position to complain about someone else’s assertion of dominion over a thing where that person is in effect his privy.65 Free of the constraints of privity, however, a P2 can in effect maintain that the dispute is outside the system of property rights that courts are meant to administer and that the court should leave P1 and P2 as it finds them (with P2 in possession of the thing). It is here, in those cases where the concepts of privity and force are not engaged, that jus tertii defences may have a role to play in the common law.66

Something like this is in effect the position that was taken in Buckley v Gross.67 There the plaintiff was in possession of tallow that the police suspected was stolen. The plaintiff was arrested and the police seized the tallow. Eventually the charges were dismissed, and the plaintiff, released but the tallow was not returned to him. Instead, the police sold the tallow to the defendants. The plaintiff sued the defendants for conversion. The plaintiff lost: bare possession does not ground a right to possess that endures beyond the fact of possession.68 Nor was this a case of either force or privity. The police, having lawfully taken the tallow, were not put into possession as the plaintiff ’s privies and, at the same time, had a justification for the use of force (it was an authorized taking).69

3. Conclusion

Our common law approach is not nearly as reductionist as the standard approach to the relativity of title suggests: the relative merits of rights to possess tracks to some extent their causa possessionis. While to a large extent our property system appears to function as a ‘first in time, stronger in right’, it thus does so for very different reasons than the standard approach to the relativity of title suggests. The best case for the ‘first in time, stronger in right’ model is that it predicts outcomes in most cases between possessors: our common law rules about the relativity of title determine who as between A and B is entitled to exclude whom, without deciding whether either of them would be able to exclude C. But even this virtue—fidelity to the actual workings of the legal machinery of property—is overstated.

65There is a debate about whether a conversion is an assertion of dominion or just the exclusion of someone with a better right to possess. See Douglas 2009. The question is not settled across the common law world. See Canada Colors & Chemicals Ltd v Shea Brothers 1945 (Ont HCJ), para. 4 (taking the view that conversion is the exercise of dominion). The Winkfield 1902 (CA); See Moorgate Mercantile v Finch 1962: the use of a borrowed car for the purposes of smuggling was a conversion. This makes sense only of the basis that the decision to put the car to an illegal use was clearly a usurpation of the owner’s agenda-setting authority.

66A return to an older view, widely seen as discredited by Asher: Doe d Carter v Barnard 1849 (proof of title in another defeats the claims of the prior possessor).

67Buckley v Gross 1863.

68Hickey 2010, 119. Hickey argues that the plaintiff did not have sufficient possession because of the statutory divestment rather than the possessory facts.

69See Field v Sullivan 1923 (Supreme Court of Victoria) (suggesting that a wrongdoer (P1) could sue a third party (P3) who derives rights from a P2 who unlawfully took possession from P1). See discussion in Fox 2006, 346 (contrasting this with cases where the third party does not derive right from P2 and so is not liable to our wrongdoer).

10

Defining Property Rights

Simon Douglas and Ben McFarlane*

1. Introduction

In order to consider the philosophical foundations of property law, it is first necessary to consider the nature and content of property law. In particular, we need to ask what, if anything, is special about it. Writing in 1996, Penner noted that some then recent works had assumed that the ‘actual nature’ of property had been ‘satisfactorily explained by the Hohfeld-Honoré bundle of rights analysis’.1 No one writing such a work today could make such an assumption: partly thanks to Penner’s contribution, and also those of Merrill and Smith,2 the ‘bundle of rights’ analysis has come under sustained critical pressure.3 In particular, it has been contrasted with a competing model which places the ‘right to exclude’ at the core of property law.4 This chapter focuses on the contested question of the ‘actual nature’ of property law, taking as its focus case law bearing on the definition of property rights.

In Section 2.1, we examine the scope of property rights by looking at the duties imposed on the rest of the world in cases where A has an undoubted property right, such as a freehold of land or ownership of a chattel. In Section 2.2, we again examine the scope of property rights, this time by considering how, in more peripheral cases, the courts have determined if A’s right has the effect of a property right. Our conclusion accords with that of Penner in his 1996 paper: the ‘bundle of rights’ analysis provides us with no assistance in determining what is special about property rights. Further, along with Penner, as well as (for example) Merrill and Smith, we conclude that the distinctiveness of proprietary rights lies in what, in loose terms, might be called the right of exclusion. More precisely, as far as the structure of the law is concerned, the special feature of a property right lies not in any liberties it affords A to make use of a resource, but rather in the duty, owed to

* We are grateful to John Mee for comments on an earlier version of the chapter. Ben McFarlane is also grateful for the support provided by a Philip Leverhulme Prize.

