LEGT 1710_Wk_9_Semester 2_2013

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LEGT 1710

BUSINESS AND THE LAW

PROPERTY LAW

2013 The University of New South Wales, Sydney 2052 Australia

The original material prepared for this guide is copyright.

Apart from fair dealing for the purposes of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced byany process without written permission. Enquiries should be addressed to the Head of School, Taxation and Business Law, UNSW, Sydney

Assignment 2

Due Monday 23 Sept by 5pm

Online submission only via Turnitin (on

Blackboard)

Include cover sheet if possible to scan

otherwise, just submit without cover sheet

as Turnitin will pick up your details

Week 9 Tutorial Materials

Competition Law

ACCC Materials on Blackboard: please

note the ACCCs copyright requirements

Group work in class

Mid-Semester Break

Monday 30 September to Monday 7 October

Classes resume Tuesday 8 October, Week 10

Week 10: NEW TOPIC, Tort Law

Tort Law will be examined in the final exam as a problemquestion, so do not miss the lecture on this topic

FOR MONDAY LECTURE ONLY:

Tuesday 8 October lecture will be recorded

Students who attend the Monday class should listen

to the recording as there will be no face-to-facelecture on Monday 7 October

Next face-to-face lecture for Monday stream will beheld Monday 14 October

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This week

Meaning of property

Real property

Land/Fixtures on the land

Ownership vs possession

Systems of title to land and types of land ownership

Legal vs equitable interests

Transferring ownership

Steps to a conveyance

Property as security

Personal property

Chose in action/possession

Transferring ownership

Property as security

Intellectual property Copyright

Designs/Patents

Trademarks

Confidential Information

Overview

On completion of this week in you should be able to:

9 Distinguish between real property, personal property and intellectualproperty

9 Distinguish between ownership and possession

9 Identify and explain the types of ownership of land9 Explain the difference between legal and equitable interests

9 Explain the key features of the Torrens system

9 Explain how real property can be transferred from one owner to anothe9 Explain how personal property can be transferred from one owner to

another9 Discuss how lenders (including financial institutions) can take security

over different types of property

9 Explain what intellectual property is and what intellectual property lawsprotect

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Relevance of property law to business

Knowledge of property law is essential for business

people

Businesses own or lease property

Businesses trade in goods or services

Businesses own goods/assets

Assets of businesses form property

Understanding of property law provides better business

understanding of the rights they have to those assets etc

What is property?

Australian law developed under English common law

Also, some property-related statutes at Commonwealth and

State/Territory level, such as:

- Native Title Act 1993 (Cth)

- Real Property Act 1900(NSW)

The word property describes types of rights and

interests recognised by law

Can be divided into : Real property = land and improvements, and

Personal property = all other property (tangible and intangible,

including intellectual property)

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Personal property

Can be divided into two categories:

Chose in action (intangible property)

Chose in possession (tangible property)

Chose is French word for thing

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Chose in action

Chose in action

Intangible property interests: interests thatcannot be seen, held or touched

Right of property that can only be claimed orenforced by the taking of legal action (notby taking physical possession)

Some examples:

- Right to sue

- Shares in a company

- Intellectual propertySee Latimer at 3-040

1111

Chose in possession

Chose in possession

Tangible physical property

Something that can be possessed

Some examples:

- Ownership of a house

- Ownership of a car

- Ownership of jewellery, artworks, stamp collections

or other collectible items etc

ee Latimer at 3-040

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Ownership vs Possession

Owneris entitled to all the legal rights over the

property

Possession involves

physical control of the property by the

possessor

the intention to claim exclusive control

See Latimer at 3-050

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Rights of a person in possession

Possession is good against the whole world

except the owner

Cases:

Armory v Delamirie

Bridges v Hawkesworth

Waverley Borough Council v Fletcher

ee Latimer at 3-060

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Real property

Land

Fixtures (ie things that are attached to the land)

Note: Land includes improvements such as

buildings on the land (not usually called

fixtures)

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Definition of Land

Limits of land: Height and Depth

Ownership extends upwards to the heavens

and downwards to the centre of the earth (but

there are some exceptions: eg: The Crown

(State) owns minerals in soil.

See Latimer at 3-070 to 3-150

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Fixtures

Tests as to whether an item is a fixture: (case law)

Fixed by means other than its own weight?

