1. law, govt and politics

Commercial Transactions
Module 1
Personal Property
Winter 2013
©MNoonan2009
This presentation and Copyright therein is the
property of Maureen Noonan and is prepared
for the benefit of students enrolled in the
Commercial Transactions course conducted by
the Law Extension Committee and is available
for their individual study. Any other use or
reproduction, including reproduction by those
students for sale without consent is prohibited.
©MNoonan2009
Introduction
It is expected of students in this course, that they remember what they have
learned in Contracts and Torts and be aware of equitable as well as legal
interests and remedies.
Students are encouraged to follow commercial news, to note reports,
matters and cases relevant to our course and to discuss them in class in
order to consolidate theoretical knowledge. They are also welcome to share
any relevant experience with the class. Much of the law we deal with in this
course involves matters we either come across in life ourselves, or see
happen to others.
In several modules of our course, we are dealing with relatively new laws.
e.g. Australian Consumer Law, and Personal Property Securities Act. In
both of these cases, text and reference books (and old exam questions) may
be out of date.
©MNoonan2009
Personal Property
In this module, we discuss the most
common types of personal property, the
subject of commercial transactions
We then go on to consider some ways of
acquiring or divesting an interest in
personal property other than by
purchase/sale, and the applicable law.
©MNoonan2009
What is property? Something we can own, have certain rights in
relation to. What is personal property? Every type of property
that is not real property.
Choses in possession
Choses in action
Tangibles-an object with
a physical form which can
be possessed.
Intangibles-rights-personal
property that can only be claimed
or enforced by action, not by
taking possession.
Examples:
Cars, boats, machines,
phones, computers,
toys, clothes, furniture,
linen, minerals, food,
manufactured items
Legal –enforceable in common law jurisdiction
Statutory Licences, Interests in Intellectual
Property , Right to sue in debt, Rights as a
shareholder, Negotiable Instruments,
Insurance.
Equitable-enforceable in equity and not common
law jurisdiction
Interest in a partnership, Rights to Legacy
under a Will, Interest in a Trust Estate.
©MNoonan2009
Choses in action
While it is relatively easy for students to
comprehend scenarios regarding physical
items, some have more trouble with
intangibles.
We consider briefly, a few of these to make
sure that students would identify them in a
particular situation and be able to
comprehend legal issues surrounding them.
©MNoonan2009
Licences important to commerce
Valuable rights. Some traded. Some personal.
• Mining rights-precious metals, iron ore,oil, etc.
• To use software
• To use IP-copyright, trademarks-e.g. franchises
• To take a natural commodity-fish, water
• To drive a taxi
• To conduct a particular occupation or business
• To use territorial airspace
• To use privileges via treaties and legislation
©MNoonan2009
Intellectual Property in Commerce
Confidential
information
Know-how
Copyright
Trademarks
Designs
Patents
Legal
protection in
Contract
Australian
Legislation
International
Treaties, WTO
and TRIPS
©MNoonan2009
Misuse of Confidential Information -Woolworths Ltd v. Olson 63 IPR 258
Woolworths were able to effectively protect themselves against misuse of
confidential information by a director.
Olson, a Director was involved in a project to streamline the supply chain. The
project had already cost $1b, and the information concerning it was sensitive.
Olson signed a confidentiality agreement. He was also secretly negotiating with a
competitor to take up employment with them. When he received an offer, he sent
two emails containing several confidential project documents to his wife’s e-mail
address. Woolworths discovered the emails, obtained an Anton Piller order and
removed Olson’s wife’s computer before the emails were opened.
The court found
Sending the documents to his wife’s account (a third party) was a breach of his
agreement.
By sending the emails a reproduction of the documents had been made on Olson’s
server (which was capable of further reproduction when the sent emails were
downloaded or deleted). Olson had infringed copyright even though the emails
were never opened.
©MNoonan2009
Taken from the news ---SMH Nov 8,2010
NSW Supreme court proceedings commenced.
Internet executives suing rock band INXS for $2.8m,
claiming that they pitched a concept to band and managera website that promoted big brands and allowed them to
download songs, ringtones and video music clips. Just as
they were about to sign a sponsorship agreement with
Telstra, manager pulled plug on project only to create a
“substantially similar” site. Claim is that business plan
was confidential and INXS stole it and used it without
their permission. Band deny it was confidential.
©MNoonan2009
COPYRIGHT
Defined in Copyright Act to be personal property
Distinguish a work that is subject to copyright
and
the copyright in that work.
Re Dickens: Dickens v. Hawksley (1935) Ch 267.
Dickens left all of his private papers (which
included a manuscript written for his family’s use
and unpublished at his death) to his sister-in-law
and everything else to his children. It was held that
the manuscript belonged to the sister-in-law and
the copyright in it belonged to his children.
©MNoonan2009
Copyright does not protect ideas; only the expression
of that idea in physical form.
Donoghue v. Allied Newspapers Ltd (1938) 1 Ch 106
The plaintiff claimed copyright in a number of
articles written by a journalist to whom he had
recounted his experiences. He failed. Held that
the plaintiff gave an idea for a story. The story
was the creation of the journalist and the
journalist was entitled to the copyright in the
finished article.
©MNoonan2009
Copyright can be transferred by
assignment, by will and by devolution due
to the operation of the law.
Assignment to be effective must be in writing
and signed by or on behalf of the assignor. S. 196
Copyright Act.
A licence is not an assignment; merely a right to
copy-that which would otherwise be a breach of
copyright.
©MNoonan2009
We are interested in the commercial aspects of Intellectual
Property in this course.
How does one assign/sell copyright? Licence it?
COPYRIGHT ACT 1968- SECT 196
Assignments and licences in respect of copyright
(1) Copyright is personal property and, subject to this
section, is transmissible by assignment, by will and by
devolution by operation of law.
(2) An assignment of copyright may be limited in any way,
including any one or more of the following ways:…...
(3) An assignment of copyright (whether total or partial)
does not have effect unless it is in writing signed by or on
behalf of the assignor.
(4) A licence granted in respect of a copyright by the owner
of the copyright binds every successor in title to the
interest in the copyright of the grantor of the licence to
the same extent as the licence was binding on the grantor.
©MNoonan2009
Seven Network (Operations) Limited v Media Entertainment and Arts
Alliance [2004] FCA 637 (21 May 2004)
The Federal Court found that Media Entertainment and Arts Alliance (MEAA)
infringed copyright when it used an internal phone directory from Seven Network
(Operation) Ltd (Seven) as the basis for polling Seven's employees on a
proposed enterprise agreement. The directory was marked by MEAA for
individuals potentially affected by the proposed agreement and given to a call
centre, ACTU Member Connect (Connect), for it to make a database of
individuals to poll.
