Laws3111 Lecture3 2011

Week 3 – Registration Systems

  • A solution to identification and transmissibility of property rights (does the seller actually have the right, and if so, how can it be ‘officially’ transferred)
  • Torrens system of land registration is the basis of most Australian land ownership
  • Intellectual Property is also registration based (patents, trademarks, etc.)
  • Corporate assets – intangible assets (patents, copyrights, etc.) can easily outvalue the tangible. Need to protect these.
  • Security interests (eg. Mortgages) also registered (PPSA)
  • System migrating from possession as the prima facie indication of rights to registration taking over.
  • More than just a new set of rules – creates a new set of legal institutions and processes as well. Bureaucratic procedures become more important than judicial rulings (greater voice to legislature, far more prevalent)

Types of Registration systems

  • Regulatory – achieves public ends unconnected to property rights (eg. Firearm registry, driver’s licenses). Can also restrict some rights, or act as evidence of ownership (eg. A registered gun in x’s name can be used as evidence that x owns that gun)
  • Proprietary – concerned primarily with property rights – but can be created FOR regulation purposes (eg. Patents – to incentivise new inventions)
    • Registration OF title: Facility to register/secure existing title/rights
    • Title BY registration: The act of registration CREATES the rights

Consequences

  • Impacts what we can own and how we can own it
  • Creates new sets of institutions, tends to mirror government trends/changes

Benefits of Registration Systems

  • Security of ownership and tenure
  • Removes doubts and aids enforceability (eg. Land transfers are more efficient and secure, which is necessary for banks and obtaining credit)
  • Resolves disputes – register is the prime/superior right
  • Pre-condition for certain market rules (eg. Cannot limit foreign land ownership without requiring land ownership be registered, cannot enforce first home buyers grant, etc.)

Effects

  • Easy to secure loans against land (which must be registered)
  • More difficult to secure loans against chattels (which generally aren’t)

Types/Mechanisms of Registration

  • True Title by Registration (eg. Patents) - Failure to register prevents ANY proprietary interest
  • Quasi Title by Registration (eg. Torrens System) – Interest must be registered to create legal ownership, but SOME interest is recognised regardless (eg. Still owner in equity) – but lesser and more easily extinguished.
  • Sui generis – special systems (eg. Trademark) – Trademarks create “stronger” rights (buy, sell, and mortgage them) but not “better” title (an unregistered trademark is still just as valid as a registered one)
  • Complementary (eg. Personal Property Securities Act) – Designed to better protect existing rights. General ‘first in, best right’ approach taken.

When we ignore registration

  • First-in when no requirement to register (eg. PPSA, Pledge)
  • Special exemptions to registration (eg. Short term leases – Torrens System)

Other Effects of Registration

1. What we can ‘own’ – the ability to record property rights can be a requirement before we legally recognise them (eg. UK trademark registration system was in black and white – could not register colour as part of a trademark. Still applies to trademarks for odours not being recognised in EU) Can also expand scope of ownership – patents, once issued, are more likely to be recognised by courts reluctant to invalidate hundreds or thousands of similar patents
2. Stability of property rights – eg. Inability to sell property after council/Cth registers their intention to seize it. Land registry not overlapping with historic/environmental listings and restrictions.
3. How we can ‘own’ something – scope of rights is recorded at the register. Piece of paper that fixes boundaries and nature of interests.
4. How the law deals with property rights – Registration process and procedures ultimately set/moderated by Bureaucracies, and their internal rules, in order to promptly register and protect interests. (eg. Federal Court Decision may make it into the trademark manual, but could be recorded incompletely or incorrectly, and the manual is paramount – courts are generally reluctant to undermine years of bureaucratic practices/system functionality) Additionally, some registration systems have their own internal dispute resolutions, outside of the courts – IP Australia hears more disputes than the Federal Court.
5. Creates relations between registry organisation and legislature, giving that department a loud voice in law reform in that area. Eg. IP reform prioritises IP Australia workplace questions over general legal questions – public holidays will be firmly clarified, but legal grey areas may not be. Even new departments running new organisations will generally be run by reassigned public servants. In addition, the strong drive to make registries self-funded creates its own potential disputes and leads to dubious policies. (eg. IP Australia offers a ‘head start’ service with ‘non-binding’ advice on registrability of patents – given by the very same people who actually review/issue the patent.

Adverse Possession

  • Generally only applies to land. Deals with the revocation of rights and possession because a third party occupied that land without consent for an exceptionally long period
  • Goes against registry – title can migrate to the adverse possessor rather than the registered owner
  • Originated from statute of limitations – designed to destroy rights, but also transfer/confer rights in the context of real property
  • Traditionally 6 years, but has been extended to 12 years for land in most jurisdictions, including Queensland.