Intention to be permanently fixed for a

substantial period or for a temporary purpose?

Degree of damage on removal?


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Ownership of land: Systems of Title

Systems of title to land in Australia:

Private ownership :

Torrens title (99%)

Old system title (or general law)

Also

Native title

Crown Land


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Torrens Title

Often called freehold land/title

System of land ownership based on registrationof title on a public register (held at the LandTitles Office)

Creates a system of title by registration

The Register and Certificate of Title reflect all

legal interests relevant to the land

Torrens Title

Registration gives title (ownership) of the land to

the registered proprietor (owner)

Those holding other types of interests over the

land can also register their interests on title.

Examples: mortgages, leases.

Torrens Title

Effect of registration:

removes uncertainties of title

Provides proof of title of the registered

proprietor so no other person can claim to be

the owner

Provides evidence of the information it

records (mirror principle)

gives priority upon registration (indefeasibility

principle)

Torrens Title

Title held under a registered interest isindefeasible by unregistered interests

If register is incorrect, the State maycompensate (insurance principle)

Leading Case: Frazer v Walker, see Latimer at3-300

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Torrens Title

Exceptions to indefeasibility of title:

Statutory fraud. Example: Owner became registered byforgery.

Unconscionable conduct

Constructive trust - where registered owner holds theland subject to rights of beneficiaries


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Priorities under Torrens Title

A person acquiring interest on the faith of

he register obtains title free of unregistered

nterests

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A person with an unregistered interest in land

can be protected by:

registration (eg a banks mortgage) or

lodging a caveat (freezes title)

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Caveat: to stop land dealings

What is it?

A caveat is:- a written warning or an entry

- Entered on register to stop certain land dealings beingregistered without the caveators agreement

- like an injunction and shows that someone else has anunregistered interest in the land

Can be lodged at the NSW Land Titles Office by aperson who reasonably believes they have an interestin land

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The earlier of two unregistered interests has

priority

The court will consider the conduct of the parties

and all circumstances to determine which party

has the better claim

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Legal and Equitable Interests in Land

Legal interests under Torrens Title are all registered

interests

An unregistered interest becomes a legal interest o

registration (eg a purchaser of land on registration).

Equitable interests may be held by those who have

no registered (legal) interest.

As an exception to indefeasibility, a legal owner

may occasionally have to recognise rights/claims of

another party who may have equitable interests


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Equitable interests

quitable interests include:

interest of a beneficiary under a will

interest under contract allowing legal or equitable owner

to assign/lease property

interest of the lessee/purchaser (before settlement)

an option to purchase

interest of a beneficiary in a trust

interest of a partner in the partnership property

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Old System Title or General Law

Ownership is proved by tracing ownership back to an

unchallengeable beginning

Chain of title, making a good root of title

Tracing of title required each time owners wanted to

deal with their property

Difficult, time consuming and complex procedure

Now applies to only very few parcels of land in

Australia that are not registered under the Torrenssystem


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Native title

Mabos case recognised that acquisition

of sovereignty by the Crown was subject

to the interests and rights of indigenous

inhabitants in land

The rights and interests of the indigenous people arerecognised by the common law of Australia today.

Native Title Legislation: Native Title Act 1993 (Cth)

Note: native title cannot exist over freehold land (TorrensTitle).

ee Latimer at 3-425

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Types of Torrens title ownership of

land

Single dwelling on land (freestanding house)

Strata Title :Examples include:- Apartments in blocks, townhouses,

- Retirement village

Strata title is a type of Torrens Title, governed by specific

legislation.


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Types of Co-Ownership of Land

Co-owners of land may own the land either as:

joint tenants or

tenants in common

Note tenants means owners in this context.

See Latimer at 3-160 to3-190

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Joint Tenancy

Joint tenants have the same interest over the

whole land eg half shares, quarter shares etc

Joint tenants are like a single owner of the whole

land

Joint tenants cannot sell or leave their share by

will during the joint tenancy

Joint tenants have right of survivorshipee Latimer at 3-160 to 3-180

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Joint Tenancy

Doctrine of Survivorship:

When one party dies, the other automatically

gets their interest


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Tenancy in Common

Tenants in common own a separate and undivided

interest in the land

Tenants in common own a proportionate share of the

land

Shares need not be in equal shares and can be dealt

with separately

Often used in business : eg Business partners co-owning

business premises.

