Advanced Property - Things Flashcards
(14 cards)
What is the numerus clausus and how does it work?
It works like a menu - there is a fixed list of available property rights with different options.
You cannot customise them in your own way - you can only create something which is already accepted as a form of property.
NC restricts the structures you can use, and restricts the courts so that they can’t recognise anything as property.
S1 LPA - only estates in land are freehold and leasehold, only legal interests are easements, charges etc.
Case law examples of the NC? Phipps, Keppell
Phipps v Pears - no new easements recognised. We don’t like positive easements or those which overly restrict our freedom to do what we want with our land.
Keppell v Bailey - A made promise to B that A’s successors will buy limestone from B only. This was not enforceable against successors, as it is not open to A to grant a new property right to B which would bind C.
Future owners bound by property rights as they are in rem, so we need to be careful before creating new property rights as they come with significant obligations.
Hill v Tupper - Right to use sailboats and hire them out was not an easement, it was merely a personal license. Needs to fit into our existing criteria of an easement and benefit the land.
Critiques of NC? Autonomy, Lawyering, Registration, Modern Society, Free Market
Autonomy: It tells me what rights I can and cannot create, which is a degree of a restriction upon my autonomy. Perhaps I should be able to create whatever kind of property rights I want on my own property. If third parties choose to buy my property knowing what rights exist on it, then it is on them to be bound by it.
Lawyering: Merrill and Smith argue that with clever lawyering, parties can really engineer whatever they want as they can manipulate and combine the building blocks, creating things like ‘a lease determinable when the war ends’. Those who cannot afford lawyers won’t be able to create the same rights.
For example, freehold positive covenants cannot run with the land, so a clever party would create a leasehold covenant within a lease of 99 years, and the positive covenant will be enforceable within that.
Registration: We already have registration in regard to land, so we have solved info problem. All we would need to do is add these new types of property rights to the register.
Counter: System of reg not there yet, many things aren’t registrable such as equitable rights. This is another issue - if you don’t know who beneficiaries are this is another key bit of info missing and perhaps this should be added to the register too.
Modern society? - With new inventions and tech, we should be able to recognise new forms of property and new innovative ways to approach it. Law of Property has developed in recent years in planning, with shift towards sustainability seen in Finchley. Perhaps we should recognise unconventional and innovative ways of handling property. It would also prevent waste of property if we could attach rights like a ‘Monday-only’ right to a watch, making sure property is fully used in a society which wastes more and more often.
Hayek-ian free market idea - If we eliminated restrictions, free market would flourish, invisible hand of the free market would guide economic prosperity. People will only use property in efficient ways since they are profit-maximisers, and so unconstrained they will be able to use property in a way that serves their, and the economy’s benefit.
Pros of NC? In rem, Information cost, simplify (outsiders), finality, flexibility, fragmentation
In rem: Property rights are in rem, therefore they bind the entire world and future owners. Therefore, we need to know what obligations we are bound to. It is easier to respect people’s property rights which fit into a fixed menu, as you can familiarise yourself with the nature of these rights. Endless customisation of rights would make it so that there is little way for the public to find out about this, and so they are subject to higher information costs.
Merrill and Smith: They argue that this info cost doesn’t just affect the parties involved in the transaction, but it affects everyone in society. If we creates a Monday-only watch, not only will it affect the parties, but it will affect everyone who wants to buy a watch, who will need to find out new information regarding any potential watch they plan to buy. By allowing one person to benefit from a Monday-only right, the information and investigation costs of the whole market have risen. With NC, we have a fixed menu so the costs will be lower as there is less processing and info-acquiring that a person needs to do before entering a transaction.
Simplifies the law: Makes it easier for individuals who come from less-wealthy or educated backgrounds to familiarise themselves with the law - property outsiders - it is a mechanism for them to become more familiar and capable. If we allowed endless customisation, the people who would win would be the ones with more money and lawyers.
Counter: Maybe it complexifies the law, since you can get around the NC with money and lawyering - perhaps this is a problem which will exist regardless, and NC does little to help.
Finality? Property law has reached the state it needs to be at - no major reform is needed - covenants, easements, planning etc have all reached an acceptable state and society is largely happy with the types of right available. Unless there is a drastic shakeup in the nature and tech of property, there would be no need for a drastic switch in what property rights are available.
