Landmark Cases in Property Law 9781474203210, 9781509900275

Landmark Cases in Property Law explores the development of basic principles of property law in leading cases. Each paper

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Landmark Cases in Property Law
 9781474203210, 9781509900275

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Preface This collection explores the development of basic principles of property law in leading cases. Each contributor was asked to select a case on land, personal property or intangibles, discussing what that case contributes to one of the dominant themes of property jurisprudence—what are the limits or boundaries of property? how are property rights acquired? what is the content of property rights? and how are property rights extinguished? The collection is organised around these key themes, and short editorial introductions preface the discussion of principle that follows in each case commentary. The set of cases is eclectic, but their selection was deliberate, each one chosen because, even if sometimes not all that well known, it bears particularly strongly on foundational aspects of our property thought. The decision to transgress the customary division of property law according to the subject-matter of the right was equally deliberate. Even though we did not expect, say, the author of a chapter on land to explore the impact of their commentary for the law on intangibles, we hoped there would be value in observing the quest for property principle unfold in these complementary contexts, and this is borne out in the chapters that follow. Individually and collectively, they identify a number of important themes for the doctrinal development of property institutions and their broader justification. These themes include: the obscure and incremental development of seemingly foundational principles, the role of instrumentalism in property reasoning, the influence of the law of tort on the scope of property doctrines, and the impact of Roman legal reasoning on the common law of property. Early versions of the chapters were presented over two days in a workshop of the same name at York Law School in September 2013. We are enormously grateful to Emma and her colleagues at York, especially Simon Halliday, Caroline Hunter and Richard Nolan, for generously supporting and organising this event; and to the contributors for lively and engaged discussion, the benefits of which are evident in the final chapters. The only contributor to join us later was Emily Hudson, whose chapter was first aired at the Oxford Property Law Discussion Group, to the members of which we express the same thanks. Revised versions of each chapter were blind peer-reviewed by a panel of property lawyers not involved in the event—they know who they are, and we thank them for their important contributions to the development of the arguments presented here. Hart Publishing encouraged us to pursue this project from its inception, supporting the workshop and offering a constant source of help and advice as we moved through completion of the manuscript. It has been a pleasure

vi Preface to work with everyone involved, and we owe particular thanks to Richard Hart, Rachel Turner, and Bill Asquith. Finally we express our thanks again to the contributors for joining us in this collection, and to our respective families for allowing and encouraging its occasional intrusions to family life. Simon Douglas Robin Hickey Emma Waring October 2014

List of Contributors Simon Douglas is Associate Professor of Law at the University of Oxford, and a Fellow of Jesus College David Fox is University Lecturer in Law at the University of Cambridge and a Fellow of St John’s College Lorna Fox O’Mahony is Executive Dean of the Faculty of Humanities and Professor of Law at the University of Essex Amy Goymour is University Lecturer in Land Law at the University of Cambridge and Hopkins Parry Fellow of Downing College Sarah Green is Associate Professor of Law at the University of Oxford, and a Fellow of St Hilda’s College Robin Hickey is Senior Lecturer in Law at Queen’s University Belfast Emily Hudson is Lecturer at the Dickson Poon School of Law, King’s College London and Senior Lecturer at the TC Beirne School of Law, University of Queensland Jonathan Griffiths is Reader in Intellectual Property Law at Queen Mary University of London James Lee is Senior Lecturer at The Dickson Poon School of Law, King’s College London Catherine Seville is Reader in Law at the University of Cambridge and a Fellow of Newnham College Rachael Walsh is Assistant Professor of Law, Trinity College Dublin Emma Waring is Lecturer in Law at York Law School

Table of Cases AB v Ministry of Defence [2009] EWHC 1225 (QB) ........................................... 32 Abbey National Building Society v Cann [1991] 1 AC 56 .............................................................................. 170, 184, 194 AG Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273................................................................................ 279–80, 283–84 Agip (Africa) Ltd v Jackson [1990] Ch 265; affirmed [1991] Ch 547 .................................................................................................. 23 Al Wood-Robinson v Secretary of State for the Environment, Wandsworth LBC [1998] EWHC (Admin) 394 .............................................. 243 Aliakmon, The see Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd Alsager v Close (1842) 10 M & W 576, 152 ER 600 ........................................ 117 Anheuser-Busch Inc v Portugal (2007) 45 EHRR 830 ......................................... 97 Anon, Tractatus Nove Monete (c 1286–87) ........................................................... 9 Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55 ........................... 89 Arbitration between Ellis and Ruislip-Northwood UDC, Re [1920] 1 KB 343 ....................................................................................... 250 Arkansas Anthracite Coal Co v Stokes 2 F (2d) 511 (CCA 8th Cir 1924 ) ...................................................................................... 121 Armory v Delamirie (1722) 1 Strange 505, 93 ER 664 ......................................................................................... 21, 127–28, 131–50, 212 Arnold v Hamilton Investment Co 38 A 2d 118 (NJ Sup Ct 1944); affirmed 40 A 2d 649 (NJ Ct Apps 1945) ........................ 121 Arnold v Jefferson (1697) 1 Ld Raym 275 ........................................................ 137 Association of General Practitioners v Denmark (1989) 62 DR 226 ..................................................................................................... 123 AT&T Istel Ltd v Tully [1993] AC 45 ............................................................... 101 Ayres v French 41 Conn 142, 1874 WL 1571 ................................................... 121 Banks v Whetston (1596) Cro Eliz 457*, 78 ER 711 .................................. 2, 3–24 Barnsley Brewery Co v RBNB [1997] FSR 462 .................................................. 280 Baxter v Mannion [2011] EWCA Civ 120, [2011] 1 WLR 1594....................... 163 Bazley v Wesley Monash IVF Pty Ltd [2010] QSC 118 ........................... 33–35, 39 BBC v Talbot Motor Co [1981] FSR 228 .......................................................... 280 Beer v Foakes see Foakes v Beer Belfast Corp v OD Cars [1959] NI 62; [1960] AC 490 ................... 202–4, 227–52 Bell v General Accident Fire and Life Assurance Corp Ltd [1998] L & TR 1...................................................................................... 166–68 Benn v Hardinge (1993) 66 P & CR 246....................................... 253–54, 257–75 Best v Chief Land Registrar [2014] EWHC 1370 (Admin), [2014] 3 All ER 637 ....................................................................................... 134 BMW Financial Services (GB) Ltd v Bhagwanani [2007] EWCA Civ 1230 ...................................................................................... 216–17

xii Table of Cases Boardman v Phipps [1967] 2 AC 46 .................................................................... 76 Booker McConnell plc v Plascow [1985] RPC 425 ........................................ 93–94 Bovis Homes Ltd v New Forest DC [2002] EWHC 483 (Admin) ...................................................................................... 245 Bowser v Cheeseman YB Mich 20 Hen VII, pl 13, fol 4 ........................................ 7 Boys v Chaplin [1971] AC 356 .......................................................................... 208 Bradshaw Construction v Bank of Nova Scotia (1993) 1 WWR 596 (BCCA) ..................................................................................... 123 Bramelid and Malmstöm v Sweden (1982) 5 EHRR 249................................... 123 Bridges v Hawkesworth (1851) Jur 1079 ............................................. 137–38, 142 British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479 .......................... 124 British Leyland Motor Corp v Armstrong Patents Co Ltd [1982] FSR 481 .............................................................................................. 289 Brown v Stott [2003] 1 AC 681 ......................................................................... 102 Bruton v London Quadrant Housing Trust [1998] QB 834; reversed [2000] 1 AC 406 ................................................................ 128, 151–78 Buckland v Secretary of State for the Environment [2001] EWHC Admin 524 ......................................................................................... 242 Buckley v Gross (1863) 3 B & S 566 ................................................................. 140 Budd v Multnomah Street Ry 12 Or 271, 53 Am Rep 355 (Or Sup Ct 1885) ........................................................................................... 121 Budweiser see Anheuser-Busch Inc v Portugal Buncefield see Shell UK Ltd v Total UK Ltd BUPA v First Choice Health Ltd (unreported, 4 December 1992, Ch D) ........................................................................... 93–94 Burdon v Steel (unreported, 9 September, Trade Marks Registry) ......................................................................................... 280, 286, 289 Burns v Burns [1984] Ch 317 ............................................................................ 197 Buttes Gas and Oil Co v Hammer [1982] AC 888 ............................................ 209 Buxton v Minister of Housing and Local Government [1965] 1 QB 278 ............................................................................................ 243 C, Ex parte [2013] WASC 3............................................................... 28, 36–37, 40 Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529 ...................................................................................... 224 Camden LBC v Shortlife Community Housing Ltd (1993) 25 HLR 330 ................................................................................................... 155 Campbell-Rodriques v Attorney General for Jamaica [2007] UKPC 65 ........................................................................................................ 227 Carlton v Goodman [2002] EWCA Civ 545, [2002] 2 FLR 259 ...................................................................................................... 192 Caxton Publishing Co Ltd v Sutherland Publishing Co Ltd [1939] AC 178 ............................................................................................... 205 Cayle’s Case (1583) 8 Co Rep 32a..................................................................... 138 CC v AW 2005 ABQB 290 .................................................................................. 38 CDC2020 plc v Ferreira [2005] EWCA Civ 611, [2005] 3 EGLR 15 ..................................................................................................... 266 Central Control Board (Liquor Traffic) v Cannon Brewery Co Ltd [1919] AC 744 ................................................................................... 229

Table of Cases xiii City of London Building Society v Flegg [1986] Ch 605 .................................... 176 Club Cruise Entertainment and Travelling Services Europe BV v Department for Transport [2008] EWHC 2794 (Comm); [2009] 1 All ER (Comm) 955.......................................................... 222 Coco v AN Clark Engineers (Ltd) [1969] RPC 41 ............................................... 99 Coleman v Wathen (1793) 5 Term Reports 245, 101 ER 137 ............................. 71 Colour Quest Ltd v Total Downstream UK Plc see Shell UK Ltd v Total UK Ltd Columbia Picture Industries v Robinson [1986] 3 All ER 338 .................................................................................................... 92 Commissioner of Public Works (Cape Colony) v Logan [1903] AC 355 ............................................................................................... 229 Coogan v News Group Newspapers Ltd [2012] EWCA Civ 48, [2012] 2 WLR 848 ................................................ 81–82, 101–2 Cook v Bath Corp (1868) LR 6 Eq 177 ....................................................... 261–62 Cooke v Loxley (1792) 5 Term Reports 4, 101 ER 2 ........................................ 168 Copley v Davers YB Hil 9 Edw IV, pl 6, fol 49.................................................... 12 Costello v Chief Constable of Derbyshire [2001] EWCA Civ 381, [2001] 1 WLR 1437 .............................................. 134, 148–49 Coventry v Lawrence [2014] UKSC 13, [2014] AC 822 ................................................................... 229, 238–39, 242–43 Crossley and Sons Ltd v Lightowler (1867) LR 2 Ch App 478................................................................................... 261, 272 Cuthbertson v Irving (1859) 4 Hurl & N 742, 157 ER 1034 ............................................................................................ 167–70 D Pride & Partners (a firm) v Institute for Animal Health [2009] EWHC 685 (QB) ................................................................................ 219 Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054 ......................................................................................................... 76 Dearle v Hall (1828) 3 Russ 1, 38 ER 475 ........................................................ 118 Dobson v North Tyneside Health Authority [1997] 1 WLR 596 ...................................................................................................... 27 Doe d Downe (Lord) v Thompson (1847) 9 QB 1037 ....................................... 168 Doe d Marchant v Errington (1839) 6 Bing NC 79, 133 ER 31 ...................................................................................................... 168 Donaldson v Beckett (1774) 4 Burr 2408, 1 ER 837 .............................. 53, 56, 59, 61, 63–67, 71–73 Doodeward v Spence (1908) 6 CLR 406 ..................................... 27, 29, 34–36, 39 Double G Communications v News Group International [2011] EWHC 961 (QB) ................................................................................ 132 Douglas v Hello! Ltd [2003] EWHC 786 (Ch); [2005] EWCA Civ 595; [2007] UKHL 21, [2008] 1 AC 1 ............................. 41, 49–50, 76, 105, 111–25 Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd [1969] 1 QB 738 ...................................................................................... 221–22 Dwyer v City of Westminster [2014] EWCA Civ 153, [2014] 2 P & CR 7 ........................................................................................ 267 Easom v Newman (1594) Cro Eliz 495, 78 ER 745 .......................................... 216

xiv Table of Cases Eastern Construction Co Ltd v National Trust Co Ltd [1914] AC 197 ............................................................................................... 141 Edelstein v Schuler & Co [1902] 2 KB 144 ....................................................... 219 Edwards (Jocelyn); Re the estate of the late Mark Edwards [2011] NSWSC 478.............................................................................. 34–35, 39 Ellenborough Park, Re [1956] Ch 131 ............................................................... 273 Ellerman Wilson Line v Webster [1952] 1 Lloyd’s LL Rep 179 .......................................................................................................... 255 Elliott v Kemp (1840) 7 M & W 306 .......................................................... 139–40 Ellis v Loftus (1874) LR 10 CP 10 ..................................................................... 214 England v Cowley (1872–73) LR 8 Ex 126 ................................................. 221–22 Entick v Carrington 95 ER 807, (1765) 2 Wils KB 275..................................... 202 Erven Warnink BV v J Townend & Sons [1980] RPC 31 ............................ 279–80 Faccenda Chicken Ltd v Fowler [1987] Ch 117 ........................................... 93, 106 Fairstar Heavy Transport v Adkins [2012] EWHC 2952 (TCC); [2013] EWCA Civ 886, [2013] 2 CLC 272.................................. 76, 106 Family Housing Association v Jones [1990] 1 WLR 779 ................................... 156 Farquharson Bros v King [1902] AC 325 .......................................................... 216 First National Bank plc v Thompson [1996] Ch 231 ........................... 166, 169–70 Foakes v Beer (1883–84) LR 9 App Cas 605 ..................................................... 112 Foskett v McKeown [2001] 1 AC 102 ............................................................. 3, 23 Fouldes v Willoughby (1841) 8 M & W 540, 151 ER 1153 ........................ 217–18 Freeman v Corbin 391 So 2d 731 (D Fla App 1980) ......................................... 121 Funke v France (1993) 16 EHRR 297 ............................................................... 101 Gadget Shop Ltd v The Bug.Com Ltd [2001] FSR 26 .................................... 93–94 General Finance, Mortgage and Discount Co v Liberator Permanent Benefit Building Society (1878) 10 Ch D 15 ................................. 170 Gilbert v Brett; sub nom Case of Mixt Monies (1604) Davis 18 ........................... 9 Glenwood Lumber Co Ltd v Phillips [1904] AC 405......................................... 141 Gotobed v Pridmore (1971) 217 EG 759 ..................................................... 263–64 Gouldsworth v Knights (1843) 11 M & W 337, 152 ER 833 ........................... 170 Government of Malaysia v Selangor Pilot Association (a firm) [1978] AC 337 ............................................................................................... 227 Graham v Peat (1801) 1 East 244, 102 ER 95 ................................................... 164 Grape Bay Ltd v Attorney General of Bermuda [2000] 1 WLR 574 .................................................................................................... 227 Gray v News Group Newspapers Ltd [2011] EWHC 349 (Ch), [2011] 2 WLR 1401 .................................................................... 80–81, 83 Gulf Insurance Ltd v Central Bank of Trinidad and Tobago [2005] UKPC 10, (2005) 66 WIR 297 ........................................................... 124 GUS Property Management v Littlewoods Mail Order Stores Ltd 1982 SC (HL) 157 ........................................................................................... 45 H, Re; AE (No 2) [2012] SASC 177 .............................................................. 35–36 Halifax plc v Curry Popeck (a firm) [2008] EWHC 1692 (Ch) ......................... 177 Hallett’s Estate, Re (1879–80) 13 Ch D 696 .................................................... 4, 24 Hanily v Minister of Local Government and Planning [1952] 2 QB 444........................................................................................................ 246 Hannah v Peel [1945] KB 509 ........................................................................... 142

Table of Cases xv Harper v Charlesworth (1825) 4 B & C 574, 107 ER 1174 .............................. 164 Harrods Ltd v Harrodian School [1996] RPC 697 ............................................ 286 Hartley v Moxham (1842) 3 QB 701, 114 ER 675 ........................................... 219 Haynes’s Case (1613) 12 Co R 113, 77 ER 1389 .............................................. 271 Hayward v Chaloner [1968] 1 QB 107.............................................................. 266 Heaney and McGuinness v Ireland (2001) 33 EHRR 12 ................................... 102 Hecht v Superior Court of Los Angeles County 20 Cal Rptr 2d 275 (1993) .................................................................................................. 27 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 ................................................................................................... 122, 214 Henderson’s Conveyance, Re [1940] 1 Ch 835 .................................................. 237 Hill v Haukes (1614) 1 Rolle 44, 81 ER 315 ....................................................... 19 Hinton v Donaldson (1773) Edinburgh ......................................................... 63–65 Hinz v Berry [1970] 2 QB 40............................................................................... 30 Holdich v Lothian Health Board [2013] CSOH 197, 2014 SLT 495 ............................................................................................ 25–26, 42–43, 46–48 Hollins v Fowler (1875) LR 7 HL 757 ...................................................... 205, 219 Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd [2010] EWCA Civ 110, [2010] RPC 16 ......................................................... 285 Hunter v Canary Wharf [1997] AC 655 ............................................................ 273 Ibberson v Neck (1886) 2 TLR 427 ................................................................... 113 IN Newman Ltd v Adlem [2005] EWCA Civ 741, [2006] FSR 16 ................................................................................................ 281 Indian Oil Corp Ltd v Greenstone Shipping SA (Panama) [1987] QB 345 ............................................................................... 18, 20–21, 24 Inglewood Pulp and Paper Co v New Brunswick Electric Power Commission [1928] AC 492 ................................................................ 229 Inland Revenue Commissioners v Muller & Co’s Margarine [1901] AC 217 ....................................................................................... 279, 285 Isaack v Clark (1614) 2 Bulst 306, 80 ER 1143 .................................. 135–36, 144 Isack v Clarke (1615) 1 Rolle 126, 81 ER 377 ............................................... 5, 16 Island Records Ltd, Ex parte [1978] 1 Ch 122 .................................................... 93 Islington LBC v O’Shea [2005] EWCA Civ 56, [2005] HLR 35............................................................................................... 157 JA Pye (Oxford) Ltd v Graham [2002] UKHL 30, [2003] 1 AC 419 .................................................................................... 134, 163 JA Pye (Oxford) Ltd and JA Pye (Oxford) Land Ltd v United Kingdom (2008) 46 EHRR 1083 ....................................... 98 Jaggard v Sawyer [1995] 1 WLR 269 ................................................................ 238 Jalloh v Germany (2007) 44 EHRR 32 .......................................................... 101–2 James v United Kingdom (1986) 8 EHRR 123 .................................................... 98 JCM v ANA 2012 BCSC 584 .................................................................. 26, 37–38 JD v East Berkshire Community Health NHS Trust [2005] UKHL 23, [2005] 2 AC 373 ............................................................................ 42 Jefferys v Bucknell (1831) 2 B & Ad 278, 109 ER 1146 ................................... 170 Jeffreys v Boosey (1854) 10 ER 681, 4 HLC 815 .......................................... 69–71

xvi Table of Cases Jeffries v Great Western Railway Co (1856) 5 E & B 802, 119 ER 680 ................................................. 135, 139–41, 143–44, 147, 149, 172 Johnson v Weedman (1843) 5 Ill 495 ................................................................ 217 Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink plc [1989] 1 FSR 135 ....................................................................................... 93–94 Jones v Kernott [2010] EWCA Civ 578, [2010] 3 All ER 423; reversed [2011] UKSC 53, [2012] 1 AC 776 ...................... 181–82, 195 JSC BTA Bank v Ablyazov [2009] EWCA Civ 1125, [2010] 1 All ER (Comm) 1029 .................................................................................. 101 JT International SA v Commonwealth of Australia [2012] HCA 43 ................................................................................................ 99 Jules Rimet Cup Ltd v The Football Association [2007] EWHC 2376 (Ch), [2008] FSR 10 ........................................................... 286–87 Kaiser Aetna v United States 444 US 164 (1979) ............................................... 201 Kavcar Investments v Aetna Financial Services (1986) 36 ACWS (2d) 330; affirmed (1989) 62 DLR (4th) 277 (Ont CA) ..................... 123 Kay v Lambeth LBC [2004] EWCA Civ 926, [2005] QB 352; [2006] UKHL 10, [2006] 2 AC 465 ...................................................... 154, 157, 165, 169 Kay v United Kingdom (37341/06) [2011] HLR 2, [2010] ECHR 1322 ........................................................................................ 157 Keefe v Isle of Man Steam Packet Co [2010] EWCA Civ 683 ........................... 132 Kensington International Ltd v Republic of Congo [2007] EWCA Civ 1128, [2008] 1 WLR 1144 ............................................................ 88 Knight v Beyond Properties [2006] EWHC 1242 (Ch), [2007] 1 WLR 625 ........................................................................... 280–81, 286 Knight v Secretary of State for Communities and Local Government [2009] EWHC 3808 (Admin) ........................................... 241 Kremen v Cohen 337 F 3d 1024 (2003) ............................................................ 118 Kuhn v McAllister 1875 WL 380 (Utah Terr Sup Ct 1875) ............................... 121 Kuwait Airways Corp v Iraqi Airways Co (No 1), [1995] 1 WLR 1147; [1999] CLC 31, [2000] 2 All ER (Comm) 360; [2002] UKHL 19, [2002] 2 AC 883 .......................................... 115, 203–4, 205–25, 220 Lam v University of British Columbia 2013 BCSC 2094 ......................... 38, 40, 43 Lambeth LBC v Blackburn [2001] EWCA Civ 912, (2001) 33 HLR 74 ..................................................................................................... 157 Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] AC 785 ................................................................................................ 25–26, 29, 44–46, 48 Less v Hussain [2012] EWHC 3513 (QB)............................................................ 32 Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548................................... 23 Lister v Dayton Tire Canada Ltd (1985) 52 OR (2d) 88 (Ont CA) ................... 123 Lister v Dunlop Canada Ltd (1979) 27 OR 2d 168 (Ont CA); reversed [1982] 1 SCR 726 (Sup Ct Can) ....................................................... 123 Lloyds Bank v Rosset [1991] 1 AC 107 ......................................... 128–29, 179–99

Table of Cases xvii Lock International plc v Beswick [1989] 3 All ER 373 ................................................................................................. 92–94 London and North Western Railway Co v Evans [1893] 1 Ch 16 ............................................................................................... 229 London Development Agency v Nidai [2009] EWHC 1730 (Ch), [2009] 2 P & CR DG23 .................................................. 165 Loretto v Teleprompter Manhattan CATV Corp 483 US 825 (1987) ................................................................................................ 236 Lough v First Secretary of State [2004] EWHC 23 (Admin) .............................. 241 Lumley v Gye 118 ER 1083, (1854) 3 El & Bl 114 ........................................... 125 Lupton v White (1808) Ves Jun 432, 33 ER 817 ................................................. 21 Mackley v Nutting [1949] 2 KB 55 ................................................................... 175 Manchester Airport v Dutton [2000] QB 133.................................... 160, 164, 166 Manor Electronics Ltd v Dickson [1988] RPC 618 ....................................... 93–94 Marfani & Co Ltd v Midland Bank Ltd [1968] 1 WLR 956 ............................. 216 Martin and Stedd’s Case (1596) 1 Leonard 88, 74 ER 81 ................................... 19 Mary Wilson Enterprises Inc’s Trade Mark Application, Re [2003] EMLR 14 ...................................................................................... 286 Maslyukov v Diageo Distilling Ltd [2010] EWHC 443 (Ch), [2010] RPC 21 ................................................................................ 286–89 Mayor of London v Hall [2010] EWCA Civ 817, [2011] 1 WLR 504 ......................................................................................... 165 McFarlane v Tayside Health Board [2000] 2 AC 59 ............................................ 43 McKennitt v Ash [2006] EWCA Civ 714..................................................... 99, 102 McLachlan v Canadian Imperial Bank of Commerce (1987) 13 BCLR (2d) 300; affirmed (1989) 35 BCLR 100, 57 DLR (4th) 687 (BCCA) ..................................................................... 123 Melnychuk v Ukraine (28743/03) ECtHR 2005 IX ............................................. 97 Mexfield Housing Trust Co-operative Ltd v Berrisford [2011] UKSC 52, [2012] 1 AC 955 ........................................................ 160, 170 Millar v Kincaid (1751) ................................................................................ 56–57 Millar v Taylor (1769) 4 Burr 2303, 98 ER 201 ................................ 49–51, 53–74 Miller v Race (1758) 1 Burrow 452, 97 ER 398 .................................................. 22 Moncrieff v Jamieson [2007] UKHL 42, [2007] 1 WLR 2620 .................................................................................................. 259 Moore v Rawson (1824) 3 B & C 332 .............................................................. 272 Moore v Regents of the University of California 793 P 2d 479 (Cal 1990) ............................................................................ 27, 40 Moorgate Mercantile Co Ltd v Finch [1962] 1 QB 701 .................................... 216 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 ............................... 205 Morison v London County and Westminster Bank [1914] 3 KB 356 ............................................................................................ 117 Morton v Woods (1869) LR 4 QB 293 .............................................................. 167 Mouson & Co v Boehm (1884) 26 Ch D 398 ........................................... 283, 284 Murray v Elliston (1822) 5 B & Ald 657, 106 ER 1331 ..................................... 71 Murungaru v Secretary of State for the Home Department [2008] EWCA Civ 1015 ................................................................................. 122

xviii Table of Cases National Guaranteed Manure Co v Donald (1859) 4 Hurl & N 8, 157 ER 737 ............................................................................ 268 Nollan v California Coastal Commission 483 US 825 (1987) ..................................................................................................... 236 Norman Kark Publications Ltd v Odhams Press [1962] 1 WLR 380 .................................................................................... 280, 284, 286 O’Halloran and Francis v United Kingdom (2008) 46 EHRR 397 ..................................................................................................... 102 Oakley v Lyster [1931] 1 KB 148 ...................................................................... 221 OBG v Allan [2005] EWCA Civ 106, [2005] QB 762; [2007] UKHL 21, [2008] 1 AC 1 .................................................. 41, 49–50, 76, 105, 111–25 OCLI Optical Coatings Ltd v Spectron Optical Coatings Ltd [1980] FSR 227 ................................................................................................ 93 OD Cars v Belfast Corp see Belfast Corp v OD Cars Oppenheimer v Cattermole (HM Inspector of Taxes) [1976] AC 249 ........................................................................................................... 210 Osborne v Donaldson; Millar v Donaldson (1765) 2 Eden 328, 28 ER 924 .................................................................................... 65 Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd (The Wagon Mound No 2) [1967] 2 AC 617 ................................................. 218 Oxley v Hiscock [2004] EWCA Civ 546, [2004] 3 WLR 715 ...................................................................................... 181–82, 190 Parker v British Airways Board [1982] QB 1004 ...................................... 134, 138, 142, 147, 172 Payne v Elliot 54 Cal 339, 35 Am Rep 80 (Cal Sup Ct 1880) .......................................................................................... 121 Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 ........................................ 217 Pennsylvania Coal v Mahon 260 US 393 (1922) ................................. 227, 231–32 Perre v Apand Pty Ltd (1999) 198 CLR 180 ..................................................... 224 Perry v Truefitt (1842) 6 Beav 66, 49 ER 749 ................................................... 279 Petre v Heneage (1701) 12 Mod 519 ................................................................. 145 Philips v Mulcaire [2012] UKSC 28, [2013] 1 AC 1 .............................. 49, 75–109 Phillips & Co v Whatley [2007] UKPC 28, [2008] Lloyd's Rep IR 111 ........................................................................................ 132 Phillips v Newsgroup Newspapers Ltd [2010] EWHC 2952 (Ch) ................................................................................ 78–80, 10 Phones 4U Ltd v Phone4U.co.uk Internet Ltd [2006] EWCA Civ 244, [2007] RPC 5 ...................................................................... 280 Pierpoint v Hoyt 260 NY 26, 182 NE 235 (NY Ct Apps 1932) ........................ 117 Pierson v Post (1805) 3 Cai R 175 ..................................................................... 127 Piljak Estate v Abraham 2014 ONSC 2893 ......................................................... 39 Pinnel’s Case (1602) 5 Co Rep 117a .................................................................. 112 Pioneer Aggregates UK Ltd v Secretary of State for the Environment [1985] AC 132 .......................................................................... 268 Popham see Shordish v Moore Powell v Turner [2013] EWHC 3242 (IPEC) ..................................................... 280

Table of Cases xix Pressos Compania Naviera SA v Belgium (1995) 21 EHRR 301 ..................................................................................................... 123 Quennell v Maltby [1979] 1 WLR 318 .............................................................. 175 R (Gavin) v Haringey LBC [2003] EWHC Admin 2591, [2004] 2 P & CR 13 ................................................................................ 244–45 R (Lord Chancellor) v Chief Land Registrar [2005] EWHC 1706 (Admin), [2006] QB 795 .......................................................... 229 R (Smith) v Land Registry [2009] EWHC 328 (Admin) .................................... 134 R v Bentham [2005] UKHL 18, [2005] 1 WLR 1057 .................................... 27–28 R v Chorley (1848) LR 12 QB 515 .................................................................... 272 R v Coulson [2013] EWCA Crim 1026, [2014] 1 WLR 1119 ............................ 75 R v Edwards and Stacey (1877) 13 Cox CC 384 ............................................... 271 R v Kelly and Lindsay [1999] QB 621 ................................................................. 27 R v Lamb (1694) 2 East PC 664 ........................................................................ 134 R v Secretary of State for Trade and Industry and Northern Electric plc (2000) 79 P & CR 299 ................................................ 229 R v Small (1988) 86 Cr App R 170 ................................................................... 255 R v White (1912) 6 Cr App R 266 .................................................................... 255 Rackham v Jesup (1772) 3 Wilson KB 332 ........................................................ 139 Radmacher v Granatino [2010] UKSC 42, [2011] 1 AC 534 ...................... 191–92 Rajapakse v Fernando [1920] AC 892 ............................................................... 169 Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 ........................................................................................... 89–95 Reckitt & Colman Products v Borden [1990] 1 WLR 491 .......................... 279–80 Reddaway v Banham LR [1896] AC 199, (1896) 13 RPC 218.................................................................................................... 279 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 ................................................................................................. 41 Ribemont v France (1995) 20 EHRR 557.......................................................... 102 Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] AC 547 ................................................................................................. 90 Roberts v Northwest Fixings [1993] FSR 281 ............................................... 93–94 Roger Bullivant Ltd v Ellis [1987] FSR 172 ................................................... 93–94 Rooney v Secretary of State for Communities and Local Government [2011] EWCA Civ 1556, [2012] JPL 684 ........................ 241 Rosenberg v Cook (1881) 8 QBD 162 ............................................................... 161 Royal Bank v Got (1994) 17 Alta LR (3d) 23; affirmed (1997) 196 AR 241 (Alta CA); affirmed [ 1999 ] 3 SCR 408 (Sup Ct Can) .............. 123 Rushworth v Taylor (1842) 3 QB 699, 114 ER 674 .......................................... 216 Ryall v Rolle (1749) 1 Atkin 165, 26 ER 107.................................................. 6, 21 Ryall v Ryall (1739) 1 Atkin 59, 26 ER 39...................................................... 6, 21 Saunders v United Kingdom (1997) 23 EHRR 313 ........................................... 101 Schafer v RMS Realty 138 Ohio App 3d 244, 741 NE 2d 155 (2000) ................................................................................................ 121 Scott v Surman (1742) Willes 400, 125 ER 1235 ............................................ 6, 21 Section 22 of the Human Tissue And Transplant Act 1982, Re (WA) see C, Ex parte

xx Table of Cases Shannon v United Kingdom (2006) 42 EHRR 31 .............................................. 102 Shell UK Ltd v Total UK Ltd [2010] EWCA Civ 180, [2011] QB 86 ....................................................................................... 27, 44–48 Shipley v Meadowbrook Club 126 A 2d 288 (Md Ct Apps 1956) ........................................................................................ 121 Shordish v Moore (1593) Popham 38, 79 ER 1156 ....................................... 19–21 Sinclair v Brougham [1914] AC 398 .................................................................... 17 Singh v Ali [1960] AC 167 ................................................................................ 205 Smart v Lambeth LBC [2013] EWCA Civ 1375, [2014] HLR 7 .............................................................................................. 155, 165–66 Smith Kline & French Laboratories Ltd v Netherlands (12633/87) (1990) 66 DR 70 ........................................................................... 97 Snell & Prideaux Ltd v Dutton Mirrors Ltd [1995] 1 EGLR 259 ............................................................................................. 265–66 Sociedad Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 QB 310 ................................................................ 101 Solloway v McLaughlin [1938] AC 247 ............................................................ 205 South Staffordshire Water Co v Sharman [1896] 2 QB 44........................... 141–42 South Wales Miners’ Federation v Glamorgan Coal Co Ltd [1905] AC 239 ............................................................................................... 125 Spartan Steel & Alloys Ltd v Martin & Co Ltd [1973] QB 27 ............................................................................................................. 223 Spence v Union Maritime Insurance Co Ltd (1868) LR 3 CP 427 ....................................................................................................... 21, 24 Sporrong and Lönnroth v Sweden (1982) 5 EHRR 35 ........................................ 98 Spring v Guardian Assurance plc [1995] 2 AC 296 ........................................... 122 Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432 .......................... 181–82, 199 Stannard v Reay [1967] RPC 589 ...................................................................... 280 Star Industrial Co Ltd v Yap Kwee Kor (t/a New Star Industrial Co) [1976] FSR 256 ........................................................ 253, 255–56, 277–89 Starbucks (HK) Ltd v British Sky Broadcasting Group plc [2013] EWCA Civ 1465, [2014] FSR 20 ....................................... 278 Stevens v Secretary of State for Communities and Local Government [2013] EWHC 792 (Admin), [2013] 2 EGLR 145 ................................................................................................... 241 Story v Gammell 94 NW 982 (Neb Sup Ct 1903) ............................................. 121 Stran Greek Refineries and Stratis Andreadis v Greece (1994) 19 EHRR 293 ..................................................................................... 123 Street v Mountford [1985] AC 809 ................................................................... 155 Sutton v Buck (1810) 2 Taunt 302 ..................................................... 136, 139, 143 Swan v Sinclair [1924] 1 Ch 254 ....................................................................... 263 Tadman v Henman [1893] 2 QB 168 ................................................................ 170 Tapling v Jones (1865) 11 HLC 290, 11 ER 1344 ............................................. 214 Taylor v Powertel 551 SE 2d 765 (Ga Ct Apps 2001) ....................................... 121 Tonson v Collins ( 1761) 1 Black W 301, 96 ER 169; (1762 ) 1 Black W 321, 96 ER 180 ........................................................................ 58–60

Table of Cases xxi Tonson v Walker (1752) 3 Swanston 672, 36 ER 1017 ................................. 57, 59 Towne v Lewis (1849) 7 CB 608, 137 ER 241 .................................................. 216 Tre Traktorer Aktiebolag v Sweden (1989) 13 EHRR 309 ................................ 123 Turner v Chief Land Registrar [2013] EWHC 1382 (Ch), [2013] 2 P & CR 12 ...................................................................................... 161 Twinsectra Ltd v Yardley [2002] UKHL 12, [2002] 2 AC 164 .............................. 7 Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638 (Ch), [2006] FSR 17 .......................................................................................... 285–86 Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840 .......................... 93–94 University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 ............................................................................................. 104 Vandrink and Archer’s Case (1591) 1 Leon 221 ................................................ 145 Vapormatic Co Ltd v Sparex Ltd [1976] 1 WLR 939 .......................................... 93 Vehicle Control Services Ltd v HM Revenue and Customs Commissioners [2013] EWCA Civ 186, [2013] STC 892....................... 160, 164 Veolia ES Nottinghamshire Ltd v Nottinghamshire CC [2010] EWCA Civ 1214 ........................................................................................ 98–99 Vestergaard Frandsen SA (MVf3 APS) v Bestnet Europe Ltd [2011] EWCA Civ 424; [2013] UKSC 31, [2013] 1 WLR 1556 ...................... 85 Vine v Waltham Forest LBC [2000] 1 WLR 2383 ............................................. 218 Von Hannover v Germany (2005) 40 EHRR 1 .................................................. 102 Wagon Mound, The see Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd Wakeham v Wood (1982) 43 P & CR 40 .......................................................... 238 Walgrave v Ogden (1590) 1 Leon 224, 74 ER 205 ............................................ 216 Ward v Duncombe [1893] AC 369 .................................................................... 118 Ward v Ward (1852) 7 Ex 838........................................................................... 262 Warde v Aeyre (1614) 2 Bulstr 324, 80 ER 1157 .................................... 19–21, 23 Waverly BC v Fletcher [1996] QB 334 ....................................................... 138, 142 Webb v Austin (1844) 7 Man & G 701, 135 ER 282 ........................................ 168 Webb v Fox (1797) 7 TR 391 ...................................................................... 136–37 Weh v Austria (2005) 40 EHRR 37 ................................................................... 102 Westdeutsche Landesbank Girozentrale v Islington LBC [1994] 4 All ER 890 ......................................................................................... 23 Western Counties Railway Co v Windsor and Annapolis Railway Co (1881–82) LR 7 App Cas 178 .................................................... 229 Westminister City Council v Great Portland Estates plc [1985] 1 AC 661 ............................................................................................ 243 Westminster Bank Ltd v Minister for Housing and Local Government [1971] AC 508 ........................................................... 229, 240, 250 Wharton v Ashpole (1524) B & M 529 ............................................................. 216 White v Bayley (1861) 10 CB (NS) 227 ............................................................. 164 White v Jones [1995] 2 AC 207 ................................................................... 45, 122 Whitecomb v Jacob (1710) Salkeld 160, 91 ER 149 .................................... 4, 6, 21 Whitewood’ s Case (1482) YB Trin 22 Edw IV, pl 46, fol 19 ........................ 16–18 Wilbraham v Snow (1670) 1 Mod 30, 1 Ventris 52 ........................... 135, 137, 218 Wilkinson v Byers (1834) 1 A & E 106 ............................................................. 113

xxii Table of Cases Williams v Canaries Seaschool [2010] RPC 32 .................................................. 285 Williams v Linnitt [1951] 1 KB 565................................................................... 138 Williams v Usherwood (1983) 45 P & CR 235 ................................................. 263 Williams & Glyn’s Bank Ltd v Boland [1981] AC 487 ...................................... 198 Wilson v First County Trust (No 2) [2003] UKHL 40, [2004] 1 AC 816 ............................................................................................ 122 Winkfield, The [1902] P 42 ....................................................................... 141, 143 Wookey v Pole (1820) 4 B & Ald 1, 106 ER 839 ................................................ 17 Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 .................................................................................................... 238 Yearworth v North Bristol NHS Trust [2009] EWCA Civ 37, [2009] 3 WLR 118 ................................................................................. 2, 25–48

Table of Legislation National United Kingdom Act of Anne 1710 .................................................................. 54–56, 58, 61–63, 74 Audit Commission Act 1998 s 15 .................................................................................................................. 98 Civil Evidence Act 1968 s 14(1) ........................................................................................................ 79, 90 Civil Procedure Act 1997 s 7 .................................................................................................................... 89 Conveyancing Act 1919 s 89 ................................................................................................................ 268 Copyright Act 1842 ................................................................................. 67–69, 71 Copyright Act 1911 ....................................................................................... 70–73 Copyright Act 1956 s 18(1) .............................................................................................................. 90 s 21 .................................................................................................................. 89 Copyright, Designs and Patents Act 1988 ............................................................ 73 s 1(1) ................................................................................................................ 86 ss 12–15A ....................................................................................................... 277 Countryside and Rights of Way Act 2000 .......................................................... 237 s 2(1) .............................................................................................................. 237 s 40 ................................................................................................................ 237 s 41 ................................................................................................................ 237 Dramatic Literary Property Act 1833 .................................................................. 71 Electricity Act 1989 sch 4, para 7 ................................................................................................... 236 Enterprise and Regulatory Reform Act 2013 s 79 .................................................................................................................. 70 Firearms Act 1968 s 17(2) .............................................................................................................. 27 Government of Ireland Act 1920 s 5 ............................................................................................................ 230–31 (1) ......................................................................................................... 229–31 Highways Act 1980 s 26 ................................................................................................................ 236 s 28 ................................................................................................................ 236 s 66 ................................................................................................................ 236 Housing Act 1985 s 32 ........................................................................................................ 155, 165 Housing (Homeless Persons) Act 1977 .............................................................. 155 Housing, Town Planning etc Act 1909............................................................... 250

xxiv Table of Legislation Human Fertilisation and Embryology Act 1990 .................................................. 40 Human Tissue Act 2004 ...................................................................................... 40 Land Registration Act 1925 s 70(1)(g) ........................................................................................................ 194 Land Registration Act 2002 ........................................................... 162–64, 173–77 s 9 .................................................................................................................. 168 (1) ............................................................................................................... 174 (c) .................................................................................................... 162, 164 s 10 ................................................................................................................ 168 s 11(2) ............................................................................................................ 174 s 28 .......................................................................................................... 175–76 s 29 .......................................................................................................... 176–77 sch 3 ............................................................................................................... 177 sch 6 ............................................................................................................... 163 para 5(4)(c) ................................................................................................. 174 Landlord and Tenant Act 1985 s 11 ................................................................................................................ 155 Landlord and Tenant (Covenants) Act 1995 ...................................................... 165 Law of Property Act 1925 s 2 .................................................................................................................. 176 s 27 ................................................................................................................ 176 s 62 .......................................................................................................... 265–66 s 84 ........................................................................................................ 237, 267 (1)(c) ........................................................................................................... 237 (1A) ............................................................................................................ 237 s 205(1)(ix) ..................................................................................................... 269 Licensing Act 1695 .............................................................................................. 56 Limitation Act 1980............................................................................. 162–63, 253 s 15 ................................................................................................................ 163 s 17 ................................................................................................................ 163 Localism Act 2011 ....................................................................................... 246–47 ss 88–95 ......................................................................................................... 246 National Health Service Act 1946 s 1(2) ................................................................................................................ 28 Patents Act 1977 s 30 .................................................................................................................. 86 Planning (Interim Development) Act (Northern Ireland) 1944 s 6(4) .............................................................................................................. 229 Planning and Compulsory Purchase Act 2004 s 17 ................................................................................................................ 245 s 38 ................................................................................................................ 245 s 38A .............................................................................................................. 246 s 61E .............................................................................................................. 246 s 61Q ............................................................................................................. 246 s 113 .............................................................................................................. 245 sch 4B ............................................................................................................. 246 sch 4C ............................................................................................................ 246

Table of Legislation xxv Planning and Housing Act (Northern Ireland) 1981 s 10(2) ............................................................................................................ 229 Prescription Act 1832 ........................................................................................ 272 Private International Law (Miscellaneous Provisions) Act 1995 ........................................................................................................ 208 Registered Designs Act 1949 s 15A ................................................................................................................ 86 Senior Courts Act 1981 s 72 ......................................................................................... 75, 77–85, 87–89, 91–94, 96, 99–109 (1) ................................................................................................................. 79 (2)(a) ....................................................................................................... 79, 84 (b) ............................................................................................................. 79 (c) .............................................................................................................. 79 (3) ................................................................................................... 79, 88, 103 (5) ..................................................................................................... 79, 81–83 State Immunity Act 1978 s 14(2) ............................................................................................................ 209 Statute of Money 1292 ........................................................................................ 11 Statute of Money 1562 ........................................................................................ 11 Statute of Monopolies 1624 ................................................................................. 55 Suicide Act 1961 .................................................................................................. 40 Telecommunications Act 1984 sch 2, para 4 ................................................................................................... 236 para 7 ......................................................................................................... 236 Theft Act 1968 s 1 .................................................................................................................. 149 s 2(1)(b) .......................................................................................................... 255 (c) ............................................................................................................ 255 s 31 ............................................................................................................ 90–91 Torts (Interference with Goods) Act 1977 s 14(1) ............................................................................................................ 120 Town and Country Planning Act 1990 s 55 ................................................................................................................ 239 s 70(2) ............................................................................................................ 246 s 78 ................................................................................................................ 246 s 97 ................................................................................................................ 239 s 103(1) .......................................................................................................... 239 (3)–(6) ..................................................................................................... 239 s 107 .............................................................................................................. 239 s 115 .............................................................................................................. 239 Town and Country Planning (Local Planning) (England) Regulations 2012 (SI 2012/767) ..................................................................... 245 Trade Marks Act 1994 s 3(1)(b) .......................................................................................................... 288 (3)9b) .......................................................................................................... 288 s 5(4)(a) .......................................................................................................... 286 s 22 .................................................................................................................. 86

xxvi Table of Legislation s 27 .................................................................................................................. 86 s 45 ................................................................................................................ 288 Trade Marks Rules 2008 r 33 ................................................................................................................ 288 Tribunals, Courts and Enforcement Act 2007 ss 72–80 ......................................................................................................... 171 sch 12 ............................................................................................................. 171 Water Industry Act 1991 s 159 .............................................................................................................. 236 sch 12, para 2 ................................................................................................. 236 Australia Assisted Reproductive Technology Act 2007 (NSW) s 3 .................................................................................................................... 34 Constitution s 51(xxxi) ......................................................................................................... 99 Human Tissue and Transplant Act 1982 (WA) s 22 .................................................................................................................. 37 Prohibition of Human Cloning Act 2002 ............................................................. 33 Research Involving Human Embryos Act 2002 ................................................... 33 Tobacco Plain Packaging Act 2011 ...................................................................... 99 Canada Warehouse Receipts Act 1996 (RSBC) ........................................................... 38, 40 Rules of Civil Procedure (Ontario) r 32.01 ............................................................................................................. 39 France Civil Code Art 706 ........................................................................................................... 273 Art 707 ........................................................................................................... 273 Iraq Civil Code Arts 192–201 ................................................................................................. 210 United States Constitution Fifth Amendment ............................................................................... 77, 230–31 European Union Charter of Fundamental Rights Art 17(2) .......................................................................................................... 97 Dir 93/98/EEC on copyright and related rights [1993] OJ L290/9 ...................... 74 Dir 2012/28/EU on permitted uses of orphan works [2012] OJ L299/5 .............. 70

Table of Legislation xxvii International Agreement on Trade-related Aspects of Intellectual Property Rights 1994 (TRIPS) Art 39 ............................................................................................................... 85 Berne Convention for the Protection of Literary and Artistic Works 1886 ............................................................................. 70–71, 73 Berlin Revision 1908 .................................................................................. 71, 73 European Convention on Human Rights 1950 Art 6 ......................................................................... 77, 80–82, 88, 99–103, 108 Art 8 ............................................................................. 98–99, 102, 157, 240–41 Art 10 ....................................................................................................... 99, 102 Protocol 1 ....................................................................................................... 100 Art 1 ........................................................................... 97–99, 122–23, 240–41 International Covenant on Civil and Political Rights 1966 Art 14 ............................................................................................................... 77 Universal Declaration of Human Rights 1948 Art 10 ............................................................................................................... 77

1 Banks v Whetston (1596) DAVID FOX

I. INTRODUCTION

B

ANKS V WHETSTON (1596)1 may not fully deserve description as a ‘landmark case’. Very few lawyers have heard of it and it does not have a strong history of citation in later decisions. It is, nonetheless, a notable marker along the route of the common law’s developing treatment of money as property. The principle that it turned on—that one piece of money is ‘not to be known from another’—has left continuing marks on the common law. The items of property adopted in law as media of payment need, so far as possible, to be perfectly fungible with each other. In terms of the monetary units of account represented by them, they must carry an equal capacity to discharge debts. Money also needs a special liquidity if it is to function efficiently, and exemption from the usual strictures of property law is one way to achieve that. The reasons in Banks v Whetston explained throughout the middle ages and into the early modern period why money was exempted from the full force of the maxim nemo plus iuris transferre potest ad alium quam ipse habet so that, contrary to this maxim, one person might in fact take a stronger title to money than the person transferring it to him or her. The cluster of cases that it belongs to is the foundation of the modern rule, which is now universally criticised, that common law titles to money cannot be traced through a mixture.2 The principle that money was ‘not to be known’ was also true of equity until developments in the early nineteenth century

1

Banks v Whetston (1596) Cro Eliz 457*, 78 ER 711. Foskett v McKeown [2001] 1 AC 102, 128 (Lord Millett); P Birks, ‘The Necessity of a Unitary Law of Tracing’ (ch 9) in R Cranston (ed), Making Commercial Law: Essays in Honour of Roy Goode (Oxford, Clarendon Press, 1997). 2

4 David Fox led to the formulation of what we now recognise as the classical rules of equitable tracing.3 This chapter considers the larger significance of Banks v Whetston for the common law’s treatment of money. It begins, in the second section, with a consideration of the main proposition in the case. Detinue, it was held, would not lie to recover money unless it was contained in a bag or chest. Otherwise, so the case held, one piece of money was not to be ‘known from another’, and the plaintiff would be left to enforce his or her claim by suing in the action of debt. The third section turns to money as a means of payment in bilateral transactions. It seeks to show that the perfect homogeneity of money was something of an ideal state, which the technical process of minting and the Tudor legal regime for monetary control strove to uphold. Monetary fungibility was a carefully fashioned construct of law. The rules governing the issue of money sought to ensure that any coin tendered as a means of payment always passed at a legally determined value. In this sense, the common law’s treatment of money was markedly different from its treatment of fungible commodities, such as corn, in that its fungibility did not depend solely on the physical similarity of its individual units. The fourth section of the chapter considers the pre-modern conception of money as the subject of a property right. For this purpose, money was treated like any other fungible commodity. The owner’s title to money was extinguished once it passed indistinguishably into the possession of another person. The sealing of money in a bag or chest was a formalised exception to that rule, which enabled one person to maintain an enforceable title to money held in the possession of another. The fifth section shows how it was the relative untraceability of money that exempted it from the maxim nemo plus iuris, so giving it a special liquidity in payments. The conclusion to the chapter outlines the remaining relevance of the principle in Banks v Whetston.

II. THE REASONING IN BANKS V WHETSTON

Banks v Whetston was an action in detinue, and argued on a demurrer in the Court of King’s Bench. The few short lines of Croke’s report tell us nothing of the facts but merely note that the defendant succeeded on the point of law: Detinue of money (not in a bag or chest); and it was thereupon demurred, whether the action lay.—And, without argument, adjudged for the defendant, that the 3 Whitecomb v Jacob (1710) Salkeld 160, 91 ER 149, considered in Section IV below. On the nineteenth-century developments, see G Virgo, ‘Re Hallett’s Estate (1879–80)’ (ch 12) in C Mitchell and P Mitchell (eds), Landmark Cases in Equity (Oxford, Hart Publishing, 2012). The suggestion made in that chapter that before the decision in Re Hallett’s Estate (1879–80) 13 Ch D 696 the common law might have allowed money to be followed through mixtures finds no historical support in the authorities considered in the present chapter.

Banks v Whetston 5 action lay not: for detinue ought always to be of things certain, and which may be known to be delivered; and moneys are incertain, and one piece cannot be known from another. And therefore, in an appeal of robbery for money, if the defendant gages battaile it is no plea, that he was taken with the mainour; for the mainour cannot be of a thing not to be known.4

Banks v Whetston is one of a cluster of cases reported during the late Tudor and early Stuart era which sought to identify the appropriate forms of action for the enforcement of claims to fungible property. The courts defined the boundary between on the one hand detinue, and on the other hand the varieties of debt action which lay to enforce claims for delivery of generic fungibles.5 There was thus a distinction between detinue, which lay in respect of specific identifiable chattels, and debt in the detinet, which lay to enforce claims to the delivery of fungible chattels other than money. Debt in the detinet lay, for example, to enforce claims for the delivery of fungible corn due to the plaintiff by bargain and sale, or under the terms of a lease.6 A similar distinction applied to money. Money could either be a specific item of property (as when it was bailed for safekeeping in a sealed bag or locked chest) or it could be owed as a fungible amount under a debt expressed in pounds, shillings and pence. In principle, there was no objection to a plaintiff suing in detinue to recover money bailed in specie, provided that the object of his claim could be identified clearly enough. Detinue, it was said, lay only in respect of un chose certain, such as money in a bag, a horse, or one hundred identified cows.7 The thing detained by the defendant had to be identified as the same thing which the plaintiff had delivered to him. Since the defendant had the option of returning the disputed thing itself (in hoc individuo) rather than just paying damages for its value, the thing had to remain extant and identifiable until the time of judgment.8 If the plaintiff ’s claim was instead to enforce a generic obligation for the payment of money, then his action was in debt in the debet et detinet. In contrast to detinue, debt lay to recover a certen summe of money.9 The distinction between the two claims thus depended on the difference between certainty in identifying an individual item of property and certainty in quantifying the number of units in an obligation to deliver fungibles. It also

4

(1596) Cro Eliz 457*, 457–58*, 78 ER 711. See generally A Fitzherbert, La Novel Natura Brevium (c 1537) 119–20; AWB Simpson, A History of the Common Law of Contract (Oxford, Clarendon Press, 1987) ch 2; and JH Baker, The Oxford History of the Laws of England (Oxford, Oxford University Press, 2003) vol vi, 852–60. 6 YB 21 Hen VII, pl 55, fol 39. 7 Fitzherbert (n 5 above), 138a. 8 Isack v Clarke (1615) 1 Rolle 126, 128, 81 ER 377; Bulstrode 306, 307, 80 ER 1143 (Dodderidge J). 9 Fitzherbert (n 5 above), 119a. 5

6 David Fox signalled two commercially different kinds of transaction: one involving the enforcement of the plaintiff ’s property (where the property in question happened to be coins) and the other for the enforcement of a simple monetary obligation to pay a generic amount denominated in monetary units. One other possible complication entered here, which was the potential overlap between the actions of debt and account. Account originally lay to enforce the duties of manorial bailiffs who failed to account for money received in the management of their lords’ estates.10 By late in the thirteenth century it extended to a broader range of ‘receivers’ who were paid money by third parties, which was then to be remitted to their principals. These might be cases where the receiver had received money proceeds from selling the principal’s goods, or where he acted as an intermediary in delivering money between a third party and the plaintiff. A ‘hazy property rationale’ explained the receiver’s liability in these cases.11 He held money for which he must account to his principal since the money was in some sense not the receiver’s own. By late in the sixteenth century it became accepted that the action of debt would lie to enforce the accounting liability of receivers in the same way as the older action of account had done. So the immediate significance of Banks v Whetston was that it tended to support this extension of debt to the ground traditionally covered by account, and defined the boundary lines between them and detinue. This leads to the significance of the money being contained in a bag or chest. At one level, it was simply a standardised criterion for identification. The bagging of money removed the evidential uncertainty about identifying coins as the property of one person or another, and in a detinue action it allowed the money to be restored in hoc individuo. In this respect, there was nothing special about money. Unspecified objects such as charters and documents of title could be sued for in detinue so long as the plaintiff pleaded that they were contained in a locked chest.12 More than a century after Banks v Whetston a different maxim emerged to explain the indistinguishabilty of money, which was to say that money had ‘no earmark’.13 This was a metaphor borrowed from the farming practice of cutting the ears of livestock, particularly sheep, as a way of identifying them as their owner’s property. Earmarking was one of many means of marking livestock, such as by branding the hides of cattle, or by marking the fleece of sheep with

10

See SJ Stoljar, ‘The Transformations of Account’ (1964) 80 LQR 203. DJ Ibbetson, History of the Common Law of Obligations (Oxford, Oxford University Press, 1999) 267. 12 YB 2 Hen V pl 25, fol 5b (distinguishing trespass from detinue); YB 3 Hen VI, pl 31, fol 35b–36b; (31 Hen VI) Statham, ‘Detenu’, pl 24 (note of unreported decision); YB 14 Edw IV, pl 3, fol 1b. 13 Whitecomb v Jacob (1710) Salkeld 160, 91 ER 149; Ryall v Ryall (1739) 1 Atkin 59, 59, 26 ER 39 (Hardwicke LC); Scott v Surman (1742) Willes 400, 404, 125 ER 1235, Willes CJ; Ryall v Rolle (1749) 1 Atkin 165, 175, 26 ER 107 (Parker LCB). 11

Banks v Whetston 7 pitch or raddle. Earmarking resolved evidential uncertainty. It identified items of property that might otherwise have been physically indistinguishable from each other. It enabled the owner to identify stolen livestock, and to recover his own animals if they were accidentally mixed with another’s. Thus we find the author of an early sixteenth-century book on husbandry recommending that sheep be marked at shearing time.14 This was perhaps a precaution against different flocks of sheep becoming inextricably mixed when they were sent to the shearers. No such means of identification was possible for coins. As we shall see, a person who clipped a coin committed a serious criminal offence, even assuming that it would have been a practical means of identifying certain coins as his own property.15 Since coins could never carry identifying marks, sealing them in bags or locking them in chests became the clearest way to differentiate and identify them. At another level, the bagging rule served as a practical way of differentiating common financial transactions. The significance of bagging would have been readily understood by the commercial parties and by juries who were charged with determining the capacity in which a person received or held sums of money. The simple question ‘Was the money in a bag or not?’ cut through the conceptual artificialities of determining what might have been the intent of the parties, of the sort encountered in modern-day law. When a lawyer today asks, ‘Was the recipient intended to have the free disposition over the money’,16 he or she effectively asks the same question but couches it in abstract terms rather than in concrete facts. Aside from actions in detinue, the Year Books and early nominate reports contain many references to money sealed in bags. An anonymous 1507 decision lists some of the transactions where the parties might deal in bags of money.17 The owner might bail money with a servant for safekeeping, as happened in that case;18 or deposit it with another for transport to a different location,19 or for him to pay a debt which the owner owed to a third person, or to buy something on the owner’s behalf. The common feature

14 J Fitzherbert, Boke of Husbandry (c 1535–40), fol 32b (‘To shere sheepe’). The author seems to have been the elder brother of Sir Anthony Fitzherbert, the Justice of the Court of Common Pleas 1523–38. See R Fitzherbert, ‘The Authorship of the ‘Book of Husbandry and the Book of Surveying’, The English Historical Review, vol 12 (1897) 225–36. On marking, see also the later work R Bradley, Dictionnaire Oeconomique or Family Dictionary (Midwinter, London, 1725), ‘Marking of sheep’. 15 See text at n 31 below. 16 This is the test for determining whether a secondary relationship of trust has been imposed on a primary relationship of debtor and creditor: Twinsectra Ltd v Yardley [2002] 2 AC 164, [73]–[76] (Lord Millett). 17 YB Hil 21 Hen VII, pl 21, fol 14b. 18 See also Bowser v Cheeseman YB Mich 20 Hen VII, pl 13, fol 4 (bailment of money in a bag and chest of jewels). 19 YB 21 Hen VI, pl 13, fol 29b–30a (delivery of tally sticks).

8 David Fox was that the person holding the money held it in right of another so that he was not free to spend it as his own. The closed bag signalled that the property in the money lay in the person to whom the bag had to be delivered. If a third person passed the money to the defendant in a closed bag for delivery to the plaintiff, this act helped to identify him as a receiver who might be liable in an action of account.20 The physical form of the parties’ dealing identified the proper analysis of the transaction and the form of action which the plaintiff would use to enforce it. It was common practice to affix a sealing mark on the knot which closed the bag. Practically, the fixing of a seal proved that the person to whom the bag was bailed had not tampered with the contents. Sealing was particularly important where the defendant was holding the money as an intermediary and was transporting it from the payer to the recipient to whom it was ultimately owed. If it turned out that there was a deficiency in the money due from the payer to the recipient, then the intermediary could argue that the problem lay with the payer to resolve.21 Sometimes the bag would be sealed with the sign of the person to whom the money was due. So a bailiff collecting rents from a village’s tenants might seal it with his lord’s sign before remitting it to the lord through the defendant.22 He thus accepted responsibility for the amount of money contained in the bag and identified the lord as the person to whom the defendant, as intermediary, had to account. To seal coins in a bag thus had a mixed evidential and substantive significance. It constituted an assertion by the person whose seal was on the bag that the property in the money was in him or in some third person to whom the money had to be remitted. Either way, it showed, negatively, that the person holding the bag might not have the full property in it. He was quite possibly a bailee who might be liable in detinue, or a receiver who might be liable in account (or in debt, as the action which superseded it). This leads then to the questions of why it was so important for one piece of money ‘not to be known from another’, and how one person’s property was affected when money out of a bag passed into the possession of another person.

III. THE FUNGIBILITY OF COINS AS MEANS OF PAYMENT

Money in early modern England consisted primarily of coins. Although much Elizabethan commercial activity depended on the creation and

20 YB Trin 11 Hen 4, pl 19 (numbered as 20), fol 79 (though the ground on which the defendant had to account to the plaintiff was disputed). 21 YB Pasch 29 Edw III, fol 20b. 22 Ibid.

Banks v Whetston 9 netting off of reciprocal debts, coins remained the primary base of the monetary system.23 Ultimately, all monetary balances had to be settled by the payment of coins, and all debts derived their value from the obligee’s right to reduce them to the payment of coins at a nominal rate. The ‘money’ or ‘pieces’ at issue in Banks v Whetston would have been intrinsically valuable coins minted under the Queen’s sovereign prerogative and assigned a legal valuation in the mint indenture by which she commissioned them from the Mint.24 Under Elizabeth I silver coins were minted according to the traditional sterling standard of 11 oz 2 dwt fine per Tower pound (ie, 92.5% fine). She thus restored the English coinage to its traditional standard of fineness after the debasements made by Henry VIII and Edward VI between 1542 and 1551.25 Gold coins were minted according to two standards of fineness: one, which had been in force since 1344, saw gold coins minted at a standard of 23 carats 3½ grains fine gold to ½ grain alloy (ie, 99.5% fine); and a second, so-called ‘Crown gold’ standard of 22 carats to two carats alloy (ie, 91.67% fine), which was introduced in 1526. Money thus had strong physical foundation. It was as much a chattel as any other kind of valuable treasure which might have stored personal wealth, such as plate or jewels. What distinguished coin from other chattels was the homogeneity of its physical form,26 and the fact that its monetary value was fixed as a matter of law. The purchasing power of coin derived from its intrinsic content of precious metal, but its legal value in payment transactions was fixed by the mint indenture.27 Thus any one coin might simultaneously carry two values. Its value as bullion was a function of its fineness and actual weight, and of the fluctuations in the international prices for gold or silver. But a court would have regard to the value fixed in the mint indenture in determining

23 CE Challis, The Tudor Coinage (Manchester, Manchester University Press, 1978); C Muldrew, The Economy of Obligation: the Culture of Credit and Social Relations in Early Modern England (Basingstoke, Macmillan, 1998). 24 The technical specifications for all the Elizabethan mint contracts are summarised in Challis (n 23 above), Appendix III. Unusually, there was no proclamation which explicitly declared that the coins of the new specification were current as lawful money of England and required the public to accept them at their nominal rates fixed in the mint indenture. But since it was the mint indenture that fixed the coin’s legal valuation, this omission was not legally significant. 25 JD Gould, The Great Debasement (Oxford, Clarendon Press, 1970); Challis (n 23 above) ch 5.1. 26 The argument for the advantages of homogeneity in the medium of exchange was clearly formulated in WS Jevons, Money and the Mechanism of Exchange (London, HS King, 1875) 37. 27 Anon, Tractatus Nove Monete (c 1286–87), reproduced in C Johnson (ed), The De Moneta of Nicholas Oresme and English Mint Documents (London, Nelson, 1956); and generally D Fox, ‘The Structures of Monetary Nominalism in the Pre-Modern Common Law’ (2013) 34 Journal of Legal History 138, 151–55. On the sovereign’s common law prerogative over the issue and valuation of the coinage, see generally Gilbert v Brett (sub nom Case of Mixt Monies) (1604) Davis 18, 19–21.

10 David Fox whether an obligor had made a valid tender towards the payment of a debt. If the bullion and legal values shifted apart from each other, then damaging possibilities for arbitrage might arise, and these would ultimately undermine the efficient use of the coins as means of payment. It was important therefore that all coins of the same denomination carried the same quantity of precious metal. All penny coins valued at 1 d needed to be equally acceptable in the discharge of debts expressed in penny units of account. Similar considerations applied across different denominations of coin. Coins of different denominations were struck to the same standard of metallic fineness so those of higher denominations, such as sixpence coins, needed to carry a proportionately greater amount of precious metal than those of lower denominations. A sixpence coin with a nominal value of 6 d had to be six times heavier than a penny coin valued at 1 d. The correspondence in weight was necessary to ensure that six penny coins of 1 d would be equally acceptable in payment of a 6 d debt as one sixpence coin. Naturally, this aim of perfect homogeneity in the coinage could only be an ideal, since coins of the same denomination were in fact different in their physical form. The process of refining metal was subject to inevitable technological limitations, so coins of the same denomination could not all be minted to a consistent level of fineness. The same was true of their weight. Coins were produced by being cut manually from metal sheets using shears. The blanks thus cut were then struck on a dye.28 The variability of the cutting process meant that some coins were heavier than others. This inevitable variation was given legal recognition by the ‘remedies for the assay and shear’ allowed to the master-worker of the Mint in his indenture with the sovereign. So long as the fineness and weight of new coins fell within a defined tolerance band, then the master would not be penalised for the variations in the individual coins which he produced. After Elizabeth I’s re-coinage of 1560, the standard remedies allowed for variations in the weight and fineness of silver coins were fixed at 2 dwt per Troy pound. Thus, at the point of issue, any one silver coin might permissibly vary by 0.625% in fineness or weight from the standard specified in the mint contract.29 The possibility of individual variation continued once the coins were put into circulation. Coins lost weight by the force of natural abrasion as they passed from hand to hand. Over a period of years coins came to weigh appreciably less than they did when they were first issued.30 The illegal

28 For a simple description, see P Grierson, Numismatics (Oxford, OUP, 1975) ch 6; and for the operation of the mint process in medieval England, see M Allen, Mints and Money in Medieval England (Cambridge, CUP, 2012). 29 See the summaries of mint indentures gathered in Challis (n 23 above) 321–25. 30 CC Patterson, ‘Silver Stocks and Losses in Ancient and Medieval Times’ (1972) 25 Economic History Review, 2nd series, 205 models the rate of loss.

Banks v Whetston 11 practice of clipping exacerbated this problem. Criminals would remove some of the silver content from coins by shaving their edges, thus exploiting the fact that even a clipped coin might still be passed off at its original value. Prohibitions on clipping and the circulation of clipped coinage were a long-standing feature of the legal regulation of the monetary system.31 They were re-affirmed by proclamation when clipping became rife, which tended to be at periods when the legal value of coins diverged from their value as bullion abroad. Other manifestations of these arbitrage problems were the buying of quantities of coin at prices different from their official proclaimed values, and the so-called ‘culling’ of coins, by which criminals— often goldsmiths—sifted the heavy-weight coins from batches of lightweight coins with a view to selling them as bullion. The prerogative law which governed the issue and circulation of money punished both practices severely.32 In all, the struggle to preserve the physical homogeneity of all coins and their consistency in value was a pressing legal concern. The homogeneity of money was different from that of any other kind of fungible chattel, such as corn or barley. It was, as we have seen, the result of legal fiat and not simply the physical similarity of each interchangeable piece. Coins were not to be ‘known’ from each other because the value of each coin in payments was fixed as a matter of law. Every coin, apart from the penny (the so-called ‘sterling’ or sterlingus), had a legal value assigned to it in the mint indenture. Usually, that value would be publicly proclaimed when the sovereign put the coin into circulation. Thus silver groats were generally valued at 4 d; shillings (or ‘testons’) at 12 d; and gold Crowns at 2 s 6 d. The courts would enforce this value in payment transactions. It had to be observed even if the coins of each denomination were themselves physically different from each other, and might have had a fractionally different intrinsic value based on their content of precious metal. The reason for the homogeneity of money in law went to the very purpose of the act of coinage. Coined money was meant to pass by tale rather than by weight. The sovereign’s act of striking coins was not just to certify that they contained an ascertained quantity of precious metal so as to save the public the trouble of having to weigh and assay the coins when they used them in payments. Coins were a generically different kind of property from uncoined bullion. Coins had to be worth their legal value if they were to be counted, rather than weighed, towards the discharge of debts. Long 31 Statute of Money (1292) 20 Edw I, Statute 4; (1415–16) 3 Hen V, Statute 2, cap 6, replaced by Statute (1562) 5 Eliz I, cap 11. 32 For Elizabeth I’s prohibitions on trafficking in coin at prices above legal valuation during the 1560 re-coinage, see Proclamation 472 (9 October 1560) Eliz I. For earlier Tudor examples, see Proclamation 326 (11 April 1549) Edw VI; Statute (1552) 5 & 6 Edw VI, cap 19; Proclamation 428 (27 April 1556), Ph & M (all Tudor proclamation references are to PL Hughes and JL Larkin, Tudor Royal Proclamations (London and New Haven CT, Yale University Press, 1964).

12 David Fox before Banks v Whetston, the Roman jurist Paul made this point when he explained how the contract of sale evolved from that of barter. Coins became money proper only when they came to be considered more in terms of their quantity than in terms of their material substance (eaque materia forma publica percussa usum dominiumque non tam ex substantia praebet quam ex quantitate).33 Eventually, that ‘quantity’ came to be identified with the legal value which was assigned to them. The only coin that did not need explicit valuation in the mint contract or by proclamation was the penny, also known as the ‘sterling’ or denier. Unless the sovereign wholly or partially demonetised the penny, it would only ever be worth 1 d.34 It was the foundational coin of the entire system, and the physical embodiment of the primary unit of reckoning in terms of which all other coins and all debts were valued. We see this in the way payment clauses in the late fifteenth and early sixteenth centuries stipulated for sums of money expressed as quantities ‘of sterlings’ (sterlingorum).35 Thus debts were literally reckoned in units or multiples of pennies even if the obligor was free to tender coins of larger denominations. The word denier evolved into a synonym for a coin of any value. We see it used in this sense in the Year Books, where it is often enough to translate the word simply as ‘money’. It was often alleged in actions of account that the defendant was a receiver of deniers for the plaintiff.36 The fundamental place of the penny coin in the monetary system points to another marked difference between the fungibility of coins and that of other commodities, such as corn. Coins served as primary referents in terms of which the value of all other commodities could be measured.37 Fungibles such as corn could have a value expressed in money. We find therefore that the appropriate remedy in the action of debt in the detinet for non-delivery of fungible corn was the monetary value of the corn rather than delivery of the corn itself.38 But in their ideal state, when all possibilities for illegal exploitation of the arbitrage between their intrinsic and legal values were 33

D.18.1.1.pr-1 (Paulus). Thus when Elizabeth I restored the debased coinage to its former sterling standard, the first step was to devalue the existing coins so that they could circulate on an intrinsic par with the new restored coins which were to replace them. The penny coin was proclaimed current at ¾ d: Proclamation 471 (27 September 1560), Eliz I. 35 See, for example, the precedents for obligatory bonds gathered in Carta Feodi (1510–15), fol 20b–21b. 36 Eg YB Hil 3 Edw III, pl 13, fol 5; YB Trin 3 Edw III, pl 28, fol 28b; YB Mich 2 Hen IV, pl 50, fol 12; YB Mich 1 Hen V, pl 2, fol 11. 37 A point obliquely recognised by Keble Sjt in argument in YB Trin 12 Hen VII, pl 2, fol 22a, 23b on whether an actionable slander could be compensated by payment of money. His argument might have been generally known. It was picked up by the reporter in the Case of Mixt Monies (1604) Davis 18, 19 to support the assertion drawn from the civil law authorities that money was a lawful measure of all exchangeable commodities. 38 R Brooke, Graunde Abridgement (London, Richard Tottell, 1573), ‘Dette’, para. 211 referring to the cases cited in Copley v Davers YB Hil 9 Edw IV, pl 6, fol 49. 34

Banks v Whetston 13 excluded, coins could only ever have a value in terms of themselves.39 If the law were to recognise any variability in the thing which was the monetary unit of measurement, then it would undermine the very capacity of that thing to serve as a measuring unit at all. Likewise, if the parties were not bound to tender and receive coins at the legal rates established by the sovereign, but at rates based on their variable intrinsic content of precious metal, then the coins would lose their defining substance as money. A transaction which might otherwise have been a true sale would regress to being a barter. A debt for payment of money would in effect be treated as one for the delivery of precious metal. This provides the link to understanding the reasoning in Banks v Whetston and the other cases which sought to draw the line between the actions in detinue and debt. Bilateral debts owed by the defendant to the plaintiff could always be discharged by the payment of coin, one piece of which was not to be ‘known from another’. They were obligations for the payment of generic monetary amounts denominated in reckoning units of account. The action of debt was the appropriate form for enforcing them. These obligations were discharged by the delivery of money as money. They were not obligations for the delivery of coins having any distinguishing characteristics. Strictly, the same reasoning did not apply when money was treated as the subject of a property right, as happened when the plaintiff sued in detinue. The perfect homogeneity of money was not then in issue, and there was no compelling reason why all coins had to be treated as indistinguishable from each other. Indeed, since the plaintiff was alleging that the defendant had detained his specific money it was out of place to argue that the coins in dispute were interchangeable with each other. The plaintiff ’s property related to certain specific coins and no other. Nonetheless, the common law also applied the principle that one piece of money was not to be known from another to claims founded upon the plaintiff ’s assertion of property in the coins. The next section develops this point.

IV. MONEY AS THE SUBJECT OF PROPERTY

We saw earlier that the sealing of money in a bag or chest was chosen as a convenient test for demarcating different kinds of monetary transaction, 39 There was perhaps some difference between the treatment of gold and silver coins. Unlike silver coins, which seemed to have passed straightforwardly by tale at their legal rate, gold coins were commonly weighed in payments. But by early in the seventeenth century, it was accepted that the legal value in payments of gold coins would be reduced by a defined money of account value for every grain that the coins were underweight: Proclamation 196 (7 February 1620), James I. See also Proclamation (26 August 1661), Charles II, PRO SP45/11. These scales tended to fix their legal value in terms of silver coins. Gold coins thus had a legal status somewhere between that of coined and uncoined bullion.

14 David Fox and for indicating that the person in possession of the money held it subject to the title or claim of another.40 We turn now to the common law’s treatment of unbagged money, and the proprietary effect of one person’s money passing loose into the possession of another. The emphasis here is on money as the subject of property. Without a bag or a chest to differentiate it, the common law cases seemed reluctant to accept that one person could maintain an enforceable title to money that had passed—voluntarily or involuntarily—into the possession of another person. In this respect, the common law treated money like fungible commodities, such as corn. The reference in Banks v Whetston to the appeal of robbery becomes relevant at this stage. To repeat what the court said: ‘in an appeal of robbery for money, if the defendant gages battaile it is no plea, that he was taken with the mainour; for the mainour cannot be of a thing not to be known’. The mainour were stolen goods found in the possession of a thief, the thief literally being found with them in his ‘hands’. The analogy which the court sought to draw was between the standards of identification applied in civil actions for detinue and criminal proceedings for the recovery of stolen property. To understand the connection requires a brief digression into the procedure for the appeals of theft and robbery. The appeals were mixed reipersecutory and punitive actions. They lay as alternatives to proceedings by criminal indictment brought in the name of the King.41 They survived into the seventeenth century as the legal descendants of the old Anglo-Saxon procedures for the recovery of stolen goods by self-help. They enabled the victim of the theft (the ‘appellor’) to recover his property from the thief himself (the ‘appellee’) or from any third person who later come into possession of it by gift or sale. Certain procedural features of the appeal are relevant to understanding the analogy drawn in Banks v Whetston. The appellor had to give fresh pursuit of the thief.42 If he caught the thief in possession of the stolen goods (‘with the mainour’), then the original practice was that the appellor was entitled to have the thief tried in an impromptu court and executed if he and others made oath that the goods were stolen. But by the time Bracton was written in the 1220–30s, this practice had been mitigated. A local baron

40

See Section II above. For the early law, see F Pollock and FW Maitland, History of English Law, 2nd edn (preface by SCF Milsom) (Cambridge, CUP, 1898, reissued 1968) vol 2, 157–59; J Hudson, Oxford History of the Laws of England, vol 2 (Oxford, OUP, 2012) 155–59, 171–75, 395–96, 688–89. The practice from the thirteenth century onwards is explained in JB Ames, ch 64 in Select Essays and Anglo-American Legal History (Cambridge, CUP, 1909) vol 3, 418–22. The best contemporary explanation is GE Woodbine and SE Thorne (eds), Bracton, De Legibus et Consuetudinibus Angliae, vol 2, 425–36 (Cambridge MA, Belknap Press, 1915, reissued 1968). 42 MC Klingelsmith (ed), Nicholas Statham, Abridgment of Cases to the End of Henry VI (1490), (Boston MA, Boston Book Co, 1915), (Hil 22 Edw III) ‘Corone’, pl 59 (note of unreported decision). 41

Banks v Whetston 15 would have jurisdiction to try in his own court a thief taken with the mainour where the thief was one of his own men and the felony was committed within the liberty of the baron’s bailiwick.43 Otherwise, when the thief was found with the mainour, the appellor had to wait to bring his appeal to a full hearing before the King’s Justices. If the case went to this later stage, then it seems to have been accepted by the early fourteenth century that an appellee found with the mainour was barred from exercising his usual election between trial by jury or trial by battle. Since one purpose of the procedure was to determine the ownership of the disputed goods, it was thought inappropriate that the appellee might defeat the appellor in a battle simply by the strength of his own body.44 So unless the appellee decided to warrant that he had acquired the goods by gift or sale from another person (in which case the appeal proceeded against that other person),45 then the outcome of the dispute before the Justices had to be determined by a jury. This rule about possession with the mainour presented the appellor with special problems when the thief had stolen unbagged money. They did not arise in the more common cases where the thief had taken specific goods, such as oxen, horses, or clothing.46 There, the distinct appearance of the goods made identification easier. If the appellor could prove his hot pursuit of the appellee, then the identification of the goods in the appellee’s possession was very strong evidence of the theft. This was not so for money. The statement in Banks v Whetston implies that the presumption that one coin was not to be known from another was so strong that even hot pursuit of the thief was inconclusive evidence that any coins found in his possession were stolen from the appellor, at least for the purpose of changing the procedure on the appeal.47 So if the case did in fact proceed to the Justices,

43 The right of ‘infangthief ’: Bracton, vol 2 (n 41 above) 436; Note by John of Cambridge Sjt reproduced in (1981) 97 Selden Society 129. 44 YB Hil 12 Edw II, pl 45(a); (Mich 2 Edw 3) Fitzherbert, ‘Corone’, pl 157 (note of unreported decision); YB Trin 1 Edw I, pl 7, fol 16; Hil 4 Edw 3, pl 21, fol 9; (Hil 13 Hen IV) Statham, ‘Corone’, pl 96 (note of unreported decision); (Mich 28 Hen VI) Statham, ‘Corone’, pl 56 (note of unreported decision). For the procedure for conducting the battle, see R Kelham (ed), Britton, Containing the Antient Pleas of the Crown (c 1530) (London, J Worrall, 1762) at XXII; and for a vivid description of an actual battle in which the appellee was vanquished, see YB Mich 19 Hen VI, pl 74, fol 35. 45 For this part of the procedure, see especially GDG Hall (ed), Glanvill, Treatise on the Laws and Customs of the Realm of England (c 1187–89) (London, Nelson, 1965) X, 15. 46 YB 30 Edw I, Appendix 1, pl 20 noted in AJ Horwood (ed), Year Books of the Reign of Edward the First: Years XXX and XXXI, Rolls Series no 31, vol 3 (London, HMSO, 1863) 512–13; YB Hil 4 Edw 3, pl 21, fol 9; Fyssh’s Case (3 Edw 3) reproduced in (1981) 97 Selden Society 162(c), 160–62. 47 This was not to say that an appeal of larceny for stolen money could never succeed. If the appellee lost the appeal, then the court would order him to repay the appellor’s very coins or their equivalent: Decision of (7 Edw II) noted in Brooke, Graunde Abridgement (1573), ‘Restitution’, pl 22. The same approach was taken where fungible corn was stolen: Decision of (3 Edw III) reported at (1981) 97 Selden Society 194; and noted at Fitzherbert, Corone, pl 323. The statutory entitlement to restitution after robberies, enacted by Statute (1529) 21 Hen VIII,

16 David Fox the appellee could block the appellor’s prospects of having the matter determined by a jury. It might go to a trial by battle, with all the uncertainties involved in that procedure. A fragmentary note during the 1313 Eyre of Kent records the stringent standard of proof required of the appellor: Note that the bailiff of a liberty may not admit proof of ownership of moneys found and claimed within his bailiwick save where the owner of such moneys make immediate suit and can testify that he never lost sight of the said moneys etc.48

Thus, if the local baron was to assert his jurisdiction over a thief taken with the mainour in the baron’s own bailiwick, then the appellor needed to keep the money constantly in sight during his pursuit. Otherwise, the coins taken from the appellor could not be identified as those found in the possession of the appellee. As far as the evidence went, they might just as easily have been the appellee’s own coins. Indeed, if anything, the appellee’s possession of the coins raised a presumption that they were his own property. The problem of identifying money found with the mainour was directly considered in Whitewood’s Case (1482), which was an appeal of robbery heard before the Justices of the King’s Bench.49 Whitewood was alleged to have robbed the appellor of something which might have been a golden locket (described in the report as un lokil de correy) and a sum of 16 s in money. The procedural question for the court was whether Whitewood was entitled to elect for trial by battle. Lovell Sjt for the appellor argued against Whitewood’s election. He alleged all the usual conditions of an appeal: that the appellor had made fresh pursuit, raised the hue and cry, and pursued Whitewood until apprehending him. He then extracted from Whitewood 30 d of the 16 s stolen money, and later produced the coins to the court. Lovell Sjt argued that this should be enough to block Whitewood’s election. But Fairfax J doubted whether producing the loose money was sufficient: It seems to me that this matter is not sufficient to oust [the defendant] for to do so you produce here this money, and one coin (denier) cannot be known from another; and now it will be more strongly presumed to be your own money than his. And also if it were a sufficient reply, it would not be necessary for you to bring it into court but to plead that you were ready to produce the mainour, which is not traversable.

Huse CJ explained a procedural way out of the problem: It seems to me that [the actual production of the coins] is sufficient to deprive [Whitewood] of trial by battle, for it is said in our books that in order to deprive cap 11, created a parallel right to recover stolen money, which operated alongside the appeal procedure. It was interpreted as giving the owner a right to equivalent money if his own money had ceased to be identifiable: Isaack v Clarke (1615) 1 Rolle 126, 131, 81 ER 377; 2 Bulstrode 306, 310, 80 ER 1143 (Dodderidge J). 48 49

Note (1909) 24 Selden Society 132. YB Trin 22 Edw IV, pl 46, fol 19.

Banks v Whetston 17 him of battle, it is sufficient for [the appellor] to say that [the appellee] was taken with the mainour. Hence if this is properly pleaded and not traversable, then the actual production of the money cannot make the plea bad, and the mainour is not traversable.

Thus by the time of Whitewood’s Case it seems that careful pleading might block the appellee from exploiting the evidential problems of identifying money found loose in the appellee’s possession. If, as a matter of law, the appellee could not deny the appellor’s plea that the appellee had been found with the mainour, then the court could ensure that the appellee’s right to wager of battle was always ousted. This procedural solution to the problem might have emerged some time after the early fourteenth century, as the courts became less willing to allow appeals for larceny to be resolved by battle.50 But the arguments over the identification of money taken with the mainour clearly persisted, if Banks v Whetston is to be believed.51 As the remainder of this section goes on to show, it had a direct parallel in the common law’s treatment of fungible commodities. The point of larger significance in Whitewood’s Case is Fairfax J’s remark that the money which the appellor produced before the court was, by that very fact, strongly presumed to be the appellor’s own property. Production of the 30 d in coins to the court was not sufficient to identify them as the same coins which he might have taken from the appellee after the pursuit. Still less could it identify them as the very coins which the appellee might have taken in the original robbery. We see in this remark early traces of the idea that one person’s possession of loose money was evidence of his own title to it.52 The onus was then on the other person to displace that presumption by specific proof that he had a better title to it. But since one coin was not to be known from another, the competing claimant would generally fail in his proof. The person in possession of money might find himself with an unchallengeable legal title regardless of the defects in the transaction by which he obtained it. Over 300 years later, this relationship between standards of identification and title to money was pithily expressed by Best J: [I]t has long been said settled, that the right to money is separable from the possession of it … To fit it for its purpose the stamp denotes its value, and possession alone must decide to whom it belongs.53 In this respect, the common law’s treatment of property in money was no different from its treatment of fungible commodities. This appears from

50

See text at n 44 above. See also YB Mich 20 Hen 7, pl, 18, fol 8 (Kingsmill J) considered below. 52 The point is developed in D Fox, Property Rights in Money (Oxford, OUP, 2008) paras 8.10–8.11. 53 Wookey v Pole (1820) 4 B & Ald 1, 6–7, 106 ER 839 (Best J). See similarly Sinclair v Brougham [1914] AC 398, 418 (Viscount Haldane LC): ‘money passes “from hand to hand”, in point, not merely of possession, but of property’. 51

18 David Fox the analogous cases of distress and replevin in relation to corn seized for rent or services due. A 1483 decision, probably of the Court of Common Pleas, accepted that a landlord could not distrain loose bundles (‘schocks’) of wheat. It would, however, be acceptable for the lord to seize wheat which was identifiably separated in a container, such as where it was in a cart.54 In argument, counsel for the landlord had made a direct analogy with money. Justifying the lord’s right to distrain two cartloads of wheat, he said: Likewise, a man cannot levy distress on coins (deniers), unless they are in a sealed bag, since a man cannot know those of which he would be entitled to replevin. One piece of money (denier) cannot be known from another.55

As in the action of detinue, the reason depended on the difficulty of returning a fund of fungible property in specie. The rule barred the lord from seizing the tenant’s goods at the outset if it would be impossible for the tenant subsequently to enforce his title by replevin. Unless the wheat was contained in a cart or the money was sealed in a bag, the tenant could not specifically identify his own property in the landlord’s possession.56 In a 1504 decision of the Common Pleas on a seller’s failure to deliver a quantity of unascertained malt, Kingsmill J was explicit in making the connection between the rule governing distress and appeals of robbery for fungible commodities: Moreover, grains cannot be the subject of a distress in that they cannot be recovered by replevin, nor can the grains be known from one another. Likewise, on an appeal of felony for theft of grain, the appellor cannot bar the defendant from waging battle by producing a part of the grains taken from the mainour. For it cannot be known directly whether he has produced the same grains or not, and thus whether they were the plaintiff’s property.57

In enforcing the plaintiff’s property, money and grain were treated alike, and the presumption of title from possession held strong. It figures again in two decisions contemporaneous with Banks v Whetston which were considered in Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama) (1987),58 where Staughton J formulated the modern common law rules governing the division of mixtures of fungible commodities.

54 YB Hil 22 Edw IV, pl 17, fol 50. For an earlier statement, see YB Hil 2 Hen IV, pl 17, fol 15, where the rule was perhaps thought to be arguable on the ground that the wheat might have been damaged in the cart. 55 YB Hil 22 Edw IV, pl 17, fol 50, 50 (Sulyard Sjt) (in arg). 56 YB 21 Hen VII, pl 55, fol 39. When the point arose again in 1675, the Common Pleas considered it as beyond argument: Wilson v Duckett (1675) 1 Freeman 202, 89 ER 143; 2 Modern 61, 86 ER 941. 57 YB Mich 20 Hen 7, pl, 18, fol 8. The point about the appellor producing in court a part of the grain taken with the mainour is a direct parallel to Whitewood’s Case YB Trin 22 Edw IV, pl 46, fol 19. 58 Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama) [1987] QB 345.

Banks v Whetston 19 These are Warde v Aeyre (1614)59 and an anonymous 1593 decision in Popham’s Reports, which may perhaps be identified as Shordish v Moore.60 Staughton J considered that neither decision was good authority in modern law. He adapted the reasoning in Warde v Aeyre and refused entirely to follow Shordish v Moore. But their reported reasoning is fully consistent with the early modern approach to property in money and fungible commodities, before the development of any evidential presumptions that would have enabled one person to identify his money in a mixture. Warde v Aeyre (1614) was a case of trespass and assault heard in the Court of King’s Bench. The parties were gambling for money. The plaintiff, Warde, thrust his coins into a heap of coins belonging to the defendant, Aeyre, as if to pretend that he had more money than was actually the case. Aeyre kept the mixture and Warde sued for the taking of the whole. Coke CJ held that the plaintiff ’s action must fail. By deliberately and wrongfully mixing his money with the defendant’s, the plaintiff’s title must be taken to have been extinguished. As stated, this result was fully consistent with the rule in the cases of detinue, larceny, and distress and replevin. The mixing of the unbagged coins extinguished Warde’s property, and since Aeyre had possession of the whole, the presumption of title worked in his favour. Coke CJ cited two authorities for the result. The first, Shordish v Moore, may be the same decision as is reported in Popham, although Coke CJ understood it as involving the wrongful intermingling of corn, and Popham reports a mixture of hay. The second was an unreported decision of the King’s Bench during the time of Popham CJ and Croke J involving Sir Richard Martin.61 There is perhaps an allusion to this decision in the case reported in Popham. If that is right, then the decision involved a man who wrongfully added a quantity of gold into the goldsmith’s melting pot. The mixture was inseparable so the man had no remedy for his gold or for an equivalent quantity. He lost his entire property.62 The outcome of Warde v Aeyre was unsurprising on its facts. If Warde put loose coins into a heap of Aerye’s own money, then he had to lose his property in them. By the standards of the time, he had failed to observe the accepted method of reserving title to money placed in the possession

59 Warde v Aeyre (1614) 2 Bulstr 324, 80 ER 1157, also reported more briefly in (1614) Cro Jac 366, 79 ER 314. 60 Shordish v Moore (1593) Popham 38, 79 ER 1156. 61 There is another oblique reference to it in Hill v Haukes (1614) 1 Rolle 44, 81 ER 315, although the facts and reasoning are there stated differently. 62 The goldsmith was quite possibly Sir Richard Martin, who was the Warden of the Tower of London Mint from 1572–99, and Master-Worker from 1592. The odd ploy of mixing gold might have arisen from an attempt to discredit Martin’s operation of the Mint. During the early 1590s, he faced allegations that his silver coin was minted below the true sterling standard: see Challis (n 23 above) 140–43. Martin was led to defend his professional reputation by proceedings for slander: Martin and Stedd’s Case (1596) 1 Leonard 88, 74 ER 81.

20 David Fox of another person: he had not kept his money in a bag. The other reasons reported in the decision were perhaps unnecessary to it. Coke CJ went on to say that Warde must not be allowed to gain by his own tortious act of mixing the money. This became the foundation of the forfeiture rule elaborated 150 years later by Blackstone in his Commentaries,63 and which Staughton J modified in Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama) in favour of a rule that each contributor could extract his contribution, subject to the wrongdoer bearing the risk of part of the mixture being dissipated. Blackstone’s forfeiture rule provided: But our law, to guard against fraud, allows no remedy in [a case of wilful intermixture]; but gives the entire property, without any account, to him, whose original dominion is invaded, and endeavoured to be rendered uncertain, without his own consent.

The statements in Warde v Aeyre were the first to indicate that the relative fault of the contributing parties might be relevant to the preservation or valuation of their share in a mixture of fungibles. They laid a foundation for the modern rule eventually formulated in Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama) (1987). The same principle that payment into a mixture extinguished title explained the 1593 decision reported in Popham. It was an action for trespass for carrying away certain loads of hay: [T]he plaintiff pretending title to certain hay which the defendant had standing in certain land, to be sure to have the action pass for him, took other hay of his own (to wit, the plaintiff) and mixed it with the defendant’s hay, after which the defendant took and carried away both the one and the other that was intermixed.

Consistently with the ordinary rule about undifferentiated fungibles passing into a mixture in another person’s possession, the plaintiff lost his entire property in his share of the hay. The mixing of the hay was the plaintiff ’s own act, which cannot have been a trespass by the defendant. In carrying away the whole mixture, the defendant had taken nothing from the plaintiff ’s possession. Moreover, by that stage, the plaintiff no longer had any surviving property which the defendant’s taking could have interfered with. But according to the report, the court went on to describe the outcome of the converse situation: [I]f the plaintiff had taken the defendant’s hay and carried it to his house, or otherwise, and there intermixed it with the plaintiff’s hay, there the defendant cannot take his hay back, but is put to his action against the plaintiff for taking the hay.

On its face, this dictum seemed to recognise that the plaintiff acquired the property in the hay he had taken by his own wrongful act. The defendant 63 W Blackstone, Commentaries on the Laws of England (Oxford, Clarendon Press, 1765–69) vol 2, 405.

Banks v Whetston 21 would be left to sue in trespass but, in terms of property, the entire mixture would have belonged to the plaintiff. In Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama), Staughton J found this result so puzzling that he assumed that the case must have been wrongly reported.64 In fact, however, the second scenario was fully consistent with the first, and both followed from the conventional understanding of property in mixtures of fungibles. Whichever party had possession of the mixture was presumed to have a title to the whole. It was irrelevant how that mixture was created, whether by the former owner’s act of adding own his fungibles to the mixture, or by another person unilaterally creating the mixture, even by a wrongful act. The scenario was equivalent to one where a landlord wrongfully distrained his tenant’s loose grain and then mixed it with his own. As we have seen, the orthodox understanding was that the tenant could not have replevin for his grain. It had ceased to be identifiable in the landlord’s possession, so his title to it was practically extinguished.65 The decision reported in Popham is only surprising in the light of the supplementary dicta in Warde v Aeyre (1614) that one who created the mixture by his own tortious act should lose his entire property in it. But that development came over 20 years later, and even then it was doubtful whether it was necessary to the decision. There was in the late sixteenth century no sign at law or in equity of presumptive rules of identification that would have enabled an innocent person to follow his money or fungible commodities into a mixture. The first signs of that development only showed at common law with the decision in Armory v Delamirie (1721)66 and in equity with the decision in Lupton v White (1808).67 They became the foundation of the rule that non-money fungibles might remain identifiable in mixtures at common law, and that money could be traced through mixtures in equity. Principles of European civil law on the creation of co-ownership interests were particularly influential in shaping the first development.68 In the time of Banks v Whetston, however, the orthodox understanding remained that

64

Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama) [1987] QB 345, 360. See the text at n 57 above. 66 Armory v Delamirie (1721) 1 Strange 505, 93 ER 664 in the principle that an evidential uncertainty in valuing property should be resolved against the person whose tort created that uncertainty. See Hickey, chapter 6 of this volume below. 67 Lupton v White (1808) Ves Jun 432, 33 ER 817. Before then equity applied the same rule as the common law that money could not be identified in a mixture: Whitcomb v Jacob (1710) Salkeld 160, 91 ER 149; Ryall v Ryall (1739) 1 Atkin 59; Scott v Surman (1742) Willes 400, 125 ER 1235 (Common Pleas applying the equitable rule); Ryall v Rolle (1749) 1 Atkin 165. For an early argument that the Warde v Aeyre (1614) forfeiture principle arising out of a wrongful mixture might also apply in equity, see Kirk v Webb (1698) Precedents in Chancery 84, 87, 24 ER 41. 68 Spence v Union Maritime Insurance Co Ltd (1868) LR 3 CP 427, relying inter alia on J Inst 2.1.27–28; and RJ Pothier, Traité du Droit du Domaine de la Propriété, new edition (Paris, 1807) para II, 190–92. 65

22 David Fox the mixture of indistinguishable fungibles entirely destroyed the property of the non-possessing contributor.

