REAL AND PERSONAL PROPERTY CHAPTER 16 REAL AND PERSONAL PROPERTY 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

CLASSIFICATION OF PROPERTY The law divides property into: REAL PROPERTY (land, fixtures and leasehold interests); and PERSONAL PROPERTY - which is further subdivided into: “Choses in Possession” - tangible property such as jewellery; and “Choses in Action” - intangible property such as shares or rights under contract. 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

OWNERSHIP AND POSSESSION Ownership means absolute rights to goods including the ability to pass ownership on to others. Possession may include control over property but does not include the right to transfer ownership to others. A person can own property without possessing it. A person can also possess property without owning it. A person in lawful possession of an object, or chattel, has rights in law against everyone except the true owner: see Armorie v Delamirie. There is a presumption in law that the owner of land is also the owner of chattels found on that land: see Ranger v Giffin. 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

TESTS FOR FIXTURES The tests for fixtures were formulated by the High Court in APA v Coroneo: Does the item stand by its own weight? How much damage to the real property or the item itself would occur if the item was removed? To what degree was/is the item attached? What was the original intention of the person who placed it? 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

ESTATES IN LAND There are different categories of interests (or estates) in land: the fee simple (or absolute ownership from the Crown); life estates (ie the right to enjoy possession and use of the land for your lifetime or the lifetime of another person/s); joint estates (joint tenancy, or tenancy in common); and expectant estates (ie estates that will vest upon the happening of a certain event). 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

JOINT TENANCIES Equal and undivided shares: in effect all parties own the whole property JOINTLY at the same time. Right of possession for each joint tenant. Same time and same document of creation. Survivorship: this means that upon the death of a joint tenant, the remaining tenant or tenants acquire the deceased’s share of the property AUTOMATICALLY. The will of the deceased joint tenant has no effect on this inheritance. If two joint tenants die together, the youngest tenant is presumed to have died last. Commonly used by married couples or where the intention is for any surviving joint owner to acquire the property on the death of other joint owner. 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

TENANCY IN COMMON Shares can be equal or unequal A separate and identifiable share can be separately mortgaged or sold Shares can be willed to persons NOT involved in tenancy All tenants have right of possession at the same time Usually this type of ownership is between business partners or joint ventures The common law presumes joint tenancy where the type of tenancy has not been specified 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

LAND TITLE While most States and Territories in Australia have similar types of title, NSW has many different forms of land title. These titles include: old system (or common law title) Torrens title (Torrens has many variations, including strata and community title) Crown land native title 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

ADVANTAGES OF TORRENS TITLE Torrens title originated in South Australia and is based on the central registration of ownership on a “Register”. In NSW, the Register is a computer database. The principle of “indefeasibility of title” in Torrens ownership means that any person who takes title from the registered proprietor (or owner recorded on the Register) gets a good title, subject only to very limited exceptions. One of these exceptions is “fraud”. The NSW Government guarantees the integrity of Torrens title and any person who suffers fraud or error on the part of the Department of Lands can apply for compensation under the Torrens Assurance Fund. Torrens title is efficient and cost-saving for vendors and purchasers, especially in comparison with old system title. 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

ENCUMBRANCES ON LAND An encumbrance is a financial or legal hindrance to the use or transfer of land. Examples include: Mortgages: see next slide Easements: a right of use or benefit conferred on the owner or occupier of land at the expense of another parcel of land (eg a right of way to access land which has no street frontage) Covenants: a contractual control over a land’s use (eg a covenant to prevent erection of a fence beyond a building line) Caveat: exclusive to Torrens land and is a statutory injunction to prevent any dealings in respect of the land until the caveat has been lifted. Caveats are often used by disputants in family law matters or where a lender cannot get their loan agreement registered on title 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

MORTGAGES Two key features of a mortgage are that: it is a contract for a loan (borrower can be sued for the debt) it creates a legal interest in the land itself. Mortgagee (lender) interest is usually registered on the title, especially if the land is under Torrens title, as registration guarantees priority of payment if the mortgagor (borrower) defaults. Remedies of an unpaid mortgagee against the land itself are: power of sale (where the property is offered for sale); and foreclosure (the mortgagee takes over the property in lieu of the sum owed) and the right to appoint a receiver. 2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition