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transferees of a different property interest in the same thing will be put off acquiring that different interest because they will not know how the interest they are acquiring will be affected by the uncertain interest. Similarly, it is often said that a property interest in a thing must have a degree of stability and predictability, for otherwise it will again put off potential transferees of that and any other property interest in the thing. (See the discussion on National Provincial Bank v. Ainsworth [1965] AC 1175 in Extract 9.1 below where we consider the argument that these criteria are circular and self-fulfilling – can you see why?)
We have so far concentrated on problems which would affect future dealings with a specific thing which was subject to an uncertain, unstable or unpredictable property interest. However, a much more fundamental problem would arise if the interest, while not necessarily suffering from any of these vices, was simply difficult for third parties to identify. For then potential transferees would not only be put off acquiring a specific thing but would have a very real disincentive in acquiring anything which might have such an interest attached (whether or not it in fact did) because there would be no easy means of finding out. This, in part, explains the law’s historic reluctance (considered briefly above) to welcome novel property interests into the fold. Arguably, if the system was too willing to do so, purchasers would be more reluctant to acquire interests in things generally as they might latterly be subjected to other (possibly conflicting) interests that no one knew existed at the time of acquisition but which the courts were subsequently willing to hold were subsisting at that time.
9.2. The dynamic nature of property
It is time to redress the balance. The preceding discussion has described a system which one might be forgiven for assuming was static and rigid with little prospect of change or development. But this is simply not the case for, despite the law’s reluctance to embrace new property interests, the pace of human development is such as to make the recognition of new interests an economic and/or social necessity. Prior to the invention of the printing press, for example, there was little incentive in recognising a general property right to copy books. Yet, in the wake of Guttenberg’s invention coupled with (and linked to) the emergence of a sufficiently large literate audience, it is hardly surprising that a law of copyright (literally the right to copy) should soon follow. Nor that the pressure to recognise a legally enforceable right to copy came not from authors struggling with their muses but from those with the technological expertise to benefit from such a right, namely, the publishers and printers (see Feather, ‘Authors, Publishers and Politicians’).
The history of the common law is littered with such instances. As society changes, the notion of what is and what is not a useable resource capable of being the subject of property also changes. For example, up until the sixteenth century, there is little evidence of the term property being applied to land under the English common law
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(Seipp, ‘The Concept of Property in the Early Common Law’). In 1828, when C. J. Swan, the Secretary to the Real Property Commissioners, invited Bentham to help the Commission in its deliberations, one of his first tasks was to list those things which were not regarded as property and which had not been included in Blackstone’s work on the subject, such as company shares and copyright (Sokol, ‘Bentham and Blackstone on Incorporeal Hereditaments’).
We will consider two examples, one primarily economic and the other broadly social, in which the courts have grappled with the difficulties inherent in such an endeavour. We will begin with the restrictive covenant before turning to the wife’s (or is it the spouse’s?) right of occupation.
9.2.1.The recognition and limits of the covenant as a proprietary interest
The recognition, in Tulk v. Moxhay (1848) 2 Ph 774, of the restrictive covenant (whereby the owner of land is restricted from using it in certain ways) as a property interest in land similarly evolved in response to economic pressures stemming from the industrial revolution and social change in respect of demographic upheaval and the breakdown of the feudal structures which had previously controlled land use (see Chapter 6 for a more detailed account). Despite the generality of some of the language employed in the case, subsequent decisions did much to limit the principle, including a requirement drawn from the law of easements that there must be both a dominant and a servient tenement (London County Council v. Allen [1914] 3 KB 642). In other words, the benefit of a restrictive covenant must attach to some land (referred to as the dominant tenement) and cannot exist in gross (i.e. unattached to land).
In spite of the somewhat arcane nature of the language employed, the restriction can be readily understood if one adopts a practical perspective. A restrictive covenant limits what can be done on a piece of land (referred to as the servient tenement) and while there were compelling social and economic reasons for recognising the proprietary status of such a restriction these held only in so far as the restriction benefited other land. The restrictive covenant enabled owners of land to sell the freehold interest in a portion of their land safe in the knowledge that they could impose restrictions on the land disposed of that would survive subsequent changes of ownership and ensure that things were not done with it which would devalue the land retained. This had the effect of freeing up the market in land and promoting alienability even though taken in isolation the burdened land is arguably made less attractive by subjecting it to restrictions in this way.
However, the balance only tilts towards alienability provided there is a dominant tenement able to benefit from the restriction. If there was no such requirement a restrictive covenant might have an entirely negative effect on alienability for it would then continue to make the servient tenement less attractive to potential purchasers without necessarily promoting the alienability of other land. For without the dominant tenement requirement there would be no need for the seller to retain any land with an aspect that needed preserving. Consequently, as
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such a vendor has no economic interest in how the sold land is subsequently utilised, the courts at the turn of the last century chose to provide him with no proprietary means of restricting its use. (There are, of course, strong environmental arguments to the contrary but it would be anachronistic to criticise judges from another era for failing to take account of issues which are, in any case, today catered for by other mechanisms – see Chapter 6.)