V. LIQUIDITY AND THE RULE NEMO PLUS IURIS

Through Banks v Whetston and the many other cases turning on the indistinguishability of coins there developed a rule that allowed property in money to pass as an exception to the general rule nemo plus iuris transferre potest ad alium quam ipse habet. A transferee of money, unlike other kinds of property, could acquire a stronger title than the person who transferred it to him. It has been argued that assets which are used as money need a special liquidity if they are to serve efficiently as means of payment.69 Some freedom from the usual rule nemo plus iuris is a means to achieve this. It reduces the transaction costs of concluding payment transactions, and the nominal value of money need not be discounted by the risk that the money is subject to the adverse title of an unknown claimant. As rationalisations ex post facto, those reasons may have some truth to them. At least some common law judges of the eighteenth century seemed to believe them, as they developed the principles of negotiability for bank notes. Most notable was Lord Mansfield’s justification in Miller v Race (1758) for exempting bank notes and coins from the nemo plus iuris rule by recognising that the recipient might take an indefeasible legal title by purchase for value in good faith: ‘[U]pon the general course of business, and from the consequence of trade and commerce: which would be much incommoded by a contrary determination’.70 The recognition of a common law good faith purchase defence applying to money became necessary in the eighteenth century once it was recognised the old ‘no earmark’ rule could not apply to bank notes. Bank notes, unlike coins, did have distinguishing ‘earmarks’. They carried serial numbers and were originally issued for odd amounts corresponding to the value of the customer’s deposit with the banker. So a different and better reason had to be found for exempting them from the general rule nemo plus iuris. The recognition and solution of this problem were the main points of Miller v Race (1758).71 But until those developments in the eighteenth century there was no sign that common law judges thought that money should be uniquely privileged in having an exemption from the nemo plus iuris rule any more than other kinds of fungible commodity. As far as property was concerned, they did not seem mindful of money carrying any special economic functions, although, as we saw in the previous section, the sovereign, the legislature 69 70 71

D Fox, Property Rights in Money (Oxford, OUP, 2008) chs 1–2. Miller v Race (1758) 1 Burrow 452, 457, 97 ER 398. See D Fox, ‘Bona Fide Purchase and the Currency of Money’ (1996) 55 CLJ 547.

Banks v Whetston 23 and the judges did treat money as an altogether different kind of thing when it was used as a means of payment.72 The law then strove to preserve an ideal of the homogeneous legal value of money even when this differed from its market value as bullion. As property, however, the legal conception of money was like any other fungible. A person owned it only as long as he could identify it, and if the money lost its specific identity in the possession of another, then he ceased entirely to be the owner of it. The criteria for identification depended on the physical appearance of each coin or unit of corn. All coins looked the same, and that was the end of the matter. If the owner wanted to defeat the rule and preserve his property in money, then he had to put it in a bag, and preferably seal it with his sign. Until the fault-based approaches to identification first suggested in Warde v Aeyre (1614), there was no indication of any presumptive rules of identification to circumvent the physical similarity of one coin to another. Money was identified in terms of its appearance rather than by rules based on the comparative fault of the parties who handled it or the relative risks of its being lost or dissipated.

VI. CONCLUSION

At the end of this historical study we are left to ask what relevance remains in the common law principle that one piece of money is ‘not to be known from another’. As a matter of authority, it is still the case that common law rules of identification do not allow money to be followed through a mixture,73 and that the payment of one person’s money into a mixture necessarily extinguishes his legal title to the money.74 The rule has been extended to payments of money into a bank account even though the ‘money’ in question consists of debts denominated in monetary units of account rather than physically identical coins, as it was in the time of Banks v Whetston.75 There is some logic to that extension. There is a sense in which units of money are now-a-days even less ‘to be known’ one from another than they were when the principle was first applied to metal coins. A mixture of dematerialised bank money is wholly different from a mixture of coins in a heap. It consists in a unitary debt owed to the account-holder, which is notionally divisible by monetary units of account. Each monetary unit in the bank balance is by definition equal to every other. We have 72

See Section III above. Foskett v McKeown [2001] 1 AC 102, 128 (Lord Millett). 74 Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548, 572 (Lord Goff); Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1994] 4 All ER 890, 917 (Hobhouse J). 75 Agip (Africa) Ltd v Jackson [1990] Ch 265, 286 (Millett J), approved [1991] Ch 547, 563–66 (Fox LJ). 73

24 David Fox seen also that there is no particular need to keep the rule to preserve the special liquidity of money in payment transactions. The rule of good faith purchase, applied to money since the eighteenth century, promotes that purpose for all kinds of money, whether coins, bank notes, or dematerialised bank balances. But the development of these new kinds of money since the coin-based systems of pre-modern times also points to an important change in the rules of evidence applied to money. It is unnecessary for the rules for identifying money or quantifying shares in monetary mixtures to depend solely on the physical form and appearance of the money being followed or on the economic equivalence of those monetary units to one another. Seen as individuated units, mixed ‘moneys’ in a bank account are as unknowable one from another as coins tipped out of bags or thrown together in a heap. But artificial rules and presumptions of identification can still be applied to unscramble the mixture or to allow the respective contributions of each claimant to be quantified within it. Since 1868 this has been possible at common law for mixtures of non-money fungibles, where it is now represented in the rule in Indian Oil Corporation Ltd v Greenstone Shipping SA (Panama) (1987).76 This approach to the identification of money in mixed funds has been taken by equity since Re Hallett’s Estate (1879–80).77 Given those developments, the rule that the common law cannot trace money through a mixture has become an outlier in a broadly integrated system of rules for identifying money and non-money fungibles. The numismatic and transactional circumstances that might once have warranted prioritising the physical similarity of all coins no longer hold good for modern forms of money. Most money nowadays is an incorporeal kind of property. Even corporeal money, in the form of coins, derives its value solely from legal fiat and not from its intrinsic content. The reasons that might once have justified the principle that one piece of money was ‘not to be known from another’ can no longer support the common law’s inability to trace money through a mixture.

76

[1987] QB 345, developing Spence v Union Maritime Insurance Co Ltd (1868) LR 3 CP

427. 77

(1879–80) 13 Ch D 696.

2 Yearworth v North Bristol NHS Trust [2009]: Instrumentalism and Fictions in Property Law JAMES LEE*

I. INTRODUCTION In order to enable a person to claim in negligence for loss caused to him by reason of loss of or damage to property, he must have had either the legal ownership of or a possessory title to the property concerned at the time when the loss or damage occurred.1

H

OW FAR DOES property law’s protection extend? This chapter addresses that question, and the limits of the above statement of principle, through examining the landmark case of Yearworth v North Bristol NHS Trust.2 In Yearworth, the Court of Appeal held that the male claimants, who were suing in respect of destroyed sperm samples being stored by the defendant, could have ‘ownership of the sperm for the purposes of their … claims’ in tort and bailment.3 It has therefore been examined for its potential to support property claims in respect of the body or parts of the body.4 * I am very grateful to Katy Barnett, Tatiana Cutts, Maksymilian Del Mar, Simon Douglas, Matthew Dyson, David Fox, Sarah Fulham-McQuillan, Amy Goymour, Sarah Green, Robin Hickey, Simon Lee, Sheelagh McGuinness, Nicky Priaulx, Muireann Quigley, Rachael Walsh, Emma Waring, Man Yip and the anonymous referee for perceptive and helpful comments on aspects of this piece. I also thank David A Stephenson QC, counsel in Holdich v Lothian Health Board [2013] SCSOH 197, for valuable correspondence. I benefited from discussing these issues with students on the Advanced Property Law course at the University of Birmingham in the autumn of 2013: I thank all those who participated. All views, and any errors, are my own. 1 Lord Brandon in Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] AC 785 (‘The Aliakmon’) 809F. 2 Yearworth v North Bristol NHS Trust [2009] EWCA Civ 37, [2009] 3 WLR 118 (‘Yearworth’). I considered wider issues raised by the decision in an extended case commentary at the time: ‘The fertile imagination of the common law: J Lee, Yearworth v North Bristol NHS Trust’ (2009) 17 Torts Law Journal 130. 3 Yearworth, n 2 above [45](f). 4 Nearly 25 years ago, Kevin Gray anticipated that one of the challenges for property thinking in the 21st century would be whether property should extend to part of the body: K Gray ‘Property in Thin Air’ (1991) 50 CLJ 252 (Of course, medical lawyers considered the issue prior to Gray).

26 James Lee I shall query the extent to which the case may be regarded as concerning ‘property’: the judgment adopts a demonstrably instrumental approach to constructing the analysis of ‘property’ in order to facilitate claims in the law of obligations. The court’s search for a nexus between the incident of ownership most strongly demonstrated by the facts of the case (surely here, the right, albeit limited, of the men to use the sperm) and the nature of the damage consequent upon the breach of the duty of care

belies a ‘property’ understanding, and runs across questions of ‘property’, ‘ownership’ and ‘possession’. Lord Brandon’s statement from The Aliakmon requires scrutiny of such concepts in order to determine whether claims may be brought. As Duncan Sheehan has asked in this context, we must wonder where to locate ‘the philosophical boundary line between personal rights and property rights’.5 Although a ‘landmark’ case,6 Yearworth is also a narrow, fact-specific decision, as demonstrated by its very limited citation in subsequent cases (notwithstanding the interest which it has excited in academic literature). Various courts in Australian States have cited Yearworth in the context of claims for the extraction of sperm, or access to previously extracted sperm, by the former partners of deceased men. There is another Canadian case which goes further still in a dispute between a couple who had purchased sperm from a sperm bank.7 As a result, a 2013 authority from the same province regards the principle that stored sperm can be ‘property’ as settled as a matter of common law.8 These cases are considered in Section IV. The reasoning in Yearworth cannot, and should not, be used as support for wider extensions of property law to cover body parts, especially if, as I shall argue, it is not a ‘property’ case.9 What those cases do show is that the limits of the proper judicial development of the law in this field should be recognised. The argument of this chapter is that the approach to ‘property’ in Yearworth—as a hook on which to hang claims in tort or bailment—should be understood as instrumental. There is one preliminary Scottish case which considers similar issues,10 in which the judge suspected that Yearworth ‘goes too far in pursuit of the property theory’.11 Comparison with the 5

D Sheehan, The Principles of Personal Property Law (Oxford, Hart Publishing, 2011)

419. 6 Eg M Quigley, ‘Property: The Future of Human Tissue?’ (2009) 17 Medical Law Review 457, 457. 7 JCM v ANA 2012 BCSC 584. 8 Lam v University of British Columbia 2013 BCSC 2094, [41] (Butler J). 9 There may of course be different arguments in favour of affording such property rights, as explored by the literature covered in Section III B: my target is the manner of reasoning in Yearworth itself. 10 Holdich v Lothian Health Board [2013] SCSOH 197. 11 Holdich, [75] (Lord Stewart).

Yearworth v North Bristol NHS Trust 27 case of Shell UK Ltd v Total UK Ltd12 (Buncefield hereafter) confirms this judicial tendency to treat ‘property’ instrumentally. Further extensions of such instrumentalism risk reducing our understanding of property to a fictive one of ‘property-ish-ness’.

II. BACKGROUND

Prior to Yearworth, the historical approach of the common law was wellestablished (though not uncontroversial). The general proposition is that there can be no ownership of a whole human body (whether living or dead), nor of separate body parts. But the general rule is inevitably subject to exceptions. One such exception was established in the High Court of Australia decision in Doodeward v Spence,13 concerning the confiscation of the corpse of a two-headed, still-born baby which had been displayed in an exhibition.14 The corpse had been preserved in spirits, and the High Court, by a majority, recognised that where work and skill has been exercised on a corpse such that it acquires different attributes, the person who applied the work and skill can acquire a right to possession. The English courts15 applied the exception to body parts in Dobson v North Tyneside Health Authority16 and R v Kelly and Lindsay.17 On the ability to possess or own body parts, the most recent House of Lords18 authority on English law is the case of R v Bentham,19 in which a burglar had persuaded his victim to comply with his demands by pointing his fingers inside his jacket in the shape of a gun. Having pleaded guilty to burglary and robbery, he was also charged with, and convicted of, being ‘in possession of an imitation firearm’ at the time of the robbery, contrary to section 17(2) of the Firearms Act 1968. The House of Lords had to determine whether Mr Bentham was in ‘possession’ of an imitation firearm. Their Lordships unanimously overturned the conviction. Lord Bingham observed: One cannot possess something which is not separate and distinct from oneself. An unsevered hand or finger is part of oneself. Therefore, one cannot possess it … What is possessed must under the definition be a thing. A person’s hand or fingers are not a thing.20 12 Colour Quest Ltd v Total Downstream UK Plc (also known as Shell UK Ltd v Total UK Ltd) [2010] EWCA Civ 180, [2011] QB 86. 13 Doodeward v Spence (1908) 6 CLR 406. 14 Ibid, 416 (Barton J). 15 There are also two important Californian cases Moore v Regents of the University of California 793 P 2d 479 (Cal 1990) and Hecht v Superior Court of Los Angeles County (1993) 20 Cal Rptr 2d 275. 16 Dobson v North Tyneside Health Authority and Another [1997] 1 WLR 596. 17 R v Kelly and Lindsay [1999] QB 621. 18 The UK Supreme Court has not had cause to consider the point. 19 R v Bentham [2005] UKHL 18, [2005] 1 WLR 1057. 20 Bentham, [8].

28 James Lee In his one-paragraph concurring speech, Lord Rodger21 referred to Ulpian’s proposition that no-one is to be regarded as the owner of his own limbs.22 The context of Ulpian’s statement was that of the lex Aquilia, a private law action in respect of destruction of, or damage to, property, which included injury to slaves.23 But it was explaining why a freeman could not sue under the statute for injury to himself, since it was directed towards injury to property. Indeed, the remedies afforded were with reference to the highest value of the property within a specified period.24 Given that the body of a freeman had no value, it would not make sense to have liability under the lex Aquilia. And in any event, a freeman would in most cases have had the delict of iniuria available to him:25 so there is some distinction between the context of Ulpian’s dictum and the issues raised in Yearworth. But, at least, unlike Bentham itself, the Roman law principle is related to title to sue.26

III. YEARWORTH

A. Facts and Decision Yearworth involved claims by male cancer patients who had been advised to store samples of their sperm27 before undergoing treatment for cancer, since their fertility might be affected by the chemotherapy. The hospital was at fault in its storage processes—the liquid nitrogen levels fell below the requisite level for adequate storage—with the result that the sperm was irreparably damaged or destroyed. Since the treatment was on the National Health Service, there could be no claim in contract.28 The men argued their 21

Bentham, [14]. Ulpian, Edict, D.9.2.13.pr ‘Liber homo suo nominee utilem Aquiliae habet actionem: directam enim non habet, quoniam dominus membrorum suorum nemo videtur’: ‘A free man does not have the benefit of the Aquilian action in his own name: it is in fact simply not available, since no-one is to be regarded as the owner of his own limbs’. 23 Lee (n 2 above) 134–35; R Zimmermann, The Law of Obligations (Oxford, OUP, 1996) at 1015. 24 There is some controversy over the terms but for our purposes we may say that, under the first chapter, which applied to destruction or death, it was the highest value in the preceding year, and under the third chapter, which applied to damage, it was the highest value in the preceding 30 days. 25 See recently E Descheemaeker and H Scott (eds), Iniuria and the Common Law (Oxford, Hart Publishing, 2013). 26 Edelman J noted in Ex parte C: ‘Of course, for at least one obvious reason, the principle that a person cannot be the object of a property right was never fully appreciated in Roman law’: Re Section 22 of the Human Tissue And Transplant Act 1982 (WA); Ex Parte C [2013] WASC 3, discussed further below (text to n 94ff above). On the relevance of Roman law more generally to modern principles, see J Lee, ‘Confusio: Reference to Roman Law in the House of Lords and the Development of English Private Law’ (2009) 5 Roman Legal Tradition 24. 27 This is permitted by the Human Fertilisation and Embryology Act 1990. 28 Services on the NHS are, in general, free at the point of use: eg s 1(2), National Health Service Act 1946. 22

Yearworth v North Bristol NHS Trust 29 case in negligence on several bases: that the loss of the sperm should be treated as personal injury, or alternatively as damage to their property (thus satisfying the dictum in The Aliakmon). The men also sought to claim for their mental distress and/or psychiatric injury at the loss of the sperm and their potential loss of the ability to conceive a child.29 Counsel for the Trust had cautioned their Lordships ‘against any piecemeal and ill-considered attempt to develop [the common law] in order to cater for modern conditions, of which, of course, the present cases yield one example out of many’.30 The Court goes on to note, wryly that ‘the effect of [Counsel’s] submission is that the common law is as inert as most of the subject-matter of his authorities’.31 It is notable that, in the context of the personal injury claim, the Court of Appeal observed: We agree with the judge that the damage to, and consequential loss of, the sperm did not constitute ‘personal injury’. Although we understand the contrary argument, it would be a fiction to hold that damage to a substance generated by a person’s body, inflicted after its removal for storage purposes, constituted a bodily or ‘personal injury’ to him … We must deal in realities. To do otherwise would generate paradoxes, and yield ramifications, productive of substantial uncertainty, expensive debate and nice distinctions in an area of law which should be simple, and the principles clear.32

However, the Court was not as cautious with regard to its approach to property, as I shall argue below, which can be understood as encouraging fictionalism. The Court concluded that the men did have ‘ownership of the sperm for the purposes of their present claims’.33 It accepted that the ‘easiest course’ would be to apply the Doodeward exception,34 but they were not ‘not content’ to do so, viewing it as an exception upon an exception.35 Instead, their Lordships sought a ‘broader basis’ for their conclusions.36 The broader ‘ownership’ conclusion was based on five reasons:37 the men had generated the sperm; the sole object of the ejaculation of the sperm was for its storage for their own potential future use; they were able to require the destruction of their sperm at any time; while the prior considerations imposed duties upon the licence-holder under the 1990 Act, only the men had rights in relation to the sperm; and finally ‘the precise correlation

29 I shall not dwell here on the complications of the different circumstances of the individual claimants, although these are important: Yearworth, [2009] EWCA Civ 37, [10]–[12]. 30 Yearworth, [29]. 31 Yearworth, [29]. 32 Yearworth, [23]. 33 Yearworth, [45](f). 34 Yearworth, [45](c). 35 Yearworth, [45](d). 36 Yearworth, [45](e). 37 All at Yearworth, [45](f)(i)–(v).

30 James Lee between the primary, if circumscribed, rights of the men in relation to the sperm, namely in relation to its future use, and the consequence of the Trust’s breach of duty, namely preclusion of its future use’.38 The Court of Appeal also requested submissions from counsel on the law of bailment, which had not been originally pleaded. Having heard those arguments, their Lordships then determined the outcome of the appeal in terms of bailment. Although liability in bailment also seemed to depend upon the controversial conclusion that the men’s sperm was their property,39 the advantage of allowing the bailment claim was that it enabled their Lordships to eschew the potential difficulties40 of the claim for psychiatric harm in negligence.41 The Court concluded that the same approach to damages for mental distress as is taken in contract is to be applied in bailment (damages for mere mental distress are not recoverable in negligence).42

B. Academic Responses The above analysis has sought to demonstrate the narrow confines of the decision, given the Court’s reasoning.43 And yet, as the first English case to consider the question in the health or reproductive context, there has been much keen academic consideration of the case.44 This section briefly 38

Yearworth [2009] EWCA Civ 37 at [45](f)(v). Although it must be noted that the relevance of ‘property’ to a claim in bailment is itself controversial: see S Douglas, Liability for Wrongful Interference with Chattels (Oxford, Hart Publishing, 2011) 3: ‘in cases where there is a bailment, the claim is not based upon the infringement of the owner’s property right, but on the breach of an undertaking. The focus of the action is the nature and terms of the undertaking. The fact that the undertaking concerns a chattel is merely incidental’. 40 N Palmer et al, Palmer on Bailment, 3rd edn (London, Sweet and Maxwell, 2009) para 1–001: ‘Occasionally in recent years this independent character has provided a refuge for judges who wish to avoid a particular legal consequence dictated by some other cause of action with which bailment overlaps’. 41 Again, I have suggested previously (Lee, n 2 above) that it would have been both possible and acceptable for the court to develop the law of psychiatric harm out of existing precedents so as to enable the men to recover. 42 Hinz v Berry [1970] 2 QB 40. 43 In what follows, I shall flesh out a point to which I adverted in my earlier comment on the case: Lee (n 2 above) 137. 44 Some examples are C Hawes, ‘Property interests in body parts: Yearworth v North Bristol NHS Trust’ (2010) 73 Modern Law Review 130; S Green, ‘The subject matter of conversion’ [2010] Journal of Business Law 18; SHE Harmon and GT Laurie, ‘Yearworth v North Bristol NHS Trust: property, principles, precedents and paradigms’ (2010) 69 CLJ 476; N Priaulx, ‘Managing Novel Reproductive Injuries in the Law of Tort: The Curious Case of Destroyed Sperm’ (2010) 10 European Journal of Health Law 81; SD Pattinson, ‘Directed donation and ownership of human organs’ (2011) 31 Legal Studies 392; and L Rostill, ‘The ownership that wasn’t meant to be: Yearworth and property rights in human tissue’ (2014) 40 Journal of Medical Ethics 14. Further consideration of the literature follows in the next section, in the light of the Commonwealth decisions examined therein. 39

Yearworth v North Bristol NHS Trust 31 provides an overview of the stances taken, not least in comparison to the subsequent use made of the case in the later authorities, which is considered in the next section. Many have focused on the implications of the judicial acknowledgement that we can have ‘ownership’ of body parts. Opinion seems divided. Some argue that Yearworth is an example of an ‘inappropriate application of property law’,45 or ‘essentially pragmatic’.46 Others have viewed it as evidence of the ‘increasing obsolescence of the no property rule’.47 Others still have queried whether the court regarded itself as ‘establishing a “new property interest” at all’.48 In some, though not all, of the literature, there is a conflation of the notions of ownership and possession, even though they are distinct.49 In a succinct piece, Simon Douglas has argued that body parts should be capable of being property, but leaves open whether they should be property in any given sense.50 As McFarlane, who adopts a similar understanding of property to Douglas, explains: The presumption is that a physical object can be the subject of a property right; but, in some rare cases, the particular nature of a physical object may make the idea of [a claimant] having a right to sue that object, prima facie binding on the whole world, distasteful, inappropriate or otherwise unwelcome.51

So far, I have been talking about ‘instrumentalism’ with respect to the deployment of property concepts or ‘paradigms’.52 But there are also objections with regard to recognising property rights in body parts on the basis that to do so treats our bodies instrumentally. That is the argument of Herring and Chau.53 Other academics have seen in Yearworth’s uncertain ambit the potential for more speculative, creative arguments for further development of the common law: Keren-Paz, for example, has recently argued that sex slaves should be able to sue their clients in conversion:54 this approach is

45

J Wall, ‘The trespasses of property law’ (2014) 40 Journal of Medical Ethics 19, 19. L Skene, ‘Proprietary Interests in Human Bodily Material: Yearworth, Recent Australian Cases on Stored Semen and their Implications’ (2012) 20 Medical Law Review 227, 230. 47 M Quigley, ‘Property in Human Biomaterials—Separating Persons and Things?’ (2012) 32 OJLS 659, 661. 48 Rostill (n 44 above) 17. 49 In particular, ‘a right to immediate possession is one aspect (or part of the “bundle of rights”) that someone with ownership (and possibly other types of property rights) has’: Douglas (n 39 above) 20. 50 S Douglas, ‘The argument for property rights in body parts: scarcity of resources’ (2014) 40 Journal of Medical Ethics 23. 51 B McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 137; this passage was described as an ‘excellent discussion’ by Edelman J in Ex parte C (n 94 below). 52 As Harmon and Laurie (n 44 above) have it. 53 J Herring and P-L Chau, ‘Interconnected, inhabited and insecure: why bodies should not be property’ (2014) 40 Journal of Medical Ethics 39. 54 For example, the ambitious claims made in T Keren-Paz, ‘Poetic justice: why sex-slaves should be allowed to sue ignorant clients in conversion’ (2010) 29 Law & Philosophy 307. See further T Keren-Paz, Sex Trafficking: A Private Law Response (Abingdon, Routledge, 2013). 46

32 James Lee both instrumental in the sense of constructing ‘property’ to the body in order to afford a claim in tort, but also instrumental in that Keren-Paz develops his argument on the basis of the way in which the client has used (or abused) the sex slave, treating them as an object.55 It is clear that, while problematic, the cautious approach of the Court of Appeal cannot be taken to support such a claim.56 But it is entirely understandable that such arguments may be made, once we move away from principle. Priaulx has cited Yearworth as an illustration ‘of legal inventiveness where the factual variants had failed squarely to fit “orthodox conceptions” of personal injury and damage’.57 My argument is not that we cannot conceive of the claimants suffering harm in Yearworth; only that the court’s inventiveness was misdirected. It would be better simply to acknowledge a new form of harm, or accommodate the claim within other authorities on psychiatric harm,58 rather than to pretend that the damage to the sperm amounts to property damage.

IV. APPLICATION OF YEARWORTH

As seen above, Yearworth has produced a good deal of literature.59 But the case has seen relatively limited citation in cases subsequently. In England and Wales, the case has only been cited twice. The first occasion was by Foskett J in AB v Ministry of Defence,60 as an example of the application of the law to novel medical contexts (but not in such a way as to be relevant for our purposes, as the case concerned the law of limitation). The second time was in Less v Hussain,61 in the context of damages for mental distress,62 where Yearworth was recognised as ‘otherwise very different’.63

55

And it perhaps merges the two. It is not the place here to set out the numerous problems with such an argument: I cite the Keren-Paz article as an example of the risks of seeming to diminish long-established principles in order to afford a remedy in a particular case. The idea that private law may operate in some form of ad hoc, incrementalist, anarchic fashion is not to be welcomed, and arguments in favour of principle and legal plausibility should be taken seriously and not dismissed as relying upon ‘formalist distinctions, conceptualist zealotry and fetishism with respect to principles and coherence’ (Keren-Paz, n 54 above, 328). 57 N Priaulx, ‘Humanising Negligence: Damaged Bodies, Biographical Lives and the Limits of Law’ (2012) 33 Adelaide Law Review 177, 186. 58 Lee (n 2 above). 59 ‘Many keyboards have been tapped by ethicists, lawyers and students on the question of whether we own our bodies’: Herring and P-L Chau (n 53 above) 39. 60 AB v Ministry of Defence [2009] EWHC 1225 (QB) ‘the Court of Appeal said that the case involved “the application of common law principles to the ever-expanding frontiers of medical science.” It is at least arguable that the present case involves the application of statutory provisions within an analogous context’. (quoting Yearworth, [2009] EWCA Civ 37, [3]). 61 Less & Anor v Hussain [2012] EWHC 3513 (QB). 62 Ibid, [192]–[204]. 63 Ibid, [194]. 56

Yearworth v North Bristol NHS Trust 33 So, insofar as the reasoning in Yearworth has been cited at all in subsequent English cases, it has not been to recognise property rights in human body parts, or even to discuss the issue. In other jurisdictions, Yearworth has been used more often by counsel and courts in the reproductive context,64 even though the Court of Appeal did not discuss the wider issues in this field.65 There have been four decisions at State level in Australia,66 and two from the province of British Columbia in Canada. I shall deal first with the Australian cases, which all raise similar issues, in chronological order, and then turn to the Canadian cases, which, though again reproductive cases, are factually distinct, as we shall see.

A. Queensland: Bazley v Wesley Monash IVF The background to Bazley v Wesley Monash IVF67 was somewhat similar to Yearworth. The appellant’s husband had been diagnosed with liver cancer in July 2009. They had had one child born the previous February, and wished to have more children together, but were told that the effects of his chemotherapy treatment would mean that he would not be able to have children for at least a year, and that his fertility might never recover. Mr Bazley therefore provided a semen sample to the respondent, and then commenced his treatment. The cancer spread, however, and Mr Bazley died in January 2010. The appellant requested that the respondent continue to store the sperm, but the respondent declined, as there was no written directive from Mr Bazley.68 The sperm was stored for a fee, and the consent form, signed by Mr Bazley, contained an express section stating that in the absence of a written, witnessed directive, the sperm would be destroyed after his death.69 The court seemingly unquestioningly accepted the applicant’s evidence that the provision for destruction of the sperm was not highlighted to her or Mr Bazley at the time,70 and so the court did not

64 Some of these decisions have been considered in the literature, with two recent articles considering Bazley and Edwards: Quigley, ‘Property in Human Biomaterials’ (n 47 above); and L Skene, ‘Proprietary Interests in Human Bodily Material’ (n 46 above), but these pre-date the other cases. 65 Hawes (n 44 above) 134. 66 There are of course both States and Territories in Australia, but all four decisions so far are from States: Queensland, New South Wales, South Australia and Western Australia. 67 Kate Jane Bazley v Wesley Monash IVF Pty Ltd [2010] QSC 118. 68 As required by the (Australian) National Health and Medical Research Council Ethical Guidelines on the Use of Assisted Reproductive Technology in Clinical Practice and Research, which take into account the Research Involving Human Embryos Act 2002 and the Prohibition of Human Cloning Act 2002. 69 Bazley, [2010] QSC 118, [10]. 70 Bazley, [11].

34 James Lee place much weight on that term in the consent form. Mr Bazley’s revised will made no provision in respect of the stored sperm. White J, drawing upon the reasoning in Yearworth,71 concluded as matter of both ‘law and … common sense’ that the straws of semen were property, and that the ‘relationship between the respondent and the deceased was one of bailor and bailee for reward because, so long as the fee was paid, and contact maintained, the respondent agreed to store the straws’.72 In so holding, White J noted that the editors of Palmer on Bailment have described the Doodeward exception as ‘quirky’.73 Importantly, the ownership was held to have vested in the deceased while alive, and after his death in his personal representatives.74 Although the (in this case contractual) bailment could come to an end upon the deceased’s death, it was ‘plain’75 that ownership of the sperm was maintained throughout. Furthermore, White J held that ‘it must be implied into the contract of bailment, that the semen would, if requested, be returned in the manner which it was held, which preserved its essential characteristics as frozen semen capable of being used’.76 The applicant therefore succeeded and the respondent was required to continue to store (and not to destroy) the straws.

B. New South Wales: The Jocelyn Edwards Case In Jocelyn Edwards,77 Ms Edwards sought a declaration that she was entitled to possession of sperm extracted post-mortem from her recently deceased husband, in her capacity as his administrator. The court was required to engage with the provisions of the Assisted Reproductive Technology Act 2007.78 Yearworth was considered,79 although again the factual distinction from the instant case was recognised, in that the claims were generally by living men and concerned the loss of, rather than the right to possession to the sperm. RA Hulme J, perhaps surprisingly, claimed that ‘a consideration of rights that flow from a recognition of something as “property” is complex

71

Bazley, [26]–[31]. Bazley, [33]. 73 Bazley, [31]. 74 Bazley, [33]. The applicant could therefore inherit under s 8 of the Succession Act 1981 (Qld). 75 Bazley, [33]. 76 Bazley, [33]. 77 Jocelyn Edwards; Re the estate of the late Mark Edwards [2011] NSWSC 478. 78 Section 3 of which provides that ‘the objects of this Act are: (a) to prevent the commercialisation of human reproduction, and (b) to protect the interests of the following persons: (i) a person born as a result of ART treatment, (ii) a person providing a gamete for use in ART treatment or for research in connection with ART treatment, (iii) a woman undergoing ART treatment’. 79 Edwards, [63]ff. 72

Yearworth v North Bristol NHS Trust 35 and beyond the scope or need of this judgment’.80 As in Yearworth, the importance of the context and the specific, limited purposes of the requested recognition of the sperm as property were emphasised.81 The judge took the view that recent authorities (including Bazley) made a ‘persuasive’ case that ‘the law should recognise the possibility of sperm being regarded as property, in certain circumstances’.82 Despite factual differences, the trend of cases demonstrated a willingness to be flexible,83 and of Yearworth, it was said: Yearworth shows a preparedness of the England and Wales Court of Appeal to extend the law considerably beyond Doodeward v Spence. However, the conclusion of property in the present case can be made under the High Court’s long-standing authority without any need for further exploration of the limits of the law.84

In following Doodeward, RA Hulme J did not see any significance in possible distinctions between the ‘property status’ of body parts or tissues removed from the body and a deceased body as a whole.85 The judge went on to hold that Mrs Edwards should be regarded as entitled to the sperm, but for reasons beyond her rights as administrator: Ms Edwards is the only person in whom an entitlement to property in the deceased’s sperm would lie. The deceased was her husband. The sperm was removed on her behalf and for her purposes. No-one else in the world has any interest in them.

The subsequent difficulty for the court in this case then related to whether, if she was possibly entitled to possession of the sperm, discretion should be exercised in her favour, since there were various legislative limitations on what she might do with the sperm. But, having surveyed the provisions, it was ordered that Ms Edwards was indeed entitled to possession of the sperm.86

C. South Australia: Re H Re H, AE (No 2)87 posed essentially the same question as the Edwards case, but for South Australia. The conclusion was that a prima facie case had been made for the applicant to have possession of the deceased’s sperm. After a survey of the relevant legislative matrix, Gray J considered the 80 81 82 83 84 85 86 87

Edwards, [77]. Edwards, [78]. Edwards, [84]. Edwards, [79]. Edwards, [84]. Edwards, [85]. Edwards, [152]. Re H, AE (No 2) [2012] SASC 177.

36 James Lee facts. The judge was satisfied that the couple had wanted to start a family together, and that the applicant would provide a stable and loving environment for the child.88 In considering whether the applicant should be entitled to possession, regard was again had to Doodeward and Yearworth, and the more recent Australian authorities.89 Gray J proceeded on the basis that the court was bound by Doodeward, and so applied the work and skill exception:90 it was concluded that work and skill had been applied by the sperm’s preservation and therefore ‘the deceased’s sperm may be treated as property, at least to the extent that there is an entitlement to possession’.91 Agreeing with Hulme J, Gray J held that the applicant was the only person in whom an entitlement could lie; the sperm were not part of the deceased’s estate.92 However, she would only be able to use the sperm in a manner approved by the court,93 and an exemption under the relevant legislation in respect of in vitro fertilisation would need to be sought.

D. Western Australia: Ex Parte C The most recent Australian case to consider Yearworth is the decision of Edelman J in the Supreme Court of Western Australia in Ex parte C.94 Each of the decisions considered here involved judicial engagement with relevant academic writings:95 in this case, Edelman J cites Blackstone, Coke and Honoré alongside modern authors directly on the point. Ex parte C was an application for orders for the removal and storage of sperm (as opposed to the other cases where the removal of the sperm had already occurred). The facts of the case were tragic: C and her husband had been trying to conceive for some time, and had begun a course of in vitro fertilisation treatment. Her husband then committed suicide. C sought the extraction of sperm from her husband’s body for possible future IVF treatment.

88

Re H, [42]. Re H, [46]ff. 90 Re H, [56]ff. 91 Re H, [58]. 92 Re H, [60]. 93 Re H, [63]. 94 Re Section 22 of the Human Tissue and Transplant Act 1982 (WA); Ex parte C [2013] WASC 3. 95 On this theme more generally, see A Braun, ‘Judges and Academics: Features of a Partnership’ and K Stanton, ‘Use of Scholarship by the House of Lords in Tort Cases’ in J Lee (ed), From House of Lords to Supreme Court: Judges, Jurists and the Process of Judging (Oxford, Hart Publishing, 2010); and J Beatson, ‘Legal Academics: Forgotten Players or Interlopers?’ in A Burrows, D Johnston and R Zimmermann, Judge and Jurist: Essays in Memory of Lord Rodger of Earlsferry (Oxford, OUP, 2013). 89

Yearworth v North Bristol NHS Trust 37 Edelman J granted the orders sought. But His Honour also hoped that his reasons would ‘facilitate the manner in which these issues can be considered in hospitals in future’.96 The solution that Edelman J found did not depend upon the common law, or in affording property law protection. Rather, his Honour adopted ‘a simpler legislative route’,97 via section 22 of the Human Tissue and Transplant Act 1982 (WA), which provides that a ‘designated officer may authorise removal of tissue from bodies in hospital’. His Honour also made clear that the relevant Minister should always have the opportunity to be represented in future applications in respect of future use of the sperm.98 Thus, although recognising the importance of the issues, Edelman J was able to resolve the case without resolving the ‘different and sometimes difficult question [of] who holds property rights over’ the sperm.99

E. British Columbia (1): JCM v ANA There is one Canadian case which cites Yearworth, and it is factually distinct from the Australian cases. In British Columbia, JCM v ANA,100 a female same-sex couple had purchased sperm from a sperm bank. They had each given birth to a child from the donor sperm, and 13 sperm straws remained. The couple separated, and entered into a separation agreement which divided up all of their joint property, but made no mention of the sperm straws. The claimant sought to use her half of the straws to conceive another child, while the respondent sought their destruction. Madam Justice Russell recognised that there were ‘important distinctions’ between the facts of the instant case and Yearworth:101 In this case, I am dealing neither with a claim in negligence nor sperm that came from either of the parties. I do not find, though, that this makes the need for advancements in the common law to keep up with medical science to be any less compelling. In fact, the Court of Appeal in Yearworth concluded that advances were needed in common law regarding the issue of ownership of body parts and products for the purposes of the negligence claim before them as well as for other purposes.102

Her Honour concluded ‘on the facts of this case’103 that the sperm was property. As will be apparent, JCM is several steps further removed from Yearworth. As with the Australian cases, the claim was for the right to 96 97 98 99 100 101 102 103

Ex parte C (n 94 above), [3]. Ex parte C, [11]. Ex parte C, [22]. Ex parte C, [7]. JCM v ANA 2012 BCSC 584. JCM, [55]. JCM, [63]. JCM, [55].

38 James Lee possess the sperm independently of any claim for negligence. But comparing JCM with the elements identified in paragraph 45104 of Yearworth makes clear that this is a very different case. Several key elements identified there are absent: the claimants in Yearworth generated the sperm themselves, and the sperm was ejaculated solely for their own future benefit. All we really then have by way of similarity is a set of facts involving a dispute over sperm. Madam Justice Russell’s approach is to treat the sperm as capable of being divided up in a similar way to the rest of the couple’s property.

F. British Columbia (2): Lam v University of British Columbia In Lam v University of British Columbia,105 Mr Justice Butler surveyed the various authorities above.106 The facts were the closest to those of Yearworth of any of the cases to have cited it. The class proceeding was brought after the claimant’s sperm was destroyed or damaged after the failure of the electricity supply to the freezing equipment where it had been stored. The defendant university sought to rely upon an exclusion clause in the storage agreement with the claimant. The Warehouse Receipt Act, RSBC 1996 would however preclude the defendant from excluding its liability if the sperm were ‘goods’. The defendant conceded that ‘its relationship with the class members was one of bailment for reward’.107 Notably, it was also not expressly contested that, as a matter of common law, the sperm was property, and Mr Justice Butler agreed with that conclusion of the previous cases.108 Rather, the defendant argued that sperm should be excluded from the statutory definition of ‘goods’ on the basis of policy reasons, such as the fact that the sperm cannot be sold, and that classifying the sperm as ‘goods’ pointed more towards commercialisation or commodification of body parts. Section 1 of the Act provides for the interpretation of terms in the statute and states that ‘“goods” includes all property other than things in action, money and land’. In rejecting the defendant’s argument, Mr Justice Butler held: The definition is clear and unequivocal; ‘goods’ is meant to include ‘all property’ with three exceptions. Those exceptions do not apply to sperm and the inclusion of sperm in the definition is not inconsistent with other provisions in the WRA.109

104

Text from n 37 above. Lam v University of British Columbia 2013 BCSC 2094. 106 Reference is also made to CC v AW, 2005 ABQB 290, a pre-Yearworth case concerning embryos. 107 Lam, [10]. 108 Lam, [41]. 109 Lam, [50]. 105

Yearworth v North Bristol NHS Trust 39 G. Summary The Australian authorities have carried on with the Doodeward v Spence110 exception analysis, focusing on the application of work and skill, as they are bound to do.111 Speaking of Bazley and Edwards, Quigley has noted that ‘the later sperm cases, in not relying on the exception, indicate that there is something else doing important normative work’.112 But as she has pointed out,113 and as the Court of Appeal seemed to recognise in Yearworth,114 the work and skill exception has been somewhat awkwardly applied to cases where it is the originator of the biological material (or someone claiming through them) who seeks possession, since it is not they who apply the work or skill.115 Yearworth seems to offer an avenue for further development of the common law.116 But this survey shows the range of considerations which arise: in each case the limitations of the reasoning and context in Yearworth are manifest. And yet, even when those limits have been recognised or conceded by the relevant judges, the courts have still taken succour from Yearworth as a more general precedent117 showing the scope for ingenuity.118 Although I urge caution in the use of Yearworth, that is not to say that it is irrelevant to the analysis in any given case. So it is surprising that when, in an Ontario medical negligence case, Piljak Estate v Abraham,119 Master Dash was required to consider whether stored liver tissue was ‘personal property’ for the purposes of Ontario Rules of Civil Procedure, rule 32.01 (so that the court could order genetic testing of the tissue), Yearworth was not mentioned at all. The judge observed that it was ‘not a simple question’120 and noted that ‘neither party has provided me with any jurisprudence determining that issue and neither party has presented a principled approach to determining the question’.121 The only reference

110

(1908) 6 CLR 406. The English Court of Appeal noted that ‘in the twentieth century the High Court of the Commonwealth of Australia has made a vast contribution to the development of the common law’: Yearworth, [2009] EWCA Civ 37, [33]. 112 Quigley (n 47 above) 669. This area has also been considered in depth by the Australian Law Reform Commission: Essentially Yours: The Protection of Human Genetic Information in Australia, Report 96 (2003). 113 Ibid. 114 Yearworth, [45](e); Lee (n 2 above) 135. 115 The agency argument appears to have been accepted by RA Hulme J in Edwards, [2011] NSWSC 478, [88]. 116 See Section V below. 117 As to which see Harmon and Laurie (n 44 above). 118 Quigley (n 6 above) 461: ‘It would not be prudent, however, to extend the implications of the words of the Court too far beyond their scope’. 119 Piljak Estate v Abraham 2014 ONSC 2893. 120 Piljak, [22]. 121 Ibid. 111

40 James Lee in the decision is to a short article in a Canadian medical journal which focuses mainly on American authorities and does not refer to any of the recent decisions considered so far in this essay:122 the judge reached the conclusion that the tissue did amount to ‘property’. A further complicating factor seen in each of the different jurisdictions which have considered Yearworth (or the broader question of property in human body parts) is the applicability of legislation. The Human Fertilisation and Embryology Act 1990 and the Human Tissue Act 2004 in England regulate gametes and other tissues respectively. As seen above, the Australian States and Territories have their own legislation. Indeed, as we saw in Ex parte C, Edelman J found a statutory route for the instant case and subsequent ones without the need to resolve the difficult proprietary questions. In Yearworth, the relevance of legislation to the general principles was adverted to by the Court of Appeal.123 And Lam demonstrates that questions of relevant statutory interpretation may not be limited to the medical or regulatory context.124 And there are also calls within the literature for legislative action.125 Insofar as these are pleas for judges to know their limits and to respect the province of the legislature, then they are easily understood. But the scope and nature of such a legislative framework is relatively rarely defined. There seems to be a general consensus that, even if rights are recognised in some cases, those rights should be limited in some way. And restrictions are not inconsistent with such rights being proprietary.126 But for our purposes, leaving aside separation of powers arguments, whether the path chosen is to develop the common law conception of ‘property’ to extend aspects of property law’s protection in certain cases, or to use legislation to afford certain rights where otherwise there would be none, may not ultimately matter as much as might appear. Not as much, that is, if—as I shall attempt to assess in the next section—this leads us to a conception of property which

122 CC Cheung and BR Martin, ‘Defining Diagnostic Tissue in the Area of Personalized Medicine’ (2013) 185 Canadian Medical Association Journal 135 (the cases are considered briefly at 137–39). 123 Yearworth, [2009] EWCA Civ 37, [30] (on the Suicide Act 1961) and [39] (mentioning the Californian authority of Moore v Regents of the University of California 793 P 2d 479 (Cal 1990)). 124 As Mr Justice Butler noted, ‘the fact that sperm cannot be purchased does not prevent it from falling within the definition of “goods” in the [Warehouse Receipts Act]. It simply reflects the fact that sperm, like other classes of property, is subject to control or regulation by other statutory provisions. If sperm is property that can be stored and for which a receipt can be issued, then it falls within the definition of “goods” in the WRA’. Lam (n 8 above) [49] (see also [67]). 125 Herring and Chau (n 53 above) propose ‘a statutory scheme which can distinguish between our response to different parts of our bodies; the circumstances of their removal; and the context of their retention … A statute can do this in a far more effective way than an overarching property, autonomy or dignity based approach’. 126 Douglas (n 50 above) ‘Further Issues’.

Yearworth v North Bristol NHS Trust 41 is revealed to be fictive. And as we shall see in the next section,127 fictions may be problematic: if I may borrow from another of our ‘Landmark’ cases, ‘legal fictions, of their nature, conceal what is going on. They are a pretence. They represent an unacknowledged departure from existing principle’.128

V. PROPERTY-ISH-NESS

How, then, ought we to view the reasoning in Yearworth? The instrumental approach to property in the case means that the true focus is on compensation for harm, which is a concern for the law of obligations. Such ‘property’ analysis as there is in the case is not concerned with ownership. It is focused upon whether the men could be said to have a sufficient ‘ownership of the sperm for the purposes of their present claims’.129 Those claims eventually included bailment, which ‘stands at the point at which contract, property and tort converge’.130 But with bailment too there may be complications relating to the fact of possession and who is the bailor and who is the bailee.131 Elsewhere, I have argued that the court could have found more creative ways within the law of tort to afford the men a remedy, not least by revisiting what forms of damage are compensable and how we compensate.132 Similarly, Professor McMeel has also observed that Yearworth could have been decided on the basis of assumption of responsibility, without the need for the property enquiry.133 To contort or distort the law of property solely for the purpose of affording a claim is dubious. There is a circularity in the approach to ‘where there is a wrong, there must be a remedy’:134 whether there has been a ‘wrong’ is the very thing one is trying to determine in such

127 See generally M Del Mar and W Twining (eds), Legal Fictions in Theory and Practice (Springer Law & Philosophy Library, vol 110, forthcoming 2015). 128 OBG v Allan [2007] UKHL 21, [228] (Lord Nicholls). See more generally, S Green, chapter 5 in this volume. Cf Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913: ‘The role of fictions in the development of the law has been likened to the use of scaffolding in the construction of a building. The scaffolding is necessary but after the building has been erected scaffolding serves only to obscure the building. Fortunately, the scaffolding can usually be removed with ease’ (referring to L Fuller, ‘Legal Fictions’ (1930–31) 25 Illinois Law Review 513, 529). 129 Yearworth, [2009] EWCA Civ 37, [45](f). 130 Palmer (n 40 above) para 1.001. 131 Ibid, para 2-015 and ch 29. 132 Lee (n 2 above) 3–4, 8–13. 133 G McMeel, ‘Bailment: Fertility and the Forms of Action’ [2010] LMCLQ 22, 24. See also Harmon and Laurie, (n 44 above) 486; and perhaps similarly, the view of Douglas quoted above n 39. See also Hawes (n 44 above) 136ff. 134 Sometimes rendered as ‘ubi ius, ibi remedium’.

42 James Lee cases.135 So here: that the men had a ‘right’ at all seems, for the court, to be both a premise and the conclusion.

A. ‘Putting a Kilt on Yearworth’? The Case of Holdich This view that Yearworth should be regarded as being much more about the law of obligations than it is about property, is directly considered by the recent Scots case of Holdich v Lothian Health Board.136 The pursuer137 had stored sperm samples with the defenders for storage, prior to undergoing treatment for testicular cancer which rendered him infertile. Nine years after storing, he requested the sperm for use in vitro fertilisation in order to try to conceive a child with his wife, only to find that a malfunction at the storage facility had occurred, potentially damaging the sample and making it unfit for use. The facts in Holdich therefore have at least the potential to be closer to the ‘paradigm’138 case envisaged by the Court of Appeal in Yearworth, though it must be noted that the defenders contended that the pursuer’s samples were below normal levels of sperm count and motility. Although the case concerned only whether the pursuer’s averments could be put to proof, Lord Stewart subjected Yearworth to close scrutiny. The defenders argued that the pursuer was ‘trying to put a kilt on Yearworth’,139 criticising both the extent to which the case was applicable to these facts, and the reasoning of the Court of Appeal (by which of course the Scottish court is not bound). Crucially, the defenders denied that they had undertaken, or otherwise owed, a duty to the pursuer in respect of the sperm;140 and denied that it was breached. Even without those distinctions, the defenders argued that Yearworth ‘expressly elides the concepts of legal ownership and possessory title’.141 There are some distinctions in the approach to obligations: particularly, the ‘nearest … equivalent’142 to bailment in Scots law is the contract of deposit, and the approach was necessarily more complicated as a result.

135 See Lord Rodger of Earlsferry’s judgment in JD v East Berkshire Community Health NHS Trust [2005] UKHL 23; [2005] 2 AC 373, [98]–[101]. See also Quigley (n 6 above) 466. Gray has argued that property thinking tends to be circular as well: ‘“Property” is “property” because it is “property”: property status and proprietary consequence confuse each other in a deadening embrace of cause and effect’ Gray (n 4 above) 293. 136 Holdich v Lothian Health Board [2013] SCSOH 197. 137 I shall use Scots terminology in describing the case. 138 Yearworth, [2009] EWCA Civ 37, [12]. I say potentially because the facts were not as clear as they might have been, and still needed to be proved. 139 Holdich, [15]. 140 Holdich, [19]. 141 Holdich, [33]. 142 Holdich, [18]. And see generally Holdich, [66]ff.

Yearworth v North Bristol NHS Trust 43 His Lordship suggested that the case under deposit could have been put on ‘a simpler footing’ by arguing that any ‘thing’, not being a living person, is capable of being the subject matter of a contract for safekeeping. Sperm in a container is such a ‘thing’. This puts the emphasis on the res as an object rather than as property.143

We thus here find echoes of the bailment reasoning of McMeel and Douglas considered above:144 as Douglas puts it, ‘The fact that the undertaking concerns a chattel is merely incidental’.145 And in Lam, the University of British Columbia even conceded that their relationship with the claimants was a bailment for reward (although they disputed that it fell within the relevant statutes).146 Lord Stewart also acknowledged the scope for the claim of loss of autonomy,147 but sagely suggested that it would be unhelpful to think of such a claim in proprietary terms.148 In a trenchant analysis of Yearworth, Lord Stewart concluded that the Court of Appeal ‘derives a property remedy from the “right to use”, which is only one of Professor Honoré’s list of eleven indiciae of ownership’.149 Under Yearworth, then, the pursuer did not therefore have ‘to demonstrate ownership in a global sense to be eligible for a Yearworth–type remedy’,150 as it is expressly predicated on some lesser conception of ownership. The various restrictions on the pursuer’s right, such as it might be understood as a property right, suggested that it could be a ‘convenient fiction’ to consider it property, merely ‘restrained by law or paction’:151 The broader question remains whether it is doctrinally correct, or indeed a useful exercise, to classify stored sperm as ‘property’, even in the minimalist, Yearworth sense.152

His Lordship did go on to hold that the case should be put to proof but, even so, we can see in Holdich an uneasiness about the conception of property relied upon on Yearworth, a feeling born at least in part from a lack of conviction that it was necessary to use ‘property’ at all.

143

Holdich, [75]. McMeel; Douglas (both n 133 above). 145 Douglas (n 39 above) 146 Lam, 2013 BCSC 2094, [10]. 147 Lee (n 2 above) 131–33. 148 Holdich, [2013] SCSOH 197, [102]. Lord Stewart had written about the issues prior to his judicial appointment: A Stewart QC, ‘Damages for the Birth of a Child’ (1995) 40 Journal of the Law Society of Scotland 298, which influenced the House of Lords in McFarlane v Tayside Health Board [2000] 2 AC 59. 149 Holdich, [46]. See (pre-Yearworth) M Quigley, ‘Property and the body: Applying Honoré’ (2007) 33 Journal of Medical Ethics 631. 150 Holdich, [46]. 151 Holdich, [48]. Paction is a species of enforceable promise in Scots law. 152 Holdich, [47]. 144

44 James Lee B. Buncefield: Another Instrumental Case The implications of the extension in Yearworth for our analysis of property can be further explored through the instructive comparator of the otherwise very different Buncefield case.153 Space precludes a full consideration of the many implications of the reasoning in the decision,154 which might qualify as a ‘landmark’ property case itself, but I would submit that there are at least parallels in the markedly instrumental reasoning of the court. The case arose out of a massive explosion at the Buncefield oil terminal near Hemel Hempstead.155 The accident was caused by negligence of workers for whose conduct Total was vicariously liable. There was extensive damage to the site and the pipelines used to transport the fuel. The pipeline system was held on trust for four oil companies by two vehicle companies, UKOP Ltd and WLPS Ltd.156 Total was required to compensate the trustees as legal owners of the system, as per The Aliakmon. Total did compensate Shell for damage to fuel of which Shell was the legal owner stored in tanks on the site. But the Court of Appeal had to consider whether Shell could sue in respect of heavy losses consequential upon damage to the assets owned by the UKOP and WLPS and its subsequent inability to supply customers at the normal and requisite levels. Since the losses had not been sustained by the legal owners, there could be no recovery by UKOP and WLPS. So could Shell, as beneficiary, sue in respect of these losses? The Court (Waller, Longmore and Richards LJJ, who handed down a single judgment) held that the beneficiaries could sue, ‘provided that the beneficial owner can join the legal owner in the proceedings[,] … [and that] it does not matter that the beneficial owner is not himself in possession

153 Colour Quest Ltd v Total Downstream UK Plc (also known as Shell UK Ltd v Total UK Ltd) [2010] EWCA Civ 180, [2011] QB 86 (Buncefield). As I hope is clear, I am not claiming that the parallel is exact. 154 For detailed analysis, see J Edelman, ‘Two fundamental questions for the law of trusts’ (2013) 129 LQR 66; 155 ‘The violent explosion at Buncefield was deemed to be unprecedented at the time, although a review of the literature revealed that this was not strictly correct’. Annex 4, para 1, The Buncefield Incident, 11 December 2005: The final report of the Major Incident Investigation Board, Volume 1: www.buncefieldinvestigation.gov.uk/reports/volume1.pdf. 156 That these were, if the pun may be forgiven, shell companies may be illustrated by Buncefield, [113]: ‘UKOP Ltd and WLPS Ltd were non-trading vehicle companies. They had no employees, made no profits, declared no dividends, and held no assets on their balance sheets (apart from £200 of issued share capital). The directors of UKOP Ltd and WLPS Ltd were appointed by the Participants, and both UKOP Ltd and WLPS Ltd were effectively obliged to act in accordance with decisions or recommendations of two co-ordinating committees that were established by the Participants’.

Yearworth v North Bristol NHS Trust 45 of the property’.157 They had a ‘special relationship’ with the damaged property.158 Their Lordships confessed to being somewhat influenced by … ‘the impulse to do practical justice’ … [and that] it would be a triumph of form over substance to deny a remedy to the beneficial owner of that property when the legal owner is a bare trustee for that beneficial owner.159

The Court also stated that it would be ‘legalistic’ to prevent Shell bringing a claim.160 Yet the statement in The Aliakmon is one of principle, and in treating its application as unnecessarily ‘legalistic’, the decision goes against orthodoxy.161 Rushworth and Scott thus wonder what Lord Brandon would have made of the decision in Buncefield.162 They suggest that a viable alternative route to enabling recovery on the facts would have been a derivative claim, which was not scrutinised.163 Instead, we again find the court reasoning backwards to answer the question, reaching a conclusion which may have ‘fundamental’164 consequences for property law.

C. Instrumentalism and Fictions It is not my purpose here to make any broader (or wilder) claim about the limits of any kind of property analysis from this pair of cases.165 For now, we may view Yearworth as part of a wider narrative, pertaining to a relaxation of the approach to ‘property’ in the context of claims in tort. Harmon and Laurie have viewed Yearworth as a ‘rather uninspired and uninspiring advancement of the property paradigm [which] suggests that property was only used as a convenient vehicle through which to achieve a certain outcome’.166 Similarly, Wall has argued that ‘property rights, as transferable rights, ought not to be used as a tool to circumvent liability

157

Buncefield [2010] EWCA Civ 180, [142]. Buncefield [136]. 159 Buncefield, [142] (quoting Lord Goff of Chieveley in White v Jones [1995] 2 AC 207, 259–60). 160 Buncefield, [132]. This observation is severely criticised by PG Turner, ‘Consequential economic loss and the trust beneficiary’ (2010) 69 CLJ 445, 446–47. The reasoning of the Court is criticised more broadly by A Rushworth and A Scott, ‘Total Chaos?’ [2010] LMCLQ 536. 161 N Macklam, ‘Colour Quest Ltd v Total Downstream UK Plc: the nature of a beneficiary’s interest under a trust’ [2010] Conv 265, 268; T Cutts, ‘The nature of “equitable property”: A functional analysis’ (2012) 6 Journal of Equity 44, 47, 73. 162 Rushworth and Scott (n 160 above) 541. 163 Rushworth and Scott (n 160 above) citing GUS Property Management v Littlewoods Mail Order Stores Ltd, 542–43. 164 Edelman (n 154 above). 165 Cf Gray (n 4 above). 166 Harmon and Laurie (n 44 above) 491. 158

46 James Lee rules’,167 even if, as Green has noted, ‘something may be “property” for some purposes but not for others’.168 But can something be ‘property’ only for one purpose? Where does Yearworth sit? Is it, for example, borrowing from paragraph 45 in Yearworth, ‘only for the purposes of the men’s claim in negligence’ generally? Is it perhaps even narrower, such as ‘only for the purposes of the men’s claim in negligence where a duty has been established or conceded’ (unlike in Holdich)?169 One might be generous and merely think that in each case the court found a solution which enabled recovery in cases which seem to demand it: a triumph of pragmatism over ‘legalism’. But my concern is that, in both Yearworth and Buncefield, we find the court asking not, as The Aliakmon demands, whether the claimant has legal ownership or possessory title so as to be able to bring a claim, but whether the claimant has some form of interest which is ‘close enough’ for the given purpose. As we have seen, the Court’s approach in Yearworth to the ‘property question’ was expressly and repeatedly couched as being ownership of the sperm ‘for the purposes of their claims in negligence’.170 But the Court did not attempt to look too far beyond that conclusion. Even if its ‘property’ analysis is intended to rest on ‘a broader basis’,171 it still appears as though, rather than ‘some purposes, but not others’ we have property for a solitary purpose. It is an exception to the Aliakmon principle, couched in ‘property-ish’172 terms, but a different species from ‘property’ properly so-called. If property simply cannot do what is being asked of it in these cases, it might be better to analyse the cases differently, rather than to reshape the common law concept.173 Reflecting then upon the fictive, instrumental approach to property in the cases which have followed Yearworth, we can see its limitations. Birks

167

Wall (n 45 above) 21. S Green, ‘The subject matter of conversion’ [2010] JBL 218, 240; M Bridge, Personal Property Law, 3rd edn (Oxford, OUP, 2002) 5. Gray (n 4 above) 296. 169 Rostill notes (n 44 above, 16) that the ‘admission that the defendant had breached those duties of care did not amount to an admission of a legal wrong: it was an admission that they acted carelessly, unreasonably, but not tortiously. This is to say that the duty violation of which amounts to a tort (and so an actionable legal wrong) is not simply a duty to take reasonable care, but a duty not to cause particular kinds of damage by one’s lack of reasonable care’. But one may question what the point is of a duty to care which can never be enforced (for example, the Trust could have admitted to negligence in a loose, moral, but not legal sense). Is it sensible to say, as on one view the Trust argued, that one owes a duty to take care to the claimants in respect of sperm, which cannot be damaged in a legally relevantly way since it has no recognisable status and that in any event the claimants, to whom the conceded duty is owed, can never have the right to sue? 170 Yearworth, [2010] EWCA Civ 180, [45](f), 171 Yearworth, [45](e). 172 By ‘property-ish-ness’, I mean the ascription of property status in the instrumental way detailed here, without regard or attention to the wider implications. It is thus different from Gray’s use of ‘propertisation’ or ‘propertiness’: Gray (n 4 above) 257 and 259. 173 Harmon and Laurie (n 44 above) 486. 168

Yearworth v North Bristol NHS Trust 47 has characterised the typically English approach to fictions as resting on a ‘conviction that an acceptable principle could … be … legitimately within interpretative reach’.174 The subsequent cases which have attempted to apply Yearworth show the courts still to be reaching for such an acceptable principle, although Lord Stewart’s reasoning in Holdich perhaps comes the closest. That points to the diachronic quality which fictions may possess, as Del Mar has argued, ‘Legal fictions … when used wisely, are inherently dynamic resources that allow courts, over time, to balance flexibility and responsiveness with stability and predictability’.175 But not every fiction works,176 and it is questionable whether the property fiction in Yearworth was either necessary or desirable. Both Yearworth and Buncefield rely upon on inapposite fictions about the nature of property: they may provide a shortcut to the chosen outcome, but without the intellectual foundation to enable future development in a sufficiently stable or flexible manner.

VI. CONCLUSIONS

The argument in this essay has been that Yearworth is not really a ‘property’ law case in any meaningful sense, but that it does have significant potential to affect how property is understood. The reasoning of the Court of Appeal, while not as confined as it could have been, is too closely linked to the peculiar facts of the case to enable a broader argument to be constructed in respect of claiming property rights in parts of the body. Rather, ‘property’ rights were only recognised in Yearworth in order to give effect to a claim within the law of obligations (whether in tort or bailment). There is perhaps then also a question of ‘ownership’ of these issues: are they to be taken as belonging within the province of property law, or tort, or bailment, or other obligations, or medical law, or health-care law more broadly? A lesson from the case law and the literature examined here is that the perspective adopted has a key influence on the conclusions of one’s argument. Yet, any property lawyers or medical lawyers who seek to use the case as a ‘landmark’ are likely to be lead astray. If Yearworth, as discussed above, reduces our understanding of property or possession to a ‘not quite, but good enough’ ad hoc approach to each

174 P Birks, ‘Fictions Ancient and Modern’ in N MacCormick and P Birks (eds), The Legal Mind: Essays for Tony Honoré (Oxford, Clarendon Press, 1986) 101. 175 M Del Mar, ‘Legal fictions and legal change’ (2013) 9 International Journal of Law in Context 442, 444; and generally M Del Mar and W Twining (eds), Legal Fictions in Theory and Practice (Springer, forthcoming 2015). 176 Equally, not all fictions are lacking in usefulness: see J Lee, ‘Fictions in Tort’ in Legal Fictions in Theory and Practice (n 5 above).

48 James Lee case, then that appears to be a nakedly instrumental approach to one of the bundle of rights. As Macklam has noted of the court in Buncefield, such reasoning seems to run issues together, on the premise ‘that justice requires an exception to be created because the beneficiary is the “true” owner of the property’.177 But ‘ownership’ is the issue in question. And if we can create exceptions with regard to one right in the bundle, why not others? ‘Property’ in itself would seem not to matter: it’s what you do with it that counts. Yet, as the contributions to this collection demonstrate, ‘property’ gives coherence and cohesion to our relationship between each other and between us and things. Thus, we might object to the separation of entitlements from our conception of property.178 The danger of this instrumentalism is that there is little to stop a collapse into an entirely fictive approach which would be altogether detached from principle.179 If the problem is thought to be with The Aliakmon’s restrictive criterion in requiring ownership or possessory title, it would be better to confront the issue directly, rather than to manipulate the approach to property or possession in such a way as to undermine them. There should be no scope, and there is no need, for any concept of ‘property-ish-ness’. Pulling at one of the sticks in our bundle might then render the analysis of property rights and their consequences little more than a game of jurisprudential ‘Kerplunk’ or ‘Mikado’.

177

Macklam (n 161 above) 270. Which is Wall’s suggestion: ‘individuals and institutions have entitlements in bodily material, but … it is not a necessary inference that these entitlements give rise to property rights’ (n 45 above) 19. 179 ‘Few concepts are quite so fragile, so elusive and so often misused as the idea of property. Most everyday references to property are unreflective, naive and relatively meaningless’: K Gray and SF Gray, ‘The Idea of Property in Land’ in S Bright and JK Dewar (eds), Land Law: Themes and Perspectives (Oxford, OUP, 1998) 15. Gray and Gray go on to criticise property lawyers’ (or legal academics’) ‘preoccupation with definitional rigour’ (at 32) but I have argued in this essay that forsaking such focus in favour of the adoption of the instrumentalist approach seen in Yearworth and Buncefield is undesirable. 178

II. INTANGIBLE THINGS

I

N MILLAR V Taylor, the first case examined in this section of Part A, Yates J, a dissenting judge in the case, asserted that the term ‘property right’ is only apt to describe rights relating to tangible things:

For, property has some certain, distinct and separate possession: the object of it, therefore, must be something visible. I am speaking now, of the object to which all rights are confined. There must be something visible; which has bounds to define it, and some marks to distinguish it.1

The three cases discussed in this section involve quite different types of dispute. Millar v Taylor itself concerns a claim brought by a London bookseller against a Scottish rival over the right to publish James Thomson’s poem, The Seasons. Philips v Mulcaire is about an attempt to invoke the privilege against self-incrimination by an investigative journalist who had hacked celebrities’ phones and collected confidential information. OBG Ltd v Allan is a commercial dispute over the handling of an insolvent company’s assets, particularly its outstanding contractual claims against former customers. Despite the different contexts of these cases, they each challenge Yate J’s assertion that only physical things can be the subject of a property right. Litigants in Millar v Taylor, Philips v Mulcaire and OBG Ltd v Allan each argue that wholly abstract and intangible assets—artistic expressions, confidential information and contractual rights, respectively—can be the subject of property rights. The litigants in these cases met with a great deal of (although not total) success. For instance, as Catherine Seville explains, Millar v Taylor was instrumental in shaping the discourse on ‘intellectual property’, and encouraged people to describe these intangible assets in proprietary language. The effect has been profound and long-standing, even permeating public discourse (the anti-piracy campaign, ‘You wouldn’t steal a handbag …’, as Emily Hudson points out in her analysis of Philips v Mulcaire, equates intangible artistic expressions with physical things). In terms of contractual rights, as Sarah Green explains in her examination of OBG Ltd v Allan,

1

Millar v Taylor (1769) 4 Burr 2303, 2361, 98 ER 201, 232.

50 Intangible Things many jurisdictions have had no difficulty in imbuing such rights with proprietary characteristics. The tendency of textbook writers to include a chapter on contractual debts, or ‘choses in action’, in most personal property textbooks, demonstrates a much wider usage of the language of ‘property’, outside of the realm of physical things. The extension of the label ‘property’ to describe intangible rights raises several issues. The most important is that of justification: is there a good reason to include rights to artistic expressions, debts, information, and so on, in the same category as rights to land, cars, paintings, etc? One approach that emerges in the following chapters is the invocation of instrumentalist arguments in order to justify an expansive approach to ‘property’. For instance, Sarah Green points out that much of our wealth is now tied up in intangible assets, such as shares and other contractual rights, rather than in tangible assets like land. Further, existing means of protection, particularly that provided by the economic torts, is often thought to be lacking. In this context, ‘property’ may be an appropriate vehicle to afford much needed protection to intangible assets: by categorising these things as ‘property rights’, we unlock the extensive protection afford by the property torts. Similar instrumentalist reasoning is found in Millar v Taylor. A deep concern of the law, as Catherine Seville explains, is that there should be appropriate incentives for producing artistic works. By rewarding an author with a ‘property right’ in his work, entitling him to prevent others from imitating it, the law provides a clear incentive to produce such work. Finally, as Emily Hudson hints, those attempting to underpin the notion of privacy with a legal basis may be tempted to label confidential information as ‘property’. According to this narrative, prying reporters should ‘keep off’ such information in the same way that a trespasser should keep off the freeholder’s land. When we encounter moral or economic arguments for extending the law’s protection to a new area, the language of ‘property’ often provides an efficient means of achieving this. The difficulty with the instrumentalist approach, however, is that it can be criticised for stretching a doctrinal concept—‘property’—for purely political reasons. No doubt aware of this objection, we see litigants in the following cases attempting to bolster their arguments with doctrinal reasoning as well. This clearly emerges, for instance, in Sarah Green’s analysis of OBG Ltd v Allan. Although a contractual debt may be physically dissimilar from land, cars, paintings and the like, they are, Green argues, ‘legally’ similar. Specifically, debts and other intangibles, like physical assets, are transferable, allowing them to be bought and sold, bailed and mortgaged. This important shared characteristic, Green argues, means that a contractual right to payment is the same type of right as a traditional property right. The need to extend the property torts to cover contractual rights, therefore, arises not merely for economic reasons, but because like cases must be treated alike. The ‘likeness’ of intangibles to tangibles is

Intangible Things 51 questioned at other points in the following chapters, however. Hudson, for instance, is more sceptical of the ‘propertisation’ rhetoric used to describe intellectual rights. Further, the dissenting judge in Millar v Taylor, Yates J, articulated a number of crucial differences between tangibles and intangibles, the most important being the inability to possess the latter (a claim rejected by Green). Similarities (and dissimilarities) between abstract assets and physical things play a central part in the reasoning of each case. The proper scope of the term ‘property right’ is a deeply controversial and unresolved question. In the following chapters we see the types of dispute that have given rise to this controversy.

3 Millar v Taylor (1769): Landmark and Beacon. Still. CATHERINE SEVILLE

I. INTRODUCTION

M

ILLAR V TAYLOR is concerned with the legal protection of literary works and the nature of literary property. Printing had been subject to a licensing system since the sixteenth century. The guild system had allowed booksellers to behave as if property in books were perpetual. However, the lapse of the licensing system at the end of the seventeenth century, and its replacement with a statutory regime in 1710, brought these assumptions into question. At issue was whether a common law right of property in books existed. If it did, how did arise? And, what was its nature? These questions were thoroughly debated during the eighteenth century. The most prominent legal discussion of these matters is to be found in the two ‘great’ cases: Millar v Taylor (1769) and Donaldson v Beckett (1774).1 The former affirmed a common law right of literary property. The latter, in its result, denied it. This was not, however, the end of the discussions. Modern copyright is now longer in term and broader in scope than ever before. Technology has transformed the way in which the public engages with copyright works. With these new possibilities come new challenges to our legislative responses. Justifications for copyright protection continue to be reexamined. The public accessibility of copyright works has become a new preoccupation. The appropriate balance of interests between authors and the public is repeatedly disputed. The notions of ‘justice for authors’ and ‘public interest’—particularly what these might mean in law—remain matters of considerable disagreement. But although these are new circumstances, some themes are fundamental. In spite of being overturned by Donaldson v Beckett, Millar v Taylor remains relevant to current 1 Millar v Taylor (1769) 4 Burr 2303, 98 ER 201; Donaldson v Beckett (1774) 4 Burr 2408, 1 ER 837.

54 Catherine Seville debates, and retains a powerful authority of its own, almost a quarter of a millenium later.

II. EARLY CONTROLS ON PRINTING: FROM LICENSING TO THE STATUTE OF ANNE

The potential power of printing was recognised early. Printing ordinances and decrees began with Henry VIII in 1538.2 Tudor desires to control the press eventually led to a licensing system. In 1557 Mary Tudor granted the Stationers’ Company a charter, which gave its members what was in effect a legal monopoly on licensed printing. Only members of the Company, or those holding royal printing patents, were allowed to print books. An entry in the Stationers’ Register at first indicated that the book had been duly licensed. But it soon came to indicate a quasi-proprietary right to what was known as the ‘copy’. This in turn came to signify the sole right of printing, publishing and selling the work listed—hence ‘copy-right’. And in time the word copy-right was also used to refer to the work embodied in the manuscript, and sometimes to the physical copy. The abolition of the Court of Star Chamber—the authority behind both licensing and their Charter—caused the Stationers considerable anxiety. But the licensing system survived the Civil War, in at least some form. Charles II restored it to full strength in 1662, but it was allowed to lapse in 1679. Briefly revived under James II, parliament refused to renew it in 1695. This threatened the book trade’s customary methods of operation profoundly. Considerable trade power was put behind efforts to remedy the situation.3 One bill in 1707 failed to pass, but further efforts in 1709 were successful, and on 5 April 1710 the first English copyright statute was passed.4 Commonly known as the Act of Anne, the preamble describes it (in part) as an Act ‘for the encouragement of learned men to compose and write useful books’. It granted a 14-year term to all books registered with the Stationers’ Company, and an additional 14 years if the author was still living at the expiry of the initial term. The right was granted to ‘authors and their assigns’. Previously, the combination of the various licensing acts and the customs of the book trade had ensured that rights were in practice 2 Henrician Proclamation, London (1538). Available from Primary Sources on Copyright (1450–1900), eds L Bently and M Kretschmer (‘Primary Sources’): copy.law.cam.ac.uk/record/ uk_1538. 3 J Feather, Publishing, Piracy and Politics: an historical study of copyright in Britain (London, Mansell, 1994) 15–18. For more extensive detail of the history, and discussion of the issues of both licensing and literary property see R Deazley, On the Origin of the Right to Copy (Oxford, Hart Publishing, 2004) 1–50. 4 An Act for the Encouragement of Learning, by Vesting the Copies of Printed Books in the Authors or Purchasers of such Copies, During the Times therein mentioned, 1710, 8 Anne, c 19.

Millar v Taylor: Landmark and Beacon. Still. 55 almost always held by the booksellers. The professional author had yet to emerge. But this choice of language—the specific inclusion of and reference to authors—was regarded (or certainly later claimed) as significant in the debates as to the nature of literary property which were to follow. As Rose has noted, both Daniel Defoe and Joseph Addison had written articles calling for authors’ ‘property’ to be protected, and it is possible that their language had been influential.5 What should also be particularly noted are the significant changes to the Bill during its passage. It began very much as a booksellers’ Bill. A group of influential London booksellers and printers had originally petitioned for leave to bring in a Bill ‘for securing to them the Property of Books, bought and obtained by them’.6 Once the Bill had been presented, the booksellers issued a broadside asking for the Bill to be passed, to confirm ‘a Right which has been enjoyed by Common Law above 150 years’.7 The Bill was first introduced as a Bill ‘for Encouragement of Learning, and for Securing the Property of Copies in Books to the Rightful Owners Thereof ’.8 But it became a Bill ‘for the Encouragement of Learning, by Vesting the Copies of printed Books in the Authors or Purchasers of such Copies, during the Times therein Mentioned’.9 The change from ‘securing’ to ‘vesting’ seems to reflect a weaker position than was first claimed.10 And the initial Preamble’s claim to ‘the undoubted Property of such Books and Writings’ did not survive into the final text of the Preamble, which was considerably shortened. Also significant was the decision to impose a limited term. The original Bill had asked for the ‘preservation’ of the rightful owner’s property, without limitation as to term. But the suggestion seems to have been made, in debate, that a limited term was sufficient, perhaps influenced by wider concerns regarding monopolies and restraint of trade. Rose has noted that the Statute of Monopolies 1624, under which patents were granted, gave a 14-year term to new inventions and a 21-year term to existing patents.11 The analogy seems compelling, although a number of other possible copyright terms had been proposed during the debate. The Act of Anne did secure to authors and their assigns the right to print and reprint books covered by it, and thus provided a mechanism 5

M Rose, Authors and Owners (Cambridge MA, Harvard University Press, 1993) 34–41. Commons Journal, 16:240 (12 December 1709). 7 The Booksellers’ Humble Address to the Honourable House of Commons, In Behalf of the Bill for Encouraging Learning, quoted Rose, Authors and Owners 43. 8 Available from Primary Sources at: copy.law.cam.ac.uk/record/uk_1710a. 9 Commons Journal, 16:369. 10 Although Lord Mansfield thought this no basis for an argument that there was no common law property before: ‘The title is but once read; and is no part of the Act. In the body, the word “secured” is made use of’. Millar v Taylor (n 1 above). 11 Rose (n 5 above) 45. The House of Commons adopted this basic pattern of 14 years for new books, 21 for those already in print. The House of Lords added the provision which granted an additional 14-year term to those authors alive on the expiry of the initial 14-year period. 6

56 Catherine Seville for pursuing pirates, which had not been available since the lapse of the Licensing Act in 1695. But in achieving this general object, it left a number of important concepts undefined—including that of literary property.12 These deficiencies were felt for decades to come, and were discussed perhaps most notably in the eighteenth-century cases, Millar v Taylor and Donaldson v Beckett.

III. TESTING THE ACT OF ANNE—ADDING TO A RIGHT OF LITERARY PROPERTY, OR REPLACING ONE?

One crucial question left unclear by the Act was its relationship with the rights previously enjoyed by booksellers; particularly the London booksellers, who dominated the Stationers’ Company. Under the licensing scheme, given the power of the guild structure, rights to copies entered in the Stationers’ Company Register had been in effect perpetual. ‘Copy-rights’ were routinely sold (to other members of the Company) and inherited. The Stationers’ Company had been responsible for the practical operation of the system, including overseeing and resolving disputes.13 The Act of Anne stated plainly that the rights it conferred were limited in time. The London trade was firmly of the view that the statutory rights were additional to a common law right in the author, which was normally assigned to a bookseller before publication. Booksellers and printers in the provinces, notably the Scottish booksellers, who were developing a market for locally reprinted titles, sought to challenge this view. The first case in which the issue arose was Millar v Kincaid (1743). A number of London booksellers brought an action in the Scottish Court of Session (which had jurisdiction over breaches of the Act which took place in Scotland), complaining about the reprinting in Scotland of various English books. They sought not the statutory penalties but an account of profits; arguing that the statute simply gave extra security to a pre-existing property right, that it was therefore declaratory of that property, that the Court of Chancery had always understood it in this way, and had given relief on this basis. The defendants argued that this could not be so. The manuscript of a book was an author’s property, as was the whole edition once it was printed. But once these were sold, the author’s property was at an end, because there was ‘no subject nor corpus of which he can be said to be the proprietor’.14 The Court reversed itself a number of times, but 12 The Act ‘though well intentioned, would spawn more than half a century of controversy, and secure a legacy of misunderstanding’: Deazley (n 3 above) 50. 13 The Stationers’ Company Court of Assistants would adjudicate on any persistent disputes between members. 14 Henry Home, Lord Kames, Remarkable Decisions of the Court of Session, from the Year 1730 to the Year 1752 (Edinburgh, Bell, 1766) 157.

Millar v Taylor: Landmark and Beacon. Still. 57 eventually ruled that no action for damages lay under the statute, only an action for the penalties stated therein. It gave no opinion on the common law, both sides having avoided direct engagement with the question there.15 The booksellers appealed to the House of Lords (1751). However, the action was dismissed by the Lord Chancellor, Lord Hardwicke, on technical grounds, so there was no ruling as to the existence of a common law right.16 William Murray, then Solicitor-General and later Lord Mansfield, was counsel for the London booksellers in Millar v Kincaid. The following year, in Tonson v Walker, Murray again argued before Lord Hardwicke for the existence of a common law right.17 Murray was seeking an injunction before hearing in the Court of Chancery. Lord Hardwicke granted the injunction, though he made it plain that it was neither necessary nor proper for him to determine whether there was a common law property in books. He indicated that if the case came to be heard, he would send it to the common law judges, so that the point could be settled. While Millar v Kincaid was being decided, William Warburton published an influential pamphlet concerning literary property. Warburton had initially trained as a lawyer, but instead had decided to become ordained. He wrote steadily, both literary criticism and theological work. He had good reason to be interested in the question of literary property. A friendship with Alexander Pope had developed, following Warburton’s public defence of Pope’s Essay on Man. Pope introduced Warburton to William Murray, who obtained for him the preachership of Lincoln’s Inn. Pope, who died in 1744, had made Warburton his literary executor, so he held Pope’s copyrights. Warburton’s edition of Shakespeare was published in 1747. His pamphlet, A Letter from an Author to a member of Parliament Concerning Literary Property, was published in the same year. Warburton’s stated purpose in this pamphlet is to show that ‘an author has an undoubted right of property in his works’. His legal training is evident, as he runs through the distinction between moveable and immovable property, and the two modes of obtaining moveable property—by occupancy and improvement. Warburton then moves on to his own analysis, which distinguishes the property in manual work from property in the product of the mind. Property in the former is confined to the individual thing made, which may be imitated by others who thereby acquire the same property in their manual labour. But property in the product of the mind, such as a book, ‘is not confined to the original MS. But extends to the doctrine contained in it; which is, indeed, the true and peculiar property

15

For more detail see Deazley (n 3 above) 115–28. John Craigie, et al, Reports of Cases Decided in the House of Lords, upon Appeal from Scotland, from 1727 to 1822 (Edinburgh, 1849–56) (5 vols) 1:488–92. See also 98 ER 210–12. Deazley (n 3 above) 130–32. 17 Tonson v Walker (1752) 3 Swanston 672, 36 ER 1017. 16

58 Catherine Seville in a book’. His position is that literary property, ‘as clear and undoubted a property as this is by nature’, may only be abridged by the legislature by an express declaration. Since the preamble to the Act of Anne, on the contrary, declares that authors did have a right before the Act—because how otherwise could the injured parties be ‘proprietors’ of something in which they had no property?—Warburton concludes that the legislature regarded this as a ‘natural right’. Thus the Act is not a restrictive law, but an accumulative one, brought in aid of the natural right. For a time the London booksellers did nothing further. But in April 1759 they took further steps to suppress the reprint trade, threatening legal action if sales of pirated editions in England continued. William Murray had become Lord Chief Justice in 1756, and was now Baron Mansfield. His known sympathy for the common law right may have encouraged the booksellers to act. A test case was brought against Benjamin Collins, for selling Scottish reprints of the Spectator. The plaintiffs were Jacob and Richard Tonson, from a leading bookselling family. Their predecessor, Jacob Tonson the elder, had bought the half the title to the Spectator directly from Addison and Steele in 1711. He consolidated his purchase by buying the other half from another publisher in 1714. Thus the statutory copyright had clearly expired, though sales of the work continued. Tonson v Collins was argued twice, and a considerable weight of legal talent was assembled.18 Both counsel at the first hearing were later to become Lord Chancellor. Alexander Wedderburn argued for the plaintiffs that the author had a right of property in the profits of his book (based on invention rather than occupation), and that it could be possessed just as other incorporeal rights were. He relied on a number of cases in Chancery where injunctions had been granted to restrain the sale of books contrary to the interests of the proprietors of their copyrights. Edward Thurlow, for Collins, argued that there was no such property flowing from natural law. He attacked explicitly Warburton’s distinction between labour of the head and the hand, and his position that literary property should be treated differently from that in machines: Sir Isaac Newton had no greater property in his Principia, than Lord Orrery had in his machine. If the labour of the head gives the right, the property is just the same. And it is possible, that the invention of a mouse-trap might cost its author the same labour of head that the orrery did its noble contriver. So that this ground of property depends entirely upon the difference of heads. The right of property in books and machines is therefore the same.

Wedderburn, in reply, stressed that the injunctions granted by the Court of Chancery signified a customary property. Lord Mansfield agreed that every 18 Tonson v Collins (1761) 1 Black W 301, 96 ER 169. Tonson v Collins (1762) 1 Black W 321, 96 ER 180. See also Deazley (n 3 above) 138–47.

Millar v Taylor: Landmark and Beacon. Still. 59 injunction proceeded on the supposition of a legal property. He ordered the case to stand over for further argument, directing Counsel towards a line of argument which he had himself developed in Tonson v Walker, and which was favourable to the booksellers’ cause. At the second hearing, William Blackstone, then Vinerian Professor at Oxford, was for the plaintiffs.19 He would later give one of the opinions in Donaldson v Beckett. Blackstone began from the position that property could be founded by invention and labour, and that both were present in an original composition. Founding his argument on Locke, he said that property ‘may with equal reason be acquired by mental as by bodily labour’, and that the property in both should be ‘equally permanent’. He took, here, a bold position; that an author has an exclusive property in a composition even when it is still in his mind, which is retained when it is reduced to writing, and is again retained when it is printed. Thus, no one had the right to multiply copies of a printed book, unless with leave from the author.20 Blackstone also argued that precedent supported his position. Counsel for the defendant was Joseph Yates, who was soon to be elevated to the bench. His powerful dissent in Millar v Taylor has roots in his argument here. Although he acknowledged that mental labour could give rise to property, and that an author would have property in an unpublished manuscript, Yates’ position was that once an author’s sentiments were published they were ‘thrown into a state of universal communion’. His central objection was that property had to be capable of possession, and that a right of publishing ideas could not be. Yates argued that although a statutory right could be (and had been) granted, the analogy with patents was compelling: Since then no permanent privilege is allowed to the inventor of an art, or a mechanical engine, what pretence have literary productions to a greater right? Both are the productions of genius, both require labour and study, and both, by publication, become equally common to the world. The Legislature seems to have judged so.

His conclusion was that authors could claim no right at common law, and should instead avail themselves of ‘that temporary indulgence’ which statute had allowed to them. From the bench, Lord Mansfield was particularly active in testing Yates’ argument as it unfolded. His decision was that the case should be adjourned, to stand over for further argument before all 12 judges of the courts of common law, assembled en banc. This would of course have given any conclusion considerable weight. But it is clear that the Court of King’s Bench suspected collusion between the Tonsons and Collins.

19

Blackstone also reported the case. A position maintained in Blackstone’s Commentaries on the Laws of England, Book the Second—Chapter the Twenty-Sixth: Of Title to Things Personal by Occupancy (1766) p 8. 20

60 Catherine Seville The suggestion was that the purpose of the case was to obtain a clear legal judgment favourable to the booksellers, which they could rely on against others. Also, it was thought that Collins’ expenses had been paid, on the understanding that he would not appeal if the Tonsons won. Particularly as the Court was tending to favour the plaintiffs’ case, it did not wish to connive in such behaviour, and so the unusual route of a hearing en banc was proposed. However, convinced that there was evidence of collusion, the 12 judges refused to hear the case. This was Willes J’s account of what happened, first made public in his opinion in Millar v Taylor. He quoted as his source—by implication—Lord Mansfield.21 Lord Mansfield (who had seen and approved Willes J’s opinion) confirmed this in his own opinion in that case.22 Even though there was no final ruling, the importance of Tonson v Collins remained, as the first case in which the question of common law literary property was fully argued. Beyond this, the exploration of the nature of literary property ranged far wider than the courts. It was a matter of significance to anyone with interests in literature and publishing, and also to the general public. There was coverage of the legal cases in the daily press, and a number of pamphlets sought to engage with the issues of principle. Two such pamphlets appeared in 1762; the year that Tonson v Collins was decided. Much of the first, An Enquiry into the Nature and Origin of Literary Property,23 is a direct response to Warburton’s earlier pamphlet. Therefore, the analysis focuses on the nature of property. The author, having searched for the principles on which a literary property right might be founded, found only an ‘airy Phantom’. Building on another’s ideas to create a derivative work does not diminish the original, so there is no injury. Sentiments, thoughts and doctrine cannot be capable of being property, because others cannot be excluded from them. The author concludes that there is no common law right, and, further, that such a right would be prejudicial to the cause of literature. An Enquiry drew a further response: A Vindication of the Exclusive Right of Authors.24 The author here considers the basic position unproblematic: ‘Though ideas considered abstractly, are not susceptible of property, yet when impressed in visible permanent characters on paper, then they become as it were incorporated, and a literary copy is thereby made the property of the author’. The author agreed with Warburton that the Statute of Anne intended to grant additional support for the encouragement

21

4 Burr 2327, 98 ER 214. 4 Burr 2400, 98 ER 253. Lord Mansfield is keen to make clear (by implication) that the Court here was agreed on the common law right, since they would have given judgment for the plaintiff. 23 An Enquiry into the Nature and Origin of Literary Property (London, printed for William Flexney, 1762). 24 A Vindication of the Exclusive Right of Authors to their own Works (London, printed for R Griffiths, 1762). 22

Millar v Taylor: Landmark and Beacon. Still. 61 of learning, and confirms the existing common law right. It is only the penalty and not the right which is limited in time. Throughout the 1760s, provincial booksellers were actively challenging the London trade, with sales of reprints. In response, the London booksellers took legal action to confirm what they regarded as their rights in literary property. Generally they would seek injunctions in Chancery, and this would often be the end of the matter. But in 1769 a highly significant case reached the Court of King’s Bench.

IV. MILLAR V TAYLOR: ON THE NATURE OF LITERARY PROPERTY

Millar v Taylor is undoubtedly a landmark case, in the sense that it was the first legal ruling on the common law right of literary property. The London bookseller Andrew Millar sued Robert Taylor, in the Court of King’s Bench, for having published and offered for sale James Thomson’s The Seasons without his consent. Millar had bought the copyright from Thomson in 1729. It had been assigned to him, and duly registered at Stationers’ Hall. He had sold copies at a reasonable price. Taylor’s edition appeared in 1763, when the statutory protection under the Statute of Anne had expired. The question was therefore whether Millar could rely on any common law right of property in an author’s works. The majority of three, led by Lord Mansfield, held that he could. However, Yates J gave a strong dissenting opinion, that only the statutory right was available after publication. This view was the one which, in the end, prevailed—in Donaldson v Beckett. But that is to jump ahead past a crucial passage in the narrative. The facts of Millar v Taylor were such that there was no distraction from the common law question. The jury found a special verdict, which confirmed the facts of the sale, assignment and registration of the work, and the subsequent sales by both parties of copies. The jury also said that since before the reign of Queen Anne, it was usual to purchase from authors the perpetual copy-right of their books; and to assign the same from hand to hand, for valuable considerations; and to make the same the subject of family settlements, for the provision of wives and children.

All that remained was the question of law: whether there was a continuing common law right which entitled Millar to damages. The judges gave their opinions, as was customary, beginning with the most junior judge, Willes J, and proceeding upward to the Lord Chief Justice, Lord Mansfield. Willes J ran through the precedents at some length, laying considerable weight on the practice of the Court of Chancery in granting injunctions. He concluded that there was a common law right before the Act of Anne. Analysing the preamble to the Act, which he regarded as supporting the existence of a prior right, he also concluded that the Act did not take away the author’s common law right to his copy.

62 Catherine Seville Aston J engaged squarely with the defendant’s ‘ingenious, metaphysical and subtle’ argument that the property claimed was not an object of law, and thus not capable of protection. He attacked some of the definitions of property cited, as, ‘very inadequate to the objects of property at this day’. Relying on Pufendorf, he stated that: ‘Since those supposed times, therefore, of universal communion, the objects of property have been much enlarged, by discovery, invention, and arts’. The present claim was founded on an original right to the work, as being the ‘mental labour’ of the author. The right would be useless without publication, as the only way to render the work useful, whether to the author or to mankind: ‘but the right to the work, the copy-right remains in him whose industry composed it’. Thus, an author did not give away or abandon his property by publication. Nor was it taken away or restrained by the Statute of Anne. Yates J spoke for nearly three hours in support of his dissent. Dissent was most unusual. Lord Mansfield remarked in his own speech in the case that this was the first difference of final opinion since he had become Lord Chief Justice in 1756. Yates J’s objection was founded on the difficulty of acquiring property in ‘mere intellectual ideas’. How could a ‘bare idea’ be appropriated? How would others know they were not to use it?: ‘The occupancy of a thought would be a new kind of occupancy indeed’. How could an author complain ‘of losing the bird he has himself voluntarily turned out?’ Although an author should enjoy the fruits of his labour for a limited time, ‘Shall an author’s claim continue, without bounds of limitation; and forever restrain all the rest of mankind from their natural rights, by an endless monopoly?’ A claim to a perpetual monopoly could not be warranted by the general principle of property, and could not be part of the common law of England. Only legislative power could restrain the use of such a thing. Lord Mansfield said that he would not repeat the material in the first two judgments, since he fully adopted them. He did, however, set out briefly his view of the matter. At the heart of his position lay ‘natural principles’. It had been admitted that an author was entitled to a common law right in his work before publication. Famously, he explained the source of this common law right as follows: because it is just, that an author should reap the pecuniary profits of his own ingenuity and labour. It is just, that another should not use his name, without his consent. It is fit that he should judge when to publish, or whether he ever will publish. It is fit he should not only choose the time, but the manner of publication; how many; what volume; what print. It is fit, he should choose to whose care he will trust the accuracy and correctness of the impression; in whose honesty he will confide, not to foist in additions: with other reasonings of the same effect.

Lord Mansfield argued that the same reasons held after publication. An author could reap no profit if his work could be pirated on worse paper and in worse print the moment after publication. As to the Act of Anne, the

Millar v Taylor: Landmark and Beacon. Still. 63 Court of Chancery had always considered the Act as giving an additional security to a proprietor. Further, had the legislature intended to take away the common law right, it would have done so expressly. Thus Millar v Taylor confirmed that a common law right of literary property existed in English law.25 However, that state of things would only prevail briefly. It would be reversed in England in 1774 by Donaldson v Beckett, and would never be the case in Scotland.

V. THE SCOTTISH CHALLENGE TO THE COMMON LAW RIGHT: HINTON V DONALDSON

Samuel Johnson was said by James Boswell to have ‘descanted on the subject of Literary Property’ in May 1773—shortly before the Court of Session’s decision in Hinton v Donaldson. Boswell was to represent Alexander Donaldson in Donaldson v Beckett, so Johnson’s close familiarity with the issues can be presumed. Johnson’s fundamental position reflected a concern with principle, as Lord Mansfield’s had. But ultimately he took a pragmatic view: ‘There seems,’ (said he,) ‘to be in authours a stronger right of property than that by occupancy; a metaphysical right, a right, as it were, of creation, which should from its nature be perpetual; but the consent of nations is against it, and indeed reason and the interests or learning are against it; for were it to be perpetual, no book, however, useful, could be universally diffused amongst mankind, should the proprietor take it into his head to restrain its circulation. No book could have the advantage of being edited with notes, however necessary to its elucidation, should the proprietor choose to oppose it. For the general good of the world, therefore, whatever valuable work has once been created by an author, and issued out by him, should be understood as no longer in his power, but as belonging to the publick; at the same time the author is entitled to an adequate reward. This he should have by an exclusive right to his work for a considerable number of years.’26

The Court of Session was to make its determination the following July. The case concerned the now common challenge to the London book trade by Scottish booksellers. John Hinton, a London bookseller, had acquired the rights to Stackhouse’s History of the Holy Bible, published in 1740. He was objecting to large numbers of reprints, produced and sold by several Scottish booksellers, including Alexander Donaldson.27 Such cases had to be heard in the Court of Session. The judges there, though courteous in their references to English law (and to Lord Mansfield 25 Deazley (n 3 above) discusses the case and describes the decision as ‘a triumph of creative revisionism and legal advocacy’: 171–79 at 178. 26 James Boswell, The Life of Johnson, 1799 (ed George Birkbeck Hill, rev LF Powell) 6 vols (Oxford, Clarendon Press, 1934–64) vol 2, 259. 27 For detail see Deazley (n 3 above) 179–87.

64 Catherine Seville in particular) were clear that their business was with Scottish law. They ruled eleven to one that in Scotland there was no common law of literary property. In addition, the Lord President spoke to express his opinion with the majority, although by tradition he did not vote unless the Judges were equally divided. Only Lord Monboddo, who founded his opinion on the ‘justice’ of an author enjoying the fruits of his labours, found a common law right in Scotland.28 In general, the judges could find simply no evidence of a Scottish common law right, either in legal writing or in case law. Several took the view that property should be corporeal and tangible, whereas ‘ideas’ were not. Some indicated concerns as to the consequences of such a right. Lord Coalston noted that it would: ‘establish a perpetual monopoly in favour of the booksellers of London, not only over most of the valuable books which have been hitherto published in this kingdom, but also over all books which may be published in time coming’. The wording of the Statute of Anne they considered to be a further indication that there was no common law right once a work was published, but instead only a privilege granted for a limited term; and this most of the judges considered to be the right approach to the protection of authors. Alexander Donaldson was victorious here, under Scottish law. He was to be again victorious, this time under English law, in Donaldson v Beckett.

