Law of Property - notes no.1

Law of Property

Introduction of law of property.

Historically, the sources of SA law of property were:

·         Roman Dutch/ common law.

·         Statutes/ legislation, and

·         Precedent.

As such, excluded African customary law. However the sources of SA current property law, includes:

·         Customary law, and

·          The constitution.

What is property?

Technically, property means - the rights of people over certain objects or things. However, “property” also refers to particular objects themselves. That is, it goes beyond the relationship between subjects and objects.

Sometimes property relates to the rights of ownership in a legal object. In other instances property refers to the legal object to which the rights of ownership relates.

It may be a tangible object or may include incorporeal objects. Moreover, constitutionally, in terms of s25 of the Constitution “property” refers to all the legal relationships that qualify for constitutional protection.

The relationships between people and objects form the basis of property law, which determines what people can and may do with things that belong to them and how to protect their “things’.

Property law also determines how to acquire and to dispose of things.

The law of property

The law of property deals with the rights and action of persons with regards to their things and other forms of PROPERTY, as well as other relationships between persons and property. It describes / regulates ways in which property rights can be acquired, lawfully exercised, and the remedies by which property rights are protected against interference.

It also regulates legal consequences and implications of other relations between persons and property.

Legal terminology

A right-is a legally recognised and valid claim by a subject to a certain object.

-       (Not all relationships between a person and an object are recognised and protected in law). E.g., A’s vehicles gets stolen by B who then sell it to C. Three weeks later A finds the vehicle in C’s possession, but C would not return the vehicle to A unless A refunds him.

Property right (right in property) - is any legally recognised claim to a property or interest therein. It is a relationship between a person and property which was established and is held in accordance with the applicable requirements, and therefore recognised and protected by law.                                                                                                                                                                                                           It includes all REAL, PERSONAL and CONSTITUTIONAL RIGHTS w.r.t. all kinds of property.

Lawful and unlawful Claim

 A claim is lawful when it is acknowledged / recognised and protected by existing legal principles.

A claim is unlawful when it is in conflict with the law or when it is not acknowledge by law. E.g.,: owner-object-theft. The thief has an unlawful relationship with the object, whereas the owner has a legal relationship.

A remedy-is a legal procedure of the legal system by which a right is protected against infringement or by which the effects of an unlawful act/situation is controlled;

i.o.w., if a right were vehicle, a remedy would by a tracker (can be used to monitor a vehicle or recover it when it stolen).

A person-is a legal subject who can acquire and exercise rights and obligations in law. It can be a natural person or juristic person. Legally, anyone who acquires and hold rights in property is a person, juristic person can be a group of people who act together to acquire and hold rights in property.

An object - is anything with regards to which a person can acquire and hold rights. It is referred to as a legal object. Different kinds of rights are recognised in law for different categories of objects.

Property-is everything that can form part of a person’s estate including corporeal (physical tangible) things and incorporeal interests and rights. Eg –corporeal things: motor vehicle, a plot of land, etc. Eg –incorporeal things: immaterial property, copy right, intellectual property, shares in a company, and usufruct of a mineral lease.

A thing -is a specific category of property, legally defined as: a corporeal object outside the human body, and an independent entity capable of being subjected to legal sovereignty by a legal subject for whom it has use and value.

Things as legal objects

A thing is a legal object of a real right. Legally, a thing serves the purpose of satisfying the needs of a legal subject.

Legal definition of a thing (in terms of its characteristics)  

(A thing is a corporeal object external to persons, and which is an independent entity, subject to juridical control by a legal subject, to whom it is useful and of value) 

       

5 characteristics of a thing

1.    Corporeal- a thing must be tangible, be observable using any of the 5 senses of human being and it must occupy a space.

However, the law recognises certain incorporeal things as things E.g., - Shares in a company - Ben-tovin v Ben-tovin 2001(C).

-       A creditor’s right against a close-corporation (Bedenhorst v Balju Pretoria Sentraal 1998 (T).

2.    External to human- a human being cannot be a thing in law.

Human Tissue Act 54 of 1983

-       (what about human hair?).  

3.    Independence – it must be a definite and distinct entity existing separately. E.g.- water, land, sand and air- 0ught to be first separated by human activity into recognisable and manageable entities before they can fall within legal commerce.

4.    Subject to juridical control - a corporeal entity that cannot be subject to juridical control cannot be classified as a thing.

5.    Useful and valuable to humans - a thing must be useful and destined to satisfy the needs of a legal subject, unless it satisfy these 2 no legal relationship can exist between a corporeal thing and a legal subject.

Classification of things

Things can be classified into 6 groups namely:

1.    Negotiable and non-negotiable things.

Examples: - negotiable things.

      i.        Res Alicuius- these are things owned by a natural / legal persons, things in a deceased or insolvent estate.

    ii.        Res Nullius- things capable of being owned, which at a particular stage are not owned by anyone. (Ownership of these may be through appropriation).

   iii.        Res Derelictae - things that are no longer within physical control of an owner and in respect of which the owner no longer has the intention to be the owner (animus domini).

   iv.        Res Deperditae - these are lost things and no longer within the physical control of the owner, but in respect of which the owner has not lost the intention to be the owner.

Examples: - non-negotiable things.

      i.        Res Communes Omnium - natural resources falling outside legal commerce and which are available to all people, such as air and running water.

    ii.        Res Publicae - things owned by the State and used directly for the public benefit, such as public roads, national parks, the sea, the beach, etc.