Gyles J held that Seven owned copyright in the compilation of the directory and
MEAA's annotation of the directory was a reproduction of the directory in material
form. Seven was granted an injunction to restrain further use and additional
damages of $10,000 pursuant to s115(4) of the Copyright Act were also awarded
against MEAA -the infringement was done in secret, and enabled Connect to
conduct polling quicker and more efficiently than otherwise possible.
In respect of Connect, Gyles J held that the creation of a database using
the annotated directory to obtain names, telephone numbers, position and
location of persons, which could be reproduced in hard copy, was also an
infringement of copyright. Seven was granted an injunction to restrain further use
by Connect of the directory. His Honour also ordered Connect to pay Seven
$2,500 on account of profits for the money it was paid for the polling.
©MNoonan2009
TRADE MARKS ACT 1995
21. Nature of registered trade mark as property
A registered trade mark is personal property.
Equities in respect of a registered trade mark may be enforced in the same way
as equities in respect of any other personal property.
******Note the need in Australia for Distinctiveness for creation and
Use of the mark by the registered owner in relation to particular classes of
goods and services in order to retain
which affects the nature of this form of personal property and what
happens
on assignment, licensing and death
©MNoonan2009
TRADE MARK VALUE in SPORTING ENTERPRISES
The days of football surviving on membership fees and ticket sales are gone.
The 2002 financial report for Australian Rugby Union Limited reported that
of total revenue of over $62m, only about $11.5m came from gate takings
and match fees (19%). Broadcasting fees, sponsorships and corporate
hospitality accounted for 74%.Underpinning the latter is the ability to market
names, logos, images and concepts. While concepts such as Mateship and
fair play can be exploited commercially, they are not exclusive to a particular
company or team. Trade Marks and other intellectual property can be
exclusive, valuable and readily exploited. Note the use of the trade mark on
the Sydney Harbour Bridge during the Rugby World Cup.
Merchandising using these marks is increasingly sophisticated. The All
Blacks have been aggressive in protecting and enforcing their intellectual
property recently. They have applied to register the name and fern leaf logo
as a trade mark in a great many countries and for a large range of goods and
services. For example, the latest applications in Australia even cover purses,
handbags, aprons and walking sticks.
©MNoonan2009
Patents and software
Software can be Copyrighted. However, if the software
represents a new process, it may also able to be Patented.
At present the Samsung-Apple patent cases (at least 21) are
displaying the complexities of this reality, and the
importance of it to many businesses. If Apple win, for
example, it is relevant to all of us using pay TV and video,
as it may prevent others from providing certain services,
without their permission and under licence.
In our Federal Court, Samsung allege in the Federal Court that
the iPhone and iPad infringe 7 patents related to wireless
communication standards.
Note also the successful action in the US by our CSIRO
relating to wifi.
©MNoonan2009
The Franchise
Consider the role of IP
Manuals-copyright licensing, packaging
Branding-trademark use for marketing,
utensils, packaging
Confidential information-business know how
Patents?-genetically engineered foodstuffs
Designs-utensils, giveaways.
©MNoonan2009
THE LINK BETWEEN THE TANGIBLE AND INTANGIBLE
BIOTECHNOLOGY and BODY PARTS
Who owns your Body tissue? When you have your appendix out, who owns it?
If it is used for medical research that ultimately results in a patented commercially
profitable product, should you have royalty rights?
Who owns a patented cell line?
In a case in the California in 1990 a man with leukemia was persuaded to give up his
spleen. The surgeon used blood samples and material to develop a patented cell line;
making substantial profits. The patient sued in conversion. In a 4/3 decision in 1990
the Californian court decided against the patient on the basis that the patented cell
line was both factually and legally distinct from the cells from the patient's body.
If you have good genes, can you market them for cloning?
Who owns frozen embryos? Are they a commodity?
Do you have a right to sell your body parts for profit?
©MNoonan2009
Genes and Patents
A court case commenced in the Federal Court Australia June 8,
2010 to test the legality of an Australian patent for a breast and
ovarian cancer gene owned by an American biotechnology
company and two international research organisations. There
have been calls by researchers, doctors and healthcare interests
to stop gene patents because it is an impediment to research and
makes treatments costly due to licence fees. In a NY case
brought by the American Civil Liberties Union against Myriad
Genetics, the US patent for the same gene has been invalidated
and an Australian Senate inquiry has inquired into gene patents.
Discovery instead of invention? 400 gene patents in Australia.
Ethical and philosophical questions-can you privatise the human
body-whose property is it?
Particularly important for targeted or customised treatmentscoming soon-control over your own treatment?
©MNoonan2009
The story of Wormitage Estate
December, 2005
Waleed Raghdo, a teacher at Altona North Primary School in Melbourne has been
at the forefront of the school environmental program and started the school’s
worm factory. 200,000 worms work their way through lunch scraps. Carnivorous
plants devour flies that hang around the worm factories.
The liquid fertiliser obtained was cleverly packaged in recycled red wine bottles,
fitted with donated recycled corks and labelled-Pengold Grange Wormitage,
complete with details of the vintage.
The brew was a hit. It is sold to local nurseries $4 wholesale and $8 retail a bottle,
and at school fetes. It raises about $3,000 a year for the school.
When Fosters, the owner of Southcorp Wines (owner of Penfolds Grange
Hermitage) heard about it, it threatened legal action for breach of copyright. The
last Grange Hermitage vintage from the 2000 crop retailed for $495 a bottle and a
record $50,200 was paid for the experimental 1951 vintage.
The school capitulated and renamed its brew-Wormitage Estate. Southcorp is
donating a 1988 bottle of Grange for the school to auction.
Why did Southcorp threaten action for breach of Copyright and not Trademark?
©MNoonan2009
Interest in a partnership
A summary of the nature of this type of personal property is
contained in a HC tax case Commissioner of State Taxation v.
Cyril Henschke Pty Ltd [2010]HCA 4. Doris Henschke
surrendered her one sixth share in a wine making partnership in
SA.
The HC adopted with approval the statement of Windeyer J in
Biolton v. FC of T [1965]ALR481,485 that the right with respect
to partnership assets is generally regarded as equitable and is “a
fractional interest in a surplus of assets over any liabilities on a
winding up and in the future profits of the partnership business…”
So, value can only finally be ascertained on a winding up…but can
be estimated and agreed prior to that.
©MNoonan2009
PERSONAL PROPERTY
DISTINGUISH
POSSESSION
CONTROL
WHY NOT FINAL?
ENCOURAGE FORCEFUL ACQUISITION
AND
OWNERSHIP
ENTITLEMENT
RIGHT TO CLAIM IT FROM SOMEONE ELSE
USUALLY SUPERIOR TO POSSESSION
©MNoonan2009
Possession
Elements
1. Exclusive control over the chattel.
Plus
2. Intention to exclude others from exercise
of control.
©MNoonan2009
Contrast Possession with Ownership
“Ownership” of personal property involves
more than possession–
–
–
–
–
–
the right to possession,
to use, to use up,
to alter,
to hire out,
to grant a security,
to gift, or sell.
