or some mechanical
process or chemical process to produce an output of
a different identity or species from the input or
inputs. (Pearson et al, Commercial Law, Commentary and
Materials, 3rd ed, 2010, Thomson Reuters)
 Associated Alloys Pty Ltd v Metropolitan
Engineering and Fabrications(1996)
Gifts
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 Gifts Inter vivos
 Testamentary Gifts
 Donationes Mortis Causa
Three elements to making a valid gift inter vivos
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 The donor must have an intention to give the
property to the donee
 The donee must have the intention to accept the gift
of property
 Both the donor and the donee (but especially the
donor) must perform an act of acts adequate to give
complete effect to the relevant intention.
Pearson et al, Commercial Law, Commentary and Materials, 3rd ed,
2010, Thomson Reuters, [3.205])
Olsson v Dyson (1969) 120 CLR 365
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Windeyer J:
.. “to make a gift of any thing the intending donor must
actually give it to the donee in a way which the law
recognises. The owner of a thing does not effectively
give it away simply by saying ‘it is yours as a gift’. He
must not only say it is a gift, he must give it to the
donee, who must, by words or conduct, accept it.
How a thing can be given away depends on what it
is”.
3 ways to make a gift
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 By deed. Actual delivery of the goods the subject of
the gift is not necessary: Norman v FCT (1963) 109
CLR 9.
 By oral or written words indicating an intention to give
the goods, together with delivery of the goods: Williams
v Williams [1956] NZLR 970. A transfer of property by
way of gift is achieved by deed or by delivery
accompanied by the intention to pass ownership:
 The owner can also declare himself or herself to be a
trustee of the goods which are the subject of the gift.
Cases
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 Rowland v Stevenson BC200502120, Supreme
Court of NSW, equity division: gift of a yacht
 Papathanasopoulos v Vacopoulos [2007] NSWSC
502: gift of an engagement ring
held to be conditional upon the
marriage actually taking place
Donationes Mortis Causa
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Gifts in Contemplation of Death
 the gift must be in contemplation of impending
death;
 its subject matter must be personal property
 there must be delivery of the subject matter of the
gift, a transfer of the means or part of the means of
getting at the property, or a transfer of the indicia
of title
 the gift must be conditional on the donor’s death
(but otherwise unconditional
Cosnahan v Grice 15 ER 476
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Lord Chelmsford:
“Cases of this kind demand the strictest scrutiny. So many
opportunities, and such temptations, present themselves to
unscrupulous persons to pretend these deathbed donations, that
there is always a danger of having an entirely fabricated case set
up. And, without any imputation of fraudulent contrivance, it is
so easy to mistake the meaning of persons languishing in a
mortal illness, and by a slight change of words, to convert their
expressions of intended benefit into an actual gift of property,
that no case of this description ought to prevail, unless it is
supported by evidence of the clearest the most unequivocal
character.”
Hobbes v NSW Trustee & Guardian [2014] NSWSC 570
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 “shortly before his death Mr Gibson made gifts to her which became
effective on his death of a credit balance in a bank account with the St.
George Bank Ltd, a fixed term deposit with St. George Bank, and his
real estate consisting of a unit in Bayley Street, Dulwich Hill”
 “when I go everything is yours,” “Take these, I don’t need any more”
 Held that Mr Gibson had intended to give her the money in a bank
account. Delivery of the bank passbook was a sufficient delivery of the
indicia of title. Similarly a card, which evidenced a term deposit of
$100,000 was sufficient to transfer title mortis causa to her.
 Not possible to have a valid donationes mortis causa of real property in
Australia. If it was, the delivery of the keys was not sufficient. Would
also need a transfer of the documents of title
Abandonment
36
 Leonard George Munday V. Australian
Capital Territory (1998) SC ACT 62 NO. SC
320 OF 1998.
 Johnstone & Wilmot v Kaine (1928) 23 Tas LR
43 “On the whole I think that I should adopt the rule
that the intentional abandonment of a chattel by the
owner of it does not divest him of his ownership.”
 Munday v. Australian Capital Territory No 2 [1999]
ACTSC 8: Restraint of trade?: “ENTRANTS MUST OBEY
ALL SIGNS AND DIRECTIONS BY STAFF AND MUST NOT
TRADE, SALVAGE, SCAVENGE, BARGAIN FOR OR SOLICIT
FOR MATERIALS, GOODS OR WASTE WITHIN THE LANDFILL”
International Barter
37
 In 2004 the WTO estimated that 15% or $8.43b in
international trade was conducted on a non cash
basis
 According to the US Department of Commerce,
barter accounts for nearly 30 percent of world
business.
 The International Reciprocal Trade Organisation
(IRTA) estimates that their 400,000 participating
businesses transacted $12 billion globally in
2009/2010
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“One well known example of
bartering is Pepsi Cola’s
arrangement with Russia where
Pepsi is sold in exchange for
Russian vodka and Russian-built
oil tankers. The vodka is
exported and sold for hard
currency. The tanker can either
be sold or operate in
international trade for hard
currency.
Coca Cola receives Russian-built
Lada cars, which are sold in
Great Britain for the final
transformation to hard currency
for Coke originally sold in Russia
for soft currency.
R.J Reynolds counter trades
Bulgarian and Yugoslavian
tobacco with American-made
cigarettes.
Feist, Heely, Lu, Nersesian,
Managing a Global Enterprise
1999 Greenwood Publishing
Group
Pepsi for Vodka
Barter
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 “Bartering can become incredibly complex. One deal
started with the hard currency purchase of raw sugar
from Brazil. the sugar was exported to the Ukraine for
refining with the processing payment being a portion
of the refined sugar. The remaining refined sugar was
bartered in Siberia for an oil product, which, in turn,
was bartered in Mongolia for copper concentrate. The
copper concentrate was refined in Kazakhstan with
the processing payment in refined copper. The
remaining refined copper was exported into the world
market to cover its intial purchase of raw sugar.”