Definitions of property

What is ‘property’?

7.11       The idea of property is multi-faceted. The term ‘property’ is used in common and some legal parlance to describe types of property that is both real and personal. ‘Real’ property encompasses interests in land and fixtures or structures upon the land. ‘Personal’ property encompasses tangible or ‘corporeal’ things—chattels or goods. It also includes certain intangible or ‘incorporeal’ legal rights, also known in law as ‘choses in action’, such as copyright and other intellectual property rights, shares in a corporation, beneficial rights in trust property, rights in superannuation[15] and some contractual rights, including, for example, many debts.[16] Intangible rights are created by law. Tangible things exist independently of law but law governs rights of ownership and possession in them—including whether they can be ‘owned’ at all.[17]

7.12       In law, the term ‘property’ is perhaps more accurately or commonly used to describe types of rights—and rights in relation to things. In Yanner v Eaton, the High Court of Australia said:

The word ‘property’ is often used to refer to something that belongs to another. But ... ‘property’ does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of ‘property’ may be elusive. Usually it is treated as a ‘bundle of rights’.[18]

7.13       The ‘bundle of rights’ that property involves, acknowledges that rights in things can be split: for example, between rights recognised at common law (‘legal’ interests) and those recognised in equity (‘equitable’ or ‘beneficial’ interests); and between an owner as lessor and a tenant as lessee. Equitable interests may further be subdivided to include ‘mere equities’.[19]

7.14       In Yanner v Eaton, Gummow J summarised this complexity:

Property is used in the law in various senses to describe a range of legal and equitable estates and interests, corporeal and incorporeal. Distinct corporeal and incorporeal property rights in relation to the one object may exist concurrently and be held by different parties. Ownership may be divorced from possession. At common law, wrongful possession of land might give rise to an estate in fee simple with the rightful owner having but a right of re-entry. Property need not necessarily be susceptible of transfer. A common law debt, albeit not assignable, was nonetheless property. Equity brings particular sophistications to the subject. The degree of protection afforded by equity to confidential information makes it appropriate to describe it as having a proprietary character, but that is not because property is the basis upon which protection is given; rather this is because of the effect of that protection. Hohfeld identified the term ‘property’ as a striking example of the inherent ambiguity and looseness in legal terminology. The risk of confusion is increased when, without further definition, statutory or constitutional rights and liabilities are so expressed as to turn upon the existence of ‘property’. The content of the term then becomes a question of statutory or constitutional interpretation.[20]

7.15       As Gummow J suggests in this passage, ‘possession’ is a distinct and complex concept. Its most obvious sense is a physical holding (of tangible things), or occupation (of land). An example is when goods are in the custody of another, where things are possessed on account of another.[21]

7.16       A ‘property right’ may take different forms depending on the type of property. Implicit in a property right, generally, are all or some of the following rights: the right to use or enjoy the property, the right to exclude others, and the right to sell or give away.[22] Property rights also depend on the statutory framework of laws and property rights affecting the particular type of property, for example, the system of land tenure in a particular state or territory, or a scheme such as the Personal Property Securities Act 2009 (Cth), and the interaction between that statutory scheme and the common law.

7.17       For land and goods, both of which may be possessed by someone other than the lawful owner, property rights in the sense of ownership must be distinguished from mere possession of the land or goods, even though the latter may give rise to qualified legal rights,[23] and from mere contractual rights affecting the property. The particular right may be regarded as ‘proprietary’ even though it is subject to certain rights of others in respect of the same property: a tenancy of land, for example, gives the tenant rights that are proprietary in nature as well as possessory.

7.18       The ‘bundle of rights’ approach has presented some contemporary challenges, particularly in relation to land holding. Laws that limit what a landowner can do, for example by creating rights in others in the same land, may give rise to arguments about compensability, expressed in the question, when does regulating what someone may do with land become a ‘taking’ of that land? This is considered later and in Chapter 8.