©MNoonan2009
Ways of acquiring Ownership
Possession
Production
Finders
Keepers
Will or
Inheritance
Barter
Purchase
Gift
See later
modules
Inter vivos, or in
Contemplation
of death
Accession Confusion
©MNoonan2009
FINDERS KEEPERS
ENTITLED AGAINST ALL EXCEPT
SOMEONE WITH BETTER TITLE
WHO FOUND IT?
- OWNER OF LAND?
- OCCUPIER?
- TRESPASSER
- VISITOR?
WHAT DID THEY FIND?
- LOOSE CHATTEL?
- FIXED ITEM?
WHERE DID THEY FIND IT?
- ON THE LAND?
- EMBEDDED IN THE LAND?
ANYONE WITH BETTER TITLE?
- TRUE OWNER?
- OWNER/OCCUPIER?
- STATUTORY ENTITLEMENT?
©MNoonan2009
Larceny by finding
What is it?
An old common law criminal offence which applies
in NSW. If at the time a finder finds property, they
believe that by taking reasonable steps they can find
the owner, but appropriate it instead, they commit
larceny by finding. BUT, if at that time they do not
believe that by taking reasonable steps they can find
the owner, they do not commit larceny.
©MNoonan2009
Taken from the news June 2, 2005 SMH
Found: $250,000 Queue here.
“When a rainbow leads you to a pot of gold take it to the police or face 5 years behind bars
for the crime of larceny by finding-because in NSW finders are not always keepers.” (23
year old bank employee who claimed he found $250,000 on an inner city street, but did not
report it. A colleague saw some in a bag under his desk and the rest later found in a safe
deposit box). (Subsequently charged with, and pleaded guilty to larceny by finding.)
What is larceny by finding?
Here finder should have reported it to police, received receipt and could have received it
back if it went unclaimed.
Acting director of University of Sydney Institute of Criminology Mark Findlay said: “Its
an old law and it doesn’t necessarily recognise the complexity of modern life-it..relates
better to villages where everyone knows each other than to big cities”.
Police may think it looks suspicious as it is unusual for people to carry about large sums
like this and lose it without reporting it….. Might be money from a bank robbery lost in
the getaway, drug money, lost, etc and taking action gives them the opportunity to check it,
and the “finder” out. i.e. evidence or proceeds of crime.
Note the difference if the money had been clearly abandoned by true owner.
©MNoonan2009
LOST PROPERTY
(REMEMBER TO DISTINGUISH BETWEEN LOST
AND ABANDONED PROPERTY)
LOCATION
PROPERTY
GENERAL RULE
EXCEPTION
CASES
In /attached
to Land
True owner has best title
Owner of land has better
title than finder
None
On land
True owner has best title
Finder has better title
than owner of land
Landowner exercised
such manifest control
over the land as to
indicate an intention
to control the land
and anything found
on it
Ranger v. Giffin
Parker
Munday
Flack
Tamworth
©MNoonan2009
Note the effect of Statute on historic finds
From the Sunday Telegraph 27/9/ 2009
Fight on for Saxon Gold
Row has erupted over who will share fortune in
Anglo-Saxon treasure found in a field in Britain
Note effect of Statute….becomes Crown Property
even though found by individual with metal
detector and private land.
Compensation payable under this particular statute.
Similar provisions in Australia.
©MNoonan2009
Items found in or attached to land
RANGER V. GIFFIN
1. MRS RANGER SOLD HER HOUSE TO MR. AND MRS.
SCHINDLER.
2. WHO CONTRACTED MACGREGOR & GIFFIN TO BUILD AN
EXTENSION.
3. TWO EMPLOYEES FOUND A BISCUIT TIN FULL OF MONEY.
 WHO WAS ENTITLED TO THE MONEY?
 NOONE ELSE CLAIMED OWNERSHIP.
 NOT A LOOSE CHATTEL. BURIED IN THE GROUND IN A PLACE
NOT NORMALLY ACCESSIBLE.
MRS. RANGER?
CLAIMED THAT SHE HID THE MONEY,
FORGET IT AND LEFT.
JUDGE DID NOT BELIEVE HER.
©MNoonan2009
Items found in or attached to land
RANGER V. GIFFIN CONT.
SCHINDLERS?
OWNERS IN FEE SIMPLE.
GENERALLY ENTITLED TO
EVERYTHING ATTACHED TO OR UNDER
THAT LAND.
MACGREGOR & GIFFIN?
NEVER IN POSSESSION OF
PREMISES OR TIN. CONTRACT
ENTITLED THEM TO DEBRIS, BUT TIN
OF MONEY NOT DEBRIS.
EMPLOYEES?
QUINN DID NOT FIND THE MONEY.
GIFFIN & QUINN?
GIFFIN FOUND IT BUT HIS RIGHTS
FLOW TO HIM FROM HIS EMPLOYER
BECAUSE HE HAD NO INDEPENDENT
RIGHT TO BE ON THE LAND.©MNoonan2009
Items found in or attached to land
Example:
A leased land to B for 99 years. While excavating,
B found a prehistoric boat 6 feet below surface.
A claimed the boat and was successful.
Immaterial that he had not been aware of it’s
existence
Elwes v. Brigg Gas Co (1886) 33 Ch D 562
Note the effect of modern statutes on finding items
such as this
©MNoonan2009
Items found in or attached to land
Example:
P water company owned land with a pool and
employed D to clean it. While doing so, workman
found 2 gold rings in mud at bottom of pool.
HELD: P as owner of land containing the pool
entitled to rings.
South Staffordshire Water Co v. Sharman (1896) 2 QB 44
©MNoonan2009
Items found in or attached to land
Example:
While using a metal detector in a public park owned by P
local authority, D became aware of object. He dug 9
inches down and found a valuable medieval gold brooch.
Court held that local authority as owner or lawful
possessor of land had better title to object found than
finder. Right of public to engage in recreational pursuits
in park did not include digging and removal of property
(acts of trespass).
Waverley Borough Council v. Fletcher (1996) QB 334
NOTE: Relevance of rights granted, signs, terms of
dedication, statutes affecting.
©MNoonan2009
Items found ON the land
PARKER V. BRITISH AIRWAYS BOARD
 MR. PARKER WAS AIRLINE PASSENGER.
 FOUND A GOLD BRACELET.
 HANDED IT TO BA LOUNGE EMPLOYEE.
 PLEASE RETURN IF OWNER DOES NOT CLAIM.
 OWNER NEVER DID.
 BOARD SOLD IT AND DID NOT GIVE IT TO MR. PARKER
 HE SUED AND WON. BA LOUNGE APPEALED.
WHO WAS ENTITLED TO THE BRACELET? NEITHER IS OWNER.