It would seem to follow from such an analysis that the principle of Tulk v. Moxhay would be inapplicable to chattels because as moveables they can always be removed from a source of interference. But before the principle of a dominant and servient tenement had been fully established, by cases subsequent to Tulk v. Moxhay, Knight Bruce LJ in De Mattos v. Gibson (1859) 4 De G&J 276 at 282 made the following observation:
Reason and justice seem to prescribe that, at least as a general rule, where a man by gift or purchase, acquires property from another with knowledge of a previous contract, lawfully and for valuable consideration made by him with a third person, to use and employ the property for a particular purpose in a specified manner, the acquirer shall not, to the material damage of the third person, in opposition to the contract and inconsistently with it, use and employ the property in a manner not allowable to the giver or the seller. This rule, applicable alike in general as I conceive to moveable and immoveable property, and recognised and adopted, as I apprehend, by the English law, may, like other general rules, be liable to exceptions arising from special circumstances, but I see at present no room for any exception in the instance before us.
The case concerned an interlocutory application by the hirer of a ship seeking an injunction to prevent both the owner and the ship’s mortgagee (who, at the time he acquired his interest, knew of the charterparty under which the terms of hire were fixed) acting in a way which was inconsistent with the charterparty. It is clear, from the above extract, that in holding that the mortgagee would be bound Knight Bruce LJ was drawing on the comparatively recent case of Tulk v. Moxhay decided little more than a decade before. In contrast, the other judge in the case, Turner LJ, seems much less persuaded, leaving the matter open because in his view it deserved greater consideration than could be devoted to it at an interlocutory hearing. This would not appear to have taken place for when it came to the full hearing it was held, on appeal by Lord Chelmsford LC, that the charterparty was ‘far too uncertain and indefinite’ to enforce. Thus the position of the third party mortgagee ceased to be an issue with the Lord Chancellor offering no more than the obiter aside that the mortgagee should ‘abstain from any act which would have the immediate effect of preventing [the charterparty’s] performance’.
Lord Chelmsford cited no authorities in support of his proposition and, in light of the introduction of the dominant tenement requirement, many judges took the view that (even had it once been so) the principle could no longer be said to apply to chattels. Thus, in Barker v. Stickney [1919] 1 KB 121 at 132, Scrutton LJ stated that ‘a purchaser of chattels is not to be bound by mere notice of stipulations made
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by his vendor unless he was himself a party to the contract in which the stipulations were made’. Such dissent was neither new nor confined to the higher courts. In Taddy v. Sterious [1904] 1 Ch 354 at 356, for example, Swinfen Eady J had already stated at first instance that ‘[c]onditions of this kind do not run with goods and cannot be imposed upon them’ even though De Mattos v. Gibson was seemingly to the point and had been cited to him.
Despite the less than auspicious reception, Knight Bruce LJ’s dictum was resurrected by the Privy Council in Lord Strathcona Steamship Co. v. Dominion Coal Co. [1926] AC 108 (see Notes and Questions 9.1 below). The case again concerned a charterparty (can you begin to speculate why this might be significant?) whereby the Dominion Coal Company chartered a ship for ten years. During that time, the ownership of the ship changed hands on a number of occasions eventually being bought by the Lord Strathcona Steamship Company who obtained the ship on the following terms:
The steamer is chartered to the Dominion Coal Company . . . [and] the buyers undertake to perform and accept all responsibilities thereunder as from date of delivery in consideration of which the buyers shall receive from date of delivery all benefits arising from said charter.
Despite agreeing to these terms, the Lord Strathcona Steamship Company refused to honour the charterparty. In response, the Dominion Coal Company sought a declaration that they were obliged so to do and an injunction restraining the ship from being used in a way that was inconsistent with the charterparty. The judgment of the board was given by Lord Shaw who, in granting the charterer the relief sought, stated that the dicta of Knight Bruce LJ in De Mattos v. Gibson, ‘notwithstanding many observations and much criticism of it in subsequent cases, is of outstanding authority . . . [for] equity would grant an injunction to compel one who obtains a conveyance or grant sub conditione from violating the condition of his purchase to the prejudice of the original contractor’.
The case received much adverse comment, particularly from Diplock J in Port Line v. Ben Line Steamers [1958] 2 KB 146, which we will deal with below after you have had a chance to examine the primary materials yourself. This will also afford us an opportunity to examine Lord Shaw’s reasoning in the case and a possible alternative rationale offered by Browne-Wilkinson J in Swiss Bank Corp. v. Lloyds Bank Ltd [1979] Ch 548. However, before embarking on this task, and without seeking to prejudge the issues, we suggest you consider what relevance the following words of Lawson and Rudden (The Law of Property, p. 30) might have in resolving the apparent inconsistencies evidenced by the case law:
Ships are indeed governed by special rules of law and are for some purposes treated almost as though they were floating plots of land.
Can you also suggest how such an approach might be consistent with the general thesis of this chapter that, despite its reluctance to do so, the law is willing