2. Singular and composite things.

Singular things exist independently. i.e., they are not composed of particular components.

Composite things consist in various components, but they have lost their individuality for their composition. E.g., a mobile-phone, etc. For purposes of the law of property, they are regarded as one thing.

The composite things have the following elements:

 i.        Principal thing- Khan v Min. of Law & Order 1991 (T). A principal thing exists independently and can be a subject of real rights, e.g., a piece of land on which a house has been built, a cellular phone, a car. The 1 who owns the principal thing owns the composite thing.

ii.        Accessory thing - any attachment which does not help to determine the identity of the composite thing can be classified as an accessory.

An accessory thing can exist independently of the principal thing, but has merged with or has been mixed with the principal thing to an extent that it has lost its independence. E.g., a brick built into a house, roof carrier of a car, tyres of a truck, etc.

iii.        Auxiliary thing - exist separately and independently of the principal thing, but is no longer regarded as an independent thing for purposes of property law, due to its economic value, distinction or use. It does not have to have a physical connection with the principal thing. E.g., door keys, a parking bay, etc.

iv.        Fruits –produced by the principal thing without the principal thing consumed or destroy. E.g., natural fruits, calve, civil fruits (rent), profit, etc.

Fruits are destined to be separate from the principal thing and to exist separately and independently, thereof. 

3. Movable and immovable thing.

All things that cannot be classified as immovable are movables. (e.g., – immovable things: land, house, etc).

The distinction is important for the following:

      i.        Movables are transferred by means of delivery to the recipient (with the intention to transfer ownership), whereas ownership of Immovable is transferred through registration of transfer in the deeds registry.

    ii.        Contract to alienate immovable must, in terms of Land Act 68 of 1981 (inter alia), meet the prescribed formalities,

                                                Whereas – Credit agreements. i.r.o. movable things must comply with the formalities prescribed by the National Credit Act 34 of 2005.

   iii.        Real security in the case of immovable things, is effected through the registration of the mortgages, while it is through pledge or the registration of a notarial bond in the case of movables.

   iv.        A minor’s immovable thing valued to more than R100 00, may be alienated or burdened by parents/ guardian only with the approval of the master of high court.

    v.        In case of sale in execution of a debtor’s assets, by law, movable must be attached first, before attaching immovables.

Both movables and immovable can either be corporeal or incorporeal.

4. Fungible and non-fungible things.

Fungibles can be replaced with another thing of a similar value. Non –fungibles have individual characteristics making a thing, non-replaceable.

5.  Consumables and non-consumables.

Consumables are consumed by normal use but non-consumables essentially maintained despite wear & tear.

               

6.   Divisible and indivisible things.

 A thing is divisible if it can be divided into smaller components without losing its nature and function, without the value of the component being less than the original.

Invisible things that cannot be divided without altering their value, nature or function. E.g., painting, etc.

RIGHTS IN RESPECT OF PROPERTY.

Right in property are about relationship between a person and property. The relationships falls into 2 categories, namely: RIGHTS and POSSESION.

·         RUGHTS – there are Real rights and Personal rights.

Creditor’s right are Personal rights (in nature).

The distinction is important in law, as it the manner in which these may be acquired, exercised, and protected in law depends on their nature.

Rights are either ownership or limited real rights.

Ownership - is the only real right held in one’s own property, it is the most complete real right (res in re propria). 

See page 43 of text.

Limited real rights-restrict the exercise of ownership entitlement by the owner e.g., usufruct, bequeath. Meanwhile, real security rights ensures the performance of specific obligation between 2 parties. They give a holder/creditor an interest in the property of the debtor such that if the debtor fails to perform in terms of the contract, the creditor can realise hid interest in the property to satisfy the debt (mortgage if it immovable property or pledge if it a movable property).

REAL AND PERSONAL RIGHTS.

Real rights establish a direction relationship between a person and a property, whereas personal rights establish a relationship between one person and another in respect of contractual or delictual obligation ‘’performance”.

Real rights are enforceable (in principle) against all other person – i.e. anyone who interferes with the relationship between the holder and the property. On the other hand, a personal right is only enforceable against the person who bound himself in terms of contract/agreement. The distinction between real right and personal rights is important for several reasons namely: they both acquired differently, exercised differently and protected differently.

1. Real rights are governed in terms of various modes, whereas personal rights are acquired through an agreement or as a result of a delict.

2. Real rights are dealt with in terms of property law, while personal rights are governed by law of obligations-contract delict and unjust enrichment.

3. Ownership of real rights is as a result of transfer and registration, but personal rights are acquired by cession (an act of giving up something (right) by the agreement /contract).

4. Different legal rules apply to various modes of transfer; the extent to which a right can be exercised is determined by the type of a right.

·         RR  - enforceable against the world at large

·         PR - usually bind specific person or defined group of people

See p.47 of the text (Oxford)

HIERARCHY OF RIGHTS

Section 16 of the Deeds Registry.-ownership is registable

Section 63(1) of Deeds Registries Act - limited real rights

Other rights and permission are usually not registable.

Distinguishing real rights from personal rights

See p.55 of text

      i.        Real rights are enforceable against third parties even those acting in good faith and

    ii.        Even against third parties who acquire the right for value in good faith

Read from pp 48-63 of the Oxford text (for Court’s approach to the distinction between real rights and personal rights).

Read from pp 48-63 of the Oxford text (for Court’s approach to the distinction between real rights and personal rights).