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Tenancy in Common

No doctrine of survivorship

When a tenant in common dies, s/he can leave

their share to someone else

Tenant in common can sell their share to

outsider

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Types of interests in land

Complete and unlimited ownership (Freehold estate or Estate infee simple): owner can do whatever s/he likes, within the law

Life estate: use of property for life but cannot give it away in yourwill

Estate in remainder: cannot use the property until the life estateholder dies

Future interests (Expectant estate/estate on expectancy): rightto the land at some future time

Native title: only exists on Crown land

ee Latimer at 3-155

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Leases

Landlord = lessor

Tenant = lessee

Leases can be:

Fixed term, with definite start/end date

Tenancies at will, with definite start date but will

continue indefinitely until terminated by one of the

parties, usually giving one months written notice.

Residential or Commercial leases

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Leases

SIDENTIAL LEASEverned to a large extent by

ute law (NSW Residential

ancies Act 1987).rms of the lease and statute

erns conditions.

r exampleQuiet enjoyment

Premises to be reasonablyhabitable at start of lease

Landlord must maintain thepremisesTenants must maintain

premises in a reasonably clean

conditionPay rent on time

Allow landlord to inspect on

reasonable notice

COMMERCIAL LEASELess regulated but note RetailLeases Act 1994in relation to

shops.Terms of the lease and statute

governs conditions.

Should be registered if 3 years orover.

Usual conditionsQuiet enjoyment

Pay rent on timeNot assign or sublet withoutlandlords consent

Pay outgoings

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Transferring ownership of property

Transfer by agreement:

Sale

Gift

Assignment by deed

Declaration of trust

Inheritance under a will

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Transferring ownership of property

Transfer without agreement:

Administration of an intestate estate

Compulsory acquisition

Court order

Execution of a court order

Death of joint owner in joint tenancy

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Conveyance of real property

General procedure:

Preparation of the written contract

Exchange or signing of contracts

Searches and inquiries

(Arranging finance)

Settlement

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Conveyancing

Property

Listed for sale

Offer accepted

by Vendor

Exchange -

Contracts

Exchanged anDeposit Paid

Purchaserconducts

enquiries

Purchasersends Transfer

to Vendor

Purchaser signsTransfer and

pays stamp duty

Settlement Vendor hands

signed Transfer & Certificate ofTitle to the Purchaser. Purchaser

hands over the rest of the

purchase price

Registration -Purchaser lodgTransfer and Certificate of Titl

with the Land Titles Office & nCertificate of Title issued

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Property as Security

Most businesses need finance to expand

Lenders may take some type of security over the

property of the borrower

Why? If debt not repaid, lender can use the property to

partially or wholly repay the debt

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Examples of security for a loan:

Morgtages: Mortgage: securities over real property

Bills of Sale: mortgage over personal property given as security

Others: Hire Purchase: form of finance where hirer has option to buy at

of hire agreement Pledge: for example, a pawn shop where owner retains ownersh

but pawn shop in possession until obtains right to sell

Bailment: transfer of possession (but not ownership) of goods fospecified purpose (eg storage/security)

Charge: security over company property Fixed charge (fixed over certain assets which cannot be dispo

of without lenders consent)

Floating charge (does not relate to specific asset but floats oassets until event of default then it becomes fixed)

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curities over

al propertyMortgage

curity over

sonal property

Bill of Sale (or

SecurityInterest). This is

a mortgage.

Registration

At Land Titles OfficeunderReal Property

Act1900

Personal Property

Securities Register underthe Personal Property

Securities Act 2009 (Cth)

curity overmpany property

Fixed ChargeFloating Charge

Australian Securitiesand Investments

Commission under the

Corporations Act2001

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Intellectual Property

OverviewOn completion of this week in you should be able to:

9 Understand the reasons why the law protects intellectual property.

9 Understand why it is advantageous to seek to protect intellectual

property.

9 Describe some of the difficulties associated with protecting

intellectual property.

