Land Tenure Law: Property Law Themes

Land Tenure Law

• Dr Glen Mola Pumuye PhD delivered this lecture.
• The lecture is influenced by the works of Prof Franci Cantatore from Bond University.

Property Law Grand Themes

• Possession is nine parts of the law.
• You do not own anything, you own rights in things.
• Various people can own different aspects of property at the same time.
• The extent of property interest is measured by how many sticks you have in the bundle of sticks that is property.
• The dividing line between chattels and land is fixtures.
• You are generally safe when registered, there are exceptions.
• It is beneficial to register early.
• Compensation is available if the registration system works against you, unless you do not deserve it.

99 Year State Lease Expiry

• Landowners assume that if the 99-year lease expires, the land reverts back to the customary landowners.
• If a lease is given to a title holder for 99 years and expires it still remains state land and will be renewed for the next 99 years, according to Hon Benny Allan, Minister for Land, 2015.
• In 2021, John Rosso, Minister for Lands stated that at the expiry of a 99-year lease, traditional landowners must form companies to reclaim the land, as it is not right for the lease to go to customary landowners.
• In Qld, the State leases the land to you for 99 years, once it expires, the lease is renewed.
• The Land Act gives the Minister the Power to grant a State lease.

Definition of Property

• According to the Land Act 1996, all land in the country other than customary land is the property of the State, subject to any estates, rights, titles, or interests in force under any law.
• All estate, right, title and interest other than customary rights in land at any time held by a person are held under the State.
• All land as property is vested in the state apart from customary land.
• The state decides what to do with property either as a residential, commercial, or special purpose lease.
• In PNG, s2(1) of the Companies Act defines property is defined as property of every kind, tangible or intangible, real or personal, corporeal or incorporeal, and includes rights, interest, and claims of every kind in relation to property however they arise.

Tangible and Intangible Property

• Tangible property is physical property that can be touched and includes real property, which is land and things attached to it, and personal property, which is movable property like cars, furniture, jewelry, etc.
• Intangible property is non-physical property that cannot be perceived by the senses and includes assets like money, accounts, stocks, bonds, patents, copyrights, etc.

Real or Personal Property

• "Real" property encompasses interests in land and fixtures or structures upon the land.
• "Personal" property encompasses tangible or "corporeal" things, which are chattels or goods.

Corporeal or Incorporeal Property

• Corporeal property is the right of ownership in material things, such as land, chattel, etc.
• Incorporeal property are other proprietary rights in rem.
• Incorporeal property is itself of two kinds: jura in repropria, which are proprietary rights over immaterial things like patents, copyrights and trademarks, and jura in re aliena (encumbrances) whether over material or immaterial things like leases, mortgages and servitudes.

Property as a Legal Relationship

• Welling defines property involving 3 parties in a relationship:
  • The State
  • The person the State has concluded is the holder of a specified form of property
  • Any other person who the State has concluded does not hold the specified form of property
• Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479

Property Separate From the Thing Itself

• Moore v Regents of the University of California, 249 Cal Rptr 494 (1988) states "the concept of property is also abstract: rather than referring directly to a material object such as a parcel of land or the tractor that cultivates it, the concept of property is often said to refer to a bundle of rights that may be exercised with respect to that object.”

Property Interests

• Ownership is the highest form of property.
• Possession: for example, a friend.
• Security interest: for example, a bank.
• A number of people can have property in the same object at the same time.
• Example:
  • A owns a car (owner).
  • A lends car to B (possession).
  • C steals from B (C has possession).
  • B and C subject to A's interest is fragmentation of a proprietary interest.

Private, Public, Communal Property

• Private property predominates in western culture.
• Even if property owned by the State, it is owned in the same way as private owners.
• This was a case where the Australian court decided that land when the colonizers arrived in Australia was not vacant and ownerless; the Land was owned by the indigenous Aboriginals in accordance with their customs. This is the Mabo Decision.

Categories of Property Interests

• Real property (land or realty).
• Personal property (everything else) is a feature of Common Law.

Categories of Personal Property

• Chattels Personal
• Choses or things in possession: Property that can be possessed in physical form.
• Choses or things in action:
  • Bundle of personal rights in property which can be claimed or enforced by action and not by taking physical possession, for example, a cash balance at the bank.
  • The PNG Sale of Goods Act 1951 deals with transactions relating to goods defined as all chattels personal other than things in action or money.
• Chattels Real
  • Property such as land or a building that is held for a limited amount of time, such as a lease for an apartment or farm equipment.