 PARKER CLAIMS “FINDERS KEEPERS” AT COMMON LAW
 BA LOUNGE CLAIMS UNDER COMMON LAW AS OCCUPIER OF
LAND AND ENTITLED TO ALL LOST CHATTELS ON THE LAND
©MNoonan2009
Items found ON the land
PARKER V. BRITISH AIRWAYS BOARD CONT.
1. PARKER NOT A TRESPASSER.
2. PARKER WAS FINDER.
3. PRIMA FACIE FINDER NOT DISPLACED IN FAVOUR OF
EMPLOYER.
 BA OCCUPIER OF LOUNGE.
 ITEM WAS LOOSE, NOT BURIED IN OR ATTACHED TO LAND.
 BECAUSE OF THIS, BA MUST HAVE MANIFEST INTENTION TO
EXERCISE CONTROL OVER THE LOUNGE AND ALL THINGS IN IT.
 CONTROLLED ENTRY AND USE, BUT NO MANIFEST INTENTION.
NO EVIDENCE THEY SEARCHED FOR LOST ITEMS.
 SOME DISCUSSION OF WHAT IT TAKES TO SHOW MANIFEST
INTENTION. SOMETIMES IT SPEAKS FOR ITSELF. E.G. BANK
SAFETY DEPOSIT ROOM.
©MNoonan2009
Abandoned goods and rights of finders
LEONARD GEORGE MUNDAY V. AUSTRALIAN CAPITAL
TERRITORY (1998) SC ACT 62 NO. SC 320 OF 1998.
PUBLIC RUBBISH DUMP.
TIP FACE AND REVOLVE DEPOT.
RIGHT OF PUBLIC TO HAVE ACCESS TO TIP FACE.
TERRITORY CLAIMED ALL PROPERTY BELONGED TO IT.
EXCLUSIVE SALVAGE RIGHT TO REVOLVE.
MR. MUNDAY SALVAGED FROM TIP FACE AND SOLICITED
DUMPERS FOR THEIR GOODS.
MR. MUNDAY SOUGHT INJUNCTION TO PREVENT INTERFERENCE
TO HIS SALVAGE/RECYCLING EFFORTS.
©MNoonan2009
Munday (2)
IS RUBBISH ABANDONED GOODS?
FEE TO ENTER RELEVANT?
WHAT ARE THE TERMS OF THE LICENCE?
EFFECT OF SIGN ASSERTING EXCLUSIVE SALVAGE
RIGHTS?
EFFECT OF SIGN ASSERTING ALL DEPOSITED MATERIAL
PROPERTY OF TERRITORY?
Decision: ACT may
REGULATE ENTRY AND EXCLUDE
LAWFULLY GRANT EXCLUSIVE LICENCE TO REVOLVE
ASSERT CONTROL OVER GOODS DEPOSITED
BUT CANNOT ASSERT CONTROL OVER GOODS PRE-DEPOSIT
SO MR MUNDAY CAN SOLICIT GOODS PRE DEPOSIT.
©MNoonan2009
Abandoned and found? A gift? Nemo dat?
See example Pearson 2nd ed p 94
George was hiking across Broadacres; an outback rural Queensland
property, when he saw an old tractor lying in a disused shed. George
was an agricultural machinery collector and immediately recognised
the value of the tractor as an antique. He inspected it and thought
that with a lot of care and work he could restore it to its former
glory. He contacted the lessee of Broadacres, Russell, who said he
could take the tractor as he did not want it. George said he would
have it towed off the land in a week. Before that, an arsonist torched
the shed in which it was housed and the tractor was destroyed.
Russell wanted to lodge an insurance claim with his equipment
insurer covering the loss of the tractor. George had taken out an
endorsement to his insurance policy covering “all goods the Insured
owned or has actual or constructive possession of at the time of
loss” with a specific notation of this particular tractor. ©MNoonan2009
Manifest intention to exercise control
TAMWORTH INDUSTRIES LTD V. ATTORNEY-GENERAL (1993) 3 NZLR 616
A property next to that of a Mr. Dods was leased by its owner to Tamworth, a company
controlled by Mr. Dods. He lived on his own property. No fences or other physical means
of separation existed between the two.
On the land leased by Tamworth were a series of derelict buildings. During a police raid,
money was found in bas under the floorboards.
Mr. Dods was charged with possession and supply of cannabis. He denied all knowledge
of the cannabis and money and defended the charges by amongst other things,
demonstrating that he did not have sufficient control over the property on which they
were found.
He then sought to assert that the money should be his as it was found on land of which
he was the occupier. To do so, he had to demonstrate that he had a manifest intention
to exercise control over it.
Court found no evidence of boundary, security. The situation did not speak for itself
as the fenced suburban block might or the bank vault mentioned in Parker.
©MNoonan2009
THE CASE OF THE GREY METAL FILING CABINET
Back in the 1970s, we had double digit inflation. Eva, was concerned how she would continue to
fund her long life. With her husband dead and children gone, she passed the time watching
television, feeding her cats and filling her house with more and more junk from the auction sales of
deceased estates in her town. She bought everything; whether it be genuine antique cedar furniture or
old filing cabinets for the cats to sleep in.
One day she heard about the internet at a Senior Citizens luncheon, bought a computer, went on line
and started to trade. She dealt with bearer stocks and bonds and had an account set up via a letter
box company in the British Virgin Islands after hearing about it on CNN.
After more than 20 years and feeling unwell, she asked her agent to send her all the share and bond
certificates. Not knowing what to do with them, she put them in one of the old filing cabinets,
locked it and decided to sort them out later. She died before she ever did.
The heirs of her will were her grand-children Sam, Sally and George. Horrified at the conditions in
which she lived when they came to clean up, they emptied the house; dividing the cedar antiques
between them, taking 4 truckloads of things to St. Vincent de Paul. The rubbish (including the old
smelly filing cabinets with cats still living inside) was taken to the banks of a creek and dumped.
The owner of the property near the creek was furious when he saw all this rubbish on his land and
pushed over one of the filing cabinets. It burst open and exposed-$7,549,000 worth of bearer stock
and bond certificates. News leaked out and the story was on the evening news..Sam, Sally and
George have claimed the securities. Who is likely to get them?
©MNoonan2009
FINDERS KEEPERS
From news.com.au April 27, 2002
Families feud over buried treasure
A $19,000 treasure trove sparked a feud between 2 Perth families.
When gardener Cliff Anderson dug a hole for a rosebush in a suburban Girrawheen
backyard, he uncovered what one family claims as their dead mother’s secret horde.
However, property owners Eunice and Joseph Borges are claiming “finders keepers”.
Former owners of the house, the Konior family, told the paper their widowed Russian
migrant mother Anna hid the money as a nest egg against hard times. When Mrs Konior
died suddenly from an aneurism in 1997 without revealing the exact location of the stash,
frantic searches with metal detectors unearthed around $6,000.The house was sold and
proceeds shared among the 3 children.
