Transfer of title by a non-owner

The general rule is that a seller of goods cannot obtain a better title to such goods than that of the person from whom they were bought.

The Sale of Goods Act (SOGA) says, in section 24 Sale by person not the owner

“when goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by the owner's conduct precluded from denying the seller's authority to sell.”

There are some notable exceptions to this rule;

Estoppel

“Where the owner of goods is by their conduct precluded from denying the seller’s authority to sell”, the buyer obtains good title.

An owner may be precluded from denying a seller’s authority by reason of their (deceitful, negligent, fraudulent) conduct which, expressly or impliedly, constitutes an unambiguous representation to the buyer that the seller has his authority to make the sale.

Sale under a voidable title

Where the seller of goods has a voidable title, for example a title gained through fraud, but the title has not been avoided at the time of the sale, the buyer acquires a good title to the goods provided they’re bought in good faith and without notice of the seller’s defect of title.

A person who obtains goods by way of fraud can pass good title because their title is voidable, not void. Therefore a person who obtains goods by way of fraud can pass a title to a bona fide recipient who acts in good faith and presents value for the property.  The original owner then only has rights against the fraudster and not the new “owner”.

Sale by a buyer in possession:

The bona fide purchaser of goods from a buyer who obtained possession of the goods with the consent of the original seller obtains a good title to them

The original seller must have been lawfully entitled to sell the goods.

A purchaser from a buyer in possession only acquires a good title under the statutory provision where the purchaser receives the goods in good faith and without notice of the rights of the original seller of the goods.

o          The onus of proving such is on the purchaser.

o          Notice may be actual or constructive.

o          It is insufficient for the original seller to contend that by making further inquiries the purchaser could have discovered that the buyer in possession of the goods who sold them had no right to do so, unless of course there was something obviously suspicious such as to put the purchaser on inquiry.

Where the goods being sold are a motor vehicle subject to a security interest, the legal position of the bona fide purchaser will depend on whether the security interest has been registered in the national Personal Property Securities Register established under the Personal Properties Securities Act 2009 (Cth).

For more information contact our office on 1300 334 566

Land estates and Waste

The relationship between life tenants and persons with a vested interest as remainder can be quite complex, so let’s use some examples.

Margaret is a retiree who lives alone on her beautiful estate. Being concerned with the preservation of her family, in creating her Will she leaves her home to her daughter Julia for life and then to her granddaughter Emily. The property has a standing of approximately 300 trees, each centuries old with an estimated value of $10,000 each.

After her mother passes away, Julia decides to harvest the trees. She calls in bulldozers and has the entire reserve knocked down to make way for a giant swimming pool and tennis court. The value of the land falls greatly.

Given that Emily possesses a future interest in the estate, it may be possible for her to claim damages against her mother for this wanton act of waste.

Waste is any act which alters the nature of the land, whether for the better or for the worse. A tenant for life shall not commit voluntary waste. Voluntary waste is a positive act of injury to the property. For example:

•      pulling down or altering buildings,
•      opening a new pit or mine and
•      cutting timber

If the Will creating the life interest grants the interest “without impeachment of waste” or words to like effect, or the life tenant has a licence or other right to commit waste, then voluntary acts of waste which do not constitute equitable waste are permissible.

If the settlement or Will does not grant such a right and no right to commit waste has been granted to the life tenant, they will be liable in damages to the holder of the reversion or remainder interest. In this case, that person is Margaret’s granddaughter Emily.

To qualify Emily’s interest as a vested remainder and thereby give her access to a legal remedy, the following conditions must be satisfied;

1. 1.    The estate in remainder and the particular estate which precedes it must be created by the same instrument (the Will that gives Emily a future interest in the property must be the same Will which gives her mother the estate for life),
2.  The estate in remainder must become vested in possession immediately upon the termination of the prior estate (ie there must be no condition to be fulfilled before Emily can take the estate other than the termination of her mother’s interest),
3.  The person or persons who are to take the estate in remainder must be ascertained as at the date of the grant.

If something you have read here may apply to you or someone you know, make an appointment to speak with one of our experts.

CAR ACCIDENT – WHAT TO DO/ SAY AT THE SIDE OF THE ROAD?

1.          *  Move the vehicle out of the traffic.

2.          *   Slow down, take your time, secure the handbrake and put the car in gear.

3.         *     Safely get out of the car.

4.           *     Make an assessment of the attitude of the other driver.  If that attitude is aggressive,  retreat. 

5.        *       Do not, even if the accident is completely your fault, admit liability.  In some cases this can void your insurance. 

6.         *      Record details of the other driver and any passengers or witnesses – name, address, phone number, registration, make, model, driver’s licence number, name of insurer and motor vehicle owner.

7.           *     Make a note of any statements made, particularly statements referring to liability for the accident.  A contemporaneous note made at the roadside or shortly after, is very powerful if there is a dispute later.

8.           *      Report to a doctor if you have even the slightest symptoms of injury or illness.

9.           *      As soon as practicable, sit down and write a summary of what happened.

These actions, taken in a timely manner, can make all the difference to any claim made by or against you.

Bennett Carroll Solicitors have offices located in Brisbane and the Sunshine Coast

Freecall: 1300 334 566
Fax: (07) 3343 8664

Email: info@bcglaw.com.au

Website: www.bcglaw.com.au  

Agents, their duties and secret commissions

When we hear the word agent our first thoughts are of real estate agents. However, an agent in a legal sense actually covers an expansive range of relationships between a person or company (an agent) and another (referred to as a principal) who has undertaken to serve their best interests.

Whether or not a relationship of agency exists is a question which the courts approach objectively[1]. There are many examples of established agency relationships. Here are a few;

·         Real estate agent and client

·         Solicitor and client

·         Employee and employer

·         Joint venturers (to each other)

·         The director of a company (to the company)

Scope of an agent’s duties

While the scope of the duties owed by an agent to their principal will vary depending on the type of agency, a fundamental duty of an agent is not to use their position to make a gain for themselves without the knowledge and assent of the principal[2].

An agent should consider if there is any personal interest in the matter which might conflict with the duty owed to the intended principal and, if so, he or she should decline to act as agent without the fully informed consent of the principal[3].

Profit from position and secret commissions

If an agent is aware of any circumstances which might influence their client’s decision to enter into a negotiation, and fails to disclose that information to their client, the commission may be forfeited[4].

If the agent does receive profit as a result of that non-disclosure, these profits are recoverable by the principal on learning the true facts[5].

Should an agent receive a secret commission or profit the principal may recover it as well as dismiss the agent[6].

Application to Real Estate

Let’s apply this to a real estate transaction, where agencies most commonly arise.

Perhaps you have heard of agents who desired to act for both a buyer and seller and to obtain commission from both. It is the duty of the agent to make full disclosure to both the buyer and seller of an intention to act for, and receive payment from, the other party. Both parties must be made fully aware of this intention and agree to the agent doing so[7]. In the event the agent does not tell both parties, or does not gain their consent, the commission will be lost.  These obligations apply in addition to any PAMDA or POA obligations.

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[1] Garnac Grain Company Inc v HMF Faure & Fairclough Ltd

[2] Parker v McKenna

[3] Lintrose Nominees Pty Ltd v King

[4] Dargusch v Sherley Investments Pty Ltd

[5] Walden Properties Ltd v Beaver Properties Pty Ltd

[6] Fullwood v Hurley

[7] Fullwood v Hurley