VI. DONALDSON V BECKETT: THE END OF THE COMMON LAW RIGHT?

Donaldson had begun his career as a bookseller in Edinburgh in 1750, confident (following Millar v Kincaid) that copyright was limited to the statutory term. He built an extensive catalogue of cheap reprints of standard works whose statutory copyright terms had expired. Provocatively, in 1763 he opened a shop in London, and sold his books at prices which undercut the London booksellers significantly. This the London trade could not ignore, and he was pursued with Chancery suits. Yet he persisted. In 1765, Donaldson succeeded in having two injunctions dissolved, which had been previously granted to restrain him from printing and selling various works, including James Thomson’s The Seasons, the copyrights in which had been assigned to the two plaintiffs. The statutory terms had expired. The Lord Chancellor, Lord Northington, heard little argument, but took the view that none of the precedents cited covered the situation, because they had been granted during the statutory term. The point being ‘of so much difficulty and consequence’, he said he would send it to law for the

28 Such arguments were often founded on the familiar Lockean position: John Locke, Second Treatise of Civil Government (1690) Chap V Sec 27.

Millar v Taylor: Landmark and Beacon. Still. 65 opinion of the judges. He made it clear that he himself gave no opinion of the subject, but he did observe ‘that it might be dangerous to determine that the author has a perpetual property in his books, for such a property would give him not only a right to publish, but to suppress too’.29 Neither plaintiff was willing to proceed further against Donaldson. This is how Millar v Taylor had begun. Rose suggests, plausibly, that the booksellers were unwilling to risk an appeal to the House of Lords, and moved instead against Taylor, who was thought more likely to acquiesce in a judgment against him than Donaldson.30 Undeterred by the London booksellers’ pressure, in 1767 Donaldson published a pamphlet, Considerations on the Nature and Origin of Literary Property: wherein that species of property is clearly proved to subsist no longer than for the Terms fixed by the Statute 8 Anne.31 The following year he issued three further publications of Thomson’s works, including a new edition of The Seasons. Andrew Millar had died before Millar v Taylor had been decided. His copyrights were sold by his executors, shortly after the decision. The Seasons was bought by a consortium of members of the London trade, including Thomas Beckett. Beckett and the others filed a bill in Chancery against Donaldson. An injunction was granted, and later made perpetual on the strength of the King’s Bench decision. But once the Court of Session had ruled against any Scottish common law right, in Hinton v Donaldson, Donaldson appealed the Chancery injunction to the House of Lords. The case was heard in February 1774, amid great public scrutiny. The decision was to overturn the Chancery injunction. Copyright was henceforth confined to the statutory term.32 The proceedings in the House of Lords were attended with considerable drama. Cases were decided by a vote of all the peers, not the lawyers alone. In a case of such significance, the 12 common law judges were summoned to hear the parties’ arguments, and to advise the peers on matters of law. Several counsel and their arguments were already familiar from earlier literary property cases: Alexander Wedderburn (now Solicitor General) and John Dunning for the common law right; Edward Thurlow (now Attorney General) and Sir John Dalrymple against it. The Lord Chancellor, Lord Apsley, asked three questions. Did an author, at common law have the sole right of first printing and publishing any book or literary composition? If so, was it taken away on publication? If so, was it taken away by the Statute of Anne? Lord Camden, a former Lord Chancellor, a committed opponent of perpetual copyright (and of Lord Mansfield), added two further questions. Did the author or his assigns have a sole right of printing and 29 30 31 32

Osborne v Donaldson; Millar v Donaldson (1765) 2 Eden 328, 28 ER 924. Rose (n 5 above) 94. Edinburgh, Alexander Donaldson, 1767. Donaldson v Beckett (1774), Hansard, 1st ser, 17 (1774), 953–1003.

66 Catherine Seville publishing a composition in perpetuity, by the common law? Was that right taken away or restrained by the statute? The two sets of questions covered the same ground, essentially. But Lord Camden sought to highlight the booksellers’ interest, beyond the question of the author’s right. Of the 12 judges, only 11 gave opinions. Lord Mansfield had already made his opinion abundantly clear in Millar v Taylor. The recording of the judges’ votes, and their interpretation, was a matter of some confusion and dispute.33 In précis, though, seven of the judges acknowledged a common law copyright, and six considered that it survived the Statute of Anne. Lord Camden spoke first in the debate, a long and ferocious speech which emphasised the need to follow precedent. Finding no foundation in the common law for a right of literary property, he also warned that the effect of granting such a right would be to ‘sanctif[y]’ the booksellers’ monopoly, with consequences highly detrimental to the public: ‘[a]ll our learning will be locked up in the hands of the Tonsons and the Lintots of the age’. Lord Chancellor Apsley also spoke against the common law right, emphasising that his decision to grant an injunction had been made simply as a matter of course following Millar v Taylor. Lord Lyttleton was the only peer to speak in favour of the common law right. Lord Mansfield, contrary to many expectations, remained silent. The Bishop of Carlisle and Lord Effingham were the other two who spoke, against the common law right. Eighty-four peers were present for the vote. The motion was to overturn the perpetual injunction previously granted by Lord Chancellor Apsley, and it was carried. It was now certain that copyright was limited in term. But difficulties remained. The motion put did not address directly the question of literary property, instead offering a choice between the two parties. The peers were most likely to have been focused on the result, rather than on niceties of legal reasoning. So the basis on which the decision had been taken remained unclear.34 The powerful speeches of Lord Camden and Lord Chancellor Apsley were authority against a common law right of literary property ever having existed. Nevertheless, Lord Mansfield’s position in Millar v Taylor was also a commanding one. He had emphasised the justice of an author reaping the profits of his own ingenuity and labour. Lord Camden placed himself very deliberately in direct conflict with this view: Glory is the reward of science, and those who deserve it, scorn all meaner views: I speak not of the scribblers for bread, who teaze the press with their wretched productions; fourteen years is too long a privilege for their perishable trash. It was not for gain, that Bacon, Newton, Milton, Locke, instructed and delighted the world; it would be unworthy of such men to traffic with a dirty bookseller for so 33 See Rose (n 5 above) 98–99; Ronan Deazley, ‘Commentary on Donaldson v. Becket (1774)’ in Primary Sources, available at: copy.law.cam.ac.uk/record/uk_1774. 34 For detail on the voting see Deazley (n 3 above) 191–210.

Millar v Taylor: Landmark and Beacon. Still. 67 much a sheet of a letter press. When the bookseller offered Milton five pound for his Paradise Lost, he did not reject it, and commit his poem to the flames, nor did he accept the miserable pittance as the reward of his labour; he knew that the real price of his work was immortality, and that posterity would pay it.

Yet this rhetorical picture of authors was in stark contrast with contemporary actuality; which found authors in a state of increasingly professional engagement with the marketplace. As Rose points out, authors continued to object to this assessment of their role in the world.35

VII. LITERARY PROPERTY AND THE CAMPAIGN FOR AN EXTENDED TERM: THE 1842 COPYRIGHT ACT

Furthermore, during the nineteenth century, authors continued to chafe at the loss of the common law right. Southey asked why men of letters were ‘deprived of a perpetual property in the produce of their own labours, when all other persons enjoy it as their indefeasible right’.36 Wordsworth asked (again using the language of property), ‘why the laws should interfere to take away those pecuniary emoluments which are the natural Inheritance of the posterity of Authors’.37 This sense that authors had been unfairly treated could be used as a lever for stronger copyright laws. In particular, it was put forward as a strong justification for a longer copyright term. The MP Thomas Noon Talfourd, too, regarded the position as an injustice. An author himself, he considered his proposals (1837–41) to extend copyright’s term to the author’s life plus 60 years as a compromise, even though a necessary one. Talfourd was opposed by various groups. Some of these saw books as simply a commodity to be traded. Others saw extension of copyright term as simply an extension of a monopoly. The elusive nature of literary property (as explained earlier, one legacy of Donaldson v Beckett) made rebutting such arguments problematic for those who considered that authors deserved special treatment. The intangible nature of literary property meant that (as was seen in the eighteenth-century debates) the traditional notions of possession and ownership could not be readily transferred. Talfourd expressed his frustration at this difficulty, when facing determinedly philistine opposition during the second reading of his 1839 Copyright Bill: ‘Is the interest itself so refined—so ethereal—that you cannot regard it as 35 Rose notes that both Southey (1819) and Talfourd (1837) cited and criticised this particular passage in Lord Camden’s speech: (n 5 above) 107. 36 Robert Southey, ‘An inquiry into the Copyright Act’ (1819) 21 Quarterly Review 196–213, 211–12. 37 Wordsworth to J Forbes Mitchell (21 April 1819): The letters of William and Dorothy Wordsworth, 2nd edn, revised arranged and ed AG Hill from the 1st edn (ed Ernest de Selincourt), 7 vols (Oxford, Clarendon Press, 1969–88) vol 3, 535.

68 Catherine Seville property, because it is not palpable to sense or feeling!’38 The rhetoric of monopoly was also powerful, though Disraeli, speaking in support of the 1838 Copyright Bill, asked the House to convert a monopoly for the publishers into a property for authors.39 However, Macaulay’s characterisation of copyright as a monopoly was sufficient to defeat the 1841 Bill. Macaulay questioned its supporters’ position that ‘the law of nature … gives to every man a sacred and indefeasible property in his own ideas, in the fruits of his own reason and imagination’. He himself was certain that after an author’s death the legislature was free to determine the duration of copyright, in the way most conducive to the public good. And, since copyright ‘is monopoly’, it should not last a day longer than necessary. As ‘a tax on readers for the purpose of giving a bounty to writers’, copyright should only be lengthened if it increased that bounty proportionately. Yet the price that a bookseller would give for it would not increase proportionately with a longer term. Using emotive examples from literary history, Macaulay argued that the Bill would increase prices to the point where works valuable to the public would be in effect suppressed. Although the Bill’s supporters protested that the arguments applied to all property, the bill was defeated by a small majority. The tension seen in Millar v Taylor, between natural right and legislative expediency, recurred in these debates. Macaulay’s position shared significant elements with Yates J’s (quoted earlier): ‘Shall an author’s claim continue, without bounds of limitation; and for ever restrain all the rest of mankind from their natural rights, by an endless monopoly?’ The 1842 Copyright Bill was in the hands of Lord Mahon. Mahon approached the matter with considerable pragmatism. He proposed an increase in term to the author’s life plus 25 years, with a minimum of 28 years; a modest extension which he had reason to think would be accepted. His speech at the committee stage was argued circumspectly and with moderation. But he still took care to emphasise that Lord Mansfield and others had previously found there to be perpetual copyright at common law: ‘I wish this fact to be especially remarked—the existence of perpetual copyright according to the common law’.40 He also still felt it necessary to address the familiar argument ‘that an author has property in his thoughts only while they are in his own brain or in his own manuscript; the moment he publishes them, they belong to the public at large’. Mahon argued that if a man who had reclaimed a field from waste was given property in it, the same should be true for work which had ‘enriched the domain of human intellect’. Macaulay responded by proposing a term of the author’s life, or 42 years, whichever was the longer. His aim was to offer longer protection to 38 39 40

Hansard, Parliamentary debates (3rd series) vol xlv, 927 (27 February 1839). Hansard, Parliamentary debates (3rd series) vol xlii, 575–78 (25 April 1838). Hansard, Parliamentary debates (3rd series) vol lxi, 1348–1403 (6 April 1842).

Millar v Taylor: Landmark and Beacon. Still. 69 mature works, supporting that position with many examples from literary history. In response, Sir Robert Inglis offered other literary examples which had weight against Macaulay’s view. And in addition he stressed that an author should have ‘the right of bequeathing the property he had created by the exertion of his mind in the same manner as if it had been property acquired in a different way’. The radical MP Thomas Wakley argued that there was no justification for any extension of term. He read out several of Wordsworth’s poems, asking, ‘who could not string such lines together by the bushel?’ Why should a ‘mere bookwright’ be distinguished from ‘the producer of other inventions’? As Lord Camden had done, Wakley objected to giving an author ‘the right of shutting up his ideas, and making his book a closed book to the people’. A compromise was negotiated, adopting elements of both proposals; copyright’s term was to become 42 years, or the author’s life plus seven years, whichever was longer. Thus, in the debates leading to the 1842 Copyright Act, several themes and arguments respecting literary property seen in the eighteenth-century cases recurred. In particular, the ghost of the common law right from Millar v Taylor still retained power, although certainly not precedence.41 It was now generally accepted that the legislature had the right to determine the protection accorded to literary property, and the ‘metaphysical’ nature of the property in literary works was no longer regarded as the defining consideration. Nevertheless, many of the concerns which arose in that discussion continued to be raised, as relevant to the legislative determination of the protection of literary works. In 1769 Yates J had described the argument that an author’s property extended ‘beyond the manuscript, to the very ideas themselves’ as ‘quite wild’.42 That sense of shock had dissipated. Although a few, such as Wakley, persisted in refusing to acknowledge the importance of the intangible, they were generally regarded as wilfully unappreciative of literary worth. There was now widespread acceptance that mental labour should be acknowledged and rewarded, both for the sake of authors, and for the sake of the public.43

VIII. THE PROBLEMS OF AN INTANGIBLE LITERARY PROPERTY

Even following agreement that mental labour ought to be protected, there remained—and still remain—difficulties caused by literary property’s 41 Argument regarding common law copyright continued in the courts, also, in the context of whether a foreigner could hold copyright in their works. See Jeffreys v Boosey (1854) 10 ER 681, 4 HLC 815. 42 4 Burr 2357, 98 ER 230. 43 For a thoughtful account of the development of property in ‘mental labour’ within the field of intellectual property more generally, and its ability to link the different areas of IP, see B Sherman and L Bently, The making of modern intellectual property law (Cambridge, CUP, 1999).

70 Catherine Seville intangible nature. What is its subject-matter? Its boundaries need to be defined. Lord Camden asked: ‘Where does this fanciful property begin, or end or continue?’44 A right which only protects the printed work itself absolutely literally is considered too narrow, and too easily evaded. Yet, a right in ideas or ‘sentiments’ is considered too broad. The solution adopted, which is still used, was to seek a middle ground between these two: [T]he claim is not to ideas but to the order of words, and this order has a marked identity and a permanent endurance … the order of each man’s words is as singular as his countenance, and although if two authors composed originally with the same order of words, each would have a property therein, still the probability of such an occurrence is less than there should be two countenances that could not be discriminated.45

The distinction between idea (unprotected) and expression (protected) remains central to modern copyright law. Nevertheless, the line between these two concepts remains difficult to draw, both in general terms and in specific cases. Even if the work can be determined, how can people know whether it is owned? If it is owned, how are people to trace its owner?46 These questions flow directly from the intangible nature of literary property, and can have a chilling effect on use of works. A cautious user will prefer to be confident of avoiding infringement, and will choose to use works whose copyright status and ownership is clear. This will restrict, very significantly, the pool of works available. There are many of these so-called ‘orphan’ works, whose owners are not known, or who cannot be contacted. The drive for digitisation of works in public collections has led to various legislative initiatives to make such works accessible, whilst still respecting copyright.47 Furthermore, which acts should be restricted by copyright and thus infringing? Should translations, abridgements, adaptations or selections be prohibited or permitted? May a book be lent to a friend? Should a circulating library be able to buy a single copy of a work and then rent it out to subscribers without further payment to the author? Should the manager of a theatre be able to buy a printed copy of a play and perform it in public,

44 Cobbett’s Parliamentary History of England: From the Earliest Period to the Year 1803, vol XVII, 1771–74 (London, TC Hansard, 1813), [997]. 45 Earl J, Jeffreys v Boosey (1854) 10 ER 681, 4 HLC 815 at 869. 46 Although registration is still used for other forms of intellectual property, following the 1908 Berlin revision of the Berne Convention, copyright could no longer be subject to formalities, and the system of registration was abolished in the UK by the 1911 Copyright Act. 47 For example, Directive 2012/28/EU on certain permitted uses of orphan works (25 October 2012), [2012] OJ L299/5. In the UK, the Enterprise and Regulatory Reform Act s 79 has allowed for the Secretary of State to provide for the licensing of orphan works by regulations. The provision has proved so contentious, particularly in relation to photographs, that the UKIPO has issued myth and fact sheets.

Millar v Taylor: Landmark and Beacon. Still. 71 even if the author intended it only to be read and not performed?48 Should the author of a novel be able to prevent its adaptation and performance as a play?49 Lord Camden asked several of these questions in Donaldson v Beckett, using the difficulty of answering them to argue against the common law right: ‘These questions … are all perfectly new to the common law, which leaves us perfectly in the dark about their solution’.50 Of course, this does not prevent the legislature from answering them. Yet, there remains argument as to how they should be answered. This challenge is still more testing in an international arena. Examples of this can be seen in discussions at the early Berne conferences (1883–86), which would lead to the Berne Union for the protection of the rights of authors in their literary and artistic works. The Berne Convention remains of central importance in defining standards of protection in international copyright law. The first draft convention proposed an exclusive right of translation co-extensive with copyright. Some countries (such as the Scandinavian countries) opposed this on principle, considering such a right less important than the need to encourage translation of copyright works, and thus promote wide dissemination of works.51 Similar arguments are relevant to adaptation, and use of extracts.

IX. THE CONTINUING INFLUENCE OF MILLAR V TAYLOR?

In a narrow sense, Millar v Taylor had little authority following Donaldson v Beckett. Yet its influence persisted. As noted above, specific references can be traced in the debates on the 1842 Copyright Act. The Royal Commission on Copyright, which reported in 1878, stated on the first page of its report: The common law principles which lie at the root of the law have never been settled. The well-known cases of Millar v Taylor, Donaldson v Becket, and Jeffries v Boosey, ended in a difference of opinion amongst many of the most eminent judges who have ever sat upon the Bench.52 48 The right of representation was not protected by the Statute of Anne. See Coleman v Wathen (1793) 5 Term Reports 245, 101 ER 137, and Murray v Elliston (1822) 5 B & Ald 657, 106 ER 1331. Rights in public performances of dramatic works were introduced in the Dramatic Literary Property Act 1833. 49 In 1866 Lord Lyttleton introduced a Bill in the House of Lords with the single purpose of granting a dramatisation right to novelists. It was opposed by those who thought dramatisations original and therefore legitimate. An exclusive dramatisation right was not granted in the UK until the 1911 Copyright Act. 50 Cobbett’s Parliamentary History of England: From the Earliest Period to the Year 1803, vol XVII, 1771–1774 (London, TC Hansard, 1813), [998]. 51 The 1886 Berne Convention required a minimum 10-year term for translation rights. The matter remained contentious. Under the 1908 Berlin Revision of the Berne Convention translation rights became coterminous with copyright protection. This was provided for in the UK by the 1911 Copyright Act. 52 Report of the Royal Commission on Copyright, 1878, xxiv, C.2036, 8.

72 Catherine Seville The Commissioners declined explicitly to discuss either the history of the copyright laws, or the issues of principle involved in them. But in the light of the case law referred to, and the subsequent debates in Parliament, their conclusion was that there was ‘no doubt’ that the interests of both authors and the public required some legislative protection of copyright, and that it should continue to be a proprietary right.53 The point of significance here is that the historical case law was cited with such prominence. And, certainly, in the minutes of evidence, the familiar arguments and examples recur.54 Sir Thomas Farrer, Permanent Secretary to the Board of Trade, acted as advisor to the Commission. He had had close official involvement with copyright matters over many years, and gave a good deal of evidence. Farrer had a particular vision for copyright, the details of which are not important here. What is again significant is that he troubled to refer to the great cases on the common law right, and the arguments set out in them: ‘Amid a great deal which is purely historical, and many subtle and profitless discussions of far-fetched legal analogies, there is much which still throws light on the present conflict of opinion’.55 One of the Commissioners, the author JA Froude, attacked the position taken by Farrer in an article in the Edinburgh Review. He, too, thought it important to highlight and précis the arguments in the ‘contradictory judgments’ given by the courts, and to sketch what he perceived as the consequences of ‘the uncertainty whether copyright was “property”’.56 As the Commissioners had emphasised, the existing law on copyright was badly arranged, spread as it was between 14 statutes passed between 1735 and 1875. Difficulties regarding colonial and international copyright matters only made the problems more intractable. A number of Bills, with various aims, were promoted but failed before the Copyright Act 1911 was passed. The details of these are not of interest here, but again it should be noted that the material familiar from the great cases could still be brought out and considered respectfully. Lord Thring, an experienced parliamentary counsel and parliamentary draftsman, had been involved in drafting the 1900 Bills. Writing in their support in the Nineteenth Century journal he still found it necessary to engage with parts of Lord Camden’s speech in Donaldson v Beckett. Thring noted that Camden had denied the claims of

53

Ibid, 16. For example, speaking of Wordsworth’s copyrights the publisher Alexander Macmillan said: ‘I am about to use a phrase which is not admitted now, but I think that it would be just to the family that they should be getting the result of their father’s labours, and I do not think that the public would lose’. The reference to Lord Mansfield’s speech—and the fact that it did not prevail—is clear. Minutes of Evidence, 227. 55 TH Farrer, ‘The Principal of Copyright’ (1878) 24 Fortnightly Review 836–51, 839. Farrer intended the article to be published with the Minutes of Evidence. 56 JA Froude, ‘The Copyright Commission’ (1878) 148 Edinburgh Review 295–343, 301, 303. 54

Millar v Taylor: Landmark and Beacon. Still. 73 authors, and denied ‘a right of property in the brain … on what may be called moral as well as on technical grounds’. He was referring to Camden’s claim that glory was the reward of science, and that it was not for gain that great authors ‘instructed the world’. In dismissing this as ‘eloquent nonsense’, Thring, like Southey and Talfourd before him, was rejecting Lord Camden’s dismissal of Lord Mansfield’s argument founding common law copyright on justice.57 Yet again, Millar v Taylor could not be entirely put down.

X. THE MODERN LAW

Of course, no one argued for common law copyright any longer. Statute ruled without question, even if agreement as to statutory content was extremely difficult to reach. The 1900 Bill (which did not pass) proposed a term of the author’s life plus 30 years. When the literary magazine the Academy asked a number of well-known authors how long copyright should last, some thought it should be longer than the proposed term. None argued for perpetual copyright, and several thought it clearly undesirable. George Bernard Shaw, in his inimitable manner, called perpetual copyright ‘a piece of rapacious impudence’.58 But there was less agreement on the appropriate fixed term, and within the range of responses one can see the familiar arguments recurring. Several said that authors deserved no longer than patentees. Others expressed concerns for an author’s immediate descendants. But there was also acknowledgement of the public’s interest. What was new in the discussion were the comparative arguments. The term of protection under the 1886 Berne Convention (which Britain had signed) was subject to a rule of national reciprocity. There was increasing awareness that other countries granted considerably longer terms. Arguments for the stronger protection of authors’ rights were heard with much more sympathy in European countries, particularly France. Under the 1908 Berlin revision of the Berne Convention, a minimum term of the author’s life plus 50 years was agreed in principle. Translation rights, and rights to prevent dramatisation and novelisation were also agreed. This provided the impetus needed to drive through the fundamental changes necessary in UK copyright law, and led, eventually, to the 1911 Copyright Act. That (as well as abolishing common law copyright entirely) introduced a term of the author’s life plus 50 years, in line with the Berne Convention. The (currently governing) Copyright Designs and Patents Act 1988 confirmed that term. Further European harmonisation has since

57 58

Lord Thring, ‘The Copyright Bills 1900’ (1900) 47 Nineteenth Century 1005–18, 1005–6. The Academy ‘How long should copyright last?’, 2 December 1899, 634–35.

74 Catherine Seville required an increase in the basic term of literary copyright to the author’s life plus 70 years.59 Statutory copyright has changed very considerably since the Act of Anne. It covers a far wider range of subject-matter, and gives far stronger rights, which last far longer. The extent to which it has ballooned is a matter which causes significant concern. The protections currently granted to right-holders come under considerable scrutiny; although more is always being demanded. The need for public access (for a range of purposes) is increasingly weighted in these debates. Technology has been a driving force. Both creation and dissemination of copyright works are possible in ways undreamt of when Millar v Taylor was decided. Yates J’s reaction to the notion of protecting of an electronic copy can only be imagined. Copyright works are in one sense more intangible than ever. But Lord Mansfield’s insistence that justice should be a fundamental principle of copyright law has continued to resonate. The influence of that view can be traced through statutory copyright’s history—albeit alongside significant economic, policy and pragmatic considerations. At the heart of Millar v Taylor lies a dispute as to the justifications for legal protection of the creative. And that most fundamental dispute has yet to be resolved. Indeed, it is a dispute which deserves to be reopened in every era.

59 Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain related rights, in force in the UK 1 January 1996, [1993] OJ L290/9.

4 Phillips v Mulcaire [2012]: A Property Paradox? EMILY HUDSON*

I. INTRODUCTION

T

HIS CHAPTER ANALYSES the Supreme Court decision in Phillips v Mulcaire,1 a case arising out of the now infamous phone-hacking scandal that led to the closure of the News of the World newspaper, and whose consequences continue to be felt through the recommendations of the Leveson Inquiry and criminal proceedings against various News characters.2 Compared with other aspects of the scandal, the Phillips v Mulcaire decision might seem quite prosaic, centring on the operation of section 72 of the Senior Courts Act 1981. That provision applies to intellectual property and passing off cases, and prevents defendants from asserting privilege against self-incrimination (PSI) to resist disclosure and other orders. The question for the Supreme Court was whether section 72 prevented Glenn Mulcaire, former private investigator for News and a defendant in a number of civil actions, from asserting PSI where the relevant claims pertained to breach of confidence and privacy. In concluding that section 72 applied, the Supreme Court considered questions relevant to the paradox that has been said to arise from treating confidential * Glenn Mulcaire was represented in the Supreme Court by Gavin Millar QC and Alexandra Marzec. Emily Hudson was engaged by Mr Millar QC to provide research assistance and to help co-author the written submissions of the appellant. The analysis that appears in this chapter is based on information in publicly-available sources. All opinions are those of the author. Thanks to Robert Anderson, Robert Burrell, Jonathan Griffiths and Gavin Millar for comments on this chapter, and to participants at the Oxford Property Law Discussion Group on 23 May 2014, at which an earlier version of this chapter was presented. 1 Phillips v Mulcaire [2012] UKSC 38 (‘Phillips v Mulcaire’). 2 This included Glenn Mulcaire, who pleaded guilty to four charges in relation to hacking the phone of Milly Dowler. In June 2014 he was sentenced to six months imprisonment, suspended for 12 months, and ordered to do 200 hours of community work: R v Coulson and Others (Sentencing Remarks of Mr Justice Saunders, Central Criminal Court, 4 July 2014). Mr Mulcaire had previously been imprisoned in 2007 after pleading guilty to hacking-related charges.

76 Emily Hudson information as a form of intellectual property and also to debates regarding the proprietary status of intellectual property rights. The confidential information paradox has been analysed recently by Lionel Bently.3 He observes that much scholarly and judicial attention has been focused on the better classification of the breach of confidence action. Bently argues that whilst agreement has yet to emerge regarding the jurisdictional basis of breach of confidence, one matter about which there has been consensus is that information is not property.4 However, at the same time and ‘without even the raising of academic eyebrows’,5 confidential information has come to be regarded as falling within the bounds of intellectual property law. This state of affairs has arisen despite an apparent incompatibility: if intellectual property is understood in proprietary terms, how can confidential information be intellectual property but not property? A key claim made by Bently (and one drawing from language in Phillips v Mulcaire) is that the term intellectual property lacks ‘conceptual potency’, telling us only about the designation of a right and not its nature and characterisation.6 This chapter revolves around three key propositions. The first is that the reasoning in Phillips v Mulcaire is in many ways consistent with the argument that the term intellectual property is an ‘empty signifier’, ie, an umbrella term bereft of any fixed or agreed content.7 As will be discussed 3 Lionel Bently, ‘Trade secrets: “Intellectual property” but not “property”?’ in Helena R Howe and Jonathan Griffiths (eds), Concepts of Property in Intellectual Property Law (Cambridge, CUP, 2013). 4 Authorities cited by Bently included: Boardman v Phipps [1967] 2 AC 46, Lord Upjohn; Douglas v Hello! Ltd (No 3) [2005] EWCA Civ 595, esp [122]–[134]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054, esp [96]; Fairstar Heavy Transport v Adkins [2012] EWHC 2952 (TCC) (but note statements of Mummery LJ in the appeal in [2013] EWCA Civ 886, discussed below n 138 and surrounding text); Gareth Jones, ‘Restitution of Benefits Obtained in Breach of Another’s Confidence’ (1970) 86 Law Quarterly Review 463; Jennifer Stuckey, ‘The Equitable Action for Breach of Confidence: Is Information Ever Property?’ (1981) 9 Sydney Law Review 402; and Francis Gurry, Breach of Confidence (Oxford, Clarendon Press, 1984). It should be noted that there is case law and commentary that supports the opposite contention. For instance, other judges in Boardman v Phipps seemed to endorse the proposition that at least some information can be property: Lord Hodson stated that ‘each case must depend on its own facts and I dissent from the view that information is of its nature something which is not properly to be described as property’ (at 107); Lord Guest saw ‘no reason why information and knowledge cannot be trust property’ (at 115); and Viscount Dilhorne, whilst concluding that the particular information in this case was not property of the trust, seemed open to the claim that ‘some information and knowledge can be properly regarded as property …’ (at 89–90). For other examples, see Paul Kohler and Norman Palmer, ‘Information as Property’ in Norman Palmer and Ewan McKendrick (eds), Interests in Goods, 2nd edn (London, Hong Kong LLP, 1998), 6–7. As noted there, support for the proposition that information is property is often qualified, eg, that it is sometimes property, or can be regulated in ways that are similar to property. 5 Bently, ‘Trade secrets’, n 3 above, 68. 6 Ibid, 81–91. 7 Terminology taken from Alexandra George, Constructing Intellectual Property (New York, CUP, 2012) 79.

Phillips v Mulcaire: A Property Paradox? 77 in Section III of this chapter, the Supreme Court held that analysis of how intellectual property is defined in other statutes and in the scholarly literature was largely unhelpful in interpreting section 72, as these definitions did not disclose consensus regarding the limits of the term. The Court instead focused its attention on section 72 itself, and was clearly concerned that certain words of that provision—notably that intellectual property means, inter alia, ‘technical or commercial information’—should not be deprived of meaning. Whether such information would be regarded as intellectual property for other purposes or in other contexts was therefore irrelevant. By taking this approach, the confidential information paradox was either avoided or resolved: the only potency that came from the term intellectual property was that technical or commercial information ‘must be something in which a civil claimant has rights capable of being infringed’.8 The second proposition, which is developed in Section IV, is that in reaching its conclusions about technical or commercial information, the Supreme Court should have done more to expressly consider the historical significance of property concepts in the creation of section 72, and the doctrinal and normative importance of property language in intellectual property debates and human rights instruments. Whilst the Supreme Court cited the Rank Film decision of the House of Lords, the case that led to the hurried introduction of section 72 in the early 1980s, it did not give weight to the inclusion in that case of analogies to the theft of physical property. Whilst a particular property narrative was at the heart of the original calls to strip defendants of their right to invoke PSI, according to the Supreme Court, the status of confidential information as property was ‘simply irrelevant’.9 This chapter agrees that there may be something in the argument that intellectual property defies a universal definition. However, even accepting this premise, the ‘property’ part of the intellectual property rubric carries a power that can never be lost. The analysis in Section V builds on that appearing in Sections III and IV, and focuses on the limits of section 72. If the Supreme Court is correct that the term intellectual property itself admits no clear boundaries, then we need to find mechanisms to place principled and context-appropriate limits on the content of that term. In the case of section 72, those limits come most obviously from the language of the provision, its history and objectives, and from its erosion of PSI—a right that has long been part of the common law, and which is reflected in human rights and constitutional instruments.10 A point developed in Section V—and the third proposition

8

Phillips v Mulcaire, [20]. Ibid. 10 See, eg, Universal Declaration of Human Rights, Art 10; International Covenant on Civil and Political Rights, Art 14; United States Constitution, 5th Amendment; European Convention on Human Rights, Art 6. 9

78 Emily Hudson in this chapter—is that we need not fear the use of property concepts if our goal is to set limits in intellectual property law. This might seem anathema to those who view the continued expansion of intellectual property rights as problematic and fuelled by property rhetoric (which this chapter agrees is the case). However, this chapter aligns itself with previous work that questions the consequences of defining intellectual property rights as proprietary, and which argues that such a characterisation can serve to limit rights and support a strong public domain.11 In the case of section 72, far from suggesting that intellectual property should be understood expansively and drive a coach and horses through PSI, property analogies instead support a more limited definition. The approach urged in this chapter does not require a radical departure from the reasoning and conclusion of the Supreme Court but may help to better explain the result and provide more useful guidance for future cases.

II. LITIGATION HISTORY

In May 2010, Nicola Phillips, a former employee of Max Clifford Associates, instituted proceedings against News Group Newspapers claiming that her rights of confidence and privacy had been violated through the interception of voicemail messages. These messages were recorded by and for the family and friends of Ms Phillips as well as clients of the MCA business.12 They were described by the claimant as: sometimes [containing] factual information, some of which is private information and some of which is commercially confidential information. This includes private and/or confidential information relating to her clients’ personal lives and relationships, health, finances, incidents in which the police have become involved, personal security or publicity issues, commercial business transactions, professional relationships and future career plans.13

In October 2010, Ms Phillips made an application for orders joining Mr Mulcaire as a defendant and requiring him to reveal specified information. This information revolved around details of his phone-hacking 11 See, eg, Michael A Carrier, ‘Cabining Intellectual Property Through a Property Paradigm’ (2004) 54 Duke Law Journal 1; Hanoch Dagan, ‘Property and the Public Domain’ (2006) 18 Supplement Yale Journal of Law and the Humanities 84; Emily Hudson and Robert Burrell, ‘Copyright, Abandonment and Orphaned Works: What Does it Mean to Take the Proprietary Nature of Intellectual Property Rights Seriously?’ (2011) 35 Melbourne University Law Review 971; and Helena R Howe, ‘Copyright Limitations and the Stewardship Model of Property’ [2011] Intellectual Property Quarterly 183. 12 As noted by Mann J, messages left by Ms Phillips herself would have been on the phones of others, and ‘it is not clear to me how that fits into the essence of the hacking allegation as against her’. He nevertheless concluded that this ‘does not affect the issue that I have to decide’: Phillips v Newsgroup Newspapers Limited [2010] EWHC 2952 (Ch), [43] (‘Phillips v NGN’). 13 Ibid, [41].

Phillips v Mulcaire: A Property Paradox? 79 assignments, including the identity of the person or people at News who had tasked Mr Mulcaire to hack her phone.14 The disclosure request was significant for a number of reasons. First, one of the hotly-disputed aspects of the phone-hacking saga has related to who at News knew of and authorised the use of hacking. Secondly, Mr Mulcaire argued that the information sought by Ms Phillips had the potential to expose him to fresh criminal prosecution.15 Mr Mulcaire did not resist the application to be added as a defendant but did object to the disclosure aspects on the grounds of, inter alia, PSI.16 With Mr Mulcaire able to establish a prima facie entitlement to invoke PSI,17 argument turned to the claimant’s response that this entitlement was ousted by section 72 of the Senior Courts Act 1981. This provision applies to proceedings ‘for infringement of rights pertaining to any intellectual property or for passing off ’.18 If applicable, a person cannot excuse themselves from answering a question or complying with any order ‘by reason that to do so would tend to expose that person … to proceedings for a related offence’,19 although the withdrawal of PSI is subject to a prohibition on the use of material compulsorily disclosed in criminal proceedings.20 The term intellectual property is defined in section 72(5) as follows: ‘“Intellectual property” means any patent, trade mark, copyright, design right, registered design, technical or commercial information or other intellectual property’. In the High Court, Mann J held that section 72 was applicable to the proceedings brought by Ms Phillips. Although that information may not have the same ‘obviously confidential’ quality as a customer list or a secret process, in my view ‘commercial information’ within the Act is a broad expression and is not confined to such things. It has to be information which relates to commerce (or business) and within that context to have a confidential quality (so as to be properly described as ‘intellectual property’). Some of the information that arrived in Ms Phillips’ voicemail box would have those qualities.21

Mr Justice Mann hinted that he might have been prepared to go further on the definition of intellectual property than had been invited by counsel 14

Ibid, [17]. As noted above at n 2, Mr Mulcaire was imprisoned in 2007 after pleading guilty to hacking-related charges, including one count in relation to acts with the voicemail system of Max Clifford. Civil proceedings later commenced by Mr Clifford against Mr Mulcaire and NGN settled out of court: see summary in Phillips v NGN [2]–[3]. 16 PSI has a long common law heritage, and is now recognised by statute: Civil Evidence Act 1968, s 14(1). For an overview, see Hodge M Malek (general editor), Phipson on Evidence, 18th edn (London, Sweet & Maxwell, 2013) [24-36]–[24-39] (‘Phipson on Evidence’). 17 Phillips v NGN, [19]–[38]. 18 Senior Courts Act 1981, s 72(2)(a); similar language in paragraphs (b) and (c). 19 Ibid, s 72(1). 20 Ibid, s 72(3). 21 Phillips v NGN, [45]. 15

80 Emily Hudson for Ms Phillips. The claimant had accepted that some of the messages contained private rather than commercial information, and had not sought to argue that these messages were within the section 72 exclusion. Mr Justice Mann observed that ‘I would have thought there would be an argument for saying that the concept of “other intellectual property” might nowadays be thought wide enough to encapsulate that class of information as well’.22 However, in the absence of argument, and given that such a finding could have far-reaching ramifications, he declined to say anything further. In the meantime, other civil proceedings were on foot against Mr Mulcaire, brought by sports commentator, Andy Gray, and actor and producer, Steve Coogan. Mr Mulcaire sought to resist orders by reference to PSI, and again the claimants pointed to section 72. Mr Justice Vos also held that section 72 applied, although using somewhat different reasoning. Whilst Mann J saw section 72 as encompassing commercial information with a confidential quality ‘so as to be properly described as “intellectual property”’,23 Vos J concluded that ‘it seems to me that the better view is that “technical or commercial information”, whilst perhaps displaying some of the attributes of property and intellectual property, is not properly to be regarded as a species of either’.24 Mr Justice Vos therefore gave the words ‘technical or commercial information’ a standalone meaning: he held that the relevant information must be confidential and protectable by an action, whether for breach of confidence, contract or some other duty. In reaching this conclusion, Vos J stated that: I have not ignored the fact that section 72 is a derogation from article 6 [of the European Convention on Human Rights], nor that it was introduced specifically to tackle video piracy. In my judgment, however, Parliament must be taken to have intended the words it used to have a real meaning. I have little doubt that what Parliament was concerned to achieve was to remove the privilege where the action was a claim to protect commercially confidential information, as much as where it was in respect of the infringement of the traditional kinds of intellectual property.25

The decision of Vos J therefore seemed to be predicated on the view that the term intellectual property did have some accepted meaning, and that legally-protected technical or commercial information would usually fall outside this definition.26 Accordingly, the inclusion of the words ‘technical

22

Ibid, [48]. Ibid, [45]. 24 Gray v News Group Newspapers Ltd [2011] EWHC 349 (Ch), [79] (‘Gray’). 25 Ibid, [81]. 26 For instance, in responding to the submission advanced on behalf of Mr Mulcaire that technical or commercial information must also constitute intellectual property to fall within s 72, Vos J observed that if this was the case, the ambit of information covered ‘would be very narrow indeed’: ibid, [83]. 23

Phillips v Mulcaire: A Property Paradox? 81 or commercial information’ in section 72 represented a deliberate legislative expansion of intellectual property, and could not be read out of existence through the imposition of requirements over and above the basic need for the relevant information to be confidential and protectable through some legal action.27 Similar ideas informed Vos J’s comments on whether confidential private information might fall within the sweeping-up words ‘or other intellectual property’. This argument was rejected on the grounds that: Since confidential commercial information would not automatically be regarded as a species of intellectual property without a definition to that effect, confidential private information would not either. It would, in my judgment, be stretching the statutory definition far too widely to hold that it included confidential private information even where such information could be protected by action.28

Appeals by Mr Mulcaire from the decisions of Mann and Vos JJ were heard together by the Court of Appeal.29 There were three limbs to the appellant’s submissions: first, that the actions did not pertain to infringement of intellectual property rights for the purposes of section 72; secondly, that even if this was wrong, the relevant offence was not sufficiently connected to any infringement to be a related offence; and finally, that section 72 is inconsistent with Article 6 of the Convention such that the court should make a declaration of incompatibility.30 On the first question, Lord Neuberger, writing the opinion of the Court of Appeal, held that technical or commercial information in section 72(5) ‘means confidential information which is technical or commercial in character’.31 Lord Neuberger held that even if this phrase were qualified by the words ‘or other intellectual property’ (such that the relevant information must also constitute intellectual property), this would not change his conclusion as prevailing authority suggested that ‘while … confidential information is not strictly property, it is not inappropriate to include it as an aspect of intellectual property’.32 This construction of section 72 was supported by the lack of a plausible alternative interpretation of ‘technical or commercial information’, Lord Neuberger having rejected submissions that the term might refer to trade secrets or some digital and computer rights.33 In a departure from the judgments below, Lord Neuberger also held that non-commercial confidential information could constitute ‘other intellectual property’. Lord Neuberger held that given the state of the law

27 28 29 30 31 32 33

Ibid, esp [75]–[83]. Ibid, [84]. Coogan v News Group Newspapers Ltd [2012] EWCA Civ 48 (‘Coogan’). Ibid, [11]–[13]. Ibid, [31]. Ibid, [39]. Ibid, [40].

82 Emily Hudson of confidence in the early 1980s, with very few cases at that time covering personal confidences, it was open to conclude that ‘technical or commercial information’ was used to refer to confidential information generally.34 This conclusion was bolstered by the observation that it would be arbitrary for PSI to be withdrawn for commercial but not personal information, and that it would often be difficult to differentiate between the two.35 Lord Neuberger therefore agreed with the overall conclusions of Mann and Vos JJ, using reasoning that he described as ‘pretty similar’ to that below.36 This may gloss over some importance differences in approach. Relevantly for this chapter: Mann J said that technical or commercial information must be confidential ‘so as to be properly described as intellectual property’; Lord Neuberger thought that the language of intellectual property was sufficiently supple to include confidential information; whilst Vos J held that technical or commercial information would rarely constitute intellectual property, such that the definition in section 72(5) was intended to be broader than that which would otherwise apply. These differences in approach played out in the analysis of whether personal confidential information was ‘other intellectual property’, with Vos J unambiguously of the view that such an argument was a non-starter, but Mann J open to and Lord Neuberger adopting this position. However, this disagreement did not impact on the outcome, as the evidence suggested that a sufficient proportion of the voicemail messages contained confidential information of a commercial character, thus allowing section 72 to be enlivened.37 Having rejected the arguments regarding related offence and Article 6, Lord Neuberger dismissed the appeal. The remainder of this chapter explores the reasoning of the Supreme Court in the further appeal by Mr Mulcaire. This judgment was written by Lord Walker, and affirmed the conclusion of all three courts below that section 72 served to withdraw PSI from Mr Mulcaire. This was on the basis of the commercial nature of many of the messages, as the Supreme Court disagreed with Lord Neuberger that ‘other intellectual property’ included personal confidential information. The reasoning of the Supreme Court is analysed as follows: first, this chapter discusses the proposition that the term intellectual property lacks potency (Section III); secondly, it discusses the interpretation given to the words ‘technical or commercial information’ (Section IV); and finally, it considers the limits of section 72, including the provision’s interaction with Article 6 of the European Convention on Human Rights and its application to claims for misuse of private information (Section V). 34 35 36 37

Ibid, [46]–[50]. Ibid, [51]–[52]. Ibid, [57]. Ibid, [58]–[61].

Phillips v Mulcaire: A Property Paradox? 83 III. THE MEANING OF ‘INTELLECTUAL PROPERTY’

A. The Lack of Potency of Intellectual Property One of the first observations made by Lord Walker was that interpretation of section 72(5) was not aided by recourse to definitions of intellectual property appearing in other statutes and in the scholarly literature. Lord Walker cited with approval the observation of Vos J that ‘a review of intellectual property textbooks shows that there is no universal definition of the term, which is no doubt why Parliament has adopted a variety of definitions for different situations’.38 This statement is in many respects unremarkable and uncontroversial.39 The term ‘intellectual property’ is used in a variety of contexts. In many instances there is little need to define precisely or to defend the boundaries of that which is included. For example, a course or textbook on intellectual property law might cover the core regimes (copyright, trade marks, patents and designs) along with moral rights, passing off, unfair competition, confidence, privacy, domain names, and so forth.40 In such situations, completeness demands an expansive approach to ensure that students or readers are exposed to actions and regimes that serve goals similar to those which are furthered by the core intellectual property rights. However, the argument developed by Lord Walker was not merely that there is no universal definition of intellectual property but that, as a matter of statutory interpretation, the presence of the words intellectual property had ‘no particular potency’ in analysing the ambit of section 72(5). To understand the significance of this conclusion, it is necessary to explain the reasoning at this point. Because Lord Walker considered the definition of intellectual property to be context-specific, the starting point for interpreting section 72 had to be the language of the provision itself. Lord Walker noted that section 72(5) has been identified in Bennion on Statutory Interpretation as an example of a ‘clarifying definition’: one in which specified examples are stated to be within the defined term (the ‘main ingredients’), and for which the defined term itself can help, through its ‘potency’, to delineate other examples.41 This drafting technique is said to bolster certainty. However, in Lord Walker’s opinion, the term intellectual property provided little potency because of its bifurcated operation. Whilst there are

38

Phillips v Mulcaire, [18], citing Gray, [77]. Cf George, Constructing Intellectual Property, n 7 above (discussed further below at n 45 and n 46). 40 A perusal of some of the leading generalist textbooks bears this out. For instance, in William Cornish, David Llewellyn and Tanya Aplin, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, 8th edn (London, Sweet & Maxwell, 2013) the coverage includes chapters on confidential information, personal privacy, passing off, and regimes relevant specifically to digital technologies. 41 Phillips v Mulcaire, [19]. 39

84 Emily Hudson core aspects that everyone agrees are intellectual property (copyright, patents, trade marks and designs), the inclusion or exclusion of other doctrines depends on the circumstances. According to Lord Walker, with general consensus as to the core but not the limits, the term intellectual property itself added little, except to suggest that technical or commercial information in section 72 requires that there ‘be something in which a civil claimant has rights capable of being infringed, since infringement of rights pertaining to intellectual property is what section 72(2)(a) is concerned with’.42 These observations regarding the meaning and potency of the term intellectual property are consistent with the proposition that the term is an ‘empty signifier’. Indeed Bently suggests that intellectual property is even more impotent than Lord Walker gave it credit for, providing little substantive guidance not only regarding the scope of that which we classify as intellectual property but also the nature and character of intellectual property rights.43 This stands in contrast with Alexandra George’s thesis that it is possible to develop a definition of intellectual property that is more particularised and helpful than existing attempts.44 Her thesis is based on the claim that the core regimes have more in common than has hitherto been recognised.45 Whilst George’s work is undoubtedly a valuable intellectual exercise, ultimately her thesis is not without its problems.46 That said, even 42

Ibid, [20]. Bently, ‘Trade Secrets’, n 3 above, 87. For instance, there are numerous non-proprietary rights that are often classified within the family of intellectual property, such as moral rights and rights to use geographical indications of origin. 44 See George, Constructing Intellectual Property, n 7 above, 51–79. George identifies common methodologies to define intellectual property, including enumeration (in which intellectual property is defined by reference to the sum of legal doctrines and/or objects of regulation) and stipulation (in which particular regimes are said to fall within the department of intellectual property). She argues that such approaches often lack any meaningful steer as to why constituent elements are intellectual property, and are ‘inadequate when one is seeking to obtain an intellectual rigorous explanation of what “intellectual property” means’: 78. 45 The thesis developed by George is that it is possible to provide a more particularised and helpful definition of intellectual property than that advanced in much of the literature. She identifies two core components ‘that can be found in almost all cases of “intellectual property”’ (ibid at 141): (1) conceptual criteria that define the subject-matter, and which involve an ideational object, a documented form, creatorship and originality; and (2) rights (eg, to copy material that is protected by copyright; to use a trade mark; and to exploit a patented invention): summarised at 143–46. 46 For instance, some of the rules regarding trade mark subsistence sit uneasily with notions of creatorship and originality. The former is defined by George as ‘the person to whom a particular documented form of an ideational object can be attributed’ (at 161), which for trade marks is the ‘first commercial user—usually requires registration’ (at 149). But this raises the question of whether use and proprietorship are synonymous with creatorship, for instance where a graphic designer develops a device mark for a client. Similarly problematic is her suggestion that the concept of originality is met in trade mark law through the requirement that a registered sign be ‘distinctive’, such that it is ‘sufficiently original in the way in which [it is] used’: at 213. For instance, the overlay of a register makes it problematic to speak of originality in the ‘use’ of a mark, as the specifications selected by the applicant may be broader than the actual use in the marketplace: see Robert Burrell and Michael Handler, ‘Making Sense of Trade Mark Law’ [2003] Intellectual Property Quarterly 388. Additionally, and perhaps most 43

Phillips v Mulcaire: A Property Paradox? 85 if we disagree with George and accept that there are no unifying characteristics of intellectual property except at the most general level, this is not to say that the term intellectual property has no legal or political significance. This is discussed in detail in Section IV.

B. The Paradox of Confidential Information There are long-standing debates over the better classification of confidential information. Bently argues that although there remains disagreement about the nature of the jurisdiction to restrain a breach of confidence, in particular whether it is equitable or sui generis, the overwhelming weight of opinion is that information is not an object of property rights and that the action for breach of confidence is not based on any proprietary interest of the claimant.47 Bently draws a contrast between the intensity of this debate and the seeming ease with which confidential information has, in his view, been accepted as intellectual property.48 It should be emphasised that the classification of confidential information as a type of intellectual property has been rejected by some scholars,49 and that some of the sources cited by Bently may reflect instances in which intellectual property is defined expansively for pragmatic rather than doctrinal reasons. However, Bently is absolutely right to observe that compared with the debate over the proprietary status of information, the treatment of confidential information as a importantly, to the extent that George uses the term ‘originality’ to mean something new in the use of a mark, this chimes neither with originality in the copyright sense (where independent creation is permitted, and originality is far more about authorship than novelty) nor with the way in which registration and infringement analysis unfolds in trade mark law. 47

Bently, ‘Trade Secrets’, n 3 above, 66–68, and see the references above at n 4. Ibid, 70. In support of the view that confidential information has been accepted as a species of intellectual property, Bently points to the coverage of UK intellectual property textbooks; Art 39 of TRIPS (requiring the effective protection of undisclosed information which has commercial value because it is secret); definitions of intellectual property in various statutes, including s 72 of the Senior Courts Act; and English authority that the principles in the Enforcement Directive apply to claims grounded in confidence: Vestergaard Frandsen SA (MVf3 APS) v Bestnet Europe Ltd [2011] EWCA Civ 424. In Vestergaard, Jacob LJ supported the use of proportionality language by the trial judge when considering the grant of injunctions, stating at [56] that the Enforcement Directive ‘requires that measures to enforce intellectual property rights shall be proportionate. It is accepted that a claim for misuse of technical trade secrets such as the present is a claim to enforce an intellectual property right. So the Judge was right to consider proportionality’. This observation was not discussed in a further appeal to the Supreme Court, although Lord Neuberger did seem to accept that trade secrets are a species of intellectual property: esp [2013] UKSC 31, [44]. 49 See esp Michael Spence, Intellectual Property (Oxford, OUP, 2007) 2. George states that breach of confidence is best seen as ‘quasi-intellectual property’, a term she says refers to regimes that are often grouped with intellectual property for ‘pragmatic or administrative reasons’, even though their ‘resemblance [to intellectual property] may be somewhat superficial’: George, Constructing Intellectual Property, n 7 above, 142–43. She does not provide any further reasoning for this conclusion, leaving it as an en passant observation. 48

86 Emily Hudson species of intellectual property has not elicited the same degree of academic or judicial interest. As noted in the introduction, the confidential information paradox revolves around three propositions: (i) information is not property; (ii) confidential information is a type of intellectual property; and (iii) intellectual property rights are proprietary. Debate around the latter proposition can be further divided into two categories. The first relates to the question of whether any intellectual property rights can be properly described as proprietary. Such a characterisation can be found in modern statutes creating the core intellectual property regimes,50 and analysis of early texts and debates also reveals that precursor statutes were accepted routinely as granting property rights.51 There are those who challenge whether this characterisation is accurate doctrinally, a matter which will be returned to later in this chapter. If this group is correct, then the confidential information paradox would seem to melt away: when it comes to intellectual property, the clue’s not in the name, as the word ‘property’ is purely metaphorical (if not downright misleading). However, if we accept that the core regimes create property rights, then this leads to a second question: must a right be proprietary in order to be classified as intellectual property? There are numerous statements in the literature to this effect, sometimes appearing as en passant observations and other times as properly developed theses.52 A key protagonist of this view is Michael Spence, who defines an intellectual property right as one ‘(i) that can be treated as property; (ii) to control particular uses; (iii) of a 50 See, eg, Copyright, Designs and Patents Act 1988, s 1(1) (referring to copyright as a ‘property right’ in certain descriptions of work); Patents Act 1977, s 30 (referring to a patent or an application for a patent being personal property); Registered Designs Act 1949, s 15A (referring to a registered design or an application for a registered design as personal property); Trade Marks Act 1994, s 22 (a registered trade mark is personal property), s 27 (an application for registration of a trade mark is also an object of property). 51 See, eg, Mark Rose, Authors and Owners: The Invention of Copyright (Cambridge MA, Harvard University Press, 1993) ch 4; Justin Hughes, ‘Copyright and Incomplete Histographies: Of Piracy, Propertization, and Thomas Jefferson’ (2006) 79 Southern California Law Review 993; Justin Hughes, ‘A Short History of “Intellectual Property” in Relation to Copyright’ (2012) 33 Cardozo Law Review 1293. For instance, one factor that permitted the acceptance of trade marks as a category of intellectual property was the reconceptualisation of trade mark law as resting on property rather than fraud: see, eg, C Stewart Drewry, The Law of Trade Marks (London, Knight and Co, 1878) 1–19. This process occurred after copyright, patents and designs had crystallised as discrete categories of intangible property. Although analogies could be drawn between trade marks and these three regimes, a number of additional steps occurred before it was accepted that trade marks were also a type of intellectual property. Two of these were: (1) acceptance that trade marks were a form of property; and (2) the establishment of a registration system for trade marks: see Brad Sherman and Lionel Bently, The Making of Modern Intellectual Property Law: The British Experience, 1760–1911 (Cambridge, CUP, 1999 [reprinted 2002]) 166–72, 197–98. 52 See, eg, Richard Arnold, Performers’ Rights, 4th edn (London, Sweet & Maxwell, 2008) 12, [1.22]; Paul Torremans, Holyoak & Torremans Intellectual Property Law, 6th edn (Oxford, OUP, 2010) 11–12.

Phillips v Mulcaire: A Property Paradox? 87 specified type of intangible asset’.53 By identifying proprietary character as an essential characteristic of an intellectual property right, Spence argues that moral rights and the action for breach of confidence, being nonproprietary in nature, are complementary to rather than subsumed within the suite of intellectual property rights.54 In contrast, if we accept the empty signifier understanding of intellectual property, then it may be much easier to make the case that intellectual property can refer to both proprietary and personal rights. Returning to Phillips v Mulcaire, it is clear that when construing the meaning of technical or commercial information, Lord Walker was extremely reluctant to read down those words by reference to arguments over whether information was property or intellectual property. His Lordship observed that: Parliament has made plain that information within that description is, for the purpose of section 72, to be regarded as intellectual property, whether or not it would otherwise be so regarded … The fact that technical or commercial information ought not, strictly speaking, to be described as property … cannot prevail over the clear statutory language. Whether or not confidential information can only loosely, or metaphorically, be described as property is simply irrelevant.55

Lord Walker was therefore disposed to the view that information is not property. However, as he was also of the view that intellectual property has limited potency and is a malleable concept with no fixed boundaries, Lord Walker was able to conclude that it was open to Parliament to define intellectual property in section 72 as it wished, thereby either avoiding or resolving the confidential information paradox. For instance, on the question (considered further in Section IV) of the meaning of technical or commercial information, there was no qualification that came from the sweeping-up words ‘or other intellectual property’, save to the extent that there ‘must be something in which a civil claimant has rights capable of being infringed’.56 These conclusions meant that Lord Walker did not need to engage directly with the question of whether at least some intellectual property rights are proprietary. In sum, the reasoning in Phillips v Mulcaire was in certain respects consistent with the empty signifier understanding of intellectual property. This leads to a central question for this chapter: if Lord Walker is correct that ‘intellectual property’ lacks conceptual potency and does not itself supply a

53 Spence, Intellectual Property, n 49 above, 12–13. Spence argues that in addition to this, intellectual property rights normally are: ‘(i) only granted when the particular intangible asset can be attributed to an individual creator or identifiable group of creators, the creator(s) being presumptively entitled to the right; and (ii) enforced by both the civil and criminal law’. 54 Ibid, 2. 55 Phillips v Mulcaire, [20]. 56 Ibid, [19]–[20].

88 Emily Hudson ready-made list of actions covered by section 72, then what matters ought to inform the interpretation of that provision? Sections IV and V focus on this question.

IV. THE MEANING OF ‘TECHNICAL OR COMMERCIAL INFORMATION’

A. Overview of the Supreme Court’s Reasoning Summarising the Supreme Court’s interpretation of technical or commercial information is not entirely straightforward as there was no succinct definition of the phrase in its judgment. However, the Court appeared to adopt the approach of Lord Neuberger that the term refers to a subset of confidential information—that which is technical or commercial in character.57 Lord Walker’s analysis was prefaced by two general observations, the first relating to the potency of intellectual property (described above), and the second discussing the correct approach to construing section 72, given that the provision withdraws PSI. Noting that this withdrawal is subject to a ‘balancing’ limb preventing material compulsorily disclosed from being used in criminal proceedings,58 Lord Walker concluded: I have some reservations as to whether the existence of a ‘balancing’ provision of this sort alters the need for clear words if the privilege is to be removed or curtailed … But I respectfully agree with Lord Neuberger that in a case where Parliament has left no room for doubt that it intends the privilege to be withdrawn, there is no need for the Court to lean in favour of the narrowest possible construction of the reach of the relevant provision. As already noted, an important part of the legislative purpose of these provisions is to reduce the risk of injustice to victims of crime, and that purpose might be frustrated by an excessively narrow approach.59

However, even if ‘the narrowest possible construction’ of section 72 is not essential (a matter that will be returned to in Section V in relation to derogating from Article 6 rights), this statement says nothing about the opposite question: just how far ought the definition of intellectual property to extend? As noted above, if intellectual property itself admits no clear 57 Phillips v Mulcaire, esp [23]–[26]. Lord Walker stated that at [21] that: ‘I cannot therefore accept [counsel for the appellant] Mr Millar’s submission that the natural meaning of “technical or commercial information” is limited (in practice, it would be almost nullified) by the sweeping-up words “or other intellectual property”’. Taken in isolation, it is unclear whether the statement in parenthesis is a summary of the appellant’s submission or Lord Walker’s opinion on the ramifications of requiring information to also be intellectual property. The first interpretation is more consistent with Lord Walker’s statements regarding the lack of conceptual potency of intellectual property. 58 Ibid, [12]–[13], discussing the Senior Courts Act 1981 s 72(3) and citing (inter alia) Kensington International Ltd v Republic of Congo [2007] EWCA Civ 1128, [36]. 59 Ibid, [14].

Phillips v Mulcaire: A Property Paradox? 89 boundaries, then we need to think about how those boundaries ought to be created, lest we end up with a definition of intellectual property that is unwieldy and unprincipled. In analysing the phrase ‘technical or commercial information’, the Supreme Court focused on the natural meaning of those words, bearing in mind the need for there to be an ‘infringement’ and therefore an underlying legal right. This should undoubtedly form part of a contextualised analysis. However, this chapter argues that given the gravity of section 72 and Lord Walker’s findings regarding the lack of potency of intellectual property, far greater weight should have been given to the legislative history of section 72 and the normative and doctrinal significance of intellectual property rights.

B. Lessons from the History of Section 72 Analysis of the history of section 72 reveals how much its introduction was justified by property concepts and was tied to the development of the Anton Piller order. However, this background, whilst noted by Lord Walker, did not seem to inform the Supreme Court’s interpretation of technical or commercial information. Section 72 was enacted in response to the Rank Film decision of the House of Lords.60 That case involved allegations of large-scale copyright infringement arising out of the production and sale of unauthorised video tapes of films. These acts also raised the possibility of offences, including conspiracy to defraud and summary offences under section 21 the Copyright Act 1956.61 The question before the House of Lords related to two Anton Piller orders that required the defendants to, inter alia, make discovery and answer interrogatories in relation to matters including the identities of suppliers and customers.62 Both the Court of Appeal and the House of Lords held, reluctantly, that the defendants could invoke PSI to avoid making any such disclosure. Analysis of the judgments in both courts reveals how property concepts informed the opinions of those judges who were most strident in their 60

Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 (‘Rank Film’). Rank Film, 441 (Lord Wilberforce, also noting that in practice s 21 has been ‘very rarely invoked’). 62 Anton Piller orders (named after the case Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55) are orders obtained ex parte and which are intended to assist in the preservation of evidence. According to the Anton Piller case, the plaintiff must demonstrate not only that she has a strong prima facie case and will suffer very serious damage if the order is not made, but also that the defendant has incriminating documents or things in her possession and that these will likely be destroyed if the defendant is given notice of the action. For an overview, see Bernard Cairns, Australian Civil Procedure (Sydney, Thomson Reuters, 2014) 537, [13.80]. In the UK Anton Piller orders are now called search orders, and are governed by s 7 of the Civil Procedure Act 1997. 61

90 Emily Hudson view that PSI ought not to be available. For instance Lord Denning MR, in the minority in the Court of Appeal, would have held that a judge-made exception served to oust the defendants’ ability to assert PSI.63 Given Lord Denning MR’s role in creating the Anton Piller order,64 it is unsurprising that he sought to protect this innovation in Rank Film, despite his support elsewhere for the continued existence of PSI.65 To make out his argument, Lord Denning MR drew not only on analogies between video piracy and the theft of physical property, for instance speaking of pirates ‘stealing all the best films’,66 but stated that the underlying policy of section 31 of the Theft Act 1968—which withdraws PSI in civil proceedings in relation to certain property claims—was equally applicable to claims for copyright infringement.67 Neither of the majority judges were prepared to adopt Lord Denning MR’s approach, concluding that any erosion of PSI had to occur through the clear words of Parliament. However, both used property language in their reasons, for instance in noting analogies to section 31 of the Theft Act and (in the case of Templeman LJ) the relevance of conversion remedies in section 18(1) of the Copyright Act 1956.68

63 Rank Film, n 60 above, 408–409. Lord Denning MR’s exception was that ‘the court will not allow the defendant the benefit of the privilege when to do so would enable him to take advantage of his own fraud or other wrongdoing so as to defeat the just claims of the plaintiff in a civil suit’. 64 Lord Denning MR wrote the lead judgment in the Anton Piller case. 65 See Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547. Whilst the Westinghouse decision pertained to a witness rather than a defendant, it says much about his views on video piracy that Lord Denning MR seemed far more sanguine about granting ex parte search orders and stripping defendants of PSI in copyright infringement actions than compelling the production of evidence from a major corporation alleged to be involved in an international uranium cartel. In that case proceedings had been brought in the US against Westinghouse, which had found itself unable to fulfill contracts in which it had, inter alia, promised to supply uranium to the operators of nuclear power plants as there had been a dramatic rise in the market price for uranium. Westinghouse alleged this was due to the actions of the cartel. Letters rogatory were issued by the US court requesting that the English courts compel, amongst other things, the production of documents by Rio Tinto. Lord Denning MR refused to adopt a narrow construction of s 14(1) of the Civil Evidence Act 1968, which recognises PSI in English law, observing (at 564) that: ‘There is, after all, good reason for retaining [PSI]—the same reason as lay behind its introduction centuries ago. No person should be compelled to expose himself to pains or penalties out of his mouth. If he is to be penalised for wrongdoing, it should be proved against him by those who accuse him’. Rio Tinto were subsequently permitted by the lower court judge to invoke PSI to resist disclosure orders, a decision affirmed by the Court of Appeal (including Lord Denning MR) and the House of Lords. 66 Rank Film, n 60 above, 404; similar 411. 67 Ibid, 410. This provision is not directly applicable because the definition of ‘property’ for the purposes of the Theft Act does not extend to copyright. 68 Ibid, 418. The gist of s 18(1) was to treat infringing copies as though they were the property of the owner of copyright, bearing in mind that a copyright owner will not usually have any tangible property rights in such copies. In Templeman LJ’s view, the presence of this provision helped justify the imposition of orders for immediate seizure and so forth, ‘the plaintiffs [being] entitled to assert rights of ownership over infringing copies of their films including the right to possession’.

Phillips v Mulcaire: A Property Paradox? 91 A further appeal to the House of Lords was dismissed. Importantly for this chapter, in a short concurring judgment, Lord Russell made a call to arms to Parliament to correct the inequity he saw as generated by PSI: Inasmuch as the application of the privilege in question can go a long way in this and other analogous fields to deprive the owner of his just rights to the protection of his property I would welcome legislation somewhat on the lines of section 31 of the Theft Act 1968: the aim of such legislation should be to remove the privilege while at the same time preventing the use in criminal proceedings of statements which otherwise have been privileged.69

One thing that is particularly significant about Lord Russell’s statement is that when read in isolation it detaches his recommendation (withdrawal of PSI) from the immediate context (concerns that Anton Piller orders will be less effective at combating piracy if disclosure claims can be resisted). Even if we agree that a provision similar to section 31 was necessary to ensure the full operation of wide-form Anton Piller orders (those with search and disclosure aspects), it is a big step to extend the withdrawal of PSI to all orders made in copyright and analogous cases. Lord Russell’s statement suggests two things: first, that such a move can be justified because copyright owners ought not to be deprived of their property; and secondly, that any risks would be negated by the balancing limb limiting the use of disclosed material in criminal proceedings. This raises numerous questions, including what ‘deprivation’ means in the copyright context, the identity of ‘analogous fields’, and the amount of comfort that we can draw from limits on re-use in subsequent criminal proceedings. More generally, Lord Russell’s statement was characteristic of much of the reasoning in piracy cases in the 1970s and 1980s, where property concepts were often used in simplistic ways. It is important that we not repeat this failing in contemporary jurisprudence. Returning to the history of section 72, the fallout from Rank Film was acted upon quickly, with a provision withdrawing PSI from intellectual property cases inserted into the Supreme Court Bill, which was at that stage making its way through Parliament. A review of Hansard suggests that the key concern about Rank Film was its impact on cases involving commercial piracy and counterfeiting, no mention being made of other claims such as breach of confidence.70 This accords with statements made by Lord Wilberforce in Rank Film about the genesis of Anton Piller orders: They are designed to deal with situations created by infringements of patents, trade marks and copyright or more correctly with acts of piracy which have 69

Ibid, 448. The first version of the Supreme Court Bill did not contain a clause enumerating what was to become s 72—this was added as the Bill was being considered by Parliament. The first substantive discussion of s 72 occurred on 6 May 1981 (see Hansard, HC Deb 06 May 1981, 6th Series, Vol 4, col 199–237), where the speeches referred to concerns about copyright and trade mark infringement. There was also a brief discussion of the drafting of new clause 72 at the Commons Sitting of 9 July 1981 (Hansard, HC Deb 09 July 1981, 6th Series, Vol 8, col 673–74). 70

92 Emily Hudson become a large and profitable business in recent years. They are intended to provide a quick and efficient means of recovering infringing articles and of discovering the sources from which these articles have been supplied and the persons to whom they are distributed before those concerned have had time to destroy or conceal them.71

It should be noted that Anton Piller orders had also been made in confidential information cases; indeed the Anton Piller case itself involved claims grounded in confidence and copyright, the plaintiffs being concerned that information about their machines was being disclosed to competitors by their English agents. This would seem to support the argument that at least some breach of confidence cases can fall within section 72. However, a full examination of the history of section 72 suggests limits on the types of cases within that subset. Section 72 was introduced in response to a specific concern: that the effectiveness of the Anton Piller order might be eroded if defendants could invoke PSI.72 The facts of Rank Film were representative of the usual fact pattern in which such orders were made. For instance, Hoffmann J (as he then was) observed in Lock International that the Anton Piller order emerged as ‘the ultimate weapon against fraudulent copyright pirates’.73 One might ask what made the facts of copyright piracy cases so special or unique that such radical equitable intervention was justified, and the answer suggested in the case law (imperfect as it is) seems to be that audio and video piracy constituted an egregious and large-scale case of ‘stealing’ dealt with inadequately by existing actions and remedies. The attraction of Anton Piller orders had been said to reside in their ability to preserve evidence and to help identify those higher up in the chain of infringement. However, by the mid-1980s, it was suggested that their remarkable success may have arisen from the fact that ‘a common, perhaps the usual, effect of the service and execution of an Anton Piller order is to close down the business which, on the applicants’ evidence, is being carried on in violation of their rights’.74 With evidence that Anton Piller orders were being granted fairly readily, there was growing criticism focusing on their draconian nature and the need for procedural safeguards to redress the balance.75 Section 72 was relevant to this debate as invocation of PSI 71

Rank Film, n 60 above, 439. See, eg, Anne Staines, ‘Protection of Intellectual Property Rights: Anton Piller Orders’ (1983) 46 Modern Law Review 274, 278. Staines notes that prior to Rank Film, no defendant had sought to raise an argument based on PSI, perhaps reflecting ‘the fact that the typical defendant had hitherto been a small shopkeeper with a stock of illegally-copied material’. 73 Lock International plc v Beswick [1989] 3 All ER 373, 382 (Ch) (‘Lock International’). 74 Columbia Picture Industries v Robinson [1986] 3 All ER 338, 369 (Ch). 75 See, eg, John Hull, ‘Anton Piller abuses’ (1989) 11 European Intellectual Property Review 382; Jill Martin, ‘Equitable and Inequitable Remedies’ [1990–91] 1 King’s College Law Journal 1. For instance, concern was expressed that what was intended as an extreme and hence infrequent intervention by the courts had become commonplace: see esp Scott J in Columbia Picture Industries v Robinson, ibid, 369 (noting that the law firm Hamlins had since 1974 72

Phillips v Mulcaire: A Property Paradox? 93 constituted one pushback against the use of Anton Piller orders, however, legislative reform in the form of section 72 turned this into a temporary glitch rather than an ongoing limitation.76 The judgment of the Supreme Court in Phillips v Mulcaire referred to both the Rank Film and Anton Piller cases. However, when it came to interpreting the words ‘technical or commercial information’, the analysis comprised a series of observations and assertions from a number of different cases, the relevance and probative value of which were not really elucidated. The key points made by Lord Walker were that there was general agreement regarding the ‘core content’ of technical or commercial information (trade secrets, as per the Faccenda Chicken case);77 that a right of confidence required information to be confidential in the eyes of the law and not merely something that was commercially valuable;78 and that not all confidential information is technical or commercial.79 Lord Walker seemed to adopt the Lord Neuberger approach that the words ‘technical or commercial information’ covered confidential information that was technical or commercial in character.80 What was not explained, however, was why section 72 was not limited to, say, Faccenda-esque trade secrets. In this respect, it is interesting that the reported cases in which Anton Piller orders have been made in the breach of confidence context have tended to involve claims made against former employees, for instance involving the unauthorised use of customer lists, secret formulae, and the like.81 obtained over 300 Anton Piller orders, all in audio and video piracy cases, and had never had an application refused); see also Ex parte Island Records Ltd [1978] 1 Ch 122, 133 (CA) (Lord Denning MR observing that given their success, Anton Piller orders are ‘in daily use—not only in cases of infringement of copyright, but also in passing-off cases, and other cases’). In Lock International, Hoffmann J observed (at 384) that the ‘more intrusive orders’ allowing search or premises and vehicles involved ‘violation of the privacy of a defendant who has had no opportunity to put his side of the case’ and were ‘contrary to normal principles of justice and can only be done when there is a paramount need to prevent a denial of justice to the plaintiff’. 76

Staines, ‘Protection of Intellectual Property Rights’, n 72 above, 274. Phillips v Mulcaire, [22], citing Faccenda Chicken Ltd v Fowler [1987] Ch 117 (CA). In Faccenda, an employer sought to restrain the use of sales information (including customer details, delivery routes, pricing details for individual customers, etc) by former employees. The Court distinguished between three forms of information: (i) that which is not confidential because it is trivial or publicly accessible; (ii) that which must be treated as confidential during employment, but once learned becomes part of the employee’s own skill and knowledge and cannot be restrained unless there is an enforceable restrictive covenant; and (iii) specific trade secrets or equivalent highly confidential information, for which post-employment use will be restrained pursuant to an implied term in the employment contract. Examples of trade secrets included ‘secret processes of manufacture such as chemical formulae … or designs or special methods of construction’: at 136. In Faccenda, the employer was unsuccessful as neither the pricing structure nor sales information as a whole fell within the third category. 78 Ibid, [23], citing Hoffmann J’s concerns in Lock International, n 73 above, 383–84 about the poor particularisation of some confidence claims brought against former employees. 79 Ibid, [24]. 80 Ibid, [25], quoting with apparent approval from Coogan, n 29 above, [32]. 81 See, eg, Vapormatic Co Ltd v Sparex Ltd [1976] 1 WLR 939 (Ch); OCLI Optical Coatings Ltd v Spectron Optical Coatings Ltd [1980] FSR 227 (CA); Booker McConnell plc v Plascow 77

94 Emily Hudson In sum, although the Supreme Court was clearly aware of the importance of Rank Film to the development of section 72, this history did not seem to inform its interpretation of technical or commercial information. However, some aspects of the Supreme Court judgment are very much supported by this history, in particular the conclusion that section 72 does not extend to all forms of confidential information. This history might also have supplied a more nuanced and perhaps more limited meaning to the words ‘technical’ and ‘commercial’ than the definitions adopted by the Supreme Court. It might, further, have served as a springboard for the Supreme Court to consider the ways in which property language permeates intellectual property jurisprudence, as discussed next.

C. The Power of Intellectual Property Law One of the key arguments made in this chapter is that even if intellectual property has no fixed definition, it is very difficult to sustain the argument that property concepts exert no normative or doctrinal force on the shape of intellectual property law. This can be seen in a number of ways. One is the deployment of property ideas in intellectual property debates, where a particular understanding of ownership has been used to support the expansion of rights. A second way is through intellectual property increasingly being seen through the prism of human rights. (i) Propertisation and the Expansion of Intellectual Property Examination of the history of intellectual property reveals numerous ways in which legal rights have expanded.82 This has occurred principally [1985] RPC 425 (CA); Roberts v Northwest Fixings [1993] FSR 281 (CA) (judgment delivered 10 November 1980); Roger Bullivant Ltd v Ellis [1987] FSR 172 (CA); Manor Electronics Ltd v Dickson [1988] RPC 618 (QB) (order discharged); Johnson & Bloy (Holdings) Limited v Wolstenholme Rink Plc [1989] 1 FSR 135 (CA); Lock International plc v Beswick [1989] 3 All ER 373 (order discharged); Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840 (Ch); BUPA v First Choice Health Ltd (unreported, Ch, 4 December 1992), discussed in (1993) 15 EIPR D87 (order discharged); and The Gadget Shop Limited v The Bug.Com Limited [2001] FSR 26 (Ch) (order discharged). It is difficult to say whether these cases are representative of the field, as search orders will also have been made in unreported decisions. The second edition of Gurry provides a fairly brief analysis of Anton Piller orders, and observes that ‘there have been a number of reported instances of seizing orders being made in relation to breach of confidence claims where they are used to recover customer lists, pricing details, or confidential formula or other data’: Tanya Aplin, Lionel Bently, Phillip Johnson and Simon Malynicz, Gurry on Breach of Confidence: The Protection of Confidential Information, 2nd edn (Oxford, OUP, 2012) [18.80] (‘Gurry 2nd edition’). The authors do not cite any cases post-1992. 82 For an overview, see, eg, Mark A Lemley, ‘Romantic Authorship and the Rhetoric of Property’ (1997) 75 Texas Law Review 873, 895–904. Although Lemley focuses on US law, the trends he describes apply equally to other countries, including the UK, Canada and Australia.

Phillips v Mulcaire: A Property Paradox? 95 through legislative reform, both through the development of entirely new rights and through the extension of existing ones (for instance through the admission of new rights and subject-matter, term extension, the introduction of more powerful remedies, etc). Expansion has also been supported by interpretative practices, for instance where judges have adopted legal tests which result in broader rights and a narrower role for defences and limitations. Not all developments point in the same direction, and it might be questioned whether rights-holders can always enforce their legal rights.83 However, the overall trend has been towards strong growth in the scope and number of statutory intellectual property rights. The expansion of intellectual property rights has been the subject of much concern amongst many members of the intellectual property community, being seen as unprincipled and dangerous, for instance due to perceived detrimental effects on the public domain and the potential to create a tragedy of the anti-commons.84 Significantly for this chapter, many scholars argue that recent expansions have been fuelled by the ‘propertisation’ of intellectual property.85 Propertisation is said to have involved ‘a fundamental shift in the rhetoric of intellectual property law’,86 with a particular conception of property being used to justify bigger and stronger rights. One example that has been identified as evidence of propertisation has already been seen in this chapter: the use of words like ‘theft’ or ‘stealing’ to describe intellectual property infringement.87 As noted by Mark Lemley, intellectual property infringement is not theft, ‘at least in the traditional meaning of the word’, however, theft carries with it a value judgement that is largely absent in the ‘morally neutral term’ infringement.88 However, for those concerned about intellectual property expansion, the issue with propertisation is not simply that it uses concepts from land or chattel property law as an imperfect shorthand to describe otherwise complex concepts—rather, propertisation has brought about fundamental changes in the content and philosophy of intellectual property law. For instance, Lemley has argued that an understanding of property driven by the Chicago School has led to

83 See, eg, Australian Government, Online Copyright Infringement Discussion Paper (July 2014). 84 See, eg, Jessica Litman, ‘The Public Domain’ (1990) 39 Emory Law Journal 965; Michael A Heller, ‘The Tragedy of the Anticommons: Property in the Transition from Marx to Markets’ (1998) 111 Harvard Law Review 621. 85 See, eg, Peter Drahos, A Philosophy of Intellectual Property (Aldershot, Dartmouth Publishing, 1996) 210–13; Carys J Craig, ‘Locke, Labour and Limiting the Author’s Right: A Warning against a Lockean Approach to Copyright Law’ (2002) 28 Queen’s Law Journal 1, 57; Lawrence Lessig, ‘The Creative Commons’ (2003) 55 Florida Law Review 763, 775–6; Mark A Lemley, ‘Property, Intellectual Property, and Free Riding’ (2005) 83 Texas Law Review 1031. 86 Lemley, ‘Romantic Authorship’, n 82 above, 895. 87 See above nn 60–69, discussing the use of analogies to theft in Rank Film. 88 Lemley, ‘Romantic Authorship’ n 82 above, 896.

96 Emily Hudson changes that are entirely consistent with a particular economic explanation of private property rights: If the point of intellectual property is to centralize control of information in a single owner who will use it efficiently, intellectual property rights ought to be infinite in term and absolute in nature. Further, if licensing is efficient, there is no reason not to allow the contracting parties to alter what become merely the ‘default rules’ set by federal law.89

I agree with the observation that property language has been used in recent years to strengthen intellectual property rights, and that this expansion is troubling. In this respect it might be asked whether Phillips v Mulcaire, with its statement that the proprietary status of confidential information is irrelevant, should in fact be welcomed as an important step away from a proprietary explanation of intellectual property rights. Not only might this be attractive to those who are concerned about the maximalist agenda, but it may appeal to property theorists who reject a proprietary characterisation of intellectual property rights.90 This point will be analysed further in Section V, where it will be queried whether expansion is the inevitable consequence of viewing intellectual property rights as proprietary. However, the key lesson at this stage is to emphasise the doctrinal and normative significance of the language of intellectual property rights. Indeed, section 72 can itself be seen as an example of intellectual property expansion. The provision was introduced to bolster the efficacy of the Anton Piller order, an extraordinary equitable remedy created in response to particular concerns about the impact of video piracy. The drafting of section 72 effected a further expansion by extending the provision beyond Anton Piller orders to other orders made in intellectual property infringement actions. With section 72 already embodying intellectual property expansion through its support for Anton Piller orders and infringement actions generally, we must think carefully before extending rights still further by giving a broad interpretation to the phrases ‘technical or commercial information’ and ‘other intellectual property’ in section 72. (ii) Intellectual Property as a Human Right The doctrinal and normative power of intellectual property must also be seen in the light of the status of intellectual property as a human right, 89 Ibid, 902. See, also, Stephen L Carter, ‘Does it Matter Whether Intellectual Property is Property?’ (1993) 68 Chicago-Kent Law Review 715 (arguing that if intellectual property rights were thought of as forms of property, there would be expansions to rights and greater limits placed on exceptions). 90 See, eg, Ben McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 132–37 (arguing that a property right must relate to a use of a thing—‘an object that can be physically located’—and that intellectual property rights are ‘background rights’). There is also scholarship that emphasises the different justifications for propertising tangible and intellectual property: see, eg, Stewart E Sterk, ‘Intellectualizing Property: The Tenuous Connection Between Land and Copyright’ (2005) 83 Washington University Law Quarterly 417.

Phillips v Mulcaire: A Property Paradox? 97 and the increasing appearance of human rights arguments in intellectual property cases. In Europe, for example, it is now indisputable that intellectual property rights can fall within Article 1 of Protocol 1 (A1P1) of the Convention.91 That provision recognises a right to peaceful enjoyment of possessions, a term which has been given a broad meaning that covers a range of valuable assets, including various types of intellectual property.92 For instance, in the longstanding Budweiser litigation, the Grand Chamber of the European Court of Human Rights (ECtHR) held that an application to register a trade mark fell within the provision.93 The Grand Chamber observed that ‘possessions’ has an autonomous meaning which is not limited to ownership of physical goods and is independent from the formal classification in domestic law: certain other rights and interests constituting assets can also be regarded as ‘property rights’, and thus as ‘possessions’ for the purposes of this provision.94

In assessing whether a trade mark application was a possession, matters that were relevant included the transferability and potential market value of the application.95 The definition of ‘possessions’ in A1P1 is therefore not coterminous with the definition of property in domestic law. However, it would be very difficult to sustain the argument that domestic and Convention understandings of property are wholly independent from one another. For instance, Tanya Aplin argues that domestic law has a bearing on the definition of possessions in A1P1, observing that ‘interests that are classified as private property under domestic law are [usually] treated as falling within A1P1’.96 She also notes that in the Budweiser case, the Grand Chamber placed considerable weight on the rights and interests enjoyed by a trade mark applicant, as defined by domestic law, when determining whether an application was a ‘possession’.97 In her view, acceptance that confidential information is 91 A1P1 states: ‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. / The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties’. See, also, Art 17(2) of the Charter of Fundamental Rights of the European Union: ‘Intellectual property shall be protected’. 92 See, eg, Smith Kline and French Laboratories Ltd v Netherlands (App No 12633/87) (1990) 66 DR 70 (ECtHR) (patents); Melnychuk v Ukraine (App No 28743/03) ECtHR 2005 IX (copyright). 93 Anheuser-Busch Inc v Portugal (2007) 45 EHRR 830 (‘Budweiser’). There was no violation of A1P1 as there was no interference with the right. 94 Ibid, [63]. 95 Ibid, [76]–[78]. 96 Tanya Aplin, ‘Confidential Information as Property?’, King’s College London Dickson Poon School of Law Legal Studies Research Paper Series, paper no 2014-20 (available at: ssrn. com/abstract=2436983), [3.1]. 97 Ibid, [3.1].

98 Emily Hudson within A1P1 (as the Court of Appeal did in the Veolia case,98 but for which there is no direct authority from the ECtHR) would be ‘at odds with clear authority under domestic English law’ and require ‘a functionalist approach to how confidential information is traded’.99 The development of an autonomous meaning of possessions raises an important question: if the definition of ‘possessions’ is broader than the private law concept of property, will this lead to change in how property is understood and treated at the domestic level? A1P1 contains three interrelated rules that prohibit deprivations and other interferences unless they are justified, the test for which has evolved into a ‘fair balance’ assessment that in substance (and often in form) is similar across all three limbs.100 The need to comply with A1P1 has the potential to affect domestic law-making in a number of ways. In Veolia, for example, the Court of Appeal held that a statutory right to inspect documents needed to be read down to provide an exception for confidential information, even though there was no express exclusion to this effect in the relevant statute.101 Arguments made under A1P1 have also been used to resist UK proposals for the introduction of legislation requiring standardised packaging for tobacco products.102 Such legislation would limit the use of branding on tobacco products, for instance allowing only the product name to appear in a designated font. However, it has been argued that such a restriction would be sufficiently broad to deprive owners of registered trade marks and other forms of intellectual property of their possessions, and would therefore be contrary to A1P1 unless compensation were paid.103 98 Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council [2010] EWCA Civ 1214 (‘Veolia’). This case concerned a disclosure application made to a council under s 15 of the Audit Commission Act 1998. The requestor wanted to inspect documents relating to a contract entered into by the council and Veolia. The council indicated that it proposed to disclose certain documents, and Veolia sought judicial review of this decision. In the Court of Appeal, one submission made by Veolia was that some of the requested documents contained confidential information, and that A1P1 (along with Art 8) required that s 15 be read down such that disclosure of confidential information was outside its ambit. It was held that given the breadth of assets that have been classified as possessions under the Convention, A1P1 can include ‘valuable commercial confidential information’: [121]. 99 Aplin, ‘Confidential Information as Property?’, n 96 above, [5]. 100 See, eg, Sporrong and Lönnroth v Sweden (1982) 5 EHRR 35, [61]; James v United Kingdom (1986) 8 EHRR 123, [37]; JA Pye (Oxford) Ltd and JA Pye (Oxford) Land Ltd v United Kingdom (2008) 46 EHRR 1083, [52]–[55]. See also DJ Harris, M O’Boyle, C Warwick and E Bates, Law of the European Convention on Human Rights, 2nd edn (Oxford, OUP, 2009) 666–72. 101 Veolia, n 98 above, [159]. 102 Department of Health, Consultation on standardised packaging of tobacco products (16 April 2012); Department of Health, Consultation on standardised packaging of tobacco products: Summary report (July 2013); Department of Health, Consultation on the introduction of regulations for standardised packaging of tobacco products (26 June 2014). 103 See esp the opinion written by Lord Hoffmann dated 24 May 2012 for Philip Morris, and attached as Annex 5 to Philip Morris Limited, Standardised tobacco packaging will harm public health and cost UK taxpayers billions: A response to the Department of Health

Phillips v Mulcaire: A Property Paradox? 99 The key point to be taken from the foregoing is that certain interpretations of A1P1 could have far-reaching effects on the ways that the legislature regulates intellectual property. Similar concerns have been expressed by Aplin in relation to the Veolia decision. She argues that elevating confidential information to a human right may cause protection ‘to be ratcheted upwards, particularly in favour of corporate actors’,104 and may set in train a process whose outcomes will result in the ‘reshaping or jettisoning’ of common law principles.105 For instance, common law reasoning that has built upon the three-stage test for breach of confidence articulated in Coco v AN Clark Engineers may be replaced with a Convention-based balancing exercise.106 There is already precedent for this with the disappearance of extended breach of confidence in the media intrusion cases and its replacement with a privacy action that balances rights to privacy and free speech under Articles 8 and 10.107 Returning to Phillips v Mulcaire, one might again ask whether the Supreme Court should be lauded for avoiding engagement with Conventionbased arguments, given the breadth and potential volatility of the human rights conception of property. One difficulty with this perspective is that the horse has already bolted—it is now indisputable that many forms of intellectual property are possessions for the purposes of A1P1. Indeed, although the Supreme Court did not refer to A1P1 or the Convention, there were indications in Lord Neuberger’s judgment that the Article 8 privacy rights of the claimants had influenced his conclusion that section 72 was compatible with the right to a fair trial in Article 6. This reasoning is not without problems, as discussed in Section V. However, for now it can be noted that the Phillips v Mulcaire litigation itself involved judges considering Convention rights, even if they did not discuss A1P1. Given the prevailing case law, the question is not whether human rights arguments should inform intellectual property cases but how they ought to do so. There is a possibility that those who favour a maximalist approach to intellectual property rights might seek to press an interpretation of A1P1 that conceives of the right to property as synonymous with strong protections. This might be countered with a number of arguments: that A1P1 is

consultation on standardised packaging of tobacco products (9 August 2012). In Australia, a legal challenge was mounted to the Tobacco Plain Packaging Act 2011 on the grounds that it is contrary to s 51(xxxi) of the Constitution, which prohibits the acquisition of property otherwise than on just terms. This challenge failed on the grounds that there had been no acquisition for the purposes of the Constitution: JT International SA v Commonwealth of Australia [2012] HCA 43. 104

Aplin, ‘Confidential Information as Property?’, n 96 above, [5.1] Ibid, [5.2]. 106 Ibid, citing Coco v AN Clark Engineers (Ltd) [1969] RPC 41. 107 Ibid. For an example of this balancing exercise, see, eg, McKennitt v Ash [2006] EWCA Civ 714. 105

100 Emily Hudson qualified in numerous ways; that existing interpretations turn on concepts such as legitimate aims and proportionality; and that states enjoy a wide margin of appreciation in relation to measures that interfere with property rights.108 The normative foundation of the right to property is varied and contested, which likewise tells against universally strong rights.109 It therefore remains to be seen whether rights-holders will attempt to make greater use of human rights concepts when seeking to protect their rights. However, even if we do not see a surge in such reasoning or in intellectual property cases coming out of Strasbourg, a human rights overlay has the capacity to lurk in the background, supporting particular conceptions of property rights or popping up in ad hoc ways to bolster certain outcomes.

D. Summation Lord Walker may well have been correct to conclude that intellectual property defies a universal definition, however, there is nevertheless doctrinal and normative significance in the property component. For instance, a particular view of property has helped ease the expansion of intellectual property rights, and it is possible that similar arguments will be deployed in the human rights context to support maximal rights. For those who are concerned that propertisation has fuelled intellectual property expansion, one strategy has been to deny that intellectual property is property or to emphasise differences between tangible and intangible things. However, a property-based analysis not only supports the key conclusion of the Supreme Court (that not all aspects of breach of confidence are covered by section 72), but provides a clearer and more coherent explanation of why that is the case, and may even support a narrower interpretation than that adopted by the Supreme Court. In Section V, this chapter examines the limits of section 72. It starts by considering the ramifications of section 72 derogating from a right protected by Article 6 of the Convention. It then analyses the reasoning of the Supreme Court in relation to personal confidential information, using that analysis to illustrate an alternative response to the maximalist agenda that does not dispute that intellectual property rights can be proprietary but challenges the consequences of that characterisation.

108 For a discussion, see, eg, Harris et al, ‘Law of the European Convention on Human Rights’, n 100 above, esp 655, 667. 109 Ongoing disagreement about the scope of the right to property was one reason why it appeared in the First Protocol rather than the main body of the Convention: Harris et al, ibid, 655. Furthermore, there have been numerous justifications put forward for property, many of which rest on very different foundations and have varying relevance for different property objects (land, fungible assets, sentimental chattels, intangible things, etc).

Phillips v Mulcaire: A Property Paradox? 101 V. THE LIMITS OF SECTION 72

A. Section 72 and Article 6 of the European Convention on Human Rights The question of whether section 72 impermissibly derogates from Article 6 of the Convention110 was ventilated to varying degrees in the Phillips v Mulcaire litigation, and was discussed—and rejected—by Lord Neuberger in the Court of Appeal.111 This conclusion is not terribly surprising given Lord Neuberger’s view that PSI has ‘had its day in civil proceedings’,112 a comment consistent with other judicial statements regarding PSI.113 That said, such reticence must be seen in light of the ‘new lease of life’114 given to PSI in the post-Human Rights Act era. In the Supreme Court, Article 6 was not referred to by Lord Walker, although his Lordship did discuss the role of PSI, agreeing that any move to cut down or remove the privilege was for the legislature and that in a case where Parliament has left no room for doubt that it intends the privilege to be withdrawn, there is no need for the Court to lean in favour of the narrowest possible construction of the reach of the relevant provision.115

In the Court of Appeal, a key reason for Lord Neuberger’s refusal to make a declaration of incompatibility was that Article 6 does not confer an absolute prohibition on attempts to limit PSI, and that legislative limitations that are proportionate and include sufficient safeguards will survive claims of incompatibility with the Convention. Lord Neuberger also cited a comment made by Vos J during argument (but not included in his written judgment) to the effect that the facts at hand related not only to Mr Mulcaire’s right to a fair trial but: the claimants’ common law and Convention rights to be told who has been responsible for intercepting their voice messages, which messages have been intercepted, and who has been told about them. In agreement with Vos J, I do not accept that what he characterised as the claimants’ claim to vindicate their right to respect for their private lives should be outweighed by Mr Mulcaire’s right to

110 Art 6 has been held to include the right to silence and right against self-incrimination: see, eg, Funke v France (1993) 16 EHRR 297; Saunders v United Kingdom (1997) 23 EHRR 313; Jalloh v Germany (2007) 44 EHRR 32. 111 Coogan, [72]–[77]. 112 Ibid, [18]. This view was subject to the proviso that there are restrictions on the use of evidence in subsequent criminal proceedings. 113 Some examples were cited by Lord Neuberger, ibid, [17], referring to Sociedad Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 QB 310, 338G (Sir Nicolas BrowneWilkinson V-C); AT&T Istel Ltd v Tully [1993] AC 45, 53B–D (Lord Templeman), 57G–58F (Lord Griffiths); and JSC BTA Bank v Ablyazov [2009] EWCA Civ 1125, [33]–[39] (Sedley LJ). 114 Phipson on Evidence, [24-36]. 115 Phillips v Mulcaire, [14]. And see above nn 58–59 and surrounding text.