9 List and describe in relation to each form of intellectual property:

9 What it protects

9 How it gives that protection

9 What it entitles the holder of the intellectual property to do9 How the holders rights can be infringed

9 What they can do about this

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Intellectual Property

Involves rights that provide protection to creative and

intellectual works

Includes laws relating to:

Copyright

Designs

Patents

Trademarks

Confidential Information

ee Latimer at 3-470 to3-690

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Copyright

Most significant area of intellectual property

Established by statute: Copyright Act 1905(Cth)

now the Copyright Act 1968(Cth)

Gives person who owns the right, exclusive

rights in relation to that property

Is NO REGISTRATION system

For example:

Exclusive right to reproduce, publish or perform an

original literary, dramatic, musical or artistic work

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Copyright

Also covered:

Sound recordings

Cinematograph films

Television and sound broadcasts

Published editions of works

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Copyright

Ideas themselves are not able to be

copyrighted, only EXPRESSIONS of ideas.

Cases:

Donoghue v Allied Newspapers Ltd

Zeccola and Universal City Studios Inc


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Copyright protection

Connecting Factors.

Must be in material form work in writing or

some other form expressions of ideas

Work first published or made in Australia

Author is a qualified person (ie: Australian

resident or Australian citizen)

Originality

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Copyright

Duration of the protection

Copyright Act 1968(Cth) s 33

Where the work was unpublished or unperformed

prior to death - 70 years after first

publication/performance

Otherwise, 70 years from death of author

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Copyright

nfringement:

By copying or reproducing

By importing pirate copies

By dealing (selling/hiring/distributing) pirate copies

Parallel imports

Importing genuine products/works made overseas withoutthe approval of original copyright owner

ee Latimer at 3-520

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Authors moral rights

The Copyright Act 1968(Cth) recognises three

moral rights:

1. the right of attribution (ie authors right to be

acknowledged/given appropriate credit for the work)

2. the right not to have authorship of a work falsely

attributed

3. the right of integrity of authorship (eg not changing a

novel)

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Remedies for copyright infringement

Statutory remedies:

Injunction

Damages

Account of profits

Criminal proceedings

Case: Le v The Queen

Common law remedies:Tort of passing off


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DESIGNS: Designs Act 2003 (Cth)

Protects overall appearance of the product

resulting from one or more visual features of the

product (s.5)

Design protection comes from registering thedesign with IP Australia.

Must be:

1. New (not identical to another design);and

2. Distinctive (not substantially similar in overall

impression to another design)

Protection for 10 years


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Patents: Patents Act 1990 (CTH)

A patent is a temporary monopoly by

which the inventorgets the exclusive

se of and right to sell a new

nvention, in return for public

isclosure (by way of publication of the

atent specification)


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Patents:Patents Act 1990 (CTH)

2 types of patents:

1. Standard (20 years protection)

2. Innovation (8 years protection) considered less inventive

Requirements: Invention must be:

A. A manner of manufacture (ie relatesto a commercially useful activity)and

B. Be new, and

C. Be useful, andD. Inventive step (standard patent)

or innovative step (innovation patent)

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Trademarks:rade Marks Act 1995 (Cth)

A trade mark is a sign used, or intended to be used,

to distinguish goods or services dealt with or

provided in the course of trade by a person from

goods or services so dealt with or provided by any

other person (s.17)

Initial registration of a trade mark lasts for 10 years

but can be extended indefinitely

Applications for registration are examined for their

validity against existing registrations and whether

there are grounds for rejection

ee Latimer at 3-65066

Examples of Trade Marks

Colour trade marks (eg Cadbury chocolate)

Scent trade marks

Shape trade marks (Coca-Cola Companycase, Latimer

at 3-650)

Sound trade marks


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Protection of Confidential Information

onfidential information may be protected:

by contract; and/or

by an equitable action for breach of confidence

o establish a breach of confidence:

The information must be secret or confidential

The information must have been given in circumstanceswhere the recipient knew of should have known it wasconfidentialThere was unauthorised use of the information to thedetriment of the person communicating it

ee Latimer at 3-685

Next lecture

Week 10: Tuesday 8 October (recorded for Monday

stream)

Week 11: Monday 14 October (next face-to-face lecture

for Monday stream)

Do not miss the lectures on this NEW AND

IMPORTANT TOPIC: Introduction to Tort Law, see

Latimer ch 4

Documents

LEGT 1710_Wk_9_Semester 2_2013