But now Adela 56, Lee 51 and Trudi 50 are considering civil action to recover what they say
is family property.
Criminal proceedings for theft were dropped.
©MNoonan2009
Taken from the news August 30,2007
On 24 August, 2007, Seven Network ran a story about AFL
players who had had drug treatment. They did not name the
players, but named the club. Seven reportedly bought the
records for $3,000 from a source who claimed to have found
them in the gutter outside a medical clinic. After seizing
documents, police arrested a man and a woman and charged
them with “larceny by finding”.
“There would be an ethical issue if we had knowingly bought
stolen documents….it is yet to be established whether the
documents were stolen or not.”
Who do the records belong to? Were they abandoned? Who does
the information in those records belong to?
See also later module on electronic commerce and data
management
©MNoonan2009
Finding /Lost Property Statutes
If a person finds goods and hands them into the Police, there
is generally a Statute which provides that if the true owner
is not found within a specified time, that the goods be
returned to the finder (unless they are proceeds of crime
etc)
Care should be taken to obtain a receipt and preferably to
have a witness.
Otherwise, one could end up in the situation described in
Edwards v. Police (2004) SASC 419. Mr.& Mrs Irwin
found a purse with $660 inside, handed it in, true owner
came forward, money missing but Irwins had no receipt for
purse and money. Police officer charged and convicted, but
it could have ended badly for the Irwins.
©MNoonan2009
Exam Q-A1-Sept2011
This question concerned the cricket ball hit out of the Sydney Cricket Ground on to Driver Avenue and picked up by a passer by.
MARKING
Understood Question
Answered Question
Law of finders-what was found-personal property
where was it found-on or in land
who found it-trespasser etc
rights of a finder in circumstances
someone with a better title?
Relative merits of others
Cases to support
Larceny by finding
Reasoning
Other-e.g. gift, negotiate
TOTAL
1
1
15
2
1
20
COMMENTS
Most students attempted this question and dealt with general law of finders adequately. A few provided superb answers.
ISSUES ARISING
A surprising number of students assumed that Cricket Australia was the true owner without analysing the situation or the relative merits
of the various contenders for that status.
Quite a few answers demonstrated confusion between the rights of a true owner and the rights of an occupier.
©MNoonan2009
GIFTS
By far the least problematic way (legally
speaking) to make a valid gift is by a
Deed of Gift.
If there is no Deed, we must rely on the
common law to work out from the
evidence whether there has been a valid
gift or not.
©MNoonan2009
DEED OF GIFT
This DEED OF GIFT is made the 22nd day of March 2013.
BETWEEN Quentin Cole of 44 Queen Street, Woollahra NSW(Donor)
AND Mary Cole of 44 Queen Street, Woollahra NSW (Donee)
NOW THIS DEED WITNESSETH:
The Donor hereby assigns to the donee all the furniture, cars, jewellery and other items of
personal property in or about the residence of the Donor at 44 Queen Street, Woollahra
NSW to hold the same for her benefit absolutely
IN WITNESS WHEREOF
the Donor has duly executed this deed on the above date.
SIGNED SEALED AND DELIVERED
As a Deed
by the said Donor
in the presence of
………………………………………..
…………………….
©MNoonan2009
There are 2 types of gift that we will consider
(1) GIFT INTER VIVOS
A gift made during one’s lifetime.
CONDITIONS FOR EFFECTIVE GIFT inter vivos
Donative intent
Delivery.
Acceptance
(2) DONATIO MORTIS CAUSA
A gift made in contemplation of death
CONDITIONS FOR EFFECTIVE donatio mortis causa
Donative intent
Death of donor
Delivery
Acceptance
Survival of donee
©MNoonan2009
GIFT INTER VIVOS
In re Cole, a Bankrupt (1964) 1 Ch 175
Mr. Cole took his wife to his house. Showed her the furniture
“It’s all yours” Mr. Cole was made bankrupt.Trustee sued
Sufficient Delivery? Enough to bring donee to gift? Change of
possession? Actual v. constructive delivery?Difference between gift
and trust. Law will not invoke to cure a defect.
Note policy considerations re bankrupt
FINDING OF THE COURT OF APPEAL
Gift never perfected by delivery
©MNoonan2009
TAWIL V. PUBLIC TRUSTEE OF NSW
Matter No 4696/97 (1998)NSWSC 520 (1July1998)
On the way to hospital on 20.04.96 (where he died on 21.04), Michael
Biriukoff gave plaintiff a bag.
"Yousef, you know I loved you always as my son, and you know that I have
no relatives, so if anything happens to me I want you to have all that is in
this bag. You will find details of my bank accounts, the car keys and all my
other papers. Everything I own is yours if anything happens to me…..I
want you to have everything if I die and the papers are all in the bag….he
gave plaintiff the bag…I packed it specially so that I could give it to you."
Donatio mortus causa? Handing over of bank statements demonstration of
intention and symbolic of it? Lessening of requirements in recent years?
Discussion of Public Trustee v. Bussel.
Judge refused to extend doctrine so that handing over bank statements
sufficient….in no sense indicia of title or even evidence of title…not
required to be produced to bank when obtaining payment from account.
Keys for car would have been enough for it to be within principles as
enunciated in Bussel.
Application for declaration failed for other reasons.
©MNoonan2009
RIGNEY V. GORDON & GORDON (1996) SADC 3531 and the dangers of vague
arrangements with charitable gift giving.
In anticipation of retirement, the Gordons went to live in Renmark in 1989. They
bought houseboats named “Buralga” and “Dupree” hoping that they would
provide security retirement. However, hire of houseboats for vacations on the
Murray declined after 1992.
Mrs Rigney was of aboriginal descent. She had for some years been employed as
co-ordinator of the Gerry Mason Senior Memorial Centre; which sought to
improve the lot of aboriginal people in the Riverland.
The parties became friendly. The Gordons were interested in making some
contribution to the advancement of the local aboriginal community, but did not
know how to go about that. As their friendship increased with Mrs Rigney, she
claims that they made a gift of the Dupree to her personally. This was supported
by a form which was completed and forwarded to the Manager Ship Survey
Department of Marine and Harbours showing a change in “new owners
name”.There was also evidence from the plaintiff that after signing the form Mrs
Gordon had said “Well, we’ve just given our boat away”.
©MNoonan2009
RIGNEY v. GORDON & GORDON(2)
The Gordons argued that they had not given their boat away. They had merely
meant Mrs Rigney to be a manager pending their finding a suitable way to give it to
an aboriginal organisation having aims that would achieve the ends that they had in
mind but had been frustrated in their objective because Mrs. Rigney had not
introduced them to persons who could receive their gift on behalf of the aboriginal
people in Riverland.