1Penner 1996a.

2See e.g. Merrill 1998; Merrill and Smith 2007b, I-28 ff.; Smith 2002; Smith 2012b.

3For recent contributions to the debate, see e.g. Claeys 2009a; Munzer 2011.

4See e.g. Merrill 1998. See also Cohen 1954, 371.

A, that it imposes on the rest of the world. Our core argument, then, is that the distinctiveness of property rights is best understood, not by looking at the positive uses available to A, but rather at the negative duties owed to A by the rest of the world. The novelty of this chapter lies not so much in the nature of its conclusion but rather in the means by which that conclusion is reached, and the implications drawn from it. For we reach the conclusion by employing a Hohfeldian analysis, and we argue that it compels us to give a narrow definition to property rights, limiting such rights to cases where the rest of the world is under a prima facie duty to A not to deliberately or carelessly interfere with a physical thing.

It may seem surprising that a Hohfeldian analysis can be used both to argue against the bundle of rights perspective and to support a requirement that a property right must relate to a physical thing. As to the first point, it is clear that, as a matter of intellectual history, the adoption of the bundle of rights model was, in many cases, supported by reference to Hohfeld’s insistence on breaking down rights such as a freehold or ownership into a more complex set of distinct legal relations.5 As to the second point, it has been suggested that ‘Hohfeld could not have been more insistent in his view that rights in rem are not properly conceived as rights to things’.6 As will be seen, however, neither of these observations is inconsistent with the analysis proposed here. That analysis will be developed in Section 2 through discussion of case law, but it will be useful to set out its basic form in this introduction.

First, consider the case in which A has an undoubted property right, such as a freehold of land or ownership of a chattel. To determine the nature of A’s right, it is useful to contrast A’s position with that of X, a party without any such property right. It may be natural to think of A’s right as a right to the ‘use, fruits and abuse’ of the thing to which A’s right relates; or as consisting of those rights of A (such as to take and retain possession; to use, manage, and take the income from the thing, etc.) that feature on Honoré’s list of the incidents of ownership;7 or, to use Harris’s term, as an ‘open-ended set of use-privileges’.8 From a Hohfeldian perspective, however, two points must be remembered when considering the effect of a property right on A’s legal relations: first, any right of A’s must be a right against a particular person;9 second, there is a crucial distinction between liberties and claim-rights.10

Consider the case where A has ownership of a car. If we say that A has a right to use the car, we may mean that A has a liberty as against B to use the car: this means that A does not owe a duty to B not to use the car and thus will not commit a wrong against B simply by using the car. This liberty is clearly recognized by the law: of

5 For an example, see Corbin 1922, 429: ‘Our concept of property has shifted . . . “property” has ceased to describe any res, or object of sense, at all, and has become merely a bundle of legal relations— rights, powers, privileges, immunities.’ This is not to say that the bundle model would not have gained prominence without Hohfeld; the metaphor was known before 1913 (see e.g. Lewis 1888, 43: ‘The dullest individual among the people knows and understands that his property in anything is a bundle of rights’). Nonetheless, as Penner (1996a, 731) notes, the Hohfeldian analysis permitted a ‘revolutionary refocusing; henceforth, property will be characterized as a complex aggregate of jural relations, not as a

course, it does not mean that A is under no duties to B in relation to A’s use of the car (A has a duty to B, for example, not to physically injure B by driving the car carelessly); but it does mean that A’s deliberate use of the car is not, by itself, a wrong against B. Prima facie,11 A has a similar liberty not just against B, but against the rest of the world. We now need to compare A’s position with that of X, a party without any property right in the car. Crucially, X also has a liberty against B to use the car, which is evident from the fact that if X does use the car he commits no legal wrong against B.12 In its content, X’s liberty against B is identical to A’s liberty against B. Moreover, as is the case with A’s liberty, X’s liberty against B does not depend on, to use Honoré’s phrase,13 any particular title: X, prima facie, has the same liberty as against C, D, E etc. As far as use of the car is concerned, then, the difference between A’s position and X’s position lies in the fact that A has a liberty as against X to use the car, whereas X has no such liberty against A. In Hohfeldian terms, of course, the fact that X does not have this liberty against A is the result of X’s owing a particular duty to A. In other words, in distinguishing A’s position, and thus determining the distinctiveness of a property right, we need to focus on the fact that X (and, prima facie, everyone else) owes a specific duty to A in relation to X’s use of the car.

