Assignment 2 LEGT 1710 BUSINESS AND THE LAW PROPERTY LAW

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

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 by any process without written permission. Enquiries should be addressed to the Head of School, Taxation and Business Law, UNSW, Sydney

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 problem question, 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-face lecture on Monday 7 October Next face-to-face lecture for Monday stream will be held Monday 14 October

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

Overview
On completion of this week in you should be able to: 9 Distinguish between real property, personal property and intellectual property 9 Distinguish between ownership and possession 9 Identify and explain the types of ownership of land 9 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 another 9 Explain how personal property can be transferred from one owner to another 9 Discuss how lenders (including financial institutions) can take security over different types of property 9 Explain what intellectual property is and what intellectual property laws protect
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Personal property
Chose in action/possession Transferring ownership Property as security

Intellectual property
Copyright Designs/Patents Trademarks Confidential Information

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)

Personal property
Can be divided into two categories: Chose in action (intangible property) Chose in possession (tangible property) Chose is French word for thing

Chose in action
Chose in action Intangible property interests: interests that cannot be seen, held or touched Right of property that can only be claimed or enforced by the taking of legal action (not by taking physical possession) Some examples: - Right to sue - Shares in a company - Intellectual property
See Latimer at 3-040
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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
See Latimer at 3-040
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Ownership vs Possession
Owner is 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
See 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? See Latimer at 3-080

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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)

Torrens Title
Often called freehold land/title System of land ownership based on registration of title on a public register (held at the Land Titles Office) Creates a system of title by registration The Register and Certificate of Title reflect all legal interests relevant to the land

Also Native title Crown Land

See Latimer at 3-290 to 3-425
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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 is indefeasible by unregistered interests If register is incorrect, the State may compensate (insurance principle) Leading Case: Frazer v Walker, see Latimer at 3-300

Torrens Title
Exceptions to indefeasibility of title: Statutory fraud. Example: Owner became registered by forgery. Unconscionable conduct Constructive trust - where registered owner holds the land subject to rights of beneficiaries See Latimer at 3-300

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Priorities under Torrens Title

A person acquiring interest on the faith of the register obtains title free of unregistered Interests

Priorities under Torrens Title

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 being registered without the caveators agreement - like an injunction and shows that someone else has an unregistered interest in the land

Priorities under Torrens Title

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

Can be lodged at the NSW Land Titles Office by a person who reasonably believes they have an interest in land

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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 on 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

See Latimer at 3-200 to 3-280

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Equitable interests
Equitable 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

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 Torrens system

See Latimer at 3-370 to 3-380

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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 are recognised by the common law of Australia today. Native Title Legislation: Native Title Act 1993 (Cth) Note: native title cannot exist over freehold land (Torrens Title). See Latimer at 3-425

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. See Latimer at 3-195

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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 survivorship
See Latimer at 3-160 to 3-180

Joint Tenancy
Doctrine of Survivorship: When one party dies, the other automatically gets their interest
See Latimer at 3-180

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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.

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 in fee simple): owner can do whatever s/he likes, within the law Life estate: use of property for life but cannot give it away in your will Estate in remainder: cannot use the property until the life estate holder dies Future interests (Expectant estate/estate on expectancy): right to the land at some future time Native title: only exists on Crown land See Latimer at 3-155

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
RESIDENTIAL LEASE Governed to a large extent by statute law (NSW Residential Tenancies Act 1987). Terms of the lease and statute governs conditions. For example Quiet enjoyment Premises to be reasonably habitable at start of lease Landlord must maintain the premises Tenants must maintain premises in a reasonably clean condition Pay rent on time Allow landlord to inspect on reasonable notice COMMERCIAL LEASE Less regulated but note Retail Leases Act 1994 in relation to shops. Terms of the lease and statute governs conditions. Should be registered if 3 years or over. Usual conditions Quiet enjoyment Pay rent on time Not assign or sublet without landlords consent Pay outgoings

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

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 and Deposit Paid

Purchaser sends Transfer to Vendor

Purchaser signs Transfer and pays stamp duty

Purchaser conducts enquiries

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Settlement Vendor hands signed Transfer & Certificate of Title to the Purchaser. Purchaser hands over the rest of the purchase price

Registration -Purchaser lodges Transfer and Certificate of Title with the Land Titles Office & new Certificate 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

Property as Security
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 end of hire agreement Pledge: for example, a pawn shop where owner retains ownership but pawn shop in possession until obtains right to sell Bailment: transfer of possession (but not ownership) of goods for a specified purpose (eg storage/security) Charge: security over company property Fixed charge (fixed over certain assets which cannot be disposed of without lenders consent) Floating charge (does not relate to specific asset but floats over assets until event of default then it becomes fixed)
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Property as Security
Registration
Securities over real property Mortgage At Land Titles Office under Real Property Act 1900 Personal Property Securities Register under the Personal Property Securities Act 2009 (Cth) Australian Securities and Investments Commission under the Corporations Act 2001
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Intellectual Property
Overview
On 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 do 9 How the holders rights can be infringed 9 What they can do about this
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Security over personal property

Bill of Sale (or Security Interest). This is a mortgage. Fixed Charge Floating Charge

Security over company property

Intellectual Property
Involves rights that provide protection to creative and intellectual works Includes laws relating to: Copyright Designs Patents Trademarks Confidential Information See 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

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 See Latimer at 3-490

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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

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
Infringement: By copying or reproducing By importing pirate copies By dealing (selling/hiring/distributing) pirate copies Parallel imports
Importing genuine products/works made overseas without the approval of original copyright owner See Latimer at 3-520

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 See Latimer at 3-540
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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 the design 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

See Latimer at 3-550

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Patents: Patents Act 1990 (CTH)

A patent is a temporary monopoly by which the inventor gets the exclusive use of and right to sell a new invention, in return for public disclosure (by way of publication of the patent specification) See Latimer at 3-580

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 relates to a commercially useful activity) and B. Be new, and C. Be useful, and D. Inventive step (standard patent) or innovative step (innovation patent)
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Trademarks:
Trade 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 See Latimer at 3-650

Examples of Trade Marks

Colour trade marks (eg Cadbury chocolate) Scent trade marks Shape trade marks (Coca-Cola Company case, Latimer at 3-650) Sound trade marks See Latimer at 3-650

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Protection of Confidential Information

Confidential information may be protected: 1. 2. by contract; and/or by an equitable action for breach of confidence

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

To establish a breach of confidence: 1. 2. 3. The information must be secret or confidential The information must have been given in circumstances where the recipient knew of should have known it was confidential There was unauthorised use of the information to the detriment of the person communicating it

See Latimer at 3-685

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