In the light of this and other evidence, the court had no trouble deciding that there
had been a gift to Mrs. Rigney personally. It found intention proven. It was satisfied
the Gordons had become progressively more impressed by Mrs Rigney and her
ability to turn her hopes into reality as a business; thereby leading to increased
employment in that business for aboriginal persons. It found that they changed their
minds about the way in which they would give the boat away and decided they
would best achieve their aims by giving it to Mrs. Rigney personally.
©MNoonan2009
FRANK LINKE V. MELVA LINKE & ORS (1995) SASC 5201
Frank was former husband of Melva and father of Dennis and Kevin. He married Melva in
1945 and set up a small transport business in the Barossa Valley, transporting grapes and
juice. In 1955 he purchased an orchard with his wife and another one in 1968. The two sons
went to work for their father when they left school.
By 1976, grapes were crushed and juice transported to winery in tankers and so one was
purchased. Dennis and Kevin formed a business called Linke Transport. In 1980 Kevin and
Melva sold the two orchard properties to Dennis and Kevin for $64,975, by way of
$4,000/year payments and a mortgage back to the parents. Kevin left in 1984 and went to
live in a house he had purchased during the marriage, but which he had not told his wife
about. He did not take any assets of the business with him; nor participate from then on.
As part of his divorce property settlement, Frank sought orders in respect of the transport
business, vehicles, plant and equipment of the transport and orchard businesses and income
earned since 1979.
Melva Kevin and Dennis claimed the plant and equipment had been gifted to them and that
the vehicles had either been sold with the business or given to them around 1980 with the
plant and equipment.
©MNoonan2009
Linke(2)
Evidence confusing and Frank not a good witness (obdurate and often evasive particularly
when cross examined as to documentary material which tended to refute his claims). He
alleged that he demanded the vehicles in 1984 but defendants failed to deliver. He claimed
that from the time the orchard properties were transferred to Dennis and Kevin he was
gradually excluded from the family businesses. This was denied. There was evidence that at
the time of the sale of the orchards both Frank and Melva had acknowledged to the solicitor
that the vehicles were discussed and they said “that’s all given in the price”. There was also
evidence that Frank had said “don’t forget one of these days it will all be yours “and “when I
retire its all yours” and other words to that effect. When he left the plant and equipment in
their possession he said “its all yours”. When he left Dennis gave evidence that he said
“When I leave, everything is yours and you have to look after mum”. The court also found
that the conduct of the business after the events in question was consistent with the vehicles
passing with the business and the plant and equipment being gifted….the sons paid all the
expenses of the business, entered into contracts, purchased more vehicles, actions and words
of Frank at time of leaving both an effective delivery….“…the sons had been using the
items while their father was still working in the business; they continued to use them after he
left. The father acquiesced in the use. In the nature of the items and of the business he could
deliver them no more effectively, no more unequivocally, than by walking away and leaving
them to the sons….his leaving was simply a part and the culmination of the process of
handing over the business to his sons….his statement on leaving was confirmation of the
gift….” It was noted that delivery need not be at the same time as the gift. Delivery first and
gift afterwards is as effectual as the other way around.
©MNoonan2009
SALLY ANNE HORSLEY V. PHILLIPS FINE ART AUCTIONEERS PTY LTD
SCNSW 31.07.95 No3211/92
Concerns gifts, bills of sale, conversion
Anthony and Carl Spies lived with their parents in The Swifts. Their Company
Minjar purchased this property in Darling point from the Catholic Church in 1986.
It executed a Mortgage back. In the same year Carl and Anthony as Mortgagors
executed an Ordinary Bill of Sale over antique furniture and chattels in favour of
the church. Anthony Spies claimed the 1986 BS was discharged in 1987. Court
found more probably than not that it was paid out (32).The evidence was slim but
an inference was raised by the fact that there was a later BS granted by Carl alone
(the 1990 BS) to secure unpaid interest from the mortgage…over …"all furniture
and furnishings now and hereafter situated in the premises known as The
Swifts…"…same furniture as in the 1986 BS This coincided with the principal
mortgage being discharged and a refinancing by Minjar with St. George. BS
transferred to St. George in 1992.
St. George seized the furniture. Anthony claimed a half interest and sued in
conversion. He had to show that he had title to the furniture, that St. George
converted it and he suffered quantified loss and damage. St. George contends that
Anthony failed to establish any of these and that prior to the grant of the BS, the
furniture had been gifted to their mother in 1987. Anthony gave evidence of the
gift to his mother in 1987(33) See later paragraphs for discussion of an effective gift
…delivery 53-83,84,85,86,87
©MNoonan2009
Nolan v. Nolan & Anor (2003) VSC 121 (28/04/2003)
Slide 1
Jinx Nolan sought a declaration that she was the full beneficial owner and entitled to
possession of 3 Sidney Nolan paintings. She was the daughter of Nolan’s second
wife(marriage 1948 to 1976) She also sought orders for delivery up and damages pursuant to
s. 82 of the Trade Practices Act claiming that Sothebys had, contrary to s. 52 of TPA
represented to the public that the sale of the paintings was being undertaken on behalf of
the true owner with the capacity to pass good title and Lady Nolan by being involved
contravened 75B. The defendants were her father’s third wife, Lady Nolan and Sotheby’s
(who Lady Nolan had commissioned to auction various paintings including the 3 in dispute).
Jinx claimed that the paintings were assets of her mother’s estate because they were given to
Cynthia by Sidney Nolan at a date prior to her death. It was undisputed that the paintings had
remained in the possession of Sidney Nolan until his death.
There were acknowledgements in catalogues that the paintings belonged to Cynthia in 1957,
1970 and 1976.
Sidney Nolan had made many gifts of paintings to Cynthia during his lifetime which he did
not dispute either during his life or after her death. Judge found this consistent with the
conclusion that he did not make gifts to her of those paintings he retained after her death.
©MNoonan2009
Intention to make the gift
NOLAN Slide 2
Jinx was unable to produce any witnesses to the gifts. The documents relied on could
constitute at best ex post facto admissions or acknowledgements. Evidence that Sidney
Nolan believed he had made a gift which had taken effect and which he did not desire to
retract would be capable of manifesting donative intention. Not so here as the catalogues
were of loans made by Cynthia and in one case Sidney Nolan did not know of the exhibition
until after it was arranged. Catalogues are in no sense equivalent to a register of title and
must be approached with considerable caution because of what goes on in putting them
together. They were also put together by Cynthia and not Sidney Nolan.
No donative intent proven.
Delivery
Not only must the donor part with possession, he must relinquish all present and future
dominion and control over it beyond any power on his part to reclaim it.
There is discussion of In Re Cole and Horsley leading to approval of a strict requirement for
delivery rather than a relaxation of that requirement. Other than for a period during
exhibitions, there is no evidence of Cynthia’s level of access to, or power, rights of user and
control over any of the paintings in dispute.
No delivery proven. (In any case, out of time because of Limitation of Actions Act )
©MNoonan2009
Rowland v. Stevenson (2005)NSWSC 325
Birthday present of a yacht? Valid gift?