102 Emily Hudson a fair criminal trial, when it is not clear that there will be such a trial and, even if there is, that it would be unfair.116

Lord Neuberger’s conclusion therefore rested largely on the proposition that PSI is not absolute, although also on the countervailing rights of the claimants. But can Article 6 rights be so limited? Qualifications to Convention rights can arise in a number of ways. One example is where a provision contains express in-built limitations that specify when a state may interfere with the right. In the case of Article 6, however, there are no material qualifications.117 Limitations to Convention rights can also arise where a claim engages competing rights and these rights are balanced against one another. For instance, cases alleging misuse of private information by the media often turn on a balancing of interests under Articles 8 and 10.118 However, it has been said that such an approach is inapt for Article 6 because of the status and nature of fair hearing rights.119 Even if this is right, there is nevertheless authority from the ECtHR that fair hearing rights are not absolute and can be limited where such measures are proportionate and the essence of the right is not impaired.120 This jurisprudence has not been consistent,121 and has also come under some criticism. For instance, some cases have used broader public interests to justify the erosion of PSI, raising the question of which interests ought to be relevant and how. In Brown v Stott, for example, a statutory provision required the registered keeper of a vehicle to provide details about the driver to the police where the driver was alleged to be guilty of an offence.122 In rejecting the argument that this provision was incompatible with Article 6, the Privy Council discussed the importance of measures to improve road safety. But surely one could discern an important public interest behind all criminal

116

Coogan, n 29 above, [76]. The only express limitation is that proceedings can be closed in certain circumstances. Article 6 does not, therefore, contain anything similar to the broad restrictions that exist elsewhere in the Convention. See Helen Fenwick and Gavin Phillipson, Media Freedom under the Human Rights Act (Oxford, OUP, 2006, [reprinted 2010]) 190; Andrew Nicol QC, Gavin Millar QC and Andrew Sharland, Media Law & Human Rights (Oxford, OUP, 2009) [2.52]. 118 See, eg, Von Hannover v Germany (2005) 40 EHRR 1; McKennitt v Ash [2006] EWCA Civ 714. 119 See, eg, Fenwick and Phillipson, Media Freedom, n 117 above, 190–94, discussing Ribemont v France (1995) 20 EHRR 557, in which there was no balancing between the Arts 6 and 10 rights engaged by the facts, but rather the observation that reporting on criminal investigations must take place ‘with all the discretion and circumspection necessary if the presumption of innocence is to be respected’: [38]. The same reasoning was applied in Fatullayev v Azerbaijan (2011) 52 EHRR 2, [159]–[163]. 120 See, eg, Weh v Austria (2005) 40 EHRR 37; O’Halloran and Francis v United Kingdom (2008) 46 EHRR 397. 121 See Phipson on Evidence, [24-51], comparing Heaney and McGuinness v Ireland (2001) 33 EHRR 12 and Shannon v United Kingdom (2006) 42 EHRR 31 with Jalloh v Germany (2007) 44 EHRR 32 and O’Halloran and Francis v United Kingdom (2008) 46 EHRR 397. 122 Brown v Stott [2003] 1 AC 681 (PC). 117

Phillips v Mulcaire: A Property Paradox? 103 offences and civil actions,123 just as Vos J did in the phone-hacking litigation. As noted by Laura Hoyano, a difficulty with using balancing tests to assess derogations from Article 6 is that such an approach sits uncomfortably with the proposition that the public interest was already considered when fair trial rights were being drafted.124 These concerns notwithstanding, it seems that any argument that section 72 is incompatible with Article 6 would be extremely difficult to sustain, in large part because the withdrawal of PSI is only partial.125 The weight of authority from the ECtHR suggests that Article 6 rights can be qualified where the ‘essence of the right’ is preserved, and that in the case of self-incrimination, safeguards such as limits on the re-use of evidence are one way to demonstrate that the core remains intact.126 Given scepticism amongst some English judges as to the continued existence of PSI in civil proceedings, it is likely that unambiguous statements from the ECtHR would be required before a UK court made a declaration of incompatibility. However, even if section 72 is compatible with the Convention, the fact remains that the provision serves to erode an Article 6 right. Lord Walker may be right that the clear words of Parliament make it unnecessary to adopt the narrowest possible definition of section 72, however, this does not mean that a court can be sanguine about going to the other extreme and adopting a broad interpretation of the provision. The Article 6 backdrop therefore suggests that any interpretation of intellectual property in section 72 needs to be appropriately limited and contextualised.

B. Section 72 and Personal Confidential Information In Phillips v Mulcaire, a key difference between the reasoning in the Court of Appeal and the Supreme Court related to the treatment of personal confidential information. Lord Neuberger held that such information fell within the sweeping-up words ‘or other intellectual property’, a conclusion with which Lord Walker disagreed. Whilst Lord Neuberger placed weight on the relative dearth of personal confidential information cases when section 72 was drafted, which he thought supported the conclusion that technical or commercial information had been used by the drafter to refer to all confidential information, Lord Walker held that consideration of the state of the law in the early 1980s was ‘simply confirmation of the natural reading

123 See, eg, Mike Redmayne, ‘Rethinking the Privilege Against Self-Incrimination’ (2007) 27 Oxford Journal of Legal Studies 209, 229. 124 Laura Hoyano, ‘What is balanced on the scales of justice? In search of the essence of the right to a fair trial’ [2014] 1 Criminal Law Review 4, 13. 125 Senior Courts Act s 72(3). 126 See, eg, Phipson on Evidence, [24-52].

104 Emily Hudson of the definition. The legislative purpose of section 72 was to prevent remedies against commercial piracy, including in particular Anton Piller search orders, from being frustrated by the privilege against self-incrimination’.127 This statement suggests that Lord Walker accepted that section 72 was not intended to cover the field but rather to apply to a subset of actions. This is supported by Lord Walker’s response to the second point raised by Lord Neuberger, namely that it would be odd for PSI to be withdrawn for some breaches of confidence actions but not others. Lord Walker observed that exceptions to PSI have been introduced by the legislature in a piecemeal fashion and again referred to the ‘central purpose’ of section 72, describing this as: ‘to fortify remedies against unlawful trading practices, not to cover the whole of the law of confidence, bifurcated as it now is’.128 This left one argument made by Lord Neuberger, which revolved around the observation that the same information can be commercial in some circumstances but not others, and that it would be undesirable for the application of section 72 to depend on how a claimant had pleaded their case. Lord Walker’s response was that although there might be some ‘difficult borderline cases’, this was ‘not a reason for adopting an unnatural construction of the definition as a whole’.129 This leaves numerous questions unanswered, in particular regarding how to deal with the trade in private information by media entities and those who intentionally or otherwise find themselves in the public spotlight. For instance, if a celebrity claimant can show that she derives an income from ‘selling’ information about her private life, can she argue that all information about herself is ‘commercial information’ for the purposes of section 72? Similarly, from whose perspective should commercial value be judged? In the High Court, Mann J observed that on the assumption that the facts pleaded are true … it hardly lies in the mouth of Mr Mulcaire to say that the information was not commercial information.… If it were not of some commercial value (in the sense of being exploitable in commerce) then he would not be looking for it in the first place.130

However, as a general test this approach would seem to be as unhelpful as the statement in University of London Press v University Tutorial Press that ‘what is worth copying is prima facie worth protecting’.131 Both Lord Neuberger and Lord Walker cited comments of Lord Hoffmann in Douglas v Hello!. In that case, Michael Douglas and Catherine ZetaJones had granted OK! the exclusive right to publish photographs of their 127

Phillips v Mulcaire, [28]. Ibid, [29]. 129 Ibid, [31]. 130 Phillips v NGN, [45]. 131 University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601, 610; for discussion, see Timothy Endicott and Michael Spence, ‘Vagueness in the Scope of Copyright’ (2005) 121 Law Quarterly Review 657. 128

Phillips v Mulcaire: A Property Paradox? 105 forthcoming wedding. Rival Hello! magazine published photographs taken by a freelance photographer who had attended the wedding and captured images surreptitiously.132 One question in the House of Lords was whether OK! could maintain an action against Hello! for breach of confidence. Lord Hoffmann observed that whilst information about the wedding of the Douglases was private to the couple, the same information was ‘commercially confidential information’ for the purposes of OK!’s claim. In concluding that OK! could maintain an action, Lord Hoffmann stated that the information was capable of being protected not because it concerned the Douglases’ image any more than because it concerned their private life, but simply because it was information of commercial value over which the Douglases had sufficient control to enable them to impose an obligation of confidence.133

In the words of the authors of the second edition of Gurry, this seems an ‘entirely unrealistic’ appraisal of the situation.134 The commercial value of the information lay in the fact that it related to the Douglases, a famous couple. Whether the Douglases were themselves able to internalise this value depended on them entering into a transaction with a willing buyer. But would the wedding information be classified as commercial information in the absence of such a deal? Whilst there are dicta in Douglas v Hello! that personal information can constitute a trade secret,135 this analysis is problematic for a number of reasons, including the difficulty in applying the Court of Appeal’s proposed test.136 The basic point seemingly being made by Lord Walker in Phillips v Mulcaire was that just because some personal confidential information can also be commercial does not mean that all personal confidential information is therefore ‘other intellectual property’ for the purposes of section 72. What remains unclear, however, is the identity of the ‘difficult borderline cases’ and how to resolve them. In Phillips v Mulcaire, Lord Walker did not need to address this matter as a sufficient proportion of the messages left on Ms Phillips’ phone related to inherently commercial matters. However, it is easy to imagine this being important in a future case where the relevant information was more obviously classified as private or personal in nature.137 132

Phillips v Mulcaire, [30], citing Douglas v Hello! Ltd (No 3) [2007] UKHL 21, [118]. Douglas v Hello! Ltd, sub nom OBG v Allan [2007] UKHL 21, [124]. 134 Gurry 2nd edition, [6.26]. 135 See, eg, Douglas v Hello! Ltd [2003] EWHC 786 (Ch), [195]–[197]; Douglas v Hello! Ltd [2005] EWCA Civ 595, [111]–[120]. 136 Gurry, 2nd edition, [6.22]–[6.31]. 137 Interestingly, after the Phillips v Mulcaire judgment was handed down, none of the other claimants in the phone-hacking litigation sought to challenge Mr Mulcaire’s ability to invoke PSI, consistent with the proposition that none of them considered the information on their voicemail to be commercial. Mr Mulcaire was therefore only required to answer the questions posed by Ms Phillips. 133

106 Emily Hudson C. Property as a Limit on Section 72 It was argued in Section IV that when considering the words ‘technical or commercial information’, the Supreme Court should have paid greater attention to the history of section 72 and the ways in which property concepts are used in intellectual property law. This is not to suggest that such an approach would have resulted in a wildly different interpretation from that adopted in Phillips v Mulcaire. However, it might have provided a richer and more convincing account of why aspects of breach of confidence are excluded from section 72. Such an account might start with the observation that section 72 was introduced as part of measures to combat commercial piracy and unlawful trading practices that are akin to theft. There will be those who object on the grounds that intellectual property infringement is never synonymous with stealing, and there is much to that argument. However, if we think of the types of intellectual property infringement that most closely remind us of stealing, then creating multiple copies of entire copyright works without any alteration or transformation, for the purposes of selling them to consumers, would seem to be one. Applying this analysis to the words ‘technical or commercial information’, one approach might posit that information covered by section 72 must be the object of a property right, such as the sui generis database right. Another approach (and one closer to the Supreme Court in Phillips v Mulcaire) might accept that property-like forms of commercial confidential information are covered by the provision. As noted by Mummery LJ in Fairstar Heavy Transport, ‘some kinds of information, such as nonpatentable know-how, are more akin to property in their specificity and exclusivity than, say, personal information about private life’.138 This approach would agree with the Supreme Court that only some types of confidential information fall within section 72, but might take a slightly narrower approach as to the identity of that information (for instance, by limiting it to Faccenda-style trade secrets). Similar principles might also apply to the words ‘other intellectual property’. For instance, the harms of moral rights violation are not usually understood by reference to deprivation but rather as affronts to autonomy and dignity.139 If we take seriously 138 Fairstar Heavy Transport NV v Adkins [2013] EWCA Civ 886, [48] (Mummery LJ). This comment was prefaced with the observation that ‘it would be unwise … for this court to endorse the proposition that there can never be property in information without knowing more about the nature of the information in dispute and the circumstances in which a property right was being asserted’. See also Koehler and Palmer, ‘Information as Property’, n 4 above, noting ways in which analysis of the legal regulation of information may be strengthened by analogies to property law. Their suggestion that judges are ‘alive to the value of the analogy’ (at 24) is qualified; for instance, they note at 22 that ‘the property label is a conclusion not a premise’, and that the fact that some treatment of confidential information ‘displays a property parallel’ does not mean that confidential information ‘is property per se but that in that regard it displays a proprietary characteristic.’ 139 See, eg, Spence, Intellectual Property, n 49 above, 132–34.

Phillips v Mulcaire: A Property Paradox? 107 the background to section 72, with its emphasis on ‘stealing’, then moral rights actions may be largely outside of section 72. Principles of statutory interpretation must also inform how we understand the definition of intellectual property in section 72. There would seem to be no ambiguity in the definition insofar as it refers to ‘any patent, trade mark, copyright, design right, [or] registered design’. Here, the clear words of Parliament must be applied. However, a contextualised treatment of section 72 illustrates how property analysis can be used in ways that limit intellectual property rights rather than expand them. This is an important lesson for those who decry the use of property concepts to expand rights, as discussed above in Section IV.140 As noted there, a common response to concerns about propertisation has been to deny that intellectual property rights are proprietary, or to focus attention on ways in which the subjectmatter of intellectual property differs from tangible objects of property. However, there are issues with this strategy. Despite the volume of scholarship to the contrary, the core intellectual property rights are routinely described as a form of property (including in the statutes that create them) and have been viewed this way throughout their history.141 Similarly, whilst the intangibility of intellectual property makes it different from land and chattels, for instance because it is not susceptible to rivalrous possession, many property scholars accept a wide definition of the things subject to property rights.142 To maintain that intellectual property is not property can therefore ‘appear unworldly and … put oneself on the wrong side of a widely shared understanding’.143 In this regard, another approach to resisting the property-fuelled expansion of intellectual property law is to focus on the consequences but not the underlying characterisation of intellectual property as a form of property. This second strategy is based on the observation that those who use property to support expansion tend to deploy a particular narrative of

140

See above nn 82–90 and surrounding text. See above nn 50–51 and surrounding text. 142 See, eg, Michael Bridge, Personal Property Law, 3rd edn (Oxford, OUP, 2002) 5–8 (observing that property is ‘not a static concept’, that it is ‘in the case of choses in action … that its dynamic properties and potential are best appreciated’, and that ‘whatever requirements the common law may impose in defining property—and statements to the effect that property takes its meaning from context suggest these are few in number—they are liable to be overridden by expansive statutory draftsmanship’); Thomas W Merrill and Henry E Smith, The Oxford Introductions to U.S. Law: Property (New York, OUP, 2010) 3, 8–11 (identifying both tangible and intangible things as objects of property rights, even though intangibles are ‘almost wholly legally constructed’ whilst a tangible such as land ‘requires some legal definition, but partly relies also on our prelegal knowledge’); Robert Chambers, An Introduction to Property Law in Australia, 3rd edn (Sydney, Lawbook Co, 2013) [2.25]–[2.55] (arguing that all property rights share two characteristics—they are enforceable generally against other members of society, and relate to ‘things’ external to ourselves—and often exhibit three other characteristics—alienability, excludability and value). 143 Hudson and Burrell, ‘Abandonment’, n 11 above, 973. 141

108 Emily Hudson property rights as strong, all-encompassing and enduring.144 However, the degree to which this story accords with the reality of property is open to question. For instance, many property scholars have sought to challenge a Blackstonian-inspired idea of property as despotic dominion, emphasising that property rights have developed to facilitate cooperation and sharing and are far more varied, limited and contingent than this depiction suggests.145 Hanoch Dagan argues that this nuanced perspective on property is not lost on the non-lawyer, and that supporters of a vibrant public domain concede too much if they assume that ordinary folk understand property only in absolutist terms.146 In a case like Phillips v Mulcaire, a contextualised analysis that sets principled limits on intellectual property is important, as section 72 derogates from an Article 6 right. When one looks at the history and goals of section 72, we see the deployment of theft-based analogies to support its creation, and that section 72 was itself part of the expansion of intellectual property rights. For anyone concerned about the maximalist agenda, the simplistic use of property in the history of section 72 is of concern, and a natural reaction may be to reject the idea that property is relevant to the provision. However, if property concepts were taken seriously in drafting section 72 then perhaps property concepts need to be taken seriously when interpreting the provision. In so doing, it is essential to take cognisance of the variety of objects and rights that are within the umbrella of ‘property’ and ‘intellectual property’, and to compare like with like. Although the analogy is problematic, those who called for section 72 to be introduced were concerned primarily with commercial traders being deprived of property rights. But not all instances of ‘intellectual property’ infringement concern commercial traders, deprivation, or, it would seem, property.

VI. CONCLUSION

This chapter has considered what the Supreme Court’s decision in Phillips v Mulcaire means for debates regarding the confidential information paradox and the consequences of intellectual property law. The Court avoided some difficult questions about the paradox through its conclusion that intellectual property lacks conceptual potency in section 72, thus allowing it to develop a meaning of technical or commercial information that was 144 The fact that this is a particular understanding of property must be emphasised. As noted by Bently, propertisation itself does not explain recent expansions which have tested the boundaries of principled growth in intellectual property law, given the long-standing understanding of core rights as a form of property: Bently, ‘Trade secrets’, n 3 above, 81–82. 145 See, eg, Dagan, ‘Property and the Public Domain’, n 11 above; Carol Rose, ‘Property as the Keystone Right?’ (1996) 71 Notre Dame Law Review 729. 146 Dagan, ibid, 85–86.

Phillips v Mulcaire: A Property Paradox? 109 unshackled by property concepts. That said, in considering whether personal confidential information fell within ‘other intellectual property’, the property-infused objectives and history of section 72 formed an important, if brief, part of the reasoning. There is much in the argument that intellectual property defies a fixed definition. In many instances, this will be of little consequence. However, for a statutory provision like section 72, which withdraws a long-standing common law right, a principled definition is important. And if the words ‘intellectual property’ themselves admit no clear boundaries, then we need to think about how those boundaries ought to be created. One of the key arguments in this chapter is that if a particular property-infused analysis was at the heart of calls to strip defendants of their right to invoke PSI, then we need to engage closely with that analysis when interpreting section 72. This ought not to lead inexorably towards expansion and big rights. One of Lord Walker’s main conclusions was that intellectual property lacks conceptual potency, but perhaps exactly the same thing can be said of property—that the shared characteristics of property rights exist at a quite general level, with even the right to exclude being observed as a characteristic of the majority but not all property rights.147 If correct, this lends further to support to the argument that rather than jettisoning the language of property from intellectual property jurisprudence, we should instead see the diversity of intellectual property rights as entirely typical of the property family.

147

See, eg, Chambers, n 142 above, [2.50].

5 OBG v Allan [2007] SARAH GREEN*

I. INTRODUCTION

O

BG V ALLAN1 was not a landmark case in property law. But it should have been. It could have been one of the most significant judgments in modern property law, and it would have been, had the House of Lords taken the opportunity it presented to make conversion a useful and relevant tort for the digital age. As it was, a non-unanimous panel consigned conversion to remain a commercial anachronism in a world in which it will become increasingly redundant. In doing so, it also perpetuated a striking inconsistency within the common law’s protection of personal property interests. Whilst the House of Lords in OBG considered several tort claims for financial loss resulting from intentional acts, the specific concern of this paper will be the claim therein for conversion of intangible property. This action was brought against receivers who had assumed control of the claimant’s assets and undertaking, and had done so, it turned out, on the basis of an invalid appointment. Consequently, the claimants brought proceedings for trespass and conversion to its land and chattels, for unlawful interference with its contractual relations and for the conversion of its debts and contractual rights. In terminating the majority of OBG’s contracts with its sub-contractors, and settling other outstanding contractual claims, the joint receivers thereby assumed control of almost 90 per cent of the claimant’s total assets. Given that this situation, in which intangible assets dwarf their tangible counterparts, is now closer to being the rule rather than the exception, this particular question was one whose answer would matter. It was unfortunate, therefore, that the answer given was the wrong one. Despite Lord Walker’s assertion to the contrary,2 the particular facts of OBG demonstrate precisely why the protection of rights in such property * Thanks to the anonymous reviewer, for his or her constructive comments on what follows. Any errors, misconceptions and oversights remain my own responsibility. 1 OBG Ltd and Others v Allan and Others [2007] UKHL 21. 2 Ibid, [271].

112 Sarah Green needs to be provided by conversion. OBG constitutes an example of a situation in which the law afforded the claimants no remedy, despite the fact that they had suffered significant losses. The suggestion has been made, both academically and judicially, that this should have been a job for the economic torts, had they been applicable, but the very fact that none was applicable demonstrates the fallacy of this argument. The receivers in OBG had conducted themselves without any proven intention to cause the claimants any loss; they did not use unlawful means; nor was any contract breached or not performed as a result of their actions. The receivers, therefore, did nothing which would engage the economic torts, as we shall see below. The essential problem with the receivers’ behaviour lay not in its nature but in its effect; their actions were not wrongful, but they amounted to a legal wrong, and conversion, being a tort to protect property rights, as opposed to one focused on economic interests, recognises the nicety of the distinction. In this sense, therefore, the facts of OBG provide a perfect example of why the economic torts are not an adequate or appropriate means of protecting property rights. No other type of property, after all, is protected by the common law only insofar as interference with it is intentional. Furthermore, although the facts of OBG are somewhat unusual (although not, as Lord Walker suggested, confused)3 this does not in itself render them an unsuitable vehicle for a reconsideration of an important area of the law. On the contrary, when such scrutiny is as long overdue as this was, this is likely to be because the facts which require it are not a common occurrence. That the issues are unlikely to trouble courts on a regular basis, however, does not mean that they are unimportant or unworthy of a properly-considered response. The conversion claim in OBG was both controversial and uncommon because it related, in part, to contractual rights. This is controversial for the simple reason that the conversion of contractual rights has never before been recognised by English courts (although it has been elsewhere in the common law world).4 It is uncommon because exclusion from one’s assets is core to the concept of conversion, and it is not a straightforward exercise to exclude someone from their contractual rights. In general, for instance, a contractual obligation can only be discharged by one contracting party to the other and, if this is not done, the party whose expectations have not been met retains the right to sue under the contract. It could not be said, therefore, that the true creditor has here been ‘excluded’ from anything. Furthermore, since, under the rule in Foakes v Beer,5 the purported settlement of a debt for less than its worth is not sufficient consideration for 3

Ibid. See n 45 below. 5 Sub nom Beer v Foakes (1883–84) LR 9 App Cas 605, a decision which approved Pinnel’s Case (1602) 5 Co Rep 117a. 4

OBG v Allan 113 the discharge of that debt, a creditor unhappy with her receipts can simply pursue her debtor for subsequent full satisfaction. Again, she would not be excluded on these facts from her assets. In OBG, the receivers settled the debts of North West Water, the company’s main contractor, in such a way as to obtain a far less advantageous realisation of OBG’s assets than would otherwise have been effected. In doing so as purported agents, they excluded OBG from the difference in value between the settlement figure they accepted, and what would have been recovered on a winding up or liquidation, which, on the figures accepted by the trial judge, amounted to a shortfall of over £1.5 million.6 Although this looks at first glance like a situation in which OBG could subsequently pursue North West Water for that difference, this option was not of course available on the facts, since the rule does not cover situations in which the claim is unliquidated, as it was here:7 In such cases, the claim is of uncertain value; and even if the overwhelming probability is that it is worth more than the sum paid, the possibility that it may be worth less suffices to satisfy the requirement of consideration.8

OBG had, therefore, no contractual claim to recover the significant shortfall in the value of its assets.9 Neither did it have, as will become clear, any claim under any of the economic torts, owing to the lack of any intention of the receivers to cause loss, and to the absence of any breach of contract. Before asserting, however, that a claim in conversion was therefore not only a conceptually appropriate response, but the only conceptually appropriate response in the circumstances, it is necessary to deal with another potentially complicating factor. Although this was a point which was dismissed at trial and not subsequently appealed, its consequent technical inapplicability has since been overlooked. In part, this may explain the argument so often made that a conversion claim was not necessary on the facts of OBG.10 In their defence, the solicitors who negligently advised on the receivers’ appointment argued that OBG’s liquidator either acquiesced or ratified the receivers’ actions, and that this therefore broke the chain of causation between their negligent advice and the claimant’s ultimate loss. Such

6 Whilst the figures are necessarily estimates, the upper range of what could have been realised, either through CVL or through administration (with or without the support of the main client, NWW), was £1,895,000–£2,000,000, whilst the receivers settled for £400,000. 7 Wilkinson v Byers (1834) 1 A & E 106; Ibberson v Neck (1886) 2 TLR 427. The rule is in any event one whose contemporary relevance has been recently questioned—see E Peel (ed), Treitel’s Law of Contract, 13th edn (London, Sweet & Maxwell, 2010) para 3-101. 8 Treitel’s Law of Contract (n 7 above) para 3-103. 9 The argument of this paper is not that intangible property is always susceptible to conversion but that it should not be excluded from the ambit of the tort in toto, since, on some facts, it will be so susceptible. 10 See, for instance, S Douglas, ‘The Scope of Conversion: Property and Contract’ (2011) 74 Modern Law Review 329, 339.

114 Sarah Green actions would also, of course, have broken the chain of causation between the receivers’ actions and OBG’s loss. Had this been accepted at trial, it would have left OBG with no claims whatsoever against the receivers, but HHJ Maddocks in fact rejected the contention: I cannot see that any such defences … could have had any prospect of success. This was and remained a hostile receivership. The Receivers were not in any way affected in their conduct of the receivership by any action taken or not taken by OBG or the Liquidators. There was never any question of the Liquidators accepting the validity of the appointments. The Liquidators were not in a position to re-negotiate the settlement which the Receivers had reached with NWW.11

There was no challenge made to this finding beyond trial, but had there been, and had it been successful, the liquidator’s actions would have become causally relevant. Even given this eventuality, however, it is difficult to see what, other than conversion, the liquidator could have been liable for: as it was a Creditors’ Voluntary Liquidation, he had no contractual duty to OBG itself;12 there had been no breach of any fiduciary duty; and the same arguments which exclude the application of the economic torts to the receivers apply equally to the liquidator. Causal questions aside, therefore, conversion remains the only appropriate cause of action on the particular facts of OBG v Allan. It could very well have been, therefore, a landmark case in being the first to apply conversion to intangible property. Had the House of Lords decided in favour of the claimants in OBG on the conversion point, the decision would have constituted a significant development in the common law’s protection of property interests. As it was, the question of whether intangibles can be the subject of conversion divided their Lordships. Lords Hoffmann, Walker and Brown answered the question in the negative, whilst Lord Nicholls and Baroness Hale thought that intangibles should no longer fall outside the ambit of the tort. With the greatest of respect for the majority, their approach is outdated, and has left an unnecessary inconsistency within the law. Simply stated, conversion protects the current superior possessory interest in personal property. It is possible to identify three elements which comprise the tort. They are, in essence: 1. A claimant who has the superior possessory right; 2. A deprivation of the claimant’s full benefit of that right; and 3. An assumption by the defendant of that right.

11

OBG v Allan and Others (Unreported, 2003, Manchester) at [70]. Even had there been such a duty of care and skill, it is unlikely, given HHJ Maddocks’ findings on how the receivers had ‘excluded’, and made false representations to, the liquidator, that the latter would have been found to have been in breach it—see [76] and [105]. 12

OBG v Allan 115 1. A claimant who has the superior possessory right The first element of conversion is that, at the time of the conversion, the claimant had the superior possessory right in the asset concerned. Such rights comprise the ability to recover it, reclaim it, or take action after the commission of a trespass in relation to it. 2. A deprivation of the claimant’s full benefit of that right The defendant’s act must have deprived the claimant of the full benefit of that right, such that he is unable to exercise that right across its full spectrum. 3. An assumption by the defendant of that right By his action, the defendant must have assumed, in whole or in part, those possessory rights which rightfully belong to the claimant; as long as he did so at some point, it does not matter whether he is still exercising those rights at the time the action is brought, or for however short a time he did so; neither does it matter whether he took physical possession of the assets at any point; what is important is whether he purported to exercise possessory rights over the assets.13 Conversion remains perhaps the most misunderstood of torts; its evolution has been restricted by judicial and legislative focus on its factual subject-matter, at the expense of its conceptual development. The defendant receivers in OBG admitted trespass and conversion in relation to the land and tangible chattels over which they took control, but disputed that the same liability applied to its intangible assets. Whilst the physical distinction between OBG’s tangible and intangible assets is hard to dispute, their respective legal characteristics are identical. Although, according to Lord Brown,14 intangible property lacks the capability of being possessed, thereby preventing it from being susceptible to conversion, this view, with respect, is founded on a narrow and static interpretation of possession. As will be illustrated below, intangible property can exhibit the requisite indicia of possession in order for it to be converted. The relevant manual indicia applicable to a particular asset are to a certain extent dictated by the nature of the asset itself. As OBG illustrates, it is irrelevant, in terms of the practical effects of interfering with property interests, that manual control looks different, according to the type of asset concerned. It would, after all, have made little sense to require the claimants in OBG to show that they had manual control of their intangible property 13 See Kuwait Airways Corp v Iraqi Airways Co and Others [2002] UKHL 19, [2002] 2 AC 886, [39]–[42]. 14 Ibid, [321].

116 Sarah Green in the same manner as they did of their land and tangible assets in order to prove that they had possession of it. If a certain manner of control is the most that the party with the property rights, and the superior possessory rights, can exercise, there is no reason why a defendant need do more than this in order to be liable in conversion. By interfering with that right of control, the defendants in OBG deprived the claimants of the benefit and use of their intangible property: they prevented the claimants from realising a greater value through other means, and so interfered with the claimants’ interests sufficiently to attract a claim in conversion. Over 70 years ago, a note in the Fordham Law Review, concerned with the question of whether or not choses in action could be converted, included the following observation: It has been pointed out that many courts which deny an action in Conversion for choses in action which are not evidenced by a writing do so on the notion that Conversion will lie for tangible property only, thus limiting the action to situations involving physical force. The new test is: Has dominion been exercised inconsistent with the rights of the owner? Such a test applies equally well to those choses in action which are evidenced by a writing as those which are not, and today this affords a much more satisfactory standard than that based on the concept of physical force. Certain it is that the expansion of Conversion to choses in action represented by a writing and the further extension of Conversion where no writing has been physically taken—all these changes conform with the shift of wealth from tangible to intangible personal property. Thus a procedural change parallels a similar one in the economic order, and is both desirable and defensible.15

At a far later stage of the development of dematerialised commerce, similar sentiments were expressed in relation to English law: The advantages of electronic as opposed to paper documents are easy to state and readily comprehensible. In business terms, paper is expensive to use, slow to send, and often productive of time-consuming delays. The processing of information by electronic means is, on the other hand, not only cheap but also astonishingly quick. Had Puck been a salesman of EDI systems,16 his boast of forty minutes to ‘throw a girdle round the earth’ would have brought him little business in today’s market. But of course there are disadvantages of paperless transactions which should not be overlooked—the business community knows and trusts paper records and feels relatively secure when using them. One reason for that security is the knowledge that the rule of commercial law will provide support for the transactions there recorded. How true is that for paperless trading? The short answer is that we do not know. So far the courts have had few occasions to pronounce on the legal implications of dematerialisation. Indeed it is only now that other bodies—notably the Law Commissions—are beginning to appreciate 15 16

L Rubin, ‘Conversion of Choses in Action’ (1941) 10 Fordham Law Review 415, 431–32. Electronic Data Interchange (data transmission by electronic means).

OBG v Allan 117 that reforms in trading law should be presented in a form that will be compatible with the introduction of paperless transactions.17

As this passage suggests, the inevitable increase in the volume and commercial importance of dematerialised assets, which will not necessarily be represented in any tangible form, requires the law to keep pace with these technological developments and recognise that such assets are as worthy, and in need, of protection, as tangible assets.18 Since commerce may be conducted far more efficiently, easily and cheaply through digital means, it would be very much a case of the tail wagging the dog, were such practices to be restricted as a result of the law’s failure to protect such transactions. A case which recognised and achieved this would have been a landmark indeed.

A. Excludability It is perhaps not immediately apparent exactly what constitutes manual control over intangible property. A clue can be found in the common law artifice known as the ‘documentary exception’. This applies where an intangible asset is so closely identified with a particular document that the two are regarded legally as having ‘merged’, and an exercise of dominion over that document, inconsistent with the rights of the true owner, will then, in effect, be a conversion of the asset it represents.19 In substance, however, this exception operates to identify those assets which have the necessary element of excludability. As Lord Hoffmann points out, in cases where the misappropriation of the document ‘could cause actual loss to the creditor’, that misappropriation will be treated as ‘a Conversion of a thing equal in value to the debt which it evidenced’.20 The reason for this is that, in such cases, the asset clearly has the characteristic of excludability because access to it is limited to the holder of the document. A document, however, is just one means of controlling access to, or symbolising, a form of intangible property and, increasingly, the function of such a document is performed by other, usually electronic, means. It is worth noting that the limited

17 B Napier, ‘The Future of Information Technology Law’ (1992) 51 CLJ 46, 52. Despite the fact that his article was written over 20 years ago, the courts have still had little to say about the legal implications of dematerialisation, despite the continuing (and exponential) growth of the phenomenon in the commercial world. 18 See also J Lipton, ‘Property Offences in the 21st Century’ (1999) 1 Journal of Information, Law and Technology: www2.warwick.ac.uk/fac/soc/law/elj/jilt/1999_1/lipton/ at 3.1. 19 See, inter alia, Alsager v Close (1842) 10 M & W 576, 152 ER 600; Morison v London County and Westminster Bank [1914] 3 KB 356 (CA); Pierpoint v Hoyt 260 NY 26, 182 NE 235 (NY Ct Apps 1932). But see A Goymour, ‘Conversion of Contractual Rights’ [2011] Lloyd’s Maritime and Commercial Law Quarterly 67, 70. 20 OBG (n 1 above) [104].

118 Sarah Green effectiveness of the documentary exception has already been recognised elsewhere in the common law world. In Kremen v Cohen, for example, the United States Court of Appeals for the Ninth Circuit concluded that: California does not follow the strict requirement in Restatement (Second) of Torts §242 (1965) that some document must actually represent the owner’s intangible property right. On the contrary, California courts routinely apply the tort to intangibles without inquiring whether they are merged in a document.21

B. Exhaustibility Where intangibles are concerned, exclusive control obviously cannot amount to the physical holding of an asset, but equates instead to controlling access to the benefit of an asset in the way that the owner of any valuable thing would wish to do. Of course, there are situations in which a debtor, having made a payment to someone not entitled to it, remains liable to his creditor for the debt beyond reasonable controversy. Such a situation may explain why the ‘documentary exception’ first came into being, since payments made to the holder of a document evidencing a debt can operate to satisfy that debt, regardless of whether the person in possession of the document is the rightful holder or not. The facts of OBG, however, demonstrate the deficiencies of this exception in a contemporary context; no longer is it the case that an individual requires a representation of intangible property in a documentary format in order to have control over it. As Baroness Hale acknowledged, there are many debts and some other obligations which can now be readily assigned, attached, form part of an insolvent estate, and enjoy all the other characteristics of property, but which are not represented by a specific document.22

For example, where the asset in question is a debt, it is crucial to the party who claims that intangible property as her own that she be recognised as the sole party to whom the debtor can reasonably consider himself indebted. So, in having the attributes and the information necessary to achieve this recognition, a party has possession of the debt in the only way such an item of property allows, for as Lord Macnaghten recognised in Ward v Duncombe, when discussing the application of the concept of possession to a debt, ‘in the case of a chose in action, you must do everything towards having possession that the subject admits’.23 The question of whether the actions of a defendant in relation to a debt or other chose in 21

Kremen v Cohen 337 F 3d 1024 (2003) at 1033. OBG (n 1 above) [310]. 23 Ward and another v Duncombe and others [1893] AC 369, 386, the quoted passage being a citation from Dearle v Hall (1828) 3 Russ 1, 23, 38 ER 475, 483 (Sir Thomas Plumer MR). 22

OBG v Allan 119 action have constituted a sufficient interference with the claimant’s possession thereof to amount to a conversion of the same should be regarded as a matter of fact for determination in the particular case, not as something which must be regarded as a legal impossibility or contradiction in terms, precluding any claim for the conversion of such an asset in limine. The defendants in OBG Ltd v Allan did ‘everything towards having possession that the subject admit[ted]’ when, acting as purported receivers, they brought about the settlement of debts to which they were not entitled. Since such debts, when settled, no longer exist as items of property, the receivers thereby deprived the claimants of their property rights in those assets.24 If the destruction of a tangible asset can amount to a conversion, it is hard to see why the complete extinction of an intangible piece of property should not attract the same legal redress. In OBG, Lord Brown stated that he viewed the proposed extension of conversion to intangible property as no less than the proposed severance of any link whatever between the tort of Conversion and the wrongful taking of physical possession of property (whether a chattel or a document) having a real and ascertainable value … to my mind there remains a logical distinction between the wrongful taking of a document of this character and the wrongful assertion of a right to a chose in action which properly belongs to someone else. One (the document) has a determinable value as at the date of its seizure. The other … does not.25

It is not, however, the value of the document which is important to a claimant in a case alleging the conversion of intangible property, but, by definition, the value of the asset which it represents. The determinable value to which his Lordship refers is the value of the asset itself at the time of the purported conversion. The existence of the document is, as far as the valuation of the asset is concerned, of no consequence. Moreover, an analysis of … choses in action will disclose that their value may be ascertained within fairly definite limits … Stocks, commercial paper, debts, contracts, accounts and judgments are rights and representations of rights that may be determined and are generally liquidated in amount.26

Since the document is regarded as the physical embodiment of the intangible property itself, it is not clear why the value of the former is any more determinable than that of the latter. 24 As outlined above, although the liquidator added his signature to the settlement agreement, he did so under great pressure and with all the relevant information being withheld from him. The trial judge, HHJ Maddocks, therefore held (in his unreported judgment of 18 February 2004 at [74]—see also that of 9 March 2004 at [5]–[6]) that the liquidators were not in a position to renegotiate the settlement which the receivers had reached. Hence there was no question of estoppel, acquiescence or ratification (see OBG (n 1 above) at [212] and [240] (Lord Nicholls)), and no break in the chain of causation from the receivers’ acts. 25 OBG (n 1 above) [321]. 26 Rubin (n 15 above) 425.

120 Sarah Green The facts of OBG well illustrate why conversion should apply to interferences with intangible assets, both conceptually and practically. Any continued exclusion of intangible assets from the ambit of conversion looks, in the contemporary commercial environment, like a steadfast refusal to acknowledge a fundamental shift in the nature of economic activity. It is not easy to identify the reason for such a refusal, particularly as the law ‘has the happy faculty of expanding to meet new needs’,27 should this be necessary. The protection of intangible property is precisely such a need, representing as it does a large, and rapidly increasing, proportion of assets in modern economic life. OBG provided the ideal opportunity for the common law to upgrade itself to a more commercially relevant version, which would not only have ensured that the full range of property interests were comprehensively protected, but would also have brought English law into line with the approach of other common law jurisdictions to the matter. It might of course be argued that there is presently a statutory obstacle to such a development in English law. In OBG, Lord Hoffmann highlights the fact that section 14(1) of the Torts (Interference with Goods) Act 1977 defines ‘goods’ as including ‘all things personal other than things in action and money’.28 Lords Walker and Brown both make more general references to the Act,29 and the view of the majority was that, since Parliament made no allowances therein for intangibles to be the subject-matter of a wrongful interference, the common law should not presume to take such a step. This is, however, a non sequitur because the 1977 Act was not a codification of the common law position.30 This being the case, and considering that the Act came into being long before intangible assets were commonplace, it is not clear why it should be allowed to stifle the common law’s ability to meet the exigencies of a new and ever-changing world. As Lord Nicholls succinctly suggests in the same case: ‘Parliament cannot be taken to have intended to preclude the courts from developing the common law tort of Conversion if this becomes necessary to achieve justice’.31 A salutary lesson on this point could be learned from The Supreme Court of Errors of Connecticut which, as long ago as 1874, delivered a prescient

27

Ibid, 430. OBG (n 1 above) [100]. 29 Ibid, [271] and [321] respectively. 30 Although, according to M Simpson et al, Clerk & Lindsell on Torts, 20th edn (including Third Cumulative Supplement) (London, Sweet & Maxwell, 2010) para 17-34, s 14(1) of the Torts (Interference with Goods) Act 1977 (the 1977 Act) ‘may not be an infallible guide as to the common law position on what kinds of property are amenable to conversion’. 31 OBG (n 1 above) [235]. 28

OBG v Allan 121 judgment on the matter of an alleged conversion (‘trover’ as it then was) of shares of manufacturing stock: A majority of the court however are of opinion that at the present time, when the action of trover is diverted from its original object of recovering the value of goods lost by the plaintiff and found by the defendant, and all the allegations with respect to such loss and finding are merely formal and unmeaning, there is no good reason for keeping up a distinction that arose wholly from that original peculiarity of the action, and therefore hold that trover will lie for shares of stock as well as for other kinds of personal property. There is really no difference in any important respect between this and other kinds of personal property. A man purchases a share of stock and pays one hundred dollars for it. He afterwards purchases a horse, and pays the same price. The one was bought in the market as readily as the other and can be sold and delivered as readily. The one can be pledged as collateral security as easily as the other; as easily attached to secure a debt; and its value as easily estimated. The one enriches a man as much as the other, and fills as important a place in the inventory of his estate. It is considered personal property of as substantial value as the other, both in law and in the transactions of men.32

Whilst these sentiments have much in common with those voiced by Baroness Hale in OBG, hers was a minority opinion, and this is not an argument to which much credence was given by those in the majority. This is unfortunate because there are simply no convincing reasons for excluding many forms of intangible personal property from the ambit of the legal protection afforded to tangible property. Such exclusion is symptomatic of a stagnant common law, ill-equipped to deal with the reality of modern-day commercial practice. The susceptibility of intangible property to conversion is something which has long been recognised in other jurisdictions, and a decision of the English common law to follow suit was long overdue. It would undoubtedly have been viewed as progressive, perhaps even audacious, but it would have been right.

II. WHY ECONOMIC TORTS ARE NOT A SUITABLE SUBSTITUTE

In the hierarchy of the interests protected by the law of tort, bodily integrity, along with other interests in an individual’s person, prevails. Just 32 Ayres v French 41 Conn 142 at 149–50, 1874 WL 1571 at 1574, Park CJ. See also Kuhn v McAllister, 1875 WL 380 (Utah Terr Sup Ct); Budd v Multnomah Street Ry 12 Or 271, 53 Am Rep 355 (Or Sup Ct 1885); Story v Gammell, 94 NW 982 (Neb Sup Ct 1903); Arkansas Anthracite Coal Co v Stokes 2 F (2d) 511 (CCA 8th Cir 1924); Shipley v Meadowbrook Club 126 A 2d 288 at 292 (Md Ct Apps 1956); all of which state that choses in action can be the subject of Conversion. To like effect re intangibles, see further Payne v Elliot 54 Cal 339 at 341, 35 Am Rep 80 at 82 (Cal Sup Ct 1880); Arnold v Hamilton Investment Co 38 A 2d 118 (NJ Sup Ct 1944), affirmed 40 A 2d 649 (NJ Ct Apps 1945); Freeman v Corbin 391 So 2d 731 (D Fla App 1980) at 732–33; Schafer v RMS Realty 138 Ohio App 3d 244 at 285, 741 NE 2d 155 at 184 (2000); Taylor v Powertel 551 SE 2d 765 at 769 (Ga Ct Apps 2001).

122 Sarah Green below these lie property interests. As Weir has argued, ‘if anything can be discovered which can be called “property” or a “right”, even if it is not a thing in fact or a right in general law, it tends to be more strongly protected’.33 Conversion protects the superior possessory right in assets, which includes the ‘use value’ of those assets, as well as their physical integrity. Non-proprietary general economic interests rank below both of these in the common law hierarchy, and a claimant will only be protected from interference with such interests where there has been some form of assumed responsibility in relation to them.34 The means by which the law recognises the relative importance of the interest being protected include the applicability of strict liability, of actionability without loss, and the recoverability of purely economic loss. In legal terms, it is difficult to provide a convincing reason why the common law should afford proper protection to tangible property, but not to intangible property. As identified by Honoré, the distinction between corporeals and incorporeals is ‘so unimportant that we ought always to speak of owning rights over material objects, never of owning the objects themselves’.35 Furthermore, Article 1 of the First Protocol to the European Convention on Human Rights and Fundamental Freedoms affords protection to ‘possessions’, a term which is not exclusive of intangibles, whether they are contractual or not.36 The application of Article 1 makes no reference to any dichotomy between tangibles and intangibles. As Lord Nicholls said in Wilson v First County Trust (No 2), ‘“Possessions” in article 1 is apt to embrace contractual rights as much as personal rights. Contractual rights may be more valuable and enduring than proprietary rights’.37

33

T Weir, A Casebook on Tort, 10th edn (London, Sweet & Maxwell, 2004) 572. See eg Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (providing a credit reference to the claimant), White and another v Jones and another [1995] 2 AC 207 (agreeing to prepare a will under which the claimant was to benefit), and Spring v Guardian Assurance plc and others [1995] 2 AC 296 (providing an industry required reference about a former agent/employee). 35 T Honoré, ‘Ownership’ in AG Guest (ed), Oxford Essays in Jurisprudence (Oxford, OUP, 1961) 131. 36 Murungaru v Secretary of State for the Home Department [2008] EWCA Civ 1015 at [29]–[30] (Sedley LJ), [42] (Jacob LJ) and [43]–[58] (Lewison J), citing Gasus Dosier v Netherlands (1995) 20 EHRR 403 (ECtHR), at [53]: ‘The Court recalls that the notion “possessions” (in French: biens) in Article 1 of Protocol No. 1 has an autonomous meaning which is certainly not limited to ownership of physical goods: certain other rights and interests constituting assets can also be regarded as “property rights” and thus as “possessions” for the purposes of this provision’. 37 Wilson v First County Trust (No 2) [2003] UKHL 40, [2004] 1 AC 816 at [39]. R Cunnington, ‘Contract Rights as Property Rights’ in A Robertson (ed), The Law of Obligations: Connections and Boundaries (London, UCL Press, 2004) offers a critical discussion of some of the issues raised by the treatment of contractual rights as property. 34

OBG v Allan 123 Examples of intangible rights which have been treated as possessions for the purposes of Article 1 include shares in a limited company,38 ‘economic interests connected with the running of [a business]’,39 the right to payment under a final and binding arbitration award,40 the contractual entitlement of Danish GPs under a collective agreement to indexation of their remuneration,41 and a right to compensation in tort;42 all assets which have the requisite indicia of possession outlined above. In fact, despite his conclusion on the conversion point, Lord Hoffmann in OBG himself says that contractual rights are a ‘species of property which deserve special protection’.43 His Lordship makes this point whilst discussing economic torts, but it is difficult to see why this concession was made here and yet refused in the context of conversion. When OBG reached the Court of Appeal, Carnwath LJ said: My initial instinct at the beginning of the case was that the receivers should be strictly liable for all the consequences of their unlawful appropriation of the business, by analogy with the long-established principles applied to unlawful receiverships under the law of trespass and conversion … The Canadian cases … seemed to point in that direction.44

In the Canadian unlawful receivership cases to which Carnwath LJ referred herein,45 there was simply no distinction made between tangible and intangible assets, and none of the numerous judges involved in those cases saw fit to separate in analytical terms the real assets, the other corporeal assets and the incorporeal assets over which the respective (purported) receivers had

38

Bramelid and Malmström v Sweden (1982) 5 EHRR 249 (ECommHR). Tre Traktorer Aktiebolag v Sweden (1989) 13 EHRR 309 (ECtHR), [53]. Stran Greek Refineries and Stratis Andreadis v Greece (1994) 19 EHRR 293 (ECtHR), [58]–[62]. In consequence, a law passed to declare void the arbitration agreement and annul the award was a contravention of article 1 of the First Protocol, there being no legitimate public interest to justify the intervention of parliament. ‘Just satisfaction’ in the amount of the award plus interest was ordered. 41 Association of General Practitioners v Denmark (1989) 62 DR 226 (ECommHR). 42 Pressos Compania Naviera SA v Belgium (1995) 21 EHRR 301 (ECtHR), [29]–[32]. Although see [2011] ECHR 2087 (29 November 2011). 43 OBG (n 1 above) [32]. 44 OBG [2005] EWCA Civ 106, [2005] QB 762 at [115]. 45 Kavcar Investments v Aetna Financial Services (1989) 62 DLR (4th) 277 (Ont CA), affg (1986) 36 ACWS (2d) 330, Hollingworth J; McLachlan v Canadian Imperial Bank of Commerce (1989) 35 BCLR 100, 57 DLR (4th) 687 (BCCA), affg (1987) 13 BCLR (2d) 300, Gould J; Bradshaw Construction v Bank of Nova Scotia (1993) 1 WWR 596 (BCCA), especially [58] and [88]–[90]; Royal Bank v Got [1999] 3 SCR 408 (Sup Ct Can), affg (1997) 196 AR 241 (Alta CA), affg (1994) 17 Alta LR (3d) 23, McDonald J. See also Lister v Dunlop Canada Ltd [liability] [1982] 1 SCR 726 (Sup Ct Can), rvsg (1979) 27 OR 2d 168 (Ont CA) and restoring (1978) 19 OR (2d) 380, Rutherford J; [damages] sub nom Lister v Dayton Tire Canada Ltd (1985) 52 OR (2d) 88 (Ont CA). 39 40

124 Sarah Green asserted dominion.46 The relationship between possessors and both types of asset is legally identical. Where this is the case, there is no reason why certain possessory rights should be treated more favourably than others on the legally irrelevant basis that their subject-matter has different physical characteristics. On this point, OBG could have been a landmark decision by bringing English common law into line both with other commonwealth jurisdictions, and with European jurisprudence. Instead, it is a landmark of reactionism. The problems with OBG are not just aesthetic of course, and the case leaves a gap in the common law’s protection of property interests which is hard to defend. In refusing conversion as a remedy to those whose possessory interests in intangibles have been infringed, the decision relegated such interests to the category of general economic interests, protected not by strict liability (as other property interests are) but only by the economic torts; torts of intention. This is not appropriate and does not make for a coherent framework of protection. As long as English law recognised a tort of interference with contractual relations, there existed a prospect of more adequate protection for interests in intangible property.47 The irony of the House of Lords’ broader decision in OBG, however, was that it both denied the claimants a remedy in conversion, stating that such interests could, where appropriate, be protected through the economic torts, whilst simultaneously suppressing the one economic tort through which such claimants might get relief. In formulating the tort of Inducing Breach of Contract, the House of Lords imposed a strict requirement of actual, subjective appreciation48 and intention by the defendant that a breach of contract will and should be brought about as a necessary element to establishing liability: [T]o be liable for inducing breach of contract, you must know that you are inducing a breach of contract. It is not enough to know that you are procuring an act which, as a matter of law or construction of the contract, is a breach. You must actually realise that it will have this effect. Nor does it matter that you ought reasonably to have done so.49

In imposing this very high evidential burden on potential claimants, the House rejected arguments to the effect that it is ‘a principle of the law,

46 The same approach was taken by the Privy Council in Gulf Insurance Ltd v Central Bank of Trinidad and Tobago [2005] UKPC 10, (2005) 66 WIR 297 (an appeal from the Court of Appeal of Trinidad and Tobago, concerning the unlawful taking of the assets and undertaking of a Bank): see [50], [53], [54]. 47 As demonstrated by the judgments of HHJ Maddocks (at first instance) and Mance LJ (in the Court of Appeal) in OBG Ltd v Allan (n 1 above) itself. 48 In both fact and law. 49 OBG (n 1 above) [39], citing British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479 (HL); see also at [42]–[43].

OBG v Allan 125 applicable even to the criminal law, that people are presumed to intend the reasonable consequences of their acts’.50 Although none of the speeches in OBG made explicit reference to this principle,51 it is hard to see how it could continue to be of any practical importance now that it is clear that actual, subjective appreciation and intention is required for the tort to be made out.52 The addition of this mental element to the only economic tort which might previously have provided at least a partial substitute for conversion of intangible property rights further limited the common law’s ability to protect such interests. As a result, there now exists a chasm between the protection provided to interests in tangible assets and that provided to the same interests in intangible assets. This void could have been filled easily, efficiently and coherently by a properly-developed tort of conversion, appropriate to the digital age. Had it been, OBG v Allan would have been a landmark case in personal property law, and a testament to the versatility and acumen of the common law. As it stands, it is significant only for what could have been. As a direct result of the House of Lords’ conservative re-alignment of the economic torts in OBG, with the accompanying severance and restrictive re-definition of the two principal economic torts which remain, Inducing Breach of Contract now affords only limited legal protection to contractual rights. As such, there would be very little overlap were conversion to be expanded to protect interests in intangible property. Even were such overlap ever to occur, however, the potential for concurrent protection is surely less problematic than the prospect of insufficient protection, particularly where property interests are concerned, and occurs without issue elsewhere in the law.53

50 See Earl of Halsbury LC in South Wales Miners’ Federation and others v Glamorgan Coal Company Ltd and others [1905] AC 239, 244. 51 Despite these and a number of further authorities concerning the application of this principle having been cited in argument. 52 For a critique of this method as a desirable means of containing the potential scope of liability in Lumley v Gye, see S Deakin and J Randall, ‘Rethinking the Economic Torts’ (2009) 72 Modern Law Review 519. For a contrasting argument that the House of Lords should have been yet more stringent in its formulation of the requirement as to intention in Lumley v Gye, see H Carty, ‘OBG Ltd v Allan: the House of Lords shapes the economic torts and explores commercial confidences and image rights’ (2007) 15 Torts Law Journal 283. 53 Eg rights are often protected concurrently by contract and by tort, by statute and by common law action etc, as in misrepresentation, consumer protection etc. As long as a claimant cannot recover more than her loss, it is difficult to see what could be said in favour of overavailability where the alternative is under-availability of legal action.

6 Armory v Delamirie (1722): Possession, Obligation, and the Evolution of Relative Title to Goods ROBIN HICKEY

I. INTRODUCTION

I

N ARMORY V Delamirie1 a chimney-sweep’s boy found a jewel and recovered substantial damages in conversion from a goldsmith who refused to redeliver it to him. It is a great case in every respect. Argued before the Chief Justice of the King’s Bench, its deceptively simple facts may well have been notorious in their day: Delamirie—or De Lamerie— was a prominent London gold- and silversmith with a reputation for sharp practice,2 and his young opponent in the case has been taken to be the first recipient of pro bono legal representation in England and Wales.3 Their dispute yielded a legal conclusion that is at once intuitive, yet dependent on a principle of property acquisition that demands (and generally has evaded) rigorous justification. For this latter reason, Armory has become an ‘icon’ of property law.4 It is an acknowledged starting point in property classes across the common law world,5 and is

1

Armory v Delamirie (1722) 1 Stra 505 (KB). ‘Lamerie, Paul Jacques de (1688–1751)’, Oxford Dictionary of National Biography. The entry records, inter alia, De Lamerie’s efforts to evade duty payable in respect of hallmarking, citing examples from 1719 and 1726. His later work in silver is enormously celebrated. The Victoria and Albert Museum holds a significant collection, and describes De Lamerie as ‘the greatest silversmith working in England in the Eighteenth century’: www.vam.ac.uk/content/ articles/s/paul-de-lamerie-objects/. 3 For interesting discussion, with relevant contextual insights, see L Inglis’s treatment of Armory on the Georgian London blog, 26 September 2009: georgianlondon.com/post/ 49464108280/armory-vs-delamirie-1722-kings-bench. 4 S Roberts, ‘More Lost than Found’ (1982) 45 MLR 683. 5 As for example in US textbooks: B Burke, AM Burkhart and RH Hemholz (eds), Fundamentals of Property, 3rd edn (LexisNexis, 2010) 23; J Dukeminier, J Krier et al (eds), Property, 7th edn (Wolters Kluwer, 2010). 2

132 Robin Hickey a useful teaching tool precisely because it introduces a foundational rule of proprietary acquisition that can be applied to dispute resolution, but which also connects to wider and perennially controversial debates about the justification of private property generally. And all this from a reported judgment that counts little more than 350 words. Technically the decision in Armory comprises three distinct principles: one about the ability of the boy to maintain the tort of conversion (trover) on the facts; one about the vicarious liability of Delamirie for the acts of his apprentice; and one about how evidential doubts will be resolved against a defendant—omnia praesumuntur contra spoliatorem—which in the instant case required damages to be assessed by reference to the value of the most expensive stones that could have been set in the socket, unless Delamirie produced the actual jewel to show otherwise. The last of these is the principle for which Armory is most often cited by courts today;6 but the first is the immediate concern of this chapter. Inasmuch as the boy was permitted to recover the full value of converted goods, Armory has come to stand for a wide principle of proprietary acquisition. According to this principle, anyone who takes possession of goods on that basis acquires a relative title to the goods which makes conversion available against any subsequent interferer. This relative title is understood to have the content of ownership,7 such that anyone who takes possession can meaningfully be called ‘an owner’ of the possessed thing,8 subject only to the pre-existing claim(s) of anyone better entitled (that is, anyone who can show a prior possession).9 Armory is routinely given as an authority for this foundational rule of original acquisition, and in this sense it can claim landmark status within the common law of property. Thus in English Private Law’s recent statement of the law, we read that ‘in the leading case of Armory v Delamirie a chimney-sweep’s boy acquired a right to exclusive possession of a brooch merely by the act of taking possession of it’.10 6 See eg Double G Communications v News Group International [2011] EWHC 961 (QB); Keefe v Isle of Man Steam Packet Co [2010] EWCA Civ 683; Phillips & Co v Whatley [2007] UKPC 28. 7 F Pollock and RS Wright, An Essay on Possession in the Common Law (Oxford, Clarendon Press, 1888) 22, 91, 93; B McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 144–46; R Hickey, Property and the Law of Finders (Oxford, Hart Publishing, 2010) 162–64; S Douglas, Liability for Wrongful Interferences with Chattels (Oxford, Hart Publishing, 2011) 24–26, 29–30. 8 McFarlane (n 7 above) 145–46. 9 This means that, in modern accounts, ‘title’ is effectively synonymous with ‘property right’, or at least might be taken to denote a general property right with certain standard content. As Swadling has explained, title is ‘derived from ‘entitlement’, that entitlement being a right to exclusive possession of the thing over which it subsists forever’: A Burrows (ed), English Private Law, 2nd edn (Oxford, OUP, 2007) para 4.131. 10 A Burrows (ed), English Private Law, 3rd edn (Oxford, OUP, 2013), para 4.422. The first edition put the matter more shortly, but to the same effect: ‘Armory v Delamirie … illustrates the fact that a right to possess will accrue from the mere fact of possessing’: P Birks (ed), English Private Law, 1st edn (Oxford, OUP, 2000), para 4.40.

Armory v Delamirie 133 This chapter is concerned with the extent to which Armory provides support for this wide principle of possessory acquisition (‘the possession principle’). There is reason to believe that, as originally decided and understood, Armory properly stood for a narrower proposition (‘the special property principle’) according to which trover was available, not on the basis of possession alone, but only where the possessor was recognised as being under some obligation to deal with the goods on behalf of someone else. The chapter argues specifically that this narrower principle fits the fact pattern and the result in Armory, using contemporaneous learning on trover to suggest that the King’s Bench must have taken the boy to be an honest finder committed to keeping the ring safely for its loser. The first part of the chapter makes this argument and locates Armory in the general development of proceedings for trover, explaining the special property principle underlying this development. The second part considers Armory’s subsequent treatment by courts and commentators, explaining how and why it came to stand for the wider principle of possessory acquisition, and characterising this development as a process of evolution attributable to rationalisations of conversion that occurred towards the end of the nineteenth century. The third part considers the lessons to be learned from a fuller contextual understanding of Armory, and argues that, despite general modern acceptance of the proposition that possession without more generates property, an obligation-based account of Armory may still have a foundational role to play in justifying the relativity of title at common law.

II. ARMORY AND THE SPECIAL PROPERTY PRINCIPLE

The basic facts of Armory are very well known and can be stated shortly. The claimant was a chimney sweep’s boy. He found a jewel ring and took it to the defendant’s retail premises ‘to know what it was’. The defendant’s apprentice removed the jewels from their setting under the pretence of weighing them, and the defendant offered the claimant three halfpence for the jewels. The claimant refused, insisting on return of the jewels; but the apprentice returned only the empty socket. On these facts, the Kings Bench held that the claimant was entitled to sue and succeed in trover, recovering damages, as noted already, up to the value of the finest jewels that could have been set in the socket. All of this is familiar enough, but the short report of Armory obscures more than it reveals about the prevailing circumstances. In the first place, we know nothing about the location of the find. The ordinary inference from the reporting of the fact that the plaintiff was a chimney-sweep’s boy has been that he found it in the course of his duties, in a chimney-flue or wherever; but there is nothing beyond inference to suggest this. Neither do the boy’s intentions appear unambiguously. There is something vaguely

134 Robin Hickey euphemistic about the aim ‘to know what it was’, and the reader approaching Armory from the report is bound to wonder what the boy was up to. Was he literally curious about what this thing was? And was that curiosity motivated by an honest desire to keep the thing safely and bring about its return to its loser, or by some version of a scheme to keep any value for himself? The report is silent about all such matters, which perhaps is surprising. To the extent that the last of them is true, the boy would have been committing a criminal offence: by the time of Armory, it was already settled that larceny could lie on the facts of finding.11 A plausible explanation for the omission of such facts from the report is simply that they were not relevant to the decision. I have argued elsewhere that their absence confirms that Armory was a case about possession, in the sense that the only burden on the claimant was to prove the facts of his own possession to the court.12 The location of the find might have been relevant if he was suing a prior possessor with a potentially superior claim, but not if he was suing a subsequent possessor, since possession gives a title good against all later comers. This also speaks to the irrelevance of any felonious intentions on the boy’s part, since even possession acquired by theft appears to be protected at common law.13 In this sense the reporting of Armory seems consistent with the much later statement of principle to this effect in Costello v Chief Constable of Derbyshire.14 This reading of Armory as a case ‘about possession’ is entirely in keeping with its place and treatment in modern books.15 There is, however, a curious and significant anomaly. Armory was not cited at all by Pollock in his parts of the Essay on Possession in the Common Law.16 It seems strange that a landmark case on the acquisitive function of possession should be omitted from the only comprehensive treatment of possession in the common law, a work which continues to be recognised as the authoritative source on the meaning and nature of possession.17 There are only two possibilities: either Pollock made some kind of error in omitting to cite and discuss the case; or 11

See R v Lamb (1694) 2 East PC 664. Hickey (n 7 above) 26–27. 13 So, it seems, is adverse possession of land acquired in reliance on criminal acts: Best v Chief Land Registrar [2014] EWHC 1370 (Admin). Cf R (on the application of Smith) v Land Registry [2009] EWHC 328 (Admin). 14 Costello v Chief Constable of Derbyshire [2001] 1 WLR 1437 (CA). 15 See English Private Law, 3rd edn (n 10 above) para 4.422; McFarlane (n 7 above) 154– 55; Douglas (n 7 above) 17; S Green and J Randall, The Tort of Conversion (Oxford, Hart Publishing, 2009) 20; D Sheehan, The Principles of Personal Property Law (Oxford, Hart Publishing, 2011) 13; Parker v British Airways Board [1982] QB 1004, 1008–9. 16 Pollock and Wright (n 7 above). 17 Note for example its influence on the arguments before the House of Lords in the leading modern case on the meaning of adverse possession: JA Pye (Oxford) v Graham [2003] 1 AC 419, 423–25. Lord Browne-Wilkinson’s opinion (at 435) that ‘there has always, both in Roman law and in common law, been a requirement to show an intention to possess in addition to objective acts of physical possession’ was entirely consistent with Pollock’s argument. 12

Armory v Delamirie 135 at the end of the nineteenth century, in that exceptionally formative period for modern common law thinking, the ruling in Armory did not loom so large as a landmark principle of proprietary acquisition. Given the breadth of coverage in the Essay, and Armory’s citation by RS Wright in his parts of it,18 it seems wholly implausible that it could have been overlooked by Pollock. Moreover, Pollock had cited Armory slightly earlier in his Law of Torts, and connected it there (albeit in a footnote) to Jeffries v Great Western Railway Co, which was certainly a case about possession.19 The latter alternative, however, seems entirely possible; indeed, there is reason to believe that as originally understood, Armory was not about possession at all, at least not in the way we would use that term today. The key to understanding the decision in Armory comes not from the report itself, but from the treatment of the case in contemporaneous legal materials. In such accounts, the chimney-sweep’s boy is treated as a ‘lawful’ possessor. The clearest and likely most-influential example comes from Serjeant Williams’s notes on Wilbraham v Snow.20 Wilbraham was a case decided around 50 years before Armory, where a sheriff was allowed trover to recover goods taken from his custody following their lawful seizure. The case was widely reported,21 which attests to its importance in the developing landscape of the property torts. In 1845, Williams published Saunders’s report of Wilbraham with extensive annotations, providing a comprehensive assessment of the constituent elements of liability for trover that was utilised and approved in court in the manner of a modern textbook.22 There, buried in the text of the first footnote (which itself runs to several pages), Armory was given to exemplify the situation where ‘a special property aris[es] simply out of a lawful possession’.23 Now, as has been indicated already, the report of Armory does not expressly account for the status of the boy’s acts of finding and taking, and appears even to leave open the possibility that the taking might have been made with felonious intent. What then accounts for Williams’s treatment of the boy as a lawful possessor? The first part of the answer lies in the history of the law relating to finders. By the time Armory was decided, it was settled law that a finder who kept goods in safe custody for their owner committed no trespass, and in that sense was behaving lawfully.24 As Coke CJ made clear in Isaac v Clark, ‘it is the law of charity, to lay up the goods which … come to [a finder’s]

18

Pollock and Wright (n 7 above) 149. F Pollock, The Law of Torts (Oxford, Clarendon Press, 1887) 300, fn (q). 20 (1845) 2 Wms Saund 47. 21 Wilbraham v Snow (1670) 1 Mod 30, 1 Ventris 52, 1 Lev 282, 2 Keble 588. 22 Note especially its approval by the court in Jeffries v Great Western Railway Co (1856) 5 E&B 802, discussed further below; and also Pollock and Wright (n 7 above) 92. Also see generally Green and Randall (n 15 above) 20. 23 (1845) 2 Wms Saund 47, fn (1), text to sub-footnote (n). 24 Hickey (n 7 above) 17–18. 19

136 Robin Hickey hands by trover, and no trespass shall lie for this’.25 We do not know much about the origins of this proposition,26 and initially it might have been a fiction designed to move proceedings out of trespass and into detinue; but from an early stage the cases very clearly indicated the view that it was lawful behaviour for a finder to take discovered goods in order to keep them safely for their loser.27 By the time of Isaack v Clark, this had become a doctrine of rightful and wrongful finding, such that one who took goods for the sake of their owner could not be charged in trespass, but ‘where one takes goods, where there is no such danger of being lost, or findes them before they are lost, otherwise it shall be’.28 In this context, Williams’s description of Armory as a case of lawful possession is sensible only on the assumption that the boy had taken the jewelled ring for safekeeping, or at least that he was treated that way by the court. This inference is strongly corroborated by the general development of the action for trover and conversion. From its inception, the standard count in trover alleged that the plaintiff was ‘possessed’ of the goods in question ‘as his own proper chattels’.29 Thus it was in substance a two-part allegation, of possession consequent on property. There was required to be some right, some title, which ‘coloured’ or explained the plaintiff’s possession,30 and two categories of property were recognised: first, of course, the title or general property of an owner; but secondly, special property.31 Special property was taken to refer broadly to the interest of a bailee.32 A list of such people could sue for trover (carriers, pledgees, factors, innkeepers),33 as they might equally have done in detinue or by their appeal in the earlier years. It is well suspected on the structure of the earliest forms that initially this was because 25

Isaac v Clark (1614) 2 Bulst 306. It was contemplated arguendo by Littleton in a case of 1455, and implicitly accepted by the court in allowing the plaintiff a writ of detinue: (1455) YB 33 Hen VI, f 26, pl 12. 27 See, for example, the observations of Nedham J in (1467) YB 7 Ed IV, f 3, pl 9: ‘if a man lose a thing in the road and I come and find the thing in the road and take it to guard it for the use of him that lost it, if he bring trespass against me of this thing I shall plead this to the action and not to the writ, for it was allowable for me to take it for the use of him that lost it’. A rationale developed which equated the taking of found goods for safekeeping with the saving of goods in danger of destruction, such that the finder’s plea of lawful taking became an invocation of the principle of jeopardy: see (1484) YB 2 Rich III, p 15, pl 39; Pollock and Wright (n 7 above) 176. 28 In substantive law, this amounted to holding that a finder of goods could not excuse himself in trespass merely by claiming that he found the goods. Something must be ‘lost’ before it could be found. This proposition was not much developed in the civil courts of the seventeenth century, but did have an impact on the development of criminal liability for larceny by finding: see Hickey (n 7 above) 18ff. 29 Or in pleaded form: ‘ut de bonis propriis’. See generally JW Salmond, ‘Observations on Trover and Conversion’ (1905) 21 LQR 42, 46. 30 Sutton v Buck (1810) 2 Taunt 302, 309. 31 See generally (1845) 2 Wms Saund 47, fn (1). 32 Webb v Fox (1797) 7 TR 391, 396. 33 See the authorities collected in (1845) 2 Wms Saund 47; and Sutton v Buck (1810) 2 Taunt 302, 309. 26

Armory v Delamirie 137 the bailee was the only person placed to initiate the action, but later the bailee’s recourse to law would be explained on the ground of his responsibility to his bailor.34 Because the bailee must account to his bailor, and answer to her for the value of the goods, the bailee must have his action, and trover was no exception from the earliest days of its availability. Contemporaneous trover cases fit this pattern and suggest that the concept of special property was doing most of the work in early decisions. In Wilbraham v Snow, the court reached its decision by analogy with the legal position of carriers, allowing trover to the sheriff because, by law, he was strictly liable for the value of the goods seized.35 Likewise, in Arnold v Jefferson, the bailee of a bond recovered it following a subsequent conversion, with the court holding specifically that ‘trover and conversion will lie upon a special property, as in case of a carrier’.36 Armory was decided some 25 years after this case, and a special property-based understanding of Armory resonates with the later decision in Webb v Fox, where counsel maintained that the availability of trover was premised very squarely on the plaintiff ’s consensually incurred ‘liab[ility] over to the person who has the absolute property for any damage that may be done to it’.37 The court agreed, Lawrence J explaining more succinctly that special property resulted from ‘lawful possession’ where the possessor ‘holds … subject to the claims of other persons’.38 Accordingly, Armory best fits the general development of trover if we understand the boy to have taken the jewel for safekeeping, and to that extent to have assumed an obligation to its loser. The final convincing note on this front, which is also significant in its own right, is that an assumption-of-duty-based account of Armory best coheres with the later decision in Bridges v Hawkesworth,39 a case which has long troubled scholars searching for coherent principles of possession in the common law.40 There the claimant found a packet of banknotes on the defendant’s shop floor. The Divisional Court recognised that the finder had a claim to the notes on the basis of Armory,41 but the defendant argued that he had a superior claim because the notes were found in his shop. In denying the defendant’s claim, the court did not consider facts relating to

34

See OW Holmes, The Common Law (Boston MA, Little Brown, 1881) 166–67. Wilbraham v Snow (1670) 1 Mod 30, 31. 36 Arnold v Jefferson (1697) 1 Ld Raym 275, 276. Green and Randall (n 15 above) 20, treat Wilbraham and Arnold as cases which establish the sufficiency of possession without more to make available conversion. But it is difficult to see how this view can be reconciled with the strict reliance on special property concepts in the reports of these decisions. 37 A point which counsel regarded as being ‘too clear to be disputed’: Webb v Fox (1797) 7 TR 391, 393. 38 Ibid, 398. 39 Bridges v Hawkesworth (1851) Jur 1079. 40 See generally AL Goodhart, ‘Three Cases on Possession’ (1927–29) 3 CLJ 195. 41 (1851) Jur 1079, 1082. 35

138 Robin Hickey his possession of the notes or the premises, as would modern authorities;42 instead it approached the matter by analogy to the position of an innkeeper, who at common law was strictly liable for the loss or damage of goods infra hospitium (‘within the protection of his house’).43 An innkeeper was recognised as holding a special property in goods infra hospitium, and could restrain wrongful interferences with those goods. But the right was consequent on the duty: because he was strictly liable to his guest for their safety, he was given the right to protect goods against strangers. In argument in Bridges, Patteson J had noted the existence of the innkeeper’s right;44 and the critical passage of his judgment denying the defendant’s claim observes that the banknotes were not ‘within the protection of his house’.45 Of course, the defendant in Bridges was not an innkeeper, and Patteson J recognised that he neither owed an innkeeper’s duty nor held an innkeeper’s right;46 but the reference reveals the nature of the court’s enquiry. If the defendant was to be regarded as having a right in the banknotes sufficient to sustain recovery against a stranger, there must exist first in the defendant a duty to the ‘real owner’ of the banknotes on which that right could be consequent. The absence of this duty accounts for the court’s decision in Bridges, and is the true ratio of that case. For present purposes though, the more important point is that the court’s enquiry follows the trajectory of the special property principle: a non-owner’s right to proceed in trover depended not on possession alone, but on the existence of some sufficiently clear accountability to someone better entitled to the goods. In this way, the decision in Bridges supports the view that Armory’s plaintiff was treated as a lawful possessor, and was allowed trover because he had made himself accountable to the loser for the jewel.

III. EVOLUTION OF THE POSSESSION PRINCIPLE

If historically it is more accurate to say that the chimney-sweep boy’s success depended on this concept of special property, there can be no doubt that today Armory is taken as authority for the proposition that possession without more generates title. This part of the paper aims to explain how the law got here from there. There are two intertwining explanations. The first has to do with common law method, and the incremental extensions to pleading and procedure attributable to the genius of counsel as they sought

42 See eg Parker v British Airways Board [1982] QB 1004; Waverly Borough Council v Fletcher [1996] QB 334. 43 Cayle’s Case (1583) 8 Co Rep 32a (KB); Williams v Linnitt [1951] 1 KB 565 (CA). 44 (1851) Jur 1079, 1080. 45 Ibid, 1082. 46 Ibid, 1081.

Armory v Delamirie 139 to bring new claimants within the purview of existing rules. The second has to do with academic rationalisations of these procedures that followed the abolition of the forms of action in England and Wales in the mid-nineteenth century, and particularly with the writings of Holmes and Pollock on possession and their ready acceptance by the courts. As to the procedural developments, in the years following Armory the special property rationale continued to be applied in proceedings on trover, but where it was difficult to show the claimant’s accountability to some other person on the facts, counsel began to plead the cases on the basis of possession alone. This occurred from at least the end of the eighteenth century,47 but initially the argument met with resistance from the courts. So in the instructive case of Elliott v Kemp,48 pressed by counsel to consider whether the deceased’s possession of certain articles of furniture would ground a claim for their recovery by her administratrix outwith the prevailing rules of succession,49 the Court of Exchequer considered itself to be dealing with a novel question about the scope of actions for interferences with goods,50 and ultimately it declined to answer that question.51 Indeed, even where counsel did choose to plead a case on the basis of possession without more, a strict special property argument would often be laid in the alternative, which again attests to the doubt and novelty around reliance on possession. In Elliott, for example, it was alternatively argued that the deceased’s own administration bond served to generate a responsibility to account to her husband’s estate, and that such responsibility warranted the availability of trover.52 Similarly in Sutton v Buck, Lord Mansfield would have allowed the plaintiff to recover a wrecked ship on proof of possession alone; but on the facts the plaintiff was bailee of the ship’s owner, and his lordship thought it equally clear that the bailment was the source of the plaintiff’s entitlement to recover.53 Eventually, though, a claimant would be successful even where no special property could be shown on the facts. This seems to have occurred first in Jeffries v Great Western Railway Co,54 where the Queen’s Bench treated the plaintiff’s possession as wrongful. 47

Rackham v Jesup (1772) 3 Wilson KB 332. Elliott v Kemp (1840) 7 M&W 306. 49 Counsel for the plaintiff relied on Armory v Delamirie (1722) and Sutton v Buck (1810) Taunt 302 to advance the now-familiar argument that: ‘as against a wrongdoer, the actual possessor of any chattel may maintain an action for it’: (1840) 7 M&W 306, 308. 50 Namely: ‘the question, whether, in an action of trespass or trover for personal property, the simple fact of possession, which is unquestionably evidence of title, is conclusive evidence, and constitutes a complete title, in all cases, against a defendant who is a mere wrong doer, as it does … in those actions for injuries to personal chattels, in which the plaintiff had a special property in such chattels’: ibid, 312. 51 The case was ultimately decided, and trover denied, on prevailing succession procedures: ibid, 312–13. 52 Ibid, 309–10. 53 (1810) Taunt 302, 308. 54 Jeffries v Great Western Railway Co (1856) 5 E&B 802. 48

140 Robin Hickey In Jeffries, the defendants had seized from the plaintiff certain trucks held by the latter under an assignment from a bankrupt, and counsel argued that the plaintiff should succeed on the basis of prior possession.55 The idea that possession without more generated title was again hotly disputed in argument,56 but the Queen’s Bench found for the plaintiff, and expressly acknowledged the novelty in such a decision. Referring to the question left open in Elliott v Kemp, Crompton J observed that the court was ‘now to decide whether a wrongdoer in actual possession of goods, the property of a stranger, can recover their value in trover against a wrongdoer who takes the goods from him’.57 It speaks to the prevailing momentum of the possession-without-more argument that the court’s ‘impression ha[d] always been’ that even a wrongful possessor could avail of trover, but the judgments again acknowledge considerable doubt on the matter,58 and for its own part, the greater goal of the plaintiff’s argument was to deny any fraud and show that he had ‘at least a claim of title’.59 Nonetheless, and on the supposition that the plaintiff was a wrongdoer, the court thought that the action was available, and expressed its decision in language which gives the form to our modern rule. So Lord Campbell CJ confirmed that ‘against a wrongdoer possession is title’;60 Wightman J spoke of ‘the prima facie right arising from possession’;61 and all denied to the defendants the ability to plead a ius tertii defence in denial of the plaintiff’s title.62 Thus from the middle of the nineteenth century, clearly much later than Armory, we have the beginnings of the proposition that possession generates a relative title to goods. If this proposition was tentatively handled in Elliott and Jeffries, it took very little time for it to gain safe recognition. For example, in the well-known case of Buckley v Gross, decided less than 10 years after Jeffries, Crompton J could take it as ‘clearly established’ that possession made trover available;63 and likewise Blackburn J, who emphasised that there was no ‘wish to question the doctrine laid down in several cases, that possession of personal property is sufficient title against a

55

Ibid, 803. Ibid, 803–4. 57 Ibid, 807. 58 Ibid, 807. 59 Ibid, 803. After trial judgment for the plaintiff, the defendants sought to prove the fraud by certain affidavits, and obtained a rule nisi for a new trial on that ground, and also on the ground of a misdirection to the jury in the instruction not to admit a ius tertii defence to the plaintiff’s title. The motions on this rule gave rise to the proceedings on the plaintiff’s title considered here, but ultimately the court supported the rule and ordered a new trial on the ground of the affidavits: ibid, 803, 806, 808. 60 Ibid, 805. 61 Ibid, 806. 62 Ibid, 805, 807–8. 63 Buckley v Gross (1863) 3 B&S 566, 573. 56

Armory v Delamirie 141 wrong doer’.64 Once the sufficiency of possession for this purpose had been accepted, it became unnecessary to plead a case on the basis of the special property principle, and correspondingly meaningless to insist on lawful accountability as the basis of recovery. If a wrongdoer in possession could have trover, a fortiori also the literal bailee or similar possessor with a voluntarily assumed duty to account to some other for the value of goods. The cases quickly came to reflect this position; and indeed went further, treating the special property cases as if they had depended all along on the proof of mere possession. In South Staffordshire Water Co v Sharman, counsel presented Armory as a case about ‘de facto possession’.65 In The Winkfield, Collins MR referred to Armory and Jeffries in the same paragraph to support the view that ‘a long series of authorities’ established that in trover ‘possession is good against a wrongdoer’.66 In this way, Amory was assimilated to Jeffries, and began to count as authority for the proposition that possession without more generates title. Parallel to these moves in the courts was increasing academic attention on possession, the most influential examples of which were Holmes’s lecture on the subject,67 and Pollock and Wright’s Essay on Possession in the Common Law.68 Both works owed a debt to Savigny’s account of the Roman law,69 especially insofar as they conceived of possession as a set of facts sufficient to generate original legal rights—in taxonomical language, they considered possession to be a causative event, and the event was the factual reality of control and intention (or corpus possessionis and animus possidendi, to use the Roman tags).70 Each considered the resultant right to be a property right in the fullest sense, sharing the standard incidents (or again taxonomically we might say, the content) of ownership; and at this point we have academic recognition of the supposedly foundational rule that possession generates title. Having articulated this theory of possession, Holmes and Pollock both sought to discuss it in the context of decided cases. Interestingly, neither made very much of Armory (Pollock did not mention it all, as noted above; Holmes cited it briefly for the proposition that a possessor could recover full value in conversion); but they each included extensive commentary on

64

Ibid, 574. South Staffordshire Water Co v Sharman [1896] 2 QB 44, 45. 66 The Winkfield [1902] P 42, 54. Also see Glenwood Lumber Co Ltd v Phillips [1904] AC 405, 410; Eastern Construction Co Ltd v National Trust Co Ltd [1914] AC 197, 209 (PC). 67 Holmes (n 34 above). 68 Pollock and Wright (n 7 above). 69 FC von Savigny, Treatise on Possession; or the Jus Possessionis of the Civil Law, trans E Perry (London, Sweet, 1848). 70 Pollock and Wright (n 7 above) 28ff; Holmes (n 34 above) 206, 214–15. 65

142 Robin Hickey Bridges v Hawkesworth.71 Of course, Bridges had not been decided on the basis of possession alone, and to suggest otherwise was to apply a theory unknown to the common law in 1851, and not considered or invoked by the Divisional Court; but very quickly this new explanation was adopted in litigation. The key case in respect of goods was South Staffordshire Water Co v Sharman, where Lord Russell of Killowen expressly relied on Pollock’s Essay to hold that an occupier of land acquired a relative title to two gold rings found buried in mud on the land.72 Lord Russell thought Pollock’s theory of possession had a reconciling effect, accounting not only for the decision in case before him, but also its distinction from Bridges v Hawkesworth.73 Of course this was an innovation—it need scarcely be repeated that the earlier cases depended on a principle of special property that emphasised the claimant’s accountability to some other person; but from this time on the proposition that possession generates title was discussed and applied in court, and Armory was folded in to the line of relevant authority.74 It is difficult to overstate the influence of the writings of Pollock and Holmes on the general development of possession in the common law. Each work comprises an enormous amount of synthesis and analysis, carefully distilling the key substantive rules from the mass of the procedural learning on trover and trespass. In many respects such an exercise was necessarily novel: the common law had been dominated by the strict forms of action for centuries, and the development of those forms had occurred in pragmatic incremental steps, as the early cases on trover illustrate very clearly. But in a new intellectual climate, freed from the rigours of the formulary system, commentators were at liberty to rationalise propositions from the outgoing procedures and present them as substantive rules of law.75 Thus from the starting point that a possessor has an action available against third parties generally, they were able to state principles of possessory title clearly for the first time. The relevant passage from Pollock is in these terms: Under the old procedure an actual possessor might sue either in trespass for the wrong to his possession, or in a form of action founded on right to possess

71 Interestingly, they thought the case turned on different limbs of the test. For Holmes, Bridges was about intent, or rather the lack of it. The defendant, ignorant of the existence of the packet of banknotes, ‘could not have had the intent to appropriate it’, and having invited members of the public in to his shop, ‘could not have the intent to exclude them from it’: Holmes (n 34 above) 222. For Pollock on the other hand, the case turned on an absence of physical control. Since the banknotes were found in a part of the shop frequented by customers, ‘it is impossible to say that the shopkeeper has any possession in fact’: Pollock and Wright (n 7 above) 39. 72 [1896] 2 QB 44, 47. 73 Ibid, 46–47. 74 See eg Hannah v Peel [1945] KB 509, 513; Parker v British Airways Board [1982] 1 QB 1004, 1008–9; Waverly Borough Council v Fletcher [1996] QB 334, 339. 75 F Pollock and FW Maitland, History of English Law, 2nd edn (Cambridge, CUP, 1923) 31.

Armory v Delamirie 143 (ejectment for land, trover for goods). In the latter alternative, his right, being derived from his own actual possession, was still not allowed to be disputed by a wrongdoer, and he had the same advantages as if he had sued in trespass. In other words, possession is equivalent to title as against a mere wrongdoer, and this is a substantive rule of law not affected by forms of action.76

It was the elucidation of this key substantive premise—title can be derived from possession—that allowed courts in cases like The Winfield to treat Armory as if it had depended on mere possession without more. Other influential commentators took the same path. Holdsworth treated Armory as a possession case;77 so did Cyprian Williams in the later editions of Williams on Personal Property, where the rehearsal of Armory is very plainly at odds with earlier treatments of the chimney sweep’s boy as a lawful possessor.78 No doubt this process of rationalisation was not completely linear—there are instances earlier than Jeffries where it appears that Armory was treated as a matter of mere possession79—but it is clear that by the early part of the twentieth century, Armory was uncontroversially taken as a foundation for the proposition that possession, without more, generates title.

IV. THE LESSONS OF ARMORY

All of this means that, for the purposes of property law, Armory v Delamirie is perhaps more accurately thought of as a milestone rather than a landmark. The decision represents an important point in the development of the law on trover, but so far as the destination was an account of original acquisition of title premised on possession alone, there was still some way to travel; and even if latterly Armory has been seen not only to fit this general account, but also to be its most recognisable exemplar, still we misrepresent its authority if we isolate it from the old learning on special property on which the original decision depends. Indeed, there is more to commend this (potentially iconoclastic) view of Armory than historical fidelity, since the Court’s concern for lawful accountability might have something significant to offer to modern accounts of relativity of title.

76

Pollock and Wright (n 7 above) 91. ‘[T]he rule laid down [in Armory] follows from the root principle of the common law of possession, that the possessor is prima facie owner, and has all the rights of an owner except as against one who can show a better right’: WS Holdsworth, A History of English Law, 3rd edn (London, Methuen & Co, 1923) 7, 426; also see 449–50. 78 Armory is used to support the proposition that that ‘one who is merely in possession of goods, even by wrong, is said to have a title against all except the true owner’: TC Williams (ed), Williams on Personal Property, 18th edn (London, Sweet & Maxwell, 1926) 49, 52. 79 See for example Sutton v Buck (1810) 2 Taunt 302 (Lord Mansfield CJ); JW Smith, A Selection of Leading Cases on Various Branches of the Law, 2nd edn (London, Maxwell, 1841) 264 (there is no discussion of Armory in the first edition of 1837). 77

144 Robin Hickey Understood generally, the series of special property cases discussed above reveals that the possessor’s accountability to some other person in respect of the goods was the fundamental justification in allowing trover to the possessor. Since the general availability of trover was itself the foundation for the substantive account of a possessor’s acquisition of a property right proffered by Pollock,80 the special property cases can safely be rationalised to include the view that the possessor’s accountability is a key part of the justification for her acquisition of a relative title. Put more shortly, the possessor’s obligation justifies her acquisition of property. This is not to say that technically the obligation causes or creates the property right—that would amount to a category mistake inasmuch as it treats a response (in this case, an obligation) as a causative event;81 rather, the point is that the existence of a given lawful accountability to some other explains why we are justified in holding relative title to arise on facts like Armory v Delamirie. It is possible that a similar view could explain the extension of the availability of trover in cases like Jeffries. Considered abstractly, Jeffries seems like a more significant milestone than Armory, because the Queen’s Bench allowed trover to a wrongdoer.82 If the law protects a wrongdoer in possession, it would seem to follow a fortiori that it must also protect those who possess goods because they have voluntarily assumed obligations to some other, and to this extent the decision in Jeffries seems to eclipse the decision in Armory. In substance this was the view of Holmes, who argued in the light of the nineteenth-century authorities that special property ‘did not mean any more than’ possession.83 Yet it is possible to query whether this move from special property to possession as a basis for conversion was so much of a shift as appears at first sight, at least insofar as that shift depends on the decision to allow conversion to wrongful possessors. Indeed, we might take the view that ultimately there is little difference between a wrongdoer in possession of goods and the kind of lawful possessor who could successfully recover on the basis of special property. Those in the latter camp—carriers, innkeepers, factors, sheriffs—were strictly liable at common law for the value of the goods; so was the finder who refused to return goods after (lawfully) taking them for safekeeping.84 On the other hand, where no lawful basis for possession can be shown, a possessor will find it very difficult not also to convert the goods: even the most transient and seemingly trivial non-consensual use of the goods of another will 80

Pollock and Wright (n 7 above) 91; see text to n 76 above. See generally P Birks, ‘Introduction’ in English Private Law, 1st edn (n 10 above), although compare the views of Grantham and Rickett, arguing the related point that existing property rights might be capable generating further or novel property rights: RB Grantham and CEF Rickett, ‘Property rights as a legally significant event’ (2003) 62 CLJ 717. 82 See text to n 57 above. 83 Holmes (n 34 above) 242. 84 Isaack v Clark (1614) 2 Bulst 206. 81

Armory v Delamirie 145 amount to conversion.85 In this case, following the third of Armory’s principles, the wrongful possessor will likewise find himself strictly liable to some other person for the full value of the goods.86 In other words, the content of the wrongful possessor’s obligation may not in the end differ from the content of the obligation that grounded the ability to recover in Armory. Reclaiming this justificatory role for obligations is potentially of great significance for the law on relativity of title. As things stand, the common law appears to offer no independent, a priori reason for why possession should be protected by the standard mechanism for the protection of property rights in goods (the tort of conversion). This level of sustained justificatory enquiry is simply not present in our authorities; and moreover, it can appear irrelevant to a system which resolves possession disputes on a bi-partite basis, reasoning incrementally and by analogy from previous cases.87 But if we overlook the justifications, especially when they appear clearly enough in the formative cases, we will find it difficult to give a coherent account of our procedure that remains faithful to the values it sought to reflect. So it is with the story of trover. Trover became generally available to possessors in the procedural steps described above, and the modern substantive position (that possession is protected by conversion because possessors necessarily can show a relative title to goods even if their possession has been unlawfully acquired) was achieved through a rationalisation of those procedures beginning with the major premise that trover was generally available to possessors. This comes close to a circular justification, and one wholly intrinsic to the procedural learning of the common law. In contrast, if it is possible to show that trover was allowed on the ground of the possessor’s responsibility to some other, this provides a reason that explains not only why possession should be protected, but also why it should be protected by the possessor’s acquisition of property. The possessor would be said to have a general claim to the full value of the goods exigible against all the world save those better entitled, because she in turn must answer for that value to someone better entitled. This last point is especially important, because there may be other legitimate reasons to protect possession that do not necessarily entail the conclusion that a possessor should acquire a property right or (to approach the matter from the other end) be protected by a property-based action. For example, a plausible proposition, often offered to support the availability of possessory protection, is that the protection of possession is necessary in the general interests of a peaceful society. This understanding of possession has figured prominently throughout English legal history, and is detectable as 85

Vandrink and Archer’s Case (1591) 1 Leon 221; Petre v Heneage (1701) 12 Mod 519. Text to n 6 above. 87 That justificatory accounts of the protection of possession were irrelevant to common law decision making was effectively Holmes’s view: Holmes (n 34 above) 206. 86

146 Robin Hickey early as the twelfth-century assize of novel disseisin, which was designed to provide an expeditious remedy where a possessor of land had been ‘unjustly and without judgment disseised’.88 In this respect, the assize resembled the Roman possessory interdicts, which allowed a possessor to retain or recover land or movables irrespective of any question of title.89 These interdicts aimed to protect the person of the possessor, preventing so far as possible the disturbance of peaceful possession, and ensuring that anyone who disputed the status quo was forced to make a claim based on right through the more formal means of a vindicatio.90 This was certainly a reasonable aim, but it was not implemented by the creation of a new property right for the possessor.91 Indeed, without more, the only result of possession at Roman law was that the possessor could avail himself of the interdicts to seek satisfaction from an immediate dispossessor.92 If he wanted to establish any larger proprietary claim (for example, if he wanted to sue the third party transferee from his immediate dispossessor) he could bring a vindicatio, but this would require him to prove property and was regarded substantively as a separate issue.93 The preliminary aim of restraining wrongful interference with possession was adequately addressed through the personal protection offered by the possessory interdicts. One of the difficulties with the modern English law of possession is a failure to distinguish between these differing levels of possessory protection. The procedural channelling of possession disputes into an action for trover and conversion has delivered the substantive premise that the possessor

88 For a specimen form of the writ and translation, see JH Baker, An Introduction to English Legal History, 4th edn (London, Butterworths, 2002) 544–45. Technically, of course, seisin rather than possession was at stake, but Maitland has argued that in its earliest sense seisin bore close factual resemblance to possession: (n 75 above) 30. So whatever the technical difficulties with the proposition, it may not in the end be misleading to say that the assize protected possession of land. Note though that any successful analysis of the assize must be located within the prevailing feudal structures to which it responded. Milsom has argued specifically that the likely plaintiff was a tenant unlawfully removed from land by his lord, such that the generally understood function of the assize was to restrain feudal lords from engaging in abuses of power: SFC Milsom, The English Framework of Legal Feudalism (Cambridge, CUP, 1972) 11ff. On this view, the assize of novel disseisin provided ‘a kind of judicial review’ (p 37) and the reciprocal obligations of the parties colour the very form of the action such that ‘there is hardly room for any deeper proprietary concept’ (p 40). 89 See generally B Nicholas, An Introduction to Roman Law (Oxford, Clarendon Press, 1962) 108ff. 90 Savigny (n 69 above) 6–7. 91 Hence the well-known observation of Ulpian, ‘ownership has nothing in common with possession’: D 41.2.12.1. 92 A possessor in the course of acquisition by use (usucapio) would acquire access to a modified vindicatio, the modifications going to the form of the pleadings rather than the substantive gist of the action. But, the availability of this action must be attributed to the full range of pre-requisites for usucapio, and must be distinguished sharply from the protection of possession without more: see Savingy (n 69 above) 129. 93 See Nicholas (n 89 above) 108, observing that proof of possession had ‘only the barest legal consequence—that it was protected’.

Armory v Delamirie 147 acquires a property right, but the cases have not been careful to match the substantive account of the possessor’s right to the aims of possessory protection. So far as any rationale appears in Jeffries, the court seemed most impressed by the argument that it was in society’s interest to protect those in the position of the plaintiff: thus Lord Campbell CJ remarked that it was ‘most reasonable law, and essential for the interests of society, that peaceable possession should not be disturbed by wrongdoers’.94 More recently, in Parker v British Airways Board, Donaldson LJ thought that a similar concern supported the ruling in Armory, ‘for otherwise lost property would be subject to a free-for-all in which the physically weakest would go to the wall’.95 Whatever the success of such propositions as a justification for the protection of existing possession, they provide at best an incomplete rationale for the acquisition of a property right. As the Roman example shows, violence can be restrained, and the status quo ante adequately protected, by the possessor’s acquisition of a personal right, exigible against immediate interferers, but conferring no broader proprietary entitlement to the possessed goods. If the law is to go further and ascribe property to the possessor, there must be reason for so doing. A special property understanding of Armory has exactly this advantage, inasmuch as it offers an explanation for why the plaintiff should be entitled to the full value of the goods, and why he should be entitled to protect that interest with a generally exigible action. In turn, this supplies a substantive explanation of the doctrine of relativity of title. To the extent that a relative title is justified because the holder is strictly liable to account to some other person for the value of the goods, that title serves and respects the continuing property of the person better entitled, not just in the general sense in which the holder of a relative title will always be bound to answer that person for the value of the goods in the event that a demand is made, but in the deeper and more thoroughgoing sense that the continuing title provides the rationale for the very existence of the relative title. On this view, relative titles are premised upon the better titles to which they relate, and though in a given dispute any two relative titles might find themselves in competition, the overall goal of this system of property law is to ensure protection for the person best entitled, and to respect continuing ownership in that sense. Insofar as the decision in Armory depends on the boy’s assumed duty to keep the ring safely for its owner, the case teaches us this general lesson, and points to an account of relativity of title that emphasises the interdependence of apparently independent original property rights. There may, of course, be further reasons to ascribe property to a possessor that have nothing to do with accountability to some other or the 94 95

(1856) 5 E&B 802. 805. Parker v British Airways Board [1982] QB 1004, 1009.

