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Question: In "Concepts of property," The National Legal Eagle: Vol. 7: Iss. 1, Article 6. (2001) (Available at: http://epublications.bond.edu.au/nle/vol7/iss1/6), Michael Weir said: “The question of why the state will protect a person’s property interest and the means of obtaining a property interest have as a background particular philosophies which provides the justi?cation for how we distribute and allocate property in our society.” How would you answer that question, of why the state will protect a person’s property interest and the means of obtaining a property interest? In developing your answer, refer to and analyse critically at least three particular theories of the concept of property.
Introduction
The law which deal with the property is law. So, the concept of property is important to understand the law which creates the rights, along with the responsibilities and also the interests in in. Basically, property is often related to things, and as defined by the Australian Law Reform Commission as one, where it has both the possessory as well as the ownership rights. The legislation governing these, classifies the properties under various heads, and identifies the property as against their nature. So, property can be a tangible if that can be moved and is not attached to earth or land, for example, jewellery, furniture, clothing, etc. it can also be an intangible property, which cannot be perceived by the senses and it includes, any kind of negotiable instruments or bonds etc. Again, land is a real property, and is immovable, on the other hand, intellectual property like trademarks, copyright, patent, where the patent rights were held to be property rights if divested by way of legislation was held by the Federal Court of Australia, in case of UWA v Gray , etc. are also property under the property law. But, practically, the word property is used to create a legal relationship between the property and the person, along with the state, if the person is identified as the holder of a definite form of property.
Body
So, the concept of property is the legal relationship created between a person along with the object and involves three persons, including the state, but the state protects and also suppresses the civil liberties which creates the notion that, any other becomes excluded and hence are not included for the entitlement of the benefits or access to the property, and thereby the state accomplishes the exclusive rights as against the person concerned, and for those properties which are sanctioned by the stateas was held in case of Yanner v Eaton . Thus, it basically indicates that, interest in the property is a separate aspect and is quite distinct from the property as a whole and can include the superannuation rights was held in case of Greville v Williams or can also be for the debts, was held in case of City of Swan v Lehman Bros Australia Ltd . So, the concept of property varies from its materiality to the bundle of rights and interest so exercised on it or developed through it. On the other hand, ownership in the property covers all the exclusive rights to be enjoyed by the owner, but ownership is not the sole and the only way a property can be enjoyed. The enjoyment to the property also comes from the mere possession of it, by holding a security interest and can also include a leasehold right or that of the tenant accommodation or can also be freehold for a certain period of time. So, a person’s interests in a property can be protected by creating some restrictions, so that the property remains in the sole possession and also ownership for the person concerned. But, to make the restriction applicable the property must be a freehold one from the onset and the dispositions concerning the sale or mortgage or any kind of transfer by alienation must be registered as against such properties. So, once the restriction is applied, it can be an absolute bar which will be subject to any kind of dispositions and can also be due to the imposition of the conditions so done by the state.
A property right accrues, based on the type of property, and it is implicit that, right includes the enjoyment, by exclusion of other, along with the right to alienate he property Milirrpum v Nabalco . Again, the right to the property is based on the legislations and also the statues, which affects certain kind of properties like that of Personal Property Securities Act 2009 (Cth) . On the other hand, for land as well as for goods, the property does not have to be with the owner only to gain the interest in it, it can also be with the one who is in possession of the property and who is also not legal owner. So, ownership rights must be distinguished from that of the possessory rights, but the possessory rights often give rise to some kind of legally qualified rights, since actual possession at times gives the possessor the better rights, which may not be achieved by the actual owner to it was held in Newington v Windeyer , in case of land matters and for goods, the better rights was held in National Crime Authority v Flack . On the other hand, right to possession is not the sole right of concern for the possessory rights since, proprietary rights are also considered to be essential when the property in possession is a tangible object Minister of State for the Army v Dalziel .
Theories
In almost all situations, the ownership and the possession is mingled up, and while still holding the ownership, a possession can be shifted to someone else. But, the priority in the interests will be dependable on the facts as to who are having the primary interest in to it as an owner.
Again, when the property is broadly distinguished it, can be classified between private and that of the public. A property is aid to be private when it is owned by a private individual and is public when it is state owned properties by either of the governments, but there are communal ownerships as well, which are identified by the High Court in Mabo v State of Queensland , and Court acknowledged entitlements of communal rights for the Aborigines. But, when it comes to the discussion for analysing the relationship between the parties and the individual interests in to it to that of the state with the holders having multiple interests in to property, it requires some justifications based on certain theories. So, when it comes to the question that, why the state will be protecting the person’s interests along with the means for the obtainment of the property interests, then it is required that, we understand the distribution and the allocation of the property based on certain justifications. So, the theories which provides the justifications are discussed below as propounded by Michael Weir :
Based on the Occupation Theory, the party who discovers the property at the initiation and remains in occupancy of that property, have the entitlement to dispose the assets belonging to that property. But, this theory is only advantageous to a certain extent. Since, the certainty and also the security of the person is with the possessory rights, and can only retain possession, for the period, before anyone else shows any better title to it. So, when a person is in the possession of a landed property, and is retaining that for a an indefinite period of time, then this possessory title becomes unassailable, if the original owner claims that, since the underlying concept of adverse possession is based on the very fact that, once the person in possession is not removed from the property for an indefinite time, then the possessory rights may under certain circumstances devolve to ownership rights.