On the night of 40th birthday of R, a yacht belonging
to Mr. S (husband of R’s mother) was moored
outside restaurant where party took place.
When making his speech Mr. S gave a gift to R and
said to R: “And you can have the boat”
R accepted in his acceptance speech.
Various other similar statements prior to that time
Mr. S later said he was joking.
©MNoonan2009
Rowland v. Stevenson cont (2)
Valid gift?
Did it matter that words not contemporaneous
with delivery? No
Did it matter that there was a liability (1/3 of
value owed and charged to third party)
transferred with gift? No
Handing keys over. “It’s all yours son”.
Enough for delivery? Yes, constructive.
©MNoonan2009
Gifts of intangibles
When considering delivery, the donor must do
all that is necessary to transfer ownership.
What is necessary?
Transfer of shares?
Licence?
©MNoonan2009
GENEROSITY AT THE HIGHEST LEVELS
ONE TEL
One Tel founder Jodee Rich transferred assets to his wife, Maxine, within
days of the Company’s collapse. Under pressure from ASIC, the Riches
undertook to reverse the transfers.
PAN PHARMACEUTICALS
Jim Selim, the founder of Pan pharmaceuticals made a substantial gift to
his wife June 10 days after Pan went into administration.
December 10, 2003 “My wife made a great contribution to the family and she never
asked for anything, and over the years, I made gifts when its appropriate” Mr. Selim
said. The money was intended to buy a childcare centre, “a second career for
her” but negotiations fell through, he told the court.
©MNoonan2009
BARTER/COUNTERTRADE
Trade in which payment is made in goods/services instead of money. Around forever.
Common after WWII in the trading practices of the Soviet Bloc who sometimes had
insufficient hard currency to conduct monetary trade. Also used to gain access to markets
otherwise unable to afford to pay.
BARTER-Exchange of goods/services….cash does not enter into the transaction.
COUNTERPURCHASE. Importer pays for imported goods through supplying other goods,
of the total or part of the value of the import. Can also be services.
BUY-BACK occurs when an importing country pays for plant and equipment, often in the
form of a turnkey factory, with products produced from the plant. The supplier of the plant
usually disposes of the countertrade goods with those produced in its own plant.
OFFSETS-suppliers of capital equipment such as aircraft and telecommunications,
computers, defence material are obliged to offer offsets in the form of licensing, coproduction, joint ventures, technology transfer, training, research and development as part of
the sales package.
For more information contact: Australian Countertrade Association Ltd or UNCITRAL United Nations Commission on International Trade Law, Vienna.
©MNoonan2009
$150M GOLD FOR WHEAT DEAL
The first Iraq war following the invasion of Kuwait had put a stop to Australia’s lucrative wheat trade
with Iraq. However, within 48 hours of hostilities ceasing, Charles Stott, (in 1991 head of international
sales and marketing for the Australian Wheat Board) was on the doorstep of longtime friend and
trading colleague Zuhair Daoud, director general of the Iraqi Grains Board to “try to resume our wheat
trade with them”. Iraq’s global assets were frozen by BIS at the time so how could they pay? In the
past, Stott had dealt with suitcases of US dollars, counted over the border in Jordan. This time, the
Iraqis suggested gold. The RBA officials found a technical way around trade bans and UN sanctions
and there was the humanitarian aspect. Stott had with him the RBA assistant governor, who could
distinguish the real thing on sight. Because of anxiety over security, the Iraqis wanted to keep the
transportation of the gold as low-key as possible. For the first leg from Baghdad to Amman, (1,000km)
200 wooden crates, each with 4*12.5kg gold bars, were loaded into a single Mercedes wheat truck
with just one driver. A 35km airport/city trip took 10 hours in the Mother of all Storms. The gold truck
had slid off the road in a snow drift and had been there for two days. A replacement Bedford fruit truck
arrived and the bullion was transferred. As it proceeded toward the meeting with Stott, the driver’s
cabin was lifted clean off the road on to the back axle with the weight. The approval of Jordanian
officials was needed because the gold was being moved through Jordan. Then, the Iraqis questioned
the authority of the Assistant Governor to accept delivery on behalf of the Reserve Bank. An urgent
call went to Bernie Fraser at the Reserve Bank. Roused from his bed, he duly faxed confirmation of his
authority. But, how did the Iraqis know the fax was genuine? An Australian $20 banknote was
produced with a flourish and the signature on the fax matched the one on the banknote. The relieved
Australians left it behind as a souvenir! The gold bars were stamped with a hammer and sickle
signifying Russian origin, proving they had come from Iraq’s vaults and not Kuwait. They found their
way slowly and unobtrusively to the Perth Mint, were quickly reprocessed and sold off as bars and
coins.
©MNoonan2009
2004 Global Reciprocal Trade
WTO estimates that 15% or $8.43b of the $5.62t in
international trade is conducted on a non cash
basis. However, less than 1% of businesses use
non cash trade. Some very large ones do and lots
of very small ones. Commercial exchanges,
government deals, individual BtoB deals.
Note dissatisfaction with USD since 2009 and
discussions re alternative reserve currency (basket
of several, SDR), role of barter, gold, real items
rather than paper money.
©MNoonan2009
Examples of reciprocal arrangements
• A lot of oil swaps both by international oil companies and
by others swapping other commodities (e.g. food) for oil.
Venezuela barters oil with 13 countries e.g. accepts sugar
from Barbados and bananas from St. Lucian
• Bulgaria receives gas from Gazprom Russia in return for
allowing pipelines through its territory to other
countries…Turkey, Greece. Similar deal..cheap
price…with Ukraine.
• Sales of arms, defence materials. Note that extensive
offsets can be involved. Planes for oil or shrimp.
• East Malaysia plans a huge barter terminal that will
exchange grains, timber, food, livestock, palm oil,
electrical products, tobacco and chemicals.
• Large companies sometimes exchange (agree to share)
sophisticated technology for access to markets. E.g. power.
©MNoonan2009
Barter example-resources
Hancock agreed with Romanian company to provide iron
ore in exchange for rolling stock and other things as
part of a countertrade deal. Unfortunately, Hancock
needed the cooperation of BHP (both to use their Mt
Newman railway and with the mining) for it to work.
Just about everything that could go wrong did go wrong,
the agreements were not interdependent. Hancock
Mining sought to assign its rights in various
agreements so someone else could bring the legal
action.
See Westraint Resources P/L v. BHP Iron Ore P/L
(2001) for details.
©MNoonan2009
ACCESSIO
The joining of one (usually smaller) thing(s) to another (usually larger or more valuable)
one. Can be Accession by attachment and accession by natural increase.Injurious removal,
separate existence and destruction of utility tests commonly used.
CONFUSIO
The mixing of fluids so that they cannot be separated e.g. wine with wine or oil with oil.
COMMIXTIO
The mixing of identical or similar dry goods so they cannot be separated e.g. corn with
corn.