148 Robin Hickey restraint of unlawful disturbances of existing possession. Indeed, modern academic literature on the subject is often characterised by its efforts to provide a satisfactory jurisprudential basis for the effect possession seems to have in the cases, building theories around the connection between possession and labour, or the connection between possession and utility, for example.96 There may be a good deal to commend all or some aspects of these theoretical positions; and indeed, it would not be impermissible to recognise further that law’s protection of possession can meaningfully respond to a range of values.97 Nothing here is meant to deny the possibility that any such theory might successfully contribute to the justification of property acquired by possession, but it is worth observing that, so far as the development of the common law is concerned, this kind of justificatory exercise is necessarily an ex post activity. As shown above, another prominent lesson from a contextual understanding of Armory is that the principle that possession generates title was achieved incrementally by rationalisation of proceedings for conversion, not by a priori elucidation. This means not only that the kinds of theories we might wish to harness to explain the protection of possession will not always be found expressly within the common law texts, but also that the very enterprise of justification is somehow alien to, or at least out of keeping with, the historical processes of reasoning and adjudication. These tensions might increase when it is remembered that here we are dealing with foundational principles of property. Property is supposed to have a special concern for rule of law values like certainty and predictability, and somehow this seems at odds with recognition that a foundational principle of property can shift over time. One advantage of adopting an obligation-based account of Armory is that it addresses each of these concerns, harnessing the reasons that were actually engaged in the resolution of early disputes to bring stability and coherence to the basic doctrine of relativity of title. If this is a correct reading of Armory, and of its implications for relativity of title, it follows that there is some room to reconfigure our current doctrines of possessory protection. This will be particularly true in circumstances where a possessor has been allowed to succeed despite high degrees of disregard for the continuing property rights of some person better entitled. In Costello v Chief Constable of Derbyshire, for example, a thief was allowed to recover a stolen car from the police following the expiry of

96 See for example: RA Epstein, ‘Possession as the Root of Title’ (1978–79) 13 Georgia Law Review 1221; C Rose, ‘Possession as the Origin of Property’ (1985) 52 University of Chicago Law Review 73; and generally the recent discussions in J Penner and H Smith (eds), Philosophical Foundations of Property Law (Oxford, OUP, 2013). 97 On the general possibility that property justifications might implicate a plural range of values (such as autonomy, personhood, utility, equality, community), see H Dagan, Property: Values and Institutions (New York, OUP, 2010).

Armory v Delamirie 149 the relevant statutory power of seizure.98 If the acquisition of a relative title depends on the claimant having assumed an obligation to someone better entitled, and the pre-existing rights of the person better entitled form part of the justification for her acquisition of relative title, then it seems inappropriate to allow the generation of a relative title on the facts of theft, which by definition requires the dishonest appropriation of property belonging to another with intention permanently to deprive.99 In this respect, Lightman J’s assertion in Costello that possession ‘means the same thing and is entitled to the same legal protection, whether or not it has been obtained lawfully or by theft or by other unlawful means’100 represents a substantial gloss on the principle developed from the authorities on trover. More generally, a challenge might be made to conversion’s dominant role in resolving possession disputes. On an obligation-based reading of Armory, the protection afforded by conversion is conceptually distinguishable from the protection afforded by trespass: in their classical forms, the latter functioned to restrain and correct direct physical interferences with possession,101 whereas the former protected possession ‘consequent on property’, that is, possession referable to a strict liability to account.102 Such a conceptual distinction does not seem to be possible on the more recent authorities. As conversion developed in incremental steps, it gradually covered the ground of trespass,103 and in this respect the decision in Jeffries represented a subsumption of trespass by conversion, inasmuch as conversion was adjudged to lie on proof of the facts of possession alone. This general availability of conversion more than anything else has dictated the form of the modern common law on possession, but if it has gone too far, allowing proprietary protection where personal protection would meet the same aim, then there is cause to revisit it. Any change would require careful delineation of the circumstances in which conversion should and should not be available, but a contextual understanding of Armory could usefully point the way, setting the parameters of future debate on the protection of possession at common law.

98 Costello v Chief Constable of Derbyshire [2001] 1 WLR 1437. For a full treatment of this case and related criminal law authorities, and their impact on general principles of possession, see R Hickey, ‘Possession Taken by Theft and the Original Acquisition of Personal Property Rights’ in Hopkins (ed), Modern Studies in Property Law (Oxford, Hart Publishing, 2013) vol 7. 99 Theft Act 1968, s 1. 100 Costello, n 14 above, [2001] 1 WLR 1437, 1450. 101 JB Ames, ‘The History of Trover’ (1897–98) 11 Harvard Law Review 277, 282–83. 102 Text to nn 29–34 above. 103 Ames (n 101 above) 383–86; Douglas (n 7 above) 60–61.

150 Robin Hickey V. CONCLUSION

Armory v Delamirie may not stand so readily as is supposed for the proposition that possession generates title, but it remains an important decision, and one whose report has the capacity to illuminate and unsettle foundational maxims of our property thought. A careful analysis of the decision in the context of its historical development reveals the heavy influence of conversion, the common law’s deep-seated reliance on rationalisations of procedure for elucidations of substantive rights, and the correspondingly incremental emergence of a proposition connecting possession with the acquisition of an original property right. As with all legal history, these observations are helpful not just for their own sake, but because they cast light on the bases and values of modern principles of property, marking out avenues of further inquiry and potential reform. In this last sense, Armory remains a milestone, but the journey is not done, and further landmarks may well lie ahead.

7 Bruton v London & Quadrant Housing Trust [2000]: Relativity of Title, and the Regulation of the ‘Proprietary Underworld’ AMY GOYMOUR*

I. INTRODUCTION

I

N BRUTON V London & Quadrant Housing Trust,1 the House of Lords decided that a landlord (L) was capable of leasing property to a tenant (T), even though the landlord was neither the owner nor a tenant of the property, but merely a licensee. Many members of the property law community were outraged.2 How could T derive a leasehold interest (typically conceived as a proprietary estate) from L, when L himself held merely a licence (an inferior and purely personal right)? For these critics, the decision in Bruton seemed to contravene the deeply-entrenched principle of nemo dat quod non habet—a person cannot give something he does not himself have. Thus perceived, the Bruton case stood as a hideous landmark, in need of demolition at the earliest opportunity. Many—including Lord Hoffmann in Bruton itself—sought to square the Bruton decision with the logic of the nemo dat principle, on the basis that ‘leases’ created in such circumstances confer merely personal, contractual rights on the tenant, rather than a proprietary estate in the land. Whilst this may appear to be a neat reconciliation, it suffers from at least two limitations. * I am indebted to Stephen Watterson for his enormously helpful comments. I am also hugely grateful for the feedback received from the anonymous referee, and to the participants at the Cambridge Private Law Centre Work in Progress Seminars (Cambridge, 2013), where a previous version of this paper was presented. All errors are my own. 1 Bruton v London & Quadrant Housing Trust [2000] 1 AC 406 (HL). 2 See, eg, J Luba, ‘The House of Lords and Landlord and Tenant’ [1999] L&T Rev 115; M Dixon, ‘The Non-contractual Lease: the Rise of the Feudal Phoenix’ (2000) 59 CLJ 25; and E Cooke, Land Law, 2nd edn (Oxford, OUP, 2012) 174–77.

152 Amy Goymour First, it is unclear how the purely contractual lease fits into the general scheme of property law. For example, how, if at all, does it differ from a contractual licence? and does its creation require a deed? Secondly, and more fundamentally, it is not obvious that this explanation of Bruton confers on the contractual tenant (T) an appropriate bundle of rights. It is axiomatic that, being purely personal, T’s contractual lease would bind his immediate landlord (L), but not the real owner (O) or other third parties. But what happens if the same landlord (L) purports to lease the same land to a second tenant (T2)? Whilst both tenants’ rights are clearly vulnerable to the real owner’s paramount title, it is far from obvious from Lord Hoffmann’s analysis how the tenants’ mutually incompatible non-proprietary personal rights might rank inter se. The absence of clear rules for resolving such disputes could lead to the undesirable situation of two parties, both with contractual rights to use the land, having to fight for their respective positions in an unregulated legal free-for-all. This apparently lawless ‘free-for-all’ state might be understood as subsisting within what is termed here a ‘proprietary underworld’: a secondtier world where the rights of those physically using and dealing with the land (here L, T and T2) are inherently vulnerable to another’s (ie O’s) paramount legal title.3 The latter may be said to inhabit the ‘proprietary overworld’. This chapter argues for better legal regulation of such so-called proprietary underworlds, via a different reading of the Bruton decision: one that is premised on the doctrine of relativity of title. There are four strands to the argument: 1.

The Bruton tenant’s lease should be re-conceived as a relative proprietary interest in the land.4 Being proprietary, the lease is potentially enforceable against third parties, including subsequent tenants of the same landlord. 2. The relativity of title analysis of Bruton is consistent with the nemo dat principle. 3. There are remarkable similarities between the doctrine of relativity of title, as applied to leasehold interests, and the parallel—but historically distinct—doctrine of ‘tenancy by estoppel’. Tenancy by estoppel case

3 Thus, the term ‘proprietary underworld’ does not mean that rights subsisting therein exist outside the law, but simply that whatever rights may exist are inherently vulnerable to the real owner’s title. 4 See also M Harwood, ‘Leases: Are They Still Not Really Real?’ (2000) 20 Legal Studies 503; J Hill ‘The Proprietary Character of Possession’ in E Cooke (ed), Modern Studies in Property Law, Volume 1 (Oxford, Hart Publishing, 2001) ch 2; J Hinojosa, ‘On Property, Leases, Licences, Horses and Carts: Revisiting Bruton v London & Quadrant Housing Trust’ [2005] Conv 114; N Roberts, ‘The Bruton Tenancy: a Matter of Relativity’ [2012] Conv 87; and B McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 667–69. Each argues that relativity of title explains the Bruton decision. For a contrasting view, see A Baker, ‘Bruton, Licensees in Possession and a Fiction of Title’ [2014] Conv 495.

Bruton v London & Quadrant Housing Trust 153 law provides a rich resource for enhancing our understanding of the Bruton tenancy. 4. Beyond the facts of the Bruton case, relativity of title reasoning should be applied to other areas of property law that would otherwise operate as unregulated ‘proprietary underworlds’. Thus understood, Bruton stands as a landmark which, although once condemned by its critics, now deserves listing as a Grade 1 national monument for its role in opening property lawyers’ minds to the importance and utility of relativity of title reasoning.5 But before considering the decision’s broader ramifications, it is important to understand the story behind the Bruton case itself.

II. THE FACTS, OUTCOME AND AFTERMATH OF BRUTON

A. The Geographical Backdrop: Rushcroft Road, Brixton The Bruton story concerns Flat 2, a ground-floor flat in Oval House (pictured on the far right in the picture below), which is situated in Rushcroft Road in Brixton, South London.

5 The closest analogy, by way of a landmark, is St Pancras railway station: saved from a demolition order in the 1960s, it now stands as a Grade 1 listed building, and ‘one of London’s favourite landmarks’: www.stpancras.com/the-station/history-and-restoration.

154 Amy Goymour Rushcroft Road6 consists of mansion blocks, built in the 1890s to house artists and technicians who came to work in the old Brixton music halls. At that time, mansion flats were a new and innovative housing type. Elsewhere in London, they took a more utilitarian form, but in Brixton their design was relatively elaborate, and Oval House epitomised this more ornate style.7 During the 1960s and 1970s, plans emerged for comprehensive redevelopment of central Brixton, which would have seen the old mansion blocks replaced by urban motorways and tower-blocks.8 These regeneration plans had the unfortunate consequence of discouraging investment in Brixton, the area witnessed a sad and steady economic decline, and the once-desirable mansion blocks became almost worthless.9 It was during this period of depressing uncertainty that the events in Bruton occurred. Ultimately, the proposed redevelopment of Brixton never happened. Today, the mansion blocks along Rushcroft Road form part of Lambeth Council’s conservation area, and are highly-valued once again.10

B. The Facts in Bruton Turning to the particular facts of Bruton, in 1975, whilst the redevelopment plans for Brixton were still on foot, Lambeth Council compulsorily purchased all of the flats in Rushcroft Road, including Flat 2, Oval House. Earmarked for demolition, the flats were at that time left empty. However, as the years rolled on and the plans for redevelopment were repeatedly postponed, the existence of empty flats increasingly jarred with Lambeth Council’s social housing responsibilities. The Council therefore sought to use the flats for temporary housing, but it was unwilling to lease the accommodation to those on its ordinary housing waiting list, for two reasons: (a) the properties, having been left empty for so long, were not up to the required standard for human habitation;11 and (b) the Council wanted to retain the right to recover possession at short notice should Brixton’s urban regeneration plans go ahead. The Council’s solution was to hand over the flats as so-called ‘short-life’ properties to charitable housing associations

6 Originally named Ardville Road: Brixton Conservation Area, Conservation Area Statement (2012), [2.73]. 7 Ibid, [2.13]. 8 Ibid, [2.20]. 9 This downward trend was exacerbated by the contemporaneous arrival of the Victoria underground line, which gave a speedy route to London’s Oxford Street, leading Brixtonites to shop there rather than locally. 10 The current estimated value of Flat 2 (in May 2014), Oval House is £437,600. 11 See Kay v Lambeth LBC [2004] EWCA Civ 926, [2005] QB 352, [7] (Auld LJ).

Bruton v London & Quadrant Housing Trust 155 pursuant to a licence, enabling those associations in turn to accommodate the homeless in the properties on a temporary basis.12 Exactly this kind of arrangement was put into place in relation to Flat 2, Oval House. More specifically, Lambeth Council granted a ‘licence’ over the flat to the London and Quadrant Housing Trust (LQHT) in 1986. The arrangement was necessarily a licence, rather than a lease, because local authorities were prohibited by legislation from leasing to non-individuals without the consent of the Secretary of State.13 Three years later, in 1989, LQHT granted a short-life weekly ‘licence’ to Mr Gary Bruton, which was understood to be a merely temporary arrangement.14 A further six years later, in 1995, Bruton brought an action against LQHT claiming that he occupied under a ‘tenancy’ (notwithstanding that the agreement was termed a ‘licence’) and therefore that LQHT, as his ‘landlord’, was subject to implied leasehold covenants to repair the flat, by virtue of section 11 of the Landlord and Tenant Act 1985. The success of Bruton’s claim hinged on his so-called ‘licence’ being in fact a ‘lease’.

C. The Decision The first instance judge and the Court of Appeal held that the arrangement was indeed what it proclaimed to be: a licence.15 The House of Lords unanimously disagreed. Despite some misgivings about the social ramifications of its decision, their Lordships ruled that the arrangement was in substance a ‘lease’, and therefore that LQHT was saddled with the statutory leasehold repairing obligations that it was never intended to have. This decision rested on their Lordships’ answers to two key questions. First, did the LQHT-Bruton agreement purport to grant a lease or a licence? Although labelled a ‘licence’ by the parties, their Lordships, following their previous decision in Street v Mountford,16 rightly looked to the 12 This solution was adopted by many London Councils. See Camden London Borough Council v Shortlife Community Housing Ltd (1993) 25 HLR 330 and Smart v The Mayor and Burgess of the London Borough of Lambeth [2013] EWCA 1375. The Council was under a duty to provide accommodation to the homeless and, by virtue of the Housing (Homeless Persons) Act 1977, was empowered to assist a voluntary homelessness organisation by permitting use of Council-owned properties. 13 Housing Act 1985, s 32; Camden LBC v Shortlife (n 12 above); Bruton (HL) (n 1 above) 410. Note that in 1995, this licence was replaced by a lease, but this event was irrelevant to the Bruton litigation: the claim was brought in relation to facts that arose while the licence was still on foot. 14 Gary Bruton had actually been occupying the flat since 1985, initially under someone else’s licence. He subsequently seemingly appeared on the front cover of Depeche Mode’s 1986 album, ‘A Question of Lust’, photographed in a Brixton Flat, most probably Flat 2, Oval House, and later became an international aid worker: mypsp.podomatic.com. 15 Bruton v London & Quadrant Housing Trust [1998] QB 834 (CA). 16 Street v Mountford [1985] AC 809 (HL).

156 Amy Goymour substance of the arrangement to see whether it bore the hallmarks of a lease, namely the conferral of the right to exclusive possession for a term certain. It did,17 and so the Lords proceeded on the basis that the parties had—albeit unwittingly—objectively tried to create a lease. This aspect of the decision is entirely orthodox, and therefore not discussed further in this chapter. Secondly, and more fundamentally, would the fact that LQHT was itself merely the Council’s licensee bar the creation of a lease in Bruton’s favour? Lord Hoffmann, giving the leading judgment, explained that it would not. A lease or tenancy, he said, ‘describes a relationship between two parties’ and is ‘not concerned with the question of whether the agreement creates an estate or other proprietary interest which may be binding on third parties’. Accordingly, a lease may or may not create a proprietary estate, depending ‘upon whether the landlord had an estate out of which he could grant it. Nemo dat quod non habet’.18 The argument developed later in this chapter is that, whilst the Bruton decision is correct, the nemo dat principle would not—contrary to Lord Hoffmann’s view—have prevented Bruton’s lease operating as a relative proprietary interest.

D. Repercussions of the Decision for Rushcroft Road To complete this preliminary narrative, it is useful to appreciate that the Bruton decision brought about far-reaching consequences for those living along the ill-fated Rushcroft Road. For Mr Bruton, the decision represented a painful irony: his victory was brief and hollow.19 In 2000, shortly after the House of Lords’ ruling, Lambeth Council, fearful of being lumbered with expensive repairing obligations,20 terminated the housing associations’ head licences21 for all of its Ruschcroft Road properties. Over the next 13 years, the Council sought to regain possession of all six mansion blocks along the street, inhabited by approximately 75 people. Its plan was to sell three blocks, in order to fund the renovation of the remaining three, which would then be used for the

17 A lease had recently been found on similar facts: Family Housing Association v Jones [1990] 1 WLR 779 (CA). 18 Bruton (HL) (n 1 above), 415. 19 As forecast in S Pascoe, ‘Street v. Mountford Gone Too Far—Bruton v. London and Quadrant Housing Trust’ [1999] JHL 87. See also D Rook, ‘Whether a Licence Agreement is a Lease: the Irrelevance of the Grantor’s Lack of Title’ [1999] Conv 517. 20 It was envisaged that the costs of repair would be passed on from the housing associations, which were immediately liable as the ‘landlords’ under Bruton, to the Council as ultimate landowner. 21 Technically, in 1995, the head licences had been converted into head leases, but this change was irrelevant to the litigation in Bruton (see n 13 above).

Bruton v London & Quadrant Housing Trust 157 Council’s own social housing programme.22 However, the Council faced fierce opposition from the residents and the local community. The residents had not only spent money renovating the properties; they had also formed a thriving and well-respected community within Brixton.23 The residents, wishing to remain in their flats, employed four key arguments to fight for their cause. First, they tried, unsuccessfully, to persuade the Council that it would be more financially astute, from the Council’s perspective, for the residents to remain in their Rushcroft Road properties than be rehoused by the Council elsewhere.24 Secondly, two residents managed to bring successful adverse possession claims against the Council for the flying freeholds of the flats they occupied.25 Thirdly, others argued—this time unsuccessfully—that their ‘tenancies’ directly bound the Council.26 Finally, in the absence of any other domestic law entitlement to remain in their flats, many residents resorted to human rights arguments, asserting that the flats were their ‘homes’, and therefore required protection under Article 8 of the European Convention on Human Rights. Their case was ultimately heard by a seven-strong committee of the House of Lords in Kay v Lambeth LBC (2006),27 which unanimously rejected the residents’ claim, on the basis that Article 8 would trump property law only in the most exceptional circumstances.28 Unperturbed, the residents took their case to Strasbourg, where, in 2010, the European Court of Human Rights found a violation of Article 8 because the domestic rules applicable at the relevant time gave insufficient procedural safeguards to the residents’ rights.29 Unfortunately for the residents, however, the remedy awarded in Strasbourg for this violation—€2000 for each affected resident—did not prevent the Council from obtaining the requisite possession orders.

22 See Lambeth Council, Equality Impact Assessment Report (Regarding Rushcroft Road Mansion Blocks Refurbishment and Part Disposal Project) (28 March 2012). 23 The residents even published their own newspaper: David Watkinson (counsel for Gary Bruton), speaking on BBC Radio London (16 July 2013). For a recording, see: www. lambethunitedhousingco-op.org.uk/?page_id=571. 24 See, eg, Hannah Schling, ‘Eviction Brixton: Creating Housing Insecurity in London’ (22 July 2013, available at: www.opendemocracy.net). 25 See, eg, Lambeth London Borough Council v Blackburn (2001) 33 HLR 74 (CA) (concerning Granville House, Rushcroft Road). 26 Kay v Lambeth London Borough Council [2006] UKHL 10, [2006] 2 AC 465 (most of the properties in dispute were situated along Rushcroft Road); see also Islington London Borough Council v O’Shea [2005] EWCA Civ 56, [2005] HLR 35. NB by the time the Kay claim was brought, the licence between the Council and the housing association had been replaced by a lease, which ‘fed’ the leases between the housing association and the residents; nonetheless Kay decided the sublease fell away when the headlease ended. 27 Ibid. 28 See further A Goymour ‘Property and Housing’ in D Hoffman, The Impact of the UK Human Rights Act on Private Law (Cambridge, CUP, 2011) ch 12, 260–63. 29 Kay v United Kingdom (App No 37341/06) [2011] HLR 2, [2010] ECHR 1322.

158 Amy Goymour The Council waited until July 2013 to repossess the Rushcroft Road flats.30 The evictions attracted widespread—although not universal—public outrage,31 and scenes of violent skirmishes between the police and residents made their way into the news headlines.32 So deep was the sense of injustice among the Brixton (and broader London) community that BBC Radio London hosted a two-hour radio phone-in on the subject.33

E. Wider Implications: the ‘Proprietary Underworld’, and its Regulation The position today, following the Brixton evictions, is that Lambeth Council, as owner of the Rushcroft Road flats, has regularised their use. However, between 2000 (when the Council terminated the housing associations’ licences) and 2013, the residents’ occupation of the flats was wholly irregular: the occupiers were either tolerated trespassers or—in some cases—wholly unauthorised occupiers.34 During that period, did they enjoy any rights? If so, against whom were they enforceable? What were their rights inter se? And what were the occupiers’ rights, if any, before the housing association licences were terminated in 2000? Prior to the 2013 evictions, Lambeth Council, as the owner of the properties, was—metaphorically—the overlord of the property, having a paramount legal entitlement to the properties. Those physically living in the flats occupied what is termed here a ‘proprietary underworld’: the occupants’ rights (whatever they may have been) were inherently vulnerable to the real owner’s (Lambeth Council’s) superior title. At least some of the residents regarded this underworld as a somewhat unregulated and lawless free-forall. This perception is demonstrated by the following anonymous comment, made by a former resident of Rushcroft Road, in July 2013: Dave and Zoe are two squatters on Rushcroft Road who were renting out ‘their’ properties for several years prior to the eviction. Zoe first ran a crack house in her squatted flat before the council gave her a council flat. At this stage it became possible for Zoe to start renting out both her squat (for over £900 a month) and

30 The Council had previously offered housing incentives to those who voluntarily ceded possession: S Childs, ‘Council and Residents Battle over short-life property evictions’, The Guardian (29 April 2013). 31 See, eg, the views expressed at: www.insidehousing.co.uk/legal/lambeth-tenants-challengeevictions/6521371.article; www.lambethunitedhousingco-op.org.uk; www.indymedia.org.uk/ en/2013/07/511428.html; www.brixtonblog.com; www.brixtonbuzz.com; and www.change. org/en-GB/petitions/lambeth-the-cooperative-sic-council-stop-the-co-op-housing-evictions. 32 See eg, www.bbc.co.uk/news/uk-england-london-23315224; www.standard.co.uk/news/london/violence-erupts-as-bailiffs-storm-in-tokick-out-brixton-squatters-8708700.html; and www. dailymail.co.uk/news/article-2364056/Brixton-Squatters-clash-police-Rushcroft-Road.html. 33 Hosted by Vanessa Feltz on 16 July 2013 (see n 23 above). 34 Lambeth Council asserts that it has received no income from the properties since 2000. The Council regarded the occupiers as wholly unauthorised once the possession orders had been obtained subsequent to the Strasbourg ruling.

Bruton v London & Quadrant Housing Trust 159 a smaller squatted flat in an adjacent building. I often attempted to tell Zoe’s ‘tenants’ that they were paying rent to live in a squat. One of Zoe’s ‘tenants’ was an amazing man called Joe who was an activist on the Palestine solidarity campaign. At one point I helped Joe change the lock and assured him Zoe had no legal right to force him to pay rent. At this point Zoe was living in Thailand (no doubt on the money she had received from her activities as scum landlord). When Joe told Zoe over the phone that he was not intended to pay any more rent, Zoe threatened Joe with a visit from a thug named ‘Boxer’.35

Is it the case that Zoe, Dave and Joe lived in a world unregulated by the law of property, where no-one has any rights against each other? Did Zoe, a squatter, really have no right to lease the property to Joe? What rights, if any, did Joe acquire? This chapter argues: (a) that it would be desirable as a matter of principle for the law to give order to this so-called proprietary underworld; and (b) that property law already has the means to provide an appropriate degree of regulation via the doctrine of relativity of title, and indeed that the Bruton case itself is best understood as a case concerning relative titles.

III. UNDERSTANDING THE LEGAL NATURE OF LQHT’S AND BRUTON’S RIGHTS

A. Isolating the Legal Problem To begin the legal analysis of Bruton, it is necessary to identify the core legal problem. In general terms, this chapter is concerned with determining what happens where: A purports to grant a proprietary interest to B,36 in circumstances where A’s own proprietary entitlement is limited or non-existent.

On the facts of Bruton, A is represented by LQHT (the housing association), which itself had a mere licence from the owner, and B is Gary Bruton, the purported tenant.

B. Academic Criticism of the Bruton Decision, Premised on the Nemo Dat Principle As outlined above, their Lordships’ decision that Bruton obtained a ‘tenancy’ has attracted widespread academic criticism. This has been 35 www. evictionbrixton.tumblr.com/post/56963327302/cultures-of-resistance-must-bedefended-the-case-of. 36 In Bruton, whilst LQHT subjectively desired to grant Bruton a mere licence, the substance of the agreement meant that it was taken to have purported to grant a lease. See text to nn 16–17 above.

160 Amy Goymour spearheaded by Martin Dixon,37 the crux of whose typically tightly-made argument broadly runs as follows: (a) assuming that English law adheres to the nemo dat principle, LQHT (a mere licensee), cannot confer a property right on Bruton; therefore (b) Bruton’s so-called ‘tenancy’ is necessarily a merely personal right; and (c), this being so, the ‘tenancy’ is in reality indistinguishable from a contractual licence, and should be recognised and labelled as such.38 For Dixon, it is a defining feature of modern leases that they confer both personal and proprietary rights on the tenant. Accordingly, Lord Hoffmann’s rationalisation of the outcome on the basis that Bruton’s lease was non-proprietary is perceived as a ‘contradiction in terms’.39

C. LQHT’s and Mr Bruton’s Rights (Re)-conceived as Relative Proprietary Rights Dixon’s criticisms of the Bruton decision are outwardly convincing. However, the argument put forward in this chapter is that Bruton looks entirely orthodox—and Dixon’s criticisms fall away—once it is understood as a case concerning relativity of title. On this analysis, Bruton’s lease was proprietary, and not merely contractual. This explanation of Bruton is not, in itself, novel: Michael Harwood, Jonathan Hill, John-Paul Hinojosa, Ben McFarlane and Nicholas Roberts have all made similar arguments in their excellent commentaries on the case,40 as has Lord Neuberger MR, speaking recently in Mexfield Housing Trust Co-Operative Ltd v Berrisford.41 This chapter seeks to develop

37 M Dixon, ‘The Non-Proprietary Lease: the Rise of the Feudal Phoenix’ (2000) 59 CLJ 25; and M Dixon, Modern Land Law, 9th edn (London, Routledge, 2014) 226–27. For other criticisms, see J Luba ‘The House of Lords and Landlord and Tenant’ [1999] L&T Rev 115; S Pascoe (n 19 above); S Bright ‘Leases, Exclusive Possession and Estates’ (2000) 116 LQR 7; E Cooke, Land Law, 2nd edn (Oxford, OUP, 2012) 174–77; and K Gray and S Gray, Elements of Land Law, 5th edn (Oxford, OUP, 2008) 314–15. 38 However, even if Bruton’s right were recognised as merely a contractual licence, that too would display two proprietary characteristics: (a) Bruton would—according to the controversial decision in Manchester Airport v Dutton [2000] QB 133 (CA)—have standing to sue in trespass, which had traditionally been reserved to those holding proprietary interests (see further Vehicle Control Services Ltd v HM Revenue and Customs Commissioners [2013] EWCA Civ 186 and W Swadling, ‘Opening the Numerous Clausus’ (2000) 116 LQR 354); and (b) Bruton’s contractual licence would be capable of becoming proprietary via the doctrine of ‘feeding’ an estoppel should LQHT subsequently acquire a proprietary interest in the future (see text to n 80 below). 39 Although Dixon hopes the decision will be confined to its own facts (in Modern Land Law (n 37 above) 227), he himself admits that, as the case is tied to the concept of a ‘lease’, it cannot be dismissed as a mere case on statutory interpretation: ‘The Non-Contractual Lease: the Rise of the Feudal Phoenix’ (2000) 59 CLJ 25. 40 M Harwood (n 4 above); J Hill (n 4 above); J Hinojosa (n 4 above), B McFarlane (n 4 above) and N Roberts (n 4 above). See also S Bright (n 37 above). 41 Mexfield Housing Trust Co-Operative Ltd v Berrisford [2011] UKSC 52; [2012] 1 AC 955, [65]: ‘The Bruton case was about relativity of title which is the traditional bedrock of

Bruton v London & Quadrant Housing Trust 161 these arguments, in order to deepen our understanding of the workings, taxonomy and functions of relative titles. (i) Squaring the Analysis with the Nemo Dat Principle: the Distinction Between Original and Derivative Titles At the outset, it is important to realise that the nemo dat principle, which for Lord Hoffmann prevented Bruton’s lease being proprietary, is no barrier to the establishment of a relative proprietary right. A distinction needs to be drawn between derivative and original titles. Nemo dat is concerned with the former, but not the latter. Literally translated, ‘nemo dat quod non habet’ means that a person cannot give, or transfer, something which he does not have himself. Thus, A cannot transfer his freehold estate over land to B unless A himself owns a freehold; conversely, B cannot derive a title from A unless A has a relevant title. Thus, on the Bruton facts, it is clear that Gary Bruton was unable to derive a property right from LQHT if the latter did not have a property right itself. However, it is quite possible for property rights to arise by way of original acquisition, from the fact of possession, rather than derivatively via the transfer of rights from another. For example, it is well-documented that a squatter acquires a possessory title (a legal fee simple) from the point at which he goes into adverse possession.42 His title derives from no-one; rather his right is new and original, having arisen out of the fact of his taking possession. The squatter’s title is a relative one. Being inferior to the real owner’s title, it exists in a second-tier world—what is termed here the proprietary underworld—but the squatter’s title is nonetheless proprietary. Thus, even though the nemo dat principle may prohibit Bruton from acquiring a title derivately from LQHT’s licence, the principle is immaterial to the acquisition of a second-tier original and relative title. A weakness in Dixon’s and Lord Hoffmann’s analyses of Bruton is that they seemingly proceed on the assumption that the only way that Bruton might have acquired a property right was derivatively, thereby overlooking the possibility of an original, relative title arising.43

English land law’. See also Kim Lewison QC, arguendo in Bruton (HL) (n 1 above), 409: ‘The assertion that the trust had no estate out of which it could carve a tenancy overlooks the doctrine of relativity of title’. 42 Rosenberg v Cook (1881) 8 QBD 162 (CA), [2013] 2 P & CR 12; and Turner v Chief Land Registrar [2013] EWHC 1382 (Ch), [13]–[15]. See further D Fox, ‘Relativity of Title at Law and in Equity (2006) 65 CLJ 330. 43 Their analyses are premised on a notion of property rights being essentially onedimensional and absolute, like Roman Quiritary title, whereby new property rights must derive from the owner’s ultimate title. See similarly, S Bright (n 37 above), which discusses Bruton in terms of title relativity, but rejects the explanation on the assumption that English law is largely premised on the acquisition of title derivatively.

162 Amy Goymour (ii) Two Modes of Original Acquisition of a Relative Title So how might Mr Bruton—a licensee, rather than a squatter44—have acquired an original, relative title? To answer this question, it must be understood, by way of necessary background, that there are two different modes of original acquisition of a relative title. These are termed here ‘non-consensual original acquisition’ and ‘consensual original acquisition’, respectively. (a) Non-consensual Original Acquisition Non-consensual original acquisition is the archetypal mode of acquiring an original title, and is epitomised by the law of adverse possession. As identified earlier, a squatter, when he takes possession of land without the owner’s permission, immediately acquires a relative fee simple estate. It is the fact of possession which itself generates the squatter’s title. Upon this happening, there are two competing fee simple titles to the land (belonging to the squatter and the paramount owner respectively), to which the law gives relative rankings. The priority of relative and competing non-consensual original titles is determined on a ‘first in time’ basis. Thus, the squatter’s title is inferior to the real owner’s title, but is enforceable against everyone else in the world. Being proprietary, the squatter’s fee simple bears some important key features: it can be alienated (by an outright conveyance, or via the creation of a lease or mortgage over the estate), registered (in the ‘possessory’ class of title),45 and it gives the squatter standing to sue in trespass anyone entering the land without permission (excepting the real owner, and those acquiring title via the real owner). Furthermore, the squatter’s title will prevail against any subsequent squatter who might go into adverse possession of the land. On this happening, there would be three relative fee simple titles: the owner’s title, being first in time, ranks highest, followed in turn by the first and second squatters’ original titles, which both exist in the so-called ‘proprietary underworld’. A further, and familiar, feature of the squatter’s relative title is that, if the squatter remains in adverse possession for long enough, he may displace the owner to become the holder of the superior fee simple estate. The rules by which this might occur differ according to whether or not the superior owner’s estate is registered. If that estate is unregistered, the squatter will become the owner after 12 years in adverse possession: at that point, the previous owner’s title is automatically extinguished by the Limitation

44 NB Bruton was an indirect licensee of the Council, having acquired his licence indirectly via LQHT. 45 Land Registration Act 2002, s 9(1)(c).

Bruton v London & Quadrant Housing Trust 163 Act 1980,46 leaving the squatter, by default, with the superior title. If the superior estate is registered, however, the rules are very different, and strongly favour the current owner. Under the rules of the Land Registration Act 2002, the squatter will only succeed in becoming owner if, after 10 years, he makes an application to the Land Registry and, even then, only in the rarest of cases.47 The unlikelihood of a squatter upgrading his title to that of registered owner has led Elizabeth Cooke, in a chapter tellingly entitled ‘Whatever Happened to Relativity of Title?’, to suggest that relativity of title ‘is no longer … an important concept’.48 In time, she suggests, the squatter may cease to be regarded as having a fee simple, or any property right at all.49 This chapter begs to differ, and reveals that relativity of title remains of fundamental importance in English law, not only as a means of regulating the proprietary underworld that squatters inhabit, but also because it operates in other spheres, for example in cases of consensual original acquisition. (b) Consensual Original Acquisition Where someone goes into exclusive possession of land with the owner’s consent, but in circumstances which do not confer on him a derivative title, the possessor might nonetheless acquire what is termed here a consensual original title.50 It seems immaterial to the generation of a possessory fee simple title whether the possessor occupies the land adversely (in the case of a squatter), or with the owner’s consent; in either case, in the absence of a derivative title stemming from the owner’s rights, an original, relative title should arise out of the fact of possession.51 46

Sections 15 and 17. Most notably where the squatter has innocently overstepped a boundary line between him and his neighbour, or where the registered owner fails to respond to a written notice of the squatter’s claim (Land Registration Act 2002, sch 6). For a rare example of the latter, see Baxter v Mannion [2011] EWCA Civ 120, [2011] 1 WLR 1594 (although the squatter’s claim failed on the facts). 48 E Cooke, Land Law, 2nd edn (Oxford, OUP, 2012) 243. 49 Ibid, 253–54. 50 NB Pollock and Wright distinguish between consensual and non-consensual possession: F Pollock and R Wright, An Essay on Possession in the Common Law (Oxford, Clarendon Press, 1888) 43–44. 51 There are at least two possible counter-arguments: (1) it might be argued that, by definition, it is impossible to be in exclusive possession when one cannot exclude the real owner; however, this argument does not prevent a squatter being in exclusive possession (see JA Pye (Oxford) Ltd v Graham [2002] UKHL 30, [2003] 1 AC 419) and should be equally irrelevant in the consensual possession context; (2) it is arguable that, because the possessor is there with the owner’s consent, his title inevitably derives from the owner, and is therefore derivative. The better view, however, is that unless the owner gives the possessor a derivate interest (such as a lease), the owner has done nothing more than put the possessor into a position whereby the latter can acquire his own original title. 47

164 Amy Goymour Evidence for this proposition can be found in some of the old cases, unearthed in work by Jonathan Hill, which, although not couched in the language of relativity, treat consensual possessors as having property rights enforceable against strangers.52 For example, in the nineteenth-century case of Harper v Charlesworth,53 the Crown purported to grant a lease to a tenant. The lease was void for failure to comply with the requisite formalities, but the court held that the ‘tenant’, being in possession, could nonetheless sue strangers in trespass—a tort for which standing to sue was, at the time, limited to those with proprietary interests.54 The best explanation for the decision is that, even though the tenant’s derivative estate was void, he held an original, possessory title to the land. The consequences of finding a consensual original title would be almost identical to the consequences of recognising the squatter’s fee simple. Thus, (a) the ranking of titles would similarly be on a first in time basis (giving the true owner priority over the holder of the later, consensual original title); (b) the consensual original title is alienable to third parties; (c) the title is seemingly registrable (in the ‘possessory’ class of title);55 and (d) the consensual original title can be enforced against everyone but the true owner, and those deriving title from the true owner.56 The only respect in which the adverse and the consensual titles differ is that only the former may mature into a superior ownership interest, via the rules of adverse possession. It is probably for this reason that one rarely hears about consensual original titles. (iii) Applying the Relativity of Title Analysis to the Bruton Facts How might this account of relative titles apply to the facts of Bruton? The interests of each of the three parties must be considered in turn. First—and most straightforwardly—Lambeth Council, as owner of Flat 2, Oval House, held the superior fee simple throughout the Bruton saga. Secondly, what was LQHT’s position prior to handing over the flat to Gary Bruton? It is clear that LQHT did not derive any title from the 52

Hill (n 4 above). Harper v Charlesworth (1825) 4 B&C 574, 107 ER 1174. See also Graham v Peat (1801) 1 East 244, 246, 102 ER 95 (where Lord Kenyon opined, in similar circumstances, that there ‘is no doubt but that the plaintiff’s possession in this case was sufficient to maintain trespass against a wrong-doer … Any possession is a legal possession against a wrongdoer’). 54 See especially Bayley J: ‘I am of opinion, that actual possession of Crown land, with the consent of the Crown, is sufficient to entitle the party possessing it to maintain trespass’ (590–91); and Littledale J: ‘Generally speaking, trespass may be maintained by a person in the actual possession of land against a wrongdoer, even where that possession may be wrongful as against a third person’ (594). For the rule that standing for trespass required a proprietary interest, see, eg, White v Bayley (1861) 10 CB (NS) 227. Although see now Dutton (n 38 above), which controversially decided that certain licensees can sue in trespass. See also Vehicle Control Services (n 38 above). 55 Land Registration Act 2002, s 9(1)(c). 56 See further Pollock and Wright (n 50 above) ch 3 and R Hickey, Property and the Law of Finders (Oxford, Hart Publishing, 2010) ch 5. 53

Bruton v London & Quadrant Housing Trust 165 Council, as the latter was prohibited by statute from granting leases.57 Nonetheless, LQHT might have acquired a consensual original title (a fee simple), by virtue of taking possession of the flat. Although the reported facts are somewhat hazy, it is probable that LQHT had been given exclusive control of the flat by the Council, and had thereupon taken physical possession of it.58 Support for this interpretation of the facts can be gleaned from the recent Court of Appeal decision in Smart v The Mayor and Burgesses of the London Borough of Lambeth, where, on materially identical facts, the relevant housing association was expressly described as having possession.59 Assuming this to be the case in Bruton, LQHT’s title— being original and relative—would have been enforceable against everyone except the Council and anyone deriving title from the Council.60 It follows from this analysis that if LQHT had taken possession, it was then in a position to grant Gary Bruton a derative legal leasehold interest, carved out of its own original legal fee simple title. Thus understood, Bruton’s lease would be a fully-fledged proprietary interest, and would behave as such. For example, its creation would be governed by leasehold formality rules, its priority vis-à-vis future disponees of LQHT by property law’s priority rules,61 and its covenants by the Landlord and Tenant (Covenants Act) 1995,62 and it would probably be registrable with the ‘good leasehold’ grade of title in the Land Register. However, even though Bruton’s proprietary title is derivative, it nonetheless derives from a merely relative title—that of LQHT. Accordingly, Bruton’s lease exists in the same relative proprietary underworld as LQHT’s fee simple, and, as such, is intrinsically vulnerable to the Council’s paramount rights.63

57 Kay v Lambeth (HL) (n 26 above), [143]: ‘[t]he tenancies were not granted by Lambeth and were not carved by LQHT out of any estate that Lambeth had granted to LQHT. They were not derivative estates’ (Lord Scott). 58 See, eg, the assumption made by Millett LJ in Bruton (CA) (n 15 above), 846; also B McFarlane (n 4 above), 668. The argument advanced here is consistent with Lord Neuberger’s discussion of possessory rights in Mayor of London v Hall [2010] EWCA Civ 817, [2011] 1 WLR 504. 59 Smart v The Mayor and Burgess of the London Borough of Lambeth [2013] EWCA 1365, [53] (the licensee housing association was described as having taken ‘possession proceedings’ against a sub-licensee, on account of its ‘superior title’). 60 It should be noted that the argument advanced here is wholly consistent with—and does not contravene—the purpose of s 32, Housing Act 1985. The legislation’s general aim is to prevent Local Authorities burdening their housing stock with certain leases to non-individuals (such as LQHT), without the consent of the Secretary of State. The finding that LQHT has a consensual original title over the Council’s property does not compromise that aim, for it is axiomatic that LQHT’s original title is relatively inferior to the Council’s superior right, which remains free from leasehold burdens. 61 Note that here, because LQHT’s original estate is necessarily unregistered, the relevant priority rules would be those governing unregistered land. 62 See further Roberts (n 4 above). 63 Although not discussed in Bruton itself, the inherent fragility of a sub-licensee’s rights compared to the paramount owner was confirmed in O’Shea (n 26 above); Kay v Lambeth (HL) (n 26 above), and London Development Agency v Nidai [2009] EWHC 1730 (Ch).

166 Amy Goymour The analysis of Bruton’s rights would be different if, alternatively, LQHT were not found to have taken possession of the flat prior to letting it out. Here, Bruton would not derive a title from LQHT because the latter had none to give.64 However, assuming that Bruton himself went into possession (which is highly probable on the facts), he would establish his own original consensual proprietary title.65 The precise nature of such a title and the consequences of such a finding are explored in the following section. It follows that Lord Hoffmann’s conclusion that Bruton’s rights were merely contractual was, with respect, too conservative. If either LQHT or Bruton (or both) took possession of the flat, Bruton acquired proprietary rights as well. These rights are fully-fledged property rights, but, being located beneath the paramount ownership rights of the Council, they take effect in the so-called proprietary underworld. (iv) Furthering the Analysis by Analogy with a Parallel Doctrine Significantly, the possibility that leases might exist in a proprietary underworld is already recognised by another body of law: the doctrine of tenancy by estoppel. The potential link between estoppel tenancies and relativity of title is frequently mooted in cases and textbooks,66 but the hypothesis has yet to be fully tested. This section seeks to do that. On close analysis, estoppel tenancies appear to occupy almost identical territory to that of leases created via consensual original acquisition. This means that the estoppel tenancy cases are a rich, and as yet largely untapped, resource for furthering our understanding of leases arising in relative proprietary underworlds. (a) Outline of the Tenancy by Estoppel Doctrine The doctrine of tenancy by estoppel originated in the sixteenth century,67 at a time when title to land was often uncertain.68 In broad terms, the doctrine gives legal effect to leasehold agreements in cases where the purported landlord lacks a proper derivative title out of which the tenancy might

64 If it did not take possession, LQHT’s rights would be purely personal at this stage. But LQHT may nonetheless have standing to sue in trespass: Dutton (n 38 above). 65 The decision in Smart (n 12 above) confirms that his possession would be consensual, rather than adverse, vis-à-vis the Council. 66 See, eg, C Harpum, S Bridge and M Dixon, Megarry and Wade’s Law of Real Property, 8th edn (London, Sweet and Maxwell, 2012) [17-126]; K Gray and S Gray (n 37 above) 388; J Furber and others (eds), Hill and Redman’s Law of Landlord and Tenant, Issue 78 (London, LexisNexis Butterworths, 2011) [A1-15]; Bell v General Accident Fire and Life Assurance Corporation Ltd [1998] L&TR 1; and First National Bank plc v Thompson [1996] Ch 231, 237 (Millett LJ). 67 For an excellent analysis, see A Pritchard, ‘Tenancy by Estoppel’ (1964) 80 LQR 370, discussed in Thompson (n 66 above). 68 Bruton (CA) (n 15 above) 845.

Bruton v London & Quadrant Housing Trust 167 be granted.69 Technically, the doctrine operates as a common law rule of evidence: once the lease is on foot, the landlord and tenant are mutually estopped from denying each other’s titles.70 The common perception is that the doctrine catapults the parties into a world of make-believe—one where, according to Mummery LJ the parties are instructed ‘to treat an imaginary state of affairs as real’, and where ‘the consequences of treating that imaginary state of affairs as real must also be imagined as real’.71 The following analysis challenges this conception of estoppel tenancies, by revealing that they are best understood not as figments of the imagination, but as real tenancies that operate as relative property rights. They inhabit proprietary underworlds, not imaginary worlds. Before turning to this argument, it should be recognised—for the sake of completing the Bruton story—that the House of Lords considered, and dismissed, an argument that Gary Bruton enjoyed a tenancy by estoppel. The reason for rejecting the argument is straightforward. The only question actually raised in Bruton was whether, for the purpose of implying statutory repairing obligations, Bruton held a lease. Having determined (a) (controversially) that leases need not be proprietary; and (b) that Gary Bruton enjoyed a non-proprietary contractual lease, their Lordships considered it unnecessary to find any tenancy by estoppel.72 If, however, the argument proposed in this chapter is accepted—that Bruton had a relative proprietary lease—the tenancy by estoppel doctrine is invaluable in determining the extent of Bruton’s rights. (b) Squaring the Doctrines of Tenancy by Estoppel and Relativity of Title Six particular features of tenancies by estoppel are examined here, in order to demonstrate (a) how closely the doctrine fits with the relativity of title doctrine; and (b) how the two doctrines might be aligned to create a coherent body of law. The first feature relates to possession. Although not essential for an estoppel tenancy to arise, in many estoppel cases, the alleged landlord possesses the land prior to granting the tenancy.73 Where this is the case (and

69

Eg where the lessor’s title had already been conveyed to another, by way of mortgage. Bruton (HL) (n 1 above) 418. Note that an estoppel arises even if both parties knew the landlord lacked title: Morton v Woods (1869) LR 4 QB 293. 71 Bell (n 66 above) 11. 72 NB In Bruton (HL) (n 1 above) 416, Lord Hoffmann opined that estoppels arise from tenancies, rather than the other way around. Nothing turns on this distinction for the purpose of the argument here. 73 See, eg, Cuthbertson v Irving (1859) 4 Hurl & N 742, 157 ER 1034 (the landlord was a mortgagor in possession). 70

168 Amy Goymour assuming the landlord’s right to possession does not derive from the real owner)74 there is no difficulty in explaining the estoppel lease in relativity of title terms: the landlord acquires a consensual original relative title (by reason of being in possession of the land), out of which he can grant a derivative lease to the tenant. Here, the tenancy by estoppel is, in effect, a proper proprietary lease, albeit one that exists in the relative underworld. A tenancy by estoppel can still be rationalised on relativity of title grounds, even if the landlord did not take prior possession.75 This is because it is invariably the case in estoppel tenancy cases that the tenant himself has taken possession.76 In such circumstances, the tenant’s own possession generates an original relative title to the land. Pure relativity of title reasoning would suggest that his title, being generated by possession, is a fee simple. However, a close analysis of the estoppel tenancy cases refines this picture of the tenant’s position: they make it clear that, in fact, the tenant’s possession generates a fee simple interest in his landlord, from which the tenant’s lease then derives.77 Here, it is through combining the relativity of title and tenancy by estoppel doctrines that we obtain a fuller picture of this kind of tenant’s position.78 Thus, in Bruton, even if LQHT had not itself taken possession of the flat prior to leasing it to Mr Bruton (which is factually unlikely), LQHT would have subsequently acquired an original fee simple by reason of Mr Bruton going into exclusive possession. The second pertinent feature of estoppel tenancies is that an estoppel tenant’s title is inherently vulnerable to the real owner’s paramount title, and to the title of anyone deriving an interest from the real owner.79 It is significant that the tenant is in an identical position when viewed from a relativity of title perspective, the leasehold interest existing in a relative underworld.

74 In some cases, the landlord derives his possessory right from the real owner. For example, in many older cases, the landlord had conveyed the fee simple by way of mortgage to a mortgagee, prior to granting the lease (see Bruton (CA) (n 15 above) 845). Here, the landlord’s possessory right (coupled with his equity of redemption) derives from the mortgagee’s paramount fee simple. Significantly, however, estoppel tenancies are not confined to such situations, and just as frequently arise where the landlord holds no derivative interest at all, as was the case in Cooke v Loxley (1792) 5 Term Reports 4, 101 ER 2, and in Bruton itself. 75 See eg Webb v Austin (1844) 7 Man & G 701, 135 ER 282. 76 Although it is unclear whether the tenant’s possession is an absolute requirement of estoppel tenancies, to the author’s knowledge, no such tenancy has been successfully pleaded where the tenant has not, at some point, been in possession. See further Pritchard (n 67 above) 394–95, 397 and Hill and Redman (n 66 above) [A1-18]. The rationale for such a requirements is that it is only reasonable to estop the tenant from denying the landlord’s title if he has received possession from the landlord. 77 Bell (n 66 above) 9; Cuthbertson v Irving (1860) 6 H&N 135, 158 ER 56, 140. 78 Note that both titles could be registered in the Land Register, as good leasehold and possessory freehold titles respectively: Land Registration Act 2002, ss 9, 10. 79 Unless the landlord acquires the real owner’s title; here the estoppel is fed. See Cuthbertson (n 73 above); Doe d Marchant v Errington (1839) 6 Bing NC 79, 133 ER 31; Doe d Downe (Lord) v Thompson (1847) 9 QB 1037. See text to n 80 below.

Bruton v London & Quadrant Housing Trust 169 Thirdly, a tenancy by estoppel can be ‘fed’ if the landlord subsequently acquires a legal estate.80 Where, for example, after an estoppel tenancy has been created, the landlord acquires the paramount freehold estate, the estoppel tenancy immediately converts into an ordinary tenancy which is carved out of the paramount freehold. The tenancy thus moves upwards from the proprietary underworld, into what might be termed the ‘proprietary overworld’. A similar result would follow if the estoppel landlord acquires a legal leasehold estate: here, the estoppel tenant’s lease would immediately derive from that leasehold estate, and become a legal sub-lease. It is worth noting that this is what ultimately happened in the Bruton story: although not relevant to the Bruton litigation, the Council finally replaced LQHT’s licence with a lease, thereby feeding Bruton’s estoppel tenancy.81 The ‘feeding’ rule is a key component of the tenancy by estoppel doctrine, but currently has no obvious counterpart in the doctrine of relativity of title. Indeed, different results would arguably pertain in these feeding cases were they reasoned purely on the basis of relativity of title. This is because, in cases such as Bruton, the titles of both landlord and tenant, which exist in the relative underworld, are regarded as inferior to the title of the paramount owner (and anyone deriving their title from the paramount owner). If the landlord himself acquires the paramount title, there is no intrinsic reason within the logic of relativity of title why the landlord’s newly acquired paramount title should be bound by his tenant’s rights. But the tenancy by estoppel doctrine’s feeding rule exists for a good reason, namely to prevent landlords reneging on promises to give their tenants exclusive possession. It follows that, in the interests of consistency and fairness, the relativity of title doctrine ought to be regarded as inherently subject to the estoppel doctrine’s feeding rule. Fourthly, the rules on tenancy by estoppel make it clear that the interests of both the landlord and the tenant are fully alienable.82 This feature is wholly consistent with a relativity of title analysis, according to which both parties would also have alienable proprietary interests. The fifth point follows from the fourth, and concerns the extent to which disponees of the landlord might be bound by an estoppel tenancy. The logic of title relativity would dictate that, given that both the landlord’s and tenant’s interests are considered to be proprietary (albeit inferior to the paramount owner’s title), any conflict between the tenant and the

80 See Thompson (n 66 above); Rajapakse v Fernando [1920] AC 892 (PC). Note that the feeding rule is inapplicable to certain cases of estoppel tenancy, namely where the estoppel is by deed (rather than representation), and the landlord already had a legal interest when he granted the tenancy: Harpum, Bridge and Dixon (n 66 above) [17.129] 81 Lord Scott explained Bruton thus in Kay v Lambeth (HL) (n 26 above) [146]. 82 Cuthbertson (n 73 above) 1040.

170 Amy Goymour landlord’s successor in title should be governed by property law’s ordinary rules of priority. Thus, assuming the landlord’s relative legal fee simple is unregistered,83 the rules on determining priority for interests in unregistered land apply. These prescribe that the lease, being legal (having derived from the landlord’s legal title), binds the landlord’s later disponee. Strikingly, the tenancy by estoppel cases tend to reach the same result,84 but they are thinly and opaquely reasoned. Here, our understanding of estoppel tenancies would be much enhanced by recognising that they are, in fact, explicable in terms of relativity of title. There is, however, one apparent mismatch between the two doctrines: the tenancy by estoppel doctrine seems to employ a ‘special rule’ for certain types of estoppel tenancies, namely where the estoppel arises by so-called ‘deed’, rather than by ‘representation’.85 Here, exceptionally, the estoppel tenancy will fail to bind a bona fide purchaser from the landlord who has no notice of the tenancy. It is hard to square this ‘special rule’ with the priority rules inherent in the relativity of title doctrine because, according to the latter, the tenant’s legal lease always prevails. Yet on close analysis, the two main cases frequently cited as authority for the ‘special’ estoppel priority rule—Jefferys v Bucknell86 and General Finance, Mortgage and Discount Co v Liberator Permanent Benefit Building Society—are probably explicable on other grounds, thereby calling the very existence of the ‘special rule’ into doubt. In neither case was it necessary to rely on the ‘special rule’ to explain why the good faith purchaser from the landlord took free from the alleged estoppel tenancy. In Jefferys, no estoppel tenancy seemed to have arisen in the first place and, in any case, any estoppel tenancy that had arisen was described as being merely equitable and, as such, would be defeated by a bona fide purchaser under property law’s ordinary priority rules. In Liberator, the relevant estoppel tenancy did not predate the landlord’s disposition to the purchaser and, for that reason, would fail to bind the purchaser’s interest.87 Arguably, given the apparent weakness of these authorities, and in the interests of achieving consistency between the doctrines of estoppel tenancies and relativity of title, the estoppel doctrine’s ‘special rule’ of priority ought to be jettisoned. The sixth feature of estoppel tenancies relates to their enforceability against complete strangers (being people unconnected to the paramount

83 It will be unregistered unless the landlord has registered his relative title as an inferior estate. See text to n 55 above. 84 And there is no need for the estoppel to have first been fed: Pritchard (n 67 above) 389; Thompson (n 66 above) 238, Gouldsworth v Knights (1843) 11 M&W 337, 152 ER 833; Cuthbertson (n 7 above), and Mexfield (n 41 above) [65]. 85 See Pritchard (n 67 above). 86 Jefferys v Bucknell (1831) 2 B & Ad 278, 109 ER 1146 (KB). 87 In the light of the timing rule in Abbey National v Cann [1991] 1 AC 56 (HL).

Bruton v London & Quadrant Housing Trust 171 owner, the landlord or the tenant). The landlord’s and tenant’s positions require separate analysis. Curiously, the tenant’s rights against strangers are scarcely discussed in the tenancy by estoppel literature. This being so, it seems expedient to draw on relativity of title reasoning to fill the void, and thereby to recognise the tenant as having a relative proprietary title and therefore standing to sue strangers in trespass. What about the estoppel landlord’s position? From a relativity of title perspective, he is regarded as being in as good a position as any other landlord, save only for his vulnerability to the paramount owner’s rights. However, one well-known estoppel tenancy case takes a very different view. In Tadman v Henman,88 an estoppel tenant permitted his wife (a stranger to the landlord) to keep her funeral hearses on the leased premises. The court was asked whether the landlord could lawfully seize the stranger’s hearses as distraint for the tenant’s unpaid rent. Crucially, although distraint of strangers’ property was generally permitted in the case of ‘normal’ tenancies,89 the court found that estoppel tenancies were different, and did not authorise the landlord to act in this way. However, there is no good reason for this result: why should the landlord, holding a consensual original relative fee simple, not have the landlord’s rights of distraint enforceable against strangers? Given its obvious mismatch with the rules of the relativity of title, the result in Tadman is at least highly questionable, and should probably be regarded as wrongly decided.90 Two important conclusions may be drawn from this brief exploration of the tenancy by estoppel doctrine. First, bar a few niggling discrepancies, estoppel tenancies can be explained in relativity of title terms. Secondly, there is obvious merit in integrating the two sets of rules into a coherent body of law, along the lines already suggested. Doing so enables a more complete and more refined picture to be formed of tenancies, like Gary Bruton’s, that are not derived from the real owner’s title, and which exist in the proprietary underworld as relative proprietary interests. (v) The Merits of Understanding Bruton as a Case about Relativity of Title Thus, the foregoing analysis establishes that it is possible to regulate the proprietary underworld by recognising relative titles, and that there is precedent for doing so in the tenancy by estoppel doctrine. However, the question remains whether such regulation is desirable as a matter of policy. At least three reasons combine to suggest that it is. 88

Tadman v Henman [1893] 2 QB 168. NB the common law right to distrain for arrears of rent was abolished on 6 April 2014, and replaced, in the commercial context, with a new ‘Commercial Rent Arrears Recovery’ procedure: Tribunals, Courts and Enforcement Act 2007, ss 72–80 and sch 12. 90 See too Harpum, Bridge and Dixon (n 66 above) [17-127]. 89

172 Amy Goymour First, at least some form of legal regulation of the proprietary underworld is needed. As discussed above, the Rushcroft Road mansion flats were occupied for at least 13 years in circumstances where neither the relevant housing associations nor the residents held proprietary interests deriving from the owner, Lambeth Council. Such ‘proprietary underworlds’ are common not only in the Borough of Lambeth, but also across London, and doubtless they will arise in the future. It was inevitable in these underworlds that disputes concerning rights in the property arose, and they will continue to arise—for example disputes between: (a) the residents themselves; (b) the residents and strangers; and (c) the residents and the Council. It is axiomatic that there should be clarity as to the rules governing these cases, rather than leaving the court to decide them on an ad hoc and instinctive basis. Secondly, there is no need to write the rule-book from scratch in order to achieve this clarity: the doctrine of relativity of title, when combined with the rules on estoppel tenancies, provides a ready-made matrix of property law rules which can be implanted straightforwardly into the proprietary underworld. Finally, the doctrine of relativity of title not only provides a means by which property disputes might be clearly resolved; with its focus on protecting possession in this context, it provides a desirable set of rules. As has long been recognised in the chattels context, it is in the interests of preserving a peaceful society that possession, however obtained and even where the possessor is not the true owner, is safeguarded against the unauthorised incursions of strangers.91 Without the relativity of title doctrine, strangers could lawfully take property from any non-owning possessor. This would inevitably lead to a free-for-all in the proprietary underworld—a situation which should be neither encouraged nor permitted.92 To see how, in practice, the rules on relativity of title might serve to regularise an otherwise unruly state of affairs, it is useful to reconsider the case of Zoe, Dave and Joe, discussed in Section II.(E) above. It will be remembered that a disgruntled neighbour complained that Zoe, a licensee in possession of a Council-owned Rushcroft Road flat, had unlawfully ‘leased out’ her property to Joe whilst she was in Thailand. If the possibility of relative titles is ignored, Zoe and Joe hold merely contractual rights to occupy the property which, being merely personal rights, are unenforceable against intruding strangers, who may seek to occupy the property

91 See, eg, Jeffries v Great Western Railway Co (1856) 5 El & Bl 802, 119 ER 680, and, generally, D Fox (n 42 above) 338. See also the protection given to possessors via the possessory interdicts in Roman Law. See, eg, W Buckland, A Textbook of Roman Law, 2nd edn (Cambridge, CUP, 1932) 732–36, and the discussion in Hickey, chapter 6 of this volume, above. 92 In the chattels context, see Parker v British Airways Board [1982] QB 1004, 1009. See further Pollock and Wright (n 50 above) ch 3.

Bruton v London & Quadrant Housing Trust 173 themselves. Without rules ranking two non-owners’ claims to property as against one another, it is likely that chaos and disorder will ensue. The relativity of title doctrine would bring much-needed order and stability to this state of affairs: it would find that Zoe, being in possession, had acquired a relative possessory title in the proprietary underworld, over which she had lawfully created a lease in favour of Joe. Everyone except Lambeth Council (the paramount owner), and those deriving title from the Council, would be bound by Zoe’s and Joe’s relative proprietary rights. Even though Zoe’s underhand conduct may appear to make her undeserving of a proprietary title to the land, the law’s recognition of such a right is preferable to the alternative: a chaotic proprietary free-for-all.

IV. BEYOND BRUTON: USING RELATIVITY OF TITLE REASONING TO REGULATE OTHER ‘PROPRIETARY UNDERWORLDS’

In summary, Bruton deserves recognition as a landmark case not for the reasoning actually employed in the case, but for the high-profile platform it provides for understanding the continuing use and function of the relativity of title doctrine. Contrary to Cooke’s argument that title relativity is ‘no longer an important concept’, it would appear that the doctrine is alive, well and—more-importantly—well-suited to the task of regulating proprietary underworlds. Indeed, as this final section suggests, relativity of title reasoning (as informed by the tenancy by estoppel doctrine) might usefully be employed outside the Bruton context, to explain and regulate other types of proprietary underworld. Two key examples are discussed in this section. These examples necessarily take us beyond the facts and context of the Bruton case, but, in common with Bruton, involve situations where it is important that we recognise, and do not overlook, the existence of second-tier property rights that exist in the proprietary underworld.

A. Original Acquisition of Relative Titles (Adverse Possession) First, despite Cooke’s assertion to the contrary, there is a continuing need to recognise the non-consensual original acquisition of relative titles in cases of adverse possession. This is true not only in cases concerning unregistered land (where the squatter’s relative title might mature into ownership through the effluxion of time), but also in cases where the land is registered. As Neil Cobb and Lorna Fox have rightly observed, the unlikelihood of a squatter becoming the registered proprietor under the Land Registration Act 2002 means that he is disincentivised from even applying for the

174 Amy Goymour superior title. Consequently, increasing numbers of squatters will choose to live ‘outside the [registration] system’, in the proprietary underworld. But even though such squatters may never become owner, they nonetheless hold relative proprietary interests, which should be properly recognised as being fully alienable, and—crucially—enforceable against everyone bar the owner and the owner’s disponees.93

B. Derivative Acquisition of Relative Titles (the Operation of ‘Priorities’ rules) Secondly, and perhaps more significantly, it is useful to recognise that relative titles might arise not only in cases of original acquisition (whether consensual or non-consensual), where the inferior right is generated by the fact of possession, but also in cases where the relatively inferior right is acquired derivatively from someone. Take, for example, a case where a fee simple owner grants a 10-year lease to A and, on the following day, leases the same land to B on identical terms, both leases to take effect immediately. Here, A’s and B’s rights both outwardly derive from the owner’s title. But their rights are mutually incompatible, and so the law must decide which has priority. Arguably, the nemo dat principle should dictate that, once the owner has leased the land, he has exhausted his possessory entitlement for that term, and cannot subsequently lease the land to B for the same period. On this analysis, B’s lease is simply ineffective. However, as demonstrated above, the nemo dat principle is no barrier to the setting up of a relative title. Thus, in cases where an owner seeks to grant two inconsistent derivative interests, the second interest may helpfully be understood as taking effect as a relative derivative right. Both A’s and B’s interests are proprietary, and both derive their proprietary status from the owner, but, being inconsistent interests, they operate relative to one another in terms of priority, in different proprietary worlds. Thus, the rules which determine the ‘priority’ of conflicting interests might actually be part of the wider doctrine of relativity of title, the priorities rules merely determining the ordering of these relative proprietary rights.94 In this context of relative derivative titles, the term ‘title’ is being used in a refined and specialised sense. As David Fox has illuminated in previous work, someone’s ‘title’ to an asset is best understood as denoting the

93 Indeed, squatters’ relative titles are recognised by schedule 6 of the Land Registration Act 2002 itself: paras 5(4)(c), 9(1) and 11(2). 94 For a similar argument in relation to competing equitable titles, see D Fox’s excellent article (n 42 above). The argument in this chapter is that relativity of title might extend further, and also explain competing claims to derivative common law titles over land.

Bruton v London & Quadrant Housing Trust 175 strength of his right, rather than the particular content of the right.95 Thus, one can have ‘titles’—ie entitlements—to easements, leases, options to purchase, and so on. It is where two or more titles—or entitlements—conflict with one another (for example, where A claims an easement and B claims an unencumbered leasehold estate over the same property) that priority rules are required in order to rank the competing entitlements relative to one another. Hence, it is plausible that the priority rules might be conceived as a specialised application of the doctrine of relativity of title.96 (i) Earlier Right Having Priority over Later Right Normally, the rules of priority mean that the first interest to be created by the owner has priority over the second. This is the ‘basic rule’ of priority applicable to registered land, within section 28 of the Land Registration Act 2002. Seen through the lens of relativity of title, the second right, even though inferior to the first, nonetheless has an existence as a proprietary interest, in a relative proprietary underworld. According to this analysis, the second interest is not void and/or unregulated; rather it is a fully alienable proprietary interest, and is enforceable against everyone except those holding superior rights.97 What does this mean for the situation, discussed above, where the owner grants T1 and T2 separate incompatible leases over the same land, one day after the other? The relativity of title analysis here means that T2’s lease is subject to T1’s lease while the latter is on foot, but that T2’s lease will become paramount if T1’s lease happens to end prematurely. In other words, T2’s lease will originally take effect in the proprietary underworld, but will later ascend into the proprietary overworld. Evidence for the priority rules being part and parcel of the relativity of title doctrine might be found in the tenancy by estoppel cases which, as has been argued above, also form part of the title relativity doctrine. It is therefore telling that the tenancy by estoppel cases reach an identical solution to the problem of two concurrent and inconsistent leases being created over the same land. In Mackley v Nutting,98 for example, T2’s lease, having been created after T1’s, was understood as taking effect as an estoppel lease (necessarily taking effect with all the proprietary features discussed above). Crucially, and consistently with a relativity of title analysis, T2’s lease was ‘fed’—and thereby ascended into the proprietary overworld—once T1’s lease had ended. 95

Fox (n 42 above) 333–34. See also Fox, ibid, 336–38, which discusses the possible conceptual link between title disputes and priority disputes. 97 See, eg, Quennell v Maltby [1979] 1 WLR 318 (CA), concerning a mortgage that took priority over a subsequent, inconsistent, lease. Templeman LJ said the lease bound the owner, but was ‘void’ against the bank. 98 Mackley v Nutting [1949] 2 KB 55 (CA). 96

176 Amy Goymour (ii) Later Right Having Priority over Earlier Right Sometimes, property law’s priority rules provide that the later right has priority over an earlier right. Here, too, a relativity of title analysis would dictate that both rights subsist concurrently; this time it is the earlier one that descends into the proprietary underworld, with the later one having priority in the proprietary overworld. There are two key examples of rights being ordered in this way. First, the doctrine of overreaching, where it applies, subordinates the prior interests of trust beneficiaries to the interests of those taking a later disposition of the property from the trustee/s. Where land is concerned, the doctrine most commonly applies where two or more trustees charge their land by way of legal mortgage to a bank.99 In such circumstances, overreaching is all too frequently conveniently summarised, for the benefit of students, as a doctrine that allows the beneficiaries’ interests to be ‘swept off’ the land, and into the monetary proceeds of the disposition.100 This is an oversimplification,101 and overlooks the doctrine of relative titles. The beneficiaries’ interests are not removed from the land; they continue to exist, and are merely subordinated to the relatively superior mortgage interest, unless and until the mortgage is discharged. This was confirmed by Lord Oliver in City of London Building Society v Flegg, where he was in ‘no doubt’ that, whilst overreached beneficial interests lose ‘priority’ to a lending mortgagee, they continue to operate as against their trustee’s legal title.102 Relativity of title necessitates and explains this result. The second rule which gives priority to the later right is found in section 29 of the Land Registration Act, which carves out an exception to the basic rule of priority in section 28. Subsection 1 provides: If a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration (emphasis added).

Where this provision applies, the statute expressly recognises that the first interest is postponed to the second interest; the first interest is not extinguished. ‘Postpon[ement]’ is left undefined by the Act, but it makes sense when seen as a concept concerning relativity of title, for it seems to dictate that the first, ‘postponed’ interest continues to subsist, albeit relatively, in

99

Law of Property Act 1925, ss 2 and 27. See, eg, Dixon, Modern Land Law (n 37 above) 98, 122 and Gray and Gray, Land Law, 7th edn (Oxford, OUP, 2011) 398; and J MacKenzie and M Phillips, Textbook on Land Law, 11th edn (Oxford, OUP, 2006) 325. 101 As the textbook authors mentioned in the preceding note would undoubtedly concede. 102 City of London Building Society v Flegg [1986] Ch 605 (HL). 100

Bruton v London & Quadrant Housing Trust 177 an inferior proprietary underworld.103 The relativity of title doctrine can be drawn upon to give meaning and content to the postponed right. Take, for example, a case where the registered proprietor first declares the land on trust for A, then grants B a 10-year registered lease. Unless A’s interest is protected as an overriding interest, A’s interest is postponed to B’s lease.104 This means that A’s interest continues against the owner’s legal title and— most significantly—will resurface from the proprietary underworld, into the overworld, once B’s lease ends. The doctrine of title relativity is central to explaining this legal state of affairs.

V. CONCLUSION

To conclude, it is necessary to return to the central legal question, posed earlier in the chapter: What happens when A purports to grant a proprietary interest to B, in circumstances where A’s own proprietary entitlement is limited or nonexistent? The answer suggested here can be summarised in four key points. 1.

The nemo dat principle dictates that A cannot generally confer proprietary enjoyment on B which he does not himself have. 2. However, the nemo dat principle presents no barrier to the possibility that B might acquire an original, relative proprietary interest by virtue of his going into possession—whether he takes possession with or without the true owner’s consent. Any title B thereby acquires ranks below the paramount owner’s title in terms of its priority, and therefore exists in the proprietary underworld. The twin doctrines of relativity of title and tenancy by estoppel, when taken together, provide a rich account of the nature and content of B’s rights. 3. In situations where A has already granted a proprietary interest (such as a lease) to X, the nemo dat principle does not prevent A from granting an equal and competing derivative right to B. In such a case, X’s and B’s rights, being inconsistent, cannot co-exist in the same proprietary world; instead they co-exist as relative titles, with the established rules on priority determining whose right exists in the proprietary overworld, and whose is pushed down into the proprietary underworld. 4. It is important, as a matter of policy, that proprietary rights which inhabit the relative proprietary underworld are recognised as being proprietary and are properly regulated as such. Thus, despite Cooke’s assertions to the contrary, the doctrine of relativity of title seems alive and well and—more importantly—plays a pivotal role 103 See further Halifax Plc v Curry Popeck (A Firm) [2008] EWHC 1692 (Ch); M Dixon, ‘Priorities under the Land Registration Act 2002’ (2009) 124 LQR 401. See also Gold Harp Properties Ltd v Macheod [2014] EWCA Civ 1084. 104 Land Registration Act 2002, s 29 and sch 3.

178 Amy Goymour in regulating rights over land. Whilst the doctrine was overlooked in their Lordships’ explanation of their decision in Bruton, the wider Bruton story provides a fitting backdrop—and a compelling social case—for reviving property lawyers’ awareness and understanding of relative titles. It is for this reason that Bruton deserves recognition as a landmark case.

8 The Politics of Lloyd’s Bank v Rosset [1991] LORNA FOX O’MAHONY

I. INTRODUCTION

W

HILE THERE CAN be little doubt that Lloyd’s Bank v Rosset1 is a paradigmatic ‘landmark case’ for English property law, that would not, in itself, justify its claim for space—against the whole of the field—in this collection. Indeed, there are strong arguments for and against inclusion. On the one hand, Rosset is part of the breadand-butter of property law courses: every student must be familiar with its well-rehearsed facts and its landmark contribution to English law through fixing the ‘bright-line’ rules of the common intention constructive trust. At the same time, one might reasonably ask: what more can be said about a decision which has been widely analysed, extensively criticised and broadly acknowledged to be doctrinally poor? In claiming that there is something more to be said about Lloyd’s Bank v Rosset, this chapter takes as its focus the almost uncanny resilience of a widely-criticised decision. The chapter re-analyses the decision within the changing political and cultural life of English property law, to reflect, firstly, on what it tells us about English property culture in 1991, and secondly, what its resilience against an onslaught of criticism and reform attempts reveals about the politics of English property law since then. As an early career researcher, I was fascinated by the subject of trusts of the family home.2 It was one of my favourite topics to teach on 1

Lloyd’s Bank PLC v Rosset [1991] 1 AC 107, [1990] UKHL 14. L Fox, ‘Co-ownership of Matrimonial Property: Radical Proposals for Reform’ (2001) 52 Northern Ireland Legal Quarterly 20–53; L Fox, ‘Creditors and the Family Home: Three Perspectives on Family Property Policy’ [2002] 2 Irish Journal of Family Law 3–8; L Fox, ‘Family Homes, Conveyancing and Pre-Contract Inquiries: Pictures from these Islands’ (2002) 7 Conveyancing and Property Law Journal 6–16; L Fox, ‘Reforming Family Property: Comparisons, Compromises and Common Dimensions’ (2003) Child and Family Law Quarterly 1–20; L Fox, ‘Trusts of the Family Home: The Impact of Oxley v Hiscock’ (2005) 56 Northern Ireland Legal Quarterly 83–104; L Fox, ‘Property Rights of Cohabitees: The Limits of Legislative Reform’ [2005] 1 Irish Journal of Family Law 2–9. 2

180 Lorna Fox O’Mahony undergraduate Trusts courses, and I enjoyed a period of intense interest in the struggle to find the right principles to govern the acquisition and management of an ‘asset’—the family home—that sits at the crux of family relationships, property principles and mortgage law.3 As a subject of property scholarship, it has all the ingredients to draw us in: it sits at the heart of domestic property, and at the core of the property canon, making powerful expressive statements about the rules of acquisition for non-title holders: the criteria that must be satisfied for a claimant to achieve entry through the gates of property. The Rosset decision was widely criticised for the gap between its ‘bright-line’ rational principles and the lived, relational experiences of claimants, provoking a surge of critical feminist property scholarship highlighting the impact of its approach on, ‘typically’, women claimants,4 which only added to the urgency of addressing the subject. In the 1990s, tensions between the possibility of dynamic doctrinal development through judicial creativity under the equitable jurisdiction, and the quest for a statutory solution through the work of the Law Commission, were echoed in similar debates across the Commonwealth, prompting considerable scholarly interest in convergence and divergence across jurisdictions.5 It was an exciting time to be an implied trusts scholar. At the dawn of the twenty-first century, law reform agencies published reports on the reform of principles governing the ownership of the family home in Northern Ireland6 and in Ireland,7 and I eagerly awaited the completion of the (long delayed) Law Commission for England and Wales’ work on the subject, which became the Sharing Homes report.8 And then, well, nothing really. Between 1973 and 2002, the Law Commission produced two working papers9 and six reports10 concerned 3 J Miles, ‘Property law v family law: resolving the problems of family property’ (2003) 23 LS 624. 4 S Wong, ‘When trust(s) is not enough: an argument for the use of unjust enrichment for home sharers’ (1999) 7 Feminist Legal Studies 47; A Bottomley, ‘Self and Subjectivities: Languages of Claim in Property Law’ (1993) 20 JLS 56; A Lawson, ‘The things we do for love: detrimental reliance in the family home’ (1996) 16 LS 218; M Halliwell, ‘Equity as Injustice: the Cohabitant’s Case’ (1990) 20 Anglo-American Law Review 500. 5 See, for example, J Mee, The Property Rights of Cohabitees (Oxford, Hart Publishing, 1999); L Fox, ‘Reforming Family Property: Comparisons, Compromises and Common Dimensions’ (2003) 15 Child and Family Law Quarterly 1. 6 In Northern Ireland, the Law Reform Advisory Committee (Northern Ireland) attempted to address the difficulties associated with trusts of the family home in its Consultation Paper (1999) and Final Report (2000) on Matrimonial Property, but this did not result in legislation: see L Fox, ‘Co-ownership of Matrimonial Property: Radical Proposals for Reform’ (2001) 52 NILQ 20–53. 7 Law Reform Commission, The Rights and Duties of Cohabitees (LRC CP 32-2004). 8 Law Commission, Sharing Homes: A Discussion Paper (Law Com No 278), (London, TSO, 2002). 9 Law Commission, Family Property (Working Paper No 42, 1971); Law Commission, Domestic Violence and Occupation of the Family Home (Working Paper No 113, 1989). 10 Law Commission, First Report on Family Property: A new Approach (Law Com No 52, 1973); Law Commission, Third Report on Family Property: the Matrimonial Home

The Politics of Lloyd’s Bank v Rosset 181 with the acquisition of interests in family property during relationships, until it admitted defeat in Sharing Homes, concluding that the ‘property approach’ was unworkable, and advocating the shift to a ‘relationship approach’ instead. Following the publication of Sharing Homes—and with reform energies diverted away from the law of trusts and towards a campaign to widen the scope of the family jurisdiction by recognising cohabitation as a potential trigger to property acquisition11—it became clear that, despite widespread criticism that it operated unfairly, particularly against female claimants,12 the decision in Rosset had been accepted as part of the property canon. By the time the Court of Appeal gave its judgment in Oxley v Hiscock13—shifting the focus of judicial and scholarly attention from the ‘first hurdle’ of the common intention constructive trust (acquisition) to the second stage (quantification)—I was losing my faith in the prospect that a new direction for family property could be found through legislation, or judicial ‘refinement’ of the common intention constructive trust, or a combination of the two. In 2003 I attended an interview for a lectureship at Durham Law School, and one of the questions I was asked following a presentation on my research was whether I planned to do any further work in the field of trusts of the family home. I think my answer at the time was that I really didn’t see what more I could find to say about it: after Sharing Homes, and in the absence of judicial willingness to revisit Rosset, I found it hard to see where I could go with this as a property problem, other than to observe (in the company of many others) that it was all quite unsatisfactory. In the 10 years that followed, that sense of dissatisfaction has lingered, and I have struggled to find anything productive to say, even with the rare treat of two new decisions from the House of Lords and the Supreme Court.14 On a data key somewhere still lies dormant a draft article that I started to write in 2005, a piece of writing that never worked out and was abandoned. And when we came to write ‘Great Debates in Property Law’, I happily traded the trusts of the family home chapter to one of my co-authors—who went on to capture the problem with getting geared up to care about what is going on with the law in this area when one has no faith (Co-ownership and Occupation Rights) and Household Goods (Law Com No 86, 1978); Law Commission, Property Law: The Implications of Williams and Glyn’s Bank Ltd v Boland (Law Com No 115, 1982); Law Commission, Family Law: Matrimonial Property (Law Com No 175, 1988); Law Commission, Family Law: Domestic Violence and Occupation of the Family Home (Law Com No 207, 1992), Law Commission, Sharing Homes: A Discussion Paper (Law Com No 278, 2002). 11 Law Commission, Cohabitation: The Financial Consequences of Relationship Breakdown (Consultation Paper No 179) (London, 2006). 12 Eg S Gardner, ‘Rethinking Family Property’ (1993) 109 LQR 263; A Barlow & C Lind, ‘A matter of trust: the allocation of rights in the family home’ (1999) 19 LS 468. 13 Oxley v Hiscock [2004] EWCA Civ 546. 14 Stack v Dowden [2007] UKHL 17; Jones v Kernott [2011] UKSC 53.

182 Lorna Fox O’Mahony in it.15 On the doctrinal/operational level, the problem lies, not least, with the inaptness of seeking to govern through rational doctrines a lived experience that is far removed from the artificialities of universal written declarations of trust, or—in the absence of these—‘express common intention’ and ‘direct financial contributions’.16 But with widespread acknowledgement of this truism, my usual approach to legal analysis—starting from the person who experiences the law to reflect on the impact of legal principles, with particular attention to differential impact on vulnerable subjects and to evaluating the role of law and policy in responding or exacerbating those vulnerabilities—has little to add to a conversation in which the disjunction between legal principles and lived experiences has been exceptionally well articulated.17 I was therefore surprised when I found myself starting to think about trusts of the family home again after reading a Conveyancer article in 2011.18 Juanita Roche’s analysis of subsequent developments in the common intention constructive trust had, for me, the welcome effect of opening a window and letting in some fresh air on what had become very stale thinking. Roche’s argument was based around what she identified as the essentially simple nature of the decisions in Oxley v Hiscock,19 Stack v Dowden,20 and Jones v Kernott.21 She argued that what has been lost in the dominant discourse, oriented as it is around the competing tropes of ‘certainty’ and ‘fairness’, is that these cases are better understood as invoking a tension between two distinctive understandings of ‘fairness’: on the one hand, the idea that the application of principles leads to a fair outcome, and, on the other, the view that what fairness in fact demands (from the perspective of a property owner, and so, arguably, for property law) is the protection of existing property rights unless there is a ‘legitimate’ basis (for example, based in intention) on which to depart from this. Roche argued that: To depart from Rosset in the sense of abandoning the requirement for common intention, the Supreme Court would have to be persuaded that there were any

15 Writing that the law seems to have become ‘intellectually moribund’: D Cowan, L Fox O’Mahony and N Cobb, Great Debates in Property Law (London, Palgrave Macmillan, 2012) 206. 16 A Bottomley, ‘Production of a Text: Hammond v Mitchell [1991] 1 WLR 1127’ (1994) 2 Feminist Legal Studies 83. 17 See, for example, G Douglas, J Pearce and H Woodward, ‘Cohabitants, Property and the Law: A Study of Injustice’ (2009) 72 MLR 24; A Barlow, C Burgoyne and J Smithson, The Living Together Campaign—An investigation of its Impact on the Legally Aware Cohabitants (Ministry of Justice, 2007). 18 J Roche, ‘Kernott, Stack and Oxley made simple: a practitioner’s view’ [2011] Conv 123. 19 [2004] EWCA Civ 546. 20 [2007] UKHL 17. 21 [2010] EWCA Civ 578, revd [2011] UKSC 53.

The Politics of Lloyd’s Bank v Rosset 183 circumstances in which it could be fair to deprive the legal owner of some of his or her property without his or her consent, without him or her having been shown to have committed some wrong, and without the sanction of statute.22

Roche’s call for a ‘happy divorce’ of trusts of the family home reasoning from ‘the ideological and emotional noise emanating from broken homes’23 would doubtless lead to greater conceptual clarity and certainty in the articulation of doctrinal principles, not least by climbing off the uncomfortable, contextualised, horn on which this dilemma is currently situated. At the same time, it casts a useful light on the fundamentally political nature of calls for ‘certainty’, ‘clarity’, and ‘conceptual coherence’, given effect, for example, in the construction of the ‘property question’ at stake in these cases as rooted in the ‘fairness to the property owner’ value of consent. In re-considering Rosset within the changing political and cultural life of English property law, this chapter focuses on the significance of this landmark case as a turning point in English property culture. As the UK began to ape the US’s extremist political commitment to individualism from the late 1980s, the decision in Rosset crucially embedded a distinction between ‘property insiders’ and ‘property outsiders’ in English property discourse. Indeed, many of the features of our contemporary property culture—from the recent debate surrounding pre-nuptial agreements to the criminalisation of squatting—can be viewed as emanations of expressive statements, resulting from Rosset, about what it means to be a property owner in English legal culture. In the period since Rosset, having property rights— specifically, the accumulation and management of assets throughout the life-course to provide a buffer against risk and to enable self-provision in a ‘wealth-fare’ state24—has become a critical component of citizenship. As the UK population witnessed a dramatic increase in inequality at the end of the twentieth century,25 the question of whether one has property rights, or not, was imbued with new significance, determining whether or not one qualifies as an ‘insider’ in the asset-based wealth-fare society. Looking beyond the specific impact of the decision on potential common intention constructive trust claimants, there is another, broader set of 22

Roche (n 18 above) 136. Ibid, 139. J Doling and R Ronald, ‘Property-based welfare and European homeowners: how would housing perform as a pension?’ (2010) 25 Journal of Housing and the Built Environment 227–41; S Parkinson, BA Searle, SJ Smith, A Stokes and G Wood, ‘Mortgage Equity Withdrawal in Australia and Britain: towards a wealth-fare state?’ (2009) 9 European Journal of Housing Policy 363. 25 AS Alderson and F Nielson, ‘Globalization and the great U-turn: Income inequality trends in 16 OECD countries’ (2002) 107 American Journal of Sociology 1244; AB Atkinson, Income inequality in OECD countries: Data and explanations, Revised version of Working Paper 881, prepared for the CESifo conference ‘Globalization, inequality and wellbeing’, Munich, November 2003): (papers.ssrn.com/sol3/papers.cfm?abstract_id=386761); B Harrison and B Bluestone, The great U-turn (New York, Basic Books, 1988). 23 24

184 Lorna Fox O’Mahony reasons for giving a case like Rosset a plinth within the property pantheon. The ownership of domestic assets is the core relationship with property for the vast majority of the general population, and, as such, the law that governs it can be expected to have a powerful expressive impact26 on popular cultural meanings of property as a category. From this perspective, questions that might reasonably be asked concerning Rosset’s enduring significance—for example, whether there are still (many) (women) claimants in the types of position we are accustomed to thinking of as generating unfair outcomes27—are set aside to reflect on the impact of Rosset on the political culture of property law. Indeed, it is only by viewing the decision through this lens that the remarkable resilience of Rosset, in the face of widespread criticism and notwithstanding hints of challenge in Le Foe and Sharing Homes, is revealed as a function of its comfortable fit within the dominant political narrative. Placing Rosset within its historical context, it is now evident that—with Abbey National Building Society v Cann28—it played a central role in constructing the neoliberal hierarchy of property litigants along a spectrum of ‘insider-ness’, with creditors at the apex, followed by ‘owners’ (legal title holders) and owner-claimants (people who have invested capital), with non-owners (for example, claimants who have not invested capital, or been expressly invited in) at the bottom of the pile. This constructed hierarchy of the parties to the paradigmatic family property dispute: with creditors recognised as holding ‘strong’ property rights; owners, or owner-claimants holding ‘weak’ property rights (relative to the creditor) and non-owners holding ‘no-rights’29 may seem obvious, inherent, and intuitive to the modern property eye. Yet, it is worth recalling that, just 10 years before Rosset, Gray and Symes articulated a social view of property30 that observed ‘the recognition of what is virtually a modern concept of seisin—the idea that the possession of the actual occupier of land must be protected’,31 which in turn was met with the opposing assertion that ‘we must face the fact that, whether we like it or not, the English law of property is a law of wealth’.32

26 CR Sunstein, ‘On the Expressive Function of Law’ (1995) 144 University of Pennsylvania Law Review 2021. 27 R Probert, ‘Trusts and the Modern Woman: Establishing an Interest in the Family Home’ (2001) 13 CFLQ 275; A Bottomley, ‘From Mrs Burns to Mrs Oxley: Do Co-habiting Women (Still) Need Marriage Law?’ (2006) 14 Feminist Legal Studies 181; cf M Oldham, ‘Homemaker Services and the Law’ in D Pearl and R Pickford, Frontiers of Family Law, 2nd edn (Chichester, Wiley, 1995); S Wong, ‘Constructive Trusts over the Family Home: Lessons to be Learned from Other Commonwealth Jurisdictions?’ (1998) 18 LS 369; A Barlow and C Lind, ‘A Matter of Trust: The Allocation of Rights in the Family Home’ (1999) 19 LS 468. 28 Abbey National Building Society v Cann [1991] 1 AC 56. 29 See AJ van der Walt, Property in the Margins (Oxford, Hart Publishing, 2009). 30 KJ Gray and PD Symes, Real Property and Real People (London, Butterworths, 1981). 31 Ibid, Preface, vi. 32 B Rudden, ‘Real Property?’ (1982) 2 OJLS 238, 243.

The Politics of Lloyd’s Bank v Rosset 185 It was just over a decade after Rosset that Gray and Gray acknowledged the political and cultural changes that have positioned the ownership of property at the heart of neoliberal citizenship, sharpening the commitment to economic rationality in English property law, and reflecting the ‘preoccupations of a materialistic and increasingly affluent era’,33 in which ‘[s]ecurity in the enjoyment of accumulated wealth has become essential to the construction of individualist visions of the good life’.34 More recently, the exclusion of the ‘no-right’ claims of property outsiders is underlined by the shift in common intention constructive trust discourse towards quantification: that is, to determining the respective shares of those who are already through the gate of property: the owners (in joint legal title cases) or the owner/owner-claimant (in sole legal title cases). The non-owner—a property outsider who is either not in a position to, or encouraged by the owning partner not to, make a capital investment towards the acquisition of the home, and who is not consensually brought through the gates of property through express legal or equitable ownership—is excluded from the opportunity of accumulating assets through owned housing, with all the citizenship implications that carries in contemporary England. It is from this perspective that the chapter proceeds to consider the legacy of Lloyd’s Bank v Rosset as a landmark case for English property law.

II. LLOYD’S BANK V ROSSET

The decision in Lloyd’s Bank v Rosset is widely known for Lord Bridge’s articulation of the two-pronged test for the acquisition of an interest under a common intention constructive trust: that (1a) there must be an ‘agreement, arrangement or understanding reached between them that the property is to be shared beneficially … based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been’; and (1b) the claimant must have acted to his or her detriment or significantly altered his or her position; OR (2) the claimant must have made a direct contribution to the purchase price, whether initially or by payment of mortgage instalments—‘it is at least extremely doubtful whether anything less will do’. The disproportionate importance of the second route was underlined by Lord Bridge, who clearly recognised that ‘spouses living in amity will not normally think it necessary to formulate or define their respective interests in the property in any precise way’, since the expectation in a happy marriage is that they will share the ‘practical benefits’ of the home, whoever owns it; although he noted that 33 KJ Gray and SF Gray, ‘The Rhetoric of Realty’ in J Getzler (ed), Rationalizing Property, Equity and Trusts: Essays in Honour of Edward Burn (London, LexisNexis UK, 2003) 244. 34 Ibid.

186 Lorna Fox O’Mahony (as seen in other contexts when the common law struggles to quantify the unquantifiable)35 this creates ‘special difficulties’ for judges. In this light, it is the crystalline36 criterion of direct financial contribution to the purchase price to establish an implied common intention constructive trust that can be viewed as effectively excluding non-propertied partners—those who are not employed in the labour market, for example, or whose earning power is significantly lower than the propertied partner—from successful common intention constructive trust claims.

A. The Background The background to the Rosset dispute highlights Mr and Mrs Rosset’s insider/outsider statuses, the routes by which those statuses were acquired, and their implications for the construction of their respective ‘contributions’. The purchase of ‘Vincent Farmhouse’, the subject-matter of the dispute, which was registered in the sole name of Mr Rosset, followed an earlier period in their marriage in which they lived in an extension that Mr Rosset had built to Mrs Rosset’s parents’ home. While the financial cost of building the extension was borne by Mr Rosset, Mrs Rosset’s parents had insisted on an express agreement that the compensation the parents agreed to pay for the benefit of the extension when the Rossets vacated the property would be paid to both parties. Setting aside the question of why Mrs Rosset’s parents had felt it necessary to protect their daughter in this way, it is curious that there is no further mention of this compensation—if it was in fact paid—in Lord Bridge’s speech. The purchase of Vincent Farmhouse was financed entirely using capital inherited by Mr Rosset under a trust fund established by his grandmother. The decision to register Mr Rosset as sole legal title holder was a condition of the inheritance: Mr Rosset’s uncle, the trustee of his Swiss inheritance, refused to release the money unless the property was acquired in Mr Rosset’s sole name. As such, Mr and Mrs Rosset’s roles as ‘propertied’ and ‘non-propertied’ spouse were clearly mapped out, with the help of his extended family, and notwithstanding the efforts of hers. The role of inheritance provides an interesting trope in the politics of Rosset. Inheritance—particularly where it facilitates access to the ‘insider’ status of owner-occupier—has been widely criticised for contributing to social inequality and reproducing class relations.37 Reflecting on 35 On the difficulties in quantifying the meaning of home within legal doctrine, see L Fox, ‘The Meaning of Home: A Chimerical Concept or a Legal Challenge’ (2002) 29 JLS 580. 36 CM Rose, ‘Crystals and Mud in Property Law’ (1987) 40 Stanford Law Review 577. 37 R Forrest and A Murie, ‘Accumulating evidence: housing and family wealth in Britain’ in R Forrest and A Murie, Housing and Family Wealth (London, Routledge, 1995); M Szydlik, ‘Inheritance and Inequality: Theoretical Reasoning and Empirical Evidence’ (2004) 20 European Sociological Review 31.

The Politics of Lloyd’s Bank v Rosset 187 Mr Rosset’s propertied status as the consequence of an unearned windfall rather than personal endeavour, and comparing this to the personal contributions made by Mrs Rosset, underlines the inequalities of opportunity typified by their story. Mrs Rosset’s claim to a beneficial interest in the property under a common intention constructive trust was based on an express agreement between her husband and herself prior to the purchase, and a ‘significant contribution in kind’ through her labour on the renovation. Indeed, the history of their financial affairs suggests that any express agreement between the Rossets themselves was embedded within a family network in which Mrs Rosset’s parents explicitly imposed an agenda of sharing on Mr Rosset, and Mr Rosset’s uncle required that he comply with a (competing) agenda of property-owning individualism. These family ideologies can be viewed as a microcosm for the wider political debate that was raging at the time, as the politics of individualisation, self-interest and strict legal entitlements triumphed over social-welfare-ist ideas of sharing and support, trust and expectation.38 It is ironic, therefore, that Mr Rosset, whose propertied status derived from inheritance, was a poor poster child for the emerging culture of individual responsibility and the newly cast legal subjectivity of the owner as an autonomous, skilled, active citizenconsumer.39 Far from demonstrating his capabilities as an active agent making choices, Mr Rosset had relatively little to do with the property purchase: it was Mrs Rosset who ‘first found the property’,40 and who took an active role—until she was prevented by her husband’s instructions—in the substantial renovations required to prepare the house for them to move in.

B. The Purchase Mr Rosset had requested an overdraft of £15,000 on his current account to meet the costs of renovation, and the bank’s claim against the property derived from Mr Rosset’s grant of a charge to secure the overdraft. In a move that would astonish modern practitioners and vendors alike, the Rossets were permitted to take possession of the property before contracts had been exchanged, to begin the renovation work. This meant that by the time the bank’s charge was registered, the building work was substantially completed. In describing Mrs Rosset’s non-financial contributions to the work, Mrs Rosset was again cast as an outsider: the County Court’s findings

38 U Beck, Risk Society: Towards a New Modernity (New Delhi, Sage, 1992). See T Allen, ‘Liberalism, Social Democracy and the Value of Property under the European Convention on Human Rights’ (2010) 59 ICLQ 1055. 39 See, for example, L Whitehouse, ‘The Home Owner: Citizen or Consumer?’ in S Bright and J Dewar (eds), Land Law: Themes and Perspectives (Oxford, OUP, 1998). 40 Rosset (n 1 above) 126 (Lord Bridge).