7.19       What may amount to a property right is of ongoing philosophical and practical interest. One clear historical example is the recognition of copyright from the 17th century, as a new form of intangible personal property created by statute and the development of a specialist body of law governing its creation and transfer. Trade marks and registered designs have a similar genesis, as statutory creations.[24]

7.20       The recognition of new forms of intangible property may be argued in the context of s 51(xxxi) of the Constitution, which is considered below. Arguments concerning rights over one’s person, for example claims over bodies and body parts, including reproductive material, are lively.[25] The need to recognise ‘traditional knowledge and traditional cultural expressions of Aboriginal and Torres Strait Islander people’ has also been advanced. In this Inquiry, the Arts Law Centre argued for recognition of cultural knowledge as intellectual property and subject to appropriate protection, noting that the Native Title Act 1993 (Cth) did not do so.[26] Similar intellectual property issues were raised in the Rights and Responsibilities consultation.[27]

7.21       The significance of recognising cultural knowledge was identified by the ALRC in the report, Connection to Country: Review of the Native Title Act 1993 (Cth). While this issue lay outside the Terms of Reference for that Inquiry, the ALRC concluded that

the question of how cultural knowledge may be protected and any potential rights to its exercise and economic utilisation governed by the Australian legal system would be best addressed by a separate review. An independent inquiry could bring to fruition the wide-ranging and valuable work that has already been undertaken but which still incompletely addresses the protection of Aboriginal and Torres Strait Islander peoples’ cultural knowledge.[28]

7.22       Understandings about what amounts to property reveal a certain fluidity when viewed historically. As one stakeholder commented:

The rights that attach to different objects, be they land, personal or intellectual property are not frozen in time. Just as for all legal rights, the nature and content of property rights will evolve and potentially change quite significantly over time.[29]

7.23       Similarly, with respect to land, Professor Peter Butt noted that the ‘categories of interests in land are not closed’ and they ‘change and develop as society changes and develops’.[30]

7.24       Another challenge in terms of property rights in the Australian context is the recognition of native title; and understanding how such interests in land or waters fit within, or relate to, the understanding of property rights of the common law.[31]

The reach of property rights

7.25       Complex interactions of property rights of different forms fill chapters of books on property law under the generic heading of ‘priorities’, where rules of law and equity, including statute law, have, over the centuries, established what property interest takes priority over another in given circumstances, regulating competing property interests. Each circumstance may involve a ‘loser’ in the sense of someone losing out in a contest of proprietary rights (rights in rem), and being relegated in such circumstances to whatever rights may be pursued against the individuals concerned (rights in personam). Some examples, expressed in very general terms, suffice to illustrate:

  • the priority of the bona fide purchaser of a legal estate for value without notice of a prior equitable interest;[32]

  • the indefeasibility of registered interests under Torrens title land systems;[33]

  • the effect of registration on priority of registered security interests in personal property;[34] and

  • the doctrine of fixtures, in which items of personal property—chattels—may lose their quality as personal property and become part of the land.[35]

7.26       A further illustration of property rights being lost may come through the operation of statutory limitation over time. So, for example, a person may be held to acquire title to land by long ‘adverse’ possession. The adage, ‘possession is nine-tenths of the law’, is reflected in the modern expression of title by possession in the Limitation of Actions legislation.[36] Under such legislation, the claim of a person may be barred after a designated period, generally between 12 and 15 years.[37] There is authority that even under Torrens title systems, title may be gained by adverse possession.[38]

7.27       A further question about the extent of property rights includes how far the title of a landowner extends in the air above and the earth below. Cases involving scaffolding, overflying and cranes, have tested airspace rights.[39] Cases involving subterranean caves, treasures and minerals have tested the limits below the surface.[40] An aspect of such issues concerns prerogative claims to minerals, including substances like coal.[41]

7.28       The extent of property rights can be at issue when it is argued that rights of property have been taken away and therefore that the property owner is entitled to compensation for that ‘taking’. This was raised by stakeholders in this Inquiry in the context of environmental regulation issues, water rights and intellectual property.