Flexibility? Perhaps the NC is sufficiently flexible when it comes to recognising what can be recognised as property - we have seen cases such as AA and Armstrong recognising new types of property - moving into a new era of technology - property staying up to date WHILST still restricting the forms of property in relation to land as that has not changed substantially.
Manchester - licensees given proprietary rights. Regency - easements over residential faciltiies recognised.
Arguably minimises fragmentation - if ownership becomes excessively fragmented, it is difficult to get consent of all beneficiaries to use the property productively.
Counter: NC doesn’t fullt solve it. It limits number of types of interests, not number of interest-holders. Many people can have a beneficial interest in a piece of land, problem remains.
What is the tragedy of the commons?
Absent intervention, everyone benefits from a communal benefit, such as grassland, and allows their cows to graze on it.
The more this is done, the worse quality the land is, however everyone benefits massively and they share the loss, so the benefit is still greater.
How do we solve the tragedy of the commons?
Allocate rights over the land. If X is in control of X’s plot - he is responsible for the benefit and the loss, so it is in his interests to keep the land fertile and good.
We also do this with timber/forests and have fishing quotas to restrict people from overfishing.
Armstrong - intangibles as property?
Question over whether EU carbon allowances which were stolen are property?
Court used test of property - exists under statutory framework, transferable, has value.
EUAs met all these criteria. But, it is not a chose in action as it is not enforcible in civil action. It is also not a chose in possession as not tangible.
Held: It is property, even if it is just categorised as ‘other intangible property’
AA v Persons Unknown - recognition of bitcoin
It is definable, identifiable, capable of assumption by third parties and has permanence and stability.
It also should be property - as it is used to effect transactions and has value as currency.
Applied this to the third category - other intangibles.
Tulip Trading - a cryptoasset such as bitcoin is property.
Justification for protecting IP rights?
Although they are non-rivalrous - one person getting info doesn’t stop the other, they have an impact on the money which goes to the original creator.
If we don’t enforce IP rights, socially desirable behaviour such as innovating and creating IP is disincentivised.
Sunk costs are not compensated.
Access v incentives tradeoff - do we promote greater access to the info itself, or do we prioritise incentive to innovate?
What does conversion do? Vs rei vindicatio
Protects personal property where it is wrongfully taken, sold, destroyed etc.
Allows delivery of the goods or payment of damages.
Rei vindicatio - you need to show ownership and can only claim against the person with your item. In conversion, you can sue anybody whose hands the property passed through.
OBG v Allan
Receivers were invalidly appointed, and settled contractual claims which they shouldn’t have.
Is conversion available for intangible goods? No.
Why?
- History of conversion was about losing and finding your item - intangibles cannot
- Inconsistent with Parliamentary intention (although it has been long time since 1977)
- Too radical a change for courts
- Facts of this case unsuitable to change the law.
Minority:
- Once the law recognises something as property, it should extend a proprietary remedy to protect it. Why should you be liable for interfering with some assets but not others?
Law Commission suggestion on whether digital assets are property - Data objects
Proposed a third category of personal property - data objects.
A digital thing, independent of a person or legal system, which is rivalrous.
Law Com suggestion on conversion for digital assets
No compelling reason why physical property and NFTs don’t give same right to conversion. Property interests requiring protection are the same in both cases.
Thus, conversion should be extended - with a definition of control being used (since digital assets can’t really be possessed).
However, good faith purchaser for notice should be a special defence.
Problem? Why would we create this defence for digital assets only? There is nothing about the physicalness of a thing which makes it more or less easy to fraudulently interfere with.
Then, in final report, they suggested that new tortious liability should be developed, drawing on conversion to deal with this.
However, when is this going to be done? We haven’t had a key case yet. Also, they said it should prioritise the sanctity of transaction over property rights - which does the opposite to conversion.
Why should conversion not be available for digital assets?
McFarlane and Douglas - property syllogism.
Just because two things are property doesn’t mean they deserve the same remedy.
Physical assets more deserving of conversion because they are more excludable. If you see a bike on the street, you expect someone to own it and do not pick it up and run away.
However, it is more difficult to avoid interfering with intangible property - if I can’t see it how can I know - eg a contractual right.
Counter: Not all property is like that - some intangible property is registered and you can easily check the logbook/register to see who owns a particular bitcoin.