SPECIFICATO
The altering of a raw material to produce something of a different identity e.g. grapes
fermented into wine or skins fashioned into a coat
Note that courts do not always use the same classifications!
The objective is a just result; whatever the test used
©MNoonan2009
Accession
The owner of the principal chattel may
become owner of both it and the
attachments.
The owner of the attachments, although they
lose ownership, may be entitled to
compensation.
See McKeown v. Cavalier Yachts Pty Ltd
©MNoonan2009
McKeown v. Cavalier Yachts
(1988) 13 NSWLR 303
Mr. McK owned yacht hull worth $1,777. It was situated on
the premises of Cavalier, the manufacturer. An engine was
installed and deck filled. Improvements worth $24,409.
Who owned the yacht as improved. Mr. Mck claimed he
did.
Can the improvements be conveniently detached? No
Would it cause injury to remove? Yes.
Accession applies. Yacht returned to Mr. Mck. Damages
inappropriate because yacht sufficiently individual. Fair
and just compensation must be paid for improvements.
©MNoonan2009
Accession
In Jones v. De Marchant (1916) 28 DLR 561
Husband used 18 of his wife’s beaver skins
along with 4 of his own to make a coat for
his mistress.
Who owned the coat?
On application of doctrine of accession, the
wife.
©MNoonan2009
Accession
If a chattel that has been attached to another can be
removed without damage to either, there is no
need to apply doctrine of accession.
e.g. Sims v. SPM Business Consultants Pty Ltd
(2002) 43 ACSR 633, held that doctrine did not
apply to documents later added to client files
because they could be removed without harm to
either documents or files.
©MNoonan2009
THE GODDESS
Ivan is a sculptor.
Suppose that he is walking in the countryside around Mudgee after a wine tasting
weekend and comes across a large stone. He imagines it is a goddess trapped and
fighting to be released. Try as he might, he cannot leave her behind to her fate.
Later, he manages to take the stone home with a little help from his friends and works
on it. Week after week, night after night he chips and polishes. Finally after 6 months,
the goddess is released.
His friends are most impressed and take it to one of the galleries in Paddington. A
major patron loves it and offers $150,000 for it. Ivan is interviewed in Art Magazine and
feted by the Art crowd. He is considering the offer.
Word gets back to Mudgee of their famous stone. The owner of the land on which it
was found claims the goddess.
Applying the principles of Accession, who do you think will end up with her?
©MNoonan2009
WHAT HAPPENS WHEN STOLEN CARS OR BOATS ARE IMPROVED BY
INNOCENT PURCHASERS? See article in Law Society Journal May 2003
Criminal Procedure Act
No matter. All goes to owner of car of boat when claimed.
Private action
It all depends on accessio…..
Only accedes if it cannot be removed without destruction or serious injury. E.g. tyres can
be removed easily and therefore would usually not accede to the truck.Note discussion of
McKeown’s Supreme Court case.
If a person sues in damages in respect of a chattel and the defendant has improved it, the
defendant is entitled to compensation for the extent to which at the time at which the
goods are to be valued, the value of the goods attributable to the improvement.
If a plaintiff does not claim damages and where the added value of a chattel has not been
realised by it being sold, why should the plaintiff give compensation to the defendant for
the enhanced value?If the plaintiff has given full and free acceptance to the work done by
the defendant then it is appropriate that the defendant be compensated for its work. The
test for this class would be whether the work done for the plaintiff conferred on him an
incontrovertible benefit. If that is the case, the plaintiff should pay compensation as a
prerequisite for an order returning the chattel to him. (The McKeown situation).
©MNoonan2009
CONFUSION
Indian Oil Corporation v. Greenstone Shipping SA (Panama) (1988) 1 QB 345
Greenstone Shipping owned cargo ship and 15,633 barrels of oil in tanks.Greenstone loaded
507,977 barrels belonging to Indian Oil onto the ship in Russia.Oil became mixed with their
own.Ship sailed to India.After Indian Oil received entitlement, claimed
remainder.Arbitration against them. They appealed to High Court of Justice
If Greenstone wrongly mixed, cannot be separated, does whole become property of
Indian?
Mixture brought about by trick to deceive?
Impossible to distinguish property of each?
DECISION
No authorities binding. Some persuasive Apply rule which justice requires.
Where B wrongfully mixes goods of A with goods of his own, which are substantially of the
same nature and quality, and they cannot in practice be separated, the mixture is held in
common and A is entitled to receive out of it a quantity equal to that of his goods which
went into the mixture, any doubt as to that quantity being resolved in favour of A. A also
entitled to claim damages in respect of any loss, by quality or otherwise.
©MNoonan2009
Student questions
Please explain the different findings in In re
Cole and the Sally Anne Horsley case with
respect to Delivery.
Note whether control relinquished
Public policy issue re a Bankrupt’s generosity
©MNoonan2009
Exam September 2008 QA1
In the 1950s, a series of 22 very large canvas paintings by aboriginal artists came into existence. They
had been the result of a government sponsored community project in Western New South Wales. At
that time, indigenous art was not very popular. The paintings were purchased from the NSW
Government for a token $50 by the Art Gallery of NSW (‘the Art Gallery’) at the insistence of the
Minister, but never recorded as an item in it's collection. As the Curator of the Art Gallery did not
want them, was very keen to be rid of them, believed they did not match the projected image and
collection envisioned, and determined there was not very much storage space at the Gallery, he asked
the NSW Museum whether it would take them; which it did. The paintings were placed in the
basement of the Museum, added to its inventory, and forgotten.
Everyone associated with this situation died before 2000.
In 2006, the Museum Manager was surprised to find the stored paintings. A major exhibition was
mounted in 2007. It drew hundreds of thousands of visitors and generated revenue of $7,000,000.
There were requests for foreign exhibition tours. Merchandising offers poured through the door. This
was very welcome, as it would enable the Museum to greatly enhance its offerings and research in
various areas.
Tristan, the curator of the Art Gallery, jealous of the rival Museum up the road, wondered where
these magical paintings had come from. "Why, from your Gallery, of course", said William, the
Museum Manager. "The Art Gallery gave them to us in 1957".
Lawyers for the Gallery have sent a letter to William, demanding the paintings be returned to the
Gallery at the end of the current exhibition.
Advise William on the legal position of the Museum with respect to the canvasses.
©MNoonan2009
Past /sample exam questions
September 2008 SECTION A QUESTION 1
Understood Q
Gifts, title, bailment
Answered the Q
Gift
including Nolan
Ownership/Copyright/Abandonment
Bailment
Reasoning
Other e.g. authority of curator, storage charges,
TOTAL
2
2
8
4
5
2
1
25
Students were expected to work through the required criteria
for a valid gift…intention, delivery and acceptance and
conclude whether the arrangement was a gift or bailment for
storage and the consequences
©MNoonan2009