The labour theory focusses on the very point that, whatever is produced through the labour of certain person, have the full entitlement towards it. So, this theory basically devolves around the very fact that, the property should be distributed based on the person’s productivity. If a property is commonly owned, then to appropriate the property, the co- mingling of the individual labour spend on it devolves on it. Based on this theory, the middle-class peoples started accumulating their assets based on the labour or hard work or the effort they so deployed in the gathering of it and definitely not by hereditary succession.
The third theory, is the economic theory, which is based on the motivation to accumulate profit, where the private property is into creating the environment and the maximum output so gathered from the productivity is based on the only motive to seek profit. So, when a farmer working in a farm, without any right to land or to that of the crops, then any one trespassing into the land and stealing the crops cannot be prevented by the farmer, and in such situations, the farmer will ultimately stop the production or rather the cultivation, since the results do no accrue from the trespassing and the stealing of the crops. This theory is into assigning the interests, so in the previous example if the farmer is inefficient and the efficiency needs to be enhanced, then the farmer has the right to assign his interest in the property to someone else for applying more efficient methods to make the work done.
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In Australia, and also in other jurisdictions, there is distinction between an outright acquisition of property by the state, subjected to compensation, and also the regulation for which compensation is not necessary as mentioned by Kevin Gray . The economic analysis of law is just an extension along with the application of traditional economic theory which is relied by Coase (1960) and Pigou (1932) , and the microeconomic constructs by Posner, 1992 ; Cooter &Ulen, 1997 ; Wittman, 2003 . The common law states that when a prohibition or even the restriction if applied on the use of land, the that does not accrue any right to compensation, without the statue conferring such a right was identified by Alan S Fogg , and was held in case of Durham Holdings Pty Ltd v New South Wales , and for the compulsory acquisition, the Court followed ICM Agriculture Pty Ltd v Commonwealth . There are also innumerable cases where intervention caused by the regulation, left the owner with intact title along with the undisturbed possession, by depriving the reasonable and beneficial use of the rights.
As the State legislation is into providing the compensation, for the purpose where land which was held in private ownership got expressly occupied and reserved for a public purpose, then the concept for the resource utilisation becomes important based on the traditional economic theory as suggested by (Hartwick, J &Olewiler, N. 1997) . But, for the conflicting uses, which can get resolved through bargaining, based on the fact that the well-defined property rights clearly specify the person, who is in the right for using the resources and is in to deriving the value out of it (Coase, 1960)15. So, on a legal perspective, there are the existence of market imperfections which necessitates intervention, which finally merges into an economic paradigm, when regulations are applied, Stigler, 1971 ; Peacock & Rowley, 1972 ; Hartwick &Olewiler, 199723. So, exercising the statutory power though inevitable at times, can also deprive owners by depriving the reasonable and beneficial use of the rights on and of the land. So, paradigm heightens, when a legislation authorises determination or when the regulation turns private land into that of a conservation estate for the public use, and by prohibiting any activity on the land or in use of the land, the land owner sought compensation, as suggested by Thomas W Merrill and Henry E Smith 2001 . Hence, due to the non- existence of the competitive equilibrium, the resultant effect is not at all Pareto optimal, since, as Pigou (1932)16, suggests, when the optimality lacks, then the state is to step forward for execution of policies. Despite the externalities and also the unrestrained bargaining, contracting can be sufficient for evolving an efficient outcome, without any intervention from external agents. (Maskin, 1994)
Again, as Demsetz (1964) identifies, that whether res nullius is the governing factor for the resource being used is solely dependable on the benefits which are expected from the property along with the costs of monitoring and also enforcing the basic property right by the exclusion of others. In Members of Yorta Yorta v Victoria a claim was based on the land and that of the river flowing within, which was opposed vehemently and the outcome came as a prominent threat. Again, in Wilson v Anderson , claim so made, increased the uncertainty. So, the Courts applies the cautious approach when they divide the property rights based on the competing claims, since the property rights which runs concurrently, often give rise to the inefficiency and furthermore affects the economical improvements of the land in question (North, 1990)
So, the prominent boundary exists when the properties are taken by the government by using the appropriate regulations, and the possible impact steeps when the owner’s use rights, is severed in such a way that it seems to be a taking or the acquisition. As the word right circumscribes an entitlement and also a claim, where the entitlement is for doing something or not by doing something and enforcement of which lies either by way of sanction may be by a legislation or based on certain customs and can also be based on the alienation, i.e. transferring the property, either by selling or gifting, or by leasing out or can also be by way of mortgage. But, at the same platform, when a right exists, there are the corelated duties attached to it (Hohfeld, 1913) , and the duties are the one which highlights that, when a property is under the possession or ownership, then that right is with the interests, which must be protected so that, the exclusive enjoyment is retained with the one who have the legal title to it, irrespective of whether it is ownership or that of the possession.