Choses in Possession

• Tangible personal property.
• Synonymous with goods and chattels.
• Fisher describes 3 characteristics: tangibility, capable of physical acquisition, movable.
• Examples can include a book, pen, car, clothes.

Choses in Action

• A residual category Colonial Bank Whinney (1886) 11 AC 426 at 440
• Rich J in Loxton v Moir (1914) 18 CLR 360 at 379 describes "a right enforceable by action and can also be used to describe the right of action itself, when considered as part of the property of the person entitled to sue. A right to sue for a sum of money is a chose in action and is a proprietary right".

Characteristics of Choses in Action

• Fisher lists the following characteristics:
  • Enforceability by the right holder against the duty holder
  • Incorporeal and intangible, being an immaterial legal object
  • Bare right without any occupation or enjoyment.
  • Examples include the entitlement to recover debt, shares, and patents.

Chattels Real

• Leasehold
• Has unique status because it is dual nature
• Is leasehold interest, which is considered personal property
• Is historically treated as contracts
• At the end of 15th century despite ejectment & recovery of land never reclassified as real property

Fixtures

• A chattel (personal property) becomes real property when it becomes a fixture.
• Definition of a Fixture
  • 'An object which was once a chattel, but which has become, in law, land because it has become affixed to the land'.
• Two tests to determine whether something is a fixture:
  • Degree of annexation
  • Purpose of annexation

Degree of Annexation Test

• If a chattel is attached to the land, other than by its own weight, it is prima facie a fixture even if the degree of annexation is very slight
• Conversely if a chattel is only attached by its own weight, prima facie, the chattel is not a fixture, even if it has become embedded in the soil.

Purpose of Annexation Test

• Holland v Hodgson (1872) L.R. 7C.P.328 states ‘the question which must depend on the circumstances of each case, and mainly on two circumstances, as indicating the intention, viz; the degree of annexation and the object of annexation'
• Peter Butt, Land Law (6th ed, 2010, para 303)
  • Whether an item has become a fixture depends primarily on the intention with which the affixer put the item in place.
  • If the affixer's intention was the better use or enjoyment of the land, in the sense of furthering the use to which the land is put, then the item is likely to be a fixture; but if the intention was the better use or enjoyment of the item itself (as distinct from the land), the item is likely to be a chattel. Of course the intentions may overlap; it then becomes a question of identifying the dominant intention.

Conveyancing

• An item is not part of the land if its only attachment is its own weight unless circumstances show it was intended to be. The onus to prove intent is on the asserting party.
• Conversely, even the slightest fixation to the land makes an object part of the land, unless circumstances indicate its intended status as chattel. Proof of the intent to remain a chattel lies with the person attempting to prove said status.

Acquiring Rights to Property Via Conveyancing

• Before executing the contract for sale of the property the buyer should already have the necessary finance available.
• The contract of sale will be executed in triplicates: one copy for the seller, one for the buyer, and one to get stamp duty.
• When the contract is executed, the buyer will pay 10% of the value of the property as an initial deposit.
• A lawyer will stamp the contract and submit it to IRC for assessment of stamp duty.
• For a first time home buyer he/she is exempted from paying stamp duty.
• After stamp duty is exempted the process goes to settlement.
• During settlement balance is paid by the buyer and transfer instrument with title is given to buyer to change title.
• If the purchase is made with cash, the title directly changes to the buyer.
• If the purchase is processed through a mortgage, title will be transferred to the buyer but held by the bank.
• All outstanding sewerage, garbage, and land tax rates will be settled from the purchase price during settlement.

Additional Notes on Acquiring Rights to Property Via Conveyancing

• To own property in the city, land is demarcated, and a lot and portion number is allocated as part of a state lease.
• First step when seeing land for sale is to do a title search at the land department. The title search will show:
  • The type of lease the property under.
  • Section and lot number.
  • Current owner of the property(named).
  • History of property ownership.
• After title and confirmation of the seller, the transaction proceeds.
• No need for a bank loan if cash purchaser, however in PNG, many buyers get a mortgage with the bank to buy their property.

Property Acquired Under Custom

• The laws of PNG recognize property owned under custom.
• Property can be owned and transferred under custom in PNG.
• Customary land are owned, and houses are built under custom, the land and house can be given away.
• Land disputes over customary land are dealt with in the Local Land Court under the Land Dispute Settlement Act.