Laws3111 Lecture7 2011

Week 7 – Intentional Transfers - Gifts

  • Derivative acquisition – transferred rights from another, rather than created new rights – and as such, subject to nemo dat.
  • Existing owner loses rights, either temporarily (bailment/lease) or permanently (sale/gift)
  • Most common source of property rights is via consensual transfer (contracts, gifts, etc.)
  • Primary focus: Transfer of ownership and conveyance
  • Requirements for transfer depend on nature of the thing being transferred, the interest being transferred, whether the transferring party is alive/dead, and legislation

Gifts of Chattels

  • Gratuitous conveyance of beneficial interest, with intent to vest property in the recipient.
  • Must be gratuitous (Leary v FCT)
  • Looks at ‘benefaction’, transferring an advantage on the recipient, extent of reciprocal detriment.
  • Legal definition of gift is very similar to the general definition, but excludes the motivation/wider circumstances – only focus on intention/consideration (Brennan J in Leary v FCT)
  • Distinguish between promise to give not being binding without actual transfer, while promise to give in return for even nominal consideration (peppercorn) is contractually binding (Beaton v McDivitt) – however a promise to give a conditional gift that is relied upon to detriment may give rise to estoppel.

Requirements to Gift

  • Giver has title
  • Giver has intention to transfer
  • Giver delivers to recipient or executes deed/trust
  • Conveyance requires delivery, deed, or trust (In Re Everett) – illustrated by Rowland v Stevenson

Rowland v Stevenson

  • Step-father stated ‘you can have the boat’, gave boat shaped cake, step-son paid insurance, etc.
  • Held that constructive delivery of large chattels is sufficient (eg. Keys rather than physically delivering boat)
  • Intention and delivery are both required, but need not be simultaneous
  • Can gift property subject to a charge (outstanding payments)
  • Can be subject to a condition subsequent that could revert gift back to the owner (must make the payments)

Gifts affected by Delivery

  • No legal formalities – only overt intention, delivery, and acceptance
  • Equity will NOT assist a volunteer
  • Continued registration in another parties name can be inconsistent with overt evidence of intention to give (Knapp v Knapp)
  • Evidence of delivery when one party retained possession is difficult to establish (Nolan v Nolan)
  • Intention can pre-date possession (“can keep it if you find it”) (Thomas v Times Book Co.)
  • No requirement for delivery if deed is executed

Conditional Gifts

  • Condition must actually QUALIFY the gift, not merely illustrate the motive for it.
  • Can only constitute a legal condition if the stipulation is FUNDAMENTAL to the gift – ancillary conditions are not necessarily required (In Re Osaba)
  • If gift is inconsistent with stated purpose, it does NOT qualify (In Re Osaba)
  • If condition precedent, normally required for ownership to be transferred, but invalidity MAY not fail the gift (In Re Allan)
  • If condition subsequent, property can revert back if it fails. (In Re Allan)
  • If condition sufficiently invalid or vague, then the gift is absolute.
  • Conditions that would interfere too much with everyday life not held to be valid (Re Piper)

Special Case: Money

  • Title to money is not derivative – nemo dat does not apply (Miller v Race)
  • Policy consideration – receipt of money must be absolute to facilitate financial transactions

Assignment of Choses in Action (intangible rights)

  • Assignment is large umbrella term that includes transfer of rights in choses in action
  • Originated in equity – few formalities, only intention to transfer (need not be in writing) and consent of assignee
  • Consideration only required for property (as equity does not act to fulfil an imperfect gift of chattels)
  • Statutory intervention granted absolute right to assignee, at the cost of making property/rights more difficult to transfer effectively.
  • Property law Act 1974 (ss 199-200) – must have done everything possible to complete gift valid in equity

Assignment of Copyrights (an example of a Chose in Action)

  • Rules set out in Copyright Act 1968 (Cth) ss 196, 197
  • Must be in writing and signed by assignor (s 196 (3))
  • May still take effect in equity if not signed (Acorn Computers v MCS)
  • Defective assignments still recognised – even if intention to assign is only implied (Warner v Gestetner, Pasterfield v Denham)
  • Absolute moral rights, such as integrity, are not transferrable (Pasterfield v Denham)
  • Equitable approach criticised for undermining statutory intent (US case – Effects Associates v Cohen)