To understand what is special about a property right, then, we need to focus on X’s duty to A, and to discover its precise content. At this point, we can consider another possible meaning of the statement that A has a right to use the car: the possibility that A has a claim-right against X to use the car. We now need to bear in mind a third point about Hohfeld’s scheme, one eloquently elucidated by Finnis:14 a claim-right ‘can never be to do or omit something: it always is a claim that somebody else do or omit something’.15 As Finnis notes, this flows from the correlativity of the Hohfeldian scheme: what content could X’s duty have if A were to have a claim-right to act (or not act) in a specific way? It is possible for A to have a claim-right against X correlating to X’s duty to A not to interfere with A’s use of the car. It is important to note, as Finnis does, that A’s holding of a liberty as against X to use the car does not have any necessary bearing on the separate question of whether X has such a duty to A not to interfere with A’s use of the car.16 For example, if A and X are each present at an academic conference where a buffet lunch is served each has a prima facie liberty against the other to take and eat a chocolate mousse; this liberty remains even if there is only one such mousse remaining, and X (or A’s) exercise of their liberty will leave A (or X) with only fruit for dessert. The point is that A’s prima facie liberty against X to perform a particular activity (here, to take and eat the mousse) can exist without X’s also being under a duty to A not to interfere with that activity of A: here, this means that it is possible for X to have a liberty against A to take the last mousse, and thus prevent A’s doing

11Prima facie because, for example, A may have made a contract to hire the car out to C for a period, such contract imposing a contractual duty on A to C not to use the car for that period.

12For an example see Hill v Tupper 1863, discussed in Section 2.2(a).

expose in his essay.

so. So, to establish if X’s duty to A includes a general duty not to interfere with A’s use of the car, we need to analyse the relevant case-law. As will be seen in Section 2.1, with the possible exceptions of a very small number of isolated cases, no such general duty has been recognized.

The first point is thus a methodological one. A Hohfeldian perspective forces us to direct our attention not on the positive uses A may wish to make of a thing, such as A’s car, but rather on the content of the prima facie duty owed to A by X, and thus also owed to A by the rest of the world. This duty, as will be seen in Section 2.1, consists of a duty not to deliberately or carelessly interfere with A’s physical thing. The Hohfeldian approach thus directs us away from the bundle of rights model and towards one based on those duties of the rest of the world that may be said, somewhat imprecisely, to make up A’s ‘right of exclusion’. The second point is a substantive one: when we conduct our inquiry into the nature of X’s duty, we will discover that the prima facie duty is defined by reference to the physical thing to which A’s right relates: to the car. X’s duty is not so broad as to be a duty not to interfere with A’s use of the car; it is rather a duty not to deliberately or carelessly interfere with the car itself.17 The Hohfeldian analysis, when applied to the case law, thus leads us to emphasize the role of physical things in defining the content of property rights. Whilst surprising, this conclusion is perfectly consistent with Hohfeld’s own work: that work made clear that A’s property right cannot usefully be understood as a right to a thing; instead, to understand the claim-rights involved in a property right, we must look to the duties owed to A. This, however, does not preclude the possibility that the content of those duties may be defined by reference to a thing. Indeed, when briefly considering possible particular species of the generic multital rights, Hohfeld first isolated ‘[m]ultital rights, or claims, relating to a definite tangible object: e.g. a landowner’s right that any ordinary person shall not enter on his land, or a chattel owner’s right that any ordinary person shall not physically harm the object involved—be it horse, watch, book, etc.’18 That category—which, in our view, presents the only definition of property rights that excludes irreducibly dissimilar rights from the set—is organized by the nature of the particular things to which the prima facie duty of the rest of the world (the ‘ordinary person’) relates.

Our view, then, is that Hohfeld’s insights into the nature of legal relations are of great importance in revealing the distinct role of property rights within the legal system. At the level of legal relations, we conclude, the distinctiveness of property rights lies not in their allocation of particular valuable uses to A but rather in the duties such rights impose on the rest of the world. This analysis supports the claim of Merrill and Smith that property, in its core instances at least, uses an ‘exclusion’ strategy rather than a ‘governance’ strategy.19 The latter strategy, like many economic analyses of property law, focuses on particular uses of resources and thus on

17 For two recent and striking examples of this point, see Club Cruise Entertainment and Travelling Services Europe BV v Department for Transport (The Van Gogh) 2008 and D Pride & Partners (a firm) v Institute for Animal Health 2009. These two cases are discussed in Section 2.1(b)(i).

19 See e.g. Merrill and Smith 2007b, 1–28 ff.; Smith 2002.