As the State legislation is into providing the compensation, for the purpose where land which was held in private ownership got expressly occupied and reserved for a public purpose, then the concept for the resource utilisation becomes important based on the traditional economic theory as suggested by (Hartwick, J &Olewiler, N. 1997) . But, for the conflicting uses, which can get resolved through bargaining, based on the fact that the well-defined property rights clearly specify the person, who is in the right for using the resources and is in to deriving the value out of it (Coase, 1960)15. So, on a legal perspective, there are the existence of market imperfections which necessitates intervention, which finally merges into an economic paradigm, when regulations are applied, Stigler, 1971 ; Peacock & Rowley, 1972 ; Hartwick &Olewiler, 199723. So, exercising the statutory power though inevitable at times, can also deprive owners by depriving the reasonable and beneficial use of the rights on and of the land. So, paradigm heightens, when a legislation authorises determination or when the regulation turns private land into that of a conservation estate for the public use, and by prohibiting any activity on the land or in use of the land, the land owner sought compensation, as suggested by Thomas W Merrill and Henry E Smith 2001 . Hence, due to the non- existence of the competitive equilibrium, the resultant effect is not at all Pareto optimal, since, as Pigou (1932)16, suggests, when the optimality lacks, then the state is to step forward for execution of policies. Despite the externalities and also the unrestrained bargaining, contracting can be sufficient for evolving an efficient outcome, without any intervention from external agents. (Maskin, 1994)
Again, as Demsetz (1964) identifies, that whether res nullius is the governing factor for the resource being used is solely dependable on the benefits which are expected from the property along with the costs of monitoring and also enforcing the basic property right by the exclusion of others. In Members of Yorta Yorta v Victoria a claim was based on the land and that of the river flowing within, which was opposed vehemently and the outcome came as a prominent threat. Again, in Wilson v Anderson , claim so made, increased the uncertainty. So, the Courts applies the cautious approach when they divide the property rights based on the competing claims, since the property rights which runs concurrently, often give rise to the inefficiency and furthermore affects the economical improvements of the land in question (North, 1990)
So, the prominent boundary exists when the properties are taken by the government by using the appropriate regulations, and the possible impact steeps when the owner’s use rights, is severed in such a way that it seems to be a taking or the acquisition. As the word right circumscribes an entitlement and also a claim, where the entitlement is for doing something or not by doing something and enforcement of which lies either by way of sanction may be by a legislation or based on certain customs and can also be based on the alienation, i.e. transferring the property, either by selling or gifting, or by leasing out or can also be by way of mortgage. But, at the same platform, when a right exists, there are the corelated duties attached to it (Hohfeld, 1913) , and the duties are the one which highlights that, when a property is under the possession or ownership, then that right is with the interests, which must be protected so that, the exclusive enjoyment is retained with the one who have the legal title to it, irrespective of whether it is ownership or that of the possession.
Bibliography
The discussion of the ‘enforceability of equities’ in Brendan Edgeworth et al, Sackville & Neave Australian Property Law (LexisNexis Butterworths, 9th ed, 2013) 401–16.