188 Lorna Fox O’Mahony of fact implied that Mrs Rosset, while seeking to involve herself in the building work, may have found her contributions less than welcome: she urged on the builders ‘until her husband insisted that he alone should give instructions’; she delivered materials to the site, acknowledged as ‘of some importance’ because the builders did not know the area; and she ‘assisted’ her husband in planning the renovations and redecoration. Although the judge’s depiction of Mrs Rosset’s contributions is undoubtedly patronising to modern ears: ‘In this, she had some skill over and above that acquired by most housewives. She was a skilled painter and decorator who enjoyed wallpapering and decorating, and, as her husband acknowledged, she had good ideas about this work’; he did emphasise that Mrs Rosset’s contributions were ‘valuable’, that she had ‘special skills’, and that ‘her indirect contribution [had] reduced the cost of renovating the farmhouse’. The County Court concluded that Mr and Mrs Rosset had a common intention to share ownership and that Mrs Rosset acted to her detriment on the faith of such common intention, evidenced by carrying out work which she could not reasonably be expected to embark upon unless she was to have an interest in the house. The House of Lords’ assumptions concerning the norms of property acquisition, and of marital relationships, were crucial in shaping the outcome of the appeal. Lord Bridge held that (1) the inference of a common intention was based ‘essentially’ on Mrs Rosset’s work on the renovations; and (2) this activity ‘it seems to me, could not possibly justify any such inference’. Rather, he concluded that, in the circumstances, it would seem the most natural thing in the world for any wife, in the absence of her husband abroad, to spend all the time she could spare and to employ any skills she might have … in doing all she could to accelerate progress of the work quite irrespective of any expectation she might have of enjoying a beneficial interest in the property.

Similarly, Lord Bridge rejected the judge’s view regarding what Mrs Rosset could ‘reasonably be expected’ to have done—and with it, the suggestion that her work on the renovations had ‘earned’ her a share of the beneficial interest as ‘quite untenable’. Describing the monetary value of any contribution she had made as ‘so trifling as to be almost de minimis’, Lord Bridge indicated that, even if there had been clear evidence of an express common intention, he would have had ‘considerable doubt’ whether Mrs Rosset’s contributions would satisfy the detriment threshold. (i) Homes are Shared; Ownership is Individual Running parallel with the bright-line approach to financial and non-financial (although arguably value-enhancing) contributions was a distinction between sharing the ‘practical benefits’ of home, and ‘sharing the beneficial

The Politics of Lloyd’s Bank v Rosset 189 interest in the property asset which the matrimonial home represents’. In the course of his analysis, Lord Bridge ‘pause[d] to observe’ that: neither a common intention by spouses that a house is to be renovated as a ‘joint venture’ nor a common intention that the house is to be shared by parents and children as the family home throws any light on their intentions with respect to the beneficial ownership of the property.

The distinction between the ‘owned home as housing’ and the ‘owned home as an investment asset’ began to emerge from the 1970s,41 but by the early 1990s the emphasis on accumulation of housing wealth to pass on as inheritance (for the family) had started to give way to a more individualist idea that the wealth tied up in the ‘owned home’ would function to meet the individual owner’s needs, either after retirement or earlier in the lifecourse. By the late 1980s, as a new wave of accumulative individualism swept over English property culture, the UK Government had articulated a political expectation that this newly ‘spendable’ wealth would be used to support welfare needs.42 In the decades since then, as the expectation that property owners will cash in their housing equity to fund welfare and other needs (both after retirement and, increasingly, during working-lives) has gained traction, the Government has become increasingly explicit in its designation of owned housing as an individual investment asset.43 While one might argue that neoliberal welfare policies ought rationally to support a property politics that enables more individuals to accumulate the assets to self-provide into the future, the proposition that the state—including through the institution of law—rather than the market would facilitate the accumulation or acquisition of property runs against the grain of the neolibertarian strand of contemporary English property culture, which defines ‘fairness’ or property ‘justice’ as protecting the freedom of the individual to do what they please with what is theirs, remote from any implications

41 Prior to this, ‘home ownership was primarily seen in terms of its role of providing a roof over people’s heads … Although homeownership was generally viewed as a sound investment and a hedge against inflation or a “store” of wealth, it was not generally seen as a source of substantial capital gains or as an important retirement nest-egg’: C Hamnett, M Harmer and P Williams, As Safe as Houses: Housing Inheritance in Britain (London, Paul Chapman, 1991) 150. 42 For example, in the Griffiths report on Community Care: An Agenda for Action, which put forward the idea that: ‘growth in individually held resources could provide a contribution to meeting community care needs … There are already a number of interesting schemes for encouraging owner occupiers to use their equity to provide income which can be used to pay for services in retirement and I believe that similar innovative schemes should be encouraged’: Griffiths, Community Care: An Agenda for Action (London, HMSO, 1988) para 6.61. 43 ‘Homes not just places to live, they are also assets’; and the aims of widening home ownership include ‘enabling more people to share in increasing asset wealth’: Office of the Deputy Prime Minister, Homebuy: expanding the opportunity to own, Consultation Paper (London, Office of the Deputy Prime Minister, 2005), cited in S Smith, ‘Owner-occupation: at home with a hybrid of money and materials’ (2008) 40 Environment and Planning A 520.

190 Lorna Fox O’Mahony on other (non-propertied) members of the community, with the role of the property law system focused on defining the proper jurisdiction of each individual’s sovereign right over their own, rightfully acquired, property. From this perspective the distinction, embedded through Rosset, between intentions to share a home and family life, on the one hand, and intentions specifically formulated with respect to the beneficial ownership of the property—echoed more recently in the Oxley quantification test that looks to ‘the whole course of dealing between them in relation to the property’44—is telling. In bifurcating the parties’ intentions with respect to housing and home, on the one hand, and concerning the ownership of the disputed property, on the other, the decision in Rosset underscored the emergence of a property culture in which a ‘sharing’ mindset towards (Mrs Rosset’s) household labour and family life is categorically distinctive from a property law and politics adopting an individualist approach towards ownership. The individualist mentality is a necessary pillar of the neoliberal property culture of self-responsibility, self-reliance and selfprovision. Indeed, the perplexing disjuncture between the rationality of the Rosset rules and the reality of the lived experience of sharing a family home becomes readily comprehensible when one recognises that the Rosset approach was a necessary step towards embedding the ‘active citizenship’ model of property ownership in which each individual is expected to look after themselves through financial productivity and the accumulation of capital in housing equity. The Rosset approach drew a clear distinction between the ‘propertied’ (skilled citizen) and ‘unpropertied’ (flawed citizen)45 parties to domestic property disputes, at a moment when major housing wealth inequalities were becoming manifest in the UK.46 Yet, within the articulation of principles that logically distinguish a sharing ethos towards housing and home while at the same time upholding an individualist approach to property ownership, Rosset foreshadowed the emergence of an explicit official discourse that described owned homes as ‘not just places to live, they are also assets’,47 and the emergence of a ‘new financial order of housing’ that changed the character of housing assets, owned homes, and owneroccupiers themselves, as (individualised) housing wealth accumulation and decumulation become ‘part of the art of responsible citizenship and ethical 44

Oxley v Hiscock [2004] EWCA Civ 546. Z Bauman, Work, Consumerism and the New Poor (Buckingham, Open University Press, 1998) 38. 46 R Burrows, Home-ownership and poverty in Britain, Findings (York, Joseph Rowntree Foundation, 2003); L Appleyard and K Rowlingson, ‘Home ownership and the distribution of personal wealth’ (JRF Programme, Housing Market Taskforce) (York, Joseph Rowntree Foundation, 2010); J Hills, M Brewer, S Jenkins, R Lister, R Lupton, S Machin, C Mills, T Modood, T Rees and S Riddell, An Anatomy of Economic Inequality in the UK: Report of the National Equality Panel (London, Government Equalities Office, 2010). 47 Office of the Deputy Prime Minister, Homebuy: expanding the opportunity to own (n 43). 45

The Politics of Lloyd’s Bank v Rosset 191 living’.48 The sharpening distinction between propertied partner and nonpropertied partner was echoed more recently in debates surrounding the Supreme Court decision in Radmacher v Granatino,49 with its clear emphasis on private autonomy for the propertied partner over protection for the non-propertied partner, explained through the politically charged rhetoric of individualism, choice, consent and respect for the (formal, decisional) autonomy of ‘grown-ups’. (ii) The Identity of Property’s Insider This concept of autonomy resonates with neoliberal risk subjectivities, by requiring the individual to be self-responsible for determining their own life plans within a supposedly neutral context. As such, it fulfils the purpose of private law to ‘deliver on the liberal state’s promise to respect the freedom of individuals … [by] construct[ing] a framework of opportunities for individuals in cooperation with others to become authors of their own lives’.50 The politically-charged conflation of autonomy with atomistic individualism, and the ‘unreality’ of excluding context from traditional legal analyses of autonomy have both been heavily criticised for concealing both the contextual and the relational nature of ‘true’ autonomy,51 and supporting a ‘constructed polarity between autonomy on the one hand and dependence on the state on the other’.52 While the circumstances of a common intention constructive trust claimant may seem very different from the non-propertied partner who agrees to execute a pre-nuptial agreement: the execution of a pre-nuptial agreement appears to exhibit exactly the kind of private ordering and express written agreement between partners that the

48

Smith (n 43 above) 522. Radmacher v Granatino [2010] UKSC 42. 50 H Collins, ‘Utility and Rights in Common Law Reasoning: Rebalancing Private Law Through Constitutionalization’ (2007) 30 Dalhousie Law Journal 1, 4–5. 51 ‘[T]he substance of autonomy is always constituted within a given political and social context’: E Ben-Ishai, ‘The Autonomy-Fostering State: “Coordinated Fragmentation” and Domestic Violence Services’ (2009) 17 Journal of Political Philosophy 307, 318. The importance of context, and challenges to the individualistic notion of autonomy in favour of ‘relational autonomy’, have been extensively analysed in feminist critique of the legal concept of autonomy: see eg J Anderson and A Honneth, ‘Autonomy, Vulnerability, Recognition, and Justice’ in JP Christman and J Anderson (eds), Autonomy and the challenges of liberalism: new essays (Cambridge, CUP, 2005); M Friedman, Autonomy, gender, politics (Oxford, OUP, 2003); EF Kittay and EK Feder, The subject of care: feminist perspectives on dependency (Lanham MD, Rowman & Littlefield Publishers, 2002); C Mackenzie and N Stoljar, Relational autonomy: feminist perspectives on autonomy, agency, and the social self (New York, OUP, 2000); J Nedelsky, ‘Reconceiving Autonomy: Sources, Thoughts and Possibilities’ (1989) 1 Yale Journal of Law and Feminism 7; as well as the ‘stripped-down subject’ of private law: see also M Nussbaum, Frontiers of Justice: Disability, Nationality, Species Membership (Cambridge MA, Harvard University Press, 2006). 52 Ben-Ishai (n 51 above) 328. 49

192 Lorna Fox O’Mahony common intention constructive trust is hard pressed to remedy;53 both are underpinned by an acute political tension between the ‘hands off ’ mentality of individualism and the formalist fairness of contractarianism, on the one hand, and the marginalisation of non-propertied perspectives, on the other. Indeed, Rix LJ’s caution in his Court of Appeal judgment in Radmacher that: ‘while the public interest in a fair and just exercise of the court’s discretion remains, there is fairness and justice too in a proper appreciation of party autonomy’,54 foreshadowed Roche’s argument that what ‘fairness’ requires in the context of the common intention constructive trust is to give effect to the intentions of the parties (or, perhaps, the intentions of the propertied party). Viewing Rosset through the lens of property ‘insiders’ and ‘outsiders’ reveals not only the fundamentally political and distributive nature of the decision, but highlights its landmark position in the neoliberalisation of English property law, with implications that reach far beyond the regressive impacts of property law’s governance of domestic property disputes, but go to the heart of contemporary debates about citizenship, identity, and the politics of inclusion and exclusion. In this frame, critiques centred on the (traditionally, typically) gendered operation of the requirement for direct financial contribution take second-order to the more immediate question of property inequality. Through this lens, the argument for a context-sensitive, or outcome-sensitive, approach can be seen as an outworking of a concern for socio-economic inequality, and so arguably less vulnerable to being undermined as ‘paternalist’, ‘patronising’, or ‘out-of-step with modern relationships’. Indeed, when the search for principle is ‘happily divorced from the ideological and emotional noise emanating from broken homes’55 it is clear that the inequalities that matter for the purposes of the Rosset test are differences in the propertied status of claimant and defendant. It is perhaps ironic, from this perspective, that Mr Rosset obtained the purchase money for the property not from his own labours but from an inheritance; and that it was Mrs Rosset who exhibited entrepreneurial flair in finding the house and ‘project managing’ the renovation work, including applying her own skill and expertise to design and delivery of the work. Yet, with Lord Bridge concluding that the monetary value of this work as a contribution to the property ‘must have been so trifling as to be almost de minimus’,56 and noting the Law Commission’s recognition that: ‘the current law

53 As Ward LJ famously implored, ‘I will try one more time: ALWAYS TRY TO AGREE ON AND THEN RECORD HOW THE BENEFICIAL INTEREST IS TO BE HELD’, Carlton v Goodman [2002] EWCA Civ 545, [44]. 54 Radmacher v Granatino [2009] EWCA Civ 649 [83]. 55 Roche (n 18 above) 139. 56 Rosset (n 1 above) 131 (Lord Bridge). Law Commission, Sharing Homes: A Discussion Paper (Law Com No 278, 2002) para 2.108.

The Politics of Lloyd’s Bank v Rosset 193 discriminates against those who do not earn income from employment’; the crucial question, applying the Rosset test, is not—in fact—who has behaved productively in accordance with the norms of active citizenship, but who is in a position—for whatever reason—to contribute financially to the acquisition of the shared home.57 That the answer to this latter question is, in turn, often determined by gendered structural inequalities is an important, secondary node of analysis,58 but the fundamental inequality shored up by Rosset was the parties’ unequal standing as property insider and property outsider. The legacy of the ‘property frame’59 it set for English legal and popular culture was a vision of property as accumulative individualism; and of property law as a fortress of protection for the propertied insider.60 (iii) The Bank A final issue to be considered concerns the position of the bank and the stranglehold the spectre of third party claims appeared to hold over innovation in the principles for the acquisition of interests in the family home. The Rosset litigation was triggered by a possession action brought by Lloyd’s Bank, presumably as a step towards realising its security interest over the property through sale. On the day the property was purchased, Mr Rosset executed a legal charge in favour of Lloyd’s Bank to secure an overdraft on his current account, initially allowing him to borrow up to £15,000 but later increased to £18,000. When Mr Rosset exceeded the limit on this overdraft, the bank demanded repayment; and upon his failure to repay the bank instituted possession proceedings against Mr and Mrs Rosset. Following the breakdown of the relationship, Mr Rosset was no longer living in the property, and did not resist the order for possession; Mrs Rosset defended the possession order on the basis of her claim to have acquired a beneficial interest in the property under a constructive trust; and

57 In acknowledging that express agreement would be rare in domestic relationships, Lord Bridge impliedly recognised that the ‘express common intention’ criterion is something of a red herring; see Cowan, Fox O’Mahony and Cobb (n 15 above) 212, describing the ‘fallacy’ of the argument for recognition of indirect financial contributions, since this route ‘only “works” when there is already financial equality or the owning partner needs the resources of the nonowning partner’. 58 For discussions of the historical tendency for men to have greater bargaining power and to use this power advantage to satisfy their preferences at the expense of their wives: DL Gillespie, ‘Who has the Power? The Marital Struggle’ (1971) 33 Journal of Marriage & Family 445; GW McDonald, ‘Family Power: The Assessment of a Decade of Theory and Research, 1970–1979’ (1980) 42 Journal of Marriage & Family 841; JM Steil and K Weltman, ‘Marital Inequality: The Importance of Resources, Personal Attributes, and Social Norms on Career Valuing and the Allocation of Domestic Responsibilities (1991) 24 Sex Roles 161. 59 JR Nash and SM Stern, ‘Property Frames’ (2010) 87 Washington University Law Review 449. 60 L Fox O’Mahony, ‘Property Outsiders and the Hidden Politics of Doctrinalism’ (2014) 62 Current Legal Problems 409.

194 Lorna Fox O’Mahony asserting that the interest was overriding under section 70(1)(g) of the Land Registration Act 1925 because she was in actual occupation of the property on both 17 December 1982 (the date that the property was conveyed to Mr Rosset) and 7 February 1983 (the date the bank’s charge was registered). The decision in the County Court, and in the Court of Appeal, focused on the relevant date of actual occupation for the purposes of overriding status, and both courts held that the relevant date was the date of creation of the bank’s charge, not the (later) date of registration of the charge. A majority of the Court of Appeal (Purchas and Nicholls LJJ) held that Mrs Rosset was in actual occupation on that date (so that her interest—if one had been acquired—would have been overriding), while Mustill LJ (dissenting) agreed with the County Court judgment that she was not. By the time the bank appealed to the House of Lords, it had already resolved in Abbey National Building Society v Cann61 that the relevant date for interests protected by actual occupation to be overriding is the date when the estate is transferred or created, not the date when it is registered. The question for the House of Lords in Rosset, therefore, focused on whether Mrs Rosset had, by the date of completion, acquired a beneficial interest in the property. Viewing these cases together, the emergence of a consistent approach towards the hierarchy of property insiders/outsiders is even clearer. The bank, as the ultimate property insider, has first claim, with the owner (in the case of default) relegated to the status of ‘weak’ right; and the non-owner defeated as a ‘no-right’ party.

III. CONCLUSIONS

What does the landmark decision in Lloyd’s Bank v Rosset tell us about English property law and property politics? At a moment in which the inequalities between property’s insiders and outsiders are starker than ever, it provides a timely reminder that the values that are ‘ingrained into the property lawyer’s psyche’62—certainty, coherence, stability and security— are politically borne, learned, internalised, and not inherent. While Dewar suggested that the ‘attempt to accommodate the resolution of family disputes within the land law framework has significantly disturbed the conceptual orderliness of land law itself ’;63 it is important to be aware that the characterisation of trusts of the family home as a contest between ‘property law values’ (stylised, and therefore accepted, as certainty, stability, security, coherence) and ‘family law values’ (read as fact-, context- and

61 62 63

Abbey National Building Society v Cann [1991] 1 AC 56. Cowan, Fox O’Mahony and Cobb (n 15 above) 213. J Dewar, Law and the Family, 2nd edn (London, Butterworths, 1992) 183.

The Politics of Lloyd’s Bank v Rosset 195 outcome-sensitivity, flexibility) is prone to lead us down the path of accepting the conservative vision of property uncritically. A more nuanced view recognises that property law—like any field of the common law—is not fixed but evolves,64 as Carol Rose memorably captured in her account of the ‘back-and-forth pattern between crystals [clear and distinct property rules] and mud [fuzzy ambiguous rules of decision]’.65 Rose posited a range of potential explanations for these shifts: from the external social, economic, political and cultural changes that shape property values according to the ‘market-conscious spirit’ of the age;66 and the interplay between legal rules and private bargaining; to the ‘characters who muck up this crystalline system … ninnies, hard-luck cases, and the occasional scoundrels who take advantage of them’.67 Rose’s account of the social life of property tends to present property’s human subject in terms of their behaviours. She notes that where property’s moral judgment tends towards ‘mud’: ‘[t]he cases are often rife with human failings—sloth and forgetfulness on the one hand, greed and self-dealing on the other’.68 While the common intention constructive trust does not explicitly portray the claimant who has not secured joint legal title, obtained an express declaration of trust or made direct financial contributions as greedy or self-dealing, it does imply normative expectations about acquisitiveindividualism over family-communitarianism, self-interest over trust, and the ‘tidy lives’69 of consent, private ordering, and capital investment over non-financial contributions and the messy realities of family life. Conservative property protagonists might argue that—at least so far as third parties are concerned—we have a ‘duty’ to be ‘tidy’ in our affairs, although this line of discourse can also be viewed as a strategy for closing down discussion of differential impact in favour of the presumption that property outsiders should be held to a standard calibrated to the interests of property insiders. This also tends to by-pass the practical question of whether third parties are adequately equipped to protect themselves in any event. From this perspective, the commitment to a strict approach might be revealed to be both regressive and unnecessary. Meanwhile, the Rossets

64 MJ Radin, ‘The Consequences of Conceptualism’ (1986) 41 University of Miami Law Review 239. 65 CM Rose, ‘Crystals and Mud in Property Law’ (1987) 40 Stanford Law Review 577, 580. 66 As traced in English contract law, for example, in PS Atiyah, The Rise and Fall of Freedom of Contract (Oxford, Clarendon Press, 1979). 67 Rose (n 64 above) 587. 68 Ibid, 597. See also, CM Rose, ‘The Moral Subject of Property’ (2007) 48 William & Mary Law Review 1897. 69 Jacob LJ in Jones v Kernott (CA) noted that: ‘In the real world unmarried couples seldom enter into express agreements into what should happen to property should the relationship fail and often do not settle matters clearly when they do. Life is untidier than that. In reality human emotional relationships simply do not operate as if they were commercial contracts and it is idle to wish that they did’: [2010] EWCA Civ 578, [2010] 3 All ER 423 (CA), [90].

196 Lorna Fox O’Mahony provide a cautionary reminder that life and domestic property arrangements are complex: Mrs Rosset had obtained by ‘consent’ a capital share in the compensation owed against the work done to her parents’ house, although not—presumably in light of the inheritance condition—where it mattered with respect to Vincent Farmhouse. It is not just the claimant who attracts censure in these cases: against a political backdrop in which the property outsider-claimant is impliedly cast as a property-failure, and notwithstanding the well-rehearsed arguments highlighting ‘unfair’ outcomes from the non-property owner’s perspective, the comfort of a strict approach is shored up by recourse to the need for coherence—and, arguably, for certainty—if the practitioners who advise parties are to be capable of negotiating the minefield of property planning. The importance of certainty in ensuring the informational value of property rules—to enable solicitors to advise clients and avoid litigation—is a stalwart argument from the conservative property theory camp that cautions against change to existing law.70 This ‘status quo bias’ is recognised by progressive scholars as a defence of the propertied against the demands of property-less parties.71 Yet, arguments based on the signalling function of property law’s ‘hardedged doctrines that tell everyone where they stand’72 tend to assume that legal advice has a meaningful influence on the process in which people buy houses, a premise that was called into question by Douglas, Pearce and Woodward’s findings of disconnect between law, and the process of receiving and responding to advice in the conveyancing process, on the one hand, and real life on the other.73 Even if we accept, for the sake of argument, that there is a supportive relationship between the advice given by practising lawyers and the arrangements made by cohabiting partners, is there any real difference in the ‘certainty’ cost between cases where a claimant makes a small direct financial contribution to gain access through the gates of property, only for the quantification process to inflate his share of the equity; and those in which a claimant makes a large indirect

70 See R Epstein, ‘Past and Future: The Temporal Dimension in the Law of Property’ (1986) 64 Washington University Law Quarterly 667, for a libertarian argument in support of certainty, to enable clear advice, avoid litigation and reduce costs; over flexibility and discretion, which from the libertarian viewpoint, allows for excessive power over property in public and private hands. See also TW Merrill and HE Smith, ‘The Morality of Property’ (2007) 48 William and Mary Law Review 1849; TW Merrill and HE Smith, ‘Optimal Standardization in the Law of Property: The Numerus Clausus Principle’ (2000) 110 Yale Law Journal 1. 71 E Rosser, ‘The Ambition and Transformative Potential of Progressive Property’ (2013) 101 California Law Review 107, 168. See also J Knight, Institutions and Social Conflict (Cambridge, CUP, 1992), arguing that property institutions are not primarily based on efficiency but reflect the interests of powerful groups. 72 Rose (n 64 above) 577. 73 G Douglas, J Pearce and H Woodward, ‘Cohabitants, Property and the Law: A Study of Injustice’ (2009) 72 MLR 24.

The Politics of Lloyd’s Bank v Rosset 197 financial contribution? Even if we agree—further—to take at face value the operational claim that the law must prioritise certainty, coherence and predictability, the benefit of such a regime remains open to question. Nestor Davidson’s critique of Frank Michelman’s argument that property must protect settled expectations (because when expectations are unsettled this generates disincentives, or ‘demoralisation costs’, in the form of lack of confidence in the system of property rights)74 challenges the assumptions that property theory and doctrine often make when juxtaposing ex ante certainty against ex post flexibility. Davidson highlighted the ‘morale’ value of a property system that allows parties to be confident that the law will ensure fair treatment,75 arguing that, in some circumstances: stability is less important than the assurance that the legal system will respond when external forces threaten to overwhelm the value owners will create, that the rules will provide a fair process of adjustment over time, and that the property regime will ensure inclusion.76

In 2011, reflecting on the sorry history of the common intention constructive trust, Dixon appealed to those responsible for law reform and law creation to ‘sort it out’, because behind the niceties of academic arguments about conceptual clarity, ‘the question of the acquisition and/or quantification of property rights for cohabiting couples is about real money, real distress, real confusion and the loss or gain of a real home for real people, many with children’.77 This chapter has sought to demonstrate that a crucial factor in how we understand this problem is the implicit political construction of the non-propertied common intention constructive trust claimant. This much was clear in John Mee’s analysis of Burns v Burns as a ‘Landmark Case in Family Law’: The creation of more sweeping (and more invasive) rules, involving a higher level of discretion, has the effect of diminishing predictability, potentially involving more people in litigation and the threat of litigation, setting family members against each other in a context of heightened tension, and risking remedies being unjustly granted in favour of claimants who can exploit the open-endedness of the law to present an unmeritorious claim in a plausible way.78

Mee’s assumptions—in the final clause of this excerpt—about the character of the constructive trust claimant are reminiscent of the shadowy suspicion of spouses ‘playing the system’ through marital collusion cast when it was 74 FI Michelman, ‘Property, Utility, and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law’ (1967) 80 Harvard Law Review 1165, 1214. 75 N Davidson, ‘Property’s Morale’ (2011) 110 Michigan Law Review 437. 76 See also JB Baron, ‘The Contested Commitments of Property’ (2010) 61 Hastings Law Journal 917, reflecting on the competing pulls of dynamism and stability in property rules. 77 M Dixon, ‘Editors Notebook’ [2011] Conv 87, 88. 78 J Mee, ‘Burns v Burns: The Villain of the Piece?’ in R Probert, J Herring and S Gilmore (eds), Landmark Cases in Family Law (Oxford, Hart Publishing, 2011) 194.

198 Lorna Fox O’Mahony suggested, with respect to Williams & Glyn’s Bank Ltd v Boland,79 that: ‘the wife was not locked in mortal combat with her husband’.80 Perhaps this is true in some cases: even if it is, should such cases be considered the ‘norm’ or the exception when we come to calibrate our property rules; are they indicative of the grasping individualism of non-propertied partners seeking to exploit the vagaries of the law, or a function of the inadequacies of that law? The underlying trope of inclusion/exclusion, or property insiderness/ outsiderness, also sounds an echo of Thomas Ross’s cautionary note about the significance of property rhetoric in shaping how we develop legal strategies to address problems, or not.81 Ross describes a tendency in legal analysis to construct certain problems—particularly problems relating to poverty or exclusion from property—as insoluble, ‘a problem of daunting complexity that is virtually beyond solution’,82 so that ‘[h]ard choices, suffering, even ‘Kafkaesque’ results are simply unavoidable’. In these cases, he argued, rhetorical strategies are deployed to justify the failure to solve the problem, particularly, in the case of claimants who are poor, by constructing ‘them’ as a class of people who are not ‘us’. By creating a rhetoric around ‘them’—what they do, what their motivations are—to assert their moral weakness, to identify them as a distinct conceptual group, to communicate an underlying message of deviance, with this deviance ‘a product of a single aspect of their lives, their relative wealth position’,83 we can justify our failure to address the problem by suggesting that: ‘[i]f poor people simply chose to “straighten up and fly right” all would be well’;84 we might say, in the realm of the common intention constructive trust, that if unpropertied partners simply obtained express statements of their claims to title, all would be well. When legal rhetoric separates a group of litigants as ‘other’—combined with the premise that we are helpless to change the ‘harsh realities’ of society, so placing the ‘problem’ beyond judicial power or jurisdiction85—it should sound a warning note to question the political undercurrent of decisions. While it may reveal a reality that exists within the problem, it detracts attention from the equal reality that propertied partners may be ‘morally weak’ in their conduct; and it obscures the alternative reality of claimants who, arguably through no fault of their own, are left high and dry.

79 80

Williams & Glyn’s Bank Ltd v Boland [1981] AC 487. KJ Gray and SF Gray, Elements of Land Law, 4th edn (Oxford, OUP, 2005) para 12.209,

fn 2. 81 T Ross, ‘The Rhetoric of Poverty: Their Immorality, Our Helplessness’ (1991) 79 Georgetown Law Journal 1499. 82 Ibid, 1499. 83 Ibid, 1501. 84 Ibid. 85 Ibid, 1502, 1509.

The Politics of Lloyd’s Bank v Rosset 199 As the focus of current jurisprudence has moved on to the nitty-gritty of quantification for relative-insider owner-claimants who have made it past the gates of property, it is difficult to say whether there are, today, significant pools of potential claimants who are denied the opportunity to acquire a beneficial interest in their shared home as a result of the Rosset rules. Dissatisfaction with the principles remains rife, with the majority in Stack v Dowden criticising the Rosset formulation as setting the ‘hurdle rather too high’.86 By 2007, the House of Lords appeared to have reached a consensus that ‘[t]he law has indeed moved on in response to changing social and economic conditions’.87 Lord Walker explained that: cohabiting couples are in a different kind of relationship. The place where they live together is their home. Living together is an exercise in give and take, mutual co-operation and compromise. Who pays for what in regard to the home has to be seen in the wider context of their overall relationship. A more practical, downto-earth, fact-based approach is called for in their case.88

Yet, despite the expression of significant doubt about the appropriateness of the Rosset formulation, it appears to remain good law. And, while it is difficult to know how many real people, in what types of circumstances, are adversely affected by the current requirements, there is widespread scholarly agreement that a satisfactory doctrinal formulation of the common intention constructive trust has remained elusive. For its contribution to this position, and—more importantly perhaps—for its wider political status as a calibrator of property values in English law, Rosset remains a landmark case.

86 87 88

[2007] UKHL 17, [63] (Baroness Hale). Ibid, [60] (Baroness Hale). Ibid, [3] (Lord Walker).

II. CONTENT OF PROPERTY RIGHTS

P

ROPERTY IS A portmanteau concept; as with Humpty Dumpty in Through the Looking-Glass, anyone can declare it to mean just what they want it to mean. Over the centuries it has thus proven to be notoriously difficult to define the content of this most contextual and contentious of terms. Despite this, property continues to exercise a ‘peculiar hold on the human imagination’.1 Most of the time the content and meaning of property are not discussed by lay-people or the courts; rather ‘property’ rights are taken for granted and incorporated into daily life somewhat unthinkingly. For property lawyers, the picture is somewhat different. Here, property is seen as an elusive and nuanced concept. Thus it is not a ‘monolithic notion of standard content and invariable intensity’, but instead is a dynamic legal concept of ‘almost infinitely divisible and commensurable quality’.2 The content of property waxes and wanes depending upon the fragmentation and aggregation of the various ‘sticks’ or interests within a property owner’s bundle of rights. The significance of the various sticks in a property bundle will vary according to the complex factual, social and relational interests at stake in determining the relative property of different parties.3 Despite this flexibility, some glimmerings of possible agreement about the content of property rights can be discerned from the literature in this area. Historically, not all of a property owner’s sticks have been viewed as being of equal proprietary significance. The right to exclude others has famously been described as ‘one of the most essential sticks in the bundle of rights that are commonly characterized as property’.4 Exclusion retains its totemic significance as the most valuable stick in an owner’s bundle of property rights and is often viewed as the ‘core’ of property.5 Whilst

1

LS Underkuffler, ‘On Property: An Essay’ (1990) 100 Yale LJ 127, 128. KJ Gray and SF Gray, ‘Private Property and Public Propriety’ in J McLean (ed), Property and the Constitution (Oxford, Hart Publishing, 1999) 12. 3 WN Hohfeld, ‘Some Fundamental Legal Conceptions as Applied in Judicial Reasoning’ (1913) 23 Yale LJ 16, (1917) 26 Yale LJ 710; Grey, ‘The Disintegration of Property’; AM Honoré, ‘Ownership’ in AG Guest (ed), Oxford Essays in Jurisprudence (Oxford, OUP, 1961). 4 Kaiser Aetna v United States 444 US 164, 176 (1979). 5 FS Cohen, ‘Dialogue on Private Property’ (1954) 9 Rutgers Law Review 357, 374. 2

202 Content of Property Rights the right to exclude others may get us closer to the content of property, it leaves some unanswered questions in its wake. The right is weak in two ways. First, the ‘right’ to exclude sounds more powerful than it really is. It is normally exercised as a shield rather than as a sword. Property owners are unlikely to assert their right to exclude unless someone has attempted to encroach onto their property and been rebuffed by the owner. At this point, as in Entick v Carrington, the owner will justify and defend their actions by claiming that they have a right to exclude others attempting to interfere with their property.6 Such a defence may be useful but it leaves the content of property rights looking rather residual. Secondly, this core of property appears weak in that it assumes that property ownership will be challenged. The notion of exclusion suggests a situation where the vigilant property owner should stay on guard, metaphorically prepared to repel intruders so that the owner may protect their property from unwarranted incursions. If property had a stronger content, though, it seems less likely that exclusion would be such a significant right. As Rose notes, the ‘distinctive hallmark of property, as opposed to territoriality, is the absence of challenge from others’ such that ‘others routinely recognize and respect one’s claims’ relieving us of ‘the debilitating expense and effort of constant vigilance’.7 The historic focus on exclusion as the core of property suggests an inherent expectation that property rights are likely to be challenged. It is worth noting though that challenge may come not only horizontally from other citizens and companies, but also vertically from the state. The extent to which property rights are recognised and protected tells us much. Gray and Gray have argued that the irreducible features of property include not only the presumptive entitlement to exclude others, but also immunity from summary cancellation or extinguishment by the state, and the entitlement to prioritise resource values.8 This attempt to delineate the content of property is a more positive approach than focusing solely on exclusion. It gives property some weight and usefully ties down abstract conceptual discussions and links them to property as a lived experience where use and prioritisation of resources is central. It also highlights the fact that property rights may be interfered with by a number of different actors. Rachael Walsh’s chapter on OD Cars v Belfast Corporation analyses the approach taken by the House of Lords’ when faced with the impact of state interference with property rights, namely Northern Irish planning controls imposed on the use of an owner’s property. In the case, two of Gray and Gray’s irreducible features of property were under attack. First, the extent 6

9 Howell’s State Trials 1029 (1765). CM Rose, ‘Property and Expropriation: Themes and Variations in American Law’ (2000) Utah Law Review 1, 3. 8 KJ Gray and SF Gray, Elements of Land Law (Oxford, OUP, 2009) 99. 7

Content of Property Rights 203 to which property rights will be protected from summary cancellation or extinguishment; and secondly, the owner’s ability to prioritise the property’s resource value. The case involved the refusal of planning permission, on the grounds of zoning and height restrictions, which left certain Belfast landowners unable to build new premises connected with their existing garage business. The thorny question arose as to whether or not property had been taken without compensation due to the refusal of the planning permission and its categorisation as an acceptable land-use regulation, rather than an unjustified expropriation or taking. In the course of the judgment, Walsh observes, Viscount Simonds took a robust approach to defining the content of property. This led to a refusal by the court to engage in academic debates about whether or not sufficient sticks from the bundle of ownership rights had been interfered with so as to require compensation. Instead, the court assessed the legitimacy of the interference by reference to a pragmatic lay understanding of property. This approach closed the door for arguments by the landowners that the non-use of the property should be compensated and has led to a restrictive approach to property protection in such cases today. Interestingly, this approach is applied inconsistently. Incursions by utility companies for example, are seen as deserving of compensation under a bundle of rights approach where the interference with one of the sticks of the bundle, use, leads to compensation. Walsh also demonstrates how the deferential judicial approach taken in OD Cars can be traced through to modern planning decisions, despite the potential for human-rights-based arguments to add ballast to the property owner’s cause. The courts appear to be happy to leave the ‘protection’ of property rights to administrative systems, including participatory rights for landowners in planning decisions. In the course of the chapter, Walsh argues that the downgrading of available property protection from liability protection in the form of compensation to participation rights is a telling shift. She usefully explains how this change in protection could be explained by reciprocity of advantage where limitations on an owner’s rights are balanced out by similar restrictions on other owners thus negating the need for compensation. The focus in planning law is on property ownership as a complex web of rights and interdependent limitations. The notion of property rights facilitating not only individual interests but also communitarian, relative, shared enterprises is one that has deep roots in English law, particularly feudal land law. Whilst we no longer exist in the formulary world of the medieval lawyer, Simon Douglas’s chapter on Kuwait Airways Corp v Iraqi Airways Co demonstrates the utility for property lawyers of focusing on remedies when delineating the potential existence and ambit of rights. Definitions of property and the extent to which it is protected ‘raise immediately the most fundamental problems of political philosophy and social life—the

204 Content of Property Rights relationship between the individual and his social environment, between the citizen and the State and—in modern society—between the personal and the commercial’.9 The chapter provides a valuable glimpse at the content of property by considering the extent to which tort law provides remedies to protect property ownership. The Kuwait Airways Corp case stemmed from complex legal wrangles in the wake of the Iraqi invasion, raising questions of state immunity amongst others. For present purposes however, it was the equivocal nature of the interference with the chattels in the case (aircraft), which made the case not only a tort landmark but also, it is argued, for property. In defining the content of property, Douglas follows McFarlane in arguing controversially that property rights should exhibit two properties: that they should be good against the world and must relate to a physical thing.10 In making these arguments, particularly in relation to the ‘thing-relatedness’, the chapter provokes a valuable reappraisal of the potential difficulties in applying property law concepts to such different types of property as chattels and intellectual property. In dealing with chattels the chapter argues that remedies provided by tort law define the scope of the duty owed to the property owner, or right-holder. In a sense this is an echo of the ancient notion that the existence (and content) of a right depends upon there being a remedy. Without the remedy, it is argued, the right cannot be said to exist. Property rights receive remedial protection from a number of different sources, including constitutional provisions and criminal law. However, there is no doubt that tort law has an ability to speak most closely to the nature and content of property because of the long-standing interrelatedness of these areas of the law. In analysing the requirements for conversion set out in the KAC Corp case, the concept of exclusion looms large along with the requirement that the conduct complained of must be inconsistent with the owner’s rights or those of someone else entitled to possession. The level of this interference is authoritatively set, requiring physical contact with the claimant’s chattel. Again, as with the OD Cars case discussed by Rachael Walsh, the courts are concerned with the use of property and an interference with the owner’s prioritisation of resource value. Similarly, there is a significant emphasis on applying property law principles in a pragmatic, user-friendly fashion. Despite the fluid and often-contentious nature of property, it continues to exert an impressive degree of legal, political, and social influence. The effects and significance of differing definitions of property can be seen in each of these spheres by considering the types of property rights that a particular society deems to be worthy of protection. 9 AE-S Tay, ‘Property and Law in the Society of Mass Production, Mass Consumption and Mass Allocation’ in A Revolution in our Age: The Transformation of Law, Justice and Morals (Canberra Seminars in the History of Ideas, 1975) 19. 10 B McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 132.

9 Kuwait Airways Corporation v Iraqi Airways Company [2002] SIMON DOUGLAS

I. INTRODUCTION

T

HE DISPUTE IN Kuwait Airways Corp v Iraqi Airways Co arose out of the seizure of aircraft belonging to Kuwait Airways Corporation during Iraq’s invasion of Kuwait in 1990. The resulting decision of the House of Lords covered several issues, including the rule of ‘double actionability’ in private international law, the principles of causation of loss, the rules governing the calculation of damages and, the focus of this chapter, the basis of liability in the tort of conversion. Conversion is a much used (if under analysed)1 tort that is broadly concerned with misappropriations of chattels. Until it handed down its decision in the case, the House of Lords had not considered the basic ingredients of the tort since the nineteenth-century case of Hollins v Fowler.2 Kuwait Airways Corp v Iraqi Airways Co (hereafter KAC v IAC) represents the most authoritative attempt to define conversion in modern times. On this basis alone, KAC v IAC qualifies as a ‘landmark’ case. The obvious question, however, is: why is it a landmark in property law? The decision, after all, concerned an action in tort law. The aims of this chapter are twofold. The first is to locate the importance of torts within the context of property law. In order to give a full account of the law of property, we must be able to describe the content of property rights, ie we must be able to describe the duties owed to the holder of a 1 Although conversion has not traditionally received the same degree of academic attention as other torts, such as negligence, defamation or nuisance, the literature on the tort has increased in recent years. The main example of this trend is S Green and J Randall, The Tort of Conversion (Oxford, Hart Publishing, 2009). 2 The House of Lords has dealt with a number of claims in conversion over the course of the twentieth century (eg, Caxton Publishing Co Ltd v Sutherland Publishing Co Ltd [1939] AC 178, Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, Singh v Ali [1960] AC 167 and Solloway v McLaughlin [1938] AC 247). However, these cases have mainly been concerned with related issues, such as title to sue in the tort and calculation of damages, rather than the basic ingredients of the tort itself.

206 Simon Douglas property right. The law of tort, as we will see, defines the scope of these duties.3 This means that torts are of central importance to the law of property and, consequently, some leading torts cases should be considered leading property law cases as well. This leads to the second aim of the chapter, which is to explain the importance of KAC v IAC in defining the content of property rights. In setting out a definition of conversion, the House of Lords was in essence describing the duty owed to the holder of a property right in respect of his chattel. This, in turn, enables us to give an accurate description of the content of this property right. KAC v IAC may be a landmark case in tort law, but this chapter aims to show that it should also be considered a foundational case in property law.

II. THE FACTS

The extraordinary facts of KAC v IAC arose out of Iraq’s invasion of Kuwait in 1990, the event which precipitated the First Gulf War.4 Iraq and Kuwait had been on friendly terms for much of the 1980s, when Kuwait had helped Iraq fund its war against Iran. Relations started to sour towards the end of the decade for a number of economic and diplomatic reasons, particularly Kuwait’s refusal to cancel debts incurred by Iraq during the course of its war with Iran. Iraq also had historical claims to sovereignty over Kuwaiti territory, territory which would have provided Iraq with further access to the sea as well as Kuwait’s oil wells.5 In July 1990, amid heightening tension between the two countries, Iraqi troops were deployed in the south of the country along the border with Kuwait. Attempts by the Arab League to mediate the crisis resulted with Iraq making a demand for the payment of US$10 billion from Kuwait. When Kuwait refused to meet this demand, Iraq launched an invasion on 2 August 1990. Iraqi forces quickly overran the country. By the end of 3 August 1990, Kuwait’s ruling family had fled to Saudi Arabia, leaving Iraqi forces in control of the country. Kuwait Airways Corporation (KAC), the claimant in the action, was the registered owner of several aircraft located at Kuwait International Airport, the corporation’s hub. The airport and aircraft were quickly captured following the invasion. Prior to the outbreak of hostilities, Iraqi Airways Company (IAC), the defendant in the action and the national carrier of Iraq, had been planning to add to its aging fleet and had placed orders for several airbuses. Following the capture of KAC’s aircraft, the director of the 3 The leading ‘rights-based’ account of tort law, which holds that torts only involve the breach of a legal duty, is Stevens, Torts and Rights (Oxford, OUP, 2007). 4 A detailed account of the conflict is provided in L Freedman and E Karsh, The Gulf Conflict, 1990–1991: Diplomacy and War in the New World Order (London, Faber, 1994). 5 Iraq claimed sovereignty over Kuwait because Kuwaiti territory had, historically, been part of the Ottoman Empire’s province of Basra, which also included modern day Iraq.

Kuwait Airways Corporation v Iraqi Airways Company 207 IAC was instructed by the Iraqi government to cancel these orders and to add KAC’s aircraft to its fleet instead. By 22 August 1990, pilots from IAC had flown 10 aircraft, consisting of two Boeing 767s, three A300-600C Airbuses, and five A310-200 Airbuses, from Kuwait to Iraq. In the aftermath of the invasion the Revolutionary Command Council (RCC) of Iraq passed a number of resolutions asserting sovereignty in the territory it had occupied. One of these resolutions, RCC Resolution 369, purported to dissolve KAC and transfer its assets to IAC.6 Thereafter, and up until Iraq was invaded by coalition forces in January the following year, IAC set about incorporating the 10 aircraft into its existing fleet. Opportunities to fly the aircraft were very limited as most foreign states had denied IAC airspace and landing rights.7 At least one plane was used for a small number of internal commercial flights,8 and a small number of flights were made for training purposes.9 For the most part IAC’s acts toward the aircraft were of a more equivocal nature, such as applying for certificates of airworthiness and effecting insurance of the aircraft.10 As we will see below, the equivocal nature of these acts made it difficult to establish the defendant’s liability in conversion. On 29 November 1990, the United Nations Security Council passed Resolution 678, which gave Iraq a withdrawal deadline of 15 January 1991. Two days after the expiry of this deadline, with no sign of an Iraqi withdrawal, the American-led coalition began Operation Desert Storm. A massive air campaign destroyed much of Iraq’s military and civilian infrastructure. Amongst the targets of the campaign was Mosul airfield in northern Iraq, where four of KAC’s aircraft had been stationed. These planes were destroyed in the ensuing bombing.11 IAC managed to fly the remaining six aircraft to Iran for safe keeping. The invasion and occupation of Iraq by coalition forces, and the liberation of Kuwait, was complete by the end of February 1991. KAC were subsequently able to secure the return of the six aircraft from Iran, on payment of some US$20 million for their upkeep. In addition to paying for the replacement of the four aircraft destroyed at Mosul, KAC suffered significant consequential losses, primarily as a result

6 The resolution, passed on 9 September 1990, stated: ‘(1) That the Kuwait Airways Corp be dissolved and all its fixed and liquid assets, rights and liabilities be transferred to the Iraqi Airways Co, who will register all assets in accordance with domestic and international laws. (2) All assets belonging to Kuwait Airways are to be transferred to the Iraqi Airways Co as soon as this resolution comes into effect’. 7 A detailed account of the history of the individual aircraft following their seizure in Kuwait was given by Brooke LJ in the Court of Appeal: [2002] 2 AC 883, 899–916. 8 Ibid, 912–14. 9 Ibid. 10 Ibid, 911–12. 11 The ‘Mosul four’, as these planes came to be known, consisted of the two Boeing 767s and two of the A300-600C Airbuses.

208 Simon Douglas of having to lease replacement aircraft pending the return or replacement of those seized by IAC.12 Shortly after the initial seizure of the aircraft, KAC issued a writ against IAC at IAC’s office in London, claiming damages for conversion. A writ was also issued against the Iraqi government at their embassy in London. Although the acts complained of took place in Kuwait and Iraq, it would have been pointless for KAC to begin proceedings in either country, not least because the resolutions passed by the Iraqi government had made IAC’s acts perfectly legal in Iraq and Kuwait.13 Consequently, KAC was able to argue that England and Wales was a ‘convenient forum’ for the claim, and jurisdiction was accepted by the High Court.14 Under the rules of private international law applying at the time15 torts committed in foreign jurisdictions could be actionable in the English courts, but only if the acts complained of were both wrongful in the jurisdiction where they were committed, and would have been wrongful if the acts had taken place in England.16 This meant that it was incumbent on KAC to show that if the seizure and subsequent use of the aircraft by IAC had happened in England, then such acts would have been wrongful. KAC argued that the relevant wrong was that of conversion, the common law’s principal action for unauthorised interferences with goods.17 By examining the defendant’s potential liability in this tort, the House of Lords, for reasons explained below, was also defining the content of KAC’s property rights in its aircraft. It is for this reason, bizarre as it may seem, that the events which precipitated the First Gulf War may also have led to a better understanding of the scope and content of property rights recognised by the common law.

III. THE LITIGATION

KAC’s proceedings against IAC lasted the better part of two decades and produced several judgments of the High Court and Court of Appeal, and two separate decisions from the House of Lords. The first difficulty KAC

12 KAC’s claim was for several heads of loss, including a claim for the value of the Mosul four (US$200m), the cost of repairing the six planes flown to Iran (US$11.25m), loss of profits (US$66m), and the costs of financing the lease of replacement aircraft and purchase of new aircraft through loans (US$290m). 13 In particular, RCC Resolution 369 purported to vest title to the 10 aircraft in IAC. 14 Kuwait Airways Corp v Iraqi Airways Co (No 1), Financial Times, 17 July 1992. 15 The Private International Law (Miscellaneous Provisions) Act 1995 only applies to tortious acts committed in foreign jurisdictions after the commencement of the Act on 1 May 1996. 16 This is known as the ‘double actionability’ rule, as stated in Boys v Chaplin [1971] AC 356. 17 See P Birks, ‘Personal Property: Proprietary Rights and Remedies’ (2000) 11 King’s College Law Journal 1 for discussion of the context of conversion.

Kuwait Airways Corporation v Iraqi Airways Company 209 faced in its claim against IAC was that of state immunity. English courts will rarely sit in judgment on the acts of a foreign state18 and the first question to be decided was whether the Iraqi government or IAC could claim state immunity for their acts in relation to the aircraft. This question was the subject of the first of the two appeals to the House of Lords.19 Predictably the House of Lords held that the Iraqi government, as a sovereign state, enjoyed state immunity and could not be sued for its part in the seizure of the aircraft.20 Importantly for our purposes, the House of Lords also held that when IAC supplied pilots to fly the 10 aircraft from Kuwait to Iraq, IAC had been acting under the authority of the government and as such could also claim state immunity in respect of those acts.21 Although the House of Lords held that IAC’s state immunity ceased after the aircraft had been flown to Iraq, IAC’s initial period of immunity had important consequences for how the claim in conversion developed. It meant that the initial overt acts of seizure of the aircraft by IAC, which were their most obvious acts of interference with the aircraft, could not form the basis of the conversion claim. This forced KAC to build their conversion claim around the subsequent (and far more equivocal) acts of interference with the aircraft, which made the discussion of conversion in the subsequent decisions far more interesting than they would otherwise have been. After the first appeal to the House of Lords, KAC discontinued its claim against the Iraqi government. KAC’s claim against IAC was sent back to the High Court22 which had to decide whether IAC could be liable for any acts of interference with the aircraft after they had been flown to Iraq, ie after IAC’s period of immunity had finished. At this point KAC encountered a second hurdle. It will be recalled that IAC could only be liable under the ‘double actionability’ rule if its acts were unlawful in both Iraq and England. However, IAC’s acts were perfectly lawful in Iraq because, as noted above, the Iraqi government had passed Resolution 369 which had the effect of dissolving KAC and vesting title to the aircraft in IAC. In a decision that was eventually upheld in the second appeal to the House of Lords, the High Court refused to recognise Resolution 369 on the basis that it would be contrary to public policy to give effect to an expropriating

18 The ‘justiciability’ rule, as stated in Buttes Gas and Oil Co v Hammer [1982] AC 888, is that courts will not adjudicate on the acts of foreign states in the conduct of foreign affairs. 19 Kuwait Airways Corp v Iraqi Airways Co (No 1), Financial Times [1995] 1 WLR 1147. 20 Ibid, 1164–68. 21 The State Immunity Act 1978, s 14(2) provides that a separate entity (such as IAC) can claim state immunity in respect of anything done ‘in the exercise of sovereign authority’. 22 In the High Court the issues of liability in conversion and causation of loss were tried separately. Mance J tried the question of whether IAC’s acts amounted to a conversion ([1999] CLC 31), and Aiken J tried the question of whether IAC’s conversion had caused KAC’s losses ([2000] 2 All ER (Comm) 360).

210 Simon Douglas statute that was contrary to international law.23 Stripped of its legal status as owner of the aircraft, IAC’s conduct was clearly unlawful in Iraq,24 thus satisfying the first limb of the double actionability rule. The only remaining question, therefore, was whether IAC’s conduct, if it had taken place in England, would have constituted the tort of conversion. This question was answered in the affirmative by the High Court,25 Court of Appeal26 and, eventually, the House of Lords.27 At each stage the relevant court analysed the elements of the conversion claim and their resultant judgments and decisions represent the most thorough judicial examination of the tort in modern times. In order to understand why these attempts to define conversion are important for our understanding of the content of property rights, it will be necessary to consider the relationship between conversion and property law.

IV. CONVERSION AND PROPERTY LAW

The analysis of conversion found in KAC v IAC is obviously important for our understanding of the law of torts, but it is not clear what relevance it has for property law. Why is IAC’s liability in conversion important for our understanding of KAC’s property rights in their aircraft? To answer this question it is necessary to consider the relationship between property law and the law of torts. We will do this by examining, first, what the term ‘property right’ means and, secondly, what constitutes a ‘tort’.

A. Property Rights In The Structure of Property Law McFarlane argues that the label ‘property right’ should be reserved for rights which have two characteristics.28 First, the right must be ‘exigible’, or ‘enforceable’ against the world.29 Secondly, 23 The exception, clearly stated in Oppenheimer v Cattermole (HM Inspector of Taxes) [1976] AC 249, provides that it would be contrary to public policy to recognise legislation that is a gross violation of human rights and contrary to established rules of international law. 24 The relevant action under Iraqi law was that of ‘usurpation’, as set out in the Iraqi Civil Code, arts 192–201. Art 193 states: ‘The usurper shall be liable if he has consumed, damaged or lost the seized item’. The action is similar in scope to that of conversion. 25 Kuwait Airways Corp v Iraqi Airways Co [1999] CLC 31. 26 The Court of Appeal upheld Mance J’s judgment from the High Court ‘in every way’: [2002] 2 AC 883, 1062 (Brooke LJ). 27 In the House of Lords the leading judgment on conversion was given by Lord Nicholls who reached the conclusion that IAC’s conduct was actionable in the tort: [2002] 2 AC 883, 1085. 28 B McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 132. 29 See B Nicholas, An Introduction to Roman Law (Oxford, Clarendon Press, 1962) 99 for a discussion of this characteristic.

Kuwait Airways Corporation v Iraqi Airways Company 211 the right must relate to a physical thing, such as land or a chattel.30 KAC’s rights in relation to the aircraft seized by IAC, as we will see, had both of these characteristics. Beginning with the first characteristic, that the right must be ‘exigible’ against the world, to understand this feature we need to say something about ‘right–duty’ relationships. To say that ‘A holds a “right” against B’ is the equivalent of saying that ‘B is under a legal “duty” to A to behave in a certain way’.31 Take a simple example where A loans money to B, in return for which B promises to repay A the money (let us say £1000). The legal relationship between A and B can either be described from A’s perspective (A’s ‘right’ that B pay him £1000), or from B’s perspective (B’s duty to pay A £1000). The ‘right’ held by A can be used to denote B’s legal duty to behave in a certain way, namely to pay A the sum of money.32 The example used here involves a contractual right. This is typically classed as a ‘personal right’ or right in personam.33 The reason for this that the right-holder, A, is owed a duty by a single person, B. It is not possible, for instance, for A to call on C for payment.34 Property rights are fundamentally different. Take an example of a clear property right, such as freehold title to land. If A has freehold title to a plot of land, then he is not owed a duty by merely one person (B) to stay off the land; rather he is owed legal duties by all persons (B, C, D etc) to stay off the land. This is what it means to say that property rights are ‘exigible’ against the world: the right corresponds with a large number of duties, owed by all persons. Penner describes the right as ‘impersonal’ and, in one sense, this is correct.35 Because the right-holder, A, is owed a duty by all others, then it does not really matter which person (B, or C, or D etc) interferes with A’s land: in all cases a duty is equally breached. This characteristic of ‘exigibility against the world’ was a clear characteristic of KAC’s right. They were owed a duty not just by IAC, but by all persons, not to interfere with the aircraft. It would not have mattered if it had been some other body (such as a different Iraqi airline) that had done the acts complained of, as this would equally have amounted to a breach of duty.

30 This feature of property rights is brought out clearly in A Pretto, Boundaries of Personal Property: Shares and Sub-Shares (Oxford, Hart Publishing, 2005) 90. For criticism see Eleftheriadis, ‘The Analysis of Property Rights’ (1996) 16 OJLS 31. 31 W Hohfeld, ‘Fundamental Legal Conceptions as Applied in Legal Reasoning’ (1913) 23 Yale LJ 16. 32 See J Finnis, ‘Some Professorial Fallacies About Rights’ (1972) 4 Adelaide Law Review 380, who points out that A’s right can only be used to describe B’s behaviour. 33 The differences between a personal right and a right in rem are fully analysed by Hohfeld (who terms them ‘paucital’ and ‘multital’ rights respectively) in ‘Fundamental Legal Conceptions as Applied in Judicial Reasoning’ (1917) 26 Yale Law Journal 710. 34 This is usually expressed as the doctrine of ‘privity’. See B McFarlane, ‘Equity, Obligations and Third Parties’ [2008] Singapore Journal of Legal Studies 308 for discussion. 35 J Penner, The Idea of Property in Law (Oxford, OUP, 1997) 25–31.

212 Simon Douglas Although all clear property rights are exigible against the world, not all rights that are ‘exigible against the world’ are property rights. An example is a right to a reputation. If A has a right to a reputation, then it is not just a single person (B) who is under a duty to refrain from defaming A, but all persons (B, C, D etc). Yet we would not normally characterise reputational rights as ‘property rights’. For this reason we need to identify a second characteristic which marks certain rights out as ‘property rights’. This characteristic, according to McFarlane, is that of ‘thing-relatedness’, in the sense that the right must relate to a physical thing (such as land, a painting, coins, cars etc).36 A right to a reputation would fall outside of this definition because it relates to an abstract concept rather than a physical thing. KAC’s rights, on the other hand, are ‘property rights’ according to this definition as they relate to physical things: all persons were under a duty to KAC to behave in a certain way in relation to physical things, namely the aircraft. This definition of ‘property rights’ is controversial as it excludes certain rights, such as intellectual property rights, because they do not relate to physical things.37 Yet the definition can be justified, and it is worth explaining why as it will prove important when we consider the content of property rights.38 The reason why the label ‘property’ should be reserved for rights that relate to physical things is that many of the rules which constitute the ‘law of property’ presuppose the existence of a physical thing. Consequently, much of property law becomes incoherent when applied to rights which do not relate to physical things. Take, for instance, the acquisition rules in property law. As discussed in Hickey’s chapter39 on Armory v Delamirie,40 the orthodox view of the rules of acquisition holds that a person will acquire a right in a physical thing by taking possession of that thing. This is what the chimney sweep’s boy is generally thought to have done in Armory v Delamirie: by taking possession of the ring, according to Pratt CJ, he acquired ‘such a property as will enable him to keep it against all but the rightful owner’.41 This rule of acquisition cannot be applied to rights that do not relate to physical things. An idea or artistic expression, for instance, cannot be ‘possessed’ in any intelligible sense and, consequently, the rule in Armory v Delamirie cannot be applied to intellectual property rights. The absence of a physical thing means that intellectual property law must develop its own rules of acquisition which are quite distinct from those found in property law textbooks. The thing-relatedness of property rights becomes crucial when we consider the content of these rights. Rights that relate to physical things can 36

McFarlane (above n 28). See A Rahmatian, ‘Intellectual Property and the Concept of Dematerialised Property’ in S Bright (ed), Modern Studies in Property Law, vol 6 (Oxford, Hart Publishing, 2011). 38 See Brouckaert, ‘What is Property?’ (1990) 13 Harvard Journal of Law and Public Policy 775 for an interesting attempt to justify the restriction of the label ‘property’ to rights relating to physical things. 39 Chapter 6 of this volume, above. 40 Armory v Delamirie (1722) 1 Strange 505, 93 ER 664. 41 Ibid. 37

Kuwait Airways Corporation v Iraqi Airways Company 213 be infringed in a particular way, namely by a physical interference with the thing. Other rights cannot be infringed in quite the same way, as David Hume argued in the following famous passage: There are different species of goods, which we are possess’d of; the internal satisfaction of our minds, the external advantages of our body, and the enjoyment of such possessions as we have acquir’d by our industry and good fortune. We are perfectly secure in the enjoyment of the first. The second may be ravish’d from us, but can be of no advantage to him who deprives us of them. The last only are both expos’d to the violence of others, and may be transferr’d without suffering any loss or alteration.42

Ideas, whether they are inventions or artistic expressions, may be imitated, but they cannot be physically interfered with. For the holder of an intellectual property right, therefore, there is never any danger of being physically deprived of the subject of the right.43 Rights relating to physical things, such as chattels or land, are different. The subjects of such rights can be physically interfered with, and the right-holder may find himself physically deprived of the thing. This is precisely what happened in KAC v IAC: KAC’s right was infringed by IAC’s physical interference with the aircraft. This vulnerability to physical interferences and dispossessions, which only exists for holders of rights that relate to physical things, exerts a strong influence on the content of these rights. As we will see below, they appear to impose duties on others to refrain from acts of physical interference with the thing. In other words, the content of the right corresponds directly with the vulnerability of the right-holder to physical interferences with his thing. The proof of this, as will be explained in the next section, can be found in the action for conversion and other torts.

B. Torts A tort is a type of civil wrong, normally considered to involve a breach of a legal duty.44 McBride and Bagshaw describe it in the following terms: Whenever someone does something he is not allowed to do under the law, we can say that he had a duty not to do that what he did, and we can also say that he has committed a (legal) wrong.45 42 D Hume, A Treatise of Human Nature, Book III (Of Morals), Part 1, Sect 2 (London, 1740). 43 Hume also refers to rights to the physical integrity of one’s body in the above quote. While such rights can be infringed by physical interferences with one’s body (ie by a trespass to the person), such interferences, as Hume points out, are of no benefit to those responsible for the interference: if a defendant physically assaults a claimant, the defendant does not take anything of value from the claimant. 44 See Stevens, Torts and Rights (above n 3) 1–3. 45 N McBride and R Bagshaw, Tort Law, 4th edn (London, Pearson, 2012) 8. For wellknown attempts to define a tort see P Winfield, The Province of the Law of Tort (Cambridge, CUP, 1931) 32; F Cooke, ‘A Proposed New Definition of a Tort’ (1898) 12 HLR 335. More

214 Simon Douglas To give an example, if A has a right to a reputation then, as we saw above, the correlative of this is that B (and C, D, E etc) is under a duty to A to behave in a certain way, namely to refrain from defaming A. If B fails to behave in this way by, for instance, publishing libellous material about A, then we can say that B has breached his duty. It is this ‘breach of duty’ which we commonly understand to be a tort.46 As one would expect there are controversies on the edges of this definition. A failure to perform what one has contracted to do also involves a breach of a legal duty, yet this would be considered a breach of contract, not a tort. The label ‘tort’ is usually reserved for breaches of non-contractual common law duties.47 The tort of conversion falls squarely within this definition. This definition of a tort helps explain why it is so important to the law of property. Because tort law tells us when a defendant will, and will not, be in breach of a legal duty, tort law is in essence defining the scope of the duty owed to a right holder. This, in turn, informs us of the content of the right-holder’s right. Take an example involving land. It is well established that if A has freehold title to a plot of land, then B will commit a tort by walking across the land without A’s consent.48 B’s liability in tort means that he must have been under a duty to A to refrain from physically interfering with A’s land. As explained above, a right, properly so called, is the correlative of a duty and, consequently, if we are able to define B’s duty then we are also able to define the content of A’s right: a right that B refrain from physically interfering with the land. Just as instructive will be instances where a court holds that B commits no tort. If A complains that his neighbour, B, is building on his land in such a way as to obstruct light coming onto A’s land, then it is well established that B commits no tort.49 B, therefore, is under no duty to refrain from obstructing the light to A’s land; the correlative of this is that A has no right that B refrain from obstructing lights.

recently, see N McBride, ‘On the Conceptual and Philosophical Foundations of Tort Law’ in J Horder (ed), Oxford Essays in Jurispridence (Oxford, OUP, 2000) 219: ‘Some lawyers of a traditional bent, use the term “tort” to refer to conduct that breaches a non-equitable, noncontractual duty owed to another to do something other than pay money to that other’. 46 P Birks, ‘The Concept of a Civil Wrong’ in D Owen (ed), Philosophical Foundations of Tort Law (Oxford, Clarendon Press, 1995) 46. 47 A case that is difficult to classify, for instance, is Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, which seems to fall between contract and tort. Similarly, it has been asked why equitable wrongs are treated differently from common law wrongs: see the chapter on ‘Torts and Equitable Wrongs’ in Burrows (ed), English Private Law, 3rd edn (Oxford, OUP, 2013) which considers torts and equitable wrongs together. 48 Ellis v Loftus (1874) LR 10 CP 10. 49 Tapling v Jones (1865) 11 HLC 290, 11 ER 1344.

Kuwait Airways Corporation v Iraqi Airways Company 215 In the above examples we can see that B’s liability (or not) in tort law defines the scope of B’s duty to A, which, in turn, allow us to define the content of A’s right. By examining liability in the tort of conversion we can make similar observations about the content of property rights relating to chattels. The case of KAC v IAC is primarily concerned with the question of what types of behaviour will constitute a breach of a legal duty in the tort of conversion. In answering this question the House of Lords also was also describing the content of KAC’s property rights.

V. WHAT COUNTS AS A CONVERSION?

In KAC v IAC Lord Nicholls attempted to define the tort of conversion. The tort, according to Lord Nicholls, consists of three elements: First, the defendant’s conduct was inconsistent with the rights of the owner (or other person entitled to possession). Second, the conduct was deliberate, not accidental. Third, the conduct was so extensive an encroachment on the rights of the owner as to exclude him from use and possession of the goods. The contrast is with lesser acts of interference. If these cause damage they may give rise to claims for trespass or in negligence, but they do not constitute conversion.50

In setting out the different elements that must be present for liability in the tort, Lord Nicholls was describing the types of behaviour that a defendant is under a legal duty, to the claimant, to refrain from doing. The claimant’s ‘property right’ is a shorthand description of this legal duty. When we ask ‘what is the content of the claimant’s property right?’, we are essentially asking ‘what is the duty owed to the claimant?’ In defining IAC’s duty to KAC, the most important element of Lord Nicholls’ definition of conversion is the first, the need for ‘conduct … inconsistent with the rights of the owner’. Before examining this requirement, we will consider the other two elements described by Lord Nicholls, the need for the defendant’s conduct to be deliberate and the need for it to result in the claimant’s exclusion.

A. Deliberateness The need for an interference to be deliberate is an important restriction on the scope of conversion.51 It means, for instance, that in the very common

50

Kuwait Airways Corp v Iraqi Airways Co [2002] 2 AC 883, 1084. For a definition of ‘deliberate’ or ‘intentional’, see J Finnis, ‘Intention in Tort Law’ in D Owen (ed), Philosophical Foundations of Tort Law (Oxford, Clarendon Press, 1995). 51

216 Simon Douglas case where A, a careless driver, crashes into B’s car, B cannot sue A for this interference in conversion as it is not deliberate.52 By requiring the interference to be deliberate Lord Nicholls was confirming a traditional restriction on the scope of the tort.53 In the earliest form of conversion a claimant had to plead that a defendant was not merely detaining his chattel, but was ‘converting it to his own use’.54 The essence of this allegation was that the defendant was doing more than passively keeping the claimant’s chattel, but was actively using it as his own: the defendant was driving the claimant’s car, spending his coins, eating his cake or wearing his clothes.55 Whilst it is no longer necessary to prove that a defendant has actively used the claimant’s chattel as though it were his own,56 the initial requirement to prove this shaped conversion into an intentional tort. The reason for this is that it is difficult to conceive of a case where a defendant actively uses a claimant’s chattel unintentionally: one cannot unintentionally drive a car, wear clothes or eat a cake.57 It is important to emphasise that the requirement for ‘deliberateness’ mentioned by Lord Nicholls should not be equated with ‘maliciousness’.58 What must be intended in conversion is the interference with the claimant’s chattel, not the harm suffered by the claimant. In the not uncommon case where a defendant, in good faith, buys stolen goods, he can be liable in the tort even though he has no idea of the existence of the owner’s property right. The reason for this is that there is no requirement for the defendant to intend to infringe the claimant’s property right; rather there is only a requirement that he intend to interfere with the chattel, which he clearly does when he takes receipt of the stolen thing after buying it.59 The types of cases excluded from the scope of conversion by the deliberateness requirement are those where the damage or physical contact with the claimant’s chattel are not a desired consequence of the defendant’s conduct.60 A good example is the recent case of BMW Financial Services (GB) Ltd v Bhagwanani61 where the defendant, who had borrowed the 52 BMW Financial Services (GB) Ltd v Bhagwanani [2007] EWCA Civ 1230. cf Moorgate Mercantile Co Ltd v Finch [1962] 1 QB 701. 53 For historical accounts of the tort see J Ames, ‘The History of Trover’ (1897) 11 Harvard Law Review 277 and Salmond, ‘Observations on Trover and Conversion’ (1905) 21 LQR 43. 54 Wharton v Ashpole (1524) B & M 529 provides a good example of this early form of pleading. 55 See Green and Randall (n 1 above) 65–67 for discussion of this element of conversion. 56 The abandonment of the requirement that the claimant plead that the defendant used the chattel as his own happened in Easom v Newman (1594) Cro Eliz 495, 78 ER 745. See S Douglas, ‘The Nature of the Tort of Conversion’ [2010] CLJ 198, 206–9 for discussion. 57 See Walgrave v Ogden (1590) 1 Leon 224, 74 ER 205. 58 See Marfani & Co Ltd v Midland Bank Ltd [1968] 1 WLR 956. 59 eg Farquharson Bros v King [1902] AC 325. 60 eg Rushworth v Taylor (1842) 3 QB 699, 114 ER 674 and Towne v Lewis (1849) 7 CB 608, 137 ER 241. 61 BMW (n 52 above).

Kuwait Airways Corporation v Iraqi Airways Company 217 claimant’s car with the claimant’s consent, crashed the car as a result of his careless driving. Although this damage could be litigated in the tort of negligence, it could not form the basis of a claim in conversion as it was accidental, not deliberate. In KAC v IAC, on the other hand, there was nothing accidental about IAC’s attempts to incorporate KAC’s aircraft into their fleet. This made conversion, rather than negligence, the natural tort for KAC to sue in.

B. Exclusion A further requirement for liability in conversion outlined by Lord Nicholls is that the defendant’s interference with the claimant’s chattel must be ‘so extensive an encroachment on the rights of the [claimant] as to exclude him from use and possession’.62 Again, Lord Nicholls was here confirming a traditional restriction on the scope of conversion. Acts of minor interference with a claimant’s chattel have never been actionable in the tort.63 The classic authority for this is the case of Fouldes v Willoughby64 where the defendant, a ferryman, had taken the claimant’s horses onshore in order to entice the misbehaving claimant to leave the ferry as well. The claimant refused and continued with his journey on the boat. When the claimant was subsequently unable to locate his horses when he returned the following day, he brought a claim against the defendant in conversion. Rejecting the claim Alderson B said ‘it is a wrongful act done, but only like any common act of trespass’.65 The defendant’s interference, merely moving the horses a couple of feet from the boat onto the shore, had not been sufficiently serious to constitute liability in conversion because it had not resulted in the claimant being excluded from the control of his horses. Any exclusion resulted from the claimant’s failure to follow his horses, not the defendant’s conduct. This is to be contrasted with IAC’s conduct which clearly did pass this threshold. In taking the aircraft back to Iraq and keeping them there, they had completely excluded KAC from the possession and control of the planes. The ‘exclusion’ requirement is an important restriction on the scope of conversion as it prevents minor interferences from being litigated

62

[2002] 2 AC 883, 1084. See J Salmond, ‘Observations on Trover and Conversion’ (1905) 21 LQR 43, where the author explains that the types of acts that were originally litigated in the tort, detaining and disposing of a thing, both resulted in the owner being completely excluded from his thing. This early restriction may have shaped conversion into a tort that is concerned with the most serious interferences only. 64 Fouldes v Willoughby (1841) 8 M & W 540, 151 ER 1153. See also Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 and Johnson v Weedman (1843) 5 Ill 495. 65 Ibid, 549, 1157. 63

218 Simon Douglas in the tort. Although it has been criticised by some,66 and it was recommended by the Law Reform Committee that it be abolished,67 the requirement was retained by Lord Nicholls in his definition of the tort. This means that minor interferences, such the type encountered in Fouldes v Willoughby, must be litigated in other torts, principally trespass, rather than in conversion.

C. The Interference Requirement The two requirements that have been considered so far, ‘deliberateness’ and ‘exclusion’, are important in defining the scope of conversion. However, they do not tell us much about the content of the claimant’s property right. The reason for this is that the protection afforded to property rights by conversion is supplemented by other torts, particularly negligence and trespass. These torts tell us that defendants are also under a duty, respectively, to avoid non-deliberate68 and minor interferences69 with a claimant’s chattel. In other words, the two restrictions on the scope of conversion considered so far give us an incomplete picture of the duties owed to the holder of a property right. When trying to define the duties owed to the holder of a property right, by far the most important element of a claim in conversion is what may be called the ‘interference’ requirement. This is what Lord Nicholls was referring to when he said: ‘the defendant’s conduct [must be] inconsistent with the rights of the owner (or other person entitled to possession)’.70 Whilst this is not in itself a particularly instructive formulation,71 it does force the court to confront the question of: what types of behaviour are inconsistent with the claimant’s property right? For instance, if A is kidnapped by B and held at B’s house, the result of this is that A is unable to use his land or any of this chattels located there for the duration of his captivity. Whilst

66 The claimant in Fouldes v Willoughby relied heavily on Serjeant Williams’s annotations on the case of Wilbraham v Snow (1845) 2 Wms Saund 47, 85 ER 624 which argued that minor interferences should be actionable in the tort. For a similar argument see S Douglas, Liability for Wrongful Interferences with Chattels (Oxford, Hart Publishing, 2011) ch 7. 67 Law Reform Committee, ‘Conversion and Detinue’ (Law Reform Com No 18 Cm 4774, 1971) 8. 68 Examples of non-deliberate, negligent, interferences with chattels and land are legion. One well known example would be the case of Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd (The Wagon Mound No 2) [1967] 2 AC 617. 69 Vine v Waltham Forest LBC [2000] 1 WLR 2383 provides a simple example of a minor interference, an unauthorised clamping of the claimant’s car. 70 [2002] 2 AC 883, 1084. 71 Conversion, as we have seen, consists of a breach of a legal duty or, which is to say the same thing, the infringement of a right. To say that conversion requires conduct that is ‘inconsistent with a right’, therefore, tells us very little.

Kuwait Airways Corporation v Iraqi Airways Company 219 B’s conduct is clearly inconsistent with A’s personality rights (as evidenced by B’s likely liability for false imprisonment and battery), his conduct is not inconsistent with A’s property rights as B does not ‘interfere’ with A’s land or chattels in any way.72 Conversion, like trespass and negligence,73 requires the defendant to interfere with the claimant’s thing, not merely impair the claimant’s ability to use it.74 Lord Blackburn made this clear in Hollins v Fowler75 where he said: From the nature of the action … it follows that it must be an interference with the property which would not, as against the true owner, be justified, or at least excused, in one who came lawfully into the possession of the goods.76

What Lord Nicholls meant in KAC v IAC when he said that the defendant’s conduct must be ‘inconsistent’ with the claimant’s right, is that the defendant must have done more than merely impair the claimant’s ability to use his thing; the defendant must have done some act which can be called an ‘interference’ with the claimant’s thing. As explained above, one of the main obstacles that KAC faced in arguing that IAC had committed conversion was that the initial acts of seizure of the aircraft from the airport in Kuwait, which clearly constituted an ‘interference’ under any definition of the word, took place during a period when IAC’s conduct was protected by state immunity. This meant that KAC had to base their claim on IAC’s far more equivocal behaviour towards the aircraft. Opportunities to use the aircraft were extremely limited after they had been flown back to Iraq and, IAC, argued, nothing that they did after this point amounted to an actionable interference: ‘In the present case, [the defendant argued], none of the acts of IAC deprived KAC of use or possession of the aircraft. Some of IAC’s acts were entirely abstract, such as applying for certificates of airworthiness’.77 This argument was rejected at first instance by Mance J, whose judgment was upheld in the Court of Appeal78 and House of Lords. Mance J identified six acts IAC carried out which may have satisfied the interference requirement: 1)

IAC applied for airworthiness certificates and registration of the aircraft in its own name, 2) Insurance cover was applied for and effected for most of the aircraft,

72 See Edelstein v Schuler & Co [1902] 2 KB 144, 156 and C Hawes, ‘Conversion by Detention’ [2009] LMCLQ 188, 191. 73 For claims in trespass and negligence that have failed for want of an interference see, respectively, Hartley v Moxham (1842) 3 QB 701, 114 ER 675 and D Pride & Partners (a firm) v Institute for Animal Health [2009] EWHC 685. 74 See S Douglas and B McFarlane, ‘Defining Property Rights’ in J Penner and H Smith (eds) Philosophical Foundations of Property Law (Oxford, OUP, 2013) 226–33. 75 Hollins v Fowler (1875) LR 7 HL 757. 76 Ibid, 766. 77 Kuwait Airways Corp v Iraqi Airways Co [2002] 2 AC 883, 1084. 78 Ibid, 1062.

220 Simon Douglas 3) 4) 5) 6)

IAC repainted most of the aircraft in its own livery, Maintenance and checks were carried out on the aircraft, A small number of commercial flights were made by an aircraft, and A number of the aircraft were used for training purposes.79

Mance J’s analysis of these different acts provides a useful insight into the interference requirement. The acts listed from (3)–(6), repainting, maintenance and flights, all involve acts of physical contact: IAC, acting through its employees, made some form of physical contact with KAC’s aircraft when doing these acts. Mance J had no difficulty in concluding that these acts could, both individually and in combination with each other, satisfy the interference requirement and constitute a conversion.80 The acts set out in (1)–(2) are different in that they do not necessarily involve any form of physical contact with KAC’s aircraft. Mance J considered them to involve ‘less compelling indicia of conversion’81 and it is easy to see why. It is possible for any defendant, without any physical proximity to a claimant’s chattel, to apply for things such as registration documents or insurance. If A’s car, for example, is parked in Edinburgh, there is nothing to prevent B, based in London, from applying to the appropriate authority for registration of title to A’s car. Whilst B’s conduct may cause A some difficulty in using his car (he may have difficulty registering it himself or effecting insurance cover), it would seem odd to say that that B has ‘interfered’ with A’s car. In the absence of any physical contact with A’s car, B has, at most, impaired A’s use of his car. The same point can be made in relation to IAC’s applications for airworthiness certificates and insurance: because they did not necessitate any form of physical contact with KAC’s aircraft, IAC could have done these very same acts before the invasion and seizure of the aircraft took place. When viewed in isolation from the rest of IAC’s conduct it becomes difficult to label these acts as acts of ‘interference’. Ultimately Mance J did conclude that these acts could constitute a conversion, but only because they were done at a time when IAC had physical possession and control of the aircraft.82 Had they been purely abstract, in the sense that they had not been accompanied with any physical contact with KAC’s aircraft, then it is unlikely that the interference requirement would have been satisfied. The view that clearly appears in Mance J’s judgment is that for the ‘interference’ requirement to be satisfied there must be some form of physical contact with the claimant’s chattel. The Court of Appeal and House of Lords upheld Mance J’s judgment. The same focus on acts of physical 79 Kuwait Airways Corp v Iraqi Airways Co [1999] CLC 31, 47–49; discussed by the Court of Appeal at [2002] 2 AC 883, 911–13. 80 Ibid, 48. 81 Ibid. 82 Ibid.

Kuwait Airways Corporation v Iraqi Airways Company 221 contact can be seen in Lord Nicholls’ decision in the House of Lords where he said that the interference requirement was satisfied because IAC had ‘possession and control of the aircraft … adverse to KAC’.83 There is no sense given that purely abstract acts, which involve no physical contact with a claimant’s chattel, could of themselves satisfy the interference requirement. What emerges from KAC v IAC, therefore, is that an essential element of liability in conversion is that the defendant must ‘physically interfere’ with the claimant’s chattel, in the sense that his conduct must result in some form of physical contact with the claimant’s chattel. The focus on acts of physical interference found in KAC v IAC is not always present in other cases. It has sometimes been held that abstract acts, which may impair the claimant’s use of his chattel, but do not result in any form of physical contact with it, will suffice for liability. A good example is Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd84 where the claimant owned two lorries which had valuable commercial haulage licences. The defendant fraudulently persuaded the licensing authority to transfer the licences to his own vehicles. Although the defendant never came into physical contact with the claimant’s vehicles, McNair J held that there had been an actionable interference with them: [T]he lorries, by the wrongful dealing by the defendants with the lorries themselves and the licences in which they were specified, had lost the function of being capable of use for their only designed and contemplated purpose, just as much as if the wheels of the lorries had been permanently removed.85

The case clearly stands for a wider conception of the ‘interference’ requirement. In the absence of any form of physical contact with the claimant’s lorries, all that can be said of the defendant is that it had impaired the utility of the vehicles as they could no longer be legally used for commercial haulage purposes. The judgment in Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd has always been problematic as it is inconsistent with the leading case (prior to KAC v IAC) on the interference requirement, England v Cowley.86 The claimant in England v Cowley had a bill of sale over a bankrupt’s furniture and sent a man to the bankrupt’s house where he was left in possession of the goods. The defendant, the bankrupt’s landlord, was intending to distrain the goods the following day. Although he allowed the claimant’s man to remain in possession of the goods, he warned him not to take them from the premises and stationed a police officer outside. The claimant argued, unsuccessfully, that this act of obstructing access from the

83

[2002] 2 AC 883, 1085. Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd [1969] 1 QB 738. See also Oakley v Lyster [1931] 1 KB 148. 85 [1969] 1 QB 738, 754. 86 England v Cowley (1872–73) LR 8 Ex 126. 84

222 Simon Douglas house amounted to a conversion. The defendant had clearly impaired the utility of the claimant’s goods, as the claimant was not able, for instance, to remove them from the house and sell them. However, the defendant never came into any kind of physical contact with them and, the court held, this was fatal to the claim. Bramwell B said: I meet a man on horseback going in a particular direction, and say to him, ‘You shall not go that way, you must turn back’; and make him comply. Who could say that I had been guilty of a conversion of the horse?87

Like the claimant in the case, the man on horseback may find that the use of his horse is impaired as he can no longer use it to travel to his desired destination. However, it is difficult to accuse the man blocking the way of an ‘interference’ with the horse as he makes no physical contact with it. This element of physical contact was seen as crucial by the court in England v Cowley. Before KAC v IAC there was something of an inconsistency in the authorities. England v Cowley, as we have seen, held that a defendant must physically interfere with a claimant’s chattel in order to be liable in conversion. Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd, on the other hand, held that mere impairment of use, unaccompanied with any acts of physical interference, was sufficient for liability in the tort. KAC v IAC has now settled this issue and any litigant suing in the tort must be able to prove that there has been a physical interference with his chattel. This approach was confirmed in the subsequent case of Club Cruise Entertainment and Travelling Services Europe BV v Department for Transport,88 where the defendant had improperly served a statutory detention notice on the claimant’s cruise ship after an outbreak of a norovirus on it. The defendant’s conduct consisted of no more than handing a sheet of paper to the plaintiff that detailed the detention order. Had there been physical contact with the ship then the interference requirement would have been satisfied, as Flaux J stated: ‘if there had been actual physical restraint of the ship by chaining it to the quayside, that would have constituted the tort of trespass to goods’.89 In the absence of physical contact all that could be said is that the defendant had prevented the claimant from making a specific use of its ship because it could not run its scheduled cruise from Harwich to Norway. Flaux J held that this impairment of use did not satisfy the interference requirement: ‘The intention of the Detention Notice was merely to prevent the Claimant from using the ship in a particular way (that is for the third May cruise) for a short period of time. That was not conversion’.90 Serving a detention 87

Ibid, 129. Club Cruise Entertainment and Travelling Services Europe BV v Department for Transport [2008] EWHC 2794. 89 Ibid, [50]. 90 Ibid, [53]. 88

Kuwait Airways Corporation v Iraqi Airways Company 223 notice is similar to acts such as registering the aircraft in KAC v IAC: it is no more than an abstract act that may, at most, prevent another from using their chattel in some way. However, it does not attract liability. There must be some form of physical interference.

VI. IMPACT OF THE DECISION

In the context of the present chapter the most important aspect of the decision in KAC v IAC is the one discussed immediately above, the insistence on some form of physical interference in order for liability in conversion. By confirming this requirement in the tort the House of Lords was essentially describing the duty owed by the defendant to the claimant: a duty to refrain from physically interfering with the claimant’s aircraft. This, in turn, allows us to describe the content of the claimant’s property right: a right that others refrain from physically interfering with the aircraft. Importantly, KAC v IAC also tells us what the defendant was not under a duty to refrain from doing. We saw above that purely abstract acts, which impair the claimant’s use of his chattel, but do not result in any form of physical contact, are not sufficient for liability in the tort. This is a crucial point as it means that the defendant in the case was not under a duty to refrain from impairing the use of the claimant’s aircraft. If IAC, a year before the invasion took place and before it had any control over KAC’s aircraft, had applied for insurance and registration in relation to the aircraft, this may have impaired KAC’s ability to use them (as it may have had difficulties registering and insuring the aircraft itself). However, because this impairment of use would not have been accompanied with any form of physical interference with the aircraft, there would be no liability in tort. The defendant’s duty is merely to refrain from physically interfering with the aircraft, not to refrain from impairing use. The decision in KAC v IAC, consequently, allows us to define the content of a property right relating to a chattel: a right that others refrain from physically interfering with the chattel. This duty may indirectly protect one’s use of a chattel: it would be difficult, for instance, for KAC to use their aircraft if others could interfere with them with impunity. The crucial point, however, is that use is not protected directly: an impairment of use, unaccompanied with any physical interference, does not result in liability. This conclusion that KAC v IAC allows us to draw is one that can be justified. If the law did recognise a right that others refrain from impairing the use of the chattel, then there would be serious implications for how we view economic loss. This is best illustrated with an example from the case law. In Spartan Steel & Alloys Ltd v Martin & Co Ltd91 the claimant was able to 91

Spartan Steel & Alloys Ltd v Martin & Co Ltd [1973] QB 27.

224 Simon Douglas recover for losses resulting from damage to a molten ingot which became trapped in a mould due to a power cut carelessly caused by the defendant. The claimant was not able to recover, however, for losses which resulted from the delay in processing a second batch of ingots while the electricity was restored and the mould replaced. As the law stands, the claimant in the case could not show that its property rights in these ingots had been infringed because the defendant had not physically interfered with them in any way. However, if the claimant’s property right was wider than this, so that it was owed a duty that others refrain from impairing its use of the ingots, then the outcome would have been different. Although the second batch of ingots was not physically damaged, the claimant was still unable to use them as it did not have the machinery to process them and, therefore, it could not sell them on the market. If we were to say that it held a right that others refrain from impairing the use of its chattels, then we would be forced to say that this right had been infringed.92 As we can see, a right that others refrain from impairing the use of chattels would open the door to claims currently classed as claims for economic loss. The definition of conversion in KAC v IAC, in particular the insistence on some form of physical interference for liability in the tort, tells us that property rights are not this wide. They merely consist of a right that others refrain from physical interferences with the right holder’s chattel.

VII. A LANDMARK IN PROPERTY LAW?

A question posed in the introduction of this chapter is why would a case involving a claim in tort law be included in a Landmarks in Property Law collection? The answer, as we have seen, is that torts define the duties we owe to the holders of property rights and, consequently, define the content of those property rights. As McBride and Bagshaw note, it is tort law that defines what basic rights we have against other people, and what remedies will be available when those rights are violated. But these rules and principles also belong to property law, because they concern what rights are enjoyed by people who have a particular interest in property.93

92 This is precisely the outcome in the controversial case of Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529, where it was accepted that impairing the use of goods and land amounted to an infringement of property rights. This allowed the claimant, in essence, to recover for his economic losses, as pointed out by Gummow J in the subsequent case of Perre v Apand Pty Ltd (1999) 198 CLR 180, 240. 93 McBride and Bagshaw (n 45 above) 25.

Kuwait Airways Corporation v Iraqi Airways Company 225 Many property law textbooks make no or very limited mention of torts such as conversion, trespass and nuisance.94 By ignoring the issue of how property rights are protected, such books are unable to describe the content of these rights. As we have seen, in order to describe the content of a property right it is necessary to consider the duties owed to the holder of the right, and it is the law of tort that defines these duties. Because tort has this function it is not clear why it has not assumed a far more prominent role within the study of property law. Winfield suggested that there was no good argument for its exclusion from property law, just a reluctance to do things differently: [B]reaches of rights in rem connected with property fall within the domain of tort rather than within that of the law of property. Historical antecedents and practical convenience are too strong to be ignored, even if logic might dictate otherwise.95

Whilst it may be inconvenient to incorporate another chapter into our standard account of property rights, it is suggested that it is essential that we do so. A failure to consider tort law cases such as KAC v IAC means that we are giving an incomplete account of property rights: we are not describing their content.

94 Several property law books make either no or very limited mention of tort law. Some examples are E Burn and J Cartwright, Maudsley & Burn’s Land Law: Cases & Materials, 9th edn (Oxford, OUP, 2009), S Gardner, An Introduction to Land Law, 2nd edn (Oxford, Hart Publishing, 2009), M Dixon, Modern Land Law, 7th edn (Abingdon, Routledge, 2010) and A Bell, Modern Law of Personal Property in England and Ireland (London, Butterworths, 1989). Some recent examples of property law textbooks which do, encouragingly, discuss tort law, are B McFarlane (above n 28) and D Sheehan, The Principles of Personal Property Law (Oxford, Hart Publishing, 2011). 95 P Winfield, The Province of the Law of Tort (Cambridge, CUP, 1931) 207.

10 Belfast Corporation v OD Cars [1959]: Setting Parameters for Restricting Use RACHAEL WALSH*

I. INTRODUCTION

T

HIS CHAPTER EXPLORES the scope of the liberty to use property by analysing the landmark case that delineated the broad parameters within which the use of property could be curtailed through regulation, Belfast Corporation v OD Cars.1 OD Cars was a decision of the House of Lords concerning the impact of Northern Irish planning control on property rights. It has been repeatedly cited as a leading authority on the limits of permissible uncompensated regulation of the use of private property.2 This chapter examines OD Cars in detail, and explores the questions that it left open in relation to so-called ‘regulatory takings’, which are restrictions that do not involve the acquisition of property through state action (as, for example, in compulsory purchase), but yet are regarded as so far-reaching in their impact on the enjoyment of property rights as to demand the payment of compensation.3

* Aspects of this chapter were presented at an early stage at the Young Property Lawyers Forum at the University of Stellenbosch in September 2012, and the author would like to thank the participants at that event. Dr Eloise Scotford of King’s College London provided very helpful comments on a later draft of the chapter. The anonymous reviewer for this volume also provided very helpful comments. All errors and omissions remain the author’s responsibility. 1 Belfast Corporation v OD Cars [1959] NI 62 (Court of Appeal); [1960] AC 490 (House of Lords). For an insightful recent analysis of the liberty to use private property, see S Douglas, ‘The Content of a Freehold: A ‘Right to Use’ Land?’ in N Hopkins (ed), Modern Studies in Property Law Volume 7 (Oxford, Hart Publishing, 2013) 359. 2 See eg Campbell-Rodriques v Attorney General for Jamaica, Privy Council, 3rd December 2007; Grape Bay Limited v Attorney General of Bermuda [2000] 1 WLR 574; Government of Malaysia and Another v Selangor Pilot Association (A Firm) [1978] AC 337. 3 The term ‘regulatory takings’ is borrowed from the jurisprudence of the US Supreme Court concerning the Fifth Amendment, which provides for compensation where property is taken for public use. In Pennsylvania Coal v Mahon 260 US 393, 415 (1922), the Court held that

228 Rachael Walsh Section II of this chapter analyses the House of Lord’s decision in OD Cars. The extent to which regulatory takings were countenanced in OD Cars, and the guidance that it provided for future courts called upon to consider the impact of regulatory controls on property rights, were key aspects of the decision. They helped to demarcate the scope of the democratic power to control private ownership, and in particular, to accommodate the use of private property with the public interest, without incurring liability for compensation. Accordingly, they were important in ensuring the practicability of publicregarding land-use regulation, in particular the expansion of planning control. Section III of this chapter considers the extent to which the parameters for restricting the use of property established by the House of Lords in OD Cars have been applied in English law, focusing on the form of land-use regulation at issue in that case, namely planning control. In so doing, it explores the scope of the category of regulatory takings in English law by assessing the consistency of the subsequent application of the key principles articulated in OD Cars. Thereafter, Sections IV and V analyse the potential significance of administrative processes in delineating regulations of use that require compensation, in light of the deference afforded to administrative land-use decisions in OD Cars. It argues that the nature of the administration involved in land-use regulation has relevant, although not determinative, justificatory significance within the boundaries for regulation of land-use set by OD Cars. Administrative procedures that attempt to capture and consider the rights of owners may tend to establish that the restrictions involved do not require compensation in order to be justified, provided that attention is paid to the complex range of values and interests at issue in such processes. Accordingly, such procedures, and the manner in which they are applied in particular cases, are relevant in delineating the grey area of regulatory takings, which is notoriously difficult to define.4

II. BELFAST CORPORATION V OD CARS

The common law requires judges to presume that the legislature does not intend to acquire private property rights without compensation, unless it applied to require compensation where a law forbade owners from removing coal so as to cause surface damage, with Justice Holmes stating, ‘[t]he general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognised as a taking’. The academic literature on the issue is vast: see eg FI Michelman, ‘Property, Utility, and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law’ (1967) 80 Harvard Law Review 1165, Michelman, ‘Takings, 1987’ (1988) 88 Columbia Law Review 1600; WA Fischel, Regulatory Takings: Law, Economics, and Politics (Cambridge MA, Harvard University Press, 1999). For an enlightening perspective on the position in English law, and in other common law jurisdictions, see Kevin Gray, ‘Can Environmental Regulation Constitute a Taking of Property At Common Law?’ (2007) 24 Environmental and Planning Law Journal 161. 4

Gray, ibid, 165–66.

Belfast Corporation v OD Cars 229 a contrary intention is clear.5 While apparently simple, this principle presupposes a clear understanding of property, and of what it means to acquire property rights. Moreover, its application has highly significant consequences for property owners. If a legislative measure or administrative decision is held to take property, property rights are afforded liability rule protection, which entitles the owner to compensation for the loss of his or her rights.6 However, OD Cars demonstrates that if a restriction is classified as a regulation of the exercise of property rights, as opposed to an appropriation of property rights, an adversely affected owner generally has no entitlement to compensation. Instead, administrative procedures, including often participation rights for affected parties, are treated as the key means of protecting the liberty to use private property.7 OD Cars concerned an application for planning permission by landowners in Belfast to build industrial and commercial premises for use as lock-up shops and factories connected to their business as garage proprietors and motor engineers. Permission was refused on the basis of height and zoning restrictions. On foot of that refusal, a claim for compensation for injurious affection was made, resulting in a consultative case stated by the arbitrator to the court concerning, in particular, his entitlement to award compensation. The relevant legislative provisions (section 6(4) of the Planning (Interim Development) Act (Northern Ireland) 1944, and section 10(2) of the Planning and Housing Act (Northern Ireland) 1981) appeared to rule out compensation in this case, on the basis that the refusal of development consent was based on height and spacing considerations, and on the basis of the nature of the use involved in the proposed development.8 Consequently, the respondents relied on section 5(1) of the Government of Ireland

5 See eg Coventry v Lawrence [2014] UKSC 13, [90], [156], [222], [165]; London and North Western Railway Company v Evans [1893] 1 Ch 16, 28; The Western Counties Railway Company v The Windsor and Annapolis Railway Company (1881–82) LR 7 App Cas 178, 188; Commissioner of Public Works (Cape Colony) v Logan [1903] AC 355, 363–64; Central Control Board (Liquor Traffic) v Cannon Brewery Co Ltd [1919] AC 744, 752; Inglewood Pulp And Paper Company v New Brunswick Electric Power Commission [1928] AC 492, 499; Westminster Bank Ltd v Minister of Housing and Local Government [1971] AC 508, 529; R v Secretary of State for Trade & Industry and Northern Electric Plc (2000) 79 P & CR 299, 303; R (Lord Chancellor) v Chief Land Registrar [2006] QB 795, 805. 6 See G Calabresi and AD Melamed, ‘Property Rules, Liability Rules, and Inalienability: One View of the Cathedral’ (1972) 85 Harvard Law Review 1089, 1092. 7 R Walsh, ‘The Evolving Relationship between Property and Participation in English Planning Law’ in Hopkins (above n 1 above). See also Eloise Scotford and Rachael Walsh, ‘The Symbiosis of Property and English Environmental Law—Property Rights in a Public Law Context’ (2013) 76 MLR 1010. 8 Section 10(2) provided: ‘[p]roperty shall not be deemed to be injuriously affected by reason of the coming into operation of any provisions inserted in a planning scheme, which prescribe the space about buildings or limit the number of buildings to be erected, or prescribe the height or character or user of buildings, or prescribe a standard of net annual value for buildings, and which the Ministry, having regard to the nature and situation of the land affected by the provisions, considers reasonable for the purpose’.