‘Vested’ property

7.29       The ALRC’s Terms of Reference refer to ‘vested property rights’. ‘Vested’ is primarily a technical legal term in property law used to differentiate a presently existing interest from a contingent interest.[42] However, particularly in the United States, the term has acquired rhetorical force in reinforcing the right of the owner not to be deprived of the property arbitrarily or unjustly by the state[43] or, in disputes over land use, to reflect the confrontation between the public interest in regulating land use and the private interest of the owner—including a developer—in making such lawful use of the land as he or she desires.[44] The tension is particularly strong with respect to retrospective legislation.[45]

7.30       In this Inquiry the ALRC considers ‘vested property rights’ more in its broad, rhetorical sense, than in its technical sense, in which there are distinct shades of meaning of ‘vested’.[46]

[15]         Greville v Williams (1906) 4 CLR 694.

[16]         City of Swan v Lehman Bros Australia Ltd (2009) 179 FCR 243.

[17]         In Yanner v Eaton, the High Court cited the common law example of wild animals, or ferae naturae: ‘At common law, wild animals were the subject of only the most limited property rights. ... An action for trespass or conversion would lie against a person taking wild animals that had been tamed, or  a person taking young wild animals born on the land and not yet old enough to fly or run away, and a land owner had the exclusive right to hunt, take and kill wild animals on his own land. Otherwise no person had property in a wild animal’: Yanner v Eaton (1999) 201 CLR 351, 366 (Gleeson CJ, Gaudron, Kirby and Hayne JJ); 80–81 (Gummow J). See also Blackstone, above n 1, vol II, bk II, ch 1, 14.

[18]         Yanner v Eaton (1999) 201 CLR 351, 365–6 (Gleeson CJ, Gaudron, Kirby and Hayne JJ). ‘Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle’: Minister of State for the Army v Dalziel (1944) 68 CLR 261, 284 (Rich J). O’Connor traces the theoretical development of the ‘bundle of rights’ approach: Pamela O’Connor, ‘The Changing Paradigm of Property and the Framing of Regulation as a Taking’ (2011) 36 Monash University Law Review 50, 54–6.

[19]         See, eg, the discussion of the ‘enforceability of equities’ in Brendan Edgeworth et al, Sackville & Neave Australian Property Law (LexisNexis Butterworths, 9th ed, 2013) 401–16.

[20]         Yanner v Eaton (1999) 201 CLR 351, 388–9. Gummow J refers to Wesley Hohfeld, ‘Some Fundamental Legal Conceptions as Applied in Judicial Reasoning’ (1913) 23 Yale Law Journal 16.

[21]         See, eg, Edgeworth et al, above n 19, 94–110.

[22]         Milirrpum v Nabalco (1971) 17 FLR 141, 171 (Blackburn J). See discussion in Edgeworth et al, above n 19. See also: Kevin Gray, ‘Property in Thin Air’ (1991) 50 Cambridge Law Journal 252. Some property rights may however be unassignable: see, Edgeworth et al, above n 19, 6.

[23]         Actual possession may give the possessor better rights than others whose interest does not derive from the true owner: see Newington v Windeyer (1985) 3 NSWLR 555 (land) or National Crime Authority v Flack (1998) 86 FCR 16 (goods). See also the quote of Gummow J in Yanner v Eaton, above. Possession may, in effect, give the possessor rights akin to proprietary rights. Note, ‘Not only is a right to possession a right of property but where the object of proprietary rights is a tangible thing it is the most characteristic and essential of those rights’: Minister of State for the Army v Dalziel (1944) 68 CLR 261, 284 (Rich J).

[24]         Patent rights were held to be property rights that attracted the presumption against divesting by legislation or delegated regulations: UWA v Gray [2008] FCA 498 [89].

[25]         See, eg, Margaret Davies and Ngaire Naffine, Are Persons Property? (Ashgate, 2001); Rosalind Croucher, ‘Disposing of the Dead: Objectivity, Subjectivity and Identity’ in Ian Freckelton and Kerry Peterson (eds), Disputes and Dilemmas in Health Law (Federation Press, 2006) 324; Donna Dickenson, Property in the Body: Feminist Perspectives (Cambridge University Press, 2007); Rohan Hardcastle, Law and the Human Body: Property Rights, Ownership and Control (Hart Publishing, 2007); Muireann Quigley, ‘Property in Human Biomaterials—Separating Persons and Things’ (2012) 32 Oxford Journal of Legal Studies 659; Muireann Quigley, ‘Propertisation and Commercialisation: On Controlling the Uses of Human Biomaterials’ (2014) 77 Modern Law Review 677. The issue was tested, for example, in Roblin v Public Trustee for the Australian Capital Territory [2015] ACTSC 100. The case concerned whether cryogenically stored semen constitutes property which, upon the death of the person, constitutes property in his estate.