Michael Weir, Concepts of Property (2001) http://epublications.bond.edu.au/cgi/viewcontent.cgi?article=1036&context=nle
Kevin Gray, ‘Can Environmental Regulation Amount to a Common Law Taking of Property Rights?’ (2007) Environmental and Planning Law Journal 161, 170–1
Coase, R. (1960). ‘The problem of social cost’, Journal of Law and Economics, 3,2-144
Pigou, A. (1932). The economics of welfare 4th ed., Macmillan: London
Posner, R. (1992). Economic analysis of law 4th ed., Little Brown and Co: Boston
Cooter, R. &Ulen, T. (1997). Law and economics, AddisonWesley: Sydney
Whittman, D. (2003). Economic analysis of the law: Selected readings, Blackwell Publishing: Malden
Alan S Fogg, Australian Town Planning Law: Uniformity and Change (University of Queensland Press, revised ed, 1982) 427
Hartwick, J &Olewiler, N. (1997). The economics of natural resource use 2nd ed., Addison-Wesley: Sydney
Stigler, G. (1971). ‘The theory of economic regulation’, Bell Journal of Economics,2,3-21
Peacock, A. & Rowley, C. (1972). ‘Welfare economics and the public regulation of natural monopoly’, Journal of Public Economics, 1, 227-244
Thomas W Merrill and Henry E Smith 2001, ‘What Happened to Property in Law and Economics?’ [2001] YaleLawJl 34; (2001) 111 Yale Law Journal 357, 359
Maskin, E. (1994). ‘The invisible hand and externalities’, American Economic Review 84,2,333-337
Demesetz, H. (1964). ‘The exchange and enforcement of property rights’, Journal of Law and Economics, 7,11-26
North, D. (1990). Institutions, institutional change and economic performance, Cambridge University Press: Cambridge
Hohfeld WN 1913, ‘Fundamental Legal Conceptions as Applied in Judicial Reasoning’, Yale Law Journal, 23:16- 59
Cooter, R. &Ulen, T. (1997). Law and economics, AddisonWesley: Sydney
Whittman, D. (2003). Economic analysis of the law: Selected readings, Blackwell Publishing: Malden
Alan S Fogg, Australian Town Planning Law: Uniformity and Change (University of Queensland Press, revised ed, 1982) 427
Hartwick, J &Olewiler, N. (1997). The economics of natural resource use 2nd ed., Addison-Wesley: Sydney
Stigler, G. (1971). ‘The theory of economic regulation’, Bell Journal of Economics,2,3-21
Peacock, A. & Rowley, C. (1972). ‘Welfare economics and the public regulation of natural monopoly’, Journal of Public Economics, 1, 227-244
Thomas W Merrill and Henry E Smith 2001, ‘What Happened to Property in Law and Economics?’ [2001] YaleLawJl 34; (2001) 111 Yale Law Journal 357, 359
Maskin, E. (1994). ‘The invisible hand and externalities’, American Economic Review 84,2,333-337
Demesetz, H. (1964). ‘The exchange and enforcement of property rights’, Journal of Law and Economics, 7,11-26
North, D. (1990). Institutions, institutional change and economic performance, Cambridge University Press: Cambridge
Hohfeld WN 1913, ‘Fundamental Legal Conceptions as Applied in Judicial Reasoning’, Yale Law Journal, 23:16- 59
B Cases
UWA v Gray [2008] FCA 498 [89]
Yanner v Eaton (1999) 201 CLR 351
Greville v Williams (1906) 4 CLR 694
City of Swan v Lehman Bros Australia Ltd (2009) 179 FCR 243
Milirrpum v Nabalco (1971) 17 FLR 141
Newington v Windeyer (1985) 3 NSWLR 555
National Crime Authority v Flack (1998) 86 FCR 16
Minister of State for the Army v Dalziel (1944) 68 CLR 261
Mabo v Queensland (No 2), HCA 23, (1992) 175 CLR 1
Newington v Windeyer (1985) 3 NSWLR 555
National Crime Authority v Flack (1998) 86 FCR 16
Minister of State for the Army v Dalziel (1944) 68 CLR 261
Mabo v Queensland (No 2), HCA 23, (1992) 175 CLR 1
Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399
ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; (2009) 240 CLR 140
Wilson v Anderson 190 ALR 313
Members of Yorta Yorta v Victoria (2002) 194 ALR 538 (Yorta Yorta)
UWA v Gray [2008] FCA 498 [89]
Yanner v Eaton (1999) 201 CLR 351
Greville v Williams (1906) 4 CLR 694
City of Swan v Lehman Bros Australia Ltd (2009) 179 FCR 243
Milirrpum v Nabalco (1971) 17 FLR 141
Newington v Windeyer (1985) 3 NSWLR 555
National Crime Authority v Flack (1998) 86 FCR 16
Minister of State for the Army v Dalziel (1944) 68 CLR 261
Mabo v Queensland (No 2), HCA 23, (1992) 175 CLR 1
Newington v Windeyer (1985) 3 NSWLR 555
National Crime Authority v Flack (1998) 86 FCR 16
Minister of State for the Army v Dalziel (1944) 68 CLR 261
Mabo v Queensland (No 2), HCA 23, (1992) 175 CLR 1
Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399
ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; (2009) 240 CLR 140
Wilson v Anderson 190 ALR 313
Members of Yorta Yorta v Victoria (2002) 194 ALR 538 (Yorta Yorta)
C Legislations
Federal Register of Legislation - Australian Government, Personal Property Securities Act 2009 (2009) Personal Property Securities Act 2009
Federal Register of Legislation - Australian Government, Personal Property Securities Act 2009 (2009) Personal Property Securities Act 2009
D Treaties
E Other
Australian Law Reform Commission, Definitions of Property (July 31, 2015) Definitions of property | ALRC
E Other
Australian Law Reform Commission, Definitions of Property (July 31, 2015) Definitions of property | ALRC
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