230 Rachael Walsh Act 1920, which provided that neither the parliaments of Southern nor Northern Ireland would ‘take any property without compensation’. They argued that insofar as the relevant planning laws denied them compensation for the loss of their right to develop their land, they were unlawful in light of section 5(1). In the Court of Appeal, Lord MacDermott held that ‘taking’ in section 5 included both direct and indirect appropriations, thereby potentially capturing regulation of the exercise of property rights. He reached that conclusion on the basis of what he saw as the functionally equivalent impact of a compulsory purchase and a prohibition on development upon an owner’s rights in relation to the use of his property. To illustrate this point, he gave the example of the preservation of a view through an empty site in the public interest by either a compulsory acquisition of the land, or via a prohibition on developing the land. He argued that a relevant appropriation occurred regardless of which means were adopted. He said that it would be unjust for compensation to be payable in one case but not the other, and that such an intention ought not to be imputed to the legislature absent clear evidence.9 Consequently, he held that a restriction or other interference with property rights could generate a taking, falling short of the outright appropriation of property. However, Lord MacDermott qualified this broad interpretation of taking, holding that the taking of any one ‘stick’ in the bundle of property rights alone could not constitute a taking requiring compensation. He drew the relevant contrast with the simple example of driving a car, which he held involved the exercise of a proprietary right. While a prohibition on driving could not amount to a taking, according to Lord MacDermott, a prohibition on all use of a car could in certain circumstances amount to a compulsory appropriation of property.10 Accordingly, Lord MacDermott held that a ‘taking’ could occur where some, but not all, of the incidents of ownership were denied to an owner, but refused to draw a clear line between such de facto appropriations and mere restrictions. He identified three types of restrictions that might be imposed on property rights: those not amounting to acquisition because they affected only one, or a small number, of the indicia of ownership; those amounting to acquisition, given the extent of their impact on ownership, and consequently requiring compensation; and those amounting to acquisition but not requiring compensation on the basis of section 5 of the 1920 Act.11 He identified the latter category on the basis that the application of section 5 had to be limited, since, ‘in a community ordered by law some

9 Belfast Corporation v OD Cars [1959] NI 62, 84–85. In support of this analysis, he made extensive reference to US decisions applying the Takings Clause of the Fifth Amendment, which as noted above potentially applies to restrictions as well as expropriations: see 85–86, 89–91. 10 Ibid, 87. 11 Ibid, 87–88.

Belfast Corporation v OD Cars 231 regulation of private rights for the public benefit is inevitable’.12 As such, he recognised that proportionate and justified limitations on use, even if in substance amounting to the acquisition of property rights, could be permissible without compensation. Lord MacDermott acknowledged the complexity of the grey area that he had thus identified in his analysis of the meaning of ‘taking’, which he held defied definition in any clear test.13 Kevin Gray explained that complexity as follows: [W]hilst a regulatory interference with a single incident of land ownership does not normally or intrinsically merit classification as a deprivation or taking of ‘property’, it remains feasible that the abstraction or destruction of a strategic combination of a landowner’s user rights and privileges may bring about precisely this kind of impact.14

This echoes the US approach under the Takings Clause of the Fifth Amendment, pursuant to which the courts have recognised that some controls on use may ‘go too far’, thereby requiring compensation.15 Thus on the spectrum between outright appropriation of property and mere regulation, Lord MacDermott identified a limited category of cases involving far-reaching limitations on use that might be characterised as acquiring property rights so as to require compensation. However, even in such cases, the entitlement to compensation could potentially be overridden by the public interest advanced by the regulation. Applying this test to the planning controls at issue in OD Cars, Lord MacDermott held that while the relevant powers could be exercised reasonably, for example to prevent overcrowding and unsafe living conditions, they might also be exercised unreasonably by the relevant administrators. Furthermore, given their breadth, their exercise might result in takings within the meaning of section 5.16 Consequently, he held that the delegation of the exercise of those powers by the legislature to the executive was ultra vires, as it undermined the protection that section 5 was designed to afford to property rights. Accordingly, he was relatively sceptical of the reliability of administrative processes for protecting property rights in all cases. The House of Lords reversed the Court of Appeal’s decision. However, like Lord MacDermott, Viscount Simonds did not treat the right to use private property in a particular way as a distinct right, the appropriation of which could generate an entitlement to compensation. He reasoned that

12 Ibid, 88. He drew its limits as follows: ‘To come within the category of a regulatory taking and at the same time to avoid the impact of section 5(1) it seems to me, (i) that the legislation must be directed, in its substance, to furthering the public interest, and (ii) that its restrictions must be reasonable and proper for that purpose’: ibid, 92. 13 Ibid, 87. 14 Gray (n 3 above) 172. 15 Pennsylvania Coal Co v Mahon 260 US 393, 415 (1922). 16 [1959] NI 62, 93.

232 Rachael Walsh anyone considering the ordinary meaning of the word ‘take’ ‘would surely deny that any one of those rights which in the aggregate constituted ownership of property could itself and by itself aptly be called “property”’.17 Since a layman would not disaggregate ownership into its various incidents and characterise an interference with any one of those incidents as a taking of private property, he declined to do so. In this way, Viscount Simonds assessed the legitimacy of the restriction on use involved in OD Cars on the basis of an intuitive understanding of the general public’s conception of property, and of the rights entailed by its ownership.18 In support of this analysis of the meaning of taking, Viscount Simonds noted that owners’ rights were always restricted by the common law maxim sic utere tuo ut alienum non laedas (meaning that property should not be used so as to harm others), as well as by statutory provisions imposing restrictions on use and other types of obligations on owners. He approved the adoption of Brandeis J’s holding in the US Supreme Court decision in Pennsylvania Coal Co v Mahon that a restriction imposed to protect public health, safety or morals, or to prohibit a noxious use, would not constitute a taking.19 Viscount Simonds apparently understood the controls imposed by planning law as designed to prevent such noxious uses, memorably stating, ‘[i]t is clear that such a diminution of rights can be affected without a cry being raised that Magna Carta is dethroned or a sacred principle of liberty infringed’.20 While he held that the issue did not fall to be determined on the facts of the case, Viscount Simonds acknowledged the possibility of regulatory takings, stating ‘a measure which is ex facie regulatory may in substance be confiscatory’; but he emphasised that the impugned legislation was clearly regulatory in nature.21 He stressed that a requirement of compensation for restrictions such as those imposed through planning control would practically deprive the legislature of the power to introduce necessary legislation in the public interest.22 Viscount Simonds differed vitally from Lord MacDermott on the consequences of the possibility of regulatory takings. He rejected the contention that the potential for unreasonable exercises of administrative powers, resulting in limitations on the use of property that ought to be compensated,

17

Belfast Corporation v OD Cars [1960] AC 490, 517. Viscount Simonds’ analysis reflects the perspective of what Bruce Ackerman terms the ‘Ordinary Observer’ in analysing property rights. According to the ‘Ordinary Observer’, ‘legal language cannot be understood unless its roots in the ordinary talk of non-lawyers are constantly kept in mind’. See BA Ackerman, Private Property and the Constitution (New Haven CT, Yale University Press, 1977) 10. 19 [1960] AC 490, 519, approving Brandeis J, Pennsylvania Coal Co v Mahon 260 US 393, 417 (1922). 20 Ibid, 519. 21 Ibid. 22 Ibid, 518. 18

Belfast Corporation v OD Cars 233 should invalidate the legislation conferring such powers. Rather, he held that any unreasonable planning decisions should be considered on a case-by-case basis. Consequently, he treated the relevant administrators as having primary responsibility for distributing the benefits and burdens of planning control, with only a residual role for the courts in identifying regulatory takings through judicial review. The exercise of administrative land-use control powers would be presumed to be reasonable, absent casespecific evidence to the contrary. Lord Radcliffe identified two divergent approaches to the phrase ‘taking without compensation’ in English and Irish law before 1920: first, that full compensation was required for the compulsory acquisition of private property; secondly, that compensation was not ordinarily required for a control of the use of property.23 In this regard, he noted that over the course of the second half of the nineteenth century, the introduction of public health and amenity regulation accelerated, primarily through delegated legislation conferring powers on local authorities. Generally, no compensation was regarded as required for these measures.24 Consequently, Lord Radcliffe held that compensation should not ordinarily be required for controls on the use of property which did not amount to ‘takings’ of property. However, like Viscount Simonds, he accepted the possibility that there could in rare cases be a restriction of user imposed through public law that might be ‘so extreme that in substance, though not in form’, it would amount to a taking of private property.25 He also felt that such cases should be considered on an ad hoc basis as they arose in the implementation of the legislation, rather than the mere possibility of such cases resulting in the invalidation of the empowering provision. In practice, he felt that restrictions amounting to regulatory takings were unlikely to be imposed by administrators through the planning process.26 This reinforces the deference to administrative decision-making that was evident in Viscount Simonds’ judgment. The proper administration of planning law was regarded as likely to ensure that regulatory takings would not occur, and any that fell through the net could be struck down as unreasonable via judicial review. In sum, OD Cars determined that compensation should not be payable for the interference with any discrete incident of ownership, as distinct from the outright appropriation of property. Regulations of the use of property were held generally not to require compensation for adversely affected

23

Ibid, 523. While the early town planning measures, which involved a shift from public health to amenity regulation, provided for compensation for injurious affection, Lord Radcliffe noted that they did not do so on the basis of an understanding that they appropriated property rights in relation to land-use: ibid, 524–25. 25 Ibid, 525. 26 Ibid. 24

234 Rachael Walsh owners, because they did not take away property. However, the House of Lords retained some discretion by holding that compensation might potentially be required in rare cases in light of the far-reaching impact of restrictions on use. Consequently, it countenanced the existence of regulatory takings in English law. Overall, the nature and range of such rare cases, and the factors relevant to their identification, were not established in OD Cars, and have remained uncertain in the subsequent case law.27 However, the House of Lords clearly treated the administrative process as the sphere with primary authority for determining how land-use controls should be applied, albeit subject to the limited supervisory jurisdiction of the courts through judicial review.

III. OD CARS IN PRACTICE

OD Cars set the tone for the future legislative developments in the regulation of property rights, and for judicial scrutiny of the implementation of such regulation in two key respects. Following its lead, the dominant tide in modern land-use regulation has been against liability rule protection for property rights, and in favour of deference to administrative decisionmaking.28 This Section considers the consistency with which those two parameters for land-use regulation are reflected in statutory developments and judicial decision-making post-OD Cars.

A. Conceptual Severance In OD Cars the House of Lords held that ownership should not be disaggregated into its discrete incidents such that compensation would be payable for the taking of any one incident through regulatory action. Accordingly, the right to develop land could be denied to an owner through the operation of the planning system without the owner gaining an entitlement to compensation. This analysis of the impact of planning control involved the rejection of what Margaret Jane Radin terms a ‘conceptual severance’ strategy in the assessment of restrictions on property rights.29 Where such a strategy is adopted, the aspects of the owner’s property rights that are interfered with or limited are isolated and treated as having been taken outright, thereby generating a claim for compensation as of right.30

27

See Gray (n 3 above) 175–76. See Scotford and Walsh (n 7 above) and Walsh (n 7 above). Margaret-Jane Radin, Reinterpreting Property (Chicago IL, University of Chicago Press, 1993) 127–29. 30 Ibid, 128. 28 29

Belfast Corporation v OD Cars 235 This involves treating each incident of ownership as a discrete property right that, if denied to an owner, amounts to an appropriation requiring compensation. As Radin puts it, ‘every regulation of any portion of an owner’s “bundle of sticks,” is a taking of the whole of that particular portion considered separately’.31 If the House of Lords in OD Cars had not rejected a ‘conceptual severance’ strategy, the right to develop land would have been characterised as appropriated by the state through planning control, resulting in an entitlement to compensation, with consequent cost implications for public-regarding regulation.32 In line with that rejection, compensation rights have been progressively eliminated for land-use constraints imposed, for example, through planning law and environmental law. While discretionary compensation regimes exist in some regulatory contexts, such as nature conservation, the range of circumstances in which a statutory right to compensation for restrictions on land-use exists has diminished considerably.33 However, there are statutory exceptions to this trend, where the legislature has ‘haphazardly’ afforded liability rule protection to land-use rights by guaranteeing compensation for restrictions imposed on property rights that fall short of outright appropriation.34 A full exploration of such exceptions for reasons of space is beyond the scope of this chapter. Nonetheless, they are enlightening insofar as they indicate circumstances in which interferences with the liberty to use property, and other discrete incidents of ownership (for example, the right to exclude), may generate a claim to compensation. As such, they demonstrate patterns of limited ‘conceptual severance’ analysis underpinning land-use regulation, thus representing a counter-trend to the dominant move away from liability rule protection of property rights in that context. Three exceptions will be considered: first, interferences involving physical intrusion on private land; secondly, the extinguishment or modification of restrictive covenants (which can be understood as privately ‘severed’ landuse rights); thirdly, the revocation or modification of grants of planning permission. First, statutory compensation rights exist in some circumstances where landowners are deprived of their ability to exclude others from the land, resulting in some physical invasion of the property.35 For example, owners

31 Ibid, 129. Radin characterises such an approach as a constitutionalisation of the liberal conception of property. 32 Lord Radcliffe referred to the concern that beneficial regulation might become prohibitively costly in support of his rejection of ‘conceptual severance’ in OD Cars: [1960] AC 490, 518. 33 Scotford and Walsh (n 7 above). See also Walsh (n 7 above). 34 See Kevin Gray, ‘Land Law and Human Rights’ in Louise Tee (ed), Land Law: Issues, Debates, Policy (Cullompton, Willan Publishing, 2002) 211, 220–21. 35 Ibid, 119.

236 Rachael Walsh affected by the actions of utilities or communications companies in laying and maintaining equipment above, below or on private land, may have statutory compensation rights.36 Similarly, section 28 of the Highways Act 1980 provides that where a local authority compulsorily creates a footpath over private land, those with an interest in that land are entitled to compensation for any depreciation in the value of their interest, or for any disturbance caused to their enjoyment of the land.37 Section 26 expressly requires the local authority, in deciding to create such a path, to have regard to the addition that it would represent to the convenience of the public or local residents, and to its impact on the rights of persons interested in the land, bearing in mind their compensation entitlements. Thus the impact on property rights, and the extent to which it might be offset by monetary compensation, must be factored into the decision to interfere with property rights in the first instance, despite the liability rule protection involved in section 26. The granting of compensation in these contexts highlights the fluidity of the distinction between restrictions on the right to use, and limitations on the right to exclude. For example, the compulsory laying of a cable under one’s land can be construed as a restriction on use (insofar as it limits how an owner can use his land in the future), or a limitation on the right to exclude (insofar as it involves a compulsory physical intrusion on land and usually an obligation to facilitate access for maintenance), or most correctly, as involving both types of interference with property rights. Owners tend to be entitled to compensation as of right where their freedom to exclude is limited, but not where the impact is solely on freedom of use. This suggests that while generally the incidents of ownership will not be treated as distinct in the context of regulatory control, an element of physical intrusion appears to trigger an entitlement to compensation.38 However, 36 For example, s 159 of the Water Industry Act 1991 confers powers to lay, inspect and access for work water pipes below private land. Schedule 12 para 2 of that Act provides for compensation for depreciation in value suffered as a result of such works, as well as compensation for disturbance. Schedule 4, para 7 of the Electricity Act 1989 provides for compensation for damage and for disturbance where a wayleave for the installation and maintenance of electric lines is statutorily granted to an electricity provider. Similarly, the Telecommunications Code, set out in sch 2 of the Telecommunications Act 1984, makes provision for compensation, and in some cases consideration, to be paid where electronic communications apparatus is laid on, over or under private land (paras 4, 7). This approach has been recently reviewed and approved by the Law Commission in the context of e-communications, Report of the Law Commission, The Electronic Communications Code, 27 February 2013 (available at lawcommission.justice.gov.uk/docs/lc336_electronic_communications_code.pdf). 37 A related provision is s 66 of the 1980 Act, which imposes a duty on highway authorities to provide footways and guard-rails for publicly maintainable highways, and to compensate any person sustaining damage as a result of the execution of works required to fulfil that duty. 38 This echoes the US experience, where, as Radin notes, the Supreme Court has demonstrated ‘solicitude for exclusion’ Radin (n 29 above) 130. For example, it has required compensation for the forced transfer of a public right of way in return for development consent (Nollan v California Coastal Commission 483 US 825 (1987)) and for the interference entailed by a statutory permission for a cable television company to install cable on a building without the owner’s permission (Loretto v Teleprompter Manhattan CATV Corp 483 US 825 (1987)).

Belfast Corporation v OD Cars 237 this approach has not been universally followed, with for example the Countryside and Rights of Way Act 2000 imposing significant uncompensable limitations on the right to exclude.39 Thus the scope of this exception to the rejection of ‘conceptual severance’ in OD Cars is unclear. Secondly, the English experience supports Radin’s suggestion that compensation may be payable as of right where a discrete incident of ownership is severed from the bundle of rights through the ‘previous real-life treatment of the resource’ and is subsequently taken away from its transferee.40 This is illustrated by the modification or discharge of restrictive covenants, which may generate an entitlement to compensation pursuant to section 84 of the Law of Property Act 1925. Through the grant of a restrictive covenant, a particular land-use right is severed from the bundle of the owner’s rights (for example, the right to develop land), and is waived for the benefit of another, who is entitled to prevent the severed use. The granted covenant is treated in English law as a property right. However, such property rights are not absolute, since the Upper Tribunal (Lands Chamber) can decide to discharge or modify a covenant. It can make such a decision on the application of any person interested in any freehold land affected by a restriction on use, if it impedes reasonable user of the land and no longer secures any practical benefits of substantial value or advantage to the dominant owners, or has become contrary to the public interest.41 However, it must be demonstrated that money would be an adequate compensation for any loss or damage suffered by the beneficiary of the covenant.42 Furthermore, the Upper Tribunal (Lands Chamber) may require the applicant to pay consideration to the beneficiary for loss or disadvantage, or reduction in the value of the benefited land.43 Accordingly, where owners waive certain land-use entitlements by granting restrictive covenants, compensation

39 Limited rights to compensation exist in s 41 for damage caused by authorised persons entering for purposes such as mapping or supervising the exercise of the public’s right of access (which purposes are set out in s 40 in detail). However, no compensation is provided for the general right of public access for open-air recreation created by s 2(1). For examples of statutory limitations on the right to exclude, additional to those considered in this section (only some of which include compensation provision), see Kevin Gray and Susan Francis Gray, ‘The Rhetoric of Realty’ in Joshua Getzler (ed), Rationalising Property, Equity and Trusts: Essays in Honour of Edward Burn (London, Butterworths, 2003) 204, 259–62. 40 Radin (n 29 above) 129. 41 Law of Property Act 1925, s 84(1A). A covenant can also be modified or discharged on grounds of obsolescence, consent, or lack of benefit, which grounds are not subject to the test of compensability. On the relevance of planning permissions to the Upper Tribunal’s (Lands Chamber) decision-making on this issue, see Kevin Gray and Susan Francis Gray, ‘The Future of Real Burdens in Scots Law’ (1999) 3 Edinburgh Law Review 229. 42 Law of Property Act 1925, s 84(1A). 43 Law of Property Act 1925, s 84(1)(c). In addition, the courts have protected the beneficiaries of covenants by emphasising that s 84 does not allow private parties to expropriate private rights for their convenience. Re Henderson’s Conveyance [1940] 1 Ch 835. However, that decision pre-dates the introduction of s 84(1A), the application of which could result in modification or discharge for private benefit.

238 Rachael Walsh may be claimed pursuant to statute where the resulting property rights are subsequently extinguished or modified. The proprietary interest entitling the beneficiary to prevent an owner from making a particular use of his or her land is afforded liability rule protection. Significantly, however, any compensation award is paid by the private actor benefiting from the discharge or modification, rather than by the state. As such, it can be understood as a private payment to reflect the benefit of regaining the use-right that was previously waived through the grant of the restrictive covenant.44 The recent decision of the Supreme Court in Coventry v Lawrence demonstrates a somewhat similar understanding of the status of private law rights to prevent neighbouring uses; in that case through the law of nuisance.45 While a detailed consideration of that decision, and its various judgments, is beyond the scope of this chapter, overall it limited considerably the scope for planning permissions to negate the private right to take a nuisance action.46 Delivering the leading judgment, Lord Neuberger held that ‘the mere fact that the activity which is said to give rise to the nuisance has the benefit of a planning permission is normally of no assistance to the defendant’.47 However, the Supreme Court suggested that in such circumstances, the private rights protected through nuisance might often be best protected through a liability rule, involving the award of damages for the offending land-use, as opposed to the grant of an injunction stopping that use.48 Lord Sumption made the latter point particularly strongly, arguing ‘it is what the law normally provides for when a public interest conflicts with a proprietary right’.49 Indeed a number of the judges emphasised the need for 44 Similar issues may arise when considering the choice between injunctions and damages for breach of restrictive covenants. See eg Jaggard v Sawyer [1995] 1 WLR 269; Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798; Wakeham v Wood (1982) 43 P & CR 40. See also Gray and Gray (n 39 above) 257–59. 45 Coventry v Lawrence [2014] UKSC 13. 46 For excellent analysis of the decision, see Maria Lee, ‘Private Nuisance in the Supreme Court: Coventry v Lawrence’ (2014) 7 JPL 705. 47 [2014] UKSC 13, [94]. See also eg Lord Neuberger, noting, ‘the fact that a particular use has been granted planning permission is not normally a matter of much weight’ [138], and Lord Sumption agreeing [156]. However, disagreeing with the majority, Lord Carnwarth allowed for exceptional cases in which planning decisions might be relevant to the substance of a nuisance dispute: [222]–[223]. Similarly, Lord Clarke held that planning permission could be relevant, without indicating in what cases it would be relevant: [16]. 48 See eg Lord Neuberger, noting ‘the grant of planning permission for a particular activity (whether carried on at the claimant’s, or the defendant’s premises) may provide strong support for the contention that the activity is of benefit to the public, which would be relevant to the question of whether or not to grant an injunction’: [125]. See also, Lord Sumption, [157]–[161]; Lord Clarke, [169]; Lord Carnwarth, [239], [245]–[246]. 49 Lord Sumption, [157]. He suggested obiter, ‘it may well be that an injunction should as a matter of principle not be granted where a use of land to which objection is taken requires and has received planning permission’: [161]. Lords Mance and Carnwarth emphasised the need to protect the enjoyment of homes, which might not be adequately addressed through damages, and expressly disagreed with Lord Sumption on this point: [168], [247]. Lord Neuberger expressed support for Lord Mance’s argument: [127].

Belfast Corporation v OD Cars 239 liability rule protection of private rights in the event that they were overridden by the public interest.50 Thus the private rights in relation to land-use protected through nuisance law are entitled at least to be protected through an entitlement to compensation. Finally, where a planning authority grants planning permission, its subsequent revocation or modification generates an entitlement to compensation out of public funds in English law. Planning permission is required for the development of land by section 57 of the Town and Country Planning Act 1990 (TCPA). For its purposes, ‘development’ involves materially changing the use of land, or carrying out building, engineering, mining or other operations on the land.51 Section 97 of the Town and Country Planning Act 1990 allows authorities to revoke or modify granted permissions when and to the extent that they consider expedient, in light of the development plan and any other material considerations, provided that the development or change of use has not yet been completed.52 Those affected by such an order have a right to notice and an opportunity to make submissions pursuant to section 98. If the order is made, they are entitled to compensation for wasted expenditure, loss, or damage incurred after the grant of planning permission, including any depreciation in value flowing from the revocation or modification.53 Similarly, where a development or change of use is completed, a planning authority may make a discontinuance order pursuant to section 102,54 but is required to pay compensation.55 Accordingly, where a new use or development of land is positively endorsed through the regulatory framework designed to control land-use, and is subsequently interfered with by planning authorities, that land-use is ‘severed’ from the ‘bundle’ of property rights and afforded distinct liability rule protection. Despite the decision in OD Cars, the imprimatur of regulatory endorsement is apparently understood by the legislature to transform the approved use into a distinctly protected land-use right, generating an entitlement to compensation where it is subsequently taken in the public interest.

50 See eg, Lord Neuberger, [90]; Lord Sumption, [156]; Lord Carnwarth, [222], Lord Mance, [165]. 51 TCPA s 55. 52 The revocation or modification cannot affect an operation/change of use that has already been completed: s 97(4). 53 TCPA, s 107. See also Victor Moore, A Practical Approach to Planning Law, 11th edn (Oxford, OUP, 2010) 506–7; Robert Duxbury, Telling & Duxbury’s Planning Law and Procedure, 14th edn (Oxford, OUP, 2009) 343–51. 54 Such an order does not become effective until confirmed by the Secretary of State: s 103(1). That will not occur until the owner and occupier is given an opportunity to be heard: ss 101(3)–(6). 55 TCPA, s 115.

240 Rachael Walsh Overall, the rejection of ‘conceptual severance’ in OD Cars, and in subsequent cases,56 has been echoed in the progressive marginalisation of compensation rights in statutory land-use control schemes.57 However, it has not been universally followed. For example, where the ability to exclude others is limited, or restrictive covenants are affected, or regulatory landuse permissions are altered, land-use controls may generate compensation entitlements. The incoherent patchwork of exceptions where compensation is awarded for interferences with use-rights adds to the ambiguity created by OD Cars concerning the scope of the category of regulatory takings at common law.

B. Deference to Administrative Decision-Making Consistently with the approach adopted in OD Cars, where land-use control occurs, property rights are treated as being vindicated within the administrative procedures through which land-use regulation is implemented. The English planning framework has a complex network of overlapping participation provisions, designed to capture the interests both of those directly affected by planning decisions, such as applicants and neighbours, and wider individual and group interests.58 Compensation is generally only awarded where planning decisions result in the outright expropriation of private property.59 A similar regulatory framework, involving participation rights and an absence of compensation entitlements for affected owners, is applied in other land-use regimes, including in various forms of environmental regulation. The outcomes of the planning process are generally deferred to and treated as sufficiently balancing property rights against the public interest.60 This deferential approach is particularly evident in cases involving property rights arguments based on Article 1 of the First Protocol and Article 8 of the European Convention on Human Rights, which protect the enjoyment of possessions, and of home and family life respectively.61 For example,

56 See eg Lord Reid in Westminster Bank Ltd v Minister for Housing and Local Government [1971] AC 508, 529, suggesting that a refusal of planning permission does not take away property rights, but simply prevents their exercise. Nonetheless, in order to avoid ‘too meticulous a distinction’, he sought clear evidence of a statutory intention to exclude compensation for the restriction. 57 See Walsh (n 7 above). 58 Ibid, 263. 59 Ibid. 60 See generally Scotford and Walsh (n 7 above); Walsh (n 7 above). 61 Article 8 provides: ‘[e]veryone has the right to respect for his private and family life, his home and his correspondence. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of

Belfast Corporation v OD Cars 241 Lough v First Secretary of State concerned a site on London’s South Bank, next to the Tate Modern museum, in respect of which planning permission was granted on appeal by a planning inspector for a twenty-storey mixed residential and commercial building.62 Local residents applied to the High Court to quash the decision on the basis that it breached their rights under Article 1 of the First Protocol and Article 8 of the European Convention on Human Rights. In the High Court, Collins J upheld the inspector’s decision, highlighting the complexity of planning decision-making as follows: If an adjoining occupier seeks to build on or change the use of his land, an individual is likely to be affected and his enjoyment of his property may be interfered with. In addition, the public generally may be affected if, for example, conservation areas or the green belt is affected. These various matters have all to be weighed and that is what a local planning authority or an inspector will do. In the vast majority of cases, that exercise will deal with all matters which are relevant in deciding proportionality within the meaning of Article 8 or Article 1 of the First Protocol.63

On appeal, Pill LJ held that neither English planning law in general, nor the particular process applied in that case, failed to take account of Convention rights, stressing that there was ‘nothing arbitrary about the procedure followed’.64 While procedural propriety is not determinative where a planning decision is challenged, the courts treat it as very significant. For example, in Stevens v Secretary of State for Communities and Local Government, the High Court held that process was important, because clear evidence that a decision-maker adhered to proper procedure could justify judicial deference to the decision, in particular affording the decision-maker a wide margin of error in its decision.65 Similarly, in the private law context, process, and especially the nature and extent of administrative engagement with the competing interests involved in planning decision-making, has been treated as relevant in nuisance disputes. While the approach of the Supreme Court

the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others’. Article 1 of the First Protocol provides: ‘[e]very natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties’. 62 Lough v First Secretary of State [2004] EWHC 23. See also Knight v Secretary of State for Communities and Local Government [2009] EWHC 3808 (Admin); Rooney v Secretary of State for Communities and Local Government [2011] EWCA Civ 1556. 63 [2004] EWHC 23, [28]. 64 Ibid, [46]. 65 Stevens v Secretary of State for Communities and Local Government [2013] EWHC 792 (Admin), [82].

242 Rachael Walsh in Lawrence was generally to marginalise the potential impact of planning decisions in the substantive law of nuisance, Lord Neuberger pointed to the relevance of planning process in determining whether an injunction or damages should be granted as a remedy for nuisance. He noted that a planning permission could indicate that damages were preferable, particularly ‘in cases where it was clear that the planning authority had been reasonably and fairly influenced by the public benefit of the activity’.66 Lord Carnwarth cited with apparent approval Maria Lee’s contention that the nature and quality of the planning process should be considered by judges in determining the impact of planning decisions in nuisance disputes.67 He argued that planning decisions representing a ‘considered policy decision’ leading to a fundamental change in local land-use patterns might, in exceptional cases, have a substantive impact in nuisance disputes.68 Overall, the deference shown to administrative land-use decision-making, coupled with the relatively limited grounds for judicial review in English law, means that statutory participation procedures within the planning process are in most cases the key site for raising concerns about the protection of property rights. The planning framework still treats owners as being presumptively entitled to develop and use their land as they see fit, consistently with broader environmental and community needs, as an aspect of their property rights that must be vindicated through the planning process.69 The presumption in favour of a property owner’s right to develop his land has received renewed imprimatur through the adoption of the National Planning Policy Framework, which states a presumption in favour of sustainable development.70 The question that thus arises is whether the confidence expressed by the House of Lords in OD Cars in the ability of administrative planning processes to adequately protect property rights, by identifying and remedying cases falling into the grey area between compulsory acquisitions and mere regulations, was well founded. It is to this question that the next Section of this chapter turns.

IV. PROPERTY RIGHTS IN THE ADMINISTRATION OF PLANNING LAW

This Section of the chapter argues that the complexity of the goals of planning control, and of its participatory frameworks, affect its ability 66

[2014] UKSC 13, [125]. Ibid, [198]. See M Lee, ‘Private Nuisance in the Supreme Court: Coventry v Lawrence’ (2014) 7 JPL 705; ‘Nuisance and Regulation in the Court of Appeal’ (2013) 3 JPL 277, 282, 284; ‘Tort Law and Regulation: Planning and Nuisance’ (2011) 8 JPL 986, 991. 68 [2014] UKSC 13, [223]. 69 Buckland v Secretary of State for the Environment [2001] EWHC Admin 524, [53]–[54]. 70 Department for Communities and Local Government, March 2012, available at: www. gov.uk/government/uploads/system/uploads/attachment_data/file/6077/2116950.pdf. 67

Belfast Corporation v OD Cars 243 to effectively consider and accommodate property rights in its decisionmaking processes. These overlapping features suggest that, contrary to the views expressed by the House of Lords in OD Cars, it cannot be assumed that in all cases, administrative procedures adequately take account of property rights so as to justify judges in affording the outcomes of those processes determinative weight in the context of judicial review of land-use controls. While the discussion in this section is confined, for reasons of space, to the planning regime, other regimes of land-use regulation entail similar complexity that may weigh against generalised judicial deference to administrative decisions.71

A. Tensions in the English Planning Framework’s Goals The first such feature is the complex nature of English planning law’s goals. Although, as OD Cars illustrates, property rights have always been a relevant consideration in its interpretation and enforcement (a tendency heightened by the fact that it must now integrate consideration of Convention rights into its processes), the planning framework is not primarily designed to protect private rights. While private interests can be relevant in determining what constitutes the public interest in the context of a particular decision, their vindication is not a distinct goal of the planning process.72 As Lord Sumption noted in Lawrence, ‘planning authorities are concerned with the public interest in development and land use, as that interest is defined in the planning legislation and any relevant development plans and policies’.73 However, as Keith Thomas points out, ‘in the exercise of development control powers, owners and others do look to the planning system to protect them’.74 Given the lack of alternative means of asserting their liberty to use their land so as to develop it or materially change its use, or of objecting to such use by neighbours, owners must engage with the planning process, and the opportunities for participation that it affords them, to either implement or protect their property rights. They must defend their plural interests in land-use through a system that is designed to attain public goals, derived from a variety of competing, overlapping interests (individual, community, governmental, NGO etc) that are potentially inconsistent with their

71

See Scotford and Walsh (n 7 above). See eg Al Wood-Robinson v Secretary of State for the Environment, Council of the London Borough of Wandsworth [1998] EWHC (Admin) 394; Buxton v Minister of Housing and Local Government [1965] 1 QB 278, 283; and Westminister City Council v Great Portland Estates plc [1985] 1 AC 661, 670. 73 [2014] UKSC 13, [156]. See also Lord Carnwarth, [192]–[193]. 74 K Thomas, Development Control Principles and Practice (London, UCL Press, 1997) 6. 72

244 Rachael Walsh private interests. Consequently, there is a tension between the goals of the planning process, and the various individual and collective interests of its participants. In addition, regulatory processes have their own systemic aims, which can be understood as distinct from the substantive policy goals that they aim to realise through their decisions. For example, the planning process emphasises the importance of achieving certainty in relation to development consents. This aim is integral to the proper functioning of the planning system. However, coupled with the potential for procedural failures, it can override statutory participation rules, with mixed results for property rights in relation to the use of land, since the protection of certainty prioritises the rights of grantees of permission over those of objectors. This is illustrated by R (on the application of Gavin) v Haringey LBC, where a neighbour affected by a grant of planning permission sought to have the grant quashed on the basis that he had not been informed of the application, due to a failure by the council to comply with its statutory duty to publicise the planning application.75 Richards J held that the claimant was ‘substantially prejudiced’ by this failure, as he would otherwise have had the opportunity to make representations in opposition to the proposed development.76 However, on the other side of the scales were the property rights of the developer in acting on foot of a planning permission granted to it 32 months prior to the commencement of the claimant’s proceedings. Although that delay was not the fault of the aggrieved neighbour, but rather was the result of an administrative failure, Richards J held that the hardship that would be suffered by the developer if the permission were quashed justified him in withholding relief from the neighbour. In this regard, he stressed the importance of certainty in planning decisions, both for those acting on foot of grants of planning permission and for third parties who rely on information in the planning register.77 Gavin indicates that once the scope of the liberty to use land falls to be determined through administration, that determination is necessarily affected by systemic values concerning the proper functioning of regulatory systems. It also demonstrates that the simple picture of planning control (as regulation of private rights in the public interest) painted in OD Cars does not tell the full story of the complexity of planning decision-making, since property rights can be both vindicated or restricted by planning decisions.

75 R (on the application of Gavin) v Haringey London Borough Council [2003] EWHC (Admin) 2591. 76 Ibid, [31]. 77 Ibid, [83].

Belfast Corporation v OD Cars 245 B. The Complexity of Participation The complexity of the goals of the planning process illustrated by Gavin is reflective of the broader complexity of participation within regulatory processes. As Phillip Goodwin points out, ‘[p]articipation is not an uncontested concept’.78 Rather, it captures a wide variety of relationships that give different degrees of control to members of the public, involving ‘significant gradations of citizen participation’.79 In questioning the validity of judicial deference to administrative decisions that restrict owners’ rights in relation to the use of their land, it is important to identify and distinguish the different forms of participation facilitated by land-use regulation processes, and to consider the different interests that they serve.80 Patsy Healy identifies as significant, ‘rights to “voice” (to be heard), to “influence” (to be taken account of), and to “information” (to enable knowledgeable participation)’, coupled with the right to challenge government decisions.81 Broadly speaking, the English planning framework facilitates both owner and broader community participation to different degrees at different stages in the process along these four metrics. At the development planning stage, owners and other interested parties are on an even footing. They all have the right to be informed about proposed plans and changes to plans, to be consulted and to have their views considered, and to challenge development-planning decisions.82 Owners are not privileged in setting the parameters within which development consent decisions are subsequently taken through development planning. In this regard, in Bovis Homes Ltd v New Forest District Council, Ouseley J held that while the development planning process affects property rights, decisions within that process do not usually determine them, since they do not directly affect ownership rights or the right to apply for planning permission.83 In the development consent process, owners are slightly privileged in their right to be heard. Only owners, or those intending to acquire the necessary interest in property to carry out a proposed development, are

78 P Goodwin, ‘“Hired Hands” or “Local Voice”: Understandings and Experience of Local Participation in Conservation’ (1998) 23 Transactions of the Institute of British Geographers (new series) 481, 483. 79 SR Arnstein, ‘A Ladder of Citizen Participation’ (1969) 35 Journal of the American Institution of Planners 216, 217. 80 See SC White, ‘Depoliticising Development: The Uses and Abuses of Participation’ (1996) 6 Development in Practice 6, 7. 81 P Healey, Collaborative Planning—Shaping Places in Fragmented Societies, 2nd edn (Basingstoke, Palgrave and Macmillan, 2006) 296. 82 Planning and Compulsory Purchase Act, ss 17, 38, 113. See also the Town and Country Planning (Local Planning) (England) Regulations 2012 (SI 2012/767). 83 Bovis Homes Ltd v New Forest District Council [2002] EWHC 483 (Admin), [300]–[303].

246 Rachael Walsh entitled to apply for planning permission.84 However, ownership affords few other distinctive privileges in the planning process. A local planning authority takes the decision on a particular planning application on the basis of all material considerations, including any representations received in relation to the application.85 While this may include property rights, such rights do not have a special status amongst other material considerations. Once a decision is reached, only applicants can appeal an adverse decision on the merits.86 However, the resulting discussion is generally opened up to include all interested parties. Consequently, property rights appear to be ‘a way into the conversation’, but once that conversation is initiated, the existence and scope of owners’ rights to develop or change the use of their land becomes ‘a constant product of conversation, dialogue, information, balancing, and experimentation’.87 Accordingly, owners’ participation rights within the planning process are limited to what Carole Pateman terms ‘partial participation’, since owners are in a position to influence decisions concerning the use of their land, but have no determinative power in relation to such decisions.88 Sherry Arnstein characterises this kind of participation provision as mere tokenism on the part of governments.89 She argues that where individuals’ rights are limited to an entitlement to be informed and consulted about decisions, ‘they lack the power to insure that their views will be heeded by the powerful’.90 She contrasts such participation with ‘partnership, delegated power, and citizen control’, which actually give citizens power.91 In the planning context, the Localism Act 2011 moves in this direction by giving citizens power through groups such as parish councils and neighbourhood forums, which are given a formal role in the planning process.92 However, such community empowerment is likely to be of little assistance to those seeking to use land in ways resisted by such groups.93 Furthermore, neighbourhood plans must be consistent with the strategic planning policies set out in local plans, and through them, with national planning policy.94 Accordingly, it 84

Hanily v Minister of Local Government and Planning [1952] 2 QB 444. TCPA, s 70(2). TCPA, s 78. 87 AJ Cohen, ‘Negotiation, Meet New Governance: Interests, Skills, and Selves’ (2008) 33 Law & Social Inquiry 503, 549–50. 88 C Pateman, Participation and Democratic Theory (Cambridge, CUP, 1970) 70–71. 89 Arnstein (n 79 above) 217. 90 Ibid. 91 Ibid. 92 The key changes are the introduction of neighbourhood development plans (see Planning and Compulsory Purchase Act 2004, s 38A), neighbourhood development orders (TCPA, s 61E and sch 4B), and community rights to build (TCPA, s 61Q and sch 4C; Localism Act 2011, ss 88–95). 93 See Walsh (n 7 above) 285–86. 94 National Planning Policy Framework (Department for Communities and Local Government, March 2012, available at: www.communities.gov.uk/publications/planningandbuilding/ nppf) paras 16, 184. 85 86

Belfast Corporation v OD Cars 247 remains to be seen when, and to what extent, the Localism Act 2011 will result in more robust owner participation in the planning process, through which property rights might be vindicated. Overall, the complexity of the planning process, and in particular the competing, often incommensurable, interests that it weighs, mean that a generalised policy of deference to the administrative process in determining the fairness of the distribution of the costs and benefits of land-use regulation is inappropriate. It suggests that the House of Lords was right in its decision in OD Cars to retain limited discretion to characterise controls of use as requiring compensation, since such discretion creates space for identifying potentially unfair burdens imposed on owners, and for scrutinising the manner in which their interests are taken into account in the planning process.

V. RECIPROCITY OF ADVANTAGE: A POTENTIAL EXPLANATION FOR OD CARS

Despite the complexities outlined in the last Section of this chapter, participation in regulatory processes is generally, and almost intuitively, thought to be a good thing for citizens.95 This raises a question about why participation rights in planning law for owners tend to justify the refusal of compensation for the adverse impacts of planning decisions, as held in OD Cars. More generally, it prompts consideration of why a shift away from liability rule protection for owners’ liberties in relation to land-use was accepted in OD Cars. Reciprocity of advantage may help to explain this approach. In basic terms, this analysis contends that a restriction of private property rights may be offset by benefits flowing to a restricted owner from limitations imposed on other owners’ rights, thereby obviating the need for compensation. As Gray puts it, [t]he general distribution of the regulatory dividend—as evidenced, say, by an enhanced quality of life for all in the neighbourhood or by an increase in local land values or by the more effective preservation of the cultural heritage—rather takes the edge off complaints of proprietary derogation.96

Depending on the interpretation of reciprocity of advantage that is adopted, different regulations of use can be characterised as justifiable without compensation. In this regard, both broad and narrow interpretations of the meaning of reciprocity of advantage have been advanced.97 95 As Arnstein points out, ‘[t]he idea of citizen participation is a little like eating spinach: no one is against it in principle, because it is good for you’: Arnstein (n 79 above) 216. 96 Gray (n 34 above) 236. 97 H Dagan, Property: Values and Institutions (New York, OUP, 2011) 102–3.

248 Rachael Walsh Adopting a relatively broad approach in an early defence of the constitutionality of zoning, Alfred Bettman argued ‘each piece of property pays, in the form of reasonable regulation of its use, for the protection which the plan gives to all property lying within the boundaries of the plan’.98 On this view, while freedom of use is lost through planning control, an owner gains in general terms from the similar restriction of other owners within the controlled area. The interpretation of reciprocity can be broadened still further, to require only that a burdened individual ‘enjoy a share of the general welfare-enhancement generated by the public action at issue or by other beneficial public actions, even if this benefit is outweighed by the burden she sustains’.99 On this approach, the simple fact that a restriction is determined to be in the public interest suffices to establish reciprocity of advantage, given that the burdened individual is a member of the benefited community.100 At the narrow end of the scale, Richard Epstein identifies the possibility of ‘implicit in-kind compensation’ existing in planning contexts, for example where neighbours receive ‘parallel and reciprocal’ benefits through restrictions such as height controls imposed in a neighbourhood.101 Accordingly, Epstein requires direct and identifiable returns for an owner adversely affected by a land-use regulation from the same regulation of other owners. General benefits, such as the benefit of orderly planning within a controlled area, or the broader public interest served by a restraint on use, are not sufficient to establish reciprocity of advantage on this view. Attempting to strike a middle ground between these broad and narrow approaches, Hanoch Dagan argues that a long-term view of reciprocity of advantage is appropriate for identifying justifiable uncompensated regulation of property rights. He contends that public authorities should be absolved from paying compensation if the disproportionate burden of the public action in question is not overly extreme and is offset, or is likely in all probability to be offset, by benefits of similar magnitude to the landowner’s current injury that she gains from other—past, present, or future—public actions (which harm neighbouring properties).102

98 A Bettman, ‘Constitutionality of Zoning’ (1923–24) 37 Harvard Law Review 834, 839. See also RR Coletta, ‘Reciprocity of Advantage and Regulatory Takings: Toward a New Theory of Takings’ (1990–91) 40 American University Law Review 297, 323. 99 Dagan (n 97 above) 102–3. 100 See eg Gray and Gray (n 39 above) 265–66, 277–78. 101 RA Epstein, Supreme Neglect (New York, OUP, 2008) 49. See also Daphna LewinsohnZami, ‘Compensation for Injuries to Land Caused by Planning Authorities: Towards a Comprehensive Theory’ (1996) 46 University of Toronto Law Journal 47. 102 Dagan (n 97 above) 103. For a long-term view of reciprocity, see also F Michelman, ‘Property, Utility and Fairness: Comments on the Ethical Foundations of “Just Compensation”’ (1967) 80 Harvard Law Review 1165, 1225.

Belfast Corporation v OD Cars 249 Accordingly, Dagan takes a long-term view of reciprocity, but requires a more clearly defined benefit to the burdened individual than simply participation in the public interest. He characterises this principle of reciprocity as a means of ensuring that owners act in a socially responsible manner in relation to the use of their land, while at the same time protecting them against effacement in the public interest. Somewhat curiously, accounts of the justificatory function of reciprocity of advantage in the context of the regulation of the use of private property generally do not directly link reciprocity to participation rights. They do not address the role that participation plays in allowing owners to advance their interests in the administrative sphere.103 It is submitted that reciprocity of advantage analysis should be linked to questions concerning good planning procedure. OD Cars established the need for deference to the planning process as the key forum for determining the distribution of the benefits and burdens of land-use regulation, but at the same time recognised the possibility of rare, undefined cases of regulatory takings that might require compensation. Since then, participation rights have largely replaced compensation as the key means of protecting property rights where they are affected by planning law,104 or indeed by land-use regulation more generally.105 Consequently, the nature of the process through which landuse regulation is applied, and in particular, the manner in which an owner’s interests are taken account of, are relevant (albeit non-determinative) considerations in determining whether a particular adverse planning decision amounts to a regulatory taking requiring compensation. On the basis of reciprocity of advantage analysis, good planning procedure, involving participation by owners, can be characterised as weakening the cogency of subsequent contentions that the application of the agreed development plan in a manner adverse to individual owners’ interests is unfair. Reciprocity of advantage, regardless of whether that concept is interpreted broadly or narrowly, is enhanced by ensuring that affected parties are permitted to participate in the planning process, and that its rules and policies are applied to all-comers equally. Such reciprocity in turn weakens the argument that an adverse planning decision represents a constraint on use that ‘goes too far’ and requires compensation. Notions of reciprocity and social obligation, arguably implicitly at work in OD Cars, have even older roots in explaining the legitimacy of 103 A notable exception are Gray and Gray (n 39 above) 276, who touch upon the role of participation rights in contributing to realising reciprocity of advantage. Dagan does suggest that in extreme cases, attention should be paid to the political power of burdened parties in assessing what counts as disproportionate, and emphasises the importance of participation rights in the context of common property. However, he does not address the relationship between reciprocity of advantage and owner participation in regulatory control generally: Dagan (n 97 above) 107, and 171, 176. 104 Walsh (n 7 above). 105 Scotford and Walsh (n 7 above).

250 Rachael Walsh uncompensated regulations of land-use in English law. In Re an Arbitration between Ellis and the Ruislip-Northwood Urban District Council, a dispute emerged over whether an owner affected by a building line in a town planning scheme was entitled to compensation on a proper interpretation of the terms of the Housing, Town Planning, &c Act 1909.106 As a matter of statutory construction, the majority held that compensation was payable.107 However, Bankes LJ rationalised the instances in which compensation was expressly excluded in the 1909 Act on the basis that the advantages resulting to the property from the provisions of the scheme are considered to equal or outweigh the injury complained of; or possibly that a man ought not to be allowed compensation for doing in reference to his property what, apart from compensation, he ought to do voluntarily.108

These comments indicate that Bankes LJ envisaged that property rights could be protected as well as restricted through regulation, thereby achieving reciprocity of advantage.109 The deference displayed by the House of Lords in OD Cars to the administrative determination of land-use rights may be understood to be justifiable on the basis of such reciprocity analysis. The proper administration of inclusive regulatory procedures is understood to ensure fairness in the distribution of the burdens of land-use regulation, thereby limiting the need for compensation. However, as the previous Section of this chapter sought to demonstrate, the complexity of planning law’s participatory procedures, and the multiple, overlapping, and at times conflicting, interests they seek to accommodate, mean that careful scrutiny is required to determine whether, in particular cases, participatory procedures have performed the justificatory function attributed to them of adequately ventilating and vindicating property rights. Consequently, while participation rights can contribute to the attainment of reciprocity of advantage in the context of land-use control, thereby helping to prevent disproportionate burdening of owners, generalised justificatory assumptions, and consequent deference to administrative decisions, may not adequately vindicate property rights. Rather, a more nuanced, context-specific approach is required, albeit grounded in the

106 Re an Arbitration between Ellis and the Ruislip-Northwood Urban District Council [1920] 1 KB 343. For discussion of the dissenting judgment of Scrutton LJ, see Gray (n 34 above) 240–41. 107 [1920] 1 KB 343, 361. 108 Ibid, 362. The Act excluded compensation where the restriction could have been imposed through a by-law, or where the restriction concerned the space around a building. 109 More recently, in Westminster Bank Ltd v Minister for Housing and Local Government [1971] AC 508, 529, Lord Reid emphasised the fact that all affected parties were denied compensation in the same way for refusals of planning permission, again touching upon notions of reciprocity in justifying uncompensated limitations on use. See also Joseph Singer, Entitlement: The Paradoxes of Property (New Haven CT, Yale University Press, 2000) 8, arguing that limitations on property rights protect such rights.

Belfast Corporation v OD Cars 251 same underpinning argument that good administration involving participation by owners is relevant to the proportionality of land-use controls. While good process cannot save decisions involving objectively disproportionate interferences with property rights, and thus cannot displace the judicial role in reviewing land-use restrictions, it clearly does tend to establish reciprocity of advantage within such regulatory regimes. Accordingly, where careful judicial analysis reveals an inclusive administrative approach taking account of the public interest and affected property rights, courts may be justified (at least in relation to the protection of property rights) in giving considerable weight to such decisions, as suggested by OD Cars. Through reasoned contextual deference, as opposed to generalised deference, courts may succeed in effectively exercising the limited supervisory jurisdiction over the application of land-use regulation envisaged in that landmark decision.

V. CONCLUSIONS

The liberty to use property is an important incident of ownership, and one that is significantly restricted through public law measures, and their administration. In the landmark decision of OD Cars, the House of Lords laid the ground-rules for regulatory control of land-use, and set the deferential tone that has characterised judicial review of such measures to-date. Planning control, and similar regimes regulating land-use, are accepted as clearly being in the public interest. The liberty to use property is generally not afforded distinct protection against regulatory interference, and is not regarded as being ‘taken’ by such action. Accordingly, compensation is rarely required, and administrators are generally trusted to avoid imposing restrictions that would go so far as to require compensation. However, a limited grey area remains, with the courts in OD Cars reserving the right to characterise restrictions on use as illegitimate absent compensation. The scope of this grey area of regulatory takings remains unclear, with courts unwilling to define it or provide exemplars, and the legislature haphazardly and inconsistently establishing compensation rights for constraints on discrete incidents of ownership. One possible principle that could be used to provide greater clarity is reciprocity of advantage, linked to judicial review of administrative process. Attention should be paid to the administrative procedures that result in decisions that restrict land-use, and in particular, to the opportunities for participation by owners that those procedures entail. Analysis of such procedures must go further than that undertaken in OD Cars by looking beyond the superficial benefits of participation to identify the substantive function of participation rights in particular cases. Furthermore, it must engage with the varied interests and goals served by such participation, and

252 Rachael Walsh by regimes of land-use control more generally. Such an approach would allow judges to effectively supervise, and where necessary to enforce, the parameters for limitations on the right to use private property identified in OD Cars, thereby defending property rights in a sphere of wide-ranging and ever-developing importance. Over time, careful judicial scrutiny of process and participation could help to illuminate the kinds (if any) of far-reaching land-use controls that might require compensation, which would answer the questions that OD Cars left open concerning the existence and range of regulatory takings. This in turn would illuminate the scope of legislative freedom in adopting new forms of land-use regulation and developing existing regimes. The two principles of no-compensation and deference to administrative decisionmaking articulated in OD Cars could provide the basis for closer judicial supervision of fairness in the distribution of the benefits and burdens of land-use control that would reflect the complex nature of the administration of such control and maintain respect for the primacy of administrative decision-making in this field.

III. DESTRUCTION OF PROPERTY RIGHTS There is no such law in this realme of goodes forsaken/for though a man weive the possessyon of his goods and saith he forsaketh them/yet by the law of the realme the property remayneth styll in hym and he may sease them after whan he wyll.1

P

ROPERTY RIGHTS DO not necessarily last forever. Some, of course, have the potential—the fee simple estate provides a central and iconic example—but others will come to an end even though the object of the right continues to exist. Much of the time this will be uncontroversial, and a reflection of ordinary proprietary relationships. Modified fees and leases will determine, easements will be released, covenants will be discharged, mortgages will be redeemed. Sometimes specific provision will be made for the extinction of a property right—as with the title-extinguishing provisions of the Limitation Act 1980 in respect of goods and land—and even though the effects of these provisions may be the subject of disquiet or disapproval, the conceptual proposition that property rights can be extinguished is not doubted as a matter of principle. It is an ordinary part of property life. The chapters in this section of Part B deal with a mode of property-rightdestruction that is much more controversial: abandonment. The common law has never settled with any certainty whether it is possible for any person to destroy a property right in respect of a thing by unilaterally taking steps to divest that right. If I throw the watch you gave me last Christmas into the river, intending to be rid of it and hoping I never see it (or you) again, do I stop being the owner of the watch? Could I sue a subsequent taker for recovery? If I board up my access to your land and stop driving across it to get to the road, do I forfeit my easement (see Emma Waring’s chapter on Benn v Hardinge)? If I stop manufacturing goods, intending never to resume, have I abandoned the goodwill in my business so as to leave you immune from proceedings for passing-off (see Jonathan Griffith’s chapter on Star Industrial Co Ltd v Yap Kwee Kor)? To these questions there are few indisputably authoritative answers, and even where the law on abandonment appears settled (as in the case of passing off), there often remain sound policy reasons to doubt the possibility.

1

St Germain, Doctor and Student 91 SS (1528) 290–92.

254 Destruction of Property Rights Doubts about the possibility of divesting abandonment are perhaps surprising, at least superficially. The idea of abandonment is relatively intuitive, certainly as a feature of ordinary life, but no less so from a legal conception of ownership. We recognise uncontroversially that an owner can destroy something she owns (see Honoré’s discussion of the right to the capital in his famous essay on ownership),2 and abandonment would seem to follow a fortiori from destruction: if the owner has a liberty to put the asset beyond all use by destroying it, how much more obviously should she be able simply to renounce her property and leave the asset for a willing taker.3 Further, it is clear that any difficulties with divesting abandonment are not to do with its conceptual mechanics: on the contrary, the common law has a clear and stable understanding of what abandonment means and requires, and it deploys this understanding consistently irrespective of the kind of property right at stake (ownership, easement, goodwill, etc). As the chapters in this section each make clear, this understanding, with a heavy debt to the Roman texts, shapes abandonment as an obverse of possessory acquisition, such that abandonment requires acts of relinquishment of an asset and a concomitant intention to divest property. Yet even with this conceptual clarity, and even while acknowledging the possibility of abandonment, it is difficult to find cases that apply the concept or countenance the possibility of abandonment without reluctance. So what is the difficulty with abandonment? There are two practical concerns, and at least one broader philosophical one. As to the former, even if the mechanics of abandonment are clear, it can be very difficult to prove abandonment as conceived. Waring here describes it as ‘almost impossible’, noting the high standards of proof and the reluctance of courts to infer abandonment lightly. This is compounded when it is remembered that abandonment allegations often figure as a defence, as in Benn v Hardinge itself where the Hardinges sought to rely on abandonment to defeat Mr Benn’s claim to an easement. Naturally a claimant will not concede or plead divesting intention in these circumstances, so any intention must be deduced and inferred from the facts. This is difficult. Waring reminds us that in Benn, 175 years’ non-use of an easement were not enough to find abandonment, and later cases on easements are consistent with this high standard. So, it seems, are the cases on passing off. Griffiths observes that 2 AM Honoré, ‘Ownership’ in AG Guest (ed), Oxford Essays in Jurisprudence (Oxford, OUP, 1961). 3 A technical Hohfeldian objection to this a fortiori argument might be that, while an owner has a liberty to destroy and thereby bring about the cessation of all property rights in respect of the thing, abandonment requires the exercise of a power, resulting as it does in a change in the prevailing duties in respect of the thing: after abandonment, the relinquishing owner no longer has the right to exclude, so no one owes her a duty to keep off the thing; after destruction, no one can be under any duties in respect of the thing. There may be some force in this distinction, but the contrast at least invites a question as to why we would allow an owner a liberty to destroy when she could exercise her power to leave for the next taker.

Destruction of Property Rights 255 while Star Industrial decides that goodwill can be abandoned, later authorities have been quick to negative any suggestion of intention to cease trading where even slight commercial activity remains. Even assuming a litigant could surpass the probative challenges in a given case, a second practical difficulty is that allegations of divesting abandonment are often immaterial, adding little or nothing to the construction of an argument. A very good example of this is provided by the law of theft, where although criminal courts have been prepared to find as a matter of fact that goods have been abandoned, the legal significance of this finding goes to the defendant’s dishonesty rather than the strict proprietary status of the goods. For example, in Ellerman Wilson Line v Webster,4 one of only a very few cases where a defendant has escaped conviction by arguing that the goods he had taken were abandoned,5 Lord Goddard CJ observed that ‘it was open to the learned magistrate … to come to the conclusion that the man had no felonious intent, because if the property had been abandoned you cannot be charged with stealing abandoned property’.6 The effect of this dictum has been preserved under the Theft Act 1968, section 2(1)(c) of which provides that a person is not dishonest if he appropriates property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps. As JC Smith once observed, ‘[i]f the taker believes there is no owner, he cannot believe that the owner can be discovered by taking reasonable steps’.7 Moreover, he may also believe that he has the owner’s consent to take the goods, thereby setting up an alternative defence under section 2(1)(b). Accordingly, it is by no means clear that abandonment is a proprietary issue in theft proceedings. Indeed, allegations of abandonment could still afford a defence to a charge of theft even if divesting abandonment were impossible. In this latter sense, even where allowed, allegations of divesting abandonment are not likely to be material in theft proceedings, and this maybe gestures to a broader concern about its conceptual redundancy within the common law.8 Beyond the practical aspects of abandonment allegations, both of the chapters in this section of Part B observe a deeper philosophical concern with abandonment, one that tells us something about the core values that animate common law systems of private property. To the extent that we allow property right-holders to abandon interests unilaterally, the

4

Ellerman Wilson Line v Webster [1952] 1 Lloyd’s LL Rep 179. Also see R v White (1912) 6 Cr App R 266 and R v Small (1988) 86 Cr App R 170, each of which is similarly explicable on the ground that abandonment provided a dishonesty defence. 6 [1952] 1 Lloyd’s LL Rep 179, 180 (Byrne and Parker JJ agreed). 7 JC Smith, ‘Title to Discovered Antiquities: Theft and Possessory Title’ in Title to Finds and Discovered Antiquities, seminar proceedings of the Institute of Art and Law, 3 October 1995, reading 4, p 2. 8 See eg JE Griffiths-Baker, ‘Divesting Abandonment: An Unnecessary Concept?’ (2007) 36 Common Law World Review 16. 5

256 Destruction of Property Rights right-holder’s autonomy is the crucial value in play: property defers to her decisions about when an asset is no longer worth using or keeping, and imposes no necessary obligation to pass it on, or (in the case of interests like easements or covenants) to ensure that it is available for a successor in title. As Peñalver as argued, property may be more suffused with obligation than this understanding of abandonment would allow.9 Griffiths cautions us this way in arguing that the law of passing off should be slower to recognise abandonment than Star Industrial would allow—unlike the majority of intellectual property rights, he argues that there is no clear public interest in recognising abandonment of goodwill; indeed, it may harm the public interest in accurate market information, effectively allowing an immunity to subsequent manufacturers to represent their wares as those of the relinquishing company. In a similar fashion, Waring observes that a law of easements that inclines against abandonment may encourage higher degrees of co-operation amongst neighbours. It may be that this moral imperative to be mindful of the broader distributive effects of abandonment obtains generally at common law; certainly, it seems to be reflected in the Student’s refusal to bow to the relinquishing autonomy of an owner (‘though a man weive the possessyon of his goods and saith he forsaketh them/yet … the property remayneth styll in hym’). So if my watch is still working, still valuable and useful, perhaps it is better that I regard myself as obligated to ensure its productive use by another, rather than free to cast it into the water.

9

EM Peñalver, ‘The Illusory Right to Abandon’ (2010) 109 Michigan Law Review 191.

11 Benn v Hardinge (1993) EMMA WARING

I. INTRODUCTION

L

ANDMARKS ARE NORMALLY conspicuous objects that act either as a boundary marker or as a directional guide. As such, Benn v Hardinge1 initially appears to be an unlikely choice for a ‘landmark’ case. After all, it has been received into the legal canon with barely a ripple of interest. The case involved a relatively mundane neighbour dispute about the existence and use of a right of way. Neither the parties to the case, nor its physical setting, were apparently special or unusual. As a result of its very ordinariness, any discussion of Benn v Hardinge in land law textbooks is normally limited to a pithy footnote observing that non-user of a right of way, even for 175 years, does not by itself constitute abandonment of the right.2 Perhaps the only slight surprise is that the case made it to the Court of Appeal. Despite these caveats, this chapter argues that Benn v Hardinge deserves to be viewed as a landmark case. Notably, the case demonstrates the reluctance of the common law to facilitate the abandonment of property rights in land. As an aside, the case also briefly touches on: the effect of the effluxion of time in land law; the complex nature of neighbour disputes, and provides an opportunity to trace the ebb and flow of property movements from enclosures to the incorporation of Roman property principles into English land law.

II. THE FACTS

The case involves relatively simple facts. Mr Benn had owned Hackhurst Farm at Lower Dicker near Hailsham in East Sussex for 20 years. The 1

Benn v Hardinge (1993) 66 P & CR 246. The case led to the rewriting of part of Gale on Easements which now states that the ‘true rule would appear to be that mere non-user without more, however long, cannot amount to abandonment’. J Gaunt and P Morgan, Gale on Easements, 19th edn (London, Sweet & Maxwell, 2012) [12.71]. 2

258 Emma Waring village of Lower Dicker lies within the gently undulating countryside of the Low Wield. Despite the beauty of the surrounding area, Lower Dicker is not an obvious rural idyll. The village, such as it is, has no centre but instead consists of sporadic frontage development along the busy A22. A few further village properties are scattered along a network of lanes to the north and south of this arterial road running from London to Eastbourne. One such lane was a private road (Hackhurst Lane) that led to a few houses, an industrial estate and Mr Benn’s home, Hackhurst Farm. Mr and Mrs Hardinge owned Little Hackhurst, a property to the south of Mr Benn’s land. A track ran along part of the boundary of Mr Benn’s land and led to Hackhurst Lane. In 1818 an enclosure award had been made which affected the track and it became a private carriageway for the benefit of various people, including the owners of Hackhurst Farm. Despite this, the Court described the track as being ‘pleasantly rural’ with grass verges and a strip of grass down the middle. There was ‘virtually no evidence at all’ that Mr Benn or his predecessors in title had ever sought to use either: (i) entrance B which was a derelict gate in a hedge adjacent to the track; or (ii) the track between another entrance, A, and B for any purpose. There was a ditch across the track that would be difficult to cross in its current state. The simple reason for this non-use of entrance B and the track between A and B was that Mr Benn had alternative means of access at gate A or through other parts of Hackhurst Farm. However, Mr Benn now wished to use entrance B and the track between A and B with vehicles because his former access routes got waterlogged and tractors had become ‘bogged down’. So here, we have a typical neighbour dispute. Mr Benn wanted to go about his farming business and for whatever reason found that he was unable to reach areas of his land using his traditional access routes. He looked around, noticed that there was a derelict unused entrance, B, and realised that if he could go along the track to get to this entrance he would be able to access his waterlogged land again. So, he tried this and presumably got rebuffed by Mr and Mrs Hardinge. Perhaps he attempted access again. It was clearly no go. From the case report, it is impossible to know why Mr and Mrs Hardinge objected so strongly to Mr Benn’s use of the entrance and track. The track did not, after all, cross the Hardinges’ land itself but instead formed a common boundary with Mr Benn’s land on one side of the track and the Hardinges’ land on the other side. However unlikely the dispute might seem, this was not a minor neighbourly disagreement that could be smoothed over. Instead, as is often the case with neighbour disputes, each side became entrenched and a small disagreement escalated. Legal advice was taken, counsel were instructed, and a great deal of money and time must have been spent in pursuing this case all the way to the Court of Appeal. We are left wondering what the back-story was here. After all, this is traditional farming country with agricultural land all

Benn v Hardinge 259 around. Tractors are surely commonplace in the lanes and roads surrounding Lower Dicker. The nearest road leading to both Hackhurst Farm and Little Hackhurst, Hackhurst Lane, is no rarefied private road with expensive mansions. It is a small pot-holed lane with a few houses on it and a large industrial estate. Large lorries and trucks must trundle up the nearby lane causing considerable noise to surrounding properties. It is hardly therefore as though the use of a tractor by Mr Benn would shatter the tranquility of the neighbourhood. It makes the Hardinges’ objections to the use of part of the adjoining track by Mr Benn with his tractor even more intriguing. As is often the case, we cannot tell whether there was there already bad blood between Mr Benn and his neighbours. The case report leaves the reader in the dark, with only Dillon LJ’s somewhat cryptic comment that Mr Benn’s bogged down tractors were ‘apparently’ the reason why the dispute had ‘come to a head now’. The hidden elements of the case’s background may be significant in explaining the Court of Appeal’s decision that long non-user of the right of way with vehicles had not been abandoned. After all, the Hardinges were not themselves the owners of the servient land. The easement was a private right of way over a shared track on the boundary of both properties; it had been created under the enclosure award for the benefit of these adjacent owners. Perhaps the Court of Appeal viewed the dispute as a case of sour grapes by the Hardinges in seeking to prevent Mr Benn from accessing his land and livestock under difficult circumstances. Whatever the relative merits and demerits of the parties, this type of background is typical of a neighbour dispute. They are notoriously difficult and expensive to settle, to the extent that many lawyers and judges would seriously caution potential litigants against embarking on such litigation. There are really no winners in such cases, since the parties often find that they have to continue living alongside each other even after the case has been heard. Additionally, the existence of court proceedings or a judgment can blight the value of both houses when they come to sale in the future. Despite this, as in Benn v Hardinge, legal proceedings may sometimes be the only way to resolve the deadlock. As Lord Rodger has observed, parties [to neighbour disputes] are … adults and the dispute between them is genuine. As a judge, I would not describe the resulting situation as sad or unfortunate: after all, courts exist and judges are paid to resolve such disputes, which are indeed the life blood of the common law.3

III. THE DECISION AT FIRST INSTANCE

No transcript exists of HH Judge Norrie’s judgment at Haywards Heath County Court. From the Court of Appeal’s judgment it seems that Mr Benn 3

Moncrieff v Jamieson [2007] UKHL 42, [2007] 1 WLR 2620, 2644 (Lord Rodger).

260 Emma Waring had claimed a right to use the track with vehicles based on prescription. HH Judge Norrie rejected this claim on ground that whilst there was evidence to show that the track was a bridleway, there was insufficient evidence to show that the track had been used with vehicles. Alternatively, Mr Benn claimed that he was entitled to use the track with vehicles by way of an express grant in an enclosure award of 1818. The Hardinges alleged that if Mr Benn’s predecessors had been entitled to such an easement, this right had been impliedly released by abandonment through non-use. At first instance, HH Judge Norrie rejected Mr Benn’s claim to an easement over the track on the basis of the enclosure award. She noted that the enclosure Commissioners had appointed a private carriage road over the track. However, she took the view that this was insufficient to grant a private easement over the carriageway, unless also accompanied by a separate grant of a right of way, which had not happened. No finding was made at first instance about an implied release based on abandonment because there had been no grant under the enclosure award, so there was nothing to be abandoned. Mr Benn appealed to the Court of Appeal.

IV. THE DECISION IN THE COURT OF APPEAL

Dillon LJ gave the lead judgment in the Court of Appeal, with which Kennedy LJ agreed. Hirst LJ gave a concurring judgment. Having set out the facts in the case, Dillon LJ held that Mr Benn’s predecessors in title had had an easement to use the track with vehicles based on the enclosure award in 1818. The enclosure award itself had created a vehicular right of way over the track. In these circumstances, Dillon LJ held that there would ‘almost inevitably’ be an implied grant of the right to use the easement. Otherwise, there would be no sense in laying out a right of way for the benefit of adjacent owners unless they could actually use the track.4 Having found that Mr Benn had an easement to use the track with vehicles, the Court of Appeal turned its attention to the Hardinges’ claim that any such right must have been impliedly released by abandonment. As is well-known by land lawyers, just as there are many ways to create an easement there are also several ways in which one can be extinguished or destroyed. This might take the form of an express deed of release, by statute or by operation of law, or impliedly by abandonment. There was no indication that Mr Benn or his predecessors in title had extinguished the easement over the track by express release, nor was there any express intimation of a desire to preserve the right of way.5 There was no deed in evidence to

4 5

Benn v Hardinge, 252–53. Ibid, 253.

Benn v Hardinge 261 suggest that this had happened at an earlier date. Thus, the only defence that the Hardinges had to Mr Benn’s use of the track was to argue that the easement had been impliedly released by abandonment as demonstrated by its long non-use. The abandonment of easements is complex. Dillon LJ in Benn v Hardinge focused on the discussion in the fifth edition of Megarry & Wade that nonuser of an easement for a long period, such as 20 years, would raise a presumption of abandonment in the absence of other information.6 As Dillon LJ noted, ‘[o]bviously if 20 years of non-user will suffice to raise a presumption of abandonment, 175 years of non-user will do’. This presumption was seemingly derived from Lord Chelmsford’s comments in Crossley and Sons Ltd v Lightowler.7 The case concerned the potential abandonment of a prescriptive right for a dye-works to foul a stream. Lord Chelmsford noted that mere suspension of the exercise of a right is not sufficient to prove an intention to abandon it. But a long continued suspension may render it necessary for the person claiming the right to show that some indication was given during the period that he ceased to use the right or his intention to preserve it. The question of abandonment of a right is one of intention, to be decided upon the facts of each particular case.8

Dillon LJ in Benn v Hardinge rightly observed that previous authority, including the Crossley case, does not view non-use alone as significant in raising a presumption of abandonment. Non-use may support the argument that there was an intention to abandon the easement, but it is merely one element to be considered along with the particular facts of each case. Mirroring the need to demonstrate factual possession and intention to possess when gaining ownership of land by adverse possession, the abandonment of land also seems to require both physical abandonment and a firm intention to abandon.

A. Factual Abandonment Whether or not abandonment has occurred will depend on the specific facts of the case. In Cook v Bath Corporation9 the plaintiff owned a house where the back door had been bricked up for about 40 years before the reopening and restoration of the door. The plaintiff was held to be entitled to enforce a right of way down a lane to which the back door gave access

6 R Megarry and HWR Wade, The Law of Real Property, 5th edn (London, Sweet & Maxwell, 1984) 897. 7 Crossley and Sons Ltd v Lightowler (1867) LR 2 Ch App 478. 8 Ibid, 482. 9 Cook v Bath Corporation (1868) LR 6 Eq 177.

262 Emma Waring because there had been no abandonment of the right of way from the back door over the lane in question. Despite its non-use for such a long-period, Malins VC held that the mere non-user of a way did not, in the absence of the acquisition of rights by other parties in consequence of it, amount to an abandonment; but only raised the inference that there had been no occasion to use it.10

The ‘law on this point is not entirely free from difficulty’ but abandonment was viewed as a ‘question of fact to be ascertained … from the surrounding circumstances, whether the act amounts to an abandonment, or was intended as such’.11 In Cook the right of way was not abandoned partly because: (i) it was unclear that there had been an intention to abandon the right of way permanently; and (ii) no one else had acquired rights as a result of the alleged abandonment. The focus in Cook on whether other parties have acquired rights as a result of the abandonment echoes Roman law debates about the timing of abandonment which are discussed further below. One of the issues in this area is that several of the cases dealing with abandonment of easements relate to prescriptive easements. As such, there is a confused sense in the case law that in the same way that the effluxion of time and physical use can create a prescriptive easement, the effluxion of time and non-use ought also to work towards obliterating an easement. In Benn v Hardinge Dillon LJ cited Alderson B’s comments in Ward v Ward12 with approval: The presumption of abandonment cannot be made from the mere fact of nonuser. There must be other circumstances in the case to raise that presumption. The right is acquired by adverse enjoyment. The non-user, therefore, must be the consequence of something which is adverse to the user.13

In its 2008 Consultation Paper, Easements Covenants and Profits à Prendre, the Law Commission noted that the ‘intention to abandon is difficult to establish’ and that because easements are an ‘important and valuable proprietary right, the courts have been slow to find that the right has been extinguished by events subsequent to its grant’.14 They noted that a ‘striking aspect’ of the current law is its incompatibility with prescriptive acquisition which allows for a right to be acquired after ‘20 years of user as of right, while 175 years of non-user do not necessarily amount to abandonment’.15

10 11 12 13 14 15

Ibid, 179 (Sir John Malins VC). Ibid. Ward v Ward (1852) 7 Ex 838. Ibid, 839. Law Commission, Easements, Covenants and Profits à Prendre (CP 186, 2008), [5.15]. Ibid, [5.22].

Benn v Hardinge 263 The courts have been consistently reluctant to accept non-use alone as an indication of abandonment. In Swan v Sinclair16 Sir Ernest Pollock MR agreed that non-user ‘is not by itself conclusive evidence that a private right of easement is abandoned’. Instead it was necessary to consider the surrounding circumstances that might explain the non-user. If such circumstances ‘clearly indicate an intention of not resuming the user’ then a ‘presumption of a release of the easement will, in general, be implied and the easement will be lost’. To support the argument that ‘mere’ non-use of an easement is insufficient evidence of abandonment, Dillon LJ turned to the more recent authority (Gotobed v Pridmore)17 which was cited with approval in Williams v Usherwood by Cumming-Bruce LJ. In drawing on the expanded transcript version of Buckley LJ’s comments in Gotobed v Pridmore Cumming-Bruce LJ in Williams noted that abandonment of an easement could only be established where the conduct of the dominant owner must … have been such as to make it clear that he had at the relevant time a firm intention that neither he nor any successor in title of his should thereafter make use of the easement … Abandonment is not, we think, to be lightly inferred. Owners of property do not normally wish to divest themselves of it unless it is to their advantage to do so, notwithstanding that they may have no present use for it.18

Rightly, Dillon LJ stated that the authorities before the court required there to be a manifest intention to abandon as well as factual abandonment. The difficulty for courts and parties lies in discerning intention in such cases. The test applied in Gotobed and Williams is almost impossible to satisfy in practice. Very few, if any, landowners will make it sufficiently clear that they intend to abandon a right of way for their own purposes, let alone that they have considered its potential benefit of unknown successors in title. In fact this illustrates one of the anomalies with the law in this area. Claims that an easement has been abandoned are not made by the dominant owner, but rather are made as a defence by the servient owner often to claims of trespass or nuisance. The cases in this area generally revolve around a servient owner who has somehow relied upon the ‘abandonment’ of the easement only to find that it has not been ‘abandoned’ after all. Benn v Hardinge is an extreme example of the difficulty of proving abandonment. The fact that neither Mr Benn nor his predecessors in title had used the track with vehicles for 175 years was not by itself, sufficient

16

Swan v Sinclair [1924] 1 Ch 254. Gotobed v Pridmore (1971) 217 EG 759; 16 December 1970, Court of Appeal (Civil Division) Transcript no 498A of 1970, pp 12D–14D. 18 Williams v Usherwood (1983) 45 P & CR 235, quoting from the transcript of Gotobed v Pridmore (n 17 above) 13. 17

264 Emma Waring evidence of an intention to abandon the right of way. Dillon LJ held that he did not feel that it is open to us in this court to say that the way must be presumed to have been abandoned merely because it was not used because no one had occasion to use it, even for so long as 175 years.

As support for this view, he remarked on the ‘rural and unchanged situation’ on the Hardinges’ side of the boundary line. The implication being therefore that Mr Benn was not to be estopped from using the track. This was ‘not an area where there has been great change’ and Mr Benn’s use of the land had not changed dramatically from its use in 1818. It was still used ‘for farming sheep rather than for any matter which could not have been in contemplation at the time of the enclosure’. The facts were therefore relatively in favour of Mr Benn retaining the right of way. The track did not cross over the Hardinges’ land and they had not been relying on the non-use for some purposes of their own. Additionally, the proposed resumption of the track’s use was not startling or excessive but merely a continuation of the use expected in 1818. In these circumstances, ‘and with considerable regret’ Dillon LJ held that ‘that there has been no abandonment of this right of way’. Hirst LJ agreed with Dillon LJ but added some further brief thoughts on the question of abandonment. Following the Court of Appeal’s unanimous judgment in Gotobed v Pridmore, Hirst LJ re-iterated that non-use itself does not raise a presumption of abandonment but there must instead be other circumstances to raise such a presumption. In the present case there were ‘no other circumstances to raise the presumption of abandonment’. The broken-down gate at B and ditch in the track were ‘easily remediable by the installation of a new gate and the construction of a small bridge over the ditch’. Added to which, even if the law placed an onus on Mr Benn as the dominant owner to explain the non-use of the track (which Hirst LJ did not suggest), this could be explained by the existence of other access routes to Hackhurst Lane. Additionally, Hirst LJ argued that whilst the right of way in Benn v Hardinge might be of ‘no particular significance to the owner for the time being’, it was ‘nevertheless a piece of property of potential value’. This right of way was ‘always a piece of property of latent value, though not actually exploited’ and as such the ‘abandonment of such a valuable latent piece of property should not be lightly inferred since it might be of significant importance in the future, as has in fact occurred during the present plaintiff’s ownership’.19 Here there was a reluctance by the Court of Appeal to take away a specific proprietary interest (the easement) from the full bundle of property rights held by Mr Benn. 19

Ibid, 262.

Benn v Hardinge 265 V. SUBSEQUENT IMPACT OF THE CASE

Benn v Hardinge has had some impact on later cases and has revealed itself to be in keeping with the common law’s restrictive approach to the abandonment of easements. In Snell & Prideaux Ltd v Dutton Mirrors Ltd 20 the dominant factory owner had, among other things, bricked up a gateway on his land that had formerly given access to a passage and had acquiesced in the servient owner building a supporting strut in the middle of the passage. As a result of these and other changes, the passage could no longer be used for passing and repassing with vehicles, but only for parking, washing and unloading vehicles. Here, the court stated that it should ‘not lightly infer’ an intention to abandon rights for all time from acquiescence by the dominant owner of acts by the servient owner that make it difficult or impossible for the dominant owner to exercise their rights at a time when they ‘do not have any need to do so’. The court stated that it would be undesirable, if … generous and good neighbourly conduct could not be indulged in for fear of losing for all time rights which at that moment the dominant owner has no need or wish to exercise. No doubt, it must be a question of degree.21

The court referred to Benn v Hardinge as authority for the proposition that mere non-use of an easement for 175 years was not sufficient alone to indicate an intention to abandon. If anything, Snell & Prideaux built on Benn v Hardinge in making abandonment harder to prove. Stuart-Smith LJ held that a ‘substantial and permanent building, which completely defeats the right if acquiesced in by the dominant owner’ would be a clear indication of abandonment of the right. However, if the obstruction can be removed, albeit at some inconvenience and expense to the servient owner, the court should, in my judgment, be slow to infer that acquiescence in its existence is sufficient to amount to evidence of intention to abandon for all time the right.22

This approach encourages a very high degree of cooperation between neighbours and reflects a surprisingly strong proprietarian concept of property, where duties accompany rights.23 It is worth noting that this approach is out of step with other areas of English land law where neighbourly generosity or laziness in enforcing rights may well lead to the creation of rights, as with the implied creation of easements under section 62 of the Law

20

Snell & Prideaux Ltd v Dutton Mirrors Ltd [1995] 1 EGLR 259. Ibid, 262 (Stuart-Smith LJ). 22 Ibid. 23 GS Alexander, ‘Property as Propriety’ (1998) 77 Nebraska Law Review 667; GS Alexander, Commodity & Propriety: Competing Visions of Property in American Legal Thought, 1776–1970 (Chicago IL, University of Chicago Press, 1998). 21

266 Emma Waring of Property Act 1925 and the adverse possession of land.24 Additionally, this restrictive approach to finding abandonment has the practical effect of making it impossible to discern clearly when an easement has been abandoned or limited, as in Snell & Prideaux itself. Even if a right of way has been blocked or obstructed, the dominant owner’s acquiescence in this cannot be equated unequivocally to an intention to abandon. Perhaps the servient owner could put forward estoppel as a defence to a claim of nuisance by the dominant owner, but it is unclear when or whether obstruction of an easement might mature into an estoppel. Hoffmann LJ in Snell & Prideaux agreed with Stuart-Smith LJ’s judgment and drew attention to the estoppel point. He noted the ‘undesirability of construing the law in such a way as to discourage neighbourly acts of acquiescence which cause no inconvenience to the dominant owner’. However, where the servient owner was ‘induced by reliance on the apparent abandonment’ to incur ‘substantial expense’ estoppel might act. The threshold at which expense becomes ‘substantial’ was not revealed however. In Snell & Prideaux itself, the servient owner’s potential estoppel acts were ‘not of the sort of significance which would in any way have made it unjust’ to retain the easement in a somewhat more limited form (that is use of the passage with vehicles, but not passing and re-passing along the passage with vehicles). The servient owner was just ‘required to remove his supporting brickwork and to substitute a steel joist instead’,25 for example. Clearly, some money would have been spent in removing the obstruction but this was apparently not ‘substantial’ enough to deny the dominant owner’s full use of the passage on the facts. The courts’ continuing restrictive approach towards the abandonment of easements is also visible in CDC2020 Plc v Ferreira.26 Here, the Court of Appeal held again that a right of way would not be easily abandoned. The case involved a conveyance in 1964 that granted a right to pass and re-pass over the servient land for all purposes connected with the use and enjoyment of three garages on the dominant land. At some point the three garages were demolished and replaced by ramps and a basement car park and the right of way was used to gain access to the basement car park. Mr Ferreira contended that the demolition of the garages gave rise to an inference that the right of way, which existed solely in connection with the use of the garages, was abandoned forever and was no longer in existence and exercisable by the claimant. However, despite the demolition of the garages and the occupation of the site by other structures for over 30 years, the easement was still held not to have been abandoned. Lloyd LJ held that

24 25 26

Hayward v Chaloner [1968] 1 QB 107. Snell & Prideaux (n 19 above) 264 (Hoffmann LJ). CDC2020 Plc v Ferreira [2005] EWCA Civ 611, [2005] 3 EGLR 15.

Benn v Hardinge 267 substantial as the works were, and as reinstatement works would have been, and no doubt have been, they do not justify an inference that the then owner intended to abandon the right of way forever so that neither it nor its successors could ever resume its exercise.27

More recently in the Court of Appeal case of Dwyer v The City of Westminster Briggs LJ rejected the lower court’s finding that there could be a partial abandonment of an easement.28 The case related to an alleged abandonment of a right of way in London that over time came to be used by Mr Dwyer not as a right of way, but rather as a place to store items related to his market trader business. Throughout the course of Mr Dwyer’s use of the passageway from 1960 to 2010 the passageway was obstructed not only by the original wrought iron gates but also by corrugated iron sheeting on the inside, two courses high of brickwork and wooden shuttering. Briggs LJ noted that there could not be a partial abandonment by reference to different classes of potential users—say tenants, owners and occupiers—because easements exist only as a right appurtenant to land, and are not simply granted to people or classes of people. He noted obiter that it might be possible for a right of way to be partially abandoned in the ‘sense that its benefit could be severed from some part of the originally dominant land’ but that this was not at issue in the current case.29 In calling for reform of the law of abandonment of easements, the Law Commission argued that the current law might lead to the parties’ ‘legal entitlements bearing little relation to the actual use made of the land’.30 In its Report, the Law Commission focused on the need to balance two competing concerns: (i) the need to preserve property rights; and (ii) the need to ensure that rights that are obsolete do not burden land.31 In the case of abandonment, the property right is unwanted by the party benefiting from the easement, otherwise it would be in use, so arguably would be just as likely to be unwanted by the servient landowner burdened by the right. The Law Commission’s recommendation in its final report was that where an easement or profit has not been used for a continuous period of 20 years, there should be a rebuttable presumption that it has been abandoned.32 The Law Commission also recommended that the jurisdiction of the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925 (relating to the modification and discharge of restrictive covenants) should be extended to include the modification and discharge of 27

Ibid, 17. Dwyer v The City of Westminster [2014] EWCA Civ 153. 29 Ibid, [23]. 30 Law Commmission Report, Easements, Covenants and Profits à Prendre (n 14 above) [5.24]. 31 Law Commission Report, Making Land Work: Easements, Covenants and Profits a Prendre (Law Com No 327), [3.214]. 32 Ibid, [3.230]. 28

268 Emma Waring future easements; this change would have echoed similar provisions operating in New South Wales under section 89 of the Conveyancing Act 1919. It would be perfectly possible to signal the abandonment to the rest of the world by requiring abandonment to be accompanied by an application to the Land Registry to remove the easement from the register. In Germany, for example, ownership of a piece of land ‘may be abandoned by a declaration of abandonment made by the owner to the land registration office and by registration of the abandonment in the Land Register’. The abandoned land may be claimed by the Tax Office of Land in which the piece of land is situated. The Tax Office then acquires ownership of the land by registration as owner in the Land Register.33 This would perhaps deal with the signalling issue raised by courts dealing with applications to abandon planning permission. In Pioneer Aggregates UK Ltd v Secretary of State for the Environment, Lord Scarman considered whether a planning permission for the development of land could be abandoned by the act of a party entitled to its benefit.34 In refusing to allow the abandonment of planning permission, the court drew attention to the fact that the planning permission would be entered in a public register, but not its abandonment. Nor would it be possible to discover whether or not the permission had been abandoned by inspecting the land.35 This could have been remedied by provision to remove the permission from the register. Whilst there are cases where the courts have found abandonment of easements on the facts, these are very rare. In National Guaranteed Manure Co v Donald36 a right to a defined supply of water to a canal ceased to exist when the canal was filled in and turned into a railway. Pollock CB noted that where an easement for a particular purpose is granted and is incidental to the use of the property ‘when that purpose no longer exists there is an end of the easement’.37 McFarlane is sceptical about the concept of abandonment in this context, arguing that generally ‘a party with a property right does not have the power to simply give up that right: if he wishes to dispose of the right he needs to transfer it to another’.38 Instead, McFarlane prefers to view successful abandonment of easement cases as examples of estoppel.

VI. THE THORNY PROBLEM OF ABANDONMENT

The common law is reluctant to recognise or facilitate the abandonment of property rights in land. This is partly because abandonment is a contentious 33 BGB §928. See further S van Erp and B Akkermans, Cases, Materials and Text on Property Law (Oxford, Hart Publishing, 2012). 34 Pioneer Aggregates UK Ltd v Secretary of State for the Environment [1985] AC 132. 35 Ibid, 139. 36 National Guaranteed Manure Co v Donald (1859) 4 Hurl & N 8, 157 ER 737. 37 Ibid, 741. 38 B McFarlane, The Structure of Property Law (Oxford, Hart Publishing, 2008) 873.

Benn v Hardinge 269 legal concept, particularly in English land law with its doctrines of tenure and estates. Land does not normally figure as a suitable asset for abandonment given its immovable nature, however it is possible to abandon fixtures annexed to land, which are legally defined as ‘land’ themselves.39 It is also possible to abandon the freehold estate upon which it reverts to the Crown, and allegedly also interests in land, such as the easement at stake in Benn v Hardinge. Abandonment is also, however, unsettling and suspicious in the context of a society that allows for the free alienability of property and land. As Blackstone commented: the legislature of England has universally promoted the grand ends of civil society, the peace and security of individuals, by steadily pursuing that wise and orderly maxim, of assigning to every thing capable of ownership a legal and determinate owner.40

Not only does abandonment raise the spectre of a property free-for-all with the potential unrest and civil disorder that this might entail, but it also has the power to undermine a conception of property that views ‘ownership as a social practice suffused with obligation and duty’.41 There may be instinctive unease when an owner seeks self-interestedly to rid themselves of obligations by abandoning land or interests in land. To this end, the common law makes it difficult for owners to abandon even where they are the only losers.

A. Elements of Abandonment As can be seen from the judgment in Benn v Hardinge, there are two elements to abandonment: (i) some overt act or non-act which indicates that the owner has physically left or discarded the property; and (ii) a clear intention by the owner to relinquish all rights of ownership whilst being indifferent as to what happens to the property afterwards. Whilst the abandoning owner has no interest in which specific person may take title to the land, it may be that a class or type of person may be in mind without this affecting the unilateral nature of the transfer.42 Clearly, merely abandoning

39 Law of Property Act 1925, s 205(1)(ix) states: ‘“land” is land of any tenure … buildings or parts of buildings … and other corporeal hereditaments; also a manor, an advowson, and a rent and other incorporeal hereditaments, and an easement, right, privilege, or benefit in, over, or derived from land’. 40 W Blackstone, Commentaries on the Laws of England, Book II (Oxford, Clarendon Press, 1766) 15. 41 EM Peñalver, ‘The Illusory Right to Abandon’ (2010) 109 Michigan Law Review 191, 195. 42 CL Saw, ‘The Law of Abandonment and the Passing of Property in Trash’ (2011) 23 Singapore Academy of Law Journal 145, 148.

270 Emma Waring possession should not constitute ‘abandonment’ since transactions frequently involve the abandonment of possession without any intention to relinquish ownership.43 In a scenario where A hands B a book and abandons possession in the book to B, the changing possession says nothing at all about A’s intention regarding ownership of the book itself. We are no clearer as to whether A intends a gift and thereby disclaims ownership at the same time as possession, or is merely lending the book to B with no intention of disclaiming ownership, or whether in fact B is the owner of the book and A is now returning possession to him. Abandonment as properly understood therefore focuses not just on abandoning possession but the owner’s unilateral intention to abandon title as well. The unilateral nature of the transaction also distinguishes abandonment from other property transfers such as forfeiture, foreclosure, adverse possession, sale, gift, bequests, releases and so on, since these all involve a third party agreeing to assume ownership of the property; abandonment should involve no consideration of any third party.44 Abandonment really makes much more sense in a civil-law world with its notions of ownership, res nullius and res derelictae. To this extent, the inclusion of an implied release of an easement by abandonment in English land law owes much to the common law’s absorption of Roman law principles and law relating to servitudes. In the medieval world of English land law, profits à prendre were far more useful than easements.45 It was not until the industrialisation of the nineteenth century that easements really expanded and rules were needed to govern their operation. English law has borrowed extensively from Roman law, both in terms of the language and principles used.46 The first edition of Gale on Easements borrowed extensively from the civil law rules relating to servitudes and built on this in the second edition where Gale wrote: [t]he introduction of the Civil Law, ‘the collective wisdom of the ages’, within this Treatise has, it is believed been found extremely useful, and indeed, on this branch of our law the opinions of the civilians seem now almost adopted as authority.47

43 F Pollock and RS Wright, An Essay on Possession in the Common Law (Oxford, Oxford University Press, 1888) (reprinted Littleton CO, FB Rothman, 1985) 15: ‘when physical and legal possession coincide, it does not necessarily follow that the loss of control in fact shall involve the loss of possession in law’. 44 JW Simonton, ‘Abandonment of Interests in Land’ (1930) 25 Illinois Law Review 256, 261. 45 AWB Simpson, A History of the Land Law, 2nd edn (Oxford, Oxford University Press, 1986) 106–15. 46 WS Holdsworth, A History of English Law, 3rd edn (London, Methuen & Co, 1923) 154. See also K Kagan, ‘Servitudes in Comparison with Easements of English Law’ (1951) 25 Tulane Law Review 336. 47 J Gaunt and J Morgan, Gale on Easements, 19th edn (London, Sweet & Maxwell, 2012) xii.

Benn v Hardinge 271 B. Time and Abandonment Even in Roman law, however, abandonment was not a simple matter. It was accepted that property could be abandoned as a result of which it would become res derelictae and susceptible to acquisition from the commons by a new possessor. The process and timing of abandonment was, however, less clear. The Sabinians argued that property could be abandoned, and became unowned from the moment at which the abandoning owner physically abandoned the property with the clear intention to abandon.48 Here, there might be a time lag between abandonment and a new owner taking possession of the property. The Proculians, however, disliked this potential gap in ownership; they argued that property was not abandoned merely by expressing intent to abandon, but only when a transfer or conveyance to the new owner had occurred.49 Until the new owner took possession the abandoning owner remained the owner.50 The Proculian approach accords well with Pollock’s views on abandonment: [it is a] high, grave and dubious question whether a man can by the common law so fully disclaim and abandon his own goods that they cease, by the mere declaration of his will, coupled or not coupled with a physical act equivalent to jettison, to be in any sense his property … an express abandonment is, in point of law, merely a licence to the first man who will take the goods for his own, which taking will be justified and will finally change the property if complete before the taker has notice that the licence is revoked.51

Here, Pollock argues that no property right is abandoned unless and until someone else acquires the property, and until that point the property rights remain with the original owner. There are some English larceny cases that support Pollock’s approach,52 but the law relating to the abandonment of chattels is also complex and unclear.53

48 WW Buckland, A Text-Book of Roman Law: from Augustus to Justinian, 3rd edn (ed P Stein) (Cambridge, Cambridge University Press, 2007) 206. 49 KJ Gray and SF Gray, Elements of Land Law, 5th edn (Oxford, Oxford University Press, 2009) [1.2.78] state that the ‘better view’ is that ownership of a chattel may be divested by abandonment ‘provided that the original owner intends to renounce his title and provided that the chattel is received or reduced into the lawful possession of another person. Unless and until this happens, title to the chattel remains in the would-be abandoner’. 50 J Griffiths-Baker, ‘Divesting Abandonment: An Unnecessary Concept?’ (2007) 36 Common Law World Review 16. 51 F Pollock (1894) 10 LQR 293, case note on Arrow Shipping Co Ltd v Tyne Improvement Commissioners [1894] AC 508. 52 Haynes’s Case (1613) 12 Co R 113, 77 ER 1389; R v Edwards and Stacey (1877) 13 Cox CC 384. 53 M Bridge, Personal Property Law (Oxford, Oxford University Press, 2002) 22. See also R Hickey, Property and the Law of Finders (Oxford, Hart Publishing, 2010) 67: ‘English law has never resolved with any certainty the question whether divesting abandonment is possible at common law, and the modern commentaries are chequered’.