[26]         Arts Law Centre of Australia, Submission 50.

[27]         Australian Human Rights Commission, Rights and Responsibilities (Consultation Report, 2015) 44–5.

[28]         Australian Law Reform Commission, Connection to Country: Review of the Native Title Act 1993 (Cth), Report No 126 (2015) [8.176]–[8.177]. The ALRC noted extensive work on the topic: eg, IP Australia, Australia’s Indigenous Knowledge Consultation <www.ipaustralia.gov.au>; World Intellectual Property Organization, Protection of Traditional Cultural Expressions and Traditional Knowledge–Gap Analyses <http://www.wipo.int/tk/en/igc/gap-analyses.html>.

[29]         Environmental Justice Australia, Submission 65.

[30]         Peter Butt, ‘Carbon Sequestration Rights—A New Interest in Land?’ (1999) 73 Australian Law Journal 235. The particular example Butt cited was of ‘the slow emergence of an interest not previously known to the law, the “carbon sequestration right”’, which has been given statutory force: in New South Wales within the well-known common law interest in land, the profit à prendre; in Victoria within a specific legislative framework, the Forestry Rights Act 1996 (Vic).

[31]         See Australian Law Reform Commission, Connection to Country: Review of the Native Title Act 1993 (Cth), Report No 126 (2015) Chs 4 and 6.

[32]         See, eg, Edgeworth et al, above n 19, ch 4.

[33]         See, eg, Ibid ch 5.

[34]         Under the Personal Property Securities Act 2009 (Cth). The system is explained on the website of the Australian Financial Security Authority, which administers the legislation: https://www.afsa.gov.au/.

[35]         See, eg, Edgeworth et al, above n 19, [1.79].

[36]         See, eg, Ibid 139–72. In Yanner v Eaton, Gummow J noted that ‘[o]wnership may be divorced from possession’, giving the example that, ‘[a]t common law, wrongful possession of land might give rise to an estate in fee simple with the rightful owner having but a right of re-entry’: Yanner v Eaton (1999) 201 CLR 351, 388. 

[37]         See, eg, Edgeworth et al, above n 19, 144–5.

[38]         See, eg, Ibid 517–20.

[39]         See, eg, Ibid 66–7.

[40]         See eg, Bulli Coal Mining Co v Osborne [1899] AC 351; Edwards v Sims (1929) 24 SW 2D 619; Elwes v Brigg Gas Co (1883) Ch D 33 562. See also Adrian J Bradbrook, ‘Relevance of the Cujus Est Solum Doctrine to the Surface Landowner’s Claims to Natural Resources Located Above and Beneath the Land’ (1987) 11 Adelaide Law Review 462.

[41]         See Ch 8.

[42]         That is, contingent on any other person’s exercising his or her rights: ‘an immediate right of present or future enjoyment’: Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490, 496, 501. See also Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30. The term ‘vested’ has been used to refer to personal property, including a presently existing and complete cause of action: see Georgiadis v AOTC (1994) 179 CLR 297.

[43]         American States Water Service Co v Johnson 31 Cal App 2d 606, 614; 88 P2d 770, 774 (1939).

[44]         Walter Witt, ‘Vested Rights in Land Uses—A View from the Practitioner’s Perspective’ (1986) 21 Real Property, Probate and Trust Journal 317. A right is described as immutable and therefore ‘vested’ when the owner has made ‘substantial expenditures or commitments in good faith reliance on a validly issued permit’: Terry Morgan, ‘Vested Rights Legislation’ (2002) 34 Urban Lawyer 131.

[45]         ‘There is no remedial act which does not affect some vested right, but, when contemplated in its total effect, justice may be overwhelmingly on the other side’: George Hudson Limited v Australian Timber Workers’ Union (1923) 32 CLR 413, 434 (Isaacs J).

[46]         For example: ‘vested in interest’, ‘vested in possession’. See, eg, Peter Butt, Land Law (Lawbook Co, 5th ed, 2006) [612].