272 Emma Waring As in Benn v Hardinge the effect of the passing of time is complex in abandonment cases. In Crossley and Sons v Lightowler the court held that time was ‘not a necessary element in a question of abandonment as it is in the case of the acquisition of a right’.54 Likewise, in R v Chorley Lord Denman commented that an express release of the easement would destroy it at any moment, so the cesser of use, coupled with any act clearly indicative of an intention to abandon the right, would have the same effect without any reference to time.55

Where there is a clear intention to abandon therefore, there is no need for lengthy periods of non-use to signal abandonment. This approach may, however, be predicated on the notion that the easement in question had been created by prescription and thus should only be lost by a mirror period. Prescription is a notoriously complex area of land law, whether by prescription at common law, under the doctrine of lost modern grant or under the Prescription Act 1832. Unlike adverse possession where the passing of time barred the former ‘paper owner’ from asserting possession over the land in question, prescription acts by giving rise to a presumption that someone’s enjoyment of a right for a long period must be based on some lawful right to enjoy that right. There does seem to be some notion in the cases of Crossley and Sons Ltd v Lightowler and R v Chorley that the doctrine of abandonment should be treated as ‘comparable to acquisition of an easement by prescription and thus the presumption of a lost deed of release’.56 This echoes Coke who appears to have thought that when an easement was acquired by prescription it could only be lost by an equal period of non-use: ‘[i]t is to be knowne that the title, being once gained by prescription or custom, cannot be lost by interruption of the possession for ten or twenty years’.57 Similarly, in Moore v Rawson, Littledale J held that as he can only acquire the right by twenty years’ enjoyment, it ought not to be lost without disuse for the same period; and that as enjoyment for such a length of time is necessary to found a presumption of a grant, there must be a similar nonuser, to raise a presumption of release. And this reasoning, perhaps, may apply to a right of common or of way.58

In adverse possession cases, the effluxion of leases and perhaps cases involving the abandonment of prescriptive easements it appears that the passing of time can destroy property rights. However, in non-prescription easement

54

(1867) LR 2 Ch App 478, 482 (Lord Chelmsford LC). R v Chorley (1848) LR 12 QB 515. 56 CJ Davis, ‘Abandonment of an Easement: Is it a Question of Intention Only?’ [1995] Conv 291, 297. 57 Co Litt 114b, as cited in Gale on Easements (n 2 above) [12.73]. 58 Moore v Rawson (1824) 3 B & C 332, 339. 55

Benn v Hardinge 273 cases such as Benn v Hardinge, it seems that the effect of time running is nugatory even for so long a period as 175 years. This approach is not universal elsewhere in the world. In France, Article 706 of the Code Civile states that ‘a servitude is extinguished by non-user during thirty years’ and under Article 707 this period begins ‘either from the day when one ceased to enjoy … [a discontinuous easement] or from the day when an act contrary to the [continuous] servitude has been performed’. In America various States have a legislative or judicial exception to the normal common law rule that non-use will not amount to abandonment of an easement. Where an easement has been acquired by prescription it can also be extinguished by non-use for the length of time necessary to acquire the easement by prescription.59 The current difficulties posed by the courts when considering whether or not an intention to abandon is manifest makes abandonment almost impossible. This approach has been described as inefficient because parties are unable to predict the future, societal losses are created, speculative purchasing of land may be encouraged and there are more opportunities for the dominant estate to hold out.60 Under our current system, parties to an easement are required to speculate not only about their own likely use of an easement but also to ‘(unrealistically) predict the future’.61 There is also a fundamental inequality in that if an easement somehow becomes a burden or useless to the dominant owner they have the ability to execute a release, cease their use, or abandon it altogether. The servient owner however has no such option and must continue not to interfere with the dominant owner’s authorised use, even where such use has never materialised.62 The restrictive approach towards facilitating abandonment of easements does not fit easily with English land law’s focus on the utility and efficiency of easements generally. Normally, an easement will not be granted unless it enhances the value and utility of the dominant land without placing an excessive burden on the servient land. This approach is sensible given the difficulty in removing easements from titles and their ability to burden land for generations. Courts are relatively reluctant to recognise new categories of easements, as demonstrated by Hunter v Canary Wharf,63 and the requirements in Re Ellenborough Park are restrictive in practice. Perhaps this explains why the Court of Appeal in Benn v Hardinge was reluctant to say that the easement had been abandoned; it still had some economic value 59 These States are: Arizona, Arkansas, California, Guam, Maine, Michigan, New York, New Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee and Wisconsin: S Brown Richardson, ‘Nonuse and Easements: Creating a Pliability Regime of Private Eminent Domain’ (2010) 78 Tennessee Law Review 1, 11, fn 87. 60 Ibid, 12. 61 Ibid, 14. 62 Ibid. 63 Hunter v Canary Wharf [1997] AC 655.

274 Emma Waring to Mr Benn. Had the right of way crossed the Hardinges’ land, however, it is questionable whether 175 years’ worth of non-use would still have been held by the court not to have constituted abandonment. Otherwise, the Hardinges’ land could have been burdened, inefficiently, for over a century at the whim of the dominant owner. Potentially this could also affect society at large since the servient owner might be constrained from making full economic use of their land, without any offsetting gain from the dominant owner’s use of the easement.64

VII. WHY DOES ABANDONMENT MATTER?

It is here that questions of abandonment come closest to telling us something about the nature of what it means to be an ‘owner’ of land in English law. Honoré, in describing the 11 standard incidents of ownership, referred to the right to capital as including the liberty to consume, waste or destroy the whole or part of it. Whilst the liberty to destroy ‘need not be unrestricted’, it would be inconsistent according to Honoré if there were a general provision requiring things (so far as they are not consumed by use) to be ‘conserved in the public interest’.65 Could we argue then that the liberty to abandon property is an incident of ownership allied to the liberty to destroy? Seemingly, this is just a facet of an owner’s ability to allocate resources in property owned by them as they see fit. Strahilevitz convincingly contends that the unilateral nature of abandonment, along with the power to destroy, makes these incidents ‘powerful manifestations of an individual’s autonomy interest’ in the bundle of property rights.66 Penner’s contention is that the law of property is motivated by an ‘analysis which takes the perspective of exclusion, rather than one which elaborates a right to use’.67 Under the exclusion thesis, property rights are viewed as an interest in ‘dealing with the things of this world without interference, but it is an interest in dealing with them or not dealing with them, as one chooses’.68 This right is still, however, bounded by the wider interest in not being harmed by the way in which people deal with their things. Penner has argued that abandonment is justified by an individual’s autonomy interest such that ‘one ought not to be saddled with a relationship to a thing that one does not want, and an unbreakable relation to a thing would condemn the owner to having to deal with it’.69 64

Ibid, 16. AM Honoré, ‘Ownership’ in Making Laws Bind (Oxford, Clarendon Press, 1987) 165–79. 66 Strahilevitz, ‘The Right to Abandon’ (2010) 158 University of Pennsylvania Law Review 355, 371. 67 J Penner, The Idea of Property in Law (Oxford, Oxford University Press, 1997) 71. 68 Ibid, 79. 69 Ibid. 65

Benn v Hardinge 275 Whilst abandonment may be theoretically valuable as a manifestation of autonomy interests in a liberal conception of property, we are no closer to a definitive answer about the abandonment process and whether and when in practice ownership may be abandoned. Peñalver argues that abandonment illustrates the virtual impossibility of severing property relationships unilaterally, and reveals landownership to be ‘an obligation-laden institution’ through which the law can ‘both enforce and disseminate norms of ownership’.70 He further argues that the principal legal function of abandonment is to determine after the fact who owns property when the property is wanted rather than empowering owners with an ability to abandon unwanted property.71 Perhaps surprisingly, Benn v Hardinge suggests that English land law is more willing to accept the abandonment of the freehold estate or fixtures, than the abandonment of interests in land such as easements. As the Law Commission notes, the current approach to abandonment of easements serves to saddle would-be abandoning owners with rights that they themselves no longer value and which may not have been of value to their successors-in-title. The restrictive approach to abandonment seems puzzling given that it is the dominant owner (who has presumably in some manner paid for the benefit of the easement) who wishes unilaterally to give up their rights burdening other land. This is not therefore a social-obligation situation where the law should enforce rights on the basis that otherwise the abandoning owner might get something for nothing and escape from their land-owning obligations. Here, the law forces a would-be abandoning owner to act as a steward for hypothetical long distant successors-intitle. English land law is seemingly reluctant to acknowledge that a right to use land or interests in it should also automatically include the right to abandon.

70 71

Peñalver (n 41 above) 196. Ibid, 208.

12 Star Industrial Co Ltd v Yap Kwee Kor [1976]: The End of Goodwill in the Tort of Passing Off JONATHAN GRIFFITHS

I. INTRODUCTION

U

NLIKE MOST FORMS of property, intellectual property rights are inherently limited in time. A patent survives for 20 years from grant,1 and a copyright interest generally comes to an end 70 years after the death of a work’s author.2 These limitations are consistent with the social justifications underlying intellectual property rights. The patent system, for example, provides an incentive for invention and for the commercial exploitation of inventions. At the end of a patent’s term, an invention falls into the public domain and the information that it discloses becomes available to all. Similarly, copyright protection provides an incentive for creators of art, literature and music while, at the same time, ensuring a supply of creativity to the public domain.3 Thus, while considerable controversy remains as to the appropriate point at which intellectual property rights should come to an end, there is little support for the idea that they should endure forever. However, these rules and rationales do not apply to all forms of ‘intellectual property’. By contrast with patents and copyright, the legal protection of registered trade marks is indefinite in duration. As long as the proprietor of a trade mark uses the mark and complies with the requirements of the trade mark system, property in the mark will persist. This potentially infinite term of protection is justified because, as long as a sign continues to indicate the trade source of goods or services, there is no good reason for 1

Patents Act 1977, s 25. Copyright Designs & Patents Act 1988, s 12–15A. 3 For a thorough analysis of the arguments in favour of limiting the term of copyright, see S Ricketson, ‘The Copyright Term’ (1992) 23 International Review of Industrial Property & Copyright Law 753. 2

278 Jonathan Griffiths it to become available to the world at large. The use of a mark by multiple undertakings would create consumer confusion, and a system permitting such confusion to arise would not provide traders with an incentive to ensure the consistent quality of their goods and services. There is no obviously desirable ‘public domain’ in trading signs. In this jurisdiction, protection for unregistered trading signs is (indirectly) available under the tort of passing off. The justification for the existence of this form of protection is the same as that described above in relation to registered trade marks. It is therefore no surprise that the property interest protected in passing off is also potentially indefinite in duration. This interest comes into being when a trader establishes ‘goodwill’ in a particular trading sign and lasts for as long as that ‘goodwill’ continues to subsist. In the absence of a statutory framework, the points at which goodwill commences and comes to an end fall to be determined entirely in accordance with common law principles. It is in this context that that the decision of the Privy Council in Star Industrial Co Ltd v Yap Kwee Kor4 in 1975 is significant. In that case, on appeal from the Court of Appeal of Singapore, the Privy Council considered the circumstances in which the property right protected in the tort of passing off would come to an end through abandonment. Star Industrial is still cited as the leading authority on that point today. In that respect, it has been more durable than the plastic toothbrushes with which the case was concerned. Furthermore, in an area of law that is often characterised as ‘protean’5 in form and development, Star Industrial’s approach to abandonment remains striking for its apparent clarity and strictness. For that reason alone, it might be regarded as a landmark in this area of property law—an unyielding granite outcrop in a landscape that is generally made up of much more malleable material. In this chapter, I outline the key features of the claim in passing off. I then move on to explain the decision in Star Industrial and to demonstrate its continuing significance. I argue that, while apparently uncontroversial, the Opinion of the Privy Council fits rather uncomfortably within the framework of protection generally accorded to unregistered marks. While the fundamental principles of the law of passing off are generally aligned closely with the reactions of real marketplace consumers, Star Industrial establishes a rule that seems inconsistent with this approach. As such, its status as a landmark may be more problematic than has hitherto been suggested. 4 Star Industrial Company Limited v Yap Kwee Kor (trading as New Star Industrial Company) [1976] FSR 256 (PC). 5 For cogent warnings against the dangers of this protean quality, see the work of Hazel Carty; most recently, see H Carty, ‘Passing Off: Frameworks of Liability Debated’ [2012] Intellectual Property Quarterly 106. See also Mummery LJ in Starbucks (HK) Ltd v British Sky Broadcasting Group plc [2013] EWCA Civ 1465, [103]: ‘On the whole it is more in the interests of consistency, when dealing with claims to exclusivity in the intangible, to stay anchored to reasonably clear, firm and established rules rather than to drift off into an open sea of uncertainty and speculation’.

Star Industrial Co Ltd v Yap Kwee Kor 279 II. PASSING OFF AND THE END OF GOODWILL

The origins of the tort of passing off lie in deceit and misrepresentation.6 Its rationale is outlined in the often-cited statement of Lord Langdale MR in Perry v Truefitt: A man is not to sell his goods under the pretence that they are the goods of another man; he cannot be permitted to practise such a deception, nor to use the means which contribute to that end. He cannot therefore be allowed to use names, marks, letters or other indicia, by which he may induce purchasers to believe, that the goods which he is selling are the manufacture of another person.7

The current parameters of the tort were established in a series of important decisions of the House of Lords in the twentieth century—AG Spalding & Bros v AW Gamage Ltd,8 Erven Warnink BV v Townend (J) & Sons9 and Reckitt & Colman Products v Borden.10 AG Spalding & Bros v AW Gamage Ltd was particularly significant in its identification of ‘goodwill’ as the property interest protected by the tort11 and Lord Oliver’s speech in Reckitt & Colman provides the most widely employed formulation of the conditions for liability (the so-called ‘classic trinity’): First, [the claimant in a passing off action] must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying ‘get-up’ (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as

6 See L Bently and B Sherman, Intellectual Property Law, 4th edn (Oxford, OUP, 2014) 811–13, 826–7. 7 Perry v Truefitt (1842) 6 Beav 66, 49 ER 749 at 752. 8 AG Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273. 9 Erven Warnink BV v J Townend & Sons [1980] RPC 31. 10 Reckitt & Colman Products v Borden [1990] 1 WLR 491. 11 In the words of Lord Parker: ‘There appears to be considerable diversity of opinion as to the nature of the right, the invasion of which is the subject of what are known as passingoff actions. The more general opinion appears to be that the right is a right of property. This view naturally demands an answer to the question—property in what? Some authorities say, property in the mark, name or get up improperly used by the defendant. Others say, property in the business or goodwill likely to be injured by the mis-representation. Lord Herschell in Reddaway v Banham LR (1896) AC 199; (1896) 13 RPC 218 expressly dissents from the former view; and if the right invaded is a right of property at all, there are, I think, strong reasons for preferring the latter view (Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273 at 284)’. Courts frequently refer to the definition of goodwill provided by Lord Macnaghtan in IRC v Muller & Co’s Margarine [1901] AC 217 at 224.

280 Jonathan Griffiths they are identified with a particular source which is in fact the plaintiff … Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.12

Courts and commentators now invariably approach claims through this tri-partite framework.13 Perhaps the most notable feature of the law of passing off is its reliance upon the perceptions of real consumers as determinants of the scope of protection. This is apparent in all three elements of the ‘classic trinity’. Thus, for example, goodwill in a mark arises only when customers come to view that mark as designating the goods or services of a particular undertaking.14 Similarly, the existence of a misrepresentation is assessed entirely by reference to actual customer responses to a defendant’s representation.15 Where customers are deceived, a defendant will not escape liability by arguing that they ought not to have been so deceived.16 The same is true of the third element of the ‘classic trinity’. Relevant damage is that which, through its impact on consumers’ perceptions of the claimant’s mark, injures the mark’s capacity to attract business.17 In accordance with these principles, goodwill in a sign will cease to exist where consumers no longer recognise it as designating the goods or services of a particular undertaking.18 This might occur, for example, where a sign has become a generic term for a product or service or where a trader has brought a business to an end and, as a result, consumers no longer recognise the sign as designating the goods or services of that business.19 In the words of Lord Parker in AG Spalding & Bros v AW Gamage Ltd: Even in the case of what are sometimes referred to as Common Law Trade Marks the property, if any, of the so-called owner is in its nature transitory, and only exists so long as the mark is distinctive of his goods in the eyes of the public or a class of the public.20 12

[1990] 1 WLR 491, 499. Even though there are alternative formulations of the requirements for liability in Erven Warnink BV v J Townsend & Sons (Hull) Ltd [1980] RPC 31 (HL). 14 See, for example, Stannard v Reay [1967] PRC 589; BBC v Talbot Motor Co [1981] FSR 228. 15 Erven Warnink BV v J Townsend & Sons (Hull) Ltd [1980] RPC 31 [HL]. 16 See Reckitt & Colman Products v Borden [1990] 1 WLR 491. 17 See, for example, Phones 4U Ltd v Phone4U.co.uk Internet Ltd [2006] EWCA Civ 244. 18 See, for example, Norman Kark Publications Ltd v Odhams Press [1962] 1 WLR 380; Barnsley Brewery Co v RBNB [1997] FSR 462; Knight v Beyond Properties [2007] 1 WLR 625. More recently, see also, Powell v Turner [2013] EWHC 3242 (IPEC, Mr Recorder Douglas Campbell) (development and demise of goodwill in a variety of line-ups of the rock band, Wishbone Ash) and Burdon v Steel, Trade Marks Registry (Geoffrey Hobbs QC, Appointed Person), 9 September 2013 (similar, The Animals). 19 Ibid. 20 (1915) 32 RPC 273. 13

Star Industrial Co Ltd v Yap Kwee Kor 281 Because the ‘eyes of the public’ are all-important, goodwill will not necessarily come to an end immediately at the point that a business ceases to trade. While a mark continues to serve as a designation of a known undertaking to consumers, goodwill in that mark (sometimes called ‘residual goodwill’) will survive. As a result, a trader may be able to prevent others from using a sign even when its trade has ceased. In a number of recent cases, courts have had to decide whether, as a matter of fact, goodwill continues to exist in circumstances in which an undertaking has ceased to trade (or, at least, has ceased to trade under a particular mark).21 In these cases, a distinction has been drawn between a relatively slight continuing reputation, in which goodwill may still be regarded as subsisting, and a ‘trivial’ one, in which it will not.22 The investigation conducted by courts in such cases is generally a highly fact-specific exercise. However, the right to sue in passing off may also come to an end for reasons that are unrelated to the demise of a mark’s distinctive power in the eyes of the consuming public. Goodwill can be dealt with in the same way as other forms of property. It can, for example, be assigned. Once the goodwill associated with a particular sign is assigned, the assignor is no longer entitled to assert its rights in relation to that sign. This is the case even where the mark or sign is based upon the personal name or other characteristics of the assignor. Indeed, the assignee of goodwill in a mark or sign will normally be able to bring proceedings to prevent continued use of the mark or sign by the assignor.23 On the face of it, this aspect of the law of passing off might appear inconsistent with its underpinning concern with consumer response.24 After assignment, consumers may continue to believe that a mark designates the business of the assignee rather than the assignor. However, this aspect of the law can be rationalised if we understand that it is a consumer’s response to a particular sign as a designation of a consistent source of goods and services that is important rather than his or her knowledge of the particular undertaking lying behind that source. Nevertheless, there is another way in which goodwill can come to an end which cannot so readily be reconciled with the consumer-focused rationales of the tort. The proprietor of goodwill in a distinctive sign may unilaterally abandon that goodwill. Where abandonment occurs, the proprietor’s property right will come to an end regardless of continuing consumer perceptions of the sign. It is in relation to this issue that Star Industrial serves as an important landmark. 21

See, for example, the cases listed above n 18. See, for example, Knight v Beyond Properties [2007] 1 WLR 625. 23 See, for example, IN Newman Ltd v Adlem [2006] FSR 16 (CA). 24 For a more general discussion of the potential conflict between the protection of goodwill and the protection of accurate sources of customer information (in the context of trade mark and unfair competition laws in the United States), see RG Bone, ‘Hunting Goodwill: a History of the Concept of Goodwill in Trademark Law’ (2006) 86 Boston University Law Review 547. 22

282 Jonathan Griffiths III. STAR INDUSTRIAL V YAP KWEE KOR

The plaintiff in Star Industrial (appellant in the Privy Council) was a company (‘Star Industrial’) incorporated in Hong Kong. It manufactured plastic toothbrushes and packed them for sale in boxes with a get-up of which prominent features were the words ‘ACE BRAND’ and the device of a capital A enclosed in a red circle (known as ‘the Red A’). Between 1953 and 1965, substantial numbers of these toothbrushes were exported from Hong Kong into Singapore. Many were immediately re-exported to Malaysia and Indonesia. However, some were sold on the local market. Star Industrial had no registered marks relating to the get-up of the toothbrushes in Singapore. In 1965, the Government of Singapore imposed an import duty on toothbrushes and, as a result, Star Industrial’s import of toothbrushes into that country ceased to be commercially viable. Accordingly, it brought the trade to an end. In 1968, it entered into an agreement to set up a new company incorporated in Singapore (‘the Singapore company’). The main object of the Singapore company was to manufacture plastic products in Singapore. Star Industrial held half the Singapore company’s capital. The other half was held by third parties. Star Industrial was to sell or let moulds to the Singapore company and to provide it with technical assistance. Under the agreement, the Singapore company was ‘allowed to use the Red “A” trade mark in Singapore and other markets free of rent or royalties for the period of ten years with priority for renewal’. In return for technical assistance and services in connection with the moulds, Star Industrial was to be paid a royalty calculated on sales. The agreement conferred an exclusive right on the Singapore company to use the Red A mark and get-up. Thus, following the coming into force of the agreement, Star Industrial was contractually precluded from using the mark in Singapore. Also in 1968, the defendant (respondent in the Privy Council), which had been manufacturing toothbrushes in Singapore since 1966, changed its trading name to ‘New Star Industrial Company’ and adopted a get-up for its products which was indistinguishable from that previously employed by Star Industrial, save that the letter ‘C’ in ‘ACE’ was replaced by the a ‘G’. In 1971, Star Industrial brought proceedings, claiming that the defendant had passed off its toothbrushes for those of Star Industrial. The High Court of Singapore found for the defendant and Star Industrial’s appeal to the Court of Appeal of Singapore was turned down. It appealed to the Judicial Committee of the Privy Council. Lord Diplock gave the advice of the Privy Council, explaining that findings of fact made by the trial judge, and upheld by the Court of Appeal, doomed Star Industrial’s claim. At first instance, it had been found that Star Industrial was not carrying on business in Singapore at the time proceedings were issued and had not manufactured toothbrushes for export to Singapore for the previous five years. It had also been found that Star

Star Industrial Co Ltd v Yap Kwee Kor 283 Industrial had no intention itself of resuming its trade in this respect. In a passage that has often been cited subsequently, Lord Diplock noted that passing off protected goodwill, rather than trading signs per se, and that goodwill was a territorial concept: Goodwill, as the subject of proprietary rights, is incapable of subsisting by itself. It has no independent existence apart from the business to which it is attached. It is local in character and divisible; if the business is carried on in several countries a separate goodwill attaches to it in each. So when the business is abandoned in one country in which it has acquired a goodwill the goodwill in that country perishes with it although the business may continue to be carried on in other countries.25

Star Industrial had abandoned its business in Singapore. Under the agreement, exclusive rights to use the mark and get-up were conferred upon the Singapore company. This agreement was to be interpreted as transferring any residual goodwill in Singapore to that company.26 In entering into the agreement, Star Industrial was to be taken to have abandoned that part of its former business that consisted in manufacturing toothbrushes for export to and sale in Singapore. As such, it had ceased to have any proprietary right that was capable of protection under the law of passing off in the courts of Singapore. Accordingly, the appeal to the Privy Council could not succeed.27 Lord Diplock’s advice suggests that there are (at least) two conditions that must be satisfied if goodwill is to be regarded as having been abandoned: There are … concurrent findings of fact by the trial judge and the Court of Appeal: that, at the time the writ was issued, [Star Industrial] was not itself carrying on any business in Singapore; that it had not, since the imposition of the import duty more than five years before, manufactured any toothbrushes for export to Singapore; and that it had no intention of itself resuming this part of its former trade.28

25 Star Industrial Company Limited v Yap Kwee Kor (trading as New Star Industrial Company) [1976] FSR 256 (PC) 269. 26 ‘At common law this right of user of the mark or get-up in Singapore was incapable of being assigned except with the goodwill of that part of the business of the Hong Kong Company in connection with which it had previously been used. So, if despite the temporary cesser of the Hong Kong Company’s business in Singapore after the import duty on toothbrushes had been imposed in 1965, it still retained—as well it might (CF Mouson & Co v Boehm (1884) 26 Ch D 398)—a residue of goodwill capable of being revived in 1968, any right of property in that goodwill would have passed to the Singapore Company under the agreement. The Singapore Company is not a party to these proceedings; and their Lordships express no view as to what rights, if any, it would have been entitled to enforce against the respondent if it had been the plaintiff in a passing-off action brought against him’ (Lord Diplock [1976] FSR 256 (PC) at 270). 27 In the Privy Council, Star Industrial argued further that the common law ought to recognise a claim to enforce an unregistered mark in these circumstances (ie in the absence of business goodwill). Lord Diplock did not accept this argument, concluding that such a development would be inconsistent with the decision of the House of Lords in AG Spalding & Bros v AW Gamage Ltd (n 8 above) and the registered trade mark legislation of Singapore (Ibid, 270–72). 28 Ibid, 269.

284 Jonathan Griffiths Thus, for goodwill to have been abandoned, its former proprietor must have ceased to carry on business in the jurisdiction (cessation of business) and must have no intention of resuming that business (absence of intention to resume). The significance of Lord Diplock’s reference to the finding that the Singapore business had not been carried on for more than five years is uncertain. It seems unlikely that this particular period is designated as a further precondition for abandonment. It seems more likely that it serves solely to provide evidence of cessation of business and also, perhaps, of absence of intention to resume. It is interesting to note that no authority is provided in support of this approach to abandonment.29 It is possible that he considered its application to be self-evident, given the common law’s traditional approach to the abandonment of property. A link with the doctrine of abandonment in property more generally had been made in earlier cases concerning the protection of unregistered marks. Thus, for example, in Norman Kark Publications Ltd v Odhams Press Ltd,30 Wilberforce J had considered the nineteenth-century judgment of Chitty J in JG Mouson & Co v Boehm,31 stating that: That was … a trade mark, not a passing off case. The question was whether the defendant … had abandoned his mark so as to entitle the plaintiff to exclusive use of his registered similar mark. Chitty J held that this was a question of fact, but he added that an intention to abandon must be shown, taking for comparison the case of an easement and the case of a man who abandons goods. He held on the facts that there had been no abandonment, persons in the market were trying to sell the goods and the defendant was endeavouring to effect sales by sending over price lists.32

In this passage, an explicit link is made between the law relating to unregistered marks and that relating to easements. In this context, it seems likely that Lord Diplock’s statement of the conditions necessary for the abandonment of goodwill in Star Industrial are implicitly related to the principles applicable in the common law of property more generally.

IV. ABANDONMENT OF GOODWILL FOLLOWING STAR INDUSTRIAL

Courts and commentators continue to cite Star Industrial as a leading authority (and often as the leading authority) for a number of propositions relating to the concept of goodwill in the tort of passing off.

29 Although he does refer to a passage in Spalding & Bros v AW Gamage Ltd in which Lord Parker raises the potential application of abandonment. 30 [1962] 1 WLR 380. 31 JG Mouson & Co v Boehm (1884) 26 Ch D 398. 32 [1962] 1 WLR 380, 387.

Star Industrial Co Ltd v Yap Kwee Kor 285 First, the territorial nature of the cause of action is supported by reference to the case.33 Secondly, it supports the principle that passing off protects property in trading goodwill rather than in a distinctive sign, get-up or other index in its own right34 and that, accordingly, if such indicia are assigned without business goodwill, a claim in passing off cannot be maintained.35 Most importantly, for our current purposes, the case also continues to be regarded as the leading authority on the requirements for the abandonment of goodwill. For example, in his leading treatise on passing off, Wadlow cites Star Industrial for the proposition that ‘if a business is deliberately abandoned in circumstances which are inconsistent with its ever being recommenced then the goodwill in it is destroyed unless contemporaneously assigned to a new owner’.36 This passage reflects the binary structure of the test laid down in Star Industrial (cessation of business plus absence of an intention to resume business). However, Wadlow has further developed the test. First, he states that the intention to abandon goodwill should be established objectively (‘circumstances which are inconsistent’). Secondly, he suggests that abandonment will only occur where the factual circumstances are inconsistent with the business ever being resumed again. Beyond Star Industrial, it is also argued that, once abandoned, goodwill cannot be revived.37 In recent years, Wadlow’s text has been influential in the development of the law of passing off.38 It is therefore not surprising that courts have approached the issue of abandonment of goodwill through the reformulation described above. Thus, for example, in Ultraframe (UK) Limited v Fielding, Lewison J approved Wadlow’s statement of the relevant principles, emphasising that the existence of an intention to abandon was not a pre-requisite for a finding of abandonment: It is clear that, as a matter of law, goodwill can be abandoned. A common case in which abandonment is held to have taken place is where a business is discontinued, with no prospect of restarting, and its assets are broken up and sold … [Counsel for the defendants] submitted that goodwill cannot be abandoned unless

33 See, for example, C Wadlow, The Law of Passing Off: Unfair Competition by Misrepresentation, 4th edn (London, Sweet & Maxwell, 2011). 34 Even though, on this point, the Privy Council explicitly followed the House of Lords in Spalding v Gamage (n 8 above). 35 See, for example, L Bently and B Sherman, Intellectual Property Law, 4th edn (Oxford, OUP, 2014) 838; W Cornish, D Llewelyn and T Aplin, Intellectual Property: Patents, Copyright, Trade Marks & Allied Rights, 8th edn(London, Sweet & Maxwell, 2013). 36 Wadlow (n 33 above) [3-220]. 37 By reference to Williams v Canaries Seaschool [2010] RPC 32. In Commissioners of Inland Revenue v Muller & Co’s Margarine, Lord Macnaghten stated that goodwill ‘cannot subsist by itself. It must be attached to a business. Destroy the business and the goodwill perishes with it’ [1901] AC 217, 224. 38 See, for example, Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd [2010] EWCA Civ 110 [117]–[124].

286 Jonathan Griffiths the person alleged to have abandoned it knew that he had it and intended to abandon it. However, the requirement of an intention to abandon was rejected in Norman Kark Publications Ltd v Odhams Press Ltd … Mr Wadlow says in his book The Law of Passing Off, 3rd edn, 2004 … : ‘The better view is that if a business is deliberately abandoned in circumstances which are inconsistent with its ever being recommenced then the goodwill in it is destroyed unless contemporaneously assigned to a new owner.’ … I agree. In my judgment when QCL went into liquidation, without any attempt being made to sell any of its assets (still less sell the business and goodwill as a going concern), its goodwill was destroyed.39

Since Star Industrial, there are very few reported cases in which goodwill has been held to have been abandoned.40 By contrast, there have been a number of judgments in which courts have decided that, as a result of the cessation of active trading, residual goodwill has either disappeared or has sunk to such a trivial level as to become irrelevant.41 There have also been a number of cases in which commercial activity on a very small scale has been held to provide sufficient evidence to refute an argument that a former trader has no intention of trading in future.42 A notable example is provided by Maslyukov v Diageo Distilling Ltd,43 in which Arnold J considered whether the goodwill in certain distillery names had been abandoned and therefore whether, as a result, a third party was entitled to register those names as trade marks.44 The distilleries in question no longer produced whisky. Indeed, two had been demolished. Nevertheless, it was held

39 Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638(Ch), [1877]–[1878]. See also Jules Rimet Cup Ltd v The Football Association [2007] EWHC 2376 (Ch); Mary Wilson Enterprises Inc’s Trade Mark Application [2003] EMLR 14; Maslyukov v Diageo Distilling Ltd [2010] EWHC 443 (Ch). 40 See Ultraframe (UK) Ltd, ibid; Harrods Ltd v Harrodian School [1996] RPC 697 (CA). See also Burdon v Steel, Trade Marks Registry (Geoffrey Hobbs QC, Appointed Person), 9 September 2013. 41 See, for example, Knight v Beyond Properties [2007] 1 WLR 625. 42 See, for example, Jules Rimet Cup Ltd v The Football Association [2007] EWHC 2376 (Ch). In that case, the claimant sought to register the words ‘WORLD CUP WILLIE’ and a lion device accompanied by those words as trademarks. The defendant, the Football Association, relied on Trade Marks Act, s 5(4)(a) [see n 44 below] in opposing registration. The Football Association claimed residual goodwill in ‘WORLD CUP WILLIE’ and in the drawings of the lion mascot for the 1966 World Cup finals. Roger Wyand QC held that, despite the passage of 40 years since 1966, the claimant’s interest in the symbols, coupled with periodic references to the mascot in the press and occasional approaches to the FA from potential licensees, was sufficient to establish residual goodwill [51]–[68]. 43 Maslyukov v Diageo Distilling Ltd [2010] ETMR 37. 44 Under Trade Marks Act 1994, s 5(4)(a), a trade mark is not to be registered ‘if, or to the extent that, its use in the United Kingdom is liable to be prevented … by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade’. As a result, in considering applications for trade mark registration, the Registrar will sometimes have to consider the application of the tort of passing off.

Star Industrial Co Ltd v Yap Kwee Kor 287 that the hearing officer in the Trade Mark Registry had wrongly decided that the goodwill attached to the distillery names had been abandoned: In the present case I do not consider that the relevant business had been abandoned so as to destroy the goodwill. It is true that the distilleries were respectively turned into a museum and destroyed, but Diageo did not liquidate the companies which owned the distilleries, still less was Diageo as a whole liquidated. On the contrary, Diageo has continued to produce whisky, including single malt Scotch whisky, on a substantial scale. The goodwill which Diageo owned in the trade marks DALLAS DHU and PITTYVAICH as at the date when the distilleries ceased production was not destroyed. On the contrary, the goodwill was sustained by further sales of whisky by the independent bottlers.45

Thus, the goodwill attached to distillery names could not be considered to have been abandoned because (i) the companies owning the distilleries still existed, (ii) the claimant (which owned those companies) marketed whisky under different trading names and through different corporate vehicles and (iii) third parties continued to market whisky under the contested signs.46 It can be suggested that this conclusion sits uneasily with the decision on the facts in Star Industrial itself. The plaintiff in that case had, after all, only granted a 10-year exclusive licence to the Singapore company and had retained significant involvement with that company. The Singapore company continued to market toothbrushes in Singapore under the contested signs. Nevertheless, these activities did not preclude a finding of abandonment. There may be a number of reasons to explain Arnold J’s reluctance to uphold the conclusion that the goodwill in the distillery names had been abandoned in Maslyukov. The party seeking to register the distillery names as trade marks had no prior connection with the distilleries. As such, his claims to the court’s sympathy were not compelling. However, there may also be more general reasons why a court might be reluctant to conclude that goodwill has been abandoned for the purpose of a claim in passing off. As noted above, the protection offered to trading signs in the tort generally can be justified both as providing an incentive for successful and conscientious traders and as a means of promoting consumer welfare. Proceedings are instigated by traders, but they also serve to protect customers against market misrepresentation. From this perspective, the doctrine of abandonment, under which the proprietor of a business is taken unilaterally to have brought goodwill in a sign to an end, even where that sign may continue to identify a business to consumers, is difficult to justify. While the approach

45 In any event, the existing goodwill remained an asset of Diageo to exploit as it saw fit. For example, Diageo could if it saw fit build a new distillery at Pittyvaich: Maslyukov v Diageo Distilling Ltd (n 43 above) [81]. 46 See also Jules Rimet Cup Ltd v The Football Association [2007] EWHC 2376 (Ch).

288 Jonathan Griffiths adopted in Star Industrial may promote the autonomy of the proprietor of a business, it does little for general welfare. In the case of most intellectual property rights, there is a strong public interest in favour of abandonment. If a right-holder does not wish to exploit an invention, it is generally beneficial for patented technology to pass into the public domain. Similarly, the abandonment of a copyright interest may result in the unrestricted dissemination of a creative work. Indeed, in the context of the open source distribution of works, it has been argued that copyright law may currently make it too difficult to dedicate a work to the public domain.47 However, these arguments do not apply to trading signs. While abandonment of a trade mark slightly increases the pool of marks available to third party traders, it provides little public benefit. Furthermore, a finding of abandonment may actually serve to harm the public interest in accurate market information. In Star Industrial, for example, the consequence of the finding of abandonment was that the defendant could continue to sell its ‘AGE’ toothbrushes. It is fairly likely that it had chosen to trade under that mark in an attempt to mislead customers into believing that its toothbrushes were those previously sold by Star Industrial. The social advantages of allowing this activity to flourish unfettered are far from clear. Similarly, if the newcomer in Maslyukov had succeeded in establishing that the distillery names had been abandoned, he would have been free to engage in commercial activity risking market confusion. These considerations apply to registered, as well as to unregistered, marks. However, some of the adverse consequences of the abandonment of a registered trading sign are mitigated by the mechanics of the registration system. Under the Trade Marks Act 1994, the holder of a registered mark can formally surrender that mark.48 On receipt of the notice of surrender, the Registrar must note the surrender on the public register of marks. Furthermore, once surrendered, a mark may not become available for immediate registration by third parties. Registration is not permitted if a mark is not distinctive of an undertaking’s goods or services49 or if it would deceive the public.50 If a third party were to immediately seek to register a surrendered mark, both grounds for refusal of registration would be likely to apply.

47 See R Burrell and E Hudson, ‘Property Concepts in European Copyright Law: the Case of Abandonment’ in HR Howe and J Griffiths, Concepts of Property in Intellectual Property Law (Cambridge, CUP, 2013). 48 Trade Marks Act 1994, s 45; Trade Marks Rules 2008, r 33. 49 Trade Marks Act 1994, s 3(1)(b). 50 Trade Marks Act 1994, s 3(3(b).

Star Industrial Co Ltd v Yap Kwee Kor 289 V. CONCLUSION—TIME TO ABANDON ABANDONMENT IN PASSING OFF?

This discussion suggests that Star Industrial may be more problematic than has hitherto been suggested. Interestingly, while the public policy concerns that apply to the abandonment of real or personal property more generally do not apply to most forms of intellectual property, similar concerns may indeed apply in the case of rights that are designed to protect trading reputation, such as goodwill. While abandonment of goodwill is unlikely to result in the forms of public unrest that the law fears would arise on the abandonment of land or personal property, other forms of market disorder may readily arise. How, then, ought we to deal with this difficulty. One possibility would be to decide that the doctrine of abandonment should not apply at all in passing off and that goodwill should subsist as long as consumers, or a sufficient number of consumers, recognise a trading sign as designating a particular undertaking. If this solution to the problem is considered to pay insufficient respect to traders’ interest in being able to deal with their property as they see fit, a less radical approach would be for the law of passing off to adopt the general policy presumption against abandonment that applies in property law more generally.51 If such a presumption were to be applied in a case with similar facts to Star Industrial, in which a claimant seeks to rely on goodwill despite cessation of trade, it can be suggested that a court might be reluctant to hold that the goodwill has been abandoned. It may well be that, in recent cases such as Maslyukov,52 courts have implicitly been acting in accordance with such a presumption. It might be beneficial for that presumption to be recognised explicitly.

51 This proposal finds support in the recent decision of Geoffrey Hobbs QC, sitting as an Appointed Person in Burdon v Steel, Trade Marks Registry, 9 September 2013. In that case, he held that goodwill continued to subsist in the name of the rock group, The Animals, and, as a result, that one of the original band members could not, alone, register ‘THE ANIMALS’ as a trade mark. In coming to that decision, he concluded that goodwill in the name had not been abandoned. In doing so, he relied on judgments in other areas of intellectual property law that supported a presumption against a finding of abandonment. Most notably, he referred to British Leyland Motor Corporation v Armstrong Patents Co Ltd [1982] FSR 481, in which Foster J stated that: ‘It is extremely difficult in my experience to divest oneself of a legal right’ (at 492). See Burdon v Steel at [9]. For discussion of the presumption against abandonment in property law more generally, see E Waring, Chapter 11 of this volume, above. 52 See also Burdon v Steel, ibid, [9].

Index Abandonment see also Benn v Hardinge (1993) abandoning possession, 269–70 acquisition of property, 271 acts of relinquishment, 254 chattels, 271 civil law, 270 common law, 257, 265, 268–9, 284 conception of ownership, 254 copyright, 288 declaration of abandonment (Germany), 268 distributive effects, 256 divesting abandonment, 253–6 easements, 254, 256–8, 261–3, 267, 273, 275 see also Easements estoppel, 266, 268 factual abandonment, 254, 261–3, 268 French law, 273 goodwill, 255–6 see also Goodwill implied release, 260–1 importance, 274–5 incidence of ownership, 274 intellectual property rights (IPRs) cessation of business, 282–5 common law, 284 deliberateness, 286 goodwill, 255–6 intention to abandon, 283–6 objective test, 285 passing off actions, 254–6, 289 precondition, 284 presumption against abandonment, 289 property right, 278 public interest considerations, 256, 288 trade marks, 288 unilateral action, 281, 287 intention to abandon, 254, 262–6, 269, 272–3, 283–6 Land Registry application, 268 law reform, 267–8, 275 legal function, 275 legal uncertainty, 253–4 non-act, 269 non-user, 257–65, 274 nuisance claims, 266 overt act, 269 partial abandonment, 267

passing-off cases, 254–6 see also Passing off planning permissions, 268 prescriptive easements, 262, 272 presumption, 261, 264, 267 property rights, 268–9, 271, 274–5, 278 public interest considerations, 256, 288 public policy concerns, 289 res derelictae, 270–1 res nullius, 270 restrictive approach, 265–6, 273, 275 right holder’s autonomy, 256, 274–5 right of way, 264, 266–7 right to abandon, 275 Roman law, 254, 257, 262, 270–1 standards of proof, 254–5, 263–5 subsequent takers, 253 theft-related cases, 255 timing of abandonment, 271–3 trade marks, 288 unilateral action, 253, 255, 281, 287 unwanted property, 275 Account recovery of money, 6 Acquisition of property rights see also Property rights administrative procedures, 228, 231, 234, 240, 243, 247, 251–2 acquisition of title consensual original acquisition, 163–4 creation of new title, 128 derivative title, 161, 163–6, 168 non-consensual original acquisition, 162–3 original title, 161–2 successive possessors, 128 allocation of property right, 127 appropriation, 233 compensation payments, 227–38, 247, 251 compulsory purchase, 227, 230 consensual original acquisition absence of derivative title, 163 alienable to third parties, 164 consensual original title, 163–4, 166 enforceable rights, 164 exclusive possession, 163, 165 fact of possession, 163–5 relative title, 163 consent to transfer, 128–9

292 Index family home, 128–9 see also Family home non-consensual original acquisition adverse possession, 162, 164 competing non-consensual titles, 162 extinguishment of title, 162–3 registered/unregistered estates, 162–3 relative title, 162 squatters. 162–3 possession principle, 127–8, 145–8 see also Possession principle property belonging to another, 127 regulatory takings, 227–8, 230–4, 251–2 relative title, 128 rules of acquisition, 127–9 state action, 227 Administrative decision-making see Deference to administrative decision-making Anton Piller Orders breach of confidence, 93 confidential information, 92 effects, 92 preservation of evidence, 92 purpose, 91–92, 96 section 72 (Senior Courts Act (1981)), 89–93, 96, 104 see also Section 72 (Senior Courts Act (1981)) Appeals of theft and robbery fungible commodities, 17–22 jurisdiction, 15–16 ownership of goods, 15, 17 recovery of stolen goods, 14 standard of proof, 16 theft taken with mainour, 14–17 trial by battle, 16–17 Armory v Delamirie (1722) acquisition of property rights creation of new title, 128 honest finder, 133 lawful accountability, 143 lawful finder, 135–6 lawful possessor, 135–6, 138, 143 original acquisition, 132 nature of possession, 134 possession rule, 127–8, 132, 138–43 possessory acquisition, 132–5, 143, 211 prior possession with superior claim, 134 property belonging to another, 127 proprietary acquisition, 132, 135, 144, 148 relative title, 128, 132–3, 143, 145, 147–9 special property principle, 133–8 assumption of duty account, 137–8, 147

conversion damages award, 131 development, 136, 149 maintaining the tort, 132 recovery of full value, 132, 141, 147 subsequent interference, 132 trespass, 149 evidential doubts, 132 facts of case, 133–4 obligation-based account, 149 omnia praesumuntur contra spoliatorem, 132 possession principle, 138–49 see also Possession principle pro bono representation, 131 significance of case, 131–2, 143, 150 special property accountability to person better entitled, 138–9, 142, 144–5, 147 assumption of duty, 137–8, 147 innkeeper’s duty, 138, 144 lawful possession, 137, 144–5 possession principle, 139, 141–2, 144, 147 trover, 136–7, 143, 145 see also Trover vicarious liability, 132 Bailment possession principle, 139 see also Possession principle property rights, 25 –26, 30, 41, 43, 45, 47 sperm samples, 30, 34, 38 trover, 136–7 Banks v Whetstone (1596) coins bullion, 9–10, 23 clipping, 7, 11 different denominations, 10 homogeneity, 9–11, 13, 23 identification, 7, 15, 17, 23 indistinguishability, 22 individual variation, 10–11 legally determined value, 4, 9–13 metallic fineness, 9–11 mint indenture, 9–11 payment of debts, 10–12 physical form, 9 sealing, 8, 13 settlement of monetary balances, 9–10 status of money, 2 ‘sterling’ (penny coin), 12 debt accounting liability, 6 debet et detinue, 5 debt in the detinet, 5, 12

Index 293 discharge of debts, 3–5, 10–13 fungible chattels, 5 identification of property, 5 money actions for account, 6 appeal of robbery, 14 bank notes, 22, 24 bilateral transactions, 4, 13 common law titles, 3–4, 23 contained in bag or chest, 4–8, 13–17, 19, 20 detinue actions, 4–6, 13–14, 18 discharge of debts, 3–5, 13 enforceable title, 14 equal capacity, 3 fungible commodities, 17–24 good faith purchase, 22, 24 homogeneity, 23 identification, 7, 15, 17, 23 incorporeal property, 24 indistinguishability, 3–4, 6–7, 22 legal valuation, 23 mainour (stolen goods), 14–17 means of payment, 4, 23–24 mixing of monies, 19–20, 23 monetary fungibility, 4–5 money as property, 2–3, 14–22, 24 ‘not to be known from another’, 3–4, 8, 11, 13, 23–24 owner’s title, 4, 14–15, 17, 19, 21–22 property right, 13–15, 17–20 recovery of money, 4–6, 13–14, 18 special liquidity, 3–4, 22, 24 traceability, 4 unbagged money, 14–17, 19–20 nemo plus iuris, 4, 22 reasoning, 4–8 significance of case, 4 tangible goods, 2 Bazeley v Wesley Monash IVF (Queensland) bailment, 34 sperm samples destruction, 33–34 donor’s wishes, 33–34 ownership, 34 property rights, 34 storage, 33–34 Belfast Corporation v OD Cars [1959] acquisition of property administrative procedures, 228, 231, 234, 240, 243, 247, 251–2 compensation payments, 227–38, 247, 251 compulsory purchase, 227, 230 outright appropriation, 233 state action, 227 taking of property, 230–3

deference to administrative decision-making administrative procedures, 228, 231, 234, 240, 251–2 balancing of rights, 240 competing interests, 241 expropriation of property, 240 human rights protection, 240–1 judicial deference, 203 land-use regulation, 234, 240, 243 margin of error, 241 nuisance actions, 241–2 participation rights, 240, 242 planning process, 240–2 protection of property rights, 242 reciprocity of advantage, 250–1 human rights peaceful enjoyment of possessions, 240–1 respect for private and family life, 240–1 planning process adverse impacts, 247, 249 appeals, 246 collective interests, 244 community empowerment, 246–7 competing interests, 243 complexity, 243, 247, 250 development consent, 229, 244–6 development control, 243 development plans, 243 judicial deference, 240–2 judicial review, 234, 243 national planning policy, 246 partial participation, 246 participatory framework, 242–7, 250 planning applications, 244, 246 planning controls, 202–3, 227–8 , 232–3, 235, 242, 244, 248, 251 planning decisions, 203, 244, 247 planning legislation, 243 planning permission, 229, 235, 239, 244–6 policy goals, 243–4 prohibition on development, 230, 234 protection of private rights, 243–4 public interest considerations, 243–4 reciprocity of advantage, 248 strategic planning policies, 246 property rights acquisition of property rights, 227–31 conceptual severance, 234–40 discrete property rights, 234–5 immunity from summary cancellation, 203 incidents of ownership, 234–5, 251 interference, 230, 234 intrusion on private land, 235–7 judicial review, 251 liability rule protection, 229, 235, 238–9, 247 liberty of use, 227, 251

294 Index nuisance actions, 238, 241–2 planning law, 242–3 prioritising resource values, 203 protection, 203, 242, 250, 252 public interest considerations, 228, 235, 237–9, 243–4, 251 reciprocity of advantage, 247–52 regulatory controls, 228, 234, 240, 243, 251 restrictions, 230–2, 234–5, 240, 251–2 restrictive covenants, 235, 237 right to exclude, 236 state interference, 202 use of property, 227–8 reciprocity of advantage adverse planning decisions, 249 beneficial public actions, 248 deference to administrative decision-making, 250–1 fairness, 250, 252 interpretation, 247–8 judicial review, 251–2 limitations on other owners’ rights, 247–8 long-term view, 248–9 obviating compensation payments, 247–8, 250 parallel and reciprocal benefits, 248 participation rights, 249–51 planning control, 248 private property rights, 247 property rights, 247, 250 public interest considerations, 248–9, 251 social responsibility, 249 uncompensated regulation, 248, 250 welfare-enhancement, 248 regulatory takings, 227–8, 230–4, 251–2 Benn v Hardinge (1993) abandonment abandoning possession, 269–70 acquisition of property, 271 chattels, 271 civil law, 270 common law, 257, 265, 268–9 declaration of abandonment (Germany), 268 easements, 254, 256–8, 261–3, 267, 273, 275 estoppel, 266, 268 factual abandonment, 261–3, 268 French law, 273 implied release, 260–1 importance, 274–5 incidence of ownership, 274 individual’s autonomy, 274–5 intention to abandon, 262–6, 269, 272–3 Land Registry application, 268

law reform, 267–8, 275 legal function, 275 non-act, 269 non-user, 257–65, 274 nuisance claims, 266 overt act, 269 partial abandonment, 267 planning permissions, 268 prescriptive easements, 262, 272 presumption, 261, 264, 267 property rights, 268–9, 271, 274–5 res derelictae, 270–1 res nullius, 270 restrictive approach, 265–6, 273, 275 right of way, 264, 266–7 right to abandon, 275 Roman law, 257, 262, 270–1 standards of proof, 263–5 timing of abandonment, 271–3 unwanted property, 275 Court of Appeal Decision, 260–4 easements abandonment, 254, 256–8, 261–3, 267, 273, 275 enclosure award, 260 extinguishment, 260 implied grant, 260, 265–6 neighbour disputes, 257–9 non-user, 254, 257–61, 265 prescriptive easements, 262, 272 removal from register, 268 right of way, 257, 259 servient owners, 263, 265, 274 facts of case, 257–9 First Instance Decision, 259–60 right of way abandonment, 264, 266–7 bridleway, 260 evidence, 258, 260 non-user, 257–61 potential value, 264 prescription, 260 preservation, 260 significance of case, 257 Body parts see also Yearmouth v North Bristol NHS Trust (2009) property claims, 25–27, 31, 33, 39–40, 47 Breach of confidence Anton Piller Orders, 93 confidential information, 104–5 information is not property, 76, 86–87 intellectual property rights (IPRs), 87 jurisdictional base, 76, 85 non-proprietary interests, 85, 87 phone hacking, 78, 80 privilege against self-incrimination (PSI), 75, 104

Index 295 see also Privilege against self-incrimination (PSI) section 72 (Senior Courts Act (1981)), 91–92, 100, 106 see also Section 72 (Senior Courts Act (1981)) selling of information, 104–5 three-stage test, 99 Bruton v London & Quadrant Housing Trust [2000] academic criticism, 159–60 acquisition of title consensual original acquisition, 163–66 derivative title, 161, 163–6, 168 non-consensual original acquisition, 162–3 original title, 161–2 consensual original acquisition absence of derivative title, 163 alienable to third parties, 164 consensual original title, 163–4, 166 enforceable rights, 164 exclusive possession, 163, 165 fact of possession, 163–5 relative title, 163, 165–6 contractual lease effect, 151–2 owner’s position, 152 personal nature, 151–2, 160, 172 relative proprietary interest, 152 second tenant, 152 tenancy by estoppel, 152–3 facts of case, 154–5 grant of proprietary interest, 159–60, 177 housing associations, 154–5 human rights protection, 157 landlord implied leasehold covenants, 155, 167 lease to second tenant, 152 mere licensee, 151, 155–6, 159–60 nemo dat quod non habet, 151–2, 156, 160–1, 174, 177 property leased to tenant, 151, 155 non-consensual original acquisition adverse possession, 162, 164 competing non-consensual titles, 162 extinguishment of title, 162–3 registered/unregistered land, 162–3, 173 relative title, 162, 173 squatters. 162–3 possession of land adverse possession, 157, 161, 173 fact of possession, 161, 163–5 good title, 128 physical force, 128 possession orders, 157 pre-existing title, 128 proprietary underworld, 128, 152

relative title, 128 repossession, 158 squatters, 128 tolerated occupiers, 128 priority earlier right, 175 later right, 176–7 overreaching, 176 priority rules, 174–6 property rights adverse possession, 161, 173 derivative title, 161, 163–4, 174–5, 177 fact of possession, 161 incompatible leases, 175 original acquisition, 161–2 registered land, 173, 175 squatters, 161–3 proprietary entitlement non-existent, 159–60, 177 proprietary underworld, 128, 152–3, 158–9, 161–2, 166–9, 171–5 see also Proprietary underworld relativity of title adverse possession, 173 consensual original title, 165–6 derivative legal leasehold, 165–6 importance, 177–8 licensee in possession, 172 nemo dat quod non habet, 152, 161, 174 non-consensual original acquisition, 173 paramount rights, 165–6, 177 proprietary underworld, 153, 159, 171–3, 177, 175 relative possessory title, 173 relative proprietary interest, 152, 156, 159, 161–2, 165, 174, 177 squatters, 161–3, 173–4 superior fee simple, 164 tenancy by estoppel, 152–3, 166–71, 173, 175 unlawful lease, 172 short-life properties, 154–6 significance of case, 153 temporary housing, 154–5 tenancy by estoppel, 166–71, 177 see also Tenant by estoppel tenant contractual tenant, 151–2 derivative title, 160–1, 163–6, 168 exclusive possession, 156 lease or licence, 155–6, 160, 164–5 leasehold interest, 151, 155–6 licencing agreements, 155–6, 162 non-proprietary lease, 156, 160–1, 166 original title, 161–2 owner’s paramount title, 152, 177 personal rights, 151, 160, 166, 172

296 Index proprietary lease, 165–6, 167, 171 relative title, 161–2, 167, 171, 177 second tenant, 152 urban regeneration, 154, 156–7 Buncefield Case consequential loss, 44 instrumental reasoning, 44 negligence, 44 ownership of property, 45, 47–48 possession of property, 44–45 vicarious liability, 44 Coins see also Banks v Whetstone (1596) bullion, 9–10, 23 clipping, 7, 11 different denominations, 10 homogeneity, 9–11, 13, 23 identification, 7, 15, 17, 23 indistinguishability, 22 individual variation, 10–11 legally determined value, 4, 9–13 metallic fineness, 9–11 mint indenture, 9–11 payment of debts, 10–12 physical form, 9 sealing, 8, 13 settlement of monetary balances, 9–10 status of money, 2 ‘sterling’ (penny coin), 12 Common intention constructive trust see also Lloyd’s Bank v Rosset [1991] agreement between the parties, 185, 191 beneficial interest, 187–8, 193–4 bright-line rules, 179–80 character of claimant, 197 claimant acting to detriment, 185, 188 contribution to purchase price, 185–6 declaration of trust, 195 direct financial contribution, 195 express agreement, 185, 187, 191–2, 198 joint legal title, 195 law reform, 197 no doctrinal formulation, 199 non-propertied partner, 191–2, 197–8 pre-nuptial agreement, 191 property rights, 179, 181–3, 185 property shared beneficially, 185 self-interest over trust, 195 shared ownership, 188 Common law abandonment, 257, 265, 268–9, 284 see also Abandonment copyright, 66 see also Copyright destruction of property rights, 253, 257 evidence rule, 167 literary property

see Common law property right (literary property) possession principle, 138–9, 149 see also Possession principle treatment of money, 3–4, 14, 17–18, 23 see also Money Common law property right (literary property) see also Literary property absence of right, 63–67 copyright, 66 exclusive right, 63, 65 literary property, 53, 69 perpetual property, 65–68 printing controls, 56–58 protection of literary works, 53, 56–58, 59–65, 69, 72 public detriment, 66 right of creation, 63 Confidential information Anton Piller Orders, 92 breach of confidence, 75–76, 78, 80, 104–5 commercial value, 105 intellectual property, 75–76, 78–82, 98–99, 103, 105 personal information, 103–5 phone hacking, 78–82 proprietary status, 96 section 72 (Senior Courts Act (1981)), 94, 106 see also Section 72 (Senior Courts Act (1981)) selling of information, 104–5 technical or commercial information, 88, 93, 103–4 see also Technical or commercial information Constructive trust see Common intention constructive trust Contractual lease see also Bruton v London & Quadrant Housing Trust [2000] effect, 151–2 owner’s position, 152 personal nature, 151–2, 160, 172 relative proprietary interest, 152 second tenant, 152 tenancy by estoppel, 152–3 Contractual relations breach of contract, 113, 124–5 contractual obligations, 112–14 contractual rights, 49–50 , 111–12 discharge of debts, 112–13 economic torts, 123 unlawful interference, 111 Conversion appropriate response, 113–14, 120–1, 123, 125

Index 297 basis of liability, 205, 207–8, 210, 223 breach of duty, 215, 223 choses in action, 116, 118–19 conduct inconsistent with claimant’s right, 219 contractual rights, 111–12 controversial claim, 112 damages award, 131, 208 debts, 111 definition, 205–6, 210, 212, 215 deliberateness, 215–17 deprivation of right, 114 development, 115, 136 electronic transactions, 116–17 exclusion from assets, 112 exclusion from use and possession, 217–18 intangible assets, 50, 111, 114–17, 119–21, 124–5 interference requirement, 208–9, 213, 217–22 maintaining the tort, 132 misappropriation of chattels, 205 personal property, 114 physical interference, 213, 220–23 protection of property rights, 111–12, 114, 210–13 recovery of asset, 115 recovery of full value, 132, 141, 147 requirements, 204 shares of manufacturing stock, 120–1 subsequent interference, 132 superior possessory right, 114–17, 122 trespass, 115, 149 use value of assets, 122 wrongful interference with goods, 120 Copyright abandonment, 288 access to copyright works, 53, 74 Act of Anne, 54, 56, 61–65 assignment, 61, 64 balance of interests, 53 Berne Convention, 71, 73 common law copyright, 66 dramatisations, 71, 73 European harmonisation, 73–74 infringements abridgements, 70 adaptations, 70–71 extracts, 70–71 privilege against self-incrimination (PSI), 90–91 section 72 (Senior Courts Act (1981)), 90–91 international copyright law, 71–72 justice for authors, 53 legislative development, 67–69, 71–73 mental labour, 57–59, 62, 66, 69

monopoly, 67–68 ‘orphan’ works, 70 period of copyright, 53, 67–69, 73–74, 277 perpetual right, 65–68, 73 protection, 53–56, 62, 72–73 public domain, 288 public good, 68, 73 purchase, 61 registration, 61 reprinting of books, 56, 58, 61, 63–64 Royal Commission (1878), 71–72 subject-matter, 74 technological change, 74 translations, 70–71, 73 unprotected ideas, 70 Debt see also Banks v Whetstone (1596) accounting liability, 6 conversion, 111 see also Conversion debet et detinue, 5 debt in the detinet, 5, 12 discharge of debts, 3–5, 10–13, 112–13 fungible chattels, 5 identification of property, 5 settlement by receivers, 113 Deference to administrative decision-making administrative procedures, 228, 231, 234, 240, 251–2 balancing of rights, 240 competing interests, 241 expropriation of property, 240 human rights protection, 240–1 judicial deference, 203 land-use regulation, 234, 240, 243 margin of error, 241 nuisance actions, 241–2 participation rights, 240, 242 planning process, 240–2 protection of property rights, 242 reciprocity of advantage, 250–1 Detinue recovery of money, 4–6, 13–14, 18 Easements see also Benn v Hardinge (1993) abandonment, 254, 256–8, 261–3, 267, 273, 275 see also Abandonment enclosure award, 260 extinguishment deed of release, 260 express release, 260 implied release, 260 operation of law, 260 statutory extinguishment, 260

298 Index implied grant, 260, 265–6 neighbour disputes, 257–9 non-user, 254, 257–61, 265 prescriptive easements, 262, 272 removal from register, 268 right of way, 257, 259 servient owners, 263, 265, 274 right of way see Right of way Economic torts applicability, 112–14 breach of contract, 124–5 contractual rights, 123 economic loss, 122 non-proprietary economic interests, 122, 124 protection of property rights, 112, 122, 124 tangible/intangible property, 122–25 Equity equitable estoppel, 170 see also Tenancy by estoppel equitable tracing, 4 Estoppel abandonment, 266, 268 see also Abandonment tenancy by estoppel see Tenancy by estoppel European Convention on Human Rights (ECHR) balancing of rights, 98–99, 102–3 compatibility, 81–82 competing rights, 102 contractual rights, 122 freedom of expression, 102 intellectual property protection, 94, 96–99 legitimate aim, 100 margin of appreciation, 100 peaceful enjoyment of possessions, 97–100, 122, 240–1 personal rights, 122 proportionality, 100 public interest considerations, 102–3 qualified rights, 102 respect for private and family life, 99, 102, 157, 240–1 right to fair trial, 81–82, 99–103 state interference with rights, 102 Ex Parte C (Western Australia) sperm samples extraction, 36–37 property rights, 37 storage, 36 Fair trial balancing of rights, 103 declaration of compatibility, 101, 103 derogation, 101, 108

European Convention on Human Rights (ECHR) provisions, 81–82, 99–103 privilege against self-incrimination (PSI), 81–82, 101–3 see also Privilege against self-incrimination (PSI) proportionality, 102 Family home see also Lloyd’s Bank v Rosset [1991] acquisition and management, 180–1 bank’s charge, 187, 193–4 beneficial interest, 187–8, 190, 193–4, 199 bifurcated intentions, 190 broken homes, 183, 192 capital investment, 185, 195 certainty, 182–3, 194, 196–7 changing social conditions, 199 claimant acting to detriment, 185, 188 cohabitation, 128–9, 181, 197 consent to transfer, 128–9 contribution to family life, 129 contribution to purchase price, 185–9 derivative acquisition, 128 direct financial contributions, 182 equitable jurisdiction, 180 fairness, 182, 192 family law values, 194–5 feminist scholarship, 180 financial contribution, 192, 195–7 home as housing, 189–90 home as investment asset, 189–90 inherited monies, 186–8, 192, 196 judicial creativity, 180 Law Commission, 180–1, 184 non-propertied partner, 191–2, 196–8 politics of individualism, 187 propertied partner, 191–2, 198 renovation work and costs, 187–9, 192 respective contributions, 186–8, 192–3 retirement needs, 189 rules of acquisition, 128–9 shared ownership, 188, 190, 199 sharing practical benefits, 188, 190 sole legal title, 186 trusts of the family home, 179, 181, 183, 194 unfair outcomes, 184 Fungible property forms of action, 5 Goodwill see also Star Industrial Co Ltd v Yap Kwee Kor [1976] abandonment, 255–6, 285–6, 289 assignment, 281 ceasing to exist, 280–1, 285–7 continuation, 278, 281

Index 299 divisible nature, 283 establishment, 278–80 identification, 279 period of protection, 289 property right, 279, 284–5 residual goodwill, 281, 283, 286 revival, 285 territorial concept, 283 Holdich v Lothian Health Board contract of deposit, 42–43 sperm samples damage, 42 property rights, 43 storage, 42–43 Human rights balancing of rights, 98–99 competing rights, 102 ECHR compatibility, 81–82 see also European Convention on Human Rights (ECHR) fair trial, 81–82, 99–103 freedom of expression, 102 intellectual property, 94, 96 legitimate aim margin of appreciation, 100 peaceful enjoyment of possessions, 97–100, 122, 240–1 private and family life, 99, 102, 157, 240–1 privilege against self-incrimination (PSI). 77, 81–82, 101–3 see also Privilege against self-incrimination (PSI) proportionality, 100 state interference, 102 Intangible property artistic expression, 49 choses in action, 118–19 controlling access, 118 conversion, 115–17, 119–21 debts, 118–19 documentary exception, 117–18 economic torts, 122–25 see also Economic torts electronic documents, 117 exclusability, 117–18 exclusive control, 118 exhaustability, 118 instrumental approach, 50 intellectual property rights (IPRs), 49–51, 100 see also Intellectual property rights (IPRs) likeness to tangibles, 50–51 manual control, 117 property rights, 49–50

Intellectual property (IP) see also Intellectual property rights (IPRs) bifurcated operation, 83 boundaries, 89, 109 conceptual potency, 76, 82–85, 87–89, 108–9 confidential information, 75–76, 78–82, 85–86 control of information, 96 copyright see Copyright core regimes, 83–84, 86, 107 definition, 77, 79, 83–85, 87–89, 94, 100, 107, 109 designation of a right, 76 fundamental changes, 95–96 human rights protection, 94, 96 see also Human rights infringement of rights, 84, 95–96 intangible property, 100 intellectual property law, 94–96, 106–9 interpretative practices, 95 lack of fixed content, 76 legal or political significance, 85 legislative reform, 95 limitation of rights, 107–8 malleable concept, 87 moral rights, 106–7 non-proprietary right, 100 patents see Patents propertisation, 95, 107 property concepts, 94, 106, 108–9 proprietary rights, 86 section 72 (Senior Courts Act (1981)), 75, 77–83, 87–88, 91, 103 see also Section 72 (Senior Courts Act (1981)) tangible property, 100 technical or commercial information, 77, 79–82, 84, 87, 108–9 see also Technical or commercial information theft-related offences, 106 trade marks see Trade marks Intellectual property rights (IPRs) abandonment see Abandonment artistic works, 49–50, 212–13 breach of confidence, 87 copyright see Copyright definition, 78, 86–87 diversity, 109 expansion, 78, 95, 100, 107–8 growth and strength, 95–96 infringement of rights, 84

300 Index intangible assets, 49–51 licensing, 96 moral rights, 87, 106–7 non-proprietary rights, 107 normative and doctrinal significance, 89, 96 passing off see Passing off patents, 277 see also Patents period of protection, 277 personal rights, 87 property right, 49 proprietary status, 76, 86–87, 96, 100 social justifications, 277 time limited, 277 trade marks see Trade marks JCM v ANA (British Columbia) same-sex couples, 37 sperm samples destruction, 37 ownership, 37 possession, 38 property rights, 37–38 purchase, 37 Jocelyn Edwards Case (New South Wales) sperm samples extraction, 34 ownership, 35 possession, 34–35 property rights, 34–35 Kuwait Airways Corporation v Iraqi Airways Company [2002] aircraft destruction of aircraft, 207 leasing replacement aircraft, 208 return of aircraft, 207 seizure of aircraft, 205–8, 219 causation of loss, 205 consequential loss, 207–8 conversion basis of liability, 205, 207–8, 210, 223 breach of duty, 215, 223 conduct inconsistent with claimant’s right, 219 damages claim, 208 definition, 205–6, 210, 212, 215 deliberateness, 215–17 exclusion from use and possession, 217–18 interference requirement, 208–9, 213, 217–22 misappropriation of chattels, 205 physical interference, 213, 220–23 property rights, 210–13 requirements, 204

damages calculation, 205 economic loss, 223–4 expropriating statute, 209–10 facts of case, 206–8 Operation Desert Storm, 207 private international law convenient forum, 208 double accountability rule, 205, 209–10 lawful acts, 208–9 property rights ambit of rights, 203 constitutional provisions, 204 content of rights, 204–6, 208, 225 contractual rights, 211 conversion, 204 criminal law, 204 definitions of property, 203–4 duties owed, 205 enforceability, 210 exigible right, 210–12 good against the world, 204 impairment of use, 223–4 intellectual property (IP), 204 interference with chattels, 204 legal, political and social influence, 204 legal relationship, 211 level of interference, 204 personal rights, 211 physical thing, 211–13 prioritising resource values, 204 protection, 203–4, 225 related to physical thing, 204 remedies, 203–4 significance, 204 state immunity, 204, 209, 219 tort remedies, 204–5, 214 significance of case, 205–6, 223–4 sovereignty issues, 207 state immunity, 204, 209, 219 tort law breach of duty, 213–15 civil wrong, 213 definition, 214 duties owed, 206, 224 importance, 205 interference with land, 214 liability, 215 Lam v University of British Columbia bailment, 38 sperm samples destruction, 38 property rights, 38 storage, 38 Landlord and tenant see also Bruton v London & Quadrant Housing Trust [2000] landlord

Index 301 implied leasehold covenants, 155, 167 lease to second tenant, 152 mere licensee, 151, 155–6, 159–60 nemo dat quod non habet, 151–2, 156, 160–1, 174, 177 property leased to tenant, 151, 155 tenant contractual tenant, 151–2 derivative title, 160–1, 163–6, 168 exclusive possession, 156 lease or licence, 155–6, 160, 164–5 leasehold interest, 151, 155–6 licencing agreements, 155–6, 162 non-proprietary lease, 156, 160–1, 166 original title, 161–2 owner’s paramount title, 152, 177 personal rights, 151, 160, 166, 172 proprietary lease, 165–6, 167, 171 relative title, 161–2, 167, 171, 177 second tenant, 152 Leases see Contractual leases; Landlord and tenant Literary property author’s rights, 55–58 boundaries, 70 common law property right, 53, 56–58, 59–63, 69, 72 see also Common law property right (literary property) copyright, 53–56, 61–62, 64–68, 71 see also Copyright existence of prior right, 61 intangible nature, 67, 69, 70, 74 nature of literary property, 53, 56 object of law, 62 original composition, 59 ‘orphan’ works, 70 ownership and possession, 67, 70 pirated copies, 62 product of the mind, 57–59, 62, 66, 69 proprietary right, 72 protection of literary works, 53, 56, 58–60, 62, 64–66 statutory rights, 59 unpublished manuscript, 59 use without consent, 61–62 Lloyds Bank v Rosset [1991] background to case, 186–7 bank’s position legal charge, 187, 193–4 overriding interests, 194 possession action, 193–4 realising security interest, 193 ultimate property insider, 194 common intention constructive trust agreement between the parties, 185, 191 beneficial interest, 187–8, 193–4

bright-line rules, 179–80 character of claimant, 197 claimant acting to detriment, 185, 188 contribution to purchase price, 185–6 declaration of trust, 195 direct financial contribution, 195 express agreement, 185, 187, 191–2, 198 joint legal title, 195 law reform, 197 no doctrinal formulation, 199 non-propertied partner, 191–2, 197–8 pre-nuptial agreement, 191 property rights, 179, 181–3, 185 property shared beneficially, 185 self-interest over trust, 195 shared ownership, 188 family home acquisition and management, 180–1 bank’s charge, 187, 193–4 beneficial interest, 187–8, 190, 193–4, 199 bifurcated intentions, 190 broken homes, 183, 192 capital investment, 185, 195 certainty, 182–3, 194, 196–7 changing social conditions, 199 claimant acting to detriment, 185, 188 cohabitation, 128–9, 181, 197 consent to transfer, 128–9 contribution to family life, 129 contribution to purchase price, 185–9 derivative acquisition, 128 direct financial contributions, 182 equitable jurisdiction, 180 fairness, 182, 192 family law values, 194–5 feminist scholarship, 180 financial contribution, 192, 195–7 home as housing, 189–90 home as investment asset, 189–90 inherited monies, 186–8, 192, 196 judicial creativity, 180 Law Commission, 180–1, 184 non-propertied partner, 191–2, 196–8 politics of individualism, 187 propertied partner, 191–2, 198 renovation work and costs, 187–9, 192 respective contributions, 186–8, 192–3 retirement needs, 189 rules of acquisition, 128–9 shared ownership, 188, 190, 199 sharing practical benefits, 188, 190 sole legal title, 186 trusts of the family home, 179, 181, 183, 194 unfair outcomes, 184 hierarchy of property litigants, 184

302 Index politics of property law, 179, 183–4, 186–7, 194, 196 property culture, 179, 183, 189–90 property discourse property insiders, 183–7, 192–4, 196, 198 property outsiders, 183–7, 192, 194, 196, 198 property insiders freedom of individuals, 191 individual autonomy, 191–2 neoliberalism, 185, 191–2 opportunities for individuals, 191 socio-economic inequality, 192 unequal standing, 193–4 property rights accumulation and management of assets, 183, 185 citizenship, 183, 185, 193 cohabitation, 128–9, 181, 197 common intention constructive trust, 179, 181–3, 185 conservative vision, 195–6 demoralisation costs, 197 economic rationality, 185 exclusion from property, 198 fairness, 182, 192, 197 law of wealth, 184 legal advice, 196 morale value, 197 neoliberalism, 185, 191–2 ownership of domestic assets, 184 property insiders, 183–7, 192–4, 196, 198 property law values, 194–5 property planning, 196 settled expectations, 197 social view of property, 184, 192, 195 trusts, 179, 181, 183, 194 wealth-fare society, 183 significance of case, 179, 194, 199 Millar v Taylor (1769) common law property right absence of right, 63–67 copyright, 66 Donaldson v Beckett, 64–67, 71 exclusive right, 63, 65 Hinton v Donaldson, 63–65 literary property, 53, 69 perpetual property, 65–68 printing controls, 56–58 public detriment, 66 right of creation, 63 continuing influence, 71–74 copyright, 53–56, 61–62, 64–68 see also Copyright intellectual property rights (IPRs) artistic works, 50

intangible assets, 49, 51 property rights, 49 literary property common law property right, 53, 61–63, 69, 72 copyright, 53–56, 61–62, 64–68 existence of prior right, 61 mental labour, 62, 66, 69 nature of literary property, 53, 56 object of law, 62 pirated copies, 62 proprietary right, 72 protection of literary works, 53, 56, 62, 64–66 use without consent, 61–62 printing controls, 53–58, 60–61, 63–64 see also Printing controls property rights, 49–50 relevance, 53–54 significance of case, 61 Money see also Banks v Whetstone (1596) actions for account, 6 appeal of robbery, 14 bank notes, 22, 24 bilateral transactions, 4, 13 coins see Coins common law titles, 3–4, 23 contained in bag or chest, 4–8, 13–17, 19, 20 detinue actions, 4–6, 13–14, 18 discharge of debts, 3–5, 13 enforceable title, 14 equal capacity, 3 fungible commodities, 17–24 good faith purchase, 22, 24 homogeneity, 23 identification, 7, 15, 17, 23 incorporeal property, 24 indistinguishability, 3–4, 6–7, 22 legal valuation, 23 mainour (stolen goods), 14–17 means of payment, 4, 23–24 mixing of monies, 19–20, 23 monetary fungibility, 4–5 money as property, 2–3, 14–22, 24 ‘not to be known from another’, 3–4, 8, 11, 13, 23–24 owner’s title, 4, 14–15, 17, 19, 21–22 property right, 13–15, 17–20 recovery of money, 4–6, 13–14, 18 special liquidity, 3–4, 22, 24 traceability, 4 unbagged money, 14–17, 19–20 OBG Ltd v Allan [2007] chain of causation

Index 303 negligent advice, 113–14 ultimate loss, 113–14 contractual relations breach of contract, 113, 124–5 contractual obligations, 112–14 contractual rights, 49–50, 111–12 discharge of debts, 112–13 economic torts, 123 unlawful interference, 111 conversion appropriate response, 113–14, 120–1, 123, 125 choses in action, 116, 118–19 contractual rights, 111–12 controversial claim, 112 debts, 111 deprivation of right, 114 development, 115 electronic transactions, 116–17 exclusion from assets, 112 intangible assets, 50, 111, 114–17, 119–21, 124–5 personal property, 114 protection of property rights, 111–12, 114 recovery of asset, 115 shares of manufacturing stock, 120–1 superior possessory right, 114–17, 122 trespass, 115 use value of assets, 122 wrongful interference with goods, 120 creditors’ voluntary liquidation, 114 economic torts applicability, 112–14 breach of contract, 124–5 contractual rights, 123 economic loss, 122 non-proprietary economic interests, 122, 124 protection of property rights, 112, 122, 124 tangible/intangible property, 122–25 fiduciary duty, 114 financial loss, 111 intangible assets choses in action, 118–19 controlling access, 118 conversion, 115–17, 119–21 debts, 118–19 documentary exception, 117–18 electronic documents, 117 exclusability, 117–18 exclusive control, 118 exhaustability, 118 manual control, 117 property rights, 49–50, 111–12, 124 receivers breach of contract, 113

control of assets, 111, 113, 123 deprivation of property rights, 119 intangible assets, 115–17 invalid appointment, 111, 113–14 legal wrong, 112 settlement of debts, 113 tangible assets, 115 trespass, 115 unlawful appropriation, 123 unliquidated claims, 113 right to payment, 50 significance of case, 111–12, 114 superior possessory right assumption of right, 114–17 deprivation of right, 114–15 Passing off see also Star Industrial Co Ltd v Yap Kwee Kor [1976] abandonment, 254–6, 289 see also Abandonment consumer protection, 280–1 consumer recognition, 280, 289 consumer welfare, 287–8 damage suffered, 280 deceit, 279–80 fundamental principles, 278 identity of manufacturer, 279 misrepresentation, 279–80 origins, 279 property rights, 278 protection, 278–9, 283, 285 right to sue, 281 tortious liability, 278–9, 284, 287 Patents commercial exploitation, 277 duration, 277 inventions, 277 Phillips v Mulcaire [2012] breach of confidence, 75–76, 85, 87, 91–92, 99, 104–6 confidential information breach of confidence, 85, 91–92, 104–5 classification, 85–87 commercial value, 105 information is not property, 76, 86–87 intellectual property, 75–76, 85–86, 98–99, 103, 105 personal information, 103–5 property right, 50, 96 selling of information, 104–5 technical or commercial information, 103–4 human rights protection, 94, 96–103, 108 see also Human rights intellectual property balancing of rights, 98–99 boundaries, 109

304 Index conceptual potency, 76, 82–85, 87–89, 108–9 confidential information, 75–76, 78–82 control of information, 96 copyright infringement, 90–91 definition, 77, 79, 83–85, 87–89, 100, 107, 109 designation of a right, 76 expansion of rights, 94–96 fundamental changes, 95–96 human rights protection, 94, 96–99 infringement of rights, 84, 91, 95–96 intangible property, 100 intellectual property law, 94–96, 107–8 interpretative practices, 95 lack of fixed content, 76 legislative reform, 95 limitation of rights, 107–8 moral rights, 106–7 non-proprietary right, 100 ownership, 94 propertisation, 107 property concepts, 77–78, 94 proprietary rights, 86, 95, 99 statutory definition, 77 tangible property, 100 technical or commercial information, 77, 79–82, 84, 87, 108–9 theft-related offences, 106 tobacco product branding, 98 trade marks, 97–98 trade secrets, 93 intellectual property rights (IPRs), 51, 76, 78, 86–87, 89, 95–96, 100, 107, 109 see also Intellectual property rights (IPRs) phone hacking authorisation, 79 breach of confidence, 78, 80 confidential information, 78–82 disclosure request, 78–79 Levenson Inquiry, 75 privacy, 78 technical or commercial information, 78–81 privilege against self-incrimination (PSI), 75, 77, 79, 80–82, 90–91, 101–3 see also Privilege against self-incrimination (PSI) property rights artistic expressions, 49 confidential information, 50 reasoning, 76, 87 section 72 (Senior Courts Act (1981)) see Section 72 (Senior Courts Act (1981)) technical or commercial information, 77–82, 84, 87–89, 93–94, 104–6, 108–9

see also Technical or commercial information Phone hacking authorisation, 79 breach of confidence, 78, 80 confidential information, 78–82 disclosure requests, 78–79 Levenson Inquiry, 75 privacy, 78 privilege against self-incrimination (PSI), 79, 80, 82 see also Privilege against self-incrimination (PSI) Planning law adverse impacts, 247, 249 appeals, 246 collective interests, 244 community empowerment, 246–7 competing interests, 243 complexity, 243, 247, 250 development consent, 229, 244–6 development control, 243 development plans, 243 judicial deference, 240–2 judicial review, 234, 243 national planning policy, 246 partial participation, 246 participatory framework, 242–7, 250 planning applications, 244, 246 planning controls, 202–3, 227–8, 232–3, 235, 242, 244, 248, 251 planning decisions, 244, 247 planning legislation, 243 planning permission, 229, 235, 239, 244–6 policy goals, 243–4 prohibition on development, 230, 234 protection of private rights, 243–4 public interest considerations, 243–4 reciprocity of advantage, 248 see also Reciprocity of advantage strategic planning policies, 246 Possession of land see also Bruton v London & Quadrant Housing Trust [2000] adverse possession, 157, 161, 173 fact of possession, 161, 163–5 good title, 128 physical force, 128 possession orders, 157 pre-existing title, 128 proprietary underworld, 128, 152 see also Proprietary underworld relative title, 128 see also Relativity of title repossession, 158 squatters, 128 tolerated occupiers, 128

Index 305 Possession principle see also Armory v Delamirie (1722) academic rationalisations, 139, 141–3 acquisition of property right, 145–8 see also Acquisition of property rights action against third parties, 142 assize of novel disseisin, 146 bailment, 139 common law, 138–9, 149 deceased’s possessions, 139 interference with goods, 139 persons better entitled, 138–9, 142, 144–5, 147, 149 possessory title, 138, 142–3 prior possession, 140 procedural developments, 138–9 recovery of full value, 141, 145 relative title, 140, 144–5, 147–9 Roman law, 146–7 special property, 139, 141–2, 144 see also Special property unlawful disturbance of existing possession, 148 wrongful interference, 146 wrongful possession, 139–41, 144–5 Printing controls Act of Anne authors’ rights, 54–56 challenges brought, 56–57 copyright protection, 54, 56, 61 literary property, 56 common law property right, 56–58, 61–65 licensing system, 53–54, 56 printing patents, 54 reprinting of books, 56, 58, 61, 63–64 Stationers’ Company, 54, 56, 61 Privacy breach of confidence, 75–76 phone hacking, 78 private and family life, 99, 102, 157, 240–1 privilege against self-incrimination (PSI), 75 see also Privilege against self-incrimination (PSI) Privilege against self-incrimination (PSI) breach of confidence, 75, 104 continued existence, 90, 103 copyright infringement, 90–91 disclosure orders, 75, 79 ECHR compatibility, 81–82, 101–3 exclusion, 75, 77, 79–80, 82, 88, 90, 109 fair trial provisions, 81–82, 101–3 human rights protection, 77, 81–82 phone hacking, 79, 80, 82 privacy, 75 right to invoke, 77

section 72 (Senior Courts Act (1981)), 90, 109 see also Section 72 (Senior Courts Act (1981)) theft-related offences, 90–91 Property rights abandonment, 253–6, 274–5 see also Abandonment accumulation and management of assets, 183, 185 acquisition see Acquisition of property rights bailment, 25–26, 30, 41, 43, 45, 47 citizenship, 183, 185, 193 cohabitation, 128–9, 181, 197 common intention constructive trust, 179, 181–3, 185 see also Common intention constructive trust common law, 1, 3, 26–27, 29, 253, 257 compensation payable, 41, 203 conservative vision, 195–6 content of rights agreement, 201 duties owed, 205 dynamic concept, 201 elusive concept, 201 flexibility, 201 immunity from summary cancellation, 202–3 portmanteau concept, 201 prioritising resource values, 202–4 right to exclude, 201–2 contractual rights, 211 definition, 203 demoralisation costs, 197 destruction of rights, 253 easements see Easements economic rationality, 185 enforceability, 210 exclusion from property, 198 exigible right, 210–12 extinguishment, 202–3 fairness, 182, 192, 197 family home see Family home fictive approach, 41, 46–48 freehold title, 211 good against the world, 204 goodwill, 279, 284–5 see also Goodwill human body parts, 25–27, 31, 33, 39–40, 47 impairment of use, 224 incidents of ownership, 234–5 instrumental approach, 26–27, 31–32, 41, 44, 46, 48

306 Index intangible things, 49–50 intellectual property rights (IPRs) see Intellectual property; Intellectual property rights (IPRs) interference, 202–4, 213, 215 judicial approach, 2, 26–27 land-use regulation, 203, 227–8 law of wealth, 184 legal advice, 196 legal relationship, 211 limit of protection, 25 morale value, 197 neoliberalism, 185, 191–2 ownership and possession, 26–29, 31, 41–42, 46–48 ownership of domestic assets, 184 participatory rights, 203 passing off see Passing off personal rights, 211 physical things, 204, 211–13 planning law, 203, 242–3 see also Planning law prioritisation of resource value, 202–4 priority earlier right, 175 later right, 176–7 overreaching, 176 priority rules, 174–6 property for a single purpose, 46 property insiders, 183–7, 192–4, 196, 198 property law values, 194–5 property planning, 196 protection, 202–4, 250, 252 recognition, 202 restrictions, 228, 230–2, 234–5 right of way see Right of way Roman law principles, 28 settled expectations, 197 social view of property, 184, 192, 195 sperm samples, 2, 25–26, 32, 34–38, 43 see also Sperm samples state immunity, 204 state interference, 202 subject-matter, 1–2 tangible things, 49 transferable rights, 45 trusts, 179, 181, 183, 194 wealth-fare society, 183 Proprietary underworld see also Bruton v London & Quadrant Housing Trust [2000] adverse possession, 173 occupiers’ rights, 158 property disputes, 172 regulation, 159, 171–2 relative possessory title, 173

relativity of title, 153. 159, 171–3, 175, 177 see also Relativity of title second-tier property rights, 173 squatters, 158–9, 161–2, 174 tenancy by estoppel, 166–9 see also Tenancy by estoppel tolerated trespassers, 158 unauthorised occupiers, 158 Re H (South Australia) sperm samples possession, 35–36 preservation, 36 property rights, 36 Receivers breach of contract, 113 control of assets, 111, 113, 123 deprivation of property rights, 119 intangible assets, 115–17 invalid appointment, 111, 113–14 legal wrong, 112 settlement of debts, 113 tangible assets, 115 trespass, 115 unlawful appropriation, 123 unliquidated claims, 113 Reciprocity of advantage see also Belfast Corporation v OD Cars [1959] adverse planning decisions, 249 beneficial public actions, 248 deference to administrative decision-making, 250–1 fairness, 250, 252 interpretation, 247–8 judicial review, 251–2 limitations on other owners’ rights, 247–8 long-term view, 248–9 obviating compensation payments, 247–8, 250 parallel and reciprocal benefits, 248 participation rights, 249–51 planning control, 248 private property rights, 247 property rights, 247, 250 public interest considerations, 248–9, 251 social responsibility, 249 uncompensated regulation, 248, 250 welfare-enhancement, 248 Relativity of title adverse possession, 173 consensual original title, 165–6 derivative legal leasehold, 165–6 importance, 177–8 licensee in possession, 172 nemo dat quod non habet, 152, 161, 174 non-consensual original acquisition, 173

Index 307 paramount rights, 165–6, 177 proprietary underworld, 153, 159, 171–3, 177, 175 see also Proprietary underworld relative possessory title, 173 relative proprietary interest, 152, 156, 159, 161–2, 165, 174, 177 squatters, 161–3, 173–4 superior fee simple, 164 tenancy by estoppel, 152–3, 166–71, 173, 175 see also Tenancy by estoppel unlawful lease, 172 Restrictive covenants extinguishment, 235, 237 Right of way see also Benn v Hardinge (1993) abandonment, 264, 266–7 see also Abandonment bridleway, 260 evidence, 258, 260 non-user, 257–61 potential value, 264 prescription, 260 preservation, 260 Robbery see Appeals of theft and robbery Section 72 (Senior Courts Act (1981)) Anton Piller Orders, 89–93, 96, 104 borderline cases, 104–5 ECHR compatibility, 81–82, 101–3 breach of confidence, 91–92, 100, 104–6 confidential information, 78–82, 94, 100, 103–5, 106 see also Confidential information copyright infringement, 90–91 disclosure claims, 89, 91 fair trial, 99–103, 108 intellectual property, 75, 77–83, 87–88, 91, 96, 103, 106–9 limits, 77, 82, 101–5 misuse of private information, 82 moral rights, 106–7 narrow construction, 88, 103 passing off cases, 75, 79 privilege against self-incrimination (PSI), 75, 77, 79–80, 82, 88, 90, 109 see also Privilege against selfincrimination (PSI) propertisation, 107 property concepts, 89 property rights, 106 purpose, 104 technical or commercial information, 77, 79–82, 84, 88–89, 93–94, 103–4, 106 see also Technical or commercial information

theft related offences, 106, 108 trade secrets, 93, 106 unlawful trading practices, 104, 106 Special property accountability to person better entitled, 138–9, 142, 144–5, 147 assumption of duty, 137–8, 147 innkeeper’s duty, 138, 144 lawful possession, 137, 144–5 possession principle, 139, 141–2, 144, 147 see also Possession principle Sperm samples see also Yearmouth v North Bristol NHS Trust (2009) case law Bazeley v Wesley Monash IVF (Queensland), 33–34, 39 Buncefield Case, 44–45 Ex parte C (Western Australia), 36–37 Holdich v Lothian Health Board, 42–43 Jocelyn Edwards Case (New South Wales), 34–35 Lam v University of British Columbia, 38 Re H (South Australia), 35–36 destruction, 25, 28–29, 33–34, 37–38 donor’s wishes, 33–34 extraction, 34, 36–37 future use, 29–30, 38 physical damage, 2, 42 physical existence, 2 ownership, 34–35, 37, 41, 43, 46 possession, 26–29, 31, 34–36, 38–39 preservation, 36 property rights, 2, 25–26, 32, 34–38, 43 purchase, 37 right to use, 43 storage, 28–29, 33–34, 36, 38, 42–43 Squatters see also Bruton v London & Quadrant Housing Trust [2000] non-consensual original acquisition, 162–3 possession of land, 128 property rights, 161–3 proprietary underworld, 158–9, 161–3, 174 see also Proprietary underworld relativity of title, 161, 173–4 Star Industrial Co Ltd v Yap Kwee Kor [1976] abandonment cessation of business, 282–5 common law, 284 deliberateness, 286 goodwill, 255–6 intention to abandon, 283–6 objective test, 285

308 Index passing off actions, 254–6, 289 precondition, 284 presumption against abandonment, 289 property right, 278 public interest considerations, 256 unilateral action, 281, 287 facts of case, 282–3, 287 goodwill abandonment, 255–6, 285–6, 289 assignment, 281 ceasing to exist, 280–1, 285–7 continuation, 278, 281 divisible nature, 283 establishment, 278–80 identification, 279 period of protection, 289 property right, 279, 284–5 residual goodwill, 281, 283, 286 revival, 285 territorial concept, 283 influence of case, 284–5 passing off abandonment, 254–6, 289 consumer protection, 280–1 consumer recognition, 280, 289 consumer welfare, 287–8 damage suffered, 280 deceit, 279–80 fundamental principles, 278 identity of manufacturer, 279 misrepresentation, 279–80 origins, 279 property rights, 278 protection, 278–9, 283, 285 right to sue, 281 tortious liability, 278–9, 284, 287 property rights abandonment, 278 goodwill, 279, 284–5 passing off actions, 278 significance of case, 278, 281 State immunity, 204, 209, 219 Tangible property economic torts, 122–25 see also Economic torts intellectual property, 100 ownership, 1 likeness to intangibles, 50–51 physical existence, 2 property rights, 49, 122–24 Roman law, 1–2 Technical or commercial information commercial value, 105 confidential information, 88, 93, 103–4 intellectual property, 77, 79–82, 84, 87, 108–9 meaning, 87–89, 93–94

phone hacking, 78–81 property concepts, 108–9 section 72 (Senior Courts Act (1981)), 77, 79–82, 84, 88–89, 93–94, 106 see also Section 72 (Senior Courts Act (1981)) selling of information, 104–5 Supreme Court interpretation, 88–89, 93–94 trade secrets, 93, 105 Telephone tapping see Phone hacking Tenancy by estoppel see also Bruton v London & Quadrant Housing Trust [2000] alienable interests, 169 common law rule of evidence, 167 consensual original relative title, 168, 171 contractual leases, 152–3 derivative lease, 168 dispones of the landlord, 169–70 enforceability against strangers, 170–1 equitable estoppel, 170 estoppel arises by deed, 170 ‘feeding’ rule, 169 origins, 166 lack of derivative title, 166 landlord acquires legal estate, 169 landlord’s fee simple interest, 168, 170–1 landlord’s position, 171 legal effect to leasehold agreements, 166 no prior possession, 168 owner’s permanent title, 168–9, 171 possession prior to granting tenancy, 167–8 priority rules, 170 proprietary lease, 168 proprietary underworld, 166–9 relative property rights, 167, 171, 173, 175 relative proprietary lease, 167 relativity of title, 166–71 see also Relativity of title tenant taken possession, 168 Tenant see Landlord and tenant Tort law breach of duty, 213–15 civil wrong, 213 definition, 214 duties owed, 206, 224 importance, 205 interference with land, 214 liability, 215 passing off, 278–9, 284, 287 see also Passing off Trade marks abandonment, 284, 288

Index 309 consumer confusion, 278 distinctiveness, 280, 288 period of protection, 277–8 registered marks, 277, 288 unregistered marks, 278, 284, 288 Trover bailment, 136–7 development, 143 possession principle, 136, 139–41, 144–5 see also Possession principle possessor’s responsibility, 145 special property, 136–7, 139 title required, 136 Yearmouth v North Bristol NHS Trust (2009) academic responses development of common law, 31–32 legal inventiveness, 32 ownership and possession, 31 property rights, 31 application Bazeley v Wesley Monash IVF (Queensland), 33–34, 39 Buncefield Case, 44–45 Ex parte C (Western Australia), 36–37 Holdich v Lothian Health Board, 42–43 Jocelyn Edwards Case (New South Wales), 34–35 Lam v University of British Columbia, 38 legislative effects, 40 limited citation, 31–33 mental distress, 32 novel medical contexts, 32 property rights, 33–34 Re H (South Australia), 35–36 relevance, 39 reproductive context, 33

facts and decision bailment, 30 damage to property, 29, 32 mental distress, 30, 32 negligence claim, 29–30, 46 personal injury claim, 29 law of obligations, 41–42, 47 pragmatism, 46 property rights bailment, 25–26, 30, 41, 43, 45, 47 case applied, 33–34 common law, 26–27, 29 compensation for harm, 41 fictive approach, 41, 46–48 human body parts, 25–27, 31, 33, 39–40, 47 instrumental approach, 26–27, 31–32, 41, 44, 46, 48 judicial approach, 26–27 ownership and possession, 26–29, 31, 41–42, 46–48 property analysis, 41–45 property for a single purpose, 46 Roman law principles, 28 sperm samples, 2, 25–26, 32 transferable rights, 45 reasoning, 26, 39, 41 significance of case, 26 sperm samples destruction, 25, 28–29 future use, 29–30, 38 physical damage, 2 physical existence, 2 ownership, 41, 43, 46 possession, 26–29, 31, 39 property rights, 2, 25–26, 32 right to use, 43 storage, 28–29